[Congressional Record Volume 152, Number 135 (Friday, December 8, 2006)]
[House]
[Pages H9160-H9182]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               POSTAL ACCOUNTABILITY AND ENHANCEMENT ACT

  Mr. TOM DAVIS of Virginia. Mr. Speaker, I move to suspend the rules 
and pass the bill (H.R. 6407) to reform the postal laws of the United 
States, as amended.
  The Clerk read as follows:

                                H.R. 6407

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

Sec. 1. Short title; table of contents.

                 TITLE I--DEFINITIONS; POSTAL SERVICES

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

                    TITLE II--MODERN RATE REGULATION

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

                  TITLE III--MODERN SERVICE STANDARDS

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

           TITLE IV--PROVISIONS RELATING TO FAIR COMPETITION

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

                      TITLE V--GENERAL PROVISIONS

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

                TITLE VI--ENHANCED REGULATORY COMMISSION

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

                         TITLE VII--EVALUATIONS

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

[[Page H9161]]

Sec. 710. Assessment of future business model of the Postal Service.
Sec. 711. Provisions relating to cooperative mailings.
Sec. 712. Definition.

   TITLE VIII--POSTAL SERVICE RETIREMENT AND HEALTH BENEFITS FUNDING

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

                TITLE IX--COMPENSATION FOR WORK INJURIES

Sec. 901. Temporary disability; continuation of pay.

                         TITLE X--MISCELLANEOUS

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

                 TITLE I--DEFINITIONS; POSTAL SERVICES

     SEC. 101. DEFINITIONS.

       Section 102 of title 39, United States Code, is amended by 
     striking ``and'' at the end of paragraph (3), by striking the 
     period at the end of paragraph (4) and inserting a semicolon, 
     and by adding at the end the following:
       ``(5) `postal service' refers to the delivery of letters, 
     printed matter, or mailable packages, including acceptance, 
     collection, sorting, transportation, or other functions 
     ancillary thereto;
       ``(6) `product' means a postal service with a distinct cost 
     or market characteristic for which a rate or rates are, or 
     may reasonably be, applied;
       ``(7) `rates', as used with respect to products, includes 
     fees for postal services;
       ``(8) `market-dominant product' or `product in the market-
     dominant category of mail' means a product subject to 
     subchapter I of chapter 36; 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)(1) In this subsection, the term ``nonpostal service'' 
     means any service that is not a postal service defined under 
     section 102(5).
       ``(2) Nothing in this section shall be considered to permit 
     or require that the Postal Service provide any nonpostal 
     service, except that the Postal Service may provide nonpostal 
     services which were offered as of January 1, 2006, as 
     provided under this subsection.
       ``(3) Not later than 2 years after the date of enactment of 
     the Postal Accountability and Enhancement Act, the Postal 
     Regulatory Commission shall review each nonpostal service 
     offered by the Postal Service on the date of enactment of 
     that Act and determine whether that nonpostal service shall 
     continue, taking into account--
       ``(A) the public need for the service; and
       ``(B) the ability of the private sector to meet the public 
     need for the service.
       ``(4) Any nonpostal service not determined to be continued 
     by the Postal Regulatory Commission under paragraph (3) shall 
     terminate.
       ``(5) If the Postal Regulatory Commission authorizes the 
     Postal Service to continue a nonpostal service under this 
     subsection, the Postal Regulatory Commission shall designate 
     whether the service shall be regulated under this title as a 
     market dominant product, a competitive product, or an 
     experimental product.''.
       (b) Conforming Amendments.--Section 1402(b)(1)(B)(ii) of 
     the Victims of Crime Act of 1984 (98 Stat. 2170; 42 U.S.C. 
     10601(b)(1)(B)(ii)) is amended by striking ``404(a)(8)'' and 
     inserting ``404(a)(7)''.

                    TITLE II--MODERN RATE REGULATION

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

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

     ``Sec. 3621. Applicability; definitions

       ``(a) Applicability.--This subchapter shall apply with 
     respect to--
       ``(1) first-class mail letters and sealed parcels;
       ``(2) first-class mail cards;
       ``(3) periodicals;
       ``(4) standard mail;
       ``(5) single-piece parcel post;
       ``(6) media mail;
       ``(7) bound printed matter;
       ``(8) library mail;
       ``(9) special services; and
       ``(10) single-piece international mail,
     subject to any changes the Postal Regulatory Commission may 
     make under section 3642.
       ``(b) Rule of Construction.--Mail matter referred to in 
     subsection (a) shall, for purposes of this subchapter, be 
     considered to have the meaning given to such mail matter 
     under the mail classification schedule.

     ``Sec. 3622. Modern rate regulation

       ``(a) Authority Generally.--The Postal Regulatory 
     Commission shall, within 18 months after the date of 
     enactment of this section, by regulation establish (and may 
     from time to time thereafter by regulation revise) a modern 
     system for regulating rates and classes for market-dominant 
     products.
       ``(b) Objectives.--Such system shall be designed to achieve 
     the following objectives, each of which shall be applied in 
     conjunction with the others:
       ``(1) To maximize incentives to reduce costs and increase 
     efficiency.
       ``(2) To create predictability and stability in rates.
       ``(3) To maintain high quality service standards 
     established under section 3691.
       ``(4) To allow the Postal Service pricing flexibility.
       ``(5) To assure adequate revenues, including retained 
     earnings, to maintain financial stability.
       ``(6) To reduce the administrative burden and increase the 
     transparency of the ratemaking process.
       ``(7) To enhance mail security and deter terrorism.
       ``(8) To establish and maintain a just and reasonable 
     schedule for rates and classifications, however the objective 
     under this paragraph shall not be construed to prohibit the 
     Postal Service from making changes of unequal magnitude 
     within, between, or among classes of mail.
       ``(9) To allocate the total institutional costs of the 
     Postal Service appropriately between market-dominant and 
     competitive products.
       ``(c) Factors.--In establishing or revising such system, 
     the Postal Regulatory Commission shall take into account--
       ``(1) the value of the mail service actually provided each 
     class or type of mail service to both the sender and the 
     recipient, including but not limited to the collection, mode 
     of transportation, and priority of delivery;
       ``(2) the requirement that each class of mail or type of 
     mail service bear the direct and indirect postal costs 
     attributable to each class or type of mail service through 
     reliably identified causal relationships plus that portion of 
     all other costs of the Postal Service reasonably assignable 
     to such class or type;
       ``(3) the effect of rate increases upon the general public, 
     business mail users, and enterprises in the private sector of 
     the economy engaged in the delivery of mail matter other than 
     letters;
       ``(4) the available alternative means of sending and 
     receiving letters and other mail matter at reasonable costs;
       ``(5) the degree of preparation of mail for delivery into 
     the postal system performed by the mailer and its effect upon 
     reducing costs to the Postal Service;
       ``(6) simplicity of structure for the entire schedule and 
     simple, identifiable relationships between the rates or fees 
     charged the various classes of mail for postal services;
       ``(7) the importance of pricing flexibility to encourage 
     increased mail volume and operational efficiency;
       ``(8) the relative value to the people of the kinds of mail 
     matter entered into the postal system and the desirability 
     and justification for special classifications and services of 
     mail;
       ``(9) the importance of providing classifications with 
     extremely high degrees of reliability and speed of delivery 
     and of providing those that do not require high degrees of 
     reliability and speed of delivery;
       ``(10) the desirability of special classifications for both 
     postal users and the Postal Service in accordance with the 
     policies of this title, including agreements between the 
     Postal Service and postal users, when available on public and 
     reasonable terms to similarly situated mailers, that--
       ``(A) either--
       ``(i) improve the net financial position of the Postal 
     Service through reducing Postal Service costs or increasing 
     the overall contribution to the institutional costs of the 
     Postal Service; or
       ``(ii) enhance the performance of mail preparation, 
     processing, transportation, or other functions; and
       ``(B) do not cause unreasonable harm to the marketplace.
       ``(11) the educational, cultural, scientific, and 
     informational value to the recipient of mail matter;
       ``(12) the need for the Postal Service to increase its 
     efficiency and reduce its costs, including infrastructure 
     costs, to help maintain high quality, affordable postal 
     services;
       (13) the value to the Postal Service and postal users of 
     promoting intelligent mail and of secure, sender-identified 
     mail; and
       ``(14) the policies of this title as well as such other 
     factors as the Commission determines appropriate.

[[Page H9162]]

       ``(d) Requirements.--
       ``(1) In general.--The system for regulating rates and 
     classes for market-dominant products shall--
       ``(A) include an annual limitation on the percentage 
     changes in rates to be set by the Postal Regulatory 
     Commission that will be equal to the change in the Consumer 
     Price Index for All Urban Consumers unadjusted for seasonal 
     variation over the most recent available 12-month period 
     preceding the date the Postal Service files notice of its 
     intention to increase rates;
       ``(B) establish a schedule whereby rates, when necessary 
     and appropriate, would change at regular intervals by 
     predictable amounts;
       ``(C) not later than 45 days before the implementation of 
     any adjustment in rates under this section, including 
     adjustments made under subsection (c)(10)--
       ``(i) require the Postal Service to provide public notice 
     of the adjustment;
       ``(ii) provide an opportunity for review by the Postal 
     Regulatory Commission;
       ``(iii) provide for the Postal Regulatory Commission to 
     notify the Postal Service of any noncompliance of the 
     adjustment with the limitation under subparagraph (A); and
       ``(iv) require the Postal Service to respond to the notice 
     provided under clause (iii) and describe the actions to be 
     taken to comply with the limitation under subparagraph (A);
       ``(D) establish procedures whereby the Postal Service may 
     adjust rates not in excess of the annual limitations under 
     subparagraph (A); and
       ``(E) notwithstanding any limitation set under 
     subparagraphs (A) and (C), and provided there is not 
     sufficient unused rate authority under paragraph (2)(C), 
     establish procedures whereby rates may be adjusted on an 
     expedited basis due to either extraordinary or exceptional 
     circumstances, provided that the Commission determines, after 
     notice and opportunity for a public hearing and comment, and 
     within 90 days after any request by the Postal Service, that 
     such adjustment is reasonable and equitable and necessary to 
     enable the Postal Service, under best practices of honest, 
     efficient, and economical management, to maintain and 
     continue the development of postal services of the kind and 
     quality adapted to the needs of the United States.
       ``(2) Limitations.--
       ``(A) Classes of mail.--Except as provided under 
     subparagraph (C), the annual limitations under paragraph 
     (1)(A) shall apply to a class of mail, as defined in the 
     Domestic Mail Classification Schedule as in effect on the 
     date of enactment of the Postal Accountability and 
     Enhancement Act.
       ``(B) Rounding of rates and fees.--Nothing in this 
     subsection shall preclude the Postal Service from rounding 
     rates and fees to the nearest whole integer, if the effect of 
     such rounding does not cause the overall rate increase for 
     any class to exceed the Consumer Price Index for All Urban 
     Consumers.
       ``(C) Use of unused rate authority.--
       ``(i) Definition.--In this subparagraph, the term `unused 
     rate adjustment authority' means the difference between--

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

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

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

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

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

     SEC. 202. PROVISIONS RELATING TO COMPETITIVE PRODUCTS.

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

      ``SUBCHAPTER II--PROVISIONS RELATING TO COMPETITIVE PRODUCTS

     ``Sec. 3631. Applicability; definitions and updates

       ``(a) Applicability.--This subchapter shall apply with 
     respect to--
       ``(1) priority mail;
       ``(2) expedited mail;
       ``(3) bulk parcel post;
       ``(4) bulk international mail; and
       ``(5) mailgrams;
     subject to subsection (d) and any changes the Postal 
     Regulatory Commission may make under section 3642.
       ``(b) Definition.--For purposes of this subchapter, the 
     term `costs attributable', as used with respect to a product, 
     means the direct and indirect postal costs attributable to 
     such product through reliably identified causal 
     relationships.
       ``(c) Rule of Construction.--Mail matter referred to in 
     subsection (a) shall, for purposes of this subchapter, be 
     considered to have the meaning given to such mail matter 
     under the mail classification schedule.

     ``Sec. 3632. Action of the Governors

       ``(a) Authority To Establish Rates and Classes.--The 
     Governors, with the concurrence of a majority of all of the 
     Governors then holding office, shall establish rates and 
     classes for products in the competitive category of mail in 
     accordance with the requirements of this subchapter and 
     regulations promulgated under section 3633.
       ``(b) Procedures.--
       ``(1) In general.--Rates and classes shall be established 
     in writing, complete with a statement of explanation and 
     justification, and the date as of which each such rate or 
     class takes effect.
       ``(2) Rates or classes of general applicability.--In the 
     case of rates or classes of general applicability in the 
     Nation as a whole or in any substantial region of the Nation, 
     the Governors shall cause each rate and class decision under 
     this section and the record of the Governors' proceedings in 
     connection with such decision to be published in

[[Page H9163]]

     the Federal Register at least 30 days before the effective 
     date of any new rates or classes.
       ``(3) Rates or classes not of general applicability.--In 
     the case of rates or classes not of general applicability in 
     the Nation as a whole or in any substantial region of the 
     Nation, the Governors shall cause each rate and class 
     decision under this section and the record of the proceedings 
     in connection with such decision to be filed with the Postal 
     Regulatory Commission by such date before the effective date 
     of any new rates or classes as the Governors consider 
     appropriate, but in no case less than 15 days.
       ``(4) Criteria.--As part of the regulations required under 
     section 3633, the Postal Regulatory Commission shall 
     establish criteria for determining when a rate or class 
     established under this subchapter is or is not of general 
     applicability in the Nation as a whole or in any substantial 
     region of the Nation.
       ``(c) Transition Rule.--Until regulations under section 
     3633 first take effect, rates and classes for competitive 
     products shall remain subject to modification in accordance 
     with the provisions of this chapter and section 407, as such 
     provisions were as last in effect before the date of 
     enactment of this section.

