[House Report 112-363]
[From the U.S. Government Publishing Office]


112th Congress                                            Rept. 112-363
                        HOUSE OF REPRESENTATIVES
 2d Session                                                      Part 1

======================================================================



 
                       POSTAL REFORM ACT OF 2011

                                _______
                                

                January 17, 2012.--Ordered to be printed

                                _______
                                

   Mr. Issa, from the Committee on Oversight and Government Reform, 
                        submitted the following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 2309]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Oversight and Government Reform, to whom 
was referred the bill (H.R. 2309) to restore the financial 
solvency of the United States Postal Service and to ensure the 
efficient and affordable nationwide delivery of mail, having 
considered the same, report favorably thereon with an amendment 
and recommend that the bill as amended do pass.

                                CONTENTS

                                                                   Page
Committee Statement and Views....................................    42
Section-by-Section...............................................    58
Explanation of Amendments........................................    73
Committee Consideration..........................................    76
Rollcall Votes...................................................    77
Application of Law to the Legislative Branch.....................    78
Statement of Oversight Findings and Recommendations of the 
  Committee......................................................    79
Statement of General Performance Goals and Objectives............    79
Federal Advisory Committee Act...................................    79
Unfunded Mandate Statement.......................................    79
Earmark Identification...........................................    79
Committee Estimate...............................................    79
Budget Authority and Congressional Budget Office Cost Estimate...    79
Changes in Existing Law Made by the Bill as Reported.............    91
Minority Views...................................................   122

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS; REFERENCES.

  (a) Short Title.--This Act may be cited as the ``Postal Reform Act of 
2011''.
  (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents; references.

                 TITLE I--POSTAL SERVICE MODERNIZATION

            Subtitle A--Commission on Postal Reorganization

Sec. 101. Short title.
Sec. 102. Definitions.
Sec. 103. Commission on Postal Reorganization.
Sec. 104. Recommendations for closures and consolidations.
Sec. 105. Implementation of closures and consolidations.
Sec. 106. Congressional consideration of final CPR reports.
Sec. 107. Nonappealability of decisions.
Sec. 108. Rules of construction.
Sec. 109. GAO study and report.

                      Subtitle B--Other Provisions

Sec. 111. Implementation of discretionary non-mail delivery days.
Sec. 112. Efficient and flexible universal postal service.
Sec. 113. Enhanced reporting on Postal Service efficiency.
Sec. 114. Applicability of procedures relating to closures and 
consolidations.

   TITLE II--POSTAL SERVICE FINANCIAL RESPONSIBILITY AND MANAGEMENT 
                          ASSISTANCE AUTHORITY

               Subtitle A--Establishment and Organization

Sec. 201. Purposes.
Sec. 202. Establishment of the Authority.
Sec. 203. Membership and qualification requirements.
Sec. 204. Organization.
Sec. 205. Executive Director and staff.
Sec. 206. Funding.

                  Subtitle B--Powers of the Authority

Sec. 211. Powers.
Sec. 212. Exemption from liability for claims.
Sec. 213. Treatment of actions arising under this title.
Sec. 214. Delivery point modernization.

Subtitle C--Establishment and Enforcement of Financial Plan and Budget 
                         for the Postal Service

Sec. 221. Development of financial plan and budget for the Postal 
Service.
Sec. 222. Supplementary borrowing authority during a control period.
Sec. 223. Process for submission and approval of financial plan and 
budget.
Sec. 224. Responsibilities of the Authority.
Sec. 225. Effect of finding noncompliance with financial plan and 
budget.
Sec. 226. Recommendations regarding financial stability, etc.
Sec. 227. Special rules for fiscal year in which control period 
commences.
Sec. 228. Assistance in achieving financial stability, etc.
Sec. 229. Obtaining reports.
Sec. 230. Reports and comments.

              Subtitle D--Termination of a Control Period

Sec. 231. Termination of control period, etc.
Sec. 232. Congressional consideration of recommendation.

                  TITLE III--POSTAL SERVICE WORKFORCE

                     Subtitle A--General Provisions

Sec. 301. Modifications relating to determination of pay comparability.
Sec. 302. Limitation on postal contributions under FEGLI and FEHBP.
Sec. 303. Repeal of provision relating to overall value of fringe 
benefits.
Sec. 304. Applicability of reduction-in-force procedures.
Sec. 305. Modifications relating to collective bargaining.
Sec. 306. One-time transfer of net surplus postal retirement 
contributions.

        Subtitle B--Postal Service Workers' Compensation Reform

Sec. 311. Postal Service workers' compensation reform.

                    TITLE IV--POSTAL SERVICE REVENUE

Sec. 401. Adequacy, efficiency, and fairness of postal rates.
Sec. 402. Repeal of rate preferences for qualified political 
committees.
Sec. 403. Rate preferences for nonprofit advertising.
Sec. 404. Streamlined review of qualifying service agreements for 
competitive products.
Sec. 405. Submission of service agreements for streamlined review.
Sec. 406. Transparency and accountability for service agreements.
Sec. 407. Nonpostal services.
Sec. 408. Reimbursement of Alaska bypass mail costs.
Sec. 409. Appropriations modernization.
Sec. 410. Retiree health care benefit payment deferral.

                   TITLE V--POSTAL CONTRACTING REFORM

Sec. 501. Contracting provisions.
Sec. 502. Technical amendment to definition.

  (c) References.--Except as otherwise expressly provided, whenever in 
this Act an amendment or repeal is expressed in terms of an amendment 
to, or repeal of, a section or other provision, the reference shall be 
considered to be made to a section or other provision of title 39, 
United States Code.

                 TITLE I--POSTAL SERVICE MODERNIZATION

            Subtitle A--Commission on Postal Reorganization

SEC. 101. SHORT TITLE.

  This subtitle may be cited as the ``Commission on Postal 
Reorganization Act'' or the ``CPR Act''.

SEC. 102. DEFINITIONS.

  For purposes of this title--
          (1) the term ``Postal Service'' means the United States 
        Postal Service;
          (2) the term ``postal retail facility'' means a post office, 
        post office branch, post office classified station, or other 
        facility which is operated by the Postal Service, and the 
        primary function of which is to provide retail postal services;
          (3) the term ``mail processing facility'' means a processing 
        and distribution center, processing and distribution facility, 
        network distribution center, or other facility which is 
        operated by the Postal Service, and the primary function of 
        which is to sort and process mail;
          (4) the term ``district office'' means the central office of 
        an administrative field unit with responsibility for postal 
        operations in a designated geographic area (as defined under 
        regulations, directives, or other guidance of the Postal 
        Service, as in effect on June 23, 2011);
          (5) the term ``area office'' means the central office of an 
        administrative field unit with responsibility for postal 
        operations in a designated geographic area which is comprised 
        of designated geographic areas as referred to in paragraph (4);
          (6) the term ``baseline year'' means the fiscal year last 
        ending before the date of the enactment of this Act; and
          (7) the term ``Member of Congress'' has the meaning given 
        such term by section 2106 of title 5, United States Code.

SEC. 103. COMMISSION ON POSTAL REORGANIZATION.

  (a) Establishment.--There shall be established, not later than 90 
days after the date of the enactment of this Act, an independent 
commission to be known as the ``Commission on Postal Reorganization'' 
(hereinafter in this section referred to as the ``Commission'').
  (b) Duties.--The Commission shall carry out the duties specified for 
it in this subtitle.
  (c) Members.--
          (1) In general.--The Commission shall be composed of 5 
        members who shall be appointed by the President, and of whom--
                  (A) 1 shall be appointed from among individuals 
                recommended by the Speaker of the House of 
                Representatives;
                  (B) 1 shall be appointed from among individuals 
                recommended by the majority leader of the Senate;
                  (C) 1 shall be appointed from among individuals 
                recommended by the minority leader of the House of 
                Representatives;
                  (D) 1 shall be appointed from among individuals 
                recommended by the minority leader of the Senate; and
                  (E) 1 shall be appointed from among individuals 
                recommended by the Comptroller General.
          (2) Qualifications.--
                  (A) In general.--Members of the Commission shall be 
                chosen to represent the public interest generally, and 
                shall not be representatives of specific interests 
                using the Postal Service.
                  (B) Ineligibility.--An individual may not be 
                appointed to serve as a member of the Commission if 
                such individual is a Member of Congress or served as an 
                employee of the Postal Service or the Postal Regulatory 
                Commission, or of a labor organization representing 
                employees of the Postal Service or the Postal 
                Regulatory Commission, during the 3-year period ending 
                on the date of such appointment.
          (3) Political affiliation.--Not more than 3 members of the 
        Commission may be of the same political party.
  (d) Terms.--Each member of the Commission shall be appointed for the 
life of the Commission and may be removed only for cause.
  (e) Vacancies.--A vacancy in the Commission shall be filled in the 
same manner as the original appointment.
  (f) Chairman.--The President shall, at the time of making 
appointments under subsection (c), designate one of the members to 
serve as chairman of the Commission.
  (g) Compensation and Travel Expenses.--
          (1) Compensation.--
                  (A) In general.--Except as provided in subparagraph 
                (B), each member of the Commission shall be paid at a 
                rate equal to the daily equivalent of $40,000 per year 
                for each day (including travel time) during which the 
                member is engaged in the actual performance of duties 
                vested in the Commission.
                  (B) Exception.--Any member of the Commission who is a 
                full-time officer or employee of the United States may 
                not receive additional pay, allowances, or benefits by 
                reason of such member's service on the Commission.
          (2) Travel expenses.--Each member shall receive travel 
        expenses, including per diem in lieu of subsistence, in 
        accordance with applicable provisions of subchapter I of 
        chapter 57 of title 5, United States Code.
  (h) Director.--The Commission shall have a Director who shall be 
appointed by the Commission. The Director shall be paid at the rate of 
basic pay for level IV of the Executive Schedule under section 5315 of 
title 5, United States Code. An appointment under this subsection shall 
be subject to the requirements of subsection (c)(2).
  (i) Additional Personnel.--With the approval of the Commission, the 
Director may appoint and fix the pay of such additional personnel as 
the Director considers appropriate. Such additional personnel may be 
appointed without regard to the provisions of title 5, United States 
Code, governing appointments in the competitive service, and may be 
paid without regard to the provisions of chapter 51 and subchapter III 
of chapter 53 of such title relating to classification and General 
Schedule pay rates, except that an individual so appointed may not 
receive pay at a rate of basic pay in excess of the rate of basic pay 
payable to the Director. An individual appointed under this subsection 
shall serve at the pleasure of the Director.
  (j) Provisions Relating to Details.--
          (1) In general.--Upon request of the Director, the head of 
        any Federal department or agency may detail any of the 
        personnel of such department or agency to the Commission to 
        assist the Commission in carrying out its duties under this 
        subtitle. Notwithstanding any other provision of law, to 
        provide continuity in the work of the Commission, such details 
        may be extended beyond 1 year at the request of the Director.
          (2) Numerical limitation.--Not more than \1/3\ of the 
        personnel of the Commission may consist of the number of 
        individuals on detail from the Postal Service and the Postal 
        Regulatory Commission combined.
          (3) Other limitations.--A person may not be detailed to the 
        Commission from the Postal Service or the Postal Regulatory 
        Commission if such person participated personally and 
        substantially on any matter, within the Postal Service or the 
        Postal Regulatory Commission, concerning the preparation of 
        recommendations for closures or consolidations of postal 
        facilities under this subtitle. No employee of the Postal 
        Service or the Postal Regulatory Commission (including a 
        detailee to the Postal Service or the Postal Regulatory 
        Commission) may--
                  (A) prepare any report concerning the effectiveness, 
                fitness, or efficiency of the performance, on the staff 
                of the Commission, of any person detailed from the 
                Postal Service or the Postal Regulatory Commission to 
                such staff;
                  (B) review the preparation of such a report; or
                  (C) approve or disapprove such a report.
  (k) Other Authorities.--
          (1) Experts and consultants.--The Commission may procure by 
        contract, to the extent funds are available, temporary or 
        intermittent services under section 3109 of title 5, United 
        States Code.
          (2) Leasing, etc.--The Commission may lease space and acquire 
        personal property to the extent funds are available.
  (l) Authorization of Appropriations.--In order to carry out this 
section, there are authorized to be appropriated out of the Postal 
Service Fund $20,000,000, which funds shall remain available until 
expended.
  (m) Financial Reporting.--
          (1) Audit and expenditures.--The Commission shall be 
        responsible for issuing annual financial statements and for 
        establishing and maintaining adequate controls over its 
        financial reporting.
          (2) Internal audits.--The Commission shall maintain an 
        adequate internal audit of its financial transactions.
          (3) Annual certification.--The Commission shall obtain an 
        annual certification for each fiscal year from an independent, 
        certified public accounting firm of the accuracy of its 
        financial statements.
          (4) Comptroller general.--The accounts and operations of the 
        Commission shall be audited by the Comptroller General and 
        reports thereon made to the Congress to the extent and at such 
        times as the Comptroller General may determine.
  (n) Termination.--The Commission shall terminate 60 days after 
submitting its final reports under section 104(d)(3).

