[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5714 Introduced in House (IH)]

<DOC>






114th CONGRESS
  2d Session
                                H. R. 5714

  To restore the financial solvency and improve the governance of the 
   United States Postal Service in order to ensure the efficient and 
    affordable nationwide delivery of mail, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 11, 2016

Mr. Chaffetz (for himself, Mr. Cummings, Mr. Meadows, Mr. Connolly, and 
  Mr. Lynch) introduced the following bill; which was referred to the 
 Committee on Oversight and Government Reform, and in addition to the 
Committees on Energy and Commerce, and Ways and Means, for a period to 
      be subsequently determined by the Speaker, in each case for 
consideration of such provisions as fall within the jurisdiction of the 
                          committee concerned

_______________________________________________________________________

                                 A BILL


 
  To restore the financial solvency and improve the governance of the 
   United States Postal Service in order to ensure the efficient and 
    affordable nationwide delivery of mail, and for other purposes.

    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 Service 
Reform Act of 2016''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
                TITLE I--POSTAL SERVICE BENEFITS REFORM

Sec. 101. Postal Service Health Benefits Program.
Sec. 102. Postal Service retiree health care benefit funding reform.
Sec. 103. Postal Service pension funding reform.
Sec. 104. Medicare part B premium transition for newly enrolling Postal 
                            Service annuitants and family members.
               TITLE II--POSTAL SERVICE OPERATIONS REFORM

Sec. 201. Governance reform.
Sec. 202. Transition to more efficient and secure mail delivery.
Sec. 203. Modernizing postal rates.
Sec. 204. Nonpostal services.
Sec. 205. Efficient and flexible universal postal service.
Sec. 206. Fair stamp-evidencing competition.
Sec. 207. Market-dominant rates.
Sec. 208. Completion of initial rate regulation review.
Sec. 209. Review of Postal Service cost attribution guidelines.
Sec. 210. Aviation security for parcels.
Sec. 211. ZIP Codes.
                  TITLE III--POSTAL SERVICE PERSONNEL

Sec. 301. Postal Service Chief Innovation Officer.
Sec. 302. Inspector General of the Postal Community.
Sec. 303. Right of appeal to Merit Systems Protection Board.
                  TITLE IV--POSTAL CONTRACTING REFORM

Sec. 401. Contracting provisions.
Sec. 402. Technical amendment to definition.

SEC. 2. DEFINITIONS.

    In this Act--
            (1) the term ``Postal Service'' means the United States 
        Postal Service; and
            (2) the term ``postal retail facility'' means a post 
        office, post office branch, post office classified station, or 
        other facility which is operated by the Postal Service, and the 
        primary function of which is to provide retail postal services, 
        but does not include a contractor-operated facility offering 
        postal services.

                TITLE I--POSTAL SERVICE BENEFITS REFORM

SEC. 101. POSTAL SERVICE HEALTH BENEFITS PROGRAM.

    (a) Establishment.--
            (1) In general.--Chapter 89 of title 5, United States Code, 
        is amended by inserting after section 8903b the following:

``SEC. 8903C. POSTAL SERVICE HEALTH BENEFITS PROGRAM.

    ``(a) Definitions.--In this section--
            ``(1) the term `covered Medicare individual' means an 
        individual who is entitled to benefits under part A of title 
        XVIII of the Social Security Act (42 U.S.C. 1395c et seq.), but 
        excluding an individual who is eligible to enroll under such 
        part under section 1818 or 1818A of the Social Security Act (42 
        U.S.C. 1395i-2, 1395i-2a);
            ``(2) the term `initial contract year' means the contract 
        year beginning in January of 2018;
            ``(3) the term `initial participating carrier' means a 
        carrier that enters into a contract with the Office to 
        participate in the Postal Service Health Benefits Program 
        during the initial contract year;
            ``(4) the term `Office' means the Office of Personnel 
        Management;
            ``(5) the term `Postal Service' means the United States 
        Postal Service;
            ``(6) the term `Postal Service annuitant' means an 
        annuitant enrolled in a health benefits plan under this chapter 
        whose Government contribution is paid pursuant to the 
        requirements of section 8906(g)(2);
            ``(7) the term `Postal Service employee' means an employee 
        of the Postal Service enrolled in a health benefits plan under 
        this chapter;
            ``(8) the term `Postal Service Medicare covered annuitant' 
        means an individual who--
                    ``(A) is a Postal Service annuitant; and
                    ``(B) is a covered Medicare individual;
            ``(9) the term `Program' means the Postal Service Health 
        Benefits Program established under subsection (c) within the 
        Federal Employees Health Benefit Program; and
            ``(10) the term `Program plan' means a health benefits plan 
        offered under the Program.
    ``(b) Application.--The requirements under this section shall--
            ``(1) apply to the initial contract year and each contract 
        year thereafter; and
            ``(2) supersede any other provision of this chapter 
        inconsistent with such requirements, as determined by the 
        Office.
    ``(c) Establishment of the Postal Service Health Benefits 
Program.--
            ``(1) In general.--The Office shall establish the Postal 
        Service Health Benefits Program under which the Office 
        contracts with carriers to offer health benefits plans as 
        described under this section. Except as otherwise provided 
        under this section, any such contract shall be consistent with 
        the requirements of this chapter for contracts under section 
        8902 with carriers to offer health benefits plans other than 
        under this section. The Program shall--
                    ``(A) to the greatest extent practicable, include 
                plans offered by--
                            ``(i) each carrier for which the total 
                        enrollment in the plans provided under this 
                        chapter includes, in the contract year 
                        beginning in January 2017, 1,500 or more 
                        enrollees who are Postal Service employees or 
                        Postal Service annuitants; and
                            ``(ii) any other carrier determined 
                        appropriate by the Office;
                    ``(B) be available for participation by all Postal 
                Service employees and Postal Service annuitants, in 
                accordance with subsection (d);
                    ``(C) provide for enrollment in a plan as an 
                individual, for self plus one, or for self and family; 
                and
                    ``(D) not be available for participation by an 
                individual who is not a Postal Service employee or 
                Postal Service annuitant (except as a family member of 
                such an employee or annuitant or as provided under 
                paragraph (5)).
            ``(2) Separate postal service risk pool.--The Office shall 
        ensure that each Program plan includes rates that reasonably 
        and equitably reflect the cost of benefits provided to a risk 
        pool consisting solely of Postal Service employees and Postal 
        Service annuitants (and covered family members of such 
        employees and annuitants), taking into specific account the 
        reduction in benefits cost for the Program plan due to the 
        Medicare enrollment requirements under subsection (e) and any 
        savings or subsidies resulting from subsection (f)(1).
            ``(3) Actuarially equivalent coverage.--The Office shall 
        ensure that each carrier participating in the Postal Service 
        Health Benefits Program provides coverage under the Program 
        plans offered by the carrier that is actuarially equivalent, as 
        determined by the Office, to the coverage that the carrier 
        provides under the health benefits plans offered by the carrier 
        under this chapter that are not Program plans.
            ``(4) Applicability of federal employees health benefits 
        program requirements.--Except as otherwise set forth in this 
        section, all provisions of this chapter applicable to health 
        benefits plans offered by the carrier under section 8903 or 
        8903a shall also apply to plans offered under the Program.
            ``(5) Application of continuation coverage.--In accordance 
        with rules established by the Office, section 8905a shall apply 
        to health benefits plans offered under this section in the same 
        manner as such section applies to other health benefits plans 
        offered under this chapter.
    ``(d) Election of Coverage.--
            ``(1) In general.--Except as provided in paragraphs (2) and 
        (3), each Postal Service employee and Postal Service annuitant 
        who elects to receive health benefits coverage under this 
        chapter--
                    ``(A) shall be subject to the requirements of this 
                section; and
                    ``(B) may not enroll in any other health benefits 
                plan offered under any other section of this chapter.
            ``(2) Annuitants.--
                    ``(A) Application.--A Postal Service annuitant 
                shall not be subject to the requirements of this 
                section if the Postal Service annuitant--
                            ``(i) is enrolled in a health benefits plan 
                        under this chapter for the contract year 
                        immediately preceding the initial contract year 
                        that is not a health benefits plan offered by 
                        an initial participating carrier, unless--
                                    ``(I) the Postal Service annuitant 
                                voluntarily enrolls in a Program plan;
                                    ``(II) the health benefits plan in 
                                which such annuitant is enrolled for 
                                such contract year ceases to be 
                                available; or
                                    ``(III) the health benefits plan in 
                                which such annuitant is enrolled for 
                                such contract year becomes available as 
                                a Program plan; or
                            ``(ii) resides in a geographic area for 
                        which there is not a Program plan in which the 
                        Postal Service annuitant may enroll.
                    ``(B) Changed enrollment.--If a Postal Service 
                annuitant changes enrollment to a health benefits plan 
                under this chapter provided by a different carrier than 
                the health benefits plan in which such annuitant is 
                enrolled during the previous contract year, the Postal 
                Service annuitant may only enroll in a Program plan.
            ``(3) Employees.--A Postal Service employee who is enrolled 
        in a health benefits plan under this chapter for the contract 
        year immediately preceding the initial contract year that is 
        not a health benefits plan offered by an initial participating 
        carrier shall not be subject to the requirements of this 
        section, except that--
                    ``(A) if the Postal Service employee changes 
                enrollment to a different health benefits plan under 
                this chapter during the open season for the initial 
                contract year, or after the start of the initial 
                contract year, the Postal Service employee may only 
                enroll in a Program plan;
                    ``(B) if the health benefits plan in which such 
                employee is enrolled for such contract year becomes 
                available as a Program plan, the Postal Service 
                employee may only enroll in a Program plan;
                    ``(C) upon becoming a Postal Service annuitant, if 
                the Postal Service employee elects to continue coverage 
                under this chapter, the Postal Service employee shall 
                enroll in a Program plan during the open season that 
                is--
                            ``(i) being held when the Postal Service 
                        employee becomes a Postal Service annuitant; or
                            ``(ii) if the date on which the Postal 
                        Service employee becomes a Postal Service 
                        annuitant falls outside of an open season, the 
                        first open season following that date; and
                    ``(D) subparagraphs (A), (B), and (C) shall not 
                apply to an employee who resides in a geographic area 
                for which there is not a Program plan in which the 
                employee may enroll.
    ``(e) Requirement of Medicare Enrollment for Annuitants and Their 
Family Members.--
            ``(1) Postal service medicare covered annuitants.--A Postal 
        Service Medicare covered annuitant subject to the requirements 
        of this section may not obtain coverage under this chapter 
        unless the annuitant is enrolled in part B of title XVIII of 
        the Social Security Act (42 U.S.C. 1395j et seq.).
            ``(2) Medicare covered family members.--If a family member 
        of a Postal Service annuitant who is subject to the 
        requirements of this section is a covered Medicare individual, 
        the family member may not be covered under the Program as a 
        family member of the Postal Service annuitant unless the family 
        member is enrolled in part B of title XVIII of the Social 
        Security Act (42 U.S.C. 1395j et seq.).
            ``(3) Process for coordinated election of enrollment under 
        medicare part b.--The Office shall establish a process under 
        which--
                    ``(A) Postal Service annuitants and family members 
                who are subject to the requirements of paragraph (1) or 
                (2)--
                            ``(i) are informed, at the time of 
                        enrollment under this chapter, of such 
                        requirement; and
                            ``(ii) as a consequence of such enrollment 
                        are deemed to have elected to be enrolled under 
                        Medicare part B (under section 1837(m)(1) of 
                        the Social Security Act) in connection with the 
                        enrollment in a Program plan under this 
                        chapter; and
                    ``(B) the Office provides the Secretary of Health 
                and Human Services and the Commissioner of Social 
                Security in a timely manner with such information 
                respecting such annuitants and family members and such 
                election as may be required to effect their enrollment 
                and coverage under Medicare part B and this section in 
                a timely manner.
    ``(f) Medicare Coordination.--
            ``(1) In general.--The Office shall require each Program 
        plan to provide benefits for covered Medicare individuals 
        pursuant to the standard coordination of benefits method used 
        under this chapter, rather than the exclusion method or the 
        carve-out method.
            ``(2) Medicare part d prescription drug benefits.--The 
        Office shall require each Program plan to provide prescription 
        drug benefits for Postal Service annuitants and family members 
        who are eligible individuals (as defined in section 1860D-
        1(a)(3)(A) of the Social Security Act (42 U.S.C. 1395w-101(a)) 
        in a form and manner that satisfies the requirements for a 
        qualified retiree prescription drug plan under subsection 
        (a)(2) of section 1860D-22 of the Social Security Act (42 
        U.S.C. 1395w-132)), for which plan a waiver or modification of 
        requirements may have been applied pursuant to subsection (b) 
        of such section. For purposes of such section, a Program plan 
        shall then be deemed to be a qualified retiree prescription 
        drug plan and the Federal Government, through the Office, shall 
        be deemed the sponsor of such plan.
    ``(g) Postal Service Contribution.--
            ``(1) In general.--Subject to subsection (i), for purposes 
        of applying section 8906(b) to the Postal Service, the weighted 
        average shall be calculated in accordance with paragraphs (2) 
        and (3).
            ``(2) Weighted average calculation.--Not later than October 
        1 of each year (beginning with 2017), the Office shall 
        determine the weighted average of the rates established 
        pursuant to subsection (c)(2) for Program plans that will be in 
        effect during the following contract year with respect to--
                    ``(A) enrollments for self only;
                    ``(B) enrollments for self plus one; and
                    ``(C) enrollments for self and family.
            ``(3) Weighting in computing rates for initial contract 
        year.--In determining such weighted average of the rates for 
        the initial contract year, the Office shall take into account 
        (for purposes of section 8906(a)(2)) the enrollment of Postal 
        Service employees and annuitants in the health benefits plans 
        offered by the initial participating carriers as of March 31, 
        2017.
    ``(h) Reserves.--
            ``(1) Separate reserves.--
                    ``(A) In general.--The Office shall ensure that 
                each Program plan maintains separate reserves 
                (including a separate contingency reserve) with respect 
                to the enrollees in the Program plan in accordance with 
                section 8909.
                    ``(B) References.--For purposes of the Program, 
                each reference to `the Government' in section 8909 
                shall be deemed to be a reference to the Postal 
                Service.
                    ``(C) Amounts to be credited.--The reserves 
                (including the separate contingency reserve) maintained 
                by each Program plan shall be credited with a 
                proportionate amount of the funds in the reserves for 
                health benefits plans offered by the carrier.
            ``(2) Discontinuation of program plan.--In applying section 
        8909(e) relating to a Program plan that is discontinued, the 
        Office shall credit the separate Postal Service contingency 
        reserve maintained under paragraph (1) for that plan only to 
        the separate Postal Service contingency reserves of the Program 
        plans continuing under this chapter.
    ``(i) No Effect on Existing Law.--Nothing in this section shall be 
construed as affecting section 1005(f) of title 39 regarding 
variations, additions, or substitutions to the provisions of this 
chapter.
    ``(j) Medicare Education Program.--Not later than 180 days after 
the date of enactment of this section, the Postal Service shall 
establish a Medicare Education Program. Under the Program, the Postal 
Service shall--
            ``(1) notify retirees and employees of the Postal Service 
        about the Postal Service Health Benefits Program established 
        under subsection (c)(1);
            ``(2) provide information regarding the Postal Service 
        Health Benefits to such retirees and employees, including a 
        description of the health care options available under such 
        Program, the requirement that retirees be enrolled in Medicare 
        under subsection (e)(1), and the operation of the premium 
        transition fund to be created under section 104 of the Postal 
        Service Reform Act of 2016; and
            ``(3) respond and provide answers to any inquiry from such 
        employees and retirees about the Postal Service Health Benefits 
        Program or Medicare enrollment.''.
            (2) Technical and conforming amendments.--
                    (A) Section 8903(1) of title 5, United States Code, 
                is amended by striking ``two levels of benefits'' and 
                inserting ``2 levels of benefits for enrollees under 
                this chapter generally and 2 levels of benefits for 
                enrollees under the Postal Service Health Benefits 
                Program established under section 8903c''.
                    (B) The table of sections for chapter 89 of title 
                5, United States Code, is amended by inserting after 
                the item relating to section 8903b the following:

``8903c. Postal Service Health Benefits Program.''.
    (b) Coordination With Medicare.--
            (1) Medicare enrollment and coverage.--Section 1837 of the 
        Social Security Act (42 U.S.C. 1395p) is amended by adding at 
        the end the following new subsection:
    ``(m)(1) In the case of an individual who--
            ``(A) is (i) a Postal Service Medicare covered annuitant, 
        or (ii) an individual who is a family member of such an 
        annuitant and is a covered Medicare individual;
            ``(B) enrolls in a Program plan under section 8903c of 
        title 5, United States Code; and
            ``(C) is not enrolled under this part,
the individual is deemed, in accordance with section 8903c(e)(3) of 
such title, to have elected to be enrolled under this part.
    ``(2) In the case of an individual who is deemed to be enrolled 
under paragraph (1), the coverage period under this part shall begin on 
the date that the individual first has coverage under the Program plan 
pursuant to the enrollment described in paragraph (1)(B).
    ``(3) The definitions in section 8903c(a) of title 5, United States 
Code, shall apply for purposes of this subsection.''.
            (2) Waiver of increase of premium.--Section 1839(b) of the 
        Social Security Act (42 U.S.C. 1395r(b)) is amended by 
        inserting after ``section 1837'' the following: ``or pursuant 
        to subsection (m) of such section''.
            (3) Conforming coordination of benefit rules.--Section 
        1862(b) of the Social Security Act (42 U.S.C. 1395y(b)) is 
        amended by adding at the end the following:
            ``(10) Coordination of benefits with postal service health 
        benefits plans.--The previous provisions of this subsection are 
        superseded to the extent the Secretary determines, in 
        consultation with the Office of Personnel Management, them to 
        be inconsistent with section 8903c(f) of title 5, United States 
        Code.''.

SEC. 102. POSTAL SERVICE RETIREE HEALTH CARE BENEFIT FUNDING REFORM.

    (a) Contributions.--Section 8906(g) of title 5, United States Code, 
is amended--
            (1) by striking ``(2)(A) The Government'' and inserting 
        ``(2)(A)(i) The Government''; and
            (2) in paragraph (2)--
                    (A) in subparagraph (A)--
                            (i) in clause (i), as added by paragraph 
                        (1), by striking ``shall through September 30, 
                        2016, be paid'' and all that follows and 
                        inserting the following: ``shall be paid as 
                        provided in clause (ii).''; and
                            (ii) by adding at the end the following:
    ``(ii) With respect to the Government contributions required to be 
paid under clause (i)--
            ``(I) the portion of the contributions that is equal to the 
        amount of the net claims costs under the enrollment of the 
        individuals described in clause (i) shall be paid from the 
        Postal Service Retiree Health Benefits Fund up to the amount 
        contained in the Fund; and
            ``(II) any remaining amount shall be paid by the United 
        States Postal Service.''; and
                    (B) by adding at the end the following:
    ``(C) For purposes of this paragraph, the amount of the net claims 
costs under the enrollment of an individual described in subparagraph 
(A)(i) shall be the amount, as determined by the Office over any 
particular period of time, equal to the difference between--
            ``(i) the sum of--
                    ``(I) the costs incurred by a carrier in providing 
                health services to, paying for health services provided 
                to, or reimbursing expenses for health services 
                provided to, the individual and any other person 
                covered under the enrollment of the individual; and
                    ``(II) an amount of indirect expenses reasonably 
                allocable to the provision, payment, or reimbursement 
                described in subclause (I), as determined by the 
                Office; and
            ``(ii) the amount withheld from the annuity of the 
        individual or otherwise paid by the individual under this 
        section.''.
    (b) Postal Service Retiree Health Benefits Fund.--Section 8909a of 
title 5, United States Code, is amended--
            (1) in subsection (d)--
                    (A) in paragraph (1), by striking ``required under 
                section 8906(g)(2)(A)'' and inserting the following: 
                ``required to be paid from the Postal Service Retiree 
                Health Benefits Fund under section 
                8906(g)(2)(A)(ii)(I)'';
                    (B) by striking paragraph (2) and inserting the 
                following:
    ``(2)(A) Not later than June 30, 2016, the Office shall compute, 
and by June 30 of each succeeding year, the Office shall recompute, a 
schedule including a series of annual installments which provide for 
the liquidation of the amount described under subparagraph (B) 
(regardless of whether the amount is a liability or surplus) by 
September 30, 2055, or within 15 years, whichever is later, including 
interest at the rate used in the computations under this subsection.
    ``(B) The amount described in this subparagraph is the amount, as 
of the date on which the applicable computation or recomputation under 
subparagraph (A) is made, that is equal to the difference between--
            ``(i) 100 percent of the Postal Service actuarial liability 
        as of September 30 of the preceding fiscal year; and
            ``(ii) the value of the assets of the Postal Service 
        Retiree Health Benefits Fund as of September 30 of the 
        preceding fiscal year.'';
                    (C) in paragraph (3)--
                            (i) in subparagraph (A)--
                                    (I) in clause (iii), by adding 
                                ``and'' at the end;
                                    (II) in clause (iv), by striking 
                                the semicolon at the end and inserting 
                                a period; and
                                    (III) by striking clauses (v) 
                                through (x); and
                            (ii) in subparagraph (B)--
                                    (I) in the matter preceding clause 
                                (i), by striking ``2017'' and inserting 
                                ``2016'';
                                    (II) in clause (i), by striking 
                                ``paragraph (1)'' and inserting 
                                ``paragraph (1), except to the extent 
                                the payment would cause the value of 
                                the assets in the Fund to exceed the 
                                Postal Service actuarial liability''; 
                                and
                                    (III) in clause (ii), by striking 
                                ``paragraph (2)(B).'' and inserting 
                                ``paragraph (2).'';
                    (D) by amending paragraph (4) to read as follows:
    ``(4) Computations under this subsection shall be based on--
            ``(A) economic and actuarial methods and assumptions 
        consistent with the methods and assumptions used in determining 
        the Postal surplus or supplemental liability under section 
        8348(h); and
            ``(B) any other methods and assumptions, including a health 
        care cost trend rate, that the Director of the Office 
        determines to be appropriate.''; and
                    (E) by adding at the end the following:
    ``(7) In this subsection, the term `Postal Service actuarial 
liability' means the difference between--
            ``(A) the net present value of future payments required to 
        be paid from the Postal Service Retiree Health Benefits Fund 
        under section 8906(g)(2)(A)(ii)(I) for current and future 
        United States Postal Service annuitants; and
            ``(B) the net present value as computed under paragraph (1) 
        attributable to the future service of United States Postal 
        Service employees.
    ``(8) For purposes of computing an amount under paragraph (1) or 
(7)(A), section 8906(g)(2)(A)(ii)(I) shall be applied as though `up to 
the amount contained in the Fund' were struck.''; and
            (2) by adding at the end the following:
    ``(e) Subsections (a) through (d) of this section shall be subject 
to section 102 of the Postal Service Reform Act of 2016.''.
    (c) Cancellation of Certain Unpaid Obligations of the Postal 
Service.--Any obligation of the Postal Service under section 
8909a(d)(3)(A) of title 5, United States Code, as in effect on the day 
before the date of enactment of this Act, that remains unpaid as of 
such date of enactment is canceled.
    (d) Technical and Conforming Amendment.--The heading of section 
8909a of title 5, United States Code, is amended by striking 
``Benefit'' and inserting ``Benefits''.

SEC. 103. POSTAL SERVICE PENSION FUNDING REFORM.

    (a) Civil Service Retirement System.--Section 8348(h) of title 5, 
United States Code, is amended--
            (1) in paragraph (2), by striking subparagraphs (B) and (C) 
        and inserting the following:
    ``(B) The Office shall redetermine the postal surplus or 
supplemental liability as of the close of the fiscal year, for each 
fiscal year beginning after September 30, 2015. Subject to subparagraph 
(C), beginning June 15, 2017, if the result is a surplus or a 
supplemental liability the Office shall establish an amortization 
schedule, including a series of annual installments commencing on 
September 30 of the subsequent fiscal year, which provides for the 
liquidation of such surplus or liability to the Postal Service or the 
Fund (as the case may be) by September 30, 2043.
    ``(C) No later than June 30, 2033, the Office shall determine, and 
thereafter redetermine as necessary, but not more frequently than once 
per year, the appropriate date to complete the liquidation of any 
remaining surplus or liability determined under this paragraph. The 
determination under this subparagraph shall be set in accordance with 
generally accepted actuarial practices and principles and shall not be 
longer than a period of 15 years from the date on which the 
determination is made.''; and
            (2) by adding at the end the following:
    ``(4) For the purpose of carrying out paragraph (1), for fiscal 
year 2013 and each fiscal year thereafter, the Office shall use--
            ``(A) demographic factors specific to current and former 
        employees of the United States Postal Service, unless such data 
        cannot be generated; and
            ``(B) economic assumptions regarding wage and salary growth 
        that reflect the specific past, and likely future, pay for 
        current employees of the United States Postal Service.''.
    (b) Federal Employees Retirement System Liability Assumption 
Reform.--Section 8423 of title 5, United States Code, is amended--
            (1) in subsection (a)--
                    (A) in paragraph (1)--
                            (i) in subparagraph (A)--
                                    (I) in clause (i), by striking 
                                ``subparagraph (B)),'' and inserting 
                                ``subparagraph (B) or (C)),''; and
                                    (II) in clause (ii), by striking 
                                ``and'' at the end;
                            (ii) in subparagraph (B)(ii), by striking 
                        the period at the end and inserting ``; and''; 
                        and
                            (iii) by adding at the end the following:
            ``(C) the product of--
                    ``(i) the normal-cost percentage, as determined for 
                employees (other than employees covered by subparagraph 
                (B)) of the United States Postal Service under 
                paragraph (5), multiplied by
                    ``(ii) the aggregate amount of basic pay payable by 
                the United States Postal Service, for the period 
                involved, to employees of the United States Postal 
                Service.''; and
                    (B) by adding at the end the following:
    ``(5)(A) In determining the normal-cost percentage for employees of 
the United States Postal Service for purposes of paragraph (1)(C), the 
Office shall use--
            ``(i) demographic factors specific to such employees, 
        unless such data cannot be generated; and
            ``(ii) economic assumptions regarding wage and salary 
        growth that reflect the specific past, and likely future, pay 
        for such employees.
    ``(B) The United States Postal Service shall provide any data or 
projections the Office requires in order to determine the normal-cost 
percentage for employees of the United States Postal Service, 
consistent with subparagraph (A).
    ``(C) The Office shall review the determination of the normal-cost 
percentage for employees of the United States Postal Service and make 
such adjustments as the Office considers necessary--
            ``(i) upon request of the United States Postal Service, but 
        not more frequently than once each fiscal year; and
            ``(ii) at such other times as the Office considers 
        appropriate.
    ``(6) For the purpose of carrying out subsection (b)(1)(B), and 
consistent with paragraph (5), for fiscal year 2013, and each fiscal 
year thereafter, the Office shall use--
            ``(A) demographic factors specific to current and former 
        employees of the United States Postal Service, unless such data 
        cannot be generated; and
            ``(B) economic assumptions regarding wage and salary growth 
        that reflect the specific past, and likely future, pay for 
        current employees of the United States Postal Service.''; and
            (2) in subsection (b)--
                    (A) by redesignating paragraph (5) as paragraph 
                (6); and
                    (B) by inserting after paragraph (4) the following:
    ``(5)(A) In this paragraph, the term `postal funding surplus' means 
the amount by which the amount of the supplemental liability computed 
under paragraph (1)(B) is less than zero.
    ``(B) If the amount of supplemental liability computed under 
paragraph (1)(B) as of the close of any fiscal year after the date of 
enactment of the Postal Service Reform Act of 2016 is less than zero, 
the Office shall establish an amortization schedule, including a series 
of equal annual installments that--
            ``(i) provide for the liquidation of the postal funding 
        surplus in 30 years, commencing on September 30 of the 
        subsequent fiscal year; and
            ``(ii) shall be transferred to the United States Postal 
        Service Fund.''.

SEC. 104. MEDICARE PART B PREMIUM TRANSITION FOR NEWLY ENROLLING POSTAL 
              SERVICE ANNUITANTS AND FAMILY MEMBERS.

