[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6407 Enrolled Bill (ENR)]


        H.R.6407

                       One Hundred Ninth Congress

                                 of the

                        United States of America


                          AT THE SECOND SESSION

          Begun and held at the City of Washington on Tuesday,
             the third day of January, two thousand and six


                                 An Act


 
             To reform the postal laws of the United States.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Postal 
Accountability and Enhancement Act''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:
Sec. 1. Short title; table of contents.

                  TITLE I--DEFINITIONS; POSTAL SERVICES

Sec. 101. Definitions.
Sec. 102. Postal Services.

                    TITLE II--MODERN RATE REGULATION

Sec. 201. Provisions relating to market-dominant products.
Sec. 202. Provisions relating to competitive products.
Sec. 203. Provisions relating to experimental and new products.
Sec. 204. Reporting requirements and related provisions.
Sec. 205. Complaints; appellate review and enforcement.
Sec. 206. Clerical amendment.

                   TITLE III--MODERN SERVICE STANDARDS

Sec. 301. Establishment of modern service standards.
Sec. 302. Postal service plan.

            TITLE IV--PROVISIONS RELATING TO FAIR COMPETITION

Sec. 401. Postal Service Competitive Products Fund.
Sec. 402. Assumed Federal income tax on competitive products income.
Sec. 403. Unfair competition prohibited.
Sec. 404. Suits by and against the Postal Service.
Sec. 405. International postal arrangements.

                       TITLE V--GENERAL PROVISIONS

Sec. 501. Qualification and term requirements for Governors.
Sec. 502. Obligations.
Sec. 503. Private carriage of letters.
Sec. 504. Rulemaking authority.
Sec. 505. Noninterference with collective bargaining agreements.
Sec. 506. Bonus authority.

                TITLE VI--ENHANCED REGULATORY COMMISSION

Sec. 601. Reorganization and modification of certain provisions relating 
          to the Postal Regulatory Commission.
Sec. 602. Authority for Postal Regulatory Commission to issue subpoenas.
Sec. 603. Authorization of appropriations from the Postal Service Fund.
Sec. 604. Redesignation of the Postal Rate Commission.
Sec. 605. Inspector General of the Postal Regulatory Commission.

                         TITLE VII--EVALUATIONS

Sec. 701. Assessments of ratemaking, classification, and other 
          provisions.
Sec. 702. Report on universal postal service and the postal monopoly.
Sec. 703. Study on equal application of laws to competitive products.
Sec. 704. Report on postal workplace safety and workplace-related 
          injuries.
Sec. 705. Study on recycled paper.
Sec. 706. Greater diversity in Postal Service executive and 
          administrative schedule management positions.
Sec. 707. Contracts with women, minorities, and small businesses.
Sec. 708. Rates for periodicals.
Sec. 709. Assessment of certain rate deficiencies.
Sec. 710. Assessment of future business model of the Postal Service.
Sec. 711. Provisions relating to cooperative mailings.
Sec. 712. Definition.

    TITLE VIII--POSTAL SERVICE RETIREMENT AND HEALTH BENEFITS FUNDING

Sec. 801. Short title.
Sec. 802. Civil Service Retirement System.
Sec. 803. Health insurance.
Sec. 804. Repeal of disposition of savings provision.
Sec. 805. Effective dates.

                TITLE IX--COMPENSATION FOR WORK INJURIES

Sec. 901. Temporary disability; continuation of pay.

                         TITLE X--MISCELLANEOUS

Sec. 1001. Employment of postal police officers.
Sec. 1002. Obsolete provisions.
Sec. 1003. Reduced rates.
Sec. 1004. Sense of Congress regarding Postal Service purchasing reform.
Sec. 1005. Contracts for transportation of mail by air.
Sec. 1006. Date of postmark to be treated as date of appeal in 
          connection with the closing or consolidation of post offices.
Sec. 1007. Provisions relating to benefits under chapter 81 of title 5, 
          United States Code, for officers and employees of the former 
          Post Office Department.
Sec. 1008. Hazardous matter.
Sec. 1009. ZIP codes and retail hours.
Sec. 1010. Technical and conforming amendments.

                 TITLE I--DEFINITIONS; POSTAL SERVICES

SEC. 101. DEFINITIONS.

    Section 102 of title 39, United States Code, is amended by striking 
``and'' at the end of paragraph (3), by striking the period at the end 
of paragraph (4) and inserting a semicolon, and by adding at the end 
the following:
        ``(5) `postal service' refers to the delivery of letters, 
    printed matter, or mailable packages, including acceptance, 
    collection, sorting, transportation, or other functions ancillary 
    thereto;
        ``(6) `product' means a postal service with a distinct cost or 
    market characteristic for which a rate or rates are, or may 
    reasonably be, applied;
        ``(7) `rates', as used with respect to products, includes fees 
    for postal services;
        ``(8) `market-dominant product' or `product in the market-
    dominant category of mail' means a product subject to subchapter I 
    of chapter 36;
        ``(9) `competitive product' or `product in the competitive 
    category of mail' means a product subject to subchapter II of 
    chapter 36; and
        ``(10) `year', as used in chapter 36 (other than subchapters I 
    and VI thereof), means a fiscal year.''.

SEC. 102. POSTAL SERVICES.

    (a) In General.--Section 404 of title 39, United States Code, is 
amended--
        (1) in subsection (a), by striking paragraph (6) and by 
    redesignating paragraphs (7) through (9) as paragraphs (6) through 
    (8), respectively; and
        (2) by adding at the end the following:
    ``(c)(1) In this subsection, the term `nonpostal service' means any 
service that is not a postal service defined under section 102(5).
    ``(2) Nothing in this section shall be considered to permit or 
require that the Postal Service provide any nonpostal service, except 
that the Postal Service may provide nonpostal services which were 
offered as of January 1, 2006, as provided under this subsection.
    ``(3) Not later than 2 years after the date of enactment of the 
Postal Accountability and Enhancement Act, the Postal Regulatory 
Commission shall review each nonpostal service offered by the Postal 
Service on the date of enactment of that Act and determine whether that 
nonpostal service shall continue, taking into account--
        ``(A) the public need for the service; and
        ``(B) the ability of the private sector to meet the public need 
    for the service.
    ``(4) Any nonpostal service not determined to be continued by the 
Postal Regulatory Commission under paragraph (3) shall terminate.
    ``(5) If the Postal Regulatory Commission authorizes the Postal 
Service to continue a nonpostal service under this subsection, the 
Postal Regulatory Commission shall designate whether the service shall 
be regulated under this title as a market dominant product, a 
competitive product, or an experimental product.''.
    (b) Conforming Amendments.--Section 1402(b)(1)(B)(ii) of the 
Victims of Crime Act of 1984 (98 Stat. 2170; 42 U.S.C. 
10601(b)(1)(B)(ii)) is amended by striking ``404(a)(8)'' and inserting 
``404(a)(7)''.

                    TITLE II--MODERN RATE REGULATION

SEC. 201. PROVISIONS RELATING TO MARKET-DOMINANT PRODUCTS.

    (a) In General.--Chapter 36 of title 39, United States Code, is 
amended by striking sections 3621 and 3622 and inserting the following:

``Sec. 3621. Applicability; definitions

    ``(a) Applicability.--This subchapter shall apply with respect to--
        ``(1) first-class mail letters and sealed parcels;
        ``(2) first-class mail cards;
        ``(3) periodicals;
        ``(4) standard mail;
        ``(5) single-piece parcel post;
        ``(6) media mail;
        ``(7) bound printed matter;
        ``(8) library mail;
        ``(9) special services; and
        ``(10) single-piece international mail,
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 18 months after the date of 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, each of which shall be applied in conjunction 
with the others:
        ``(1) To maximize incentives to reduce costs and increase 
    efficiency.
        ``(2) To create predictability and stability in rates.
        ``(3) To maintain high quality service standards established 
    under section 3691.
        ``(4) To allow the Postal Service pricing flexibility.
        ``(5) To assure adequate revenues, including retained earnings, 
    to maintain financial stability.
        ``(6) To reduce the administrative burden and increase the 
    transparency of the ratemaking process.
        ``(7) To enhance mail security and deter terrorism.
        ``(8) To establish and maintain a just and reasonable schedule 
    for rates and classifications, however the objective under this 
    paragraph shall not be construed to prohibit the Postal Service 
    from making changes of unequal magnitude within, between, or among 
    classes of mail.
        ``(9) To allocate the total institutional costs of the Postal 
    Service appropriately between market-dominant and competitive 
    products.
    ``(c) Factors.--In establishing or revising such system, the Postal 
Regulatory Commission shall take into account--
        ``(1) the value of the mail service actually provided each 
    class or type of mail service to both the sender and the recipient, 
    including but not limited to the collection, mode of 
    transportation, and priority of delivery;
        ``(2) the requirement that each class of mail or type of mail 
    service bear the direct and indirect postal costs attributable to 
    each class or type of mail service through reliably identified 
    causal relationships plus that portion of all other costs of the 
    Postal Service reasonably assignable to such class or type;
        ``(3) the effect of rate increases upon the general public, 
    business mail users, and enterprises in the private sector of the 
    economy engaged in the delivery of mail matter other than letters;
        ``(4) the available alternative means of sending and receiving 
    letters and other mail matter at reasonable costs;
        ``(5) the degree of preparation of mail for delivery into the 
    postal system performed by the mailer and its effect upon reducing 
    costs to the Postal Service;
        ``(6) simplicity of structure for the entire schedule and 
    simple, identifiable relationships between the rates or fees 
    charged the various classes of mail for postal services;
        ``(7) the importance of pricing flexibility to encourage 
    increased mail volume and operational efficiency;
        ``(8) the relative value to the people of the kinds of mail 
    matter entered into the postal system and the desirability and 
    justification for special classifications and services of mail;
        ``(9) the importance of providing classifications with 
    extremely high degrees of reliability and speed of delivery and of 
    providing those that do not require high degrees of reliability and 
    speed of delivery;
        ``(10) the desirability of special classifications for both 
    postal users and the Postal Service in accordance with the policies 
    of this title, including agreements between the Postal Service and 
    postal users, when available on public and reasonable terms to 
    similarly situated mailers, that--
            ``(A) either--
                ``(i) improve the net financial position of the Postal 
            Service through reducing Postal Service costs or increasing 
            the overall contribution to the institutional costs of the 
            Postal Service; or
                ``(ii) enhance the performance of mail preparation, 
            processing, transportation, or other functions; and
            ``(B) do not cause unreasonable harm to the marketplace.
        ``(11) the educational, cultural, scientific, and informational 
    value to the recipient of mail matter;
        ``(12) the need for the Postal Service to increase its 
    efficiency and reduce its costs, including infrastructure costs, to 
    help maintain high quality, affordable postal services;
        (13) the value to the Postal Service and postal users of 
    promoting intelligent mail and of secure, sender-identified mail; 
    and
        ``(14) the policies of this title as well as such other factors 
    as the Commission determines appropriate.
    ``(d) Requirements.--
        ``(1) In general.--The system for regulating rates and classes 
    for market-dominant products shall--
            ``(A) include an annual limitation on the percentage 
        changes in rates to be set by the Postal Regulatory Commission 
        that will be equal to the change in the Consumer Price Index 
        for All Urban Consumers unadjusted for seasonal variation over 
        the most recent available 12-month period preceding the date 
        the Postal Service files notice of its intention to increase 
        rates;
            ``(B) establish a schedule whereby rates, when necessary 
        and appropriate, would change at regular intervals by 
        predictable amounts;
            ``(C) not later than 45 days before the implementation of 
        any adjustment in rates under this section, including 
        adjustments made under subsection (c)(10)--
                ``(i) require the Postal Service to provide public 
            notice of the adjustment;
                ``(ii) provide an opportunity for review by the Postal 
            Regulatory Commission;
                ``(iii) provide for the Postal Regulatory Commission to 
            notify the Postal Service of any noncompliance of the 
            adjustment with the limitation under subparagraph (A); and
                ``(iv) require the Postal Service to respond to the 
            notice provided under clause (iii) and describe the actions 
            to be taken to comply with the limitation under 
            subparagraph (A);
            ``(D) establish procedures whereby the Postal Service may 
        adjust rates not in excess of the annual limitations under 
        subparagraph (A); and
            ``(E) notwithstanding any limitation set under 
        subparagraphs (A) and (C), and provided there is not sufficient 
        unused rate authority under paragraph (2)(C), establish 
        procedures whereby rates may be adjusted on an expedited basis 
        due to either extraordinary or exceptional circumstances, 
        provided that the Commission determines, after notice and 
        opportunity for a public hearing and comment, and within 90 
        days after any request by the Postal Service, that such 
        adjustment is reasonable and equitable and necessary to enable 
        the Postal Service, under best practices of honest, efficient, 
        and economical management, to maintain and continue the 
        development of postal services of the kind and quality adapted 
        to the needs of the United States.
        ``(2) Limitations.--
            ``(A) Classes of mail.--Except as provided under 
        subparagraph (C), the annual limitations under paragraph (1)(A) 
        shall apply to a class of mail, as defined in the Domestic Mail 
        Classification Schedule as in effect on the date of enactment 
        of the Postal Accountability and Enhancement Act.
            ``(B) Rounding of rates and fees.--Nothing in this 
        subsection shall preclude the Postal Service from rounding 
        rates and fees to the nearest whole integer, if the effect of 
        such rounding does not cause the overall rate increase for any 
        class to exceed the Consumer Price Index for All Urban 
        Consumers.
            ``(C) Use of unused rate authority.--
                ``(i) Definition.--In this subparagraph, the term 
            `unused rate adjustment authority' means the difference 
            between--

                    ``(I) the maximum amount of a rate adjustment that 
                the Postal Service is authorized to make in any year 
                subject to the annual limitation under paragraph (1); 
                and
                    ``(II) the amount of the rate adjustment the Postal 
                Service actually makes in that year.

                ``(ii) Authority.--Subject to clause (iii), the Postal 
            Service may use any unused rate adjustment authority for 
            any of the 5 years following the year such authority 
            occurred.
                ``(iii) Limitations.--In exercising the authority under 
            clause (ii) in any year, the Postal Service--

                    ``(I) may use unused rate adjustment authority from 
                more than 1 year;
                    ``(II) may use any part of the unused rate 
                adjustment authority from any year;
                    ``(III) shall use the unused rate adjustment 
                authority from the earliest year such authority first 
                occurred and then each following year; and
                    ``(IV) for any class or service, may not exceed the 
                annual limitation under paragraph (1) by more than 2 
                percentage points.

        ``(3) Review.--Ten years after the date of enactment of the 
    Postal Accountability and Enhancement Act and as appropriate 
    thereafter, the Commission shall review the system for regulating 
    rates and classes for market-dominant products established under 
    this section to determine if the system is achieving the objectives 
    in subsection (b), taking into account the factors in subsection 
    (c). If the Commission determines, after notice and opportunity for 
    public comment, that the system is not achieving the objectives in 
    subsection (b), taking into account the factors in subsection (c), 
    the Commission may, by regulation, make such modification or adopt 
    such alternative system for regulating rates and classes for 
    market-dominant products as necessary to achieve the objectives.
    ``(e) Workshare Discounts.--
        ``(1) Definition.--In this subsection, the term `workshare 
    discount' refers to rate discounts provided to mailers for the 
    presorting, prebarcoding, handling, or transportation of mail, as 
    further defined by the Postal Regulatory Commission under 
    subsection (a).
        ``(2) Scope.--The Postal Regulatory Commission shall ensure 
    that such discounts do not exceed the cost that the Postal Service 
    avoids as a result of workshare activity, unless--
            ``(A) the discount is--
                ``(i) associated with a new postal service, a change to 
            an existing postal service, or with a new work share 
            initiative related to an existing postal service; and
                ``(ii) necessary to induce mailer behavior that 
            furthers the economically efficient operation of the Postal 
            Service and the portion of the discount in excess of the 
            cost that the Postal Service avoids as a result of the 
            workshare activity will be phased out over a limited period 
            of time;
            ``(B) the amount of the discount above costs avoided--
                ``(i) is necessary to mitigate rate shock; and
                ``(ii) will be phased out over time;
            ``(C) the discount is provided in connection with 
        subclasses of mail consisting exclusively of mail matter of 
        educational, cultural, scientific, or informational value; or
            ``(D) reduction or elimination of the discount would impede 
        the efficient operation of the Postal Service.
        ``(3) Limitation.--Nothing in this subsection shall require 
    that a work share discount be reduced or eliminated if the 
    reduction or elimination of the discount would--
            ``(A) lead to a loss of volume in the affected category or 
        subclass of mail and reduce the aggregate contribution to the 
        institutional costs of the Postal Service from the category or 
        subclass subject to the discount below what it otherwise would 
        have been if the discount had not been reduced or eliminated; 
        or
            ``(B) result in a further increase in the rates paid by 
        mailers not able to take advantage of the discount.
        ``(4) Report.--Whenever the Postal Service establishes a 
    workshare discount rate, the Postal Service shall, at the time it 
    publishes the workshare discount rate, submit to the Postal 
    Regulatory Commission a detailed report that--
                ``(A) explains the Postal Service's reasons for 
            establishing the rate;
                ``(B) sets forth the data, economic analyses, and other 
            information relied on by the Postal Service to justify the 
            rate; and
                ``(C) certifies that the discount will not adversely 
            affect rates or services provided to users of postal 
            services who do not take advantage of the discount rate.
    ``(f) Transition Rule.--For the 1-year period beginning on the date 
of enactment of this section, rates and classes for market-dominant 
products shall remain subject to modification in accordance with the 
provisions of this chapter and section 407, as such provisions were 
last in effect before the date of enactment of this section. 
Proceedings initiated to consider a request for a recommended decision 
filed by the Postal Service during that 1-year period shall be 
completed in accordance with subchapter II of chapter 36 of this title 
and implementing regulations, as in effect before the date of enactment 
of this section.''.
    (b) Repealed Sections.--Sections 3623, 3624, 3625, and 3628 of 
title 39, United States Code, are repealed.
    (c) Redesignation.--Chapter 36 of title 39, United States Code (as 
in effect after the amendment made by section 601, but before the 
amendment made by section 202) is amended by striking the heading for 
subchapter II and inserting the following:

   ``SUBCHAPTER I--PROVISIONS RELATING TO MARKET-DOMINANT PRODUCTS''.

