[House Report 109-66]
[From the U.S. Government Publishing Office]
109th Congress Rept. 109-66
HOUSE OF REPRESENTATIVES
1st Session Part 1
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POSTAL ACCOUNTABILITY AND ENHANCEMENT ACT
_______
April 28, 2005.--Ordered to be printed
_______
Mr. Tom Davis of Virginia, from the Committee on Government Reform,
submitted the following
R E P O R T
[To accompany H.R. 22]
[Including cost estimate of the Congressional Budget Office]
The Committee on Government Reform, to whom was referred the
bill (H.R. 22) to reform the postal laws of the United States,
having considered the same, report favorably thereon with an
amendment and recommend that the bill as amended do pass.
CONTENTS
Committee Statement And Views.................................... 42
Section-by-Section Analysis...................................... 45
Explanation Of Amendments........................................ 71
Committee Consideration.......................................... 73
Rollcall Vote.................................................... 75
Correspondence................................................... 75
Application Of Law To The Legislative Branch..................... 76
Statement Of Oversight Findings And Recommendations Of The
Committee...................................................... 77
Statement Of General Performance Goals And Objectives............ 77
Constitutional Authority Statement............................... 77
Federal Advisory Committee Act................................... 77
Unfunded Mandate Statement....................................... 77
Committee Estimate............................................... 77
Budget Authority And Congressional Budget Office Cost Estimate... 77
Changes In Existing Law Made By The Bill As Reported............. 87
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Postal
Accountability and Enhancement Act''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--DEFINITIONS; POSTAL SERVICES
Sec. 101. Definitions.
Sec. 102. Postal services.
Sec. 103. Financial transparency.
TITLE II--MODERN RATE REGULATION
Sec. 201. Provisions relating to market-dominant products.
Sec. 202. Provisions relating to competitive products.
Sec. 203. Provisions relating to experimental and new products.
Sec. 204. Reporting requirements and related provisions.
Sec. 205. Complaints; appellate review and enforcement.
Sec. 206. Workshare discounts.
Sec. 207. Clerical amendment.
TITLE III--PROVISIONS RELATING TO FAIR COMPETITION
Sec. 301. Postal Service Competitive Products Fund.
Sec. 302. Assumed Federal income tax on competitive products income.
Sec. 303. Unfair competition prohibited.
Sec. 304. Suits by and against the Postal Service.
Sec. 305. International postal arrangements.
Sec. 306. Redesignation.
TITLE IV--GENERAL PROVISIONS
Sec. 401. Qualification requirements for Governors.
Sec. 402. Obligations.
Sec. 403. Private carriage of letters.
Sec. 404. Rulemaking authority.
Sec. 405. Noninterference with collective bargaining agreements, etc.
Sec. 406. Bonus and compensation authority.
Sec. 407. Mediation in collective-bargaining disputes.
TITLE V--ENHANCED REGULATORY COMMISSION
Sec. 501. Reorganization and modification of certain provisions
relating to the Postal Regulatory Commission.
Sec. 502. Authority for Postal Regulatory Commission to issue
subpoenas.
Sec. 503. Appropriations for the Postal Regulatory Commission.
Sec. 504. Redesignation of the Postal Rate Commission.
Sec. 505. Officer of the Postal Regulatory Commission representing the
general public.
TITLE VI--INSPECTORS GENERAL
Sec. 601. Inspector General of the Postal Regulatory Commission.
Sec. 602. Inspector General of the United States Postal Service to be
appointed by the President.
TITLE VII--EVALUATIONS
Sec. 701. Universal postal service study.
Sec. 702. Assessments of ratemaking, classification, and other
provisions.
Sec. 703. Study on equal application of laws to competitive products.
Sec. 704. Greater diversity in Postal Service Executive and
administrative schedule management positions.
Sec. 705. Plan for assisting displaced workers.
Sec. 706. Contracts with women, minorities, and small businesses.
Sec. 707. Rates for periodicals.
Sec. 708. Assessment of certain rate deficiencies.
Sec. 709. Network optimization.
Sec. 710. Assessment of future business model of the postal service.
Sec. 711. Study on certain proposed amendments.
Sec. 712. Definition.
TITLE VIII--MISCELLANEOUS; TECHNICAL AND CONFORMING AMENDMENTS
Sec. 801. Employment of postal police officers.
Sec. 802. Date of postmark to be treated as date of appeal in
connection with the closing or consolidation of post offices.
Sec. 803. Provisions relating to benefits under chapter 81 of title 5,
United States Code, for officers and employees of the former Post
Office Department.
Sec. 804. Obsolete provisions.
Sec. 805. Investments.
Sec. 806. Reduced rates.
Sec. 807. Hazardous matter.
Sec. 808. Provisions relating to cooperative mailings.
Sec. 809. Technical and conforming amendments.
TITLE IX--POSTAL PENSION FUNDING REFORM AMENDMENTS
Sec. 901. Civil Service Retirement System.
Sec. 902. Health insurance.
Sec. 903. Repealer.
Sec. 904. Ensuring appropriate use of escrow and military savings.
Sec. 905. Effective dates.
TITLE I--DEFINITIONS; POSTAL SERVICES
SEC. 101. DEFINITIONS.
Section 102 of title 39, United States Code, is amended by striking
``and'' at the end of paragraph (3), by striking the period at the end
of paragraph (4) and inserting a semicolon, and by adding at the end
the following:
``(5) `postal service' means the carriage of letters, printed
matter, or mailable packages, including acceptance, collection,
processing, delivery, or other functions supportive or
ancillary thereto;
``(6) `product' means a postal service with a distinct cost
or market characteristic for which a rate or rates are, or may
reasonably be, applied;
``(7) `rates', as used with respect to products, includes
fees for postal services;
``(8) `market-dominant product' or `product in the market-
dominant category of mail' means a product subject to
subchapter I of chapter 36;
``(9) `competitive product' or `product in the competitive
category of mail' means a product subject to subchapter II of
chapter 36;
``(10) `Consumer Price Index' means the Consumer Price Index
for All Urban Consumers published monthly by the Bureau of
Labor Statistics of the Department of Labor; and
``(11) `year', as used in chapter 36 (other than subchapters
I and VI thereof), means a fiscal year.''.
SEC. 102. POSTAL SERVICES.
(a) In General.--Section 404 of title 39, United States Code, is
amended--
(1) in subsection (a), by striking paragraph (6) and by
redesignating paragraphs (7) through (9) as paragraphs (6)
through (8), respectively; and
(2) by adding at the end the following:
``(c) Nothing in this title shall be considered to permit or require
that the Postal Service provide any special nonpostal or similar
services, except that nothing in this subsection shall prevent the
Postal Service from providing any special nonpostal or similar services
provided by the Postal Service as of January 4, 2005.''.
(b) Conforming Amendment.--Section 1402(b)(1)(B)(ii) of the Victims
of Crime Act of 1984 (98 Stat. 2170; 42 U.S.C. 10601(b)(1)(B)(ii)) is
amended by striking ``404(a)(8)'' and inserting ``404(a)(7)''.
SEC. 103. FINANCIAL TRANSPARENCY.
(a) In General.--Section 101 of title 39, United States Code, is
amended by redesignating subsections (d) through (g) as subsections (e)
through (h), respectively, and by inserting after subsection (c) the
following:
``(d) As an establishment that provides both market-dominant and
competitive products, the Postal Service shall be subject to a high
degree of transparency, including in its finances and operations, to
ensure fair treatment of customers of the Postal Service's market-
dominant products and companies competing with the Postal Service's
competitive products.''.
(b) Conforming Amendment.--Section 5001 of title 39, United States
Code, is amended by striking ``101(e) and (f)'' and inserting ``101(f)
and (g)''.
TITLE II--MODERN RATE REGULATION
SEC. 201. PROVISIONS RELATING TO MARKET-DOMINANT PRODUCTS.
(a) In General.--Chapter 36 of title 39, United States Code, is
amended by striking sections 3621 and 3622 and inserting the following:
``Sec. 3621. Applicability; definitions
``(a) Applicability.--This subchapter shall apply with respect to--
``(1)(A) single piece first-class letters (both domestic and
international);
``(B) single piece first-class cards (both domestic and
international); and
``(C) special services;
``(2) all first-class mail not included under paragraph (1);
``(3) periodicals;
``(4) standard mail;
``(5) media mail;
``(6) library mail; and
``(7) bound printed matter,
subject to any changes the Postal Regulatory Commission may make under
section 3642.
``(b) Rule of Construction.--Mail matter referred to in subsection
(a) shall, for purposes of this subchapter, be considered to have the
meaning given to such mail matter under the mail classification
schedule.
``Sec. 3622. Modern rate regulation
``(a) Authority Generally.--The Postal Regulatory Commission shall,
within 24 months after the date of the enactment of this section, by
regulation establish (and may from time to time thereafter by
regulation revise) a modern system for regulating rates and classes for
market-dominant products.
``(b) Objectives.--Such system shall be designed to achieve the
following objectives:
``(1) To establish and maintain a fair and equitable schedule
for rates and classification.
``(2) To maximize incentives to reduce costs and increase
efficiency.
``(3) To create predictability and stability in rates.
``(4) To maintain high quality service standards.
``(5) To allow the Postal Service pricing flexibility.
``(6) To assure adequate revenues, including retained
earnings, to maintain financial stability.
``(7) To reduce the administrative burden of the ratemaking
process.
``(c) Factors.--In establishing or revising such system, the Postal
Regulatory Commission shall take into account--
``(1) the 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 direct and indirect postal costs attributable to
each class or type of mail service plus that portion of all
other costs of the Postal Service reasonably assignable to such
class or type;
``(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 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;
``(8) 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;
``(9) the desirability of special classifications from the
point of view of both the user and of the Postal Service;
``(10) the educational, cultural, scientific, and
informational value to the recipient of mail matter; and
``(11) the policies of this title as well as such other
factors as the Commission deems appropriate.
``(d) Allowable Provisions.--The system for regulating rates and
classes for market-dominant products may include one or more of the
following:
``(1) Price caps, revenue targets, or other form of incentive
regulation.
``(2) Cost-of-service regulation.
``(3) Such other form of regulation as the Commission
considers appropriate to achieve, consistent with subsection
(c), the objectives of subsection (b).
``(e) Limitation.--In the administration of this section, the
Commission shall not permit the average rate in any subclass of mail to
increase at an annual rate greater than the comparable increase in the
Consumer Price Index, unless it has, after notice and opportunity for a
public hearing and comment, determined that such increase is reasonable
and equitable and necessary to enable the Postal Service, under best
practices of honest, efficient, and economical management, to maintain
and continue the development of postal services of the kind and quality
adapted to the needs of the United States.
``(f) Transition Rule.--Until regulations under this section first
take effect, rates and classes for market-dominant products shall
remain subject to modification in accordance with the provisions of
this chapter and section 407, as such provisions were last in effect
before the date of the enactment of this section.''.
(b) Repealed Sections.--Sections 3623, 3624, 3625, and 3628 of title
39, United States Code, are repealed.
(c) Redesignation.--Chapter 36 of title 39, United States Code (as in
effect after the amendment made by section 501(a)(2), but before the
amendment made by section 202) is amended by striking the heading for
subchapter II and inserting the following:
``SUBCHAPTER I--PROVISIONS RELATING TO MARKET-DOMINANT PRODUCTS''.
SEC. 202. PROVISIONS RELATING TO COMPETITIVE PRODUCTS.
Chapter 36 of title 39, United States Code, is amended by inserting
after section 3629 the following:
``SUBCHAPTER II--PROVISIONS RELATING TO COMPETITIVE PRODUCTS
``Sec. 3631. Applicability; definitions and updates
``(a) Applicability.--This subchapter shall apply with respect to--
``(1) priority mail;
``(2) expedited mail;
``(3) mailgrams;
``(4) international mail; and
``(5) parcel post,
subject to any changes the Postal Regulatory Commission may make under
section 3642.
``(b) Definition.--For purposes of this subchapter, the term `costs
attributable', as used with respect to a product, means the direct and
indirect postal costs attributable to such product.
``(c) Rule of Construction.--Mail matter referred to in subsection
(a) shall, for purposes of this subchapter, be considered to have the
meaning given to such mail matter under the mail classification
schedule.
``Sec. 3632. Action of the Governors
``(a) Authority To Establish Rates and Classes.--The Governors shall
establish rates and classes for products in the competitive category of
mail in accordance with the requirements of this subchapter and
regulations promulgated under section 3633.
``(b) Procedures.--
``(1) In general.--Rates and classes shall be established in
writing, complete with a statement of explanation and
justification, and the date as of which each such rate or class
takes effect.
``(2) Rates or classes of general applicability.--In the case
of rates or classes of general applicability in the Nation as a
whole or in any substantial region of the Nation, the Governors
shall cause each rate and class decision under this section and
the record of the Governors' proceedings in connection with
such decision to be published in the Federal Register at least
30 days before the effective date of any new rates or classes.
``(3) Rates or classes not of general applicability.--In the
case of rates or classes not of general applicability in the
Nation as a whole or in any substantial region of the Nation,
the Governors shall cause each rate and class decision under
this section and the record of the proceedings in connection
with such decision to be filed with the Postal Regulatory
Commission by such date before the effective date of any new
rates or classes as the Governors consider appropriate, but in
no case less than 15 days.
``(4) Criteria.--As part of the regulations required under
section 3633, the Postal Regulatory Commission shall establish
criteria for determining when a rate or class established under
this subchapter is or is not of general applicability in the
Nation as a whole or in any substantial region of the Nation.
``(c) Transition Rule.--Until regulations under section 3633 first
take effect, rates and classes for competitive products shall remain
subject to modification in accordance with the provisions of this
chapter and section 407, as such provisions were as last in effect
before the date of the enactment of this section.
``Sec. 3633. Provisions applicable to rates for competitive products
``The Postal Regulatory Commission shall, within 18 months after the
date of the enactment of this section, promulgate (and may from time to
time thereafter revise) regulations--
``(1) to prohibit the subsidization of competitive products
by market-dominant products;
``(2) to ensure that each competitive product covers its
costs attributable; and
``(3) to ensure that all competitive products collectively
make a reasonable contribution to the institutional costs of
the Postal Service.''.
SEC. 203. PROVISIONS RELATING TO EXPERIMENTAL AND NEW PRODUCTS.
Subchapter III of chapter 36 of title 39, United States Code, is
amended to read as follows:
``SUBCHAPTER III--PROVISIONS RELATING TO EXPERIMENTAL AND NEW PRODUCTS
``Sec. 3641. Market tests of experimental products
``(a) Authority.--
``(1) In general.--The Postal Service may conduct market
tests of experimental products in accordance with this section.
``(2) Provisions waived.--A product shall not, while it is
being tested under this section, be subject to the requirements
of sections 3622, 3633, or 3642, or regulations promulgated
under those sections.
``(b) Conditions.--A product may not be tested under this section
unless it satisfies each of the following:
``(1) Significantly different product.--The product is, from
the viewpoint of the mail users, significantly different from
all products offered by the Postal Service within the 2-year
period preceding the start of the test.
``(2) Market disruption.--The introduction or continued
offering of the product will not create an unfair or otherwise
inappropriate competitive advantage for the Postal Service or
any mailer, particularly in regard to small business concerns
(as defined under subsection (h)).
``(3) Correct categorization.--The Postal Service identifies
the product, for the purpose of a test under this section, as
either market dominant or competitive, consistent with the
criteria under section 3642(b)(1). Costs and revenues
attributable to a product identified as competitive shall be
included in any determination under section 3633(3) (relating
to provisions applicable to competitive products collectively).
``(c) Notice.--
``(1) In general.--At least 30 days before initiating a
market test under this section, the Postal Service shall file
with the Postal Regulatory Commission and publish in the
Federal Register a notice--
``(A) setting out the basis for the Postal Service's
determination that the market test is covered by this
section; and
``(B) describing the nature and scope of the market
test.
``(2) Safeguards.--For a competitive experimental product,
the provisions of section 504(g) shall be available with
respect to any information required to be filed under paragraph
(1) to the same extent and in the same manner as in the case of
any matter described in section 504(g)(1). Nothing in paragraph
(1) shall be considered to permit or require the publication of
any information as to which confidential treatment is accorded
under the preceding sentence (subject to the same exception as
set forth in section 504(g)(3)).
``(d) Duration.--
``(1) In general.--A market test of a product under this
section may be conducted over a period of not to exceed 24
months.
``(2) Extension authority.--If necessary in order to
determine the feasibility or desirability of a product being
tested under this section, the Postal Regulatory Commission
may, upon written application of the Postal Service (filed not
later than 60 days before the date as of which the testing of
such product would otherwise be scheduled to terminate under
paragraph (1)), extend the testing of such product for not to
exceed an additional 12 months.
``(e) Dollar-Amount Limitation.--
``(1) In general.--A product may be tested under this section
only if the total revenues that are anticipated, or in fact
received, by the Postal Service from such product do not exceed
$10,000,000 nationwide in any year, subject to paragraph (2)
and subsection (g). In carrying out the preceding sentence, the
Postal Regulatory Commission may limit the amount of revenues
the Postal Service may obtain from any particular geographic
market as necessary to prevent market disruption (as defined in
subsection (b)(2)).
``(2) Exemption authority.--The Postal Regulatory Commission
may, upon written application of the Postal Service, exempt the
market test from the limit in paragraph (1) if the total
revenues that are anticipated, or in fact received, by the
Postal Service from such product do not exceed $50,000,000 in
any year, subject to subsection (g). In reviewing an
application under this paragraph, the Postal Regulatory
Commission shall approve such application if it determines
that--
``(A) the product is likely to benefit the public and
meet an expected demand;
``(B) the product is likely to contribute to the
financial stability of the Postal Service; and
``(C) the product is not likely to result in unfair
or otherwise inappropriate competition.
``(f) Cancellation.--If the Postal Regulatory Commission at any time
determines that a market test under this section fails, with respect to
any particular product, to meet one or more of the requirements of this
section, it may order the cancellation of the test involved or take
such other action as it considers appropriate. A determination under
this subsection shall be made in accordance with such procedures as the
Commission shall by regulation prescribe.
``(g) Adjustment for Inflation.--For purposes of each year following
the year in which occurs the deadline for the Postal Service's first
report to the Postal Regulatory Commission under section 3652(a), each
dollar amount contained in this section shall be adjusted by the change
in the Consumer Price Index for such year (as determined under
regulations of the Commission).
``(h) Definition of a Small Business Concern.--The criteria used in
defining small business concerns or otherwise categorizing business
concerns as small business concerns shall, for purposes of this
section, be established by the Postal Regulatory Commission in
conformance with the requirements of section 3 of the Small Business
Act.
``(i) Effective Date.--Market tests under this subchapter may be
conducted in any year beginning with the first year in which occurs the
deadline for the Postal Service's first report to the Postal Regulatory
Commission under section 3652(a).
``Sec. 3642. New products and transfers of products between the market-
dominant and competitive categories of mail
``(a) In General.--Upon request of the Postal Service or users of the
mails, or upon its own initiative, the Postal Regulatory Commission may
change the list of market-dominant products under section 3621 and the
list of competitive products under section 3631 by adding new products
to the lists, removing products from the lists, or transferring
products between the lists.
``(b) Criteria.--All determinations by the Postal Regulatory
Commission under subsection (a) shall be made in accordance with the
following criteria:
``(1) The market-dominant category of products shall consist
of each product in the sale of which the Postal Service
exercises sufficient market power that it can effectively set
the price of such product substantially above costs, raise
prices significantly, decrease quality, or decrease output,
without risk of losing business to other firms offering similar
products. The competitive category of products shall consist of
all other products.
``(2) Exclusion of products covered by postal monopoly.--A
product covered by the postal monopoly shall not be subject to
transfer under this section from the market-dominant category
of mail. For purposes of the preceding sentence, the term
`product covered by the postal monopoly' means any product the
conveyance or transmission of which is reserved to the United
States under section 1696 of title 18, subject to the same
exception as set forth in the last sentence of section
409(e)(1).
``(3) Additional considerations.--In making any decision
under this section, due regard shall be given to--
``(A) the availability and nature of enterprises in
the private sector engaged in the delivery of the
product involved;
``(B) the views of those who use the product involved
on the appropriateness of the proposed action; and
``(C) the likely impact of the proposed action on
small business concerns (within the meaning of section
3641(h)).
``(c) Transfers of Subclasses and Other Subordinate Units
Allowable.--Nothing in this title shall be considered to prevent
transfers under this section from being made by reason of the fact that
they would involve only some (but not all) of the subclasses or other
subordinate units of the class of mail or type of postal service
involved (without regard to satisfaction of minimum quantity
requirements standing alone).
``(d) Notification and Publication Requirements.--
``(1) Notification requirement.--The Postal Service shall,
whenever it requests to add a product or transfer a product to
a different category, file with the Postal Regulatory
Commission and publish in the Federal Register a notice setting
out the basis for its determination that the product satisfies
the criteria under subsection (b) and, in the case of a request
to add a product or transfer a product to the competitive
category of mail, that the product meets the regulations
promulgated by the Postal Regulatory Commission pursuant to
section 3633. The provisions of section 504(g) shall be
available with respect to any information required to be filed.
``(2) Publication requirement.--The Postal Regulatory
Commission shall, whenever it changes the list of products in
the market-dominant or competitive category of mail, prescribe
new lists of products. The revised lists shall indicate how and
when any previous lists (including the lists under sections
3621 and 3631) are superseded, and shall be published in the
Federal Register.
``(e) Notification Requirement.--The Postal Regulatory Commission
shall, whenever it reaches a conclusion that a product or products
should be transferred between the list of market-dominant products
under section 3621 and the list of competitive products under section
3631, immediately notify the appropriate committees of the Congress. No
such transfer may take effect less than 12 months after such
conclusion.
``(f) Prohibition.--Except as provided in section 3641, no product
that involves the carriage of letters, printed matter, or mailable
packages may be offered by the Postal Service unless it has been
assigned to the market-dominant or competitive category of mail (as
appropriate) either--
``(1) under this subchapter; or
``(2) by or under any other provision of law.''.
SEC. 204. REPORTING REQUIREMENTS AND RELATED PROVISIONS.
(a) Redesignation.--Chapter 36 of title 39, United States Code (as in
effect before the amendment made by subsection (b)) is amended by
striking the heading for subchapter IV and inserting the following:
``SUBCHAPTER V--POSTAL SERVICES, COMPLAINTS, AND JUDICIAL REVIEW''.
(b) Reports and Compliance.--Chapter 36 of title 39, United States
Code, is amended by inserting after subchapter III the following:
``SUBCHAPTER IV--REPORTING REQUIREMENTS AND RELATED PROVISIONS
``Sec. 3651. Annual reports by the Commission
``(a) In General.--The Postal Regulatory Commission shall submit an
annual report to the President and the Congress concerning the
operations of the Commission under this title, including the extent to
which regulations are achieving the objectives under sections 3622 and
3633, respectively.
``(b) Additional Information.--In addition to the information
required under subsection (a), each report under this section shall
also include, with respect to the period covered by such report, an
estimate of the costs incurred by the Postal Service in providing--
``(1) postal services to areas of the Nation where, in the
judgment of the Postal Regulatory Commission, the Postal
Service either would not provide services at all or would not
provide such services in accordance with the requirements of
this title if the Postal Service were not required to provide
prompt, reliable, and efficient services to patrons in all
areas and all communities, including as required under the
first sentence of section 101(b);
``(2) free or reduced rates for postal services as required
by this title; and
``(3) other public services or activities which, in the
judgment of the Postal Regulatory Commission, would not
otherwise have been provided by the Postal Service but for the
requirements of law.
The Commission shall detail the bases for its estimates and the
statutory requirements giving rise to the costs identified in each
report under this section.
``(c) Information From Postal Service.--The Postal Service shall
provide the Postal Regulatory Commission with such information as may,
in the judgment of the Commission, be necessary in order for the
Commission to prepare its reports under this section.
``Sec. 3652. Annual reports to the Commission
``(a) Costs, Revenues, and Rates.--Except as provided in subsection
(c), the Postal Service shall, no later than 90 days after the end of
each year, prepare and submit to the Postal Regulatory Commission a
report (together with such nonpublic annex thereto as the Commission
may require under subsection (e))--
``(1) which shall analyze costs, revenues, and rates, using
such methodologies as the Commission shall by regulation
prescribe, and in sufficient detail to demonstrate that the
rates in effect for all products during such year complied with
all applicable requirements of this title; and
``(2) which shall, for each market-dominant product provided
in such year, provide--
``(A) market information, including mail volumes; and
``(B) measures of the quality of service afforded by
the Postal Service in connection with such product,
including--
``(i) the service standard applicable to such
product;
``(ii) the level of service (described in
terms of speed of delivery and reliability)
provided; and
``(iii) the degree of customer satisfaction
with the service provided.
The Inspector General shall regularly audit the data collection systems
and procedures utilized in collecting information and preparing such
report (including any annex thereto and the information required under
subsection (b)). The results of any such audit shall be submitted to
the Postal Service and the Postal Regulatory Commission.
``(b) Information Relating to Workshare Discounts.--
``(1) In general.--The Postal Service shall include, in each
report under subsection (a), the following information with
respect to each market-dominant product for which a workshare
discount was in effect during the period covered by such
report:
``(A) The per-item cost avoided by the Postal Service
by virtue of such discount.
``(B) The percentage of such per-item cost avoided
that the per-item workshare discount represents.
``(C) The per-item contribution made to institutional
costs.
``(2) Workshare discount defined.--For purposes of this
subsection, the term `workshare discount' has the meaning given
such term under section 3687.
``(c) Market Tests.--In carrying out subsections (a) and (b) with
respect to experimental products offered through market tests under
section 3641 in a year, the Postal Service--
``(1) may report summary data on the costs, revenues, and
quality of service by market test; and
``(2) shall report such data as the Postal Regulatory
Commission requires.
``(d) Supporting Matter.--The Postal Regulatory Commission shall have
access, in accordance with such regulations as the Commission shall
prescribe, to the working papers and any other supporting matter of the
Postal Service and the Inspector General in connection with any
information submitted under this section.
``(e) Content and Form of Reports.--
``(1) In general.--The Postal Regulatory Commission shall, by
regulation, prescribe the content and form of the public
reports (and any nonpublic annex and supporting matter relating
thereto) to be provided by the Postal Service under this
section. In carrying out this subsection, the Commission shall
give due consideration to--
``(A) providing the public with adequate information
to assess the lawfulness of rates charged;
``(B) avoiding unnecessary or unwarranted
administrative effort and expense on the part of the
Postal Service; and
``(C) protecting the confidentiality of commercially
sensitive information.
``(2) Revised requirements.--The Commission may, on its own
motion or on request of an interested party, initiate
proceedings (to be conducted in accordance with regulations
that the Commission shall prescribe) to improve the quality,
accuracy, or completeness of Postal Service data required by
the Commission under this subsection whenever it shall appear
that--
``(A) the attribution of costs or revenues to
products has become significantly inaccurate or can be
significantly improved;
``(B) the quality of service data has become
significantly inaccurate or can be significantly
improved; or
``(C) 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).
``(g) Other Reports.--The Postal Service shall submit to the Postal
Regulatory Commission, together with any other submission that it is
required to make under this section in a year, copies of its then most
recent--
``(1) comprehensive statement under section 2401(e);
``(2) performance plan under section 2803; and
``(3) program performance reports under section 2804.
``Sec. 3653. Annual determination of compliance
``(a) Opportunity for Public Comment.--After receiving the reports
required under section 3652 for any year, the Postal Regulatory
Commission shall promptly provide an opportunity for comment on such
reports by users of the mails, affected parties, and an officer of the
Commission who shall be required to represent the interests of the
general public.
``(b) Determination of Compliance or Noncompliance.--Not later than
90 days after receiving the submissions required under section 3652
with respect to a year, the Postal Regulatory Commission shall make a
written determination as to--
``(1) whether any rates or fees in effect during such year
(for products individually or collectively) were not in
compliance with applicable provisions of this chapter (or
regulations promulgated thereunder);
``(2) whether any performance goals established under section
2803 or 2804 for such year were not met; and
``(3) whether any market-dominant product failed to meet any
service standard during such year.
If, with respect to a year, no instance of noncompliance is found under
this subsection to have occurred in such year, the written
determination shall be to that effect.
``(c) If Any Noncompliance Is Found.--If, for a year, a timely
written determination of noncompliance is made under subsection (b),
the Postal Regulatory Commission shall take appropriate action in
accordance with subsections (c)-(e) of section 3662 (as if a complaint
averring such noncompliance had been duly filed and found under such
section to be justified).
``(d) Rebuttable Presumption.--A timely written determination
described in the last sentence of subsection (b) shall, for purposes of
any proceeding under section 3662, create a rebuttable presumption of
compliance by the Postal Service (with regard to the matters described
in paragraphs (1) through (3) of subsection (b)) during the year to
which such determination relates.
``Sec. 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 35 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 2007.
``(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)(A) Beginning with reports for the fiscal year 2007, 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.--Interested persons (including an officer of the
Postal Regulatory Commission representing the interests of the general
public) who believe the Postal Service is not operating in conformance
with the requirements of chapter 1, 4, or 6, or this chapter (or
regulations promulgated under any of those chapters) may lodge a
complaint with the Postal Regulatory Commission in such form and manner
as the Commission may prescribe.
``(b) Prompt Response Required.--
``(1) In general.--The Postal Regulatory Commission shall,
within 90 days after receiving a complaint under subsection
(a), either--
``(A) begin proceedings on such complaint; or
``(B) issue an order dismissing the complaint
(together with a statement of the reasons therefor).
``(2) Treatment of complaints not timely acted on.--For
purposes of section 3663, any complaint under subsection (a) on
which the Commission fails to act in the time and manner
required by paragraph (1) shall be treated in the same way as
if it had been dismissed pursuant to an order issued by the
Commission on the last day allowable for the issuance of such
order under paragraph (1).
``(c) Action Required If Complaint Found to Be Justified.--If the
Postal Regulatory Commission finds the complaint to be justified, it
shall order that the Postal Service take such action as the Commission
considers appropriate in order to achieve compliance with the
applicable requirements and to remedy the effects of any noncompliance
(such as ordering unlawful rates to be adjusted to lawful levels,
ordering the cancellation of market tests, ordering the Postal Service
to discontinue providing loss-making products, or requiring the Postal
Service to make up for revenue shortfalls in competitive products).
``(d) Suspension Authority.--The Postal Regulatory Commission may
suspend implementation of rates or classifications under section
3632(b)(3) for a limited period of time pending expedited proceedings
under this section. In evaluating whether circumstances warrant
suspension, the Commission shall consider factors such as (1) whether
there is a substantial likelihood that such rate or classification will
violate the requirements of chapter 1, 4, or 6, or this chapter (or
regulations promulgated under any of those chapters), (2) whether any
persons would suffer substantial injury, loss, or damage absent a
suspension, (3) whether the Postal Service or any other persons would
suffer substantial injury, loss, or damage under a suspension, and (4)
the public interest.
``(e) Authority to Order Fines in Cases of Deliberate
Noncompliance.--In addition, in cases of deliberate noncompliance by
the Postal Service with the requirements of this title, the Postal
Regulatory Commission may order, based on the nature, circumstances,
extent, and seriousness of the noncompliance, a fine (in the amount
specified by the Commission in its order) for each incidence of
noncompliance. Fines resulting from the provision of competitive
products shall be paid out of the Competitive Products Fund established
in section 2011. All receipts from fines imposed under this subsection
shall be deposited in the general fund of the Treasury of the United
States.
``Sec. 3663. Appellate review
``A person adversely affected or aggrieved by a final order or
decision of the Postal Regulatory Commission may, within 30 days after
such order or decision becomes final, institute proceedings for review
thereof by filing a petition in the United States Court of Appeals for
the District of Columbia. The court shall review the order or decision
in accordance with section 706 of title 5, and chapter 158 and section
2112 of title 28, on the basis of the record before the Commission. For
purposes of this section, the term `person' includes the Postal
Service.
``Sec. 3664. Enforcement of orders
``The several district courts have jurisdiction specifically to
enforce, and to enjoin and restrain the Postal Service from violating,
any order issued by the Postal Regulatory Commission.''.
SEC. 206. WORKSHARE DISCOUNTS.
(a) In General.--Title 39, United States Code, is amended by adding
after section 3686 (as added by section 406) the following:
``Sec. 3687. Workshare discounts
``(a) In General.--As part of the regulations established under
section 3622(a), the Postal Regulatory Commission shall establish rules
for workshare discounts that ensure that such discounts do not exceed
the cost that the Postal Service avoids as the result of workshare
activity, unless--
``(1) the discount is--
``(A) associated with a new postal service, a change
to an existing postal service, or a new workshare
initiative related to an existing postal service; and
``(B) 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;
``(2) a reduction in 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 to costs avoided;
``(B) result in a further increase in the rates paid
by mailers not able to take advantage of the discount;
or
``(C) impede the efficient operation of the Postal
Service;
``(3) the amount of the discount above costs avoided--
``(A) is necessary to mitigate rate shock; and
``(B) will be phased out over time; or
``(4) the discount is provided in connection with subclasses
of mail consisting exclusively of mail matter of educational,
cultural, scientific, or informational value.
``(b) Report.--Whenever the Postal Service establishes or maintains a
workshare discount, the Postal Service shall, at the time it publishes
the workshare discount rate, submit to the Postal Regulatory Commission
a detailed report that--
``(1) explains the Postal Service's reasons for establishing
or maintaining the rate;
``(2) sets forth the data, economic analyses, and other
information relied on by the Postal Service to justify the
rate; and
``(3) 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.
``(c) Definition.--For purposes of this section, 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 section
3622(a).''.
(b) Clerical Amendment.--The analysis for chapter 36 of title 39,
United States Code (as amended by section 207) is amended by adding
after the item relating to section 3686 the following:
``3687. Workshare discounts.''.
SEC. 207. CLERICAL AMENDMENT.
Chapter 36 of title 39, United States Code, is amended by striking
the heading and analysis for such chapter and inserting the following:
``CHAPTER 36--POSTAL RATES, CLASSES AND SERVICES
``Subchapter I--Provisions relating to market-dominant products
``Sec.
``3621. Applicability; definitions.
``3622. Modern rate regulation.
``3626. Reduced rates.
``3627. Adjusting free rates.
``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.''.
TITLE III--PROVISIONS RELATING TO FAIR COMPETITION
SEC. 301. POSTAL SERVICE COMPETITIVE PRODUCTS FUND.
(a) Provisions Relating to Postal Service Competitive Products Fund
and Related Matters.--
(1) In general.--Chapter 20 of title 39, United States Code,
is amended by adding at the end the following:
``Sec. 2011. Provisions relating to competitive products
``(a) There is established in the Treasury of the United States a
revolving fund, to be called the Postal Service Competitive Products
Fund, which shall be available to the Postal Service without fiscal
year limitation for the payment of--
``(1) costs attributable to competitive products; and
``(2) all other costs incurred by the Postal Service, to the
extent allocable to competitive products.
For purposes of this subsection, the term `costs attributable' has the
meaning given such term by section 3631.
``(b) There shall be deposited in the Competitive Products Fund,
subject to withdrawal by the Postal Service--
``(1) revenues from competitive products;
``(2) amounts received from obligations issued by the Postal
Service under subsection (e);
``(3) interest and dividends earned on investments of the
Competitive Products Fund; and
``(4) any other receipts of the Postal Service (including
from the sale of assets), to the extent allocable to
competitive products.
``(c) If the Postal Service determines that the moneys of the
Competitive Products Fund are in excess of current needs, it may
request the investment of such amounts as it deems 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 it deems
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) Subject to the limitations specified in section 2005(a), the
Postal Service is authorized to borrow money and to issue and sell such
obligations as it determines necessary to provide for competitive
products and deposit such amounts in the Competitive Products Fund. Any
such borrowings by the Postal Service shall be supported and serviced
by the revenues and receipts from competitive products and the assets
related to the provision of competitive products (as determined under
subsection (h) or, for purposes of any period before accounting
practices and principles under subsection (h) have been established and
applied, the best information available from the Postal Service,
including the audited statements required by section 2008(e), but in
either case subject to paragraph (5)).
``(2) The Postal Service may enter into binding covenants with the
holders of such obligations, and with the trustee, if any, under any
agreement entered into in connection with the issuance thereof with
respect to--
``(A) the establishment of reserve, sinking, and other funds;
``(B) application and use of revenues and receipts of the
Competitive Products Fund;
``(C) stipulations concerning the subsequent issuance of
obligations or the execution of leases or lease purchases
relating to properties of the Postal Service; and
``(D) such other matters as the Postal Service considers
necessary or desirable to enhance the marketability of such
obligations.
``(3) The obligations issued by the Postal Service under this
section--
``(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 they 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) of this title,
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; 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 against the Postal Service or the Government of the
United States (or settlement of a claim) shall, to the extent that it
arises out of activities of the Postal Service in the provision of
competitive products, be paid out of the Competitive Products Fund.
``(h)(1) The Secretary of the Treasury, in consultation with the
Postal Service and an independent, certified public accounting firm and
such other advisors as the Secretary considers appropriate, shall
develop recommendations regarding--
``(A) the accounting practices and principles that should be
followed by the Postal Service with the objectives of (i)
identifying and valuing the assets and liabilities of the
Postal Service associated with providing, and the capital and
operating costs incurred by the Postal Service in providing,
competitive products, and (ii) subject to subsection (e)(5),
preventing the subsidization of such products by market-
dominant products; and
``(B) the substantive and procedural rules that should be
followed in determining the Postal Service's assumed Federal
income tax on competitive products income for any year (within
the meaning of section 3634).
Such recommendations shall be submitted to the Postal Regulatory
Commission no earlier than 6 months, and no later than 12 months, after
the effective date of this section.
``(2)(A) Upon receiving the recommendations of the Secretary of the
Treasury under paragraph (1), the Commission shall give interested
parties, including the Postal Service, users of the mails, and an
officer of the Commission who shall be required to represent the
interests of the general public, an opportunity to present their views
on those recommendations through submission of written data, views, or
arguments, with or without opportunity for oral presentation, or in
such other manner as the Commission considers appropriate.
``(B) After due consideration of the views and other information
received under subparagraph (A), the Commission shall by rule--
``(i) provide for the establishment and application of the
accounting practices and principles which shall be followed by
the Postal Service;
``(ii) provide for the establishment and application of the
substantive and procedural rules described in paragraph (1)(B);
and
``(iii) provide for the submission by the Postal Service to
the Postal Regulatory Commission of annual and other periodic
reports setting forth such information as the Commission may
require.
Final rules under this subparagraph shall be issued not later than 12
months after the date on which the Secretary of the Treasury makes his
submission to the Commission under paragraph (1) (or by such later date
as the Commission and the Postal Service may agree to). The Commission
is authorized to promulgate regulations revising such rules.
``(C) Reports described in subparagraph (B)(iii) shall be submitted
at such time and in such form, and shall include such information, as
the Commission by rule requires. The Commission may, on its own motion
or on request of an interested party, initiate proceedings (to be
conducted in accordance with such rules as the Commission shall
prescribe) to improve the quality, accuracy, or completeness of Postal
Service data under such subparagraph whenever it shall appear that--
``(i) the quality of the information furnished in those
reports has become significantly inaccurate or can be
significantly improved; or
``(ii) those revisions are, in the judgment of the
Commission, otherwise necessitated by the public interest.
``(D) A copy of each report described in subparagraph (B)(iii) shall
also be transmitted by the Postal Service to the Secretary of the
Treasury and the Inspector General of the United States Postal Service.
``(i) The Postal Service shall render an annual report to the
Secretary of the Treasury concerning the operation of the Competitive
Products Fund, in which it shall address such matters as risk
limitations, reserve balances, allocation or distribution of moneys,
liquidity requirements, and measures to safeguard against losses. A
copy of its then most recent report under this subsection shall be
included with any other submission that it is required to make to the
Postal Regulatory Commission under section 3652(g).''.
(2) Clerical amendment.--The analysis for chapter 20 of title
39, United States Code, is amended by adding after the item
relating to section 2010 the following:
``2011. Provisions relating to competitive products.''.
(b) Technical and Conforming Amendments.--
(1) Definition.--Section 2001 of title 39, United States
Code, is amended by striking ``and'' at the end of paragraph
(1), by redesignating paragraph (2) as paragraph (3), and by
inserting after paragraph (1) the following:
``(2) `Competitive Products Fund' means the Postal Service
Competitive Products Fund established by section 2011; and''.
(2) Capital of the Postal Service.--Section 2002(b) of title
39, United States Code, is amended by striking ``Fund,'' and
inserting ``Fund and the balance in the Competitive Products
Fund,''.
(3) Postal service fund.--
(A) Purposes for which available.--Section 2003(a) of
title 39, United States Code, is amended by striking
``title.'' and inserting ``title (other than any of the
purposes, functions, or powers for which the
Competitive Products Fund is available).''.
(B) Deposits.--Section 2003(b) of title 39, United
States Code, is amended by striking ``There'' and
inserting ``Except as otherwise provided in section
2011, there''.
(4) Relationship between the treasury and the postal
service.--Section 2006 of title 39, United States Code, is
amended--
(A) in subsection (a), by inserting ``or section
2011'' before ``of this title,'';
(B) in subsection (b), by inserting ``under section
2005'' before ``in such amounts'' in the first sentence
and before ``in excess of such amount.'' in the second
sentence; and
(C) in subsection (c), by inserting ``or section
2011(e)(4)(E)'' before ``of this title,''.
SEC. 302. ASSUMED FEDERAL INCOME TAX ON COMPETITIVE PRODUCTS INCOME.
Subchapter II of chapter 36 of title 39, United States Code, as
amended by section 202, is amended by adding at the end the following:
``Sec. 3634. Assumed Federal income tax on competitive products income
``(a) Definitions.--For purposes of this section--
``(1) the term `assumed Federal income tax on competitive
products income' means the net income tax that would be imposed
by chapter 1 of the Internal Revenue Code of 1986 on the Postal
Service's assumed taxable income from competitive products for
the year; and
``(2) the term `assumed taxable income from competitive
products', with respect to a year, refers to the amount
representing what would be the taxable income of a corporation
under the Internal Revenue Code of 1986 for the year, if--
``(A) the only activities of such corporation were
the activities of the Postal Service allocable under
section 2011(h) to competitive products; and
``(B) the only assets held by such corporation were
the assets of the Postal Service allocable under
section 2011(h) to such activities.
``(b) Computation and Transfer Requirements.--The Postal Service
shall, for each year beginning with the year in which occurs the
deadline for the Postal Service's first report to the Postal Regulatory
Commission under section 3652(a)--
``(1) compute its assumed Federal income tax on competitive
products income for such year; and
``(2) transfer from the Competitive Products Fund to the
Postal Service Fund the amount of that assumed tax.
``(c) Deadline for Transfers.--Any transfer required to be made under
this section for a year shall be due on or before the January 15th next
occurring after the close of such year.''.
SEC. 303. UNFAIR COMPETITION PROHIBITED.
(a) Specific Limitations.--Chapter 4 of title 39, United States Code,
is amended by adding after section 404 the following:
``Sec. 404a. Specific Limitations
``(a) Except as specifically authorized by law, the Postal Service
may not--
``(1) establish any rule or regulation (including any
standard) the effect of which is to preclude competition or
establish the terms of competition unless the Postal Service
demonstrates that the regulation does not create an unfair
competitive advantage for itself or any entity funded (in whole
or in part) by the Postal Service;
``(2) compel the disclosure, transfer, or licensing of
intellectual property to any third party (such as patents,
copyrights, trademarks, trade secrets, and proprietary
information); or
``(3) obtain information from a person that provides (or
seeks to provide) any product, and then offer any product or
service that uses or is based in whole or in part on such
information, without the consent of the person providing that
information, unless substantially the same information is
obtained (or obtainable) from an independent source or is
otherwise obtained (or obtainable).
``(b) The Postal Regulatory Commission shall prescribe regulations to
carry out this section.
``(c) Any party (including an officer of the Commission representing
the interests of the general public) who believes that the Postal
Service has violated this section may bring a complaint in accordance
with section 3662.''.
(b) Conforming Amendments.--
(1) General powers.--Section 401 of title 39, United States
Code, is amended by striking ``The'' and inserting ``Subject to
the provisions of section 404a, the''.
(2) Specific powers.--Section 404(a) of title 39, United
States Code, is amended by striking ``Without'' and inserting
``Subject to the provisions of section 404a, but otherwise
without''.
(c) Clerical Amendment.--The analysis for chapter 4 of title 39,
United States Code, is amended by inserting after the item relating to
section 404 the following:
``404a. Specific limitations.''.
SEC. 304. SUITS BY AND AGAINST THE POSTAL SERVICE.
(a) In General.--Section 409 of title 39, United States Code, is
amended by striking subsections (d) and (e) and inserting the
following:
``(d)(1) For purposes of the provisions of law cited in paragraphs
(2)(A) and (2)(B), respectively, the Postal Service--
``(A) shall be considered to be a `person', as used in the
provisions of law involved; and
``(B) shall not be immune under any other doctrine of
sovereign immunity from suit in Federal court by any person for
any violation of any of those provisions of law by any officer
or employee of the Postal Service.
``(2) This subsection applies with respect to--
``(A) the Act of July 5, 1946 (commonly referred to as the
`Trademark Act of 1946' (15 U.S.C. 1051 and following)); and
``(B) the provisions of section 5 of the Federal Trade
Commission Act to the extent that such section 5 applies to
unfair or deceptive acts or practices.
``(e)(1) To the extent that the Postal Service, or other Federal
agency acting on behalf of or in concert with the Postal Service,
engages in conduct with respect to any competitive product, the Postal
Service or other Federal agency (as the case may be)--
``(A) shall not be immune under any doctrine of sovereign
immunity from suit in Federal court by any person for any
violation of Federal law by such agency or any officer or
employee thereof; and
``(B) shall be considered to be a person (as defined in
subsection (a) of the first section of the Clayton Act) for
purposes of--
``(i) the antitrust laws (as defined in such
subsection); and
``(ii) section 5 of the Federal Trade Commission Act
to the extent that such section 5 applies to unfair
methods of competition.
``(2) No damages, interest on damages, costs or attorney's fees may
be recovered, and no criminal liability may be imposed, under the
antitrust laws (as so defined) from any officer or employee of the
Postal Service, or other Federal agency acting on behalf of or in
concert with the Postal Service, acting in an official capacity.
``(3) This subsection shall not apply with respect to conduct
occurring before the date of the enactment of this subsection.
``(f)(1) Each building constructed or altered by the Postal Service
shall be constructed or altered, to the maximum extent feasible as
determined by the Postal Service, in compliance with one of the
nationally recognized model building codes and with other applicable
nationally recognized codes.
``(2) Each building constructed or altered by the Postal Service
shall be constructed or altered only after consideration of all
requirements (other than procedural requirements) of zoning laws, land
use laws, and applicable environmental laws of a State or subdivision
of a State which would apply to the building if it were not a building
constructed or altered by an establishment of the Government of the
United States.
``(3) For purposes of meeting the requirements of paragraphs (1) and
(2) with respect to a building, the Postal Service shall--
``(A) in preparing plans for the building, consult with
appropriate officials of the State or political subdivision, or
both, in which the building will be located;
``(B) upon request, submit such plans in a timely manner to
such officials for review by such officials for a reasonable
period of time not exceeding 30 days; and
``(C) permit inspection by such officials during construction
or alteration of the building, in accordance with the customary
schedule of inspections for construction or alteration of
buildings in the locality, if such officials provide to the
Postal Service--
``(i) a copy of such schedule before construction of
the building is begun; and
``(ii) reasonable notice of their intention to
conduct any inspection before conducting such
inspection.
Nothing in this subsection shall impose an obligation on any State or
political subdivision to take any action under the preceding sentence,
nor shall anything in this subsection require the Postal Service or any
of its contractors to pay for any action taken by a State or political
subdivision to carry out this subsection (including reviewing plans,
carrying out on-site inspections, issuing building permits, and making
recommendations).
``(4) Appropriate officials of a State or a political subdivision of
a State may make recommendations to the Postal Service concerning
measures necessary to meet the requirements of paragraphs (1) and (2).
Such officials may also make recommendations to the Postal Service
concerning measures which should be taken in the construction or
alteration of the building to take into account local conditions. The
Postal Service shall give due consideration to any such
recommendations.
``(5) In addition to consulting with local and State officials under
paragraph (3), the Postal Service shall establish procedures for
soliciting, assessing, and incorporating local community input on real
property and land use decisions.
``(6) For purposes of this subsection, the term `State' includes the
District of Columbia, the Commonwealth of Puerto Rico, and a territory
or possession of the United States.
``(g)(1) Notwithstanding any other provision of law, legal
representation may not be furnished by the Department of Justice to the
Postal Service in any action, suit, or proceeding arising, in whole or
in part, under any of the following:
``(A) Subsection (d) or (e) of this section.
``(B) Subsection (f) or (g) of section 504 (relating to
administrative subpoenas by the Postal Regulatory Commission).