SEC. 104. RECOMMENDATIONS FOR CLOSURES AND CONSOLIDATIONS.

  (a) Plan for the Closure or Consolidation of Postal Retail 
Facilities.--
          (1) In general.--Not later than 120 days after the date of 
        the enactment of this Act, the Postal Service, in consultation 
        with the Postal Regulatory Commission, shall develop and submit 
        to the Commission on Postal Reorganization a plan for the 
        closure or consolidation of such postal retail facilities as 
        the Postal Service considers necessary and appropriate so that 
        the total annual costs attributable to the operation of postal 
        retail facilities will be, for each fiscal year beginning at 
        least 2 years after the date on which the Commission transmits 
        to Congress its final report under subsection (d)(3)(A) 
        relating to this subsection, at least $1,000,000,000 less than 
        the corresponding total annual costs for the baseline year.
          (2) Contents.--The plan shall include--
                  (A) a list of the postal retail facilities proposed 
                for closure or consolidation under this subtitle;
                  (B) a proposed schedule under which--
                          (i) closures and consolidations of postal 
                        retail facilities would be carried out under 
                        this subtitle; and
                          (ii) all closures and consolidations of 
                        postal retail facilities under this subtitle 
                        would be completed by not later than 2 years 
                        after the date on which the Commission 
                        transmits to Congress its final report under 
                        subsection (d)(3)(A) relating to such plan;
                  (C) the estimated total annual cost savings 
                attributable to the proposed closures and 
                consolidations described in the plan;
                  (D) the criteria and process used to develop the 
                information described in subparagraphs (A) and (B);
                  (E) the methodology and assumptions used to derive 
                the estimates described in subparagraph (C); and
                  (F) any changes to the processing, transportation, 
                delivery, or other postal operations anticipated as a 
                result of the proposed closures and consolidations 
                described in the plan.
          (3) Consistency.--The methodology and assumptions used to 
        derive the cost estimates described in paragraph (2)(C) shall 
        be consistent with the methodology and assumptions which would 
        have been used by the Postal Service if those closures and 
        consolidations had instead taken effect in the baseline year.
  (b) Plan for the Closure or Consolidation of Mail Processing 
Facilities.--
          (1) In general.--Not later than 300 days after the date of 
        the enactment of this Act, the Postal Service, in consultation 
        with the Inspector General of the United States Postal Service, 
        shall develop and submit to the Commission on Postal 
        Reorganization a plan for the closure or consolidation of such 
        mail processing facilities as the Postal Service considers 
        necessary and appropriate so that--
                  (A) the total annual costs attributable to the 
                operation of mail processing facilities will be, for 
                each fiscal year beginning at least 2 years after the 
                date on which the Commission transmits to Congress its 
                final report under subsection (d)(3)(A) relating to 
                this subsection, at least $2,000,000,000 less than the 
                corresponding total annual costs for the baseline year; 
                and
                  (B) the Postal Service has, for fiscal years 
                beginning at least 2 years after the date on which the 
                Commission transmits to Congress its final report under 
                subsection (d)(3)(A) relating to this subsection, no 
                more than 10 percent excess mail processing capacity.
          (2) Contents.--The plan shall include--
                  (A) a list of the mail processing facilities proposed 
                for closure or consolidation under this subtitle;
                  (B) a proposed schedule under which--
                          (i) closures and consolidations of mail 
                        processing facilities would be carried out 
                        under this subtitle; and
                          (ii) all closures and consolidations of mail 
                        processing facilities under this subtitle would 
                        be completed by not later than 2 years after 
                        the date on which the Commission transmits to 
                        Congress its final report under subsection 
                        (d)(3)(A) relating to such plan;
                  (C) the estimated total annual cost savings 
                attributable to the proposed closures and 
                consolidations described in the plan;
                  (D) the criteria and process used to develop the 
                information described in subparagraphs (A) and (B);
                  (E) the methodology and assumptions used to derive 
                the estimates described in subparagraph (C); and
                  (F) any changes to the processing, transportation, 
                delivery, or other postal operations anticipated as a 
                result of the proposed closures and consolidations 
                described in the plan.
          (3) Consistency.--The methodology and assumptions used to 
        derive the cost estimates described in paragraph (2)(C) shall 
        be consistent with the methodology and assumptions which would 
        have been used by the Postal Service if those closures and 
        consolidations had instead taken effect in the baseline year.
          (4) Excess mail processing capacity.--The Commission shall 
        cause to be published in the Federal Register notice of a 
        proposed definition of ``excess mail processing capacity'' for 
        purposes of this section within 120 days after the date of the 
        enactment of this Act, and shall provide a period of 30 days 
        for public comment on the proposed definition. Not later than 
        180 days after the date of the enactment of this Act, the 
        Commission shall issue and cause to be published in the Federal 
        Register a final definition of ``excess mail processing 
        capacity'' for purposes of this section. Such definition shall 
        include an estimate of the total amount of excess mail 
        processing capacity in mail processing facilities as of the 
        date of the enactment of this Act.
          (5) Underutilized mail processing facilities.--In developing 
        a plan under this subsection, the Postal Service may include 
        the estimated total cost savings that would result from moving 
        mail processing operations to any mail processing facility 
        that, as of the date of introduction of this Act--
                  (A) is not currently used by the Postal Service; and
                  (B) is capable of processing mail to the Postal 
                Service's standards.
  (c) Plan for the Closure or Consolidation of Area and District 
Offices.--
          (1) In general.--Not later than 300 days after the date of 
        the enactment of this Act, the Postal Service, in consultation 
        with the Inspector General of the United States Postal Service, 
        shall develop and submit to the Commission on Postal 
        Reorganization a plan for the closure or consolidation of such 
        area and district offices as the Postal Service considers 
        necessary and appropriate so that the combined total number of 
        area and district offices will be, for each fiscal year 
        beginning at least 2 years after the date on which the 
        Commission transmits to Congress its final report under 
        subsection (d)(3)(A) relating to this subsection, at least 30 
        percent less than the corresponding combined total for the 
        baseline year.
          (2) Contents.--The plan shall include--
                  (A) a list of the area and district offices proposed 
                for closure or consolidation under this subtitle;
                  (B) a proposed schedule under which--
                          (i) closures and consolidations of area and 
                        district offices would be carried out under 
                        this subtitle; and
                          (ii) all closures and consolidations of area 
                        and district offices under this subtitle would 
                        be completed by not later than 2 years after 
                        the date on which the Commission transmits to 
                        Congress its final report under subsection 
                        (d)(3)(A) relating to such plan;
                  (C) the estimated total annual cost savings 
                attributable to the proposed closures and 
                consolidations described in the plan;
                  (D) the criteria and process used to develop the 
                information described in subparagraphs (A) and (B);
                  (E) the methodology and assumptions used to derive 
                the estimates described in subparagraph (C); and
                  (F) any changes to the processing, transportation, 
                delivery, or other postal operations anticipated as a 
                result of the proposed closures and consolidations 
                described in the plan.
          (3) Consistency.--The methodology and assumptions used to 
        derive the cost estimates described in paragraph (2)(C) shall 
        be consistent with the methodology and assumptions which would 
        have been used by the Postal Service if those closures and 
        consolidations had instead taken effect in the baseline year.
  (d) Review and Recommendations of the Commission.--
          (1) Initial reports.--
                  (A) In general.--After receiving the plan of the 
                Postal Service under subsection (a), (b), or (c), the 
                Commission on Postal Reorganization shall transmit to 
                Congress and publish in the Federal Register a report 
                under this paragraph, which shall contain the 
                Commission's findings based on a review and analysis of 
                such plan, together with the Commission's initial 
                recommendations for closures and consolidations of 
                postal facilities, mail processing facilities, or area 
                and district offices (as the case may be).
                  (B) Explanation of changes.--The Commission shall 
                explain and justify in its report any recommendations 
                made by the Commission that are different from those 
                contained in the Postal Service plan to which such 
                report pertains.
                  (C) Deadlines.--A report of the Commission under this 
                paragraph shall be transmitted and published, in 
                accordance with subparagraph (A), within--
                          (i) if the report pertains to the plan under 
                        subsection (a), 60 days after the date on which 
                        the Commission receives such plan; or
                          (ii) if the report pertains to the plan under 
                        subsection (b) or (c), 90 days after the date 
                        on which the Commission receives such plan.
          (2) Public hearings.--
                  (A) In general.--After receiving the plan of the 
                Postal Service under subsection (a), (b), or (c), the 
                Commission on Postal Reorganization shall conduct at 
                least 5 public hearings on such plan. The hearings 
                shall be conducted in geographic areas chosen so as to 
                reflect a broadly representative range of needs and 
                interests.
                  (B) Testimony.--All testimony before the Commission 
                at a public hearing conducted under this paragraph 
                shall be given under oath.
                  (C) Deadlines.--All hearings under this paragraph 
                shall be completed within 60 days after the date as of 
                which the Commission satisfies the requirements of 
                paragraph (1) with respect to such plan.
          (3) Final reports.--
                  (A) In general.--After satisfying the requirements of 
                paragraph (2) with respect to the plan of the Postal 
                Service under subsection (a), (b), or (c) (as the case 
                may be), the Commission shall transmit to Congress and 
                publish in the Federal Register a report under this 
                paragraph containing a summary of the hearings 
                conducted with respect to such plan, together with the 
                Commission's final recommendations for closures and 
                consolidations of postal facilities, mail processing 
                facilities, or area and district offices (as the case 
                may be).
                  (B) Approval.--Recommendations under subparagraph (A) 
                shall not be considered to be final recommendations 
                unless they are made with--
                          (i) except as provided in clause (ii), the 
                        concurrence of at least 4 members of the 
                        Commission; or
                          (ii) to the extent that the requirements of 
                        subsection (b)(1)(A) or (c)(1) are not met, the 
                        concurrence of all sitting members, but only if 
                        the shortfall (relative to the requirements of 
                        subsection (b)(1)(A) or (c)(1), as the case may 
                        be) does not exceed 25 percent.
                  (C) Contents.--A report under this paragraph shall 
                include--
                          (i) the information required by paragraph (2) 
                        of subsection (a), (b), or (c) (as the case may 
                        be); and
                          (ii) a description of the operations that 
                        will be affected by the closure or 
                        consolidation and the facilities or offices 
                        which will be performing or ceasing to perform 
                        such operations as a result of such closure or 
                        consolidation.
                  (D) Deadlines.--A report of the Commission under this 
                paragraph shall be transmitted and published, in 
                accordance with subparagraph (A), within 60 days after 
                the date as of which the Commission satisfies the 
                requirements of paragraph (2) with respect to the plan 
                involved.
  (e) Limitation Relating to Postal Retail Facilities Identified for 
Closure or Consolidation.--
          (1) Applicability.--This subsection applies to any plan of 
        the Postal Service under subsection (a) and any report of the 
        Commission under subsection (d) (whether initial or final) 
        pertaining to such plan.
          (2) Limitation.--Of the total number of postal retail 
        facilities recommended for closure or consolidation (combined) 
        under any plan or report to which this subsection applies, the 
        number of such facilities that are within the K or L cost 
        ascertainment grouping (combined) shall account for not more 
        than 10 percent of such total number.
          (3) References.--For purposes of this subsection--
                  (A) any reference to a ``cost ascertainment 
                grouping'' shall be considered to refer to a cost 
                ascertainment grouping as described in section 123.11 
                of the Postal Operations Manual (as in effect on June 
                23, 2011); and
                  (B) any reference to a particular category 
                (designated by a letter) of a cost ascertainment 
                grouping shall be considered to refer to such category, 
                as described in such section 123.11 (as in effect on 
                the date specified in subparagraph (A)).
  (f) Annual Reports.--
          (1) In general.--There shall be included in the next 5 annual 
        reports submitted under section 2402 of title 39, United States 
        Code, beginning with the report covering any period of time 
        occurring after the date of enactment of this Act, the 
        following (shown on a State-by-State basis):
                  (A) In connection with closures and consolidations 
                taking effect in the year covered by the report, the 
                total number of individuals separated from employment 
                with the Postal Service, including, if separation 
                occurs in a year other than the year in which the 
                closing or consolidation occurs, the year in which 
                separation occurs.
                  (B) Of the total numbers under subparagraph (A)--
                          (i) the number and percentage comprising 
                        preference eligibles or veterans; and
                          (ii) the number and percentage comprising 
                        individuals other than preference eligibles or 
                        veterans.
                  (C) Of the total numbers under subparagraph (A), the 
                number and percentage reemployed in a position within 
                the general commuting area of the facility or office 
                involved (including, if reemployment occurs in a year 
                other than the year in which the closing or 
                consolidation occurs, the year in which reemployment 
                occurs)--
                          (i) with the Postal Service; or
                          (ii) with an employer other than the Postal 
                        Service.
                  (D) The methodology and assumptions used to derive 
                the estimates described in subparagraph (B).
                  (E) The criteria and process used to develop the 
                information described in subparagraph (C).
          (2) Definitions.--For purposes of this subsection--
                  (A) the term ``preference eligible'' has the meaning 
                given such term in section 2108(3) of title 5, United 
                States Code; and
                  (B) the term ``veteran'' has the meaning given such 
                term in section 101(2) of title 38, United States Code.