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

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

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

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

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

     ``Sec. 3641. Market tests of experimental products

       ``(a) Authority.--
       ``(1) In general.--The Postal Service may conduct market 
     tests of experimental products in accordance with this 
     section.
       ``(2) Provisions waived.--A product shall not, while it is 
     being tested under this section, be subject to the 
     requirements of sections 3622, 3633, or 3642, or regulations 
     promulgated under those sections.
       ``(b) Conditions.--A product may not be tested under this 
     section unless it satisfies each of the following:
       ``(1) Significantly different product.--The product is, 
     from the viewpoint of the mail users, significantly different 
     from all products offered by the Postal Service within the 2-
     year period preceding the start of the test.
       ``(2) Market disruption.--The introduction or continued 
     offering of the product will not create an unfair or 
     otherwise inappropriate competitive advantage for the Postal 
     Service or any mailer, particularly in regard to small 
     business concerns (as defined under subsection (h)).
       ``(3) Correct categorization.--The Postal Service 
     identifies the product, for the purpose of a test under this 
     section, as either market-dominant or competitive, consistent 
     with the criteria under section 3642(b)(1). Costs and 
     revenues attributable to a product identified as competitive 
     shall be included in any determination under section 3633(3) 
     (relating to provisions applicable to competitive products 
     collectively). Any test that solely affects products 
     currently classified as competitive, or which provides 
     services ancillary to only competitive products, shall be 
     presumed to be in the competitive product category without 
     regard to whether a similar ancillary product exists for 
     market-dominant products.
       ``(c) Notice.--
       ``(1) In general.--At least 30 days before initiating a 
     market test under this section, the Postal Service shall file 
     with the Postal Regulatory Commission and publish in the 
     Federal Register a notice--
       ``(A) setting out the basis for the Postal Service's 
     determination that the market test is covered by this 
     section; and
       ``(B) describing the nature and scope of the market test.
       ``(2) Safeguards.--For a competitive experimental product, 
     the provisions of section 504(g) shall be available with 
     respect to any information required to be filed under 
     paragraph (1) to the same extent and in the same manner as in 
     the case of any matter described in section 504(g)(1). 
     Nothing in paragraph (1) shall be considered to permit or 
     require the publication of any information as to which 
     confidential treatment is accorded under the preceding 
     sentence (subject to the same exception as set forth in 
     section 504(g)(3)).
       ``(d) Duration.--
       ``(1) In general.--A market test of a product under this 
     section may be conducted over a period of not to exceed 24 
     months.
       ``(2) Extension authority.--If necessary in order to 
     determine the feasibility or desirability of a product being 
     tested under this section, the Postal Regulatory Commission 
     may, upon written application of the Postal Service (filed 
     not later than 60 days before the date as of which the 
     testing of such product would otherwise be scheduled to 
     terminate under paragraph (1)), extend the testing of such 
     product for not to exceed an additional 12 months.
       ``(e) Dollar-Amount Limitation.--
       ``(1) In general.--A product may only be tested under this 
     section if the total revenues that are anticipated, or in 
     fact received, by the Postal Service from such product do not 
     exceed $10,000,000 in any year, subject to paragraph (2) and 
     subsection (g). In carrying out the preceding sentence, the 
     Postal Regulatory Commission may limit the amount of revenues 
     the Postal Service may obtain from any particular geographic 
     market as necessary to prevent market disruption (as defined 
     under subsection (b)(2)).
       ``(2) Exemption authority.--The Postal Regulatory 
     Commission may, upon written application of the Postal 
     Service, exempt the market test from the limit in paragraph 
     (1) if the total revenues that are anticipated, or in fact 
     received, by the Postal Service from such product do not 
     exceed $50,000,000 in any year, subject to subsection (g). In 
     reviewing an application under this paragraph, the Postal 
     Regulatory Commission shall approve such application if it 
     determines that--
       ``(A) the product is likely to benefit the public and meet 
     an expected demand;
       ``(B) the product is likely to contribute to the financial 
     stability of the Postal Service; and
       ``(C) the product is not likely to result in unfair or 
     otherwise inappropriate competition.
       ``(f) Cancellation.--If the Postal Regulatory Commission at 
     any time determines that a market test under this section 
     fails, with respect to any particular product, to meet 1 or 
     more of the requirements of this section, it may order the 
     cancellation of the test involved or take such other action 
     as it considers appropriate. A determination under this 
     subsection shall be made in accordance with such procedures 
     as the Commission shall by regulation prescribe.
       ``(g) Adjustment for Inflation.--For purposes of each year 
     following the year in which occurs the deadline for the 
     Postal Service's first report to the Postal Regulatory 
     Commission under section 3652(a), each dollar amount 
     contained in this section shall be adjusted by the change in 
     the Consumer Price Index for such year (as determined under 
     regulations of the Commission).
       ``(h) Definition of a Small Business Concern.--The criteria 
     used in defining small business concerns or otherwise 
     categorizing business concerns as small business concerns 
     shall, for purposes of this section, be established by the 
     Postal Regulatory Commission in conformance with the 
     requirements of section 3 of the Small Business Act.
       ``(i) Effective Date.--Market tests under this subchapter 
     may be conducted in any year beginning with the first year in 
     which occurs the deadline for the Postal Service's first 
     report to the Postal Regulatory Commission under section 
     3652(a).

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

       ``(a) In General.--Upon request of the Postal Service or 
     users of the mails, or upon its own initiative, the Postal 
     Regulatory Commission may change the list of market-dominant 
     products under section 3621 and the list of competitive 
     products under section 3631 by adding new products to the 
     lists, removing products from the lists, or transferring 
     products between the lists.
       ``(b) Criteria.--All determinations by the Postal 
     Regulatory Commission under subsection (a) shall be made in 
     accordance with the following criteria:
       ``(1) The market-dominant category of products shall 
     consist of each product in the sale of which the Postal 
     Service exercises sufficient market power that it can 
     effectively set the price of such product substantially above 
     costs, raise prices significantly, decrease quality, or 
     decrease output, without risk of losing a significant level 
     of business to other firms offering similar products. The 
     competitive category of products shall consist of all other 
     products.
       ``(2) Exclusion of products covered by postal monopoly.--A 
     product covered by the postal monopoly shall not be subject 
     to transfer under this section from the market-dominant 
     category of mail. For purposes of the preceding sentence, the 
     term `product covered by the postal monopoly' means any 
     product the conveyance or transmission of which is reserved 
     to the United States under section 1696 of title 18, subject 
     to the same exception as set forth in the last sentence of 
     section 409(e)(1).
       ``(3) Additional considerations.--In making any decision 
     under this section, due regard shall be given to--
       ``(A) the availability and nature of enterprises in the 
     private sector engaged in the delivery of the product 
     involved;

[[Page H9164]]

       ``(B) the views of those who use the product involved on 
     the appropriateness of the proposed action; and
       ``(C) the likely impact of the proposed action on small 
     business concerns (within the meaning of section 3641(h)).
       ``(c) Transfers of Subclasses and Other Subordinate Units 
     Allowable.--Nothing in this title shall be considered to 
     prevent transfers under this section from being made by 
     reason of the fact that they would involve only some (but not 
     all) of the subclasses or other subordinate units of the 
     class of mail or type of postal service involved (without 
     regard to satisfaction of minimum quantity requirements 
     standing alone).
       ``(d) Notification and Publication Requirements.--
       ``(1) Notification requirement.--The Postal Service shall, 
     whenever it requests to add a product or transfer a product 
     to a different category, file with the Postal Regulatory 
     Commission and publish in the Federal Register a notice 
     setting out the basis for its determination that the product 
     satisfies the criteria under subsection (b) and, in the case 
     of a request to add a product or transfer a product to the 
     competitive category of mail, that the product meets the 
     regulations promulgated by the Postal Regulatory Commission 
     under section 3633. The provisions of section 504(g) shall be 
     available with respect to any information required to be 
     filed.
       ``(2) Publication requirement.--The Postal Regulatory 
     Commission shall, whenever it changes the list of products in 
     the market-dominant or competitive category of mail, 
     prescribe new lists of products. The revised lists shall 
     indicate how and when any previous lists (including the lists 
     under sections 3621 and 3631) are superseded, and shall be 
     published in the Federal Register.
       ``(e) Prohibition.--Except as provided in section 3641, no 
     product that involves the physical delivery of letters, 
     printed matter, or packages may be offered by the Postal 
     Service unless it has been assigned to the market-dominant or 
     competitive category of mail (as appropriate) either--
       ``(1) under this subchapter; or
       ``(2) by or under any other provision of law.''.

     SEC. 204. REPORTING REQUIREMENTS AND RELATED PROVISIONS.

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

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

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

                      ``SUBCHAPTER VI--GENERAL''.

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

     ``SUBCHAPTER IV--REPORTING REQUIREMENTS AND RELATED PROVISIONS

     ``Sec. 3651. Annual reports by the Commission

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

     ``Sec. 3652. Annual reports to the Commission

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

     ``Sec. 3653. Annual determination of compliance

       ``(a) Opportunity for Public Comment.--After receiving the 
     reports required under section 3652 for any year, the Postal 
     Regulatory Commission shall promptly provide

[[Page H9165]]

     an opportunity for comment on such reports by users of the 
     mails, affected parties, and an officer of the Commission who 
     shall be required to represent the interests of the general 
     public.
       ``(b) Determination of Compliance or Noncompliance.--Not 
     later than 90 days after receiving the submissions required 
     under section 3652 with respect to a year, the Postal 
     Regulatory Commission shall make a written determination as 
     to--
       ``(1) whether any rates or fees in effect during such year 
     (for products individually or collectively) were not in 
     compliance with applicable provisions of this chapter (or 
     regulations promulgated thereunder); or
       ``(2) whether any service standards in effect during such 
     year were not met.
     If, with respect to a year, no instance of noncompliance is 
     found under this subsection to have occurred in such year, 
     the written determination shall be to that effect.
       ``(c) Noncompliance With Regard to Rates or Services.--If, 
     for a year, a timely written determination of noncompliance 
     is made under subsection (b), the Postal Regulatory 
     Commission shall take appropriate action in accordance with 
     subsections (c) and (e) of section 3662 (as if a complaint 
     averring such noncompliance had been duly filed and found 
     under such section to be justified).
       ``(d) Review of Performance Goals.--The Postal Regulatory 
     Commission shall also evaluate annually whether the Postal 
     Service has met the goals established under sections 2803 and 
     2804, and may provide recommendations to the Postal Service 
     related to the protection or promotion of public policy 
     objectives set out in this title.
       ``(e) Rebuttable Presumption.--A timely written 
     determination described in the last sentence of subsection 
     (b) shall, for purposes of any proceeding under section 3662, 
     create a rebuttable presumption of compliance by the Postal 
     Service (with regard to the matters described under 
     paragraphs (1) and (2) of subsection (b)) during the year to 
     which such determination relates.

     ``Sec. 3654. Additional financial reporting

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

     SEC. 205. COMPLAINTS; APPELLATE REVIEW AND ENFORCEMENT.

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

     ``Sec. 3662. Rate and service complaints

       ``(a) In General.--Any interested person (including an 
     officer of the Postal Regulatory Commission representing the 
     interests of the general public) who believes the Postal 
     Service is not operating in conformance with the requirements 
     of the provisions of sections 101(d), 401(2), 403(c), 404a, 
     or 601, or this chapter (or regulations promulgated under any 
     of those provisions) may lodge a complaint with the Postal 
     Regulatory Commission in such form and manner as the 
     Commission may prescribe.
       ``(b) Prompt Response Required.--
       ``(1) In general.--The Postal Regulatory Commission shall, 
     within 90 days after receiving a complaint under subsection 
     (a)--
       ``(A) either--
       ``(i) upon a finding that such complaint raises material 
     issues of fact or law, begin proceedings on such complaint; 
     or
       ``(ii) issue an order dismissing the complaint; and
       ``(B) with respect to any action taken under subparagraph 
     (A) (i) or (ii), issue a written statement setting forth the 
     bases of its determination.
       ``(2) Treatment of complaints not timely acted on.--For 
     purposes of section 3663, any complaint under subsection (a) 
     on which the Commission fails to act in the time and manner 
     required by paragraph (1) shall be treated in the same way as 
     if it had been dismissed pursuant to an order issued by the 
     Commission on the last day allowable for the issuance of such 
     order under paragraph (1).
       ``(c) Action Required if Complaint Found To Be Justified.--
     If the Postal Regulatory Commission finds the complaint to be 
     justified, it shall order that the Postal Service take such 
     action as the Commission considers appropriate in order to 
     achieve compliance with the applicable requirements and to 
     remedy the effects of any noncompliance (such as ordering 
     unlawful rates to be adjusted to lawful levels, ordering the 
     cancellation of market tests, ordering the Postal Service to 
     discontinue providing loss-making products, or requiring the 
     Postal Service to make up for revenue shortfalls in 
     competitive products).
       ``(d) Authority To Order Fines in Cases of Deliberate 
     Noncompliance.--In addition, in cases of deliberate 
     noncompliance by the Postal Service with the requirements of 
     this title, the Postal Regulatory Commission may order, based 
     on the nature, circumstances, extent, and seriousness of the 
     noncompliance, a fine (in the amount specified by the 
     Commission in its order) for each incidence of noncompliance. 
     Fines resulting from the provision of competitive products 
     shall be paid from the Competitive Products Fund established 
     in section 2011. All receipts from fines imposed under this 
     subsection shall be deposited in the general fund of the 
     Treasury of the United States.