``(C) Section 3663 (relating to appellate review).
The Postal Service may, by contract or otherwise, employ attorneys to
obtain any legal representation that it is precluded from obtaining
from the Department of Justice under this paragraph.
``(2) In any circumstance not covered by paragraph (1), the
Department of Justice shall, under section 411, furnish the Postal
Service such legal representation as it may require, except that, with
the prior consent of the Attorney General, the Postal Service may, in
any such circumstance, employ attorneys by contract or otherwise to
conduct litigation brought by or against the Postal Service or its
officers or employees in matters affecting the Postal Service.
``(3)(A) In any action, suit, or proceeding in a court of the United
States arising in whole or in part under any of the provisions of law
referred to in subparagraph (B) or (C) of paragraph (1), and to which
the Commission is not otherwise a party, the Commission shall be
permitted to appear as a party on its own motion and as of right.
``(B) The Department of Justice shall, under such terms and
conditions as the Commission and the Attorney General shall consider
appropriate, furnish the Commission such legal representation as it may
require in connection with any such action, suit, or proceeding, except
that, with the prior consent of the Attorney General, the Commission
may employ attorneys by contract or otherwise for that purpose.
``(h) A judgment against the Government of the United States arising
out of activities of the Postal Service shall be paid by the Postal
Service out of any funds available to the Postal Service, subject to
the restriction specified in section 2011(g).''.
(b) Technical Amendment.--Section 409(a) of title 39, United States
Code, is amended by striking ``Except as provided in section 3628 of
this title,'' and inserting ``Except as otherwise provided in this
title,''.
SEC. 305. INTERNATIONAL POSTAL ARRANGEMENTS.
(a) In General.--Section 407 of title 39, United States Code, is
amended to read as follows:
``Sec. 407. International postal arrangements
``(a) It is the policy of the United States--
``(1) to promote and encourage communications between peoples
by efficient operation of international postal services and
other international delivery services for cultural, social, and
economic purposes;
``(2) to promote and encourage unrestricted and undistorted
competition in the provision of international postal services
and other international delivery services, except where
provision of such services by private companies may be
prohibited by law of the United States;
``(3) to promote and encourage a clear distinction between
governmental and operational responsibilities with respect to
the provision of international postal services and other
international delivery services by the Government of the United
States and by intergovernmental organizations of which the
United States is a member; and
``(4) to participate in multilateral and bilateral agreements
with other countries to accomplish these objectives.
``(b)(1) The Secretary of State shall be responsible for formulation,
coordination, and oversight of foreign policy related to international
postal services and other international delivery services, and shall
have the power to conclude treaties, conventions and amendments related
to international postal services and other international delivery
services, except that the Secretary may not conclude any treaty,
convention, or other international agreement (including those
regulating international postal services) if such treaty, convention,
or agreement would, with respect to any competitive product, grant an
undue or unreasonable preference to the Postal Service, a private
provider of international postal or delivery services, or any other
person.
``(2) In carrying out the responsibilities specified in paragraph
(1), the Secretary of State shall exercise primary authority for the
conduct of foreign policy with respect to international postal services
and international delivery services, including the determination of
United States positions and the conduct of United States participation
in negotiations with foreign governments and international bodies. In
exercising this authority, the Secretary--
``(A) shall coordinate with other agencies as appropriate,
and in particular, shall give full consideration to the
authority vested by law or Executive order in the Postal
Regulatory Commission, the Department of Commerce, the
Department of Transportation, and the Office of the United
States Trade Representative in this area;
``(B) shall maintain continuing liaison with other executive
branch agencies concerned with postal and delivery services;
``(C) shall maintain continuing liaison with the Committee on
Government Reform of the House of Representatives and the
Committee on Governmental Affairs of the Senate;
``(D) shall maintain appropriate liaison with both
representatives of the Postal Service and representatives of
users and private providers of international postal services
and other international delivery services to keep informed of
their interests and problems, and to provide such assistance as
may be needed to ensure that matters of concern are promptly
considered by the Department of State or (if applicable, and to
the extent practicable) other executive branch agencies; and
``(E) shall assist in arranging meetings of such public
sector advisory groups as may be established to advise the
Department of State and other executive branch agencies in
connection with international postal services and international
delivery services.
``(3) The Secretary of State shall establish an advisory committee
(within the meaning of the Federal Advisory Committee Act) to perform
such functions as the Secretary considers appropriate in connection
with carrying out subparagraphs (A) through (D) of paragraph (2).
``(c)(1) Before concluding any treaty, convention, or amendment that
establishes a rate or classification for a product subject to
subchapter I of chapter 36, the Secretary of State shall request the
Postal Regulatory Commission to submit a decision on whether such rate
or classification is consistent with the standards and criteria
established by the Commission under section 3622.
``(2) The Secretary shall ensure that each treaty, convention, or
amendment concluded under subsection (b) is consistent with a decision
of the Commission adopted under paragraph (1), except if, or to the
extent, the Secretary determines, by written order, that considerations
of foreign policy or national security require modification of the
Commission's decision.
``(d) Nothing in this section shall be considered to prevent the
Postal Service from entering into such commercial or operational
contracts related to providing international postal services and other
international delivery services as it deems appropriate, except that--
``(1) any such contract made with an agency of a foreign
government (whether under authority of this subsection or
otherwise) shall be solely contractual in nature and may not
purport to be international law; and
``(2) a copy of each such contract between the Postal Service
and an agency of a foreign government shall be transmitted to
the Secretary of State and the Postal Regulatory Commission not
later than the effective date of such contract.
``(e)(1) With respect to shipments of international mail that are
competitive products within the meaning of section 3631 that are
exported or imported by the Postal Service, the Bureau of Customs and
Border Protection of the Department of Homeland Security and other
appropriate Federal agencies shall apply the customs laws of the United
States and all other laws relating to the importation or exportation of
such shipments in the same manner to both shipments by the Postal
Service and similar shipments by private companies.
``(2) For purposes of this subsection, the term `private company'
means a private company substantially owned or controlled by persons
who are citizens of the United States.
``(3) In exercising the authority pursuant to subsection (b) to
conclude new treaties, conventions and amendments related to
international postal services and to renegotiate such treaties,
conventions and amendments, the Secretary of State shall, to the
maximum extent practicable, take such measures as are within the
Secretary's control to encourage the governments of other countries to
make available to the Postal Service and private companies a range of
nondiscriminatory customs procedures that will fully meet the needs of
all types of American shippers. The Secretary of State shall consult
with the United States Trade Representative and the Commissioner of
Customs, Department of Homeland Security in carrying out this
paragraph.
``(4) The provisions of this subsection shall take effect 6 months
after the date of the enactment of this subsection or such earlier date
as the Bureau of Customs and Border Protection of the Department of
Homeland Security may determine in writing.''.
(b) Effective Date.--Notwithstanding any provision of the amendment
made by subsection (a), the authority of the United States Postal
Service to establish the rates of postage or other charges on mail
matter conveyed between the United States and other countries shall
remain available to the Postal Service until--
(1) with respect to market-dominant products, the date as of
which the regulations promulgated under section 3622 of title
39, United States Code (as amended by section 201(a)) take
effect; and
(2) with respect to competitive products, the date as of
which the regulations promulgated under section 3633 of title
39, United States Code (as amended by section 202) take effect.
SEC. 306. REDESIGNATION.
Chapter 36 of title 39, United States Code (as in effect before the
amendment made by section 204(a)) is amended by striking the heading
for subchapter V and inserting the following:
``SUBCHAPTER VI--GENERAL''.
TITLE IV--GENERAL PROVISIONS
SEC. 401. QUALIFICATION REQUIREMENTS FOR GOVERNORS.
(a) In General.--Section 202(a) of title 39, United States Code, is
amended by striking ``(a)'' and inserting ``(a)(1)'' and by striking
the fourth sentence and inserting the following: ``The Governors shall
represent the public interest generally, and at least 4 of the
Governors shall be chosen solely on the basis of their demonstrated
ability in managing organizations or corporations (in either the public
or private sector) of substantial size; for purposes of this sentence,
an organization or corporation shall be considered to be of substantial
size if it employs at least 50,000 employees. The Governors shall not
be representatives of specific interests using the Postal Service, and
may be removed only for cause.''.
(b) Consultation Requirement.--Section 202(a) of title 39, United
States Code, is amended by adding at the end the following:
``(2) In selecting the individuals described in paragraph (1) for
nomination for appointment to the position of Governor, the President
should consult with the Speaker of the House of Representatives, the
minority leader of the House of Representatives, the majority leader of
the Senate, and the minority leader of the Senate.''.
(c) Restriction.--Section 202(b) of title 39, United States Code, is
amended by striking ``(b)'' and inserting ``(b)(1)'', and by adding at
the end the following:
``(2)(A) Notwithstanding any other provision of this section, in the
case of the office of the Governor the term of which is the first one
scheduled to expire at least 4 months after the date of the enactment
of this paragraph--
``(i) such office may not, in the case of any person
commencing service after that expiration date, be filled by any
person other than an individual chosen from among persons
nominated for such office with the unanimous concurrence of all
labor organizations described in section 206(a)(1); and
``(ii) instead of the term that would otherwise apply under
the first sentence of paragraph (1), the term of any person so
appointed to such office shall be 3 years.
``(B) Except as provided in subparagraph (A), an appointment under
this paragraph shall be made in conformance with all provisions of this
section that would otherwise apply.''.
(d) Applicability.--The amendment made by subsection (a) shall not
affect the appointment or tenure of any person serving as a Governor of
the Board of Governors of the United States Postal Service pursuant to
an appointment made before the date of the enactment of this Act, or,
except as provided in the amendment made by subsection (c), any
nomination made before that date; however, when any such office becomes
vacant, the appointment of any person to fill that office shall be made
in accordance with such amendment. The requirement set forth in the
fourth sentence of section 202(a)(1) of title 39, United States Code
(as amended by subsection (a)) shall be met beginning not later than 9
years after the date of the enactment of this Act.
SEC. 402. OBLIGATIONS.
(a) Purposes for Which Obligations May Be Issued.--The first sentence
of section 2005(a)(1) of title 39, United States Code, is amended by
striking ``title.'' and inserting ``title, other than any of the
purposes for which the corresponding authority is available to the
Postal Service under section 2011.''.
(b) Limitation on Net Annual Increase in Obligations Issued for
Certain Purposes.--The third sentence of section 2005(a)(1) of title
39, United States Code, is amended to read as follows: ``In any one
fiscal year, the net increase in the amount of obligations outstanding
issued for the purpose of capital improvements and the net increase in
the amount of obligations outstanding issued for the purpose of
defraying operating expenses of the Postal Service shall not exceed a
combined total of $3,000,000,000.'' .
(c) Limitations on Obligations Outstanding.--
(1) In general.--Subsection (a) of section 2005 of title 39,
United States Code, is amended by adding at the end the
following:
``(3) For purposes of applying the respective limitations under this
subsection, the aggregate amount of obligations issued by the Postal
Service which are outstanding as of any one time, and the net increase
in the amount of obligations outstanding issued by the Postal Service
for the purpose of capital improvements or for the purpose of defraying
operating expenses of the Postal Service in any fiscal year, shall be
determined by aggregating the relevant obligations issued by the Postal
Service under this section with the relevant obligations issued by the
Postal Service under section 2011.''.
(2) Conforming amendment.--The second sentence of section
2005(a)(1) of title 39, United States Code, is amended by
striking ``any such obligations'' and inserting ``obligations
issued by the Postal Service which may be''.
(d) Amounts Which May Be Pledged, Etc.--
(1) Obligations to which provisions apply.--The first
sentence of section 2005(b) of title 39, United States Code, is
amended by striking ``such obligations,'' and inserting
``obligations issued by the Postal Service under this
section,''.
(2) Assets, revenues, and receipts to which provisions
apply.--Subsection (b) of section 2005 of title 39, United
States Code, is amended by striking ``(b)'' and inserting
``(b)(1)'', and by adding at the end the following:
``(2) Notwithstanding any other provision of this section--
``(A) the authority to pledge assets of the Postal Service
under this subsection shall be available only to the extent
that such assets are not related to the provision of
competitive products (as determined under section 2011(h) or,
for purposes of any period before accounting practices and
principles under section 2011(h) have been established and
applied, the best information available from the Postal
Service, including the audited statements required by section
2008(e)); and
``(B) any authority under this subsection relating to the
pledging or other use of revenues or receipts of the Postal
Service shall be available only to the extent that they are not
revenues or receipts of the Competitive Products Fund.''.
SEC. 403. PRIVATE CARRIAGE OF LETTERS.
(a) In General.--Section 601 of title 39, United States Code, is
amended by striking subsection (b) and inserting the following:
``(b) A letter may also be carried out of the mails when--
``(1) the amount paid for the private carriage of the letter
is at least the amount equal to 6 times the rate then currently
charged for the 1st ounce of a single-piece first class letter;
``(2) the letter weighs at least 12\1/2\ ounces; or
``(3) such carriage is within the scope of services described
by regulations of the Postal Service (including, in particular,
sections 310.1 and 320.2-320.8 of title 39 of the Code of
Federal Regulations, as in effect on July 1, 2004) that purport
to permit private carriage by suspension of the operation of
this section (as then in effect).
``(c) Any regulations necessary to carry out this section shall be
promulgated by the Postal Regulatory Commission.''.
(b) Effective Date.--This section shall take effect on the date as of
which the regulations promulgated under section 3633 of title 39,
United States Code (as amended by section 202) take effect.
SEC. 404. RULEMAKING AUTHORITY.
Paragraph (2) of section 401 of title 39, United States Code, is
amended to read as follows:
``(2) to adopt, amend, and repeal such rules and regulations,
not inconsistent with this title, as may be necessary in the
execution of its functions under this title and such other
functions as may be assigned to the Postal Service under any
provisions of law outside of this title;''.
SEC. 405. NONINTERFERENCE WITH COLLECTIVE BARGAINING AGREEMENTS, ETC.
(a) Noninterference With Collective Bargaining Agreements.--Except as
provided in section 407, nothing in this Act or any amendment made by
this Act shall restrict, expand, or otherwise affect any of the rights,
privileges, or benefits of either employees of or labor organizations
representing employees of the United States Postal Service under
chapter 12 of title 39, United States Code, the National Labor
Relations Act, any handbook or manual affecting employee labor
relations within the United States Postal Service, or any collective
bargaining agreement.
(b) Free Mailing Privileges Continue Unchanged.--Nothing in this Act
or any amendment made by this Act shall affect any free mailing
privileges accorded under section 3217 or sections 3403 through 3406 of
title 39, United States Code.
SEC. 406. BONUS AND COMPENSATION AUTHORITY.
Subchapter VI of chapter 36 of title 39, United States Code (as so
redesignated by section 306) is amended by adding at the end the
following:
``Sec. 3686. Bonus authority
``(a) In General.--The Postal Service may establish one or more
programs to provide bonuses or other rewards to officers and employees
of the Postal Service 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 in such form and
manner as the Board requires; and
``(B) the Board of Governors shall approve any such
request if it 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 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.''.
SEC. 407. MEDIATION IN COLLECTIVE-BARGAINING DISPUTES.
(a) In General.--Section 1207(b) of title 39, United States Code, is
amended by striking all that follows ``the Director of the Federal
Mediation and Conciliation Service shall'' and inserting ``, within 10
days appoint a mediator of nationwide reputation and professional
stature, and who is also a member of the National Academy of
Arbitrators. The parties shall cooperate with the mediator in an effort
to reach an agreement and shall meet and negotiate in good faith at
such times and places that the mediator, in consultation with the
parties, shall direct.''.
(b) Provisions Relating to Arbitration Boards.--Section 1207(c) of
title 39, United States Code, is amended--
(1) in paragraph (1)--
(A) by striking ``90'' and inserting ``60'';
(B) by striking ``not members of the factfinding
panel,''; and
(C) by striking all that follows ``shall be made''
and inserting ``from a list of names provided by the
Director. This list shall consist of not less than 9
names of arbitrators of nationwide reputation and
professional stature, who are also members of the
National Academy of Arbitrators, and whom the Director
has determined are available and willing to serve.'';
and
(2) in paragraph (3), by striking ``factfinding panel'' and
inserting ``mediation''.
(c) Conforming Amendment.--Section 1207(d) of title 39, United States
Code, is amended by striking ``factfinding panel will be established''
and inserting ``mediator shall be appointed''.
TITLE V--ENHANCED REGULATORY COMMISSION
SEC. 501. REORGANIZATION AND MODIFICATION OF CERTAIN PROVISIONS
RELATING TO THE POSTAL REGULATORY COMMISSION.
(a) Transfer and Redesignation.--Title 39, United States Code, is
amended--
(1) by inserting after chapter 4 the following:
``CHAPTER 5--POSTAL REGULATORY COMMISSION
``Sec.
``501. Establishment.
``502. Commissioners.
``503. Rules; regulations; procedures.
``504. Administration.
``Sec. 501. Establishment
``The Postal Regulatory Commission is an independent establishment of
the executive branch of the Government of the United States.
``Sec. 502. Commissioners
``(a) The Postal Regulatory Commission is composed of 5
Commissioners, appointed by the President, by and with the advice and
consent of the Senate. The Commissioners shall be chosen solely on the
basis of their technical qualifications, professional standing, and
demonstrated expertise in economics, accounting, law, or public
administration, and may be removed by the President only for cause.
Each individual appointed to the Commission shall have the
qualifications and expertise necessary to carry out the
responsibilities accorded Commissioners under the Postal Accountability
and Enhancement Act. Not more than 3 of the Commissioners may be
adherents of the same political party.
``(b) A Commissioner may continue to serve after the expiration of
his term until his successor has qualified, except that a Commissioner
may not so continue to serve for more than 1 year after the date upon
which his term otherwise would expire under subsection (e).
``(c) One of the Commissioners shall be designated as Chairman by,
and shall serve in the position of Chairman at the pleasure of, the
President.
``(d) The Commissioners shall by majority vote designate a Vice
Chairman of the Commission. The Vice Chairman shall act as Chairman of
the Commission in the absence of the Chairman.
``(e) The Commissioners shall serve for terms of 6 years.'';
(2) in subchapter I of chapter 36 (as in effect before the
amendment made by section 201(c)), by striking the heading for
such subchapter I and all that follows through section 3602;
and
(3) by redesignating sections 3603 and 3604 as sections 503
and 504, respectively, and transferring such sections to the
end of chapter 5 (as inserted by paragraph (1)).
(b) Determinations.--Section 503 of title 39, United States Code, as
so redesignated by subsection (a)(3), is amended by adding at the end
the following: ``Such rules shall include procedures which balance,
inter alia, the need for protecting due process rights and ensuring
expeditious decision-making.''.
(c) Applicability.--The amendment made by subsection (a)(1) shall not
affect the appointment or tenure of any person serving as a
Commissioner on the Postal Regulatory Commission (as so redesignated by
section 504) pursuant to an appointment made before the date of the
enactment of this Act or any nomination made before that date, but,
when any such office becomes vacant, the appointment of any person to
fill that office shall be made in accordance with such amendment.
(d) Clerical Amendment.--The analysis for part I of title 39, United
States Code, is amended by inserting after the item relating to chapter
4 the following:
``5. Postal Regulatory Commission........................... 501''.
SEC. 502. AUTHORITY FOR POSTAL REGULATORY COMMISSION TO ISSUE
SUBPOENAS.
Section 504 of title 39, United States Code (as so redesignated by
section 501) is amended by adding at the end the following:
``(f)(1) Any Commissioner of the Postal Regulatory Commission, any
administrative law judge appointed by the Commission under section 3105
of title 5, and any employee of the Commission designated by the
Commission may administer oaths, examine witnesses, take depositions,
and receive evidence.
``(2) The Chairman of the Commission, any Commissioner designated by
the Chairman, and any administrative law judge appointed by the
Commission under section 3105 of title 5 may, with respect to any
proceeding conducted by the Commission under this title--
``(A) issue subpoenas requiring the attendance and
presentation of testimony by, or the production of documentary
or other evidence in the possession of, any covered person; and
``(B) order the taking of depositions and responses to
written interrogatories by a covered person.
The written concurrence of a majority of the Commissioners then holding
office shall, with respect to each subpoena under subparagraph (A), be
required in advance of its issuance.
``(3) In the case of contumacy or failure to obey a subpoena issued
under this subsection, upon application by the Commission, the district
court of the United States for the district in which the person to whom
the subpoena is addressed resides or is served may issue an order
requiring such person to appear at any designated place to testify or
produce documentary or other evidence. Any failure to obey the order of
the court may be punished by the court as a contempt thereof.
``(4) For purposes of this subsection, the term `covered person'
means an officer, employee, agent, or contractor of the Postal Service.
``(g)(1) If the Postal Service determines that any document or other
matter it provides to the Postal Regulatory Commission pursuant to a
subpoena issued under subsection (f), or otherwise at the request of
the Commission in connection with any proceeding or other purpose under
this title, contains information which is described in section 410(c)
of this title, or exempt from public disclosure under section 552(b) of
title 5, the Postal Service shall, at the time of providing such matter
to the Commission, notify the Commission, in writing, of its
determination (and the reasons therefor).
``(2) 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 prevent the Commission from publicly
disclosing relevant information in furtherance of its duties under this
title if 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, as required by section 101(d) of this title for financial
transparency of a government establishment.
``(B) Paragraph (2) shall not prevent information from being
furnished under any process of discovery established under this title
in connection with a proceeding under this title. The Commission shall,
by regulations based on rule 26(c) of the Federal Rules of Civil
Procedure, establish procedures for ensuring appropriate
confidentiality for any information furnished under the preceding
sentence.''.
SEC. 503. APPROPRIATIONS FOR THE POSTAL REGULATORY COMMISSION.
(a) Authorization of Appropriations.--Subsection (d) of section 504
of title 39, United States Code (as so redesignated by section 501) is
amended to read as follows:
``(d) There are authorized to be appropriated, out of the Postal
Service Fund, such sums as may be necessary for the Postal Regulatory
Commission. In requesting an appropriation under this subsection for a
fiscal year, the Commission shall prepare and submit to the Congress
under section 2009 a budget of the Commission's expenses, including
expenses for facilities, supplies, compensation, and employee
benefits.''.
(b) Budget Program.--
(1) In general.--The next to last sentence of section 2009 of
title 39, United States Code, is amended to read as follows:
``The budget program shall also include separate statements of
the amounts which (1) the Postal Service requests to be
appropriated under subsections (b) and (c) of section 2401, (2)
the Office of Inspector General of the United States Postal
Service requests to be appropriated, out of the Postal Service
Fund, under section 8L(e) of the Inspector General Act of 1978,
and (3) the Postal Regulatory Commission requests to be
appropriated, out of the Postal Service Fund, under section
504(d) of this title.''.
(2) Conforming amendment.--Section 2003(e)(1) of title 39,
United States Code, is amended by striking the first sentence
and inserting the following: ``The Fund shall be available for
the payment of (A) all expenses incurred by the Postal Service
in carrying out its functions as provided by law, subject to
the same limitation as set forth in the parenthetical matter
under subsection (a); (B) all expenses of the Postal Regulatory
Commission, subject to the availability of amounts appropriated
pursuant to section 504(d); and (C) all expenses of the Office
of Inspector General, subject to the availability of amounts
appropriated pursuant to section 8L(e) of the Inspector General
Act of 1978.''.
(c) Effective Date.--
(1) In general.--The amendments made by this section shall
apply with respect to fiscal years beginning on or after
October 1, 2005.
(2) Savings provision.--The provisions of title 39, United
States Code, that are amended by this section shall, for
purposes of any fiscal year before the first fiscal year to
which the amendments made by this section apply, continue to
apply in the same way as if this section had never been
enacted.
SEC. 504. REDESIGNATION OF THE POSTAL RATE COMMISSION.
(a) Amendments to Title 39, United States Code.--Title 39, United
States Code, is amended in sections 404, 503-504 (as so redesignated by
section 501), 1001, and 1002 by striking ``Postal Rate Commission''
each place it appears and inserting ``Postal Regulatory Commission''.
(b) Amendments to Title 5, United States Code.--Title 5, United
States Code, is amended in sections 104(1), 306(f), 2104(b), 3371(3),
5314 (in the item relating to Chairman, Postal Rate Commission), 5315
(in the item relating to Members, Postal Rate Commission),
5514(a)(5)(B), 7342(a)(1)(A), 7511(a)(1)(B)(ii), 8402(c)(1),
8423(b)(1)(B), and 8474(c)(4) by striking ``Postal Rate Commission''
and inserting ``Postal Regulatory Commission''.
(c) Amendment to the Ethics in Government Act of 1978.--Section
101(f)(6) of the Ethics in Government Act of 1978 (5 U.S.C. App.) is
amended by striking ``Postal Rate Commission'' and inserting ``Postal
Regulatory Commission''.
(d) Amendment to the Rehabilitation Act of 1973.--Section 501(b) of
the Rehabilitation Act of 1973 (29 U.S.C. 791(b)) is amended by
striking ``Postal Rate Office'' and inserting ``Postal Regulatory
Commission''.
(e) Amendment to Title 44, United States Code.--Section 3502(5) of
title 44, United States Code, is amended by striking ``Postal Rate
Commission'' and inserting ``Postal Regulatory Commission''.
(f) Other References.--Whenever a reference is made in any provision
of law (other than this Act or a provision of law amended by this Act),
regulation, rule, document, or other record of the United States to the
Postal Rate Commission, such reference shall be considered a reference
to the Postal Regulatory Commission.
SEC. 505. OFFICER OF THE POSTAL REGULATORY COMMISSION REPRESENTING THE
GENERAL PUBLIC.
(a) In General.--Chapter 5 of title 39, United States Code (as added
by this Act) is amended by adding after section 504 the following:
``Sec. 505. Officer of the Postal Regulatory Commission representing
the general public
``The Postal Regulatory Commission shall designate an officer of the
Postal Regulatory Commission in all public proceedings (such as
developing rules, regulations, and procedures) who shall represent the
interests of the general public.''.
(b) Clerical Amendment.--The analysis for chapter 5 of title 39,
United States Code (as amended by section 501(a)(1)) is amended by
adding after the item relating to section 504 the following:
``505. Officer of the Postal Regulatory Commission representing the
general public.''.
TITLE VI--INSPECTORS GENERAL
SEC. 601. INSPECTOR GENERAL OF THE POSTAL REGULATORY COMMISSION.
(a) In General.--Paragraph (2) of section 8G(a) of the Inspector
General Act of 1978 is amended by inserting ``the Postal Regulatory
Commission,'' after ``the United States International Trade
Commission,''.
(b) Administration.--Section 504 of title 39, United States Code (as
so redesignated by section 501) is amended by adding after subsection
(g) (as added by section 502) the following:
``(h)(1) Notwithstanding any other provision of this title or of the
Inspector General Act of 1978, the authority to select, appoint, and
employ officers and employees of the Office of Inspector General of the
Postal Regulatory Commission, and to obtain any temporary or
intermittent services of experts or consultants (or an organization of
experts or consultants) for such Office, shall reside with the
Inspector General of the Postal Regulatory Commission.
``(2) Except as provided in paragraph (1), any exercise of authority
under this subsection shall, to the extent practicable, be in
conformance with the applicable laws and regulations that govern
selections, appointments and employment, and the obtaining of any such
temporary or intermittent services, within the Postal Regulatory
Commission.''.
(c) Deadline.--No later than 180 days after the date of the enactment
of this Act--
(1) the first Inspector General of the Postal Regulatory
Commission shall be appointed; and
(2) the Office of Inspector General of the Postal Regulatory
Commission shall be established.
SEC. 602. INSPECTOR GENERAL OF THE UNITED STATES POSTAL SERVICE TO BE
APPOINTED BY THE PRESIDENT.
(a) Definitional Amendments to the Inspector General Act of 1978.--
Section 11 of the Inspector General Act of 1978 is amended--
(1) in paragraph (1)--
(A) by striking ``or'' before ``the President of the
Export-Import Bank;'' and
(B) by inserting ``or the Governors of the United
States Postal Service (within the meaning of section
102(3) of title 39, United States Code);'' after ``the
President of the Export-Import Bank;''; and
(2) in paragraph (2)--
(A) by striking ``or'' before ``the Export-Import
Bank,''; and
(B) by inserting ``or the United States Postal
Service,'' after ``the Export-Import Bank,''.
(b) Special Provisions Concerning the United States Postal Service.--
(1) In general.--The Inspector General Act of 1978 is amended
by inserting after section 8K the following:
``special provisions concerning the united states postal service
``Sec. 8L. (a) In carrying out the duties and responsibilities
specified in this Act, the Inspector General of the United States
Postal Service shall have oversight responsibility for all activities
of the Postal Inspection Service, including any internal investigation
performed by the Postal Inspection Service. The Chief Postal Inspector
shall promptly report any significant activities being carried out by
the Postal Inspection Service to such Inspector General. The Postmaster
General shall promptly report to such Inspector General all allegations
of theft, fraud, or misconduct by Postal Service officers or employees,
and entities or individuals doing business with the Postal Service.
``(b) In the case of any report that the Governors of the United
States Postal Service (within the meaning of section 102(3) of title
39, United States Code) are required to transmit under the second
sentence of section 5(d), such sentence shall be applied by deeming the
term `appropriate committees of Congress' to mean the Committee on
Government Reform of the House of Representatives, the Committee on
Governmental Affairs of the Senate, and such other committees or
subcommittees of Congress as may be appropriate.
``(c) Notwithstanding any provision of paragraph (7) or (8) of
section 6(a), the Inspector General of the United States Postal Service
may select, appoint, and employ such officers and employees as may be
necessary for carrying out the functions, powers, and duties of the
Office of Inspector General and to obtain the temporary or intermittent
services of experts or consultants or an organization of experts or
consultants, subject to the applicable laws and regulations that govern
such selections, appointments, and employment, and the obtaining of
such services, within the United States Postal Service.
``(d) Nothing in this Act shall restrict, eliminate, or otherwise
adversely affect any of the rights, privileges, or benefits of
employees of the United States Postal Service, or labor organizations
representing employees of the United States Postal Service, under
chapter 12 of title 39, United States Code, the National Labor
Relations Act, any handbook or manual affecting employee labor
relations with the United States Postal Service, or any collective
bargaining agreement.
``(e) There are authorized to be appropriated, out of the Postal
Service Fund, such sums as may be necessary for the Office of Inspector
General of the United States Postal Service.''.
(2) Related provisions.--For certain related provisions, see
section 503(b).
(c) Exercise of Certain Powers.--Section 6(e)(3) of the Inspector
General Act of 1978 is amended--
(1) by striking ``and the'' before ``Tennessee Valley
Authority''; and
(2) by inserting ``, and United States Postal Service'' after
``Tennessee Valley Authority''.
(d) Public Contracts.--
(1) Additional provisions applicable.--Section 410(b)(5) of
title 39, United States Code, is amended--
(A) in subparagraph (A), by striking ``and'' after
the semicolon; and
(B) by adding after subparagraph (B) the following:
``(C) the Anti-Kickback Act of 1986 (41 U.S.C. 51 and
following), other than subsections (a) and (b) of 7 and
section 8 of that Act; and
``(D) section 315 of the Federal Property and
Administrative Services Act of 1949 (41 U.S.C. 265)
(relating to protecting contractor employees from
reprisal for disclosure of certain information);''.
(2) Regulations on allowable costs.--Section 410 of title 39,
United States Code, is amended by adding at the end the
following:
``(e) The Postal Service shall develop and issue purchasing
regulations that prohibit contract costs not allowable under section
5.2.5 of the United States Postal Service Procurement Manual
(Publication 41), as in effect on July 12, 1995.''.
(e) Reports.--Section 3013 of title 39, United States Code, is
amended by striking ``Postmaster General'' each place it appears and
inserting ``Chief Postal Inspector''.
(f) Technical and Conforming Amendments.--
(1) Relating to the inspector general act of 1978.--(A)
Subsection (a) of section 8G of the Inspector General Act of
1978 (as amended by section 601(a)) is further amended--
(i) in paragraph (2), by striking ``the Postal
Regulatory Commission, and the United States Postal
Service;'' and inserting ``and the Postal Regulatory
Commission;'' and
(ii) in paragraph (4), by striking ``except that''
and all that follows through ``Code);'' and inserting
``except that, with respect to the National Science
Foundation, such term means the National Science
Board;''.
(B)(i) Subsection (f) of section 8G of such Act is repealed.
(ii) Subsection (c) of section 8G of such Act is amended by
striking ``Except as provided under subsection (f) of this
section, the'' and inserting ``The''.
(C) Section 8J of such Act is amended by striking the matter
after ``8D,'' and before ``of this Act'' and inserting ``8E,
8F, 8H, or 8L''.
(2) Relating to title 39, united states code.--(A) Subsection
(e) of section 202 of title 39, United States Code, is
repealed.
(B) Paragraph (4) of section 102 of such title 39 (as amended
by section 101) is amended to read as follows:
``(4) `Inspector General' means the Inspector General of the
United States Postal Service, appointed under section 3(a) of
the Inspector General Act of 1978;''.
(C) The first sentence of section 1003(a) of such title 39 is
amended by striking ``chapters 2 and 12 of this title, section
8G of the Inspector General Act of 1978, or other provision of
law,'' and inserting ``chapter 2 or 12 of this title,
subsection (b) or (c) of this section, or any other provision
of law,''.
(D) Section 1003(b) of such title 39 is amended by striking
``respective'' and inserting ``other''.
(E) Section 1003(c) of such title 39 is amended by striking
``included'' and inserting ``includes''.
(3) Relating to the energy policy act of 1992.--Section
160(a) of the Energy Policy Act of 1992 (42 U.S.C. 8262f(a)) is
amended (in the matter before paragraph (1)) by striking all
that follows ``(5 U.S.C. App.)'' and before ``shall--''.
(g) Effective Date; Transition Provisions.--
(1) Effective date.--Except as provided in paragraph (2) or
subsection (c), this section and the amendments made by this
section shall take effect on the date of the enactment of this
Act.
(2) Transition provisions.--
(A) Presidential appointment authority available
immediately.--The authority to appoint an Inspector
General of the United States Postal Service in
accordance with the amendments made by this section
shall be available as of the effective date of this
section.
(B) Continuation in office.--Pending the appointment
of an Inspector General of the United States Postal
Service in accordance with the amendments made by this
section, the individual serving as the Inspector
General of the United States Postal Service on the day
before the effective date of this section may continue
to serve--
(i) in accordance with applicable provisions
of the Inspector General Act of 1978 and
(except as provided in clause (ii)) of title
39, United States Code, as last in effect
before the effective date of this Act; but
(ii) subject to the provisions of such title
39 as amended by subsection (e) of this section
(deeming any reference to the ``Inspector
General'' in such provisions, as so amended, to
refer to the individual continuing to serve
under authority of this subparagraph) and
subparagraph (C).
(C) Authorization of appropriations.--
(i) In general.--Notwithstanding any other
provision of this subsection, section 8L(e) of
the Inspector General Act of 1978 (as amended
by this section) shall be effective for
purposes of fiscal years beginning on or after
October 1, 2005.
(ii) Savings provision.--For purposes of the
fiscal year ending on September 30, 2005,
funding for the Office of Inspector General of
the United States Postal Service shall be made
available in the same manner as if this Act had
never been enacted.
(D) Eligibility of prior inspector general.--Nothing
in this Act shall prevent any individual who has served
as Inspector General of the United States Postal
Service at any time before the date of the enactment of
this Act from being appointed to that position pursuant
to the amendments made by this section.
TITLE VII--EVALUATIONS
SEC. 701. UNIVERSAL POSTAL SERVICE STUDY.
(a) Report by the Postal Service.--The United States Postal Service
shall, within 12 months after the date of the enactment of this Act,
submit to the President, the Congress, and the Postal Regulatory
Commission, a written report on universal postal service in the United
States (hereinafter in this section referred to as ``universal
service''). Such report shall include at least the following:
(1) A comprehensive review of the history and development of
universal service, including how the scope and standards of
universal service have evolved over time.
(2) The scope and standards of universal service provided
under current law (including sections 101 and 403 of title 39,
United States Code) and current rules, regulations, policy
statements, and practices of the Postal Service.
(3) A description of any geographic areas, populations,
communities, organizations, or other groups or entities not
currently covered by universal service or that are covered but
that are receiving services deficient in scope or quality or
both.
(4) The scope and standards of universal service likely to be
required in the future in order to meet the needs and
expectations of the American public, including all types of
mail users, based on such assumptions or alternative sets of
assumptions as the Postal Service considers plausible.
(5) Such recommendations as the Postal Service considers
appropriate.
(b) Report by the Postal Regulatory Commission.--The Postal
Regulatory Commission shall, within 12 months after receiving the
report of the Postal Service under subsection (a), submit to the
President and the Congress a written report evaluating the report of
the Postal Service. The report of the Commission shall include at least
the following:
(1) Such comments and observations relating to the matters
addressed in the Postal Service's report as the Commission
considers appropriate.
(2) An estimate of the cost attributable to the obligation to
provide universal service under prior and current law,
respectively.
(3) An estimate of the likely cost of fulfilling the
obligation to provide universal service under--
(A) the assumptions or respective sets of assumptions
of the Postal Service described in subsection (a)(4);
and
(B) such other assumptions or sets of assumptions as
the Commission considers plausible.
(4) Such additional topics and recommendations as the
Commission considers appropriate.
(c) Consultation.--In preparing the reports required by this section,
the Postal Service and the Postal Regulatory Commission--
(1) shall consult with each other, other Federal agencies,
users of the mails, enterprises in the private sector engaged
in the delivery of mail, and the general public; and
(2) shall address in their respective reports any written
comments received under this section.
(d) Clarifying Provision.--Nothing in this section shall be
considered to relate to any services that are not postal services
(within the meaning of section 102 of title 39, United States Code, as
amended by section 101).
SEC. 702. ASSESSMENTS OF RATEMAKING, CLASSIFICATION, AND OTHER
PROVISIONS.
(a) In General.--The Postal Regulatory Commission shall, at least
every 5 years, submit a report to the President and the Congress
concerning--
(1) the operation of the amendments made by the Postal
Accountability and Enhancement Act; and
(2) recommendations for any legislation or other measures
necessary to improve the effectiveness or efficiency of the
postal laws of the United States.
(b) Postal Service Views.--A report under this section shall be
submitted only after reasonable opportunity has been afforded to the
Postal Service to review such report and to submit written comments
thereon. Any comments timely received from the Postal Service under the
preceding sentence shall be attached to the report submitted under
subsection (a).
(c) Specific Information Required.--The Postal Regulatory Commission
shall include, as part of at least its first report under subsection
(a), the following:
(1) Cost-coverage requirement relating to competitive
products collectively.--With respect to section 3633 of title
39, United States Code (as amended by this Act)--
(A) a description of how such section has operated;
and
(B) recommendations as to whether or not such section
should remain in effect and, if so, any suggestions as
to how it might be improved.
(2) Competitive products fund.--With respect to the Postal
Service Competitive Products Fund (under section 2011 of title
39, United States Code, as amended by section 301), in
consultation with the Secretary of the Treasury--
(A) a description of how such Fund has operated;
(B) any suggestions as to how the operation of such
Fund might be improved; and
(C) a description and assessment of alternative
accounting or financing mechanisms that might be used
to achieve the objectives of such Fund.
(3) Assumed federal income tax on competitive products
fund.--With respect to section 3634 of title 39, United States
Code (as amended by this Act), in consultation with the
Secretary of the Treasury--
(A) a description of how such section has operated;
and
(B) recommendations as to whether or not such section
should remain in effect and, if so, any suggestions as
to how it might be improved.
SEC. 703. STUDY ON EQUAL APPLICATION OF LAWS TO COMPETITIVE PRODUCTS.
(a) In General.--The Federal Trade Commission shall prepare and
submit to the President, the Congress, and the Postal Regulatory
Commission, within 1 year after the date of the enactment of this Act,
a comprehensive report identifying Federal and State laws that apply
differently to the United States Postal Service with respect to the
competitive category of mail (within the meaning of section 102 of
title 39, United States Code, as amended by section 101) and private
companies providing similar products.
(b) Recommendations; Adjustments.--The Federal Trade Commission shall
include such recommendations as it considers appropriate for bringing
such legal differences to an end and, in the interim, to account under
section 3633, for the net economic effects provided by those laws.
(c) Consultation.--In preparing its report, the Federal Trade
Commission shall consult with the United States Postal Service, the
Postal Regulatory Commission, other Federal agencies, mailers, private
companies that provide delivery services, and the general public, and
shall append to such report any written comments received under this
subsection.
(d) Competitive Product Rate Regulation.--The Postal Regulatory
Commission shall take into account the recommendations of the Federal
Trade Commission, and subsequent events that affect the continuing
validity of the estimate of the net economic effect, in promulgating or
revising the regulations required by section 3633 of title 39, United
States Code.
SEC. 704. GREATER DIVERSITY IN POSTAL SERVICE EXECUTIVE AND
ADMINISTRATIVE SCHEDULE MANAGEMENT POSITIONS.
(a) Study.--The Board of Governors shall study and, within 1 year
after the date of the enactment of this Act, submit to the President
and Congress a report concerning the extent to which women and
minorities are represented in supervisory and management positions
within the United States Postal Service. Any data included in the
report shall be presented in the aggregate and by pay level.
(b) Performance Evaluations.--The United States Postal Service shall,
as soon as practicable, take such measures as may be necessary to
ensure that, for purposes of conducting performance appraisals of
supervisory or managerial employees, appropriate consideration shall be
given to meeting affirmative action goals, achieving equal employment
opportunity requirements, and implementation of plans designed to
achieve greater diversity in the workforce.
SEC. 705. PLAN FOR ASSISTING DISPLACED WORKERS.
(a) Plan.--The United States Postal Service shall, before the
deadline specified in subsection (b), develop and be prepared to
implement, whenever necessary, a comprehensive plan under which
reemployment assistance shall be afforded to employees displaced as a
result of the automation or privatization of any of its functions.
(b) Report.--Not later than 1 year after the date of the enactment of
this Act, the United States Postal Service shall submit to the Board of
Governors and to Congress a written report describing its plan under
this section.
SEC. 706. CONTRACTS WITH WOMEN, MINORITIES, AND SMALL BUSINESSES.
The Board of Governors shall study and, within 1 year after the date
of the enactment of this Act, submit to the President and the Congress
a report concerning the number and value of contracts and subcontracts
the Postal Service has entered into with women, minorities, and small
businesses.
SEC. 707. RATES FOR PERIODICALS.
(a) In General.--The United States Postal Service, acting jointly
with the Postal Regulatory Commission, shall study and submit to the
President and Congress a report concerning--
(1) the quality, accuracy, and completeness of the
information used by the Postal Service in determining the
direct and indirect postal costs attributable to periodicals;
and
(2) any opportunities that might exist for improving
efficiencies in the collection, handling, transportation, or
delivery of periodicals by the Postal Service, including any
pricing incentives for mailers that might be appropriate.
(b) Recommendations.--The report shall include recommendations for
any administrative action or legislation that might be appropriate.
SEC. 708. ASSESSMENT OF CERTAIN RATE DEFICIENCIES.
(a) In General.--Within 12 months after the date of the enactment of
this Act, the Office of Inspector General of the United States Postal
Service shall study and submit to the President, the Congress, and the
United States Postal Service, a report concerning the administration of
section 3626(k) of title 39, United States Code.
(b) Specific Requirements.--The study and report shall specifically
address the adequacy and fairness of the process by which assessments
under section 3626(k) of title 39, United States Code, are determined
and appealable, including--
(1) whether the Postal Regulatory Commission or any other
body outside the Postal Service should be assigned a role; and
(2) whether a statute of limitations should be established
for the commencement of proceedings by the Postal Service
thereunder.
SEC. 709. NETWORK OPTIMIZATION.
(a) In General.--The Postal Service shall, within 90 days after the
end of each fiscal year, prepare and submit to the Postal Regulatory
Commission, the Congress, and the Board of Governors a written report
on the postal processing, transportation, and distribution networks.
Such report shall include at least the following:
(1) An account of actions taken during the preceding fiscal
year to improve the efficiency and effectiveness of the
processing, transportation, and distribution networks, while
preserving the timely delivery of postal services.
(2) An account of--
(A) actions taken to identify any excess capacity
within the processing, transportation, and distribution
networks; and
(B) actions taken to implement savings through
realignment or consolidation of facilities.
(3) Identification of statutory or regulatory obstacles that
prevented or will prevent the Postal Service from taking action
to realign or consolidate facilities.
(4) Such additional topics and recommendations as the Postal
Service considers appropriate.
(b) Treatment as Performance Goals.--The Postal Service shall
establish and report the matters set forth in subsection (a) as
performance goals in the reports required by sections 2803 and 2804.
(c) Actions To Be Taken.--The Postal Service shall take such actions
it considers, in its sole discretion, necessary and appropriate to
provide the Nation with a modern and efficient network for the
processing, transportation, and distribution of mail. Nothing in this
section shall prevent the Postal Service from making such improvements
in the efficiency and effectiveness of the network as it deems
appropriate.
SEC. 710. ASSESSMENT OF FUTURE BUSINESS MODEL OF THE POSTAL SERVICE.
(a) Appointment of Research Organization.--Not later than 90 days
after the date of the enactment of this Act, the Comptroller General of
the United States shall appoint, in such manner and under such terms as
he in his sole discretion determines appropriate, an independent,
impartial, and expert research organization (hereinafter in this
section referred to as the ``research organization'') to prepare and
submit to the President and to Congress a comprehensive report that
evaluates what business model would best promote an efficient,
reliable, innovative, and viable Postal Service that can meet the needs
of the Nation and its citizens in the 21st century. The final report
required by this section shall be submitted within 27 months of the
date of the enactment of this Act. The final report shall identify
costs, benefits, and feasible options, if any, associated with one or
more strategies for--
(1) maintaining the Postal Service in its current form as an
independent establishment in the executive branch of the
Government; and
(2) transforming the Postal Service into an ordinary
corporation, owned wholly by the Government, wholly by private
shareholders, or partly by the Government and partly by private
shareholders.
(b) Protection of Universal Service.--The research organization 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 (based on the
reports required by section 701). The research organization 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 research organization.
(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 research organization.
(C) Qualitative and, to the extent possible,
quantitative effects that each strategy identified by
the research organization 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 research organization 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 research organization.
(F) Such additional topics as the Comptroller General
or the research organization shall consider necessary
and appropriate.
(2) Matters to consider.--For each strategy identified, the
research organization 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
or the research organization 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 research organization shall
comprehensively and quantitatively investigate the experiences
of other industrialized countries that have transformed the
national post office. The research organization shall undertake
such original research as it deems necessary. In each case, the
research organization 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 research
organization may retain the services of additional experts and
consultants.
(e) Consultation.--In preparing its report, the research organization
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 research organization
shall include with its final report a copy of all formal written
comments received under this subsection.
(f) Authorization of Appropriations.--There are authorized to be
appropriated from the Postal Service Fund such sums as may be necessary
to carry out this section.
SEC. 711. STUDY ON CERTAIN PROPOSED AMENDMENTS.
The Government Accountability Office shall study and, within 12
months after the date of the enactment of this Act, submit to the
Congress a report on sections 805 and 807 of H.R. 22 (109th Congress),
as introduced. Such report shall include the following:
(1) A description of the efficiencies of the current system
under section 5402 of title 39, United States Code.
(2) The potential for cost savings to the United States
Postal Service if the Postal Service, rather than the
Department of Transportation, were to administer international
mail carriage.
(3) The potential for harm to domestic air carriers and
American workers currently employed by domestic air carriers.
(4) The potential loss of revenue to domestic air carriers
and American workers currently employed by domestic air
carriers.
(5) The process by which the United States Postal Service
would administer any changes in current law.
(6) The process by which the Department of Transportation
administers current law.
(7) The potential for change in protection of national
security by carriage by foreign carriers of international mail
to and from the United States.
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--MISCELLANEOUS; TECHNICAL AND CONFORMING AMENDMENTS
SEC. 801. EMPLOYMENT OF POSTAL POLICE OFFICERS.
Section 3061 of title 18, United States Code, is amended by adding at
the end the following:
``(c)(1) The Postal Service may employ police officers for duty in
connection with the protection of property owned or occupied by the
Postal Service or under the charge and control of the Postal Service,
and persons on the property, including duty in areas outside the
property to the extent necessary to protect the property and persons on
the property.
``(2) With respect to such property, such officers shall have the
power to--
``(A) enforce Federal laws and regulations for the protection
of persons and property;
``(B) carry firearms; and
``(C) make arrests without a warrant for any offense against
the United States committed in the presence of the officer or
for any felony cognizable under the laws of the United States
if the officer has reasonable grounds to believe that the
person to be arrested has committed or is committing a felony.
``(3) With respect to such property, such officers may have, to such
extent as the Postal Service may by regulations prescribe, the power
to--
``(A) serve warrants and subpoenas issued under the authority
of the United States; and
``(B) conduct investigations, on and off the property in
question, of offenses that may have been committed against
property owned or occupied by the Postal Service or persons on
the property.
