[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 22 Introduced in House (IH)]
109th CONGRESS
1st Session
H. R. 22
To reform the postal laws of the United States.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 4, 2005
Mr. McHugh (for himself, Mr. Davis of Illinois, Mr. Tom Davis of
Virginia, and Mr. Waxman) introduced the following bill; which was
referred to the Committee on Government Reform
_______________________________________________________________________
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.
Sec. 103. Financial transparency.
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. Workshare discounts.
Sec. 207. Clerical amendment.
TITLE III--PROVISIONS RELATING TO FAIR COMPETITION
Sec. 301. Postal Service Competitive Products Fund.
Sec. 302. Assumed Federal income tax on competitive products income.
Sec. 303. Unfair competition prohibited.
Sec. 304. Suits by and against the Postal Service.
Sec. 305. International postal arrangements.
Sec. 306. Redesignation.
Sec. 307. Clarification.
TITLE IV--GENERAL PROVISIONS
Sec. 401. Qualification requirements for Governors.
Sec. 402. Obligations.
Sec. 403. Private carriage of letters.
Sec. 404. Rulemaking authority.
Sec. 405. Noninterference with collective bargaining agreements, etc.
Sec. 406. Bonus authority.
Sec. 407. Mediation in collective-bargaining disputes.
TITLE V--ENHANCED REGULATORY COMMISSION
Sec. 501. Reorganization and modification of certain provisions
relating to the Postal Regulatory
Commission.
Sec. 502. Authority for Postal Regulatory Commission to issue
subpoenas.
Sec. 503. Appropriations for the Postal Regulatory Commission.
Sec. 504. Redesignation of the Postal Rate Commission.
Sec. 505. Officer of the Postal Regulatory Commission representing the
general public.
TITLE VI--INSPECTORS GENERAL
Sec. 601. Inspector General of the Postal Regulatory Commission.
Sec. 602. Inspector General of the United States Postal Service to be
appointed by the President.
TITLE VII--EVALUATIONS
Sec. 701. Universal postal service study.
Sec. 702. Assessments of ratemaking, classification, and other
provisions.
Sec. 703. Study on equal application of laws to competitive products.
Sec. 704. Greater diversity in Postal Service Executive and
administrative schedule management
positions.
Sec. 705. Plan for assisting displaced workers.
Sec. 706. Contracts with women, minorities, and small businesses.
Sec. 707. Rates for periodicals.
Sec. 708. Assessment of certain rate deficiencies.
Sec. 709. Postal processing and distribution network study.
Sec. 710. Definition.
TITLE VIII--MISCELLANEOUS; TECHNICAL AND CONFORMING AMENDMENTS
Sec. 801. Employment of postal police officers.
Sec. 802. Date of postmark to be treated as date of appeal in
connection with the closing or
consolidation of post offices.
Sec. 803. Provisions relating to benefits under chapter 81 of title 5,
United States Code, for officers and
employees of the former Post Office
Department.
Sec. 804. Obsolete provisions.
Sec. 805. Expanded contracting authority.
Sec. 806. Investments.
Sec. 807. Repeal of section 5403.
Sec. 808. Reduced rates.
Sec. 809. Hazardous matter.
Sec. 810. Provisions relating to cooperative mailings.
Sec. 811. Technical and conforming amendments.
TITLE IX--POSTAL PENSION FUNDING REFORM AMENDMENTS
Sec. 901. Civil Service Retirement System.
Sec. 902. Health insurance.
Sec. 903. Repealer.
Sec. 904. Ensuring appropriate use of escrow and military savings.
Sec. 905. Effective dates.
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' means the carriage of letters,
printed matter, or mailable packages, including acceptance,
collection, processing, delivery, or other services supportive
or ancillary thereto;
``(6) `product' means a postal service with a distinct cost
or market characteristic for which a rate or rates are, or may
reasonably be, applied;
``(7) `rates', as used with respect to products, includes
fees for postal services;
``(8) `market-dominant product' or `product in the market-
dominant category of mail' means a product subject to
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;
``(10) `Consumer Price Index' means the Consumer Price
Index for All Urban Consumers published monthly by the Bureau
of Labor Statistics of the Department of Labor; and
``(11) `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, except that nothing in this subsection shall prevent
the Postal Service from providing any special nonpostal or similar
services provided by the Postal Service as of January 4, 2005.''.
(b) Conforming Amendment.--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)''.
SEC. 103. FINANCIAL TRANSPARENCY.
(a) In General.--Section 101 of title 39, United States Code, is
amended by redesignating subsections (d) through (g) as subsections (e)
through (h), respectively, and by inserting after subsection (c) the
following:
``(d) As an establishment that provides both market-dominant and
competitive products, the Postal Service shall be subject to a high
degree of transparency, including in its finances and operations, to
ensure fair treatment of customers of the Postal Service's market-
dominant products and companies competing with the Postal Service's
competitive products.''.
(b) Conforming Amendment.--Section 5001 of title 39, United States
Code, is amended by striking ``101(e) and (f)'' and inserting ``101(f)
and (g)''.
TITLE II--MODERN RATE REGULATION
SEC. 201. PROVISIONS RELATING TO MARKET-DOMINANT PRODUCTS.
(a) In General.--Chapter 36 of title 39, United States Code, is
amended by striking sections 3621 and 3622 and inserting the following:
``Sec. 3621. Applicability; definitions
``(a) Applicability.--This subchapter shall apply with respect to--
``(1)(A) single piece first-class letters (both domestic
and international);
``(B) single piece first-class cards (both domestic and
international); and
``(C) special services;
``(2) all first-class mail not included under paragraph
(1);
``(3) periodicals;
``(4) standard mail;
``(5) media mail;
``(6) library mail; and
``(7) bound printed matter,
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 24 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 maximize incentives to reduce costs and increase
efficiency.
``(2) To create predictability and stability in rates.
``(3) To maintain high quality service standards.
``(4) To allow the Postal Service pricing flexibility.
``(5) To assure adequate revenues, including retained
earnings, to maintain financial stability.
``(6) To reduce the administrative burden of the ratemaking
process.
``(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) Allowable Provisions.--The system for regulating rates and
classes for market-dominant products may include one or more of the
following:
``(1) Price caps, revenue targets, or other form of
incentive regulation.
``(2) Cost-of-service regulation.
``(3) Such other form of regulation as the Commission
considers appropriate to achieve, consistent with subsection
(c), the objectives of subsection (b).
``(e) Limitation.--In the administration of this section, the
Commission shall not permit the average rate in any subclass of mail to
increase at an annual rate greater than the comparable increase in the
Consumer Price Index, unless it has, after notice and opportunity for a
public hearing and comment, determined that such increase is reasonable
and equitable and necessary to enable the Postal Service, under best
practices of honest, efficient, and economical management, to maintain
and continue the development of postal services of the kind and quality
adapted to the needs of the United States.
``(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.''.
(b) Repealed Sections.--Sections 3623, 3624, 3625, and 3628 of
title 39, United States Code, are repealed.
(c) Redesignation.--Chapter 36 of title 39, United States Code (as
in effect after the amendment made by section 501(a)(2), 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) mailgrams;
``(4) international mail; and
``(5) parcel post,
subject to 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.
``Sec. 3632. Action of the Governors
``(a) Authority To Establish Rates and Classes.--The Governors
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) Rates or classes of general applicability.--In the
case of rates or classes of general applicability in the Nation
as a whole or in any substantial region of the Nation, the
Governors shall cause each rate and class decision under this
section and the record of the Governors' proceedings in
connection with such decision to be published in the Federal
Register at least 30 days before the effective date of any new
rates or classes.
``(3) Rates or classes not of general applicability.--In
the case of rates or classes not of general applicability in
the Nation as a whole or in any substantial region of the
Nation, the Governors shall cause each rate and class decision
under this section and the record of the proceedings in
connection with such decision to be filed with the Postal
Regulatory Commission by such date before the effective date of
any new rates or classes as the Governors consider appropriate,
but in no case less than 15 days.
``(4) Criteria.--As part of the regulations required under
section 3633, the Postal Regulatory Commission shall establish
criteria for determining when a rate or class established under
this subchapter is or is not of general applicability in the
Nation as a whole or in any substantial region of the Nation.
``(c) Transition Rule.--Until regulations under section 3633 first
take effect, rates and classes for competitive products shall remain
subject to modification in accordance with the provisions of this
chapter and section 407, as such provisions were as last in effect
before the date of the enactment of this section.
``Sec. 3633. Provisions applicable to rates for competitive products
``The Postal Regulatory Commission shall, within 18 months after
the date of the enactment of this section, promulgate (and may from
time to time thereafter revise) regulations--
``(1) to prohibit the subsidization of competitive products
by market-dominant products;
``(2) to ensure that each competitive product covers its
costs attributable; and
``(3) to ensure that all competitive products collectively
make a reasonable contribution to 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).
``(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 be tested under this
section only if the total revenues that are anticipated, or in
fact received, by the Postal Service from such product do not
exceed $10,000,000 nationwide in any year, subject to paragraph
(2) and subsection (g). In carrying out the preceding sentence,
the Postal Regulatory Commission may limit the amount of
revenues the Postal Service may obtain from any particular
geographic market as necessary to prevent market disruption (as
defined in subsection (b)(2)).
``(2) Exemption authority.--The Postal Regulatory
Commission may, upon written application of the Postal Service,
exempt the market test from the limit in paragraph (1) if the
total revenues that are anticipated, or in fact received, by
the Postal Service from such product do not exceed $50,000,000
in any year, subject to subsection (g). In reviewing an
application under this paragraph, the Postal Regulatory
Commission shall approve such application if it determines
that--
``(A) the product is likely to benefit the public
and meet an expected demand;
``(B) the product is likely to contribute to the
financial stability of the Postal Service; and
``(C) the product is not likely to result in unfair
or otherwise inappropriate competition.
``(f) Cancellation.--If the Postal Regulatory Commission at any
time determines that a market test under this section fails, with
respect to any particular product, to meet one 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 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 pursuant to
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) Notification Requirement.--The Postal Regulatory Commission
shall, whenever it reaches a conclusion that a product or products
should be transferred between the list of market-dominant products
under section 3621 and the list of competitive products under section
3631, immediately notify the appropriate committees of the Congress. No
such transfer may take effect less than 12 months after such
conclusion.
``(f) Prohibition.--Except as provided in section 3641, no product
that involves the carriage of letters, printed matter, or mailable
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 by
striking the heading for subchapter IV and inserting the following:
``SUBCHAPTER V--POSTAL SERVICES, COMPLAINTS, AND JUDICIAL REVIEW''.
(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 and
3633, respectively.
``(b) Additional Information.--In addition to the information
required under subsection (a), each report under this section shall
also include, with respect to the period covered by such report, an
estimate of the costs incurred by the Postal Service in providing--
``(1) postal services to areas of the Nation where, in the
judgment of the Postal Regulatory Commission, the Postal
Service either would not provide services at all or would not
provide such services in accordance with the requirements of
this title if the Postal Service were not required to provide
prompt, reliable, and efficient services to patrons in all
areas and all communities, including as required under the
first sentence of section 101(b);
``(2) free or reduced rates for postal services as required
by this title; and
``(3) other public services or activities which, in the
judgment of the Postal Regulatory Commission, would not
otherwise have been provided by the Postal Service but for the
requirements of law.
The Commission shall detail the bases for its estimates and the
statutory requirements giving rise to the costs identified in each
report under this section.