     ``Sec. 3663. Appellate review

       ``A person, including the Postal Service, adversely 
     affected or aggrieved by a final

[[Page H9166]]

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

     ``Sec. 3664. Enforcement of orders

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

     SEC. 206. CLERICAL AMENDMENT.

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

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

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

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

      ``SUBCHAPTER II--PROVISIONS RELATING TO COMPETITIVE PRODUCTS

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

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

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

     ``SUBCHAPTER IV--REPORTING REQUIREMENTS AND RELATED PROVISIONS

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

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

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

                        ``SUBCHAPTER VI--GENERAL

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

               ``SUBCHAPTER VII--MODERN SERVICE STANDARDS

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

                  TITLE III--MODERN SERVICE STANDARDS

     SEC. 301. ESTABLISHMENT OF MODERN SERVICE STANDARDS.

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

               ``SUBCHAPTER VII--MODERN SERVICE STANDARDS

     ``Sec. 3691. Establishment of modern service standards

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

     SEC. 302. POSTAL SERVICE PLAN.

       (a) In General.--Within 6 months after the establishment of 
     the service standards under section 3691 of title 39, United 
     States Code, as added by this Act, the Postal Service shall, 
     in consultation with the Postal Regulatory Commission, 
     develop and submit to Congress a plan for meeting those 
     standards.
       (b) Contents.--The plan under this section shall--
       (1) establish performance goals;
       (2) describe any changes to the Postal Service's 
     processing, transportation, delivery, and retail networks 
     necessary to allow the Postal Service to meet the performance 
     goals;
       (3) describe any changes to planning and performance 
     management documents previously submitted to Congress to 
     reflect new performance goals; and
       (4) describe the long-term vision of the Postal Service for 
     rationalizing its infrastructure and workforce, and how the 
     Postal Service intends to implement that vision.
       (c) Postal Facilities.--
       (1) Findings.--Congress finds that--
       (A) the Postal Service has more than 400 logistics 
     facilities, separate from its post office network;
       (B) as noted by the President's Commission on the United 
     States Postal Service, the Postal Service has more facilities 
     than it needs and the streamlining of this distribution 
     network can pave the way for the potential consolidation of 
     sorting facilities and the elimination of excess costs;
       (C) the Postal Service has always revised its distribution 
     network to meet changing conditions and is best suited to 
     address its operational needs; and
       (D) Congress strongly encourages the Postal Service to--
       (i) expeditiously move forward in its streamlining efforts; 
     and
       (ii) keep unions, management associations, and local 
     elected officials informed as an essential part of this 
     effort and abide by any procedural requirements contained in 
     the national bargaining agreements.
       (2) In general.--The Postal Service plan shall include a 
     description of--
       (A) the long-term vision of the Postal Service for 
     rationalizing its infrastructure and workforce; and
       (B) how the Postal Service intends to implement that 
     vision.
       (3) Content of facilities plan.--The plan under this 
     subsection shall include--
       (A) a strategy for how the Postal Service intends to 
     rationalize the postal facilities network and remove excess 
     processing capacity and space from the network, including 
     estimated timeframes, criteria, and processes to be used for 
     making changes to the facilities network, and the process for 
     engaging policy makers and the public in related decisions;
       (B) a discussion of what impact any facility changes may 
     have on the postal workforce and whether the Postal Service 
     has sufficient flexibility to make needed workforce changes;
       (C) an identification of anticipated costs, cost savings, 
     and other benefits associated with the infrastructure 
     rationalization alternatives discussed in the plan; and
       (D) procedures that the Postal Service will use to--
       (i) provide adequate public notice to communities 
     potentially affected by a proposed rationalization decision;
       (ii) make available information regarding any service 
     changes in the affected communities, any other effects on 
     customers, any effects on postal employees, and any cost 
     savings;
       (iii) afford affected persons ample opportunity to provide 
     input on the proposed decision; and
       (iv) take such comments into account in making a final 
     decision.
       (4) Annual reports.--
       (A) In general.--Not later than 90 days after the end of 
     each fiscal year, the Postal Service shall prepare and submit 
     a report to Congress on how postal decisions have impacted or 
     will impact rationalization plans.
       (B) Contents.--Each report under this paragraph shall 
     include--
       (i) an account of actions taken during the preceding fiscal 
     year to improve the efficiency and effectiveness of its 
     processing, transportation, and distribution networks while 
     preserving the timely delivery of postal services, including 
     overall estimated costs and cost savings;
       (ii) an account of actions taken to identify any excess 
     capacity within its processing,

[[Page H9167]]

     transportation, and distribution networks and implement 
     savings through realignment or consolidation of facilities 
     including overall estimated costs and cost savings;
       (iii) an estimate of how postal decisions related to mail 
     changes, security, automation initiatives, worksharing, 
     information technology systems, excess capacity, 
     consolidating and closing facilities, and other areas will 
     impact rationalization plans;
       (iv) identification of any statutory or regulatory 
     obstacles that prevented or will prevent or hinder the Postal 
     Service from taking action to realign or consolidate 
     facilities; and
       (v) such additional topics and recommendations as the 
     Postal Service considers appropriate.
       (5) Existing efforts.--Effective on the date of enactment 
     of this Act, the Postal Service may not close or consolidate 
     any processing or logistics facilities without using 
     procedures for public notice and input consistent with those 
     described under paragraph (3)(D).
       (d) Alternate Retail Options.--The Postal Service plan 
     shall include plans to expand and market retail access to 
     postal services, in addition to post offices, including--
       (1) vending machines;
       (2) the Internet;
       (3) postage meters;
       (4) Stamps by Mail;
       (5) Postal Service employees on delivery routes;
       (6) retail facilities in which overhead costs are shared 
     with private businesses and other government agencies;
       (7) postal kiosks; or
       (8) any other nonpost office access channel providing 
     market retail access to postal services.
       (e) Reemployment Assistance and Retirement Benefits.--The 
     Postal Service plan shall include--
       (1) a comprehensive plan under which reemployment 
     assistance shall be afforded to employees displaced as a 
     result of automation of any of its functions, the closing and 
     consolidation of any of its facilities, or such other reasons 
     as the Postal Service may determine; and
       (2) a plan, developed in consultation with the Office of 
     Personnel Management, to offer early retirement benefits.
       (f) Continued Authority.--Nothing in this section shall be 
     construed to prohibit the Postal Service from implementing 
     any change to its processing, transportation, delivery, and 
     retail networks under any authority granted to the Postal 
     Service for those purposes.

           TITLE IV--PROVISIONS RELATING TO FAIR COMPETITION

     SEC. 401. POSTAL SERVICE COMPETITIVE PRODUCTS FUND.

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

     ``Sec. 2011. Provisions relating to competitive products

       ``(a)(1) In this subsection, the term `costs attributable' 
     has the meaning given such term by section 3631.
       ``(2) There is established in the Treasury of the United 
     States a revolving fund, to be called the Postal Service 
     Competitive Products Fund, which shall be available to the 
     Postal Service without fiscal year limitation for the payment 
     of--
       ``(A) costs attributable to competitive products; and
       ``(B) all other costs incurred by the Postal Service, to 
     the extent allocable to competitive products.
       ``(b) There shall be deposited in the Competitive Products 
     Fund, subject to withdrawal by the Postal Service--
       ``(1) revenues from competitive products;
       ``(2) amounts received from obligations issued by Postal 
     Service under subsection (e);
       ``(3) interest and dividends earned on investments of the 
     Competitive Products Fund; and
       ``(4) any other receipts of the Postal Service (including 
     from the sale of assets), to the extent allocable to 
     competitive products.
       ``(c) If the Postal Service determines that the moneys of 
     the Competitive Products Fund are in excess of current needs, 
     the Postal Service may request the investment of such amounts 
     as the Postal Service determines advisable by the Secretary 
     of the Treasury in obligations of, or obligations guaranteed 
     by, the Government of the United States, and, with the 
     approval of the Secretary, in such other obligations or 
     securities as the Postal Service determines appropriate.
       ``(d) With the approval of the Secretary of the Treasury, 
     the Postal Service may deposit moneys of the Competitive 
     Products Fund in any Federal Reserve bank, any depository for 
     public funds, or in such other places and in such manner as 
     the Postal Service and the Secretary may mutually agree.
       ``(e)(1)(A) Subject to the limitations specified in section 
     2005(a), the Postal Service is authorized to borrow money and 
     to issue and sell such obligations as the Postal Service 
     determines necessary to provide for competitive products and 
     deposit such amounts in the Competitive Products Fund.
       ``(B) Subject to paragraph (5), any borrowings by the 
     Postal Service under subparagraph (A) shall be supported and 
     serviced by--
       ``(i) the revenues and receipts from competitive products 
     and the assets related to the provision of competitive 
     products (as determined under subsection (h)); or
       ``(ii) for purposes of any period before accounting 
     practices and principles under subsection (h) have been 
     established and applied, the best information available from 
     the Postal Service, including the audited statements required 
     by section 2008(e).
       ``(2) The Postal Service may enter into binding covenants 
     with the holders of such obligations, and with any trustee 
     under any agreement entered into in connection with the 
     issuance of such obligations with respect to--
       ``(A) the establishment of reserve, sinking, and other 
     funds;
       ``(B) application and use of revenues and receipts of the 
     Competitive Products Fund;
       ``(C) stipulations concerning the subsequent issuance of 
     obligations or the execution of leases or lease purchases 
     relating to properties of the Postal Service; and
       ``(D) such other matters as the Postal Service, considers 
     necessary or desirable to enhance the marketability of such 
     obligations.
       ``(3) Obligations issued by the Postal Service under this 
     subsection--
       ``(A) shall be in such forms and denominations;
       ``(B) shall be sold at such times and in such amounts;
       ``(C) shall mature at such time or times;
       ``(D) shall be sold at such prices;
       ``(E) shall bear such rates of interest;
       ``(F) may be redeemable before maturity in such manner, at 
     such times, and at such redemption premiums;
       ``(G) may be entitled to such relative priorities of claim 
     on the assets of the Postal Service with respect to principal 
     and interest payments; and
       ``(H) shall be subject to such other terms and conditions,
     as the Postal Service determines.
       ``(4) Obligations issued by the Postal Service under this 
     subsection--
       ``(A) shall be negotiable or nonnegotiable and bearer or 
     registered instruments, as specified therein and in any 
     indenture or covenant relating thereto;
       ``(B) shall contain a recital that such obligations are 
     issued under this section, and such recital shall be 
     conclusive evidence of the regularity of the issuance and 
     sale of such obligations and of their validity;
       ``(C) shall be lawful investments and may be accepted as 
     security for all fiduciary, trust, and public funds, the 
     investment or deposit of which shall be under the authority 
     or control of any officer or agency of the Government of the 
     United States, and the Secretary of the Treasury or any other 
     officer or agency having authority over or control of any 
     such fiduciary, trust, or public funds, may at any time sell 
     any of the obligations of the Postal Service acquired under 
     this section;
       ``(D) shall not be exempt either as to principal or 
     interest from any taxation now or hereafter imposed by any 
     State or local taxing authority; and
       ``(E) except as provided in section 2006(c), shall not be 
     obligations of, nor shall payment of the principal thereof or 
     interest thereon be guaranteed by, the Government of the 
     United States, and the obligations shall so plainly state.
       ``(5) The Postal Service shall make payments of principal, 
     or interest, or both on obligations issued under this section 
     out of revenues and receipts from competitive products and 
     assets related to the provision of competitive products (as 
     determined under subsection (h)), or for purposes of any 
     period before accounting practices and principles under 
     subsection (h) have been established and applied, the best 
     information available, including the audited statements 
     required by section 2008(e). For purposes of this subsection, 
     the total assets of the Competitive Products Fund shall be 
     the greater of--
       ``(A) the assets related to the provision of competitive 
     products as calculated under subsection (h); or
       ``(B) the percentage of total Postal Service revenues and 
     receipts from competitive products times the total assets of 
     the Postal Service.
       ``(f) The receipts and disbursements of the Competitive 
     Products Fund shall be accorded the same budgetary treatment 
     as is accorded to receipts and disbursements of the Postal 
     Service Fund under section 2009a.
       ``(g) A judgment (or settlement of a claim) against the 
     Postal Service or the Government of the United States shall 
     be paid out of the Competitive Products Fund to the extent 
     that the judgment or claim arises out of activities of the 
     Postal Service in the provision of competitive products.
       ``(h)(1)(A) The Secretary of the Treasury, in consultation 
     with the Postal Service and an independent, certified public 
     accounting firm and other advisors as the Secretary considers 
     appropriate, shall develop recommendations regarding--
       ``(i) the accounting practices and principles that should 
     be followed by the Postal Service with the objectives of--
       ``(I) identifying and valuing the assets and liabilities of 
     the Postal Service associated with providing competitive 
     products, including the capital and operating costs incurred 
     by the Postal Service in providing such competitive products; 
     and
       ``(II) subject to subsection (e)(5), preventing the 
     subsidization of such products by market-dominant products; 
     and
       ``(ii) the substantive and procedural rules that should be 
     followed in determining the assumed Federal income tax on 
     competitive