``(4)(A) As to such property, the Postmaster General may prescribe
regulations necessary for the protection and administration of property
owned or occupied by the Postal Service and persons on the property.
The regulations may include reasonable penalties, within the limits
prescribed in subparagraph (B), for violations of the regulations. The
regulations shall be posted and remain posted in a conspicuous place on
the property.
``(B) A person violating a regulation prescribed under this
subsection shall be fined under this title, imprisoned for not more
than 30 days, or both.''.
SEC. 802. DATE OF POSTMARK TO BE TREATED AS DATE OF APPEAL IN
CONNECTION WITH THE CLOSING OR CONSOLIDATION OF
POST OFFICES.
(a) In General.--Section 404(b) of title 39, United States Code, is
amended by adding at the end the following:
``(6) For purposes of paragraph (5), any appeal received by the
Commission shall--
``(A) if sent to the Commission through the mails, be
considered to have been received on the date of the Postal
Service postmark on the envelope or other cover in which such
appeal is mailed; or
``(B) if otherwise lawfully delivered to the Commission, be
considered to have been received on the date determined based
on any appropriate documentation or other indicia (as
determined under regulations of the Commission).''.
(b) Effective Date.--This section and the amendments made by this
section shall apply with respect to any determination to close or
consolidate a post office which is first made available, in accordance
with paragraph (3) of section 404(b) of title 39, United States Code,
after the end of the 3-month period beginning on the date of the
enactment of this Act.
SEC. 803. PROVISIONS RELATING TO BENEFITS UNDER CHAPTER 81 OF TITLE 5,
UNITED STATES CODE, FOR OFFICERS AND EMPLOYEES OF
THE FORMER POST OFFICE DEPARTMENT.
(a) In General.--Section 8 of the Postal Reorganization Act (39
U.S.C. 1001 note) is amended by inserting ``(a)'' after ``8.'' and by
adding at the end the following:
``(b) For purposes of chapter 81 of title 5, United States Code, the
Postal Service shall, with respect to any individual receiving benefits
under such chapter as an officer or employee of the former Post Office
Department, have the same authorities and responsibilities as it has
with respect to an officer or employee of the Postal Service receiving
such benefits.''.
(b) Effective Date.--This section and the amendments made by this
section shall be effective as of the first day of the fiscal year in
which this Act is enacted.
SEC. 804. OBSOLETE PROVISIONS.
(a) Repeal.--
(1) In general.--Chapter 52 of title 39, United States Code,
is repealed.
(2) Conforming amendments.--(A) Section 5005(a) of title 39,
United States Code, is amended--
(i) by striking paragraph (1), and by redesignating
paragraphs (2) through (4) as paragraphs (1) through
(3), respectively; and
(ii) in paragraph (3) (as so designated by clause
(i)), by striking ``(as defined in section 5201(6) of
this title)''.
(B) Section 5005(b) of such title 39 is amended by striking
``(a)(4)'' each place it appears and inserting ``(a)(3)''.
(C) Section 5005(c) of such title 39 is amended by striking
``by carrier or person under subsection (a)(1) of this section,
by contract under subsection (a)(4) of this section, or'' and
inserting ``by contract under subsection (a)(3) of this section
or''.
(b) Eliminating Restriction on Length of Contracts.--(1) Section
5005(b)(1) of title 39, United States Code, is amended by striking
``(or where the Postal Service determines that special conditions or
the use of special equipment warrants, not in excess of 6 years)'' and
inserting ``(or such longer period of time as may be determined by the
Postal Service to be advisable or appropriate)''.
(2) Section 5402(d) of such title 39 is amended by striking ``for a
period of not more than 4 years''.
(3) Section 5605 of such title 39 is amended by striking ``for
periods of not in excess of 4 years''.
(c) Clerical Amendment.--The analysis for part V of title 39, United
States Code, is amended by repealing the item relating to chapter 52.
SEC. 805. INVESTMENTS.
Subsection (c) of section 2003 of title 39, United States Code, is
amended--
(1) by striking ``(c) If'' and inserting ``(c)(1) Except as
provided in paragraph (2), if''; and
(2) by adding at the end the following:
``(2)(A) Nothing in this section shall be considered to authorize any
investment in any obligations or securities of a commercial entity.
``(B) For purposes of this paragraph, the term `commercial entity'
means any corporation, company, association, partnership, joint stock
company, firm, society, or other similar entity, as further defined
under regulations prescribed by the Postal Regulatory Commission.''.
SEC. 806. REDUCED RATES.
Section 3626 of title 39, United States Code, is amended--
(1) in subsection (a), by striking all before paragraph (4)
and inserting the following:
``(a)(1) Except as otherwise provided in this section, rates of
postage for a class of mail or kind of mailer under former section
4358, 4452(b), 4452(c), 4554(b), or 4554(c) of this title shall be
established in accordance with section 3622.
``(2) For the purpose of this subsection, the term `regular-rate
category' means any class of mail or kind of mailer, other than a class
or kind referred to in section 2401(c).
``(3) Rates of postage for a class of mail or kind of mailer under
former section 4358(a) through (c) of this title shall be established
so that postage on each mailing of such mail reflects its preferred
status as compared to the postage for the most closely corresponding
regular-rate category mailing.'';
(2) in subsection (g), by adding at the end the following:
``(3) For purposes of this section and former section 4358(a) through
(c) of this title, those copies of an issue of a publication entered
within the county in which it is published, but distributed outside
such county on postal carrier routes originating in the county of
publication, shall be treated as if they were distributed within the
county of publication.
``(4)(A) In the case of an issue of a publication, any number of
copies of which are mailed at the rates of postage for a class of mail
or kind of mailer under former section 4358(a) through (c) of this
title, any copies of such issue which are distributed outside the
county of publication (excluding any copies subject to paragraph (3))
shall be subject to rates of postage provided for under this paragraph.
``(B) The rates of postage applicable to mail under this paragraph
shall be established in accordance with section 3622.
``(C) This paragraph shall not apply with respect to an issue of a
publication unless the total paid circulation of such issue outside the
county of publication (not counting recipients of copies subject to
paragraph (3)) is less than 5,000.''; and
(3) by adding at the end the following:
``(n) In the administration of this section, matter that satisfies
the circulation standards for requester publications shall not be
excluded from being mailed at the rates for mail under former section
4358 solely because such matter is designed primarily for free
circulation or for circulation at nominal rates, or fails to meet the
requirements of former section 4354(a)(5).''.
SEC. 807. HAZARDOUS MATTER.
(a) Nonmailability Generally.--Section 3001 of title 39, United
States Code, is amended--
(1) by redesignating subsection (n) as subsection (o); and
(2) by inserting after subsection (m) the following:
``(n)(1) Except as otherwise authorized by law or regulations of the
Postal Service, hazardous material is nonmailable.
``(2) In this subsection, the term `hazardous material' means a
substance or material designated by the Secretary of Transportation
under section 5103(a) of title 49.''.
(b) Mailability.--Chapter 30 of title 39, United States Code, is
amended by adding at the end the following:
``Sec. 3018. Hazardous material
``(a) In General.--The Postal Service shall prescribe regulations for
the safe transportation of hazardous material in the mail.
``(b) Prohibitions.--No person may--
``(1) mail or cause to be mailed hazardous material that has
been declared by statute or Postal Service regulation to be
nonmailable;
``(2) mail or cause to be mailed hazardous material in
violation of any statute or Postal Service regulation
restricting the time, place, or manner in which hazardous
material may be mailed; or
``(3) manufacture, distribute, or sell any container,
packaging kit, or similar device that--
``(A) is represented, marked, certified, or sold by
such person for use in the mailing of hazardous
material; and
``(B) fails to conform with any statute or Postal
Service regulation setting forth standards for a
container, packaging kit, or similar device used for
the mailing of hazardous material.
``(c) Civil Penalty; Clean-Up Costs and Damages.--
``(1) In general.--A person who knowingly violates this
section or a regulation prescribed under this section shall be
liable for--
``(A) a civil penalty of at least $250, but not more
than $100,000, for each violation;
``(B) the costs of any clean-up associated with each
violation; and
``(C) damages.
``(2) Knowing action.--A person acts knowingly for purposes
of paragraph (1) when--
``(A) the person has actual knowledge of the facts
giving rise to the violation; or
``(B) a reasonable person acting in the circumstances
and exercising reasonable care would have had that
knowledge.
``(3) Separate violations.--
``(A) Violations over time.--A separate violation
under this subsection occurs for each day hazardous
material, mailed or caused to be mailed in
noncompliance with this section, is in the mail.
``(B) Separate items.--A separate violation under
this subsection occurs for each item containing
hazardous material that is mailed or caused to be
mailed in noncompliance with this section.
``(d) Hearings.--The Postal Service may determine that a person has
violated this section or a regulation prescribed under this section
only after notice and an opportunity for a hearing. Proceedings under
this section shall be conducted in accordance with section 3001(m).
``(e) Penalty Considerations.--In determining the amount of a civil
penalty for a violation of this section, the Postal Service shall
consider--
``(1) the nature, circumstances, extent, and gravity of the
violation;
``(2) with respect to the person who committed the violation,
the degree of culpability, any history of prior violations, the
ability to pay, and any effect on the ability to continue in
business;
``(3) the impact on Postal Service operations; and
``(4) any other matters that justice requires.
``(f) Civil Actions To Collect.--
``(1) In general.--In accordance with section 409(d), a civil
action may be commenced in an appropriate district court of the
United States to collect a civil penalty, clean-up costs, and
damages assessed under subsection (c).
``(2) Compromise.--The Postal Service may compromise the
amount of a civil penalty, clean-up costs, and damages assessed
under subsection (c) before commencing a civil action with
respect to such civil penalty, clean-up costs, and damages
under paragraph (1).
``(g) Civil Judicial Penalties.--
``(1) In general.--At the request of the Postal Service, the
Attorney General may bring a civil action in an appropriate
district court of the United States to enforce this section or
a regulation prescribed under this section.
``(2) Relief.--The court in a civil action under paragraph
(1) may award appropriate relief, including a temporary or
permanent injunction, civil penalties as determined in
accordance with this section, or punitive damages.
``(3) Construction.--A civil action under this subsection
shall be in lieu of civil penalties for the same violation
under subsection (c)(1)(A).
``(h) Deposit of Amounts Collected.--
``(1) Postal service fund.--Except as provided under
paragraph (2), amounts collected under subsection (c)(1)(B) and
(C) shall be deposited into the Postal Service Fund under
section 2003.
``(2) Treasury.--Amounts collected under subsection (c)(1)(A)
and any punitive damages collected under subsection (c)(1)(C)
shall be deposited into the Treasury of the United States.''.
(c) Conforming Amendments.--(1) Section 2003(b) of title 39, United
States Code, is amended--
(A) in paragraph (7), by striking ``and'' after the
semicolon;
(B) in paragraph (8), by striking ``purposes.'' and inserting
``purposes; and''; and
(C) by adding at the end the following:
``(9) any amounts collected under section 3018.''.
(2) The analysis for chapter 30 of title 39, United States Code, is
amended by adding at the end the following:
``3018. Hazardous material.''.
(d) Injurious Articles as Nonmailable.--Section 1716(a) of title 18,
United States Code, is amended by inserting after ``explosives,'' the
following: ``hazardous materials,''.
SEC. 808. PROVISIONS RELATING TO COOPERATIVE MAILINGS.
(a) Determination.--The Postal Regulatory Commission shall examine
section E670.5.3 of the Domestic Mail Manual to determine whether it
contains adequate safeguards to protect against (1) abuses of rates for
nonprofit mail and (2) deception of consumers.
(b) Regulations.--If the Postal Regulatory Commission determines that
section E670.5.3 of the Domestic Mail Manual does not contain adequate
safeguards as described in the preceding subsection, the Commission
shall promulgate such regulations as may be necessary to ensure such
safeguards.
(c) Timing.--The Postal Regulatory Commission shall complete the
examination required by subsection (a) and the promulgation of any
necessary regulations required by subsection (b) within one year after
the date of the enactment of this section.
SEC. 809. TECHNICAL AND CONFORMING AMENDMENTS.
(a) Reimbursement.--Section 3681 of title 39, United States Code, is
amended by striking ``section 3628'' and inserting ``sections 3662
through 3664''.
(b) Size and Weight Limits.--Section 3682 of title 39, United States
Code, is amended to read as follows:
``Sec. 3682. Size and weight limits
``The Postal Service may establish size and weight limitations for
mail matter in the market-dominant category of mail consistent with
regulations the Postal Regulatory Commission may prescribe under
section 3622. The Postal Service may establish size and weight
limitations for mail matter in the competitive category of mail
consistent with its authority under section 3632.''.
(c) Revenue Foregone, Etc.--Title 39, United States Code, is
amended--
(1) in section 503 (as so redesignated by section 501), by
striking ``this chapter.'' and inserting ``this title.''; and
(2) in section 2401(d), by inserting ``(as last in effect
before enactment of the Postal Accountability and Enhancement
Act)'' after ``3626(a)'' and after ``3626(a)(3)(B)(ii)''.
(d) Appropriations and Reporting Requirements.--
(1) Appropriations.--Subsection (e) of section 2401 of title
39, United States Code, is amended--
(A) by striking ``Committee on Post Office and Civil
Service'' each place it appears and inserting
``Committee on Government Reform''; and
(B) by striking ``Not later than March 15 of each
year,'' and inserting ``Each year,''.
(2) Reporting requirements.--Sections 2803(a) and 2804(a) of
title 39, United States Code, are amended by striking
``2401(g)'' and inserting ``2401(e)''.
(e) Authority to Fix Rates and Classes Generally; Requirement
Relating to Letters Sealed Against Inspection.--Section 404 of title
39, United States Code (as amended by section 102) is further amended
by redesignating subsections (b) and (c) as subsections (d) and (e),
respectively, and by inserting after subsection (a) the following:
``(b) Except as otherwise provided, the Governors are authorized to
establish reasonable and equitable classes of mail and reasonable and
equitable rates of postage and fees for postal services in accordance
with the provisions of chapter 36. Postal rates and fees shall be
reasonable and equitable and sufficient to enable the Postal Service,
under best practices of honest, efficient, and economical management,
to maintain and continue the development of postal services of the kind
and quality adapted to the needs of the United States.
``(c) The Postal Service shall maintain one or more classes of mail
for the transmission of letters sealed against inspection. The rate for
each such class shall be uniform throughout the United States, its
territories, and possessions. One such class shall provide for the most
expeditious handling and transportation afforded mail matter by the
Postal Service. No letter of such a class of domestic origin shall be
opened except under authority of a search warrant authorized by law, or
by an officer or employee of the Postal Service for the sole purpose of
determining an address at which the letter can be delivered, or
pursuant to the authorization of the addressee.''.
(f) Limitations.--Section 3684 of title 39, United States Code, is
amended by striking all that follows ``any provision'' and inserting
``of this title.''.
(g) Miscellaneous.--Title 39, United States Code, is amended--
(1) in section 1005(d)(2)--
(A) by striking ``subsection (g) of section 5532,'';
and
(B) by striking ``8344,'' and inserting ``8344'';
(2) in the analysis for part III, by striking the item
relating to chapter 28 and inserting the following:
``28. Strategic Planning and Performance Management......... 2801'';
(3) in section 3005(a)--
(A) in the matter before paragraph (1), by striking
all that follows ``nonmailable'' and precedes ``(h),''
and inserting ``under section 3001(d),''; and
(B) in the sentence following paragraph (3), by
striking all that follows ``nonmailable'' and precedes
``(h),'' and inserting ``under such section 3001(d),'';
(4) in section 3210(a)(6)(C), by striking the matter after
``if such mass mailing'' and before ``than 60 days'' and
inserting ``is postmarked fewer''; and
(5) by striking the heading for section 3627 and inserting
the following:
``Sec. 3627. Adjusting free rates''.
TITLE IX--POSTAL PENSION FUNDING REFORM AMENDMENTS
SEC. 901. CIVIL SERVICE RETIREMENT SYSTEM.
(a) Termination of Obligation to Pay Government Contributions.--
Section 8334(a)(1)(B)(ii) of title 5, United States Code, is amended by
striking all that follows ``be equal to'' and inserting ``zero.''.
(b) Determination and Disposition of Postal Surplus or Supplemental
Liability.--Section 8348(h) of title 5, United States Code, is amended
to read as follows:
``(h)(1) For purposes of this subsection, a Postal surplus (or
supplemental liability) is the amount, as estimated by the Office, by
which--
``(A) the actuarial present value of all future benefits
which are payable from the Fund under this subchapter to
current or former employees of the United States Postal
Service, or their survivors, and attributable to civilian
employment with the Postal Service, is less than (or greater
than)
``(B) the sum of--
``(i) the actuarial present value of deductions to be
withheld from the future basic pay of employees of the
Postal Service currently subject to this subchapter
pursuant to section 8334;
``(ii) that portion of the Fund balance, as of the
date such surplus or supplemental liability is
determined, attributable to payments to the Fund by the
Postal Service and its employees, plus the earnings on
such amounts while in the Fund; and
``(iii) any other appropriate amount, as determined
by the Office in accordance with generally accepted
actuarial practices and principles.
``(2)(A)(i) Not later than June 15, 2006, the Office shall determine
the Postal surplus or supplemental liability as of September 30, 2005.
``(ii) If a supplemental liability is determined under this
subparagraph for fiscal year 2005, the Office shall establish an
amortization schedule, including a series of equal annual installments
commencing September 30, 2006, which provides for the liquidation of
such liability by September 30, 2043.
``(iii) If a surplus is determined under this subparagraph for fiscal
year 2005, the amount of the surplus shall be transferred to the Postal
Service Retiree Health Benefits Fund by June 30, 2006.
``(B)(i) For each of fiscal years 2006 through 2038, the Office shall
determine the Postal surplus or supplemental liability as of the close
of such fiscal year, with each such determination to be made by June
15th of the following fiscal year.
``(ii) If a supplemental liability is determined under this
subparagraph for a fiscal year, the Office shall establish an
amortization schedule, including a series of equal annual installments
commencing on September 30 of the following fiscal year, which provides
for the liquidation of such liability by September 30, 2043.
``(iii)(I) If a surplus of $500,000,000 or more is determined under
this subparagraph for a fiscal year, the amount of the surplus shall be
transferred to the Postal Service Retiree Health Benefits Fund by June
30th of the following fiscal year.
``(II) If a surplus of less than $500,000,000 is determined under
this subparagraph for a fiscal year, the surplus shall remain in the
Fund, subject to transfer in a subsequent fiscal year under subclause
(I) or subparagraph (C)(iii).
``(C)(i) Not later than June 15, 2040, the Office shall determine the
Postal surplus or supplemental liability as of September 30, 2039.
``(ii) If a supplemental liability is determined under this
subparagraph for fiscal year 2039, the Office shall establish an
amortization schedule, including a series of equal annual installments
commencing September 30, 2040, which provides for the liquidation of
such liability by September 30, 2043.
``(iii) If a surplus is determined under this subparagraph for fiscal
year 2039, the amount of the surplus--
``(I) shall be applied first toward reducing the amount of
any supplemental liability described in section 8423(b)(1)(B);
and
``(II) to the extent that any portion of such surplus remains
after the application of subclause (I), shall, not later than
June 30, 2040, be transferred to the Postal Service Retiree
Health Benefits Fund.
``(D) An amortization schedule under this paragraph--
``(i) shall be established in accordance with generally
accepted actuarial practices and principles, with interest
computed at the rate used in the most recent valuation of the
Civil Service Retirement System;
``(ii) shall supersede any amortization schedule previously
established under this paragraph; and
``(iii) shall not be taken into account, for purposes of any
determination of Postal surplus or supplemental liability,
except to the extent of any amounts under such schedule
actually paid.
``(E)(i) The Postal Service shall pay to the Office the amounts due
under any amortization schedule established under this paragraph, to
the extent not superseded or canceled.
``(ii) A determination under subparagraph (B)(i) or (C)(i) that no
supplemental liability exists shall cancel any amortization schedule
previously established under this paragraph, to the extent of any
amounts first coming due after the close of the fiscal year to which
such determination relates.
``(3) Notwithstanding any other provision of law, in computing the
amount of any payment under any other subsection of this section that
is based on the amount of the unfunded liability, such payment shall be
computed disregarding that portion of the unfunded liability that the
Office determines will be liquidated by payments under this subsection.
``(4) As used in this subsection, `Postal Service Retiree Health
Benefits Fund' refers to the Postal Service Retiree Health Benefits
Fund, as established by section 8909a.''.
(c) Provisions Relating to Amounts for Military Service.--In the
application of paragraph (2) of section 8348(g) of title 5, United
States Code, for fiscal year 2006, the Office of Personnel Management
shall include, in addition to the amount otherwise computed under that
paragraph, the amounts that would have been included for fiscal years
2003 through 2005 with respect to credit for military service of former
employees of the United States Postal Service if Public Law 108-18 had
not been enacted (including earnings thereon) and the Secretary of the
Treasury shall make the required transfer to the Civil Service
Retirement and Disability Fund based on that amount.
(d) Review.--
(1) In general.--Notwithstanding any other provision of this
section, any determination or redetermination made by the
Office of Personnel Management under this section shall, upon
request of the United States Postal Service, be subject to
review by the Postal Regulatory Commission. The Commission
shall submit a report containing the results of any such review
to the Postal Service, the Office of Personnel Management, and
the Congress.
(2) Response.--Upon receiving the report of the Postal
Regulatory Commission, the Office of Personnel Management shall
reconsider its determination or redetermination in light of
such report, and shall make any appropriate adjustments. The
Office shall submit a report containing the results of its
reconsideration to the Commission, the Postal Service, and the
Congress.
SEC. 902. HEALTH INSURANCE.
(a) In General.--Chapter 89 of title 5, United States Code, is
amended--
(1) in section 8906(g)(2)(A), by striking ``by the United
States Postal Service.'' and inserting ``first from the Postal
Service Retiree Health Benefits Fund up to the amount contained
therein, with any remaining amount paid by the United States
Postal Service.'';
(2) by inserting after section 8909 the following:
``Sec. 8909a. Postal Service Retiree Health Benefits Fund
``(a) There is in the Treasury of the United States a Postal Service
Retiree Health Benefits Fund (hereinafter in this section referred to
as the `Fund') which is administered by the Office of Personnel
Management. Any amounts transferred to the Fund under section
8348(h)(2) shall yield interest at a rate equal to the weighted average
yield of all the investments in the Civil Service Retirement and
Disability Fund as of the date of transfer. All other investments of
amounts in the Fund shall be made in accordance with subsections (c)-
(e) of section 8348.
``(b) The Fund is available without fiscal year limitation for
payments required by section 8906(g)(2).
``(c)(1) Not later than June 30, 2006, and by June 30 of each
succeeding year, the Office of Personnel Management shall compute the
net present value of the excess of future payments required by section
8906(g)(2)(A) for current and future United States Postal Service
annuitants over the value of the assets of the Fund as of the end of
the fiscal year ending on September 30 of that year. The actuarial
costing method to be used by the Office and all actuarial assumptions
shall be established by the Office after consultation with the United
States Postal Service and must be in accordance with generally accepted
actuarial practices and principles.
``(2) Not later than September 30, 2006, and by September 30 of each
succeeding year, the Office shall compute and the United States Postal
Service shall pay into such Fund--
``(A) the portion of the net present value described in
paragraph (1) attributable to the current year's service of
Postal Service employees; and
``(B) interest on the net present value described in
paragraph (1) for that fiscal year, at the interest rate used
in computing that net present value;
except that the amount otherwise payable by the Postal Service under
the preceding provisions of this paragraph by not later than September
30, 2006, shall be reduced by the total contributions made by the
Postal Service under section 8906(g)(2) and attributable to fiscal year
2006 (as determined by the Office).
``(3)(A) Any computation or other determination of the Office under
this subsection shall, upon request of the Postal Service, be subject
to review by the Postal Regulatory Commission. The Commission shall
submit a report containing the results of any such review to the Postal
Service, the Office of Personnel Management, and the Congress.
``(B) Upon receiving the report of the Postal Regulatory Commission,
the Office of Personnel Management shall reconsider its computation or
other determination in light of such report, and shall make any
appropriate adjustments. The Office shall submit a report containing
the results of its reconsideration to the Commission, the Postal
Service, and the Congress.
``(4) The Office shall promulgate, after consultation with the United
States Postal Service, any regulations it deems necessary under this
subsection.''; and
(3) in the analysis by inserting after the item relating to
section 8909 the following:
``8909a. Postal Service Retiree Health Benefits Fund.''.
(b) Review.--
(1) In general.--Any regulation established under section
8909a(c)(4) of title 5, United States Code (as amended by
subsection (a)) shall, upon request of the Postal Service, be
subject to review by the Postal Regulatory Commission. The
Commission shall submit a report containing the results of any
such review to the Postal Service, the Office of Personnel
Management, and the Congress.
(2) Response.--Upon receiving the report of the Postal
Regulatory Commission, the Office of Personnel Management shall
reconsider its regulation in light of such report, and shall
take such action as it considers appropriate. The Office shall
submit a report containing the results of its reconsideration
to the Commission, the Postal Service, and the Congress.
SEC. 903. REPEALER.
Section 3 of Public Law 108-18 is repealed.
SEC. 904. ENSURING APPROPRIATE USE OF ESCROW AND MILITARY SAVINGS.
(a) Definition.--For purposes of this section, the term ``total
savings'' means, for any fiscal year, the amount equal to--
(1) the amount of contributions that the Postal Service would
otherwise have been required to make to the Civil Service
Retirement and Disability Fund under subchapter III of chapter
83 of title 5, United States Code, for such fiscal year if
Public Law 108-18 and this Act had not been enacted, minus
(2) the amount of amortization payments (if any) required
under section 8348(h)(2) of title 5, United States Code, for
such fiscal year.
(b) Calculations.--The following calculations shall be made for each
of fiscal years 2006 through 2015:
(1) Not later than January 31 of the fiscal year following
the fiscal year involved, the Office of Personnel Management
(in consultation with the Postal Service) shall determine the
total savings for the fiscal year.
(2) On the date of making its determination under paragraph
(1), the Office shall also determine (in consultation with the
Postal Service) the amount by which--
(A) the amount the Postal Service paid for that
fiscal year into the Postal Service Retiree Health
Benefits Fund in accordance with 8909a(c)(2) of title
5, United States Code, exceeds (if at all)
(B) the amount of payments made by the Postal Service
for that fiscal year from such Fund in order to satisfy
the requirements of section 8906(g)(2) of such title 5.
(c) Requirements.--
(1) If threshold is met.--If the amount calculated under
subsection (b)(2) for a fiscal year is greater than or equal to
two-thirds of the total savings in such fiscal year, no further
action under this section is necessary with respect to such
fiscal year.
(2) If threshold is not met.--
(A) In general.--If the amount calculated under
subsection (b)(2) for a fiscal year is less than two-
thirds of the total savings in such fiscal year, the
Postal Service shall pay into the Postal Service
Retiree Health Benefits Fund, by June 30 of the
following fiscal year, an amount equal to the
difference.
(B) Allowable alternative.--
(i) In general.--Notwithstanding subparagraph
(A), and subject to clause (ii), the Postal
Service may instead use the amount that it
would otherwise be required to pay into the
Postal Service Retiree Health Benefits Fund for
a year (or any portion thereof) to reduce the
postal debt.
(ii) Limitation.--Amounts used to reduce the
postal debt under this subparagraph may not
exceed a total of $3,000,000,000.
(3) Aggregation allowed.--Notwithstanding paragraph (2), if
the amount calculated under subsection (b)(2) for a fiscal year
is less than two-thirds of the total savings in such fiscal
year, but the sum of the amounts calculated under subsection
(b)(2) for all fiscal years from 2006 to the fiscal year
involved is greater than or equal to two-thirds of the sum of
the total savings for such years, no further action under this
section is necessary with respect to such fiscal year.
(d) Reporting Requirement.--The Office of Personnel Management shall
submit a report containing the results of its calculations under
subsection (b) to the Postal Service, the Postal Regulatory Commission,
and the Congress.
(e) Waiver Authority.--The requirements of subsection (c)(2)(A) may,
upon application of the Postal Service, be waived by the Postal
Regulatory Commission, to the extent that the Commission determines
that such waiver is reasonable and equitable and necessary to enable
the Postal Service, under best practices of honest, efficient, and
economical management, to maintain and continue the development of
postal services of the kind and quality adapted to the needs of the
United States.
SEC. 905. EFFECTIVE DATES.
(a) In General.--Except as otherwise provided, this title shall take
effect on October 1, 2005.
(b) Government Contributions.--Section 901(a) shall take effect on
the first day of the first pay period beginning on or after October 1,
2005.
Committee Statement and Views
BACKGROUND AND NEED FOR LEGISLATION
The United States Postal Service (USPS) processes and
delivers over 200 billion pieces of mail to more than 130
million households and businesses in the United States each
year. The agency's mission, outlined in the Postal
Reorganization Act of 1970, is to provide postal services that
bind the Nation together through the correspondence of the
people, to provide access in all communities, and to offer
prompt, reliable postal services at uniform prices.\1\ The 1970
law was designed to transform the Postal Service from a
bureaucracy subsidized by tax revenue to a self-supporting,
businesslike entity supported by the fees (e.g., stamp revenue)
paid by its users. Today the Postal Service is the center of a
$900 billion industry employing 9 million workers nationwide.
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\1\ 39 U.S.C. 101 et seq.
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The mission of the USPS is being challenged by a variety of
factors including decreasing volume, insufficient revenue,
mounting debts, and electronic communications alternatives such
as Internet advertising, electronic bill payments, emails and
faxes.
In January, the Comptroller General maintained the Postal
Service on its list of high risk areas, stating that
``comprehensive postal reform is urgently needed. The Postal
Service's financial viability is at risk because its business
model--which relies on mail volume growth to cover the costs of
its expanding delivery network--is not aligned with 21st
century realities.'' The Comptroller General outlined the
trends that are creating the need for reform:
declining mail volume, particularly for
First-Class Mail, which is critical to generating
sufficient revenues to maintain affordable, high-
quality, universal postal service;
changes in the mail mix from high-margin to
lower-margin products;
increased competition from private delivery
companies;
projected revenue declines and increases in
expenses;
significant financial liabilities and
obligations that continue to exceed assets (e.g., $60
billion in unfunded retiree health obligations and a
multibillion-dollar escrow account);
uncertain funding for emergency preparedness
(the Postal Service has received almost $800 million in
emergency response funds from Congress to help cover
its security costs for 2005);
changing demographics of the aging postal
workforce; and
challenges in restructuring infrastructure
and workforce to become more efficient and performance
based.
PRESIDENT'S COMMISSION
On July 31, 2003, the President's Commission on the Postal
Service released its recommendations for maintaining the
viability of the Postal Service. Roughly half of the
recommendations require legislative change. Most of these
concerns have been addressed in earlier postal reform
proposals, although some specific recommendations differ. New
issues raised by the Commission include reform of the
collective bargaining process and legislative changes making it
easier to close post offices and processing centers. In
addition, the Commission recommended that the Postal Service
not be responsible for funding the portion of Civil Service
Retirement System (CSRS) employees' pensions that are
attributable to their prior military service, for which no
other agency is responsible under CSRS.
ADMINISTRATION'S PRINCIPLES FOR POSTAL REFORM
On December 8, 2003, the Department of the Treasury
released a set of 5 principles, based on the recommendations of
the President's Commission that should guide Congress's effort
to reform the Postal Service. The principles are:
Implement Best Practices: Ensure that the
Postal Service's governing body is equipped to meet the
responsibilities and objectives of an enterprise of its
size and scope.
Transparency: Ensure that important factual
information on the Postal Service's product costs and
performance is accurately measured and made available
to the public in a timely manner.
Flexibility: Ensure that the Postal
Service's governing body and management have the
authority to reduce costs, set rates, and adjust key
aspects of its business in order to meet its
obligations to customers in a dynamic marketplace.
Accountability: Ensure that a Postal Service
operating with greater flexibility has appropriate
independent oversight to protect consumer welfare and
universal mail service.
Self-Financing: Ensure that a Postal Service
operating with greater flexibility is financially self-
sufficient, covering all of its obligations.
POSTAL ACCOUNTABILITY AND ENHANCEMENT ACT
The ``Postal Accountability and Enhancement Act'',
introduced as H.R. 22 by Mr. McHugh on January 4, 2005, with
Chairman Davis, Ranking Member Waxman, and Mr. Danny Davis as
original cosponsors, affirmatively responds to all of the
Administration's five principles for postal reform, and
incorporates most of the seventeen 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 Postal Service's
universal service obligation and the scope of the mail
monopoly, and institutes improvements to the collective
bargaining process. However, unlike the unconstrained pricing
flexibility recommendedby the President's Commission for
competitive products, the bill imposes limited but important controls
to protect the public interest from unfair competition.
The objective of the bill is to position the Postal Service
to operate in a more business-like manner. To achieve this
goal, the system must be responsive to market considerations
and must provide clear incentives for postal management and the
Postal Service as an institution. The Postal Service would no
longer operate under a break-even mandate. By maximizing gains
and minimizing costs, the Postal Service could generate
earnings that would be retained, and which could be distributed
as incentives to management as well as to employees through
collective bargaining. In the same way, losses could not be
recovered by increasing rates beyond specific parameters
without regulatory approval.
On April 8, 2005, the Postal Service filed a request with
the Postal Rate Commission for an across-the-board rate
increase of 5.4 percent, or 2 cents on a first class stamp.\2\
According to the Postal Service, this rate increase is only
necessary to meet the escrow requirement of Public Law 108-18,
the Postal Civil Service Retirement System Funding Reform Act
of 2003. The Postal Accountability and Enhancement Act
eliminates the P.L. 108-18 escrow requirement, which should
substantially mitigate the need for this rate increase.
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\2\ Postal Rate Commission Docket No. R2005-1, ``Postal Rate and
Fee Changes Pursuant to Public Law 108-18.''
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Highlights of the Postal Accountability and Enhancement Act
include:
Preservation of Universal Service: Maintenance of a
universal postal system must be the cornerstone of any postal
reform measure, and the bill preserves this mandate by giving
the Postal Service the ability to remain viable and effective.
The statutory mission of the Postal Service is focused strictly
on postal services. A study will be required to recommend
concrete standards for universal service. In addition, the
Postal Regulatory Commission will develop an annual estimate of
the costs of universal service so that Congress can better
understand how to provide the necessary protections in the
future.
Promotion of Efficiency and Flexibility: The bill gives
postal management and employees the tools to adapt and survive
in the face of enormous challenges caused by changing
technology and a dynamic communications marketplace. The bill
encourages innovation and efficiency by permitting the Postal
Service to distribute earnings as bonuses to all employees. In
the same way, losses could not be recovered by increasing rates
beyond specified parameters without regulatory approval. The
bill also allows the Postal Service to better react to market
conditions by streamlining the rate setting process, and
permitting rates that are better tailored to consumers' needs.
Ensuring Fair Competition and Accountability: Under the
legislation, the Postal Service will compete on a level playing
field, under many of the same terms and conditions as faced by
its private sector competitors, albeit with stronger controls,
oversight, and limitations in recognition of its governmental
status. The Postal Service will be given flexibility to price
competitive products, but competitive products and services
will have to pay their own costs without subsidy from market-
dominant mail revenues. A ``Postal Regulatory Commission'' is
created from the existing Postal Rate Commission to oversee and
regulate the Postal Service. The bill clarifies the distinction
between competitive and market-dominant products and imposes
prohibitions on the Postal Service's ability to regulate areas
in which it competes. In addition, the bill, for the first
time, subjects the Postal Service's competitive products to
many of the same laws as private companies, such as--
Antitrust laws
Fair-trade laws
Equal customs procedures
An assumed federal income tax payment
Basis for Future Reforms: The legislation mandates several
studies, including a comprehensive assessment of the scope and
standards for universal service. Other evaluations address:
Equal application of laws
Plans for assisting displaced workers
Quality of ratemaking data for Periodicals' costs
An assessment of the revenue deficiency process
The future business model and legal status of the
Postal Service
Section-by-Section Analysis
TITLE I--DEFINITIONS; POSTAL SERVICES
Sec. 101. Definitions
Section 101 of the bill proposes, for the first time, a
clear definition of ``postal services'' as the carriage of
letters, printed matter, or mailable packages, including
acceptance, collection, processing, delivery, or other
functions supportive or ancillary thereto. The definition of
``postal service'' will clarify the scope of activities that
the Postal Service is authorized to pursue.
Section 101 also defines the term ``product'' to mean ``any
postal service with a distinct cost or market characteristic
for which a rate or rates are, or may reasonably be, applied.''
Section 101 further clarifies that ``rates,'' as used with
respect to products, ``includes fees for postal services.'' It
defines ``market-dominant product'' as ``a product subject to
subchapter I of chapter 36'' and ``competitive product'' as ``a
product subject to subchapter II of chapter 36.'' Section 101
defines ``Consumer Price Index'' to mean the Consumer Price
Index for All Urban Consumers published monthly by the Bureau
of Labor Statistics of the Department of Labor. Finally,
section 101 defines ``year'' to refer to a fiscal year for most
purposes of rate regulation.
Sec. 102. Postal Services
Section 102 declares that the Postal Service's authority to
offer products and services is limited to postal services.
Current law is unclear in this respect. The section strikes a
provision that gave the Postal Service the specific power ``to
provide, establish, change, or abolish special nonpostal or
similar services.'' If the Service unlawfully offers a
nonpostal service or product, the Postal Regulatory Commission
may order that the Postal Service cease providing the product
under the complaint procedures outlined in section 202 of the
bill. An exception is made for ``special nonpostal or similar
services'' provided as of January 4, 2005.
The changes made by this section should not be interpreted
to limit the Postal Service's ability to furnish government
services to the public, such as acceptance of passport
applications and sale of duck stamps, in accordance with
section 411 of title 39.
Sec. 103. Transparency
Recognizing the recommendations of the President's
Commission on the U.S. Postal Service as well as the
Administration's key principles for reform, including the need
for a more open and accountable executive branch, the nation's
postal laws will now include a clear mandate that the Postal
Service must be subject to a high degree of transparency,
including in its finances and operations. This is a key
foundation for ensuring fair treatment of both customers and
competitors.
TITLE II--MODERN RATE REGULATION
In the new regulatory regime proposed in the bill, the
classes of mail and services are classified as either Market
Dominant or Competitive products. In general, the bill requires
the Postal Regulatory Commission to design, within 24 months, a
new system of rate regulation for Market Dominant products. The
new system will, for the most part, continue the ratemaking
factors found in current law while providing increased
flexibility, predictability, incentives for efficiency, and
long term financial stability. The Commission is required to
ensure that price increases of subclasses in the Market
Dominant category do not exceed the rise in the Consumer Price
Index (CPI) unless such an increase is reasonable and equitable
and necessary for 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.
With respect to Competitive products, the Postal Regulatory
Commission must issue regulations within 18 months to guard
against subsidization by market-dominant products and ensure
that competitive products cover their attributable costs and,
as a group, make a reasonable contribution to institutional
costs. Once the Commission has issued its regulations, the
Postal Service is given pricing flexibility somewhat comparable
to that exercised by private competitors. The changes regarding
competitive products will be complemented by title III, which
provides for a level playing field for such products in several
important respects.
Sec. 201. Provisions relating to market-dominant products
Section 201 of the bill establishes a new, modern system
for regulation of Market Dominant products, which account for
almost 90 percent of current Postal Service revenues. In
current title 39, chapter 36 deals with regulation of postal
rates. The bill redesignates subchapter I of chapter 36
(establishing the Postal Rate Commission) as chapter 5 (see
section 501, below). Section 201 revises subchapter II, which
currently sets out the process of rate regulation, and
redesignates it as subchapter I. As amended, subchapter I
relates only to regulation of Market Dominant products. Section
201 adds two new provisions to title 39, sections 3621 and
3622, as follows.
Section 3621 lists certain postal products to be regulated
as Market Dominant products immediately after enactment: First-
Class mail (but not priority and express mail, which are deemed
competitive products), Periodical mail, Standard mail, media
mail, library mail, and bound printed matter. This list
specifically includes ``Aunt Minnie'' or ``individual
consumer'' mail, that is, domestic and international single
piece First-Class letters and cards. Special services (e.g.,
post office boxes in rural areas, certificates of mailing and
delivery, etc.) are also regarded as Market Dominant products.
The products listed have the same meaning given them in the
Mail Classification Schedule (39 CFR pt. 3001, Subpt. C, App.
A) as of the date of enactment. After enactment, the Commission
may revise the list of Market Dominant products. See new
section 3642 set out in section 203 of the bill.
Subsection 3622(a) requires the Postal Regulatory
Commission to establish within 24 months a new system for
regulating postage rates and classes for Market Dominant
products. The Commission may subsequently revise the system.
Subsection 3622(b) provides that the objectives of the new
system shall be:
1. Establish and maintain a fair and equitable
schedule for rates and classification;
2. Maximize incentives to reduce costs and increase
efficiency;
3. Create predictability and stability in rates;
4. Maintain high quality service standards;
5. Allow the Postal Service pricing flexibility;
6. Assure adequate revenues, including retained
earnings, to maintain financial stability; and
7. Reduce the administrative burden of the ratemaking
process.
Subsection 3622(c) requires that, in establishing or
revising the new system, the Commission shall take into account
certain factors, which are modeled after the rate and
classification factors found in sections 3622 and 3623 of
current law. These factors include the value of the mail
service actually provided for each class or type of mail to
both the sender and recipient; the direct and indirect postal
costs attributable to each class or type of mail service and
that portion of all other Postal Service costs
reasonablyassignable to the class or type; the effect of rate increases
on certain groups; available alternative means to sending and receiving
letters or other mail matter at reasonable costs; the degree of
preparation of mail for delivery into the system performed by the
mailer and its effect upon reducing Postal Service costs; simplicity of
structure for the entire schedule, along with simple, identifiable
relationships between rates or fees charged the various classes of mail
for postal services; the relative value to the people of the kinds of
mail matter entered in the postal system and the desirability and
justification for special classifications and services; the importance
of providing classifications with extremely high degrees of reliability
and speed of delivery, and of providing classifications without such
requirements; the desirability of special classifications; the
educational, cultural, scientific, and informational value to the
recipient; and the policies of this title as well as such other factors
as the Commission deems appropriate.
Subsection 3622(d) declares that the new system may include
price caps, revenue targets, cost-of-service regulation, or
such other forms of regulation as the Commission considers
appropriate. This subsection lists potential approaches and is
not intended to limit the options of the Commission to a
particular result.
Subsection 3622(e) requires that the Postal Regulatory
Commission ensure that the average rate for any subclass does
not increase by more than the annual increase in the Consumer
Price Index unless the Commission has determined, after notice
and opportunity for a public hearing and comment, that such an
increase is ``reasonable and equitable and necessary to enable
the Postal Service, under best practices of honest, efficient,
and economical management, to maintain and continue the
development of postal services of the kind and quality adapted
to the needs of the United States.''
The current rate-setting process provides little or no
incentive for the Postal Service to control its costs because
all costs are ultimately passed through to the consumer
regardless of how efficiently or inefficiently the Postal
Service operates. Under the new system, the Postal Regulatory
Commission will have the flexibility to design a system that
will improve efficiency and control costs. The details of such
a system have been left to the Commission so that this
regulatory body will be able to respond to changes in mail
volume, technologies, and other factors. To ensure fairness,
the new system provides that rates from any one subclass should
not increase faster than CPI, unless the Commission finds such
increase ``reasonable and equitable and necessary'' to maintain
services and quality.
Sec. 202. Provisions relating to competitive products
Section 202 of the bill adds a new subchapter II to chapter
36 of title 39. Subchapter II establishes a flexible system for
regulation of Competitive products, which currently account for
about 10 percent of current Postal Service revenues. Section
202 adds three new sections to title 39, as follows.
Section 3631 lists the present mail classes and products to
be included within the Competitive category immediately after
enactment. This list includes Priority mail, Express mail,
mailgrams, international mail not included in the market-
dominant category, and parcel post. After enactment, the
Commission may revise the list of Competitive products. See new
section 3642 set out in section 203 of the bill. Further the
section defines ``costs attributable'', as the direct and
indirect costs attributable to a postal product. Although
single piece parcels are assigned to the competitive category,
the Committee expects the Postal Regulatory Commission to
monitor package delivery services of the Postal Service. If
there is not effective competition in rural areas or elsewhere,
the Postal Regulatory Commission should consider appropriate
changes, including transfers of single piece parcels to the
market dominant category.
Section 3632 provides that the Governors of the Postal
Service may establish rates and classes for all products in the
Competitive category of mail after giving notice in the Federal
Register at least 30 days in advance, for rates or classes of
general applicability in the Nation as a whole or in any
substantial region. For rates and classes not in that category,
the Governors must file their decision at least 15 days in
advance with the Postal Regulatory Commission, which shall
establish the criteria for determining when rate or class falls
within this 15 day category. The Governors' new pricing
authority for competitive products does not take effect until
the Postal Regulatory Commission promulgates regulations under
section 3633.
Section 3633 requires the Postal Regulatory Commission to
promulgate regulations within 18 months of enactment
prohibiting subsidization of competitive products by market
dominant products. The Commission shall ensure that each
competitive product covers its attributable costs, and in
addition ensure that competitive products collectively make a
``reasonable contribution'' to the institutional costs of the
Postal Service. The committee expects that the Commission, like
the courts, will take into account the inherent differences
between market dominant and competitive markets.
In addressing the attributable costs, the Commission should
continue to focus on the need to have reliable indicators of
cost causality. This committee heard testimony from differing
viewpoints, with some urging a higher attribution of costs. The
goal of the Commission should be a technically correct result,
placing accuracy above achieving a particular outcome of higher
or lower attribution.
With respect to the requirement that competitive products
collectively make a reasonable contribution to overhead, it
should be noted that the broad standard contains inherent
flexibility. It is not intended to dictate a particular
approach that the Postal Regulatory Commission should follow.
Sec. 203. Provisions relating to experimental and new products
Section 203 of the bill adds a new subchapter III to
chapter 36 of title 39. Subchapter III provides rules for
market tests of experimental products and for shifting products
between the Market Dominant and Competitive categories. The new
subchapter III replaces, and thus repeals, the current
subchapter III dealing with temporary rates and classes.
Section 203 adds two new provisions to title 39 as follows.
Section 3641 authorizes the Postal Service to conduct
limited market tests, which are exempt from the statutory
criteria for market-dominant and competitive products. Market
tests under this section are restricted to periods that last no
more than two years (whichmay be increased to three years by
the Commission) and to products that earn less than $10 million
annually nationwide (which may be raised to $50 million by the
Commission). Regardless of duration or size, a market test may not be
conducted under this section if it will ``create an unfair or otherwise
inappropriate competitive advantage for the Postal Service or any
mailer, particularly in regard to small business concerns.'' Under this
section, the Commission retains substantial oversight authority over
market tests. Under section 3652, the Postal Service is obliged to
provide summary information in annual reports to the Postal Regulatory
Commission about market tests.
Section 3642 authorizes the Postal Regulatory Commission to
classify new products as falling in either the Market Dominant
category or Competitive category, to transfer existing products
between the two categories, and to remove a product from a list
for a category. Subsection (b) adopts criteria for the two
categories that reflect the Federal Communications Commission's
(FCC) approach to defining ``dominant'' carriers for the
purpose of regulation. Paragraph (b)(1) provides that: ``The
market-dominant category of products shall consist of each
product in the sale of which the Postal Service exercises
sufficient market power that it can effectively set the price
of such product substantially above costs, raise prices
significantly, decrease quality, or decrease output, without
risk of losing business to other firms offering similar
products. The competitive category of products shall consist of
all other products.'' Products covered by the postal monopoly
may not be transferred to the Competitive category. Paragraph
(b)(3) requires the Postal Regulatory Commission to consider in
addition (a) the availability and nature of enterprises in the
private sector engaged in the delivery of the product involved;
(b) the views of those who use the product involved on the
appropriateness of the action; and (c) the likely impact of the
proposed action on small business concerns. The Commission is
also allowed to transfer a subclass or other subordinate unit
of a class of mail or type of postal service.
Subsection 3642(d) provides that the Postal Regulatory
Commission must ensure that any change in the lists of products
in the Market Dominant and Competitive categories is published
in the Federal Register. Subsection (e) requires that Congress
be notified when the Commission has concluded a product should
be transferred and that such transfer may not take effect for
one year. Subsection (f) provides that the Postal Service may
not offer any product involving the carriage of letters,
printed matter, or packages until it is categorized as falling
in either the Market Dominant or Competitive Category (except
for an experimental product).
Sec. 204. Reporting requirements and related provisions
Section 204 of the bill adds a new subchapter IV to chapter
36 of title 39. In general, subchapter IV provides for annual
audits of Postal Service operations by the Postal Regulatory
Commission to ensure compliance with the ratemaking criteria of
the act.