``(c) Information From Postal Service.--The Postal Service shall
provide the Postal Regulatory Commission with such 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, and Rates.--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 thereto as the Commission
may require under subsection (e))--
``(1) which shall analyze costs, revenues, and rates, using
such methodologies as the Commission shall by regulation
prescribe, and in sufficient detail to demonstrate that the
rates in effect for 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) market information, including mail volumes;
and
``(B) measures of the quality of service afforded
by the Postal Service in connection with such product,
including--
``(i) the service standard applicable to
such product;
``(ii) the level of service (described in
terms of speed of delivery and reliability)
provided; and
``(iii) the degree of customer satisfaction
with the service provided.
The Inspector General shall regularly audit the data collection systems
and procedures utilized in collecting information and preparing such
report (including any annex thereto and the information required under
subsection (b)). The results of any such audit shall be submitted to
the Postal Service and the Postal Regulatory Commission.
``(b) Information Relating to Workshare Discounts.--
``(1) In general.--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:
``(A) The per-item cost avoided by the Postal
Service by virtue of such discount.
``(B) The percentage of such per-item cost avoided
that the per-item workshare discount represents.
``(C) The per-item contribution made to
institutional costs.
``(2) Workshare discount defined.--For purposes of this
subsection, the term `workshare discount' has the meaning given
such term under section 3687.
``(c) Market Tests.--In carrying out subsections (a) and (b) with
respect to experimental products offered through market tests under
section 3641 in a year, the Postal Service--
``(1) may report summary data on the costs, revenues, and
quality of service by 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
thereto) 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 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 pursuant to subsection (d) contains
information which is described in section 410(c) of this title,
or exempt from public disclosure under section 552(b) of title
5, the Postal Service shall, at the time of providing such
matter to the Commission, notify the Commission of its
determination, in writing, and describe with particularity the
documents (or portions of documents) or other matter for which
confidentiality is sought and the reasons therefor.
``(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 it is
required to make under this section in a year, copies of its then most
recent--
``(1) comprehensive statement under section 2401(e);
``(2) performance plan under section 2803; and
``(3) program performance reports under section 2804.
``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);
``(2) whether any performance goals established under
section 2803 or 2804 for such year were not met; and
``(3) whether any market-dominant product failed to meet
any service standard during such year.
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 appropriate action in
accordance with subsections (c)-(e) of section 3662 (as if a complaint
averring such noncompliance had been duly filed and found under such
section to be justified).
``(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 pursuant to an order issued by the
Commission on the last day allowable for the issuance of such
order under paragraph (1).
``(c) Action Required If Complaint Found to Be Justified.--If the
Postal Regulatory Commission finds the complaint to be justified, it
shall order that the Postal Service take such action as the Commission
considers appropriate in order to achieve compliance with the
applicable requirements and to remedy the effects of any noncompliance
(such as ordering unlawful rates to be adjusted to lawful levels,
ordering the cancellation of market tests, ordering the Postal Service
to discontinue providing loss-making products, or requiring the Postal
Service to make up for revenue shortfalls in competitive products).
``(d) Suspension Authority.--The Postal Regulatory Commission may
suspend implementation of rates or classifications under section
3632(b)(3) for a limited period of time pending expedited proceedings
under this section. In evaluating whether circumstances warrant
suspension, the Commission shall consider factors such as (1) whether
there is a substantial likelihood that such rate or classification will
violate the requirements of chapter 1, 4, or 6, or this chapter (or
regulations promulgated under any of those chapters), (2) whether any
persons would suffer substantial injury, loss, or damage absent a
suspension, (3) whether the Postal Service or any other persons would
suffer substantial injury, loss, or damage under a suspension, and (4)
the public interest.
``(e) 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 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. For
purposes of this section, the term `person' includes the Postal
Service.
``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. WORKSHARE DISCOUNTS.
(a) In General.--Title 39, United States Code, is amended by adding
after section 3686 (as added by section 406) the following:
``Sec. 3687. Workshare discounts
``(a) In General.--As part of the regulations established under
section 3622(a), the Postal Regulatory Commission shall establish rules
for workshare discounts that ensure that workshare discounts do not
exceed the cost that the Postal Service avoids as the result of private
sector workshare activity, except--
``(1) where the discount is associated with a new product
or service or with a change to an existing product or service
and is necessary, over a period of time not to exceed 4 years,
to induce mailer behavior that will enable the new or changed
product or service in furtherance of the overall economically
efficient operation of the Postal Service;
``(2) to the extent that a reduction in the discount would
lead to a loss of volume in the affected category 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; would result in a further increase in
the rates paid by mailers not able to take advantage of the
discount; or would impede the efficient operation of the Postal
Service;
``(3) where the amount of the discount above costs avoided
is necessary to mitigate rate shock and will be phased out over
time; or
``(4) where the workshare discount is provided in
connection with subclasses of mail consisting exclusively of
mail matter of educational, cultural, scientific, or
informational value.
``(b) Reporting Requirement.--Whenever the Postal Service
establishes or maintains a workshare discount, the Postal Service
shall, at the time it publishes the workshare discount rate, file with
the Postal Regulatory Commission a detailed report and explanation of
its 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.
``(c) Definition.--For purposes of this section, the term
`workshare discount' refers to rate discounts provided to mailers for
presorting, prebarcoding, handling, or transportation, as further
defined by the Postal Regulatory Commission as part of regulations
established under section 3622(a).''.
(b) Clerical Amendment.--The analysis for chapter 36 of title 39,
United States Code (as amended by section 207) is amended by adding
after the item relating to section 3686 the following:
``3687. Workshare discounts.''.
SEC. 207. 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:
``subchapter i--provisions relating to market-dominant products
``Sec.
``3621. Applicability; definitions.
``3622. Modern rate regulation.
``3626. Reduced rates.
``3627. Adjusting free rates.
``3629``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.
```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
``subchapter iv--reporting requirements and related provisions
``3651. Annual reports by the Commission.
``3652. Annual reports to the Commission.
``36``subchapter v--postal services, complaints, and judicial review
``3661. Postal services.
``3662. Rate and service complaints.
``3663. Appellate review.
``3664. Enforcement of o``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.''.
TITLE III--PROVISIONS RELATING TO FAIR COMPETITION
SEC. 301. 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--
``(1) obligations of, or obligations guaranteed by, the
Government of the United States; and
``(2) in accordance with regulations which the Secretary of
the Treasury shall prescribe (by not later than 18 months after
the date of the enactment of the Postal Accountability and
Enhancement Act), such other obligations or securities as it
deems appropriate.
``(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 it deems 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
Secretary of the Treasury makes the submission required 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 Secretary of the Treasury, in consultation with the
Postal Service and an independent, certified public accounting firm and
such other advisors as the Secretary considers appropriate, shall
develop recommendations regarding--
``(A) the accounting practices and principles that should
be followed by the Postal Service with the objectives of (i)
identifying and valuing the assets and liabilities of the
Postal Service associated with providing, and the capital and
operating costs incurred by the Postal Service in providing,
competitive products, and (ii) preventing the 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 earlier than 6 months, and no later than 12 months, after
the effective date of this section.
``(2)(A) Upon receiving the recommendations of the Secretary of the
Treasury under paragraph (1), the Commission shall give interested
parties, including the Postal Service, users of the mails, and an
officer of the Commission who shall be required to represent the
interests of the general public, an opportunity to present their views
on those recommendations through submission of written data, views, or
arguments with or without opportunity for oral presentation, or in such
other manner as the Commission considers appropriate.
``(B) 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 Secretary of the Treasury makes his
submission to the Commission under paragraph (1) (or by such later date
as the Commission and the Postal Service may agree to). 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. 302. 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. 303. 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 product or
service that uses or is based in whole or in part on such
information, without the consent of the person providing that
information, unless 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. 304. SUITS BY AND AGAINST THE POSTAL SERVICE.
(a) In General.--Section 409 of title 39, United States Code, is
amended by striking subsections (d) and (e) and inserting the
following:
``(d)(1) For purposes of the provisions of law cited in paragraphs
(2)(A) and (2)(B), respectively, the Postal 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 competitive product, the Postal
Service or other Federal agency (as the case may be)--
``(A) shall not be immune under any doctrine of sovereign
immunity from suit in Federal court by any person for any
violation of Federal law by such agency or any officer or
employee thereof; and
``(B) shall be considered to be a person (as 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.
``(2) No damages, interest on damages, costs or attorney's fees may
be recovered, and no criminal liability may be imposed, under the
antitrust laws (as so defined) from any officer or employee of the
Postal Service, or other Federal agency acting on behalf of or in
concert with the Postal Service, acting in an official capacity.
``(3) This subsection shall not apply with respect to conduct
occurring before the date of the enactment of this subsection.
``(f)(1) Each building constructed or altered by the Postal Service
shall be constructed or altered, to the maximum extent feasible as
determined by the Postal Service, in compliance with one 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.
``(g)(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.
``(h) A judgment against the Government of the United States
arising out of activities of the Postal Service shall be paid by the
Postal Service out of any funds available to the Postal Service,
subject to the restriction specified in section 2011(g).''.
(b) Technical Amendment.--Section 409(a) of title 39, United States
Code, is amended by striking ``Except as provided in section 3628 of
this title,'' and inserting ``Except as otherwise provided in this
title,''.
SEC. 305. INTERNATIONAL POSTAL ARRANGEMENTS.
(a) In General.--Section 407 of title 39, United States Code, is
amended to read as follows:
``Sec. 407. International postal arrangements
``(a) It is the policy of the United States--
``(1) to promote and encourage communications between
peoples by efficient operation of international postal services
and other international delivery services for cultural, social,
and economic purposes;
``(2) to promote and encourage unrestricted and undistorted
competition in the provision of international postal services
and other international delivery services, except where
provision of such services by private companies may be
prohibited by law of the United States;
``(3) to promote and encourage a clear distinction between
governmental and operational responsibilities with respect to
the provision of international postal services and other
international delivery services by the Government of the United
States and by intergovernmental organizations of which the
United States is a member; and
``(4) to participate in multilateral and bilateral
agreements with other countries to accomplish these objectives.
``(b)(1) The Secretary of State shall be responsible for
formulation, coordination, and oversight of foreign policy related to
international postal services and other international delivery
services, and shall have the power to conclude treaties, conventions
and amendments related to international postal services and other
international delivery services, except that the Secretary may not
conclude any treaty, convention, or other international agreement
(including those regulating international postal services) if such
treaty, convention, or agreement would, with respect to any competitive
product, grant an undue or unreasonable preference to the Postal
Service, a private provider of international postal or delivery
services, or any other person.
``(2) In carrying out the responsibilities specified in paragraph
(1), the Secretary of State shall exercise primary authority for the
conduct of foreign policy with respect to international postal services
and international delivery services, including the determination of
United States positions and the conduct of United States participation
in negotiations with foreign governments and international bodies. In
exercising this authority, the Secretary--
``(A) shall coordinate with other agencies as appropriate,
and in particular, shall give full consideration to the
authority vested by law or Executive order in the Postal
Regulatory Commission, the Department of Commerce, the
Department of Transportation, and the Office of the United
States Trade Representative in this area;
``(B) shall maintain continuing liaison with other
executive branch agencies concerned with postal and delivery
services;
``(C) shall maintain continuing liaison with the Committee
on Government Reform of the House of Representatives and the
Committee on Governmental Affairs of the Senate;
``(D) shall maintain appropriate liaison with both
representatives of the Postal Service and representatives of
users and private providers of international postal services
and other international delivery services to keep informed of
their interests and problems, and to provide such assistance as
may be needed to ensure that matters of concern are promptly
considered by the Department of State or (if applicable, and to
the extent practicable) other executive branch agencies; and
``(E) shall assist in arranging meetings of such public
sector advisory groups as may be established to advise the
Department of State and other executive branch agencies in
connection with international postal services and international
delivery services.
