[Congressional Record Volume 149, Number 90 (Wednesday, June 18, 2003)]
[Senate]
[Pages S8136-S8153]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. CARPER:
  S. 1285. A bill to reform the postal laws of the United States; to 
the Committee on Governmental Affairs.
  Mr. CARPER. Madam President, I rise today to introduce the Postal 
Accountability and Enhancement Act of 2003, legislation that makes the 
reforms necessary for the Postal Service to thrive in the 21st Century 
and to better serve the American people.
  The Postal Service has, for the most part, operated in the same 
manner for more than thirty years. In the early 1970s, Senator Stevens 
and others led the effort in the Senate to create the Postal Service 
out of the failing Post Office Department. At the time, the Post Office 
Department received about 20 percent of its revenue from taxpayer 
subsidies. The service it provided was suffering and there was little 
money available to expand. By all accounts, the product of Senator 
Stevens' labors, the Postal Reorganization Act signed into law by 
President Nixon in 1971, has been a phenomenal success. The Postal 
Service today receives virtually no taxpayer support and the service 
its hundreds of thousands of employees provide to every American, every 
day is second to none. More than thirty years later, the Postal Service 
now delivers to 141 million addresses each day and is the anchor of a 
$900 billion mailing industry.
  All that said, the Postal Service is clearly in need of modernization 
once again. When it started out in 1971, nobody had access to fax 
machines, cell phones and pagers and nobody imagined that we would ever 
enjoy conveniences like e-mail and electronic bill pay. After decades 
of success, electronic diversion of mail volume coupled with economic 
recession and terrorism have made for some rough going at the Postal 
Service in recent years. In 2001, as Postmaster General Potter assumed 
his position, the Postal Service was projecting its third consecutive 
year of deficits. They lost $199 million in fiscal year 2000 and $1.68 
billion in fiscal year 2001. They were projecting losses of up to $4 
billion in fiscal year 2002. Mail volume was falling, revenues were 
below projections and the Postal Service was estimating that it needed 
to spend $4 billion on security enhancements in order to prevent a 
repeat of the tragic anthrax attacks that took several lives. The 
Postal Service was also perilously close to its $15 billion debt 
ceiling and had been forced to raise rates three times in less than two 
years in order to pay for its operations, further eroding mail volume.
  In recent months, however, the Postal Service's short-term financial 
outlook has improved. Under General Potter's strong leadership, Postal 
Service management cut a total of $2.9 billion in costs fiscal year 
2002. They did this mostly by eliminating 23,000 positions, mostly 
through attrition. This included 800 management positions at postal 
headquarters in Washington and 2,000 administrative positions in 
regional offices. They also continued their drive to further automate 
their processing operations, most notably in the area of flats 
processing. They have continued their construction freeze and ended 
their self-imposed ban on post office closings, resulting in the 
closing of dozens of post offices across the country.
  Most dramatically, the Postal Service learned in 2002 that an 
unfunded pension liability they once believed was as high as $32 
billion was actually $5 billion. My friend from Maine, Ms. Collins, and 
I responded with legislation, the Postal Civil Service Retirement 
System Funding Reform Act, signed into law by President Bush last 
month, which cuts the amount the Postal Service must pay into the Civil 
Service Retirement System each year by nearly $3 billion. This will 
free up money for debt reduction and prevent the need for another rate 
increase until at least 2006.
  Aggressive cost cutting and the lower pension payment, then, have put 
off the emergency that would have come if the Postal Service had 
reached their debt limit. Cost cutting can only go so far, however, and 
will not solve the Postal Service's long-term problems. It could 
actually hurt service. The Postal Service continues to add about 1.7 
million new delivery points each year, creating the need for thousands 
of new routes and thousands of new letter carriers to work them. In 
addition, faster-

[[Page S8137]]

growing parts of the country will need new or expanded postal 
facilities in the coming years. Even if the economy recovers soon and 
the Postal Service begins to see volume and revenues improve, we will 
still need to make the fundamental reforms necessary to make the Postal 
Service as successful in the 21st Century as it was in the 20th 
Century.
  As more and more customers turn to electronic forms of communication, 
letter carriers are bringing fewer and fewer pieces of mail to each 
address they serve. The rate increases that will be needed to maintain 
the Postal Service's current infrastructure, finance retirement 
obligations to its current employees, pay for new letter carriers and 
build facilities in growing parts of the country will only further 
erode mail volume. The Postal Service has been trying to improve on its 
own. They are making progress, but there is only so much they can do on 
their own.
  That is where my bill comes in. First, the Postal Accountability and 
Enhancement Act begins the process of developing a modern rate system 
for pricing Postal Service products. The new rate system, to be 
developed by a strengthened Postal Rate Commission, re-named the Postal 
Regulatory Commission, would allow retained earnings, provide the 
Postal Service more flexibility in setting prices and streamline 
today's burdensome ratemaking process. It would also allow rates to be 
increased on an expedited basis during crises like a sharp spike in 
fuel prices and require that the Regulatory Commission develop a 
``phased rate'' schedule whereby rate increases would be phased in 
gradually over a period of time.

  In addition, the new rate system authorized through my bill will 
allow the Postal Service to negotiate service agreements with 
individual mailers. The Postal Rate Commission recently approved a 
service agreement the Postal Service negotiated with Capital One, but 
the process for considering the agreement took almost a year and the 
Postal Service's authority to enter into agreements is not clearly 
spelled out in law. The Postal Accountability and Enhancement Act 
allows the Postal Service to enter into agreements if the revenue 
generated from them covers all costs attributable to the Postal Service 
and results in a greater contribution to the Postal Service's 
institutional costs. No agreement would be permitted if it resulted in 
higher rates for any other mailer or prohibited any similarly situated 
mailer from negotiating a similar agreement.
  Second, the Postal Accountability and Enhancement Act requires the 
Postal Regulatory Commission to set strong service standards for the 
Postal Service's Market Dominant products, a category made up mostly of 
those products, like First Class Mail, that are part of the postal 
monopoly. The Postal Service currently sets its own service standards, 
which allows them to pursue efforts like the elimination of Saturday 
delivery, a proposal floated two years ago. The new standards set by 
the Commission will aim to improve service and will be used by the 
Postal Service to establish performance goals and to rationalize their 
physical infrastructure. Once the standards are established, the Postal 
Service will recommend a list of facilities that can be closed or 
consolidated without hindering their ability to meet the standards. A 
new commission, called the Postal Network Modernization Commission, 
would then study the Postal Service's recommendations. The closings and 
consolidations recommended by this commission would be carried out, 
subject to approval by the President, unless Congress passed a 
resolution disapproving them.
  Third, the Postal Accountability and Enhancement Act ensures that the 
Postal Service competes fairly. The bill prohibits the Postal Service 
from issuing anti-competitive regulations and makes the State 
Department, instead of the Postal Service, responsible for setting U.S. 
foreign policy on mailing issues. It also subjects the Postal Service 
to State zoning, planning and land use laws, requires them to pay an 
assumed Federal income tax on products like packages and Express Mail 
that private firms also offer and requires that these products as a 
whole pay their share of the Postal Service's institutional costs.
  Fourth, the Postal Accountability and Enhancement Act improves Postal 
Service accountability, mostly by strengthening oversight. 
Qualifications for membership on the Regulatory Commission would be 
stronger than those for the Rate Commission so that Commissioners would 
have a background in finance or economics. Commissioners would also 
have the power to demand information from the Postal Service, including 
by subpoena, and have the power to punish them for violating rate and 
service regulations. In addition, the Commission will make an annual 
determination as to whether the Postal Service is in compliance with 
rate law and meeting service standards and will have the power to 
punish them for any transgressions.
  Finally, and most importantly, the Postal Accountability and 
Enhancement Act preserves universal service and forces the Postal 
Service to concentrate solely on what they do best--processing and 
delivering the mail to all Americans. The bill for the first time 
limits the Postal Service to providing ``postal services,'' meaning 
they would be prohibited from engaging in other lines of business, such 
as e-commerce, that draw time and resources away from letter and 
package delivery. It also explicitly preserves the requirement that the 
Postal Service ``bind the Nation together through the mail'' and serve 
all parts of the country, urban, suburban and rural, in a non-
discriminatory fashion. Any service standards established by the Postal 
Regulatory Commission will continue to ensure delivery to every 
address, every day. In addition, the bill maintains the prohibition on 
closing post offices solely because they operate at a deficit, ensuring 
that rural and urban customers continue to enjoy full access to retail 
postal services.
  One thing the Postal Accountability and Enhancement Act does not do, 
is blame postal employees for the Postal Service's problems. The bill 
preserves collective bargaining and does nothing that would harm postal 
employees' pay or benefits.

  Another thing the Postal Accountability and Enhancement Act does not 
do is privatize or downsize the Postal Service. The bill preserves the 
Postal Service's monopoly along with its sole access to the mailbox. 
While it could result in the closing of some postal facilities, the 
process I have laid out in the bill is completely driven by the service 
standards established by the Postal Regulatory Commission. Nothing will 
be closed for the sake of being closed. Instead, the bill encourages 
the Postal Service to find ways to improve customer access to retail 
services through things like vending machines or post offices located 
in grocery stores or pharmacies.
  As my colleagues are aware, President Bush last year announced the 
creation of the President's Commission on the United States Postal 
Service, which is expected to release a set of postal reform proposals 
this summer that I hope will offer some fair, balanced recommendations. 
It is also my hope, however, that the President's Commission look to 
the Postal Accountability and Enhancement Act as a touchstone as they 
complete their work. The bill is the product of nearly a decade's worth 
of work on postal reform in the House of Representatives led by 
Congressman John McHugh from New York and is based in large part on 
legislation Congressman McHugh introduced towards the end of the 107th 
Congress. While I cannot claim that the McHugh bill had unanimous 
support, it did draw the support of most postal employees, much of the 
mailing industry and the Postal Service's Board of Governors.
  When Treasury Department Under Secretary Peter Fisher addressed the 
President's Commission at its first meeting, he stated that everything 
was on the table and that the Commission's findings were not 
predetermined. I know there is some concern that the Commission will 
recommend privatization, and that this was the idea from the beginning. 
I will admit that I initially shared these feelings but, based on what 
I have heard about the Commission's deliberations, they appear on track 
to develop a reasonable set of recommendations. That said, I urge them 
to take careful consideration of the work Congress has done on postal 
reform in the past. Radical reforms undertaken at a number of foreign 
posts in recent years should teach us a lesson

[[Page S8138]]

about going too far. When the British deregulated Royal Mail, service 
began to suffer dramatically. When the New Zealand Post Office was 
privatized, universal service was eliminated and customers in rural 
areas were forced to pay for delivery. When Argentina privatized its 
Postal Authority, the new private entity went bankrupt even before the 
country's economic crisis began. We cannot afford to gamble with 
similar reforms at the Postal Service.
  I look forward to working with Chairman Collins, the Governmental 
Affairs Committee and all of my colleagues in passing comprehensive 
postal reform this year.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1285

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

Sec. 1. Short title; table of contents.

                 TITLE I--DEFINITIONS; POSTAL SERVICES

Sec. 101. Definitions.
Sec. 102. Postal services.

                    TITLE II--MODERN RATE REGULATION

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

                  TITLE III--MODERN SERVICE STANDARDS

Sec. 301. Establishment of modern service standards.
Sec. 302. Postal service plan.
Sec. 303. Postal Network Modernization Commission.
Sec. 304. Closure and consolidation of facilities.
Sec. 305. Congressional consideration of commission report.
Sec. 306. Nonappealability to Postal Regulatory Commission.

           TITLE IV--PROVISIONS RELATING TO FAIR COMPETITION

Sec. 401. Postal Service Competitive Products Fund.
Sec. 402. Assumed Federal income tax on competitive products income.
Sec. 403. Unfair competition prohibited.
Sec. 404. Suits by and against the Postal Service.
Sec. 405. International postal arrangements.
Sec. 406. Change-of-address order involving a commercial mail receiving 

              agency.
Sec. 407. Exception for competitive products.

                      TITLE V--GENERAL PROVISIONS

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

                TITLE VI--ENHANCED REGULATORY COMMISSION

Sec. 601. Reorganization and modification of certain provisions.
Sec. 602. Authority for Postal Regulatory Commission to issue 
              subpoenas.
Sec. 603. Appropriations for the Postal Regulatory Commission.
Sec. 604. Redesignation of the Postal Rate Commission.

                     TITLE VII--INSPECTORS GENERAL

Sec. 701. Inspector General of the Postal Regulatory Commission.
Sec. 702. Inspector General of the United States Postal Service to be 
              appointed by the President.

                        TITLE VIII--EVALUATIONS

Sec. 801. Definition.
Sec. 802. Assessments of ratemaking, classification, and other 
              provisions.
Sec. 803. Study on equal application of laws to competitive products.
Sec. 804. Greater diversity in Postal Service executive and 
              administrative schedule management positions.
Sec. 805. Contracts with women, minorities, and small businesses.
Sec. 806. Rates for periodicals.
Sec. 807. Assessment of certain rate deficiencies.

      TITLE IX--MISCELLANEOUS; TECHNICAL AND CONFORMING AMENDMENTS

Sec. 901. Employment of postal police officers.
Sec. 902. Date of postmark to be treated as date of appeal in 
              connection with the closing or consolidation of post 
              offices.
Sec. 903. Provisions relating to benefits under chapter 81 of title 5, 
              United States Code, for officers and employees of the 
              former Post Office Department.
Sec. 904. Obsolete provisions.
Sec. 905. Expanded contracting authority.
Sec. 906. Investments.
Sec. 907. Repeal of section 5403.
Sec. 908. Technical and conforming amendments.

                 TITLE I--DEFINITIONS; POSTAL SERVICES

     SEC. 101. DEFINITIONS.

       Section 102 of title 39, United States Code, is amended by 
     striking ``and'' at the end of paragraph (3), by striking the 
     period at the end of paragraph (4) and inserting a semicolon, 
     and by adding at the end the following:
       ``(5) `postal service' refers to the physical delivery of 
     letters, printed matter, or packages weighing up to 70 
     pounds, including physical acceptance, collection, sorting, 
     transportation, or other services ancillary thereto;
       ``(6) `product' means a postal service with a distinct cost 
     or market characteristic for which a rate is applied;
       ``(7) `rates', as used with respect to products, includes 
     fees for postal services;
       ``(8) `market-dominant product' or `product in the market-
     dominant category of mail' means a product subject to 
     subchapter I of chapter 36; and
       ``(9) `competitive product' or `product in the competitive 
     category of mail' means a product subject to subchapter II of 
     chapter 36; and
       ``(10) `year', as used in chapter 36 (other than 
     subchapters I and VI thereof), means a fiscal year.''.

     SEC. 102. POSTAL SERVICES.

       (a) In General.--Section 404 of title 39, United States 
     Code, is amended--
       (1) in subsection (a), by striking paragraph (6) and by 
     redesignating paragraphs (7) through (9) as paragraphs (6) 
     through (8), respectively; and
       (2) by adding at the end the following:
       ``(c) Nothing in this title shall be considered to permit 
     or require that the Postal Service provide any special 
     nonpostal or similar services.''.
       (b) Conforming Amendments.--(1) Section 1402(b)(1)(B)(ii) 
     of the Victims of Crime Act of 1984 (98 Stat. 2170; 42 U.S.C. 
     10601(b)(1)(B)(ii)) is amended by striking ``404(a)(8)'' and 
     inserting ``404(a)(7)''.
       (2) Section 2003(b)(1) of title 39, United States Code, is 
     amended by striking ``and nonpostal''.

                    TITLE II--MODERN RATE REGULATION

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

       (a) In General.--Chapter 36 of title 39, United States 
     Code, is amended by striking sections 3621, 3622, and 3623 
     and inserting the following:

     ``Sec. 3621. Applicability; definitions

       ``(a) Applicability.--This subchapter shall apply with 
     respect to--
       ``(1)(A) single piece first-class letters (both domestic 
     and international);
       ``(B) single piece first-class cards (both domestic and 
     international);
       ``(C) single piece parcels (both domestic and 
     international); and
       ``(D) special services;
       ``(2) all first-class mail not included under paragraph 
     (1);
       ``(3) periodicals;
       ``(4) standard mail (except for parcel post);
       ``(5) media mail;
       ``(6) library mail; and
       ``(7) bound printed matter,
     subject to any changes the Postal Regulatory Commission may 
     make under section 3642.
       ``(b) Rule of Construction.--Mail matter referred to in 
     subsection (a) shall, for purposes of this subchapter, be 
     considered to have the meaning given to such mail matter 
     under the mail classification schedule.