SEC. 202. PROVISIONS RELATING TO COMPETITIVE PRODUCTS.

    Chapter 36 of title 39, United States Code, is amended by inserting 
after section 3629 the following:

      ``SUBCHAPTER II--PROVISIONS RELATING TO COMPETITIVE PRODUCTS

``Sec. 3631. Applicability; definitions and updates

    ``(a) Applicability.--This subchapter shall apply with respect to--
        ``(1) priority mail;
        ``(2) expedited mail;
        ``(3) bulk parcel post;
        ``(4) bulk international mail; and
        ``(5) mailgrams;
subject to subsection (d) and any changes the Postal Regulatory 
Commission may make under section 3642.
    ``(b) Definition.--For purposes of this subchapter, the term `costs 
attributable', as used with respect to a product, means the direct and 
indirect postal costs attributable to such product through reliably 
identified causal relationships.
    ``(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, 
with the concurrence of a majority of all of the Governors then holding 
office, shall establish rates and classes for products in the 
competitive category of mail in accordance with the 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 enactment of this section.

``Sec. 3633. Provisions applicable to rates for competitive products

    ``(a) In General.--The Postal Regulatory Commission shall, within 
18 months after the date of enactment of this section, promulgate (and 
may from time to time thereafter revise) regulations to--
        ``(1) prohibit the subsidization of competitive products by 
    market-dominant products;
        ``(2) ensure that each competitive product covers its costs 
    attributable; and
        ``(3) ensure that all competitive products collectively cover 
    what the Commission determines to be an appropriate share of the 
    institutional costs of the Postal Service.
    ``(b) Review of Minimum Contribution.--Five years after the date of 
enactment of this section, and every 5 years thereafter, the Postal 
Regulatory Commission shall conduct a review to determine whether the 
institutional costs contribution requirement under subsection (a)(3) 
should be retained in its current form, modified, or eliminated. In 
making its determination, the Commission shall consider all relevant 
circumstances, including the prevailing competitive conditions in the 
market, and the degree to which any costs are uniquely or 
disproportionately associated with any competitive products.''.

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

    Subchapter III of chapter 36 of title 39, United States Code, is 
amended to read as follows:

 ``SUBCHAPTER III--PROVISIONS RELATING TO EXPERIMENTAL AND NEW PRODUCTS

``Sec. 3641. Market tests of experimental products

    ``(a) Authority.--
        ``(1) In general.--The Postal Service may conduct market tests 
    of experimental products in accordance with this section.
        ``(2) Provisions waived.--A product shall not, while it is 
    being tested under this section, be subject to the requirements of 
    sections 3622, 3633, or 3642, or regulations promulgated under 
    those sections.
    ``(b) Conditions.--A product may not be tested under this section 
unless it satisfies each of the following:
        ``(1) Significantly different product.--The product is, from 
    the viewpoint of the mail users, significantly different from all 
    products offered by the Postal Service within the 2-year period 
    preceding the start of the test.
        ``(2) Market disruption.--The introduction or continued 
    offering of the product will not create an unfair or otherwise 
    inappropriate competitive advantage for the Postal Service or any 
    mailer, particularly in regard to small business concerns (as 
    defined under subsection (h)).
        ``(3) Correct categorization.--The Postal Service identifies 
    the product, for the purpose of a test under this section, as 
    either market-dominant or competitive, consistent with the criteria 
    under section 3642(b)(1). Costs and revenues attributable to a 
    product identified as competitive shall be included in any 
    determination under section 3633(3) (relating to provisions 
    applicable to competitive products collectively). Any test that 
    solely affects products currently classified as competitive, or 
    which provides services ancillary to only competitive products, 
    shall be presumed to be in the competitive product category without 
    regard to whether a similar ancillary product exists for market-
    dominant products.
    ``(c) Notice.--
        ``(1) In general.--At least 30 days before initiating a market 
    test under this section, the Postal Service shall file with the 
    Postal Regulatory Commission and publish in the Federal Register a 
    notice--
            ``(A) setting out the basis for the Postal Service's 
        determination that the market test is covered by this section; 
        and
            ``(B) describing the nature and scope of the market test.
        ``(2) Safeguards.--For a competitive experimental product, the 
    provisions of section 504(g) shall be available with respect to any 
    information required to be filed under paragraph (1) to the same 
    extent and in the same manner as in the case of any matter 
    described in section 504(g)(1). Nothing in paragraph (1) shall be 
    considered to permit or require the publication of any information 
    as to which confidential treatment is accorded under the preceding 
    sentence (subject to the same exception as set forth in section 
    504(g)(3)).
    ``(d) Duration.--
        ``(1) In general.--A market test of a product under this 
    section may be conducted over a period of not to exceed 24 months.
        ``(2) Extension authority.--If necessary in order to determine 
    the feasibility or desirability of a product being tested under 
    this section, the Postal Regulatory Commission may, upon written 
    application of the Postal Service (filed not later than 60 days 
    before the date as of which the testing of such product would 
    otherwise be scheduled to terminate under paragraph (1)), extend 
    the testing of such product for not to exceed an additional 12 
    months.
    ``(e) Dollar-Amount Limitation.--
        ``(1) In general.--A product may only be tested under this 
    section if the total revenues that are anticipated, or in fact 
    received, by the Postal Service from such product do not exceed 
    $10,000,000 in any year, subject to paragraph (2) and subsection 
    (g). 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 under subsection (b)(2)).
        ``(2) Exemption authority.--The Postal Regulatory Commission 
    may, upon written application of the Postal Service, exempt the 
    market test from the limit in paragraph (1) if the total revenues 
    that are anticipated, or in fact received, by the Postal Service 
    from such product do not exceed $50,000,000 in any year, subject to 
    subsection (g). In reviewing an application under this paragraph, 
    the Postal Regulatory Commission shall approve such application if 
    it determines that--
            ``(A) the product is likely to benefit the public and meet 
        an expected demand;
            ``(B) the product is likely to contribute to the financial 
        stability of the Postal Service; and
            ``(C) the product is not likely to result in unfair or 
        otherwise inappropriate competition.
    ``(f) Cancellation.--If the Postal Regulatory Commission at any 
time determines that a market test under this section fails, with 
respect to any particular product, to meet 1 or more of the 
requirements of this section, it may order the cancellation of the 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 a 
    significant level of business to other firms offering similar 
    products. The competitive category of products shall consist of all 
    other products.
        ``(2) Exclusion of products covered by postal monopoly.--A 
    product covered by the postal monopoly shall not be subject to 
    transfer under this section from the market-dominant category of 
    mail. For purposes of the preceding sentence, the term `product 
    covered by the postal monopoly' means any product the conveyance or 
    transmission of which is reserved to the United States under 
    section 1696 of title 18, subject to the same exception as set 
    forth in the last sentence of section 409(e)(1).
        ``(3) Additional considerations.--In making any decision under 
    this section, due regard shall be given to--
            ``(A) the availability and nature of enterprises in the 
        private sector engaged in the delivery of the product involved;
            ``(B) the views of those who use the product involved on 
        the appropriateness of the proposed action; and
            ``(C) the likely impact of the proposed action on small 
        business concerns (within the meaning of section 3641(h)).
    ``(c) Transfers of Subclasses and Other Subordinate Units 
Allowable.--Nothing in this title shall be considered to prevent 
transfers under this section from being made by reason of the fact that 
they would involve only some (but not all) of the subclasses or other 
subordinate units of the class of mail or type of postal service 
involved (without regard to satisfaction of minimum quantity 
requirements standing alone).
    ``(d) Notification and Publication Requirements.--
        ``(1) Notification requirement.--The Postal Service shall, 
    whenever it requests to add a product or transfer a product to a 
    different category, file with the Postal Regulatory Commission and 
    publish in the Federal Register a notice setting out the basis for 
    its determination that the product satisfies the criteria under 
    subsection (b) and, in the case of a request to add a product or 
    transfer a product to the competitive category of mail, that the 
    product meets the regulations promulgated by the Postal Regulatory 
    Commission under section 3633. The provisions of section 504(g) 
    shall be available with respect to any information required to be 
    filed.
        ``(2) Publication requirement.--The Postal Regulatory 
    Commission shall, whenever it changes the list of products in the 
    market-dominant or competitive category of mail, prescribe new 
    lists of products. The revised lists shall indicate how and when 
    any previous lists (including the lists under sections 3621 and 
    3631) are superseded, and shall be published in the Federal 
    Register.
    ``(e) Prohibition.--Except as provided in section 3641, no product 
that involves the physical delivery of letters, printed matter, or 
packages may be offered by the Postal Service unless it has been 
assigned to the market-dominant or competitive category of mail (as 
appropriate) either--
        ``(1) under this subchapter; or
        ``(2) by or under any other provision of law.''.

SEC. 204. REPORTING REQUIREMENTS AND RELATED PROVISIONS.

    (a) Redesignation.--Chapter 36 of title 39, United States Code (as 
in effect before the amendment made by subsection (b)) is amended--
        (1) by striking the heading for subchapter IV and inserting the 
    following:

``SUBCHAPTER V--POSTAL SERVICES, COMPLAINTS, AND JUDICIAL REVIEW''; and

        (2) by striking the heading for subchapter V and inserting the 
    following:

                      ``SUBCHAPTER VI--GENERAL''.

    (b) Reports and Compliance.--Chapter 36 of title 39, United States 
Code, is amended by inserting after subchapter III the following:

     ``SUBCHAPTER IV--REPORTING REQUIREMENTS AND RELATED PROVISIONS

``Sec. 3651. Annual reports by the Commission

    ``(a) In General.--The Postal Regulatory Commission shall submit an 
annual report to the President and the Congress concerning the 
operations of the Commission under this title, including the extent to 
which regulations are achieving the objectives under sections 3622 and 
3633, respectively.
    ``(b) Additional Information.--
        ``(1) In general.--In addition to the information required 
    under subsection (a), each report under this section shall also 
    include, with respect to the period covered by such report, an 
    estimate of the costs incurred by the Postal Service in providing--
            ``(A) postal services to areas of the Nation where, in the 
        judgment of the Postal Regulatory Commission, the Postal 
        Service either would not provide services at all or would not 
        provide such services in accordance with the requirements of 
        this title if the Postal Service were not required to provide 
        prompt, reliable, and efficient services to patrons in all 
        areas and all communities, including as required under the 
        first sentence of section 101(b);
            ``(B) free or reduced rates for postal services as required 
        by this title; and
            ``(C) other public services or activities which, in the 
        judgment of the Postal Regulatory Commission, would not 
        otherwise have been provided by the Postal Service but for the 
        requirements of law.
        ``(2) Basis for estimates.--The Commission shall detail the 
    basis for its estimates and the statutory requirements giving rise 
    to the costs identified in each report under this section.
    ``(c) Information From Postal Service.--The Postal Service shall 
provide the Postal Regulatory Commission with such information as may, 
in the judgment of the Commission, be necessary in order for the 
Commission to prepare its reports under this section.

``Sec. 3652. Annual reports to the Commission

    ``(a) Costs, Revenues, Rates, and Service.--Except as provided in 
subsection (c), the Postal Service shall, no later than 90 days after 
the end of each year, prepare and submit to the Postal Regulatory 
Commission a report (together with such nonpublic annex to the report 
as the Commission may require under subsection (e))--
        ``(1) which shall analyze costs, revenues, rates, and quality 
    of service, using such methodologies as the Commission shall by 
    regulation prescribe, and in sufficient detail to demonstrate that 
    all products during such year complied with all applicable 
    requirements of this title; and
        ``(2) which shall, for each market-dominant product provided in 
    such year, provide--
            ``(A) product information, including mail volumes; and
            ``(B) measures of the quality of service afforded by the 
        Postal Service in connection with such product, including--
                ``(i) the level of service (described in terms of speed 
            of delivery and reliability) provided; and
                ``(ii) the degree of customer satisfaction with the 
            service provided.
    The Inspector General shall regularly audit the data collection 
    systems and procedures utilized in collecting information and 
    preparing such report (including any annex thereto and the 
    information required under subsection (b)). The results of any such 
    audit shall be submitted to the Postal Service and the Postal 
    Regulatory Commission.
    ``(b) Information Relating to Workshare Discounts.--The Postal 
Service shall include, in each report under subsection (a), the 
following information with respect to each market-dominant product for 
which a workshare discount was in effect during the period covered by 
such report:
        ``(1) The per-item cost avoided by the Postal Service by virtue 
    of such discount.
        ``(2) The percentage of such per-item cost avoided that the 
    per-item workshare discount represents.
        ``(3) The per-item contribution made to institutional costs.
    ``(c) Market Tests.--In carrying out subsections (a) and (b) with 
respect to experimental products offered through market tests under 
section 3641 in a year, the Postal Service shall--
        ``(1) report data on the costs, revenues, and quality of 
    service by market test, which may be reported in summary form; and
        ``(2) report such data as the Postal Regulatory Commission 
    requires.
    ``(d) Supporting Matter.--The Postal Regulatory Commission shall 
have access, in accordance with such regulations as the Commission 
shall prescribe, to the working papers and any other supporting matter 
of the Postal Service and the Inspector General in connection with any 
information submitted under this section.
    ``(e) Content and Form of Reports.--
        ``(1) In general.--The Postal Regulatory Commission shall, by 
    regulation, prescribe the content and form of the public reports 
    (and any nonpublic annex and supporting matter relating to the 
    report) to be provided by the Postal Service under this section. In 
    carrying out this subsection, the Commission shall give due 
    consideration to--
            ``(A) providing the public with timely, adequate 
        information to assess the lawfulness of rates charged;
            ``(B) avoiding unnecessary or unwarranted administrative 
        effort and expense on the part of the Postal Service; and
            ``(C) protecting the confidentiality of commercially 
        sensitive information.
        ``(2) Revised requirements.--The Commission may, on its own 
    motion or on request of an interested party, initiate proceedings 
    (to be conducted in accordance with regulations that the Commission 
    shall prescribe) to improve the quality, accuracy, or completeness 
    of Postal Service data required by the Commission under this 
    subsection whenever it shall appear that--
            ``(A) the attribution of costs or revenues to products has 
        become significantly inaccurate or can be significantly 
        improved;
            ``(B) the quality of service data has become significantly 
        inaccurate or can be significantly improved; or
            ``(C) such revisions are, in the judgment of the 
        Commission, otherwise necessitated by the public interest.
    ``(f) Confidential Information.--
        ``(1) In general.--If the Postal Service determines that any 
    document or portion of a document, or other matter, which it 
    provides to the Postal Regulatory Commission in a nonpublic annex 
    under this section or under subsection (d) contains information 
    which is described in section 410(c) of this title, or exempt from 
    public disclosure under section 552(b) of title 5, the Postal 
    Service shall, at the time of providing such matter to the 
    Commission, notify the Commission of its determination, in writing, 
    and describe with particularity the documents (or portions of 
    documents) or other matter for which confidentiality is sought and 
    the reasons therefor.
        ``(2) Treatment.--Any information or other matter described in 
    paragraph (1) to which the Commission gains access under this 
    section shall be subject to paragraphs (2) and (3) of section 
    504(g) in the same way as if the Commission had received 
    notification with respect to such matter under section 504(g)(1).
    ``(g) Other Reports.--The Postal Service shall submit to the Postal 
Regulatory Commission, together with any other submission that the 
Postal Service is required to make under this section in a year, copies 
of its then most recent--
        ``(1) comprehensive statement under section 2401(e);
        ``(2) 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); or
        ``(2) whether any service standards in effect during such year 
    were not met.
If, with respect to a year, no instance of noncompliance is found under 
this subsection to have occurred in such year, the written 
determination shall be to that effect.
    ``(c) Noncompliance With Regard to Rates or Services.--If, for a 
year, a timely written determination of noncompliance is made under 
subsection (b), the Postal Regulatory Commission shall take appropriate 
action in accordance with subsections (c) and (e) of section 3662 (as 
if a complaint averring such noncompliance had been duly filed and 
found under such section to be justified).
    ``(d) Review of Performance Goals.--The Postal Regulatory 
Commission shall also evaluate annually whether the Postal Service has 
met the goals established under sections 2803 and 2804, and may provide 
recommendations to the Postal Service related to the protection or 
promotion of public policy objectives set out in this title.
    ``(e) Rebuttable Presumption.--A timely written 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 
under paragraphs (1) and (2) of subsection (b)) during the year to 
which such determination relates.