[[Page H9168]]

     products income of the Postal Service for any year (within 
     the meaning of section 3634).
       ``(B) Not earlier than 6 months after the date of enactment 
     of this section, and not later than 12 months after such 
     date, the Secretary of the Treasury shall submit the 
     recommendations under subparagraph (A) to the Postal 
     Regulatory Commission.
       ``(2)(A) Upon receiving the recommendations of the 
     Secretary of the Treasury under paragraph (1), the Commission 
     shall give interested parties, including the Postal Service, 
     users of the mails, and an officer of the Commission who 
     shall be required to represent the interests of the general 
     public, an opportunity to present their views on those 
     recommendations through submission of written data, views, or 
     arguments with or without opportunity for oral presentation, 
     or in such other manner as the Commission considers 
     appropriate.
       ``(B)(i) After due consideration of the views and other 
     information received under subparagraph (A), the Commission 
     shall by rule--
       ``(I) provide for the establishment and application of the 
     accounting practices and principles which shall be followed 
     by the Postal Service;
       ``(II) provide for the establishment and application of the 
     substantive and procedural rules described under paragraph 
     (1)(A)(ii); and
       ``(III) provide for the submission by the Postal Service to 
     the Postal Regulatory Commission of annual and other periodic 
     reports setting forth such information as the Commission may 
     require.
       ``(ii) Final rules under this subparagraph shall be issued 
     not later than 12 months after the date on which 
     recommendations are submitted under paragraph (1) (or by such 
     later date on which the Commission and the Postal Service may 
     agree). The Commission is authorized to promulgate 
     regulations revising such rules.
       ``(C)(i) Reports described under subparagraph (B)(i)(III) 
     shall be submitted at such time and in such form, and shall 
     include such information, as the Commission by rule requires.
       ``(ii) The Commission may, on its own motion or on request 
     of an interested party, initiate proceedings (to be conducted 
     in accordance with such rules as the Commission shall 
     prescribe) to improve the quality, accuracy, or completeness 
     of Postal Service information under subparagraph (B)(i)(III) 
     whenever it shall appear that--
       ``(I) the quality of the information furnished in those 
     reports has become significantly inaccurate or can be 
     significantly improved; or
       ``(II) such revisions are, in the judgment of the 
     Commission, otherwise necessitated by the public interest.
       ``(D) A copy of each report described under subparagraph 
     (B)(i)(III) shall be submitted by the Postal Service to the 
     Secretary of the Treasury and the Inspector General of the 
     United States Postal Service.
       ``(i)(1) The Postal Service shall submit an annual report 
     to the Secretary of the Treasury concerning the operation of 
     the Competitive Products Fund. The report shall address such 
     matters as risk limitations, reserve balances, allocation or 
     distribution of moneys, liquidity requirements, and measures 
     to safeguard against losses.
       ``(2) A copy of the most recent report submitted under 
     paragraph (1) shall be included in the annual report 
     submitted by the Postal Regulatory Commission under section 
     3652(g).''.
       (2) Clerical amendment.--The table of sections for chapter 
     20 of title 39, United States Code, is amended by adding 
     after the item relating to section 2010 the following:

``2011. Provisions relating to competitive products.''.
       (b) Technical and Conforming Amendments.--
       (1) Definition.--Section 2001 of title 39, United States 
     Code, is amended by striking ``and'' at the end of paragraph 
     (1), by redesignating paragraph (2) as paragraph (3), and by 
     inserting after paragraph (1) the following:
       ``(2) Competitive products fund.--The term `Competitive 
     Products Fund' means the Postal Service Competitive Products 
     Fund established by section 2011; and''.
       (2) Capital of the postal service.--Section 2002(b) of 
     title 39, United States Code, is amended by striking 
     ``Fund,'' and inserting ``Fund and the balance in the 
     Competitive Products Fund,''.
       (3) Postal service fund.--
       (A) Purposes for which available.--Section 2003(a) of title 
     39, United States Code, is amended by striking ``title.'' and 
     inserting ``title (other than any of the purposes, functions, 
     or powers for which the Competitive Products Fund is 
     available).''.
       (B) Deposits.--Section 2003(b) of title 39, United States 
     Code, is amended by striking ``There'' and inserting ``Except 
     as otherwise provided in section 2011, there''.
       (4) Relationship between the treasury and the postal 
     service.--Section 2006 of title 39, United States Code, is 
     amended--
       (A) in subsection (a), in the first sentence, by inserting 
     ``or 2011'' after ``section 2005'';
       (B) in subsection (b)--
       (i) in the first sentence, by inserting ``under section 
     2005'' before ``in such amounts''; and
       (ii) in the second sentence, by inserting ``under section 
     2005'' before ``in excess of such amount.''; and
       (C) in subsection (c), by inserting ``or 2011(e)(4)(E)'' 
     after ``section 2005(d)(5)''.

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

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

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

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

     SEC. 403. UNFAIR COMPETITION PROHIBITED.

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

     ``Sec. 404a. Specific limitations

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

``404a. Specific limitations.''.

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

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

[[Page H9169]]

       ``(A) shall not be immune under any doctrine of sovereign 
     immunity from suit in Federal court by any person for any 
     violation of Federal law by such agency or any officer or 
     employee thereof; and
       ``(B) shall be considered to be a person (as defined in 
     subsection (a) of the first section of the Clayton Act) for 
     purposes of--
       ``(i) the antitrust laws (as defined in such subsection); 
     and
       ``(ii) section 5 of the Federal Trade Commission Act to the 
     extent that such section 5 applies to unfair methods of 
     competition.
     For purposes of the preceding sentence, any private carriage 
     of mail allowable by virtue of section 601 shall not be 
     considered a service reserved to the United States under 
     section 1696 of title 18.
       ``(2) No damages, interest on damages, costs or attorney's 
     fees may be recovered, and no criminal liability may be 
     imposed, under the antitrust laws (as so defined) from any 
     officer or employee of the Postal Service, or other Federal 
     agency acting on behalf of or in concert with the Postal 
     Service, acting in an official capacity.
       ``(3) This subsection shall not apply with respect to 
     conduct occurring before the date of enactment of this 
     subsection.
       ``(f)(1) Each building constructed or altered by the Postal 
     Service shall be constructed or altered, to the maximum 
     extent feasible as determined by the Postal Service, in 
     compliance with 1 of the nationally recognized model building 
     codes and with other applicable nationally recognized codes.
       ``(2) Each building constructed or altered by the Postal 
     Service shall be constructed or altered only after 
     consideration of all requirements (other than procedural 
     requirements) of zoning laws, land use laws, and applicable 
     environmental laws of a State or subdivision of a State which 
     would apply to the building if it were not a building 
     constructed or altered by an establishment of the Government 
     of the United States.
       ``(3) For purposes of meeting the requirements of 
     paragraphs (1) and (2) with respect to a building, the Postal 
     Service shall--
       ``(A) in preparing plans for the building, consult with 
     appropriate officials of the State or political subdivision, 
     or both, in which the building will be located;
       ``(B) upon request, submit such plans in a timely manner to 
     such officials for review by such officials for a reasonable 
     period of time not exceeding 30 days; and
       ``(C) permit inspection by such officials during 
     construction or alteration of the building, in accordance 
     with the customary schedule of inspections for construction 
     or alteration of buildings in the locality, if such officials 
     provide to the Postal Service--
       ``(i) a copy of such schedule before construction of the 
     building is begun; and
       ``(ii) reasonable notice of their intention to conduct any 
     inspection before conducting such inspection.
     Nothing in this subsection shall impose an obligation on any 
     State or political subdivision to take any action under the 
     preceding sentence, nor shall anything in this subsection 
     require the Postal Service or any of its contractors to pay 
     for any action taken by a State or political subdivision to 
     carry out this subsection (including reviewing plans, 
     carrying out on-site inspections, issuing building permits, 
     and making recommendations).
       ``(4) Appropriate officials of a State or a political 
     subdivision of a State may make recommendations to the Postal 
     Service concerning measures necessary to meet the 
     requirements of paragraphs (1) and (2). Such officials may 
     also make recommendations to the Postal Service concerning 
     measures which should be taken in the construction or 
     alteration of the building to take into account local 
     conditions. The Postal Service shall give due consideration 
     to any such recommendations.
       ``(5) In addition to consulting with local and State 
     officials under paragraph (3), the Postal Service shall 
     establish procedures for soliciting, assessing, and 
     incorporating local community input on real property and land 
     use decisions.
       ``(6) For purposes of this subsection, the term `State' 
     includes the District of Columbia, the Commonwealth of Puerto 
     Rico, and a territory or possession of the United States.
       ``(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 postal treaties, conventions, and amendments related 
     to international postal services and other international 
     delivery services, except that the Secretary may not conclude 
     any treaty, convention, or other international agreement 
     (including those regulating international postal services) if 
     such treaty, convention, or agreement would, with respect to 
     any competitive product, grant an undue or unreasonable 
     preference to the Postal Service, a private provider of 
     international postal or delivery services, or any other 
     person.
       ``(2) In carrying out the responsibilities specified in 
     paragraph (1), the Secretary of State shall exercise primary 
     authority for the conduct of foreign policy with respect to 
     international postal services and international delivery 
     services, including the determination of United States 
     positions and the conduct of United States participation in 
     negotiations with foreign governments and international 
     bodies. In exercising this authority, the Secretary--
       ``(A) shall coordinate with other agencies as appropriate, 
     and in particular, shall give full consideration to the 
     authority vested by law or Executive order in the Postal 
     Regulatory Commission, the Department of Commerce, the 
     Department of Transportation, and the Office of the United 
     States Trade Representative in this area;
       ``(B) shall maintain continuing liaison with other 
     executive branch agencies concerned with postal and delivery 
     services;
       ``(C) shall maintain continuing liaison with the Committee 
     on Homeland Security and Governmental Affairs of the Senate 
     and the Committee on Government Reform of the House of 
     Representatives;
       ``(D) shall maintain appropriate liaison with both 
     representatives of the Postal Service and representatives of 
     users and private providers of international postal services 
     and other international delivery services to keep informed of 
     their interests and problems, and to provide such assistance 
     as may be needed to ensure that matters of concern are 
     promptly considered by the Department of State or (if 
     applicable, and to the extent practicable) other executive 
     branch agencies; and
       ``(E) shall assist in arranging meetings of such public 
     sector advisory groups as may be established to advise the 
     Department of State and other executive branch agencies in 
     connection with international postal services and 
     international delivery services.
       ``(3) The Secretary of State shall establish an advisory 
     committee (within the meaning of the Federal Advisory 
     Committee Act) to perform such functions as the Secretary 
     considers appropriate in connection with carrying out 
     subparagraphs (A) through (D) of paragraph (2).
       ``(c)(1) Before concluding any treaty, convention, or 
     amendment that establishes a rate or classification for a 
     product subject to subchapter I of chapter 36, the Secretary 
     of

[[Page H9170]]

     State shall request the Postal Regulatory Commission to 
     submit its views on whether such rate or classification is 
     consistent with the standards and criteria established by the 
     Commission under section 3622.
       ``(2) The Secretary shall ensure that each treaty, 
     convention, or amendment concluded under subsection (b) is 
     consistent with the views submitted by the Commission 
     pursuant to paragraph (1), except if, or to the extent, the 
     Secretary determines, in writing, that it is not in the 
     foreign policy or national security interest of the United 
     States to ensure consistency with the Commission's views. 
     Such written determination shall be provided to the 
     Commission together with a full explanation of the reasons 
     thereof, provided that the Secretary may designate which 
     portions of the determination or explanation shall be kept 
     confidential for reasons of foreign policy or national 
     security.
       ``(d) Nothing in this section shall be considered to 
     prevent the Postal Service from entering into such commercial 
     or operational contracts related to providing international 
     postal services and other international delivery services as 
     it deems appropriate, except that--
       ``(1) any such contract made with an agency of a foreign 
     government (whether under authority of this subsection or 
     otherwise) shall be solely contractual in nature and may not 
     purport to be international law; and
       ``(2) a copy of each such contract between the Postal 
     Service and an agency of a foreign government shall be 
     transmitted to the Secretary of State and the Postal 
     Regulatory Commission not later than the effective date of 
     such contract.
       ``(e)(1) In this subsection, the term `private company' 
     means a private company substantially owned or controlled by 
     persons who are citizens of the United States.
       ``(2) With respect to shipments of international mail that 
     are competitive products within the meaning of section 3631 
     that are exported or imported by the Postal Service, the 
     Customs Service and other appropriate Federal agencies shall 
     apply the customs laws of the United States and all other 
     laws relating to the importation or exportation of such 
     shipments in the same manner to both shipments by the Postal 
     Service and similar shipments by private companies.
       ``(3) In exercising the authority under subsection (b) to 
     conclude new postal treaties and conventions related to 
     international postal services and to renegotiate such 
     treaties and conventions, the Secretary of State shall, to 
     the maximum extent practicable, take such measures as are 
     within the Secretary's control to encourage the governments 
     of other countries to make available to the Postal Service 
     and private companies a range of nondiscriminatory customs 
     procedures that will fully meet the needs of all types of 
     American shippers. The Secretary of State shall consult with 
     the United States Trade Representative and the Commissioner 
     of Customs in carrying out this paragraph.
       ``(4) The provisions of this subsection shall take effect 6 
     months after the date of enactment of this subsection or such 
     earlier date as the Bureau of Customs and Border Protection 
     of the Department of Homeland Security may determine in 
     writing.''.
       (b) Effective Date.--Notwithstanding any provision of the 
     amendment made by subsection (a), the authority of the United 
     States Postal Service to establish the rates of postage or 
     other charges on mail matter conveyed between the United 
     States and other countries shall remain available to the 
     Postal Service until--
       (1) with respect to market-dominant products, the date as 
     of which the regulations promulgated under section 3622 of 
     title 39, United States Code (as amended by section 201(a)) 
     take effect; and
       (2) with respect to competitive products, the date as of 
     which the regulations promulgated under section 3633 of title 
     39, United States Code (as amended by section 202) take 
     effect.