     ``Sec. 3622. Modern rate regulation

       ``(a) Authority Generally.--The Postal Regulatory 
     Commission shall, within 24 months after the date of the 
     enactment of this section, by regulation establish (and may 
     from time to time thereafter by regulation revise) a modern 
     system for regulating rates and classes for market-dominant 
     products.
       ``(b) Objectives.--Such system shall be designed to achieve 
     the following objectives:
       ``(1) To reduce the administrative burden of the ratemaking 
     process.
       ``(2) To create predictability and stability in rates.
       ``(3) To maximize incentives to reduce costs and increase 
     efficiency.
       ``(4) To enhance mail security and deter terrorism by 
     promoting secure, sender-identified mail.
       ``(5) To allow the Postal Service pricing flexibility, 
     including the ability to use pricing to promote intelligent 
     mail and encourage increased mail volume during nonpeak 
     periods.
       ``(6) To assure adequate revenues, including retained 
     earnings, to maintain financial stability and meet the 
     service standards established under section 3691.
       ``(c) Factors.--In establishing or revising such system, 
     the Postal Regulatory Commission shall take into account--
       ``(1) the establishment and maintenance of a fair and 
     equitable schedule for rates and classification system;

[[Page S8139]]

       ``(2) the value of the mail service actually provided each 
     class or type of mail service to both the sender and the 
     recipient, including but not limited to the collection, mode 
     of transportation, and priority of delivery;
       ``(3) the direct and indirect postal costs attributable to 
     each class or type of mail service plus that portion of all 
     other costs of the Postal Service reasonably assignable to 
     such class or type;
       ``(4) the effect of rate increases upon the general public, 
     business mail users, and enterprises in the private sector of 
     the economy engaged in the delivery of mail matter other than 
     letters;
       ``(5) the available alternative means of sending and 
     receiving letters and other mail matter at reasonable costs;
       ``(6) the degree of preparation of mail for delivery into 
     the postal system performed by the mailer and its effect upon 
     reducing costs to the Postal Service;
       ``(7) simplicity of structure for the entire schedule and 
     simple, identifiable relationships between the rates or fees 
     charged the various classes of mail for postal services;
       ``(8) the relative value to the people of the kinds of mail 
     matter entered into the postal system and the desirability 
     and justification for special classifications and services of 
     mail;
       ``(9) the importance of providing classifications with 
     extremely high degrees of reliability and speed of delivery 
     and of providing those that do not require high degrees of 
     reliability and speed of delivery;
       ``(10) the desirability of special classifications from the 
     point of view of both the user and of the Postal Service;
       ``(11) the educational, cultural, scientific, and 
     informational value to the recipient of mail matter; and
       ``(12) the policies of this title as well as such other 
     factors as the Commission deems appropriate.
       ``(d) Allowable Provisions.--The system for regulating 
     rates and classes for market-dominant products may include--
       ``(1) price caps, revenue targets, or other form of 
     incentive regulation;
       ``(2) cost-of-service regulation; or
       ``(3) such other form of regulation as the Commission 
     considers appropriate to achieve, consistent with subsection 
     (c), the objectives of subsection (b).
       ``(e) Requirements.--The system for regulating rates and 
     classes for market-dominant products shall--
       ``(1) establish a schedule whereby rates, when necessary, 
     would increase at regular intervals by predictable amounts; 
     and
       ``(2) establish procedures whereby rates may be increased 
     on a expedited basis when an unexpected decline in revenue or 
     increase in costs threatens the ability of the Postal Service 
     to maintain service at the standards established by the 
     Postal Regulatory Commission under section 3691.
       ``(f) Transition Rule.--Until regulations under this 
     section first take effect, rates and classes for market-
     dominant products shall remain subject to modification in 
     accordance with the provisions of this chapter and section 
     407, as such provisions were last in effect before the date 
     of the enactment of this section.

     ``Sec. 3623. Service agreements for market-dominant products

       ``(a) In General.--
       ``(1) Authority.--The Postal Service may enter into service 
     agreements with mailers that provide for the provision of 
     postal services under terms and conditions that differ from 
     those that would apply under the otherwise applicable market-
     dominant mail classification.
       ``(2) Agreements.--An agreement under this section may 
     involve--
       ``(A) performance by the contracting mail user of mail 
     preparation, processing, transportation, or other functions 
     that reduce costs to the Postal Service;
       ``(B) performance by the Postal Service of additional mail 
     preparation, processing, transportation, or other functions 
     that increase costs to the Postal Service; or
       ``(C) other terms and conditions that meet the requirements 
     of subsections (b) and (c).
       ``(b) Requirements.--A service agreement under this section 
     may only be entered into if the agreement will benefit the 
     contracting mailer, the Postal Service, and mailers who are 
     not parties to the agreement and if each of the following 
     conditions is met:
       ``(1) The total revenue generated under the agreement--
       ``(A) will cover all costs attributable to the Postal 
     Service; and
       ``(B) will result in a greater contribution to the 
     institutional costs of the Postal Service than would have 
     been granted had the agreement not been entered into.
       ``(2) Rates and fees for other mailers will not increase as 
     a result of the agreement.
       ``(3) The agreement pertains exclusively to products in the 
     market-dominant category of mail.
       ``(4) The agreement will not preclude or materially hinder 
     similarly situated mail users from entering into agreements 
     with the Postal Service on the same, or substantially the 
     same, terms, and the Postal Service remains willing and able 
     to enter into such.
       ``(c) Limitations.--A service agreement under this section 
     shall--
       ``(1) be for a term of not to exceed 3 years; and
       ``(2) provide that such agreement shall be subject to the 
     cancellation authority of the Commission under section 3662.
       ``(d) Notice Requirements.--
       ``(1) In general.--At least 30 days before a service 
     agreement under this section is to take effect, the Postal 
     Service shall file with the Postal Regulatory Commission and 
     publish in the Federal Register the following:
       ``(A) With respect to each condition under subsection (b), 
     information in sufficient detail to demonstrate the bases for 
     the Postal Service's view that such condition would be met.
       ``(B) A description of the type of mail the agreement 
     involves.
       ``(C) The mail preparation, processing, transportation, 
     administration, or other additional functions, if any, the 
     mail user is to perform under the agreement.
       ``(D) The services or benefits the Postal Service is to 
     perform under the agreement.
       ``(E) The rates and fees payable by the mail user during 
     the term of the agreement.
       ``(2) Agreements less than national in scope.--In the case 
     of a service agreement under this section that is less than 
     national in scope, the information described under paragraph 
     (1) shall also be published by the Postal Service in a manner 
     designed to afford reasonable notice to persons within any 
     geographic area to which such agreement (or any amendment 
     thereto) pertains.
       ``(e) Equal Treatment Required.--If the Postal Service 
     enters into a negotiated service agreement with a mailer 
     under this section, the Postal Service shall make such 
     agreement available to other mailers on the same terms and 
     conditions.
       ``(f) Complaints.--Any person who believes that a service 
     agreement under this section is not (or, in the case of a 
     proposed agreement or a proposed amendment to a service 
     agreement under this section, would not be) in conformance 
     with the requirements of this section and regulations 
     thereunder, or who aggrieved by a decision of the Postal 
     Service not to enter into an agreement under this section, 
     may file a complaint with the Postal Regulatory Commission in 
     accordance with section 3662.
       ``(g) Postal Regulatory Commission Role.--
       ``(1) Regulations.--The Postal Regulatory Commission may 
     promulgate such regulations regarding service agreements as 
     the Commission determines necessary to implement the 
     requirements of this section.
       ``(2) Review.--The Postal Regulatory Commission may review 
     any agreement or proposed agreement under this section and 
     may suspend, cancel, or prevent such agreement if the 
     Commission finds that the agreement does not meet the 
     requirements of this section or the regulations thereunder.
       ``(h) Interpretation.--The determination of whether the 
     revenue generated under the agreement meets the requirements 
     of (b)(1)(B) shall be based on the actual contribution of the 
     mail involved, not on the average contribution made by the 
     mail classification most similar to the services performed 
     under the agreement.
       ``(i) Rate Discounts.--In the administration of this 
     section, the Postal Regulatory Commission shall not permit 
     rate discounts for additional mail preparation, processing, 
     transportation, or other functions that exceed the costs 
     avoided by the Postal Service by virtue of the additional 
     functions performed by the mailer. Such discounts are 
     allowable only if the Commission has, after notice and 
     opportunity for a public hearing and comment, determined that 
     such discounts are reasonable and equitable and are necessary 
     to enable the Postal Service, under best practices of honest, 
     efficient, and economical management, to maintain and 
     continue the development of postal services of the kind and 
     quality adapted to the needs of the United States consistent 
     with the service standards established under section 3691.''.
       (b) Repealed Sections.--Sections 3624, 3625, and 3628 of 
     title 39, United States Code, are repealed.
       (c) Redesignation.--Chapter 36 of title 39, United States 
     Code (as in effect after the amendment made by section 601, 
     but before the amendment made by section 202) is amended by 
     striking the heading for subchapter II and inserting the 
     following:

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

     SEC. 202. PROVISIONS RELATING TO COMPETITIVE PRODUCTS.

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

      ``SUBCHAPTER II--PROVISIONS RELATING TO COMPETITIVE PRODUCTS

     ``Sec. 3631. Applicability; definitions and updates

       ``(a) Applicability.--This subchapter shall apply with 
     respect to--
       ``(1) priority mail;
       ``(2) expedited mail;
       ``(3) mailgrams;
       ``(4) international mail; and
       ``(5) parcel post,
     subject to subsection (d) and any changes the Postal 
     Regulatory Commission may make under section 3642.
       ``(b) Definition.--For purposes of this subchapter, the 
     term `costs attributable', as used with respect to a product, 
     means the direct and indirect postal costs attributable to 
     such product.
       ``(c) Rule of Construction.--Mail matter referred to in 
     subsection (a) shall, for purposes of this subchapter, be 
     considered to have the meaning given to such mail matter 
     under the mail classification schedule.
       ``(d) Limitation.--Notwithstanding any other provision of 
     this section, nothing in this subchapter shall be considered 
     to apply

[[Page S8140]]

     with respect to any product then currently in the market-
     dominant category of mail.

     ``Sec. 3632. Action of the Governors

       ``(a) Authority To Establish Rates and Classes.--The 
     Governors, with the written concurrence of a majority of all 
     of the Governors then holding office, shall establish rates 
     and classes for products in the competitive category of mail 
     in accordance with the requirements of this subchapter and 
     regulations promulgated under section 3633.
       ``(b) Procedures.--
       ``(1) In general.--Rates and classes shall be established 
     in writing, complete with a statement of explanation and 
     justification, and the date as of which each such rate or 
     class takes effect.
       ``(2) Publication.--The Governors shall cause each rate and 
     class decision under this section and the record of the 
     Governors' proceedings in connection with such decision to be 
     published in the Federal Register by such date before the 
     effective date of any new rates or classes as the Governors 
     consider appropriate.
       ``(c) Transition Rule.--Until regulations under section 
     3633 first take effect, rates and classes for competitive 
     products shall remain subject to modification in accordance 
     with the provisions of this chapter and section 407, as such 
     provisions were as last in effect before the date of the 
     enactment of this section.

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

       ``The Postal Regulatory Commission shall, within 180 days 
     after the date of the enactment of this section, promulgate 
     (and may from time to time thereafter revise) regulations--
       ``(1) to prohibit the subsidization of competitive products 
     by market-dominant products;
       ``(2) to ensure that each competitive product covers its 
     costs attributable; and
       ``(3) to ensure that all competitive products collectively 
     cover their share of the institutional costs of the Postal 
     Service.''.

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

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

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

     ``Sec. 3641. Market tests of experimental products

       ``(a) Authority.--
       ``(1) In general.--The Postal Service may conduct market 
     tests of experimental products in accordance with this 
     section.
       ``(2) Provisions waived.--A product shall not, while it is 
     being tested under this section, be subject to the 
     requirements of sections 3622, 3633, or 3642, or regulations 
     promulgated under those sections.
       ``(b) Conditions.--A product may not be tested under this 
     section unless it satisfies each of the following:
       ``(1) Significantly different product.--The product is, 
     from the viewpoint of the mail users, significantly different 
     from all products offered by the Postal Service within the 2-
     year period preceding the start of the test.
       ``(2) Market disruption.--The introduction or continued 
     offering of the product will not create an unfair or 
     otherwise inappropriate competitive advantage for the Postal 
     Service or any mailer, particularly in regard to small 
     business concerns (as defined under subsection (h)).
       ``(3) Correct categorization.--The Postal Service 
     identifies the product, for the purpose of a test under this 
     section, as either market dominant or competitive, consistent 
     with the criteria under section 3642(b)(1). Costs and 
     revenues attributable to a product identified as competitive 
     shall be included in any determination under section 
     3633(3)(relating to provisions applicable to competitive 
     products collectively).
       ``(c) Notice.--
       ``(1) In general.--At least 30 days before initiating a 
     market test under this section, the Postal Service shall file 
     with the Postal Regulatory Commission and publish in the 
     Federal Register a notice--
       ``(A) setting out the basis for the Postal Service's 
     determination that the market test is covered by this 
     section; and
       ``(B) describing the nature and scope of the market test.
       ``(2) Safeguards.--For a competitive experimental product, 
     the provisions of section 504(g) shall be available with 
     respect to any information required to be filed under 
     paragraph (1) to the same extent and in the same manner as in 
     the case of any matter described in section 504(g)(1). 
     Nothing in paragraph (1) shall be considered to permit or 
     require the publication of any information as to which 
     confidential treatment is accorded under the preceding 
     sentence (subject to the same exception as set forth in 
     section 504(g)(3)).
       ``(d) Duration.--
       ``(1) In general.--A market test of a product under this 
     section may be conducted over a period of not to exceed 24 
     months.
       ``(2) Extension authority.--If necessary in order to 
     determine the feasibility or desirability of a product being 
     tested under this section, the Postal Regulatory Commission 
     may, upon written application of the Postal Service (filed 
     not later than 60 days before the date as of which the 
     testing of such product would otherwise be scheduled to 
     terminate under paragraph (1)), extend the testing of such 
     product for not to exceed an additional 12 months.
       ``(e) Dollar-Amount Limitation.--
       ``(1) In general.--A product may only be tested under this 
     section if the total revenues that are anticipated, or in 
     fact received, by the Postal Service from such product do not 
     exceed $10,000,000 in any year, subject to paragraph (2) and 
     subsection (g).
       ``(2) Exemption authority.--The Postal Regulatory 
     Commission may, upon written application of the Postal 
     Service, exempt the market test from the limit in paragraph 
     (1) if the total revenues that are anticipated, or in fact 
     received, by the Postal Service from such product do not 
     exceed $50,000,000 in any year, subject to subsection (g). In 
     reviewing an application under this paragraph, the Postal 
     Regulatory Commission shall approve such application if it 
     determines that--
       ``(A) the product is likely to benefit the public and meet 
     an expected demand;
       ``(B) the product is likely to contribute to the financial 
     stability of the Postal Service; and
       ``(C) the product is not likely to result in unfair or 
     otherwise inappropriate competition.
       ``(f) Cancellation.--If the Postal Regulatory Commission at 
     any time determines that a market test under this section 
     fails, with respect to any particular product, to meet one or 
     more of the requirements of this section, it may order the 
     cancellation of the test involved or take such other action 
     as it considers appropriate. A determination under this 
     subsection shall be made in accordance with such procedures 
     as the Commission shall by regulation prescribe.
       ``(g) Adjustment for Inflation.--For purposes of each year 
     following the year in which occurs the deadline for the 
     Postal Service's first report to the Postal Regulatory 
     Commission under section 3652(a), each dollar amount 
     contained in this section shall be adjusted by the change in 
     the Consumer Price Index for such year (as determined under 
     regulations of the Commission).
       ``(h) Definition of a Small Business Concern.--The criteria 
     used in defining small business concerns or otherwise 
     categorizing business concerns as small business concerns 
     shall, for purposes of this section, be established by the 
     Postal Regulatory Commission in conformance with the 
     requirements of section 3 of the Small Business Act.
       ``(i) Effective Date.--Market tests under this subchapter 
     may be conducted in any year beginning with the first year in 
     which occurs the deadline for the Postal Service's first 
     report to the Postal Regulatory Commission under section 
     3652(a).

     ``Sec. 3642. New products and transfers of products between 
       the market-dominant and competitive categories of mail

       ``(a) In General.--Upon request of the Postal Service or 
     users of the mails, or upon its own initiative, the Postal 
     Regulatory Commission may change the list of market-dominant 
     products under section 3621 and the list of competitive 
     products under section 3631 by adding new products to the 
     lists, removing products from the lists, or transferring 
     products between the lists.
       ``(b) Criteria.--All determinations by the Postal 
     Regulatory Commission under subsection (a) shall be made in 
     accordance with the following criteria:
       ``(1) The market-dominant category of products shall 
     consist of each product in the sale of which the Postal 
     Service exercises sufficient market power that it can 
     effectively set the price of such product substantially above 
     costs, raise prices significantly, decrease quality, or 
     decrease output, without risk of losing business to other 
     firms offering similar products. The competitive category of 
     products shall consist of all other products.
       ``(2) Exclusion of products covered by postal monopoly.--A 
     product covered by the postal monopoly shall not be subject 
     to transfer under this section from the market-dominant 
     category of mail. For purposes of the preceding sentence, the 
     term `product covered by the postal monopoly' means any 
     product the conveyance or transmission of which is reserved 
     to the United States under section 1696 of title 18, subject 
     to the same exception as set forth in the last sentence of 
     section 409(e)(1).
       ``(3) Additional considerations.--In making any decision 
     under this section, due regard shall be given to--
       ``(A) the availability and nature of enterprises in the 
     private sector engaged in the delivery of the product 
     involved;
       ``(B) the views of those who use the product involved on 
     the appropriateness of the proposed action; and
       ``(C) the likely impact of the proposed action on small 
     business concerns (within the meaning of section 3641(h)).
       ``(c) Transfers of Subclasses and Other Subordinate Units 
     Allowable.--Nothing in this title shall be considered to 
     prevent transfers under this section from being made by 
     reason of the fact that they would involve only some (but not 
     all) of the subclasses or other subordinate units of the 
     class of mail or type of postal service involved (without 
     regard to satisfaction of minimum quantity requirements 
     standing alone).
       ``(d) Notification and Publication Requirements.--
       ``(1) Notification requirement.--The Postal Service shall, 
     whenever it requests to add a product or transfer a product 
     to a different category, file with the Postal Regulatory 
     Commission and publish in the Federal Register a notice 
     setting out the basis for its determination that the product 
     satisfies the

[[Page S8141]]

     criteria under subsection (b) and, in the case of a request 
     to add a product or transfer a product to the competitive 
     category of mail, that the product meets the regulations 
     promulgated by the Postal Regulatory Commission pursuant to 
     section 3633. The provisions of section 504(g) shall be 
     available with respect to any information required to be 
     filed.
       ``(2) Publication requirement.--The Postal Regulatory 
     Commission shall, whenever it changes the list of products in 
     the market-dominant or competitive category of mail, 
     prescribe new lists of products. The revised lists shall 
     indicate how and when any previous lists (including the lists 
     under sections 3621 and 3631) are superseded, and shall be 
     published in the Federal Register.
       ``(e) Prohibition.--Except as provided in section 3641, no 
     product that involves the physical delivery of letters, 
     printed matter, or packages may be offered by the Postal 
     Service unless it has been assigned to the market-dominant or 
     competitive category of mail (as appropriate) either--
       ``(1) under this subchapter; or
       ``(2) by or under any other provision of law.''.