SEC. 105. IMPLEMENTATION OF CLOSURES AND CONSOLIDATIONS.

  (a) In General.--Subject to subsection (b), the Postal Service 
shall--
          (1) close or consolidate (as the case may be) the facilities 
        and offices recommended by the Commission in each of its final 
        reports under section 104(d)(3); and
          (2) carry out those closures and consolidations in accordance 
        with the timetable recommended by the Commission in such 
        report, except that in no event shall any such closure or 
        consolidation be completed later than 2 years after the date on 
        which such report is submitted to Congress.
  (b) Congressional Disapproval.--
          (1) In general.--The Postal Service may not carry out any 
        closure or consolidation recommended by the Commission in a 
        final report if a joint resolution disapproving the 
        recommendations of the Commission is enacted, in accordance 
        with section 106, before the earlier of--
                  (A) the end of the 30-day period beginning on the 
                date on which the Commission transmits those 
                recommendations to Congress under section 104(d)(3); or
                  (B) the adjournment of the Congress sine die for the 
                session during which such report is transmitted.
          (2) Days of session.--For purposes of paragraph (1) and 
        subsections (a) and (c) of section 106, the days on which 
        either House of Congress is not in session because of an 
        adjournment of more than 7 days to a day certain shall be 
        excluded in the computation of a period.

SEC. 106. CONGRESSIONAL CONSIDERATION OF FINAL CPR REPORTS.

  (a) Terms of the Resolution.--For purposes of this subtitle, the term 
``joint resolution'', as used with respect to a report under section 
104(d)(3), means only a joint resolution--
          (1) which is introduced within the 10-day period beginning on 
        the date on which such report is received by Congress;
          (2) the matter after the resolving clause of which is as 
        follows: ``That Congress disapproves the recommendations of the 
        Commission on Postal Reorganization, submitted by such 
        Commission on __, and pertaining to the closure or 
        consolidation of __.'', the first blank space being filled in 
        with the appropriate date and the second blank space being 
        filled in with ``postal retail facilities'', ``mail processing 
        facilities'', or ``area and district offices'' (as the case may 
        be);
          (3) the title of which is as follows: ``Joint resolution 
        disapproving the recommendations of the Commission on Postal 
        Reorganization.''; and
          (4) which does not have a preamble.
  (b) Referral.--A resolution described in subsection (a) that is 
introduced in the House of Representatives or the Senate shall be 
referred to the appropriate committees of the House of Representatives 
or the Senate, respectively.
  (c) Discharge.--If the committee to which a resolution described in 
subsection (a) is referred has not reported such resolution (or an 
identical resolution) by the end of the 20-day period beginning on the 
date on which the Commission transmits the report (to which such 
resolution pertains) to Congress under section 104(d)(3), such 
committee shall, at the end of such period, be discharged from further 
consideration of such resolution, and such resolution shall be placed 
on the appropriate calendar of the House involved.
  (d) Consideration.--
          (1) In general.--On or after the third day after the date on 
        which the committee to which such a resolution is referred has 
        reported, or has been discharged (under subsection (c)) from 
        further consideration of, such a resolution, it is in order 
        (even though a previous motion to the same effect has been 
        disagreed to) for any Member of the respective House to move to 
        proceed to the consideration of the resolution. A Member may 
        make the motion only on the day after the calendar day on which 
        the Member announces to the House concerned the Member's 
        intention to make the motion, except that, in the case of the 
        House of Representatives, the motion may be made without such 
        prior announcement if the motion is made by direction of the 
        committee to which the resolution was referred. All points of 
        order against the resolution (and against consideration of the 
        resolution) are waived. The motion is highly privileged in the 
        House of Representatives and is privileged in the Senate and is 
        not debatable. The motion is not subject to amendment, or to a 
        motion to postpone, or to a motion to proceed to the 
        consideration of other business. A motion to reconsider the 
        vote by which the motion is agreed to or disagreed to shall not 
        be in order. If a motion to proceed to the consideration of the 
        resolution is agreed to, the respective House shall immediately 
        proceed to consideration of the joint resolution without 
        intervening motion, order, or other business, and the 
        resolution shall remain the unfinished business of the 
        respective House until disposed of.
          (2) Debate.--Debate on the resolution, and on all debatable 
        motions and appeals in connection therewith, shall be limited 
        to not more than 2 hours, which shall be divided equally 
        between those favoring and those opposing the resolution. An 
        amendment to the resolution is not in order. A motion further 
        to limit debate is in order and not debatable. A motion to 
        postpone, or a motion to proceed to the consideration of other 
        business, or a motion to recommit the resolution is not in 
        order. A motion to reconsider the vote by which the resolution 
        is agreed to or disagreed to is not in order.
          (3) Vote on final passage.--Immediately following the 
        conclusion of the debate on a resolution described in 
        subsection (a) and a single quorum call at the conclusion of 
        the debate if requested in accordance with the rules of the 
        appropriate House, the vote on final passage of the resolution 
        shall occur.
          (4) Appeals.--Appeals from the decisions of the Chair 
        relating to the application of the rules of the Senate or the 
        House of Representatives, as the case may be, to the procedure 
        relating to a resolution described in subsection (a) shall be 
        decided without debate.
  (e) Consideration by Other House.--
          (1) In general.--If, before the passage by one House of a 
        resolution of that House described in subsection (a), that 
        House receives from the other House a resolution (described in 
        subsection (a)) relating to the same report, then the following 
        procedures shall apply:
                  (A) The resolution of the other House shall not be 
                referred to a committee and may not be considered in 
                the House receiving it except in the case of final 
                passage as provided in subparagraph (B)(ii).
                  (B) With respect to the resolution described in 
                subsection (a) (relating to the report in question) of 
                the House receiving the resolution--
                          (i) the procedure in that House shall be the 
                        same as if no resolution (relating to the same 
                        report) had been received from the other House; 
                        but
                          (ii) the vote on final passage shall be on 
                        the resolution of the other House.
          (2) Disposition of a resolution.--Upon disposition of the 
        resolution received from the other House, it shall no longer be 
        in order to consider the resolution that originated in the 
        receiving House.
  (f) Rules of the Senate and House.--This section is enacted by 
Congress--
          (1) as an exercise of the rulemaking power of the Senate and 
        House of Representatives, respectively, and as such it is 
        deemed a part of the rules of each House, respectively, but 
        applicable only with respect to the procedure to be followed in 
        that House in the case of a resolution described in subsection 
        (a), and it supersedes other rules only to the extent that it 
        is inconsistent with such rules; and
          (2) with full recognition of the constitutional right of 
        either House to change the rules (so far as relating to the 
        procedure of that House) at any time, in the same manner, and 
        to the same extent as in the case of any other rule of that 
        House.

SEC. 107. NONAPPEALABILITY OF DECISIONS.

  (a) To PRC.--The closing or consolidation of any facility or office 
under this subtitle may not be appealed to the Postal Regulatory 
Commission under section 404(d) or any other provision of title 39, 
United States Code, or be the subject of an advisory opinion issued by 
the Postal Regulatory Commission under section 3661 of such title.
  (b) Judicial Review.--No process, report, recommendation, or other 
action of the Commission on Postal Reorganization shall be subject to 
judicial review.

SEC. 108. RULES OF CONSTRUCTION.

  (a) Continued Availability of Authority To Close or Consolidate 
Postal Facilities.--
          (1) In general.--Nothing in this subtitle shall be considered 
        to prevent the Postal Service from closing or consolidating any 
        postal facilities, in accordance with otherwise applicable 
        provisions of law, either before or after the implementation of 
        any closures or consolidations under this subtitle.
          (2) Coordination rule.--No appeal or determination under 
        section 404(d) of title 39, United States Code, or any other 
        provision of law shall delay, prevent, or otherwise affect any 
        closure or consolidation under this subtitle.
  (b) Inapplicability of Certain Provisions.--
          (1) In general.--The provisions of law identified in 
        paragraph (2)--
                  (A) shall not apply to any closure or consolidation 
                carried out under this subtitle; and
                  (B) shall not be taken into account for purposes of 
                carrying out section 103 or 104.
          (2) Provisions identified.--The provisions of law under this 
        paragraph are--
                  (A) section 101(b) of title 39, United States Code; 
                and
                  (B) section 404(d) of title 39, United States Code.

SEC. 109. GAO STUDY AND REPORT.

  (a) Study.--Not later than 1 year after the date of enactment of this 
Act, the Comptroller General of the United States shall conduct a study 
on the effects, with respect to the unemployment rate of minority 
communities, of the proposed closures and consolidations of postal 
retail facilities, mail processing facilities, and area or district 
offices under this subtitle.
  (b) Report.--Upon completion of the study required under subsection 
(a), the Comptroller General of the United States shall submit a report 
to Congress regarding the findings of such study.

                      Subtitle B--Other Provisions

SEC. 111. IMPLEMENTATION OF DISCRETIONARY NON-MAIL DELIVERY DAYS.

  (a) In General.--Section 404 is amended by inserting after subsection 
(e) the following:
  ``(f)(1) The Postmaster General may, with respect to any year for 
which 6-day delivery is otherwise required, declare up to 12 non-mail 
delivery days. Not later than 1 month before the beginning of the year, 
the Postmaster General shall submit to the Board of Governors a report 
listing the non-mail delivery days in such year.
  ``(2) A non-mail delivery day under this subsection shall be a day 
other than--
          ``(A) a Sunday;
          ``(B) a legal public holiday listed in section 6103(a) of 
        title 5 or any other day declared to be a holiday by Federal 
        statute or Executive order; or
          ``(C) during the 30-day period that ends on the date of a 
        regularly scheduled general election for Federal office.
  ``(3) Any day which is declared under this subsection to be a non-
mail delivery day--
          ``(A) shall, for purposes of mail delivery and such other 
        postal operations as the Postal Service may by regulation 
        prescribe, be treated as if it were a Sunday; except that
          ``(B) an employee of the Postal Service (other than one who 
        is prevented from working on such day by reason of this 
        subsection) shall be entitled to the same pay and benefits for 
        that day as if this subsection had not been enacted.
  ``(4)(A) The 6-day mail delivery requirement shall not apply with 
respect to a week in which a non-mail delivery day under this 
subsection occurs.
  ``(B) The authority to declare a non-mail delivery day under this 
subsection shall be considered to be within the right of the Postal 
Service to determine the methods, means, and personnel by which postal 
operations are to be conducted.
  ``(5) Not less than 6 months after the date of enactment of this 
subsection, the Postal Service may submit a proposal under section 3661 
for a nationwide change in service to reduce mail delivery from 6 days 
to 5 days each week. Notwithstanding any other provision of law, the 
Postal Service shall maintain 6-day delivery service as the standard 
mail delivery schedule until 90 days following the rendering of an 
advisory opinion on 5-day delivery by the Postal Regulatory 
Commission.''.

SEC. 112. EFFICIENT AND FLEXIBLE UNIVERSAL POSTAL SERVICE.