``(3) The Secretary of State shall establish an advisory committee
(within the meaning of the Federal Advisory Committee Act) to perform
such functions as the Secretary considers appropriate in connection
with carrying out subparagraphs (A) through (D) of paragraph (2).
``(c)(1) Before concluding any treaty, convention, or amendment
that establishes a rate or classification for a product subject to
subchapter I of chapter 36, the Secretary of State shall request the
Postal Regulatory Commission to submit a decision on whether such rate
or classification is consistent with the standards and criteria
established by the Commission under section 3622.
``(2) The Secretary shall ensure that each treaty, convention, or
amendment concluded under subsection (b) is consistent with a decision
of the Commission adopted under paragraph (1), except if, or to the
extent, the Secretary determines, by written order, that considerations
of foreign policy or national security require modification of the
Commission's decision.
``(d) Nothing in this section shall be considered to prevent the
Postal Service from entering into such commercial or operational
contracts related to providing international postal services and other
international delivery services as it deems appropriate, except that--
``(1) any such contract made with an agency of a foreign
government (whether under authority of this subsection or
otherwise) shall be solely contractual in nature and may not
purport to be international law; and
``(2) a copy of each such contract between the Postal
Service and an agency of a foreign government shall be
transmitted to the Secretary of State and the Postal Regulatory
Commission not later than the effective date of such contract.
``(e)(1) With respect to shipments of international mail that are
competitive products within the meaning of section 3631 that are
exported or imported by the Postal Service, the Bureau of Customs and
Border Protection of the Department of Homeland Security and other
appropriate Federal agencies shall apply the customs laws of the United
States and all other laws relating to the importation or exportation of
such shipments in the same manner to both shipments by the Postal
Service and similar shipments by private companies.
``(2) For purposes of this subsection, the term `private company'
means a private company substantially owned or controlled by persons
who are citizens of the United States.
``(3) In exercising the authority pursuant to subsection (b) to
conclude new treaties, conventions and amendments related to
international postal services and to renegotiate such treaties,
conventions and amendments, the Secretary of State shall, to the
maximum extent practicable, take such measures as are within the
Secretary's control to encourage the governments of other countries to
make available to the Postal Service and private companies a range of
nondiscriminatory customs procedures that will fully meet the needs of
all types of American shippers. The Secretary of State shall consult
with the United States Trade Representative and the Commissioner of
Customs, Department of Homeland Security in carrying out this
paragraph.
``(4) The provisions of this subsection shall take effect 6 months
after the date of the enactment of this subsection or such earlier date
as the Bureau of Customs and Border Protection of the Department of
Homeland Security may determine in writing.''.
(b) Effective Date.--Notwithstanding any provision of the amendment
made by subsection (a), the authority of the United States Postal
Service to establish the rates of postage or other charges on mail
matter conveyed between the United States and other countries shall
remain available to the Postal Service until--
(1) with respect to market-dominant products, the date as
of which the regulations promulgated under section 3622 of
title 39, United States Code (as amended by section 201(a))
take effect; and
(2) with respect to competitive products, the date as of
which the regulations promulgated under section 3633 of title
39, United States Code (as amended by section 202) take effect.
SEC. 306. REDESIGNATION.
Chapter 36 of title 39, United States Code (as in effect before the
amendment made by section 204(a)) is amended by striking the heading
for subchapter V and inserting the following:
``SUBCHAPTER VI--GENERAL''.
SEC. 307. CLARIFICATION.
Section 403(c) of title 39, United States Code, is amended by
adding after ``user.'' the following: ``The prohibition in this
subsection shall not be construed to prevent the establishment of rates
that vary with volume if such rates will be made available to similarly
situated persons and will increase the aggregate contribution to the
institutional costs of the Postal Service.''.
TITLE IV--GENERAL PROVISIONS
SEC. 401. QUALIFICATION REQUIREMENTS FOR GOVERNORS.
(a) In General.--Section 202(a) of title 39, United States Code, is
amended by striking ``(a)'' and inserting ``(a)(1)'' and by striking
the fourth sentence and inserting the following: ``The Governors shall
represent the public interest generally, and at least 4 of the
Governors shall be chosen solely on the basis of their demonstrated
ability in managing organizations or corporations (in either the public
or private sector) of substantial size; for purposes of this sentence,
an organization or corporation shall be considered to be of substantial
size if it employs at least 50,000 employees. The Governors shall not
be representatives of specific interests using the Postal Service, and
may be removed only for cause.''.
(b) Consultation Requirement.--Section 202(a) of title 39, United
States Code, is amended by adding at the end the following:
``(2) In selecting the individuals described in 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) Restriction.--Section 202(b) of title 39, United States Code,
is amended by striking ``(b)'' and inserting ``(b)(1)'', and by adding
at the end the following:
``(2)(A) Notwithstanding any other provision of this section, in
the case of the office of the Governor the term of which is the first
one scheduled to expire at least 4 months after the date of the
enactment of this paragraph--
``(i) such office may not, in the case of any person
commencing service after that expiration date, be filled by any
person other than an individual chosen from among persons
nominated for such office with the unanimous concurrence of all
labor organizations described in section 206(a)(1); and
``(ii) instead of the term that would otherwise apply under
the first sentence of paragraph (1), the term of any person so
appointed to such office shall be 3 years.
``(B) Except as provided in subparagraph (A), an appointment under
this paragraph shall be made in conformance with all provisions of this
section that would otherwise apply.''.
(d) Applicability.--The amendment made by subsection (a) shall not
affect the appointment or tenure of any person serving as a Governor of
the Board of Governors of the United States Postal Service pursuant to
an appointment made before the date of the enactment of this Act, or,
except as provided in the amendment made by subsection (c), any
nomination made before that date; however, when any such office becomes
vacant, the appointment of any 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.
SEC. 402. OBLIGATIONS.
(a) Purposes for Which Obligations May Be Issued.--The first
sentence of section 2005(a)(1) of title 39, United States Code, is
amended by striking ``title.'' and inserting ``title, other than any of
the purposes for which the corresponding authority is available to the
Postal Service under section 2011.''.
(b) Limitation on Net Annual Increase in Obligations Issued for
Certain Purposes.--The third sentence of section 2005(a)(1) of title
39, United States Code, is amended to read as follows: ``In any one
fiscal year, the net increase in the amount of obligations outstanding
issued for the purpose of capital improvements and the net increase in
the amount of obligations outstanding issued for the purpose of
defraying operating expenses of the Postal Service shall not exceed a
combined total of $3,000,000,000.'' .
(c) Limitations on Obligations Outstanding.--
(1) In general.--Subsection (a) of section 2005 of title
39, United States Code, is amended by adding at the end the
following:
``(3) For purposes of applying the respective limitations under
this subsection, the aggregate amount of obligations issued by the
Postal Service which are outstanding as of any one time, and the net
increase in the amount of obligations outstanding issued by the Postal
Service for the purpose of capital improvements or for the purpose of
defraying operating expenses of the Postal Service in any fiscal year,
shall be determined by aggregating the relevant obligations issued by
the Postal Service under this section with the relevant obligations
issued by the Postal Service under section 2011.''.
(2) Conforming amendment.--The second sentence of section
2005(a)(1) of title 39, United States Code, is amended by
striking ``any such obligations'' and inserting ``obligations
issued by the Postal Service which may be''.
(d) Amounts Which May Be Pledged, Etc.--
(1) Obligations to which provisions apply.--The first
sentence of section 2005(b) of title 39, United States Code, is
amended by striking ``such obligations,'' and inserting
``obligations issued by the Postal Service under this
section,''.
(2) Assets, revenues, and receipts to which provisions
apply.--Subsection (b) of section 2005 of title 39, United
States Code, is amended by striking ``(b)'' and inserting
``(b)(1)'', and by adding at the end the following:
``(2) Notwithstanding any other provision of this 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. 403. 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 Postal Service (including, in
particular, sections 310.1 and 320.2-320.8 of title 39 of the
Code of Federal Regulations, as in effect on July 1, 2004) that
purport to permit private carriage by suspension of the
operation of this section (as then in effect).
``(c) Any regulations necessary to carry out this section shall be
promulgated by the Postal Regulatory 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. 404. RULEMAKING AUTHORITY.
Paragraph (2) of section 401 of title 39, United States Code, is
amended to read as follows:
``(2) to adopt, amend, and repeal such rules and
regulations, not inconsistent with this title, as may be
necessary in the execution of its functions under this title
and such other functions as may be assigned to the Postal
Service under any provisions of law outside of this title;''.
SEC. 405. NONINTERFERENCE WITH COLLECTIVE BARGAINING AGREEMENTS, ETC.
(a) Noninterference With Collective Bargaining Agreements.--Except
as provided in section 407, nothing in this Act or any amendment made
by this Act shall restrict, expand, or otherwise affect any of the
rights, privileges, or benefits of either employees of or labor
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.
(b) Free Mailing Privileges Continue Unchanged.--Nothing in this
Act or any amendment made by this Act shall affect any free mailing
privileges accorded under section 3217 or sections 3403 through 3406 of
title 39, United States Code.
SEC. 406. BONUS AUTHORITY.
Subchapter VI of chapter 36 of title 39, United States Code (as so
redesignated by section 306) is amended by adding at the end the
following:
``Sec. 3686. Bonus authority
``(a) In General.--The Postal Service may establish one or more
programs to provide bonuses or other rewards to officers and employees
of the Postal Service to achieve the objectives of this chapter.
``(b) Waiver of Limitation on Compensation.--
``(1) In general.--Under any such program, the Postal
Service may award a bonus or other reward in excess of the
limitation set forth in the last sentence of section 1003(a),
if such program has been approved under paragraph (2).
``(2) Approval process.--If the Postal Service wishes to
have the authority, under any program described in subsection
(a), to award bonuses or other rewards in excess of the
limitation referred to in paragraph (1)--
``(A) the Postal Service shall make an appropriate
request to the Postal Regulatory Commission, in such
form and manner as the Commission requires; and
``(B) the Postal Regulatory Commission shall
approve any such request if it finds that the program
is likely to achieve the objectives of this chapter.
``(3) Revocation authority.--If the Postal Regulatory
Commission finds that a program previously approved under
paragraph (2) is not achieving the objectives of this chapter,
the Commission may revoke or suspend the authority of the
Postal Service to continue such program until such time as
appropriate corrective measures have, in the judgment of the
Commission, been taken.
``(c) Reporting Requirement Relating to Bonuses or Other Rewards.--
Included in its comprehensive statement under section 2401(e) for any
period shall be--
``(1) the name of each person receiving a bonus or other
reward during such period which would not have been allowable
but for the provisions of subsection (b);
``(2) the amount of the bonus or other reward; and
``(3) the amount by which the limitation referred to in
subsection (b)(1) was exceeded as a result of such bonus or
other reward.''.
SEC. 407. MEDIATION IN COLLECTIVE-BARGAINING DISPUTES.