     SEC. 204. REPORTING REQUIREMENTS AND RELATED PROVISIONS.

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

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

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

     ``SUBCHAPTER IV--REPORTING REQUIREMENTS AND RELATED PROVISIONS

     ``Sec. 3651. Annual reports by the Commission

       ``(a) In General.--The Postal Regulatory Commission shall 
     submit an annual report to the President and the Congress 
     concerning the operations of the Commission under this title, 
     including the extent to which regulations are achieving the 
     objectives under sections 3622, 3633, and 3691.
       ``(b) Information From Postal Service.--The Postal Service 
     shall provide the Postal Regulatory Commission with such 
     information as may, in the judgment of the Commission, be 
     necessary in order for the Commission to prepare its reports 
     under this section.

     ``Sec. 3652. Annual reports to the Commission

       ``(a) Costs, Revenues, Rates, and Service.--Except as 
     provided in subsection (c), the Postal Service shall, no 
     later than 90 days after the end of each year, prepare and 
     submit to the Postal Regulatory Commission a report (together 
     with such nonpublic annex thereto as the Commission may 
     require under subsection (e))--
       ``(1) which shall analyze costs, revenues, rates, and 
     quality of service in sufficient detail to demonstrate that 
     all products during such year complied with all applicable 
     requirements of this title; and
       ``(2) which shall, for each market-dominant product 
     provided in such year, provide--
       ``(A) market information, including mail volumes; and
       ``(B) measures of the service afforded by the Postal 
     Service in connection with such product, including--
       ``(i) the level of service (described in terms of speed of 
     delivery and reliability) provided; and
       ``(ii) the degree of customer satisfaction with the service 
     provided.
     Before submitting a report under this subsection (including 
     any annex thereto and the information required under 
     subsection (b)), the Postal Service shall have the 
     information contained in such report (and annex) audited by 
     the Inspector General. The results of any such audit shall be 
     submitted along with the report to which it pertains.
       ``(b) Information Relating to Workshare Discounts.
       ``(1) In general.--The Postal Service shall include, in 
     each report under subsection (a), the following information 
     with respect to each market-dominant product for which a 
     workshare discount was in effect during the period covered by 
     such report:
       ``(A) The per-item cost avoided by the Postal Service by 
     virtue of such discount.
       ``(B) The percentage of such per-item cost avoided that the 
     per-item workshare discount represents.
       ``(C) The per-item contribution made to institutional 
     costs.
       ``(2) Workshare discount defined.--For purposes of this 
     subsection, the term `workshare discount' refers to 
     presorting, barcoding, dropshipping, and other similar 
     discounts, as further defined under regulations which the 
     Postal Regulatory Commission shall prescribe.
       ``(c) Service Agreements and Market Tests.--In carrying out 
     subsections (a) and (b) with respect to service agreements 
     (including service agreements entered into under section 
     3623) and experimental products offered through market tests 
     under section 3641 in a year, the Postal Service--
       ``(1) may report summary data on the costs, revenues, and 
     quality of service by service agreement and market test; and
       ``(2) shall report such data as the Postal Regulatory 
     Commission requires.
       ``(d) Supporting Matter.--The Postal Regulatory Commission 
     shall have access, in accordance with such regulations as the 
     Commission shall prescribe, to the working papers and any 
     other supporting matter of the Postal Service and the 
     Inspector General in connection with any information 
     submitted under this section.
       ``(e) Content and Form of Reports.--
       ``(1) In general.--The Postal Regulatory Commission shall, 
     by regulation, prescribe the content and form of the public 
     reports (and any nonpublic annex and supporting matter 
     relating thereto) to be provided by the Postal Service under 
     this section. In carrying out this subsection, the Commission 
     shall give due consideration to--
       ``(A) providing the public with adequate information to 
     assess the lawfulness of rates charged;
       ``(B) avoiding unnecessary or unwarranted administrative 
     effort and expense on the part of the Postal Service; and
       ``(C) protecting the confidentiality of commercially 
     sensitive information.
       ``(2) Revised requirements.--The Commission may, on its own 
     motion or on request of an interested party, initiate 
     proceedings (to be conducted in accordance with regulations 
     that the Commission shall prescribe) to improve the quality, 
     accuracy, or completeness of Postal Service data required by 
     the Commission under this subsection whenever it shall appear 
     that--
       ``(A) the attribution of costs or revenues to products has 
     become significantly inaccurate or can be significantly 
     improved;
       ``(B) the quality of service data has become significantly 
     inaccurate or can be significantly improved; or
       ``(C) such revisions are, in the judgment of the 
     Commission, otherwise necessitated by the public interest.
       ``(f) Confidential Information.--
       ``(1) In general.--If the Postal Service determines that 
     any document or portion of a document, or other matter, which 
     it provides to the Postal Regulatory Commission in a 
     nonpublic annex under this section or pursuant to subsection 
     (d) contains information which is described in section 410(c) 
     of this title, or exempt from public disclosure under section 
     552(b) of title 5, the Postal Service shall, at the time of 
     providing such matter to the Commission, notify the 
     Commission of its determination, in writing, and describe 
     with particularity the documents (or portions of documents) 
     or other matter for which confidentiality is sought and the 
     reasons therefor.
       ``(2) Treatment.--Any information or other matter described 
     in paragraph (1) to which the Commission gains access under 
     this section shall be subject to paragraphs (2) and (3) of 
     section 504(g) in the same way as if the Commission had 
     received notification with respect to such matter under 
     section 504(g)(1).
       ``(g) Other Reports.--The Postal Service shall submit to 
     the Postal Regulatory Commission, together with any other 
     submission that the Postal Service is required to make under 
     this section in a year, copies of its then most recent--
       ``(1) comprehensive statement under section 2401(e);
       ``(2) strategic plan under section 2802;
       ``(3) performance plan under section 2803; and
       ``(4) program performance reports under section 2804.

     ``Sec. 3653. Annual determination of compliance

       ``(a) Opportunity for Public Comment.--After receiving the 
     reports required under section 3652 for any year, the Postal 
     Regulatory Commission shall promptly provide an opportunity 
     for comment on such reports by users of the mails, affected 
     parties, and an officer of the Commission who shall be 
     required to represent the interests of the general public.
       ``(b) Determination of Compliance or Noncompliance.--Not 
     later than 90 days after receiving the submissions required 
     under section 3652 with respect to a year, the Postal 
     Regulatory Commission shall make a written determination as 
     to--
       ``(1) whether any rates or fees in effect during such year 
     (for products individually or collectively) were not in 
     compliance with applicable provisions of this chapter (or 
     regulations promulgated thereunder); or
       ``(2) whether any service standards in effect during such 
     year were not met.
     If, with respect to a year, no instance of noncompliance is 
     found under this subsection to have occurred in such year, 
     the written determination shall be to that effect.
       ``(c) If Any Noncompliance Is Found.--If, for a year, a 
     timely written determination of noncompliance is made under 
     subsection (b), the Postal Regulatory Commission shall take 
     appropriate action in accordance with section 3662.
       ``(d) Rebuttable Presumption.--A timely written 
     determination described in the last sentence of subsection 
     (b) shall, for purposes of any proceeding under section 3662, 
     create a rebuttable presumption of compliance by the Postal 
     Service (with regard to the matters described in paragraphs 
     (1) through (3) of subsection (b)) during the year to which 
     such determination relates.''.

     SEC. 205. COMPLAINTS; APPELLATE REVIEW AND ENFORCEMENT.

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

     ``Sec. 3662. Rate and service complaints

       ``(a) In General.--Interested persons (including an officer 
     of the Postal Regulatory Commission representing the 
     interests of the general public) who believe the Postal 
     Service is not operating in conformance with the requirements 
     of chapter 1, 4, or 6, or this chapter (or regulations 
     promulgated under

[[Page S8142]]

     any of those chapters) may lodge a complaint with the Postal 
     Regulatory Commission in such form and manner as the 
     Commission may prescribe.
       ``(b) Prompt Response Required.--
       ``(1) In general.--The Postal Regulatory Commission shall, 
     within 90 days after receiving a complaint under subsection 
     (a), either--
       ``(A) begin proceedings on such complaint; or
       ``(B) issue an order dismissing the complaint (together 
     with a statement of the reasons therefor).
       ``(2) Treatment of complaints not timely acted on.--For 
     purposes of section 3663, any complaint under subsection (a) 
     on which the Commission fails to act in the time and manner 
     required by paragraph (1) shall be treated in the same way as 
     if it had been dismissed pursuant to an order issued by the 
     Commission on the last day allowable for the issuance of such 
     order under paragraph (1).
       ``(c) Action Required If Complaint Found To Be Justified.--
     If the Postal Regulatory Commission finds the complaint to be 
     justified, it shall order that the Postal Service take such 
     action as the Commission considers appropriate in order to 
     achieve compliance with the applicable requirements and to 
     remedy the effects of any noncompliance. Such action may 
     include ordering unlawful rates to be adjusted to lawful 
     levels, ordering the cancellation of market tests, ordering 
     the Postal Service to discontinue providing loss-making 
     products, and requiring the Postal Service to make up for 
     revenue shortfalls in competitive products.
       ``(d) Authority To Order Fines in Cases of Deliberate 
     Noncompliance.--In addition, in cases of deliberate 
     noncompliance by the Postal Service with the requirements of 
     this title, the Postal Regulatory Commission may order, based 
     on the nature, circumstances, extent, and seriousness of the 
     noncompliance, a fine (in the amount specified by the 
     Commission in its order) for each incidence of noncompliance. 
     Fines resulting from the provision of competitive products 
     shall be paid out of the Competitive Products Fund 
     established in section 2011. All receipts from fines imposed 
     under this subsection shall be deposited in the general fund 
     of the Treasury of the United States.

     ``Sec. 3663. Appellate review

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

     ``Sec. 3664. Enforcement of orders

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

     SEC. 206. CLERICAL AMENDMENT.

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

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

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

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

      ``SUBCHAPTER II--PROVISIONS RELATING TO COMPETITIVE PRODUCTS

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

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

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

     ``SUBCHAPTER IV--REPORTING REQUIREMENTS AND RELATED PROVISIONS

``3651. Annual reports by the Commission.
``3652. Annual reports to the Commission.
``3653. Annual determination of compliance.

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

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

                        ``SUBCHAPTER VI--GENERAL

``3681. Reimbursement.
``3682. Size and weight limits.
``3683. Uniform rates for books; films, other materials.
``3684. Limitations.
``3685. Filing of information relating to periodical publications.
``3686. Change-of-address order involving a commercial mail receiving 
              agency.
``3687. Bonus authority.

               ``SUBCHAPTER VII--MODERN SERVICE STANDARDS

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

                  TITLE III--MODERN SERVICE STANDARDS

     SEC. 301. ESTABLISHMENT OF MODERN SERVICE STANDARDS.

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

               ``SUBCHAPTER VII--MODERN SERVICE STANDARDS

     ``Sec. 3691. Establishment of modern service standards

       ``(a) Authority Generally.--The Postal Regulatory 
     Commission shall, within 24 months after the date of the 
     enactment of this section, by regulation establish (and may 
     from time to time thereafter by regulation revise) a set of 
     service standards for market-dominant products consistent 
     with sections 101 (a) and (b) and 403.
       ``(b) Objectives.--Such standards shall be designed to 
     achieve the following objectives:
       ``(1) To increase the value of postal services to both 
     senders and recipients.
       ``(2) To provide a benchmark for Postal Service performance 
     goals.
       ``(3) To guarantee Postal Service customers delivery speed 
     and frequency consistent with reasonable rates.
       ``(c) Factors.--In establishing or revising such standards, 
     the Postal Regulatory Commission shall take into account--
       ``(1) any service standards previously established by the 
     Postal Service;
       ``(2) the actual level of service Postal Service customers 
     receive;
       ``(3) customer satisfaction with Postal Service 
     performance;
       ``(4) mail volume and revenues projected for future years;
       ``(5) the projected growth in the number of addresses the 
     Postal Service will be required to serve in future years;
       ``(6) the current and projected future cost of serving 
     Postal Service customers; and
       ``(7) the policies of this title as well as such other 
     factors as the Commission determines appropriate.''.

     SEC. 302. POSTAL SERVICE PLAN.

       (a) In General.--Within 1 year after the establishment of 
     the service standards under section 3691 of title 39, United 
     States Code, as added by this Act, the Postal Service shall, 
     in consultation with the Postal Regulatory Commission, 
     develop and submit to Congress a plan for meeting those 
     standards.
       (b) Content.--The plan under this section shall--
       (1) establish performance goals;
       (2) describe any changes to the Postal Service's 
     processing, transportation, delivery, and retail networks 
     necessary to allow the Postal Service to meet the performance 
     goals; and
       (3) describe any changes to planning and performance 
     management documents previously submitted to Congress to 
     reflect new performance goals.
       (c) Recommendations.--The Postal Service plan shall include 
     a list of any processing and retail facilities that can be 
     closed or consolidated without hindering the Postal Service's 
     ability to meet established service standards. The 
     recommendations shall be consistent with the provisions in 
     section 101(b) of title 39, United States Code prohibiting 
     the closing of post offices, including post offices in rural 
     areas and small towns, solely because they are not self-
     sustaining or operate at a deficit.
       (d) Alternate Retail Options.--The Postal Service plan 
     shall include, to the extent possible, plans to provide 
     postal services by other means, including--
       (1) vending machines;
       (2) the Internet;
       (3) Postal Service employees on delivery routes; and
       (4) retail facilities in which overhead costs are shared 
     with private businesses and other government agencies.
       (e) Reemployment Assistance and Retirement Benefits.--The 
     Postal Service plan shall include--
       (1) a plan under which reemployment assistance shall be 
     afforded to employees displaced as a result of the automation 
     or privatization of any of its functions or the closing and 
     consolidation of any of its facilities; and
       (2) a plan, developed in consultation with the Office of 
     Personnel Management, to offer early retirement benefits.
       (f) Inspector General Report.--
       (1) In general.--Before submitting the plan under this 
     section to Congress, the Postal Service shall submit the plan 
     to the Inspector General of the United States Postal Service 
     in a timely manner to carry out this subsection.
       (2) Report.--The Inspector General shall prepare a report 
     describing the extent to which the Postal Service plan--
       (A) is consistent with the continuing obligations of the 
     Postal Service under title 39, United States Code; and
       (B) provides for the Postal Service to meet the service 
     standards established under section 3691.
       (3) Submission of report.--The Postal Service shall submit 
     the report of the Inspector General under this subsection 
     with the

[[Page S8143]]

     plan submitted to Congress under subsection (a).
       (g) Recommended Facility Closings and Consolidations.--The 
     list of recommended facility closings and consolidations, 
     including the criteria used for selection, justifications for 
     each recommendation, and any comments received from affected 
     communities, shall be transmitted to the Postal Network 
     Modernization Commission at the same time the Postal Service 
     plan is transmitted to Congress.
       (h) Continuing Responsibilities.--Nothing in this section 
     shall affect the responsibilities of the Postal Service under 
     section 404(b) of title 39, United States Code, with respect 
     to any postal facility by reason of that facility being 
     recommended for closing or consolidation under this section.

     SEC. 303. POSTAL NETWORK MODERNIZATION COMMISSION.