Section 3651 requires that the Postal Regulatory Commission
provide an annual report to the President and the Congress
concerning its operations, including an assessment of whether
its regulations for Market Dominant and Competitive products
are meeting legislative policy. As part of this report, the
Commission is directed to prepare an estimate of public service
costs borne by the Postal Service including universal service
costs, revenue-forgone costs, and other costs (e.g., law
enforcement activities). The Postal Service must give the
Commission such information as the Commission deems necessary
to prepare the reports.
Subsection 3652(a) requires that the Postal Service submit
information to the Postal Regulatory Commission no later than
three months after the last day of each fiscal year, which
demonstrates that the rates in effect for all Market Dominant
and Competitive products during the year are in compliance with
the requirements of this title. In addition, information must
be provided on each product in the Market Dominant category
including volume and market information, along with measures of
quality of service, including service standards, the level of
service (in terms of speed and reliability), and customer
satisfaction. In this manner, the bill mandates that the Postal
Service must develop measures for and report on, among other
things, the speed and reliability of postal services in all
classes of mail in the Market Dominant category. The Postal
Service Inspector General is required to regularly audit the
data collection systems and procedures that the Postal Service
uses in the report prepared for Postal Regulatory Commission
review.
Subsection 3652(b) requires annual reporting on work-
sharing discounts, including the per-item cost avoided by the
Postal Service by virtue of such discount; the percentage of
such per-item cost avoided that the per-item discount
represents; and the per-item contribution made to institutional
costs.
Subsection 3652(c) provides that the Service must provide
such data as the Commission requires for market tests but may
provide summary data on the required costs, revenues, and
quality of service for market tests for which the Commission
has not required specific information.
Subsection 3652(d) states that the Commission will have
access to all the working papers and supporting materials of
the Postal Service and the Inspector General in connection with
the required reports.
Subsection 3652(e) provides that the Commission must
develop regulations prescribing the content and form of the
required annual reports. In doing so, the Commission shall give
due consideration to providing the public with adequate
information to assess the lawfulness of rates charged, avoiding
unnecessary or unwarranted administrative effort or expense on
the part of the Postal Service, and protecting the
confidentiality of commercially sensitive information. The
Commission may specify what information will be provided as
either (1) public reports or (2) non-public annexes and
supporting matter. The subsection also contains a provision for
the Commission, on its own motion or on request from an
interested party, to initiate a proceeding to improve the
quality, accuracy, or completeness of Postal Service data
required by the Commission.
Subsection 3652(f) provides that the Postal Service may
obtain confidential treatment for information that is protected
from disclosure under current law, in accordance with
provisions outlined in new section 504. See section 502 of the
bill.
Subsection 3652(g) requires the Postal Service to provide
the Commission, as part of information to be examined in the
annual audit, specific reports that are submitted to Congress,
including the comprehensive statement required under section
2401 and the performance plan and program reports required
under the Government Performance and Results Act.
Section 3653 provides that, after receiving annual reports
from the Postal Service in accordance with section 3652, the
Postal Regulatory Commission shall provide an opportunity for
public comment. The Commission will then, within 90 days, make
a written determination whether any rates and fees were not in
compliance with the law or whether performance goals or any
service standards were not met. If any noncompliance is found,
the Commission is required to take appropriate action under the
revised complaint procedure, section 3662 (section 205 of the
bill, below). On the other hand, a determination of compliance
creates a rebuttable presumption of compliance in any complaint
proceeding on the specific matters reviewed in the annual
audit.
Section 3654(a) requires the Postal Service to file with
the Postal Regulatory Commission the quarterly, annual, and
periodic reports required of Securities and Exchange Commission
registrants, and to comply with the internal control
requirements of Sarbanes-Oxley. Section 3654(b) and (c) require
the Postal Service to include in such reports information
regarding their pension and postretirement health obligations,
segment reporting (after consultation with the Postal
Regulatory Commission on the appropriate manner of such
reporting), and that such reports be independently audited.
Section 3654(d) requires that the Postal Regulatory Commission
have access to audit documentation and other supporting matter
of such reports. Section 3654(e) allows the Postal Regulatory
Commission to revise the requirements of Section 3654 when the
data required by the reports have become significantly
inaccurate or can be significantly improved, or when such
revisions are otherwise necessitated by the public interest.
Section 3654(f) provides for confidential treatment of
information provided to the Postal Regulatory Commission under
certain circumstances.
Sec. 205. Complaints; appellate review and enforcement
Section 205 of the bill revises the complaint and appellate
review provisions set out in subchapter V of chapter 36, title
39 (as redesignated by the bill). In general, the bill
strengthens the authority of the Postal Regulatory Commission
to act on complaints. Section 205 repeals current sections 3662
(rate and service complaints) and 3663 (annual report on
international services) and adds three sections in title 39 as
follows:
Section 3662 provides the Postal Regulatory Commission with
enhanced authority to respond to complaints of pricing,
service, or other actions by the Postal Service in violation of
law. As revised, this section would require the Commission to
begin proceedings on or dismiss complaints within 90 days and
if not acted on, the complaint 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). In subsection 3662(c), the amendment
gives the Commission broad authority to correct violations by
ordering the Postal Service to take whatever steps the
Commission considers appropriate. For instance, the Commission
may order the Postal Service to adjust the rates of Competitive
products to lawful levels if they are set below attributable
costs (the Commission has no such authority under current law).
The Commission is authorized to suspend Competitive product
rates or classifications under section 3632(b)(3) that are not
of general applicability in the Nation as a whole or in any
substantial region of the Nation. This suspension is permitted
for only a limited period of time pending expedited proceedings
under 3662, and four key factors are outlined in subsection (d)
that the Commission must consider in evaluating whether this
authority may be exercised. The Committee does not intend this
provision to restrain the ability of the Postal Service to
compete fully and fairly against private sector competitors in
competitive markets. Under subsection (e), for cases of
deliberate noncompliance with law, the Commission is authorized
to levy fines based on the seriousness, nature, circumstances,
and extent of the noncompliance. Fines resulting from provision
of Competitive products must be paid out of the Competitive
Products Fund, and all fines are paid into the general Treasury
fund.
Section 3663 provides for appeals of any order or decision
of the Postal Regulatory Commission to the United States Court
of Appeals for the District of Columbia Circuit in accordance
with chapter 706 of title 5 and chapter 158 of title 28.
Section 3664 gives any United States District Court
jurisdiction to enforce orders of the Postal Regulatory
Commission and issue injunctions or restraining orders.
Sec. 206. Workshare discounts
Section 206 amends Title 39 by adding section 3687,
requiring the Postal Regulatory Commission to establish rules
for workshare discounts that ensure that workshare discounts do
not exceed the cost that the Postal Service avoids as the
result of private sector workshare activity, except (1) where
the discount is associated with a new product or service or
with a change to an existing product or service and is
necessary to induce certain mailer behavior, although such
discount must be phased out over a limited period of time; (2)
to the extent that a reduction in the discount would lead to a
loss of volume in the affected category and reduce the
aggregate contribution to institutional costs of the Postal
Service, from the mail matter subject to the discount, below
what it otherwise would have been if the discount had not been
reduced to costs avoided; would result in a further increase in
the rates paid by mailers not able to take advantage of the
discount; or would impede the efficient operation of the Postal
Service; (3) where the amount of the discount above costs
avoided is necessary to mitigate rate shock and will be phased
out over time; or (4) where the workshare discount is provided
in connection with subclasses of mail consisting exclusively of
mail matter of educational, cultural, scientific, or
informational value.
Section 206 also requires the Postal Service to submit to
the Postal Regulatory Commission reports justifying each
worksharing discount.
Sec. 207. Clerical amendment
Section 207 of the bill revises the analysis of chapter 36,
title 39, in accordance with the changes made by the bill.
TITLE III--PROVISIONS RELATING TO FAIR COMPETITION
Sec. 301. Postal Service Competitive Products Fund
Section 301 of the bill adds a new section 2011 to title
39. Section 2011 establishes an off-budget fund within the
Treasury for revenues and expenditures associated with
competitive products. The ``Competitive Products Fund'' is in
addition to the current Postal Service Fund. The intent of this
section is to level the playing field for the Postal Service
and its competitors in the Competitive product market by
requiring the Postal Service to keep separate financial
accounts for Market Dominant and Competitive products.
Separation of accounts also protects the interests of postal
consumers in the Market Dominant category and taxpayers.
Subsection 2011 essentially permits the Postal Service to
manage the Competitive Products Fund in its discretion. The new
fund can borrow money from Treasury to support competitive
products by pledging the assets of the fund and its revenues
and receipts.
Subsection 2011(h) requires that the Secretary of the
Treasury, in consultation with the Postal Service, an
independent accountant, and other appropriate advisors, develop
recommendations for rules such as accounting practices and
principles that will identify and value the assets,
liabilities, capital, and operating costs, associated with
Competitive products. Treasury's recommendations must be
submitted to the Postal Regulatory Commission, which must then
provide an opportunity for all other interested parties to
present their views. The Postal Service, among others, will
therefore be able to present its own recommendations and
counterarguments. While Treasury will have the first
opportunity to make recommendations, the Committee expects the
Commission to give consideration to all input from interested
parties, without a presumption that the Treasury
recommendations are correct. After taking into account all
views and information presented, the Commission must issue
rules providing for the establishment and application of
accounting practices and principles, certain substantive and
procedural rules, and submission by the Postal Service of
annual and periodic reports. The Commission is authorized to
update the rules as necessary.
The Postal Service must report to the Postal Regulatory
Commission on the Competitive Products Fund periodically, as
may be required by the Commission. In addition, the Postal
Service must prepare an annual report for the Secretary of the
Treasury concerning the operation of this Fund. This report
shall address such matters as risk limitations, reserve
balances, allocation or distribution of moneys, liquidity
requirements, and measures to safeguard against losses. A copy
of the report must also be provided to the Commission as part
of the required annual reports.
Sec. 302. Assumed Federal income tax on competitive products income
Section 302 of the bill adds a new section 3634 to title
39. Section 3634 requires the Postal Service each year to
compute an assumed Federal income tax on income from
Competitive products and to transfer from the Competitive
Products Fund to the Postal Service Fund the amount of that
assumed tax.
Sec. 303. Unfair competition prohibited
Section 303 of the bill adds a new section 404a to title
39. Section 404a prohibits the Postal Service from (1)
establishing rules or regulations which preclude competition or
give the Postal Service an unfair competitive advantage; (2)
compelling disclosure, transfer, or licensing of intellectual
property to any third party; or (3) offering any product or
service that makes use of information obtained from a person
that provides or seeks to provide a product to the Postal
Service (unless the person has consented to such use or
substantially the same information is otherwise obtainable).
The Postal Regulatory Commission is required to prescribe
regulations to carry out the purposes of this section, and the
prohibitions are enforced through the Commission's strengthened
complaint process and remedies, which include ordering
rescission of any regulation.
Sec. 304. Suits by and against the Postal Service
Section 304 of the bill amends section 409 of title 39 to
make the Postal Service more amenable to other laws regulating
the conduct of commercial activities.
First, the amendment subjects all Postal Service activities
to federal laws prohibiting the conduct of business in a
fraudulent manner (the Lanham Act and certain parts of the
Federal Trade Commission Act).
Second, the amendment subjects Postal Service conduct with
respect to competitive products to federal antitrust laws and
unfair competition prohibitions and eliminates sovereign
immunity protection from suits in Federal court for violations
of Federal law. The amended section 409 allows injunctive
relief against officers and employees of the Postal Service in
case of violation of the antitrust laws, while the Postal
Service itself would be subject to all available remedies.
Fourth, the amendment would require the Postal Service to
consider local zoning, planning, or land use regulations and
building codes when constructing or altering buildings.
As amended, section 409 further requires the Postal Service
to represent itself in most legal proceedings permitted by the
amendment as well as in cases involving administrative
subpoenas issued by the Postal Regulatory Commission and
appeals of decisions by the Commission or the Governors. The
amendment requires that judgments arising out of activities of
the Postal Service must be paid by the Postal Service, and
judgments arising out of violations of law involving
competitive products must be paid from revenues from
competitive products.
Sec. 305. International postal arrangements
Section 305 of the bill replaces section 407 of title 39.
Section 407 deals with international postal arrangements.
New subsection 407(a) establishes a policy framework for
future international postal agreements that stresses separation
of regulatory and operational functions.
Subsection 407(b) vests the Secretary of State with
authority to lead U.S. delegations in intergovernmental
meetings devoted to postal matters. The Secretary is barred
fromconcluding agreements with respect to any competitive
product that give preference to any entity, either public or private,
including the Postal Service. The subsection provides the Secretary in
carrying out his responsibilities under this section shall maintain
continuing liaison with other federal agencies and the Congress, and
appropriate liaison with the Postal Service and affected members of the
public. The subsection further declares that the Secretary of State
shall establish an advisory committee, under the Federal Advisory
Committee Act, to help perform such functions as the Secretary
considers appropriate in connection with the necessary coordination and
liaison with entities in the public and private sectors as the
Secretary develops U.S. foreign policy related to international postal
services and other international delivery services.
Subsection 407(c) provides that, before concluding an
international agreement that establishes a rate or
classification for a market-dominant product, the Secretary
shall request a decision from the Postal Regulatory Commission
to determine whether the proposed rate or classification is
consistent with the Commission standards and criteria for
market dominant products. The Secretary must ensure that
international agreements are consistent with the Commission's
decision except to the extent that modification may be required
by considerations of foreign policy or national security.
Subsection 407(d) authorizes the Postal Service to enter
into agreements or contracts as it deems appropriate for
international postal services or other international delivery
services without the consent of the Secretary as long as any
agreements with agencies or subsidiaries of foreign governments
are contractual in nature and do not purport to be
international law. The Postal Service must notify the Secretary
and the Commission of agreements with agencies of foreign
governments.
In light of studies conducted by the General Accounting
Office and the former U.S. Customs Service, subsection 407(e)
requires the Bureau of Customs and Border Protection of the
Department of Homeland Security to afford non-discriminatory
access to U.S. customs procedures for both the Postal Service's
Competitive products and similar products of U.S.-owned private
carriers. Since some foreign governments currently limit access
to simplified customs procedures to government post offices--
thus discriminating between the Postal Service and U.S. private
carriers--the subsection requires the Secretary of State ``to
the maximum extent practicable'' to negotiate with other
countries to make available customs procedures that do not
discriminate between the Postal Service and U.S. private
carriers while fully meeting the needs of all types of American
shippers.
Sec. 306. Redesignation
Section 306 redesignates a subchapter heading in chapter 36
of title 39 to reflect various amendments in the bill.
TITLE IV--GENERAL PROVISIONS
Sec. 401. Qualification requirements for Governors
Section 401 of the bill amends section 202 of title 39.
Section 202 establishes the Board of Governors and provides
that the nine Governors shall represent the public interest
generally. The amendment adds a requirement that the President
shall select at least four Governors based solely on their
demonstrated ability in managing organizations or corporations,
in either the public or the private sector, of substantial size
(employing at least 50,000 employees). The amendment requires
the President to consult with the Speaker and minority leader
of the House and the majority and minority leaders of the
Senate in selecting individuals to nominate to the Board.
The amendment also has a provision that one of the nine
Governors must be chosen from among persons unanimously
nominated by all labor unions recognized by law as collective-
bargaining representatives for employees of the Postal Service
in one or more bargaining units. The term of office for this
Governor is three years (instead of nine).
Section 401 recognizes the bill vests enhanced powers and
responsibilities in the Governors. A majority of current and
former Board members have indicated support for well-defined
qualification requirements for Board appointments. The
qualification provisions in the bill are modeled on the
appointment criteria for the Amtrak Board of Directors. Those
Governors currently serving or nominated before enactment are
not affected by this change.
Sec. 402. Obligations
Current law imposes a $2 billion annual cap on borrowing
for capital investments and a $1 billion annual cap on
borrowing for operating expenses. As recommended by the
President's Commission on the U.S. Postal Service, section 402
of the bill amends section 2005 of title 39 to eliminate these
annual sub-limits, but still maintains the overall $3 billion
cap on the annual net increase in borrowed funds. Current law
also remains unchanged regarding the aggregate $15 billion
limit of obligations outstanding at any one time, and this cap
would apply in the aggregate to the Postal Service Fund and the
Competitive Products Fund.
Sec. 403. Private carriage of letters
Section 405 of the bill amends section 601 of title 39 to
provide limited additional statutory exemptions to the postal
monopoly. In summary, this section provides that a letter may
be carried outside the mail under three new circumstances: (1)
when the amount paid to a private carrier is at least 6 times
the rate then currently charged for the first ounce of a
single-piece first-class letter, (2) when the letter weighs at
least 12 and a half ounces, and (3) when private carriage is
within the scope of current Postal Service regulations that
purport to suspend the operation of current law.
The proposed price and weight limits for the postal
monopoly, 6 times the first-class stamp price and 12 and a half
ounces, remain significantly more protective of the Postal
Service than postal monopoly limits enacted in other
industrialized nations that have concluded smaller monopolies
will promote greater efficiency without jeopardizing universal
service. For example, in 1997, the European Union limited
European postal monopolies to 5 times the stamp price or 12 and
a half ounces. In 2002, the European Union adopted a second
postal directive that reduced last year the limits on postal
monopoly laws to 3 times the stamp price or 3 and a half
ounces. Canada's postal monopoly has been limited to 3 times
the stamp price since 1981; Australia's monopolyis limited to 4
times the stamp price or 8 ounces. Indeed, several countries have
abolished their postal monopolies or are in the process of doing so,
including Germany, Sweden, New Zealand, and the United Kingdom. In
comments submitted to the Committee in August 1998, the Department of
Justice stated its support for limiting the scope of the statutory
monopoly with a bright-line test for identifying products falling
within it. In that August 1998 correspondence, the Department also
noted that the Postal Service's entry into competitive markets
suggested that economic theory did not justify the postal monopoly as
it existed under current law. In April 1997, the General Accounting
Office testified that the ``impact of reducing the scope of the letter
mail monopoly to $2 would not significantly affect the Postal Service's
ability to provide affordable universal service because little of the
first-class mail volumes that are currently protected by the postal
monopoly would become subject to competition. * * * Available data
indicate that less than 3 percent of the first-class mail revenues are
currently derived from first-class mail that falls outside the proposed
reduced limit of $2.'' By setting the limit at 6 times the first-class
stamp price, the amended section 601 provides that the price limit on
the postal monopoly will rise as the stamp price increases.
As predicted by the Postal Rate Commission Chairman's
testimony in 1996, the Postal Service subsequently testified
that year that it would interpret current Section 601(b) of
Title 39 to allow it to repeal the changes proposed by the
bill. Subsection (b) is derived from section 7 of an 1864
postal act, and the revision repeals it as obsolete--this
suspension power has never been used as provided; in fact, no
occasion is known of the Post Office or the Postal Service
suspending the exception for postage paid mail. Current
subsection (b) of 601 simply authorizes the Postal Service to
suspend the exception of paragraph (a) and thereby forbid the
private carriage of letters even if postage is paid. The Postal
Service's authority to reapply the postal monopoly to stamped
letters is unnecessary and antiquated; it is repealed by the
bill. Some entities in both the government and the private
sector have testified that since 1974, the Postal Service has
often misused the suspension power of 601(b). Since 1974, the
Postal Service has, under color of subsection (b), issued
regulations that rather than suspend the exception to the
monopoly for stamped letters set out in subsection (a), instead
suspend the postal monopoly itself (i.e., the criminal
prohibitions set out in chapter 83 of title 18, U.S. Code).
Indeed, when the Postal Service first proposed these
regulations in 1973 that purported to derive a suspension power
for the private express statutes contained in Title 18 of the
U.S. Code, the Postal Rate Commission's General Counsel
concluded that use of the suspension authority in this way
violated the legislative language and intent. The ``grandfather
clause'' provided in the bill will authorize the continuation
of private activities that the Postal Service has permitted
under color of this section. In this way, the bill protects
mailers and private carriers who have relied upon regulations
that the Postal Service has adopted to date in apparent
misinterpretation of the current subsection (b).
By establishing boundaries for the postal monopoly while
providing the Postal Service more commercial freedom, the bill
clarifies the scope of the statutory monopoly that historically
has been defined solely by the Service.
The suspension for outgoing international mail would be
continued, to the extent that it involves the uninterrupted
carriage of letters from a point within the United States to a
foreign country for delivery to an ultimate destination outside
the United States. However, the requirement that a shipper or
carrier submit to an inspection or audit or face a presumption
of violation would not be continued. At the time this
regulation (section 320.8 of title 39 of the Code of Federal
Regulations) was promulgated, the carriage and delivery of mail
was generally the preserve of government-owned or sponsored
postal administrations in foreign countries. The Committee
intends the suspension to incorporate more recent changes in
the laws of destinating countries, so that it would not
prohibit delivery outside a foreign government-owned or
sponsored post if such delivery is permitted by the laws of the
foreign country.
The Postal Regulatory Commission is authorized to adopt
regulations necessary to carry out the exceptions to the postal
monopoly set out in section 601 as amended. This amendment does
not take effect until the Postal Regulatory Commission
promulgates regulations for the competitive pricing system
under section 3633.
Sec. 404. Rulemaking authority
Section 404 of the bill amends section 401(2) of title 39
to clarify the rulemaking function of the Postal Service. As
amended, section 401(2) authorizes the Postal Service ``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.'' This amendment is
intended to make clear that the Postal Service is not, unless
explicitly authorized by Congress, empowered to adopt
regulations implementing other parts of the U.S. code, e.g.,
the criminal laws. This amendment is fully consistent with the
legislative history of this provision (which originated in the
1960 codification) and is modeled on the Federal Communications
Commission's rulemaking authority, 47 USC 154(i). The amendment
recognizes that the rulemaking authority of the Postal Service
is affected by its obligations under title 5 and certain other
limited provisions of law outside title 39.
Sec. 405. Noninterference with collective bargaining agreements, etc.
Section 405 of the bill addresses two specific issues.
First, subsection (a) mandates that, except for section 407,
nothing in the bill, or amendments made by the bill to current
law, can affect any of the rights, privileges, or benefits of
postal employees or the labor organizations representing them.
Second, subsection (b) clarifies that nothing in the bill will
affect free mail as currently provided by law for (1)
correspondence of members of the diplomatic corps and consuls
of the countries of the Postal Union of Americas and Spain; (2)
people who are blind and other people with a physical
impairment preventing them from using or reading conventionally
printed material; and (3) mailing of balloting materials under
the Uniformed and Overseas Citizens Absentee Voting Act.
Sec. 406. Bonus authority
Section 406 of the bill adds a new section 3686 to title
39. Section 3686 authorizes the Postal Service to establish one
or more bonus or reward programs in furtherance of the
objectives of chapter 36. The Board of Governors must review
any such program prior toimplementation and may approve any
program that it finds ``makes meaningful distinctions based on relative
performance.'' The section states that bonus payments may exceed the
salary cap for postal employees established in section 1003(a) of title
39 so long as the total compensation of such employees does not exceed
the annual compensation of the Vice President of the United States. The
Board of Governors may also allow up to twelve officers or employees of
the Postal Service to receive total compensation of up to 120 percent
of the Vice President's annual compensation, but report to Congress and
the Office of Personnel Management within 30 days of a payment made
under this exception. For each employee whose compensation exceeds the
salary cap by virtue of a bonus or other payment awarded under this
section, the Postal Service is required to list in its annual
comprehensive statement the name of the employee, the amount of the
bonus, the limitation of the salary cap, and amount by which the cap
was exceeded. Nothing in this new section is intended to modify
existing statutory authority for employment in the Postal Service under
chapter 10 of title 39, particularly in regard to section 1001(c)
(i.e., authority for the Postal Service to hire individuals as
executives under employment contracts).
Sec. 407. Mediation in collective bargaining disputes
Section 407 is intended to expedite the resolution of
collective bargaining disputes. It would replace the fact-
finding panel that currently conducts the first step in the
dispute resolution process with a mediator appointed by the
Director of the Federal Mediation and Conciliation Service. If
the parties are unable to agree and determine to submit the
dispute to arbitration, the existing process of an arbitration
board remains in place. This new step in the current bargaining
process reflects a joint suggestion by the Postal Service and
its four postal unions, and is based upon a recommendation by
the President's Commission on the U.S. Postal Service. It
should assist disagreeing parties in forging a final agreement,
or limiting the issues that must be addressed if interest
arbitration becomes necessary.
TITLE V--ENHANCED REGULATORY COMMISSION
Sec. 501. Reorganization and modification of certain provisions
relating to the Postal Regulatory Commission
Section 501 of the bill creates a new chapter 5 in title 39
to establish the Postal Regulatory Commission. Chapter 5
consists of four sections as follows.
Section 501 of title 39 establishes the Postal Regulatory
Commission. Section 3601 of current law, establishing the
Postal Rate Commission, is repealed.
Section 502 of title 39 sets out the qualifications and
terms of office for the five Commissioners. This section
provides that ``Commissioners shall be chosen solely on the
basis of their technical qualifications, professional standing,
and demonstrated expertise in economics, accounting, law, or
public administration.'' Section 3602, establishing terms of
office for Commissioners of the Postal Rate Commission, is
repealed. Commissioners currently serving or nominated before
enactment are not affected by this change.
Section 503 of title 39 authorizes and directs the
Commission to issue rules and regulations. Section 503 is a
redesignation of current section 3603.
Section 504 of title 39 sets out rules governing the
administration of the Commission. Section 504 is a
redesignation of current section 3604.
In sum, section 501 of the bill recognizes the Commission's
enhanced responsibilities by establishing the Commission in
provisions set out in a chapter located in part I of title 39,
dealing with general matters, rather than, as in current law,
provisions set out in a subchapter of chapter 36, and dealing
with rate regulation.
Sec. 502. Authority for Postal Regulatory Commission to issue subpoenas
Section 502 of the bill amends section 504 of title 39
(i.e., section 3604 of current law as redesignated by section
501 of the bill). As amended, section 504 provides that
Commissioners, any administrative law judge appointed by the
Commission, and any designated employee of the Commission may
administer oaths, examine witnesses, take depositions, and
receive evidence. In addition, the Chairman of the Commission,
any Commissioner designated by the Chairman, and any
administrative law judge appointed by the Commission may issue
subpoenas requiring the attendance and presentation of
testimony by, or production of documentary or other evidence in
the possession of, officers, employees, agents, or contractors
of the Postal Service and to order the taking of depositions of
and responses to written interrogatories by such persons. Such
subpoena or order is allowed with respect to any proceeding
conducted by the Commission under this title. Any subpoena
requires the written concurrence of a majority of Commissioners
then holding office in advance of its issuance. Failure to obey
a subpoena may be referred to the appropriate United States
District Court, and failure to obey a court order is punishable
as a contempt of court.
The amendment also provides for the handling of information
the Postal Service views as proprietary that is requested from
the Postal Service by the Commission. As amended, section 504
provides that, if the Postal Service determines requested
information is proprietary and so notifies the Commission in
writing, the Commission may use the information only for the
purpose supplied and must restrict access to the information to
Commission officers and employees. However, the amendment
authorizes the Commission to publicly disclose relevant
information it deems necessary in furtherance of its duties, as
long as it has adopted regulations establishing a procedure for
affording appropriate confidentiality; this authority includes
a mandate to the Commission to balance the nature and extent of
likely commercial injury with the mandate for financial
transparency of 101(d) of this Title. The amendment further
provides for the possibility of discovery of such information
by interested parties and requires the Commission to adopt
rules to protect the confidentiality of such information
similar to the rules that govern protective orders issued by
the federal courts under the Federal Rules of Civil Procedure.
Sec. 503. Appropriations for the Postal Regulatory Commission
Section 503 of the bill further amends section 504 of title
39 to ensure the financial independence of the Postal
Regulatory Commission. Under the amendment, funding for the
Commission will be paid out of the Postal Service Fund, as
under current law, but the budget of the Commission will no
longer be subject to disapproval by the Governors.
Sec. 504. Redesignation of the Postal Rate Commission
Section 504 of the bill changes ``Postal Rate Commission''
to the ``Postal Regulatory Commission'' in various statutes.
Sec. 505. Officer of the Postal Regulatory Commission representing the
general public
Section 505 ensures that the existing role of a Consumer
Advocate is maintained in all proceedings of the new Postal
Regulatory Commission, to ensure that the interests of the
general public are represented.
TITLE VI--INSPECTORS GENERAL
Sec. 601. Inspector General of the Postal Regulatory Commission
Section 601 of the bill amends the Inspector General Act of
1978 to provide for an Inspector General for the Postal
Regulatory Commission.
Sec. 602. Inspector General of the United States Postal Service to be
appointed by the President
Section 602 of the bill amends the Inspector General Act of
1978 to require appointment of the Postal Service's Inspector
General by the President with Senate confirmation, in the same
manner as the other presidentially appointed Inspectors General
at major federal departments and agencies. In keeping with the
intent of the Inspector General Act, the Inspector General is
required to investigate internal criminal activity committed by
Postal Service employees, including Inspection Service
employees. By clarifying the investigative responsibilities of
the Inspector General, this section complies with the Inspector
General Act's requirement to avoid duplication and insure
effective coordination and cooperation between the Inspection
Service and the Office of the Inspector General. Section 602
provides that the current Inspector General will remain in
office until the President appoints one pursuant to the new
authority, although the Section makes clear that nothing in
this act shall prevent the current Inspector General from being
appointed by the President. In addition, the provision
authorizes an appropriation for the Office of Inspector General
rather than leaving its budget to the discretion of the agency
it is charged with overseeing, consistent with the similar
manner in which the Federal Deposit Insurance Corporation
(FDIC) Inspector General receives a congressional appropriation
from the FDIC's fund. Such a change is critical to recognizing
the independence and objectivity of this key watchdog entity.
The bill also subjects the Postal Service, for the first
time, to provisions of the Anti-Kickback Act, gives Postal
Service contractor employees whistleblower protection, and
requires the Postal Service to develop and issue purchasing
regulations prohibiting the reimbursement of certain contractor
costs. Under the Anti-Kickback Act, major postal contractors
would have to maintain compliance systems that would detect and
prevent kickbacks. In addition, whistleblower protection would
apply to postal contractors' employees. Finally, the Postal
Service would be required to develop and issuepurchasing
regulations that prohibit the reimbursement of contract costs not
allowable under the Postal Service Procurement Manual.
TITLE VII--EVALUATIONS
Sec. 701. Universal Postal Service Study
Recognizing that the concept of universal postal service
has never been defined in the United States, and yet is a
critical component of assessing the future role of a national
post office, section 701 directs the Postal Service to submit a
report on universal postal service in the United States to the
President, Congress, and the Postal Regulatory Commission. The
report must include a review of the history and development of
universal service, an explanation of the current scope and
standards of universal service and what will likely be required
in the future, a description of groups not currently covered by
universal service or receiving deficient service or quality,
and such recommendations as the Postal Service deems
appropriate. The Postal Regulatory Commission must then
evaluate the Postal Service's study and issue its own report to
the President and the Congress. That report must include,
according to paragraph (b): (1) comments and observations on
the matters raised in the Postal Service's report as the
Commission considers appropriate; (2) an estimate of the cost
attributable to the obligation to provide universal service
under prior and current law; (3) an estimate of the likely cost
of fulfilling the obligation to provide universal service; and
(4) additional topics and recommendations as the Commission
considers appropriate. According to paragraph (c), in preparing
the reports required by section 701 the Postal Service and the
Postal Regulatory Commission (1) shall consult with each other,
other Federal agencies, users of the mails, enterprises in the
private sector engaged in the delivery of mail, and the general
public; and (2) shall address in their respective reports any
written comments received under this section.
Sec. 702. Assessments of ratemaking, classification and other
provisions
Section 702 of the bill requires the Postal Regulatory
Commission to report, in conjunction with the views of the
Postal Service, to the President and the Congress, at least
every 5 years, on the operation of the amendments made by this
bill, with recommendations for any legislative or other
measures necessary to improve the effectiveness or efficiency
of the nation's postal laws. Specifically, at least the first
report must include, under paragraph (c), information on (1)
the operation of the Commission regulations applicable to rates
for competitive products and relevant recommendations; (2) the
competitive products fund; and (3) the assumed Federal income
tax on the competitive products fund.
Sec. 703. Study on equal application of laws to competitive products
Section 703 of the bill requires the Federal Trade
Commission to prepare a report detailing how federal and state
laws apply differently to the Postal Service with respect to
competitive products and private companies providing similar
products. The Commission is directed to report within one year
after enactment and to include recommendations for resolving
any identified disparities in legal treatment. The Federal
Trade Commission is to consult in preparing its report with the
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.
Sec. 704. Greater diversity in Postal Service executive and
administrative schedule management positions
Section 704 of the bill directs the Board of Governors to
study and report to the President and Congress on the extent of
representation by women and minorities in supervisory and
management positions within the Postal Service. In addition,
the Postal Service is required, as part of its performance
evaluations of supervisory and management employees, to give
appropriate consideration to meeting affirmative action goals,
achieving equal employment opportunity requirements, and
implementation of plans to achieve greater workforce diversity.
Sec. 705. Plan for assisting displaced workers
Section 705 of the bill requires the Postal Service to
develop and be prepared to implement a plan for affording
reemployment assistance to employees displaced by automation or
privatization. The plan is to be provided to the Board of
Governors and Congress within one year of enactment.
Sec. 706. Contracts with women, minorities and small businesses
Section 706 of the bill requires the Board of Governors,
within one year, to study and report to the President and
Congress on the number and value of contracts and subcontracts
entered into with women, minorities, and small businesses.
Sec. 707. Rates for periodicals
Section 707 of the bill requires the Postal Service, acting
jointly with the Postal Regulatory Commission and the General
Accounting Office, to 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. The report shall include recommendations
for any administrative action or legislation that might be
appropriate.
Sec. 708. Assessment of certain rate deficiencies
Section 708 of the bill requires the Office of Inspector
General of the Postal Service to study and submit to the
President, the Congress, and the Postal Service a report
concerning the Postal Service's administration of the reduced
rate provisions of section 3626(k) of title 39. The study must
specifically address the adequacy and fairness of the process
by which assessments are determined and appealable, including
whether the Postal Regulatory Commission or any other body
outside the Postal Service should be assigned a role, and
whether a statute of limitations should be established for the
commencement of proceedings by the Postal Service.
Sec. 709. Postal processing and distribution network study
Section 709 requires the Postal Service to provide an
annual report to the Postal Regulatory Commission, the
Congress, and the Board of Governors on the processing,
transportation, and distribution network of the Service, with
an eye toward recommendations on improving the system's
efficiency and effectiveness. Per subsection (b), the annual
report would be publicly incorporated into the reports and
plans required by the Government Performance and Results Act,
whose reports are reviewed each year by the Postal Regulatory
Commission under its annual determination of compliance
required by new Sections 3652(g) and 3653. Subsection (c)
emphasizes that the Postal Service shall take such actions it
considers, in its sole discretion, necessary and appropriate to
provide the Nation with a modern and efficient network for the
processing, transportation, and distribution of mail. Nothing
in this section shall prevent the Postal Service from making
such improvements in the efficiency and effectiveness of the
network, as it deems appropriate.
Sec. 710. Assessment of future business model of the Postal Service
Section 710 requires a comprehensive, two year study by an
independent, impartial, and expert research organization
appointed by the Comptroller General to assess the costs,
benefits, effects, and future strategies for maintaining the
Postal Service as wholly part of the Executive Branch, or
transforming it into a private corporation in whole or in part.
This should provide Congress the proper foundation to evaluate
the appropriate long term business model for the Postal
Service.
Section (a) outlines the process to be undertaken by the
Comptroller General in selecting the research organization.
Section (b) makes clear that the research organization 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. Section (c) specifies the topics and matters to
consider that will compromise the elements of the report.
Subsection (d) permits the use of outside experts by the
research organization, while Subsection (f) requires
consultation with the wide range of postal stakeholders and
inclusion of such comments in the final report. Subsection (e)
provides funding from the Postal Service for the study.
Sec. 711. Study on certain proposed amendments
Section 711 of the bill directs the Government
Accountability Office to study proposals in H.R. 22 (109th
Congress), as introduced section 805, that would move to a
market-based system for establishing rates for the carriage of
international mail. The list of matters to evaluate are not
intended to limit the GAO from considering additional issues
that it deems appropriate to analyze.
Sec. 712. Definition
Section 712 of the bill declares that the term ``Board of
Governors'' as used in this title shall have the same meaning
as given in section 102 of title 39.
TITLE VIII--MISCELLANEOUS; TECHNICAL AND CONFORMING AMENDMENTS
Sec. 801. Employment of Postal Police Officers
Section 801 of the bill further amends section 404 and
makes permanent the authority for the Postal Service to employ
postal police officers to protect property owned or occupied by
the Postal Service or under the charge and control of the
Postal Service and to protect persons on the property. The
Postal Service currently employs more than one thousand
uniformed Postal Police Officers who are assigned to critical
postal facilities throughout the country. The officers provide
perimeter security, escort high-value mail shipments, and
perform other essential protective functions. To date, Congress
has provided temporary authority for such officers each year in
appropriations bills.
Sec. 802. Date of postmark to be treated as date of appeal in
connection with the closing or consolidation of post offices
Section 802 of the bill further amends section 404 of title
39 to provide that the appeal to the Postal Regulatory
Commission of a post office closing by any person shall be
considered timely if it is postmarked within 30 days of
notification of the closure to the appellant. The Commission
testified that current law, which requires the appeal to be
received by the Commission within 30 days, precludes adequate
consideration of certain post office closings.
Sec. 803. Provisions relating to benefits under chapter 81 of title 5,
United States Code, for officers and employees of the former
Post Office Department
Section 803 of the bill amends section 8 of the Postal
Reorganization Act of 1970 (39 U.S.C. 1001 note) and addresses
the administrative status of employees affected by change made
by Public Law105-33 (repealing the authority for transitional
appropriations) by clarifying their status as officers and
employees of the U.S. Postal Service with respect to
compensation for work injuries.
Sec. 804. Obsolete provisions
Subsection 804(a) of the bill repeals chapter 52 of title
39, relating to contracts for the surface transportation of
mail. Such contracts are now allowed under section 5005 of
title 39.
Subsection 804(b) authorizes the Postal Service to lengthen
the statutory four-year limitation on postal transportation
contracts as it deems appropriate or advisable. The four-year
limitations in current postal law date from President Grant's
Administration and reflect the spoils system of that era by
allowing a new President to assume control of the Post Office
Department and its accompanying patronage.
The Committee has spent the last 10 years examining all
aspects of the Postal Service with the thought of giving it the
flexibility and the authority it needs to survive as a viable
public institution well into the future. During our extensive
review we have discovered some sound policies and programs of
the Postal Service that have been quite successful, and the
Committee recommends the Postal Service continue that which
works for it. One such sound policy is the Postal Service's
relationship with its Highway Contractors (Star Routes). For
the last 56 years, the Postal Service has contracted with
Highway Contractors for periods up to four years. Such
contracts may be renewed for successive contract terms and may
be adjusted, with the consent of the Contractor, for increased
or decreased costs resulting from changed conditions occurring
during the contract term.
The Postal Service has also provided indemnity payments for
contracts cancelled for reasons other than default. This
program has returned corresponding benefits to both the Postal
Service and its Highway Contractors. The Postal Service has had
the benefit of continuity of service from a dedicated group of
highway transportation suppliers, and the contractors have been
able to amortize their costs over a longer period of time thus
keeping their rates economic and efficient. These Highway
Contractors have also provided efficient and reliable service
in times of unanticipated increases in Postal mail volume. As a
result of this program's highly successful history, the
Committee recommends that the Postal Service maintain its 56
year old policy of renewing and adjusting Highway Contractors
with indemnity provisions or liquidated damages. As noted, the
Committee has included in this bill a provision that permits
the Postal Service to contract for longer terms than 4 years.
The Postal Service is in the midst of a major
transformation to improve and modernize its operations. The
Postal Service has identified the procurement area,
particularly improvements in its supply chain management, as an
area in need of change and improvement.
The Committee requested that the Government Accountability
Office (GAO) determine the Postal Service's progress in
implementing supply chain management initiatives and whether
these initiatives have had an effect on small businesses.
Supply chain management is a process that has helped successful
private-sector companies leverage their buying power and
identify more efficient ways to procure goods and services.
In its report entitled ``Progress in Implementing Supply
Chain Management Initiatives,'' GAO-04-540, the GAO recommended
that the Postal Service improve implementation of its bulk fuel
program, consider adjustments to reverse auction procedures,
and focus more attention on small, minority-owned, and woman-
owned businesses in carrying out supply chain management
initiatives. GAO also believes that the Postal Service should
have a mechanism in place to ensure accountability and
transparency in its small business contracting.
The Committee will continue its oversight of these programs
and urges the Postal Service to move quickly to address issues
identified by GAO in its report.
Sec. 805. Investments
Section 805 of the bill amends section 2003 of title 39 to
prohibit the Postal Service from using funds from the Postal
Service Fund to invest in ``obligations or securities of a
commercial entity.'' Under the bill's establishment of new
section 2011(c) of title 39, such investments are permitted
using funds from the Competitive Products Fund with the
approval of the Secretary of the Treasury.
Sec. 806. Reduced rates
Section 806 makes changes related to the rates provided for
``within county publications''--publications within the county
in which they are published. These types of publications are
predominantly small-circulation, local newspapers--family-owned
or small group weeklies targeted toward the news and
advertising needs of small communities or counties. Before the
Postal Reorganization Act, within county publications, along
with other classes of mail and types of mailers such as
nonprofit periodicals and library matter, were allowed to mail
at reduced rates of postage. In 1970, the Postal Reorganization
Act required that the products cover their attributable costs,
but their institutional costs were paid for by annual
appropriation. In 1993, Congress phased in rate increases so
that after five years the reduced rate mailers would eventually
pay half the institutional costs that comparable commercial
mailers paid. Following the realization of some practical
difficulties related to this ``fifty percent markup rule,'' the
law was changed in 2000 with respect to certain publications.
Within county publications, however, remained subject to the
fifty percent markup rule.
This bill correctly discontinues the fifty percent markup
rule for within county publications. Continuing such a rule
could unduly limit the flexibility available to the Postal
Regulatory Commission in creating a new rate-setting approach.
This section at the same time preserves the preferred status of
within county publication rates by tracking the phrasing of the
current statute. The intent of the change is to maintain the
special status of within county publications while replacing
the fifty percent markup rule with a more general statement
that within county rates should reflect the mail's ``preferred
status.'' Because of the local nature of within county
publications, they have low costs compared to many national
publications. As a result, the current approach toward within
county publications is for them to have their own subclass
status, which keeps them from having their costs averaged
together with more costly national mail. This section is not
intended to require the Commission or Postal Service to delete
the within county subclass; rather, it is intended to maintain
authority for preferred treatment of within county publications
in terms of rates.
Sec. 807. Hazardous matter
Section 807 provides for penalties regarding illegal use of
the mails to transport hazardous matter. It adds a new section
3018 to title 39 that prohibits the mailing of hazardous
material, the causing of hazardous material to be mailed, and
the manufacture, distribution, or sale of containers, packaging
kits or other devices (for use in mailing hazardous materials)
that fail to conform with relevant standards. Subsection (c)
states that persons knowingly violating hazardous material
mailing provisions shall be liable for civil penalties, clean
up charges, and damages. Subsection (d) states that there must
be notice and an opportunity for hearing before the Postal
Service can determine a violation to the hazardous material
provisions has occurred. Subsection (e) states what matters the
Postal Service shall consider before determining the amount of
civil penalties to violators of the hazardous material
provisions. Subsections (f), (g) and (h) outline the procedures
for collecting and depositing such penalties, costs and
damages.
Sec. 808. Provisions relating to cooperative mailings
Section 808 directs the Postal Regulatory Commission to
study the Postal Service's Cooperative Mail Rule to determine
whether it contains adequate safeguards to protect against
abuses of rates for nonprofit mail and deception of consumers.
The Cooperative Mail Rule is a long-standing postal regulation
designed to prevent the commercial exploitation of the
nonprofit rate by prohibiting for-profit mail matter such as
advertisements for products and services from being sent at the
nonprofit rate. It has alsobeen applied to prevent abusive
relationships between commercial fundraisers and nonprofits, and to
otherwise regulate those relationships. If the Postal Regulatory
Commission determines that the Cooperative Mail Rule does not
adequately safeguard against abuse of the nonprofit rate, section 810
authorizes the Commission to promulgate such regulations as it deems
necessary.
Sec. 809. Technical and conforming amendments
Miscellaneous technical and conforming amendments required
by the bill's changes to Title 39.
TITLE IX--POSTAL PENSION FUNDING REFORM AMENDMENTS
In 2003, the Postal Civil Service Retirement System Funding
Reform Act of 2003 (P.L. 108-18 or the Act) was enacted to
change the calculation of Postal Service contributions to the
Civil Service Retirement System (CSRS). The Act credited the
Postal Service for the real value of contributions it had made
in the past and changed how contributions would be computed in
the future. The Act provided immediate financial relief to the
Postal Service, allowing the Postal Service to use the savings
resulting from the change in FY 2003-2005 to reduce its debt
and hold postage rates steady. After FY 2005, the Act required
that the savings go into an escrow account, absent any
additional congressional action.
P.L. 108-18 was enacted quickly to avert a financial crisis
at the Postal Service, which had indicated that, absent a
change, a rate increase would have been necessary within a
year. However, the Act left two issues unresolved. First, the
Act did not address whether the escrow account would be used to
pay down debt, prefund retiree health benefits, or for some
other purpose. Second, there was disagreement about what entity
should be responsible for paying the costs of retirement
benefits related to military service. Under previous law, the
Treasury Department had paid those benefits for CSRS retirees.
P.L. 108-18 shifted the responsibility for these military costs
to the Postal Service, both prospectively and retrospectively.
This bill addresses both of these issues. The bill removes
the requirement in P.L. 108-18 that funds be collected and
placed in an escrow account, and requires the Treasury
Department to pay the costs of retirement benefits related to
military service. Returning the responsibility for military
costs to Treasury will result in an immediate overfunding of
the CSRS fund. The bill directs the Postal Service to use that
overfunding and other savings to address both its short- and
long-term financial needs and ensures that the Postal Service
reduces its growing unfunded liability for retiree health
benefits. In its 2003 annual report, the Postal Service
estimated that liability as being between $47 and $57 billion.
Sec. 901. Civil Service Retirement System
Section 901 restores the responsibility to the Treasury
Department for paying retirement costs related to military
service. Because such a change will result in an immediate
overfunding of the Postal Service's portion of the CSRS Fund,
the section terminates the Postal Service's obligation to make
CSRS contributions. The Office of Personnel Management is
required to determine whether there is a postal surplus or a
supplemental liability by June 15, 2006. If there is a surplus,
as anticipated, the Office must transfer that amount to the
Postal Service Retiree Health Benefits Fund. If there is a
supplemental liability, the Office must establish an
amortization schedule to liquidate the liability by the end of
FY 2043. All determinations and redeterminations made by the
Office are subject to review by the Postal Regulatory
Commission at the Postal Service's request. The Commission must
submit the results of its review to the Office, the Postal
Service, and Congress. The Office must reconsider its decision
in light of the Commission's review and make appropriate
adjustments.
Subsection (c) ensures that the monetary impact of
restoring to Treasury the responsibility for military costs is
retroactive, as if the relevant provision of P.L. 108-18 had
not been enacted. It directs the Office to transfer to the CSRS
Fund amounts that it would otherwise have paid for FY 2003-2005
and earnings on those amounts.
Sec. 902. Health insurance
Section 902 would change the way the Postal Service
finances its share of the cost of providing health care to
retirees. The Postal Service must pay a portion of health care
premiums for currently retired employees eligible to
participate in the Federal Employees Health Benefits (FEHB)
program. Currently, the Postal Service pays only its portion of
the health premiums incurred by current retirees each year.
Under section 902, the Postal Service would begin paying for
estimated costs of retiree health care as such costs are
accrued by current workers.
The bill creates a new on-budget account, the Postal
Service Retiree Health Benefits Fund (PSRHBF), which would earn
interest at the same rate as the CSRS Fund. The bill also
requires calculation of the unfunded liability for health care
costs of current and future retirees, which would be the
difference between the assets held in the PSRHBF and the net
present value of accrued liabilities projected for retiree
health care.
Starting in 2006, the bill requires the Postal Service to
make payments equal to the annual increase in the unfunded
liability attributable to current employees. The Postal Service
also would pay annual interest costs on the unfunded liability
(attributable to current and future retirees). These payments,
made at the end of each fiscal year, would be deposited into
the PSRHBF. The Postal Service's share of health care premiums
for current retirees would be paid out of the PSRHBF as soon as
adequate funds are available in the account to do so.
The bill directs the Office of Personnel Management to
compute the required prefunding and interest payments after
consultation with the Postal Service. All computations or other
determinations made by the Office, along with any relevant
regulations established by the office, are subject to review by
the Postal Regulatory Commission at the Postal Service's
request. The Commission must submit the results of its review
to the Office, the Postal Service, and Congress. The Office
must reconsider its decision in light of the Commission's
review and make appropriate adjustments.