                      TITLE V--GENERAL PROVISIONS

     SEC. 501. QUALIFICATION AND TERM REQUIREMENTS FOR GOVERNORS.

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

     SEC. 502. OBLIGATIONS.

       (a) Purposes for Which Obligations May Be Issued.--The 
     first sentence of section 2005(a)(1) of title 39, United 
     States Code, is amended by striking ``title.'' and inserting 
     ``title, other than any of the purposes for which the 
     corresponding authority is available to the Postal Service 
     under section 2011.''.
       (b) Limitation on Net Annual Increase in Obligations Issued 
     for Certain Purposes.--The third sentence of section 
     2005(a)(1) of title 39, United States Code, is amended to 
     read as follows: ``In any one fiscal year, the net increase 
     in the amount of obligations outstanding issued for the 
     purpose of capital improvements and the net increase in the 
     amount of obligations outstanding issued for the purpose of 
     defraying operating expenses of the Postal Service shall not 
     exceed a combined total of $3,000,000,000.'' .
       (c) Limitations on Obligations Outstanding.--
       (1) In general.--Subsection (a) of section 2005 of title 
     39, United States Code, is amended by adding at the end the 
     following:
       ``(3) For purposes of applying the respective limitations 
     under this subsection, the aggregate amount of obligations 
     issued by the Postal Service which are outstanding as of any 
     one time, and the net increase in the amount of obligations 
     outstanding issued by the Postal Service for the purpose of 
     capital improvements or for the purpose of defraying 
     operating expenses of the Postal Service in any fiscal year, 
     shall be determined by aggregating the relevant obligations 
     issued by the Postal Service under this section with the 
     relevant obligations issued by the Postal Service under 
     section 2011.''.
       (2) Conforming amendment.--The second sentence of section 
     2005(a)(1) of title 39, United States Code, is amended by 
     striking ``any such obligations'' and inserting ``obligations 
     issued by the Postal Service which may be''.
       (d) Amounts Which May Be Pledged.--
       (1) Obligations to which provisions apply.--The first 
     sentence of section 2005(b) of title 39, United States Code, 
     is amended by striking ``such obligations,'' and inserting 
     ``obligations issued by the Postal Service under this 
     section,''.
       (2) Assets, revenues, and receipts to which provisions 
     apply.--Subsection (b) of section 2005 of title 39, United 
     States Code, is amended by striking ``(b)'' and inserting 
     ``(b)(1)'', and by adding at the end the following:
       ``(2) Notwithstanding any other provision of this section--

[[Page H9171]]

       ``(A) the authority to pledge assets of the Postal Service 
     under this subsection shall be available only to the extent 
     that such assets are not related to the provision of 
     competitive products (as determined under section 2011(h) or, 
     for purposes of any period before accounting practices and 
     principles under section 2011(h) have been established and 
     applied, the best information available from the Postal 
     Service, including the audited statements required by section 
     2008(e)); and
       ``(B) any authority under this subsection relating to the 
     pledging or other use of revenues or receipts of the Postal 
     Service shall be available only to the extent that they are 
     not revenues or receipts of the Competitive Products Fund.''.

     SEC. 503. PRIVATE CARRIAGE OF LETTERS.

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

     SEC. 504. RULEMAKING AUTHORITY.

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

     SEC. 505. NONINTERFERENCE WITH COLLECTIVE BARGAINING 
                   AGREEMENTS.

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

     ``Sec. 1207. Labor disputes

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

     SEC. 506. BONUS AUTHORITY.

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

     ``Sec. 3686. Bonus authority

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

[[Page H9172]]

                TITLE VI--ENHANCED REGULATORY COMMISSION

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

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

               ``CHAPTER 5--POSTAL REGULATORY COMMISSION

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

     ``Sec. 501. Establishment

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

     ``Sec. 502. Commissioners

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

     ``Sec. 505. Officer of the Postal Regulatory Commission 
       representing the general public

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

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

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

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

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

       (a) Postal Regulatory Commission.--Subsection (d) of 
     section 504 of title 39, United States Code (as so 
     redesignated by section 601) is amended to read as follows:
       ``(d) There are authorized to be appropriated, out of the 
     Postal Service Fund, such sums as may be necessary for the 
     Postal Regulatory Commission. In requesting an appropriation 
     under this subsection for a fiscal year, the Commission shall 
     prepare and submit to the Congress under section 2009 a 
     budget of the Commission's expenses, including expenses for 
     facilities, supplies, compensation, and employee benefits.''.
       (b) Office of Inspector General of the United States Postal 
     Service.--Section 8G(f) of the Inspector General Act of 1978 
     (5 U.S.C. App.) is amended--
       (1) by redesignating paragraph (4) as paragraph (5);
       (2) by redesignating the second paragraph (3) (relating to 
     employees and labor organizations) as paragraph (4); and
       (3) by adding at the end the following:
       ``(6) There are authorized to be appropriated, out of the 
     Postal Service Fund, such sums as may be necessary for the 
     Office of Inspector General of the United States Postal 
     Service.''.
       (c) Budget Program.--
       (1) In general.--The next to last sentence of section 2009 
     of title 39, United States Code, is amended to read as 
     follows: ``The budget program shall also include separate 
     statements of the amounts which (1) the Postal Service 
     requests to be appropriated under subsections (b) and (c) of 
     section 2401, (2) the Office of Inspector General of the 
     United States Postal Service requests to be appropriated, out 
     of the Postal Service Fund, under section 8G(f) of the 
     Inspector General Act of 1978, and (3) the Postal Regulatory 
     Commission requests to be appropriated, out of the Postal 
     Service Fund, under section 504(d) of this title.''.
       (2) Conforming amendment.--Section 2003(e)(1) of title 39, 
     United States Code, is amended by striking the first sentence 
     and inserting the following: ``The Fund shall be available 
     for the payment of (A) all expenses incurred by the Postal 
     Service in carrying out its functions as provided by law, 
     subject to the same limitation as set forth in the 
     parenthetical matter under subsection (a); (B) all expenses 
     of the Postal Regulatory Commission, subject to the 
     availability of amounts appropriated under section 504(d); 
     and (C) all expenses of the Office of Inspector

[[Page H9173]]

     General, subject to the availability of amounts appropriated 
     under section 8G(f) of the Inspector General Act of 1978.''.
       (d) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     apply with respect to fiscal years beginning on or after 
     October 1, 2008.
       (2) Savings provision.--The provisions of title 39, United 
     States Code, and the Inspector General Act of 1978 (5 U.S.C. 
     App.) that are amended by this section shall, for purposes of 
     any fiscal year before the first fiscal year to which the 
     amendments made by this section apply, continue to apply in 
     the same way as if this section had never been enacted.

     SEC. 604. REDESIGNATION OF THE POSTAL RATE COMMISSION.

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

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

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

                         TITLE VII--EVALUATIONS

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

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

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

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

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

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

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

       (a) Report by the Inspector General.--

[[Page H9174]]

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

     SEC. 705. STUDY ON RECYCLED PAPER.

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

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

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

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

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

     SEC. 708. RATES FOR PERIODICALS.

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

     SEC. 709. ASSESSMENT OF CERTAIN RATE DEFICIENCIES.

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

     SEC. 710. ASSESSMENT OF FUTURE BUSINESS MODEL OF THE POSTAL 
                   SERVICE.

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

[[Page H9175]]

     final report a copy of all formal written comments received 
     under this subsection.
       (f) Authorization of Appropriations.--There are authorized 
     to be appropriated from the Postal Service Fund such sums as 
     may be necessary to carry out this section.

     SEC. 711. PROVISIONS RELATING TO COOPERATIVE MAILINGS.

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

     SEC. 712. DEFINITION.

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

   TITLE VIII--POSTAL SERVICE RETIREMENT AND HEALTH BENEFITS FUNDING

     SEC. 801. SHORT TITLE.

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

     SEC. 802. CIVIL SERVICE RETIREMENT SYSTEM.

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

     SEC. 803. HEALTH INSURANCE.

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

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

       ``(a) There is in the Treasury of the United States a 
     Postal Service Retiree Health Benefits Fund which is 
     administered by the Office of Personnel Management.
       ``(b) The Fund is available without fiscal year limitation 
     for payments required under section 8906(g)(2)(A).
       ``(c) The Secretary of the Treasury shall immediately 
     invest, in interest-bearing securities of the United States 
     such currently available portions of the Fund as are not 
     immediately required for payments from the Fund. Such 
     investments shall be made in the same manner as investments 
     for the Civil Service Retirement and Disability Fund under 
     section 8348.
       ``(d)(1) Not later than June 30, 2007, and by June 30 of 
     each succeeding year, the Office shall compute the net 
     present value of the future payments required under section 
     8906(g)(2)(A) and attributable to the service of Postal 
     Service employees during the most recently ended fiscal year.
       ``(2)(A) Not later than June 30, 2007, the Office shall 
     compute, and by June 30 of each succeeding year, the Office 
     shall recompute the difference between--
       ``(i) the net present value of the excess of future 
     payments required under section 8906(g)(2)(A) for current and 
     future United States Postal Service annuitants as of the end 
     of the fiscal year ending on September 30 of that year; and
       ``(ii)(I) the value of the assets of the Postal Retiree 
     Health Benefits Fund as of the end of the fiscal year ending 
     on September 30 of that year; and
       ``(II) the net present value computed under paragraph (1).
       ``(B) Not later than June 30, 2017, the Office shall 
     compute, and by June 30 of each succeeding year shall 
     recompute, a schedule including a series of annual 
     installments which provide for the liquidation of any 
     liability or surplus by September 30, 2056, or within 15 
     years, whichever is later, of the net present value 
     determined under subparagraph (A), including interest at the 
     rate used in that computation.
       ``(3)(A) The United States Postal Service shall pay into 
     such Fund--
       ``(i) $5,400,000,000, not later than September 30, 2007;
       ``(ii) $5,600,000,000, not later than September 30, 2008;
       ``(iii) $5,400,000,000, not later than September 30, 2009;
       ``(iv) $5,500,000,000, not later than September 30, 2010;
       ``(v) $5,500,000,000, not later than September 30, 2011;
       ``(vi) $5,600,000,000, not later than September 30, 2012;
       ``(vii) $5,600,000,000, not later than September 30, 2013;

[[Page H9176]]

       ``(viii) $5,700,000,000, not later than September 30, 2014;
       ``(ix) $5,700,000,000, not later than September 30, 2015; 
     and
       ``(x) $5,800,000,000, not later than September 30, 2016.
       ``(B) Not later than September 30, 2017, and by September 
     30 of each succeeding year, the United States Postal Service 
     shall pay into such Fund the sum of--
       ``(i) the net present value computed under paragraph (1); 
     and
       ``(ii) any annual installment computed under paragraph 
     (2)(B).
       ``(4) Computations under this subsection shall be made 
     consistent with the assumptions and methodology used by the 
     Office for financial reporting under subchapter II of chapter 
     35 of title 31.
       ``(5)(A)(i) Any computation or other determination of the 
     Office under this subsection shall, upon request of the 
     United States Postal Service, be subject to a review by the 
     Postal Regulatory Commission under this paragraph.
       ``(ii) Upon receiving a request under clause (i), the 
     Commission shall promptly procure the services of an actuary, 
     who shall hold membership in the American Academy of 
     Actuaries and shall be qualified in the evaluation of 
     healthcare insurance obligations, to conduct a review in 
     accordance with generally accepted actuarial practices and 
     principles and to provide a report to the Commission 
     containing the results of the review. The Commission, upon 
     determining that the report satisfies the requirements of 
     this subparagraph, shall approve the report, with any 
     comments it may choose to make, and submit it with any such 
     comments to the Postal Service, the Office of Personnel 
     Management, and Congress.
       ``(B) Upon receiving the report under subparagraph (A), the 
     Office of Personnel Management shall reconsider its 
     determination or redetermination in light of such report, and 
     shall make any appropriate adjustments. The Office shall 
     submit a report containing the results of its reconsideration 
     to the Commission, the Postal Service, and Congress.
       ``(6) After consultation with the United States Postal 
     Service, the Office shall promulgate any regulations the 
     Office determines necessary under this subsection.''.
       (2) Technical and conforming amendment.--The table of 
     sections for chapter 89 of title 5, United States Code, is 
     amended by inserting after the item relating to section 8909 
     the following:

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

     SEC. 804. REPEAL OF DISPOSITION OF SAVINGS PROVISION.