       (a) Establishment.--There is established an independent 
     commission to be known as the ``Postal Network Modernization 
     Commission''.
       (b) Duties.--The Commission shall carry out the duties 
     specified in this title.
       (c) Appointment.--
       (1) In general.--
       (A) Composition.--The Commission shall be composed of 8 
     members appointed by the President, by and with the advice 
     and consent of the Senate.
       (B) Limitation on political party membership.--No more than 
     4 members of the Commission at any time shall be from the 
     same political party.
       (C) Employee representation.--One member of the Commission 
     shall be chosen from among persons nominated for such office 
     with the unanimous concurrence of all organizations 
     representing postmasters and all employee organizations 
     described under section 1004(b) of title 39, United States 
     Code.
       (D) Union Representation.--One member of the Commission 
     shall be chosen from among persons nominated for such office 
     with the unanimous concurrence of all labor organizations 
     described in section 206(a)(1) of title 39, United States 
     Code.
       (2) Chairman.--At the time the President nominates 
     individuals for appointment to the Commission, the President 
     shall designate one such individual who shall serve as 
     Chairman of the Commission.
       (d) Meetings.--
       (1) Open meetings.--Each meeting of the Commission shall be 
     open to the public.
       (2) Proceedings, information, and deliberations.--All of 
     the proceedings, information, and deliberation of the 
     Commission shall be open, upon request, to the following:
       (A) Committee on governmental affairs.--The Chairman and 
     the ranking minority party member of the Committee on 
     Governmental Affairs of the Senate, or such other members of 
     the Committee designated by such Chairman or ranking minority 
     party member.
       (B) Committee on government reform.--The Chairman and the 
     ranking minority party member of the Committee on Government 
     Reform of the House of Representatives, or such other members 
     of the Committee designated by such Chairman or ranking 
     minority party member.
       (C) Committees on appropriations.--The Chairmen and ranking 
     minority party members of the Subcommittees on 
     Transportation, Treasury, and General Government of the 
     Committees on Appropriations of the Senate and the House of 
     Representatives, or such other members of the Subcommittees 
     designated by such Chairmen or ranking minority party 
     members.
       (e) Vacancies.--A vacancy in the Commission shall be filled 
     in the same manner as the original appointment.
       (f) Pay and Travel Expenses.--
       (1) In general.--
       (A) Pay.--Each member, other than the Chairman, shall be 
     paid at a rate equal to the daily equivalent of the minimum 
     annual rate of basic pay payable for level IV of the 
     Executive Schedule under section 5315 of title 5, United 
     States Code, for each day (including travel time) during 
     which the member is engaged in the actual performance of 
     duties vested in the Commission.
       (B) Pay for chairman.--The Chairman shall be paid for each 
     day referred to in subparagraph (A) at a rate equal to the 
     daily equivalent of the minimum annual rate of basic pay 
     payable for level III of the Executive Schedule under section 
     5314 of title 5, United States Code.
       (2) Travel expenses.--Members shall receive travel 
     expenses, including per diem in lieu of subsistence, in 
     accordance with sections 5702 and 5703 of title 5, United 
     States Code.
       (g) Director of Staff.--
       (1) Appointment.--The Commission shall, without regard to 
     section 5311(b) of title 5, United States Code, appoint a 
     Director who was not employed by the Postal Service during 
     the 1-year period preceding the date of such appointment.
       (2) Pay.--The Director shall be paid at the rate of basic 
     pay payable for level IV of the Executive Schedule under 
     section 5315 of title 5, United States Code.
       (h) Staff.--
       (1) In general.--Subject to paragraphs (2) and (3), the 
     Director, with the approval of the Commission, may appoint 
     and fix the pay of additional personnel.
       (2) Conditions of appointments.--The Director may make such 
     appointments without regard to the provisions of title 5, 
     United States Code, governing appointments in the competitive 
     service, and any personnel so appointed may be paid without 
     regard to the provisions of chapter 51 and subchapter III of 
     chapter 53 of that title relating to classification and 
     General Schedule pay rates, except that an individual so 
     appointed may not receive pay in excess of the highest annual 
     rate of basic pay payable for a position classified at above 
     GS-15 of the General Schedule.
       (3) Details.--
       (A) In general.--Not more than \1/3\ of the personnel 
     employed by or detailed to the Commission may be on detail 
     from the Postal Service.
       (B) Analysts.--Not more than \1/3\ of the professional 
     analysts of the Commission staff may be persons detailed from 
     the Postal Service to the Commission.
       (C) Limitations.--A person may not be detailed from the 
     Postal Service to the Commission if that person participated 
     personally and substantially in any matter within the Postal 
     Service concerning the preparation of recommendations for 
     closures or consolidations of postal facilities. No employee 
     of the Postal Service may--
       (i) prepare any report concerning the effectiveness, 
     fitness, or efficiency of the performance on the staff of the 
     Commission of any person detailed from the Postal Service to 
     that staff;
       (ii) review the preparation of such a report; or
       (iii) approve or disapprove such a report.
       (4) Detail upon request.--Upon request of the Director, the 
     head of any Federal department or agency may detail any of 
     the personnel of that department or agency to the Commission 
     to assist the Commission in carrying out its duties under 
     this part.
       (5) Comptroller general assistance.--The Comptroller 
     General of the United States shall provide assistance, 
     including the detailing of employees, to the Commission in 
     accordance with an agreement entered into with the 
     Commission.
       (6) Limitation on number of staff.--There may not be more 
     than 15 persons on the staff at any one time.
       (i) Other Authority.--
       (1) Experts and consultants.--The Commission may procure by 
     contract, to the extent funds are available, the temporary of 
     intermittent services of experts or consultants under section 
     3109 of title 5, United States Code.
       (2) Lease of space.--The Commission may lease space and 
     acquire personal property to the extent funds are available.
       (j) Funding.--There are authorized to be appropriated to 
     the Commission such funds as are necessary to carry out its 
     duties under this part. Such funds shall remain available 
     until expended.
       (k) Review of Postal Service Recommendations.--
       (1) In general.--After receiving the recommendations from 
     the Postal Service under section 302, the Commission shall 
     conduct public hearings on the recommendations. All testimony 
     before the Commission at a public hearing conducted under 
     this paragraph shall be presented under oath. The hearings 
     shall solicit views from Postal Service customers and 
     employees and community leaders and government officials in 
     the communities affected by the Postal Service's 
     recommendations.
       (2) Report.--
       (A) Transmission.--The Commission shall, no later than 1 
     year following receipt of the Postal Service's 
     recommendations under section 302, transmit to the President 
     a report containing the Commission's findings and conclusions 
     based on a review and analysis of the recommendations made by 
     the Postal Service, together with the Commission's 
     recommendations for closures and consolidations.
       (B) Changes in recommendations.--In making its 
     recommendations, the Commission may make changes in any of 
     the recommendations made by the Postal Service if the 
     Commission determines that the Postal Service's recommended 
     closings and consolidations would not allow them to meet the 
     service standards established by the Postal Regulatory 
     Commission under section 301.
       (3) Explanation.--The Commission shall explain and justify 
     in its report submitted to the President under paragraph (2) 
     any recommendation made by the Commission that is different 
     from the recommendations made by the Postal Service under 
     section 302. The Commission shall transmit a copy of such 
     report to the Committee on Governmental Affairs of the 
     Senate, Committee on Government Reform of the House of 
     Representatives and the Subcommittees on Transportation, 
     Treasury, and General Government of the Committees on 
     Appropriations of the Senate and the House of Representatives 
     on the same date on which it transmits its recommendations to 
     the President under paragraph (2).
       (4) Provision of information.--After transmitting its 
     recommendations, the Commission shall promptly provide, upon 
     request, to any member of Congress information used by the 
     Commission in making its recommendations.
       (5) Comptroller general.--The Comptroller General of the 
     United States shall--
       (A) assist the Commission, to the extent requested, in the 
     Commission's review and analysis of the recommendations made 
     by the Postal Service under section 302; and
       (B) not later than 30 days following receipt of the Postal 
     Service's recommendations, transmit to Congress and the 
     Commission a detailed analysis of the Postal Service's 
     recommendations.

[[Page S8144]]

       (l) Review by the President.--
       (1) Report.--The President shall, no later than 14 days 
     following receipt of the Commission's recommendations, 
     transmit to the Commission and to Congress a report 
     containing the President's approval or disapproval of the 
     Commission's recommendations.
       (2) Approval.--If the President approves all the 
     recommendations, the President shall transmit a copy of such 
     recommendations to Congress, together with a certification of 
     such approval.
       (3) Disapproval.--If the President disapproves the 
     recommendations of the Commission, in whole or in part, the 
     President shall transmit to the Commission and the Congress 
     the reasons for that disapproval. The Commission shall than 
     transmit to the President, within 30 days, a revised list of 
     recommendations.
       (4) Approval after revisions.--If the President approves 
     all of the revised recommendations of the Commission 
     transmitted to the President under paragraph (3), the 
     President shall transmit a copy of such revised 
     recommendations to Congress, together with a certification of 
     such approval.

     SEC. 304. CLOSURE AND CONSOLIDATION OF FACILITIES.

       (a) In General.--Subject to subsection (b), the Postal 
     Service shall--
       (1) close all postal facilities recommended by the 
     Commission in such report transmitted to the Congress by the 
     President under section 303(l);
       (2) consolidate all postal facilities recommended for 
     consolidation by the Commission in such report;
       (3) initiate all such closures and consolidations no later 
     than 1 year after the date on which the President transmits a 
     report to Congress under section 303(l) containing the 
     recommendations for such closures or consolidations; and
       (4) complete all such closures and consolidations no later 
     than the end of the 2-year period beginning on the date on 
     which the President transmits the report under section 303(l) 
     containing the recommendations for such closures and 
     consolidations.
       (b) Congressional Disapproval.--
       (1) In general.--The Postal Service may not carry out any 
     closure or consolidation recommended by the Commission in a 
     report transmitted from the President under section 303(l) if 
     a joint resolution is enacted, in accordance with section 
     305, disapproving such recommendations of the Commission 
     before the earlier of--
       (A) the end of the 45-day period beginning on the date on 
     which the President transmits such report; or
       (B) the adjournment of the Congress sine die for the 
     session during which such report is transmitted.
       (2) Days of session.--For purposes of paragraph (1) and 
     subsections (a) and (c) of section 305, the days on which 
     either House of Congress is not in session because of an 
     adjournment of more than 3 days to a day certain shall be 
     excluded in the computation of a period.

     SEC. 305. CONGRESSIONAL CONSIDERATION OF COMMISSION REPORT.

       (a) Terms of the Resolution.--For purposes of this title, 
     the term ``joint resolution'' means only a joint resolution 
     which is introduced within the 10-day period beginning on the 
     date on which the President transmits the report to the 
     Congress under section 303(l), and--
       (1) which does not have a preamble;
       (2) the matter after the resolving clause of which is as 
     follows: ``That Congress disapproves the recommendations of 
     the Postal Facility Closure and Consolidation Commission as 
     submitted by the President on ------'', the blank space being 
     filled in with the appropriate date; and
       (3) the title of which is as follows: ``Joint resolution 
     disapproving the recommendations of the Postal Facility 
     Closure and Consolidation Commission.''.
       (b) Referral.--A resolution described in subsection (a) 
     that is introduced in the House of Representatives shall be 
     referred to the Committee on Government Reform of the House 
     of Representatives. A resolution described in subsection (a) 
     introduced in the Senate shall be referred to the Committee 
     on Governmental Affairs of the Senate.
       (c) Discharge.--If the committee to which a resolution 
     described in subsection (a) is referred has not reported such 
     resolution (or an identical resolution) by the end of the 20-
     day period beginning on the date on which the President 
     transmits the report to the Congress under section 303(l), 
     such committee shall be, at the end of such period, 
     discharged from further consideration of such resolution, and 
     such resolution shall be placed on the appropriate calendar 
     of the House involved.
       (d) Consideration.--
       (1) In general.--On or after the third day after the date 
     on which the committee to which such a resolution is referred 
     has reported, or has been discharged (under subsection (c)) 
     from further consideration of, such a resolution, it is in 
     order (even though a previous motion to the same effect has 
     been disagreed to) for any Member of the respective House to 
     move to proceed to the consideration of the resolution. A 
     Member may make the motion only on the day after the calendar 
     day on which the Member announces to the House concerned the 
     Member's intention to make the motion, except that, in the 
     case of the House of Representatives, the motion may be made 
     without such prior announcement if the motion is made by 
     direction of the committee to which the resolution was 
     referred. All points of order against the resolution (and 
     against consideration of the resolution) are waived. The 
     motion is highly privileged in the House of Representatives 
     and is privileged in the Senate and is not debatable. The 
     motion is not subject to amendment, or to a motion to 
     postpone, or to a motion to proceed to the consideration of 
     other business. A motion to reconsider the vote by which the 
     motion is agreed to or disagreed to shall not be in order. If 
     a motion to proceed to the consideration of the resolution is 
     agreed to, the respective House shall immediately proceed to 
     consideration of the joint resolution without intervening 
     motion, order, or other business, and the resolution shall 
     remain the unfinished business of the respective House until 
     disposed of.
       (2) Debate.--Debate on the resolution, and on all debatable 
     motions and appeals in connection therewith, shall be limited 
     to not more than 2 hours, which shall be divided equally 
     between those favoring and those opposing the resolution. An 
     amendment to the resolution is not in order. A motion further 
     to limit debate is in order and not debatable. A motion to 
     postpone, or a motion to proceed to the consideration of 
     other business, or a motion to recommit the resolution is not 
     in order. A motion to reconsider the vote by which the 
     resolution is agreed to or disagreed to is not in order.
       (3) Vote on final passage.--Immediately following the 
     conclusion of the debate on a resolution described in 
     subsection (a) and a single quorum call at the conclusion of 
     the debate if requested in accordance with the rules of the 
     appropriate House, the vote on final passage of the 
     resolution shall occur.
       (4) Appeals.--Appeals from the decisions of the Chair 
     relating to the application of the rules of the Senate or the 
     House of Representatives, as the case may be, to the 
     procedure relating to a resolution described in subsection 
     (a) shall be decided without debate.
       (e) Consideration by Other House.--
       (1) In general.--If, before the passage by one House of a 
     resolution of that House described in subsection (a), that 
     House receives from the other House a resolution described in 
     subsection (a), then the following procedures shall apply:
       (A) The resolution of the other House shall not be referred 
     to a committee and may not be considered in the House 
     receiving it except in the case of final passage as provided 
     in subparagraph (B)(ii).
       (B) With respect to a resolution described in subsection 
     (a) of the House receiving the resolution--
       (i) the procedure in that House shall be the same as if no 
     resolution had been received from the other House; but
       (ii) the vote on final passage shall be on the resolution 
     of the other House.
       (2) Disposition of a resolution.--Upon disposition of the 
     resolution received from the other House, it shall no longer 
     be in order to consider the resolution that originated in the 
     receiving House.
       (f) Rules of the Senate and House.--This section is enacted 
     by Congress--
       (1) as an exercise of the rulemaking power of the Senate 
     and House of Representatives, respectively, and as such it is 
     deemed a part of the rules of each House, respectively, but 
     applicable only with respect to the procedure to be followed 
     in that House in the case of a resolution described in 
     subsection (a), and it supersedes other rules only to the 
     extent that it is inconsistent with such rules; and
       (2) with full recognition of the constitutional right of 
     either House to change the rules (so far as relating to the 
     procedure of that House) at any time, in the same manner, and 
     to the same extent as in the case of any other rule of that 
     House.

     SEC. 306. NONAPPEALIBILITY TO THE POSTAL REGULATORY 
                   COMMISSION.

       The closing or consolidation of any post office or other 
     postal facility under this title may not be appealed to the 
     Postal Regulatory Commission under the provisions of title 
     39, United States Code, including section 404(b)(5) of that 
     title.

           TITLE IV--PROVISIONS RELATING TO FAIR COMPETITION

     SEC. 401. POSTAL SERVICE COMPETITIVE PRODUCTS FUND.

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

     ``Sec. 2011. Provisions relating to competitive products

       ``(a) There is established in the Treasury of the United 
     States a revolving fund, to be called the Postal Service 
     Competitive Products Fund, which shall be available to the 
     Postal Service without fiscal year limitation for the payment 
     of--
       ``(1) costs attributable to competitive products; and
       ``(2) all other costs incurred by the Postal Service, to 
     the extent allocable to competitive products.