    (a) In General.--Section 1839 of the Social Security Act (42 U.S.C. 
1395r) is amended by adding at the end the following new subsection:
    ``(j) Transition for Newly Enrolling Postal Service Annuitants and 
Family Members.--With respect to each individual who is enrolled under 
this part pursuant to and during the open enrollment period established 
under section 1837(m) and who is not eligible for Medicare cost-sharing 
described in section 1905(p)(3)(A)(ii) under a State plan under title 
XIX, the premium otherwise established under this part (taking into 
account any adjustments, including those under subsections (b) and (i)) 
for a month--
            ``(1) in the initial contract year (as defined in section 
        8903c(a) of title 5, United States Code), shall be reduced by 
        75 percent;
            ``(2) in the succeeding year, shall be reduced by 50 
        percent; and
            ``(3) in the second succeeding year, shall be reduced by 25 
        percent.''.
    (b) Funding Through Postal Service Fund.--Section 1844 of the 
Social Security Act (42 U.S.C. 1395w) is amended--
            (1) in the last sentence of subsection (a), by striking 
        ``under subsection (d)(1) with respect to enrollees described 
        in subparagraphs (A) and (B) of such subsection'' and inserting 
        ``under subsections (d)(1) and (d)(4) with respect to enrollees 
        described in subparagraphs (A) and (B) of such respective 
        subsection''; and
            (2) in subsection (d), by adding at the end the following 
        new paragraph:
    ``(4) For each year, there shall be transferred from the Postal 
Service Fund to the Trust Fund an amount, as estimated by the Chief 
Actuary of the Centers for Medicare & Medicaid Services, equal to the 
reduction in aggregate premiums payable under this part for a month in 
such year that is attributable to the application of section 1839(j) 
with respect to--
            ``(A) enrollees age 65 and over; and
            ``(B) enrollees under age 65.
Such amounts shall be transferred from time to time as appropriate but, 
to the extent practicable, on an annual basis and in a manner that 
places the Trust Fund in the same actuarial status as if this paragraph 
and section 1839(j) did not apply.''.

               TITLE II--POSTAL SERVICE OPERATIONS REFORM

SEC. 201. GOVERNANCE REFORM.

    (a) Board of Governors.--
            (1) In general.--Section 202 of title 39, United States 
        Code, is amended to read as follows:
``Sec. 202. Board of Governors
    ``(a) In General.--There is established in the Postal Service a 
Board of Governors composed of 5 Governors, a Postmaster General, and a 
Deputy Postmaster General, all of whom shall be appointed in accordance 
with this section. The Governors shall have the power to--
            ``(1) exercise the powers of the Postal Service, consistent 
        with section 203(c);
            ``(2) appoint, fix the term of service of, and remove the 
        Postmaster General;
            ``(3) in consultation with the Postmaster General, appoint, 
        fix the term of service of, and remove the Deputy Postmaster 
        General;
            ``(4) set the strategic direction of postal operations and 
        approve the pricing and product strategy for the Postal 
        Service;
            ``(5) set the compensation of the Postmaster General and 
        the Deputy Postmaster General in accordance with private sector 
        best practices, as determined by the Governors pursuant to 
        section 3686; and
            ``(6) carry out any other duties specifically provided for 
        in this title.
    ``(b) Appointment; Pay.--
            ``(1) In general.--The Governors shall be appointed by the 
        President, by and with the advice and consent of the Senate, 
        not more than 3 of whom may be adherents of the same political 
        party. The Governors shall elect a Chair from among their 
        members. The Governors shall represent the public interest 
        generally, and shall be chosen solely on the basis of their 
        experience in the field of public administration, law, or 
        accounting, or on their demonstrated ability in managing 
        organizations or corporations (in either the public or private 
        sector) of substantial size, except that at least 3 of the 
        Governors shall be chosen solely on the basis of their 
        demonstrated ability in managing organizations or corporations 
        (in either the public or private sector) that employ at least 
        10,000 employees. The Governors shall not be representatives of 
        specific interests using the Postal Service, and may be removed 
        only for cause.
            ``(2) Compensation.--Each Governor shall receive a salary 
        of $30,000 a year plus $300 a day for not more than 42 days of 
        meetings each year and shall be reimbursed for travel and 
        reasonable expenses incurred in attending meetings of the 
        Board. Nothing in the preceding sentence shall be construed to 
        limit the number of days of meetings each year to 42 days.
            ``(3) Consultation.--In selecting the individuals described 
        in paragraph (1) for nomination for appointment to the position 
        of Governor, the President should consult with the Speaker of 
        the House of Representatives, the minority leader of the House 
        of Representatives, the majority leader of the Senate, and the 
        minority leader of the Senate.
    ``(c) Terms of Governors.--
            ``(1) In general.--The terms of the 5 Governors shall be 7 
        years, except that the terms of the 5 Governors first taking 
        office shall expire as designated by the President at the time 
        of appointment, 1 at the end of 1 year, 1 at the end of 2 
        years, 1 at the end of 3 years, 1 at the end of 4 years, and 1 
        at the end of 5 years, following the appointment of the first 
        of them. Any Governor appointed to fill a vacancy before the 
        expiration of the term for which the Governor's predecessor was 
        appointed shall serve for the remainder of such term. A 
        Governor may continue to serve after the expiration of the 
        Governor's term until his successor has qualified, but not to 
        exceed one year.
            ``(2) Limitation.--No individual may serve more than 2 
        terms as a Governor.
    ``(d) Staff.--The Chair of the Board of Governors shall ensure that 
the Board has appropriate independent staff to carry out the roles and 
responsibilities of the Board.''.
            (2) Application.--Any individual serving as a Governor on 
        the Board of Governors of the Postal Service on the date of 
        enactment of this Act shall continue to serve as a Governor 
        until the term applicable to such individual expires (as 
        determined under section 202(b) of title 39, United States 
        Code, as in effect before the amendments made by this section 
        take effect pursuant to subsection (g)).
    (b) Postmaster General.--
            (1) In general.--Section 203 of title 39, United States 
        Code, is amended to read as follows:
``Sec. 203. Postmaster General
    ``(a) In General.--The chief executive officer of the Postal 
Service is the Postmaster General, appointed pursuant to section 
202(a)(1). The alternate chief executive officer of the Postal Service 
is the Deputy Postmaster General, appointed pursuant to section 
202(a)(2) of this title.
    ``(b) Powers.--Consistent with the requirements of this title, the 
exercise of the power of the Postal Service shall be vested in the 
Governors and carried out by the Postmaster General in a manner 
consistent with the strategic direction and pricing and product 
strategy approved by the Governors. The Postmaster General shall 
consult with the Governors and the Deputy Postmaster General in 
carrying out such power.''.
            (2) Conforming amendment.--The item relating to section 203 
        in the table of sections for chapter 2 of title 39, United 
        States Code, is amended to read as follows:

``203. Postmaster General.''.
    (c) Procedures of the Board.--Section 205 of title 39, United 
States Code, is amended to read as follows:
``Sec. 205. Procedures of the Board of Governors
    ``(a) Vacancies.--Vacancies in the Board shall not impair the 
powers of the Board under this title.
    ``(b) Vote.--The Board shall act upon majority vote of those 
members who are present, subject to such quorum requirements as the 
Board may establish.
    ``(c) Limitation.--No officer or employee of the United States may 
serve concurrently as a Governor. A Governor may hold any other office 
or employment not inconsistent or in conflict with the Governor's 
duties, responsibilities, and powers as an officer of the Government of 
the United States in the Postal Service.''.
    (d) Delegation of Authority.--Section 402 of title 39, United 
States Code, is amended to read as follows:
``Sec. 402. Delegation of authority
    ``(a) Postmaster General.--The Postmaster General may delegate his 
or her authority under such terms, conditions, and limitations, 
including the power of redelegation, as he or she determines desirable. 
The Postmaster General may establish such committees of officers and 
employees of the Postal Service, and delegate such powers to any 
committee, as the Postmaster General determines appropriate to carry 
out his or her functions and duties. Delegations under this section 
shall be consistent with other provisions of this title, shall not 
relieve the Postmaster General of full responsibility for the carrying 
out the Postmaster General's duties and functions, and shall be 
revocable by the Postmaster General.
    ``(b) Board of Governors.--The Board may establish such committees 
of the Board, and delegate such powers to any committee, as the Board 
determines appropriate to carry out its functions and duties. 
Delegations to committees shall be consistent with other provisions of 
this title, shall not relieve the Board of full responsibility for the 
carrying out of its duties and functions, and shall be revocable by the 
Board in its exclusive judgment.''.
    (e) International Postal Arrangements.--
            (1) In general.--Section 407 of title 39, United States 
        Code, is amended by adding at the end the following:
    ``(f) After submission to the Postal Regulatory Commission by the 
Department of State of the budget detailing the estimated costs of 
carrying out the activities under this section, and the Commission's 
review and approval of such submission, the Postal Service shall 
transfer to the Department of State, from any funds available to the 
Postal Service, such sums as may be reasonable, documented, and 
auditable for the Department of State to carry out such activities.''.
            (2) Application.--The amendment made by paragraph (1) shall 
        take effect on October 1 of the first fiscal year beginning 
        after the date of enactment of this Act.
            (3) Conforming amendment.--Section 633 of title VI of the 
        Treasury and General Government Appropriations Act, 1999 
        (Public Law 105-277; 39 U.S.C. 407 note) is amended by striking 
        subsection (d).
    (f) Technical and Conforming Amendments.--Title 39, United States 
Code, is amended as follows:
            (1) In section 102(3)--
                    (A) by striking ``9 members'' and inserting ``5 
                members''; and
                    (B) by striking ``section 202(a)'' and inserting 
                ``section 202(b)(1)''.
            (2) In section 204--
                    (A) by striking ``the Board'' and inserting ``the 
                Postmaster General''; and
                    (B) by striking ``the Governors and''.
            (3) In section 207, by striking ``the Board'' and inserting 
        ``the Postal Service''.
            (4) In section 414(b)(2), by striking ``the Governors'' in 
        each instance it appears and inserting ``the Postal Service''.
            (5) In section 416(c)--
                    (A) by striking ``the Governors'' and inserting 
                ``the Postal Service''; and
                    (B) by striking ``they'' and inserting ``the Postal 
                Service''.
            (6) In section 1011, by striking ``the Board'' and 
        inserting ``the Postal Service''.
            (7) By striking section 2402 and inserting the following:
``Sec. 2402. Annual report
    ``The Postmaster General shall render an annual report concerning 
the operations of the Postal Service under this title to the President 
and Congress.''.
            (8) In section 3632--
                    (A) by striking the section heading, and inserting 
                ``Establishment of rates and classes of competitive 
                products'';
                    (B) by striking subsection (a) and redesignating 
                subsections (b) and (c) as (a) and (b), respectively;
                    (C) in paragraph (a)(2) (as redesignated by 
                subparagraph (B)), by striking ``and the record of the 
                Governors' proceedings in connection with such 
                decision'';
                    (D) in paragraph (a)(3) (as redesignated by 
                subparagraph (B))--
                            (i) by striking ``and the record of the 
                        proceedings in connection with such decision''; 
                        and
                            (ii) by striking ``the Governors consider'' 
                        and inserting ``the Postal Service considers''; 
                        and
                    (E) by striking ``the Governors'' in each instance 
                it appears and inserting ``the Postal Service''.
            (9) The table of sections for chapter 36 of title 39, 
        United States Code, is amended by striking the item relating to 
        section 3632 and inserting the following:

``3632. Establishment of rates and classes of competitive products.''.
    (g) Delayed Effective Date.--The amendments made by this section 
shall take effect upon the date that is 30 days after the date of 
enactment of this Act.

SEC. 202. TRANSITION TO MORE EFFICIENT AND SECURE MAIL DELIVERY.