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

     SEC. 805. EFFECTIVE DATES.

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

                TITLE IX--COMPENSATION FOR WORK INJURIES

     SEC. 901. TEMPORARY DISABILITY; CONTINUATION OF PAY.

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

                         TITLE X--MISCELLANEOUS

     SEC. 1001. EMPLOYMENT OF POSTAL POLICE OFFICERS.

       Section 3061 of title 18, United States Code, is amended by 
     adding at the end the following:
       ``(c)(1) The Postal Service may employ police officers for 
     duty in connection with the protection of property owned or 
     occupied by the Postal Service or under the charge and 
     control of the Postal Service, and persons on that property, 
     including duty in areas outside the property to the extent 
     necessary to protect the property and persons on the 
     property.
       ``(2) With respect to such property, such officers shall 
     have the power to--
       ``(A) enforce Federal laws and regulations for the 
     protection of persons and property;
       ``(B) carry firearms; and
       ``(C) make arrests without a warrant for any offense 
     against the Unites States committed in the presence of the 
     officer or for any felony cognizable under the laws of the 
     United States if the officer has reasonable grounds to 
     believe that the person to be arrested has committed or is 
     committing a felony.
       ``(3) With respect to such property, such officers may 
     have, to such extent as the Postal Service may by regulations 
     prescribe, the power to--
       ``(A) serve warrants and subpoenas issued under the 
     authority of the United States; and
       ``(B) conduct investigations, on and off the property in 
     question, of offenses that may have been committed against 
     property owned or occupied by the Postal Service or persons 
     on the property.
       ``(4)(A) As to such property, the Postmaster General may 
     prescribe regulations necessary for the protection and 
     administration of property owned or occupied by the Postal 
     Service and persons on the property. The regulations may 
     include reasonable penalties, within the limits prescribed in 
     subparagraph (B), for violations of the regulations. The 
     regulations shall be posted and remain posted in a 
     conspicuous place on the property.
       ``(B) A person violating a regulation prescribed under this 
     subsection shall be fined under this title, imprisoned for 
     not more than 30 days, or both.''.

     SEC. 1002. OBSOLETE PROVISIONS.

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

     SEC. 1003. REDUCED RATES.

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

[[Page H9177]]

       ``(3) Rates of postage for a class of mail or kind of 
     mailer under former section 4358(a) through (c) of this title 
     shall be established so that postage on each mailing of such 
     mail reflects its preferred status as compared to the postage 
     for the most closely corresponding regular-rate category 
     mailing.'';
       (2) in subsection (g), by adding at the end the following:
       ``(3) For purposes of this section and former section 
     4358(a) through (c) of this title, those copies of an issue 
     of a publication entered within the county in which it is 
     published, but distributed outside such county on postal 
     carrier routes originating in the county of publication, 
     shall be treated as if they were distributed within the 
     county of publication.
       ``(4)(A) In the case of an issue of a publication, any 
     number of copies of which are mailed at the rates of postage 
     for a class of mail or kind of mailer under former section 
     4358(a) through (c) of this title, any copies of such issue 
     which are distributed outside the county of publication 
     (excluding any copies subject to paragraph (3)) shall be 
     subject to rates of postage provided for under this 
     paragraph.
       ``(B) The rates of postage applicable to mail under this 
     paragraph shall be established in accordance with section 
     3622.
       ``(C) This paragraph shall not apply with respect to an 
     issue of a publication unless the total paid circulation of 
     such issue outside the county of publication (not counting 
     recipients of copies subject to paragraph (3)) is less than 
     5,000.''; and
       (3) by adding at the end the following:
       ``(n) In the administration of this section, matter that 
     satisfies the circulation standards for requester 
     publications shall not be excluded from being mailed at the 
     rates for mail under former section 4358 solely because such 
     matter is designed primarily for free circulation or for 
     circulation at nominal rates, or fails to meet the 
     requirements of former section 4354(a)(5).''.

     SEC. 1004. SENSE OF CONGRESS REGARDING POSTAL SERVICE 
                   PURCHASING REFORM.

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

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

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

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

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

     SEC. 1007. PROVISIONS RELATING TO BENEFITS UNDER CHAPTER 81 
                   OF TITLE 5, UNITED STATES CODE, FOR OFFICERS 
                   AND EMPLOYEES OF THE FORMER POST OFFICE 
                   DEPARTMENT.

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

     SEC. 1008. HAZARDOUS MATTER.

       (a) Nonmailability Generally.--Section 3001 of title 39, 
     United States Code, is amended--
       (1) by redesignating subsection (n) as subsection (o); and
       (2) by inserting after subsection (m) the following:
       ``(n)(1) Except as otherwise authorized by law or 
     regulations of the Postal Service, hazardous material is 
     nonmailable.

[[Page H9178]]

       ``(2) In this subsection, the term `hazardous material' 
     means a substance or material designated by the Secretary of 
     Transportation under section 5103(a) of title 49.''.
       (b) Mailability.--Chapter 30 of title 39, United States 
     Code, is amended by adding at the end the following:

     ``Sec. 3018. Hazardous material

       ``(a) In General.--The Postal Service shall prescribe 
     regulations for the safe transportation of hazardous material 
     in the mail.
       ``(b) Prohibitions.--No person may--
       ``(1) mail or cause to be mailed hazardous material that 
     has been declared by statute or Postal Service regulation to 
     be nonmailable;
       ``(2) mail or cause to be mailed hazardous material in 
     violation of any statute or Postal Service regulation 
     restricting the time, place, or manner in which hazardous 
     material may be mailed; or
       ``(3) manufacture, distribute, or sell any container, 
     packaging kit, or similar device that--
       ``(A) is represented, marked, certified, or sold by such 
     person for use in the mailing of hazardous material; and
       ``(B) fails to conform with any statute or Postal Service 
     regulation setting forth standards for a container, packaging 
     kit, or similar device used for the mailing of hazardous 
     material.
       ``(c) Civil Penalty; Clean-Up Costs and Damages.--
       ``(1) In general.--A person who knowingly violates this 
     section or a regulation prescribed under this section shall 
     be liable for--
       ``(A) a civil penalty of at least $250, but not more than 
     $100,000, for each violation;
       ``(B) the costs of any clean-up associated with each 
     violation; and
       ``(C) damages.
       ``(2) Knowing action.--A person acts knowingly for purposes 
     of paragraph (1) when--
       ``(A) the person has actual knowledge of the facts giving 
     rise to the violation; or
       ``(B) a reasonable person acting in the circumstances and 
     exercising reasonable care would have had that knowledge.
       ``(3) Separate violations.--
       ``(A) Violations over time.--A separate violation under 
     this subsection occurs for each day hazardous material, 
     mailed or caused to be mailed in noncompliance with this 
     section, is in the mail.
       ``(B) Separate items.--A separate violation under this 
     subsection occurs for each item containing hazardous material 
     that is mailed or caused to be mailed in noncompliance with 
     this section.
       ``(d) Hearings.--The Postal Service may determine that a 
     person has violated this section or a regulation prescribed 
     under this section only after notice and an opportunity for a 
     hearing. Proceedings under this section shall be conducted in 
     accordance with section 3001(m).
       ``(e) Penalty Considerations.--In determining the amount of 
     a civil penalty for a violation of this section, the Postal 
     Service shall consider--
       ``(1) the nature, circumstances, extent, and gravity of the 
     violation;
       ``(2) with respect to the person who committed the 
     violation, the degree of culpability, any history of prior 
     violations, the ability to pay, and any effect on the ability 
     to continue in business;
       ``(3) the impact on Postal Service operations; and
       ``(4) any other matters that justice requires.
       ``(f) Civil Actions To Collect.--
       ``(1) In general.--In accordance with section 409(d), a 
     civil action may be commenced in an appropriate district 
     court of the United States to collect a civil penalty, clean-
     up costs, and damages assessed under subsection (c).
       ``(2) Compromise.--The Postal Service may compromise the 
     amount of a civil penalty, clean-up costs, and damages 
     assessed under subsection (c) before commencing a civil 
     action with respect to such civil penalty, clean-up costs, 
     and damages under paragraph (1).
       ``(g) Civil Judicial Penalties.--
       ``(1) In general.--At the request of the Postal Service, 
     the Attorney General may bring a civil action in an 
     appropriate district court of the United States to enforce 
     this section or a regulation prescribed under this section.
       ``(2) Relief.--The court in a civil action under paragraph 
     (1) may award appropriate relief, including a temporary or 
     permanent injunction, civil penalties as determined in 
     accordance with this section, or punitive damages.
       ``(3) Construction.--A civil action under this subsection 
     shall be in lieu of civil penalties for the same violation 
     under subsection (c)(1)(A).
       ``(h) Deposit of Amounts Collected.--
       ``(1) Postal service fund.--Except as provided under 
     paragraph (2), amounts collected under subsection (c)(1)(B) 
     and (C) shall be deposited into the Postal Service Fund under 
     section 2003.
       ``(2) Treasury.--Amounts collected under subsection 
     (c)(1)(A) and any punitive damages collected under subsection 
     (c)(1)(C) shall be deposited into the Treasury of the United 
     States.''.
       (c) Conforming Amendments.--(1) Section 2003(b) of title 
     39, United States Code, is amended--
       (A) in paragraph (7), by striking ``and'' after the 
     semicolon;
       (B) in paragraph (8), by striking ``purposes.'' and 
     inserting ``purposes; and''; and
       (C) by adding at the end the following:
       ``(9) any amounts collected under section 3018.''.
       (2) The analysis for chapter 30 of title 39, United States 
     Code, is amended by adding at the end the following:

``3018. Hazardous material.''.
       (d) Injurious Articles as Nonmailable.--Section 1716(a) of 
     title 18, United States Code, is amended by inserting after 
     ``explosives,'' the following: ``hazardous materials,''.

     SEC. 1009. ZIP CODES AND RETAIL HOURS.

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

     SEC. 1010. TECHNICAL AND CONFORMING AMENDMENTS.

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

     ``Sec. 3682. Size and weight limits

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

``28. Strategic Planning and Performance Management.............2801'';
       (3) in section 3005(a)--
       (A) in the matter before paragraph (1), by striking all 
     that follows ``nonmailable'' and

[[Page H9179]]

     precedes ``(h),'' and inserting ``under section 3001(d),''; 
     and
       (B) in the sentence following paragraph (3), by striking 
     all that follows ``nonmailable'' and precedes ``(h),'' and 
     inserting ``under such section 3001(d),'';
       (4) in section 3210(a)(6)(C), by striking the matter after 
     ``if such mass mailing'' and before ``than 60 days'' and 
     inserting ``is postmarked fewer''; and
       (5) by striking the heading for section 3627 and inserting 
     the following:

     ``Sec. 3627. Adjusting free rates''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Virginia (Mr. Tom Davis) and the gentleman from Illinois (Mr. Davis) 
each will control 20 minutes.
  The Chair recognizes the gentleman from Virginia.


                             General Leave

  Mr. TOM DAVIS of Virginia. Mr. Speaker, I ask unanimous consent that 
all Members may have 5 legislative days within which to revise and 
extend their remarks and include extraneous material on the bill under 
consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Virginia?
  There was no objection.
  Mr. TOM DAVIS of Virginia. Mr. Speaker, I yield myself such time as I 
may consume.
  Mr. Speaker, I rise today in support of H.R. 6407, the Postal 
Accountability and Enhancement Act. This is the first major overhaul of 
the Postal Service since 1970. The House passed its version of postal 
reform in July of 2005 by a vote of 410-20. The Senate passed its 
version in February by unanimous consent.
  This bill is the product of months of negotiations between the House 
and the Senate and the administration. It is also the culmination of 
more than a decade of hard work and study, not to mention a great deal 
of bipartisan negotiation and cooperation.