(a) In General.--Section 1207(b) of title 39, United States Code,
is amended by striking all that follows ``the Director of the Federal
Mediation and Conciliation Service shall'' and inserting ``, within 10
days appoint a mediator of nationwide reputation and professional
stature, and who is also a member of the National Academy of
Arbitrators. The parties shall cooperate with the mediator in an effort
to reach an agreement and shall meet and negotiate in good faith at
such times and places that the mediator, in consultation with the
parties, shall direct.''.
(b) Provisions Relating to Arbitration Boards.--Section 1207(c) of
title 39, United States Code, is amended--
(1) in paragraph (1)--
(A) by striking ``90'' and inserting ``60'';
(B) by striking ``not members of the factfinding
panel,''; and
(C) by striking all that follows ``shall be made''
and inserting ``from a list of names provided by the
Director. This list shall consist of not less than 9
names of arbitrators of nationwide reputation and
professional stature, who are also members of the
National Academy of Arbitrators, and whom the Director
has determined are available and willing to serve.'';
and
(2) in paragraph (3), by striking ``factfinding panel'' and
inserting ``mediation''.
(c) Conforming Amendment.--Section 1207(d) of title 39, United
States Code, is amended by striking ``factfinding panel will be
established'' and inserting ``mediator shall be appointed''.
TITLE V--ENHANCED REGULATORY COMMISSION
SEC. 501. 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
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) 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 (e).
``(c) One of the Commissioners shall be designated as Chairman by,
and shall serve in the position of Chairman at the pleasure of, the
President.
``(d) The Commissioners shall by majority vote designate a Vice
Chairman of the Commission. The Vice Chairman shall act as Chairman of
the Commission in the absence of the Chairman.
``(e) The Commissioners shall serve for terms of 6 years.'';
(2) in subchapter I of chapter 36 (as in effect before the
amendment made by section 201(c)), by striking 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) Determinations.--Section 503 of title 39, United States Code,
as so redesignated by subsection (a)(3), is amended by adding at the
end the following: ``Such rules shall include procedures which balance,
inter alia, the need for protecting due process rights and ensuring
expeditious decision-making.''.
(c) Applicability.--The amendment made by 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 504) pursuant to 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.
(d) Clerical Amendment.--The analysis for part I of title 39,
United States Code, is amended by inserting after the item relating to
chapter 4 the following:
``5. Postal Regulatory Commission........................... 501''.
SEC. 502. AUTHORITY FOR POSTAL REGULATORY COMMISSION TO ISSUE
SUBPOENAS.
Section 504 of title 39, United States Code (as so redesignated by
section 501) is amended by adding at the end the following:
``(f)(1) Any Commissioner of the Postal Regulatory Commission, any
administrative law judge appointed by the Commission under section 3105
of title 5, and any 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 pursuant
to 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) 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) Paragraph (2) shall not prevent information from being
furnished under any process of discovery established under this title
in connection with a proceeding under this title. The Commission shall,
by regulations based on rule 26(c) of the Federal Rules of Civil
Procedure, establish procedures for ensuring appropriate
confidentiality for any information furnished under the preceding
sentence.''.
SEC. 503. APPROPRIATIONS FOR THE POSTAL REGULATORY COMMISSION.
(a) Authorization of Appropriations.--Subsection (d) of section 504
of title 39, United States Code (as so redesignated by section 501) is
amended to read as follows:
``(d) There are authorized to be appropriated, out of the Postal
Service Fund, such sums as may be necessary for the Postal Regulatory
Commission. In requesting an 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 8J(e) of
the Inspector General Act of 1978, and (3) the Postal Regulatory
Commission requests to be appropriated, out of the Postal Service Fund,
under section 504(d) of this title.''.
(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
pursuant to section 504(d); and (C) all expenses of the Office
of Inspector General, subject to the availability of amounts
appropriated pursuant to section 8J(e) 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, 2005.
(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. 504. REDESIGNATION OF THE POSTAL RATE COMMISSION.
(a) Amendments to Title 39, United States Code.--Title 39, United
States Code, is amended in sections 404, 503-504 (as so redesignated by
section 501), 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. 505. OFFICER OF THE POSTAL REGULATORY COMMISSION REPRESENTING THE
GENERAL PUBLIC.
(a) In General.--Chapter 5 of title 39, United States Code (as
added by this Act) is amended by adding after section 504 the
following:
``Sec. 505. Officer of the Postal Regulatory Commission representing
the general public
``The Postal Regulatory Commission shall designate an officer of
the Postal Regulatory Commission in all public proceedings (such as
developing rules, regulations, and procedures) who shall represent the
interests of the general public.''.
(b) Clerical Amendment.--The analysis for chapter 5 of title 39,
United States Code (as amended by section 501(a)(1)) is amended by
adding after the item relating to section 504 the following:
``505. Officer of the Postal Regulatory Commission representing the
general public.''.
TITLE VI--INSPECTORS GENERAL
SEC. 601. INSPECTOR GENERAL OF THE POSTAL REGULATORY COMMISSION.
(a) In General.--Paragraph (2) of section 8G(a) of the Inspector
General Act of 1978 is amended by inserting ``the Postal Regulatory
Commission,'' after ``the United States International Trade
Commission,''.
(b) Administration.--Section 504 of title 39, United States Code
(as so redesignated by section 501) is amended by adding after
subsection (g) (as added by section 502) the following:
``(h)(1) Notwithstanding any other provision of this title or of
the Inspector General Act of 1978, the authority to select, appoint,
and employ officers and employees of the Office of Inspector General of
the Postal Regulatory Commission, and to obtain any temporary or
intermittent services of experts or consultants (or an organization of
experts or consultants) for such Office, shall reside with the
Inspector General of the Postal Regulatory Commission.
``(2) Except as provided in paragraph (1), any exercise of
authority under this subsection shall, to the extent practicable, be in
conformance with the applicable laws and regulations that govern
selections, appointments and employment, and the obtaining of any such
temporary or intermittent services, within the Postal Regulatory
Commission.''.
(c) Deadline.--No later than 180 days after the date of the
enactment of this Act--
(1) the first Inspector General of the Postal Regulatory
Commission shall be appointed; and
(2) the Office of Inspector General of the Postal
Regulatory Commission shall be established.
SEC. 602. INSPECTOR GENERAL OF THE UNITED STATES POSTAL SERVICE TO BE
APPOINTED BY THE PRESIDENT.
(a) Definitional Amendments to the Inspector General Act of 1978.--
Section 11 of the Inspector General Act of 1978 is amended--
(1) in paragraph (1)--
(A) by striking ``or'' before ``the President of
the Export-Import Bank;'' and
(B) by inserting ``or the Governors of the United
States Postal Service (within the meaning of section
102(3) of title 39, United States Code);'' after ``the
President of the Export-Import Bank;''; and
(2) in paragraph (2)--
(A) by striking ``or'' before ``the Export-Import
Bank,''; and
(B) by inserting ``or the United States Postal
Service,'' after ``the Export-Import Bank,''.
(b) Special Provisions Concerning the United States Postal
Service.--
(1) In general.--The Inspector General Act of 1978 is
amended--
(A) by redesignating section 8J as section 8K; and
(B) by inserting after section 8I the following:
``special provisions concerning the united states postal service
``Sec. 8J. (a) In carrying out the duties and responsibilities
specified in this Act, the Inspector General of the United States
Postal Service shall have oversight responsibility for all activities
of the Postal Inspection Service, including any internal investigation
performed by the Postal Inspection Service. The Chief Postal Inspector
shall promptly report any significant activities being carried out by
the Postal Inspection Service to such Inspector General. The Postmaster
General shall promptly report to such Inspector General all allegations
of theft, fraud, or misconduct by Postal Service officers or employees,
and entities or individuals doing business with the Postal Service.
``(b) In the case of any report that the Governors of the United
States Postal Service (within the meaning of section 102(3) of title
39, United States Code) are required to transmit under the second
sentence of section 5(d), such sentence shall be applied by deeming the
term `appropriate committees of Congress' to mean the Committee on
Government Reform of the House of Representatives, the Committee on
Governmental Affairs of the Senate, and such other committees or
subcommittees of Congress as may be appropriate.
``(c) Notwithstanding any provision of paragraph (7) or (8) of
section 6(a), the Inspector General of the United States Postal Service
may select, appoint, and employ such officers and employees as may be
necessary for carrying out the functions, powers, and duties of the
Office of Inspector General and to obtain the temporary or intermittent
services of experts or consultants or an organization of experts or
consultants, subject to the applicable laws and regulations that govern
such selections, appointments, and employment, and the obtaining of
such services, within the United States Postal Service.
``(d) Nothing in this Act shall restrict, eliminate, or otherwise
adversely affect any of the rights, privileges, or benefits of
employees of the United States Postal Service, 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 with the United States Postal Service, or any collective
bargaining agreement.
``(e) There are authorized to be appropriated, out of the Postal
Service Fund, such sums as may be necessary for the Office of Inspector
General of the United States Postal Service.''.
(2) Related provisions.--For certain related provisions,
see section 503(b).
(c) Exercise of Certain Powers.--Section 6(e)(3) of the Inspector
General Act of 1978 is amended--
(1) by striking ``and the'' before ``Tennessee Valley
Authority''; and
(2) by inserting ``, and United States Postal Service''
after ``Tennessee Valley Authority''.
(d) Public Contracts.--
(1) Additional provisions applicable.--Section 410(b)(5) of
title 39, United States Code, is amended--
(A) in subparagraph (A), by striking ``and'' after
the semicolon; and
(B) by adding after subparagraph (B) the following:
``(C) the Anti-Kickback Act of 1986 (41 U.S.C. 51
and following), other than subsections (a) and (b) of 7
and section 8 of that Act; and
``(D) section 315 of the Federal Property and
Administrative Services Act of 1949 (41 U.S.C. 265)
(relating to protecting contractor employees from
reprisal for disclosure of certain information);''.
(2) Regulations on allowable costs.--Section 410 of title
39, United States Code, is amended by adding at the end the
following:
``(e) The Postal Service shall develop and issue purchasing
regulations that prohibit contract costs not allowable under section
5.2.5 of the United States Postal Service Procurement Manual
(Publication 41), as in effect on July 12, 1995.''.
(e) Audits of the Postal Service.--
(1) Audits.--Subsection (e) of section 2008 of title 39,
United States Code, is amended to read as follows:
``(e)(1) At least once each year beginning with the fiscal year
commencing after the date of the enactment of the Postal Accountability
and Enhancement Act, the financial statements of the Postal Service
(including those used in determining and establishing postal rates)
shall be audited by the Inspector General or by an independent external
auditor selected by the Inspector General.
``(2) Audits under this section shall be conducted in accordance
with applicable generally accepted government auditing standards.
``(3) Upon completion of the audit required by this subsection, the
person who audits the statement shall submit a report on the audit to
the Postmaster General.''.
(2) Results of inspector general's audit to be included in
annual report.--Section 2402 of title 39, United States Code,
is amended by inserting after the first sentence the following:
``Each report under this section shall include a copy of the
report most recently received by the Postmaster General under
section 2008(e)(3).''.
(3) Coordination provisions.--Section 2008(d) of title 39,
United States Code, is amended--
(A) by striking ``(d) Nothing'' and inserting
``(d)(1) Except as provided in paragraph (2),
nothing''; and
(B) by adding at the end the following:
``(2) An audit or report under paragraph (1) may not be obtained
without the prior written approval of the Inspector General.''.