``Sec. 3654. Additional financial reporting

    ``(a) Additional Financial Reporting.--
        ``(1) In general.--The Postal Service shall file with the 
    Postal Regulatory Commission beginning with the first full fiscal 
    year following the effective date of this section--
            ``(A) within 40 days after the end of each fiscal quarter, 
        a quarterly report containing the information required by the 
        Securities and Exchange Commission to be included in quarterly 
        reports under sections 13 and 15(d) of the Securities Exchange 
        Act of 1934 (15 U.S.C. 78m, 78o(d)) on Form 10-Q, as such Form 
        (or any successor form) may be revised from time to time;
            ``(B) within 60 days after the end of each fiscal year, an 
        annual report containing the information required by the 
        Securities and Exchange Commission to be included in annual 
        reports under such sections on Form 10-K, as such Form (or any 
        successor form) may be revised from time to time; and
            ``(C) periodic reports within the time frame and containing 
        the information prescribed in Form 8-K of the Securities and 
        Exchange Commission, as such Form (or any successor form) may 
        be revised from time to time.
        ``(2) Registrant defined.--For purposes of defining the reports 
    required by paragraph (1), the Postal Service shall be deemed to be 
    the `registrant' described in the Securities and Exchange 
    Commission Forms, and references contained in such Forms to 
    Securities and Exchange Commission regulations are incorporated 
    herein by reference, as amended.
        ``(3) Internal control report.--For purposes of defining the 
    reports required by paragraph (1)(B), the Postal Service shall 
    comply with the rules prescribed by the Securities and Exchange 
    Commission implementing section 404 of the Sarbanes-Oxley Act of 
    2002 (15 U.S.C. 7262), beginning with the annual report for fiscal 
    year 2010.
    ``(b) Financial reporting.--
        ``(1) The reports required by subsection (a)(1)(B) shall 
    include, with respect to the Postal Service's pension and post-
    retirement health obligations--
            ``(A) the funded status of the Postal Service's pension and 
        postretirement health obligations;
            ``(B) components of the net change in the fund balances and 
        obligations and the nature and cause of any significant 
        changes;
            ``(C) components of net periodic costs;
            ``(D) cost methods and assumptions underlying the relevant 
        actuarial valuations;
            ``(E) the effect of a one-percentage point increase in the 
        assumed health care cost trend rate for each future year on the 
        service and interest costs components of net periodic 
        postretirement health cost and the accumulated obligation;
            ``(F) actual contributions to and payments from the funds 
        for the years presented and the estimated future contributions 
        and payments for each of the following 5 years;
            ``(G) the composition of plan assets reflected in the fund 
        balances; and
            ``(H) the assumed rate of return on fund balances and the 
        actual rates of return for the years presented.
        ``(2) The Office of Personnel Management shall provide the data 
    listed under paragraph (1) to the Postal Service not later than 30 
    days after the end of each fiscal year.
        ``(3)(A) Beginning with reports for the fiscal year 2010, for 
    purposes of the reports required under subparagraphs (A) and (B) of 
    subsection (a)(1), the Postal Service shall include segment 
    reporting.
        ``(B) The Postal Service shall determine the appropriate 
    segment reporting under subparagraph (A) after consultation with 
    the Postal Regulatory Commission.
    ``(c) Treatment.--For purposes of the reports required by 
subsection (a)(1)(B), the Postal Service shall obtain an opinion from 
an independent auditor on whether the information listed in subsection 
(b) is fairly stated in all material respects, either in relation to 
the basic financial statements as a whole or on a stand-alone basis.
    ``(d) Supporting Matter.--The Postal Regulatory Commission shall 
have access to the audit documentation and any other supporting matter 
of the Postal Service and its independent auditor in connection with 
any information submitted under this section.
    ``(e) Revised Requirements.--The Postal Regulatory 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 under this section 
whenever it shall appear that--
        ``(1) the data have become significantly inaccurate or can be 
    significantly improved; or
        ``(2) those revisions are, in the judgment of the Commission, 
    otherwise necessitated by the public interest.
    ``(f) Confidential Information.--
        ``(1) In general.--If the Postal Service determines that any 
    document or portion of a document, or other matter, which it 
    provides to the Postal Regulatory Commission in a nonpublic annex 
    under this section or pursuant to subsection (d) contains 
    information which is described in section 410(c) of this title, or 
    exempt from public disclosure under section 552(b) of title 5, the 
    Postal Service shall, at the time of providing such matter to the 
    Commission, notify the Commission of its determination, in writing, 
    and describe with particularity the documents (or portions of 
    documents) or other matter for which confidentiality is sought and 
    the reasons therefor.
        ``(2) Treatment.--Any information or other matter described in 
    paragraph (1) to which the Commission gains access under this 
    section shall be subject to paragraphs (2) and (3) of section 
    504(g) in the same way as if the Commission had received 
    notification with respect to such matter under section 
    504(g)(1).''.

SEC. 205. COMPLAINTS; APPELLATE REVIEW AND ENFORCEMENT.

    Chapter 36 of title 39, United States Code, is amended by striking 
sections 3662 and 3663 and inserting the following:

``Sec. 3662. Rate and service complaints

    ``(a) In General.--Any interested person (including an officer of 
the Postal Regulatory Commission representing the interests of the 
general public) who believes the Postal Service is not operating in 
conformance with the requirements of the provisions of sections 101(d), 
401(2), 403(c), 404a, or 601, or this chapter (or regulations 
promulgated under any of those provisions) may lodge a complaint with 
the Postal Regulatory Commission in such form and manner as the 
Commission may prescribe.
    ``(b) Prompt Response Required.--
        ``(1) In general.--The Postal Regulatory Commission shall, 
    within 90 days after receiving a complaint under subsection (a)--
            ``(A) either--
                ``(i) upon a finding that such complaint raises 
            material issues of fact or law, begin proceedings on such 
            complaint; or
                ``(ii) issue an order dismissing the complaint; and
            ``(B) with respect to any action taken under subparagraph 
        (A) (i) or (ii), issue a written statement setting forth the 
        bases of its determination.
        ``(2) Treatment of complaints not timely acted on.--For 
    purposes of section 3663, any complaint under subsection (a) on 
    which the Commission fails to act in the time and manner required 
    by paragraph (1) shall be treated in the same way as if it had been 
    dismissed pursuant to an order issued by the Commission on the last 
    day allowable for the issuance of such order under paragraph (1).
    ``(c) Action Required if Complaint Found To Be Justified.--If the 
Postal Regulatory Commission finds the complaint to be justified, it 
shall order that the Postal Service take such action as the Commission 
considers appropriate in order to achieve 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) 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 from the Competitive Products Fund established 
in section 2011. All receipts from fines imposed under this subsection 
shall be deposited in the general fund of the Treasury of the United 
States.

``Sec. 3663. Appellate review

    ``A person, including the Postal Service, adversely affected or 
aggrieved by a final order or decision of the Postal Regulatory 
Commission may, within 30 days after such order or decision becomes 
final, institute proceedings for review thereof by filing a petition in 
the United States Court of Appeals for the District of Columbia. The 
court shall review the order or decision in accordance with section 706 
of title 5, and chapter 158 and section 2112 of title 28, on the basis 
of the record before the Commission.

``Sec. 3664. Enforcement of orders

    ``The several district courts have jurisdiction specifically to 
enforce, and to enjoin and restrain the Postal Service from violating, 
any order issued by the Postal Regulatory Commission.''.

SEC. 206. CLERICAL AMENDMENT.

    Chapter 36 of title 39, United States Code, is amended by striking 
the heading and analysis for such chapter and inserting the following:

            ``CHAPTER 36--POSTAL RATES, CLASSES, AND SERVICES

     ``SUBCHAPTER I--PROVISIONS RELATING TO MARKET-DOMINANT PRODUCTS

``Sec.
``3621. Applicability; definitions.
``3622. Modern rate regulation.
``[3623. Repealed.]
``[3624. Repealed.]
``[3625. Repealed.]
``3626. Reduced Rates.
``3627. Adjusting free rates.
``[3628. Repealed.]
``3629. Reduced rates for voter registration purposes.

      ``SUBCHAPTER II--PROVISIONS RELATING TO COMPETITIVE PRODUCTS

``3631. Applicability; definitions and updates.
``3632. Action of the Governors.
``3633. Provisions applicable to rates for competitive products.
``3634. Assumed Federal income tax on competitive products.

 ``SUBCHAPTER III--PROVISIONS RELATING TO EXPERIMENTAL AND NEW PRODUCTS

``3641. Market tests of experimental products.
``3642. New products and transfers of products between the market-
          dominant and competitive categories of mail.

     ``SUBCHAPTER IV--REPORTING REQUIREMENTS AND RELATED PROVISIONS

``3651. Annual reports by the Commission.
``3652. Annual reports to the Commission.
``3653. Annual determination of compliance.
``3654. Additional financial reporting.

    ``SUBCHAPTER V--POSTAL SERVICES, COMPLAINTS, AND JUDICIAL REVIEW

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

                        ``SUBCHAPTER VI--GENERAL

``3681. Reimbursement.
``3682. Size and weight limits.
``3683. Uniform rates for books; films, other materials.
``3684. Limitations.
``3685. Filing of information relating to periodical publications.
``3686. Bonus authority.

               ``SUBCHAPTER VII--MODERN SERVICE STANDARDS

``3691. Establishment of modern service standards.''.

                  TITLE III--MODERN SERVICE STANDARDS

SEC. 301. ESTABLISHMENT OF MODERN SERVICE STANDARDS.

    Chapter 36 of title 39, United States Code, as amended by this Act, 
is further amended by adding at the end the following:

               ``SUBCHAPTER VII--MODERN SERVICE STANDARDS

``Sec. 3691. Establishment of modern service standards

    ``(a) Authority Generally.--Not later than 12 months after the date 
of enactment of this section, the Postal Service shall, in consultation 
with the Postal Regulatory Commission, by regulation establish (and may 
from time to time thereafter by regulation revise) a set of service 
standards for market-dominant products.
    ``(b) Objectives.--
        ``(1) In general.--Such standards shall be designed to achieve 
    the following objectives:
            ``(A) To enhance the value of postal services to both 
        senders and recipients.
            ``(B) To preserve regular and effective access to postal 
        services in all communities, including those in rural areas or 
        where post offices are not self-sustaining.
            ``(C) To reasonably assure Postal Service customers 
        delivery reliability, speed and frequency consistent with 
        reasonable rates and best business practices.
            ``(D) To provide a system of objective external performance 
        measurements for each market-dominant product as a basis for 
        measurement of Postal Service performance.
        ``(2) Implementation of performance measurements.--With respect 
    to paragraph (1)(D), with the approval of the Postal Regulatory 
    Commission an internal measurement system may be implemented 
    instead of an external measurement system.
    ``(c) Factors.--In establishing or revising such standards, the 
Postal Service shall take into account--
        ``(1) the actual level of service that Postal Service customers 
    receive under any service guidelines previously established by the 
    Postal Service or service standards established under this section;
        ``(2) the degree of customer satisfaction with Postal Service 
    performance in the acceptance, processing and delivery of mail;
        ``(3) the needs of Postal Service customers, including those 
    with physical impairments;
        ``(4) mail volume and revenues projected for future years;
        ``(5) the projected growth in the number of addresses the 
    Postal Service will be required to serve in future years;
        ``(6) the current and projected future cost of serving Postal 
    Service customers;
        ``(7) the effect of changes in technology, demographics, and 
    population distribution on the efficient and reliable operation of 
    the postal delivery system; and
        ``(8) the policies of this title and such other factors as the 
    Postal Service determines appropriate.
    ``(d) Review.--The regulations promulgated pursuant to this section 
(and any revisions thereto), and any violations thereof, shall be 
subject to review upon complaint under sections 3662 and 3663.''.

SEC. 302. POSTAL SERVICE PLAN.

    (a) In General.--Within 6 months after the establishment of the 
service standards under section 3691 of title 39, United States Code, 
as added by this Act, the Postal Service shall, in consultation with 
the Postal Regulatory Commission, develop and submit to Congress a plan 
for meeting those standards.
    (b) Contents.--The plan under this section shall--
        (1) establish performance goals;
        (2) describe any changes to the Postal Service's processing, 
    transportation, delivery, and retail networks necessary to allow 
    the Postal Service to meet the performance goals;
        (3) describe any changes to planning and performance management 
    documents previously submitted to Congress to reflect new 
    performance goals; and
        (4) describe the long-term vision of the Postal Service for 
    rationalizing its infrastructure and workforce, and how the Postal 
    Service intends to implement that vision.
    (c) Postal Facilities.--
        (1) Findings.--Congress finds that--
            (A) the Postal Service has more than 400 logistics 
        facilities, separate from its post office network;
            (B) as noted by the President's Commission on the United 
        States Postal Service, the Postal Service has more facilities 
        than it needs and the streamlining of this distribution network 
        can pave the way for the potential consolidation of sorting 
        facilities and the elimination of excess costs;
            (C) the Postal Service has always revised its distribution 
        network to meet changing conditions and is best suited to 
        address its operational needs; and
            (D) Congress strongly encourages the Postal Service to--
                (i) expeditiously move forward in its streamlining 
            efforts; and
                (ii) keep unions, management associations, and local 
            elected officials informed as an essential part of this 
            effort and abide by any procedural requirements contained 
            in the national bargaining agreements.
        (2) In general.--The Postal Service plan shall include a 
    description of--
            (A) the long-term vision of the Postal Service for 
        rationalizing its infrastructure and workforce; and
            (B) how the Postal Service intends to implement that 
        vision.
        (3) Content of facilities plan.--The plan under this subsection 
    shall include--
            (A) a strategy for how the Postal Service intends to 
        rationalize the postal facilities network and remove excess 
        processing capacity and space from the network, including 
        estimated timeframes, criteria, and processes to be used for 
        making changes to the facilities network, and the process for 
        engaging policy makers and the public in related decisions;
            (B) a discussion of what impact any facility changes may 
        have on the postal workforce and whether the Postal Service has 
        sufficient flexibility to make needed workforce changes;
            (C) an identification of anticipated costs, cost savings, 
        and other benefits associated with the infrastructure 
        rationalization alternatives discussed in the plan; and
            (D) procedures that the Postal Service will use to--
                (i) provide adequate public notice to communities 
            potentially affected by a proposed rationalization 
            decision;
                (ii) make available information regarding any service 
            changes in the affected communities, any other effects on 
            customers, any effects on postal employees, and any cost 
            savings;
                (iii) afford affected persons ample opportunity to 
            provide input on the proposed decision; and
                (iv) take such comments into account in making a final 
            decision.
        (4) Annual reports.--
            (A) In general.--Not later than 90 days after the end of 
        each fiscal year, the Postal Service shall prepare and submit a 
        report to Congress on how postal decisions have impacted or 
        will impact rationalization plans.
            (B) Contents.--Each report under this paragraph shall 
        include--
                (i) an account of actions taken during the preceding 
            fiscal year to improve the efficiency and effectiveness of 
            its processing, transportation, and distribution networks 
            while preserving the timely delivery of postal services, 
            including overall estimated costs and cost savings;
                (ii) an account of actions taken to identify any excess 
            capacity within its processing, transportation, and 
            distribution networks and implement savings through 
            realignment or consolidation of facilities including 
            overall estimated costs and cost savings;
                (iii) an estimate of how postal decisions related to 
            mail changes, security, automation initiatives, 
            worksharing, information technology systems, excess 
            capacity, consolidating and closing facilities, and other 
            areas will impact rationalization plans;
                (iv) identification of any statutory or regulatory 
            obstacles that prevented or will prevent or hinder the 
            Postal Service from taking action to realign or consolidate 
            facilities; and
                (v) such additional topics and recommendations as the 
            Postal Service considers appropriate.
        (5) Existing efforts.--Effective on the date of enactment of 
    this Act, the Postal Service may not close or consolidate any 
    processing or logistics facilities without using procedures for 
    public notice and input consistent with those described under 
    paragraph (3)(D).
    (d) Alternate Retail Options.--The Postal Service plan shall 
include plans to expand and market retail access to postal services, in 
addition to post offices, including--
        (1) vending machines;
        (2) the Internet;
        (3) postage meters;
        (4) Stamps by Mail;
        (5) Postal Service employees on delivery routes;
        (6) retail facilities in which overhead costs are shared with 
    private businesses and other government agencies;
        (7) postal kiosks; or
        (8) any other nonpost office access channel providing market 
    retail access to postal services.
    (e) Reemployment Assistance and Retirement Benefits.--The Postal 
Service plan shall include--
        (1) a comprehensive plan under which reemployment assistance 
    shall be afforded to employees displaced as a result of automation 
    of any of its functions, the closing and consolidation of any of 
    its facilities, or such other reasons as the Postal Service may 
    determine; and
        (2) a plan, developed in consultation with the Office of 
    Personnel Management, to offer early retirement benefits.
    (f) Continued Authority.--Nothing in this section shall be 
construed to prohibit the Postal Service from implementing any change 
to its processing, transportation, delivery, and retail networks under 
any authority granted to the Postal Service for those purposes.