     For purposes of this subsection, the term `costs 
     attributable' has the meaning given such term by section 
     3631.
       ``(b) There shall be deposited in the Competitive Products 
     Fund, subject to withdrawal by the Postal Service--
       ``(1) revenues from competitive products;
       ``(2) amounts received from obligations issued by the 
     Postal Service under subsection (e);

[[Page S8145]]

       ``(3) interest and dividends earned on investments of the 
     Competitive Products Fund; and
       ``(4) any other receipts of the Postal Service (including 
     from the sale of assets), to the extent allocable to 
     competitive products.
       ``(c) If the Postal Service determines that the moneys of 
     the Competitive Products Fund are in excess of current needs, 
     it may invest such amounts as it considers appropriate in--
       ``(1) obligations of, or obligations guaranteed by, the 
     Government of the United States; and
       ``(2) in accordance with regulations which the Secretary of 
     the Treasury shall prescribe (by not later than 12 months 
     after the date of enactment of the Postal Accountability and 
     Enhancement Act), such other obligations or securities as it 
     considers appropriate, with the exception of obligations of 
     or securities in any business entity subject to Postal 
     Service regulations other than those regulations applying to 
     the mailing public generally.
       ``(d) The Postal Service may, in its sole discretion, 
     provide that moneys of the Competitive Products Fund be 
     deposited in a Federal Reserve bank or a depository for 
     public funds.
       ``(e)(1) Subject to the limitations specified in section 
     2005(a), the Postal Service is authorized to borrow money and 
     to issue and sell such obligations as it determines necessary 
     to provide for competitive products and deposit such amounts 
     in the Competitive Products Fund, except that the Postal 
     Service may pledge only assets related to the provision of 
     competitive products (as determined under subsection (h) or, 
     for purposes of any period before accounting practices and 
     principles under subsection (h) have been established and 
     applied, the best information available from the Postal 
     Service, including the audited statements required by section 
     2008(e)), and the revenues and receipts from such products, 
     for the payment of the principal of or interest on such 
     obligations, for the purchase or redemption thereof, and for 
     other purposes incidental thereto, including creation of 
     reserve, sinking, and other funds which may be similarly 
     pledged and used, to such extent and in such manner as the 
     Postal Service determines necessary or desirable.
       ``(2) The Postal Service may enter into binding covenants 
     with the holders of such obligations, and with the trustee, 
     if any, under any agreement entered into in connection with 
     the issuance thereof with respect to--
       ``(A) the establishment of reserve, sinking, and other 
     funds;
       ``(B) application and use of revenues and receipts of the 
     Competitive Products Fund;
       ``(C) stipulations concerning the subsequent issuance of 
     obligations or the execution of leases or lease purchases 
     relating to properties of the Postal Service; and
       ``(D) such other matters as the Postal Service considers 
     necessary or desirable to enhance the marketability of such 
     obligations.
       ``(3) Obligations issued by the Postal Service under this 
     subsection--
       ``(A) may not be purchased by the Secretary of the 
     Treasury;
       ``(B) shall not be exempt either as to principal or 
     interest from any taxation now or hereafter imposed by any 
     State or local taxing authority;
       ``(C) shall not be obligations of, nor shall payment of the 
     principal thereof or interest thereon be guaranteed by, the 
     Government of the United States, and the obligations shall so 
     plainly state; and
       ``(D) notwithstanding the provisions of the Federal 
     Financing Bank Act of 1973 or any other provision of law 
     (except as specifically provided by reference to this 
     subparagraph in a law enacted after this subparagraph takes 
     effect), shall not be eligible for purchase by, commitment to 
     purchase by, or sale or issuance to, the Federal Financing 
     Bank.
       ``(4)(A) This paragraph applies with respect to the period 
     beginning on the date of the enactment of this paragraph and 
     ending at the close of the 5-year period which begins on the 
     date on which the Postal Service makes its submission under 
     subsection (h)(1).
       ``(B) During the period described in subparagraph (A), 
     nothing in subparagraph (A) or (D) of paragraph (3) or the 
     last sentence of section 2006(b) shall, with respect to any 
     obligations sought to be issued by the Postal Service under 
     this subsection, be considered to affect such obligations' 
     eligibility for purchase by, commitment to purchase by, or 
     sale or issuance to, the Federal Financing Bank.
       ``(C) The Federal Financing Bank may elect to purchase such 
     obligations under such terms, including rates of interest, as 
     the Bank and the Postal Service may agree, but at a rate of 
     yield no less than the prevailing yield on outstanding 
     marketable securities of comparable maturity issued by 
     entities with the same credit rating as the rating then most 
     recently obtained by the Postal Service under subparagraph 
     (D), as determined by the Bank.
       ``(D) In order to be eligible to borrow under this 
     paragraph, the Postal Service shall first obtain a credit 
     rating from a nationally recognized credit rating 
     organization. Such rating--
       ``(i) shall be determined taking into account only those 
     assets and activities of the Postal Service which are 
     described in section 3634(a)(2) (relating to the Postal 
     Service's assumed taxable income from competitive products); 
     and
       ``(ii) may, before final rules of the Postal Regulatory 
     Commission under subsection (h) are issued (or deemed to have 
     been issued), be based on the best information available from 
     the Postal Service, including the audited statements required 
     by section 2008(e).
       ``(f) The receipts and disbursements of the Competitive 
     Products Fund shall be accorded the same budgetary treatment 
     as is accorded to receipts and disbursements of the Postal 
     Service Fund under section 2009a.
       ``(g) A judgment against the Postal Service or the 
     Government of the United States (or settlement of a claim) 
     shall, to the extent that it arises out of activities of the 
     Postal Service in the provision of competitive products, be 
     paid out of the Competitive Products Fund.
       ``(h)(1) The Postal Service, in consultation with an 
     independent, certified public accounting firm and such other 
     advisors as it considers appropriate, shall develop 
     recommendations regarding--
       ``(A) the accounting practices and principles that should 
     be followed by the Postal Service with the objectives of 
     identifying the capital and operating costs incurred by the 
     Postal Service in providing competitive products, and 
     preventing the cross-subsidization of such products by 
     market-dominant products; and
       ``(B) the substantive and procedural rules that should be 
     followed in determining the Postal Service's assumed Federal 
     income tax on competitive products income for any year 
     (within the meaning of section 3634).

     Such recommendations shall be submitted to the Postal 
     Regulatory Commission no earlier than 6 months, and no later 
     than 12 months, after the effective date of this section.
       ``(2)(A) Upon receiving the recommendations of the Postal 
     Service under paragraph (1), the Commission shall give 
     interested parties, including the Postal Service, users of 
     the mails, and an officer of the Commission who shall be 
     required to represent the interests of the general public, an 
     opportunity to present their views on those recommendations 
     through submission of written data, views, or arguments with 
     or without opportunity for oral presentation, or in such 
     other manner as the Commission considers appropriate.
       ``(B) After due consideration of the views and other 
     information received under subparagraph (A), the Commission 
     shall by rule--
       ``(i) provide for the establishment and application of the 
     accounting practices and principles which shall be followed 
     by the Postal Service;
       ``(ii) provide for the establishment and application of the 
     substantive and procedural rules described in paragraph 
     (1)(B); and
       ``(iii) provide for the submission by the Postal Service to 
     the Postal Regulatory Commission of annual and other periodic 
     reports setting forth such information as the Commission may 
     require.

     Final rules under this subparagraph shall be issued not later 
     than 12 months after the date on which the Postal Service 
     makes its submission to the Commission under paragraph (1) 
     (or by such later date as the Commission and the Postal 
     Service may agree to). If final rules are not issued by the 
     Commission by the deadline under the preceding sentence, the 
     recommendations submitted by the Postal Service under 
     paragraph (1) shall be treated as the final rules. The 
     Commission is authorized to promulgate regulations revising 
     such rules.
       ``(C) Reports described in subparagraph (B)(iii) shall be 
     submitted at such time and in such form, and shall include 
     such information, as the Commission by rule requires. The 
     Commission may, on its own motion or on request of an 
     interested party, initiate proceedings (to be conducted in 
     accordance with such rules as the Commission shall prescribe) 
     to improve the quality, accuracy, or completeness of Postal 
     Service data under such subparagraph whenever it shall appear 
     that--
       ``(i) the quality of the information furnished in those 
     reports has become significantly inaccurate or can be 
     significantly improved; or
       ``(ii) such revisions are, in the judgment of the 
     Commission, otherwise necessitated by the public interest.
       ``(D) A copy of each report described in subparagraph 
     (B)(iii) shall also be transmitted by the Postal Service to 
     the Secretary of the Treasury and the Inspector General of 
     the United States Postal Service.
       ``(i) The Postal Service shall render an annual report to 
     the Secretary of the Treasury concerning the operation of the 
     Competitive Products Fund, in which it shall address such 
     matters as risk limitations, reserve balances, allocation or 
     distribution of moneys, liquidity requirements, and measures 
     to safeguard against losses. A copy of its then most recent 
     report under this subsection shall be included with any other 
     submission that it is required to make to the Postal 
     Regulatory Commission under section 3652(g).''.
       (2) Clerical amendment.--The analysis for chapter 20 of 
     title 39, United States Code, is amended by adding after the 
     item relating to section 2010 the following:

``2011. Provisions relating to competitive products.''.
       (b) Technical and Conforming Amendments.--
       (1) Definition.--Section 2001 of title 39, United States 
     Code, is amended by striking ``and'' at the end of paragraph 
     (1), by redesignating paragraph (2) as paragraph (3), and by 
     inserting after paragraph (1) the following:

[[Page S8146]]

       ``(2) `Competitive Products Fund' means the Postal Service 
     Competitive Products Fund established by section 2011; and''.
       (2) Capital of the postal service.--Section 2002(b) of 
     title 39, United States Code, is amended by striking 
     ``Fund,'' and inserting ``Fund and the balance in the 
     Competitive Products Fund,''.
       (3) Postal service fund.--
       (A) Purposes for which available.--Section 2003(a) of title 
     39, United States Code, is amended by striking ``title.'' and 
     inserting ``title (other than any of the purposes, functions, 
     or powers for which the Competitive Products Fund is 
     available).''.
       (B) Deposits.--Section 2003(b) of title 39, United States 
     Code, is amended by striking ``There'' and inserting ``Except 
     as otherwise provided in section 2011, there''.
       (4) Relationship between the treasury and the postal 
     service.--Section 2006 of title 39, United States Code, is 
     amended--
       (A) in subsection (b), by adding at the end the following: 
     ``Nothing in this chapter shall be considered to permit or 
     require the Secretary of the Treasury to purchase any 
     obligations of the Postal Service other than those issued 
     under section 2005.''; and
       (B) in subsection (c), by inserting ``under section 2005'' 
     before ``shall be obligations''.

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

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

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

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

     SEC. 403. UNFAIR COMPETITION PROHIBITED.

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

     ``Sec. 404a. Specific limitations

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

``404a. Specific limitations.''.

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

       (a) In General.--Section 409 of title 39, United States 
     Code, is amended by striking subsections (d) and (e) and 
     inserting the following:
       ``(d)(1) For purposes of the provisions of law cited in 
     paragraphs (2)(A) and (2)(B), respectively, the Postal 
     Service--
       ``(A) shall be considered to be a `person', as used in the 
     provisions of law involved; and
       ``(B) shall not be immune under any other doctrine of 
     sovereign immunity from suit in Federal court by any person 
     for any violation of any of those provisions of law by any 
     officer or employee of the Postal Service.
       ``(2) This subsection applies with respect to--
       ``(A) the Act of July 5, 1946 (commonly referred to as the 
     `Trademark Act of 1946' (15 U.S.C. 1051 and following)); and
       ``(B) the provisions of section 5 of the Federal Trade 
     Commission Act to the extent that such section 5 applies to 
     unfair or deceptive acts or practices.
       ``(e)(1) To the extent that the Postal Service, or other 
     Federal agency acting on behalf of or in concert with the 
     Postal Service, engages in conduct with respect to any 
     product which is not reserved to the United States under 
     section 1696 of title 18, the Postal Service or other Federal 
     agency (as the case may be)--
       ``(A) shall not be immune under any doctrine of sovereign 
     immunity from suit in Federal court by any person for any 
     violation of Federal law by such agency or any officer or 
     employee thereof; and
       ``(B) shall be considered to be a person (as defined in 
     subsection (a) of the first section of the Clayton Act) for 
     purposes of--
       ``(i) the antitrust laws (as defined in such subsection); 
     and
       ``(ii) section 5 of the Federal Trade Commission Act to the 
     extent that such section 5 applies to unfair methods of 
     competition.

     For purposes of the preceding sentence, any private carriage 
     of mail allowable by virtue of section 601 shall not be 
     considered a service reserved to the United States under 
     section 1696 of title 18.
       ``(2) No damages, interest on damages, costs or attorney's 
     fees may be recovered under the antitrust laws (as so 
     defined) from the Postal Service or any officer or employee 
     thereof acting in an official capacity for any conduct with 
     respect to a product in the market-dominant category of mail.
       ``(3) This subsection shall not apply with respect to 
     conduct occurring before the date of the enactment of this 
     subsection.
       ``(f) To the extent that the Postal Service engages in 
     conduct with respect to the provision of competitive 
     products, it shall be considered a person for the purposes of 
     the Federal bankruptcy laws.
       ``(g)(1) Each building constructed or altered by the Postal 
     Service shall be constructed or altered, to the maximum 
     extent feasible as determined by the Postal Service, in 
     compliance with one of the nationally recognized model 
     building codes and with other applicable nationally 
     recognized codes.
       ``(2) Each building constructed or altered by the Postal 
     Service shall be constructed or altered only after 
     consideration of all requirements (other than procedural 
     requirements) of zoning laws, land use laws, and applicable 
     environmental laws of a State or subdivision of a State which 
     would apply to the building if it were not a building 
     constructed or altered by an establishment of the Government 
     of the United States.
       ``(3) For purposes of meeting the requirements of 
     paragraphs (1) and (2) with respect to a building, the Postal 
     Service shall--
       ``(A) in preparing plans for the building, consult with 
     appropriate officials of the State or political subdivision, 
     or both, in which the building will be located;
       ``(B) upon request, submit such plans in a timely manner to 
     such officials for review by such officials for a reasonable 
     period of time not exceeding 30 days; and
       ``(C) permit inspection by such officials during 
     construction or alteration of the building, in accordance 
     with the customary schedule of inspections for construction 
     or alteration of buildings in the locality, if such officials 
     provide to the Postal Service--
       ``(i) a copy of such schedule before construction of the 
     building is begun; and
       ``(ii) reasonable notice of their intention to conduct any 
     inspection before conducting such inspection.

     Nothing in this subsection shall impose an obligation on any 
     State or political subdivision to take any action under the 
     preceding sentence, nor shall anything in this subsection 
     require the Postal Service or any of its contractors to pay 
     for any action taken by a State or political subdivision to 
     carry out this subsection (including reviewing plans, 
     carrying out on-site inspections, issuing building permits, 
     and making recommendations).
       ``(4) Appropriate officials of a State or a political 
     subdivision of a State may make recommendations to the Postal 
     Service concerning measures necessary to meet the 
     requirements of paragraphs (1) and (2). Such officials may 
     also make recommendations to the Postal Service concerning 
     measures which should be taken in the construction or 
     alteration of the building to take into account local 
     conditions. The Postal Service shall give due consideration 
     to any such recommendations.
       ``(5) In addition to consulting with local and State 
     officials under paragraph (3), the Postal Service shall 
     establish procedures for soliciting, assessing, and 
     incorporating local community input on real property and land 
     use decisions.

[[Page S8147]]

       ``(6) For purposes of this subsection, the term `State' 
     includes the District of Columbia, the Commonwealth of Puerto 
     Rico, and a territory or possession of the United States.
       ``(h)(1) Notwithstanding any other provision of law, legal 
     representation may not be furnished by the Department of 
     Justice to the Postal Service in any action, suit, or 
     proceeding arising, in whole or in part, under any of the 
     following:
       ``(A) Subsection (d) or (e) of this section.
       ``(B) Subsection (f) or (g) of section 504 (relating to 
     administrative subpoenas by the Postal Regulatory 
     Commission).
       ``(C) Section 3663 (relating to appellate review).

     The Postal Service may, by contract or otherwise, employ 
     attorneys to obtain any legal representation that it is 
     precluded from obtaining from the Department of Justice under 
     this paragraph.
       ``(2) In any circumstance not covered by paragraph (1), the 
     Department of Justice shall, under section 411, furnish the 
     Postal Service such legal representation as it may require, 
     except that, with the prior consent of the Attorney General, 
     the Postal Service may, in any such circumstance, employ 
     attorneys by contract or otherwise to conduct litigation 
     brought by or against the Postal Service or its officers or 
     employees in matters affecting the Postal Service.
       ``(3)(A) In any action, suit, or proceeding in a court of 
     the United States arising in whole or in part under any of 
     the provisions of law referred to in subparagraph (B) or (C) 
     of paragraph (1), and to which the Commission is not 
     otherwise a party, the Commission shall be permitted to 
     appear as a party on its own motion and as of right.
       ``(B) The Department of Justice shall, under such terms and 
     conditions as the Commission and the Attorney General shall 
     consider appropriate, furnish the Commission such legal 
     representation as it may require in connection with any such 
     action, suit, or proceeding, except that, with the prior 
     consent of the Attorney General, the Commission may employ 
     attorneys by contract or otherwise for that purpose.
       ``(i) A judgment against the Government of the United 
     States arising out of activities of the Postal Service shall 
     be paid by the Postal Service out of any funds available to 
     the Postal Service, subject to the restriction specified in 
     section 2011(g).''.
       (b) Technical Amendment.--Section 409(a) of title 39, 
     United States Code, is amended by striking ``Except as 
     provided in section 3628 of this title,'' and inserting 
     ``Except as otherwise provided in this title,''.

     SEC. 405. INTERNATIONAL POSTAL ARRANGEMENTS.