  (a) Postal Policy.--
          (1) In general.--Section 101(b) is amended to read as 
        follows:
  ``(b) The Postal Service shall provide effective and regular postal 
services to rural areas, communities, and small towns where post 
offices are not self-sustaining.''.
          (2) Conforming amendments.--Clause (iii) of section 
        404(d)(2)(A) is amended to read as follows:
                  ``(iii) whether such closing or consolidation is 
                consistent with the policy of the Government, as stated 
                in section 101(b), that the Postal Service shall 
                provide effective and regular postal services to rural 
                areas, communities, and small towns where post offices 
                are not self-sustaining;''.
  (b) General Duty.--Paragraph (3) of section 403(b) is amended to read 
as follows:
          ``(3) to ensure that postal patrons throughout the Nation 
        will, consistent with reasonable economies of postal 
        operations, have ready access to essential postal services.''.
  (c) PRC Review of Determinations To Close or Consolidate a Post 
Office.--
          (1) Deadline for review.--Section 404(d)(5) is amended by 
        striking ``120 days'' and inserting ``60 days''.
          (2) Exclusion from review.--Section 404(d) is amended by 
        adding at the end the following:
  ``(7)(A) The appeals process set forth in paragraph (5) shall not 
apply to a determination of the Postal Service to close a post office 
if there is located, within 2 miles of such post office, a qualified 
contract postal unit.
  ``(B) For purposes of this paragraph--
          ``(i) the term `contract postal unit' means a store or other 
        place of business which--
                  ``(I) is not owned or operated by the Postal Service; 
                and
                  ``(II) in addition to its usual operations, provides 
                postal services to the general public under contract 
                with the Postal Service; and
          ``(ii) the term `qualified contract postal unit', as used in 
        connection with a post office, means a contract postal unit 
        which--
                  ``(I) begins to provide postal services to the 
                general public during the period--
                          ``(aa) beginning 1 year before the date on 
                        which the closure or consolidation of such post 
                        office is scheduled to take effect; and
                          ``(bb) ending on the 15th day after the date 
                        on which the closure or consolidation of such 
                        post office is scheduled to take effect; and
                  ``(II) has not, pursuant to subparagraph (A), served 
                as the basis for exempting any other post office from 
                the appeals process set forth in paragraph (5).
  ``(C)(i) If the contract postal unit (which is providing postal 
services that had been previously provided by the post office that was 
closed) does not continue to provide postal services, as required by 
subparagraph (B)(i)(II), for at least the 2-year period beginning on 
the date on which such post office was closed, the contract postal unit 
shall be subject to a closure determination by the Postal Service to 
decide whether a post office must be reopened within the area 
(delimited by the 2-mile radius referred to in subparagraph (A)).
  ``(ii) A decision under clause (i) not to reopen a post office may be 
appealed to the Postal Regulatory Commission under procedures which the 
Commission shall by regulation prescribe. Such procedures shall be 
based on paragraph (5), except that, for purposes of this clause, 
paragraph (5)(C) shall be applied by substituting `in violation of 
section 101(b), leaving postal patrons without effective and regular 
access to postal services' for `unsupported by substantial evidence on 
the record'.''.
          (3) Applicability.--The amendments made by this subsection 
        shall not apply with respect to any appeal, notice of which is 
        received by the Postal Regulatory Commission before the date of 
        the enactment of this Act (determined applying the rules set 
        forth in section 404(d)(6) of title 39, United States Code).
  (d) Expedited Procedures.--
          (1) In general.--Section 3661 is amended by adding at the end 
        the following:
  ``(d)(1) The Commission shall issue its opinion within 90 days after 
the receipt of any proposal (as referred to in subsection (b)) 
concerning--
          ``(A) the closing or consolidation of postal retail 
        facilities (as that term is defined in section 102(2) of the 
        Postal Reform Act of 2011) to a degree that will generally 
        affect service on a nationwide or substantially nationwide 
        basis; or
          ``(B) an identical or substantially identical proposal on 
        which the Commission issued an opinion within the preceding 5 
        years.
  ``(2) If necessary in order to comply with the 90-day requirement 
under paragraph (1), the Commission may apply expedited procedures 
which the Commission shall by regulation prescribe.''.
          (2) Regulations.--The Postal Regulatory Commission shall 
        prescribe any regulations necessary to carry out the amendment 
        made by paragraph (1) within 90 days after the date of the 
        enactment of this Act.
          (3) Applicability.--The amendment made by this subsection 
        shall apply with respect to any proposal received by the Postal 
        Regulatory Commission on or after the earlier of--
                  (A) the 90th day after the date of the enactment of 
                this Act; or
                  (B) the effective date of the regulations under 
                paragraph (2).

SEC. 113. ENHANCED REPORTING ON POSTAL SERVICE EFFICIENCY.

  Section 3652(a) is amended--
          (1) in paragraph (1), by striking ``and'' after the 
        semicolon;
          (2) in paragraph (2), by striking the period at the end and 
        inserting ``; and''; and
          (3) by adding after paragraph (2) the following:
          ``(3) which shall provide the overall change in Postal 
        Service productivity and the resulting effect of such change on 
        overall Postal Service costs during such year, using such 
        methodologies as the Commission shall by regulation 
        prescribe.''.

SEC. 114. APPLICABILITY OF PROCEDURES RELATING TO CLOSURES AND 
                    CONSOLIDATIONS.

  (a) In General.--Section 404(d) is amended by adding after paragraph 
(7) (as added by section 112(c)(2)) the following:
  ``(8) For purposes of this subsection, the term `post office' means a 
post office and any other facility described in section 102(2) of the 
Postal Reform Act of 2011.''.
  (b) Effective Date.--The amendment made by subsection (a) shall be 
effective with respect to any closure or consolidation, the proposed 
effective date of which occurs on or after the 60th day following the 
date of enactment of this Act.

   TITLE II--POSTAL SERVICE FINANCIAL RESPONSIBILITY AND MANAGEMENT 
                          ASSISTANCE AUTHORITY

               Subtitle A--Establishment and Organization

SEC. 201. PURPOSES.

  (a) Purposes.--The purposes of this title are as follows:
          (1) To eliminate budget deficits and cash shortages of the 
        Postal Service through strategic financial planning, sound 
        budgeting, accurate revenue forecasts, and careful spending.
          (2) To ensure the universal service mandate detailed in 
        section 101 of title 39, United States Code, is maintained 
        during a period of fiscal emergency.
          (3) To conduct necessary investigations and studies to 
        determine the fiscal status and operational efficiency of the 
        Postal Service.
          (4) To assist the Postal Service in--
                  (A) restructuring its organization and workforce to 
                bring expenses in line with diminishing revenue and 
                generate sufficient profits for capital investment and 
                repayment of debt;
                  (B) meeting all fiscal obligations to the Treasury of 
                the United States; and
                  (C) ensuring the appropriate and efficient delivery 
                of postal services.
          (5) To provide the Postal Service with a temporary increase 
        in its borrowing authority to enable the Postal Service to 
        complete necessary restructuring.
          (6) To ensure the long-term financial, fiscal, and economic 
        vitality and operational efficiency of the Postal Service.
  (b) Reservation of Powers.--Nothing in this title may be construed--
          (1) to relieve any obligations existing as of the date of the 
        enactment of this Act of the Postal Service to the Treasury of 
        the United States; or
          (2) to limit the authority of Congress to exercise ultimate 
        legislative authority over the Postal Service.

SEC. 202. ESTABLISHMENT OF THE AUTHORITY.

  (a) Establishment.--There shall be established, upon the commencement 
of any control period, an entity to be known as the ``Postal Service 
Financial Responsibility and Management Assistance Authority'' 
(hereinafter in this title referred to as the ``Authority'').
  (b) Control Period.--
          (1) Commencement of a control period.--
                  (A) In general.--For the purposes of this title, a 
                control period commences whenever the Postal Service 
                has been in default to the Treasury of the United 
                States, with respect to any debts, obligations, loans, 
                bonds, notes, or other form of borrowing, or any 
                scheduled payments to any fund in the Treasury of the 
                United States, for a period of at least 30 days.
                  (B) Advisory period.--For purposes of the first 
                control period, the Authority shall operate exclusively 
                in an advisory period for two full fiscal years after 
                the commencement of the control period. At the 
                completion of the second full fiscal year or any year 
                thereafter during the length of the control period, if 
                the Postal Service's annual deficit is greater than 
                $2,000,000,000, the Authority shall be fully in force 
                according to the provisions of this title. During an 
                advisory period--
                          (i) the Authority is not authorized to employ 
                        any staff and the Postal Service shall 
                        designate a Level-Two Postal Service Executive 
                        as a liaison with the members of the Authority;
                          (ii) any provision of this title that 
                        requires the Authority or the Postal Service to 
                        take any action shall be considered only to 
                        take effect in the event the Authority comes 
                        into full force and that effective date shall 
                        be considered to be the date of the 
                        commencement of the control period for the 
                        purposes any provision not mention in this 
                        subparagraph; and
                          (iii) the Postal Service shall have access to 
                        the funds available under section 222 according 
                        to applicable provisions of this Act, subject 
                        to the approval of the Postal Service Board of 
                        Governors without the approval of the 
                        Authority.
          (2) Treatment of authorities and responsibilities of the 
        board of governors, etc. during a control period.--During a 
        control period--
                  (A) all authorities and responsibilities of the Board 
                of Governors, and the individual Governors, of the 
                Postal Service under title 39, United States Code, and 
                any other provision of law shall be assumed by the 
                Authority; and
                  (B) the Board of Governors, and the individual 
                Governors, may act in an advisory capacity only.
          (3) Treatment of certain postal service executives during a 
        control period.--
                  (A) Definition.--For the purposes of this section, 
                the term ``Level-Two Postal Service Executive'' 
                includes the Postmaster General, the Deputy Postmaster 
                General, and all other officers or employees of the 
                Postal Service in level two of the Postal Career 
                Executive Service (or the equivalent).
                  (B) Treatment.--Notwithstanding any other provision 
                of law or employment contract, during a control 
                period--
                          (i) all Level-Two Postal Service Executives 
                        shall serve at the pleasure of the Authority;
                          (ii) the duties and responsibilities of all 
                        Level-Two Postal Service Executives, as well as 
                        the terms and conditions of their employment 
                        (including their compensation), shall be 
                        subject to determination or redetermination by 
                        the Authority;
                          (iii) total compensation of a Level-Two 
                        Postal Service Executive may not, for any year 
                        in such control period, exceed the annual rate 
                        of basic pay payable for level I of the 
                        Executive Schedule under section 5312 of title 
                        5, United States Code, for such year; for 
                        purposes of this clause, the term ``total 
                        compensation'' means basic pay, bonuses, 
                        awards, and all other monetary compensation;
                          (iv) the percentage by which the rate of 
                        basic pay of a Level-Two Postal Service 
                        Executive is increased during any year in such 
                        control period may not exceed the percentage 
                        change in the Consumer Price Index for All 
                        Urban Consumers, unadjusted for seasonal 
                        variation, for the most recent 12-month period 
                        available, except that, in the case of a Level-
                        Two Postal Service Executive who has had a 
                        significant change in job responsibilities, a 
                        greater change shall be allowable if approved 
                        by the Authority;
                          (v) apart from basic pay, a Level-Two Postal 
                        Service Executive may not be afforded any 
                        bonus, award, or other monetary compensation 
                        for any fiscal year in the control period if 
                        expenditures of the Postal Service for such 
                        fiscal year exceeded revenues of the Postal 
                        Service for such fiscal year (determined in 
                        accordance with generally accepted accounting 
                        principles); and
                          (vi) no deferred compensation may be paid, 
                        accumulated, or recognized in the case of any 
                        Level-Two Postal Service Executive, with 
                        respect to any year in a control period, which 
                        is not generally paid, accumulated, or 
                        recognized in the case of employees of the 
                        United States (outside of the Postal Service) 
                        in level I of the Executive Schedule under 
                        section 5312 of title 5, United States Code, 
                        with respect to such year.
                  (C) Bonus authority.--Section 3686 of title 39, 
                United States Code, shall, during the period beginning 
                on the commencement date of the control period and 
                ending on the termination date of the control period--
                          (i) be suspended with respect to all Level-
                        Two Postal Service Executives; but
                          (ii) remain in effect for all other officers 
                        and employees of the Postal Service otherwise 
                        covered by this section.
          (4) Termination of a control period.--Subject to subtitle D, 
        a control period terminates upon certification by the 
        Authority, with the concurrence of the Secretary of the 
        Treasury and the Director of the Office of Personnel 
        Management, that--
                  (A) for 2 consecutive fiscal years (occurring after 
                the date of the enactment of this Act), expenditures of 
                the Postal Service did not exceed revenues of the 
                Postal Service (as determined in accordance with 
                generally accepted accounting principles);
                  (B) the Authority has approved a Postal Service 
                financial plan and budget that shows expenditures of 
                the Postal Service not exceeding revenues of the Postal 
                Service (as so determined) for the fiscal year to which 
                such budget pertains and each of the next 3 fiscal 
                years; and
                  (C) the Postal Service financial plan and budget (as 
                referred to in subparagraph (B)) includes plans--
                          (i) for the repayment of any supplementary 
                        debt under section 222, in equal annual 
                        installments over a period of not more than 5 
                        years; and
                          (ii) to properly fund Postal Service pensions 
                        and retiree health benefits in accordance with 
                        law.

SEC. 203. MEMBERSHIP AND QUALIFICATION REQUIREMENTS.