(4) Transition provision.--For purposes of any fiscal year
preceding the first fiscal year commencing after the date of
the enactment of this Act, the provisions of title 39, United
States Code, shall be applied as if the amendments made by this
subsection had never been enacted.
(f) Reports.--Section 3013 of title 39, United States Code, is
amended by striking ``Postmaster General'' each place it appears and
inserting ``Chief Postal Inspector''.
(g) Technical and Conforming Amendments.--
(1) Relating to the inspector general act of 1978.--(A)
Subsection (a) of section 8G of the Inspector General Act of
1978 (as amended by section 601(a)) is further amended--
(i) in paragraph (2), by striking ``the Postal
Regulatory Commission, and the United States Postal
Service;'' and inserting ``and the Postal Regulatory
Commission;'' and
(ii) in paragraph (4), by striking ``except that''
and all that follows through ``Code);'' and inserting
``except that, with respect to the National Science
Foundation, such term means the National Science
Board;''.
(B)(i) Subsection (f) of section 8G of such Act is
repealed.
(ii) Subsection (c) of section 8G of such Act is amended by
striking ``Except as provided under subsection (f) of this
section, the'' and inserting ``The''.
(C) Section 8K of such Act (as so redesignated by
subsection (b)(1)(A)) is amended by striking the matter after
``8D,'' and before ``of this Act'' and inserting ``8E, 8F, 8H,
or 8J''.
(2) Relating to title 39, united states code.--(A)
Subsection (e) of section 202 of title 39, United States Code,
is repealed.
(B) Paragraph (4) of section 102 of such title 39 (as
amended by section 101) is amended to read as follows:
``(4) `Inspector General' means the Inspector General of
the United States Postal Service, appointed under section 3(a)
of the Inspector General Act of 1978;''.
(C) The first sentence of section 1003(a) of such title 39
is amended by striking ``chapters 2 and 12 of this title,
section 8G of the Inspector General Act of 1978, or other
provision of law,'' and inserting ``chapter 2 or 12 of this
title, subsection (b) or (c) of this section, or any other
provision of law,''.
(D) Section 1003(b) of such title 39 is amended by striking
``respective'' and inserting ``other''.
(E) Section 1003(c) of such title 39 is amended by striking
``included'' and inserting ``includes''.
(3) Relating to the energy policy act of 1992.--Section
160(a) of the Energy Policy Act of 1992 (42 U.S.C. 8262f(a)) is
amended (in the matter before paragraph (1)) by striking all
that follows ``(5 U.S.C. App.)'' and before ``shall--''.
(h) Effective Date; Transition Provisions.--
(1) Effective date.--Except as provided in paragraph (2) or
subsection (c), this section and the amendments made by this
section shall take effect on the date of the enactment of this
Act.
(2) Transition provisions.--
(A) Presidential appointment authority available
immediately.--The authority to appoint an Inspector
General of the United States Postal Service in
accordance with the amendments made by this section
shall be available as of the effective date of this
section.
(B) Continuation in office.--Pending the
appointment of an Inspector General of the United
States Postal Service in accordance with the amendments
made by this section, the individual serving as the
Inspector General of the United States Postal Service
on the day before the effective date of this section
may continue to serve--
(i) in accordance with applicable
provisions of the Inspector General Act of 1978
and (except as provided in clause (ii)) of
title 39, United States Code, as last in effect
before the effective date of this Act; but
(ii) subject to the provisions of such
title 39 as amended by subsections (e) and (f)
of this section (deeming any reference to the
``Inspector General'' in such provisions, as so
amended, to refer to the individual continuing
to serve under authority of this subparagraph)
and subparagraph (C).
(C) Authorization of appropriations.--
(i) In general.--Notwithstanding any other
provision of this subsection, section 8J(e) of
the Inspector General Act of 1978 (as amended
by this section) shall be effective for
purposes of fiscal years beginning on or after
October 1, 2005.
(ii) Savings provision.--For purposes of
the fiscal year ending on September 30, 2005,
funding for the Office of Inspector General of
the United States Postal Service shall be made
available in the same manner as if this Act had
never been enacted.
(D) Eligibility of prior inspector general.--
Nothing in this Act shall prevent any individual who
has served as Inspector General of the United States
Postal Service at any time before the date of the
enactment of this Act from being appointed to that
position pursuant to the amendments made by this
section.
TITLE VII--EVALUATIONS
SEC. 701. UNIVERSAL POSTAL SERVICE STUDY.
(a) Report by the Postal Service.--The United States Postal Service
shall, within 12 months after the date of the enactment of this Act,
submit to the President, the Congress, and the Postal Regulatory
Commission, a written report on universal postal service in the United
States (hereinafter in this section referred to as ``universal
service''). Such report shall include at least the following:
(1) A comprehensive review of the history and development
of universal service, including how the scope and standards of
universal service have evolved over time.
(2) The scope and standards of universal service 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.
(3) A description of any geographic areas, populations,
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.
(4) The scope and standards of universal service likely to
be required in the future in order to meet the needs and
expectations of the American public, including all types of
mail users, based on such assumptions or alternative sets of
assumptions as the Postal Service considers plausible.
(5) Such recommendations as the Postal Service considers
appropriate.
(b) Report by the Postal Regulatory Commission.--The Postal
Regulatory Commission shall, within 12 months after receiving the
report of the Postal Service under subsection (a), submit to the
President and the Congress a written report evaluating the report of
the Postal Service. The report of the Commission shall include at least
the following:
(1) Such comments and observations relating to the matters
addressed in the Postal Service's report as the Commission
considers appropriate.
(2) An estimate of the cost attributable to the obligation
to provide universal service under prior and current law,
respectively.
(3) An estimate of the likely cost of fulfilling the
obligation to provide universal service under--
(A) the assumptions or respective sets of
assumptions of the Postal Service described in
subsection (a)(4); and
(B) such other assumptions or sets of assumptions
as the Commission considers plausible.
(4) Such additional topics and recommendations as the
Commission considers appropriate.
(c) Consultation.--In preparing the reports required by this
section, the Postal Service and the Postal Regulatory Commission--
(1) shall consult with each other, other Federal agencies,
users of the mails, enterprises in the private sector engaged
in the delivery of mail, and the general public; and
(2) shall address in their respective reports any written
comments received under this section.
(d) Clarifying Provision.--Nothing in this section shall be
considered to relate to any services that are not postal services
(within the meaning of section 102 of title 39, United States Code, as
amended by section 101).
SEC. 702. ASSESSMENTS OF RATEMAKING, CLASSIFICATION, AND OTHER
PROVISIONS.
(a) In General.--The Postal Regulatory Commission shall, at least
every 5 years, submit a report to the President and the Congress
concerning--
(1) the operation of the amendments made by the Postal
Accountability and Enhancement 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 such report and to submit written comments
thereon. Any comments timely received from the Postal Service under the
preceding sentence shall be attached to the report submitted under
subsection (a).
(c) Specific Information Required.--The Postal Regulatory
Commission shall include, as part of at least its first report under
subsection (a), the following:
(1) Cost-coverage requirement relating to competitive
products collectively.--With respect to section 3633 of title
39, United States Code (as amended by this Act)--
(A) a description of how such section has operated;
and
(B) recommendations as to whether or not such
section should remain in effect and, if so, any
suggestions as to how it might be improved.
(2) Competitive products fund.--With respect to the Postal
Service Competitive Products Fund (under section 2011 of title
39, United States Code, as amended by section 301), in
consultation with the Secretary of the Treasury--
(A) a description of how such Fund has operated;
(B) any suggestions as to how the operation of such
Fund might be improved; and
(C) a description and assessment of alternative
accounting or financing mechanisms that might be used
to achieve the objectives of such Fund.
(3) Assumed federal income tax on competitive products
fund.--With respect to section 3634 of title 39, United States
Code (as amended by this Act), in consultation with the
Secretary of the Treasury--
(A) a description of how such section has operated;
and
(B) recommendations as to whether or not such
section should remain in effect and, if so, any
suggestions as to how it might be improved.
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, the Congress, and 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 private
companies providing similar products.
(b) Recommendations; Adjustments.--The Federal Trade Commission
shall include such recommendations as it considers appropriate for
bringing such legal differences to an end and, in the interim, to
account under section 3633, for the net economic effects provided by
those laws.
(c) Consultation.--In preparing its report, the Federal Trade
Commission shall consult with the United States Postal Service, the
Postal Regulatory Commission, other Federal agencies, mailers, private
companies that provide delivery services, and the general public, and
shall append to such report any written comments received under this
subsection.
(d) Competitive Product Rate Regulation.--The Postal Regulatory
Commission shall take into account the recommendations of the Federal
Trade Commission, and subsequent events that affect the continuing
validity of the estimate of the net economic effect, in promulgating or
revising the regulations required by section 3633 of title 39, United
States Code.
SEC. 704. GREATER DIVERSITY IN POSTAL SERVICE EXECUTIVE AND
ADMINISTRATIVE SCHEDULE MANAGEMENT POSITIONS.
(a) Study.--The Board of Governors shall study and, within 1 year
after the date of the enactment of this Act, submit to the President
and Congress a report concerning the extent to which women and
minorities are represented in supervisory and management positions
within the United States Postal Service. Any data included in the
report shall be presented in the aggregate and by pay level.
(b) Performance Evaluations.--The United States Postal Service
shall, as soon as practicable, take such measures as may be necessary
to ensure that, for purposes of conducting performance appraisals of
supervisory or managerial employees, appropriate consideration shall be
given to meeting affirmative action goals, achieving equal employment
opportunity requirements, and implementation of plans designed to
achieve greater diversity in the workforce.
SEC. 705. PLAN FOR ASSISTING DISPLACED WORKERS.
(a) Plan.--The United States Postal Service shall, before the
deadline specified in subsection (b), develop and be prepared to
implement, whenever necessary, a comprehensive plan under which
reemployment assistance shall be afforded to employees displaced as a
result of the automation or privatization of any of its functions.
(b) Report.--Not later than 1 year after the date of the enactment
of this Act, the United States Postal Service shall submit to its Board
of Governors and Congress a written report describing its plan under
this section.
SEC. 706. CONTRACTS WITH WOMEN, MINORITIES, AND SMALL BUSINESSES.
The Board of Governors shall study and, within 1 year after the
date of the enactment of this Act, submit to the President and the
Congress a report concerning the number and value of contracts and
subcontracts the Postal Service has entered into with women,
minorities, and small businesses.
SEC. 707. RATES FOR PERIODICALS.
(a) In General.--The United States Postal Service, acting jointly
with the Postal Regulatory Commission, shall study and submit to the
President and Congress a report concerning--
(1) the quality, accuracy, and completeness of the
information used by the Postal Service in determining the
direct and indirect postal costs attributable to periodicals;
and
(2) any opportunities that might exist for improving
efficiencies in the collection, handling, transportation, or
delivery of periodicals by the Postal Service, including any
pricing incentives for mailers that might be appropriate.
(b) Recommendations.--The report shall include recommendations for
any administrative action or legislation that might be appropriate.
SEC. 708. ASSESSMENT OF CERTAIN RATE DEFICIENCIES.
(a) In General.--Within 12 months after the date of the enactment
of this Act, the Office of Inspector General of the United States
Postal Service shall study and submit to the President, the Congress,
and the United States Postal Service, a report concerning the
administration of section 3626(k) of title 39, United States Code.