                              {time}  2215

  Mr. Speaker, this bill is the product of months of negotiations 
between the House, the Senate and the administration. It is also the 
culmination of more than a decade of hard work and study, not to 
mention a great deal of bipartisan negotiation and cooperation. The 
landmark legislation solves the structural, legal and financial 
constraints that have brought the postal service to the brink of utter 
breakdown.
  The postal service is the center of a $900 billion industry, 
employing 9 million workers nationwide. Each year, the U.S.P.S. 
processes and delivers over 200 million pieces of mail to more than 130 
million households and businesses in the United States, but the last 
major overhaul of the statutes governing the postal service occurred in 
1970 before the Internet and e-mails and faxes, before letters became 
snail mail, before the deregulation of the airline industry, before 
competitors like FedEx even existed.
  Today, this critical component of our Nation's economy is being 
challenged by a variety of factors, including increasing volume, 
insufficient revenue, mounting debts and new technologies such as the 
Internet advertising, electronic bill payments, e-mails and faxes.
  As a result, the GAO has included the postal service on its high-risk 
series since 2001. This compromise will reverse the death spiral at the 
postal service and bring the postal service into the 21st century.
  I want to take this opportunity to thank Congressman John McHugh of 
New York who recognized the need for comprehensive postal reform 
legislation when he became chairman of this subcommittee at the 
beginning of the 104th Congress and has championed reform tirelessly. I 
also want to thank Henry Waxman and Danny Davis for their dedication to 
this subject and their willingness to cooperate in a bipartisan manner.
  I want to thank the principal sponsors in the Senate, Susan Collins 
of Maine and Tom Carper of Delaware. Without their leadership and 
dedication, this compromise would not have been possible.
  Finally, I want to thank the many members of our staff who have 
worked on this important issue: Jack Callender, Ellen Brown, and Mason 
Alinger of my committee staff; also Robert Taub of Congressman McHugh's 
staff who has dedicated years of his life to this cause; and also Phil 
Barnett, Denise Wilson, and Naomi Seiler of Congressman Waxman's staff; 
Jill Hunter-Williams of Congressman Danny Davis' staff; and Ann Fisher 
of Senator Collins' and John Kilvington of Senator Carper's staff.
  I also want to thank all those individuals in the administration that 
have actively and tirelessly participated in the negotiations to help 
us reach this point today, especially Michael Bopp, Jeff Sharpe and 
Chris Frech.
  Mr. Speaker, all the stakeholders in this legislation, postal 
employees, financial services companies, major marketers, have been 
rigorous in urging Congress and the administration to complete this 
bill. No one thinks it is perfect. This is the nature of compromise, 
but everyone, especially all Americans who use stamps, will be 
significantly better off with this legislation than they would be 
without this long overdue package of reforms.
  I urge my colleagues to support this important legislation.
  Mr. Speaker, I reserve the balance of my time.
  Mr. DAVIS of Illinois. Mr. Speaker, I yield myself such time as I 
might consume.
  Mr. Speaker, I rise in strong support of this landmark postal reform 
bill. Members of the House have worked for over a decade to reform this 
important part of our national communications system and our economy. I 
am indeed pleased to serve in the Congress that is making this reform a 
reality.
  I want to commend and congratulate Chairman Tom Davis and Ranking 
Member Henry Waxman for their tremendous commitment and dedication to 
making this truly a bipartisan effort and for the tenacious way in 
which they have worked to bring us to this point this evening.
  I also want to commend Representative McHugh who has been the point 
person for the Republican side of the aisle on this matter for more 
than 10 years, who has stayed with it, stuck with it, and one of the 
reasons that we are here today is because of his tenacious work.
  I also want to thank all of the stakeholders, the unions, the mailers 
and others, who are greatly affected.
  I want to thank the Board of Governors and the Postmaster General, 
Mr. Potter, for their willingness to work with us.
  And I want to think the other body, the Members of the Senate who 
were willing to negotiate, to engage in the give-and-take that is so 
necessary to make bipartisan, bicameral legislation a reality.
  This bill is a prime example of bipartisan negotiation and 
collaboration. It is a compromise that will modernize the postal system 
and help it remain healthy and affordable well into the 21st century.
  I represent much of the city of Chicago, one of the primary postal 
hubs in the Midwest with over 12,000 postal employees who deliver mail 
daily to 1.2 million homes and businesses in the Chicago area. I also 
represent numerous printing and mailing companies that rely upon the 
movement of mail. Therefore, ensuring a healthy postal service is a key 
issue of great concern to me.
  This bill has many highlights. It provides for ratemaking 
flexibility, rate stability, universal service, high quality standards, 
and collective bargaining.
  In addition, I am pleased that the bill advances fair business 
practices related to employees who are women and/or racial minorities. 
For example, I am pleased that it includes a study on the 
representation of women and minority members in supervisory and 
management positions within the postal service. It is important to 
understand how well the postal service is doing in opening up its 
senior positions to groups who historically have not had that kind of 
access.
  The bill goes even further by requiring measures to incorporate the 
affirmative action and equal opportunity criteria into the performance 
appraisals of senior supervisory or managerial employees. This change 
helps ensure that management will be held accountable for adhering to 
the organization's goals of equal opportunity. And I want to sincerely 
thank Mr. Waxman for his vigorous support for this diversity provision.
  I am also pleased that the bill includes a study of the number of 
contracts with women, minorities and small businesses to ensure that 
all

[[Page H9180]]

groups have access to the postal service contracts.
  Mr. Speaker, these are just some of the provisions that will go a 
long way towards helping the postal service to better serve its 
customers, compete fairly with the mailing industry, and contribute to 
our Nation.
  I especially want to thank the committee staff, Phil Barnett, Denise 
Wilson, Naomi Seiler, and all of the staff persons who worked to make 
this a reality.
  I want to thank Ellen Brown, Jack Callender, Robert Taub and my 
staff, Richard Boykin and Jill Hunter-Williams.
  Mr. Speaker, it is obviously time for postal reform. We have gone 
through this now for several years, and all of us who have worked on it 
are indeed pleased with the fact that we were able to compromise, to 
come together, to massage egos, to make real the idea that we can have 
a solid piece of legislation. I am proud to support it.
  Mr. Speaker, I reserve the balance of my time.
  Mr. TOM DAVIS of Virginia. Mr. Speaker, I yield 5 minutes to the 
gentleman from New York (Mr. McHugh).
  Mr. McHUGH. Mr. Speaker, I thank the chairman.
  I had a friend of mine say the other day, gee, 11\1/2\ years 
dedicated to one issue, that is a long time. My observation was, there 
are people in certain jurisdictions in this country that have spent 
less time for committing murder than I have spent on this bill. I am 
not sure what the parallel there is, but if there is any truth in the 
old adage that anything worth having is worth waiting for, this is a 
very, very good night.
  This is an excellent bill. It is not a perfect bill, but the fact 
that you can take the mix of interests that is represented in this 
piece of legislation, unions, mailers, postal dependents and postal 
competitive industries, the postal service itself, and have them 
virtually uniformly and universally support it suggests that it is a 
remarkable achievement.
  In that regard, I want to thank so many people: former Chairman Bill 
Clinger who first presented me the challenge and the opportunity of 
advancing this initiative; then, of course, Dan Burton, the follow-on 
chairman, the gentleman from Indiana, who kept it alive; and most 
recently, most importantly, the gentleman from Virginia (Mr. Tom Davis) 
who really pushed it over the goal line. We are all deeply in his debt.
  The minority as well: Henry Waxman; Danny Davis, the gentleman who 
tonight is managing this bill very appropriately, as he has managed the 
affairs from the minority side on this issue so very, very ably; Chaka 
Fattah, who was the ranking member when we really got into the meat of 
this issue; Barbara Rose Collins, the first ranking member, and on and 
on and on.
  But most of all, those who had the greatest stake in this initiative, 
the unions, the postal service, Jack Potter, the mailers, the mailing 
dependent mailers, those in the competitive industry, those who 
understood that for whatever their differences might be, their need for 
a common cause, their need for reform should override all of it. And at 
the end of the day, as we see here tonight, they put that aside.
  Special thanks to the staff. They are the folks who, whatever the 
endeavor in this House, are really the ones who do the lion's share of 
the work. Of course, Dan Blair who is the chief of staff and the person 
who headed up the Postal Subcommittee for the Government Reform 
Committee when we first began this initiative, and foremost, most 
importantly, Robert Taub, a man who as I have said on this House floor 
so many times before brings such compassion, such passion, such 
patience, really embodied in any individual that I have ever had the 
pleasure of meeting. I am proud to call him a colleague. I am proud to 
call him my friend, and today, it is perhaps the finest hour of his 
work because of the effort he has put together.
  This bill represents 80 percent, probably more than 80 percent, of 
the first bill we introduced some 11\1/2\ years ago. That is a pretty 
remarkable achievement. The postal service is the kind of endeavor that 
touches the lives of virtually each and every American each and every 
day, and while it may not garner the kind of attention and passion and 
interest that some other issues do, at the end of the day, it is one of 
the most important activities.
  Most of all, this is for the postal workers, those 800,000-plus 
strong who go out every day and do their job so effectively, so 
efficiently that for the vast majority of our constituents, the last 
thing they think of when they walk to their mailbox or go to their post 
office is will the mail be there. It will. And through this 
legislation, through this advancement, hopefully it will continue in 
that regard.
  Mr. Speaker, it is a great night, a great day for all Americans, and 
I thank all of those who have endeavored so hard for more than a decade 
to make it a reality.
  It has been more than 36 years since President Nixon signed into law 
the most comprehensive postal legislation since the founding of the 
Republic, the Postal Reorganization Act of 1970. The Post Office 
Department was transformed into the United States Postal Service, an 
independent establishment of the executive branch of the Government of 
the United States.
  The universal service mission of the Postal Service remained the 
same, as stated in Title 39 of the U.S. Code: ``The Postal Service 
shall have as its basic function the obligation to provide postal 
services to bind the Nation together through the personal, educational, 
literary, and business correspondence of the people. It shall provide 
prompt, reliable, and efficient services to patrons in all areas and 
shall render postal services to all communities.''
  The new Postal Service officially began operations on July 1, 1971. 
In the intervening 35 years, the commercial environment in which the 
Postal Service operates has changed. In 1971, UPS had a much smaller 
percentage of the parcel market, FedEx didn't exist, and the Internet 
had not been created. As we know, these developments have drastically 
altered the postal and delivery sector of our economy. Yet, in the last 
three and a half decades our Nation's postal laws have changed very 
little. I do not know of any entity in the United States today, public 
or private, that is still operating with such an outdated structure.
  A report by the President's Commission on the Postal Service 
concluded that without a new approach, the future of universal mail 
service is in peril. According to the Secretary of the Treasury, ``We 
really need to get it done now . . . the business model of the Postal 
Service just doesn't work anymore. It's not sustainable in light of all 
the technological changes and changes in the marketplace.''
  Today we have a choice . . . whether to vote to preserve universal 
postal service at uniform rates to every stretch of this Nation, or 
whether to instead vote ``no'' and assign the Postal Service to an 
almost certain future of ever escalating increases in postal prices and 
devastating post office closures. The bill we have before us is the 
product of extensive bipartisan/bicameral efforts with the Government 
Reform Committee Chairman, the Committee's Ranking Member, the 
Committee Member from Illinois (i.e., Mr. Danny Davis), and me, 
together with our colleagues in the other body, particularly Senators 
Collins, Carper, and Lieberman. I want to take a moment to underscore 
my appreciation for the hard work that each of them took to bring about 
a proposed solution, in close collaboration with the Administration. 
This bill is truly a consensus document, having built upon H.R. 22 as 
it passed the House in the last session 413-20, and then the Senate by 
unanimous consent in February of this year.

  I have heard it said, time and time again, and it is absolutely true, 
this is not a perfect bill. I cannot imagine any person, short of 
someone suffering from multiple personality disorder, who would sit 
down and, by themselves, craft this particular piece of legislation. 
But I think that is true of any product that comes about after 12 years 
of negotiations; of any product in this legislative body that attempts, 
as this bill does, to effect sector reform or reform of a system that 
while touching every American's life, 6 days a week, at a minimum, has 
not been changed in any meaningful way, in more than 35 years.
  So what we have tried to do, with the enormous, enormous support and 
patience and input of: the Government Reform Chairman; of the gentleman 
from Illinois, Mr. Danny Davis, who started on the Postal Subcommittee, 
who served so honorably and so diligently with me; and over the past 
years, the Ranking Member of the Government Reform Committee--all of 
whom I hold in great esteem, and to whom I express great appreciation. 
I would be remiss if I also didn't note the work and commitment of the 
two previous Government Reform Chairmen, Dan Burton and Bill Clinger, 
to this task. We have come up with a bill that embodies the input of 
literally hundreds of organizations that either compete against or rely 
upon this system we call the post office in America today. It does, as 
well, advance what, at least for me, was always the primary directive, 
and that is, that the interests of the Postal

[[Page H9181]]

Service, under this legislation, would be better served than the status 
quo.
  That is an opinion, by the way, that is held by corporate and non-
profit mailers, competitors, postal unions and management groups, and 
the Administration. All of these groups, I think it is fair to say, are 
particularly interested in seeing this House, and ultimately the 
Congress, advance the issue; an issue that I hope all of my colleagues 
understand is one of great urgency, and one that we continue to ignore 
at our extreme peril. So it is a positive moment.