           TITLE IV--PROVISIONS RELATING TO FAIR COMPETITION

SEC. 401. POSTAL SERVICE COMPETITIVE PRODUCTS FUND.

    (a) Provisions Relating to Postal Service Competitive Products Fund 
and Related Matters.--
        (1) In general.--Chapter 20 of title 39, United States Code, is 
    amended by adding at the end the following:

``Sec. 2011. Provisions relating to competitive products

    ``(a)(1) In this subsection, the term `costs attributable' has the 
meaning given such term by section 3631.
    ``(2) There is established in the Treasury of the United States a 
revolving fund, to be called the Postal Service Competitive Products 
Fund, which shall be available to the Postal Service without fiscal 
year limitation for the payment of--
        ``(A) costs attributable to competitive products; and
        ``(B) all other costs incurred by the Postal Service, to the 
    extent allocable to competitive products.
    ``(b) There shall be deposited in the Competitive Products Fund, 
subject to withdrawal by the Postal Service--
        ``(1) revenues from competitive products;
        ``(2) amounts received from obligations issued by Postal 
    Service under subsection (e);
        ``(3) interest and dividends earned on investments of the 
    Competitive Products Fund; and
        ``(4) any other receipts of the Postal Service (including from 
    the sale of assets), to the extent allocable to competitive 
    products.
    ``(c) If the Postal Service determines that the moneys of the 
Competitive Products Fund are in excess of current needs, the Postal 
Service may request the investment of such amounts as the Postal 
Service determines advisable by the Secretary of the Treasury in 
obligations of, or obligations guaranteed by, the Government of the 
United States, and, with the approval of the Secretary, in such other 
obligations or securities as the Postal Service determines appropriate.
    ``(d) With the approval of the Secretary of the Treasury, the 
Postal Service may deposit moneys of the Competitive Products Fund in 
any Federal Reserve bank, any depository for public funds, or in such 
other places and in such manner as the Postal Service and the Secretary 
may mutually agree.
    ``(e)(1)(A) Subject to the limitations specified in section 
2005(a), the Postal Service is authorized to borrow money and to issue 
and sell such obligations as the Postal Service determines necessary to 
provide for competitive products and deposit such amounts in the 
Competitive Products Fund.
    ``(B) Subject to paragraph (5), any borrowings by the Postal 
Service under subparagraph (A) shall be supported and serviced by--
        ``(i) the revenues and receipts from competitive products and 
    the assets related to the provision of competitive products (as 
    determined under subsection (h)); or
        ``(ii) for purposes of any period before accounting practices 
    and principles under subsection (h) have been established and 
    applied, the best information available from the Postal Service, 
    including the audited statements required by section 2008(e).
    ``(2) The Postal Service may enter into binding covenants with the 
holders of such obligations, and with any trustee under any agreement 
entered into in connection with the issuance of such obligations with 
respect to--
        ``(A) the establishment of reserve, sinking, and other funds;
        ``(B) application and use of revenues and receipts of the 
    Competitive Products Fund;
        ``(C) stipulations concerning the subsequent issuance of 
    obligations or the execution of leases or lease purchases relating 
    to properties of the Postal Service; and
        ``(D) such other matters as the Postal Service considers 
    necessary or desirable to enhance the marketability of such 
    obligations.
    ``(3) Obligations issued by the Postal Service under this 
subsection--
        ``(A) shall be in such forms and denominations;
        ``(B) shall be sold at such times and in such amounts;
        ``(C) shall mature at such time or times;
        ``(D) shall be sold at such prices;
        ``(E) shall bear such rates of interest;
        ``(F) may be redeemable before maturity in such manner, at such 
    times, and at such redemption premiums;
        ``(G) may be entitled to such relative priorities of claim on 
    the assets of the Postal Service with respect to principal and 
    interest payments; and
        ``(H) shall be subject to such other terms and conditions,
as the Postal Service determines.
    ``(4) Obligations issued by the Postal Service under this 
subsection--
        ``(A) shall be negotiable or nonnegotiable and bearer or 
    registered instruments, as specified therein and in any indenture 
    or covenant relating thereto;
        ``(B) shall contain a recital that such obligations are issued 
    under this section, and such recital shall be conclusive evidence 
    of the regularity of the issuance and sale of such obligations and 
    of their validity;
        ``(C) shall be lawful investments and may be accepted as 
    security for all fiduciary, trust, and public funds, the investment 
    or deposit of which shall be under the authority or control of any 
    officer or agency of the Government of the United States, and the 
    Secretary of the Treasury or any other officer or agency having 
    authority over or control of any such fiduciary, trust, or public 
    funds, may at any time sell any of the obligations of the Postal 
    Service acquired under this section;
        ``(D) shall not be exempt either as to principal or interest 
    from any taxation now or hereafter imposed by any State or local 
    taxing authority; and
        ``(E) except as provided in section 2006(c), shall not be 
    obligations of, nor shall payment of the principal thereof or 
    interest thereon be guaranteed by, the Government of the United 
    States, and the obligations shall so plainly state.
    ``(5) The Postal Service shall make payments of principal, or 
interest, or both on obligations issued under this section out of 
revenues and receipts from competitive products and assets related to 
the provision of competitive products (as determined under 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, including the audited statements required 
by section 2008(e). For purposes of this subsection, the total assets 
of the Competitive Products Fund shall be the greater of--
        ``(A) the assets related to the provision of competitive 
    products as calculated under subsection (h); or
        ``(B) the percentage of total Postal Service revenues and 
    receipts from competitive products times the total assets of the 
    Postal Service.
    ``(f) The receipts and disbursements of the Competitive Products 
Fund shall be accorded the same budgetary treatment as is accorded to 
receipts and disbursements of the Postal Service Fund under section 
2009a.
    ``(g) A judgment (or settlement of a claim) against the Postal 
Service or the Government of the United States shall be paid out of the 
Competitive Products Fund to the extent that the judgment or claim 
arises out of activities of the Postal Service in the provision of 
competitive products.
    ``(h)(1)(A) The Secretary of the Treasury, in consultation with the 
Postal Service and an independent, certified public accounting firm and 
other advisors as the Secretary considers appropriate, shall develop 
recommendations regarding--
        ``(i) the accounting practices and principles that should be 
    followed by the Postal Service with the objectives of--
            ``(I) identifying and valuing the assets and liabilities of 
        the Postal Service associated with providing competitive 
        products, including the capital and operating costs incurred by 
        the Postal Service in providing such competitive products; and
            ``(II) subject to subsection (e)(5), preventing the 
        subsidization of such products by market-dominant products; and
        ``(ii) the substantive and procedural rules that should be 
    followed in determining the assumed Federal income tax on 
    competitive products income of the Postal Service for any year 
    (within the meaning of section 3634).
    ``(B) Not earlier than 6 months after the date of enactment of this 
section, and not later than 12 months after such date, the Secretary of 
the Treasury shall submit the recommendations under subparagraph (A) to 
the Postal Regulatory Commission.
    ``(2)(A) Upon receiving the recommendations of the Secretary of the 
Treasury under paragraph (1), the Commission shall give interested 
parties, including the Postal Service, users of the mails, and an 
officer of the Commission who shall be required to represent the 
interests of the general public, an opportunity to present their views 
on those recommendations through submission of written data, views, or 
arguments with or without opportunity for oral presentation, or in such 
other manner as the Commission considers appropriate.
    ``(B)(i) After due consideration of the views and other 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 under paragraph 
    (1)(A)(ii); 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.
    ``(ii) Final rules under this subparagraph shall be issued not 
later than 12 months after the date on which recommendations are 
submitted under paragraph (1) (or by such later date on which the 
Commission and the Postal Service may agree). The Commission is 
authorized to promulgate regulations revising such rules.
    ``(C)(i) Reports described under subparagraph (B)(i)(III) shall be 
submitted at such time and in such form, and shall include such 
information, as the Commission by rule requires.
    ``(ii) The Commission may, on its own motion or on request of an 
interested party, initiate proceedings (to be conducted in accordance 
with such rules as the Commission shall prescribe) to improve the 
quality, accuracy, or completeness of Postal Service information under 
subparagraph (B)(i)(III) whenever it shall appear that--
        ``(I) the quality of the information furnished in those reports 
    has become significantly inaccurate or can be significantly 
    improved; or
        ``(II) such revisions are, in the judgment of the Commission, 
    otherwise necessitated by the public interest.
    ``(D) A copy of each report described under subparagraph 
(B)(i)(III) shall be submitted by the Postal Service to the Secretary 
of the Treasury and the Inspector General of the United States Postal 
Service.
    ``(i)(1) The Postal Service shall submit an annual report to the 
Secretary of the Treasury concerning the operation of the Competitive 
Products Fund. The report shall address such matters as risk 
limitations, reserve balances, allocation or distribution of moneys, 
liquidity requirements, and measures to safeguard against losses.
    ``(2) A copy of the most recent report submitted under paragraph 
(1) shall be included in the annual report submitted by the Postal 
Regulatory Commission under section 3652(g).''.
        (2) Clerical amendment.--The table of sections for chapter 20 
    of title 39, United States Code, is amended by adding after the 
    item relating to section 2010 the following:

``2011. Provisions relating to competitive products.''.

    (b) Technical and Conforming Amendments.--
        (1) Definition.--Section 2001 of title 39, United States Code, 
    is amended by striking ``and'' at the end of paragraph (1), by 
    redesignating paragraph (2) as paragraph (3), and by inserting 
    after paragraph (1) the following:
        ``(2) Competitive products fund.--The term `Competitive 
    Products Fund' means the Postal Service Competitive Products Fund 
    established by section 2011; and''.
        (2) Capital of the postal service.--Section 2002(b) of title 
    39, United States Code, is amended by striking ``Fund,'' and 
    inserting ``Fund and the balance in the Competitive 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 (a), in the first sentence, by inserting 
        ``or 2011'' after ``section 2005'';
            (B) in subsection (b)--
                (i) in the first sentence, by inserting ``under section 
            2005'' before ``in such amounts''; and
                (ii) in the second sentence, by inserting ``under 
            section 2005'' before ``in excess of such amount.''; and
            (C) in subsection (c), by inserting ``or 2011(e)(4)(E)'' 
        after ``section 2005(d)(5)''.

SEC. 402. ASSUMED FEDERAL INCOME TAX ON COMPETITIVE PRODUCTS INCOME.

    Subchapter II of chapter 36 of title 39, United States Code, as 
amended by section 202, is amended by adding at the end the following:

``Sec. 3634. Assumed Federal income tax on competitive products income

    ``(a) Definitions.--For purposes of this section--
        ``(1) the term `assumed Federal income tax on competitive 
    products income' means the net income tax that would be imposed by 
    chapter 1 of the Internal Revenue Code of 1986 on the Postal 
    Service's assumed taxable income from competitive products for the 
    year; and
        ``(2) the term `assumed taxable income from competitive 
    products', with respect to a year, refers to the amount 
    representing what would be the taxable income of a corporation 
    under the Internal Revenue Code of 1986 for the year, if--
            ``(A) the only activities of such corporation were the 
        activities of the Postal Service allocable under section 
        2011(h) to competitive products; and
            ``(B) the only assets held by such corporation were the 
        assets of the Postal Service allocable under section 2011(h) to 
        such activities.
    ``(b) Computation and Transfer Requirements.--The Postal Service 
shall, for each year beginning with the year in which occurs the 
deadline for the Postal Service's first report to the Postal Regulatory 
Commission under section 3652(a)--
        ``(1) compute its assumed Federal income tax on competitive 
    products income for such year; and
        ``(2) transfer from the Competitive Products Fund to the Postal 
    Service Fund the amount of that assumed tax.
    ``(c) Deadline for Transfers.--Any transfer required to be made 
under this section for a year shall be due on or before the January 
15th next occurring after the close of such year.''.

SEC. 403. UNFAIR COMPETITION PROHIBITED.

    (a) Specific Limitations.--Chapter 4 of title 39, United States 
Code, is amended by adding after section 404 the following:

``Sec. 404a. Specific limitations

    ``(a) Except as specifically authorized by law, the Postal Service 
may not--
        ``(1) establish any rule or regulation (including any standard) 
    the effect of which is to preclude competition or establish the 
    terms of competition unless the Postal Service demonstrates that 
    the regulation does not create an unfair competitive advantage for 
    itself or any entity funded (in whole or in part) by the Postal 
    Service;
        ``(2) compel the disclosure, transfer, or licensing of 
    intellectual property to any third party (such as patents, 
    copyrights, trademarks, trade secrets, and proprietary 
    information); or
        ``(3) obtain information from a person that provides (or seeks 
    to provide) any product, and then offer any postal service that 
    uses or is based in whole or in part on such information, without 
    the consent of the person providing that information, unless 
    substantially the same information is obtained (or obtainable) from 
    an independent source or is otherwise obtained (or obtainable).
    ``(b) The Postal Regulatory Commission shall prescribe regulations 
to carry out this section.
    ``(c) Any party (including an officer of the Commission 
representing the interests of the general public) who believes that the 
Postal Service has violated this section may bring a complaint in 
accordance with section 3662.''.
    (b) Conforming Amendments.--
        (1) General powers.--Section 401 of title 39, United States 
    Code, is amended by striking ``The'' and inserting ``Subject to the 
    provisions of section 404a, the''.
        (2) Specific powers.--Section 404(a) of title 39, United States 
    Code, is amended by striking ``Without'' and inserting ``Subject to 
    the provisions of section 404a, but otherwise without''.
    (c) Clerical Amendment.--The analysis for chapter 4 of title 39, 
United States Code, is amended by inserting after the item relating to 
section 404 the following:
``404a. Specific limitations.''.

SEC. 404. SUITS BY AND AGAINST THE POSTAL SERVICE.