Sec. 903. Repealer
Section 903 repeals section 3 of the Postal Civil Service
Retirement System Funding Reform Act, related to the
disposition of savings accruing to the Postal Service. This
change removes the requirement that savings be placed in an
escrow account.
Sec. 904. Ensuring appropriate use of escrow and military savings
Section 904 requires that for the ten years beginning in FY
2006, two-thirds of the ``total savings''--the amount of money
the Postal Service would have had to pay to the CSRS Fund if
P.L. 108-18 and this bill had not been enacted, less any
amortization payments required to the CSRS Fund for any
supplemental liability as described above--be used to address
the Postal Service's long-term needs of prefunding retiree
health benefits and paying down its debt. Amounts that would
otherwise have been paid into the Fund established under
8909a(a) under this paragraph, but that are used to reduce the
postal debt may not exceed a total of $3 billion for fiscal
years 2006-2015.
A safety valve is also put in place to allow the Postal
Service to appeal to the Postal Regulatory Commission for
relief from the requirement that two-thirds of the savings be
allocated for such purposes.
After FY 2015, there is not a specific statutory
requirement related to the total savings. Instead, the
Committee expects that the Postal Service will use its best
judgment in promoting its long-term viability (by further
reducing the unfunded liability for retiree health benefits,
debt repayment, and other measures) while moderating postage
rate increases. The absence of a specific requirement after FY
2015 should not be interpreted by the Postal Service as a sign
that it no longer needs to be concerned with the outstanding
unfunded liability for retiree health benefits.
Sec. 905. Effective dates
Title IX will take effect on October 1, 2005.
Explanation of Amendments
The Committee adopted an amendment in the nature of a
substitute offered by Chairman Davis when it considered the
bill on April 13, 2005. The amendment contained the following
changes to H.R. 22, as introduced:
Required SEC-like financial reporting by the
Postal Service: The substitute amendment requires the
Postal Service to file with the PRC the same public
financial statements and reports required of private
companies by the Securities and Exchange Commission,
including a breakdown of costs and revenues by segment
as defined by USPS in consultation with the PRC.
Network Optimization: The substitute
amendment requires annual assessment of network
optimization, which would be publicly incorporated into
the reports and plans required by the Government
Performance and Results Act.
Worksharing: The substitute amendment
conforms H.R. 22 with S. 662 (109th Congress), as
introduced, eliminating the House bill's four-year
limit on new worksharing discounts that exceed the
costs avoided by the Postal Service and instead
requiring such discounts to apply for only a limited
time period.
Banking, Borrowing and Investing: The
substitute amendment limits the Postal Service's
Competitive Products fund to banking, borrowing and
investing with the U.S. Treasury, rather than with the
private sector.
Treatment of Confidential Information: The
substitute amendment provides the Postal Regulatory
Commission, rather than the Postal Service, with the
authority to decide what regulatory information will be
protected from public disclosure on grounds of
commercial sensitivity.
Rate Discrimination: The substitute
amendment maintains the current law prohibition on
undue or unreasonable rate discrimination.
Salary Cap Flexibility: The substitute
amendment establishes a more efficient process for the
Postal Service's authority to offer bonuses and other
compensation to its employees, consistent with similar
performance incentive programs in other sectors.
Business Model Study: The substitute
amendment requires the Government Accountability Office
to assess the costs, benefits, effects, and future
strategies for maintaining the Postal Service as wholly
part of the Executive Branch, or transforming it into a
private corporation in whole or in part.
Outside Auditor: The substitute amendment
removes a provision from H.R. 22 that would have
required the Inspector General--rather than an
independent accounting firm selected by the Board--to
certify the Postal Service's annual financial
statements.
Technical Changes: The substitute amendment
makes a technical change to the definition of a
``postal service,'' and moves the directive that the
PRC take the fairness and equity of the rate structure
into account from the list of the factors to be
considered in regulation to the list of objectives.
In addition, two sections of the bill were struck following
adoption of an amendment offered by Mr. LaTourette. Mr.
LaTourette's amendment struck sections 805 and 807 of the
legislation and instead created a new study in Title VII of
H.R. 22 for the Government Accountability Office (GAO) to
evaluate aspects of the matter. Mr. LaTourette's amendment was
adopted by voice vote.
For more than 20 years, the air transportation of U.S. mail
to domestic destinations has been open to competitive bidding.
However, air transport of international mail is subject to the
same regulatory control of the U.S. Department of
Transportation (DOT) that has been in place since the late
1970s. Section 805 would have permitted the Postal Servicethe
same opportunity to contract for the transportation of international
mail that it has had domestically for decades. Also, Section 805
protected domestic carriers from unfair competition by ensuring that
any foreign carrier competing for a contract must be from a country
whose nation provides the same opportunity for U.S. carriers to deliver
its mail. Fifty-one countries already contract with U.S. carriers to
move mail for their post offices, and in fact, the Postal Service pays
more for the air transportation of mail to the U.S. carriers than what
those same U.S. carriers charge a foreign post to transport their mail.
Section 807 of the bill, which would have repealed the Postal Service's
ability to unilaterally fine air carriers for delays in moving
international mail because such authority would be inappropriate in a
negotiated contracting environment, was also deleted under Mr.
LaTourette's amendment in order to reflect the amendment's repeal of
the flexibilities that would have been provided by section 805.
Mr. LaTourette's amendment replaces these sections with a
section mandating a Government Accountability Office study of
the matter, including an assessment of the impact of such
reforms on the domestic airlines. This study should build on
the GAO's April 8, 2005 report on this subject.
Committee Consideration
H.R. 22 is derived from H.R. 3717, introduced in the 104th
Congress, H.R. 22, introduced in the 105th and 106th
Congresses, H.R. 4970 introduced in the 107th Congress, and
H.R. 4341 introduced in the 108th Congress.
In the 104th Congress, the former Postal Service
Subcommittee, chaired by Mr. McHugh, held oversight hearings on
the Postal Service and, in particular, its calls for greater
commercial flexibility, on February 23, March 2 and 8, May 23,
June 7, 14, and 28, and November 15, 1995, and January 25 (with
the Senate Committee on Governmental Affairs) and March 13 and
19, 1996. In addition, on November 15, 1995, the Subcommittee
held a legislative hearing on H.R. 210, a bill to provide for
privatization of the Postal Service.
On June 25, 1996, Subcommittee Chairman McHugh introduced
H.R. 3717, the Postal Reform Act of 1996. The Subcommittee held
legislative hearings on H.R. 3717 on July 10 and 18 and
September 17 and 26, 1996.
In the 105th Congress, on January 7, 1997, Subcommittee
Chairman McHugh reintroduced former H.R. 3717 as H.R. 22, the
Postal Reform Act of 1997. The Subcommittee held a legislative
hearing on H.R. 22 on April 16, 1997. The Subcommittee also
held a general oversight hearing on April 24, 1997. On December
12, 1997, Mr. McHugh issued a comprehensive, section-by-section
plan for revision of H.R. 22. In late February 1998, Mr. McHugh
announced that the Subcommittee was actively soliciting written
comments through early April on proposed revisions to H.R. 22.
The Subcommittee received 47 written submissions. The 47
comments subsequently received were shared with all
Subcommittee Members for review, and they were posted on the
Subcommittee's web page for public examination. In addition,
the Subcommittee received extensive additional comments more
informally from representatives of interested parties. Through
this process, the Subcommittee attempted to ensure that the
public and all postal stakeholders had repeated opportunities
to provide input on the revisions as proposed December 1997.
After carefully evaluating all of the comments received,
Postal Service Subcommittee Chairman McHugh released the text
of a comprehensive amendment to H.R. 22 on September 2, 1998,
which was also posted on the Subcommittee's web page. On
September 24, 1998, the Subcommittee on the Postal Service
voted to approve H.R. 22, renamed the Postal Modernization Act
of 1998, as amended by the comprehensive amendment announced by
Subcommittee Chairman McHugh on September 2, 1998, and to send
it to the Committee on Government Reform and Oversight for
further consideration, which did not occur before the 105th
Congress adjourned.
With the beginning of the 106th Congress, Postal Service
Subcommittee Chairman McHugh introduced a revised version of
H.R. 22, and the Subcommittee convened a final round of
hearings on the bill on February 11 and March 4, 1999. After
incorporating further modifications from these hearings, on
April 29, 1999, the Postal Service Subcommittee approved H.R.
22 again and reported it to the Committee on Government Reform.
However, the Committee did not consider the bill before the
106th Congress expired. The Subcommittee did convene additional
hearings throughout 1999 and 2000 that continued to explore and
underscore the need for reform.
In the 107th Congress, the Postal Service Subcommittee was
abolished and postal issues became the focus of the full
Government Reform Committee. After several full Committee
hearings on the Postal Service's worsening financial
situation--the General Accounting Office added the Service to
its watch-list of ``high risk'' agencies--the Committee marked
up a revised postal reform bill, H.R. 4970, introduced by Mr.
McHugh. H.R. 4970, the Postal Accountability and Enhancement
Act, was the product of a nearly year long bipartisan effort of
the Committee staff to address remaining concerns and
objections that certain stakeholders expressed with previous
versions of the postal reform legislation. Despite support for
the legislation, there was disagreement among some Committee
members over the timing of moving the bill forward. As a
result, in a mark-up on June 20, 2002, H.R. 4970 failed on a
vote of 6 ayes, 20 no, and 9 voting ``present.'' Nine Members
did not vote.
In the 108th Congress, the Government Reform Committee's
Special Panel on Postal Reform and Oversight, chaired by Mr.
McHugh, held three hearings in a two week period to examine the
need to modernize our nation's postal laws following the work
of the President's Commission. On January 28, 2004, the Panel
heard from the Treasury Department, the Postal Service, the
Postal Rate Commission, and the General Accounting Office. On
February 5, the Panel traveled to Chicago, Illinois for a
hearing in which the Presidents of all postal unions and
employee groups testified. The Panel held a final hearing on
February 11 in which nine CEOs of competitors, commercial and
nonprofit mailers, and postal reliant businesses testified. On
March 23, 2004, the Committee held a joint hearing with the
Senate Governmental Affairs Committee, in which it heard
testimony from the Secretary of the Treasury and the Postal
Service.
All witnesses stated support for the Administration's broad
principles on postal reform, and the hearings underscored that
universal postal service is at risk and reform is urgently
needed to minimize the danger of significant taxpayer bailout
or dramatic postal rate increases. As the General Accounting
Office emphasized, the Postal Service's current business model,
formulated as it was in 1970, is no longer sustainable in the
21st century.
On May 12, 2004, the Committee met in open session and
ordered reported favorably the bill introduced by Mr. McHugh,
H.R. 4341, by roll call vote, a quorum being present, with a
vote of 40 yeas and 0 nays. The Committee filed its report to
accompany H.R. 4341 on September 8, 2004, as Report 108-672
Part I. The Judiciary Committee then sought referral of the
bill to address matters within its jurisdiction. On September
15, 2004, the Judiciary Committee considered H.R. 4341 and
ordered the bill reported with several amendments by voice vote
(see Report 108-672 Part II filed September 23, 2004). The bill
was then placed on the Union Calendar, Calendar No. 427. The
108th Congress adjourned before further action was taken on
H.R. 4341.
On January 4, 2005, Mr. McHugh and Chairman Davis
introduced H.R. 22. On April 13, 2005, the Committee on
Government Reform ordered the bill reported to the House, as
amended, by a recorded vote.
Rollcall Vote
----------------------------------------------------------------------------------------------------------------
Representatives Aye Nay Present Dem. Aye Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Davis (VA), (chairman)..... X ........ ......... Mr. Waxman....... X ........ .........
Mr. Shays...................... X ........ ......... Mr. Lantos....... X ........ .........
Mr. Burton..................... X ........ ......... Mr. Owens........ X ........ .........
Mrs. Ros-Lehtinen.............. X ........ ......... Mr. Towns........ X ........ .........
Mr. McHugh..................... X ........ ......... Mr. Kanjorski.... X ........ .........
Mr. Mica....................... X ........ ......... Mr. Sanders...... X ........ .........
Mr. Gutknecht.................. X ........ ......... Mrs. Maloney..... X ........ .........
Mr. Souder..................... X ........ ......... Mr. Cummings..... X ........ .........
Mr. LaTourette................. X ........ ......... Mr. Kucinich..... X ........ .........
Mr. Platts..................... X ........ ......... Mr. Davis (IL)... X ........ .........
Mr. Cannon..................... X ........ ......... Mr. Clay......... X ........ .........
Mr. Duncan..................... X ........ ......... Ms. Watson....... X ........ .........
Mrs. Miller (MI)............... X ........ ......... Mr. Lynch........ X ........ .........
Mr. Turner (OH)................ X ........ ......... Mr. Van Hollen... X ........ .........
Mr. Issa....................... X ........ ......... Ms. Sanchez...... X ........ .........
Mrs. Brown-Waite............... X ........ ......... Mr. Ruppersberger ........ ........ .........
Mr. Porter..................... X ........ ......... Mr. Higgins...... X ........ .........
Mr. Marchant................... X ........ ......... Ms. Norton....... X ........ .........
Mr. Westmoreland............... X ........ ......... ................. ........ ........ .........
Mr. McHenry.................... X ........ ......... ................. ........ ........ .........
Mr. Dent....................... X ........ ......... ................. ........ ........ .........
Mrs. Foxx...................... X ........ ......... ................. ........ ........
Vacancy
----------------------------------------------------------------------------------------------------------------
Totals: Ayes 39, Nays 0, Present 0.
Correspondence
U.S. House of Representatives,
Committee on Transportation and Infrastructure,
Washington, DC, April 25, 2005.
Hon. Tom Davis,
Chairman, Committee on Government Reform,
Rayburn Building, Washington, DC.
Dear Mr. Chairman: I am writing to you concerning the
jurisdictional interest of the Transportation and
Infrastructure Committee in matters being considered in H.R.
22, the Postal Accountability and Enhancement Act.
Our committee recognizes the importance of H.R. 22 and the
need for the legislation to move expeditiously. Therefore,
while we have a valid claim to jurisdiction over certain
provisions of the bill, I will agree not to request a
sequential referral. This, of course, is conditional on our
mutual understanding that nothing in this legislation or my
decision to forego a sequential referral waives, reduces or
otherwise affects the jurisdiction of the Transportation and
Infrastructure Committee, and that a copy of this letter and of
your response acknowledging our valid jurisdictional interest
will be included in the Committee report and in the
Congressional Record when the bill is considered on the House
Floor.
The Committee on Transportation and Infrastructure also
asks that you support our request to be conferees on the
provisions over which we have jurisdiction during any House-
Senate conference.
Thank you for your cooperation in this matter.
Sincerely,
Don Young,
Chairman.
------
Hon. Don Young,
Chairman, Committee on Transportation and Infrastructure,
House of Representatives, Washington, DC.
Dear Mr. Chairman: Thank you for your recent letter
regarding the Committee on Transportation and Infrastructure's
jurisdictional interest in H.R. 22, the Postal Accountability
and Enhancement Act, and your willingness to forego
consideration of H.R. 22 by the Committee on Transportation and
Infrastructure.
I agree that the Committee on Transportation and
Infrastructure has a valid jurisdictional interest in H.R. 22
and that the committee's jurisdiction will not be adversely
affected by your decision to not request a sequential referral
of H.R. 22. In addition, I will support your request for the
appointment of outside conferees from the Committee on
Transportation and Infrastructure 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 Government Reform Committee's report
on H.R. 22 and in the Congressional Record during consideration
of the legislation on the House floor. Thank you for your
assistance as I work towards the enactment of H.R. 22.
Sincerely,
Tom Davis,
Chairman.
Application of Law to the Legislative Branch
Section 102(b)(3) of Public Law 104-1 requires a
description of the application of this bill to the legislative
branch where the bill relates to the terms and conditions of
employment or access to public services and accommodations.
This bill creates a modern system of rate regulation,
establishes fair competition rules and a powerful new
regulator, addresses the Postal Service's universal service
obligation and the scope of the mail monopoly, and institutes
improvements to the collective bargaining process.
Legislative branch employees and their families, to the
extent that they are otherwise eligible for the benefits
provided by this legislation, have equal access to its
benefits.
Statement of Oversight Findings and Recommendations of the Committee
In compliance with clause 3(c)(1) of rule XIII and clause
2(b)(1) of rule X of the Rules of the House of Representatives,
the Committee's oversight findings and recommendations are
reflected in the descriptive portions of this report.
Statement of General Performance Goals and Objectives
In accordance with clause 3(c)(4) of rule XIII of the Rules
of the House of Representatives, the Committee's performance
goals and objectives are reflected in the descriptive portions
of this report.
Constitutional Authority Statement
Under clause 3(d)(1) of rule XIII of the Rules of the House
of Representatives, the Committee must include a statement
citing the specific powers granted to Congress to enact the law
proposed by H.R. 22. Article I, Section 8, Clause 7 of the
Constitution of the United States grants the Congress the power
to establish post offices.
Federal Advisory Committee Act
Section 305 of H.R. 22 establishes an advisory committee
within the meaning of the Federal Advisory Committee Act (5
U.S.C. Appendix 2). The functions of the advisory committee are
reflected in the descriptive portions of this report.
Unfunded Mandate Statement
Section 423 of the Congressional Budget and Impoundment
Control Act (as amended by Section 101(a)(2) of the Unfunded
Mandates Reform Act, P.L. 104-4) requires a statement on
whether the provisions of the reported bill include unfunded
mandates. In compliance with this requirement, the Committee
has received a letter from the Congressional Budget Office
included herein.
Committee Estimate
Clause 3(d)(2) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison by the
Committee of the costs that would be incurred in carrying out
H.R. 22. However, clause 3(d)(3)(B) of that rule provides that
this requirement does not apply when the Committee has included
in its report a timely submitted cost estimate of the bill
prepared by the Director of the Congressional Budget Office
under section 402 of the Congressional Budget Act.
Budget Authority and Congressional Budget Office Cost Estimate
With respect to the requirements of clause 3(c)(2) of rule
XIII of the Rules of the House of Representatives and section
308(a) of the Congressional Budget Act of 1974 and with respect
to requirements of clause 3(c)(3) of rule XIII of the Rules of
the House of Representatives and section 402 of the
Congressional Budget Act of 1974, the Committee has received
the following cost estimate for H.R. 22 from the Director of
the Congressional Budget Office:
U.S. Congress,
Congressional Budget Office,
Washington, DC, April 25, 2005.
Hon. Tom Davis,
Chairman, Committee on Government Reform,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 22, the Postal
Accountability and Enhancement Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Mark
Grabowicz (for Postal Service costs), Geoffrey Gerhardt (for
retirement costs), and Julie Christensen (for health care
costs).
Sincerely,
Douglas Holtz-Eakin, Director.
Enclosure.
H.R. 22--Postal Accountability and Enhancement Act
Summary: H.R. 22 would change the laws that govern the
operation of the United States Postal Service (USPS),
particularly those regarding the cost of pensions and health
care benefits of retired workers and the requirement to hold
certain funds in escrow. CBO estimates that enacting this
legislation would result in on-budget savings of $35.7 billion
and off-budget costs of $41.6 billion over the 2006-2015
period. (The net expenditures of the USPS are classified as
``off-budget.'') Thus, CBO estimates the net cost to the
unified budget would be $5.9 billion over the 2006-2015 period.
All of those effects reflect changes in direct spending. In
addition, we estimate that implementing H.R. 22 would have
discretionary costs of about $1.6 billion over the 2006-2015
period, assuming appropriation of the necessary amounts.
(Enacting the bill would not affect federal revenues.)
Enacting H.R. 22 would not affect how much the federal
government spends on pension or health care benefits for USPS
retirees. By increasing how much the Postal Service pays to
finance those benefits and by eliminating the current-law
escrow account requirements, however, the bill would increase
future budget deficits as measured by the unified federal
budget. Eliminating the escrow account requirement for the USPS
would allow that agency to increase spending for capital
improvements or other projects, pay down its outstanding debt,
postpone or diminish future rate increases, or some combination
of these options. Enacting the bill also would reduce direct
spending by making the costs of the Postal Rate Commission and
the USPS Office of the Inspector General subject to
appropriation.
H.R. 22 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA)
and would impose no costs on state, local, or tribal
governments.
Major provisions of H.R. 22 would:
Eliminate a requirement in Public Law 108-18 (P.L.
108-18), the Postal Civil Service Retirement Funding
Reform Act of 2003, that the Postal Service place
savings from reduced pension contributions in escrow.
Transfer from the Postal Service to the Department of
the Treasury responsibility for paying pension costs
associated with military service credits.
Replace direct payments the Postal Service is making
for retiree health care costs with payments designed to
prefund some of the health care costs of current
employees when they retire.
Revise the procedure for raising postal rates.
Strengthen the USPS Board of Governors and the Postal
Rate Commission, which would be redesignated the Postal
Regulatory Commission (PRC).
Make other changes designed to increase the Postal
Service's competitiveness with private industry.
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 22 is summarized in Table 1. The costs
of this legislation fall within budget functions 370 (commerce
and housing credit), 550 (health), 900 (net interest), and 950
(undistributed offsetting receipts).
TABLE 1.--ESTIMATED BUDGETARY EFFECTS OF H.R. 22
----------------------------------------------------------------------------------------------------------------
By fiscal year, in billions of dollars--
-------------------------------------------------------------------------------
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
----------------------------------------------------------------------------------------------------------------
CHANGES IN DIRECT SPENDING
On-Budget Effects:
Estimated Budget Authority.. -2.9 -3.0 -3.1 -3.3 -3.4 -3.6 -3.8 -4.0 -4.2 -4.4
Estimated Outlays........... -2.9 -3.0 -3.1 -3.3 -3.4 -3.6 -3.8 -4.0 -4.2 -4.4
Off-Budget Effects:
Estimated Budget Authority.. 2.9 3.2 3.5 3.6 3.9 4.3 4.5 4.9 5.3 5.6
Estimated Outlays........... 2.9 3.2 3.5 3.6 3.9 4.3 4.5 4.9 5.3 5.6
Total Unified Budget Effect:
Estimated Budget Authority.. 0.0 0.2 0.3 0.4 0.5 0.7 0.7 0.9 1.1 1.1
Estimated Outlays........... 0.0 0.2 0.3 0.4 0.5 0.7 0.7 0.9 1.1 1.1
CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Estimated Authorization Level... 0.1 0.1 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2
Estimated Outlays............... 0.1 0.1 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2
----------------------------------------------------------------------------------------------------------------
Note.--Components may not add to totals because of rounding.
Basis of estimate
For this estimate, CBO assumes that H.R. 22 will be enacted
near the start of fiscal year 2006. For direct spending, CBO
estimates that enacting the bill would result in on-budget
savings of $35.7 billion and off-budget costs of $41.6 billion
over the 2006-2015 period, for a net cost to the unified budget
of $5.9 billion over the 10-year period. In addition, we
estimate that implementing H.R. 22 would cost about $1.6
billion over the 2006-2015 period, assuming appropriation of
the necessary amounts, mostly to fund the USPS Office of the
Inspector General.
Background
The following paragraphs present background information
relating to the major provisions of H.R. 22, mostly for postal
finances affected by the bill.
Budgetary Treatment of USPS. Although the Postal Service is
a federal agency, its financial operations are classified as
off-budget. Despite this treatment, federal budget documents
present the net income (gross income minus expenses) of the
agency in the unified budgetary totals for the federal
government. The Postal Service is required by law to set
postage rates to cover its full costs, although from year to
year its net income may be positive or negative. In fiscal year
2004, the Postal Service generated $69.6 billion in
collections, mostly from postage and user fees, and had $65.5
billion in expenses, for a net cash surplus of $4.1 billion in
that year. CBO projects that the USPS will end 2005 with a cash
surplus of $3.8 billion.
USPS and Federal Retirement Plans. Postal Service employees
participate in the federal government's two main defined
benefit pension programs. Those workers initially hired prior
to 1984 are covered by the Civil Service Retirement System
(CSRS) while those initially hired after 1983, as well as
former CSRS workers who elected to change federal retirement
plans in 1987 or 1998, participate in the Federal Employees'
Retirement System (FERS). In 2004, about 25 percent of the USPS
workforce was covered by CSRS, and the rest were under FERS.
The Postal Service and its employees each make payroll
contributions toward the civilian retirement system (CSRS and
FERS). Unlike other agencies, the agency contribution rate for
most CSRS employees is 17.4 percent of basic pay (most other
agencies contribute 7 percent), while the employee contribution
rate is 7 percent.\1\ For FERS employees, the agency
contribution rate for most employees is 10.7 percent, while the
employee rate is 0.8 percent, plus Social Security payroll
taxes on both employers and employees. Workers in CSRS receive
generally higher benefits than those in FERS, but unlike FERS,
those in CSRS do not participate in Social Security and do not
receive agency contributions toward the Thrift Savings Plan. In
addition to its payroll contributions, the Postal Service also
makes annual amortization payments toward an unfunded liability
within CSRS. In 2004, that payment was about $250 million.
---------------------------------------------------------------------------
\1\ P.L. 108-18 increased the contribution rate the Postal Service
pays for its CSRS employees from 7 percent to 17.4 percent. That
legislation also eliminated a series of amortization payments the
Postal Service was required to make for unfunded CSRS liabilities. For
more details, see CBO's cost estimates of the Postal Civil Service
Retirement System Funding Reform Act of 2003 (S. 380 and H.R. 735 from
the 108th Congress). These estimates are posted on www.cbo.gov.
---------------------------------------------------------------------------
USPS and Federal Health Benefits. The Postal Service also
pays a portion of health care premiums for currently retired
USPS employees who are eligible to participate in the Federal
Employees Health Benefits (FEHB) program. Currently, there are
over 400,000 Postal Service retirees who participate in the
FEHB program. On average, the Postal Service currently pays
about 45 percent of the health care premiums for its retirees.
Retirees pay about 30 percent of their FEHB premiums with
general revenues accounting for the remaining amount, roughly
25 percent. In 2004, the Postal Service paid $1.3 billion to
FEHB for premiums for current retirees.
USPS Escrow Fund. Starting in fiscal year 2006, the Postal
Service will be required under current law to begin holding
funds in an escrow account equal to the difference between what
the Postal Service currently pays toward CSRS and what it would
have paid for CSRS benefits prior to the enactment P.L. 108-18.
Under current law, CBO estimates the Postal Service will need
to hold in escrow nearly $3 billion in 2006 and $43 billion
over the 2006-2015 period. H.R. 22 would eliminate the
requirement that USPS collect and hold such funds in escrow.
Effects on the unified budget
H.R. 22 would not affect how much the federal government
spends on pension or health benefits for USPS retirees.
However, by increasing how much the Postal Service pays to
finance those benefits and by eliminating the current-law
escrow requirements, the bill would increase future budget
deficits as measured by the unified federal budget.
Off-budget payments made by the Postal Service for CSRS and
FEHB are transfers to on-budget federal accounts, and are
counted as offsetting receipts (a credit against direct
spending). Eliminating the USPS transfer to CSRS would reduce
on-budget offsetting receipts by $11.7 billion over the 2006-
2015 period. Under the bill, that reduction would be more than
offset by a $47.4 billion increase in on-budget offsetting
receipts paid by the Postal Service for the new health benefits
fund. Thus, the bill would increase on-budget offsetting
receipts by $35.7 billion over the 2006-2015 period.
The collection of funds to be held in escrow by the Postal
Service is recorded as an off-budget offsetting receipt (i.e.,
simply reflecting the payment by the USPS into escrow).
Eliminating the requirement to fund the escrow account would
allow the USPS to pay down debt, increase spending for capital
improvements or other projects, postpone or diminish future
rate increases, or some combination of these activities. CBO
estimates that this provision would increase off-budget
spending by $43.2 billion over the 2006-2015 period. Making the
costs of the PRC and the USPS Office of the Inspector General
subject to appropriation would reduce direct spending by the
Postal Service by $1.6 billion over the next 10 years.
The combined effect of the $35.7 billion net increase in
on-budget receipts, the $43.2 billion reduction in off-budget
offsetting receipts, and a $1.6 billion reduction in USPS
direct spending would produce a $5.9 billion cost to the
unified budget deficit over the 2006-2015 period. Those effects
are presented in Table 2 and explained in more detail below.
TABLE 2.--ESTIMATED CHANGES IN DIRECT SPENDING FOR H.R. 22
----------------------------------------------------------------------------------------------------------------
By fiscal year, outlays in billions of dollars--
-------------------------------------------------------------------------------
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
----------------------------------------------------------------------------------------------------------------
CHANGES IN DIRECT SPENDING
On-Budget Effects
Civil Service Retirement System. 1.8 1.7 1.6 1.4 1.3 1.1 1.0 0.8 0.6 0.4
Postal Service Retiree Health -4.7 -4.7 -4.7 -4.7 -4.7 -4.7 -4.7 -4.8 -4.8 -4.8
Benefits Fund net of retiree
premium payments to FEHB a.....
-------------------------------------------------------------------------------
Total On-Budget Effects..... -2.9 -3.0 -3.1 -3.3 -3.4 -3.6 -3.8 -4.0 -4.2 -4.4
===============================================================================
Off-Budget Effects
Eliminate Escrow Account........ 3.1 3.3 3.6 3.8 4.1 4.4 4.6 5.0 5.4 5.7
Funding for PRC and USPS -0.1 -0.1 -0.2 -0.2 -0.2 -0.2 -0.2 -0.2 -0.2 -0.2
Inspector General Office Costs
Subject to Appropriation.......
-------------------------------------------------------------------------------
Total Off-Budget Effects........ 2.9 3.2 3.5 3.6 3.9 4.3 4.5 4.9 5.3 5.6
===============================================================================
Total Unified Budget 0.0 0.2 0.3 0.4 0.5 0.7 0.7 0.9 1.1 1.1
Effects................
----------------------------------------------------------------------------------------------------------------
Memorandum
Payments from the Postal Service -5.2 -6.7 -7.0 -7.3 -7.6 -7.9 -8.2 -8.6 -9.0 -9.4
received by PSRHBF.............
FEHB premiums paid from PSRHBF.. 0.4 2.0 2.3 2.6 2.9 3.2 3.5 3.8 4.2 4.6
-------------------------------------------------------------------------------
Net outlays of PSRHBF....... -4.7 -4.7 -4.7 -4.7 -4.7 -4.7 -4.7 -4.8 -4.8 -4.8
----------------------------------------------------------------------------------------------------------------
a. Starting in July 2006, CBO assumes that payments of FEHB premiums for Postal Service retirees would be paid
out of the Postal Service Retiree Health Benefits Fund instead of being paid directly by the Postal Service as
under current law. The bill would have no effect on spending by the FEHB program for health benefits for
Postal Service annuitants.
NotesEHB = Federal Employees Health Benefits program; PSRHBF = Postal Service Retiree Health Benefits Fund; PRC
= Postal Regulatory Commission; USPS = United States Postal Service.
Components may not add to totals because of rounding.
Amounts in the table represent net changes in offsetting receipts, which are recorded in the budget as changes
in direct spending. A positive sign indicates lower offsetting receipts, thus an increase in outlays; negative
numbers represent increased offsetting receipts, or a reduction in net outlays.
On-budget effects (direct spending)
CBO estimates the on-budget effect of the pension and
health care provisions in H.R. 22 would be a net increase in
offsetting receipts of $2.9 billion in 2006, $15.8 billion over
the 2006-2010 period, and $35.7 billion over the 2006-2015
period. That increase in on-budget collections (i.e., reduction
in direct spending) would come from increased transfers (off-
budget outlays) coming from the USPS. (The off-budget effects
are discussed in the following section.)
Civil Service Retirement Contributions. H.R. 22 would
change the way the Postal Service finances retirement benefits
for current and retired employees. Starting in October 2005,
the bill would transfer financial responsibility for military
service credits earned by Postal Service employees and retirees
participating in CSRS from the Postal Service to the Department
of the Treasury. Military service credits represent time served
in the U.S. military that is credited toward benefits under the
civilian retirement system. Most federal agencies are not
responsible for the cost to the pension system of the military
service credits incurred by their CSRS employees, but P.L. 108-
18 transferred responsibility for military service credits from
the Treasury to the Postal Service beginning in June 2004.
The Office of Personnel Management (OPM) estimates that
transferring responsibility for military service credits from
the Postal Service back to the Treasury would cause the Postal
Service to have overfunded its obligation to CSRS by about
$20.3 billion through September 2005.\2\ Consequently, under
H.R. 22 the Postal Service would no longer be obligated to make
either agency contributions or any further annual amortization
payments for CSRS. (Employee contributions would continue at 7
percent of basic pay and retirement benefits under CSRS would
not change.)
---------------------------------------------------------------------------
\2\ This overfunding, which is calculated on a net-present-value
basis, represents an estimate of the total amount of money the Postal
Service will have contributed toward CSRS from 1971 through September
30, 2005, minus the agency's CSRS liabilities if USPS bears no
financial responsibility for the pension costs associated with military
service credits. The projected overfunding is due primarily to larger-
than-expected returns on assets held in the CSRDF.
---------------------------------------------------------------------------
Spending by the Postal Service--including amounts paid into
other federal accounts--is considered off-budget spending.
However, the Civil Service Retirement and Disability Fund
(CSRDF) is an on-budget account, so the amounts the CSRDF
collects from the PostalService are on-budget offsetting
receipts. Reducing payments the Postal Service makes to the CSRDF would
result in a reduction in off-budget spending and a reduction in on-
budget offsetting receipts. CBO estimates transferring responsibility
for military service credits, and the attendant reduction in CSRS
contributions such a change would bring, would reduce onbudget receipts
by $1.8 billion in 2006 and $11.7 billion over the 2006-2015 period.
Although the Treasury Department would then be responsible for the
costs associated with those pension liabilities under the bill, the
Treasury payment and receipt by CSRDF are both on-budget
intragovernmental transactions. That is, the bill would replace one
intragovernmental transfer with another. Instead of a transfer from the
off-budget Postal Service to the on-budget CSRDF, there would be a
transfer from the Treasury to the CSRDF.
Postal Service Retiree Health Benefits Fund. H.R. 22 also
would change the way the Postal Service finances its share of
the cost of providing health care to retirees. Instead of
directly paying a portion of the health premiums incurred by
current retirees each year, the USPS would begin paying for
estimated costs of retiree health care as such costs are
accrued by current workers. Starting in 2006, H.R. 22 would
require the USPS to make payments equal to the annual increase
in retiree health care liabilities accrued by current
employees. These payments would be deposited into a new on-
budget account, the Postal Service Retiree Health Benefits Fund
(PSRHBF), which would earn interest at the same rate as the
CSRDF. CBO currently projects that the CSRDF fund will earn
about 5.75 percent next year. The Postal Service's share of
health care premiums for current retirees would be paid out of
the PSRHBF as soon as adequate funds are available in the
account to do so.
Under H.R. 22, any overfunding toward CSRS liabilities
(after financial responsibility for military service credits
reverts to the Treasury) would be transferred from the CSRDF to
the PSRHBF by June 30, 2006. Based on information provided by
OPM, CBO anticipates that the transfer to the new fund would
total $21.2 billion and would occur in June 2006. This amount
reflects the $20.3 billion in estimated CSRS overfunding plus
interest that would accrue between the end of the valuation
period in September 2005 and when CBO assumes the asset
transfer would take place in June 2006.
Under the bill, the Postal Service also would pay annual
interest costs on the unfunded liabilities for health care
costs of both current and future retirees. The unfunded
liability would be the difference between the assets held in
the PSRHBF and the net present value of accrued liabilities
projected for retiree health care. The bill would direct OPM to
compute the required prefunding and interest payments after
consultation with the Postal Service, subject to review by the
PRC. The bill specifies that payments would be made at the end
of each fiscal year.
Based on information provided by OPM and using CBO's
current projections of long-term interest rates, CBO
anticipates the net present value of the unfunded liability for
the health care costs of retirees would amount to about $49
billion at the end of 2006 and remain roughly at that level
through the end of 2015. CBO estimates that payments by the
Postal Service for prefunding health care costs of retirees and
interest on the remaining unfunded liability would be $5.2
billion in 2006 (net of the 2006 premium adjustment described
below), $33.8 billion over the 2006-2010 period, and $76.8
billion over the 2006-2015 period. Those amounts could change
significantly if future rates are much different than currently
projected by CBO.
For fiscal year 2006, H.R. 22 would reduce the initial
prefunding and interest payments otherwise due at the end of
the year under the bill. The reduction would reflect all
contributions directly paid to the FEHB program by the Postal
Service in fiscal year 2006 for its share of premiums for
current annuitants--about $1.3 billion in that year. (Such
contributions would be made by June 30, 2006, prior to the
transfer of assets from the CSRDF into the PSRHBF.) Before
applying the offset, CBO estimates that the total payments
required under the bill for prefunding retiree health costs and
interest on the remaining unfunded liability would be $6.5
billion in 2006. The final payment required under the bill, net
of the adjustment for specified 2006 premium contributions,
would be $5.2 billion in 2006 as stated above.
CBO expects that the transfer of $21.2 billion from the
CSRDF to the PSRHBF resulting from the shift in responsibility
for military service credits would occur in June 2006.
Therefore, the Postal Service would cease making payments under
current law for its share of FEHB premiums for annuitants
beginning in July 2006; with those premium payments instead
being drawn from the PSRHBF. (As mentioned earlier, the bill
also would direct the Postal Service to deduct all fiscal year
2006 contributions toward its share of health premiums for
current retirees made prior to July 2006 from initial
prefunding and interest payments otherwise due under the bill
for fiscal year 2006.) CBO estimates that change in the funding
mechanism for retiree health benefits would reduce off-budget
payments by the Postal Service for FEHB premiums by $0.4
billion in 2006 (which reflects premium payments, under current
law, for the last three months of 2006), $10.2 billion over the
2006-2010 period, and $29.4 billion over the 2006-2015 period.
On-budget payments for those amounts would then be transferred
from the PSRHBF to the FEHB program to pay the Postal Service's
share of health care costs for retirees.
The bill would require a minimum level of prefunding by the
Postal Service through 2015, after accounting for disbursements
for health premiums from the PSRHBF. To achieve the annual or
cumulative prefunding target, payments from the Postal Service
to the PSRHBF--net of premiums paid by the PSRHBF--must total
at least two-thirds of the amount the Postal Service would have
paid toward CSRS prior to the enactment of P.L. 108-18. If the
threshold is not met, additional prefunding payments would be
required to make up the shortfall. Those payments also could be
used to reduce postal debt (up to$3 billion) in lieu of
contributions to the fund. The requirement could be waived completely
by the PRC under certain conditions. CBO anticipates that the threshold
established under the bill would be met and no additional payments
would be required through 2015.
Health premiums paid by the Postal Service for FEHB and any
payments that would be made into the new PSRHBF would be
considered on-budget offsetting receipts. CBO estimates the
increase in on-budget receipts as a result of changes in how
the Postal Service finances its health care obligations would
be $4.7 billion in 2006, $23.6 billion over the 2006-2010
period, and $47.4 billion over the 2006-2015 period.
Off-budget effects (direct spending)
CBO estimates that enacting H.R. 22 would result in net
off-budget costs $2.9 billion in fiscal year 2006, $17.2
billion over the 2006-2010 period, and $41.6 billion over the
2006-2015 period. Those amounts reflect the effects of allowing
the Postal Service to increase other spending, reduce postal
rates, or some combination of these actions because the bill
would eliminate the requirement for the Postal Service to fund
the escrow account. The net costs also reflect off-budget
savings from a provision in the bill to make the costs of the
PRC and the USPS Office of the Inspector General subject to
appropriation, thus reducing direct spending by about $1.6
billion over the next 10 years. The bill contains many other
provisions that could affect USPS cash flows in each year, but
we estimate they would not have a significant net effect on the
USPS over the long term.
Elimination of Escrow Fund. P.L. 108-18 permanently reduced
payments by the USPS to the CSRDF. As a result of that act,
USPS payments to the CSRDF declined by $2.5 billion to $5.5
billion annually, beginning in 2003. For fiscal years starting
in 2006, P.L. 108-18 requires that savings resulting from
reduced payments to the CSRDF be considered an operating
expense of the Postal Service and held in escrow, remaining
unavailable for obligation unless authorized by subsequent
legislation.
H.R. 22 would amend P.L. 108-18 to eliminate the escrow
fund requirement. As a result of this provision, the Postal
Service could lower rates and thus reduce its revenues from the
levels expected under current law, or maintain rates and
increase spending, or some combination of these actions. The
net outlays of the Postal Service would increase because
collections would not be deposited in escrow. CBO estimates
that eliminating the escrow requirement would increase net off-
budget spending by about $3.1 billion in 2006, $17.9 billion
over the 2006-2010 period, and $43.2 billion over the 2006-2015
period. Much of the spending would go toward making new
payments to the on-budget account for health care costs.
Make Cost of PRC and USPS IG Subject to Appropriation.
Under current law, the PRC and the Inspector General of the
Postal Service are funded from the Postal Service Fund without
annual Congressional appropriation. In total, these offices
spent about $140 million in 2004. H.R. 22 would authorize the
appropriation of such sums as may be necessary from the Postal
Service Fund for these offices. Thus, enacting this legislation
would reduce direct spending--and therefore, increase spending
subject to appropriation--by about $140 million annually
beginning in fiscal year 2006.
Changes to USPS Rate-Setting Procedures. Under the bill the
Postal Service would be directed to define the cost basis for
the different products and services it supplies. These products
and services would broadly be categorized as market-dominant
products and competitive products. Different rate-setting
procedures would apply to these different categories of
products and services.
Market-Dominant Products. Under H.R. 22, market-dominant
products would include: first class mail, special services,
periodicals, standard mail, media mail, library mail, and bound
printed matter.
H.R. 22 would require the PRC to establish, within two
years of enactment, a new system for regulating postage rates
for market-dominant products. The bill would permit the new
system to involve price caps, revenue targets, or other forms
of incentive or cost-of-service regulation. However, the
legislation would mandate that the average rate for any market
dominant product could not rise more than the annual increase
in the Consumer Price Index (CPI), unless a larger increase
would be necessary to ensure the viability of the Postal
Service.
Since 1970, increases in postage rates have largely tracked
the rate of inflation. Over the past 10 years, rates were
increased in 1995, 1999, 2001, and 2002 as a result of rate
cases, and the Postal Service has begun preparation for a rate
increase in 2006. Under the bill, we expect that the Postal
Service would increase rates for market-dominant mail services
more frequently than under current law, but by smaller
increments (as limited by the CPI). Over the long term, CBO
does not expect that enacting H.R. 22 would significantly
change the revenues from market-dominant products that the
Postal Service would be expected to receive under current law.
Competitive Products. Under H.R. 22, competitive products
would include the following: priority mail, express mail,
mailgrams, international mail, and parcel post. Currently, the
competitive products contribute less than 15 percent of total
postal revenues.
H.R. 22 would direct the PRC to prohibit subsidizing
competitive products by market dominant products, ensure that
each competitive product covers its attributable costs, and
ensure that all competitive products collectively make a
reasonable contribution to the institutional costs of the
Postal Service. After these requirements have been implemented,
the USPS could change rates for competitive products without
consulting the PRC, as long as the cost coverage requirements
are met. The Postal Service, however, would have to provide
public notice and justification of changes in rates.
In addition, H.R. 22 would require the Postal Service to
establish a new off-budget fund, the Competitive Products Fund,
solely for revenues and expenditures associated with
competitive products. We expect that it could be difficult to
differentiate postal expenses related only to competitive
products, as USPS uses the same employees and facilities to
handle both market dominant and competitive products.
CBO cannot predict the bill's effect on Postal Service
revenues from competitive products because the agency could set
and change prices with few restrictions, although we would
expect that yearly cash flows under the bill would differ from
those estimated under current law. CBO also cannot predict how
successfully the Postal Service might compete in the open
market. However, the highly competitive nature of the mailing
industry would tend to keep prices and revenues down, while the
labor-intensive cost structure of the USPS would maintain
upward pressure on expenses. Thus, over the long term under
this legislation, CBO expects the Postal Service to attempt to
recover its costs and break even as it did before the enactment
of P.L. 108-18.
Other Off-Budget Effects. H.R. 22 would make many other
changes to the laws governing the Postal Service, the PRC, and
the delivery of mail and other postal products. Some of these
provisions, such as the expansion of USPS contracting authority
for the interstate air transportation of mail, would yield
savings. Other provisions, including the requirement for
additional USPS reports and the establishment of an inspector
general for the PRC, would increase costs. In total, CBO does
not expect the net effects of these provisions to be
significant.
Spending subject to appropriation
H.R. 22 would authorize the appropriation of such sums as
may be necessary, out of the Postal Service Fund, for the PRC
and the Inspector General of the Postal Service. (Currently,
these offices are funded out the Postal Service Fund without
Congressional action.) Beginning in 2006, this provision would
entail about $140 million a year in spending, subject to
appropriation of the necessary amounts. (Spending after 2006
would increase to reflect anticipated inflation.) Enacting the
bill would reduce direct spending by the same amounts. Spending
on these activities would likely still be considered off-
budget, since funds would come from the Postal Service Fund.
In addition, H.R. 22 would require OPM to make actuarial
computations related to the CSRS and PSRHBF trust funds and
would increase OPM' s administrative workload to comply with
the requirements under the bill. CBO estimates that such
activities would cost less than $500,000 annually, assuming the
availability of appropriated funds.
Intergovernmental and private-sector impact: H.R. 22
contains no intergovemmental or private-sector mandates as
defined in UMRA and would impose no costs on state, local, or
tribal governments.
Estimate prepared by: Federal costs: Mark Grabowicz for
USPS costs; Geoffrey Gerhardt for retirement costs; and Julia
Christensen for health care costs; impact on state, local, and
tribal governments: Sarah Puro; impact on the private sector:
Paige Piper/Bach.
Estimate approved by: Peter H. Fontaine, Deputy Assistant
Director for Budget Analysis.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
TITLE 39, UNITED STATES CODE
* * * * * * *
PART I--GENERAL
Chap. Sec.
1. Postal Policy and Definitions.................................. 101
* * * * * * *
5. Postal Regulatory Commission................................... 501
CHAPTER 1--POSTAL POLICY AND DEFINITIONS
* * * * * * *
Sec. 101. Postal policy
(a) * * *
* * * * * * *
(d) As an establishment that provides both market-dominant
and competitive products, the Postal Service shall be subject
to a high degree of transparency, including in its finances and
operations, to ensure fair treatment of customers of the Postal
Service's market-dominant products and companies competing with
the Postal Service's competitive products.
[(d)] (e) Postal rates shall be established to apportion the
costs of all postal operations to all users of the mail on a
fair and equitable basis.
[(e)] (f) In determining all policies for postal services,
the Postal Service shall give the highest consideration to the
requirement for the most expeditious collection,
transportation, and delivery of important letter mail.
[(f)] (g) In selecting modes of transportation, the Postal
Service shall give highest consideration to the prompt and
economical delivery of all mail and shall make a fair and
equitable distribution of mail business to carriers providing
similar modes of transportation services to the Postal Service.
Modern methods of transporting mail by containerization and
programs designed to achieve overnight transportation to the
destination of important letter mail to all parts of the Nation
shall be a primary goal of postal operations.
[(g)] (h) In planning and building new postal facilities, the
Postal Service shall emphasize the need for facilities and
equipment designed to create desirable working conditions for
its officers and employees, a maximum degree of convenience for
efficient postal services, proper access to existing and future
air and surface transportation facilities, and control of costs
to the Postal Service.
Sec. 102. Definitions
As used in this title--
(1) * * *
* * * * * * *
(3) ``Governors'' means the 9 members of the Board of
Governors appointed by the President, by and with the
advice and consent of the Senate, under section 202(a)
of this title; [and]
[(4) ``Inspector General'' means the Inspector
General appointed under section 202(e) of this title;]
(4) ``Inspector General'' means the Inspector General
of the United States Postal Service, appointed under
section 3(a) of the Inspector General Act of 1978;
(5) ``postal service'' means the carriage of letters,
printed matter, or mailable packages, including
acceptance, collection, processing, delivery, or other
functions supportive or ancillary thereto;
(6) ``product'' means a postal service with a
distinct cost or market characteristic for which a rate
or rates are, or may reasonably be, applied;
(7) ``rates'', as used with respect to products,
includes fees for postal services;
(8) ``market-dominant product'' or ``product in the
market-dominant category of mail'' means a product
subject to subchapter I of chapter 36;
(9) ``competitive product'' or ``product in the
competitive category of mail'' means a product subject
to subchapter II of chapter 36;
(10) ``Consumer Price Index'' means the Consumer
Price Index for All Urban Consumers published monthly
by the Bureau of Labor Statistics of the Department of
Labor; and
(11) ``year'', as used in chapter 36 (other than
subchapters I and VI thereof), means a fiscal year.