  (a) Membership.--
          (1) In general.--The Authority shall consist of 5 members 
        appointed by the President who meet the qualifications 
        described in subsection (b), except that the Authority may take 
        any action under this title at any time after the President has 
        appointed 4 of its members.
          (2) Recommendations.--Of the 5 members so appointed--
                  (A) 1 shall be appointed from among individuals 
                recommended by the Speaker of the House of 
                Representatives;
                  (B) 1 shall be appointed from among individuals 
                recommended by the majority leader of the Senate;
                  (C) 1 shall be appointed from among individuals 
                recommended by the minority leader of the House of 
                Representatives;
                  (D) 1 shall be appointed from among individuals 
                recommended by the minority leader of the Senate; and
                  (E) 1 shall be appointed from among individuals 
                recommended by the Comptroller General.
          (3) Political affiliation.--No more than 3 members of the 
        Authority may be of the same political party.
          (4) Chair.--The President shall designate 1 of the members of 
        the Authority as the Chair of the Authority.
          (5) Sense of congress regarding deadline for appointment.--It 
        is the sense of Congress that the President should appoint the 
        members of the Authority as soon as practicable after the date 
        on which a control period commences, but no later than 30 days 
        after such date.
          (6) Term of service.--
                  (A) In general.--Except as provided in subparagraph 
                (B), each member of the Authority shall be appointed 
                for a term of 3 years.
                  (B) Appointment for term following initial term.--As 
                designated by the President at the time of appointment 
                for the term immediately following the initial term, of 
                the members appointed for the term immediately 
                following the initial term--
                          (i) 1 member shall be appointed for a term of 
                        1 year;
                          (ii) 2 members shall be appointed for a term 
                        of 2 years; and
                          (iii) 2 members shall be appointed for a term 
                        of 3 years.
                  (C) Removal.--The President may remove any member of 
                the Authority only for cause.
                  (D) No compensation for service.--Members of the 
                Authority shall serve without pay, but may receive 
                reimbursement for any reasonable and necessary expenses 
                incurred by reason of service on the Authority.
  (b) Qualification Requirements.--
          (1) In general.--An individual meets the qualifications for 
        membership on the Authority if the individual--
                  (A) has significant knowledge and expertise in 
                finance, management, and the organization or operation 
                of businesses having more than 500 employees; and
                  (B) represents the public interest generally, is not 
                a representative of specific interests using or 
                belonging to the Postal Service, and does not have any 
                business or financial interest in any enterprise in the 
                private sector of the economy engaged in the delivery 
                of mail matter.
          (2) Specific conditions.--An individual shall not be 
        considered to satisfy paragraph (1)(B) if, at any time during 
        the 5-year period ending on the date of appointment, such 
        individual--
                  (A) has been an officer, employee, or private 
                contractor with the Postal Service or the Postal 
                Regulatory Commission; or
                  (B) has served as an employee or contractor of a 
                labor organization representing employees of the Postal 
                Service or the Postal Regulatory Commission.

SEC. 204. ORGANIZATION.

  (a) Adoption of By-Laws for Conducting Business.--As soon as 
practicable after the appointment of its members, the Authority shall 
adopt by-laws, rules, and procedures governing its activities under 
this title, including procedures for hiring experts and consultants. 
Upon adoption, such by-laws, rules, and procedures shall be submitted 
by the Authority to the Postmaster General, the President, and 
Congress.
  (b) Certain Activities Requiring Approval of Majority of Members.--
Under its by-laws, the Authority may conduct its operations under such 
procedures as it considers appropriate, except that an affirmative vote 
of a majority of the members of the Authority shall be required in 
order for the Authority to--
          (1) approve or disapprove a financial plan and budget as 
        described by subtitle C;
          (2) implement recommendations on financial stability and 
        management responsibility under section 226;
          (3) take any action under authority of section 
        202(b)(3)(B)(i); or
          (4) initiate the establishment of a new workers' compensation 
        system for the Postal Service in accordance with section 311.

SEC. 205. EXECUTIVE DIRECTOR AND STAFF.

  (a) Executive Director.--The Authority shall have an Executive 
Director who shall be appointed by the Chair with the consent of the 
Authority. The Executive Director shall be paid at a rate determined by 
the Authority, except that such rate may not exceed the rate of basic 
pay payable for level IV of the Executive Schedule under section 5315 
of title 5, United States Code.
  (b) Staff.--With the approval of the Authority, the Executive 
Director may appoint and fix the pay of such additional personnel as 
the Executive Director considers appropriate, except that no individual 
appointed by the Executive Director may be paid at a rate greater than 
the rate of pay for the Executive Director. Personnel appointed under 
this subsection shall serve at the pleasure of the Executive Director.
  (c) Inapplicability of Certain Civil Service Laws.--The Executive 
Director and staff of the Authority may be appointed without regard to 
the provisions of title 5, United States Code, governing appointments 
in the competitive service, and paid without regard to the provisions 
of chapter 51 and subchapter III of chapter 53 of such title relating 
to classification and General Schedule pay rates.
  (d) Staff of Federal Agencies.--Upon request of the Chair, the head 
of any Federal department or agency may detail, on a reimbursable or 
nonreimbursable basis, any of the personnel of such department or 
agency to the Authority to assist it in carrying out its duties under 
this title.

SEC. 206. FUNDING.

  (a) In General.--There are authorized to be appropriated, out of the 
Postal Service Fund, such sums as may be necessary for the Authority. 
In requesting an appropriation under this section for a fiscal year, 
the Authority shall prepare and submit to the Congress under section 
2009 of title 39, United States Code, a budget of the Authority's 
expenses, including expenses for facilities, supplies, compensation, 
and employee benefits not to exceed $10,000,000. In years in which a 
control period commences, the Authority shall submit a budget within 30 
days of the appointment of the members of the Authority.
  (b) Amendment to Section 2009.--Section 2009 is amended in the next 
to last sentence--
          (1) by striking ``, and (3)'' and inserting ``, (3)''; and
          (2) by striking the period and inserting ``, and (4) the 
        Postal Service Financial Responsibility and Management 
        Assistance Authority requests to be appropriated, out of the 
        Postal Service Fund, under section 206 of the Postal Reform Act 
        of 2011.''.

                  Subtitle B--Powers of the Authority

SEC. 211. POWERS.

  (a) Powers of Members and Agents.--Any member or agent of the 
Authority may, if authorized by the Authority, take any action which 
the Authority is authorized by this section to take.
  (b) Obtaining Official Data From the Postal Service.--Notwithstanding 
any other provision of law, the Authority may secure copies of such 
records, documents, information, or data from any entity of the Postal 
Service necessary to enable the Authority to carry out its 
responsibilities under this title. At the request of the Authority, the 
Authority shall be granted direct access to such information systems, 
records, documents, information, or data as will enable the Authority 
to carry out its responsibilities under this title. The head of the 
relevant entity of the Postal Service shall provide the Authority with 
such information and assistance (including granting the Authority 
direct access to automated or other information systems) as the 
Authority requires under this subsection.
  (c) Gifts, Bequests, and Devises.--The Authority may accept, use, and 
dispose of gifts, bequests, or devises of services or property, both 
real and personal, for the purpose of aiding or facilitating the work 
of the Authority. Gifts, bequests, or devises of money and proceeds 
from sales of other property received as gifts, bequests, or devises 
shall be deposited in such account as the Authority may establish and 
shall be available for disbursement upon order of the Chair.
  (d) Administrative Support Services.--Upon the request of the 
Authority, the Administrator of General Services may provide to the 
Authority, on a reimbursable basis, the administrative support services 
necessary for the Authority to carry out its responsibilities under 
this title.
  (e) Authority To Enter Into Contracts.--The Executive Director may 
enter into such contracts as the Executive Director considers 
appropriate (subject to the approval of the Chair) to carry out the 
Authority's responsibilities under this title.
  (f) Civil Actions To Enforce Powers.--The Authority may seek judicial 
enforcement of its authority to carry out its responsibilities under 
this title.
  (g) Penalties.--
          (1) Administrative discipline.--Any officer or employee of 
        the Postal Service who, by action or inaction, fails to comply 
        with any directive or other order of the Authority under 
        section 226(c) shall be subject to appropriate administrative 
        discipline, including suspension from duty without pay or 
        removal from office, by order of either the Postmaster General 
        or the Authority.
          (2) Reporting requirement.--Whenever an officer or employee 
        of the Postal Service takes or fails to take any action which 
        is noncompliant with any directive or other order of the 
        Authority under section 226(c), the Postmaster General shall 
        immediately report to the Authority all pertinent facts, 
        together with a statement of any actions taken by the 
        Postmaster General or proposed by the Postmaster General to be 
        taken under paragraph (1).
  (h) Sense of Congress.--It is the sense of Congress that, in making 
determinations that affect prior collective bargaining agreements and 
prior agreements on workforce reduction, any rightsizing effort within 
the Postal Service that results in a decrease in the number of postal 
employees should ensure that such employees can receive their full 
pensions, are fully compensated, and that the collective bargaining 
agreements and prior agreements on workforce reduction that they 
entered into with Postal Service management are fully honored.

SEC. 212. EXEMPTION FROM LIABILITY FOR CLAIMS.

  The Authority and its members may not be liable for any obligation of 
or claim against the Postal Service resulting from actions taken to 
carry out this title.

SEC. 213. TREATMENT OF ACTIONS ARISING UNDER THIS TITLE.

  (a) Jurisdiction Established in United States Court of Appeals for 
the District of Columbia Circuit.--A person (including the Postal 
Service) adversely affected or aggrieved by an order or decision of the 
Authority 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 
Circuit. The court shall review the order or decision in accordance 
with section 706 of title 5, United States Code, and chapter 158 and 
section 2112 of title 28, United States Code. Judicial review shall be 
limited to the question of whether the Authority acted in excess of its 
statutory authority, and determinations of the Authority with respect 
to the scope of its statutory authority shall be upheld if based on a 
permissible construction of the statutory authority.
  (b) Prompt Appeal to the Supreme Court.--Notwithstanding any other 
provision of law, review by the Supreme Court of the United States of a 
decision of the Court of Appeals which is issued pursuant to subsection 
(a) may be had only if the petition for such review is filed within 10 
days after the entry of such decision.
  (c) Timing of Relief.--No order of any court granting declaratory or 
injunctive relief against the Authority, including relief permitting or 
requiring the obligation, borrowing, or expenditure of funds, shall 
take effect during the pendency of the action before such court, during 
the time appeal may be taken, or (if appeal is taken) during the period 
before the court has entered its final order disposing of such action.
  (d) Expedited Consideration.--It shall be the duty of the United 
States Court of Appeals for the District of Columbia and the Supreme 
Court of the United States to advance on the docket and to expedite to 
the greatest possible extent the disposition of any matter brought 
under subsection (a).

SEC. 214. DELIVERY POINT MODERNIZATION.