    (a) In General.--Section 409 of title 39, United States Code, is 
amended by striking subsections (d) and (e) and inserting the 
following:
    ``(d)(1) For purposes of the provisions of law cited in paragraphs 
(2)(A) and (2)(B), respectively, the Postal Service--
        ``(A) shall be considered to be a `person', as used in the 
    provisions of law involved; and
        ``(B) shall not be immune under any other doctrine of sovereign 
    immunity from suit in Federal court by any person for any violation 
    of any of those provisions of law by any officer or employee of the 
    Postal Service.
    ``(2) This subsection applies with respect to--
        ``(A) the Act of July 5, 1946 (commonly referred to as the 
    `Trademark Act of 1946' (15 U.S.C. 1051 and following)); and
        ``(B) the provisions of section 5 of the Federal Trade 
    Commission Act to the extent that such section 5 applies to unfair 
    or deceptive acts or practices.
    ``(e)(1) To the extent that the Postal Service, or other Federal 
agency acting on behalf of or in concert with the Postal Service, 
engages in conduct with respect to any product which is not reserved to 
the United States under section 1696 of title 18, the Postal Service or 
other Federal agency (as the case may be)--
        ``(A) shall not be immune under any doctrine of sovereign 
    immunity from suit in Federal court by any person for any violation 
    of Federal law by such agency or any officer or employee thereof; 
    and
        ``(B) shall be considered to be a person (as defined in 
    subsection (a) of the first section of the Clayton Act) for 
    purposes of--
            ``(i) the antitrust laws (as defined in such subsection); 
        and
            ``(ii) section 5 of the Federal Trade Commission Act to the 
        extent that such section 5 applies to unfair methods of 
        competition.
For purposes of the preceding sentence, any private carriage of mail 
allowable by virtue of section 601 shall not be considered a service 
reserved to the United States under section 1696 of title 18.
    ``(2) No damages, interest on damages, costs or attorney's fees may 
be recovered, and no criminal liability may be imposed, under the 
antitrust laws (as so defined) from any officer or employee of the 
Postal Service, or other Federal agency acting on behalf of or in 
concert with the Postal Service, acting in an official capacity.
    ``(3) This subsection shall not apply with respect to conduct 
occurring before the date of enactment of this subsection.
    ``(f)(1) Each building constructed or altered by the Postal Service 
shall be constructed or altered, to the maximum extent feasible as 
determined by the Postal Service, in compliance with 1 of the 
nationally recognized model building codes and with other applicable 
nationally recognized codes.
    ``(2) Each building constructed or altered by the Postal Service 
shall be constructed or altered only after consideration of all 
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. 405. 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 postal treaties, conventions, and 
amendments related to international postal services and other 
international delivery services, except that the Secretary may not 
conclude any treaty, convention, or other international agreement 
(including those regulating international postal services) if such 
treaty, convention, or agreement would, with respect to any 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 
    Homeland Security and Governmental Affairs of the Senate and the 
    Committee on Government Reform of the House of Representatives;
        ``(D) shall maintain appropriate liaison with both 
    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 its views on whether such rate 
or classification is consistent with the standards and criteria 
established by the Commission under section 3622.
    ``(2) The Secretary shall ensure that each treaty, convention, or 
amendment concluded under subsection (b) is consistent with the views 
submitted by the Commission pursuant to paragraph (1), except if, or to 
the extent, the Secretary determines, in writing, that it is not in the 
foreign policy or national security interest of the United States to 
ensure consistency with the Commission's views. Such written 
determination shall be provided to the Commission together with a full 
explanation of the reasons thereof, provided that the Secretary may 
designate which portions of the determination or explanation shall be 
kept confidential for reasons of foreign policy or national security.
    ``(d) Nothing in this section shall be considered to prevent the 
Postal Service from entering into such commercial or operational 
contracts related to providing international postal services and other 
international delivery services as it deems appropriate, except that--
        ``(1) any such contract made with an agency of a foreign 
    government (whether under authority of this subsection or 
    otherwise) shall be solely contractual in nature and may not 
    purport to be international law; and
        ``(2) a copy of each such contract between the Postal Service 
    and an agency of a foreign government shall be transmitted to the 
    Secretary of State and the Postal Regulatory Commission not later 
    than the effective date of such contract.
    ``(e)(1) In this subsection, the term `private company' means a 
private company substantially owned or controlled by persons who are 
citizens of the United States.
    ``(2) With respect to shipments of international mail that are 
competitive products within the meaning of section 3631 that are 
exported or imported by the Postal Service, the Customs Service and 
other appropriate Federal agencies shall apply the customs laws of the 
United States and all other laws relating to the importation or 
exportation of such shipments in the same manner to both shipments by 
the Postal Service and similar shipments by private companies.
    ``(3) In exercising the authority under subsection (b) to conclude 
new postal treaties and conventions related to international postal 
services and to renegotiate such treaties and conventions, the 
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 in carrying out this 
paragraph.
    ``(4) The provisions of this subsection shall take effect 6 months 
after the date of enactment of this subsection or such earlier date as 
the Bureau of Customs and Border Protection of the Department of 
Homeland Security may determine in writing.''.
    (b) Effective Date.--Notwithstanding any provision of the amendment 
made by subsection (a), the authority of the United States Postal 
Service to establish the rates of postage or other charges on mail 
matter conveyed between the United States and other countries shall 
remain available to the Postal Service until--
        (1) with respect to market-dominant products, the date as of 
    which the regulations promulgated under section 3622 of title 39, 
    United States Code (as amended by section 201(a)) take effect; and
        (2) with respect to competitive products, the date as of which 
    the regulations promulgated under section 3633 of title 39, United 
    States Code (as amended by section 202) take effect.

                      TITLE V--GENERAL PROVISIONS

SEC. 501. QUALIFICATION AND TERM REQUIREMENTS FOR GOVERNORS.

    (a) Qualifications.--
        (1) In general.--Section 202(a) of title 39, United States 
    Code, is amended by striking ``(a)'' and inserting ``(a)(1)'' and 
    by striking the fourth sentence and inserting the following: ``The 
    Governors shall represent the public interest generally, and shall 
    be chosen solely on the basis of their experience in the field of 
    public service, law or accounting or on their demonstrated ability 
    in managing organizations or corporations (in either the public or 
    private sector) of substantial size; except that at least 4 of the 
    Governors shall be chosen solely on the basis of their demonstrated 
    ability in managing organizations or corporations (in either the 
    public or private sector) that employ at least 50,000 employees. 
    The Governors shall not be representatives of specific interests 
    using the Postal Service, and may be removed only for cause.''.
        (2) Applicability.--The amendment made by paragraph (1) shall 
    not affect the appointment or tenure of any person serving as a 
    Governor of the United States Postal Service under an appointment 
    made before the date of enactment of this Act however, when any 
    such office becomes vacant, the appointment of any person to fill 
    that office shall be made in accordance with such amendment. The 
    requirement set forth in the fourth sentence of section 202(a)(1) 
    of title 39, United States Code (as amended by subsection (a)) 
    shall be met beginning not later than 9 years after the date of 
    enactment of this Act.
    (b) Consultation Requirement.--Section 202(a) of title 39, United 
States Code, is amended by adding at the end the following:
    ``(2) In selecting the individuals described in paragraph (1) for 
nomination for appointment to the position of Governor, the President 
should consult with the Speaker of the House of Representatives, the 
minority leader of the House of Representatives, the majority leader of 
the Senate, and the minority leader of the Senate.''.
    (c) 7-Year Terms.--
        (1) In general.--Section 202(b) of title 39, United States 
    Code, is amended in the first sentence by striking ``9 years'' and 
    inserting ``7 years''.
        (2) Applicability.--
            (A) Continuation by incumbents.--The amendment made by 
        paragraph (1) shall not affect the tenure of any person serving 
        as a Governor of the United States Postal Service on the date 
        of enactment of this Act and such person may continue to serve 
        the remainder of the applicable term.
            (B) Vacancy by incumbent before 7 years of service.--If a 
        person who is serving as a Governor of the United States Postal 
        Service on the date of enactment of this Act resigns, is 
        removed, or dies before the expiration of the 9-year term of 
        that Governor, and that Governor has served less than 7 years 
        of that term, the resulting vacancy in office shall be treated 
        as a vacancy in a 7-year term.
            (C) Vacancy by incumbent after 7 years of service.--If a 
        person who is serving as a Governor of the United States Postal 
        Service on the date of enactment of this Act resigns, is 
        removed, or dies before the expiration of the 9-year term of 
        that Governor, and that Governor has served 7 years or more of 
        that term, that term shall be deemed to have been a 7-year term 
        beginning on its commencement date for purposes of determining 
        vacancies in office. Any appointment to the vacant office shall 
        be for a 7-year term beginning at the end of the original 9-
        year term determined without regard to the deeming under the 
        preceding sentence. Nothing in this subparagraph shall be 
        construed to affect any action or authority of any Governor or 
        the Board of Governors during any portion of a 9-year term 
        deemed to be a 7-year term under this subparagraph.
    (d) Term Limitation.--
        (1) In general.--Section 202(b) of title 39, United States 
    Code, is amended--
            (A) by inserting ``(1)'' after ``(b)''; and
            (B) by adding at the end the following:
        ``(2) No person may serve more than 2 terms as a Governor.''.
        (2) Applicability.--The amendments made by paragraph (1) shall 
    not affect the tenure of any person serving as a Governor of the 
    United States Postal Service on the date of enactment of this Act 
    with respect to the term which that person is serving on that date. 
    Such person may continue to serve the remainder of the applicable 
    term, after which the amendments made by paragraph (1) shall apply.

SEC. 502. OBLIGATIONS.

    (a) Purposes for Which Obligations May Be Issued.--The first 
sentence of section 2005(a)(1) of title 39, United States Code, is 
amended by striking ``title.'' and inserting ``title, other than any of 
the purposes for which the corresponding authority is available to the 
Postal Service under section 2011.''.
    (b) 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.--
        (1) Obligations to which provisions apply.--The first sentence 
    of section 2005(b) of title 39, United States Code, is amended by 
    striking ``such obligations,'' and inserting ``obligations issued 
    by the Postal Service under this section,''.
        (2) Assets, revenues, and receipts to which provisions apply.--
    Subsection (b) of section 2005 of title 39, United States Code, is 
    amended by striking ``(b)'' and inserting ``(b)(1)'', and by adding 
    at the end the following:
    ``(2) Notwithstanding any other provision of this section--
        ``(A) the authority to pledge assets of the Postal Service 
    under this subsection shall be available only to the extent that 
    such assets are not related to the provision of competitive 
    products (as determined under section 2011(h) or, for purposes of 
    any period before accounting practices and principles under section 
    2011(h) have been established and applied, the best information 
    available from the Postal Service, including the audited statements 
    required by section 2008(e)); and
        ``(B) any authority under this subsection relating to the 
    pledging or other use of revenues or receipts of the Postal Service 
    shall be available only to the extent that they are not revenues or 
    receipts of the Competitive Products Fund.''.

SEC. 503. PRIVATE CARRIAGE OF LETTERS.

    (a) In General.--Section 601 of title 39, United States Code, is 
amended by striking subsection (b) and inserting the following:
    ``(b) A letter may also be carried out of the mails when--
        ``(1) the amount paid for the private carriage of the letter is 
    at least the amount equal to 6 times the rate then currently 
    charged for the 1st ounce of a single-piece first class letter;
        ``(2) the letter weighs at least 12\1/2\ ounces; or
        ``(3) such carriage is within the scope of services described 
    by regulations of the United States Postal Service (including, in 
    particular, sections 310.1 and 320.2-320.8 of title 39 of the Code 
    of Federal Regulations, as in effect on July 1, 2005) that purport 
    to permit private carriage by suspension of the operation of this 
    section (as then in effect).
    ``(c) Any regulations necessary to carry out this section shall be 
promulgated by the Postal Regulatory Commission.''.
    (b) Effective Date.--This section shall take effect on the date as 
of which the regulations promulgated under section 3633 of title 39, 
United States Code (as amended by section 202) take effect.

SEC. 504. RULEMAKING AUTHORITY.

    Paragraph (2) of section 401 of title 39, United States Code, is 
amended to read as follows:
        ``(2) to adopt, amend, and repeal such rules and regulations, 
    not inconsistent with this title, as may be necessary in the 
    execution of its functions under this title and such other 
    functions as may be assigned to the Postal Service under any 
    provisions of law outside of this title;''.

SEC. 505. NONINTERFERENCE WITH COLLECTIVE BARGAINING AGREEMENTS.

    (a) Labor Disputes.--Section 1207 of title 39, United States Code, 
is amended to read as follows:

``Sec. 1207. Labor disputes

    ``(a) If there is a collective-bargaining agreement in effect, no 
party to such agreement shall terminate or modify such agreement unless 
the party desiring such termination or modification serves written 
notice upon the other party to the agreement of the proposed 
termination or modification not less than 90 days prior to the 
expiration date thereof, or not less than 90 days prior to the time it 
is proposed to make such termination or modification. The party serving 
such notice shall notify the Federal Mediation and Conciliation Service 
of the existence of a dispute within 45 days after such notice, if no 
agreement has been reached by that time.
    ``(b) If the parties fail to reach agreement or to adopt a 
procedure providing for a binding resolution of a dispute by the 
expiration date of the agreement in effect, or the date of the proposed 
termination or modification, the Director of the Federal Mediation and 
Conciliation Service shall within 10 days appoint a mediator of 
nationwide reputation and professional stature, and who is also a 
member of the National Academy of Arbitrators. The parties shall 
cooperate with the mediator in an effort to reach an agreement and 
shall meet and negotiate in good faith at such times and places that 
the mediator, in consultation with the parties, shall direct.
    ``(c)(1) If no agreement is reached within 60 days after the 
expiration or termination of the agreement or the date on which the 
agreement became subject to modification under subsection (a) of this 
section, or if the parties decide upon arbitration but do not agree 
upon the procedures therefore, an arbitration board shall be 
established consisting of 3 members, 1 of whom shall be selected by the 
Postal Service, 1 by the bargaining representative of the employees, 
and the third by the 2 thus selected. If either of the parties fails to 
select a member, or if the members chosen by the parties fail to agree 
on the third person within 5 days after their first meeting, the 
selection shall be made from a list of names provided by the Director. 
This list shall consist of not less then 9 names of arbitrators of 
nationwide reputation and professional nature, who are also members of 
the National Academy of Arbitrators, and whom the Director has 
determined are available and willing to serve.
    ``(2) The arbitration board shall give the parties a full and fair 
hearing, including an opportunity to present evidence in support of 
their claims, and an opportunity to present their case in person, by 
counsel or by other representative as they may elect. Decisions of the 
arbitration board shall be conclusive and binding upon the parties. The 
arbitration board shall render its decision within 45 days after its 
appointment.
    ``(3) Costs of the arbitration board and mediation shall be shared 
equally by the Postal Service and the bargaining representative.
    ``(d) In the case of a bargaining unit whose recognized collective-
bargaining representative does not have an agreement with the Postal 
Service, if the parties fail to reach the agreement within 90 days 
after the commencement of collective bargaining, a mediator shall be 
appointed in accordance with the terms in subsection (b) of this 
section, unless the parties have previously agreed to another procedure 
for a binding resolution of their differences. If the parties fail to 
reach agreement within 180 days after the commencement of collective 
bargaining, and if they have not agreed to another procedure for 
binding resolution, an arbitration board shall be established to 
provide conclusive and binding arbitration in accordance with the terms 
of subsection (c) of this section.''.
    (b) Noninterference With Collective Bargaining Agreements.--Except 
as otherwise provided by the amendment made by subsection (a), nothing 
in this Act shall restrict, expand, or otherwise affect any of the 
rights, privileges, or benefits of either employees of or labor 
organizations representing employees of the United States Postal 
Service under chapter 12 of title 39, United States Code, the National 
Labor Relations Act, any handbook or manual affecting employee labor 
relations within the United States Postal Service, or any collective 
bargaining agreement.
    (c) Free Mailing Privileges Continue Unchanged.--Nothing in this 
Act or any amendment made by this Act shall affect any free mailing 
privileges accorded under section 3217 or sections 3403 through 3406 of 
title 39, United States Code.

SEC. 506. BONUS AUTHORITY.

    Chapter 36 of title 39, United States Code, is amended by inserting 
after section 3685 the following:

``Sec. 3686. Bonus authority

    ``(a) In General.--The Postal Service may establish 1 or more 
programs to provide bonuses or other rewards to officers and employees 
of the Postal Service in senior executive or equivalent positions to 
achieve the objectives of this chapter.
    ``(b) Limitation on Total Compensation.--
        ``(1) In general.--Under any such program, the Postal Service 
    may award a bonus or other reward in excess of the limitation set 
    forth in the last sentence of section 1003(a), if such program has 
    been approved under paragraph (2). Any such award or bonus may not 
    cause the total compensation of such officer or employee to exceed 
    the total annual compensation payable to the Vice President under 
    section 104 of title 3 as of the end of the calendar year in which 
    the bonus or award is paid.
        ``(2) Approval process.--If the Postal Service wishes to have 
    the authority, under any program described in subsection (a), to 
    award bonuses or other rewards in excess of the limitation set 
    forth in the last sentence of section 1003(a)--
            ``(A) the Postal Service shall make an appropriate request 
        to the Board of Governors of the Postal Service in such form 
        and manner as the Board requires; and
            ``(B) the Board of Governors shall approve any such request 
        if the Board certifies, for the annual appraisal period 
        involved, that the performance appraisal system for affected 
        officers and employees of the Postal Service (as designed and 
        applied) makes meaningful distinctions based on relative 
        performance.
        ``(3) Revocation authority.--If the Board of Governors of the 
    Postal Service finds that a performance appraisal system previously 
    approved under paragraph (2)(B) does not (as designed and applied) 
    make meaningful distinctions based on relative performance, the 
    Board may revoke or suspend the authority of the Postal Service to 
    continue a program approved under paragraph (2) until such time as 
    appropriate corrective measures have, in the judgment of the Board, 
    been taken.
    ``(c) Exceptions for Critical Positions.--Notwithstanding any other 
provision of law, the Board of Governors may allow up to 12 officers or 
employees of the Postal Service in critical senior executive or 
equivalent positions to receive total compensation in an amount not to 
exceed 120 percent of the total annual compensation payable to the Vice 
President under section 104 of title 3 as of the end of the calendar 
year in which such payment is received. For each exception made under 
this subsection, the Board shall provide written notification to the 
Director of the Office of Personnel Management and the Congress within 
30 days after the payment is made setting forth the name of the officer 
or employee involved, the critical nature of his or her duties and 
responsibilities, and the basis for determining that such payment is 
warranted.
    ``(d) Information for Inclusion in Comprehensive Statement.--
Included in its comprehensive statement under section 2401(e) for any 
period shall be--
        ``(1) the name of each person receiving a bonus or other 
    payment during such period which would not have been allowable but 
    for the provisions of subsection (b) or (c);
        ``(2) the amount of the bonus or other payment; and
        ``(3) the amount by which the limitation set forth in the last 
    sentence of section 1003(a) was exceeded as a result of such bonus 
    or other payment.
    ``(e) Regulations.--The Board of Governors may prescribe 
regulations for the administration of this section.''.

                TITLE VI--ENHANCED REGULATORY COMMISSION

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

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

               ``CHAPTER 5--POSTAL REGULATORY COMMISSION

``Sec.
``501. Establishment.
``502. Commissioners.
``503. Rules; regulations; procedures.
``504. Administration.
``505. Officer of the Postal Regulatory Commission representing the 
          general public.