    (a) In General.--Subchapter VII of chapter 36 of title 39, United 
States Code, is amended by adding at the end the following:
``Sec. 3692. Delivery-point modernization
    ``(a) Definitions.--For purposes of this section--
            ``(1) the term `delivery point' means a mailbox or other 
        receptacle to which mail is delivered;
            ``(2) the term `primary mode of mail delivery' means the 
        typical method by which the Postal Service delivers letter mail 
        to the delivery point of a postal patron;
            ``(3) the term `door delivery' means a primary mode of mail 
        delivery whereby mail is placed into a slot or receptacle at or 
        near the postal patron's door or is hand delivered to a postal 
        patron, but does not include centralized delivery, curbside 
        delivery, or sidewalk delivery;
            ``(4) the term `centralized delivery' means a primary mode 
        of mail delivery whereby mail receptacles of a number of 
        delivery points are grouped or clustered at a single location;
            ``(5) the term `curbside delivery' means a primary mode of 
        mail delivery whereby a mail receptacle is situated at the edge 
        of a sidewalk abutting a road or curb, at a road, or at a curb, 
        and can be served by a letter carrier from a motorized vehicle; 
        and
            ``(6) the term `sidewalk delivery' means a primary mode of 
        mail delivery whereby a mail receptacle is situated at the edge 
        of a sidewalk and can be served by a letter carrier from the 
        sidewalk.
    ``(b) Policy.--It shall be the policy of the Postal Service--
            ``(1) to provide access to secure, convenient mail and 
        package delivery receptacles to the greatest number of postal 
        patrons feasible; and
            ``(2) to use the most cost-effective primary mode of mail 
        delivery feasible for postal patrons.
    ``(c) Phaseout of Door Delivery for New Addresses.--For any new 
delivery point established after December 31, 2016, the Postal Service 
shall provide a primary mode of mail delivery other than door delivery, 
with a preference for secure, centralized delivery.
    ``(d) Business Address Conversion.--
            ``(1) Identification.--Not later than 1 year after the date 
        of the Postal Service Reform Act of 2016, each Postal Service 
        district office shall identify the business delivery points 
        within its service area that are appropriate candidates for 
        conversion from door delivery to centralized delivery, curbside 
        delivery, or sidewalk delivery.
            ``(2) Conversion requirement.--Beginning not later than 
        October 1, 2017, the Postal Service shall implement a program 
        to convert delivery points identified under paragraph (1) to 
        centralized delivery, curbside delivery, or sidewalk delivery 
        at a rate sufficient to ensure that--
                    ``(A) not less than 20 percent of such delivery 
                points are converted by September 30, 2018;
                    ``(B) not less than 40 percent of such delivery 
                points are converted by September 30, 2019;
                    ``(C) not less than 60 percent of such delivery 
                points are converted by September 30, 2020;
                    ``(D) not less than 80 percent of such delivery 
                points are converted by September 30, 2021; and
                    ``(E) all such delivery points are converted by 
                September 30, 2022.
            ``(3) Notification.--In carrying out conversions under 
        paragraph (2), the Postal Service shall provide written notice 
        at least 60 days in advance of the implementation date of a 
        change in primary mode of mail delivery to postal customers 
        served by an applicable delivery point.
    ``(e) Residential Address Conversion.--
            ``(1) Identification.--Not later than 1 year after the date 
        of the enactment of the Postal Service Reform Act of 2016, each 
        Postal Service district office shall identify the residential 
        delivery points within its service area that are appropriate 
        candidates for conversion from door delivery to centralized 
        delivery, curbside delivery, or sidewalk delivery.
            ``(2) Voluntary conversion.--Not later than October 1, 
        2017, the Postal Service shall commence a program to convert 
        delivery points identified under paragraph (1) to centralized 
        delivery, curbside delivery, or sidewalk delivery. Such program 
        shall operate as follows:
                    ``(A) Not later than 3 months after the 
                identification of the delivery points under paragraph 
                (1), the Postal Service shall divide such delivery 
                points into geographically based address units (such as 
                street blocks or other similar reasonably segregable 
                units) not to exceed 50 delivery points per unit.
                    ``(B) Not later than 6 months after such 
                identification, the Postal Service shall provide 
                written notification to postal patrons served by each 
                identified delivery point containing the following:
                            ``(i) Notice that the delivery point has 
                        been proposed for conversion to a more 
                        efficient primary mode of mail delivery to more 
                        economically provide universal postal service 
                        and improve service.
                            ``(ii) A description of the new primary 
                        mode of delivery proposed by the Postal Service 
                        and a visual example of such mode.
                            ``(iii) A conversion consent form and 
                        notice that conversion for residential 
                        addresses is on a voluntary basis.
                            ``(iv) A description of benefits of 
                        conversion to the postal patron, including 
                        access to secure mail and package delivery, and 
                        benefits of conversion to the Postal Service, 
                        including a smaller environmental impact for 
                        delivery.
                            ``(v) A description of how the conversion 
                        process would work, and the monetary costs (if 
                        any) to the postal patron.
                            ``(vi) Any other information the Postal 
                        Service considers necessary.
                    ``(C) No delivery point may be converted under this 
                subsection unless prior written consent is provided to 
                the Postal Service by a postal patron served by such 
                delivery point who is at least 18 years old. Prior to 
                the conversion of a delivery point under this section, 
                any written consent so provided may be withdrawn by 
                such patron or by any other postal patron served by 
                such delivery point who is at least 18 years old upon 
                written notification to the Postal Service. The Postal 
                Service shall place on the Postal Service's public Web 
                site an option to request that a consent form or 
                consent-withdrawal form be delivered to any delivery 
                point identified for conversion under this subsection.
                    ``(D) Upon the receipt of written consent 
                applicable to at least 40 percent of the delivery 
                points within an address unit described under 
                subparagraph (A), the Postal Service shall--
                            ``(i) not later than 30 days after the date 
                        that the requisite percentage is reached, 
                        provide written notice to each delivery point 
                        within such unit stating that the conversion 
                        threshold has been reached and that--
                                    ``(I) with respect to any delivery 
                                point for which a consent for 
                                conversion was received, that the 
                                primary mode of mail delivery for such 
                                address will be converted; and
                                    ``(II) with respect to any delivery 
                                point for which a consent for 
                                conversion was not received, that--
                                            ``(aa) a postal patron 
                                        served by such delivery point 
                                        may elect, by written consent, 
                                        at any time to convert the 
                                        primary mode of mail delivery 
                                        to the same form of delivery as 
                                        the converted delivery points 
                                        in such unit; and
                                            ``(bb) if such a patron 
                                        provides such consent, the 
                                        primary mode of mail delivery 
                                        shall be converted not later 
                                        than 30 days after the date of 
                                        such consent or, in any case 
                                        where the conversion of 
                                        delivery points has not yet 
                                        occurred, upon implementation 
                                        of that conversion;
                            ``(ii) not later than 90 days after the 
                        date that the requisite percentage is reached, 
                        but not less than 30 days following the written 
                        notice under clause (i), convert the delivery 
                        points for which consent was received to the 
                        applicable new primary mode of mail delivery; 
                        and
                            ``(iii) following the conversion of an 
                        address unit, ensure that the primary mode of 
                        mail delivery for any new residents to the 
                        address unit is the converted primary mode of 
                        mail, regardless of the primary mode of mail 
                        delivery for the previous occupant.
    ``(f) Considerations.--In making a determination to convert the 
primary mode of mail delivery under this section, the Postal Service 
shall consider--
            ``(1) the impact of weather conditions, physical barriers, 
        or any other factor that may impact the feasibility of 
        providing a primary mode of mail delivery other than door 
        delivery (such as a factor that may significantly reduce the 
        potential cost savings associated with providing centralized 
        delivery or curbside delivery);
            ``(2) whether the address is in a registered historic 
        district (as that term is defined in section 47(c)(3)(B) of the 
        Internal Revenue Code of 1986), is listed on the National 
        Register of Historic Places, is designated as a National 
        Historic Landmark, or is of historic value; and
            ``(3) population density and the concentration of poverty.
    ``(g) Waiver for Physical Hardship.--
            ``(1) In general.--The Postal Service shall establish and 
        maintain a waiver program under which, upon application, door 
        delivery may be continued, or provided, for a delivery point 
        identified under subsection (d)(1) or (e)(1) at no cost to the 
        applicant in any case in which--
                    ``(A) centralized delivery, curbside delivery, or 
                sidewalk delivery would, but for this paragraph, 
                otherwise be the primary mode of mail delivery; and
                    ``(B) door delivery is necessary in order to avoid 
                causing significant physical hardship or physical 
                safety risks to a postal patron.
            ``(2) Treatment of waiver.--An address receiving door 
        delivery pursuant to a waiver under this subsection--
                    ``(A) shall be counted, for purposes of the 
                reporting requirement under subsection (j), as an 
                address that receives the primary mode of mail delivery 
                which the address would be subject to if not for the 
                waiver; and
                    ``(B) shall, not later than 60 days after ceasing 
                to meet the requirements of paragraph (1), be converted 
                to the primary mode of mail delivery which is otherwise 
                applicable.
    ``(h) Procedures.--In carrying out conversions under this section, 
the Postal Service shall establish procedures to--
            ``(1) solicit, consider, and respond to input from the 
        general public, postal patrons, State and local governments, 
        local associations, and property owners;
            ``(2) calculate and make publicly accessible the cost or 
        savings of the conversion to the Postal Service as well as the 
        average conversion cost or savings to each postal patron and 
        any cost or savings to the State and local government; and
            ``(3) place centralized delivery points in locations that 
        maximize delivery efficiency, ease of use for postal patrons, 
        and respect for private property rights.
    ``(i) Voucher Program.--The Postal Service shall provide for a 
voucher program under which, upon application, the Postal Service may 
defray all or any portion of the costs associated with conversion from 
door delivery under this section which would otherwise be borne by 
postal patrons.
    ``(j) Annual Report.--Not later than 60 days after the end of each 
of fiscal years 2017 through 2023, the Postal Service shall submit to 
Congress and the Inspector General a report on the implementation of 
this section during the most recently completed fiscal year. Each such 
report shall include--
            ``(1) the number of residential and business addresses 
        that--
                    ``(A) receive door delivery as of the end of the 
                fiscal year preceding the most recently completed 
                fiscal year;
                    ``(B) receive door delivery as of the end of the 
                most recently completed fiscal year; and
                    ``(C) during the most recently completed fiscal 
                year, were converted from door delivery to--
                            ``(i) centralized delivery;
                            ``(ii) curbside delivery; and
                            ``(iii) any other primary mode of mail 
                        delivery;
            ``(2) the estimated cost savings from the conversions 
        described in paragraph (1)(C);
            ``(3) a description of the progress made by the Postal 
        Service toward meeting the requirements of the phaseout under 
        subsection (c); and
            ``(4) any other information which the Postal Service 
        considers appropriate.
    ``(k) Inspector General Audit.--The Inspector General shall issue 
an annual audit report on the implementation of this section not later 
than 90 days after the date on which the Postal Service releases its 
annual report under subsection (j). Such report shall include--
            ``(1) an audit of the data contained in the Postal 
        Service's report under subsection (j); and
            ``(2) an evaluation of the Postal Service's implementation 
        of the voucher program under subsection (i).
    ``(l) Review.--Subchapters IV and V shall not apply with respect to 
any action taken by the Postal Service under this section.''.
    (b) Clerical Amendment.--The table of sections for chapter 36 of 
title 39, United States Code, is amended by adding after the item 
relating to section 3691 the following:

``3692. Delivery-point modernization.''.
    (c) Updated Delivery Cost Data.--
            (1) Study.--Not later than 180 days after the date of the 
        enactment of this Act, the Postal Service shall begin to 
        collect data on delivery mode costs and the potential savings 
        of converting to more cost-efficient primary modes of mail 
        delivery.
            (2) Report.--Not later than 2 years after the date of 
        enactment of this Act, the Postal Service shall submit a report 
        to the Committee on Oversight and Government Reform of the 
        House of Representatives and the Committee on Homeland Security 
        and Governmental Affairs of the Senate describing the findings 
        of the study conducted under paragraph (1).
    (d) Inspector General Review of Costs and Benefits of Delivery 
Point Conversions.--
            (1) Study.--Not later than 2 years after the date on which 
        the Postal Service commences delivery point conversions 
        pursuant to subsections (d)(2) and (e)(2) of section 3692 of 
        title 39, United States Code (as added by subsection (a)), and 
        not later than 3 years thereafter, the Inspector General of the 
        Postal Community shall conduct a study of the costs and 
        benefits of such conversions.
            (2) Report.--Not later than 1 year after the date on which 
        the Inspector General conducts each study required under 
        paragraph (1), the Inspector General shall submit to the 
        Committee on Homeland Security and Governmental Affairs of the 
        Senate and the Committee on Oversight and Government Reform of 
        the House of Representatives a report on the results of each 
        study.
            (3) Content.--The studies required under paragraph (1) 
        shall assess the following:
                    (A) The cost savings realized by the Postal Service 
                from the conversions under subsections (d)(2) and 
                (e)(2) of section 3692 of title 39, United States Code 
                (as added by subsection (a)), and the projected cost 
                savings the Postal Service is likely to realize from 
                full implementation of such conversions.
                    (B) The expenses incurred by the Postal Service to 
                achieve such conversions and the projected expenses the 
                Postal Service is likely to incur from full 
                implementation of such conversions.
                    (C) The impact of the conversions on--
                            (i) response rates to mailed advertising;
                            (ii) advertising revenue earned by the 
                        Postal Service;
                            (iii) small businesses, including small 
                        home-based businesses; and
                            (iv) mail volumes shipped through the 
                        Postal Service.
                    (D) Any other factors the Inspector General 
                considers relevant to provide a complete analysis of 
                the costs and benefits associated with the conversions 
                described under such subsections.
            (4) Net cost benefit analysis.--The Inspector General shall 
        conduct a cost benefit analysis to determine the net cost or 
        benefit to the Postal Service of the conversions conducted 
        under such subsections and include the analysis in each report 
        submitted under paragraph (2).

SEC. 203. MODERNIZING POSTAL RATES.

    (a) Adequacy, Efficiency, and Fairness of Postal Rates.--
            (1) Objectives.--Section 3622(b) of title 39, United States 
        Code, is amended--
                    (A) in paragraph (2), by inserting ``and ensure'' 
                after ``create'';
                    (B) in paragraph (3)--
                            (i) by inserting ``and meet'' after 
                        ``maintain''; and
                            (ii) by inserting ``, with a focus on 
                        achieving predictable and consistent delivery'' 
                        before the period at the end;
                    (C) in paragraph (5), by inserting ``establish 
                and'' before ``maintain'';
                    (D) in paragraph (6), by striking ``process'' and 
                inserting ``and cost allocation processes''; and
                    (E) in paragraph (9), by inserting ``(and to ensure 
                appropriate levels of transparency)'' before the period 
                at the end.
            (2) Factors.--Section 3622(c) of title 39, United States 
        Code, is amended to read as follows:
    ``(c) Factors.--In establishing or revising such system, the Postal 
Regulatory Commission shall take into account the following factors:
            ``(1) The effect of rate increases upon the general public 
        and business mail users.
            ``(2) The available alternative means of sending and 
        receiving written communications, information, and letters and 
        other mail matter at reasonable costs.
            ``(3) The reliability of delivery timelines and the extent 
        to which the Postal Service is meeting its service standard 
        obligations.
            ``(4) The need to ensure that the Postal Service has 
        adequate revenues and has taken appropriate cost-cutting 
        measures to maintain financial stability and meet all legal 
        obligations.
            ``(5) The extent to which the Postal Service has taken 
        actions to increase its efficiency and reduce its costs.
            ``(6) The value of the mail service actually provided by 
        each class or type of mail service to both the sender and the 
        recipient, including but not limited to the collection, mode of 
        transportation, and priority of delivery.
            ``(7) The requirement that each class of mail or type of 
        mail service bear the direct and indirect postal costs 
        attributable to each class or type of mail service through 
        reliably identified causal relationships plus that portion of 
        all other costs of the Postal Service reasonably assignable to 
        such class or type.
            ``(8) The degree of preparation of mail for delivery into 
        the postal system performed by the mailer and its effect upon 
        improving efficiency and reducing costs to the Postal Service.
            ``(9) Simplicity of structure for the entire schedule and 
        simple, identifiable relationships between the rates or fees 
        charged the various classes of mail for postal services.
            ``(10) The importance of pricing flexibility to encourage 
        increased mail volume and operational efficiency.
            ``(11) The relative value to the people of the kinds of 
        mail matter entered into the postal system and the desirability 
        and justification for special classifications and services of 
        mail.
            ``(12) The importance of providing classifications with 
        extremely high degrees of reliability and speed of delivery and 
        of providing those that do not require high degrees of 
        reliability and speed of delivery.
            ``(13) The desirability of special classifications for both 
        postal users and the Postal Service in accordance with the 
        policies of this title, including agreements between the Postal 
        Service and postal users, when available on public and 
        reasonable terms to similarly situated mailers, that--
                    ``(A) improve the net financial position of the 
                Postal Service by reducing Postal Service costs or 
                increasing the overall contribution to the 
                institutional costs of the Postal Service; and
                    ``(B) do not cause--
                            ``(i) unfair competitive advantage for the 
                        Postal Service or postal users eligible for the 
                        agreements; or
                            ``(ii) unreasonable disruption to the 
                        volume or revenues of other postal users.
            ``(14) The educational, cultural, scientific, and 
        informational value to the recipient of mail matter.
            ``(15) The need for the Postal Service to increase its 
        efficiency and reduce its costs, including infrastructure 
        costs, to help maintain high quality, affordable postal 
        services.
            ``(16) The value to the Postal Service and postal users of 
        promoting intelligent mail and of secure, sender-identified 
        mail.
            ``(17) The importance of stability and predictability of 
        rates to ratepayers.
            ``(18) The policies of this title as well as such other 
        factors as the Commission determines appropriate.''.
            (3) Requirements.--Section 3622(d)(1) of title 39, United 
        States Code, is amended--
                    (A) by redesignating subparagraphs (B) through (E) 
                as subparagraphs (C) through (F), respectively;
                    (B) in subparagraph (F) (as redesignated by clause 
                (i)) by striking ``subparagraphs (A) and (C)'' and 
                inserting ``subparagraphs (A) and (D)''; and
                    (C) by inserting after subparagraph (A) the 
                following:
                    ``(B) establish postal rates for each group of 
                functionally equivalent agreements between the Postal 
                Service and users of the mail that--
                            ``(i) cover attributable cost;
                            ``(ii) improve the net financial position 
                        of the Postal Service; and
                            ``(iii) do not cause unreasonable 
                        disruption in the marketplace, consistent with 
                        subsection (c)(13)(B);
                for purposes of this subparagraph, a group of 
                functionally equivalent agreements shall consist of all 
                service agreements that are functionally equivalent to 
                each other within the same market-dominant product, but 
                shall not include agreements within an experimental 
                product;''.
            (4) Technical and conforming amendments.--Section 3622 of 
        title 39, United States Code, is amended--
                    (A) in subsection (a) by striking ``, within 18 
                months after the date of enactment of this section,''; 
                and
                    (B) in subsection (d)(1)(E) (as redesignated by 
                paragraph (3)(A)(i)) by striking ``(c)(10)'' and 
                inserting ``(c)(H)''.
    (b) Repeal of Rate Preferences for Qualified Political 
Committees.--Subsection (e) of section 3626 of title 39, United States 
Code, is repealed.
    (c) Use of Negotiated Service Agreements.--
            (1) Streamlined review of qualifying service agreements for 
        competitive products.--Section 3633 of title 39, United States 
        Code, is amended by adding at the end the following:
    ``(c) Streamlined Review.--Not later than 90 days after the date of 
enactment of this subsection, after notice and opportunity for comment, 
the Postal Regulatory Commission shall promulgate (and may from time to 
time thereafter revise) regulations for streamlined after-the-fact 
review of newly proposed agreements between the Postal Service and 
users of the mail that provide rates not of general applicability for 
competitive products. Streamlined review shall apply only if agreements 
are functionally equivalent to existing agreements that have 
collectively covered attributable costs and collectively improved the 
net financial position of the Postal Service. The regulations issued 
under this subsection shall provide that streamlined review shall be 
concluded not later than 5 business days after the date on which the 
agreement is filed with the Commission and shall be limited to approval 
or disapproval of the agreement as a whole based on the Commission's 
determination of its functional equivalence. Agreements not approved 
may be resubmitted without prejudice under section 3632.''.
            (2) Submission of service agreements for streamlined 
        review.--Section 3632(b) of title 39, United States Code, is 
        amended--
                    (A) by redesignating paragraph (4) as paragraph 
                (5); and
                    (B) by inserting after paragraph (3) the following:
            ``(4) Rates for streamlined review.--In the case of rates 
        not of general applicability for competitive products that the 
        Postmaster General considers eligible for streamlined review 
        under section 3633(c), the Postmaster General shall cause the 
        agreement to be filed with the Postal Regulatory Commission by 
        a date that is on or before the effective date of any new rate 
        established under the agreement, as the Postmaster General 
        considers appropriate.''.
            (3) Transparency and accountability for service 
        agreements.--
                    (A) Certain information required to be included in 
                determinations of compliance.--Section 3653 of title 
                39, United States Code, is amended--
                            (i) by redesignating subsections (c), (d), 
                        and (e) as subsections (d), (e), and (f), 
                        respectively; and
                            (ii) by inserting after subsection (b) the 
                        following:
    ``(c) Written Determination.--Each annual written determination of 
the Commission under this section shall include the following:
            ``(1) Requirements.--For each group of functionally 
        equivalent agreements between the Postal Service and users of 
        the mail, whether such group fulfilled requirements to--
                    ``(A) cover costs attributable; and
                    ``(B) improve the net financial position of the 
                Postal Service.
            ``(2) Noncompliance.--Any group of functionally equivalent 
        agreements not meeting subparagraphs (A) and (B) of paragraph 
        (1) shall be determined to be in noncompliance under this 
        subsection.
            ``(3) Definition.--For purposes of this subsection, a group 
        of functionally equivalent agreements shall consist of 1 or 
        more service agreements that are functionally equivalent to 
        each other within the same market-dominant or competitive 
        product, but shall not include agreements within an 
        experimental product.''.
                    (B) Technical amendment.--Section 3653(d) of title 
                39, United States Code (as redesignated by subparagraph 
                (A)), is amended by striking ``subsections (c) and 
                (e)'' and inserting ``subsections (c) and (d)''.