  (a) Definitions.--For purposes of this section--
          (1) the term ``delivery point'' means a mailbox or other 
        receptacle to which mail is delivered;
          (2) the term ``primary mode of delivery'' means the typical 
        method by which the Postal Service delivers letter mail to the 
        delivery point of a postal patron;
          (3) the term ``door delivery'' means a primary mode of mail 
        delivery whereby mail is placed into a slot or receptacle at or 
        near the postal patron's door or is hand delivered to a postal 
        patron, but does not include curbside or centralized delivery;
          (4) the term ``centralized delivery'' means a primary mode of 
        mail delivery whereby mail receptacles are grouped or clustered 
        at a single location; and
          (5) the term ``curbside delivery'' means a primary mode of 
        mail delivery whereby a mail receptacle is situated at the edge 
        of a roadway or curb.
  (b) Reduction in Total Number of Delivery Points.--The Authority 
shall, during the first control period commencing under this title, 
take such measures as may be necessary and appropriate so that--
          (1) in each fiscal year beginning at least 2 years after the 
        commencement date of such first control period--
                  (A) the total number of delivery points for which 
                door delivery is the primary mode of mail delivery does 
                not exceed 25 percent of the corresponding number for 
                the fiscal year last ending before such commencement 
                date; and
                  (B) the total annual costs attributable to door 
                delivery, centralized delivery, and curbside delivery 
                combined will be at least $3,500,000,000 less than the 
                corresponding total annual costs for the fiscal year 
                last ending before such commencement date; and
          (2) in each fiscal year beginning at least 4 years after the 
        commencement date of such first control period, the total 
        number of delivery points for which door delivery is the 
        primary mode of mail delivery does not exceed 10 percent of the 
        corresponding number for the fiscal year last ending before 
        such commencement date.
In making any decision under this subsection involving the continuation 
or termination of door delivery with respect to any locality or 
addresses within a locality, the Authority shall consider rates of 
poverty, population density, historical value, whether such locality is 
in a registered historic district (as that term is defined in section 
47(c)(3)(B) of the Internal Revenue Code of 1986), whether such address 
is another place on the National Register of Historic Places, and other 
appropriate factors.
  (c) Order of Precedence.--In order to carry out subsection (b)--
          (1) in making conversions from door delivery to other primary 
        modes of delivery--
                  (A) conversion shall be to centralized delivery; 
                except
                  (B) if subparagraph (A) is impractical, conversion 
                shall be to curbside delivery; and
          (2) in the case of delivery points established after the 
        commencement date of the first control period under this 
        title--
                  (A) centralized delivery shall be the primary mode of 
                delivery; except
                  (B) if subparagraph (A) is impractical, curbside 
                delivery shall be the primary mode of delivery.
  (d) Waiver for Physical Hardship.--The Postal Service shall establish 
and maintain a waiver program under which, upon application, door 
delivery may be continued or provided in any case in which--
          (1) centralized or curbside delivery would, but for this 
        subsection, otherwise be the primary mode of delivery; and
          (2) door delivery is necessary in order to avoid causing 
        significant physical hardship to a postal patron.
  (e) Centralized Delivery Placement.--It is the sense of the Congress 
that the Postal Service should negotiate with State and local 
governments, businesses, local associations, and property owners to 
place centralized delivery units in locations that maximize delivery 
efficiency, ease of use for postal patrons, and respect for private 
property rights.
  (f) Voucher Program.--
          (1) In general.--The Postal Service may, in accordance with 
        such standards and procedures as the Postal Service shall by 
        regulation prescribe, provide for a voucher program under 
        which--
                  (A) upon application, the Postal Service may defray 
                all or any portion of the costs associated with 
                conversion from door delivery under this section which 
                would otherwise be borne by postal patrons; and
                  (B) the Postal Service Competitive Products Fund is 
                made available for that purpose.
          (2) Conforming amendment.--Section 2011(a)(2) is amended--
                  (A) in subparagraph (A), by striking ``and'' after 
                the semicolon;
                  (B) in subparagraph (B), by striking the period and 
                inserting ``; and''; and
                  (C) by adding at the end the following:
          ``(C) vouchers under the program described in section 
        214(f)(1) of the Postal Reform Act of 2011.''.
  (g) Audits.--
          (1) In general.--The Inspector General of the United States 
        Postal Service--
                  (A) shall conduct an annual audit to determine 
                whether the Postal Service is in compliance with the 
                requirements of subsection (b); and
                  (B) shall make such recommendations as the Inspector 
                General considers appropriate to improve the 
                administration of such subsection.
          (2) Submission.--The audit and recommendations under 
        paragraph (1) shall be submitted by the Inspector General to--
                  (A) the Committee on Oversight and Government Reform 
                of the House of Representatives; and
                  (B) the Committee on Homeland Security and 
                Governmental Affairs of the Senate.
          (3) Information.--Upon request, the Postal Service shall 
        furnish such information as the Inspector General may require 
        in order to carry out this subsection.
  (h) Savings Report.--
          (1) In general.--In the event that a reduction in door 
        delivery points is required under this section, the Authority 
        shall submit a report to Congress, not later than 1 year after 
        the date on which such reductions commence, describing the cost 
        savings realized to the date of such submission and the 
        estimated additional cost savings anticipated as a result of 
        such reductions occurring after such submission. The report 
        shall include--
                  (A) the measures taken to achieve the realized 
                savings and the assumptions and methodologies used to 
                compute the estimated cost savings; and
                  (B) information with respect to what additional 
                measures might be necessary to achieve the cost savings 
                required under this section.
          (2) Reduction limitation.--Notwithstanding any other 
        provision of this Act, if the Authority determines that the 
        measures described pursuant to subparagraphs (A) and (B) of 
        paragraph (1) are not feasible, not cost effective, or 
        otherwise detrimental to the mail delivery policy of the Postal 
        Service, the Authority shall submit a report to Congress 
        stating any legislative changes recommended for door delivery 
        modernization procedures under this section, including 
        increasing flexibility of this section's requirements or the 
        postponement of further conversion.

Subtitle C--Establishment and Enforcement of Financial Plan and Budget 
                         for the Postal Service

SEC. 221. DEVELOPMENT OF FINANCIAL PLAN AND BUDGET FOR THE POSTAL 
                    SERVICE.

  (a) Development of Financial Plan and Budget.--For each fiscal year 
for which the Postal Service is in a control period, the Postmaster 
General shall develop and submit to the Authority a financial plan and 
budget for the Postal Service in accordance with this section.
  (b) Contents of Financial Plan and Budget.--A financial plan and 
budget for the Postal Service for a fiscal year shall specify the 
budget for the Postal Service as required by section 2009 of title 39, 
United States Code, for the applicable fiscal year and the next 3 
fiscal years, in accordance with the following requirements:
          (1) The financial plan and budget shall meet the requirements 
        described in subsection (c) to promote the financial stability 
        of the Postal Service.
          (2) The financial plan and budget shall--
                  (A) include the Postal Service's annual budget 
                program (under section 2009 of title 39, United States 
                Code) and the Postal Service's plan commonly referred 
                to as its ``Integrated Financial Plan'';
                  (B) describe lump-sum expenditures by all categories 
                traditionally used by the Postal Service;
                  (C) describe capital expenditures (together with a 
                schedule of projected capital commitments and cash 
                outlays of the Postal Service and proposed sources of 
                funding);
                  (D) contain estimates of overall debt (both 
                outstanding and anticipated to be issued); and
                  (E) contain cash flow and liquidity forecasts for the 
                Postal Service at such intervals as the Authority may 
                require.
          (3) The financial plan and budget shall include a statement 
        describing methods of estimations and significant assumptions.
          (4) The financial plan and budget shall include any other 
        provisions and shall meet such other criteria as the Authority 
        considers appropriate to meet the purposes of this title, 
        including provisions for--
                  (A) changes in personnel policies and levels for each 
                component of the Postal Service; and
                  (B) management initiatives to promote productivity, 
                improvement in the delivery of services, or cost 
                savings.
  (c) Requirements To Promote Financial Stability.--
          (1) In general.--The requirements to promote the financial 
        stability of the Postal Service applicable to the financial 
        plan and budget for a fiscal year are as follows:
                  (A) In each fiscal year (following the first full 
                fiscal year) in a control period, budgeted expenditures 
                of the Postal Service for the fiscal year involved may 
                not exceed budgeted revenues of the Postal Service for 
                the fiscal year involved.
                  (B) In each fiscal year in a control period, the 
                Postal Service shall make continuous, substantial 
                progress towards long-term fiscal solvency and shall 
                have substantially greater net income than in the 
                previous fiscal year.
                  (C) The Postal Service shall provide for the orderly 
                liquidation of any supplementary debt under section 
                222.
                  (D) The financial plan and budget shall assure the 
                continuing long-term financial stability of the Postal 
                Service, as indicated by factors such as the efficient 
                management of the Postal Service's workforce and the 
                effective provision of services by the Postal Service.
          (2) Application of sound budgetary practices.--In meeting the 
        requirement described in paragraph (1) with respect to a 
        financial plan and budget for a fiscal year, the Postal Service 
        shall apply sound budgetary practices, including reducing costs 
        and other expenditures, improving productivity, increasing 
        revenues, or a combination of such practices.
          (3) Assumptions based on current law.--In meeting the 
        requirements described in paragraph (1) with respect to a 
        financial plan and budget for a fiscal year, the Postal Service 
        shall base estimates of revenues and expenditures on Federal 
        law as in effect at the time of the preparation of such 
        financial plan and budget.

SEC. 222. SUPPLEMENTARY BORROWING AUTHORITY DURING A CONTROL PERIOD.

  (a) In General.--Upon the commencement of a control period, subject 
to the approval of the Authority, the Postal Service is authorized to 
borrow money and issue and sell such obligations as may be necessary to 
carry out the purposes of this title, to the same extent, in the same 
manner, and subject to the same terms and conditions as if the maximum 
amount allowable under the provisions of section 2005(a)(2) of title 
39, United States Code, for the fiscal year involved were equal to the 
maximum amount which (but for this section) would otherwise be 
allowable under such provisions, increased by $10,000,000,000. The 
authorization to issue obligations under this section shall extend for 
a period of not more than 10 years beginning on the date of 
commencement of a control period, as described in section 202(b). At 
the end of such a 10-year period, the Postal Service shall dispose of 
real property of the Postal Service generating sufficient proceeds to 
repay any outstanding obligation incurred under this subsection in its 
entirety.
  (b) Exclusion.--The last sentence of section 2005(a)(1) of title 39, 
United States Code, shall not apply with respect to any amounts 
borrowed or obligations issued or sold under authority of this section 
(which, but for subsection (a), would not otherwise have been 
allowable).
  (c) Deposit.--Any amounts received under this section shall be 
deposited in the Postal Service Fund.
  (d) Collateral.--For the purposes of funds acquired under subsection 
(a), the Postal Service shall provide an appropriate level of 
collateral in the form of pledged Postal Service property assets. For 
each fiscal year in which there remain funds made available to the 
Postal Service under subsection (a), the Postal Service shall dispose 
of real property equal to an amount that is at least 10 percent of the 
total funds obligated by the Postal Service under subsection (a), and 
the proceeds of such disposal shall be used to repay any outstanding 
obligation made by the Postal Service under subsection (a) in its 
entirety.

SEC. 223. PROCESS FOR SUBMISSION AND APPROVAL OF FINANCIAL PLAN AND 
                    BUDGET.