``Sec. 501. Establishment

    ``The Postal Regulatory Commission is an independent establishment 
of the executive branch of the Government of the United States.

``Sec. 502. Commissioners

    ``(a) The Postal Regulatory Commission is composed of 5 
Commissioners, appointed by the President, by and with the advice and 
consent of the Senate. The Commissioners shall be chosen solely on the 
basis of their technical qualifications, professional standing, and 
demonstrated expertise in economics, accounting, law, or public 
administration, and may be removed by the President only for cause. 
Each individual appointed to the Commission shall have the 
qualifications and expertise necessary to carry out the enhanced 
responsibilities accorded Commissioners under the Postal Accountability 
and Enhancement Act. Not more than 3 of the Commissioners may be 
adherents of the same political party.
    ``(b) No Commissioner shall be financially interested in any 
enterprise in the private sector of the economy engaged in the delivery 
of mail matter.
    ``(c) A Commissioner may continue to serve after the expiration of 
his term until his successor has qualified, except that a Commissioner 
may not so continue to serve for more than 1 year after the date upon 
which his term otherwise would expire under subsection (f).
    ``(d) One of the Commissioners shall be designated as Chairman by, 
and shall serve in the position of Chairman at the pleasure of, the 
President.
    ``(e) The Commissioners shall by majority vote designate a Vice 
Chairman of the Commission. The Vice Chairman shall act as Chairman of 
the Commission in the absence of the Chairman.
    ``(f) The Commissioners shall serve for terms of 6 years.'';
        (2) by striking, in subchapter I of chapter 36 (as in effect 
    before the amendment made by section 201(c)), the heading for such 
    subchapter I and all that follows through section 3602;
        (3) by redesignating sections 3603 and 3604 as sections 503 and 
    504, respectively, and transferring such sections to the end of 
    chapter 5 (as inserted by paragraph (1)); and
        (4) by adding after such section 504 the following:

``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) Applicability.--The amendment made by subsection (a)(1) shall 
not affect the appointment or tenure of any person serving as a 
Commissioner on the Postal Regulatory Commission (as so redesignated by 
section 604) under an appointment made before the date of enactment of 
this Act or any nomination made before that date, but, when any such 
office becomes vacant, the appointment of any person to fill that 
office shall be made in accordance with such amendment.
    (c) Clerical Amendment.--The analysis for part I of title 39, 
United States Code, is amended by inserting after the item relating to 
chapter 4 the following:

    ``5. Postal Regulatory Commission.........................


                                                                   501''

SEC. 602. AUTHORITY FOR POSTAL REGULATORY COMMISSION TO ISSUE 
              SUBPOENAS.

    Section 504 of title 39, United States Code (as so redesignated by 
section 601) is amended by adding at the end the following:
    ``(f)(1) Any Commissioner of the Postal Regulatory Commission, any 
administrative law judge appointed by the Commission under section 3105 
of title 5, and any employee of the Commission designated by the 
Commission may administer oaths, examine witnesses, take depositions, 
and receive evidence.
    ``(2) The Chairman of the Commission, any Commissioner designated 
by the Chairman, and any administrative law judge appointed by the 
Commission under section 3105 of title 5 may, with respect to any 
proceeding conducted by the Commission under this title or to obtain 
information to be used to prepare a report under this title--
        ``(A) issue subpoenas requiring the attendance and presentation 
    of testimony by, or the production of documentary or other evidence 
    in the possession of, any covered person; and
        ``(B) order the taking of depositions and responses to written 
    interrogatories by a covered person.
The written concurrence of a majority of the Commissioners then holding 
office shall, with respect to each subpoena under subparagraph (A), be 
required in advance of its issuance.
    ``(3) In the case of contumacy or failure to obey a subpoena issued 
under this subsection, upon application by the Commission, the district 
court of the United States for the district in which the person to whom 
the subpoena is addressed resides or is served may issue an order 
requiring such person to appear at any designated place to testify or 
produce documentary or other evidence. Any failure to obey the order of 
the court may be punished by the court as a contempt thereof.
    ``(4) For purposes of this subsection, the term `covered person' 
means an officer, employee, agent, or contractor of the Postal Service.
    ``(g)(1) If the Postal Service determines that any document or 
other matter it provides to the Postal Regulatory Commission under a 
subpoena issued under subsection (f), or otherwise at the request of 
the Commission in connection with any proceeding or other purpose under 
this title, contains information which is described in section 410(c) 
of this title, or exempt from public disclosure under section 552(b) of 
title 5, the Postal Service shall, at the time of providing such matter 
to the Commission, notify the Commission, in writing, of its 
determination (and the reasons therefor).
    ``(2) Except as provided in paragraph (3), no officer or employee 
of the Commission may, with respect to any information as to which the 
Commission has been notified under paragraph (1)--
        ``(A) use such information for purposes other than the purposes 
    for which it is supplied; or
        ``(B) permit anyone who is not an officer or employee of the 
    Commission to have access to any such information.
        ``(3)(A) Paragraph (2) shall not prohibit the Commission from 
    publicly disclosing relevant information in furtherance of its 
    duties under this title, provided that the Commission has adopted 
    regulations under section 553 of title 5, that establish a 
    procedure for according appropriate confidentiality to information 
    identified by the Postal Service under paragraph (1). In 
    determining the appropriate degree of confidentiality to be 
    accorded information identified by the Postal Service under 
    paragraph (1), the Commission shall balance the nature and extent 
    of the likely commercial injury to the Postal Service against the 
    public interest in maintaining the financial transparency of a 
    government establishment competing in commercial markets.
        ``(B) Paragraph (2) shall not prevent the Commission from 
    requiring production of information in the course of any discovery 
    procedure established in connection with a proceeding under this 
    title. The Commission shall, by regulations based on rule 26(c) of 
    the Federal Rules of Civil Procedure, establish procedures for 
    ensuring appropriate confidentiality for information furnished to 
    any party.''.

SEC. 603. AUTHORIZATION OF APPROPRIATIONS FROM THE POSTAL SERVICE FUND.

    (a) Postal Regulatory Commission.--Subsection (d) of section 504 of 
title 39, United States Code (as so redesignated by section 601) is 
amended to read as follows:
    ``(d) There are authorized to be appropriated, out of the Postal 
Service Fund, such sums as may be necessary for the Postal 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) Office of Inspector General of the United States Postal 
Service.--Section 8G(f) of the Inspector General Act of 1978 (5 U.S.C. 
App.) is amended--
        (1) by redesignating paragraph (4) as paragraph (5);
        (2) by redesignating the second paragraph (3) (relating to 
    employees and labor organizations) as paragraph (4); and
        (3) by adding at the end the following:
        ``(6) There are authorized to be appropriated, out of the 
    Postal Service Fund, such sums as may be necessary for the Office 
    of Inspector General of the United States Postal Service.''.
    (c) Budget Program.--
        (1) In general.--The next to last sentence of section 2009 of 
    title 39, United States Code, is amended to read as follows: ``The 
    budget program shall also include separate statements of the 
    amounts which (1) the Postal Service requests to be appropriated 
    under subsections (b) and (c) of section 2401, (2) the Office of 
    Inspector General of the United States Postal Service requests to 
    be appropriated, out of the Postal Service Fund, under section 
    8G(f) of the Inspector General Act of 1978, and (3) the Postal 
    Regulatory Commission requests to be appropriated, out of the 
    Postal Service Fund, under section 504(d) of this title.''.
        (2) Conforming amendment.--Section 2003(e)(1) of title 39, 
    United States Code, is amended by striking the first sentence and 
    inserting the following: ``The Fund shall be available for the 
    payment of (A) all expenses incurred by the Postal Service in 
    carrying out its functions as provided by law, subject to the same 
    limitation as set forth in the parenthetical matter under 
    subsection (a); (B) all expenses of the Postal Regulatory 
    Commission, subject to the availability of amounts appropriated 
    under section 504(d); and (C) all expenses of the Office of 
    Inspector General, subject to the availability of amounts 
    appropriated under section 8G(f) of the Inspector General Act of 
    1978.''.
    (d) Effective Date.--
        (1) In general.--The amendments made by this section shall 
    apply with respect to fiscal years beginning on or after October 1, 
    2008.
        (2) Savings provision.--The provisions of title 39, United 
    States Code, and the Inspector General Act of 1978 (5 U.S.C. App.) 
    that are amended by this section shall, for purposes of any fiscal 
    year before the first fiscal year to which the amendments made by 
    this section apply, continue to apply in the same way as if this 
    section had never been enacted.

SEC. 604. REDESIGNATION OF THE POSTAL RATE COMMISSION.

    (a) Amendments to Title 39, United States Code.--Title 39, United 
States Code, is amended in sections 404, 503 and 504 (as so 
redesignated by section 601), 1001 and 1002, by striking ``Postal Rate 
Commission'' each place it appears and inserting ``Postal Regulatory 
Commission'';
    (b) Amendments to Title 5, United States Code.--Title 5, United 
States Code, is amended in sections 104(1), 306(f), 2104(b), 3371(3), 
5314 (in the item relating to Chairman, Postal Rate Commission), 5315 
(in the item relating to Members, Postal Rate Commission), 
5514(a)(5)(B), 7342(a)(1)(A), 7511(a)(1)(B)(ii), 8402(c)(1), 
8423(b)(1)(B), and 8474(c)(4) by striking ``Postal Rate Commission'' 
and inserting ``Postal Regulatory Commission''.
    (c) Amendment to the Ethics in Government Act of 1978.--Section 
101(f)(6) of the Ethics in Government Act of 1978 (5 U.S.C. App.) is 
amended by striking ``Postal Rate Commission'' and inserting ``Postal 
Regulatory Commission''.
    (d) Amendment to the Rehabilitation Act of 1973.--Section 501(b) of 
the Rehabilitation Act of 1973 (29 U.S.C. 791(b)) is amended by 
striking ``Postal Rate Office'' and inserting ``Postal Regulatory 
Commission''.
    (e) Amendment to Title 44, United States Code.--Section 3502(5) of 
title 44, United States Code, is amended by striking ``Postal Rate 
Commission'' and inserting ``Postal Regulatory Commission''.
    (f) Other References.--Whenever a reference is made in any 
provision of law (other than this Act or a provision of law amended by 
this Act), regulation, rule, document, or other record of the United 
States to the Postal Rate Commission, such reference shall be 
considered a reference to the Postal Regulatory Commission.

SEC. 605. INSPECTOR GENERAL OF THE POSTAL REGULATORY COMMISSION.

    (a) In General.--Section 8G(a)(2) of the Inspector General Act of 
1978 is amended by inserting ``the Postal Regulatory Commission,'' 
after ``the United States International Trade Commission,''.
    (b) Administration.--Section 504 of title 39, United States Code 
(as so redesignated by section 601) is amended by adding after 
subsection (g) (as added by section 602) the following:
    ``(h)(1) Notwithstanding any other provision of this title or of 
the Inspector General Act of 1978, the authority to select, appoint, 
and employ officers and employees of the Office of Inspector General of 
the Postal Regulatory Commission, and to obtain any temporary or 
intermittent services of experts or consultants (or an organization of 
experts or consultants) for such Office, shall reside with the 
Inspector General of the Postal Regulatory Commission.
    ``(2) Except as provided in paragraph (1), any exercise of 
authority under this subsection shall, to the extent practicable, be in 
conformance with the applicable laws and regulations that govern 
selections, appointments, and employment, and the obtaining of any such 
temporary or intermittent services, within the Postal Regulatory 
Commission.''.
    (c) Deadline.--No later than 180 days after the date of the 
enactment of this Act--
        (1) the first Inspector General of the Postal Regulatory 
    Commission shall be appointed; and
        (2) the Office of Inspector General of the Postal Regulatory 
    Commission shall be established.

                         TITLE VII--EVALUATIONS

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

    (a) In General.--The Postal Regulatory Commission shall, at least 
every 5 years, submit a report to the President and Congress 
concerning--
        (1) the operation of the amendments made by this Act; and
        (2) recommendations for any legislation or other measures 
    necessary to improve the effectiveness or efficiency of the postal 
    laws of the United States.
    (b) Postal Service Views.--A report under this section shall be 
submitted only after reasonable opportunity has been afforded to the 
Postal Service to review the report and to submit written comments on 
the report. Any comments timely received from the Postal Service under 
the preceding sentence shall be attached to the report submitted under 
subsection (a).

SEC. 702. REPORT ON UNIVERSAL POSTAL SERVICE AND THE POSTAL MONOPOLY.

    (a) Report by the Postal Regulatory Commission.--
        (1) In general.--Not later than 24 months after the date of 
    enactment of this Act, the Postal Regulatory Commission shall 
    submit a report to the President and Congress on universal postal 
    service and the postal monopoly in the United States (in this 
    section referred to as ``universal service and the postal 
    monopoly''), including the monopoly on the delivery of mail and on 
    access to mailboxes.
        (2) Contents.--The report under this subsection shall include--
            (A) a comprehensive review of the history and development 
        of universal service and the postal monopoly, including how the 
        scope and standards of universal service and the postal 
        monopoly have evolved over time for the Nation and its urban 
        and rural areas;
            (B) the scope and standards of universal service and the 
        postal monopoly provided under current law (including sections 
        101 and 403 of title 39, United States Code), and current 
        rules, regulations, policy statements, and practices of the 
        Postal Service;
            (C) a description of any geographic areas, populations, 
        communities (including both urban and rural communities), 
        organizations, or other groups or entities not currently 
        covered by universal service or that are covered but that are 
        receiving services deficient in scope or quality or both; and
            (D) the scope and standards of universal service and the 
        postal monopoly likely to be required in the future in order to 
        meet the needs and expectations of the United States public, 
        including all types of mail users, based on discussion of such 
        assumptions, alternative sets of assumptions, and analyses as 
        the Postal Service considers plausible.
    (b) Recommended Changes to Universal Service and the Monopoly.--The 
Postal Regulatory Commission shall include in the report under 
subsection (a), and in all reports submitted under section 701 of this 
Act--
        (1) any recommended changes to universal service and the postal 
    monopoly as the Commission considers appropriate, including changes 
    that the Commission may implement under current law and changes 
    that would require changes to current law, with estimated effects 
    of the recommendations on the service, financial condition, rates, 
    and security of mail provided by the Postal Service;
        (2) with respect to each recommended change described under 
    paragraph (1)--
            (A) an estimate of the costs of the Postal Service 
        attributable to the obligation to provide universal service 
        under current law; and
            (B) an analysis of the likely benefit of the current postal 
        monopoly to the ability of the Postal Service to sustain the 
        current scope and standards of universal service, including 
        estimates of the financial benefit of the postal monopoly to 
        the extent practicable, under current law; and
        (3) such additional topics and recommendations as the 
    Commission considers appropriate, with estimated effects of the 
    recommendations on the service, financial condition, rates, and the 
    security of mail provided by the Postal Service.
    (c) Consultation.--In preparing the report required by this 
section, the Postal Regulatory Commission--
        (1) shall solicit written comments from the Postal Service and 
    consult with the Postal Service and other Federal agencies, users 
    of the mails, enterprises in the private sector engaged in the 
    delivery of the mail, and the general public; and
        (2) shall address in the report any written comments received 
    under this section.
    (d) Clarifying Provision.--Nothing in this section shall be 
considered to relate to any services that are not postal services 
within the meaning of section 102 of title 39, United States Code, as 
amended by section 101 of this Act.

SEC. 703. STUDY ON EQUAL APPLICATION OF LAWS TO COMPETITIVE PRODUCTS.

    (a) In General.--The Federal Trade Commission shall prepare and 
submit to the President and Congress, and to the Postal Regulatory 
Commission, within 1 year after the date of enactment of this Act, a 
comprehensive report identifying Federal and State laws that apply 
differently to the United States Postal Service with respect to the 
competitive category of mail (within the meaning of section 102 of 
title 39, United States Code, as amended by section 101) and to private 
companies providing similar products.
    (b) Recommendations.--The Federal Trade Commission shall include 
such recommendations as it considers appropriate for bringing such 
legal differences to an end, and in the interim, to account under 
section 3633 of title 39, United States Code (as added by this Act), 
for the net economic effects provided by those laws.
    (c) Consultation.--In preparing its report, the Federal Trade 
Commission shall consult with the United States Postal Service, the 
Postal Regulatory Commission, other Federal agencies, mailers, private 
companies that provide delivery services, and the general public, and 
shall append to such report any written comments received under this 
subsection.
    (d) Competitive Product Regulation.--The Postal 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 under section 3633 of title 39, 
United States Code.

SEC. 704. REPORT ON POSTAL WORKPLACE SAFETY AND WORKPLACE-RELATED 
              INJURIES.