(b) Specific Requirements.--The study and report shall specifically
address the adequacy and fairness of the process by which assessments
under section 3626(k) of title 39, United States Code, are determined
and appealable, including--
(1) whether the Postal Regulatory Commission or any other
body outside the Postal Service should be assigned a role; and
(2) whether a statute of limitations should be established
for the commencement of proceedings by the Postal Service
thereunder.
SEC. 709. POSTAL PROCESSING AND DISTRIBUTION NETWORK STUDY.
The United States Postal Service shall, within 16 months after the
date of the enactment of this Act, submit to the President, the
Congress, and the Board of Governors of the United States Postal
Service a written report on the postal processing and distribution
network. Such report shall include at least the following:
(1) Recommendations to improve the efficiency and
effectiveness of the processing and distribution network while
preserving the timely delivery of postal services.
(2) Identification of excess capacity (if any) within the
processing and distribution network and opportunities for
savings through realignment or consolidation of facilities.
(3) Report of the Postal Service's plans for dealing with
the recommendations and findings identified in paragraphs (1)
and (2).
(4) Statutory or regulatory obstacles preventing the Postal
Service from taking action to realign or consolidate facilities
identified in paragraph (2).
(5) Such additional topics and recommendations as the
Postal Service considers appropriate.
SEC. 710. DEFINITION.
For purposes of this title, the term ``Board of Governors'' has the
meaning given such term by section 102 of title 39, United States Code.
TITLE VIII--MISCELLANEOUS; TECHNICAL AND CONFORMING AMENDMENTS
SEC. 801. EMPLOYMENT OF POSTAL POLICE OFFICERS.
Section 3061 of title 18, United States Code, is amended by adding
at the end the following:
``(c)(1) The Postal Service may employ police officers for duty in
connection with the protection of property owned or occupied by the
Postal Service or under the charge and control of the Postal Service,
and persons on the property, including duty in areas outside the
property to the extent necessary to protect the property and persons on
the property.
``(2) With respect to such property, such officers shall have the
power to--
``(A) enforce Federal laws and regulations for the
protection of persons and property;
``(B) carry firearms; and
``(C) make arrests without a warrant for any offense
against the United States committed in the presence of the
officer or for any felony cognizable under the laws of the
United States if the officer has reasonable grounds to believe
that the person to be arrested has committed or is committing a
felony.
``(3) With respect to such property, such officers may have, to
such extent as the Postal Service may by regulations prescribe, the
power to--
``(A) serve warrants and subpoenas issued under the
authority of the United States; and
``(B) conduct investigations, on and off the property in
question, of offenses that may have been committed against
property owned or occupied by the Postal Service or persons on
the property.
``(4)(A) As to such property, the Postmaster General may prescribe
regulations necessary for the protection and administration of property
owned or occupied by the Postal Service and persons on the property.
The regulations may include reasonable penalties, within the limits
prescribed in subparagraph (B), for violations of the regulations. The
regulations shall be posted and remain posted in a conspicuous place on
the property.
``(B) A person violating a regulation prescribed under this
subsection shall be fined under this title, imprisoned for not more
than 30 days, or both.''.
SEC. 802. DATE OF POSTMARK TO BE TREATED AS DATE OF APPEAL IN
CONNECTION WITH THE CLOSING OR CONSOLIDATION OF POST
OFFICES.
(a) In General.--Section 404(b) of title 39, United States Code, is
amended by adding at the end the following:
``(6) For purposes of paragraph (5), any appeal received by the
Commission shall--
``(A) if sent to the Commission through the mails, be
considered to have been received on the date of the Postal
Service postmark on the envelope or other cover in which such
appeal is mailed; or
``(B) if otherwise lawfully delivered to the Commission, be
considered to have been received on the date determined based
on any appropriate documentation or other indicia (as
determined under regulations of the Commission).''.
(b) Effective Date.--This section and the amendments made by this
section shall apply with respect to any determination to close or
consolidate a post office which is first made available, in accordance
with paragraph (3) of section 404(b) of title 39, United States Code,
after the end of the 3-month period beginning on the date of the
enactment of this Act.
SEC. 803. PROVISIONS RELATING TO BENEFITS UNDER CHAPTER 81 OF TITLE 5,
UNITED STATES CODE, FOR OFFICERS AND EMPLOYEES OF THE
FORMER POST OFFICE DEPARTMENT.
(a) In General.--Section 8 of the Postal Reorganization Act (39
U.S.C. 1001 note) is amended by inserting ``(a)'' after ``8.'' and by
adding at the end the following:
``(b) For purposes of chapter 81 of title 5, United States Code,
the Postal Service shall, with respect to any individual receiving
benefits under such chapter as an officer or employee of the former
Post Office Department, have the same authorities and responsibilities
as it has with respect to an officer or employee of the Postal Service
receiving such benefits.''.
(b) Effective Date.--This section and the amendments made by this
section shall be effective as of the first day of the fiscal year in
which this Act is enacted.
SEC. 804. OBSOLETE PROVISIONS.
(a) Repeal.--
(1) In general.--Chapter 52 of title 39, United States
Code, is repealed.
(2) Conforming amendments.--(A) Section 5005(a) of title
39, United States Code, is amended--
(i) by striking paragraph (1), and by redesignating
paragraphs (2) through (4) as paragraphs (1) through
(3), respectively; and
(ii) in paragraph (3) (as so designated by clause
(i)), by striking ``(as defined in section 5201(6) of
this title)''.
(B) Section 5005(b) of such title 39 is amended by striking
``(a)(4)'' each place it appears and inserting ``(a)(3)''.
(C) Section 5005(c) of such title 39 is amended by striking
``by carrier or person under subsection (a)(1) of this section,
by contract under subsection (a)(4) of this section, or'' and
inserting ``by contract under subsection (a)(3) of this section
or''.
(b) Eliminating Restriction on Length of Contracts.--(1) Section
5005(b)(1) of title 39, United States Code, is amended by striking
``(or where the Postal Service determines that special conditions or
the use of special equipment warrants, not in excess of 6 years)'' and
inserting ``(or such longer period of time as may be determined by the
Postal Service to be advisable or appropriate)''.
(2) Section 5402(d) of such title 39 is amended by striking ``for a
period of not more than 4 years''.
(3) Section 5605 of such title 39 is amended by striking ``for
periods of not in excess of 4 years''.
(c) Clerical Amendment.--The analysis for part V of title 39,
United States Code, is amended by repealing the item relating to
chapter 52.
SEC. 805. EXPANDED CONTRACTING AUTHORITY.
(a) Amendment to Title 39, United States Code.--
(1) Contracts with air carriers.--Subsection (e)(1) of
section 5402 of title 39, United States Code, is amended to
read as follows:
``(e)(1)(A) The Postal Service may contract with any air carrier
for the transportation of mail by aircraft in interstate air
transportation, including the rates therefor, either through
negotiations or competitive bidding.
``(B) Notwithstanding subsections (a) through (d), the Postal
Service may contract with any air carrier or foreign air carrier for
the transportation of mail by aircraft in foreign air transportation,
including the rates therefor, either through negotiations or
competitive bidding, except that--
``(i) any such contract may be awarded only to (I) an air
carrier holding a certificate required by section 41101 of
title 49 or an exemption therefrom issued by the Secretary of
Transportation, (II) a foreign air carrier holding a permit
required by section 41301 of title 49 or an exemption therefrom
issued by the Secretary of Transportation, or (III) a
combination of such air carriers or foreign air carriers (or
both);
``(ii) mail transported under any such contract shall not
be subject to any duty-to-carry requirement imposed by any
provision of subtitle VII of title 49 or by any certificate,
permit, or corresponding exemption authority issued by the
Secretary of Transportation under that subtitle;
``(iii) every contract that the Postal Service awards to a
foreign air carrier under this subparagraph shall be subject to
the continuing requirement that air carriers shall be afforded
the same opportunity to carry the mail of the country to and
from which the mail is transported and the flag country of the
foreign air carrier, if different, as the Postal Service has
afforded the foreign air carrier; and
``(iv) the Postmaster General shall consult with the
Secretary of Defense concerning actions that affect the
carriage of military mail transported in foreign air
transportation.
``(C) Subparagraph (B) shall not be interpreted as suspending or
otherwise diminishing the authority of the Secretary of Transportation
under section 41310 of title 49.''.
(2) Definitions.--Paragraph (2) of section 5402(a) of title
39, United States Code, is amended to read as follows:
``(2) the terms `air carrier', `air transportation',
`foreign air carrier', `foreign air transportation',
`interstate air transportation', and `mail' shall have the
meanings given such terms in section 40102 of title 49;''.
(b) Amendments to Title 49, United States Code.--
(1) Authority of postal service to provide for interstate
air transportation of mail.--Section 41901(a) of title 49,
United States Code, is amended to read as follows:
``(a) Title 39.--The United States Postal Service may provide for
the transportation of mail by aircraft in air transportation under this
chapter and under chapter 54 of title 39.''.
(2) Schedules for certain transportation of mail.--Section
41902(b)(1) of title 49, United States Code, is amended by
inserting before the semicolon at the end the following:
``(other than foreign air transportation of mail)''.
(3) Prices for foreign transportation of mail.--Section
41907 of title 49, United States Code, is amended--
(A) by striking ``(a) Limitations.--''; and
(B) by striking subsection (b).
(4) Conforming amendments.--Sections 41107, 41901(b)(1),
41902(a), 41903(a), and 41903(b) of title 49, United States
Code, are amended by striking ``in foreign air transportation
or''.
SEC. 806. INVESTMENTS.
Subsection (c) of section 2003 of title 39, United States Code, is
amended--
(1) by striking ``(c) If'' and inserting ``(c)(1) Except as
provided in paragraph (2), if''; and
(2) by adding at the end the following:
``(2)(A) Nothing in this section shall be considered to authorize
any investment in any obligations or securities of a commercial entity.
``(B) For purposes of this paragraph, the term `commercial entity'
means any corporation, company, association, partnership, joint stock
company, firm, society, or other similar entity, as further defined
under regulations prescribed by the Postal Regulatory Commission.''.
SEC. 807. REPEAL OF SECTION 5403.
(a) In General.--Section 5403 of title 39, United States Code, is
repealed.
(b) Clerical Amendment.--The analysis for chapter 54 of title 39,
United States Code, is amended by repealing the item relating to
section 5403.
SEC. 808. REDUCED RATES.
Section 3626 of title 39, United States Code, is amended--
(1) in subsection (a), by striking all before paragraph (4)
and inserting the following:
``(a)(1) Except as otherwise provided in this section, rates of
postage for a class of mail or kind of mailer under former section
4358, 4452(b), 4452(c), 4554(b), or 4554(c) of this title shall be
established in accordance with section 3622.
``(2) For the purpose of this subsection, the term `regular-rate
category' means any class of mail or kind of mailer, other than a class
or kind referred to in section 2401(c).
``(3) Rates of postage for a class of mail or kind of mailer under
former section 4358(a) through (c) of this title shall be established
so that postage on each mailing of such mail reflects its preferred
status as compared to the postage for the most closely corresponding
regular-rate category mailing.'';
(2) in subsection (g), by adding at the end the following:
``(3) For purposes of this section and former section 4358(a)
through (c) of this title, those copies of an issue of a publication
entered within the county in which it is published, but distributed
outside such county on postal carrier routes originating in the county
of publication, shall be treated as if they were distributed within the
county of publication.
``(4)(A) In the case of an issue of a publication, any number of
copies of which are mailed at the rates of postage for a class of mail
or kind of mailer under former section 4358(a) through (c) of this
title, any copies of such issue which are distributed outside the
county of publication (excluding any copies subject to paragraph (3))
shall be subject to rates of postage provided for under this paragraph.