  (a) In General.--For each fiscal year for which the Postal Service is 
in a control period, the Postmaster General shall submit to the 
Authority--
          (1) by February 1 before the start of such fiscal year, a 
        preliminary financial plan and budget under section 221 for 
        such fiscal year; and
          (2) by August 1 before the start of such fiscal year, a final 
        financial plan and budget under section 221 for such fiscal 
        year.
  (b) Review by Authority.--Upon receipt of a financial plan and budget 
under subsection (a) (whether preliminary or final), the Authority 
shall promptly review such financial plan and budget. In conducting the 
review, the Authority may request any additional information it 
considers necessary and appropriate to carry out its duties under this 
subtitle.
  (c) Approval of Postmaster General's Financial Plan and Budget.--
          (1) In general.--If the Authority determines that the final 
        financial plan and budget for the fiscal year submitted by the 
        Postmaster General under subsection (a) meets the requirements 
        of section 221--
                  (A) the Authority shall approve the financial plan 
                and budget and shall provide the Postmaster General, 
                the President, and Congress with a notice certifying 
                its approval; and
                  (B) the Postmaster General shall promptly submit the 
                annual budget program to the Office of Management and 
                Budget pursuant to section 2009 of title 39, United 
                States Code.
          (2) Deemed approval after 30 days.--
                  (A) In general.--If the Authority has not provided 
                the Postmaster General, the President, and Congress 
                with a notice certifying approval under paragraph 
                (1)(A) or a statement of disapproval under subsection 
                (d) before the expiration of the 30-day period which 
                begins on the date the Authority receives the financial 
                plan and budget from the Postmaster General under 
                subsection (a), the Authority shall be deemed to have 
                approved the financial plan and budget and to have 
                provided the Postmaster General, the President, and 
                Congress with the notice certifying approval under 
                paragraph (1)(A).
                  (B) Explanation of failure to respond.--If 
                subparagraph (A) applies with respect to a financial 
                plan and budget, the Authority shall provide the 
                Postmaster General, the President and Congress with an 
                explanation for its failure to provide the notice 
                certifying approval or the statement of disapproval 
                during the 30-day period described in such 
                subparagraph.
  (d) Disapproval of Postmaster General's Budget.--If the Authority 
determines that the final financial plan and budget for the fiscal year 
submitted by the Postmaster General under subsection (a) does not meet 
the requirements applicable under section 221, the Authority shall 
disapprove the financial plan and budget, and shall provide the 
Postmaster General, the President, and Congress with a statement 
containing--
          (1) the reasons for such disapproval;
          (2) the amount of any shortfall in the budget or financial 
        plan; and
          (3) any recommendations for revisions to the budget the 
        Authority considers appropriate to ensure that the budget is 
        consistent with the financial plan and budget.
  (e) Authority Review of Postmaster General's Revised Final Financial 
Plan and Budget.--
          (1) Submission of postmaster general's revised final 
        financial plan and budget.--Not later than 15 days after 
        receiving the statement from the Authority under subsection 
        (d), the Postmaster General shall promptly adopt a revised 
        final financial plan and budget for the fiscal year which 
        addresses the reasons for the Authority's disapproval cited in 
        the statement, and shall submit such financial plan and budget 
        to the Authority.
          (2) Approval of postmaster general's revised final financial 
        plan and budget.--If, after reviewing the revised final 
        financial plan and budget for a fiscal year submitted by the 
        Postmaster General under paragraph (1) in accordance with the 
        procedures described in this section, the Authority determines 
        that the revised final financial plan and budget meets the 
        requirements applicable under section 221--
                  (A) the Authority shall approve the financial plan 
                and budget and shall provide the Postmaster General, 
                the President, and Congress with a notice certifying 
                its approval; and
                  (B) the Postmaster General shall promptly submit the 
                annual budget program to the Office of Management and 
                Budget pursuant to section 2009 of title 39, United 
                States Code.
          (3) Disapproval of postmaster general's revised final 
        financial plan and budget.--
                  (A) In general.--If, after reviewing the revised 
                final financial plan and budget for a fiscal year 
                submitted by the Postmaster General under paragraph (1) 
                in accordance with the procedures described in this 
                subsection, the Authority determines that the revised 
                final financial plan and budget does not meet the 
                applicable requirements under section 221, the 
                Authority shall--
                          (i) disapprove the financial plan and budget;
                          (ii) provide the Postmaster General, the 
                        President, and Congress with a statement 
                        containing the reasons for such disapproval and 
                        describing the amount of any shortfall in the 
                        financial plan and budget; and
                          (iii) approve and recommend a financial plan 
                        and budget for the Postal Service which meets 
                        the applicable requirements under section 221, 
                        and submit such financial plan and budget to 
                        the Postmaster General, the President, and 
                        Congress.
                  (B) Submission to omb.--Upon receipt of the 
                recommended financial plan and budget under 
                subparagraph (A)(iii), the Postmaster General shall 
                promptly submit the recommended annual budget program 
                to the Office of Management and Budget pursuant to 
                section 2009 of title 39, United States Code.
          (4) Deemed approval after 15 days.--
                  (A) In general.--If the Authority has not provided 
                the Postmaster General, the President, and Congress 
                with a notice certifying approval under paragraph 
                (2)(A) or a statement of disapproval under paragraph 
                (3) before the expiration of the 15-day period which 
                begins on the date the Authority receives the revised 
                final financial plan and budget submitted by the 
                Postmaster General under paragraph (1), the Authority 
                shall be deemed to have approved the revised final 
                financial plan and budget and to have provided the 
                Postmaster General, the President, and Congress with 
                the notice certifying approval described in paragraph 
                (2)(A).
                  (B) Explanation of failure to respond.--If 
                subparagraph (A) applies with respect to a financial 
                plan and budget, the Authority shall provide the 
                Postmaster General, the President and Congress with an 
                explanation for its failure to provide the notice 
                certifying approval or the statement of disapproval 
                during the 15-day period described in such 
                subparagraph.
  (f) Deadline for Transmission of Financial Plan and Budget by 
Authority.--Notwithstanding any other provision of this section, not 
later than September 30th before each fiscal year which is in a control 
period, the Authority shall--
          (1) provide Congress with a notice certifying its approval of 
        the Postmaster General's initial financial plan and budget for 
        the fiscal year under subsection (c);
          (2) provide Congress with a notice certifying its approval of 
        the Postmaster General's revised final financial plan and 
        budget for the fiscal year under subsection (e)(2); or
          (3) submit to Congress an approved and recommended financial 
        plan and budget of the Authority for the Postal Service for the 
        fiscal year under subsection (e)(3)(A)(iii).
  (g) Revisions to Financial Plan and Budget.--
          (1) Permitting postmaster general to submit revisions.--The 
        Postmaster General may submit proposed revisions to the 
        financial plan and budget for a control period to the Authority 
        at any time during the year.
          (2) Process for review, approval, disapproval, and postmaster 
        general action.--Except as provided in paragraph (3), the 
        procedures described in subsections (b), (c), (d), and (e) 
        shall apply with respect to a proposed revision to a financial 
        plan and budget in the same manner as such procedures apply 
        with respect to the original financial plan and budget.
          (3) Exception for revisions not affecting spending.--To the 
        extent that a proposed revision to a financial plan and budget 
        adopted by the Postmaster General pursuant to this subsection 
        does not increase the amount of spending with respect to any 
        account of the Postal Service, the revision shall become 
        effective upon the Authority's approval of such revision.

SEC. 224. RESPONSIBILITIES OF THE AUTHORITY.

  (a) In General.--The Authority shall direct the exercise of the 
powers of the Postal Service, including--
          (1) determining its overall strategies (both long-term and 
        short-term);
          (2) determining its organizational structure, particularly 
        for senior management at the level of vice president and 
        higher;
          (3) hiring, monitoring, compensating, and, when necessary, 
        replacing senior management at the level of vice president and 
        higher, as well as ensuring adequate succession planning for 
        these positions;
          (4) approving major policies, particularly those that have an 
        important effect on the Postal Service's financial position and 
        the provision of universal postal service;
          (5) approving corporate budgets, financial and capital plans, 
        operational and service performance standards and targets, 
        human resources strategies, collective bargaining strategies, 
        negotiation parameters, and collective bargaining agreements, 
        and the compensation structure for nonbargaining employees;
          (6) approving substantial capital projects and any 
        substantial disposition of capital assets, such as surplus 
        property;
          (7) approving changes in rates and classifications, new 
        products and services, policy regarding other substantial 
        matters before the Postal Regulatory Commission, and any 
        appeals of its decisions or orders to the Federal courts;
          (8) approving the Postal Service Annual Report, Annual 
        Comprehensive Statement, and strategic plans, performance 
        plans, and performance program reports under chapter 28 of 
        title 39, United States Code;
          (9) formulating and communicating organizational policy and 
        positions on legislative and other public policy matters to 
        Congress and the public;
          (10) ensuring organizational responsiveness to oversight by 
        Congress, the Postal Regulatory Commission, the Treasury of the 
        United States, and other audit entities;
          (11) ensuring adequate internal controls and selecting, 
        monitoring, and compensating an independent public accounting 
        firm to conduct an annual audit of the Postal Service; and
          (12) carrying out any responsibility, not otherwise listed in 
        this subsection, that was the responsibility of the Board of 
        Governors at any time during the 5-year period ending on the 
        date of the enactment of this Act.
  (b) Review of Postal Service Proposals.--
          (1) Submission of postal service proposals to the 
        authority.--During a control period, the Postmaster General 
        shall submit to the Authority any proposal that has a 
        substantial effect on any item listed in subsection (a).
          (2) Prompt review by authority.--Upon receipt of a proposal 
        from the Postmaster General under paragraph (1), the Authority 
        shall promptly review the proposal to determine whether it is 
        consistent with the applicable financial plan and budget 
        approved under this title.
          (3) Actions by authority.--
                  (A) Approval.--If the Authority determines that a 
                proposal is consistent with the applicable financial 
                plan and budget, the Authority shall notify the 
                Postmaster General that it approves the proposal.
                  (B) Finding of inconsistency.--If the Authority 
                determines that a proposal is significantly 
                inconsistent with the applicable financial plan and 
                budget, the Authority shall--
                          (i) notify the Postmaster General of its 
                        finding;
                          (ii) provide the Postmaster General with an 
                        explanation of the reasons for its finding; and
                          (iii) to the extent the Authority considers 
                        appropriate, provide the Postmaster General 
                        with recommendations for modifications to the 
                        proposal.
          (4) Deemed approval.--If the Authority does not notify the 
        Postmaster General that it approves or disapproves a proposal 
        submitted under this subsection during the 7-day period which 
        begins on the date the Postmaster General submits the proposal 
        to the Authority, the Authority shall be deemed to have 
        approved the proposal in accordance with paragraph (3)(A). At 
        the option of the Authority, the previous sentence shall be 
        applied as if the reference in such sentence to ``7-day 
        period'' were a reference to ``14-day period'' if, during the 
        7-day period referred to in the preceding sentence, the 
        Authority so notifies the Postmaster General.
  (c) Effect of Approved Financial Plan and Budget on Contracts and 
Leases.--
          (1) Mandatory prior approval for certain contracts and 
        leases.--
                  (A) In general.--In the case of a contract or lease 
                described in subparagraph (B) which is proposed to be 
                entered into, renewed, modified, or extended by the 
                Postal Service during a control period, the Postmaster 
                General (or the appropriate officer or agent of the 
                Postal Service) shall submit the proposed contract or 
                lease to the Authority. The Authority shall review each 
                contract or lease submitted under this subparagraph, 
                and the Postmaster General (or the appropriate officer 
                or agent of the Postal Service) may not enter into the 
                contract or lease unless the Authority determines that 
                the proposed contract or lease is consistent with the 
                financial plan and budget for the fiscal year.
                  (B) Contracts and leases described.--A contract or 
                lease described in this subparagraph is--
                          (i) a labor contract entered into through 
                        collective bargaining; or
                          (ii) such other type of contract or lease as 
                        the Authority may specify for purposes of this 
                        subparagraph.
          (2) Authority to review other contracts after execution.--
                  (A) In general.--In addition to the prior approval of 
                certain contracts and leases, the Postal Service shall 
                submit to the Authority--
                          (i) any Level-Two Post Career Executive 
                        Service employee contract that is in effect 
                        during a control period; and
                          (ii) any collective bargaining agreement 
                        entered into by the Postal Service that is in 
                        effect during a control period.
                Any such contract or agreement shall be submitted to 
                the Authority upon the commencement of a control period 
                and at such other times as the Authority may require.
                  (B) Review by authority.--The Authority shall review 
                each contract submitted under subparagraph (A) to 
                determine if the contract is consistent with the 
                financial plan and budget for the fiscal year. If the 
                Authority determines that the contract is not 
                consistent with the financial plan and budget, the 
                Authority shall take such actions as are within the 
                Authority's powers to revise the contract.

SEC. 225. EFFECT OF FINDING NONCOMPLIANCE WITH FINANCIAL PLAN AND 
                    BUDGET.

  (a) Submission of Reports.--Not later than 30 days after the 
expiration of each quarter of each fiscal year beginning in a control 
period, the Postmaster General shall submit reports to the Authority 
describing the actual revenues obtained and expenditures made by the 
Postal Service during the quarter with its cash flows during the 
quarter, and comparing such actual revenues, expenditures, and cash 
flows with the most recent projections for these items.
  (b) Additional Information.--If the Authority determines, based on 
reports submitted by the Postmaster General under subsection (a), 
independent audits, or such other information as the Authority may 
obtain, that the revenues or expenditures of the Postal Service during 
a control period are not consistent with the financial plan and budget 
for the year, the Authority shall require the Postmaster General to 
provide such additional information as the Authority determines to be 
necessary to explain the inconsistency.
  (c) Certification of Variance.--
          (1) In general.--After requiring the Postmaster General to 
        provide additional information under subsection (b), the 
        Authority shall certify to the Postmaster General, the 
        President, the Secretary of the Treasury, and Congress that the 
        Postal Service is at variance with the financial plan and 
        budget unless--
                  (A) the additional information provides an 
                explanation for the inconsistency which the Authority 
                finds reasonable and appropriate; or
                  (B)(i) the Postal Service adopts or implements 
                remedial action (including revising the financial plan 
                and budget pursuant to section 223(g)) to correct the 
                inconsistency which the Authority finds reasonable and 
                appropriate, taking into account the terms of the 
                financial plan and budget; and
                  (ii) the Postmaster General agrees to submit the 
                reports described in subsection (a) on a monthly basis 
                for such period as the Authority may require.
          (2) Special rule for inconsistencies attributable to acts of 
        congress.--
                  (A) Determination by authority.--If the Authority 
                determines that the revenues or expenditures of the 
                Postal Service during a control period are not 
                consistent with the financial plan and budget for the 
                year as approved by the Authority under section 223 as 
                a result of the terms and conditions of any law enacted 
                by Congress which affects the Postal Service, the 
                Authority shall so notify the Postmaster General.
                  (B) Certification.--In the case of an inconsistency 
                described in subparagraph (A), the Authority shall 
                certify to the Postmaster General, the President, the 
                Secretary of the Treasury, and Congress that the Postal 
                Service is at variance with the financial plan and 
                budget unless the Postal Service adopts or implements 
                remedial action (including revising the financial plan 
                and budget pursuant to section 202(e)) to correct the 
                inconsistency which the Authority finds reasonable and 
                appropriate, taking into account the terms of the 
                financial plan and budget.
  (d) Effect of Certification.--If the Authority certifies to the 
Secretary of the Treasury that a variance exists, the Authority or the 
Secretary may withhold access by the Postal Service to additional 
supplementary debt authorized by this title.

SEC. 226. RECOMMENDATIONS REGARDING FINANCIAL STABILITY, ETC.