       (a) In General.--Section 407 of title 39, United States 
     Code, is amended to read as follows:

     ``Sec. 407. International postal arrangements

       ``(a) It is the policy of the United States--
       ``(1) to promote and encourage communications between 
     peoples by efficient operation of international postal 
     services and other international delivery services for 
     cultural, social, and economic purposes;
       ``(2) to promote and encourage unrestricted and undistorted 
     competition in the provision of international postal services 
     and other international delivery services, except where 
     provision of such services by private companies may be 
     prohibited by law of the United States;
       ``(3) to promote and encourage a clear distinction between 
     governmental and operational responsibilities with respect to 
     the provision of international postal services and other 
     international delivery services by the Government of the 
     United States and by intergovernmental organizations of which 
     the United States is a member; and
       ``(4) to participate in multilateral and bilateral 
     agreements with other countries to accomplish these 
     objectives.
       ``(b)(1) The Secretary of State shall be responsible for 
     formulation, coordination, and oversight of foreign policy 
     related to international postal services and other 
     international delivery services, and shall have the power to 
     conclude treaties, conventions and amendments related to 
     international postal services and other international 
     delivery services, except that the Secretary may not conclude 
     any treaty, convention, or other international agreement 
     (including those regulating international postal services) if 
     such treaty, convention, or agreement would, with respect to 
     any competitive product, grant an undue or unreasonable 
     preference to the Postal Service, a private provider of 
     international postal or delivery services, or any other 
     person.
       ``(2) In carrying out the responsibilities specified in 
     paragraph (1), the Secretary of State shall exercise primary 
     authority for the conduct of foreign policy with respect to 
     international postal services and international delivery 
     services, including the determination of United States 
     positions and the conduct of United States participation in 
     negotiations with foreign governments and international 
     bodies. In exercising this authority, the Secretary--
       ``(A) shall coordinate with other agencies as appropriate, 
     and in particular, shall give full consideration to the 
     authority vested by law or Executive order in the Postal 
     Regulatory Commission, the Department of Commerce, the 
     Department of Transportation, and the Office of the United 
     States Trade Representative in this area;
       ``(B) shall maintain continuing liaison with other 
     executive branch agencies concerned with postal and delivery 
     services;
       ``(C) shall maintain continuing liaison with the Committee 
     on Government Reform of the House of Representatives and the 
     Committee on Governmental Affairs of the Senate;
       ``(D) shall maintain appropriate liaison with both 
     representatives of the Postal Service and representatives of 
     users and private providers of international postal services 
     and other international delivery services to keep informed of 
     their interests and problems, and to provide such assistance 
     as may be needed to ensure that matters of concern are 
     promptly considered by the Department of State or (if 
     applicable, and to the extent practicable) other executive 
     branch agencies; and
       ``(E) shall assist in arranging meetings of such public 
     sector advisory groups as may be established to advise the 
     Department of State and other executive branch agencies in 
     connection with international postal services and 
     international delivery services.
       ``(3) The Secretary of State shall establish an advisory 
     committee (within the meaning of the Federal Advisory 
     Committee Act) to perform such functions as the Secretary 
     considers appropriate in connection with carrying out 
     subparagraphs (A) through (D) of paragraph (2).
       ``(c)(1) Before concluding any treaty, convention, or 
     amendment that establishes a rate or classification for a 
     product subject to subchapter I of chapter 36, the Secretary 
     of State shall request the Postal Regulatory Commission to 
     submit a decision on whether such rate or classification is 
     consistent with the standards and criteria established by the 
     Commission under section 3622.
       ``(2) The Secretary shall ensure that each treaty, 
     convention, or amendment concluded under subsection (b) is 
     consistent with a decision of the Commission adopted under 
     paragraph (1), except if, or to the extent, the Secretary 
     determines, by written order, that considerations of foreign 
     policy or national security require modification of the 
     Commission's decision.
       ``(d) Nothing in this section shall be considered to 
     prevent the Postal Service from entering into such commercial 
     or operational contracts related to providing international 
     postal services and other international delivery services as 
     it deems appropriate, except that--
       ``(1) any such contract made with an agency of a foreign 
     government (whether under authority of this subsection or 
     otherwise) shall be solely contractual in nature and may not 
     purport to be international law; and
       ``(2) a copy of each such contract between the Postal 
     Service and an agency of a foreign government shall be 
     transmitted to the Secretary of State and the Postal 
     Regulatory Commission not later than the effective date of 
     such contract.
       ``(e)(1) With respect to shipments of international mail 
     that are competitive products within the meaning of section 
     3631 that are exported or imported by the Postal Service, the 
     Customs Service and other appropriate Federal agencies shall 
     apply the customs laws of the United States and all other 
     laws relating to the importation or exportation of such 
     shipments in the same manner to both shipments by the Postal 
     Service and similar shipments by private companies.
       ``(2) For purposes of this subsection, the term `private 
     company' means a private company substantially owned or 
     controlled by persons who are citizens of the United States.
       ``(3) In exercising the authority pursuant to subsection 
     (b) to conclude new treaties, conventions and amendments 
     related to international postal services and to renegotiate 
     such treaties, conventions and amendments, the Secretary of 
     State shall, to the maximum extent practicable, take such 
     measures as are within the Secretary's control to encourage 
     the governments of other countries to make available to the 
     Postal Service and private companies a range of 
     nondiscriminatory customs procedures that will fully meet the 
     needs of all types of American shippers. The Secretary of 
     State shall consult with the United States Trade 
     Representative and the Commissioner of Customs in carrying 
     out this paragraph.
       ``(4) The provisions of this subsection shall take effect 6 
     months after the date of the enactment of this subsection or 
     such earlier date as the Customs Service may determine in 
     writing.''.
       (b) Effective Date.--Notwithstanding any provision of the 
     amendment made by subsection (a), the authority of the United 
     States Postal Service to establish the rates of postage or 
     other charges on mail matter conveyed between the United 
     States and other countries shall remain available to the 
     Postal Service until--
       (1) with respect to market-dominant products, the date as 
     of which the regulations promulgated under section 3622 of 
     title 39, United States Code (as amended by section 201(a)) 
     take effect; and
       (2) with respect to competitive products, the date as of 
     which the regulations promulgated under section 3633 of title 
     39, United States Code (as amended by section 202) take 
     effect.

     SEC. 406. CHANGE-OF-ADDRESS ORDER INVOLVING A COMMERCIAL MAIL 
                   RECEIVING AGENCY.

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

[[Page S8148]]

                      ``SUBCHAPTER VI--GENERAL''.

       (b) Change-of-Address Order Involving a Commercial Mail 
     Receiving Agency.--Subchapter VI of chapter 36 of title 39, 
     United States Code (as so redesignated by subsection (a)) is 
     amended by adding at the end the following:

     ``Sec. 3686. Change-of-address order involving a commercial 
       mail receiving agency

       ``(a) For the purpose of this section, the term `commercial 
     mail receiving agency' or `CMRA' means a private business 
     that acts as the mail receiving agent for specific clients.
       ``(b) Upon termination of an agency relationship between an 
     addressee and a commercial mail receiving agency--
       ``(1) the addressee or, if authorized to do so, the CMRA 
     may file a change-of-address order with the Postal Service 
     with respect to such addressee;
       ``(2) a change-of-address order so filed shall, to the 
     extent practicable, be given full force and effect; and
       ``(3) any mail for the addressee that is delivered to the 
     CMRA after the filing of an appropriate order under this 
     subsection shall be subject to subsection (c).
       ``(c) Mail described in subsection (b)(3) shall, if marked 
     for forwarding and remailed by the CMRA, be forwarded by the 
     Postal Service in the same manner as, and subject to the same 
     terms and conditions (including limitations on the period of 
     time for which a change-of-address order shall be given 
     effect) as apply to, mail forwarded directly by the Postal 
     Service to the addressee.''.

     SEC. 407. EXCEPTION FOR COMPETITIVE PRODUCTS.

       (a) In General.--Section 403(c) of title 39, United States 
     Code, is amended by striking ``user.'' and inserting ``user, 
     except that this subsection shall not apply to competitive 
     products.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply with respect to services, classifications, rates, 
     and fees, to the extent provided or applicable (as the case 
     may be) on or after the date as of which the regulations 
     promulgated under section 3633 of title 39, United States 
     Code (as amended by section 202) take effect.

                      TITLE V--GENERAL PROVISIONS

     SEC. 501. QUALIFICATION REQUIREMENTS FOR GOVERNORS.

       (a) In General.--Section 202(a) of title 39, United States 
     Code, is amended by striking ``(a)'' and inserting ``(a)(1)'' 
     and by striking the fourth sentence and inserting the 
     following: ``The Governors shall represent the public 
     interest generally, and at least 4 of the Governors shall be 
     chosen solely on the basis of their demonstrated ability in 
     managing organizations or corporations (in either the public 
     or private sector) of substantial size; for purposes of this 
     sentence, an organization or corporation shall be considered 
     to be of substantial size if it employs at least 50,000 
     employees. The Governors shall not be representatives of 
     specific interests using the Postal Service, and may be 
     removed only for cause.''.
       (b) Consultation Requirement.--Section 202(a) of title 39, 
     United States Code, is amended by adding at the end the 
     following:
       ``(2) In selecting the individuals described in paragraph 
     (1) for nomination for appointment to the position of 
     Governor, the President should consult with the Speaker of 
     the House of Representatives, the minority leader of the 
     House of Representatives, the majority leader of the Senate, 
     and the minority leader of the Senate.''.
       (c) Restriction.--Section 202(b) of title 39, United States 
     Code, is amended by striking ``(b)'' and inserting 
     ``(b)(1)'', and by adding at the end the following:
       ``(2)(A) Notwithstanding any other provision of this 
     section, in the case of the office of the Governor the term 
     of which is the first one scheduled to expire at least 4 
     months after the date of the enactment of this paragraph--
       ``(i) such office may not, in the case of any person 
     commencing service after that expiration date, be filled by 
     any person other than an individual chosen from among persons 
     nominated for such office with the unanimous concurrence of 
     all labor organizations described in section 206(a)(1); and
       ``(ii) instead of the term that would otherwise apply under 
     the first sentence of paragraph (1), the term of any person 
     so appointed to such office shall be 3 years.
       ``(B) Except as provided in subparagraph (A), an 
     appointment under this paragraph shall be made in conformance 
     with all provisions of this section that would otherwise 
     apply.''.
       (d) Applicability.--The amendment made by subsection (a) 
     shall not affect the appointment or tenure of any person 
     serving as a Governor of the Board of Governors of the United 
     States Postal Service pursuant to an appointment made before 
     the date of the enactment of this Act, or, except as provided 
     in the amendment made by subsection (c), any nomination made 
     before that date; however, when any such office becomes 
     vacant, the appointment of any person to fill that office 
     shall be made in accordance with such amendment. The 
     requirement set forth in the fourth sentence of section 
     202(a)(1) of title 39, United States Code (as amended by 
     subsection (a)) shall be met beginning not later than 9 years 
     after the date of the enactment of this Act.

     SEC. 502. OBLIGATIONS.

       (a) Purposes for Which Obligations May Be Issued.--The 
     first sentence of section 2005(a)(1) of title 39, United 
     States Code, is amended by striking ``title.'' and inserting 
     ``title, other than any of the purposes for which the 
     corresponding authority is available to the Postal Service 
     under section 2011.''.
       (b) Increase Relating to Obligations Issued for Capital 
     Improvements.--The third sentence of section 2005(a)(1) of 
     title 39, United States Code, is amended by striking 
     ``$2,000,000,000'' and inserting ``$3,000,000,000''.
       (c) Increase in Maximum Outstanding Obligations 
     Allowable.--Paragraph (2) of section 2005(a) of title 39, 
     United States Code, is amended--
       (1) by striking ``and'' at the end of subparagraph (B); and
       (2) by striking subparagraph (C) and inserting the 
     following:
       ``(C) $15,000,000,000 for each of fiscal years 1992 through 
     2002; and
       ``(D) $25,000,000,000 for fiscal year 2003 and each fiscal 
     year thereafter.''.
       (d) Limitations on Obligations Outstanding.--
       (1) In general.--Subsection (a) of section 2005 of title 
     39, United States Code, is amended by adding at the end the 
     following:
       ``(3) For purposes of applying the respective limitations 
     under this subsection, the aggregate amount of obligations 
     issued by the Postal Service which are outstanding as of any 
     one time, and the net increase in the amount of obligations 
     outstanding issued by the Postal Service for the purpose of 
     capital improvements or for the purpose of defraying 
     operating expenses of the Postal Service in any fiscal year, 
     shall be determined by aggregating the relevant obligations 
     issued by the Postal Service under this section with the 
     relevant obligations issued by the Postal Service under 
     section 2011.''.
       (2) Conforming amendment.--The second sentence of section 
     2005(a)(1) of title 39, United States Code, is amended by 
     striking ``any such obligations'' and inserting ``obligations 
     issued by the Postal Service which may be''.
       (e) Amounts Which May Be Pledged, Etc.--
       (1) Obligations to which provisions apply.--The first 
     sentence of section 2005(b) of title 39, United States Code, 
     is amended by striking ``such obligations,'' and inserting 
     ``obligations issued by the Postal Service under this 
     section,''.
       (2) Assets, revenues, and receipts to which provisions 
     apply.--Subsection (b) of section 2005 of title 39, United 
     States Code, is amended by striking ``(b)'' and inserting 
     ``(b)(1)'', and by adding at the end the following:
       ``(2) Notwithstanding any other provision of this section--
       ``(A) the authority to pledge assets of the Postal Service 
     under this subsection shall be available only to the extent 
     that such assets are not related to the provision of 
     competitive products (as determined under section 2011(h) or, 
     for purposes of any period before accounting practices and 
     principles under section 2011(h) have been established and 
     applied, the best information available from the Postal 
     Service, including the audited statements required by section 
     2008(e)); and
       ``(B) any authority under this subsection relating to the 
     pledging or other use of revenues or receipts of the Postal 
     Service shall be available only to the extent that they are 
     not revenues or receipts of the Competitive Products Fund.''.

     SEC. 503. PRIVATE CARRIAGE OF LETTERS.

       (a) In General.--Section 601 of title 39, United States 
     Code, is amended by striking subsection (b) and inserting the 
     following:
       ``(b) A letter may also be carried out of the mails when--
       ``(1) the amount paid for the private carriage of the 
     letter is at least the amount equal to 6 times the rate then 
     currently charged for the 1st ounce of a single-piece first 
     class letter;
       ``(2) the letter weighs at least 12\1/2\ ounces; or
       ``(3) such carriage is within the scope of services 
     described by regulations of the United States Postal Service 
     (as in effect on July 1, 2001) that purport to permit private 
     carriage by suspension of the operation of this section (as 
     then in effect).
       ``(c) Any regulations necessary to carry out this section 
     shall be promulgated by the Postal Regulatory Commission.''.
       (b) Effective Date.--This section shall take effect on the 
     date as of which the regulations promulgated under section 
     3633 of title 39, United States Code (as amended by section 
     202) take effect.

     SEC. 504. RULEMAKING AUTHORITY.

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

     SEC. 505. NONINTERFERENCE WITH COLLECTIVE BARGAINING 
                   AGREEMENTS, ETC.

       (a) Noninterference With Collective Bargaining 
     Agreements.--Nothing in this Act or any amendment made by 
     this Act shall restrict, expand, or otherwise affect any of 
     the rights, privileges, or benefits of either employees of or 
     labor organizations representing employees of the United 
     States Postal Service under chapter 12 of title 39, United 
     States Code, the National Labor Relations Act, any handbook 
     or manual affecting employee labor relations within the

[[Page S8149]]

     United States Postal Service, or any collective bargaining 
     agreement.
       (b) Free Mailing Privileges Continue Unchanged.--Nothing in 
     this Act or any amendment made by this Act shall affect any 
     free mailing privileges accorded under section 3217 or 
     sections 3403 through 3406 of title 39, United States Code.

     SEC. 506. BONUS AUTHORITY.

       Title 39, United States Code, is amended by adding after 
     section 3686 (as added by section 406(b)) the following:

     ``Sec. 3687. Bonus authority

       ``(a) In General.--The Postal Service may establish one or 
     more programs to provide bonuses or other rewards to officers 
     and employees of the Postal Service to achieve the objectives 
     of this chapter.
       ``(b) Waiver of Limitation on Compensation.--
       ``(1) In general.--Under any such program, the Postal 
     Service may award a bonus or other reward in excess of the 
     limitation set forth in the last sentence of section 1003(a), 
     if such program has been approved under paragraph (2).
       ``(2) Approval process.--If the Postal Service wishes to 
     have the authority, under any program described in subsection 
     (a), to award bonuses or other rewards in excess of the 
     limitation referred to in paragraph (1)--
       ``(A) the Postal Service shall make an appropriate request 
     to the Postal Regulatory Commission, in such form and manner 
     as the Commission requires; and
       ``(B) the Postal Regulatory Commission shall approve any 
     such request if it finds that the program is likely to 
     achieve the objectives of this chapter.
       ``(3) Revocation authority.--If the Postal Regulatory 
     Commission finds that a program previously approved under 
     paragraph (2) is not achieving the objectives of this 
     chapter, the Commission may revoke or suspend the authority 
     of the Postal Service to continue such program until such 
     time as appropriate corrective measures have, in the judgment 
     of the Commission, been taken.
       ``(c) Reporting Requirement Relating to Bonuses or Other 
     Rewards.--Included in its comprehensive statement under 
     section 2401(e) for any period shall be--
       ``(1) the name of each person receiving a bonus or other 
     reward during such period which would not have been allowable 
     but for the provisions of subsection (a)(2);
       ``(2) the amount of the bonus or other reward; and
       ``(3) the amount by which the limitation referred to in 
     subsection (a)(2) was exceeded as a result of such bonus or 
     other reward.''.

                TITLE VI--ENHANCED REGULATORY COMMISSION

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

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

               ``CHAPTER 5--POSTAL REGULATORY COMMISSION

``Sec.
``501. Establishment.
``502. Commissioners.
``503. Rules; regulations; procedures.
``504. Administration.

     ``Sec. 501. Establishment

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

     ``Sec. 502. Commissioners

       ``(a) The Postal Regulatory Commission is composed of 5 
     Commissioners, appointed by the President, by and with the 
     advice and consent of the Senate. The Commissioners shall be 
     chosen solely on the basis of their technical qualifications, 
     professional standing, and demonstrated expertise in 
     economics, accounting, law, or public administration, and may 
     be removed by the President only for cause. Each individual 
     appointed to the Commission shall have the qualifications and 
     expertise necessary to carry out the enhanced 
     responsibilities accorded Commissioners under the Postal 
     Accountability and Enhancement Act. Not more than 3 of the 
     Commissioners may be adherents of the same political party.
       ``(b) No Commissioner shall be financially interested in 
     any enterprise in the private sector of the economy engaged 
     in the delivery of mail matter.
       ``(c) A Commissioner may continue to serve after the 
     expiration of his term until his successor has qualified, 
     except that a Commissioner may not so continue to serve for 
     more than 1 year after the date upon which his term otherwise 
     would expire under subsection (f).
       ``(d) One of the Commissioners shall be designated as 
     Chairman by, and shall serve in the position of Chairman at 
     the pleasure of, the President.
       ``(e) The Commissioners shall by majority vote designate a 
     Vice Chairman of the Commission. The Vice Chairman shall act 
     as Chairman of the Commission in the absence of the Chairman.
       ``(f) The Commissioners shall serve for terms of 6 
     years.'';
       (2) by striking, in subchapter I of chapter 36 (as in 
     effect before the amendment made by section 201(c)), the 
     heading for such subchapter I and all that follows through 
     section 3602; and
       (3) by redesignating sections 3603 and 3604 as sections 503 
     and 504, respectively, and transferring such sections to the 
     end of chapter 5 (as inserted by paragraph (1)).
       (b) Applicability.--The amendment made by subsection (a)(1) 
     shall not affect the appointment or tenure of any person 
     serving as a Commissioner on the Postal Regulatory Commission 
     (as so redesignated by section 604) pursuant to an 
     appointment made before the date of the enactment of this Act 
     or any nomination made before that date, but, when any such 
     office becomes vacant, the appointment of any person to fill 
     that office shall be made in accordance with such amendment.
       (c) Clerical Amendment.--The analysis for part I of title 
     39, United States Code, is amended by inserting after the 
     item relating to chapter 4 the following:

  ``5. Postal Regulatory Commission...........................501''....