    (a) Report by the Inspector General.--
        (1) In general.--Not later than 6 months after the enactment of 
    this Act, the Inspector General of the United States Postal Service 
    shall submit a report to Congress and the Postal Service that--
            (A) details and assesses any progress the Postal Service 
        has made in improving workplace safety and reducing workplace-
        related injuries nationwide; and
            (B) identifies opportunities for improvement that remain 
        with respect to such improvements and reductions.
        (2) Contents.--The report under this subsection shall also--
            (A) discuss any injury reduction goals established by the 
        Postal Service;
            (B) describe the actions that the Postal Service has taken 
        to improve workplace safety and reduce workplace-related 
        injuries, and assess how successful the Postal Service has been 
        in meeting its injury reduction goal; and
            (C) identify areas where the Postal Service has failed to 
        meet its injury reduction goals, explain the reasons why these 
        goals were not met, and identify opportunities for making 
        further progress in meeting these goals.
    (b) Report by the Postal Service.--
        (1) Report to congress.--Not later than 6 months after 
    receiving the report under subsection (a), the Postal Service shall 
    submit a report to Congress detailing how it plans to improve 
    workplace safety and reduce workplace-related injuries nationwide, 
    including goals and metrics.
        (2) Problem areas.--The report under this subsection shall also 
    include plans, developed in consultation with the Inspector General 
    and employee representatives, including representatives of each 
    postal labor union and management association, for addressing the 
    problem areas identified by the Inspector General in the report 
    under subsection (a)(2)(C).

SEC. 705. STUDY ON RECYCLED PAPER.

    (a) In General.--Within 12 months after the date of enactment of 
this Act, the Government Accountability Office shall study and submit 
to the Congress, the Board of Governors of the Postal Service, and to 
the Postal Regulatory Commission a report concerning--
        (1) a description and analysis of the accomplishments of the 
    Postal Service in each of the preceding 5 years involving recycling 
    activities, including efforts by the Postal Service to recycle 
    undeliverable and discarded mail and other materials and its public 
    affairs efforts to promote the increased recycling of paper 
    products; and
        (2) additional opportunities that may be available for the 
    United States Postal Service to engage in recycling initiatives, 
    including consultation with the paper recycling industry and 
    encouraging mailers to increase both the recycling of paper 
    products and the use of recycled paper, and the projected costs and 
    revenues of undertaking such opportunities.
    (b) Recommendations.--The report shall include recommendations for 
any administrative or legislative actions that may be appropriate.

SEC. 706. GREATER DIVERSITY IN POSTAL SERVICE EXECUTIVE AND 
              ADMINISTRATIVE SCHEDULE MANAGEMENT POSITIONS.

    (a) In general.--The Board of Governors shall study and, within 1 
year after the date of the enactment of this Act, submit to the 
President and Congress a report concerning the extent to which women 
and minorities are represented in supervisory and management positions 
within the United States Postal Service. Any data included in the 
report shall be presented in the aggregate and by pay level.
    (b) Performance Evaluations.--The United States Postal Service 
shall, as soon as is practicable, take such measures as may be 
necessary to incorporate the affirmative action and equal opportunity 
criteria contained in 4313(5) of title 5, United States Code, into the 
performance appraisals of senior supervisory or managerial employees.

SEC. 707. CONTRACTS WITH WOMEN, MINORITIES, AND SMALL BUSINESSES.

    The Board of Governors shall study and, within 1 year after the 
date of the enactment of this Act, submit to the President and the 
Congress a report concerning the number and value of contracts and 
subcontracts the Postal Service has entered into with women, 
minorities, and small businesses.

SEC. 708. RATES FOR PERIODICALS.

    (a) In General.--The United States Postal Service, acting jointly 
with the Postal Regulatory Commission, shall study and submit to the 
President and Congress a report concerning--
        (1) the quality, accuracy, and completeness of the 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. 709. 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. 710. ASSESSMENT OF FUTURE BUSINESS MODEL OF THE POSTAL SERVICE.

    (a) Government Accountability Office Mandate.--The Comptroller 
General of the United States shall prepare and submit to the President 
and Congress a report that builds upon the work of the 2002 President's 
Commission on the United States Postal Service by evaluating in-depth 
various options and strategies for the long-term structural and 
operational reforms of the United States Postal Service. The final 
report required by this section shall be submitted within 5 years of 
the date of enactment of this Act.
    (b) Protection of Universal Service.--The Government Accountability 
Office may include such recommendations as it considers appropriate 
with respect to how the Postal Service's business model can be 
maintained or transformed in an orderly manner that will minimize 
adverse effects on all interested parties and assure continued 
availability of affordable, universal postal service throughout the 
United States. The Government Accountability Office shall not consider 
any strategy or other course of action that would pose a significant 
risk to the continued availability of affordable, universal postal 
service throughout the United States.
    (c) Elements of Report.--
        (1) Topics to address.--The report shall address at least the 
    following:
            (A) Specification of nature and bases of one or more sets 
        of reasonable assumptions about the development of the postal 
        services market, to the extent that such assumptions may be 
        necessary or appropriate for each strategy identified by the 
        Government Accountability Office.
            (B) Specification of the nature and bases of one or more 
        sets of reasonable assumptions about the development of the 
        regulatory framework for postal services, to the extent that 
        such assumptions may be necessary or appropriate for each 
        strategy identified by the Government Accountability Office.
            (C) Qualitative and, to the extent possible, quantitative 
        effects that each strategy identified by the Government 
        Accountability Office may have on universal service generally, 
        the Postal Service, mailers, postal employees, private 
        companies that provide delivery services, and the general 
        public.
            (D) Financial effects that each strategy identified by the 
        Government Accountability Office may have on the Postal 
        Service, postal employees, the Treasury of the United States, 
        and other affected parties, including the American mailing 
        consumer.
            (E) Feasible and appropriate procedural steps and 
        timetables for implementing each strategy identified by the 
        Government Accountability Office.
            (F) Such additional topics as the Comptroller General shall 
        consider necessary and appropriate.
        (2) Matters to consider.--For each strategy identified, the 
    Government Accountability Office shall assess how each business 
    model might--
            (A) address the human-capital challenges facing the Postal 
        Service, including how employee-management relations within the 
        Postal Service may be improved;
            (B) optimize the postal infrastructure, including the best 
        methods for providing retail services that ensure convenience 
        and access to customers;
            (C) ensure the safety and security of the mail and of 
        postal employees;
            (D) minimize areas of inefficiency or waste and improve 
        operations involved in the collection, processing, or delivery 
        of mail; and
            (E) impact other matters that the Comptroller General 
        determines are relevant to evaluating a viable long-term 
        business model for the Postal Service.
        (3) Experiences of other countries.--In preparing the report 
    required by subsection (a), the Government Accountability Office 
    shall comprehensively and quantitatively investigate the 
    experiences of other industrialized countries that have transformed 
    the national post office. The Government Accountability Office 
    shall undertake such original research as it deems necessary. In 
    each case, the Government Accountability Office shall describe as 
    fully as possible the costs and benefits of transformation of the 
    national post office on all affected parties and shall identify any 
    lessons that foreign experience may imply for each strategy 
    identified by the research organization.
    (d) Outside experts.--In preparing its study, the Government 
Accountability Office may retain the services of additional experts and 
consultants.
    (e) Consultation.--In preparing its report, the Government 
Accountability Office shall consult fully with the Postal Service, the 
Postal Regulatory Commission, other Federal agencies, postal employee 
unions and management associations, mailers, private companies that 
provide delivery services, and the general public. The Government 
Accountability Office shall include with its final report a copy of all 
formal written comments received under this subsection.
    (f) Authorization of Appropriations.--There are authorized to be 
appropriated from the Postal Service Fund such sums as may be necessary 
to carry out this section.

SEC. 711. PROVISIONS RELATING TO COOPERATIVE MAILINGS.

    (a) Study.--
        (1) In general.--The Postal Regulatory Commission shall examine 
    section E670.5.3 of the Domestic Mail Manual to determine whether 
    it contains adequate safeguards to protect against--
            (A) abuses of rates for nonprofit mail; and
            (B) deception of consumers.
        (2) Report.--The Commission shall report the results of its 
    examination to the Postal Service, along with any recommendations 
    that the Commission determines appropriate.
    (b) Failure to Act.--If the Postal Service fails to act on the 
recommendations of the Commission, the Commission may take such action 
as it determines necessary to prevent abuse of rates or deception of 
consumers.

SEC. 712. DEFINITION.

    For purposes of this title, the term ``Board of Governors'' has the 
meaning given such term by section 102 of title 39, United States Code.

   TITLE VIII--POSTAL SERVICE RETIREMENT AND HEALTH BENEFITS FUNDING

SEC. 801. SHORT TITLE.

    This title may be cited as the ``Postal Civil Service Retirement 
and Health Benefits Funding Amendments of 2006''.

SEC. 802. CIVIL SERVICE RETIREMENT SYSTEM.

    (a) In General.--Chapter 83 of title 5, United States Code, is 
amended--
        (1) in section 8334(a)(1)(B), by striking clause (ii) and 
    inserting the following:
    ``(ii) In the case of an employee of the United States Postal 
Service, no amount shall be contributed under this subparagraph.''; and
        (2) by amending section 8348(h) to read as follows:
    ``(h)(1) In this subsection, the term `Postal surplus or 
supplemental liability' means the estimated difference, as determined 
by the Office, between--
        ``(A) the actuarial present value of all future benefits 
    payable from the Fund under this subchapter to current or former 
    employees of the United States Postal Service and attributable to 
    civilian employment with the United States Postal Service; and
        ``(B) the sum of--
            ``(i) the actuarial present value of deductions to be 
        withheld from the future basic pay of employees of the United 
        States Postal Service currently subject to this subchapter 
        under section 8334;
            ``(ii) that portion of the Fund balance, as of the date the 
        Postal surplus or supplemental liability is determined, 
        attributable to payments to the Fund by the United States 
        Postal Service and its employees, minus benefit payments 
        attributable to civilian employment with the United States 
        Postal Service, plus the earnings on such amounts while in the 
        Fund; and
            ``(iii) any other appropriate amount, as determined by the 
        Office in accordance with generally accepted actuarial 
        practices and principles.
    ``(2)(A) Not later than June 15, 2007, the Office shall determine 
the Postal surplus or supplemental liability, as of September 30, 2006. 
If that result is a surplus, the amount of the surplus shall be 
transferred to the Postal Service Retiree Health Benefits Fund 
established under section 8909a by June 30, 2007.
    ``(B) The Office shall redetermine the Postal surplus or 
supplemental liability as of the close of the fiscal year, for each 
fiscal year beginning after September 30, 2007, through the fiscal year 
ending September 30, 2038. If the result is a surplus, that amount 
shall remain in the Fund until distribution is authorized under 
subparagraph (C). Beginning June 15, 2017, if the result is a 
supplemental liability, the Office shall establish an amortization 
schedule, including a series of annual installments commencing on 
September 30 of the subsequent fiscal year, which provides for the 
liquidation of such liability by September 30, 2043.
    ``(C) As of the close of the fiscal years ending September 30, 
2015, 2025, 2035, and 2039, if the result is a surplus, that amount 
shall be transferred to the Postal Service Retiree Health Benefits 
Fund, and any prior amortization schedule for payments shall be 
terminated.
    ``(D) Amortization schedules established under this paragraph shall 
be set in accordance with generally accepted actuarial practices and 
principles, with interest computed at the rate used in the most recent 
valuation of the Civil Service Retirement System.
    ``(E) The United States Postal Service shall pay the amounts so 
determined to the Office, with payments due not later than the date 
scheduled by the Office.
    ``(3) Notwithstanding any other provision of law, in computing the 
amount of any payment under any other subsection of this section that 
is based upon the amount of the unfunded liability, such payment shall 
be computed disregarding that portion of the unfunded liability that 
the Office determines will be liquidated by payments under this 
subsection.''.
    (b) Credit Allowed for Military Service.--In the application of 
section 8348(g)(2) of title 5, United States Code, for the fiscal year 
2007, the Office of Personnel Management shall include, in addition to 
the amount otherwise computed under that paragraph, the amounts that 
would have been included for the fiscal years 2003 through 2006 with 
respect to credit for military service of former employees of the 
United States Postal Service as though the Postal Civil Service 
Retirement System Funding Reform Act of 2003 (Public Law 108-18) had 
not been enacted, and the Secretary of the Treasury shall make the 
required transfer to the Civil Service Retirement and Disability Fund 
based on that amount.
    (c) Review.--
        (1) In general.--
            (A) Request for review.--Notwithstanding any other 
        provision of this section (including any amendment made by this 
        section), any determination or redetermination made by the 
        Office of Personnel Management under this section (including 
        any amendment made by this section) shall, upon request of the 
        United States Postal Service, be subject to a review by the 
        Postal Regulatory Commission under this subsection.
            (B) Report.--Upon receiving a request under subparagraph 
        (A), the Commission shall promptly procure the services of an 
        actuary, who shall hold membership in the American Academy of 
        Actuaries and shall be qualified in the evaluation of pension 
        obligations, to conduct a review in accordance with generally 
        accepted actuarial practices and principles and to provide a 
        report to the Commission containing the results of the review. 
        The Commission, upon determining that the report satisfies the 
        requirements of this paragraph, shall approve the report, with 
        any comments it may choose to make, and submit it with any such 
        comments to the Postal Service, the Office of Personnel 
        Management, and Congress.
        (2) Reconsideration.--Upon receiving the report from the 
    Commission under paragraph (1), the Office of Personnel Management 
    shall reconsider its determination or redetermination in light of 
    such report, and shall make any appropriate adjustments. The Office 
    shall submit a report containing the results of its reconsideration 
    to the Commission, the Postal Service, and Congress.

SEC. 803. HEALTH INSURANCE.

    (a) In General.--
        (1) Funding.--Chapter 89 of title 5, United States Code, is 
    amended--
            (A) in section 8906(g)(2)(A), by striking ``shall be paid 
        by the United States Postal Service.'' and inserting ``shall 
        through September 30, 2016, be paid by the United States Postal 
        Service, and thereafter shall be paid first from the Postal 
        Service Retiree Health Benefits Fund up to the amount contained 
        in the Fund, with any remaining amount paid by the United 
        States Postal Service.''; and
            (B) by inserting after section 8909 the following:

``Sec. 8909a. Postal Service Retiree Health Benefit Fund

    ``(a) There is in the Treasury of the United States a Postal 
Service Retiree Health Benefits Fund which is administered by the 
Office of Personnel Management.
    ``(b) The Fund is available without fiscal year limitation for 
payments required under section 8906(g)(2)(A).
    ``(c) The Secretary of the Treasury shall immediately invest, in 
interest-bearing securities of the United States such currently 
available portions of the Fund as are not immediately required for 
payments from the Fund. Such investments shall be made in the same 
manner as investments for the Civil Service Retirement and Disability 
Fund under section 8348.
    ``(d)(1) Not later than June 30, 2007, and by June 30 of each 
succeeding year, the Office shall compute the net present value of the 
future payments required under section 8906(g)(2)(A) and attributable 
to the service of Postal Service employees during the most recently 
ended fiscal year.
    ``(2)(A) Not later than June 30, 2007, the Office shall compute, 
and by June 30 of each succeeding year, the Office shall recompute the 
difference between--
        ``(i) the net present value of the excess of future payments 
    required under section 8906(g)(2)(A) for current and future United 
    States Postal Service annuitants as of the end of the fiscal year 
    ending on September 30 of that year; and
        ``(ii)(I) the value of the assets of the Postal Retiree Health 
    Benefits Fund as of the end of the fiscal year ending on September 
    30 of that year; and
        ``(II) the net present value computed under paragraph (1).
    ``(B) Not later than June 30, 2017, the Office shall compute, and 
by June 30 of each succeeding year shall recompute, a schedule 
including a series of annual installments which provide for the 
liquidation of any liability or surplus by September 30, 2056, or 
within 15 years, whichever is later, of the net present value 
determined under subparagraph (A), including interest at the rate used 
in that computation.
    ``(3)(A) The United States Postal Service shall pay into such 
Fund--
        ``(i) $5,400,000,000, not later than September 30, 2007;
        ``(ii) $5,600,000,000, not later than September 30, 2008;
        ``(iii) $5,400,000,000, not later than September 30, 2009;
        ``(iv) $5,500,000,000, not later than September 30, 2010;
        ``(v) $5,500,000,000, not later than September 30, 2011;
        ``(vi) $5,600,000,000, not later than September 30, 2012;
        ``(vii) $5,600,000,000, not later than September 30, 2013;
        ``(viii) $5,700,000,000, not later than September 30, 2014;
        ``(ix) $5,700,000,000, not later than September 30, 2015; and
        ``(x) $5,800,000,000, not later than September 30, 2016.
    ``(B) Not later than September 30, 2017, and by September 30 of 
each succeeding year, the United States Postal Service shall pay into 
such Fund the sum of--
        ``(i) the net present value computed under paragraph (1); and
        ``(ii) any annual installment computed under paragraph (2)(B).
    ``(4) Computations under this subsection shall be made consistent 
with the assumptions and methodology used by the Office for financial 
reporting under subchapter II of chapter 35 of title 31.
    ``(5)(A)(i) Any computation or other determination of the Office 
under this subsection shall, upon request of the United States Postal 
Service, be subject to a review by the Postal Regulatory Commission 
under this paragraph.
    ``(ii) Upon receiving a request under clause (i), the Commission 
shall promptly procure the services of an actuary, who shall hold 
membership in the American Academy of Actuaries and shall be qualified 
in the evaluation of healthcare insurance obligations, to conduct a 
review in accordance with generally accepted actuarial practices and 
principles and to provide a report to the Commission containing the 
results of the review. The Commission, upon determining that the report 
satisfies the requirements of this subparagraph, shall approve the 
report, with any comments it may choose to make, and submit it with any 
such comments to the Postal Service, the Office of Personnel 
Management, and Congress.
    ``(B) Upon receiving the report under subparagraph (A), the Office 
of Personnel Management shall reconsider its determination or 
redetermination in light of such report, and shall make any appropriate 
adjustments. The Office shall submit a report containing the results of 
its reconsideration to the Commission, the Postal Service, and 
Congress.
    ``(6) After consultation with the United States Postal Service, the 
Office shall promulgate any regulations the Office determines necessary 
under this subsection.''.
        (2) Technical and conforming amendment.--The table of sections 
    for chapter 89 of title 5, United States Code, is amended by 
    inserting after the item relating to section 8909 the following:

``8909a. Postal Service Retiree Health Benefits Fund.''.