``(B) The rates of postage applicable to mail under this paragraph
shall be established in accordance with section 3622.
``(C) This paragraph shall not apply with respect to an issue of a
publication unless the total paid circulation of such issue outside the
county of publication (not counting recipients of copies subject to
paragraph (3)) is less than 5,000.''; and
(3) by adding at the end the following:
``(n) In the administration of this section, matter that satisfies
the circulation standards for requester publications shall not be
excluded from being mailed at the rates for mail under former section
4358 solely because such matter is designed primarily for free
circulation or for circulation at nominal rates, or fails to meet the
requirements of former section 4354(a)(5).''.
SEC. 809. HAZARDOUS MATTER.
(a) Nonmailability Generally.--Section 3001 of title 39, United
States Code, is amended--
(1) by redesignating subsection (n) as subsection (o); and
(2) by inserting after subsection (m) the following:
``(n)(1) Except as otherwise authorized by law or regulations of
the Postal Service, hazardous material is nonmailable.
``(2) In this subsection, the term `hazardous material' means a
substance or material designated by the Secretary of Transportation
under section 5103(a) of title 49.''.
(b) Mailability.--Chapter 30 of title 39, United States Code, is
amended by adding at the end the following:
``Sec. 3018. Hazardous material
``(a) In General.--The Postal Service shall prescribe regulations
for the safe transportation of hazardous material in the mail.
``(b) Prohibitions.--No person may--
``(1) mail or cause to be mailed hazardous material that
has been declared by statute or Postal Service regulation to be
nonmailable;
``(2) mail or cause to be mailed hazardous material in
violation of any statute or Postal Service regulation
restricting the time, place, or manner in which hazardous
material may be mailed; or
``(3) manufacture, distribute, or sell any container,
packaging kit, or similar device that--
``(A) is represented, marked, certified, or sold by
such person for use in the mailing of hazardous
material; and
``(B) fails to conform with any statute or Postal
Service regulation setting forth standards for a
container, packaging kit, or similar device used for
the mailing of hazardous material.
``(c) Civil Penalty; Clean-Up Costs and Damages.--
``(1) In general.--A person who knowingly violates this
section or a regulation prescribed under this section shall be
liable for--
``(A) a civil penalty of at least $250, but not
more than $100,000, for each violation;
``(B) the costs of any clean-up associated with
each violation; and
``(C) damages.
``(2) Knowing action.--A person acts knowingly for purposes
of paragraph (1) when--
``(A) the person has actual knowledge of the facts
giving rise to the violation; or
``(B) a reasonable person acting in the
circumstances and exercising reasonable care would have
had that knowledge.
``(3) Separate violations.--
``(A) Violations over time.--A separate violation
under this subsection occurs for each day hazardous
material, mailed or caused to be mailed in
noncompliance with this section, is in the mail.
``(B) Separate items.--A separate violation under
this subsection occurs for each item containing
hazardous material that is mailed or caused to be
mailed in noncompliance with this section.
``(d) Hearings.--The Postal Service may determine that a person has
violated this section or a regulation prescribed under this section
only after notice and an opportunity for a hearing. Proceedings under
this section shall be conducted in accordance with section 3001(m).
``(e) Penalty Considerations.--In determining the amount of a civil
penalty for a violation of this section, the Postal Service shall
consider--
``(1) the nature, circumstances, extent, and gravity of the
violation;
``(2) with respect to the person who committed the
violation, the degree of culpability, any history of prior
violations, the ability to pay, and any effect on the ability
to continue in business;
``(3) the impact on Postal Service operations; and
``(4) any other matters that justice requires.
``(f) Civil Actions To Collect.--
``(1) In general.--In accordance with section 409(d), a
civil action may be commenced in an appropriate district court
of the United States to collect a civil penalty, clean-up
costs, and damages assessed under subsection (c).
``(2) Compromise.--The Postal Service may compromise the
amount of a civil penalty, clean-up costs, and damages assessed
under subsection (c) before commencing a civil action with
respect to such civil penalty, clean-up costs, and damages
under paragraph (1).
``(g) Civil Judicial Penalties.--
``(1) In general.--At the request of the Postal Service,
the Attorney General may bring a civil action in an appropriate
district court of the United States to enforce this section or
a regulation prescribed under this section.
``(2) Relief.--The court in a civil action under paragraph
(1) may award appropriate relief, including a temporary or
permanent injunction, civil penalties as determined in
accordance with this section, or punitive damages.
``(3) Construction.--A civil action under this subsection
shall be in lieu of civil penalties for the same violation
under subsection (c)(1)(A).
``(h) Deposit of Amounts Collected.--
``(1) Postal service fund.--Except as provided under
paragraph (2), amounts collected under subsection (c)(1)(B) and
(C) shall be deposited into the Postal Service Fund under
section 2003.
``(2) Treasury.--Amounts collected under subsection
(c)(1)(A) and any punitive damages collected under subsection
(c)(1)(C) shall be deposited into the Treasury of the United
States.''.
(c) Conforming Amendments.--(1) Section 2003(b) of title 39, United
States Code, is amended--
(A) in paragraph (7), by striking ``and'' after the
semicolon;
(B) in paragraph (8), by striking ``purposes.'' and
inserting ``purposes; and''; and
(C) by adding at the end the following:
``(9) any amounts collected under section 3018.''.
(2) The analysis for chapter 30 of title 39, United States Code, is
amended by adding at the end the following:
``3018. Hazardous material.''.
(d) Injurious Articles as Nonmailable.--Section 1716(a) of title
18, United States Code, is amended by inserting after ``explosives,''
the following: ``hazardous materials,''.
SEC. 810. PROVISIONS RELATING TO COOPERATIVE MAILINGS.
(a) Determination.--The Postal Regulatory Commission shall examine
section E670.5.3 of the Domestic Mail Manual to determine whether it
contains adequate safeguards to protect against (1) abuses of rates for
nonprofit mail and (2) deception of consumers.
(b) Regulations.--If the Postal Regulatory Commission determines
that section E670.5.3 of the Domestic Mail Manual does not contain
adequate safeguards as described in the preceding subsection, the
Commission shall promulgate such regulations as may be necessary to
ensure such safeguards.
(c) Timing.--The Postal Regulatory Commission shall complete the
examination required by subsection (a) and the promulgation of any
necessary regulations required by subsection (b) within one year after
the date of the enactment of this section.
SEC. 811. TECHNICAL AND CONFORMING AMENDMENTS.
(a) Reimbursement.--Section 3681 of title 39, United States Code,
is amended by striking ``section 3628'' and inserting ``sections 3662
through 3664''.
(b) Size and Weight Limits.--Section 3682 of title 39, United
States Code, is amended to read as follows:
``Sec. 3682. Size and weight limits
``The Postal Service may establish size and weight limitations for
mail matter in the market-dominant category of mail consistent with
regulations the Postal Regulatory Commission may prescribe under
section 3622. The Postal Service may establish size and weight
limitations for mail matter in the competitive category of mail
consistent with its authority under section 3632.''.
(c) Revenue Foregone, Etc.--Title 39, United States Code, is
amended--
(1) in section 503 (as so redesignated by section 501), by
striking ``this chapter.'' and inserting ``this title.''; and
(2) in section 2401(d), by inserting ``(as last in effect
before enactment of the Postal Accountability and Enhancement
Act)'' after ``3626(a)'' and after ``3626(a)(3)(B)(ii)''.
(d) Appropriations and Reporting Requirements.--
(1) Appropriations.--Subsection (e) of section 2401 of
title 39, United States Code, is amended--
(A) by striking ``Committee on Post Office and
Civil Service'' each place it appears and inserting
``Committee on Government Reform''; and
(B) by striking ``Not later than March 15 of each
year,'' and inserting ``Each year,''.
(2) Reporting requirements.--Sections 2803(a) and 2804(a)
of title 39, United States Code, are amended by striking
``2401(g)'' and inserting ``2401(e)''.
(e) Authority to Fix Rates and Classes Generally; Requirement
Relating to Letters Sealed Against Inspection.--Section 404 of title
39, United States Code (as amended by section 102) is further amended
by redesignating subsections (b) and (c) as subsections (d) and (e),
respectively, and by inserting after subsection (a) the following:
``(b) Except as otherwise provided, the Governors are authorized to
establish reasonable and equitable classes of mail and reasonable and
equitable rates of postage and fees for postal services in accordance
with the provisions of chapter 36. Postal rates and fees shall be
reasonable and equitable and sufficient to enable the Postal Service,
under best practices of honest, efficient, and economical management,
to maintain and continue the development of postal services of the kind
and quality adapted to the needs of the United States.
``(c) The Postal Service shall maintain one or more classes of mail
for the transmission of letters sealed against inspection. The rate for
each such class shall be uniform throughout the United States, its
territories, and possessions. One such class shall provide for the most
expeditious handling and transportation afforded mail matter by the
Postal Service. No letter of such a class of domestic origin shall be
opened except under authority of a search warrant authorized by law, or
by an officer or employee of the Postal Service for the sole purpose of
determining an address at which the letter can be delivered, or
pursuant to the authorization of the addressee.''.
(f) Limitations.--Section 3684 of title 39, United States Code, is
amended by striking all that follows ``any provision'' and inserting
``of this title.''.
(g) Miscellaneous.--Title 39, United States Code, is amended--
(1) in section 1005(d)(2)--
(A) by striking ``subsection (g) of section
5532,''; and
(B) by striking ``8344,'' and inserting ``8344'';
(2) in the analysis for part III, by striking the item
relating to chapter 28 and inserting the following:
``28. Strategic Planning and Performance Management......... 2801'';
(3) in section 3005(a)--
(A) in the matter before paragraph (1), by striking
all that follows ``nonmailable'' and precedes ``(h),''
and inserting ``under section 3001(d),''; and
(B) in the sentence following paragraph (3), by
striking all that follows ``nonmailable'' and precedes
``(h),'' and inserting ``under such section 3001(d),'';
(4) in section 3210(a)(6)(C), by striking the matter after
``if such mass mailing'' and before ``than 60 days'' and
inserting ``is postmarked fewer''; and
(5) by striking the heading for section 3627 and inserting
the following:
``Sec. 3627. Adjusting free rates''.
TITLE IX--POSTAL PENSION FUNDING REFORM AMENDMENTS
SEC. 901. CIVIL SERVICE RETIREMENT SYSTEM.
(a) Termination of Obligation to Pay Government Contributions.--
Section 8334(a)(1)(B)(ii) of title 5, United States Code, is amended by
striking all that follows ``be equal to'' and inserting ``zero.''.
(b) Determination and Disposition of Postal Surplus or Supplemental
Liability.--Section 8348(h) of title 5, United States Code, is amended
to read as follows:
``(h)(1) For purposes of this subsection, a Postal surplus (or
supplemental liability) is the amount, as estimated by the Office, by
which--
``(A) the actuarial present value of all future benefits
which are payable from the Fund under this subchapter to
current or former employees of the United States Postal
Service, or their survivors, and attributable to civilian
employment with the Postal Service, is less than (or greater
than)
``(B) the sum of--
``(i) the actuarial present value of deductions to
be withheld from the future basic pay of employees of
the Postal Service currently subject to this subchapter
pursuant to section 8334;
``(ii) that portion of the Fund balance, as of the
date such surplus or supplemental liability is
determined, attributable to payments to the Fund by the
Postal Service and its employees, 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)(i) Not later than June 15, 2006, the Office shall
determine the Postal surplus or supplemental liability as of September
30, 2005.