  The patient work on postal modernization has proceeded steadily even 
though, in all this time, ``postal reform'' has not once been featured 
on the Sunday talk shows. Balanced, nonpartisan postal reform may not 
be the stuff of political glory, but it is the sort of legislative work 
that will earn the long-term gratitude of the American mailing 
consumer--for I can think of no other government agency that touches 
the lives of all us, nearly every day, at home and at work. We've said 
it before and we'll say it again--that the Postal Service is the center 
of a nearly $900 billion industry, employing 9 million workers 
nationwide, and representing nearly 9 percent of our nation's gross 
domestic product.
  The ``Postal Accountability and Enhancement Act'' affirmatively 
responds to all of the Administration's 5 principles for postal reform, 
and incorporates most of the 17 legislative recommendations made by the 
President's Commission on the U.S. Postal Service. The bill mandates 
transparency in the Service's finances, costs, and operations. The 
legislation creates a modern system of rate regulation, establishes 
fair competition rules and a powerful new regulator, addresses the 
Service's universal service obligation and the scope of the mail 
monopoly, and institutes improvements to the collective bargaining 
process. While the bill provides some of the pricing flexibility 
recommended for the Postal Service by the President's Commission, the 
bill also imposes controls to protect the public interest from unfair 
competition.
  This is well-refined legislation that reflects the input and feedback 
from the more than three dozen hearings and nearly 125 witnesses that 
the Government Reform Committee and its former Postal Service 
Subcommittee held over the course of the last 12 years.
  Make no mistake that today is indeed a day to choose. The Comptroller 
General of the United States has reported that the Postal Service's 
current business model, formulated as it was in 1970, is no longer 
sustainable in the 21st century. Our Postal Service is in trouble and 
requires reform to preserve universal service and prevent a worsening 
crisis.
  To understand the challenges at hand, one needs simply to read the 
testimony the Committee received regarding the: Serious declines in 
first-class volume, changes in the mail mix, increased competition from 
private delivery companies, sub par revenue growth, rising costs, 
significant financial liabilities and obligations (including roughly 
$60 billion in unfunded retiree health benefits alone), insufficient 
increases in postal productivity, and uncertainties regarding how well 
the Service can streamline its outdated network of facilities under 
existing law.

  Take declining first-class mail volume as one example of a 
fundamental challenge to the Service's long-term viability. First-class 
mail volume has declined annually for the last 5 years--not since the 
Great Depression has the Postal Service seen declines in first-class 
mail. The Service's core business of first-class mail has historically 
been the ``bread and butter'' that makes the system operate: first-
class mail generates about half of the Service's mail volume, more than 
half of its revenues, and covers more than two-thirds of the Service's 
overhead costs. About half of overhead costs are comprised of universal 
service costs of maintaining postal delivery and retail networks. 
Declining first class mail volume is causing a loss of first-class mail 
revenues to cover overhead costs, which will be difficult to recover 
from other classes of mail.
  While the problems are dire, I believe the strong bipartisan bill we 
are presenting today--based as it is on the President's principles for 
legislative change--identify a path to some solutions. The Postal 
Service is simply too important an institution--too important to the 
people of this nation; too important to our economy--to await the full 
brunt of a crisis that is clearly upon the doorstep. Indeed, there is 
good reason why this is the first Administration since President 
Nixon's to call on Congress to modernize our Nation's postal laws. I 
remain hopeful that as Congress did in 1970, we too today will answer 
the President's charge and challenge. The Postal Service, its 750,000 
dedicated employees, and the nearly 300 million American citizens who 
depend on universal service at affordable rates are counting on us.
  Mr. DAVIS of Illinois. Mr. Speaker, I am pleased to yield such time 
as she might consume to the gentlewoman from New York (Mrs. Maloney).
  Mrs. MALONEY. Mr. Speaker, I thank the gentleman for yielding, and I 
rise in strong support of H.R. 6407, the Postal Accountability and 
Enhancement Act.
  I want to congratulate the Government Reform Chairman, Tom Davis, 
Ranking Member Waxman, Representative John McHugh from New York who has 
dedicated well over 11 years working on this, and Danny Davis who led 
the effort in the minority, and their counterparts in the Senate for 
their hard work in getting this compromise bill to the floor prior to 
the adjournment.
  The legislation before us will bring long overdue reforms to the 
operations of the postal service after almost 11\1/2\ years of 
negotiations between the House, the Senate and the administration.
  We reached an agreement on negotiated service agreements, work 
sharing, the rate cap and the authority of the Postal Regulatory 
Commission to design a new postal system. The $9 billion mailing 
industry is tremendously important to our economy. Had Congress failed 
to reach this compromise, the public and postal reliant businesses 
surely would have faced more frequent increases in postal rates in the 
near future.
  This bill will help to keep rates more stable by releasing the funds 
from an escrow account to pay retiree health benefits.

                              {time}  2230

  Additionally, this relieves the Postal Service and postal customers 
of the $27 billion burden in military service payments by returning 
that responsibility to the Treasury. The legislation creates a new 
Postal Regulatory Commission with the authority to establish a modern 
system for postal rate regulation. The new PRC will improve the rate-
setting process by reducing administrative burdens. As a result, 
consumers and postal-reliant businesses can expect a greater rate 
stability.
  I represent a large portion of the magazine industry which is 
enormously important both for the economy of New York and the country. 
High costs have forced many magazines out of business, including 
Mademoiselle, Mode, Brill's Content, and Industry Standard, leaving 
many workers without jobs. I also represent many postal workers, some 
of the 700,000 postal workers who rely on a healthy Postal Service for 
their livelihoods.
  We are hopeful that the legislation we passed today will satisfy many 
of the concerns of the postal employees, the postal-reliant businesses, 
and the U.S. Postal Service and consumers. With the passage of this 
legislation we can ensure the long-term viability of the Postal Service 
and the continuation of services on which this Nation relies.
  Once again, I commend my colleagues and the staff of the Government 
Reform and Oversight Committee, particularly Denise Wilson, for their 
hard work and dedication, and Jen Keaton from my own staff for their 
efforts in completing this task and I urge my colleagues to support it.
  Mr. TOM DAVIS of Virginia. Mr. Speaker, I would reserve the balance 
of my time.
  Mr. DAVIS of Illinois. Mr. Speaker, let me just again commend and 
congratulate Chairman Tom Davis, Ranking Member Henry Waxman, and Mr. 
McHugh. And just say that Tom Davis and Henry Waxman demonstrated the 
very best of leadership as they worked through this process. Tom was a 
great chairman; Mr. Waxman is going to become a great chairman in the 
next session, and he is what I call a Member's chairman. It has been a 
pleasure working with all of them. I urge passage.
  Mr. Speaker, I yield back the balance of my time.
  Mr. TOM DAVIS of Virginia. Mr. Speaker, let me just say again, this 
legislation mandates transparency in the Service's finances, costs, and 
operations, creates a modern system of rate regulation, establishes 
fair competition rules, and a powerful new regulator to oversee 
operations. It addresses the Postal Service's universal service 
operation in the scope of the mail monopoly; it institutes improvements 
to the collective bargaining process; it also puts a reasonable rate 
cap on it for the mailers, the first-class mailers and across the board 
for Americans who use the postal system. I urge my colleagues to adopt 
it and support this.

[[Page H9182]]

  Mr. Speaker, I want to thank the Chairman of the Ways and Means 
Committee for agreeing to work with me on H.R. 6407 and I ask that our 
letters of exchange be inserted into the Record.

                                                 December 8, 2006.
     Hon. William M. Thomas,
     Chairman, Committee on Ways and Means,
     House of Representatives, Washington, DC.
       Dear Mr. Chairman: Thank you for your December 8, letter 
     regarding the Committee on Ways and Means jurisdictional 
     interest in H.R. 6407, the Postal Accountability and 
     Enhancement Act, and your willingness to forego consideration 
     of H.R. 6407 by your committee.
       I agree that the Committee on Ways and Means has a valid 
     jurisdictional interest in H.R. 6407 and that the committee's 
     jurisdiction will not be adversely affected by your decision 
     to forego consideration at this time. In addition, I will 
     support your request for the appointment of outside conferees 
     from the Committee on Ways and Means to a House-Senate 
     Conference committee on this or similar legislation should 
     such a conference be convened.
       As you have requested, I will include a copy of your letter 
     and this response in the Congressional Record during 
     consideration of H.R. 6407 on the House floor. Thank you for 
     your assistance as I work towards the enactment of H.R. 6407.
           Sincerely,
                                                        Tom Davis,
     Chairman.
                                  ____

                                                 December 8, 2006.
     Hon. Tom Davis,
     Chairman, Committee on Government Reform
     Rayburn House Office Building, Washington, DC.
       Dear Chairman Davis: I am writing concerning H.R. 6407, the 
     ``Postal Accountability and Enhancement Act,'' which was 
     introduced on December 7, 2006, and is scheduled for floor 
     action.
       As, you know, the Committee on Ways and Means has 
     jurisdiction over matters concerning trade and customs 
     revenue functions and the bill contains provisions impacting 
     these issues. For example, contained in the bill is a 
     provision that directs the Bureau of Customs and Border 
     Protection to apply United States customs laws to certain 
     mail, and thus falls within the jurisdiction of the Committee 
     on Ways and Means. However, in order to expedite this 
     legislation for floor consideration, the committee will forgo 
     action on this bill. This is being done with the 
     understanding that it does not in any way prejudice the 
     committee with respect to the appointment of conferees or its 
     jurisdictional prerogatives on this or similar legislation.
       I would appreciate your response to this letter, confirming 
     this understanding with respect to this bill, and would ask 
     that a copy of our exchange of letters on this matter be 
     included in the Congressional Record during floor 
     consideration.
           Best regards,
                                                      Bill Thomas,
                                                         Chairman.

  Mrs. MILLER of Michigan. Mr. Speaker, I rise today in strong support 
of H.R. 6407, The Postal Accountability and Enhancement Act.
  This measure is the accumulation of 10 years of hard work and I would 
like to thank Chairman Davis and Congressman McHugh for their 
unwavering commitment to this bill, and their steadfast commitment to 
modernizing and reforming all aspects of the federal government.
  The United States Postal Service is currently operating under a 
system built in 1970. In 1970, Richard Nixon was President, gasoline 
cost $0.36 per gallon, and very few people had even heard of computers, 
much less owned one.
  Much has changed since then. The primary mode of written 
communication now is via email or fax, not first class mail. Consumers 
have a whole range of options to send mail and packages urgently. Most 
households either have or have access to a computer. But the Postal 
Service still operates at the same frequency as it did in 1970.
  The simple fact is that this generation-old structure is unable to 
support the functioning of the 21st Century economy. With ever-
accelerating declines in First Class Mail volumes, it's becoming more 
and more difficult for the Postal Service to collect revenue. This in 
turn leads to the need for frequent rate hikes, which is nothing more 
than an indirect tax increase on average Americans and a significant 
cost increase for businesses that heavily utilize the mail.
  Mr. Speaker, this bill strikes the correct balance between the need 
for Postal reform and the obligations that the Postal Service has to 
the American people. If enacted, this bill will guarantee universal 
service, streamline back office operations, provide for workforce 
stability and implement a logical, reasoned process for increases in 
postal rates, which will generally be in line with the rate of 
inflation. Such stability and predictability will allow the Postal 
Service to grow along with the needs of its customers.
  Mr. Speaker, America relies on the Unites States Postal Service to 
deliver our mail. Every Member of this body relies on the Postal 
Service to deliver important communications to our constituents. It's 
time we give the Postal Service the tools they need to remain an 
efficient, effective organization in the years to come.
  I urge a ``yes'' vote on the bill.
  Mr. SHAYS. Mr. Speaker, I rise in support of H.R. 6407, the Postal 
Accountability and Enhancement Act.
  The Government Reform Committee, of which I am vice-chairman, has 
held hearings and briefings on postal reform for several years now, and 
I am glad to see our efforts come to fruition today.
  The United States Postal Service has been forced to cut back on its 
service due to serious financial challenges. H.R. 6407 is an effort to 
modernize our nation's postal laws for the first time in 36 years. It 
is intended to help ensure the United States Postal Service can survive 
in an increasingly competitive marketplace.
  Due to the increasing use of electronic forms of communication, such 
as email, first-class mail volume is declining, but postal addresses 
are increasing. In lieu of simply increasing rates, an entire reform of 
the postal service is necessary.
  H.R. 6407 would require the Postal Service to operate in a more 
businesslike manner by creating a modern system of rate regulation, 
establishing fair competition rules and a more powerful regulatory 
commission.
  H.R. 6407 will also promote both price stability and pricing 
flexibility. Giving the Postal Service pricing flexibility will allow 
USPS to price its core mail products in a way that keeps them 
competitive and, quite literally, in the mail. By limiting the amount 
of future postage rate increases, however, the bill also takes an 
important step towards encouraging the Postal Service to increase mail 
volume and keep the mailbags full while giving mailers predictability 
and stability.
  Universal postal service should be the first and foremost goal of 
reform. This can only be accomplished if the financial and operational 
crisis facing the United States Postal Service is met with innovative 
and bold action. H.R. 6407 takes such action.
  Mr. TOM DAVIS of Virginia. Mr. Speaker, I yield back the balance of 
my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Virginia (Mr. Tom Davis) that the House suspend the 
rules and pass the bill, H.R. 6407, as amended.
  The question was taken.
  The SPEAKER pro tempore (Mr. LaHood). In the opinion of the Chair, 
two-thirds of those voting have responded in the affirmative.
  Mr. PENCE. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were refused.
  So (two-thirds of those voting having responded in the affirmative) 
the rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

                          ____________________