    (b) Review.--
        (1) In general.--
            (A) Request for review.--Any regulation established under 
        section 8909a(d)(5) of title 5, United States Code (as added by 
        subsection (a)), shall, upon request of the United States 
        Postal Service, be subject to a review by the Postal Regulatory 
        Commission under this paragraph.
            (B) Report.--Upon receiving a request under subparagraph 
        (A), the Commission shall promptly procure the services of an 
        actuary, who shall hold membership in the American Academy of 
        Actuaries and shall be qualified in the evaluation of 
        healthcare insurance obligations, to conduct a review in 
        accordance with generally accepted actuarial practices and 
        principles and to provide a report to the Commission containing 
        the results of the review. The Commission, upon determining 
        that the report satisfies the requirements of this paragraph, 
        shall approve the report, with any comments it may choose to 
        make, and submit it with any such comments to the Postal 
        Service, the Office of Personnel Management, and Congress.
        (2) Reconsideration.--Upon receiving the report under paragraph 
    (1), the Office of Personnel Management shall reconsider its 
    determination or redetermination in light of such report, and shall 
    make any appropriate adjustments. The Office shall submit a report 
    containing the results of its reconsideration to the Commission, 
    the Postal Service, and Congress.

SEC. 804. REPEAL OF DISPOSITION OF SAVINGS PROVISION.

    (a) In General.--Section 3 of the Postal Civil Service Retirement 
System Funding Reform Act of 2003 (Public Law 108-18) is repealed.
    (b) Savings.--Savings accrued to the Postal Service as a result of 
enactment of Public Law 108-18 and attributable to fiscal year 2006 
shall be transferred to the Postal Service Retiree Health Benefits Fund 
established under section 8909a of title 5, United States Code, as 
added by section 803 of this Act.

SEC. 805. EFFECTIVE DATES.

    (a) In General.--Except as provided under subsection (b), this 
title shall take effect on October 1, 2006.
    (b) Termination of Employer Contribution.--The amendment made by 
paragraph (1) of section 802(a) shall take effect on the first day of 
the first pay period beginning on or after October 1, 2006.

                TITLE IX--COMPENSATION FOR WORK INJURIES

SEC. 901. TEMPORARY DISABILITY; CONTINUATION OF PAY.

    (a) Time of Accrual of Right.--Section 8117 of title 5, United 
States Code, is amended--
        (1) by striking ``An employee'' and inserting ``(a) An employee 
    other than a Postal Service employee''; and
        (2) by adding at the end the following:
    ``(b) A Postal Service employee is not entitled to compensation or 
continuation of pay for the first 3 days of temporary disability, 
except as provided under paragraph (3) of subsection (a). A Postal 
Service employee may use annual leave, sick leave, or leave without pay 
during that 3-day period, except that if the disability exceeds 14 days 
or is followed by permanent disability, the employee may have their 
sick leave or annual leave reinstated or receive pay for the time spent 
on leave without pay under this section.''.
    (b) Technical and Conforming Amendment.--Section 8118(b)(1) of 
title 5, United States Code, is amended to read as follows:
        ``(1) without a break in time, except as provided under section 
    8117(b), unless controverted under regulations of the Secretary;''.

                         TITLE X--MISCELLANEOUS

SEC. 1001. EMPLOYMENT OF POSTAL POLICE OFFICERS.

    Section 3061 of title 18, United States Code, is amended by adding 
at the end the following:
    ``(c)(1) The Postal Service may employ police officers for duty in 
connection with the protection of property owned or occupied by the 
Postal Service or under the charge and control of the Postal Service, 
and persons on that property, including duty in areas outside the 
property to the extent necessary to protect the property and persons on 
the property.
    ``(2) With respect to such property, such officers shall have the 
power to--
        ``(A) enforce Federal laws and regulations for the protection 
    of persons and property;
        ``(B) carry firearms; and
        ``(C) make arrests without a warrant for any offense against 
    the Unites States committed in the presence of the officer or for 
    any felony cognizable under the laws of the United States if the 
    officer has reasonable grounds to believe that the person to be 
    arrested has committed or is committing a felony.
    ``(3) With respect to such property, such officers may have, to 
such extent as the Postal Service may by regulations prescribe, the 
power to--
        ``(A) serve warrants and subpoenas issued under the authority 
    of the United States; and
        ``(B) conduct investigations, on and off the property in 
    question, of offenses that may have been committed against property 
    owned or occupied by the Postal Service or persons on the property.
    ``(4)(A) As to such property, the Postmaster General may 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. 1002. OBSOLETE PROVISIONS.

    (a) Repeal.--
        (1) In general.--Chapter 52 of title 39, United States Code, is 
    repealed.
        (2) Conforming amendments.--(A) Section 5005(a) of title 39, 
    United States Code, is amended--
            (i) by striking paragraph (1), and by redesignating 
        paragraphs (2) through (4) as paragraphs (1) through (3), 
        respectively; and
            (ii) in paragraph (3) (as so designated by clause (i)), by 
        striking ``(as defined in section 5201(6) of this title)''.
        (B) Section 5005(b) of such title 39 is amended by striking 
    ``(a)(4)'' each place it appears and inserting ``(a)(3)''.
        (C) Section 5005(c) of such title 39 is amended by striking 
    ``by carrier or person under subsection (a)(1) of this section, by 
    contract under subsection (a)(4) of this section, or'' and 
    inserting ``by contract under subsection (a)(3) of this section 
    or''.
    (b) Eliminating Restriction on Length of Contracts.--(1) Section 
5005(b)(1) of title 39, United States Code, is amended by striking 
``(or where the Postal Service determines that special conditions or 
the use of special equipment warrants, not in excess of 6 years)'' and 
inserting ``(or such longer period of time as may be determined by the 
Postal Service to be advisable or appropriate)''.
    (2) Section 5402(d) of such title 39 is amended by striking ``for a 
period of not more than 4 years''.
    (3) Section 5605 of such title 39 is amended by striking ``for 
periods of not in excess of 4 years''.
    (c) Technical and Conforming Amendment.--The table of chapters for 
part V of title 39, United States Code, is amended by repealing the 
item relating to chapter 52.

SEC. 1003. REDUCED RATES.

    Section 3626 of title 39, United States Code, is amended--
        (1) in subsection (a), by striking all before paragraph (4) and 
    inserting the following:
    ``(a)(1) Except as otherwise provided in this section, rates of 
postage for a class of mail or kind of mailer under former section 
4358, 4452(b), 4452(c), 4554(b), or 4554(c) of this title shall be 
established in accordance with section 3622.
    ``(2) For the purpose of this subsection, the term `regular-rate 
category' means any class of mail or kind of mailer, other than a class 
or kind referred to in section 2401(c).
    ``(3) Rates of postage for a class of mail or kind of mailer under 
former section 4358(a) through (c) of this title shall be 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. 1004. SENSE OF CONGRESS REGARDING POSTAL SERVICE PURCHASING 
              REFORM.

    It is the sense of Congress that the Postal Service should--
        (1) ensure the fair and consistent treatment of suppliers and 
    contractors in its current purchasing policies and any revision or 
    replacement of such policies, such as through the use of 
    competitive contract award procedures, effective dispute resolution 
    mechanisms, and socioeconomic programs; and
        (2) implement commercial best practices in Postal Service 
    purchasing policies to achieve greater efficiency and cost savings 
    by taking full advantage of private-sector partnerships as 
    recommended in July 2003 by the President's Commission on the 
    United States Postal Service.

SEC. 1005. CONTRACTS FOR TRANSPORTATION OF MAIL BY AIR.

    (a) Definitions.--Section 5402(a) of title 39, United States Code, 
is amended--
        (1) in paragraph (4), by striking ``(g)(1)(D)(i)'' and 
    inserting ``(g)(1)(A)(iv)(I)'';
        (2) in paragraph (5), by striking ``(g)(1)(D)(i)'' and 
    inserting ``(g)(1)(A)(iv)(I)'';
        (3) in paragraph (8), by striking ``rates paid to a bush 
    carrier'' and inserting ``linehaul rates and a single terminal 
    handling payment at a bush terminal handling rate paid to a bush 
    carrier'';
        (4) in paragraph (11), by striking ``(g)(1)(D)(ii)'' and 
    inserting ``(g)(1)(A)(iv)(II)''; and
        (5) in paragraph (13)--
            (A) in subparagraph (A)--
                (i) by striking ``clause (i) or (ii) of subsection 
            (g)(1)(D)'' and inserting ``subclause (I) or (II) of 
            subsection (g)(1)(A)(iv)''; and
                (ii) by striking ``and'' after the semicolon;
            (B) in subparagraph (B), by adding ``and'' after the 
        semicolon; and
            (C) by adding at the end the following:
            ``(C) is not comprised of previously qualified existing 
        mainline carriers as a result of merger or sale;''.
    (b) Nonpriority Bypass Mail.--Section 5402(g) of title 39, United 
States Code, is amended--
        (1) in paragraph (3), by adding at the end the following:
            ``(C) When a new hub results from a change in a 
        determination under subparagraph (B), mail tender from that hub 
        during the 12-month period beginning on the effective date of 
        that change shall be based on the passenger and freight shares 
        to the destinations of the affected hub or hubs resulting in 
        the new hub.''; and
        (2) in paragraph (5)(A)(i), by striking ``(g)(1)(D)(ii)'' and 
    inserting ``(g)(1)(A)(iv)(II)''.
    (c) Equitable Tender.--Section 5402(h) of title 39, United States 
Code, is amended--
        (1) in paragraph (1), by inserting ``bush'' after ``providing 
    scheduled'';
        (2) by striking paragraph (3) and inserting the following:
        ``(3)(A) Except as provided under subparagraph (C), a new or 
    existing 121 bush passenger carrier qualified under subsection 
    (g)(1) shall be exempt from the requirements under paragraphs 
    (1)(B) and (2)(A) on a city pair route for a period which shall 
    extend for--
            ``(i) 1 year;
            ``(ii) 1 year in addition to the extension under clause (i) 
        if, as of the conclusion of the first year, such carrier has 
        been providing not less than 5 percent of the passenger service 
        on that route (as calculated under paragraph (5)); and
            ``(iii) 1 year in addition to the extension under clause 
        (ii) if, as of the conclusion of the second year, such carrier 
        has been providing not less than 10 percent of the passenger 
        service on that route (as calculated under paragraph (5)).
        ``(B)(i) The first 3 121 bush passenger carriers entitled to 
    the exemptions under subparagraph (A) on any city pair route shall 
    divide no more than an additional 10 percent of the mail, 
    apportioned equally, comprised of no more than--
            ``(I) 5 percent of the share of each qualified passenger 
        carrier servicing that route that is not a 121 bush passenger 
        carrier; and
            ``(II) 5 percent of the share of each nonpassenger carrier 
        servicing that route that transports 25 percent or more of the 
        total nonmail freight under subsection (i)(1).
        ``(ii) Additional 121 bush passenger carriers entering service 
    on that city pair route after the first 3 shall not receive any 
    additional mail share.
        ``(iii) If any 121 bush passenger carrier on a city pair route 
    receiving an additional share of the mail under clause (ii) 
    discontinues service on that route, the 121 bush passenger carrier 
    that has been providing the longest period of service on that route 
    and is otherwise eligible but is not receiving a share by reason of 
    clause (ii), shall receive the share of the carrier discontinuing 
    service.
        ``(C) Notwithstanding the requirements of this subsection, if 
    only 1 passenger carrier or aircraft is qualified to be tendered 
    nonpriority bypass mail as a passenger carrier or aircraft on a 
    city pair route in the State of Alaska, the Postal Service shall 
    tender 20 percent of the nonpriority bypass mail described under 
    paragraph (1) to the passenger carrier or aircraft providing at 
    least 10 percent of the passenger service on such route.'';
        (3) in paragraph (5)(A)--
            (A) by striking ``(i)'' after ``(A)''; and
            (B) by striking clause (ii).
    (d) Percent of Nonmail Freight.--Section 5402(i)(6) of title 39, 
United States Code, is amended--
        (1) by striking ``(A)'' after ``(6)''; and
        (2) by striking subparagraph (B).
    (e) Percent of Tender Rate.--Section 5402(j)(3)(B) of title 39, 
United States Code, is amended by striking ``bush routes in the State 
of Alaska'' and inserting ``routes served exclusively by bush carriers 
in the State of Alaska''.
    (f) Determination of Rates.--Section 5402(k) of title 39, United 
States Code, is amended by striking paragraph (5).
    (g) Technical and Conforming Amendment.--Section 5402(p)(3) of 
title 39, United States Code, is amended by striking ``(g)(1)(D)'' and 
inserting ``(g)(1)(A)(iv)''.
    (h) Effective Date.--
        (1) In general.--Except as provided under paragraph (2), this 
    section shall take effect on the date of enactment of this Act.
        (2) Equitable tender.--Subsection (c) shall take effect on 
    December 1, 2006.

SEC. 1006. DATE OF POSTMARK TO BE TREATED AS DATE OF APPEAL IN 
              CONNECTION WITH THE CLOSING OR CONSOLIDATION OF POST 
              OFFICES.

    (a) In General.--Section 404(b) of title 39, United States Code, is 
amended by adding at the end the following:
    ``(6) For purposes of paragraph (5), any appeal received by the 
Commission shall--
        ``(A) if sent to the Commission through the mails, be 
    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. 1007. 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. 1008. HAZARDOUS MATTER.

    (a) Nonmailability Generally.--Section 3001 of title 39, United 
States Code, is amended--
        (1) by redesignating subsection (n) as subsection (o); and
        (2) by inserting after subsection (m) the following:
    ``(n)(1) Except as otherwise authorized by law or regulations of 
the Postal Service, hazardous material is nonmailable.
    ``(2) In this subsection, the term `hazardous material' means a 
substance or material designated by the Secretary of 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. 1009. ZIP CODES AND RETAIL HOURS.

    (a) ZIP Codes.--Not later than September 30, 2007, the United 
States Postal Service shall assign a single, unified ZIP code to serve, 
as nearly as practicable, each of the following communities:
        (1) Auburn Township, Ohio.
        (2) Hanahan, South Carolina.
        (3) Bradbury, California.
        (4) Discovery Bay, California.
    (b) Retail Hours.--Not later than 60 days after the date of the 
enactment of this Act, the United States Postal Service shall provide 
the same window service hours for the Fairport Harbor Branch of the 
United States Post Office in Painesville, Ohio, as were in effect as of 
December 1, 2005.

SEC. 1010. TECHNICAL AND CONFORMING AMENDMENTS.

    (a) Reimbursement.--Section 3681 of title 39, United States Code, 
is amended by striking ``section 3628'' and inserting ``sections 3662 
through 3664''.
    (b) Size and Weight Limits.--Section 3682 of title 39, United 
States Code, is amended to read as follows:

``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 601), by 
    striking ``this chapter.'' and inserting ``this title.''; and
        (2) in section 2401(d), by inserting ``(as last in effect 
    before enactment of the Postal Accountability and Enhancement 
    Act)'' after ``3626(a)'' and after ``3626(a)(3)(B)(ii)''.
    (d) Appropriations and Reporting Requirements.--
        (1) Appropriations.--Subsection (e) of section 2401 of title 
    39, United States Code, is amended--
            (A) by striking ``Committee on Post Office and Civil 
        Service'' each place it appears and inserting ``Committee on 
        Government Reform''; and
            (B) by striking ``Not later than March 15 of each year,'' 
        and inserting ``Each year,''.
        (2) Reporting requirements.--Sections 2803(a) and 2804(a) of 
    title 39, United States Code, are amended by striking ``2401(g)'' 
    and inserting ``2401(e)''.
    (e) Authority to Fix Rates and Classes Generally; Requirement 
Relating to Letters Sealed Against 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''.

                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.