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

       Section 504 of title 39, United States Code (as so 
     redesignated by section 601) is amended by adding at the end 
     the following:
       ``(f)(1) Any Commissioner of the Postal Regulatory 
     Commission, any administrative law judge appointed by the 
     Commission under section 3105 of title 5, and any employee of 
     the Commission designated by the Commission may administer 
     oaths, examine witnesses, take depositions, and receive 
     evidence.
       ``(2) The Chairman of the Commission, any Commissioner 
     designated by the Chairman, and any administrative law judge 
     appointed by the Commission under section 3105 of title 5 
     may, with respect to any proceeding conducted by the 
     Commission under this title--
       ``(A) issue subpoenas requiring the attendance and 
     presentation of testimony by, or the production of 
     documentary or other evidence in the possession of, any 
     covered person; and
       ``(B) order the taking of depositions and responses to 
     written interrogatories by a covered person.

     The written concurrence of a majority of the Commissioners 
     then holding office shall, with respect to each subpoena 
     under subparagraph (A), be required in advance of its 
     issuance.
       ``(3) In the case of contumacy or failure to obey a 
     subpoena issued under this subsection, upon application by 
     the Commission, the district court of the United States for 
     the district in which the person to whom the subpoena is 
     addressed resides or is served may issue an order requiring 
     such person to appear at any designated place to testify or 
     produce documentary or other evidence. Any failure to obey 
     the order of the court may be punished by the court as a 
     contempt thereof.
       ``(4) For purposes of this subsection, the term `covered 
     person' means an officer, employee, agent, or contractor of 
     the Postal Service.
       ``(g)(1) If the Postal Service determines that any document 
     or other matter it provides to the Postal Regulatory 
     Commission pursuant to a subpoena issued under subsection 
     (f), or otherwise at the request of the Commission in 
     connection with any proceeding or other purpose under this 
     title, contains information which is described in section 
     410(c) of this title, or exempt from public disclosure under 
     section 552(b) of title 5, the Postal Service shall, at the 
     time of providing such matter to the Commission, notify the 
     Commission, in writing, of its determination (and the reasons 
     therefor).
       ``(2) No officer or employee of the Commission may, with 
     respect to any information as to which the Commission has 
     been notified under paragraph (1)--
       ``(A) use such information for purposes other than the 
     purposes for which it is supplied; or
       ``(B) permit anyone who is not an officer or employee of 
     the Commission to have access to any such information.
       ``(3) Paragraph (2) shall not prevent information from 
     being furnished under any process of discovery established 
     under this title in connection with a proceeding under this 
     title. The Commission shall, by regulations based on rule 
     26(c) of the Federal Rules of Civil Procedure, establish 
     procedures for ensuring appropriate confidentiality for any 
     information furnished under the preceding sentence.''.

     SEC. 603. APPROPRIATIONS FOR THE POSTAL REGULATORY 
                   COMMISSION.

       (a) Authorization of Appropriations.--Subsection (d) of 
     section 504 of title 39, United States Code (as so 
     redesignated by section 601) is amended to read as follows:
       ``(d) There are authorized to be appropriated, out of the 
     Postal Service Fund, such sums as may be necessary for the 
     Postal Regulatory Commission. In requesting an appropriation 
     under this subsection for a fiscal year, the Commission shall 
     prepare and submit to the Congress under section 2009 a 
     budget of the Commission's expenses, including expenses for 
     facilities, supplies, compensation, and employee benefits.''.
       (b) Budget Program.--
       (1) In general.--The next to last sentence of section 2009 
     of title 39, United States Code, is amended to read as 
     follows: ``The budget program shall also include separate 
     statements of the amounts which (1) the Postal Service 
     requests to be appropriated under subsections (b) and (c) of 
     section 2401, (2) the Office of Inspector General of the 
     United States Postal Service requests to be appropriated, out 
     of the Postal Service Fund, under section 8G(f) of the 
     Inspector General Act of 1978, and (3) the Postal Regulatory 
     Commission requests to be appropriated, out of the Postal 
     Service Fund, under section 504(d) of this title.''.
       (2) Conforming amendment.--Section 2003(e)(1) of title 39, 
     United States Code, is

[[Page S8150]]

     amended by striking the first sentence and inserting the 
     following: ``The Fund shall be available for the payment of 
     (A) all expenses incurred by the Postal Service in carrying 
     out its functions as provided by law, subject to the same 
     limitation as set forth in the parenthetical matter under 
     subsection (a); (B) all expenses of the Postal Regulatory 
     Commission, subject to the availability of amounts 
     appropriated pursuant to section 504(d); and (C) all expenses 
     of the Office of Inspector General, subject to the 
     availability of amounts appropriated pursuant to section 
     8G(f) of the Inspector General Act of 1978.''.
       (c) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     apply with respect to fiscal years beginning on or after 
     October 1, 2002.
       (2) Savings provision.--The provisions of title 39, United 
     States Code, that are amended by this section shall, for 
     purposes of any fiscal year before the first fiscal year to 
     which the amendments made by this section apply, continue to 
     apply in the same way as if this section had never been 
     enacted.

     SEC. 604. REDESIGNATION OF THE POSTAL RATE COMMISSION.

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

                     TITLE VII--INSPECTORS GENERAL

     SEC. 701. INSPECTOR GENERAL OF THE POSTAL REGULATORY 
                   COMMISSION.

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

     SEC. 702. INSPECTOR GENERAL OF THE UNITED STATES POSTAL 
                   SERVICE TO BE APPOINTED BY THE PRESIDENT.

       (a) Definitional Amendments to the Inspector General Act of 
     1978.--Section 11 of the Inspector General Act of 1978 is 
     amended--
       (1) in paragraph (1)--
       (A) by striking ``and'' before ``the chief executive 
     officer of the Resolution Trust Corporation'';
       (B) by striking ``and'' before ``the Chairperson of the 
     Federal Deposit Insurance Corporation''; and
       (C) by inserting ``the Postmaster General;'' after ``Social 
     Security Administration;''; and
       (2) in paragraph (2)--
       (A) by striking ``or'' before ``the Veterans' 
     Administration''; and
       (B) by inserting ``the United States Postal Service,'' 
     after ``Social Security Administration,''.
       (b) Special Provisions Concerning the United States Postal 
     Service.--The Inspector General Act of 1978 is amended--
       (1) by redesignating sections 8G (as amended by section 
     701(a)), 8H, and 8I as sections 8H through 8J, respectively; 
     and
       (2) by inserting after section 8F the following:


    ``special provisions concerning the united states postal service

       ``Sec. 8G. (a) Notwithstanding the last two sentences of 
     section 3(a), the Inspector General of the United States 
     Postal Service shall report to and be under the general 
     supervision of the Postmaster General, but shall not report 
     to, or be subject to supervision by, any other officer or 
     employee of the United States Postal Service or its Board of 
     Governors. No such officer or employee (including the 
     Postmaster General) or member of such Board shall prevent or 
     prohibit the Inspector General from initiating, carrying out, 
     or completing any audit or investigation, or from issuing any 
     subpoena during the course of any audit or investigation.
       ``(b) In carrying out the duties and responsibilities 
     specified in this Act, the Inspector General of the United 
     States Postal Service shall have oversight responsibility for 
     all activities of the Postal Inspection Service, including 
     any internal investigation performed by the Postal Inspection 
     Service. The Chief Postal Inspector shall promptly report the 
     significant activities being carried out by the Postal 
     Inspection Service to such Inspector General.
       ``(c) Any report required to be transmitted by the 
     Postmaster General to the appropriate committees or 
     subcommittees of the Congress under section 5(d) shall also 
     be transmitted, within the 7-day period specified under such 
     section, to the Committee on Government Reform of the House 
     of Representatives and the Committee on Governmental Affairs 
     of the Senate.
       ``(d) Notwithstanding any provision of paragraph (7) or (8) 
     of section 6(a), the Inspector General of the United States 
     Postal Service may select, appoint, and employ such officers 
     and employees as may be necessary for carrying out the 
     functions, powers and duties of the Office of Inspector 
     General and to obtain the temporary or intermittent services 
     of experts or consultants or an organization of experts or 
     consultants, subject to the applicable laws and regulations 
     that govern such selections, appointments, and employment, 
     and the obtaining of such services, within the United States 
     Postal Service.
       ``(e) Nothing in this Act shall restrict, eliminate, or 
     otherwise adversely affect any of the rights, privileges, or 
     benefits of employees of the United States Postal Service, or 
     labor organizations representing employees of the United 
     States Postal Service, under chapter 12 of title 39, United 
     States Code, the National Labor Relations Act, any handbook 
     or manual affecting employee labor relations with the United 
     States Postal Service, or any collective bargaining 
     agreement.
       ``(f) There are authorized to be appropriated, out of the 
     Postal Service Fund, such sums as may be necessary for the 
     Office of Inspector General of the United States Postal 
     Service.
       ``(g) As used in this section, `Board of Governors' and 
     `Board' each has the meaning given it by section 102 of title 
     39, United States Code.''.
       (c) Audits of the Postal Service.--
       (1) Audits.--Subsection (e) of section 2008 of title 39, 
     United States Code, is amended to read as follows:
       ``(e)(1) At least once each year beginning with the fiscal 
     year commencing after the date of the enactment of the Postal 
     Accountability and Enhancement Act, the financial statements 
     of the Postal Service (including those used in determining 
     and establishing postal rates) shall be audited by the 
     Inspector General or by an independent external auditor 
     selected by the Inspector General.
       ``(2) Audits under this section shall be conducted in 
     accordance with applicable generally accepted government 
     auditing standards.
       ``(3) Upon completion of the audit required by this 
     subsection, the person who audits the statement shall submit 
     a report on the audit to the Postmaster General.''.
       (2) Results of inspector general's audit to be included in 
     annual report.--Section 2402 of title 39, United States Code, 
     is amended by inserting after the first sentence the 
     following: ``Each report under this section shall include, 
     for the most recent fiscal year for which a report under 
     section 2008(e) is available (unless previously transmitted 
     under the following sentence), a copy of such report.''.
       (3) Coordination provisions.--Section 2008(d) of title 39, 
     United States Code, is amended--
       (A) by striking ``(d) Nothing'' and inserting ``(d)(1) 
     Except as provided in paragraph (2), nothing''; and
       (B) by adding at the end the following:
       ``(2) An audit or report under paragraph (1) may not be 
     obtained without the prior written approval of the Inspector 
     General.''.
       (4) Savings provision.--For purposes of any fiscal year 
     preceding the first fiscal year commencing after the date of 
     the enactment of this Act, the provisions of title 39, United 
     States Code, shall be applied as if the amendments made by 
     this subsection had never been enacted.
       (d) Reports.--Section 3013 of title 39, United States Code, 
     is amended by striking ``Postmaster General'' each place it 
     appears and inserting ``Chief Postal Inspector''.

[[Page S8151]]

       (e) Technical and Conforming Amendments.--
       (1) Relating to the inspector general act of 1978.--(A) 
     Subsection (a) of section 8H of the Inspector General Act of 
     1978 (as amended by section 701(a) and redesignated by 
     subsection (b) of this section) is further amended--
       (i) in paragraph (2) by striking ``the Postal Regulatory 
     Commission, and the United States Postal Service;'' and 
     inserting ``and the Postal Regulatory Commission;'' and
       (ii) in paragraph (4) by striking ``except that'' and all 
     that follows through ``Code);'' and inserting ``except that, 
     with respect to the National Science Foundation, such term 
     means the National Science Board;''.
       (B)(i) Subsection (f) of section 8H of such Act (as so 
     redesignated) is repealed.
       (ii) Subsection (c) of section 8H of such Act (as so 
     redesignated) is amended by striking ``Except as provided 
     under subsection (f) of this section, the'' and inserting 
     ``The''.
       (C) Section 8J of such Act (as so redesignated) is 
     amended--
       (i) by striking all after ``8D,'' and before ``of this 
     Act'' and inserting `` 8E, 8F, 8G, or 8I''; and
       (ii) by striking ``8G(a)'' and inserting ``8H(a)''.
       (2) Relating to title 39, united states code.--(A) 
     Subsection (e) of section 202 of title 39, United States 
     Code, is repealed.
       (B) Paragraph (4) of section 102 of such title 39 (as 
     amended by section 101) is amended to read as follows:
       ``(4) `Inspector General' means the Inspector General of 
     the United States Postal Service, appointed under section 
     3(a) of the Inspector General Act of 1978;''.
       (C) The first sentence of section 1003(a) of such title 39 
     is amended by striking ``chapters 2 and 12 of this title, 
     section 8G of the Inspector General Act of 1978, or other 
     provision of law,'' and inserting ``chapter 2 or 12 of this 
     title, subsection (b) or (c) of section 1003 of this title, 
     or any other provision of law,''.
       (D) Section 1003(b) of such title 39 is amended by striking 
     ``respective'' and inserting ``other''.
       (E) Section 1003(c) of such title 39 is amended by striking 
     ``included'' and inserting ``includes''.
       (3) Relating to the federal property and administrative 
     services act of 1949.--Section 304C(b)(1) of the Federal 
     Property and Administrative Services Act of 1949 (41 U.S.C. 
     254d(b)(1)) is amended by striking ``8G'' and inserting 
     ``8H''.
       (4) Relating to the energy policy act of 1992.--Section 
     160(a) of the Energy Policy Act of 1992 (42 U.S.C. 8262f(a)) 
     is amended (in the matter before paragraph (1)) by striking 
     all that follows ``(5 U.S.C. App.)'' and before ``shall--''.
       (f) Effective Date; Eligibility of Prior Inspector 
     General.--
       (1) Effective date.--
       (A) In general.--Except as provided in subparagraph (B) or 
     subsection (c), this section and the amendments made by this 
     section shall take effect on the date of the enactment of 
     this Act.
       (B) Special rules.--
       (i) In general.--If the position of Inspector General of 
     the United States Postal Service is occupied on the date of 
     enactment of this Act (other than by an individual serving 
     due to a vacancy arising in that position before the 
     expiration of his or her predecessor's term), then, for 
     purposes of the period beginning on such date of enactment 
     and ending on January 5, 2004, or, if earlier, the date on 
     which such individual ceases to serve in that position, title 
     39, United States Code, and the Inspector General Act of 1978 
     shall be applied as if the amendments made by this section 
     had not been enacted, except--

       (I) for those made by subsections (c) and (d); and
       (II) as provided in clause (ii).

       (ii) Authorization of appropriations.--

       (I) In general.--Notwithstanding any other provision of 
     this paragraph, subsection (f) of section 8G of the Inspector 
     General Act of 1978 (as amended by this section) shall be 
     effective for purposes of fiscal years beginning on or after 
     October 1, 2002.
       (II) Savings provision.--For purposes of the fiscal year 
     ending on September 30, 2002, funding for the Office of 
     Inspector General of the United States Postal Service shall 
     be made available in the same manner as if this Act had never 
     been enacted.

       (2) Eligibility of prior inspector general.--Nothing in 
     this Act shall prevent any individual who has served as 
     Inspector General of the United States Postal Service at any 
     time before the date of the enactment of this Act from being 
     appointed to that position pursuant to the amendments made by 
     this section.

                        TITLE VIII--EVALUATIONS

     SEC. 801. DEFINITION.

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

     SEC. 802. ASSESSMENTS OF RATEMAKING, CLASSIFICATION, AND 
                   OTHER PROVISIONS.

       (a) In General.--The Postal Regulatory Commission shall, at 
     least every 5 years, submit a report to the President and the 
     Congress concerning--
       (1) the operation of the amendments made by the Postal 
     Accountability and Enhancement Act; and
       (2) recommendations for any legislation or other measures 
     necessary to improve the effectiveness or efficiency of the 
     postal laws of the United States.
       (b) Postal Service Views.--A report under this section 
     shall be submitted only after reasonable opportunity has been 
     afforded to the Postal Service to review such report and to 
     submit written comments thereon. Any comments timely received 
     from the Postal Service under the preceding sentence shall be 
     attached to the report submitted under subsection (a).
       (c) Specific Information Required.--The Postal Regulatory 
     Commission shall include, as part of at least its first 
     report under subsection (a), the following:
       (1) Cost-coverage requirement relating to competitive 
     products collectively.--With respect to section 3633 of title 
     39, United States Code (as amended by this Act)--
       (A) a description of how such section has operated; and
       (B) recommendations as to whether or not such section 
     should remain in effect and, if so, any suggestions as to how 
     it might be improved.
       (2) Competitive products fund.--With respect to the Postal 
     Service Competitive Products Fund (under section 2011 of 
     title 39, United States Code, as amended by section 401), in 
     consultation with the Secretary of the Treasury--
       (A) a description of how such Fund has operated;
       (B) any suggestions as to how the operation of such Fund 
     might be improved; and
       (C) a description and assessment of alternative accounting 
     or financing mechanisms that might be used to achieve the 
     objectives of such Fund.
       (3) Assumed federal income tax on competitive products 
     fund.--With respect to section 3634 of title 39, United 
     States Code (as amended by this Act), in consultation with 
     the Secretary of the Treasury--
       (A) a description of how such section has operated; and
       (B) recommendations as to whether or not such section 
     should remain in effect and, if so, any suggestions as to how 
     it might be improved.