CHAPTER 2--ORGANIZATION
* * * * * * *
Sec. 202. Board of Governors
(a)(1) The exercise of the power of the Postal Service shall
be directed by a Board of Governors composed of 11 members
appointed in accordance with this section. Nine of the members,
to be known as Governors, shall be appointed by the President,
by and with the advice and consent of the Senate, not more than
5 of whom may be adherents of the same political party. The
Governors shall elect a Chairman from among the members of the
Board. [The Governors shall be chosen to represent the public
interest generally, and shall not be representatives of
specific interests using the Postal Service, and may be removed
only for cause.] The Governors shall represent the public
interest generally, and at least 4 of the Governors shall be
chosen solely on the basis of their demonstrated ability in
managing organizations or corporations (in either the public or
private sector) of substantial size; for purposes of this
sentence, an organization or corporation shall be considered to
be of substantial size if it employs at least 50,000 employees.
The Governors shall not be representatives of specific
interests using the Postal Service, and may be removed only for
cause. Each Governor shall receive a salary of $30,000 a year
plus $300 a day for not more than 42 days of meetings each year
and shall be reimbursed for travel and reasonable expenses
incurred in attending meetings of the Board. Nothing in the
preceding sentence shall be construed to limit the number of
days of meetings each year to 42 days.
(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.
(b)(1) The terms of the 9 Governors shall be 9 years, except
that the terms of the 9 Governors first taking office shall
expire as designated by the President at the time of
appointment, 1 at the end of 1 year, 1 at the end of 2 years, 1
at the end of 3 years, 1 at the end of 4 years, 1 at the end of
5 years, 1 at the end of 6 years, 1 at the end of 7 years, 1 at
the end of 8 years, and 1 at the end of 9 years, following the
appointment of the first of them. Any Governor appointed to
fill a vacancy before the expiration of the term for which his
predecessor was appointed shall serve for the remainder of such
term. A Governor may continue to serve after the expiration of
his term until his successor has qualified, but not to exceed
one year.
(2)(A) Notwithstanding any other provision of this section,
in the case of the office of the Governor the term of which is
the first one scheduled to expire at least 4 months after the
date of the enactment of this paragraph--
(i) such office may not, in the case of any person
commencing service after that expiration date, be
filled by any person other than an individual chosen
from among persons nominated for such office with the
unanimous concurrence of all labor organizations
described in section 206(a)(1); and
(ii) instead of the term that would otherwise apply
under the first sentence of paragraph (1), the term of
any person so appointed to such office shall be 3
years.
(B) Except as provided in subparagraph (A), an appointment
under this paragraph shall be made in conformance with all
provisions of this section that would otherwise apply.
* * * * * * *
[(e)(1) The Governors shall appoint and shall have the power
to remove the Inspector General.
[(2) The Inspector General shall be appointed--
[(A) for a term of 7 years;
[(B) without regard to political affiliation; and
[(C) solely on the basis of integrity and
demonstrated ability in accounting, auditing, financial
analysis, law, management analysis, public
administration, or investigations.
[(3) The Inspector General may at any time be removed upon
the written concurrence of at least 7 Governors, but only for
cause. Nothing in this subsection shall be considered to exempt
the Governors from the requirements of section 8G(e) of the
Inspector General Act of 1978.]
* * * * * * *
CHAPTER 4--GENERAL AUTHORITY
Sec.
401. General powers of the Postal Service.
* * * * * * *
404a. Specific limitations.
* * * * * * *
Sec. 401. General powers of the Postal Service
[The] Subject to the provisions of section 404a, the Postal
Service shall have the following general powers:
(1) * * *
[(2) to adopt, amend, and repeal such rules and
regulations as it deems necessary to accomplish the
objectives of this title;]
(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. 404. Specific powers
(a) [Without] Subject to the provisions of section 404a, but
otherwise without limitation of the generality of its powers,
the Postal Service shall have the following specific powers,
among others:
(1) * * *
* * * * * * *
[(6) to provide, establish, change, or abolish
special nonpostal or similar services;]
[(7)] (6) to investigate postal offenses and civil
matters relating to the Postal Service;
[(8)] (7) to offer and pay rewards for information
and services in connection with violation of the postal
laws, and, unless a different disposal is expressly
prescribed, to pay one-half of all penalties and
forfeitures imposed for violations of law affecting the
Postal Service, its revenues, or property, to the
person informing for the same, and to pay the other
one-half into the Postal Service Fund; and
[(9)] (8) to authorize the issuance of a substitute
check for a lost, stolen, or destroyed check of the
Postal Service.
(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.
[(b)] (d)(1) * * *
* * * * * * *
(5) A determination of the Postal Service to close or
consolidate any post office may be appealed by any person
served by such office to the [Postal Rate] Postal Regulatory
Commission within 30 days after such determination is made
available to such person under paragraph (3). The Commission
shall review such determination on the basis of the record
before the Postal Service in the making of such determination.
The Commission shall make a determination based upon such
review no later than 120 days after receiving any appeal under
this paragraph. The Commission shall set aside any
determination, findings, and conclusions found to be--
(A) * * *
* * * * * * *
(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).
(e) Nothing in this title shall be considered to permit or
require that the Postal Service provide any special nonpostal
or similar services, except that nothing in this subsection
shall prevent the Postal Service from providing any special
nonpostal or similar services provided by the Postal Service as
of January 4, 2005.
Sec. 404a. Specific Limitations
(a) Except as specifically authorized by law, the Postal
Service may not--
(1) establish any rule or regulation (including any
standard) the effect of which is to preclude
competition or establish the terms of competition
unless the Postal Service demonstrates that the
regulation does not create an unfair competitive
advantage for itself or any entity funded (in whole or
in part) by the Postal Service;
(2) compel the disclosure, transfer, or licensing of
intellectual property to any third party (such as
patents, copyrights, trademarks, trade secrets, and
proprietary information); or
(3) obtain information from a person that provides
(or seeks to provide) any product, and then offer any
product or service that uses or is based in whole or in
part on such information, without the consent of the
person providing that information, unless substantially
the same information is obtained (or obtainable) from
an independent source or is otherwise obtained (or
obtainable).
(b) The Postal Regulatory Commission shall prescribe
regulations to carry out this section.
(c) Any party (including an officer of the Commission
representing the interests of the general public) who believes
that the Postal Service has violated this section may bring a
complaint in accordance with section 3662.
* * * * * * *
[Sec. 407. International Postal Arrangements.
[(a)(1) The Secretary of State shall have primary
responsibility for formulation, coordination and oversight of
policy with respect to United States participation in the
Universal Postal Union, including the Universal Postal
Convention and other Acts of the Universal Postal Union,
amendments thereto, and all postal treaties and conventions
concluded within the framework of the Convention and such Acts.
[(2) Subject to subsection (d), the Secretary may, with the
consent of the President, negotiate and conclude treaties,
conventions and amendments referred to in paragraph (1).
[(b)(1) Subject to subsections (a), (c), and (d), the Postal
Service may, with the consent of the President, negotiate and
conclude postal treaties and conventions.
[(2) The Postal Service may, with the consent of the
President, establish rates of postage or other charges on mail
matter conveyed between the United States and other countries.
[(3) The Postal Service shall transmit a copy of each postal
treaty or convention concluded with other governments under the
authority of this subsection to the Secretary of State, who
shall furnish a copy to the Public Printer for publication.
[(c) The Postal Service shall not conclude any treaty or
convention under the authority of this section or any other
arrangement related to the delivery of international postal
services that is inconsistent with any policy developed
pursuant to subsection (a).
[(d) In carrying out their responsibilities under this
section, the Secretary and the Postal Service shall consult
with such federal agencies as the Secretary or the Postal
Service considers appropriate, private providers of
international postal services, users of international postal
services, the general public, and such other persons as the
Secretary or the Postal Service considers appropriate.]
Sec. 407. International postal arrangements
(a) It is the policy of the United States--
(1) to promote and encourage communications between
peoples by efficient operation of international postal
services and other international delivery services for
cultural, social, and economic purposes;
(2) to promote and encourage unrestricted and
undistorted competition in the provision of
international postal services and other international
delivery services, except where provision of such
services by private companies may be prohibited by law
of the United States;
(3) to promote and encourage a clear distinction
between governmental and operational responsibilities
with respect to the provision of international postal
services and other international delivery services by
the Government of the United States and by
intergovernmental organizations of which the United
States is a member; and
(4) to participate in multilateral and bilateral
agreements with other countries to accomplish these
objectives.
(b)(1) The Secretary of State shall be responsible for
formulation, coordination, and oversight of foreign policy
related to international postal services and other
international delivery services, and shall have the power to
conclude treaties, conventions and amendments related to
international postal services and other international delivery
services, except that the Secretary may not conclude any
treaty, convention, or other international agreement (including
those regulating international postal services) if such treaty,
convention, or agreement would, with respect to any competitive
product, grant an undue or unreasonable preference to the
Postal Service, a private provider of international postal or
delivery services, or any other person.
(2) In carrying out the responsibilities specified in
paragraph (1), the Secretary of State shall exercise primary
authority for the conduct of foreign policy with respect to
international postal services and international delivery
services, including the determination of United States
positions and the conduct of United States participation in
negotiations with foreign governments and international bodies.
In exercising this authority, the Secretary--
(A) shall coordinate with other agencies as
appropriate, and in particular, shall give full
consideration to the authority vested by law or
Executive order in the Postal Regulatory Commission,
the Department of Commerce, the Department of
Transportation, and the Office of the United States
Trade Representative in this area;
(B) shall maintain continuing liaison with other
executive branch agencies concerned with postal and
delivery services;
(C) shall maintain continuing liaison with the
Committee on Government Reform of the House of
Representatives and the Committee on Governmental
Affairs of the Senate;
(D) shall maintain appropriate liaison with both
representatives of the Postal Service and
representatives of users and private providers of
international postal services and other international
delivery services to keep informed of their interests
and problems, and to provide such assistance as may be
needed to ensure that matters of concern are promptly
considered by the Department of State or (if
applicable, and to the extent practicable) other
executive branch agencies; and
(E) shall assist in arranging meetings of such public
sector advisory groups as may be established to advise
the Department of State and other executive branch
agencies in connection with international postal
services and international delivery services.
(3) The Secretary of State shall establish an advisory
committee (within the meaning of the Federal Advisory Committee
Act) to perform such functions as the Secretary considers
appropriate in connection with carrying out subparagraphs (A)
through (D) of paragraph (2).
(c)(1) Before concluding any treaty, convention, or amendment
that establishes a rate or classification for a product subject
to subchapter I of chapter 36, the Secretary of State shall
request the Postal Regulatory Commission to submit a decision
on whether such rate or classification is consistent with the
standards and criteria established by the Commission under
section 3622.
(2) The Secretary shall ensure that each treaty, convention,
or amendment concluded under subsection (b) is consistent with
a decision of the Commission adopted under paragraph (1),
except if, or to the extent, the Secretary determines, by
written order, that considerations of foreign policy or
national security require modification of the Commission's
decision.
(d) Nothing in this section shall be considered to prevent
the Postal Service from entering into such commercial or
operational contracts related to providing international postal
services and other international delivery services as it deems
appropriate, except that--
(1) any such contract made with an agency of a
foreign government (whether under authority of this
subsection or otherwise) shall be solely contractual in
nature and may not purport to be international law; and
(2) a copy of each such contract between the Postal
Service and an agency of a foreign government shall be
transmitted to the Secretary of State and the Postal
Regulatory Commission not later than the effective date
of such contract.
(e)(1) With respect to shipments of international mail that
are competitive products within the meaning of section 3631
that are exported or imported by the Postal Service, the Bureau
of Customs and Border Protection of the Department of Homeland
Security and other appropriate Federal agencies shall apply the
customs laws of the United States and all other laws relating
to the importation or exportation of such shipments in the same
manner to both shipments by the Postal Service and similar
shipments by private companies.
(2) For purposes of this subsection, the term ``private
company'' means a private company substantially owned or
controlled by persons who are citizens of the United States.
(3) In exercising the authority pursuant to subsection (b) to
conclude new treaties, conventions and amendments related to
international postal services and to renegotiate such treaties,
conventions and amendments, the Secretary of State shall, to
the maximum extent practicable, take such measures as are
within the Secretary's control to encourage the governments of
other countries to make available to the Postal Service and
private companies a range of nondiscriminatory customs
procedures that will fully meet the needs of all types of
American shippers. The Secretary of State shall consult with
the United States Trade Representative and the Commissioner of
Customs, Department of Homeland Security in carrying out this
paragraph.
(4) The provisions of this subsection shall take effect 6
months after the date of the enactment of this subsection or
such earlier date as the Bureau of Customs and Border
Protection of the Department of Homeland Security may determine
in writing.
* * * * * * *
Sec. 409. Suits by and against the Postal Service
(a) [Except as provided in section 3628 of this title,]
Except as otherwise provided in this title, the United States
district courts shall have original but not exclusive
jurisdiction over all actions brought by or against the Postal
Service. Any action brought in a State court to which the
Postal Service is a party may be removed to the appropriate
United States district court under the provisions of chapter 89
of title 28.
* * * * * * *
[(d) The Department of Justice shall furnish, under section
411 of this title, the Postal Service such legal representation
as it may require, but with the prior consent of the Attorney
General the Postal Service may 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.
[(e) 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.]
(d)(1) For purposes of the provisions of law cited in
paragraphs (2)(A) and (2)(B), respectively, the Postal
Service--
(A) shall be considered to be a ``person'', as used
in the provisions of law involved; and
(B) shall not be immune under any other doctrine of
sovereign immunity from suit in Federal court by any
person for any violation of any of those provisions of
law by any officer or employee of the Postal Service.
(2) This subsection applies with respect to--
(A) the Act of July 5, 1946 (commonly referred to as
the ``Trademark Act of 1946'' (15 U.S.C. 1051 and
following)); and
(B) the provisions of section 5 of the Federal Trade
Commission Act to the extent that such section 5
applies to unfair or deceptive acts or practices.
(e)(1) To the extent that the Postal Service, or other
Federal agency acting on behalf of or in concert with the
Postal Service, engages in conduct with respect to any
competitive product, the Postal Service or other Federal agency
(as the case may be)--
(A) shall not be immune under any doctrine of
sovereign immunity from suit in Federal court by any
person for any violation of Federal law by such agency
or any officer or employee thereof; and
(B) shall be considered to be a person (as defined in
subsection (a) of the first section of the Clayton Act)
for purposes of--
(i) the antitrust laws (as defined in such
subsection); and
(ii) section 5 of the Federal Trade
Commission Act to the extent that such section
5 applies to unfair methods of competition.
(2) No damages, interest on damages, costs or attorney's fees
may be recovered, and no criminal liability may be imposed,
under the antitrust laws (as so defined) from any officer or
employee of the Postal Service, or other Federal agency acting
on behalf of or in concert with the Postal Service, acting in
an official capacity.
(3) This subsection shall not apply with respect to conduct
occurring before the date of the enactment of this subsection.
(f)(1) Each building constructed or altered by the Postal
Service shall be constructed or altered, to the maximum extent
feasible as determined by the Postal Service, in compliance
with one of the nationally recognized model building codes and
with other applicable nationally recognized codes.
(2) Each building constructed or altered by the Postal
Service shall be constructed or altered only after
consideration of all requirements (other than procedural
requirements) of zoning laws, land use laws, and applicable
environmental laws of a State or subdivision of a State which
would apply to the building if it were not a building
constructed or altered by an establishment of the Government of
the United States.
(3) For purposes of meeting the requirements of paragraphs
(1) and (2) with respect to a building, the Postal Service
shall--
(A) in preparing plans for the building, consult with
appropriate officials of the State or political
subdivision, or both, in which the building will be
located;
(B) upon request, submit such plans in a timely
manner to such officials for review by such officials
for a reasonable period of time not exceeding 30 days;
and
(C) permit inspection by such officials during
construction or alteration of the building, in
accordance with the customary schedule of inspections
for construction or alteration of buildings in the
locality, if such officials provide to the Postal
Service--
(i) a copy of such schedule before
construction of the building is begun; and
(ii) reasonable notice of their intention to
conduct any inspection before conducting such
inspection.
Nothing in this subsection shall impose an obligation on any
State or political subdivision to take any action under the
preceding sentence, nor shall anything in this subsection
require the Postal Service or any of its contractors to pay for
any action taken by a State or political subdivision to carry
out this subsection (including reviewing plans, carrying out
on-site inspections, issuing building permits, and making
recommendations).
(4) Appropriate officials of a State or a political
subdivision of a State may make recommendations to the Postal
Service concerning measures necessary to meet the requirements
of paragraphs (1) and (2). Such officials may also make
recommendations to the Postal Service concerning measures which
should be taken in the construction or alteration of the
building to take into account local conditions. The Postal
Service shall give due consideration to any such
recommendations.
(5) In addition to consulting with local and State officials
under paragraph (3), the Postal Service shall establish
procedures for soliciting, assessing, and incorporating local
community input on real property and land use decisions.
(6) For purposes of this subsection, the term ``State''
includes the District of Columbia, the Commonwealth of Puerto
Rico, and a territory or possession of the United States.
(g)(1) Notwithstanding any other provision of law, legal
representation may not be furnished by the Department of
Justice to the Postal Service in any action, suit, or
proceeding arising, in whole or in part, under any of the
following:
(A) Subsection (d) or (e) of this section.
(B) Subsection (f) or (g) of section 504 (relating to
administrative subpoenas by the Postal Regulatory
Commission).
(C) Section 3663 (relating to appellate review).
The Postal Service may, by contract or otherwise, employ
attorneys to obtain any legal representation that it is
precluded from obtaining from the Department of Justice under
this paragraph.
(2) In any circumstance not covered by paragraph (1), the
Department of Justice shall, under section 411, furnish the
Postal Service such legal representation as it may require,
except that, with the prior consent of the Attorney General,
the Postal Service may, in any such circumstance, employ
attorneys by contract or otherwise to conduct litigation
brought by or against the Postal Service or its officers or
employees in matters affecting the Postal Service.
(3)(A) In any action, suit, or proceeding in a court of the
United States arising in whole or in part under any of the
provisions of law referred to in subparagraph (B) or (C) of
paragraph (1), and to which the Commission is not otherwise a
party, the Commission shall be permitted to appear as a party
on its own motion and as of right.
(B) The Department of Justice shall, under such terms and
conditions as the Commission and the Attorney General shall
consider appropriate, furnish the Commission such legal
representation as it may require in connection with any such
action, suit, or proceeding, except that, with the prior
consent of the Attorney General, the Commission may employ
attorneys by contract or otherwise for that purpose.
(h) A judgment against the Government of the United States
arising out of activities of the Postal Service shall be paid
by the Postal Service out of any funds available to the Postal
Service, subject to the restriction specified in section
2011(g).
* * * * * * *
Sec. 410. Application of other laws
(a) * * *
(b) The following provisions shall apply to the Postal
Service:
(1) * * *
* * * * * * *
(5) the following provisions of title 41:
(A) sections 35-45 (known as the Walsh-Healey
Act, relating to wages and hours); [and]
(B) chapter 6 (the Service Contract Act of
1965);
(C) the Anti-Kickback Act of 1986 (41 U.S.C.
51 and following), other than subsections (a)
and (b) of 7 and section 8 of that Act; and
(D) section 315 of the Federal Property and
Administrative Services Act of 1949 (41 U.S.C.
265) (relating to protecting contractor
employees from reprisal for disclosure of
certain information);
* * * * * * *
(e) The Postal Service shall develop and issue purchasing
regulations that prohibit contract costs not allowable under
section 5.2.5 of the United States Postal Service Procurement
Manual (Publication 41), as in effect on July 12, 1995.
* * * * * * *
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 responsibilities accorded
Commissioners under the Postal Accountability and Enhancement
Act. Not more than 3 of the Commissioners may be adherents of
the same political party.
(b) A Commissioner may continue to serve after the expiration
of his term until his successor has qualified, except that a
Commissioner may not so continue to serve for more than 1 year
after the date upon which his term otherwise would expire under
subsection (e).
(c) One of the Commissioners shall be designated as Chairman
by, and shall serve in the position of Chairman at the pleasure
of, the President.
(d) The Commissioners shall by majority vote designate a Vice
Chairman of the Commission. The Vice Chairman shall act as
Chairman of the Commission in the absence of the Chairman.
(e) The Commissioners shall serve for terms of 6 years.
[Sec. 3603.] Sec. 503. Rules; regulations; procedures
The [Postal Rate] Postal Regulatory Commission shall
promulgate rules and regulations and establish procedures,
subject to chapters 5 and 7 of title 5, and take any other
action they deem necessary and proper to carry out their
functions and obligations to the Government of the United
States and the people as prescribed under this [chapter] title.
Such rules, regulations, procedures, and actions shall not be
subject to any change or supervision by the Postal Service.
Such rules shall include procedures which balance, inter alia,
the need for protecting due process rights and ensuring
expeditious decision-making.
[Sec. 3604.] Sec. 504. Administration
(a) The Chairman of the [Postal Rate] Postal Regulatory
Commission shall be the principal executive officer of the
Commission. The Chairman shall exercise or direct the exercise
of all the executive and administrative functions of the
Commission, including functions of the Commission with respect
to (1) the appointment of personnel employed under the
Commission, except that the appointment of heads of major
administrative units under the Commission shall require the
approval of a majority of the members of the Commission, (2)
the supervision of the personnel employed under the Commission
and the distribution of business among them and among the
Commissioners, and (3) the use and expenditure of funds.
* * * * * * *
[(d)(1) The Commission shall periodically prepare and submit
to the Postal Service a budget of the Commission's expenses,
including, but not limited to, expenses for facilities,
supplies, compensation, and employee benefits. The budget shall
be considered approved--
[(A) as submitted if the Governors fail to act in
accordance with subparagraph (B) of this paragraph; or
[(B) as adjusted if the Governors holding office, by
unanimous written decision, adjust the total amount of
money requested in the budget.
Subparagraph (B) shall not be construed to authorize the
Governors to adjust any item included within the budget.
[(2) Expenses incurred under any budget approved under
paragraph (1) of this subsection shall be paid out of the
Postal Service fund established under section 2003 of this
title.]
(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.
* * * * * * *
(f)(1) Any Commissioner of the Postal Regulatory Commission,
any administrative law judge appointed by the Commission under
section 3105 of title 5, and any employee of the Commission
designated by the Commission may administer oaths, examine
witnesses, take depositions, and receive evidence.
(2) The Chairman of the Commission, any Commissioner
designated by the Chairman, and any administrative law judge
appointed by the Commission under section 3105 of title 5 may,
with respect to any proceeding conducted by the Commission
under this title--
(A) issue subpoenas requiring the attendance and
presentation of testimony by, or the production of
documentary or other evidence in the possession of, any
covered person; and
(B) order the taking of depositions and responses to
written interrogatories by a covered person.
The written concurrence of a majority of the Commissioners then
holding office shall, with respect to each subpoena under
subparagraph (A), be required in advance of its issuance.
(3) In the case of contumacy or failure to obey a subpoena
issued under this subsection, upon application by the
Commission, the district court of the United States for the
district in which the person to whom the subpoena is addressed
resides or is served may issue an order requiring such person
to appear at any designated place to testify or produce
documentary or other evidence. Any failure to obey the order of
the court may be punished by the court as a contempt thereof.
(4) For purposes of this subsection, the term ``covered
person'' means an officer, employee, agent, or contractor of
the Postal Service.
(g)(1) If the Postal Service determines that any document or
other matter it provides to the Postal Regulatory Commission
pursuant to a subpoena issued under subsection (f), or
otherwise at the request of the Commission in connection with
any proceeding or other purpose under this title, contains
information which is described in section 410(c) of this title,
or exempt from public disclosure under section 552(b) of title
5, the Postal Service shall, at the time of providing such
matter to the Commission, notify the Commission, in writing, of
its determination (and the reasons therefor).
(2) 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 prevent the Commission from
publicly disclosing relevant information in furtherance of its
duties under this title if 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, as required by section
101(d) of this title for financial transparency of a government
establishment.
(B) Paragraph (2) shall not prevent information from being
furnished under any process of discovery established under this
title in connection with a proceeding under this title. The
Commission shall, by regulations based on rule 26(c) of the
Federal Rules of Civil Procedure, establish procedures for
ensuring appropriate confidentiality for any information
furnished under the preceding sentence.
(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.
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.
CHAPTER 6--PRIVATE CARRIAGE OF LETTERS
* * * * * * *
Sec. 601. Letters carried out of the mail
(a) * * *
[(b) The Postal Service may suspend the operation of any part
of this section upon any mail route where the public interest
requires the suspension.]
(b) A letter may also be carried out of the mails when--
(1) the amount paid for the private carriage of the
letter is at least the amount equal to 6 times the rate
then currently charged for the 1st ounce of a single-
piece first class letter;
(2) the letter weighs at least 12\1/2\ ounces; or
(3) such carriage is within the scope of services
described by regulations of the Postal Service
(including, in particular, sections 310.1 and 320.2-
320.8 of title 39 of the Code of Federal Regulations,
as in effect on July 1, 2004) that purport to permit
private carriage by suspension of the operation of this
section (as then in effect).
(c) Any regulations necessary to carry out this section shall
be promulgated by the Postal Regulatory Commission.
* * * * * * *
PART II--PERSONNEL
* * * * * * *
CHAPTER 10--EMPLOYMENT WITHIN THE POSTAL SERVICE
* * * * * * *
Sec. 1001. Appointment and status
(a) * * *
* * * * * * *
(d) Notwithstanding section 5533, 5535, or 5536 of title 5,
or any other provision of law, any officer or employee of the
Government of the United States is eligible to serve and
receive pay concurrently as an officer or employee of the
Postal Service (other than as a member of the Board or of the
[Postal Rate] Postal Regulatory Commission) and as an officer
or employee of any other department, agency, or establishment
of the Government of the United States.
* * * * * * *
Sec. 1002. Political recommendations
(a) Except as provided in subsection (e) of this section,
each appointment, promotion, assignment, transfer, or
designation, interim or otherwise, of an officer or employee in
the Postal Service (except a Governor or member of the [Postal
Rate] Postal Regulatory Commission) shall be made without
regard to any recommendation or statement, oral or written,
with respect to any person who requests or is under
consideration for such appointment, promotion, assignment,
transfer, or designation, made by--
(1) * * *
* * * * * * *
Sec. 1003. Employment policy
(a) Except as provided under [chapters 2 and 12 of this
title, section 8G of the Inspector General Act of 1978, or
other provision of law,] chapter 2 or 12 of this title,
subsection (b) or (c) of this section, or any other provision
of law, the Postal Service shall classify and fix the
compensation and benefits of all officers and employees in the
Postal Service. It shall be the policy of the Postal Service to
maintain compensation and benefits for all officers and
employees on a standard of comparability to the compensation
and benefits paid for comparable levels of work in the private
sector of the economy. No officer or employee shall be paid
compensation at a rate in excess of the rate for level I of the
Executive Schedule under section 5312 of title 5.
(b) Compensation and benefits for all officers and
employees serving in or under the Office of Inspector General
of the United States Postal Service shall be maintained on a
standard of comparability to the compensation and benefits paid
for comparable levels of work in the [respective] other Offices
of Inspector General of the various establishments named in
section 11(2) of the Inspector General Act of 1978.
(c) Compensation and benefits for all Postal Inspectors
shall be maintained on a standard of comparability to the
compensation and benefits paid for comparable levels of work in
the executive branch of the Government outside of the Postal
Service. As used in this subsection, the term ``Postal
Inspector'' [included] includes any agent to whom any
investigative powers are granted under section 3061 of title
18.
* * * * * * *
Sec. 1005. Applicability of laws relating to Federal employees
(a) * * *
* * * * * * *
(d)(1) * * *
(2) The provisions of [subsection (g) of section 5532,]
subsections (i) and (l)(2) of section 8344[,] and subsections
(f) and (i)(2) of section 8468 of title 5 shall apply with
respect to the Postal Service. For purposes of so applying such
provisions--
(A) * * *
* * * * * * *
CHAPTER 12--EMPLOYEE-MANAGEMENT AGREEMENTS
* * * * * * *
Sec. 1207. Labor disputes
(a) * * *
(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 [direct the
establishment of a factfinding panel consisting of 3 persons.
For this purpose, he shall submit to the parties a list of not
less than 15 names, from which list each party, within 10 days,
shall select 1 person. The 2 so selected shall then choose from
the list a third person who shall serve as chairman of the
factfinding panel. If either of the parties fails to select a
person or if the 2 members are unable to agree on the third
person within 3 days, the selection shall be made by the
Director. The factfinding panel shall issue after due
investigation a report of its findings, with or without
recommendations, to the parties no later than 45 days from the
date the list of names is submitted.], 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 [90] 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 therefor, an
arbitration board shall be established consisting of 3 members,
[not members of the factfinding panel,] 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 [by the Director. If the parties do not agree on
the framing of the issues to be submitted, the factfinding
panel shall frame the issues and submit them to the arbitration
board.] from a list of names provided by the Director. This
list shall consist of not less than 9 names of arbitrators of
nationwide reputation and professional stature, who are also
members of the National Academy of Arbitrators, and whom the
Director has determined are available and willing to serve.
* * * * * * *
(3) Costs of the arbitration board and [factfinding panel]
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 agreement
within 90 days of the commencement of collective bargaining, a
[factfinding panel will be established] mediator shall be
appointed in accordance with the terms of 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 of 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.
* * * * * * *
PART III--MODERNIZATION AND FISCAL ADMINISTRATION
Chap. Sec.
20. Finance....................................................... 2001
* * * * * * *
[28. Strategic planning and performance management................ 2801]
2801rategic Planning and Performance Management.................
* * * * * * *
CHAPTER 20--FINANCE
Sec.
2001. Definitions.
* * * * * * *
2011. Provisions relating to competitive products.
Sec. 2001. Definitions
As used in this chapter--
(1) ``Fund'' means the Postal Service Fund
established by section 2003 of this chapter; [and]
(2) ``Competitive Products Fund'' means the Postal
Service Competitive Products Fund established by
section 2011; and
[(2)] (3) ``obligations'', when referring to debt
instruments issued by the Postal Service, means notes,
bonds, debentures, mortgages, and any other evidence of
indebtedness.
Sec. 2002. Capital of the Postal Service
(a) * * *
(b) The capital of the Postal Service at any time shall
consist of its assets, including the balance in the [Fund,]
Fund and the balance in the Competitive Products Fund, less its
liabilities.
* * * * * * *
Sec. 2003. The Postal Service Fund
(a) There is established in the Treasury of the United States
a revolving fund to be called the Postal Service Fund which
shall be available to the Postal Service without fiscal-year
limitation to carry out the purposes, functions, and powers
authorized by this [title.] title (other than any of the
purposes, functions, or powers for which the Competitive
Products Fund is available).
(b) [There] Except as otherwise provided in section 2011,
there shall be deposited in the Fund, subject to withdrawal by
check by the Postal Service--
(1) * * *
* * * * * * *
(7) amounts (including proceeds from the sale of
forfeited items) from any civil forfeiture conducted by
the Postal Service; [and]
(8) any transfers from the Secretary of the Treasury
from the Department of the Treasury Forfeiture Fund
which shall be available to the Postmaster General only
for Federal law enforcement related purposes[.]; and
(9) any amounts collected under section 3018.
[(c) If] (c)(1) Except as provided in paragraph (2), if the
Postal Service determines that the moneys of the Fund are in
excess of current needs, it may request the investment of such
amounts as it deems 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 it deems
appropriate.
(2)(A) Nothing in this section shall be considered to
authorize any investment in any obligations or securities of a
commercial entity.
(B) For purposes of this paragraph, the term ``commercial
entity'' means any corporation, company, association,
partnership, joint stock company, firm, society, or other
similar entity, as further defined under regulations prescribed
by the Postal Regulatory Commission.
* * * * * * *
(e)(1) [The Fund shall be available for the payment of all
expenses incurred by the Postal Service in carrying out its
functions as provided by law and, subject to the provisions of
section 3604 of this title, all of the expenses of the Postal
Rate Commission.] The Fund shall be available for the payment
of (A) all expenses incurred by the Postal Service in carrying
out its functions as provided by law, subject to the same
limitation as set forth in the parenthetical matter under
subsection (a); (B) all expenses of the Postal Regulatory
Commission, subject to the availability of amounts appropriated
pursuant to section 504(d); and (C) all expenses of the Office
of Inspector General, subject to the availability of amounts
appropriated pursuant to section 8L(e) of the Inspector General
Act of 1978. The Postmaster General shall transfer from the
Fund to the Secretary of the Treasury for deposit in the
Department of the Treasury Forfeiture Fund amounts appropriate
to reflect the degree of participation of Department of the
Treasury law enforcement organizations (described in section
9703(p) of title 31) in the law enforcement effort resulting in
the forfeiture pursuant to laws enforced or administered by the
Postal Service. Neither the Fund nor any of the funds credited
to it shall be subject to apportionment under the provisions of
subchapter II of chapter 15 of title 31.
* * * * * * *
Sec. 2005. Obligations
(a)(1) The Postal Service is authorized to borrow money and
to issue and sell such obligations as it determines necessary
to carry out the purposes of this [title.] title, other than
any of the purposes for which the corresponding authority is
available to the Postal Service under section 2011. The
aggregate amount of [any such obligations] obligations issued
by the Postal Service which may be outstanding at any one time
shall not exceed the maximum amount then allowable under
paragraph (2) of this subsection. [In any one fiscal year the
net increase in the amount of obligations outstanding issued
for the purpose of capital improvements shall not exceed
$2,000,000,000, 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
$1,000,000,000.] 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.
* * * * * * *
(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.
(b)(1) The Postal Service may pledge the assets of the Postal
Service and pledge and use its revenues and receipts for the
payment of the principal of or interest on [such obligations,]
obligations issued by the Postal Service under this section,
for the purchase or redemption thereof, and for other purposes
incidental thereto, including creation of reserve, sinking, and
other funds which may be similarly pledged and used, to such
extent and in such manner as it deems necessary or desirable.
The Postal Service is authorized to enter into binding
covenants with the holders of such obligations, and with the
trustee, if any, under any agreement entered into in connection
with the issuance thereof with respect to the establishment of
reserve, sinking, and other funds, application and use of
revenues and receipts of the Postal Service, stipulations
concerning the subsequent issuance of obligations or the
execution of leases or lease purchases relating to properties
of the Postal Service and such other matters as the Postal
Service deems necessary or desirable to enhance the
marketability of such obligations.
(2) Notwithstanding any other provision of this section--
(A) the authority to pledge assets of the Postal
Service under this subsection shall be available only
to the extent that such assets are not related to the
provision of competitive products (as determined under
section 2011(h) or, for purposes of any period before
accounting practices and principles under section
2011(h) have been established and applied, the best
information available from the Postal Service,
including the audited statements required by section
2008(e)); and
(B) any authority under this subsection relating to
the pledging or other use of revenues or receipts of
the Postal Service shall be available only to the
extent that they are not revenues or receipts of the
Competitive Products Fund.
* * * * * * *
Sec. 2006. Relationship between the Treasury and the Postal Service
(a) At least 15 days before selling any issue of obligations
under section 2005 or section 2011 of this title, the Postal
Service shall advise the Secretary of the Treasury of the
amount, proposed date of sale, maturities, terms and
conditions, and expected maximum rates of interest of the
proposed issue in appropriate detail and shall consult with him
or his designee thereon. The Secretary may elect to purchase
such obligations under such terms, including rates of interest,
as he and the Postal Service may agree, but at a rate of yield
no less than the prevailing yield on outstanding marketable
Treasury securities of comparable maturity, as determined by
the Secretary. If the Secretary does not purchase such
obligations, the Postal Service may proceed to issue and sell
them to a party or parties other than the Secretary upon notice
to the Secretary and upon consultation as to the date of
issuance, maximum rates of interest, and other terms and
conditions.
(b) Subject to the conditions of subsection (a) of this
section, the Postal Service may require the Secretary of the
Treasury to purchase obligations of the Postal Service under
section 2005 in such amounts as will not cause the holding by
the Secretary of the Treasury resulting from such required
purchases to exceed $2,000,000,000 at any one time. This
subsection shall not be construed as limiting the authority of
the Secretary to purchase obligations of the Postal Service
under section 2005 in excess of such amount.
(c) Notwithstanding section 2005(d)(5) or section
2011(e)(4)(E) of this title, obligations issued by the Postal
Service under section 2005 shall be obligations of the
Government of the United States, and payment of principal and
interest thereon shall be fully guaranteed by the Government of
the United States, such guaranty being expressed on the face
thereof, if and to the extent that--
(1) * * *
* * * * * * *
Sec. 2009. Annual budget
The Postal Service shall cause to be prepared annually a
budget program which shall be submitted to the Office of
Management and Budget, under such rules and regulations as the
President may establish as to the date of submission, the form
and content, the classifications of data, and the manner in
which such budget program shall be prepared and presented. The
budget program shall be a business-type budget, or plan of
operations, with due allowance given to the need for
flexibility, including provision for emergencies and
contingencies, in order that the Postal Service may properly
carry out its activities as authorized by law. The budget
program shall contain estimates of the financial condition and
operations of the Postal Service for the current and ensuing
fiscal years and the actual condition and results of operation
for the last completed fiscal year. Such budget program shall
include a statement of financial condition, a statement of
income and expense, an analysis of surplus or deficit, a
statement of sources and application of funds, and such other
supplementary statements and information as are necessary or
desirable to make known the financial condition and operations
of the Postal Service. Such statements shall include estimates
of operations by major types of activities, together with
estimates of administrative expenses and estimates of
borrowings. [The budget program shall also include separate
statements of the amounts which the Postal Service requests to
be appropriated under subsections (b) and (c) of section 2401
of this title.] 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 8L(e) of the Inspector General Act
of 1978, and (3) the Postal Regulatory Commission requests to
be appropriated, out of the Postal Service Fund, under section
504(d) of this title. The President shall include these
amounts, with his recommendations but without revision, in the
budget transmitted to Congress under section 1105 of title 31.
* * * * * * *
Sec. 2011. Provisions relating to competitive products
(a) There is established in the Treasury of the United States
a revolving fund, to be called the Postal Service Competitive
Products Fund, which shall be available to the Postal Service
without fiscal year limitation for the payment of--
(1) costs attributable to competitive products; and
(2) all other costs incurred by the Postal Service,
to the extent allocable to competitive products.
For purposes of this subsection, the term ``costs
attributable'' has the meaning given such term by section 3631.
(b) There shall be deposited in the Competitive Products
Fund, subject to withdrawal by the Postal Service--
(1) revenues from competitive products;
(2) amounts received from obligations issued by the
Postal Service under subsection (e);
(3) interest and dividends earned on investments of
the Competitive Products Fund; and
(4) any other receipts of the Postal Service
(including from the sale of assets), to the extent
allocable to competitive products.
(c) If the Postal Service determines that the moneys of the
Competitive Products Fund are in excess of current needs, it
may request the investment of such amounts as it deems
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 it deems 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) Subject to the limitations specified in section
2005(a), the Postal Service is authorized to borrow money and
to issue and sell such obligations as it determines necessary
to provide for competitive products and deposit such amounts in
the Competitive Products Fund. Any such borrowings by the
Postal Service shall be supported and serviced by the revenues
and receipts from competitive products and the assets related
to the provision of competitive products (as determined under
subsection (h) or, for purposes of any period before accounting
practices and principles under subsection (h) have been
established and applied, the best information available from
the Postal Service, including the audited statements required
by section 2008(e), but in either case subject to paragraph
(5)).
(2) The Postal Service may enter into binding covenants with
the holders of such obligations, and with the trustee, if any,
under any agreement entered into in connection with the
issuance thereof with respect to--
(A) the establishment of reserve, sinking, and other
funds;
(B) application and use of revenues and receipts of
the Competitive Products Fund;
(C) stipulations concerning the subsequent issuance
of obligations or the execution of leases or lease
purchases relating to properties of the Postal Service;
and
(D) such other matters as the Postal Service
considers necessary or desirable to enhance the
marketability of such obligations.
(3) The obligations issued by the Postal Service under this
section--
(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 they 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) of this
title, 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; 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 against the Postal Service or the Government
of the United States (or settlement of a claim) shall, to the
extent that it arises out of activities of the Postal Service
in the provision of competitive products, be paid out of the
Competitive Products Fund.
(h)(1) The Secretary of the Treasury, in consultation with
the Postal Service and an independent, certified public
accounting firm and such other advisors as the Secretary
considers appropriate, shall develop recommendations
regarding--
(A) the accounting practices and principles that
should be followed by the Postal Service with the
objectives of (i) identifying and valuing the assets
and liabilities of the Postal Service associated with
providing, and the capital and operating costs incurred
by the Postal Service in providing, competitive
products, and (ii) subject to subsection (e)(5),
preventing the subsidization of such products by
market-dominant products; and
(B) the substantive and procedural rules that should
be followed in determining the Postal Service's assumed
Federal income tax on competitive products income for
any year (within the meaning of section 3634).
Such recommendations shall be submitted to the Postal
Regulatory Commission no earlier than 6 months, and no later
than 12 months, after the effective date of this section.
(2)(A) Upon receiving the recommendations of the Secretary of
the Treasury under paragraph (1), the Commission shall give
interested parties, including the Postal Service, users of the
mails, and an officer of the Commission who shall be required
to represent the interests of the general public, an
opportunity to present their views on those recommendations
through submission of written data, views, or arguments, with
or without opportunity for oral presentation, or in such other
manner as the Commission considers appropriate.
(B) After due consideration of the views and other
information received under subparagraph (A), the Commission
shall by rule--
(i) provide for the establishment and application of
the accounting practices and principles which shall be
followed by the Postal Service;
(ii) provide for the establishment and application of
the substantive and procedural rules described in
paragraph (1)(B); and
(iii) provide for the submission by the Postal
Service to the Postal Regulatory Commission of annual
and other periodic reports setting forth such
information as the Commission may require.
Final rules under this subparagraph shall be issued not later
than 12 months after the date on which the Secretary of the
Treasury makes his submission to the Commission under paragraph
(1) (or by such later date as the Commission and the Postal
Service may agree to). The Commission is authorized to
promulgate regulations revising such rules.
(C) Reports described in subparagraph (B)(iii) shall be
submitted at such time and in such form, and shall include such
information, as the Commission by rule requires. The Commission
may, on its own motion or on request of an interested party,
initiate proceedings (to be conducted in accordance with such
rules as the Commission shall prescribe) to improve the
quality, accuracy, or completeness of Postal Service data under
such subparagraph whenever it shall appear that--
(i) the quality of the information furnished in those
reports has become significantly inaccurate or can be
significantly improved; or
(ii) those revisions are, in the judgment of the
Commission, otherwise necessitated by the public
interest.
(D) A copy of each report described in subparagraph (B)(iii)
shall also be transmitted by the Postal Service to the
Secretary of the Treasury and the Inspector General of the
United States Postal Service.
(i) The Postal Service shall render an annual report to the
Secretary of the Treasury concerning the operation of the
Competitive Products Fund, in which it shall address such
matters as risk limitations, reserve balances, allocation or
distribution of moneys, liquidity requirements, and measures to
safeguard against losses. A copy of its then most recent report
under this subsection shall be included with any other
submission that it is required to make to the Postal Regulatory
Commission under section 3652(g).
* * * * * * *
CHAPTER 24--APPROPRIATIONS AND ANNUAL REPORT
* * * * * * *
Sec. 2401. Appropriations
(a) * * *
* * * * * * *
(d) As reimbursement to the Postal Service for losses which
it incurred as a result of insufficient amounts appropriated
under section 2401(c) for fiscal years 1991 through 1993, and
to compensate for the additional revenues it is estimated the
Postal Service would have received under the provisions of
section 3626(a) (as last in effect before enactment of the
Postal Accountability and Enhancement Act), for the period
beginning on October 1, 1993, and ending on September 30, 1998,
if the fraction specified in subclause (VI) of section
3626(a)(3)(B)(ii) (as last in effect before enactment of the
Postal Accountability and Enhancement Act) were applied with
respect to such period (instead of the respective fractions
specified in subclauses (I) through (V) thereof), there are
authorized to be appropriated to the Postal Service $29,000,000
for each of fiscal years 1994 through 2035.
(e) The Postal Service shall present to the Committee on
Governmental Affairs of the Senate and the [Committee on Post
Office and Civil Service] Committee on Government Reform of the
House of Representatives and the Committees on Appropriations
of the Senate and the House of Representatives, at the same
time it submits its annual budget under section 2009 of this
title, sufficient copies of the budget of the Postal Service
for the fiscal year for which funds are requested to be
appropriated, and a comprehensive statement relating to the
following matters:
(1) * * *
* * * * * * *
[Not later than March 15 of each year,] Each year, the Postal
Service shall appear before the Committee on Governmental
Affairs of the Senate and the [Committee on Post Office and
Civil Service] Committee on Government Reform of the House of
Representatives to submit information which any such committee
considers necessary to determine the amount of funds to be
appropriated for the operation of the Postal Service, and to
present testimony and respond to questions with respect to such
budget and statement. Each such committee shall take such
action as it considers appropriate and shall advise the Postal
Service of such action.
* * * * * * *
CHAPTER 28--STRATEGIC PLANNING AND PERFORMANCE MANAGEMENT
* * * * * * *
Sec. 2803. Performance plans
(a) The Postal Service shall prepare an annual performance
plan covering each program activity set forth in the Postal
Service budget, which shall be included in the comprehensive
statement presented under section [2401(g)] 2401(e) of this
title. Such plan shall--
(1) * * *
* * * * * * *
Sec. 2804. Program performance reports
(a) The Postal Service shall prepare a report on program
performance for each fiscal year, which shall be included in
the annual comprehensive statement presented under section
[2401(g)] 2401(e) of this title.
* * * * * * *
PART IV--MAIL MATTER
* * * * * * *
CHAPTER 30--NONMAILABLE MATTER
Sec.
3001. Nonmailable matter.
* * * * * * *
3018. Hazardous material.
Sec. 3001. Nonmailable matter
(a) * * *
* * * * * * *
(n)(1) Except as otherwise authorized by law or regulations
of the Postal Service, hazardous material is nonmailable.
(2) In this subsection, the term ``hazardous material'' means
a substance or material designated by the Secretary of
Transportation under section 5103(a) of title 49.
[(n)] (o) The district courts, together with the District
Court of the Virgin Islands and the District Court of Guam,
shall have jurisdiction, upon cause shown, to enjoin violations
of section 1716 of title 18.
* * * * * * *
Sec. 3005. False representations; lotteries
(a) Upon evidence satisfactory to the Postal Service that any
person is engaged in conducting a scheme or device for
obtaining money or property through the mail by means of false
representations, including the mailing of matter which is
nonmailable [under 3001(d),] under section 3001(d), (h), (i),
(j), or (k) of this title, or is engaged in conducting a
lottery, gift enterprise, or scheme for the distribution of
money or of real or personal property, by lottery, chance, or
drawing of any kind, the Postal Service may issue an order
which--
(1) * * *
* * * * * * *
(3) requires the person or his representative to
cease and desist from engaging in any such scheme,
device, lottery, or gift enterprise.
For purposes of the preceding sentence, the mailing of matter
which is nonmailable [under such 3001(d),] under such section
3001(d), (h), (i), (j), or (k) by any person shall constitute
prima facie evidence that such person is engaged in conducting
a scheme or device for obtaining money or property through the
mail by false representations.
* * * * * * *
Sec. 3013. Semiannual reports on investigative activities of the Postal
Service
The [Postmaster General] Chief Postal Inspector shall submit
semiannual reports to the Inspector General summarizing the
investigative activities of the Postal Service. One semiannual
report shall be submitted for the reporting period beginning on
October 1 and ending on March 31, and the other semiannual
report shall be submitted for the reporting period beginning on
April 1 and ending on September 30. Each such report shall be
submitted within 1month (or such shorter length of time as the
Inspector General may specify) after the close of the reporting period
involved and shall include with respect to such reporting period--
(1) * * *
* * * * * * *
The information in a report submitted under this section to the
Inspector General with respect to a reporting period shall be
included as part of the semiannual report prepared by the
Inspector General under section 5 of the Inspector General Act
of 1978 for the same reporting period. Nothing in this section
shall be considered to permit or require that any report by the
[Postmaster General] Chief Postal Inspector under this section
include any information relating to activities of the Inspector
General.
* * * * * * *
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.
CHAPTER 32--PENALTY AND FRANKED MAIL
* * * * * * *
Sec. 3210. Franked mail transmitted by the Vice President, Members of
Congress, and congressional officials
(a)(1) * * *
* * * * * * *
(6)(A) * * *
* * * * * * *
(C) No Member of the Senate may mail any mass mailing as
franked mail if such mass mailing [is mailed fewer] is
postmarked fewer than 60 days immediately before the date of
any primary election or general election (whether regular,
special, or runoff) for any national, State or local office in
which such Member is a candidate for election.
* * * * * * *
[CHAPTER 36--POSTAL RATES, CLASSES, AND SERVICES
[SUBCHAPTER I--POSTAL RATE COMMISSION
[Sec.
[3601. Establishment.
[3602. Terms of office.
[3603. Rules; regulations; procedures.
[3604. Administration.