SEC. 204. NONPOSTAL SERVICES.

    (a) Nonpostal Services.--
            (1) In general.--Part IV of title 39, United States Code, 
        is amended by adding after chapter 36 the following:

                    ``CHAPTER 37--NONPOSTAL SERVICES

``Sec.
``3701. Purpose.
``3702. Definitions.
``3703. Postal service program for State governments.
``3704. Postal service program for other government agencies.
``3705. Transparency and accountability for nonpostal services.
``Sec. 3701. Purpose
    ``The purpose of this chapter is to enable the Postal Service to 
increase its net revenues through specific nonpostal products and 
services that are expressly authorized by this chapter. Postal Service 
revenues and expenses under this chapter shall be funded through the 
Postal Service Fund.
``Sec. 3702. Definitions
    ``In this chapter--
            ``(1) the term `nonpostal services' is limited to services 
        offered by the Postal Service that are expressly authorized by 
        this chapter and are not postal products or services;
            ``(2) the term `attributable costs' has the meaning given 
        such term in section 3631; and
            ``(3) the term `year' means a fiscal year.
``Sec. 3703. Postal service program for State governments
    ``(a) In General.--Notwithstanding any other provision of this 
title, the Postal Service may establish a program to enter into 
agreements with an agency of any State government, local government, or 
tribal government to provide property and services on behalf of such 
agencies for non-commercial products and services at Postal Service 
facilities within the United States, but only if such property and 
services--
            ``(1) provide enhanced value to the public, such as by 
        lowering the cost or raising the quality of such services or by 
        making such services more accessible;
            ``(2) do not interfere with or detract from the value of 
        postal services, including--
                    ``(A) the cost and efficiency of postal services; 
                and
                    ``(B) unreasonably restricting access to postal 
                retail service, such as customer waiting time and 
                access to parking; and
            ``(3) provide a reasonable contribution to the 
        institutional costs of the Postal Service, defined as 
        reimbursement that covers at least 100 percent of attributable 
        costs of all property and services provided under each relevant 
        agreement in each year.
    ``(b) Public Notice.--At least 90 days before offering a service 
under the program, the Postal Service shall make available to the 
public on its Web site--
            ``(1) the agreement with the agency regarding such service; 
        and
            ``(2) a business plan that describes the specific service 
        to be provided, the enhanced value to the public, terms of 
        reimbursement, the estimated annual reimbursement to the Postal 
        Service, and the estimated percentage of attributable Postal 
        Service costs that will be covered by reimbursement (with 
        documentation to support the estimates).
    ``(c) Public Comment.--Before offering a service under the program, 
the Postal Service shall provide for a public comment period of at 
least 30 days that allows the public to post comments relating to the 
provision of such services on the Postal Service Web site. The Postal 
Service shall make reasonable efforts to provide written responses to 
the comments on such Web site at least 30 days before offering such 
services.
    ``(d) Approval Required.--The Postal Service may not establish the 
program under subsection (a) unless the Governors of the Postal Service 
approve such program by a recorded vote that is publicly disclosed on 
the Postal Service Web site with a majority of the total Governors 
voting for approval.
    ``(e) Application of Reporting Requirements.--For purposes of the 
reporting requirements under section 3705, the Postal Service shall 
submit a separate report for each agreement with an agency entered into 
under subsection (a) analyzing the costs, revenues, rates, and quality 
of service for the provision of all services under such agreement, 
including information demonstrating that the agreement satisfies the 
requirements of paragraphs (1) through (3) of subsection (a).
    ``(f) Regulations Required.--The Postal Regulatory Commission shall 
issue such regulations as are necessary to carry out this section.
    ``(g) Definitions.--For the purpose of this section--
            ``(1) the term `local government' means a county, 
        municipality, city, town, township, local public authority, 
        school district, special district, intrastate district, council 
        of governments, or regional or interstate government entity;
            ``(2) the term `State government' includes the government 
        of the District of Columbia, the Commonwealth of Puerto Rico, 
        the United States Virgin Islands, Guam, American Samoa, the 
        Commonwealth of the Northern Mariana Islands, and any other 
        territory or possession of the United States;
            ``(3) the term `tribal government' means the government of 
        an Indian tribe, as that term is defined in section 4(e) of the 
        Indian Self-Determination Act (25 U.S.C. 450b(e)); and
            ``(4) the term `United States', when used in a geographical 
        sense, means the States, the District of Columbia, the 
        Commonwealth of Puerto Rico, the United States Virgin Islands, 
        Guam, American Samoa, the Commonwealth of the Northern Mariana 
        Islands, and any other territory or possession of the United 
        States.
``Sec. 3704. Postal service program for other government agencies
    ``(a) In General.--The Postal Service may establish a program to 
provide property and services to other Government agencies within the 
meaning of section 411, but only if such program provides a reasonable 
contribution to the institutional costs of the Postal Service, defined 
as reimbursement by each agency that covers at least 100 percent of the 
attributable costs of all property and service provided by the Postal 
Service in each year to such agency.
    ``(b) Application of Reporting Requirements.--For purposes of the 
reporting requirements under section 3705, the Postal Service shall 
submit a separate report for each agreement with an agency entered into 
under subsection (a) analyzing the costs, revenues, rates, and quality 
of service for the provision of all services under such agreement, 
including information demonstrating that the agreement satisfies the 
requirements of subsection (a).
``Sec. 3705. Transparency and accountability for nonpostal services
    ``(a) Annual Report to the Commission.--
            ``(1) In general.--Not later than 90 days after the last 
        day of each year, the Postal Service shall submit to the Postal 
        Regulatory Commission a report that analyzes costs, revenues, 
        rates, and quality of service for each agreement for the 
        provision of property and services under this chapter, using 
        such methodologies as the Commission may prescribe, and in 
        sufficient detail to demonstrate compliance with the 
        requirements of this chapter.
            ``(2) Supporting matter.--A report submitted under 
        paragraph (1) shall include any nonpublic annex, the working 
        papers, and any other supporting matter of the Postal Service 
        and the Inspector General related to the information submitted 
        in such report.
    ``(b) Content and Form of Report.--
            ``(1) In general.--The Postal Regulatory Commission shall, 
        by regulation, prescribe the content and form of the report 
        required under subsection (a). In prescribing such regulations, 
        the Commission shall give due consideration to--
                    ``(A) providing the public with timely, adequate 
                information to assess compliance;
                    ``(B) avoiding unnecessary or unwarranted 
                administrative effort and expense on the part of the 
                Postal Service; and
                    ``(C) protecting the confidentiality of information 
                that is commercially sensitive or is exempt from public 
                disclosure under section 552(b) of title 5.
            ``(2) Revised requirements.--The Commission may, on its own 
        motion or on request of any interested party, initiate 
        proceedings to improve the quality, accuracy, or completeness 
        of Postal Service data required by the Commission if--
                    ``(A) the attribution of costs or revenues to 
                property or services under this chapter has become 
                significantly inaccurate or can be significantly 
                improved;
                    ``(B) the quality of service data provided to the 
                Commission for a report under this chapter has become 
                significantly inaccurate or can be significantly 
                improved; or
                    ``(C) such revisions are, in the judgment of the 
                Commission, otherwise necessitated by the public 
                interest.
    ``(c) Audits.--The Inspector General shall regularly audit the data 
collection systems and procedures used in collecting information and 
preparing the report required under subsection (a). The results of any 
such audit shall be submitted to the Postal Service and the Postal 
Regulatory Commission.
    ``(d) Confidential Information.--
            ``(1) In general.--If the Postal Service determines that 
        any document or portion of a document, or other matter, which 
        it provides to the Postal Regulatory Commission in a nonpublic 
        annex under this section contains information described in 
        section 410(c), or exempt from public disclosure under section 
        552(b) of title 5, the Postal Service shall, at the time of 
        providing such matter to the Commission, notify the Commission 
        of its determination, in writing, and describe with 
        particularity the documents (or portions of documents) or other 
        matter for which confidentiality is sought and the reasons 
        therefor.
            ``(2) Treatment.--Any information or other matter described 
        in paragraph (1) to which the Commission gains access under 
        this section shall be subject to paragraphs (2) and (3) of 
        section 504(g) in the same way as if the Commission had 
        received notification with respect to such matter under section 
        504(g)(1).
    ``(e) Annual Compliance Determination.--
            ``(1) Opportunity for public comment.--Upon receiving a 
        report required under subsection (a), the Postal Regulatory 
        Commission shall promptly--
                    ``(A) provide an opportunity for comment on such 
                report by any interested party; and
                    ``(B) appoint an officer of the Commission to 
                represent the interests of the general public.
            ``(2) Determination of compliance or noncompliance.--Not 
        later than 90 days after receiving a report required under 
        subsection (a), the Postal Regulatory Commission shall make a 
        written determination as to whether the nonpostal activities 
        carried out during the applicable year were or were not in 
        compliance with the provisions of this chapter. For purposes of 
        this paragraph, any case in which the requirements for coverage 
        of attributable costs have not been met shall be considered to 
        be a case of noncompliance. If, with respect to a year, no 
        instance of noncompliance is found to have occurred, the 
        determination shall be to that effect. Such determination of 
        noncompliance shall be included with the annual compliance 
        determination required under section 3653.
            ``(3) Noncompliance.--If a timely written determination of 
        noncompliance is made under paragraph (2), the Postal 
        Regulatory Commission shall take the following appropriate 
        action. If the requirements for coverage of attributable costs 
        specified by this chapter are not met, the Commission shall, 
        within 60 days after the determination, prescribe remedial 
        action to restore compliance as soon as practicable, including 
        the full restoration of revenue shortfalls during the following 
        year. The Commission may order the Postal Service to 
        discontinue a nonpostal service under section 3703 that 
        persistently fails to meet cost coverage requirements.
            ``(4) Deliberate noncompliance.--In the case of deliberate 
        noncompliance by the Postal Service with the requirements of 
        this chapter, the Postal Regulatory Commission may order, based 
        on the nature, circumstances, extent, and seriousness of the 
        noncompliance, a fine (in the amount specified by the 
        Commission in its order) for each incidence of such 
        noncompliance. All receipts from fines imposed under this 
        subsection shall be deposited in the general fund of the 
        Treasury.
    ``(f) Regulations Required.--The Postal Regulatory Commission shall 
issue such regulations as are necessary to carry out this section.''.
            (2) Clerical amendment.--The table of chapters for part IV 
        of title 39, United States Code, is amended by adding after the 
        item relating to chapter 36 the following:

``37. Nonpostal services....................................    3701''.
    (b) Conforming Amendments.--
            (1) Section 404.--Section 404(e) of title 39, United States 
        Code, is amended--
                    (A) in paragraph (2), by inserting after 
                ``subsection'' the following: ``, or any nonpostal 
                products or services authorized by chapter 37''; and
                    (B) by adding at the end the following:
    ``(6) Licensing which, before the date of enactment of this 
paragraph, has been authorized by the Postal Regulatory Commission for 
continuation as a nonpostal service may not be used for any purpose 
other than--
            ``(A) to continue to provide licensed mailing, shipping, or 
        stationery supplies offered as of June 23, 2011; or
            ``(B) to license other goods, products, or services, the 
        primary purpose of which is to promote and enhance the image or 
        brand of the Postal Service.
            ``(7) Nothing in this section shall be considered to 
        prevent the Postal Service from establishing nonpostal products 
        and services that are expressly authorized by chapter 37.''.
            (2) Section 411.--The last sentence of section 411 of title 
        39, United States Code, is amended by striking ``including 
        reimbursability'' and inserting ``including reimbursability 
        within the limitations of chapter 37''.
            (3) Treatment of existing nonpostal services.--All 
        individual nonpostal services, provided directly or through 
        licensing, that are continued pursuant to section 404(e) of 
        title 39, United States Code, shall be considered to be 
        expressly authorized by chapter 37 of such title (as added by 
        subsection (a)(1)) and shall be subject to the requirements of 
        such chapter.