``(ii) If a supplemental liability is determined under this
subparagraph for fiscal year 2005, the Office shall establish an
amortization schedule, including a series of equal annual installments
commencing September 30, 2006, which provides for the liquidation of
such liability by September 30, 2043.
``(iii) If a surplus is determined under this subparagraph for
fiscal year 2005, the amount of the surplus shall be transferred to the
Postal Service Retiree Health Benefits Fund by June 30, 2006.
``(B)(i) For each of fiscal years 2006 through 2038, the Office
shall determine the Postal surplus or supplemental liability as of the
close of such fiscal year, with each such determination to be made by
June 15th of the following fiscal year.
``(ii) If a supplemental liability is determined under this
subparagraph for a fiscal year, the Office shall establish an
amortization schedule, including a series of equal annual installments
commencing on September 30 of the following fiscal year, which provides
for the liquidation of such liability by September 30, 2043.
``(iii)(I) If a surplus of $500,000,000 or more is determined under
this subparagraph for a fiscal year, the amount of the surplus shall be
transferred to the Postal Service Retiree Health Benefits Fund by June
30th of the following fiscal year.
``(II) If a surplus of less than $500,000,000 is determined under
this subparagraph for a fiscal year, the surplus shall remain in the
Fund, subject to transfer in a subsequent fiscal year under subclause
(I) or subparagraph (C)(iii).
``(C)(i) Not later than June 15, 2040, the Office shall determine
the Postal surplus or supplemental liability as of September 30, 2039.
``(ii) If a supplemental liability is determined under this
subparagraph for fiscal year 2039, the Office shall establish an
amortization schedule, including a series of equal annual installments
commencing September 30, 2040, which provides for the liquidation of
such liability by September 30, 2043.
``(iii) If a surplus is determined under this subparagraph for
fiscal year 2039, the amount of the surplus--
``(I) shall be applied first toward reducing the amount of
any supplemental liability described in section 8423(b)(1)(B);
and
``(II) to the extent that any portion of such surplus
remains after the application of subclause (I), shall, not
later than June 30, 2040, be transferred to the Postal Service
Retiree Health Benefits Fund.
``(D) An amortization schedule under this paragraph--
``(i) shall be established 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;
``(ii) shall supersede any amortization schedule previously
established under this paragraph; and
``(iii) shall not be taken into account, for purposes of
any determination of Postal surplus or supplemental liability,
except to the extent of any amounts under such schedule
actually paid.
``(E)(i) The Postal Service shall pay to the Office the amounts due
under any amortization schedule established under this paragraph, to
the extent not superseded or canceled.
``(ii) A determination under subparagraph (B)(i) or (C)(i) that no
supplemental liability exists shall cancel any amortization schedule
previously established under this paragraph, to the extent of any
amounts first coming due after the close of the fiscal year to which
such determination relates.
``(3) Notwithstanding any other provision of law, in computing the
amount of any payment under any other subsection of this section that
is based on 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.
``(4) As used in this subsection, `Postal Service Retiree Health
Benefits Fund' refers to the Postal Service Retiree Health Benefits
Fund, as established by section 8909a.''.
(c) Provisions Relating to Amounts for Military Service.--In the
application of paragraph (2) of section 8348(g) of title 5, United
States Code, for 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 fiscal years
2003 through 2005 with respect to credit for military service of former
employees of the United States Postal Service if Public Law 108-18 had
not been enacted (including earnings thereon) and the Secretary of the
Treasury shall make the required transfer to the Civil Service
Retirement and Disability Fund based on that amount.
(d) Review.--
(1) In general.--Notwithstanding any other provision of
this section, any determination or redetermination made by the
Office of Personnel Management under this section shall, upon
request of the United States Postal Service, be subject to
review by the Postal Regulatory Commission. The Commission
shall submit a report containing the results of any such review
to the Postal Service, the Office of Personnel Management, and
the Congress.
(2) Response.--Upon receiving the report of the Postal
Regulatory Commission, the Office of Personnel Management shall
reconsider its determination or redetermination in light of
such report, and shall make any appropriate adjustments. The
Office shall submit a report containing the results of its
reconsideration to the Commission, the Postal Service, and the
Congress.
SEC. 902. HEALTH INSURANCE.
(a) In General.--Chapter 89 of title 5, United States Code, is
amended--
(1) in section 8906(g)(2)(A), by striking ``by the United
States Postal Service.'' and inserting ``first from the Postal
Service Retiree Health Benefits Fund up to the amount contained
therein, with any remaining amount paid by the United States Postal
Service.'';
(2) by inserting after section 8909 the following:
``Sec. 8909a. Postal Service Retiree Health Benefits Fund
``(a) There is in the Treasury of the United States a Postal
Service Retiree Health Benefits Fund (hereinafter in this section
referred to as the `Fund') which is administered by the Office of
Personnel Management. Any amounts transferred to the Fund under section
8348(h)(2) shall yield interest at a rate equal to the weighted average
yield of all the investments in the Civil Service Retirement and
Disability Fund as of the date of transfer. All other investments of
amounts in the Fund shall be made in accordance with subsections (c)-
(e) of section 8348.
``(b) The Fund is available without fiscal year limitation for
payments required by section 8906(g)(2).
``(c)(1) Not later than June 30, 2006, and by June 30 of each
succeeding year, the Office of Personnel Management shall compute the
net present value of the excess of future payments required by section
8906(g)(2)(A) for current and future United States Postal Service
annuitants over the value of the assets of the Fund as of the end of
the fiscal year ending on September 30 of that year. The actuarial
costing method to be used by the Office and all actuarial assumptions
shall be established by the Office after consultation with the United
States Postal Service and must be in accordance with generally accepted
actuarial practices and principles.
``(2) Not later than September 30, 2006, and by September 30 of
each succeeding year, the Office shall compute and the United States
Postal Service shall pay into such Fund--
``(A) the portion of the net present value described in
paragraph (1) attributable to the current year's service of
Postal Service employees; and
``(B) interest on the net present value described in
paragraph (1) for that fiscal year, at the interest rate used
in computing that net present value;
except that the amount otherwise payable by the Postal Service under
the preceding provisions of this paragraph by not later than September
30, 2006, shall be reduced by the total contributions made by the
Postal Service under section 8906(g)(2) and attributable to fiscal year
2006 (as determined by the Office).
``(3)(A) Any computation or other determination of the Office under
this subsection shall, upon request of the Postal Service, be subject
to review by the Postal Regulatory Commission. The Commission shall
submit a report containing the results of any such review to the Postal
Service, the Office of Personnel Management, and the Congress.
``(B) Upon receiving the report of the Postal Regulatory
Commission, the Office of Personnel Management shall reconsider its
computation or other determination in light of such report, and shall
make any appropriate adjustments. The Office shall submit a report
containing the results of its reconsideration to the Commission, the
Postal Service, and the Congress.
``(4) The Office shall promulgate, after consultation with the
United States Postal Service, any regulations it deems necessary under
this subsection.''; and
(3) in the analysis by inserting after the item relating to
section 8909 the following:
``8909a. Postal Service Retiree Health Benefits Fund.''.
(b) Review.--
(1) In general.--Any regulation established under section
8909a(c)(4) of title 5, United States Code (as amended by
subsection (a)) shall, upon request of the Postal Service, be
subject to review by the Postal Regulatory Commission. The
Commission shall submit a report containing the results of any
such review to the Postal Service, the Office of Personnel
Management, and the Congress.
(2) Response.--Upon receiving the report of the Postal
Regulatory Commission, the Office of Personnel Management shall
reconsider its regulation in light of such report, and shall
take such action as it considers appropriate. The Office shall
submit a report containing the results of its reconsideration
to the Commission, the Postal Service, and the Congress.
SEC. 903. REPEALER.
Section 3 of Public Law 108-18 is repealed.
SEC. 904. ENSURING APPROPRIATE USE OF ESCROW AND MILITARY SAVINGS.
(a) Definition.--For purposes of this section, the term ``total
savings'' means, for any fiscal year, the amount equal to--
(1) the amount of contributions that the Postal Service
would otherwise have been required to make to the Civil Service
Retirement and Disability Fund under subchapter III of chapter
83 of title 5, United States Code, for such fiscal year if
Public Law 108-18 and this Act had not been enacted, minus
(2) the amount of amortization payments (if any) required
under section 8348(h)(2) of title 5, United States Code, for
such fiscal year.
(b) Calculations.--The following calculations shall be made for
each of fiscal years 2006 through 2015:
(1) Not later than January 31 of the fiscal year following
the fiscal year involved, the Office of Personnel Management
(in consultation with the Postal Service) shall determine the
total savings for the fiscal year.
(2) On the date of making its determination under paragraph
(1), the Office shall also determine (in consultation with the
Postal Service) the amount by which--
(A) the amount the Postal Service paid for that
fiscal year into the Postal Service Retiree Health
Benefits Fund in accordance with 8909a(c)(2) of title
5, United States Code, exceeds (if at all)
(B) the amount of payments made by the Postal
Service for that fiscal year from such Fund in order to
satisfy the requirements of section 8906(g)(2) of such
title 5.
(c) Requirements.--
(1) If threshold is met.--If the amount calculated under
subsection (b)(2) for a fiscal year is greater than or equal to
two-thirds of the total savings in such fiscal year, no further
action under this section is necessary with respect to such
fiscal year.
(2) If threshold is not met.--
(A) In general.--If the amount calculated under
subsection (b)(2) for a fiscal year is less than two-
thirds of the total savings in such fiscal year, the
Postal Service shall pay into the Postal Service
Retiree Health Benefits Fund, by June 30 of the
following fiscal year, an amount equal to the
difference.
(B) Allowable alternative.--
(i) In general.--Notwithstanding
subparagraph (A), and subject to clause (ii),
the Postal Service may instead use the amount
that it would otherwise be required to pay into
the Postal Service Retiree Health Benefits Fund
for a year (or any portion thereof) to reduce
the postal debt.
(ii) Limitation.--Amounts used to reduce
the postal debt under this subparagraph may not
exceed a total of $3,000,000,000.
(3) Aggregation allowed.--Notwithstanding paragraph (2), if
the amount calculated under subsection (b)(2) for a fiscal year
is less than two-thirds of the total savings in such fiscal
year, but the sum of the amounts calculated under subsection
(b)(2) for all fiscal years from 2006 to the fiscal year
involved is greater than or equal to two-thirds of the sum of
the total savings for such years, no further action under this
section is necessary with respect to such fiscal year.
(d) Reporting Requirement.--The Office of Personnel Management
shall submit a report containing the results of its calculations under
subsection (b) to the Postal Service, the Postal Regulatory Commission,
and the Congress.
(e) Waiver Authority.--The requirements of subsection (c)(2)(A)
may, upon application of the Postal Service, be waived by the Postal
Regulatory Commission, to the extent that the Commission determines
that such waiver is reasonable and equitable and necessary to enable
the Postal Service, under best practices of honest, efficient, and
economical management, to maintain and continue the development of
postal services of the kind and quality adapted to the needs of the
United States.
SEC. 905. EFFECTIVE DATES.
(a) In General.--Except as otherwise provided, this title shall
take effect on October 1, 2005.
(b) Government Contributions.--Section 901(a) shall take effect on
the first day of the first pay period beginning on or after October 1,
2005.
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