[SUBCHAPTER II--PERMANENT RATES AND CLASSES OF MAIL
[3621. Authority to fix rates and classes.
[3622. Rates and fees.
[3623. Mail classification.
[3624. Recommended decisions of Commission.
[3625. Action of the Governors.
[3626. Reduced rates.
[3627. Adjusting free rates.
[3628. Appellate review.
[3629. Reduced rates for voter registration purposes.
[SUBCHAPTER III--TEMPORARY RATES AND CLASSES
[3641. Temporary changes in rates and classes.
[3642. Special authority relating to reduced-rate categories of mail.
[SUBCHAPTER IV--POSTAL SERVICES AND COMPLAINTS
[3661. Postal services.
[3662. Rate and service complaints.
[3663. Annual report on international services.
[SUBCHAPTER V--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.
[SUBCHAPTER I--POSTAL RATE COMMISSION
[Sec. 3601. Establishment
[(a) The Postal Rate Commission is an independent
establishment of the executive branch of the Government of the
United States. The 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 on the basis
of their professional qualifications and may be removed by the
President only for cause. Not more than 3 of the Commissioners
may be adherents of the same political party.
[(b) A Commissioner may continue to serve after the
expiration of his term until his successor has qualified,
except that a Commissioner may not so continue to serve for
more than 1 year after the date upon which his term otherwise
would expire under section 3602 of this title.
[(c) One of the Commissioners shall be designated as Chairman
by, and shall serve in the position of Chairman at the pleasure
of, the President.
[(d) The Commissioners shall by majority vote designate a
Vice Chairman of the Commission. The Vice Chairman shall act as
Chairman of the Commission in the absence of the Chairman.
[Sec. 3602. Terms of office
[The Commissioners of the Postal Rate Commission shall serve
for terms of 6 years except that--
[(1) the terms of the Commissioners first taking
office shall expire as designated by the President at
the time of appointment, 1 at the end of 2 years, 2 at
the end of 4 years, and 2 at the end of 6 years,
following the appointment of the first of them; and
[(2) any Commissioner appointed to fill a vacancy
occurring before the expiration of the term for which
his predecessor was appointed shall serve for the
remainder of such term.
[SUBCHAPTER II--PERMANENT RATES AND CLASSES OF MAIL
[Sec. 3621. Authority to fix rates and classes
[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 this chapter.
Postal rates and fees shall be reasonable and equitable and
sufficient to enable the Postal Service under 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. Postal rates and
fees shall provide sufficient revenues so that the total
estimated income and appropriations to the Postal Service will
equal as nearly as practicable total estimated costs of the
Postal Service. For purposes of this section, ``total estimated
costs'' shall include (without limitation) operating expenses,
depreciation on capital facilities and equipment, debt service
(including interest, amortization of debt discount and expense,
and provision for sinking funds or other retirements of
obligations to the extent that such provision exceeds
applicable depreciation charges), and a reasonable provision
for contingencies.
[Sec. 3622. Rates and fees
[(a) From time to time the Postal Service shall request the
Postal Rate Commission to submit a recommended decision on
changes in a rate or rates of postage or in a fee or fees for
postal services if the Postal Service determines that such
changes would be in the public interest and in accordance with
the policies of this title. The Postal Service may submit such
suggestions for rate adjustments as it deems suitable.
[(b) Upon receiving a request, the Commission shall make a
recommended decision on the request for changes in rates or
fees in each class of mail or type of service in accordance
with the policies of this title and the following factors:
[(1) the establishment and maintenance of a fair and
equitable schedule;
[(2) the value of the mail service actually provided
each class or type of mail service to both the sender
and the recipient, including but not limited to the
collection, mode of transportation, and priority of
delivery;
[(3) the requirement that each class of mail or type
of mail service bear the direct and indirect postal
costs attributable to that class or type plus that
portion of all other costs of the Postal Service
reasonably assignable to such class or type;
[(4) the effect of rate increases upon the general
public, business mail users, and enterprises in the
private sector of the economy engaged in the delivery
of mail matter other than letters;
[(5) the available alternative means of sending and
receiving letters and other mail matter at reasonable
costs;
[(6) the degree of preparation of mail for delivery
into the postal system performed by the mailer and its
effect upon reducing costs to the Postal Service;
[(7) simplicity of structure for the entire schedule
and simple, identifiable relationships between the
rates or fees charged the various classes of mail for
postal services;
[(8) the educational, cultural, scientific, and
informational value to the recipient of mail matter;
and
[(9) such other factors as the Commission deems
appropriate.
[(c) Regular rates for each class or subclass of mail that
includes 1 or more special rate categories for mail under
former section 4358 (d) or (e), 4452 (b) or (c), or 4554 (b) or
(c) of this title shall be established by applying the policies
of this title, including the factors of section 3622(b) of this
title, to the costs attributable to the regular rate mail in
each class or subclass combined with the mail in the
corresponding special rate categories authorized by former
section 4358 (d) or (e), 4452 (b) or (c), or 4554 (b) or (c) of
this title.
[(d) Compliance with any provision of the Occupational Safety
and Health Act of 1970 (29 U.S.C. 651 et seq.) shall not be
considered by the Commission in determining whether to increase
rates and shall not otherwise affect the service of the Postal
Service.
[Sec. 3623. Mail classification
[(a) Within 2 years after the effective date of this
subchapter, the Postal Service shall request the Postal Rate
Commission to make a recommended decision on establishing a
mail classification schedule in accordance with the provisions
of this section.
[(b) Following the establishment of the mail classification
schedule requested under subsection (a) of this section, the
Postal Service may from time to time request that the
Commission submit, or the Commission may submit to the
Governors on its own initiative, a recommended decision on
changes in the mail classification schedule.
[(c) The Commission shall make a recommended decision on
establishing or changing the schedule in accordance with the
policies of this title and the following factors:
[(1) the establishment and maintenance of a fair and
equitable classification system for all mail;
[(2) 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;
[(3) the importance of providing classifications with
extremely high degrees of reliability and speed of
delivery;
[(4) the importance of providing classifications
which do not require an extremely high degree of
reliability and speed of delivery;
[(5) the desirability of special classifications from
the point of view of both the user and of the Postal
Service; and
[(6) such other factors as the Commission may deem
appropriate.
[(d) 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.
[Sec. 3624. Recommended decisions of Commission
[(a) The Postal Rate Commission shall promptly consider a
request made under section 3622 or 3623 of this title, except
that the Commission shall not recommend a decision until the
opportunity for a hearing on the record under sections 556 and
557 of title 5 has been accorded to 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.
[(b) In order to conduct its proceedings with utmost
expedition consistent with procedural fairness to the parties,
the Commission may (without limitation) adopt rules which
provide for--
[(1) the advance submission of written direct
testimony;
[(2) the conduct of prehearing conferences to define
issues, and for other purposes to insure orderly and
expeditious proceedings;
[(3) discovery both from the Postal Service and the
parties to the proceedings;
[(4) limitation of testimony; and
[(5) the conduct of the entire proceedings off the
record with the consent of the parties.
[(c)(1) Except as provided by paragraph (2) of this
subsection, in any case in which the Postal Service makes a
request under section 3622 of this title for a recommended
decision by the Commission on changes in a rate or rates of
postage or in a fee or fees for postal services the Commission
shall transmit its recommended decision to the Governors under
subsection (d) of this section no later than 10 months after
receiving any such request from the Postal Service.
[(2) In any case in which the Commission determines that the
Postal Service has unreasonably delayed consideration of a
request made by the Postal Service under section 3622 by
failing to respond within a reasonable time to any lawful order
of the Commission, the Commission may extend the 10-month
period described in paragraph (1) of this subsection by one day
for each day of such delay.
[(d) The Commission shall transmit its recommended decision
in a rate, fee, or classification matter to the Governors. The
recommended decision shall include a statement specifically
responsive to the criteria established under section 3622 or
3623, as the case may be.
[Sec. 3625. Action of the Governors
[(a) Upon receiving a recommended decision from the Postal
Rate Commission, the Governors may approve, allow under
protest, reject, or modify that decision in accordance with the
provisions of this section.
[(b) The Governors may approve the recommended decision and
order the decision placed in effect.
[(c) The Governors may, under protest, allow a recommended
decision of the Commission to take effect and (1) seek judicial
review thereof under section 3628 of this title, or (2) return
the recommended decision to the Commission for reconsideration
and a further recommended decision, which shall be acted upon
under this section and subject to review in accordance with
section 3628 of this title.
[(d) The Governors may reject the recommended decision of the
Commission and the Postal Service may resubmit its request to
the Commission for reconsideration. Upon resubmission, the
request shall be reconsidered, and a further recommended
decision of the Commission shall be acted upon under this
section and subject to review in accordance with section 3628
of this title. However, with the unanimous written concurrence
of all of the Governors then holding office, the Governors may
modify any such further recommended decision of the Commission
under this subsection if the Governors expressly find that (1)
such modification is in accord with the record and the policies
of this chapter, and (2) the rates recommended by the
Commission are not adequate to provide sufficient total
revenues so that total estimated income and appropriations will
equal as nearly as practicable estimated total costs.
[(e) The decision of the Governors to approve, allow under
protest, reject, or modify a recommended decision of the
Commission shall be in writing and shall include an estimate of
anticipated revenue and a statement of explanation and
justification. The decision, the record of the Commission's
hearings, and the Commission's recommended decision shall be
made generally available at the time the decision is issued and
shall be printed and made available for sale by the Public
Printer within 10 days following the day the decision is
issued.
[(f) The Board shall determine the date on which the new
rates, fees, the mail classification schedule, and changes in
such schedule under this subchapter shall become effective.]
CHAPTER 36--POSTAL RATES, CLASSES AND SERVICES
Subchapter I--Provisions relating to market-dominant products
Sec.
3621. Applicability; definitions.
3622. Modern rate regulation.
3626. Reduced rates.
3627. Adjusting free rates.
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.
3687. Workshare discounts.
SUBCHAPTER I--PROVISIONS RELATING TO MARKET-DOMINANT PRODUCTS
Sec. 3621. Applicability; definitions
(a) Applicability.--This subchapter shall apply with respect
to--
(1)(A) single piece first-class letters (both
domestic and international);
(B) single piece first-class cards (both domestic and
international); and
(C) special services;
(2) all first-class mail not included under paragraph
(1);
(3) periodicals;
(4) standard mail;
(5) media mail;
(6) library mail; and
(7) bound printed matter,
subject to any changes the Postal Regulatory Commission may
make under section 3642.
(b) Rule of Construction.--Mail matter referred to in
subsection (a) shall, for purposes of this subchapter, be
considered to have the meaning given to such mail matter under
the mail classification schedule.
Sec. 3622. Modern rate regulation
(a) Authority Generally.--The Postal Regulatory Commission
shall, within 24 months after the date of the enactment of this
section, by regulation establish (and may from time to time
thereafter by regulation revise) a modern system for regulating
rates and classes for market-dominant products.
(b) Objectives.--Such system shall be designed to achieve the
following objectives:
(1) To establish and maintain a fair and equitable
schedule for rates and classification.
(2) To maximize incentives to reduce costs and
increase efficiency.
(3) To create predictability and stability in rates.
(4) To maintain high quality service standards.
(5) To allow the Postal Service pricing flexibility.
(6) To assure adequate revenues, including retained
earnings, to maintain financial stability.
(7) To reduce the administrative burden of the
ratemaking process.
(c) Factors.--In establishing or revising such system, the
Postal Regulatory Commission shall take into account--
(1) the 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 direct and indirect postal costs attributable
to each class or type of mail service plus that portion
of all other costs of the Postal Service reasonably
assignable to such class or type;
(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 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;
(8) 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;
(9) the desirability of special classifications from
the point of view of both the user and of the Postal
Service;
(10) the educational, cultural, scientific, and
informational value to the recipient of mail matter;
and
(11) the policies of this title as well as such other
factors as the Commission deems appropriate.
(d) Allowable Provisions.--The system for regulating rates
and classes for market-dominant products may include one or
more of the following:
(1) Price caps, revenue targets, or other form of
incentive regulation.
(2) Cost-of-service regulation.
(3) Such other form of regulation as the Commission
considers appropriate to achieve, consistent with
subsection (c), the objectives of subsection (b).
(e) Limitation.--In the administration of this section, the
Commission shall not permit the average rate in any subclass of
mail to increase at an annual rate greater than the comparable
increase in the Consumer Price Index, unless it has, after
notice and opportunity for a public hearing and comment,
determined that such increase is reasonable and equitable and
necessary to enable the Postal Service, under best practices of
honest, efficient, and economical management, to maintain and
continue the development of postal services of the kind and
quality adapted to the needs of the United States.
(f) Transition Rule.--Until regulations under this section
first take effect, rates and classes for market-dominant
products shall remain subject to modification in accordance
with the provisions of this chapter and section 407, as such
provisions were last in effect before the date of the enactment
of this section.
Sec. 3626. Reduced rates
[(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 the applicable
provisions of this chapter.
[(2) For the purpose of this subsection--
[(A) the term ``costs attributable'', as used with
respect to a class of mail or kind of mailer, means the
direct and indirect postal costs attributable to such
class of mail or kind of mailer (excluding any other
costs of the Postal Service);
[(B) the term ``regular-rate category'' means any
class of mail or kind of mailer, other than a class or
kind referred to in paragraph (3)(A) or section
2401(c); and
[(C) the term ``institutional-costs contribution'',
as used with respect to a class of mail or kind of
mailer, means that portion of the estimated revenues to
the Postal Service from such class of mail or kind of
mailer which remains after subtracting an amount equal
to the estimated costs attributable to such class of
mail or kind of mailer.
[(3)(A) Except as provided in paragraph (4) or (5), rates of
postage for a class of mail or kind of mailer under former
section 4358 of this title shall be established in a manner
such that the estimated revenues to be received by the Postal
Service from such class of mail or kind of mailer shall be
equal to the sum of--
[(i) the estimated costs attributable to such class
of mail or kind of mailer; and
[(ii) the product derived by multiplying the
estimated costs referred to in clause (i) by the
applicable percentage under subparagraph (B).
[(B) The applicable percentage for any class of mail or kind
of mailer referred to in subparagraph (A) shall be the product
derived by multiplying--
[(i) the percentage which, for the most closely
corresponding regular-rate category, the institutional-
costs contribution for such category represents
relative to the estimated costs attributable to such
category of mail, times
[(ii)(I) one-twelfth, for fiscal year 1994;
[(II) one-sixth, for fiscal year 1995;
[(III) one-fourth, for fiscal year 1996;
[(IV) one-third, for fiscal year 1997;
[(V) five-twelfths, for fiscal year 1998; and
[(VI) one-half, for any fiscal year after fiscal year
1998.
[(C) Temporary special authority to permit the timely
implementation of the preceding provisions of this paragraph is
provided under section 3642.
[(D) For purposes of establishing rates of postage under this
subchapter for any of the classes of mail or kinds of mailers
referred to in subparagraph (A), subclauses (I) through (V) of
subparagraph (B)(ii) shall be deemed amended by striking the
fraction specified in each such subclause and inserting ``one-
half''.]
(a)(1) Except as otherwise provided in this section, rates of
postage for a class of mail or kind of mailer under former
section 4358, 4452(b), 4452(c), 4554(b), or 4554(c) of this
title shall be established in accordance with section 3622.
(2) For the purpose of this subsection, the term ``regular-
rate category'' means any class of mail or kind of mailer,
other than a class or kind referred to in section 2401(c).
(3) Rates of postage for a class of mail or kind of mailer
under former section 4358(a) through (c) of this title shall be
established so that postage on each mailing of such mail
reflects its preferred status as compared to the postage for
the most closely corresponding regular-rate category mailing.
* * * * * * *
(g)(1) * * *
* * * * * * *
(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.
* * * * * * *
(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. 3627. Adjusting free and reduced rates]
Sec. 3627. Adjusting free rates
If Congress fails to appropriate an amount authorized under
section 2401(c) of this title for any class of mail sent free
of postage under section 3217 or 3403-3406 the rate for that
class may be adjusted in accordance with the provisions of this
subchapter so that the increased revenues received from the
users of such class will equal the amount for that class that
the Congress was to appropriate.
[Sec. 3628. Appellate review
[A decision of the Governors to approve, allow under protest,
or modify the recommended decision of the Postal Rate
Commission may be appealed to any court of appeals of the
United States, within 15 days after its publication by the
Public Printer, by an aggrieved party who appeared in the
proceedings under section 3624(a) of this title. The court
shall review the decision, in accordance with section 706 of
title 5, and chapter 158 and section 2112 of title 28, except
as otherwise provided in this section, on the basis of the
record before the Commission and the Governors. The court may
affirm the decision or order that the entire matter be returned
for further consideration, but the court may not modify the
decision. The court may not suspend the effectiveness of the
changes, or otherwise prevent them from taking effect until
final disposition of the suit by the court. No court shall have
jurisdiction to review a decision made by the Commission or
Governors under this chapter except as provided in this
section.]
* * * * * * *
SUBCHAPTER II--PROVISIONS RELATING TO COMPETITIVE PRODUCTS
Sec. 3631. Applicability; definitions and updates
(a) Applicability.--This subchapter shall apply with respect
to--
(1) priority mail;
(2) expedited mail;
(3) mailgrams;
(4) international mail; and
(5) parcel post,
subject to any changes the Postal Regulatory Commission may
make under section 3642.
(b) Definition.--For purposes of this subchapter, the term
``costs attributable'', as used with respect to a product,
means the direct and indirect postal costs attributable to such
product.
(c) Rule of Construction.--Mail matter referred to in
subsection (a) shall, for purposes of this subchapter, be
considered to have the meaning given to such mail matter under
the mail classification schedule.
Sec. 3632. Action of the Governors
(a) Authority To Establish Rates and Classes.--The Governors
shall establish rates and classes for products in the
competitive category of mail in accordance with the
requirements of this subchapter and regulations promulgated
under section 3633.
(b) Procedures.--
(1) In general.--Rates and classes shall be
established in writing, complete with a statement of
explanation and justification, and the date as of which
each such rate or class takes effect.
(2) Rates or classes of general applicability.--In
the case of rates or classes of general applicability
in the Nation as a whole or in any substantial region
of the Nation, the Governors shall cause each rate and
class decision under this section and the record of the
Governors' proceedings in connection with such decision
to be published in the Federal Register at least 30
days before the effective date of any new rates or
classes.
(3) Rates or classes not of general applicability.--
In the case of rates or classes not of general
applicability in the Nation as a whole or in any
substantial region of the Nation, the Governors shall
cause each rate and class decision under this section
and the record of the proceedings in connection with
such decision to be filed with the Postal Regulatory
Commission by such date before the effective date of
any new rates or classes as the Governors consider
appropriate, but in no case less than 15 days.
(4) Criteria.--As part of the regulations required
under section 3633, the Postal Regulatory Commission
shall establish criteria for determining when a rate or
class established under this subchapter is or is not of
general applicability in the Nation as a whole or in
any substantial region of the Nation.
(c) Transition Rule.--Until regulations under section 3633
first take effect, rates and classes for competitive products
shall remain subject to modification in accordance with the
provisions of this chapter and section 407, as such provisions
were as last in effect before the date of the enactment of this
section.
Sec. 3633. Provisions applicable to rates for competitive products
The Postal Regulatory Commission shall, within 18 months
after the date of the enactment of this section, promulgate
(and may from time to time thereafter revise) regulations--
(1) to prohibit the subsidization of competitive
products by market-dominant products;
(2) to ensure that each competitive product covers
its costs attributable; and
(3) to ensure that all competitive products
collectively make a reasonable contribution to the
institutional costs of the Postal Service.
Sec. 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.
[SUBCHAPTER III--TEMPORARY RATES AND CLASSES
[Sec. 3641. Temporary changes in rates and classes
[(a) In any case in which the Postal Rate Commission fails to
transmit a recommended decision on a change in rates of postage
or in fees for postal services to the Governors in accordance
with section 3624(c) of this title, the Postal Service may
establish temporary changes in rates of postage and in fees for
postal services in accordance with the proposed changes under
consideration by the Commission. Such temporary changes may
take effect upon such date as the Postal Service may determine,
except that such temporary changes may take effect only after
10 days' notice in the Federal Register.
[(b) Any temporary rate or fee established by the Postal
Service under subsection (a) of this section shall be in
accordance with the policies of this title and shall not exceed
such amount as may be necessary for sufficient revenues to
assure that the total estimated income, including
appropriations, of the Postal Service shall, to the extent
practicable, be equal to the total estimated costs of the
Postal Service.
[(c) Notwithstanding the provisions of subsection (b) of this
section, the Postal Service may not establish any temporary
rate for a class of mail or any temporary fee for a postal
service which is more than the permanent rate or fee requested
for such class or postal service by the Postal Service under
section 3622 of this title.
[(d) Any temporary change in rates of postage or in fees for
postal services made by the Postal Service under this section
shall remain in effect no longer than 150 days after the date
on which the Commission transmits its recommended decision to
the Governors under section 3624(d) of this title, unless such
temporary change is terminated by the Governors before the
expiration of such period.
[(e) If the Postal Rate Commission does not transmit to the
Governors within 90 days after the Postal Service has
submitted, or within 30 days after the Postal Service has
resubmitted, to the Commission a request for a recommended
decision on a change in the mail classification schedule (after
such schedule is established under section 3623 of this title),
the Postal Service, upon 10 days' notice in the Federal
Register, may place into effect temporary changes in the mail
classification schedule in accordance with proposed changes
under consideration by the Commission. Any temporary change
shall be effective for a period ending not later than 30 days
after the Commission has transmitted its recommended decision
to the Governors.
[(f) If, under section 3628 of this title, a court orders a
matter returned to the Commission for further consideration,
the Postal Service, with the consent of the Commission, may
place into effect temporary changes in rates of postage, and
fees for postal services, or in the mail classification
schedule.
[Sec. 3642. Special authority relating to reduced-rate categories of
mail
[(a) In order to permit the timely implementation of section
3626(a)(3), the Postal Service may establish temporary rates of
postage for any class of mail or kind of mailer referred to in
section 3626(a)(3)(A).
[(b) Any exercise of authority under this section shall be in
conformance with the requirements of section 3626(a), subject
to the following:
[(1) All attributable costs and institutional-costs
contributions assumed shall be the same as those which
were assumed for purposes of the then most recent
proceedings under subchapter II pursuant to which rates
of postage for the class of mail or kind of mailer
involved were last adjusted.
[(2) Any temporary rate established under this
section shall take effect upon such date as the Postal
Service may determine, except that--
[(A) such a rate may take effect only after
10 days' notice in the Federal Register; and
[(B) no such rate may take effect after
September 30, 1998.
[(3) A temporary rate under this section may remain
in effect no longer than the last day of the fiscal
year in which it first takes effect.
[(4) Authority under this section may not be
exercised in a manner that would result in more than 1
change taking effect under this section, during the
same fiscal year, in the rates of postage for a
particular class of mail or kind of mailer, except as
provided in paragraph (5).
[(5) Nothing in paragraph (4) shall prevent an
adjustment under this section in rates for a class of
mail or kind of mailer with respect to which any rates
took effect under this section earlier in the same
fiscal year if--
[(A) the rates established for such class of
mail or kind of mailer by the earlier
adjustment are superseded by new rates
established under subchapter II; and
[(B) authority under this paragraph has not
previously been exercised with respect to such
class of mail or kind of mailer based on the
new rates referred to in subparagraph (A).
[(c) The Postal Service may prescribe any regulations which
may be necessary to carry out this section, including
provisions governing the coordination of adjustments under this
section with any other adjustments under this title.
[(d) Notwithstanding any provision of section 3626(a)(3)(B)
or subsection (a) of this section, any temporary rates
established under this section for non-letter-shaped mail under
former section 4452(b) or 4452(c) of this title shall not be
lower than the rates in effect for such mail on September 30,
1993.]
SUBCHAPTER III--PROVISIONS RELATING TO EXPERIMENTAL AND NEW PRODUCTS
Sec. 3641. Market tests of experimental products
(a) Authority.--
(1) In general.--The Postal Service may conduct
market tests of experimental products in accordance
with this section.
(2) Provisions waived.--A product shall not, while it
is being tested under this section, be subject to the
requirements of sections 3622, 3633, or 3642, or
regulations promulgated under those sections.
(b) Conditions.--A product may not be tested under this
section unless it satisfies each of the following:
(1) Significantly different product.--The product is,
from the viewpoint of the mail users, significantly
different from all products offered by the Postal
Service within the 2-year period preceding the start of
the test.
(2) Market disruption.--The introduction or continued
offering of the product will not create an unfair or
otherwise inappropriate competitive advantage for the
Postal Service or any mailer, particularly in regard to
small business concerns (as defined under subsection
(h)).
(3) Correct categorization.--The Postal Service
identifies the product, for the purpose of a test under
this section, as either market dominant or competitive,
consistent with the criteria under section 3642(b)(1).
Costs and revenues attributable to a product identified
as competitive shall be included in any determination
under section 3633(3) (relating to provisions
applicable to competitive products collectively).
(c) Notice.--
(1) In general.--At least 30 days before initiating a
market test under this section, the Postal Service
shall file with the Postal Regulatory Commission and
publish in the Federal Register a notice--
(A) setting out the basis for the Postal
Service's determination that the market test is
covered by this section; and
(B) describing the nature and scope of the
market test.
(2) Safeguards.--For a competitive experimental
product, the provisions of section 504(g) shall be
available with respect to any information required to
be filed under paragraph (1) to the same extent and in
the same manner as in the case of any matter described
in section 504(g)(1). Nothing in paragraph (1) shall be
considered to permit or require the publication of any
information as to which confidential treatment is
accorded under the preceding sentence (subject to the
same exception as set forth in section 504(g)(3)).
(d) Duration.--
(1) In general.--A market test of a product under
this section may be conducted over a period of not to
exceed 24 months.
(2) Extension authority.--If necessary in order to
determine the feasibility or desirability of a product
being tested under this section, the Postal Regulatory
Commission may, upon written application of the Postal
Service (filed not later than 60 days before the date
as of which the testing of such product would otherwise
be scheduled to terminate under paragraph (1)), extend
the testing of such product for not to exceed an
additional 12 months.
(e) Dollar-Amount Limitation.--
(1) In general.--A product may be tested under this
section only if the total revenues that are
anticipated, or in fact received, by the Postal Service
from such product do not exceed $10,000,000 nationwide
in any year, subject to paragraph (2) and subsection
(g). In carrying out the preceding sentence, the Postal
Regulatory Commission may limit the amount of revenues
the Postal Service may obtain from any particular
geographic market as necessary to prevent market
disruption (as defined in subsection (b)(2)).
(2) Exemption authority.--The Postal Regulatory
Commission may, upon written application of the Postal
Service, exempt the market test from the limit in
paragraph (1) if the total revenues that are
anticipated, or in fact received, by the Postal Service
from such product do not exceed $50,000,000 in any
year, subject to subsection (g). In reviewing an
application under this paragraph, the Postal Regulatory
Commission shall approve such application if it
determines that--
(A) the product is likely to benefit the
public and meet an expected demand;
(B) the product is likely to contribute to
the financial stability of the Postal Service;
and
(C) the product is not likely to result in
unfair or otherwise inappropriate competition.
(f) Cancellation.--If the Postal Regulatory Commission at any
time determines that a market test under this section fails,
with respect to any particular product, to meet one or more of
the requirements of this section, it may order the cancellation
of the test involved or take such other action as it considers
appropriate. A determination under this subsection shall be
made in accordance with such procedures as the Commission shall
by regulation prescribe.
(g) Adjustment for Inflation.--For purposes of each year
following the year in which occurs the deadline for the Postal
Service's first report to the Postal Regulatory Commission
under section 3652(a), each dollar amount contained in this
section shall be adjusted by the change in the Consumer Price
Index for such year (as determined under regulations of the
Commission).
(h) Definition of a Small Business Concern.--The criteria
used in defining small business concerns or otherwise
categorizing business concerns as small business concerns
shall, for purposes of this section, be established by the
Postal Regulatory Commission in conformance with the
requirements of section 3 of the Small Business Act.
(i) Effective Date.--Market tests under this subchapter may
be conducted in any year beginning with the first year in which
occurs the deadline for the Postal Service's first report to
the Postal Regulatory Commission under section 3652(a).
Sec. 3642. New products and transfers of products between the market-
dominant and competitive categories of mail
(a) In General.--Upon request of the Postal Service or users
of the mails, or upon its own initiative, the Postal Regulatory
Commission may change the list of market-dominant products
under section 3621 and the list of competitive products under
section 3631 by adding new products to the lists, removing
products from the lists, or transferring products between the
lists.
(b) Criteria.--All determinations by the Postal Regulatory
Commission under subsection (a) shall be made in accordance
with the following criteria:
(1) The market-dominant category of products shall
consist of each product in the sale of which the Postal
Service exercises sufficient market power that it can
effectively set the price of such product substantially
above costs, raise prices significantly, decrease
quality, or decrease output, without risk of losing
business to other firms offering similar products. The
competitive category of products shall consist of all
other products.
(2) Exclusion of products covered by postal
monopoly.--A product covered by the postal monopoly
shall not be subject to transfer under this section
from the market-dominant category of mail. For purposes
of the preceding sentence, the term ``product covered
by the postal monopoly'' means any product the
conveyance or transmission of which is reserved to the
United States under section 1696 of title 18, subject
to the same exception as set forth in the last sentence
of section 409(e)(1).
(3) Additional considerations.--In making any
decision under this section, due regard shall be given
to--
(A) the availability and nature of
enterprises in the private sector engaged in
the delivery of the product involved;
(B) the views of those who use the product
involved on the appropriateness of the proposed
action; and
(C) the likely impact of the proposed action
on small business concerns (within the meaning
of section 3641(h)).
(c) Transfers of Subclasses and Other Subordinate Units
Allowable.--Nothing in this title shall be considered to
prevent transfers under this section from being made by reason
of the fact that they would involve only some (but not all) of
the subclasses or other subordinate units of the class of mail
or type of postal service involved (without regard to
satisfaction of minimum quantity requirements standing alone).
(d) Notification and Publication Requirements.--
(1) Notification requirement.--The Postal Service
shall, whenever it requests to add a product or
transfer a product to a different category, file with
the Postal Regulatory Commission and publish in the
Federal Register a notice setting out the basis for its
determination that the product satisfies the criteria
under subsection (b) and, in the case of a request to
add a product or transfer a product to the competitive
category of mail, that the product meets the
regulations promulgated by the Postal Regulatory
Commission pursuant to section 3633. The provisions of
section 504(g) shall be available with respect to any
information required to be filed.
(2) Publication requirement.--The Postal Regulatory
Commission shall, whenever it changes the list of
products in the market-dominant or competitive category
of mail, prescribe new lists of products. The revised
lists shall indicate how and when any previous lists
(including the lists under sections 3621 and 3631) are
superseded, and shall be published in the Federal
Register.
(e) Notification Requirement.--The Postal Regulatory
Commission shall, whenever it reaches a conclusion that a
product or products should be transferred between the list of
market-dominant products under section 3621 and the list of
competitive products under section 3631, immediately notify the
appropriate committees of the Congress. No such transfer may
take effect less than 12 months after such conclusion.
(f) Prohibition.--Except as provided in section 3641, no
product that involves the carriage of letters, printed matter,
or mailable packages may be offered by the Postal Service
unless it has been assigned to the market-dominant or
competitive category of mail (as appropriate) either--
(1) under this subchapter; or
(2) by or under any other provision of law.
SUBCHAPTER IV--REPORTING REQUIREMENTS AND RELATED PROVISIONS
Sec. 3651. Annual reports by the Commission
(a) In General.--The Postal Regulatory Commission shall
submit an annual report to the President and the Congress
concerning the operations of the Commission under this title,
including the extent to which regulations are achieving the
objectives under sections 3622 and 3633, respectively.
(b) Additional Information.--In addition to the information
required under subsection (a), each report under this section
shall also include, with respect to the period covered by such
report, an estimate of the costs incurred by the Postal Service
in providing--
(1) postal services to areas of the Nation where, in
the judgment of the Postal Regulatory Commission, the
Postal Service either would not provide services at all
or would not provide such services in accordance with
the requirements of this title if the Postal Service
were not required to provide prompt, reliable, and
efficient services to patrons in all areas and all
communities, including as required under the first
sentence of section 101(b);
(2) free or reduced rates for postal services as
required by this title; and
(3) other public services or activities which, in the
judgment of the Postal Regulatory Commission, would not
otherwise have been provided by the Postal Service but
for the requirements of law.
The Commission shall detail the bases for its estimates and the
statutory requirements giving rise to the costs identified in
each report under this section.
(c) Information From Postal Service.--The Postal Service
shall provide the Postal Regulatory Commission with such
information as may, in the judgment of the Commission, be
necessary in order for the Commission to prepare its reports
under this section.
Sec. 3652. Annual reports to the Commission
(a) Costs, Revenues, and Rates.--Except as provided in
subsection (c), the Postal Service shall, no later than 90 days
after the end of each year, prepare and submit to the Postal
Regulatory Commission a report (together with such nonpublic
annex thereto as the Commission may require under subsection
(e))--
(1) which shall analyze costs, revenues, and rates,
using such methodologies as the Commission shall by
regulation prescribe, and in sufficient detail to
demonstrate that the rates in effect for all products
during such year complied with all applicable
requirements of this title; and
(2) which shall, for each market-dominant product
provided in such year, provide--
(A) market information, including mail
volumes; and
(B) measures of the quality of service
afforded by the Postal Service in connection
with such product, including--
(i) the service standard applicable
to such product;
(ii) the level of service (described
in terms of speed of delivery and
reliability) provided; and
(iii) the degree of customer
satisfaction with the service provided.
The Inspector General shall regularly audit the data collection
systems and procedures utilized in collecting information and
preparing such report (including any annex thereto and the
information required under subsection (b)). The results of any
such audit shall be submitted to the Postal Service and the
Postal Regulatory Commission.
(b) Information Relating to Workshare Discounts.--
(1) In general.--The Postal Service shall include, in
each report under subsection (a), the following
information with respect to each market-dominant
product for which a workshare discount was in effect
during the period covered by such report:
(A) The per-item cost avoided by the Postal
Service by virtue of such discount.
(B) The percentage of such per-item cost
avoided that the per-item workshare discount
represents.
(C) The per-item contribution made to
institutional costs.
(2) Workshare discount defined.--For purposes of this
subsection, the term ``workshare discount'' has the
meaning given such term under section 3687.
(c) Market Tests.--In carrying out subsections (a) and (b)
with respect to experimental products offered through market
tests under section 3641 in a year, the Postal Service--
(1) may report summary data on the costs, revenues,
and quality of service by market test; and
(2) shall report such data as the Postal Regulatory
Commission requires.
(d) Supporting Matter.--The Postal Regulatory Commission
shall have access, in accordance with such regulations as the
Commission shall prescribe, to the working papers and any other
supporting matter of the Postal Service and the Inspector
General in connection with any information submitted under this
section.
(e) Content and Form of Reports.--
(1) In general.--The Postal Regulatory Commission
shall, by regulation, prescribe the content and form of
the public reports (and any nonpublic annex and
supporting matter relating thereto) to be provided by
the Postal Service under this section. In carrying out
this subsection, the Commission shall give due
consideration to--
(A) providing the public with adequate
information to assess the lawfulness of rates
charged;
(B) avoiding unnecessary or unwarranted
administrative effort and expense on the part
of the Postal Service; and
(C) protecting the confidentiality of
commercially sensitive information.
(2) Revised requirements.--The Commission may, on its
own motion or on request of an interested party,
initiate proceedings (to be conducted in accordance
with regulations that the Commission shall prescribe)
to improve the quality, accuracy, or completeness of
Postal Service data required by the Commission under
this subsection whenever it shall appear that--
(A) the attribution of costs or revenues to
products has become significantly inaccurate or
can be significantly improved;
(B) the quality of service data has become
significantly inaccurate or can be
significantly improved; or
(C) 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).
(g) Other Reports.--The Postal Service shall submit to the
Postal Regulatory Commission, together with any other
submission that it is required to make under this section in a
year, copies of its then most recent--
(1) comprehensive statement under section 2401(e);
(2) performance plan under section 2803; and
(3) program performance reports under section 2804.
Sec. 3653. Annual determination of compliance
(a) Opportunity for Public Comment.--After receiving the
reports required under section 3652 for any year, the Postal
Regulatory Commission shall promptly provide an opportunity for
comment on such reports by users of the mails, affected
parties, and an officer of the Commission who shall be required
to represent the interests of the general public.
(b) Determination of Compliance or Noncompliance.--Not later
than 90 days after receiving the submissions required under
section 3652 with respect to a year, the Postal Regulatory
Commission shall make a written determination as to--
(1) whether any rates or fees in effect during such
year (for products individually or collectively) were
not in compliance with applicable provisions of this
chapter (or regulations promulgated thereunder);
(2) whether any performance goals established under
section 2803 or 2804 for such year were not met; and
(3) whether any market-dominant product failed to
meet any service standard during such year.
If, with respect to a year, no instance of noncompliance is
found under this subsection to have occurred in such year, the
written determination shall be to that effect.
(c) If Any Noncompliance Is Found.--If, for a year, a timely
written determination of noncompliance is made under subsection
(b), the Postal Regulatory Commission shall take appropriate
action in accordance with subsections (c)-(e) of section 3662
(as if a complaint averring such noncompliance had been duly
filed and found under such section to be justified).
(d) Rebuttable Presumption.--A timely written determination
described in the last sentence of subsection (b) shall, for
purposes of any proceeding under section 3662, create a
rebuttable presumption of compliance by the Postal Service
(with regard to the matters described in paragraphs (1) through
(3) of subsection (b)) during the year to which such
determination relates.
Sec. 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 35 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 2007.
(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)(A) Beginning with reports for the fiscal year
2007, 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).
[SUBCHAPTER IV--POSTAL SERVICES AND COMPLAINTS]
SUBCHAPTER V--POSTAL SERVICES, COMPLAINTS, AND JUDICIAL REVIEW
* * * * * * *
[Sec. 3662. Rate and service complaints
[Interested parties who believe the Postal Service is
charging rates which do not conform to the policies set out in
this title or who believe that they are not receiving postal
service in accordance with the policies of this title may lodge
a complaint with the Postal Rate Commission in such form and in
such manner as it may prescribe. The Commission may in its
discretion hold hearings on such complaint. If the Commission,
in a matter covered by subchapter II of this chapter,
determines the complaint to be justified, it shall, after
proceedings in conformity with section 3624 of this title,
issue a recommended decision which shall be acted upon in
accordance with the provisions of section 3625 of this title
and subject to review in accordance with the provisions of
section 3628 of this title. If a matter not covered by
subchapter II of this chapter is involved, and the Commission
after hearing finds the complaint to be justified, it shall
render a public report thereon to the Postal Service which
shall take such action as it deems appropriate.
[Sec. 3663. Annual report on international services
[(a) Not later than July 1 of each year, the Postal Rate
Commission shall transmit to each House of Congress a
comprehensive report of the costs, revenues, and volumes
accrued by the Postal Service in connection with mail matter
conveyed between the United States and other countries for the
previous fiscal year.
[(b) Not later than March 15 of each year, the Postal Service
shall provide to the Postal Rate Commission such data as the
Commission may require to prepare the report required under
subsection (a) of this section. Data shall be provided in
sufficient detail to enable the Commission to analyze the
costs, revenues, and volumes for each international mail
product or service, under the methods determined appropriate by
the Commission for the analysis of rates for domestic mail.]
Sec. 3662. Rate and service complaints
(a) In General.--Interested persons (including an officer of
the Postal Regulatory Commission representing the interests of
the general public) who believe the Postal Service is not
operating in conformance with the requirements of chapter 1, 4,
or 6, or this chapter (or regulations promulgated under any of
those chapters) may lodge a complaint with the Postal
Regulatory Commission in such form and manner as the Commission
may prescribe.
(b) Prompt Response Required.--
(1) In general.--The Postal Regulatory Commission
shall, within 90 days after receiving a complaint under
subsection (a), either--
(A) begin proceedings on such complaint; or
(B) issue an order dismissing the complaint
(together with a statement of the reasons
therefor).
(2) Treatment of complaints not timely acted on.--For
purposes of section 3663, any complaint under
subsection (a) on which the Commission fails to act in
the time and manner required by paragraph (1) shall be
treated in the same way as if it had been dismissed
pursuant to an order issued by the Commission on the
last day allowable for the issuance of such order under
paragraph (1).
(c) Action Required if Complaint Found To Be Justified.--If
the Postal Regulatory Commission finds the complaint to be
justified, it shall order that the Postal Service take such
action as the Commission considers appropriate in order to
achieve compliance with the applicable requirements and to
remedy the effects of any noncompliance (such as ordering
unlawful rates to be adjusted to lawful levels, ordering the
cancellation of market tests, ordering the Postal Service to
discontinue providing loss-making products, or requiring the
Postal Service to make up for revenue shortfalls in competitive
products).
(d) Suspension Authority.--The Postal Regulatory Commission
may suspend implementation of rates or classifications under
section 3632(b)(3) for a limited period of time pending
expedited proceedings under this section. In evaluating whether
circumstances warrant suspension, the Commission shall consider
factors such as (1) whether there is a substantial likelihood
that such rate or classification will violate the requirements
of chapter 1, 4, or 6, or this chapter (or regulations
promulgated under any of those chapters), (2) whether any
persons would suffer substantial injury, loss, or damage absent
a suspension, (3) whether the Postal Service or any other
persons would suffer substantial injury, loss, or damage under
a suspension, and (4) the public interest.
(e) Authority To Order Fines in Cases of Deliberate
Noncompliance.--In addition, in cases of deliberate
noncompliance by the Postal Service with the requirements of
this title, the Postal Regulatory Commission may order, based
on the nature, circumstances, extent, and seriousness of the
noncompliance, a fine (in the amount specified by the
Commission in its order) for each incidence of noncompliance.
Fines resulting from the provision of competitive products
shall be paid out of the Competitive Products Fund established
in section 2011. All receipts from fines imposed under this
subsection shall be deposited in the general fund of the
Treasury of the United States.
Sec. 3663. Appellate review
A person adversely affected or aggrieved by a final order or
decision of the Postal Regulatory Commission may, within 30
days after such order or decision becomes final, institute
proceedings for review thereof by filing a petition in the
United States Court of Appeals for the District of Columbia.
The court shall review the order or decision in accordance with
section 706 of title 5, and chapter 158 and section 2112 of
title 28, on the basis of the record before the Commission. For
purposes of this section, the term ``person'' includes the
Postal Service.
Sec. 3664. Enforcement of orders
The several district courts have jurisdiction specifically to
enforce, and to enjoin and restrain the Postal Service from
violating, any order issued by the Postal Regulatory
Commission.
[SUBCHAPTER V--GENERAL]
SUBCHAPTER VI--GENERAL
Sec. 3681. Reimbursement
No mailer may be reimbursed for any amount paid under any
rate or fee which, after such payment, is determined to have
been unlawful after proceedings in accordance with the
provisions of [section 3628] sections 3662 through 3664 of this
title, or is superseded by a lower rate or fee established
under subchapter II of this chapter.
[Sec. 3682. Size and weight limits
[The Postal Service may establish size and weight limitations
for mail matter in the same manner as prescribed for changes in
mail classification under subchapter II of this chapter.]
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.
* * * * * * *
Sec. 3684. Limitations
Except as provided in section 3627 of this title, no
provision of this chapter shall be construed to give authority
to the Governors to make any change in any provision [of
section 3682 or 3683 or chapter 30, 32, or 34 of this title.]
of this title.
* * * * * * *
Sec. 3686. Bonus authority
(a) In General.--The Postal Service may establish one or more
programs to provide bonuses or other rewards to officers and
employees of the Postal Service 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
in such form and manner as the Board requires;
and
(B) the Board of Governors shall approve any
such request if it 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
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.
Sec. 3687. Workshare discounts
(a) In General.--As part of the regulations established under
section 3622(a), the Postal Regulatory Commission shall
establish rules for workshare discounts that ensure that such
discounts do not exceed the cost that the Postal Service avoids
as the result of workshare activity, unless--
(1) the discount is--
(A) associated with a new postal service, a
change to an existing postal service, or a new
workshare initiative related to an existing
postal service; and
(B) 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;
(2) a reduction in 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 to costs avoided;
(B) result in a further increase in the rates
paid by mailers not able to take advantage of
the discount; or
(C) impede the efficient operation of the
Postal Service;
(3) the amount of the discount above costs avoided--
(A) is necessary to mitigate rate shock; and
(B) will be phased out over time; or
(4) the discount is provided in connection with
subclasses of mail consisting exclusively of mail
matter of educational, cultural, scientific, or
informational value.
(b) Report.--Whenever the Postal Service establishes or
maintains a workshare discount, the Postal Service shall, at
the time it publishes the workshare discount rate, submit to
the Postal Regulatory Commission a detailed report that--
(1) explains the Postal Service's reasons for
establishing or maintaining the rate;
(2) sets forth the data, economic analyses, and other
information relied on by the Postal Service to justify
the rate; and
(3) 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.
(c) Definition.--For purposes of this section, 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 section 3622(a).
PART V--TRANSPORTATION OF MAIL
Chap. Sec.
50. General....................................................... 5001
[52. Transportation of Mail by Surface Carrier.................... 5201]
* * * * * * *
CHAPTER 50--GENERAL
* * * * * * *
Sec. 5001. Provisions for carrying mail
The Postal Service shall provide for the transportation of
mail in accordance with the policies established under section
[101(e) and (f)] 101(f) and (g) of this title and the
provisions of this chapter. Notwithstanding any other provision
of this title, the Postal Service may make arrangements on a
temporary basis for the transportation of mail when, as
determined by the Postal Service, an emergency arises. Such
arrangements shall terminate when the emergency ceases and the
Postal Service is promptly able to secure transportation
services under other provisions of this title.
* * * * * * *
Sec. 5005. Mail transportation
(a) The Postal Service may obtain mail transportation
service--
[(1) from common carriers by rail and motor vehicle
or persons as provided in chapter 52 of this title;]
[(2)] (1) from air carriers as provided in chapter 54
of this title;
[(3)] (2) from water carriers as provided in chapter
56 of this title; and
[(4)] (3) by contract from any person [(as defined in
section 5201(6) of this title)] or carrier for surface
and water transportation under such terms and
conditions as it deems appropriate, subject to the
provisions of this section.
(b)(1) Contracts for the transportation of mail procured
under subsection [(a)(4)] (a)(3) of this section shall be for
periods not in excess of 4 years [(or where the Postal Service
determines that special conditions or the use of special
equipment warrants, not in excess of 6 years)] (or such longer
period of time as may be determined by the Postal Service to be
advisable or appropriate) and shall be entered into only after
advertising a sufficient time previously for proposals. The
Postal Service, with the consent of the holder of any such
contract, may adjust the compensation allowed under that
contract for increased or decreased costs resulting from
changed conditions occurring during the term of the contract.
(2) A contract under subsection [(a)(4)] (a)(3) of this
section may be renewed at the existing rate by mutual agreement
between the contractor or subcontractor and the Postal Service.
* * * * * * *
(c) The Postal Service, in determining whether to obtain
transportation of mail [by carrier or person under subsection
(a)(1) of this section, by contract under subsection (a)(4) of
this section, or] by contract under subsection (a)(3) of this
section or by Government motor vehicle, shall use the mode of
transportation which best serves the public interest, due
consideration being given to the cost of the transportation
service under each mode.
* * * * * * *
[CHAPTER 52--TRANSPORTATION OF MAIL BY SURFACE CARRIER
[Sec.
[5201. Definitions.
[5202. Applicability.
[5203. Authorization of service by carrier.
[5204. Changes in service; placement of equipment.
[5205. Evidence of service.
[5206. Fines and deductions.
[5207. Surface Transportation Board to fix rates.
[5208. Procedures.
[5209. Special rates.
[5210. Intermodal transportation.
[5211. Statistical studies.
[5212. Special contracts.
[5213. Carrier operations; receipts; expenditures.
[5214. Agreements with passenger common carriers by motor vehicle.
[5215. Star route certification.
[Sec. 5201. Definitions
[For purposes of this chapter--
[(1) ``Board'' means the Surface Transportation
Board;
[(2) ``carrier'' and ``regulated surface carrier''
mean a railroad, a freight forwarder, or a motor
carrier;
[(3) ``railroad'' means a railway common carrier,
including an electric urban and interurban railway
common carrier;
[(4) ``freight forwarder'' means any regulated
freight forwarder which holds itself out to the general
public as a carrier to transport or provide
transportation of property as authorized by a
registration issued by the Board;
[(5) ``motor carrier'' means a motor carrier, except
a passenger-carrying motor vehicle of such a carrier,
within the meaning of section 13102(12) of title 49,
that holds a registration issued by the Board;
[(6) ``person'' includes any person other than a
carrier holding a certificate or registration issued by
the Board; and
[(7) ``mail'' includes equipment and supplies of the
Postal Service.