SEC. 205. EFFICIENT AND FLEXIBLE UNIVERSAL POSTAL SERVICE.

    (a) Conditions Regarding Determinations for Post Office Closures.--
Clause (i) of section 404(d)(2)(A) of title 39, United States Code, is 
amended to read as follows:
                    ``(i) the effect of such closing or consolidation 
                on the community served by such post office, including 
                through an analysis of--
                            ``(I) the distance (as measured by public 
                        roads) to the closest postal retail facility 
                        not proposed for closure or consolidation under 
                        such plan;
                            ``(II) the characteristics of such 
                        location, including weather and terrain;
                            ``(III) whether commercial mobile service 
                        (as defined in section 332 of the 
                        Communications Act of 1934) and commercial 
                        mobile data service (as defined in section 6001 
                        of the Middle Class Tax Relief and Job Creation 
                        Act of 2012) are available in at least 80 
                        percent of the total geographic area of the ZIP 
                        codes served by the postal retail facility 
                        proposed for closure or consolidation; and
                            ``(IV) whether fixed broadband Internet 
                        access service is available to households in at 
                        least 80 percent of such geographic area at 
                        speeds not less than those sufficient for 
                        service to be considered broadband for purposes 
                        of the most recent report of the Federal 
                        Communications Commission under section 706 of 
                        the Telecommunications Act of 1996;''.
    (b) PRC Review of Determinations To Close or Consolidate a Post 
Office.--
            (1) Deadline for review.--Section 404(d)(5) title 39, 
        United States Code, is amended by striking ``120 days'' and 
        inserting ``60 days, or a longer period for good cause shown 
        but in no event longer than 120 days,''.
            (2) Applicability.--The amendment made by paragraph (1) 
        shall not apply with respect to an appeal received by the 
        Postal Regulatory Commission before the date of enactment of 
        this Act (as determined applying the rules set forth in section 
        404(d)(6) of such title).
    (c) Expedited Procedures.--
            (1) In general.--Section 3661 of title 39, United States 
        Code, is amended by adding at the end the following:
    ``(d)(1) The Commission shall issue its opinion within 90 days, or 
a longer period for good cause shown but in no event longer than 120 
days, after the receipt of any proposal (as referred to in subsection 
(b)) concerning an identical or substantially identical proposal on 
which the Commission has issued an opinion within the preceding 5 
years.
    ``(2) If necessary in order to comply with the 90-day requirement 
under paragraph (1), the Commission may apply expedited procedures 
which the Commission shall by regulation prescribe.''.
            (2) Regulations.--The Postal Regulatory Commission shall 
        prescribe any regulations necessary to carry out the amendment 
        made by paragraph (1) within 90 days after the date of 
        enactment of this Act.
            (3) Applicability.--The amendment made by this subsection 
        shall apply with respect to any proposal received by the Postal 
        Regulatory Commission on or after the earlier of--
                    (A) the 90th day after the date of enactment of 
                this Act; or
                    (B) the effective date of the regulations under 
                paragraph (2).
    (d) Alternate Postal Access Choice.--Section 404(d) of title 39, 
United States Code, is amended by striking paragraph (1) and inserting 
the following:
            ``(1) The Postal Service, prior to making a determination 
        under subsection (a)(3) as to the necessity for the closing or 
        consolidation of any post office, shall--
                    ``(A) provide adequate notice of its intention to 
                close or consolidate such post office at least 60 days 
                prior to the proposed date of such closing or 
                consolidation to postal patrons served by such post 
                office;
                    ``(B) conduct a nonbinding survey on the proposed 
                closing or consolidation to allow postal patrons served 
                by such post office an opportunity to indicate their 
                preference between or among--
                            ``(i) the closing or consolidation; and
                            ``(ii) 1 or more alternative options; and
                    ``(C) ensure that--
                            ``(i) should the closure or consolidation 
                        of a postal retail facility be deemed 
                        necessary, it shall be the policy of the Postal 
                        Service to provide alternative access to postal 
                        services to those served by the postal retail 
                        facility by the option chosen by the highest 
                        number of survey respondents under subparagraph 
                        (B)(ii); and
                            ``(ii) if the Postal Service is unable to 
                        provide alternative access through the option 
                        identified in clause (i), or if that option is 
                        cost prohibitive, the Postal Service may 
                        provide alternative access through a different 
                        means. Upon selection of an alternative access 
                        method other than the one identified by clause 
                        (i), the Postal Service must provide written 
                        notice to those patrons served by the postal 
                        retail facility identifying and explaining why 
                        the option identified by clause (i) was not 
                        possible or cost prohibitive.''.
    (e) Applicability of Procedures Relating to Closures and 
Consolidations.--
            (1) In general.--Section 404(d) of title 39, United States 
        Code, is further amended by adding at the end the following:
    ``(7) For purposes of this subsection, the term `post office' means 
a post office and any other facility described in section 2(2) of the 
Postal Service Reform Act of 2016.''.
            (2) Effective date.--In the case of any post office (within 
        the meaning of the amendment made by paragraph (1)) which, but 
        for such amendment, would not otherwise be subject to section 
        404(d) of title 39, United States Code, the amendment made by 
        subsection (a) shall be effective with respect to any closure 
        or consolidation, the proposed effective date of which occurs 
        on or after the 60th day following the date of enactment of 
        this Act.
    (f) Enhanced Reporting on Postal Service Efficiency.--Section 
3652(a) of title 39, United States Code, is amended--
            (1) in paragraph (1), by striking ``and'' at the end;
            (2) in paragraph (2)(B)(ii), by striking the period at the 
        end and inserting ``; and''; and
            (3) by adding after paragraph (2) the following:
            ``(3) which shall provide the overall change in Postal 
        Service productivity and the resulting effect of such change on 
        overall Postal Service costs during such year, using such 
        methodologies as the Commission shall by regulation prescribe, 
        if necessary.''.
    (g) POSTPlan Study.--
            (1) In general.--Beginning not later than 30 days after the 
        date of enactment of this Act, the Inspector General of the 
        Postal Community shall conduct a 1-year review to study of the 
        impacts of the POSTPlan post office restructuring plan on 
        Postal Service expenses, revenue, and retail service provision.
            (2) Content.--In conducting the review under paragraph (1), 
        the Inspector General shall examine--
                    (A) changes in the costs for the provision of 
                Postal Service operated retail service, both nationwide 
                and in the aggregate for each of the Level 2, Level 4, 
                Level 6, and Level 18 post offices for which the hours, 
                functions, or responsibilities changed as a result of 
                the POSTPlan initiative before and after the 
                implementation of the POSTPlan initiative;
                    (B) changes in revenue received by Postal Service 
                operated retail service, both nationwide and in the 
                aggregate for each of the Level 2, Level 4, Level 6, 
                and Level 18 post offices for which the hours, 
                functions, or responsibilities changed as a result of 
                the POSTPlan initiative before and after the 
                implementation of the POSTPlan initiative;
                    (C) a determination of the relative cost savings, 
                taking into account any changes in revenue earned, 
                realized on an annual basis for Level 2, Level 4, Level 
                6, and Level 18 offices each in the aggregate and any 
                trends in such cost savings;
                    (D) the relative impact on retail access to postal 
                services for individuals served by Level 2, Level 4, 
                Level 6, and Level 18 offices each in the aggregate; 
                and
                    (E) any other factors the Inspector General 
                determines appropriate.
            (3) Report and recommendations.--Upon completion of the 
        review required under paragraph (1), the Inspector General 
        shall submit to the Postal Service, the Committee on Homeland 
        Security and Governmental Affairs of the Senate, and the 
        Committee on Oversight and Government Reform of the House of 
        Representatives a report containing--
                    (A) the results of the review; and
                    (B) any recommendations resulting from such review.
            (4) Postal service review.--Prior to any hour changes or 
        consolidation decisions related to POSTPlan initiative impacted 
        post offices, the Postal Service shall--
                    (A) review the report and any recommendations 
                submitted pursuant to paragraph (3); and
                    (B) revise any planned efforts regarding the 
                POSTPlan initiative, as appropriate.

SEC. 206. FAIR STAMP-EVIDENCING COMPETITION.

    Section 404a(a) of title 39, United States Code, is further 
amended--
            (1) in paragraph (2), by striking ``or'' at the end;
            (2) in paragraph (3) by striking the period and inserting 
        ``; or''; and
            (3) by adding at the end the following:
            ``(4) offer to the public any postage-evidencing product or 
        service that does not comply with any rule or regulation that 
        would be applicable to such product or service if the product 
        or service were offered by a private company.''.

SEC. 207. MARKET-DOMINANT RATES.

    (a) Establishment of Rate Baseline.--Notwithstanding any order of 
the Postal Regulatory Commission to the contrary--
            (1) no earlier than the first Sunday after the date of 
        enactment of this Act, on a date selected by the Postmaster 
        General in the exercise of the Postmaster General's 
        unreviewable discretion, the Postal Service shall reinstate, as 
        nearly as is practicable, 50 percent of the rate surcharge 
        implemented under section 3622(d)(1)(G) (as redesignated by 
        this Act) that was in effect on April 9, 2016; and
            (2) the partially reinstated surcharge reinstated pursuant 
        to paragraph (1) shall be considered a part of the rate base 
        for purposes of determining the percentage changes in rates 
        when the Postal Service files a notice of rate adjustment.
    (b) Subsequent Rate Increases.--The reinstatement described under 
subsection (a)(1) may not affect the calculation of the Postal 
Service's maximum rate adjustment authority under subpart C of Part 
3010 of title 39, Code of Federal Regulations, for purposes of any rate 
increase that occurs following such reinstatement.
    (c) Postal Regulatory Commission Authority Not Affected.--Nothing 
in this section shall be construed as affecting the authority of the 
Postal Regulatory Commission to, by regulation, make such modification 
or adopt such alternative system for regulating rates and classes for 
market-dominant products as provided under section 3622 of title 39, 
United States Code.
    (d) Exigency Appeal Terminated.--The Postal Service--
            (1) shall withdraw its judicial appeal concerning the rates 
        previously established pursuant to section 3622(d)(1)(G) (as 
        redesignated by this Act) of title 39, United States Code; and
            (2) may not institute or maintain an additional rate 
        increase pursuant to section 3622(d)(1)(G) (as redesignated by 
        this Act) of title 39, United States Code, predicated upon the 
        same extraordinary or exceptional circumstances upon which 
        rates have previously been increased pursuant to such section.

SEC. 208. COMPLETION OF INITIAL RATE REGULATION REVIEW.

    The Postal Regulatory Commission shall complete the initial review 
of the system for regulating rates and classes for market-dominant 
products established under section 3622 of title 39, United States 
Code, such that a final rule or rules regarding a revised or reapproved 
system for regulating rates and classes for market-dominant products is 
issued not later than January 1, 2018.

SEC. 209. REVIEW OF POSTAL SERVICE COST ATTRIBUTION GUIDELINES.

    Not later than April 1, 2018, the Postal Regulatory Commission 
shall initiate a review of the regulations issued pursuant to sections 
3633(a) and 3652(a)(1) of title 39, United States Code, to determine 
whether revisions are appropriate to ensure that all direct and 
indirect costs attributable to competitive and market-dominant products 
are properly attributed to those products, including by considering the 
underlying methodologies in determining cost attribution and 
considering options to revise such methodologies. If the Commission 
determines, after notice and opportunity for public comment, that 
revisions are appropriate, the Commission shall make modifications or 
adopt alternative methodologies as necessary.

SEC. 210. AVIATION SECURITY FOR PARCELS.

    (a) In General.--Chapter 54 of title 39, United States Code, is 
amended by adding at the end the following:
``Sec. 5404. Aviation security for parcels
    ``A parcel carried by an air carrier or foreign air carrier (as 
those terms are defined in section 40102(a) of title 49) shall--
            ``(1) use postage that has been generated by a postage 
        evidencing system that has been validated under level 4 of the 
        140 series of the Federal Information Processing Standards; or
            ``(2) be entered with in person sender verification.''.
    (b) Technical Amendment.--Section 5401(b) of title 39, United 
States Code, is amended by inserting ``or 5404'' after ``in section 
5402''.
    (c) Conforming Amendment.--The table of sections for chapter 54 of 
title 39, United States Code, is amended by adding at the end the 
following:

``5404. Aviation security for parcels.''.

SEC. 211. ZIP CODES.

    Not later than September 30, 2017, the Postal Service shall 
designate a single, unique ZIP code for, as nearly as practicable, each 
of the following communities:
            (1) Miami Lakes, Florida.
            (2) Storey County, Nevada.
            (3) Flanders, Northampton, and Riverside in the Town of 
        Southampton, New York.

                  TITLE III--POSTAL SERVICE PERSONNEL

SEC. 301. POSTAL SERVICE CHIEF INNOVATION OFFICER.