     SEC. 803. STUDY ON EQUAL APPLICATION OF LAWS TO COMPETITIVE 
                   PRODUCTS.

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

     SEC. 804. GREATER DIVERSITY IN POSTAL SERVICE EXECUTIVE AND 
                   ADMINISTRATIVE SCHEDULE MANAGEMENT POSITIONS.

       (a) Study.--The Board of Governors shall study and, within 
     1 year after the date of the enactment of this Act, submit to 
     the President and Congress a report concerning the extent to 
     which women and minorities are represented in supervisory and 
     management positions within the United States Postal Service. 
     Any data included in the report shall be presented in the 
     aggregate and by pay level.
       (b) Performance Evaluations.--The United States Postal 
     Service shall, as soon as practicable, take such measures as 
     may be necessary to ensure that, for purposes of conducting 
     performance appraisals of supervisory or managerial 
     employees, appropriate consideration shall be given to 
     meeting affirmative action goals, achieving equal employment 
     opportunity requirements, and implementation of plans 
     designed to achieve greater diversity in the workforce.

     SEC. 805. CONTRACTS WITH WOMEN, MINORITIES, AND SMALL 
                   BUSINESSES.

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

     SEC. 806. RATES FOR PERIODICALS.

       (a) In General.--The United States Postal Service, acting 
     jointly with the Postal Regulatory Commission and the General 
     Accounting Office, shall study and submit to the President 
     and Congress a report concerning--
       (1) the quality, accuracy, and completeness of the 
     information used by the Postal Service in determining the 
     direct and indirect postal costs attributable to periodicals; 
     and
       (2) any opportunities that might exist for improving 
     efficiencies in the collection, handling, transportation, or 
     delivery of periodicals by the Postal Service, including any 
     pricing incentives for mailers that might be appropriate.
       (b) Recommendations.--The report shall include 
     recommendations for any administrative action or legislation 
     that might be appropriate.

[[Page S8152]]

     SEC. 807. ASSESSMENT OF CERTAIN RATE DEFICIENCIES.

       (a) In General.--Within 12 months after the date of the 
     enactment of this Act, the Office of Inspector General of the 
     United States Postal Service shall study and submit to the 
     President, the Congress, and the United States Postal 
     Service, a report concerning the administration of section 
     3626(k) of title 39, United States Code.
       (b) Specific Requirements.--The study and report shall 
     specifically address the adequacy and fairness of the process 
     by which assessments under section 3626(k) of title 39, 
     United States Code, are determined and appealable, 
     including--
       (1) whether the Postal Regulatory Commission or any other 
     body outside the Postal Service should be assigned a role; 
     and
       (2) whether a statute of limitations should be established 
     for the commencement of proceedings by the Postal Service 
     thereunder.

      TITLE IX--MISCELLANEOUS; TECHNICAL AND CONFORMING AMENDMENTS

     SEC. 901. EMPLOYMENT OF POSTAL POLICE OFFICERS.

       Section 404 of title 39, United States Code, as amended by 
     sections 102 and 908(f), is further amended by adding at the 
     end the following:
       ``(f)(1) The Postal Service may employ guards for all 
     buildings and areas owned or occupied by the Postal Service 
     or under the charge and control of the Postal Service, and 
     such guards shall have, with respect to such property, the 
     powers of special policemen provided by the first section of 
     the Act cited in paragraph (2), and, as to such property, the 
     Postmaster General (or his designee) may take any action that 
     the Administrator of General Services (or his designee) may 
     take under section 2 or 3 of such Act, attaching thereto 
     penalties under the authority and within the limits provided 
     in section 4 of such Act.
       ``(2) The Act cited in this paragraph is the Act of June 1, 
     1948 (62 Stat. 281), commonly known as the `Protection of 
     Public Property Act'.''.

     SEC. 902. DATE OF POSTMARK TO BE TREATED AS DATE OF APPEAL IN 
                   CONNECTION WITH THE CLOSING OR CONSOLIDATION OF 
                   POST OFFICES.

       (a) In General.--Section 404(b) of title 39, United States 
     Code, is amended by adding at the end the following:
       ``(6) For purposes of paragraph (5), any appeal received by 
     the Commission shall--
       ``(A) if sent to the Commission through the mails, be 
     considered to have been received on the date of the Postal 
     Service postmark on the envelope or other cover in which such 
     appeal is mailed; or
       ``(B) if otherwise lawfully delivered to the Commission, be 
     considered to have been received on the date determined based 
     on any appropriate documentation or other indicia (as 
     determined under regulations of the Commission).''.
       (b) Effective Date.--This section and the amendments made 
     by this section shall apply with respect to any determination 
     to close or consolidate a post office which is first made 
     available, in accordance with paragraph (3) of section 404(b) 
     of title 39, United States Code, after the end of the 3-month 
     period beginning on the date of the enactment of this Act.

     SEC. 903. PROVISIONS RELATING TO BENEFITS UNDER CHAPTER 81 OF 
                   TITLE 5, UNITED STATES CODE, FOR OFFICERS AND 
                   EMPLOYEES OF THE FORMER POST OFFICE DEPARTMENT.

       (a) In General.--Section 8 of the Postal Reorganization Act 
     (39 U.S.C. 1001 note) is amended by inserting ``(a)'' after 
     ``8.'' and by adding at the end the following:
       ``(b) For purposes of chapter 81 of title 5, United States 
     Code, the Postal Service shall, with respect to any 
     individual receiving benefits under such chapter as an 
     officer or employee of the former Post Office Department, 
     have the same authorities and responsibilities as it has with 
     respect to an officer or employee of the Postal Service 
     receiving such benefits.''.
       (b) Effective Date.--This section and the amendments made 
     by this section shall take effect on October 1, 2001.

     SEC. 904. OBSOLETE PROVISIONS.

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

     SEC. 905. EXPANDED CONTRACTING AUTHORITY.

       (a) Amendment to Title 39, United States Code.--
       (1) Contracts with air carriers.--Subsection (d) of section 
     5402 of title 39, United States Code, is amended to read as 
     follows:
       ``(d)(1) The Postal Service may contract with any air 
     carrier for the transportation of mail by aircraft in 
     interstate air transportation, including the rates therefor, 
     either through negotiations or competitive bidding.
       ``(2) Notwithstanding subsections (a) through (c), the 
     Postal Service may contract with any air carrier or foreign 
     air carrier for the transportation of mail by aircraft in 
     foreign air transportation, including the rates therefor, 
     either through negotiations or competitive bidding, except 
     that--
       ``(A) any such contract may be awarded only to (i) an air 
     carrier holding a certificate required by section 41101 of 
     title 49 or an exemption therefrom issued by the Secretary of 
     Transportation, (ii) a foreign air carrier holding a permit 
     required by section 41301 of title 49 or an exemption 
     therefrom issued by the Secretary of Transportation, or (iii) 
     a combination of such air carriers or foreign air carriers 
     (or both);
       ``(B) mail transported under any such contract shall not be 
     subject to any duty-to-carry requirement imposed by any 
     provision of subtitle VII of title 49 or by any certificate, 
     permit, or corresponding exemption authority issued by the 
     Secretary of Transportation under that subtitle;
       ``(C) every contract that the Postal Service awards to a 
     foreign air carrier under this paragraph shall be subject to 
     the continuing requirement that air carriers shall be 
     afforded the same opportunity to carry the mail of the 
     country to and from which the mail is transported and the 
     flag country of the foreign air carrier, if different, as the 
     Postal Service has afforded the foreign air carrier; and
       ``(D) the Postmaster General shall consult with the 
     Secretary of Defense concerning actions that affect the 
     carriage of military mail transported in foreign air 
     transportation.
       ``(3) Paragraph (2) shall not be interpreted as suspending 
     or otherwise diminishing the authority of the Secretary of 
     Transportation under section 41310 of title 49.''.
       (2) Definitions.--Subsection (e) of section 5402 of title 
     39, United States Code, is amended to read as follows:
       ``(e) For purposes of this section, the terms `air 
     carrier', `air transportation', `foreign air carrier', 
     `foreign air transportation', `interstate air 
     transportation', and `mail' shall have the meanings given 
     such terms in section 40102 of title 49.''.
       (b) Amendments to Title 49, United States Code.--
       (1) Authority of postal service to provide for interstate 
     air transportation of mail.--Section 41901(a) of title 49, 
     United States Code, is amended to read as follows:
       ``(a) Title 39.--The United States Postal Service may 
     provide for the transportation of mail by aircraft in air 
     transportation under this chapter and under chapter 54 of 
     title 39.''.
       (2) Schedules for certain transportation of mail.--Section 
     41902(b)(1) of title 49, United States Code, is amended by 
     inserting before the semicolon at the end the following: 
     ``(other than foreign air transportation of mail)''.
       (3) Prices for foreign transportation of mail.--Section 
     41907 of title 49, United States Code, is amended--
       (A) by striking ``(a) Limitations.--''; and
       (B) by striking subsection (b).
       (4) Conforming amendments.--Sections 41107, 41901(b)(1), 
     41902(a), 41903(a), and 41903(b) of title 49, United States 
     Code, are amended by striking ``in foreign air transportation 
     or''.

     SEC. 906. INVESTMENTS.

       Subsection (c) of section 2003 of title 39, United States 
     Code, is amended--
       (1) by striking ``(c) If'' and inserting ``(c)(1) Except as 
     provided in paragraph (2), if''; and
       (2) by adding at the end the following:
       ``(2)(A) Nothing in this section shall be considered to 
     authorize any investment in any obligations or securities of 
     a commercial entity.
       ``(B) For purposes of this paragraph, the term `commercial 
     entity' means any corporation, company, association, 
     partnership, joint stock company, firm, society, or other 
     similar entity, as further defined under regulations 
     prescribed by the Postal Regulatory Commission.''.

     SEC. 907. REPEAL OF SECTION 5403.

       (a) In General.--Section 5403 of title 39, United States 
     Code, is repealed.
       (b) Clerical Amendment.--The analysis for chapter 54 of 
     title 39, United States Code, is amended by repealing the 
     item relating to section 5403.

     SEC. 908. TECHNICAL AND CONFORMING AMENDMENTS.

       (a) Reduced Rates.--Section 3626 of title 39, United States 
     Code, is amended--
       (1) in subsection (a)--
       (A) by striking all before paragraph (4) and inserting the 
     following:
       ``(a)(1) Except as otherwise provided in this section, 
     rates of postage for a class of mail

[[Page S8153]]

     or kind of mailer under former section 4358, 4452(b), 
     4452(c), 4554(b), or 4554(c) of this title shall be 
     established in accordance with section 3622.
       ``(2) For the purpose of this subsection, the term 
     `regular-rate category' means any class of mail or kind of 
     mailer, other than a class or kind referred to in section 
     2401(c).''; and
       (B) by redesignating paragraphs (4) through (7) as 
     paragraphs (3) through (6), respectively;
       (2) in subsection (g) by adding at the end the following:
       ``(3) For purposes of this section and former section 
     4358(a) through (c) of this title, those copies of an issue 
     of a publication entered within the county in which it is 
     published, but distributed outside such county on postal 
     carrier routes originating in the county of publication, 
     shall be treated as if they were distributed within the 
     county of publication.
       ``(4)(A) In the case of an issue of a publication, any 
     number of copies of which are mailed at the rates of postage 
     for a class of mail or kind of mailer under former section 
     4358(a) through (c) of this title, any copies of such issue 
     which are distributed outside the county of publication 
     (excluding any copies subject to paragraph (3)) shall be 
     subject to rates of postage provided for under this 
     paragraph.
       ``(B) The rates of postage applicable to mail under this 
     paragraph shall be established in accordance with section 
     3622.
       ``(C) This paragraph shall not apply with respect to an 
     issue of a publication unless the total paid circulation of 
     such issue outside the county of publication (not counting 
     recipients of copies subject to paragraph (3)) is less than 
     5,000.'';
       (3) in subsection (j)(1)(D)--
       (A) by striking ``and'' at the end of subclause (I); and
       (B) by adding after subclause (II) the following:
       ``(III) clause (i) shall not apply to space advertising in 
     mail matter that otherwise qualifies for rates under former 
     section 4452(b) or 4452(c) of this title, and satisfies the 
     content requirements established by the Postal Service for 
     periodical publications.''; and
       (4) by adding at the end the following:
       ``(n) In the administration of this section, matter that 
     satisfies the circulation standards for requester 
     publications shall not be excluded from being mailed at the 
     rates for mail under former section 4358 solely because such 
     matter is designed primarily for free circulation or for 
     circulation at nominal rates, or fails to meet the 
     requirements of former section 4354(a)(5).''.
       (b) Reimbursement.--Section 3681 of title 39, United States 
     Code, is amended by striking ``section 3628'' and inserting 
     ``sections 3662 through 3664''.
       (c) Size and Weight Limits.--Section 3682 of title 39, 
     United States Code, is amended to read as follows:

     ``Sec. 3682. Size and weight limits

       ``The Postal Service may establish size and weight 
     limitations for mail matter in the market-dominant category 
     of mail consistent with regulations the Postal Regulatory 
     Commission may prescribe under section 3622. The Postal 
     Service may establish size and weight limitations for mail 
     matter in the competitive category of mail consistent with 
     its authority under section 3632.''.
       (d) Revenue Foregone, Etc.--Title 39, United States Code, 
     is amended--
       (1) in section 503 (as so redesignated by section 601) by 
     striking ``this chapter.'' and inserting ``this title.''; and
       (2) in section 2401(d) by inserting ``(as last in effect 
     before enactment of the Postal Accountability and Enhancement 
     Act)'' after ``3626(a)'' and after ``3626(a)(3)(B)(ii)''.
       (e) Appropriations and Reporting Requirements.--
       (1) Appropriations.--Subsection (e) of section 2401 of 
     title 39, United States Code, is amended--
       (A) by striking ``Committee on Post Office and Civil 
     Service'' each place it appears and inserting ``Committee on 
     Government Reform''; and
       (B) by striking ``Not later than March 15 of each year,'' 
     and inserting ``Each year,''.
       (2) Reporting requirements.--Sections 2803(a) and 2804(a) 
     of title 39, United States Code, are amended by striking 
     ``2401(g)'' and inserting ``2401(e)''.
       (f) Authority To Fix Rates and Classes Generally; 
     Requirement Relating to Letters Sealed Against Inspection.--
     Section 404 of title 39, United States Code (as amended by 
     section 102) is further amended by redesignating subsections 
     (b) and (c) as subsections (d) and (e), respectively, and by 
     inserting after subsection (a) the following:
       ``(b) Except as otherwise provided, the Governors are 
     authorized to establish reasonable and equitable classes of 
     mail and reasonable and equitable rates of postage and fees 
     for postal services in accordance with the provisions of 
     chapter 36. Postal rates and fees shall be reasonable and 
     equitable and sufficient to enable the Postal Service, under 
     best practices of honest, efficient, and economical 
     management, to maintain and continue the development of 
     postal services of the kind and quality adapted to the needs 
     of the United States.
       ``(c) The Postal Service shall maintain one or more classes 
     of mail for the transmission of letters sealed against 
     inspection. The rate for each such class shall be uniform 
     throughout the United States, its territories, and 
     possessions. One such class shall provide for the most 
     expeditious handling and transportation afforded mail matter 
     by the Postal Service. No letter of such a class of domestic 
     origin shall be opened except under authority of a search 
     warrant authorized by law, or by an officer or employee of 
     the Postal Service for the sole purpose of determining an 
     address at which the letter can be delivered, or pursuant to 
     the authorization of the addressee.''.
       (g) Limitations.--Section 3684 of title 39, United States 
     Code, is amended by striking all that follows ``any 
     provision'' and inserting ``of this title.''.
       (h) Miscellaneous.--Title 39, United States Code, is 
     amended--
       (1) in section 410(b), by moving the left margin of 
     paragraph (10) 2 ems to the left;
       (2) in section 1005(d)(2)--
       (A) by striking ``subsection (g) of section 5532,''; and
       (B) by striking ``8344,'' and inserting ``8344'';
       (3) in the analysis for part III, by striking the item 
     relating to chapter 28 and inserting the following:

``28. Strategic Planning and Performance Management.............2801'';
       (4) in subsections (h)(2) and (i)(2) of section 3001, by 
     moving the left margin of subparagraph (C) of each 2 ems to 
     the left;
       (5) in section 3005(a)--
       (A) in the matter before paragraph (1), by striking all 
     that follows ``nonmailable'' and precedes ``(h),'' and 
     inserting ``under section 3001(d),''; and
       (B) in the sentence following paragraph (3), by striking 
     all that follows ``nonmailable'' and precedes ``(h),'' and 
     inserting ``under such section 3001(d),'';
       (6) in section 3210(a)(6)(C), by striking the matter after 
     ``if such mass mailing'' and before ``than 60 days'' and 
     inserting ``is postmarked fewer'';
       (7) in section 3626(a), by moving the left margin of 
     paragraphs (3), (5), and (6) (as so redesignated by 
     subsection (a)(1)(B), and including each subparagraph 
     thereunder (if any)) 2 ems to the left;
       (8) by striking the heading for section 3627 and inserting 
     the following:

     ``Sec. 3627. Adjusting free rates''

       ; and
       (9) in section 5402(g)(1), by moving the left margin of 
     subparagraph (D) (including each clause thereunder) 2 ems to 
     the left.
                                 ______