[Sec. 5202. Applicability
[This chapter applies to mail transportation performed by any
person or carrier or carrier combination regardless of the mode
of transportation actually used to provide the service.
[Sec. 5203. Authorization of service by carrier
[(a) The Postal Service may establish mail routes and
authorize mail transportation service thereon.
[(b) A carrier shall transport mail offered for
transportation by the Postal Service in the manner, under the
conditions, and with the service prescribed by the Postal
Service. A carrier is entitled to receive fair and reasonable
compensation for the transportation and service connected
therewith.
[(c) The Postal Service shall determine the trains or motor
vehicles upon which mail shall be transported, except that no
carrier shall be compelled to transport mail on any train or
vehicle which is operated exclusively for the transportation of
passengers and their baggage.
[(d) A carrier shall transport with due speed such mail as
the Postal Service directs under this section.
[(e) No carrier shall be required to serve territory it is
not otherwise authorized to serve, to provide service for the
Postal Service at a rate which is less than compensatory cost,
or to provide service at a detriment to the carrier or its
other customers.
[(f) Any order or determination of the Postal Service
providing for the transportation of mail by a motor carrier
shall be filed with the Board. If the Board finds, within 90
days after the filing, that the order or determination will be
detrimental to the motor carrier or its other customers, or
that such carrier does not operate equipment suitable for the
transportation of mail, the order or determination shall be
terminated.
[(g) An order or determination of the Postal Service under
this section shall be consistent with the orders of the Board
under sections 5207 and 5208 of this title.
[Sec. 5204. Changes in service; placement of equipment
[(a) The Postal Service may authorize, according to the need
therefor, new or additional mail transportation service by
carriers at the rate or compensation fixed under this chapter.
It may reduce or discontinue service with pro rata reductions
in compensation and indemnity for the loss of reasonable
investment in equipment used exclusively for mail.
[(b) A railroad shall place cars used for full or apartment
post office service in position at such times before departure
as the Postal Service directs.
[Sec. 5205. Evidence of service
[A carrier shall submit evidence of its performance of mail
transportation service, signed by an authorized official, in
such form and at such times as the Postal Service requires.
Mail transportation service is considered that of the carrier
performing it regardless of the ownership of the property used
by the carrier.
[Sec. 5206. Fines and deductions
[(a) The Postal Service may fine any carrier an amount not to
exceed $500 for each day the carrier refuses to perform mail
transportation services required by it at rates or compensation
established under this chapter.
[(b) The Postal Service shall fine a carrier an amount it
deems reasonable for failure or refusal by that carrier to
transport mail as required by the Postal Service under section
5203 of this title.
[(c) The Board may make deductions from the compensation of a
carrier for failure to perform mail transportation service as
required under section 5203 of this title. If the failure to
perform is due to the fault of the carrier, it may deduct a sum
not exceeding twice the compensation applying to such service.
Such deductions shall not be made prior to the expiration of 60
days following service upon the carrier by the Board of notice
of intention to assess a fine or make a deduction and of the
basis therefor.
[Sec. 5207. Surface Transportation Board to fix rates
[(a) The Board shall determine and fix the fair and
reasonable rates or compensation for the transportation of mail
by carrier and the service connected therewith, and shall
prescribe the method of computing such rates or compensation.
The Board shall publish its orders stating its determination
under this section which shall remain in force until changed by
it after notice and hearing.
[(b) For the purpose of determining and fixing rates or
compensation under this section, the Board may make just and
reasonable classifications of carriers and, where just and
equitable, fix general rates applicable to carriers in the same
classification.
[(c) In determining and fixing fair and reasonable rates or
compensation under this section, the Board shall consider the
relation between the Government and carriers as public service
corporations, and the nature of public service as
distinguished, if there is a distinction, from the ordinary
transportation business of the carriers.
[(d) Initial rates or compensation for mail transportation
service by any carrier or carriers shall be those agreed to by
the Postal Service and the carrier or carriers, and such rates
or compensation shall continue in effect until such time as the
Board fixes the rates or compensation under subsection (a) of
this section.
[Sec. 5208. Procedures
[(a) At any time after 6 months from the entry of an order
stating the Board's determination under section 5207 of this
title, the Postal Service or an interested carrier may apply
for a reexamination and substantially similar proceedings as
have theretofore been had shall be followed with respect to the
rates of compensation for services covered by the application.
At the conclusion of the hearing the Board shall enter an order
stating its determination.
[(b) Except as authorized by sections 5207(d), 5209, 5210,
and 5212 of this title, the Postal Service shall pay a carrier
the rates or compensation so determined and fixed for
application at such stated times as named in the order.
[(c) The Postal Service may file with the Board a
comprehensive plan stating--
[(1) its requirements for the transportation of mail
by carrier;
[(2) the character and speed of the trains or motor
vehicles which are to carry the various kinds of mail;
[(3) the service, both terminal and en route, which
carriers are to render;
[(4) what it believes to be the fair and reasonable
rates or compensation for the services required; and
[(5) all other information which may be material to
the inquiry, but such other information may be filed at
any time in the discretion of the Board.
[(d) When a comprehensive plan is filed, the Board shall give
notice of not less than 30 days to each carrier required by the
Postal Service to transport mail pursuant to such plan. A
carrier may file its answer at the time fixed by the Board, but
not later than 30 days after the expiration date fixed by the
Board in the notice, and the Board shall proceed with the
hearing.
[Sec. 5209. Special rates
[Upon petition by the Postal Service, the Board shall
determine and fix carload or truckload, or less than carload or
truckload, rates for the transportation of mail not entitled to
high priority in transportation. A carrier shall perform the
service at the rates so determined when requested to do so and
under the conditions prescribed by the Postal Service.
[Sec. 5210. Intermodal transportation
[The Postal Service may permit a carrier to perform mail
transportation by any form of transportation it deems
appropriate at rates or compensation not exceeding those
allowable for similar service by the designated form of
transportation.
[Sec. 5211. Statistical studies
[The Postal Service may arrange for weighing and measuring
mail transported on carrier mail routes and make other
computations for statistical and administrative purposes to
carry out the purposes of this chapter.
[Sec. 5212. Special contracts
[The Postal Service may enter into special contracts with any
carrier or person, without advertising, for bids and for
periods not in excess of 4 years. It may contract to pay lower
rates or compensation or, where in its judgment conditions
warrant, higher rates or compensation than those determined or
fixed by the Board. The fact that the Board has not prescribed
rates or compensation for the carrier involved, under section
5207 of this title, shall not preclude execution of a contract
under this section. Such contracts may be negotiated only after
reasonable notice has been posted in advance in post offices on
the post roads to be served, and other carriers or persons have
been given an opportunity to offer to negotiate for the
transportation of mail.
[Sec. 5213. Carrier operations; receipts; expenditures
[The Postal Service shall request any carrier transporting
the mails to furnish, under seal, such data relating to the
operations, receipts, and expenditures of such carrier as may,
in its judgment, be deemed necessary to enable it to ascertain
the cost of mail transportation and the proper compensation to
be paid for such service.
[Sec. 5214. Agreements with passenger common carriers by motor vehicle
[The Postal Service may enter into contracts under such terms
and conditions as it shall prescribe and without advertising
for bids for the transportation of mail, in passenger-carrying
motor vehicles, by passenger common carriers, or by motor
vehicles over the regular routes on which the carrier is
permitted by law to transport passengers.
[Sec. 5215. Star route certification
[(a) Any person who was a contractor under a star route, mail
messenger, or contract motor vehicle service contract on the
effective date of this section (or successor in interest to any
such person), shall, upon application to the Board for the
territory within which such contractor operated on or before
the effective date of this section be issued a certificate of
public convenience and necessity as a motor carrier for the
transportation of mail by the Board without the Board's
requiring further proof that the public convenience and
necessity will be served by such operation and without further
proceedings.
[(b) Applications of persons who were not contractors on the
effective date of this section shall be decided in accordance
with applicable Board procedure.
[(c) For purposes of this section, the term ``person'' has
the same meaning given that term under section 1 of title 1.]
CHAPTER 54--TRANSPORTATION OF MAIL BY AIR
* * * * * * *
Sec. 5402. Contracts for transportation of mail by air
(a) * * *
* * * * * * *
(d) If the Postal Service determines that service by
certificated air carriers or combination of air carriers
between any pair or pairs of points in foreign air
transportation is not adequate for its purposes, it may
contract [for a period of not more than 4 years], without
advertising for bids, in such manner and under such terms and
conditions as it may deem appropriate, with any air taxi
operator or combination thereof for such air transportation
service. Contracts made under this subsection may be renewed at
the existing rate by mutual agreement between the holder and
the Postal Service. The Postal Service, with the consent of the
air taxi operator, may adjust the compensation under such
contracts for increased or decreased costs occasioned by
changed conditions occurring during the contract term. The
Postal Service shall cancel such a contract when the Secretary
authorizes an additional certificated carrier or carriers to
provide service between any pair or pairs of points covered by
the contract, and such carrier or carriers inaugurate schedules
adequate for its purposes.
* * * * * * *
CHAPTER 56--TRANSPORTATION OF MAIL BY VESSEL
* * * * * * *
Sec. 5605. Contracts for transportation of mail by vessel
The Postal Service may contract for the transportation of
mail by vessel without advertising for bids [for periods of not
in excess of 4 years].
----------
SECTION 1402 OF THE VICTIMS OF CRIME ACT OF 1984
crime victims fund
Sec. 1402. (a) * * *
(b) Except as limited by subsection (c), there shall be
deposited in the Fund--
(1) all fines that are collected from persons
convicted of offenses against the United States
except--
(A) * * *
(B) fines to be paid into--
(i) * * *
(ii) the Postal Service Fund pursuant
to sections 2601(a)(2) and 2003 of
title 39 of the United States Code and
for the purposes set forth in section
[404(a)(8)] 404(a)(7) of such title 39;
* * * * * * *
----------
TITLE 5, UNITED STATES CODE
* * * * * * *
PART I--THE AGENCIES GENERALLY
* * * * * * *
CHAPTER 1--ORGANIZATION
* * * * * * *
Sec. 104. Independent establishment
For the purpose of this title, ``independent establishment''
means--
(1) an establishment in the executive branch (other
than the United States Postal Service or the [Postal
Rate] Postal Regulatory Commission) which is not an
Executive department, military department, Government
corporation, or part thereof, or part of an independent
establishment; and
* * * * * * *
CHAPTER 3--POWERS
* * * * * * *
Sec. 306. Strategic plans
(a) * * *
* * * * * * *
(f) For purposes of this section the term ``agency'' means an
Executive agency defined under section 105, but does not
include the Central Intelligence Agency, the General Accounting
Office, the Panama Canal Commission, the United States Postal
Service, and the [Postal Rate] Postal Regulatory Commission.
* * * * * * *
PART III--EMPLOYEES
Subpart A--General Provisions
* * * * * * *
CHAPTER 21--DEFINITIONS
* * * * * * *
Sec. 2104. Officer
(a) * * *
(b) Except as otherwise provided by law, an officer of the
United States Postal Service or of the [Postal Rate] Postal
Regulatory Commission is deemed not an officer for purposes of
this title.
* * * * * * *
Subpart B--Employment and Retention
* * * * * * *
CHAPTER 33--EXAMINATION, SELECTION, AND PLACEMENT
* * * * * * *
SUBCHAPTER VI--ASSIGNMENTS TO AND FROM STATES
Sec. 3371. Definitions
For the purpose of this subchapter--
(1) * * *
* * * * * * *
(3) ``Federal agency'' means an Executive agency,
military department, a court of the United States, the
Administrative Office of the United States Courts, the
Library of Congress, the Botanic Garden, the Government
Printing Office, the Congressional Budget Office, the
United States Postal Service, the [Postal Rate] Postal
Regulatory Commission, the Office of the Architect of
the Capitol, the Office of Technology Assessment, and
such other similar agencies of the legislative and
judicial branches as determined appropriate by the
Office of Personnel Management; and
* * * * * * *
Subpart D--Pay and Allowances
* * * * * * *
CHAPTER 53--PAY RATES AND SYSTEMS
* * * * * * *
SUBCHAPTER II--EXECUTIVE SCHEDULE PAY RATES
* * * * * * *
Sec. 5314. Positions at level III
Level III of the Executive Schedule applies to the following
positions, for which the annual rate of basic pay shall be the
rate determined with respect to such level under chapter 11 of
title 2, as adjusted by section 5318 of this title:
Solicitor General of the United States.
* * * * * * *
Chairman, [Postal Rate] Postal Regulatory Commission.
* * * * * * *
Sec. 5315. Positions at level IV
Level IV of the Executive Schedule applies to the following
positions, for which the annual rate of basic pay shall be the
rate determined with respect to such level under chapter 11 of
title 2, as adjusted by section 5318 of this title:
Deputy Administrator of General Services.
* * * * * * *
Members, [Postal Rate] Postal Regulatory Commission
(4).
* * * * * * *
CHAPTER 55--PAY ADMINISTRATION
* * * * * * *
SUBCHAPTER II--WITHHOLDING PAY
* * * * * * *
Sec. 5514. Installment deduction for indebtedness to the United States
(a)(1) * * *
* * * * * * *
(5) For purposes of this subsection--
(A) * * *
(B) ``agency'' includes executive departments
and agencies, the United States Postal Service,
the [Postal Rate] Postal Regulatory Commission,
the United States Senate, the United States
House of Representatives, and any court, court
administrative office, or instrumentality in
the judicial or legislative branches of the
Government, and government corporations.
* * * * * * *
Subpart F--Labor-Management and Employee Relations
* * * * * * *
CHAPTER 73--SUITABILITY, SECURITY, AND CONDUCT
* * * * * * *
SUBCHAPTER IV--FOREIGN GIFTS AND DECORATIONS
Sec. 7342. Receipt and disposition of foreign gifts and decorations
(a) For the purpose of this section--
(1) ``employee'' means--
(A) an employee as defined by section 2105 of
this title and an officer or employee of the
United States Postal Service or of the [Postal
Rate] Postal Regulatory Commission;
* * * * * * *
CHAPTER 75--ADVERSE ACTIONS
* * * * * * *
SUBCHAPTER II--REMOVAL, SUSPENSION FOR MORE THAN 14 DAYS, REDUCTION IN
GRADE OR PAY, OR FURLOUGH FOR 30 DAYS OR LESS
Sec. 7511. Definitions; application
(a) For the purpose of this subchapter--
(1) ``employee'' means--
(A) * * *
(B) a preference eligible in the excepted
service who has completed 1 year of current
continuous service in the same or similar
positions--
(i) in an Executive agency; or
(ii) in the United States Postal
Service or [Postal Rate] Postal
Regulatory Commission; and
* * * * * * *
Subpart G--Insurance and Annuities
* * * * * * *
CHAPTER 83--RETIREMENT
* * * * * * *
SUBCHAPTER III--CIVIL SERVICE RETIREMENT
* * * * * * *
Sec. 8334. Deductions, contributions, and deposits
(a)(1)(A) * * *
(B)(i) * * *
(ii) In the case of an employee of the United States Postal
Service, the amount to be contributed under this subparagraph
shall (instead of the amount described in clause (i)) be equal
to [the product derived by multiplying the employee's basic pay
by the percentage equal to--
[(I) the normal-cost percentage for the applicable
employee category listed in subparagraph (A), minus
[(II) the percentage deduction rate that applies with
respect to such employee under subparagraph (A).] zero.
* * * * * * *
Sec. 8348. Civil Service Retirement and Disability Fund
(a) * * *
* * * * * * *
[(h)(1)(A) For purposes of this subsection, ``Postal
supplemental liability'' means the estimated excess, as
determined by the Office, of--
[(i) the actuarial present value of all future
benefits payable from the Fund under this subchapter
attributable to the service of current or former
employees of the United States Postal Service, over
[(ii) 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
pursuant to section 8334;
[(II) the actuarial present value of the
future contributions to be made pursuant to
section 8334 with respect to employees of the
United States Postal Service currently subject
to this subchapter;
[(III) that portion of the Fund balance, as
of the date the Postal supplemental liability
is determined, attributable to payments to the
Fund by the United States Postal Service and
its employees, including earnings on those
payments; and
[(IV) any other appropriate amount, as
determined by the Office in accordance with
generally accepted actuarial practices and
principles.
[(B)(i) In computing the actuarial present value of future
benefits, the Office shall include the full value of benefits
attributable to military and volunteer service for United
States Postal Service employees first employed after June 30,
1971, and a prorated share of the value of benefits
attributable to military and volunteer service for United
States Postal Service employees first employed before July 1,
1971.
[(ii) Military service so included shall not be included in
the computation of any amount under subsection (g)(2).
[(2)(A) Not later than June 30, 2004, the Office shall
determine the Postal supplemental liability as of September 30,
2003. The Office shall establish an amortization schedule,
including a series of equal annual installments commencing
September 30, 2004, which provides for the liquidation of such
liability by September 30, 2043.
[(B) The Office shall redetermine the Postal supplemental
liability as of the close of the fiscal year, for each fiscal
year beginning after September 30, 2003, through the fiscal
year ending September 30, 2038, and shall establish a new
amortization schedule, including a series of equal annual
installments commencing on September 30 of the subsequent
fiscal year, which provides for the liquidation of such
liability by September 30, 2043.
[(C) The Office shall redetermine the Postal supplemental
liability as of the close of the fiscal year for each fiscal
year beginning after September 30, 2038, and shall establish a
new amortization schedule, including a series of equal annual
installments commencing on September 30 of the subsequent
fiscal year, which provides for the liquidation of such
liability over 5 years.
[(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 dynamic actuarial 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.
[(F) An amortization schedule established under subparagraph
(B) or (C) shall supersede any amortization schedule previously
established under this paragraph.
[(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.
[(4) Notwithstanding any other provision of this subsection,
any determination or redetermination made by the Office under
this subsection shall, upon request of the Postal Service, be
subject to reconsideration and review (including adjustment by
the Board of Actuaries of the Civil Service Retirement System)
to the same extent and in the same manner as provided under
section 8423(c).]
(h)(1) For purposes of this subsection, a Postal surplus (or
supplemental liability) is the amount, as estimated by the
Office, by which--
(A) the actuarial present value of all future
benefits which are payable from the Fund under this
subchapter to current or former employees of the United
States Postal Service, or their survivors, and
attributable to civilian employment with the Postal
Service, is less than (or greater than)
(B) the sum of--
(i) the actuarial present value of deductions
to be withheld from the future basic pay of
employees of the Postal Service currently
subject to this subchapter pursuant to section
8334;
(ii) that portion of the Fund balance, as of
the date such surplus or supplemental liability
is determined, attributable to payments to the
Fund by the Postal Service and its employees,
plus the earnings on such amounts while in the
Fund; and
(iii) any other appropriate amount, as
determined by the Office in accordance with
generally accepted actuarial practices and
principles.
(2)(A)(i) Not later than June 15, 2006, the Office shall
determine the Postal surplus or supplemental liability as of
September 30, 2005.
(ii) If a supplemental liability is determined under this
subparagraph for fiscal year 2005, the Office shall establish
an amortization schedule, including a series of equal annual
installments commencing September 30, 2006, which provides for
the liquidation of such liability by September 30, 2043.
(iii) If a surplus is determined under this subparagraph for
fiscal year 2005, the amount of the surplus shall be
transferred to the Postal Service Retiree Health Benefits Fund
by June 30, 2006.
(B)(i) For each of fiscal years 2006 through 2038, the Office
shall determine the Postal surplus or supplemental liability as
of the close of such fiscal year, with each such determination
to be made by June 15th of the following fiscal year.
(ii) If a supplemental liability is determined under this
subparagraph for a fiscal year, the Office shall establish an
amortization schedule, including a series of equal annual
installments commencing on September 30 of the following fiscal
year, which provides for the liquidation of such liability by
September 30, 2043.
(iii)(I) If a surplus of $500,000,000 or more is determined
under this subparagraph for a fiscal year, the amount of the
surplus shall be transferred to the Postal Service Retiree
Health Benefits Fund by June 30th of the following fiscal year.
(II) If a surplus of less than $500,000,000 is determined
under this subparagraph for a fiscal year, the surplus shall
remain in the Fund, subject to transfer in a subsequent fiscal
year under subclause (I) or subparagraph (C)(iii).
(C)(i) Not later than June 15, 2040, the Office shall
determine the Postal surplus or supplemental liability as of
September 30, 2039.
(ii) If a supplemental liability is determined under this
subparagraph for fiscal year 2039, the Office shall establish
an amortization schedule, including a series of equal annual
installments commencing September 30, 2040, which provides for
the liquidation of such liability by September 30, 2043.
(iii) If a surplus is determined under this subparagraph for
fiscal year 2039, the amount of the surplus--
(I) shall be applied first toward reducing the amount
of any supplemental liability described in section
8423(b)(1)(B); and
(II) to the extent that any portion of such surplus
remains after the application of subclause (I), shall,
not later than June 30, 2040, be transferred to the
Postal Service Retiree Health Benefits Fund.
(D) An amortization schedule under this paragraph--
(i) shall be established in accordance with generally
accepted actuarial practices and principles, with
interest computed at the rate used in the most recent
valuation of the Civil Service Retirement System;
(ii) shall supersede any amortization schedule
previously established under this paragraph; and
(iii) shall not be taken into account, for purposes
of any determination of Postal surplus or supplemental
liability, except to the extent of any amounts under
such schedule actually paid.
(E)(i) The Postal Service shall pay to the Office the amounts
due under any amortization schedule established under this
paragraph, to the extent not superseded or canceled.
(ii) A determination under subparagraph (B)(i) or (C)(i) that
no supplemental liability exists shall cancel any amortization
schedule previously established under this paragraph, to the
extent of any amounts first coming due after the close of the
fiscal year to which such determination relates.
(3) Notwithstanding any other provision of law, in computing
the amount of any payment under any other subsection of this
section that is based on the amount of the unfunded liability,
such payment shall be computed disregarding that portion of the
unfunded liability that the Office determines will be
liquidated by payments under this subsection.
(4) As used in this subsection, ``Postal Service Retiree
Health Benefits Fund'' refers to the Postal Service Retiree
Health Benefits Fund, as established by section 8909a.
* * * * * * *
CHAPTER 84--FEDERAL EMPLOYEES' RETIREMENT SYSTEM
* * * * * * *
SUBCHAPTER I--GENERAL PROVISIONS
* * * * * * *
Sec. 8402. Federal Employees' Retirement System; exclusions
(a) * * *
* * * * * * *
(c)(1) The Office may exclude from the operation of this
chapter an employee or group of employees in or under an
Executive agency, the United States Postal Service, or the
[Postal Rate] Postal Regulatory Commission, whose employment is
temporary or intermittent, except an employee whose employment
is part-time career employment (as defined in section 3401(2)).
* * * * * * *
SUBCHAPTER II--BASIC ANNUITY
* * * * * * *
Sec. 8423. Government contributions
(a) * * *
(b)(1) The Office shall compute--
(A) the amount of the supplemental liability of the
Fund with respect to individuals other than those to
whom subparagraph (B) relates, and
(B) the amount of the supplemental liability of the
Fund with respect to current or former employees of the
United States Postal Service (and the [Postal Rate]
Postal Regulatory Commission) and their survivors;
as of the close of each fiscal year beginning after September
30, 1987.
* * * * * * *
SUBCHAPTER VII--FEDERAL RETIREMENT THRIFT INVESTMENT MANAGEMENT SYSTEM
* * * * * * *
Sec. 8474. Executive Director
(a) * * *
* * * * * * *
(c) The Executive Director may--
(1) * * *
* * * * * * *
(4) secure directly from an Executive agency, the
United States Postal Service, or the [Postal Rate]
Postal Regulatory Commission any information necessary
to carry out the provisions of this subchapter or
subchapter III of this chapter and policies of the
Board;
* * * * * * *
CHAPTER 89--HEALTH INSURANCE
Sec.
8901. Definitions.
* * * * * * *
8909a. Postal Service Retiree Health Benefits Fund.
* * * * * * *
Sec. 8906. Contributions
(a) * * *
* * * * * * *
(g)(1) * * *
(2)(A) The Government contributions authorized by this
section for health benefits for an individual who first becomes
an annuitant by reason of retirement from employment with the
United States Postal Service on or after July 1, 1971, or for a
survivor of such an individual or of an individual who died on
or after July 1, 1971, while employed by the United States
Postal Service, shall be paid [by the United States Postal
Service.] first from the Postal Service Retiree Health Benefits
Fund up to the amount contained therein, with any remaining
amount paid by the United States Postal Service.
* * * * * * *
Sec. 8909a. Postal Service Retiree Health Benefits Fund
(a) There is in the Treasury of the United States a Postal
Service Retiree Health Benefits Fund (hereinafter in this
section referred to as the ``Fund'') which is administered by
the Office of Personnel Management. Any amounts transferred to
the Fund under section 8348(h)(2) shall yield interest at a
rate equal to the weighted average yield of all the investments
in the Civil Service Retirement and Disability Fund as of the
date of transfer. All other investments of amounts in the Fund
shall be made in accordance with subsections (c)-(e) of section
8348.
(b) The Fund is available without fiscal year limitation for
payments required by section 8906(g)(2).
(c)(1) Not later than June 30, 2006, and by June 30 of each
succeeding year, the Office of Personnel Management shall
compute the net present value of the excess of future payments
required by section 8906(g)(2)(A) for current and future United
States Postal Service annuitants over the value of the assets
of the Fund as of the end of the fiscal year ending on
September 30 of that year. The actuarial costing method to be
used by the Office and all actuarial assumptions shall be
established by the Office after consultation with the United
States Postal Service and must be in accordance with generally
accepted actuarial practices and principles.
(2) Not later than September 30, 2006, and by September 30 of
each succeeding year, the Office shall compute and the United
States Postal Service shall pay into such Fund--
(A) the portion of the net present value described in
paragraph (1) attributable to the current year's
service of Postal Service employees; and
(B) interest on the net present value described in
paragraph (1) for that fiscal year, at the interest
rate used in computing that net present value;
except that the amount otherwise payable by the Postal Service
under the preceding provisions of this paragraph by not later
than September 30, 2006, shall be reduced by the total
contributions made by the Postal Service under section
8906(g)(2) and attributable to fiscal year 2006 (as determined
by the Office).
(3)(A) Any computation or other determination of the Office
under this subsection shall, upon request of the Postal
Service, be subject to review by the Postal Regulatory
Commission. The Commission shall submit a report containing the
results of any such review to the Postal Service, the Office of
Personnel Management, and the Congress.
(B) Upon receiving the report of the Postal Regulatory
Commission, the Office of Personnel Management shall reconsider
its computation or other determination in light of such report,
and shall make any appropriate adjustments. The Office shall
submit a report containing the results of its reconsideration
to the Commission, the Postal Service, and the Congress.
(4) The Office shall promulgate, after consultation with the
United States Postal Service, any regulations it deems
necessary under this subsection.
* * * * * * *
----------
SECTION 101 OF THE ETHICS IN GOVERNMENT ACT OF 1978
PERSONS REQUIRED TO FILE
Sec. 101. (a) * * *
* * * * * * *
(f) The officers and employees referred to in subsections
(a), (d), and (e) are--
(1) * * *
* * * * * * *
(6) the Postmaster General, the Deputy Postmaster
General, each Governor of the Board of Governors of the
United States Postal Service and each officer or
employee of the United States Postal Service or [Postal
Rate] Postal Regulatory Commission who occupies a
position for which the rate of basic pay is equal to or
greater than 120 percent of the minimum rate of basic
pay payable for GS-15 of the General Schedule;
* * * * * * *
----------
SECTION 501 OF THE REHABILITATION ACT OF 1973
EMPLOYMENT OF INDIVIDUALS WITH DISABILITIES
Sec. 501. (a) * * *
(b) Each department, agency, and instrumentality (including
the United States Postal Service and the [Postal Rate Office]
Postal Regulatory Commission) in the executive branch and the
Smithsonian Institution shall, within one hundred and eighty
days after the date of enactment of this Act, submit to the
Commission and to the Committee an affirmative action program
plan for the hiring, placement, and advancement of individuals
with disabilities in such department, agency, instrumentality,
or Institution. Such plan shall include a description of the
extent to which and methods whereby the special needs of
employees who are individuals with disabilities are being met.
Such plan shall be updated annually, and shall be reviewed
annually and approved by the Commission, if the Commission
determines, after consultation with the Committee, that such
plan provides sufficient assurances, procedures, and
commitments to provide adequate hiring, placement, and
advancement opportunities for individuals with disabilities.
* * * * * * *
----------
SECTION 3502 OF TITLE 44, UNITED STATES CODE
Sec. 3502. Definitions
As used in this subchapter--
(1) * * *
* * * * * * *
(5) the term ``independent regulatory agency'' means
the Board of Governors of the Federal Reserve System,
the Commodity Futures Trading Commission, the Consumer
Product Safety Commission, the Federal Communications
Commission, the Federal Deposit Insurance Corporation,
the Federal Energy Regulatory Commission, the Federal
Housing Finance Board, the Federal Maritime Commission,
the Federal Trade Commission, the Interstate Commerce
Commission, the Mine Enforcement Safety and Health
Review Commission, the National Labor Relations Board,
the Nuclear Regulatory Commission, the Occupational
Safety and Health Review Commission, the [Postal Rate]
Postal Regulatory Commission, the Securities and
Exchange Commission, and any other similar agency
designated by statute as a Federal independent
regulatory agency or commission;
* * * * * * *
----------
INSPECTOR GENERAL ACT OF 1978
* * * * * * *
AUTHORITY; ADMINISTRATION PROVISIONS
Sec. 6. (a) * * *
* * * * * * *
(e)(1) * * *
* * * * * * *
(3) The Inspector General offices of the Department of
Commerce, Department of Education, Department of Energy,
Department of Health and Human Services, Department of Homeland
Security, Department of Housing and Urban Development,
Department of the Interior, Department of Justice, Department
of Labor, Department of State, Department of Transportation,
Department of the Treasury, Department of Veterans Affairs,
Agency for International Development, Environmental Protection
Agency, Federal Deposit Insurance Corporation, Federal
Emergency Management Agency, General Services Administration,
National Aeronautics and Space Administration, Nuclear
Regulatory Commission, Office of Personnel Management, Railroad
Retirement Board, Small Business Administration, Social
Security Administration, [and the] Tennessee Valley Authority,
and United States Postal Service are exempt from the
requirement of paragraph (2) of an initial determination of
eligibility by the Attorney General.
* * * * * * *
REQUIREMENTS FOR FEDERAL ENTITIES AND DESIGNATED FEDERAL ENTITIES
Sec. 8G. (a) Notwithstanding section 11 of this Act, as used
in this section--
(1) * * *
(2) the term ``designated Federal entity'' means
Amtrak, the Appalachian Regional Commission, the Board
of Governors of the Federal Reserve System, the Board
for International Broadcasting, the Commodity Futures
Trading Commission, the Consumer Product Safety
Commission, the Corporation for Public Broadcasting,
the Equal Employment Opportunity Commission, the Farm
Credit Administration, the Federal Communications
Commission, the Federal Deposit Insurance Corporation,
the Federal Election Commission, the Election
Assistance Commission, the Federal Housing Finance
Board, the Federal Labor Relations Authority, the
Federal Maritime Commission, the Federal Trade
Commission, the Legal Services Corporation, the
National Archives and Records Administration, the
National Credit Union Administration, the National
Endowment for the Arts, the National Endowment for the
Humanities, the National Labor Relations Board, the
National Science Foundation, the Panama Canal
Commission, the Peace Corps, the Pension Benefit
Guaranty Corporation, the Securities and Exchange
Commission, the Smithsonian Institution, the United
States International Trade Commission, [and the United
States Postal Service;] and the Postal Regulatory
Commission;
* * * * * * *
(4) the term ``head of the designated Federal
entity'' means any person or persons designated by
statute as the head of a designated Federal entity and
if no such designation exists, the chief policymaking
officer or board of a designated Federal entity as
identified in the list published pursuant to subsection
(h)(1) of this section, [except that--
[(A) with respect to the National Science
Foundation, such term means the National
Science Board; and
[(B) with respect to the United States Postal
Service, such term means the Governors (within
the meaning of section 102(3) of title 39,
United States Code);] except that, with respect
to the National Science Foundation, such term
means the National Science Board;
* * * * * * *
(c) [Except as provided under subsection (f) of this section,
the] The Inspector General shall be appointed by the head of
the designated Federal entity in accordance with the applicable
laws and regulations governing appointments within the
designated Federal entity.
* * * * * * *
[(f)(1) For purposes of carrying out subsection (c) with
respect to the United States Postal Service, the appointment
provisions of section 202(e) of title 39, United States Code,
shall be applied.
[(2) In carrying out the duties and responsibilities
specified in this Act, the Inspector General of the United
States Postal Service (hereinafter in this subsection referred
to as the ``Inspector General'') shall have oversight
responsibility for all activities of the Postal Inspection
Service, including any internal investigation performed by the
Postal Inspection Service. The Chief Postal Inspector shall
promptly report the significant activities being carried out by
the Postal Inspection Service to such Inspector General.
[(3)(A)(i) Notwithstanding subsection (d), the Inspector
General shall be under the authority, direction, and control of
the Governors with respect to audits or investigations, or the
issuance of subpoenas, which require access to sensitive
information concerning--
[(I) ongoing civil or criminal investigations or
proceedings;
[(II) undercover operations;
[(III) the identity of confidential sources,
including protected witnesses;
[(IV) intelligence or counterintelligence matters; or
[(V) other matters the disclosure of which would
constitute a serious threat to national security.
[(ii) With respect to the information described under
clause (i), the Governors may prohibit the Inspector General
from carrying out or completing any audit or investigation, or
from issuing any subpoena, after such Inspector General has
decided to initiate, carry out, or complete such audit or
investigation or to issue such subpoena, if the Governors
determine that such prohibition is necessary to prevent the
disclosure of any information described under clause (i) or to
prevent the significant impairment to the national interests of
the United States.
[(iii) If the Governors exercise any power under clause (i)
or (ii), the Governors shall notify the Inspector General in
writing stating the reasons for such exercise. Within 30 days
after receipt of any such notice, the Inspector General shall
transmit a copy of such notice to the Committee on Governmental
Affairs of the Senate and the Committee on Government Reform
and Oversight of the House of Representatives, and to other
appropriate committees or subcommittees of the Congress.
[(B) In carrying out the duties and responsibilities
specified in this Act, the Inspector General--
[(i) may initiate, conduct and supervise such audits
and investigations in the United States Postal Service
as the Inspector General considers appropriate; and
[(ii) shall give particular regard to the activities
of the Postal Inspection Service with a view toward
avoiding duplication and insuring effective
coordination and cooperation.
[(C) Any report required to be transmitted by the Governors
to the appropriate committees or subcommittees of the Congress
under section 5(d) shall also be transmitted, within the seven-
day period specified under such section, to the Committee on
Governmental Affairs of the Senate and the Committee on
Government Reform and Oversight of the House of
Representatives.
[(3) Nothing in this Act shall restrict, eliminate, or
otherwise adversely affect any of the rights, privileges, or
benefits of either employees of the United States Postal
Service, or labor organizations representing employees of the
United States Postal Service, under chapter 12 of title 39,
United States Code, the National Labor Relations Act, any
handbook or manual affecting employee labor relations with the
United States Postal Service, or any collective bargaining
agreement.
[(4) As used in this subsection, the term ``Governors'' has
the meaning given such term by section 102(3) of title 39,
United States Code.]
* * * * * * *
RULE OF CONSTRUCTION OF SPECIAL PROVISIONS
Sec. 8J. The special provisions under section 8, 8A, 8B, 8C,
8D, [8E or 8F] 8E, 8F, 8H, or 8L of this Act relate only to the
establishment named in such section and no inference shall be
drawn from the presence or absence of a provision in any such
section with respect to an establishment not named in such
section or with respect to a designated Federal entity as
defined under section 8G(a).
* * * * * * *
SPECIAL PROVISIONS CONCERNING THE UNITED STATES POSTAL SERVICE
Sec. 8L. (a) In carrying out the duties and responsibilities
specified in this Act, the Inspector General of the United
States Postal Service shall have oversight responsibility for
all activities of the Postal Inspection Service, including any
internal investigation performed by the Postal Inspection
Service. The Chief Postal Inspector shall promptly report any
significant activities being carried out by the Postal
Inspection Service to such Inspector General. The Postmaster
General shall promptly report to such Inspector General all
allegations of theft, fraud, or misconduct by Postal Service
officers or employees, and entities or individuals doing
business with the Postal Service.
(b) In the case of any report that the Governors of the
United States Postal Service (within the meaning of section
102(3) of title 39, United States Code) are required to
transmit under the second sentence of section 5(d), such
sentence shall be applied by deeming the term ``appropriate
committees of Congress'' to mean the Committee on Government
Reform of the House of Representatives, the Committee on
Governmental Affairs of the Senate, and such other committees
or subcommittees of Congress as may be appropriate.
(c) Notwithstanding any provision of paragraph (7) or (8) of
section 6(a), the Inspector General of the United States Postal
Service may select, appoint, and employ such officers and
employees as may be necessary for carrying out the functions,
powers, and duties of the Office of Inspector General and to
obtain the temporary or intermittent services of experts or
consultants or an organization of experts or consultants,
subject to the applicable laws and regulations that govern such
selections, appointments, and employment, and the obtaining of
such services, within the United States Postal Service.
(d) Nothing in this Act shall restrict, eliminate, or
otherwise adversely affect any of the rights, privileges, or
benefits of employees of the United States Postal Service, or
labor organizations representing employees of the United States
Postal Service, under chapter 12 of title 39, United States
Code, the National Labor Relations Act, any handbook or manual
affecting employee labor relations with the United States
Postal Service, or any collective bargaining agreement.
(e) There are authorized to be appropriated, out of the
Postal Service Fund, such sums as may be necessary for the
Office of Inspector General of the United States Postal
Service.
* * * * * * *
DEFINITIONS
Sec. 11. As used in this Act--
(1) the term ``head of the establishment'' means the
Secretary of Agriculture, Commerce, Defense, Education,
Energy, Health and Human Services, Housing and Urban
Development, the Interior, Labor, State,
Transportation, Homeland Security, or the Treasury; the
Attorney General; the Administrator of the Agency for
International Development, Environmental Protection,
General Services, National Aeronautics and Space, or
Small Business, or Veterans' Affairs; the Director of
the Federal Emergency Management Agency, or the Office
of Personnel Management; the Chairman of the Nuclear
Regulatory Commission or the Railroad Retirement Board;
the Chairperson of the Thrift Depositor Protection
Oversight Board; the Chief Executive Officer of the
Corporation for National and Community Service; the
Administrator of the Community Development Financial
Institutions Fund; the chief executive officer of the
Resolution Trust Corporation; the Chairperson of the
Federal Deposit Insurance Corporation; the Commissioner
of Social Security, Social Security Administration; the
Board of Directors of the Tennessee Valley Authority;
[or] the President of the Export-Import Bank; or the
Governors of the United States Postal Service (within
the meaning of section 102(3) of title 39, United
States Code); as the case may be;
(2) the term ``establishment'' means the Department
of Agriculture, Commerce, Defense, Education, Energy,
Health and Human Services, Housing and Urban
Development, the Interior, Justice, Labor, State,
Transportation, Homeland Security, or the Treasury; the
Agency for International Development, the Community
Development Financial Institutions Fund, the
Environmental Protection Agency, the Federal Emergency
Management Agency, the General Services Administration,
the National Aeronautics and Space Administration, the
Nuclear Regulatory Commission, the Office of Personnel
Management, the Railroad Retirement Board, the
Resolution Trust Corporation, the Federal Deposit
Insurance Corporation, the Small Business
Administration, the Corporation for National and
Community Service, or the Veterans' Administration, the
Social Security Administration, the Tennessee Valley
Authority, [or] the Export-Import Bank, or the United
States Postal Service, as the case may be;
* * * * * * *
----------
SECTION 160 OF THE ENERGY POLICY ACT OF 1992
SEC. 160. INSPECTOR GENERAL REVIEW AND AGENCY ACCOUNTABILITY.
(a) Audit Survey.--Not later than 120 days after the date of
the enactment of this Act, each Inspector General created to
conduct and supervise audits and investigations relating to the
programs and operations of the establishments listed in section
11(2) of the Inspector General Act of 1978 (5 U.S.C. App.)[,
and the Chief Postal Inspector of the United States Postal
Service, in accordance with section 8E(f)(1) as established by
section 8E(a)(2) of the Inspector General Act Amendments of
1988 (Public Law 100-504)] shall--
(1) * * *
* * * * * * *
----------
TITLE 18, UNITED STATES CODE
* * * * * * *
PART I--CRIMES
* * * * * * *
CHAPTER 83--POSTAL SERVICE
* * * * * * *
Sec. 1716. Injurious articles as nonmailable
(a) All kinds of poison, and all articles and compositions
containing poison, and all poisonous animals, insects,
reptiles, and all explosives, hazardous materials, inflammable
materials, infernal machines, and mechanical, chemical, or
other devices or compositions which may ignite or explode, and
all disease germs or scabs, and all other natural or artificial
articles, compositions, or material which may kill or injure
another, or injure the mails or other property, whether or not
sealed as first-class matter, are nonmailable matter and shall
not be conveyed in the mails or delivered from any post office
or station thereof, nor by any officer or employee of the
Postal Service.
* * * * * * *
PART II--CRIMINAL PROCEDURE
* * * * * * *
CHAPTER 203--ARREST AND COMMITMENT
* * * * * * *
Sec. 3061. Investigative powers of Postal Service personnel
(a) * * *
* * * * * * *
(c)(1) The Postal Service may employ police officers for duty
in connection with the protection of property owned or occupied
by the Postal Service or under the charge and control of the
Postal Service, and persons on the property, including duty in
areas outside the property to the extent necessary to protect
the property and persons on the property.
(2) With respect to such property, such officers shall have
the power to--
(A) enforce Federal laws and regulations for the
protection of persons and property;
(B) carry firearms; and
(C) make arrests without a warrant for any offense
against the United States committed in the presence of
the officer or for any felony cognizable under the laws
of the United States if the officer has reasonable
grounds to believe that the person to be arrested has
committed or is committing a felony.
(3) With respect to such property, such officers may have, to
such extent as the Postal Service may by regulations prescribe,
the power to--
(A) serve warrants and subpoenas issued under the
authority of the United States; and
(B) conduct investigations, on and off the property
in question, of offenses that may have been committed
against property owned or occupied by the Postal
Service or persons on the property.
(4)(A) As to such property, the Postmaster General may
prescribe regulations necessary for the protection and
administration of property owned or occupied by the Postal
Service and persons on the property. The regulations may
include reasonable penalties, within the limits prescribed in
subparagraph (B), for violations of the regulations. The
regulations shall be posted and remain posted in a conspicuous
place on the property.
(B) A person violating a regulation prescribed under this
subsection shall be fined under this title, imprisoned for not
more than 30 days, or both.
* * * * * * *
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SECTION 8 OF THE POSTAL REORGANIZATION ACT
TRANSFER OF POST OFFICE DEPARTMENT PERSONNEL
Sec. 8. (a) Officers and employees of the Post Office
Department shall become officers and employees of the United
States Postal Service on the effective date of this section.
The provisions of this section shall not apply to persons
occupying the positions of Postmaster General, Deputy
Postmaster General, Assistant Postmasters General, General
Counsel, or Judicial Officer. This section shall not be
construed, however, to prohibit the appointment of such persons
to positions in the Postal Service.
(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.
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SECTION 3 OF THE POSTAL CIVIL SERVICE RETIREMENT SYSTEM FUNDING REFORM
ACT OF 2003
(Public Law 108-18)
* * * * * * *
[SEC. 3. DISPOSITION OF SAVINGS ACCRUING TO THE UNITED STATES POSTAL
SERVICE.
[(a) In General.--Savings accruing to the United States
Postal Service as a result of the enactment of this Act--
[(1) shall, to the extent that such savings are
attributable to fiscal year 2003 or 2004, be used to
reduce the postal debt (in consultation with the
Secretary of the Treasury), and the Postal Service
shall not incur additional debt to offset the use of
the savings to reduce the postal debt in fiscal years
2003 and 2004;
[(2) shall, to the extent that such savings are
attributable to fiscal year 2005, be used to continue
holding postage rates unchanged and to reduce the
postal debt, to such extent and in such manner as the
Postal Service shall specify (in consultation with the
Secretary of the Treasury); and
[(3) to the extent that such savings are attributable
to any fiscal year after fiscal year 2005, shall be
considered to be operating expenses of the Postal
Service and, until otherwise provided for by law, shall
be held in escrow and may not be obligated or expended.
[(b) Amounts Saved.--
[(1) In general.--The amounts representing any
savings accruing to the Postal Service in any fiscal
year as a result of the enactment of this Act shall be
computed by the Office of Personnel Management for each
such fiscal year in accordance with paragraph (2).
[(2) Methodology.--Not later than July 31, 2003, the
Office of Personnel Management shall--
[(A) formulate a plan specifically
enumerating the actuarial methods and
assumptions by which the Office shall make its
computations under paragraph (1); and
[(B) submit such plan to the Committee on
Government Reform of the House of
Representatives and the Committee on
Governmental Affairs of the Senate.
[(3) Requirements.--The plan shall be formulated in
consultation with the Postal Service and shall include
the opportunity for the Postal Service to request
reconsideration of computations under this subsection,
and for the Board of Actuaries of the Civil Service
Retirement System to review and make adjustments to
such computations, to the same extent and in the same
manner as provided under section 8423(c) of title 5,
United States Code.
[(c) Reporting Requirement.--The Postal Service shall include
in each report rendered under section 2402 of title 39, United
States Code, the amount applied toward reducing the postal
debt, and the size of the postal debt before and after the
application of subsection (a), during the period covered by
such report.
[(d) Sense of Congress.--It is the sense of the Congress
that--
[(1) the savings accruing to the Postal Service as a
result of the enactment of this Act will be sufficient
to allow the Postal Service to fulfill its commitment
to hold postage rates unchanged until at least 2006;
[(2) because the Postal Service still faces
substantial obligations related to postretirement
health benefits for its current and former employees,
some portion of the savings referred to in paragraph
(1) should be used to address those unfunded
obligations; and
[(3) none of the savings referred to in paragraph (1)
should be used in the computation of any bonuses for
Postal Service executives.
[(e) Postal Service Proposal.--
[(1) In general.--The United States Postal Service
shall, by September 30, 2003, prepare and submit to the
President, the Congress, and the General Accounting
Office its proposal detailing how any savings accruing
to the Postal Service as a result of the enactment of
this Act, which are attributable to any fiscal year
after fiscal year 2005, should be expended.
[(2) Matters to consider.--In preparing its proposal
under this subsection, the Postal Service shall
consider--
[(A) whether, and to what extent, those
future savings should be used to address--
[(i) debt repayment;
[(ii) prefunding of postretirement
healthcare benefits for current and
former postal employees;
[(iii) productivity and cost saving
capital investments;
[(iv) delaying or moderating
increases in postal rates; and
[(v) any other matter; and
[(B) the work of the President's Commission
on the United States Postal Service under
section 5 of Executive Order 13278 (67 Fed.
Reg. 76672).
[(3) GAO review and report.--Not later than 60 days
after the Postal Service submits its proposal pursuant
to paragraph (1), the General Accounting Office shall
prepare and submit a written evaluation of such
proposal to the Committee on Government Reform of the
House of Representatives and the Committee on
Governmental Affairs of the Senate.
[(4) Legislative action.--Not later than 180 days
after it has received both the proposal of the Postal
Service and the evaluation of such proposal by the
General Accounting Office under this subsection,
Congress shall revisit the question of how the savings
accruing to the Postal Service as a result of the
enactment of this Act should be used.
[(f) Determination and Disposition of Surplus.--
[(1) In general.--If, as of the date under paragraph
(2), the Office of Personnel Management determines
(after consultation with the Postmaster General) that
the computation under section 8348(h)(1)(A) of title 5,
United States Code, yields a negative amount
(hereinafter referred to as a ``surplus'')--
[(A) the Office shall inform the Postmaster
General of its determination, including the
size of the surplus so determined; and
[(B) the Postmaster General shall submit to
the Congress a report describing how the Postal
Service proposes that such surplus be used,
including a draft of any legislation that might
be necessary.
[(2) Determination date.--The date to be used for
purposes of paragraph (1) shall be September 30, 2025,
or such earlier date as, in the judgment of the Office,
is the date by which all postal employees under the
Civil Service Retirement System will have retired.
[(g) Definitions.--For purposes of this section--
[(1) the savings accruing to the Postal Service as a
result of the enactment of this Act shall, for any
fiscal year, be equal to the amount (if any) by which--
[(A) the contributions that the Postal
Service would otherwise have been required to
make to the Civil Service Retirement and
Disability Fund for such fiscal year if this
Act had not been enacted, exceed
[(B) the contributions made by the Postal
Service to such Fund for such fiscal year; and
[(2) the term ``postal debt'' means the outstanding
obligations of the Postal Service, as determined under
chapter 20 of title 39, United States Code.]