    (a) In General.--Chapter 2 of title 39, United States Code, is 
amended by adding at the end the following:
``Sec. 209. Chief Innovation Officer
    ``(a) In General.--There is established within the Postal Service 
the position of Chief Innovation Officer, appointed by the Postmaster 
General, who shall manage the Postal Service's development and 
implementation of innovative postal and nonpostal products and 
services.
    ``(b) Duties.--The primary duties of the Chief Innovation Officer 
are as follows:
            ``(1) Leading the development of innovative nonpostal 
        products and services that will maximize revenue to the Postal 
        Service.
            ``(2) Developing innovative postal products and services, 
        specifically those that utilize emerging information 
        technologies, to maximize revenue to the Postal Service.
            ``(3) Implementing the innovation strategy described under 
        subsection (d).
            ``(4) Monitoring the performance of innovative products and 
        services and revising them as needed to meet changing market 
        trends.
            ``(5) Taking into consideration comments or advisory 
        opinions, if applicable, issued by the Postal Regulatory 
        Commission prior to the initial sale of innovative postal or 
        nonpostal products and services.
    ``(c) Appointment.--
            ``(1) Deadline.--As soon as practicable after the date of 
        enactment of the Postal Service Reform Act of 2016, but no 
        later than 6 months after such date, the Postmaster General 
        shall appoint a Chief Innovation Officer.
            ``(2) Requirements.--Any individual appointed to serve as 
        the Chief Innovation Officer shall have proven expertise and a 
        record of success in at least 1 of the following: postal and 
        shipping industry; innovation product research and development; 
        marketing brand strategy; emerging communications technology; 
        or business process management.
            ``(3) Current officer or employee eligible.--An officer or 
        employee of the Postal Service may be appointed to the position 
        of Chief Innovation Officer under this chapter. Upon 
        appointment to such position, such officer or employee may not 
        concurrently hold any other position in the Postal Service.
    ``(d) Innovation Strategy.--
            ``(1) In general.--Not later than 12 months after the date 
        on which the Chief Innovation Officer is appointed under 
        subsection (c)(1), the Postmaster General shall submit to the 
        Committee on Oversight and Government Reform of the House of 
        Representatives, the Committee on Homeland Security and 
        Governmental Affairs of the Senate, and the Postal Regulatory 
        Commission a comprehensive strategy for maximizing revenues 
        through innovative postal and nonpostal products and services.
            ``(2) Matters to be addressed.--The strategy submitted 
        under paragraph (1) shall address--
                    ``(A) the specific innovative postal and nonpostal 
                products and services to be developed and offered by 
                the Postal Service, including the nature of the market 
                to be filled by each product and service and the likely 
                date by which each product and service will be 
                introduced;
                    ``(B) the cost of developing and offering each 
                product or service;
                    ``(C) the anticipated sales volume of each product 
                and service;
                    ``(D) the anticipated revenues and profits expected 
                to be generated by each product and service;
                    ``(E) the likelihood of success of each product and 
                service as well as the risks associated with the 
                development and sale of each product and service;
                    ``(F) the trends anticipated in market conditions 
                that may affect the success of each product and service 
                over the 5-year period beginning on the date such 
                strategy or update is submitted;
                    ``(G) the metrics that will be utilized to assess 
                the effectiveness of the innovation strategy; and
                    ``(H) the specific methods by which mailpiece 
                design analysis may be improved to speed the approval 
                process and promote the increased use of innovative 
                mailpiece design.
            ``(3) Strategy updates.--On January 1, 2018, and every 3 
        years thereafter, the Postal Service shall submit an update to 
        the innovation strategy submitted under paragraph (1) to the 
        Committee on Oversight and Government Reform of the House of 
        Representatives, the Committee on Homeland Security and 
        Governmental Affairs of the Senate, and the Postal Regulatory 
        Commission.
    ``(e) Report.--
            ``(1) In general.--On the date of submission of the 
        President's annual budget under section 1105(a) of title 31, 
        the Postmaster General shall submit to the Committee on 
        Oversight and Government Reform of the House of 
        Representatives, the Committee on Homeland Security and 
        Governmental Affairs of the Senate, and the Postal Regulatory 
        Commission a report that details the Postal Service's progress 
        in implementing the innovation strategy described under 
        subsection (d).
            ``(2) Matters to be addressed.--The report required under 
        paragraph (1) shall address--
                    ``(A) the revenue generated by each product and 
                service developed through the innovation strategy and 
                the costs of developing and offering each such product 
                and service for the most recent fiscal year;
                    ``(B) the total sales volume and revenue generated 
                by each product and service on a monthly basis for the 
                preceding year;
                    ``(C) trends in the markets filled by each product 
                and service;
                    ``(D) products and services identified in the 
                innovation strategy that are to be discontinued, the 
                date on which the discontinuance will occur, and the 
                reasons for the discontinuance;
                    ``(E) alterations in products and services 
                identified in the innovation strategy that will be made 
                to meet changing market conditions, and an explanation 
                of how these alterations will ensure the success of the 
                products and services; and
                    ``(F) the performance of the innovation strategy 
                according to the metrics identified in subsection 
                (d)(2)(G).
    ``(f) Comptroller General Study.--
            ``(1) In general.--The Comptroller General shall conduct a 
        study on the implementation of the innovation strategy 
        described under subsection (d) not later than 4 years after the 
        date of enactment of the Postal Service Reform Act of 2016.
            ``(2) Contents.--The study required under paragraph (1) 
        shall assess the effectiveness of the Postal Service in 
        identifying, developing, and selling innovative postal and 
        nonpostal products and services. The study shall also include--
                    ``(A) an audit of the costs of developing each 
                innovative postal and nonpostal product and service 
                developed or offered by the Postal Service during the 
                period beginning on the date of enactment of the Postal 
                Service Reform Act of 2016 and ending 4 years after 
                such date;
                    ``(B) the sales volume of each such product and 
                service;
                    ``(C) the revenues and profits generated by each 
                such product and service; and
                    ``(D) the likelihood of continued success of each 
                such product and service.
            ``(3) Submission.--The results of the study required under 
        this subsection shall be submitted to the Committee on 
        Oversight and Government Reform of the House of 
        Representatives, the Committee on Homeland Security and 
        Governmental Affairs of the Senate, and the Postal Regulatory 
        Commission.''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
chapter 2 of title 39, United States Code, is amended by adding at the 
end the following:

``209. Chief Innovation Officer.''.

SEC. 302. INSPECTOR GENERAL OF THE POSTAL COMMUNITY.

    (a) Presidentially Appointed, Senate-Confirmed Inspector General.--
The Inspector General Act of 1978 (5 U.S.C. App.) is amended--
            (1) in section 8G--
                    (A) in subsection (a)--
                            (i) in paragraph (2), by striking ``the 
                        United States International Trade Commission, 
                        the Postal Regulatory Commission, and the 
                        United States Postal Service'' and inserting 
                        ``and the United States International Trade 
                        Commission'';
                            (ii) in paragraph (3), by striking 
                        ``subsection (h)(1)'' and inserting 
                        ``subsection (g)(1)''; and
                            (iii) in paragraph (4)--
                                    (I) by striking subparagraph (B);
                                    (II) by striking ``subsection 
                                (h)(1)'' and inserting ``subsection 
                                (g)(1)''; and
                                    (III) by redesignating 
                                subparagraphs (C), (D), (E), (F), (G), 
                                (H), and (I) as (B), (C), (D), (E), 
                                (F), (G), and (H), respectively;
                    (B) in subsection (c), by striking ``Except as 
                provided under subsection (f) of this section, the'' 
                and inserting ``The'';
                    (C) by striking subsection (f); and
                    (D) by redesignating subsections (g) and (h) as (f) 
                and (g), respectively; and
            (2) in section 12--
                    (A) in paragraph (1), by inserting ``the Postmaster 
                General of the United States; the Chairman of the 
                Postal Regulatory Commission;'' after ``the President 
                of the Export-Import Bank;''; and
                    (B) in paragraph (2), by inserting ``the United 
                States Postal Service, the Postal Regulatory 
                Commission,'' after ``the Export-Import Bank,''.
    (b) Inspector General of the Postal Community.--
            (1) Establishment.--The Inspector General Act of 1978 (5 
        U.S.C. App.), as amended by subsection (a), is further amended 
        by inserting after section 8L the following new section:

``SEC. 8M. SPECIAL PROVISIONS CONCERNING THE UNITED STATES POSTAL 
              SERVICE AND POSTAL REGULATORY COMMISSION.

    ``(a) Office of Inspector General of the Postal Community.--The 
Inspector General for the United States Postal Service and the Postal 
Regulatory Commission shall be referred to as the `Inspector General of 
the Postal Community'.
    ``(b) Responsibilities.--In carrying out the duties and 
responsibilities specified in this Act, the Inspector General of the 
Postal Community shall have equal responsibility over the United States 
Postal Service and the Postal Regulatory Commission.
    ``(c) Applicable Head of the Establishment.--For purposes of the 
applicability of this Act to the Inspector General of the Postal 
Community--
            ``(1) the `head of the establishment' shall mean the 
        Postmaster General of the United States for activities by the 
        Office related to the United States Postal Service; and
            ``(2) the `head of the establishment' shall mean the 
        Chairman of the Postal Regulatory Commission for activities by 
        the Office related to the Postal Regulatory Commission.
    ``(d) Applicability of Establishment for Reports.--In carrying out 
the duties and responsibilities under section 5--
            ``(1) the term `establishment' shall include as separate 
        establishments--
                    ``(A) the United States Postal Service; and
                    ``(B) the Postal Regulatory Commission; and
            ``(2) the Inspector General of the Postal Community shall 
        prepare separate semiannual reports for the United States 
        Postal Service and the Postal Regulatory Commission.
    ``(e) Office Space.--In carrying out the duties and 
responsibilities under section 6(c), the heads of the establishments 
for the United States Postal Service and the Postal Regulatory 
Commission shall work jointly with one another and in consultation with 
the Inspector General of the Postal Community to ensure adequate and 
appropriate provision to the Office of the Inspector General of the 
Postal Community under section 6(c).
    ``(f) Budget.--In carrying out the duties and responsibilities 
under section 6(f)--
            ``(1) the `head of the establishment' shall mean the 
        Postmaster General of the United States; and
            ``(2) designation of the Postmaster General of the United 
        States as `head of the establishment' under this subsection 
        shall not be construed as granting any authorities to the 
        Postmaster General of the United States with regard to the 
        Postal Regulatory Commission.
    ``(g) General Duties and Responsibilities.--In carrying out the 
duties and responsibilities specified in this Act--
            ``(1) the Inspector General of the Postal Community shall 
        have oversight responsibility for all activities of the Postal 
        Inspection Service, including any internal investigation 
        performed by the Postal Inspection Service;
            ``(2) the Inspector General of the Postal Community shall 
        give particular regard to the activities of the Postal 
        Inspection Service with a view toward avoiding duplication and 
        insuring effective coordination and cooperation; and
            ``(3) the Chief Postal Inspector shall promptly report the 
        significant activities being carried out by the Postal 
        Inspection Service to the Inspector General of the Postal 
        Community.
    ``(h) Authorization of Appropriations.--There are authorized to be 
appropriated, out of the Postal Service Fund, such sums as may be 
necessary for the Office of Inspector General of the Postal 
Community.''.
            (2) Conforming amendments.--Section 8J of the Inspector 
        General Act of 1978 (5 U.S.C. App.) is amended by striking 
        ``The special provisions under section'' through ``of this 
        Act'' and inserting ``The special provisions under section 8, 
        8A, 8B, 8C, 8D, 8E, 8F, 8H, 8I, or 8M of this Act''.
            (3) Appointment.--Not later than 180 days after the date of 
        enactment of this Act, the President shall appoint, by and with 
        the advice and consent of the Senate, an Inspector General of 
        the Postal Community. Any individual appointed under the 
        previous sentence shall be deemed to be appointed under section 
        8M of the Inspector General Act of 1978 (5 U.S.C. App.) (as 
        amended by paragraph (1)).
    (c) Transfer of the Office of the Inspector General of the Postal 
Regulatory Commission.--
            (1) In general.--On the date that is the effective date of 
        this section, the duties, responsibilities, functions, 
        personnel, assets, unexpended balances of appropriations, and 
        obligations held by the Inspector General of the Postal 
        Regulatory Commission shall be transferred to the Office of the 
        Inspector General of the Postal Community.
            (2) Existing inspector general.--The Inspector General of 
        the Postal Regulatory Commission transferred pursuant to 
        paragraph (1) shall serve under the Inspector General of the 
        Postal Community.
    (d) Transfer of the Office of the Inspector General of United 
States Postal Service.--
            (1) In general.--On the date that is the effective date of 
        this section, the duties, responsibilities, functions, 
        personnel, assets, unexpended balances of appropriations, and 
        obligations held by the Inspector General of the United States 
        Postal Service shall be transferred to the Office of the 
        Inspector General of the Postal Community.
            (2) Existing inspector general.--The Inspector General of 
        the United States Postal Service transferred pursuant to 
        paragraph (1) shall serve under the Inspector General of the 
        Postal Community.
    (e) Delegation and Assignment.--Except as otherwise expressly 
prohibited by law or otherwise provided in this Act, the Inspector 
General of the Postal Community may delegate any of the functions 
transferred pursuant to this section to such officers and employees of 
the Office of the Inspector General of the Postal Community as the 
Inspector General may designate, and may authorize successive 
redelegations of such functions as may be necessary or appropriate. No 
delegation of functions under this subsection or under any other 
provision of this Act shall relieve the Inspector General of the Postal 
Community of responsibility for the administration of the function.
    (f) Savings Provisions.--
            (1) Legal documents.--Any order, determination, rule, 
        regulation, permit, grant, loan, contract, agreement, 
        certificate, license, or privilege that has been issued, made, 
        granted, or allowed to become effective that is in effect on 
        the effective date of this section shall continue in effect 
        according to their terms until modified, terminated, 
        superseded, set aside, or revoked in accordance with law.
            (2) Proceedings.--This section shall not affect any 
        proceeding pending on the effective date of this section before 
        an office transferred by either such subsection, but such 
        proceeding shall be continued. Nothing in this paragraph shall 
        be considered to prohibit the discontinuance or modification of 
        any such proceeding under the same terms and conditions and to 
        the same extent that such proceeding could have been 
        discontinued or modified if this section had not been enacted.
            (3) Suits.--This section shall not affect any suit 
        commenced before the effective date of this section, and in any 
        such suit, proceeding shall be had, appeals taken, and 
        judgments rendered in the same manner and with the same effect 
        as if this section had not been enacted.
            (4) References.--Any reference in any other Federal law, 
        Executive order, rule, regulation, or delegation of authority, 
        or any document relating to the Inspector General of the Postal 
        Regulatory Commission, the Inspector General of the United 
        States Postal Service, or the office of either such inspector 
        general shall be deemed to refer to the Inspector General of 
        the Postal Community or the Office of the Inspector General of 
        the Postal Community, as applicable.
    (g) Availability of Existing Funds.--Existing appropriations and 
funds available for the performance of functions, programs, and 
activities transferred pursuant to this section shall remain available, 
for the duration of their period of availability, for necessary 
expenses in connection with the Office of the Inspector General of the 
Postal Community and the transfer of such functions, programs, and 
activities.
    (h) Title 39 Amendments.--Title 39, United States Code, is amended 
as follows:
            (1) In section 102(4), by striking ``the Inspector General 
        appointed under section 202(e) of this title'' and inserting 
        ``the Inspector General of the Postal Community as described in 
        section 8M of the Inspector General Act of 1978 (5 U.S.C. 
        App.)''.
            (2) In section 504, by striking subsection (h).
            (3) In section 1003(b), by striking ``the Office of 
        Inspector General of the United States Postal Service'' and 
        inserting ``the Office of Inspector General of the Postal 
        Community''.
            (4) In section 2003(e)(1), by striking ``the Office of 
        Inspector General, subject to the availability of amounts 
        appropriated under section 8G(f) of the Inspector General Act 
        of 1978.'' and inserting ``the Office of Inspector General of 
        the Postal Community''.
            (5) In section 2009, by striking ``the Office of Inspector 
        General of the United States Postal Service requests to be 
        appropriated, out of the Postal Service Fund, under section 
        8G(f) of the Inspector General Act of 1978, and'' and inserting 
        ``the Office of Inspector General of the Postal Community 
        requests to be appropriated out of the Postal Service Fund''.
            (6) In section 2011(h)(D), by striking ``the Inspector 
        General of the United States Postal Service'' and inserting 
        ``the Inspector General of the Postal Community''.
    (i) Delayed Effective Date.--This section, and the amendments made 
by this section, shall take effect upon the date that is 30 days after 
the date on which an individual is confirmed by the Senate as the 
Inspector General of the Postal Community under subsection (b)(3).

SEC. 303. RIGHT OF APPEAL TO MERIT SYSTEMS PROTECTION BOARD.

    Section 1005(a)(4)(A)(ii)(I) of title 39, United States Code, is 
amended to read as follows:
                    ``(I) is an officer or employee of the Postal 
                Service who--
                            ``(aa) is not represented by a bargaining 
                        representative recognized under section 1203; 
                        and
                            ``(bb) is in a supervisory, professional, 
                        technical, clerical, administrative, or 
                        managerial position covered by the Executive 
                        and Administrative Schedule; and''.

                  TITLE IV--POSTAL CONTRACTING REFORM

SEC. 401. CONTRACTING PROVISIONS.

    (a) In General.--Part I of title 39, United States Code, is amended 
by adding at the end the following:

                  ``CHAPTER 7--CONTRACTING PROVISIONS

``Sec.
``701. Definitions.
``702. Delegation of contracting authority.
``703. Posting of noncompetitive purchase requests for noncompetitive 
                            contracts.
``704. Review of ethical issues.
``705. Ethical restrictions on participation in certain contracting 
                            activity.
``Sec. 701. Definitions
    ``In this chapter--
            ``(1) the term `contracting officer' means an employee of a 
        covered postal entity who has authority to enter into a postal 
        contract;
            ``(2) the term `covered postal entity' means--
                    ``(A) the Postal Service; or
                    ``(B) the Postal Regulatory Commission;
            ``(3) the term `head of a covered postal entity' means--
                    ``(A) in the case of the Postal Service, the 
                Postmaster General; or
                    ``(B) in the case of the Postal Regulatory 
                Commission, the Chairman of the Postal Regulatory 
                Commission;
            ``(4) the term `postal contract' means--
                    ``(A) in the case of the Postal Service, any 
                contract (including any agreement or memorandum of 
                understanding) entered into by the Postal Service for 
                the procurement of goods or services; or
                    ``(B) in the case of the Postal Regulatory 
                Commission, any contract (including any agreement or 
                memorandum of understanding) in an amount exceeding the 
                simplified acquisition threshold (as defined in section 
                134 of title 41 and adjusted under section 1908 of such 
                title) entered into by the Postal Regulatory Commission 
                for the procurement of goods or services; and
            ``(5) the term `senior procurement executive' means the 
        senior procurement executive of a covered postal entity.
``Sec. 702. Delegation of contracting authority
    ``(a) In General.--
            ``(1) Policy.--Not later than 60 days after the date of 
        enactment of this chapter, the head of each covered postal 
        entity shall issue a policy on contracting officer delegations 
        of authority for postal contracts for the covered postal 
        entity.
            ``(2) Contents.--The policy issued under paragraph (1) 
        shall require that--
                    ``(A) notwithstanding any delegation of authority 
                with respect to postal contracts, the ultimate 
                responsibility and accountability for the award and 
                administration of postal contracts resides with the 
                senior procurement executive; and
                    ``(B) a contracting officer shall maintain an 
                awareness of and engagement in the activities being 
                performed on postal contracts of which that officer has 
                cognizance, notwithstanding any delegation of authority 
                that may have been executed.
    ``(b) Posting of Delegations.--
            ``(1) In general.--The head of each covered postal entity 
        shall make any delegation of authority for postal contracts 
        outside the functional contracting unit readily available and 
        accessible on the Web site of the covered postal entity.
            ``(2) Effective date.--This paragraph shall apply to any 
        delegation of authority made on or after the date that is 30 
        days after the date of enactment of this chapter.
``Sec. 703. Posting of noncompetitive purchase requests for 
              noncompetitive contracts
    ``(a) Posting Required.--
            ``(1) Postal regulatory commission.--The Postal Regulatory 
        Commission shall make the noncompetitive purchase request for 
        any noncompetitive award for any contract (including any 
        agreement or memorandum of understanding) entered into by the 
        Postal Regulatory Commission for the procurement of goods and 
        services, in an amount of $20,000 or more, including the 
        rationale supporting the noncompetitive award, publicly 
        available on the Web site of the Postal Regulatory Commission--
                    ``(A) not later than 14 days after the date of the 
                award of the noncompetitive contract; or
                    ``(B) not later than 30 days after the date of the 
                award of the noncompetitive contract, if the basis for 
                the award was a compelling business interest.
            ``(2) Postal service.--The Postal Service shall make the 
        noncompetitive purchase request for any noncompetitive award of 
        a postal contract in an amount of $250,000 or more, including 
        the rationale supporting the noncompetitive award, publicly 
        available on the Web site of the Postal Service--
                    ``(A) not later than 14 days after the date of the 
                award; or
                    ``(B) not later than 30 days after the date of the 
                award, if the basis for the award was a compelling 
                business interest.
            ``(3) Adjustments to the posting threshold.--
                    ``(A) Review and determination.--Not later than 
                January 31 of each year, the Postal Service and the 
                Postal Regulatory Commission shall--
                            ``(i) review the applicable threshold 
                        established under paragraph (1) or (2); and
                            ``(ii) based on any change in the Consumer 
                        Price Index for All Urban Consumers of the 
                        Department of Labor, determine whether an 
                        adjustment to the threshold shall be made.
                    ``(B) Amount of adjustments.--An adjustment under 
                subparagraph (A) shall be made in increments of $5,000. 
                If the covered postal entity determines that a change 
                in the Consumer Price Index for a year would require an 
                adjustment in an amount that is less than $5,000, the 
                Postal Service may not make an adjustment to the 
                threshold for the year.
            ``(4) Effective date.--This subsection shall apply to any 
        noncompetitive contract awarded on or after the date that is 90 
        days after the date of enactment of this chapter.
    ``(b) Public Availability.--
            ``(1) In general.--Subject to paragraph (2), the 
        information required to be made publicly available by a covered 
        postal entity under subsection (a) shall be readily accessible 
        on the Web site of the covered postal entity.
            ``(2) Protection of proprietary information.--A covered 
        postal entity shall--
                    ``(A) carefully screen any description of the 
                rationale supporting a noncompetitive award required to 
                be made publicly available under subsection (a) to 
                determine whether the description includes proprietary 
                data (including any reference or citation to the 
                proprietary data) or security-related information; and
                    ``(B) remove any proprietary data or security-
                related information before making publicly available a 
                description of the rationale supporting a 
                noncompetitive award.
    ``(c) Waivers.--
            ``(1) Waiver permitted.--If the Postal Service determines 
        that making a noncompetitive purchase request for a postal 
        contract of the Postal Service publicly available would risk 
        placing the Postal Service at a competitive disadvantage 
        relative to a private sector competitor, the senior procurement 
        executive, in consultation with the advocate for competition of 
        the Postal Service, may waive the requirements under subsection 
        (a).
            ``(2) Form and content of waiver.--
                    ``(A) Form.--A waiver under paragraph (1) shall be 
                in the form of a written determination placed in the 
                file of the contract to which the noncompetitive 
                purchase request relates.
                    ``(B) Content.--A waiver under paragraph (1) shall 
                include--
                            ``(i) a description of the risk associated 
                        with making the noncompetitive purchase request 
                        publicly available; and
                            ``(ii) a statement that redaction of 
                        sensitive information in the noncompetitive 
                        purchase request would not be sufficient to 
                        protect the Postal Service from being placed at 
                        a competitive disadvantage relative to a 
                        private sector competitor.
            ``(3) Delegation of waiver authority.--The Postal Service 
        may not delegate the authority to approve a waiver under 
        paragraph (1) to any employee having less authority than the 
        senior procurement executive.
``Sec. 704. Review of ethical issues
    ``If a contracting officer identifies any ethical issues relating 
to a proposed contract and submits those issues and that proposed 
contract to the designated ethics official for the covered postal 
entity before the awarding of that contract, that ethics official 
shall--
            ``(1) review the proposed contract; and
            ``(2) advise the contracting officer on the appropriate 
        resolution of ethical issues.
``Sec. 705. Ethical restrictions on participation in certain 
              contracting activity
    ``(a) Definitions.--In this section--
            ``(1) the term `covered employee' means--
                    ``(A) a contracting officer; or
                    ``(B) any employee of a covered postal entity whose 
                decisionmaking affects a postal contract as determined 
                by regulations prescribed by the head of a covered 
                postal entity;
            ``(2) the term `final conviction' means a conviction, 
        whether entered on a verdict or plea, including a plea of nolo 
        contendere, for which a sentence has been imposed; and
            ``(3) the term `covered relationship' means a covered 
        relationship described in section 2635.502(b)(1) of title 5, 
        Code of Federal Regulations, or any successor thereto.
    ``(b) In General.--
            ``(1) Regulations.--The head of each covered postal entity 
        shall prescribe regulations that--
                    ``(A) require a covered employee to include in the 
                file of any noncompetitive purchase request for a 
                noncompetitive postal contract a written certification 
                that--
                            ``(i) discloses any covered relationship of 
                        the covered employee; and
                            ``(ii) states that the covered employee 
                        will not take any action with respect to the 
                        noncompetitive purchase request that affects 
                        the financial interests of a friend, relative, 
                        or person with whom the covered employee is 
                        affiliated in a nongovernmental capacity, or 
                        otherwise gives rise to an appearance of the 
                        use of public office for private gain, as 
                        described in section 2635.702 of title 5, Code 
                        of Federal Regulations, or any successor 
                        thereto;
                    ``(B) require a contracting officer to consult with 
                the ethics counsel for the covered postal entity 
                regarding any disclosure made by a covered employee 
                under subparagraph (A)(i), to determine whether 
                participation by the covered employee in the 
                noncompetitive purchase request would give rise to a 
                violation of part 2635 of title 5, Code of Federal 
                Regulations (commonly referred to as the Standards of 
                Ethical Conduct for Employees of the Executive Branch), 
                or any successor thereto;
                    ``(C) require the ethics counsel for a covered 
                postal entity to review any disclosure made by a 
                contracting officer under subparagraph (A)(i) to 
                determine whether participation by the contracting 
                officer in the noncompetitive purchase request would 
                give rise to a violation of part 2635 of title 5, Code 
                of Federal Regulations (commonly referred to as the 
                Standards of Ethical Conduct for Employees of the 
                Executive Branch), or any successor thereto;
                    ``(D) under subsections (d) and (e) of section 
                2635.502 of title 5, Code of Federal Regulations, or 
                any successor thereto, require the ethics counsel for a 
                covered postal entity to--
                            ``(i) authorize a covered employee that 
                        makes a disclosure under subparagraph (A)(i) to 
                        participate in the noncompetitive postal 
                        contract; or
                            ``(ii) disqualify a covered employee that 
                        makes a disclosure under subparagraph (A)(i) 
                        from participating in the noncompetitive postal 
                        contract;
                    ``(E) require a contractor to timely disclose to 
                the contracting officer in a bid, solicitation, award, 
                or performance of a postal contract any conflict of 
                interest with a covered employee; and
                    ``(F) include authority for the head of the covered 
                postal entity to grant a waiver or otherwise mitigate 
                any organizational or personal conflict of interest, if 
                the head of the covered postal entity determines that 
                the waiver or mitigation is in the best interests of 
                the covered postal entity.
            ``(2) Posting of waivers.--Not later than 30 days after the 
        head of a covered postal entity grants a waiver described in 
        paragraph (1)(F), the head of the covered postal entity shall 
        make the waiver publicly available on the Web site of the 
        covered postal entity.
    ``(c) Contract Voidance and Recovery.--
            ``(1) Unlawful conduct.--In any case in which there is a 
        final conviction for a violation of any provision of chapter 11 
        of title 18 relating to a postal contract, the head of a 
        covered postal entity may--
                    ``(A) void that contract; and
                    ``(B) recover the amounts expended and property 
                transferred by the covered postal entity under that 
                contract.
            ``(2) Obtaining or disclosing procurement information.--
                    ``(A) In general.--In any case in which a 
                contractor under a postal contract fails to timely 
                disclose a conflict of interest to the appropriate 
                contracting officer as required under the regulations 
                promulgated under subsection (b)(1)(E), the head of a 
                covered postal entity may--
                            ``(i) void that contract; and
                            ``(ii) recover the amounts expended and 
                        property transferred by the covered postal 
                        entity under that contract.
                    ``(B) Conviction or administrative determination.--
                A case described under subparagraph (A) is any case in 
                which--
                            ``(i) there is a final conviction for an 
                        offense punishable under section 2105 of title 
                        41; or
                            ``(ii) the head of a covered postal entity 
                        determines, based upon a preponderance of the 
                        evidence, that the contractor or someone acting 
                        for the contractor has engaged in conduct 
                        constituting an offense punishable under 
                        section 2105 of such title.''.
    (b) Clerical Amendment.--The table of chapters at the beginning of 
part I is amended by adding at the end the following:

``7. Contracting Provisions.................................     701''.

SEC. 402. TECHNICAL AMENDMENT TO DEFINITION.

    Section 7101(8) of title 41, United States Code, is amended--
            (1) by striking ``and'' at the end of subparagraph (C);
            (2) by striking the period at the end of subparagraph (D) 
        and inserting ``; and''; and
            (3) by adding at the end the following:
                    ``(E) the United States Postal Service and the 
                Postal Regulatory Commission.''.
                                 <all>