  (a) In General.--The Authority may at any time submit recommendations 
to the Postmaster General, the President, and Congress on actions the 
Postal Service or any other entity of the Federal Government should 
take to ensure compliance by the Postal Service with a financial plan 
and budget or to otherwise promote the financial stability, management 
responsibility, and service delivery efficiency of the Postal Service, 
including recommendations relating to--
          (1) the management of the Postal Service's financial affairs, 
        including cash forecasting, information technology, placing 
        controls on expenditures for personnel, reducing benefit costs, 
        reforming procurement practices, and placing other controls on 
        expenditures;
          (2) the relationship between the Postal Service and other 
        entities of the Federal Government;
          (3) the structural relationship of subdivisions within the 
        Postal Service;
          (4) the modification of existing revenue structures, or the 
        establishment of additional revenue structures;
          (5) the establishment of alternatives for meeting obligations 
        to pay for the pensions and retirement benefits of current and 
        future Postal Service retirees;
          (6) modifications of services which are the responsibility of 
        and are delivered by the Postal Service;
          (7) modifications of the types of services which are 
        delivered by entities other than the Postal Service under 
        alternative service delivery mechanisms;
          (8) the effects of Federal Government laws and court orders 
        on the operations of the Postal Service;
          (9) the increased use of a personnel system for employees of 
        the Postal Service which is based upon employee performance 
        standards; and
          (10) the improvement of personnel training and proficiency, 
        the adjustment of staffing levels, and the improvement of 
        training and performance of management and supervisory 
        personnel.
  (b) Response to Recommendations for Actions Within Authority of 
Postal Service.--
          (1) In general.--In the case of any recommendations submitted 
        under subsection (a) during a control period which are within 
        the authority of the Postal Service to adopt, not later than 90 
        days after receiving the recommendations, the Postmaster 
        General shall submit a statement to the Authority, the 
        President, and Congress which provides notice as to whether the 
        Postal Service will adopt the recommendations.
          (2) Implementation plan required for adopted 
        recommendations.--If the Postmaster General notifies the 
        Authority and Congress under paragraph (1) that the Postal 
        Service will adopt any of the recommendations submitted under 
        subsection (a), the Postmaster General shall include in the 
        statement a written plan to implement the recommendation which 
        includes--
                  (A) specific performance measures to determine the 
                extent to which the Postal Service has adopted the 
                recommendation; and
                  (B) a schedule for auditing the Postal Service's 
                compliance with the plan.
          (3) Explanations required for recommendations not adopted.--
        If the Postmaster General notifies the Authority, the 
        President, and Congress under paragraph (1) that the Postal 
        Service will not adopt any recommendation submitted under 
        subsection (a) which the Postal Service has authority to adopt, 
        the Postmaster General shall include in the statement 
        explanations for the rejection of the recommendations.
  (c) Implementation of Rejected Recommendations by Authority.--
          (1) In general.--If the Postmaster General notifies the 
        Authority, the President, and Congress under subsection (b)(1) 
        that the Postal Service will not adopt any recommendation 
        submitted under subsection (a) which the Postal Service has 
        authority to adopt, the Authority may by a majority vote of its 
        members take such action concerning the recommendation as it 
        deems appropriate, after consulting with the Committee on 
        Oversight and Government Reform of the House of Representatives 
        and the Committee on Homeland Security and Governmental Affairs 
        of the Senate.
          (2) Effective date.--This subsection shall apply with respect 
        to recommendations of the Authority made after the expiration 
        of the 6-month period which begins on the date of the 
        commencement of a control period.

SEC. 227. SPECIAL RULES FOR FISCAL YEAR IN WHICH CONTROL PERIOD 
                    COMMENCES.

  (a) Adoption of Transition Budget.--Notwithstanding any provision of 
section 223 to the contrary, in the case of a fiscal year in which a 
control period commences, the following rules shall apply:
          (1) Not later than 45 days after the appointment of its 
        members, the Authority shall review the proposed Integrated 
        Financial Plan for the Postal Service for such fiscal year and 
        shall submit any recommendations for modifications to such plan 
        to promote the financial stability of the Postal Service to the 
        Postmaster General, the President, and Congress.
          (2) Not later than 15 days after receiving the 
        recommendations of the Authority submitted under paragraph (1), 
        the Postmaster General shall promptly adopt a revised budget 
        for the fiscal year (in this section referred to as the 
        ``transition budget''), and shall submit the transition budget 
        to the Authority, the President, and Congress.
          (3) Not later than 15 days after receiving the transition 
        budget from the Postmaster General under paragraph (2), the 
        Authority shall submit a report to the Postmaster General, the 
        President, and Congress analyzing the budget (taking into 
        account any items or provisions disapproved by the Postmaster 
        General) and shall include in the report such recommendations 
        for revisions to the transition budget as the Authority 
        considers appropriate to promote the financial stability of the 
        Postal Service during the fiscal year.
  (b) Financial Plan and Budget.--
          (1) Deadline for submission.--For purposes of section 223, 
        the Postmaster General shall submit the financial plan and 
        budget for the applicable fiscal year as soon as practicable 
        after the commencement of a control period (in accordance with 
        guidelines established by the Authority).
          (2) Adoption by postmaster general.--In accordance with the 
        procedures applicable under section 223 (including procedures 
        providing for review by the Authority) the Postmaster General 
        shall adopt the financial plan and budget for the applicable 
        fiscal year (including the transition budget incorporated in 
        the financial plan and budget).
          (3) Transition budget as temporary financial plan and 
        budget.--Until the approval of the financial plan and budget 
        for the applicable fiscal year by the Authority under this 
        subsection, the transition budget established under subsection 
        (a) shall serve as the financial plan and budget adopted under 
        this subtitle for purposes of this Act (and any provision of 
        law amended by this Act) for the applicable fiscal year.

SEC. 228. ASSISTANCE IN ACHIEVING FINANCIAL STABILITY, ETC.

  In addition to any other actions described in this title, the 
Authority may undertake cooperative efforts to assist the Postal 
Service in achieving financial stability and management efficiency, 
including--
          (1) assisting the Postal Service in avoiding defaults, 
        eliminating and liquidating deficits, maintaining sound 
        budgetary practices, and avoiding interruptions in the delivery 
        of services;
          (2) assisting the Postal Service in improving the delivery of 
        services, the training and effectiveness of personnel of the 
        Postal Service, and the efficiency of management and 
        supervision; and
          (3) making recommendations to the President for transmission 
        to Congress on changes to this Act or other Federal laws, or 
        other actions of the Federal Government, which would assist the 
        Postal Service in complying with an approved financial plan and 
        budget under subtitle B.

SEC. 229. OBTAINING REPORTS.

  The Authority may require the Postmaster General, the Chief Financial 
Officer of the Postal Service, and the Inspector General of the Postal 
Service, to prepare and submit such reports as the Authority considers 
appropriate to assist it in carrying out its responsibilities under 
this title, including submitting copies of any reports regarding 
revenues, expenditures, budgets, costs, plans, operations, estimates, 
and other financial or budgetary matters of the Postal Service.

SEC. 230. REPORTS AND COMMENTS.

  (a) Annual Reports to Congress.--Not later than 30 days after the 
last day of each fiscal year which is a control year, the Authority 
shall submit a report to Congress describing--
          (1) the progress made by the Postal Service in meeting the 
        objectives of this title during the fiscal year;
          (2) the assistance provided by the Authority to the Postal 
        Service in meeting the purposes of this title for the fiscal 
        year; and
          (3) any other activities of the Authority during the fiscal 
        year.
  (b) Review and Analysis of Performance and Financial Accountability 
Reports.--The Authority shall review each yearly report prepared and 
submitted by the Postmaster General to the Postal Regulatory Commission 
and Congress and shall submit a report to Congress analyzing the 
completeness and accuracy of such reports.
  (c) Comments Regarding Activities of Postal Service.--At any time 
during a control period, the Authority may submit a report to Congress 
describing any action taken by the Postal Service (or any failure to 
act by the Postal Service) which the Authority determines will 
adversely affect the Postal Service's ability to comply with an 
approved financial plan and budget under subtitle B or will otherwise 
have a significant adverse impact on the best interests of the Postal 
Service.
  (d) Reports on Effect of Federal Laws on the Postal Service.--At any 
time during any year, the Authority may submit a report to the 
Postmaster General, the President, and Congress on the effect of laws 
enacted by Congress on the financial plan and budget for the year and 
on the financial stability and management efficiency of the Postal 
Service in general.
  (e) Making Reports Publicly Available.--The Authority shall make any 
report submitted under this section available to the public, except to 
the extent that the Authority determines that the report contains 
confidential material.

              Subtitle D--Termination of a Control Period

SEC. 231. TERMINATION OF CONTROL PERIOD, ETC.

  (a) In General.--After the completion of the requirements for the 
termination of a control period described in section 202(b)(4), the 
Authority shall submit a recommendation to Congress requesting the 
termination of such control period, the dissolution of the Authority, 
and the reinstatement to the Board of Governors (and the individual 
Governors) of the Postal Service of the authorities and 
responsibilities referred to in section 202(b)(2)(A).
  (b) Congressional Approval.--
          (1) In general.--A control period shall not be terminated 
        unless a joint resolution approving of the recommendation in 
        subsection (a) is enacted, in accordance with section 232, 
        before the earlier of--
                  (A) the end of the 30-day period beginning on the 
                date on which the Authority transmits the 
                recommendation to Congress under subsection (a); or
                  (B) the adjournment of the Congress sine die for the 
                session during which such recommendation is 
                transmitted.
          (2) Days of session.--For purposes of paragraph (1) and 
        subsections (a) and (c) of section 232, the days on which 
        either House of Congress is not in session because of an 
        adjournment of more than 3 days to a day certain shall be 
        excluded in the computation of a period.

SEC. 232. CONGRESSIONAL CONSIDERATION OF RECOMMENDATION.

  (a) Terms of the Resolution.--For purposes of this subtitle, the term 
``joint resolution'' means only a joint resolution which is introduced 
within the 10-day period beginning on the date on which the 
recommendation referred to in section 231(a) is received by Congress--
          (1) the matter after the resolving clause of which is as 
        follows: ``That Congress approves the recommendation of the 
        Postal Service Financial Responsibility and Management 
        Assistance Authority, submitted by such Authority on __.'', the 
        blank space being filled in with the appropriate date;
          (2) the title of which is as follows: ``Joint resolution 
        approving the recommendation of Postal Service Financial 
        Responsibility and Management Assistance Authority.''; and
          (3) which does not have a preamble.
  (b) Referral.--A resolution described in subsection (a) that is 
introduced in the House of Representatives or the Senate shall be 
referred to the appropriate committees of the House of Representatives 
or the Senate, respectively.
  (c) Discharge.--If the committee to which a resolution described in 
subsection (a) is referred has not reported such resolution (or an 
identical resolution) by the end of the 20-day period beginning on the 
date on which the Authority transmits its recommendation to Congress 
under section 231(a) such committee shall, at the end of such period, 
be discharged from further consideration of such resolution, and such 
resolution shall be placed on the appropriate calendar of the House 
involved.
  (d) Consideration.--
          (1) In general.--On or after the third day after the date on 
        which the committee to which such a resolution is referred has 
        reported, or has been discharged (under subsection (c)) from 
        further consideration of, such a resolution, it is in order 
        (even though a previous motion to the same effect has been 
        disagreed to) for any Member of the respective House to move to 
        proceed to the consideration of the resolution. A Member may 
        make the motion only on the day after the calendar day on which 
        the Member announces to the House concerned the Member's 
        intention to make the motion, except that, in the case of the 
        House of Representatives, the motion may be made without such 
        prior announcement if the motion is made by direction of the 
        committee to which the resolution was referred. All points of 
        order against the resolution (and against consideration of the 
        resolution) are waived. The motion is highly privileged in the 
        House of Representatives and is privileged in the Senate and is 
        not debatable. The motion is not subject to amendment, or to a 
        motion to postpone, or to a motion to proceed to the 
        consideration of other business. A motion to reconsider the 
        vote by which the motion is agreed to or disagreed to shall not 
        be in order. If a motion to proceed to the consideration of the 
        resolution is agreed to, the respective House shall immediately 
        proceed to consideration of the joint resolution without 
        intervening motion, order, or other business, and the 
        resolution shall remain the unfinished business of the 
        respective House until disposed of.
          (2) Debate.--Debate on the resolution, and on all debatable 
        motions and appeals in connection therewith, shall be limited 
        to not more than 2 hours, which shall be divided equally 
        between those favoring and those opposing the resolution. An 
        amendment to the resolution is not in order. A motion further 
        to limit debate is in order and not debatable. A motion to 
        postpone, or a motion to proceed to the consideration of other 
        business, or a motion to recommit the resolution is not in 
        order. A motion to reconsider the vote by which the resolution 
        is agreed to or disagreed to is not in order.
          (3) Vote on final passage.--Immediately following the 
        conclusion of the debate on a resolution described in 
        subsection (a) and a single quorum call at the conclusion of 
        the debate if requested in accordance with the rules of the 
        appropriate House, the vote on final passage of the resolution 
        shall occur.
          (4) Appeals.--Appeals from the decisions of the Chair 
        relating to the application of the rules of the Senate or the 
        House of Representatives, as the case may be, to the procedure 
        relating to a resolution described in subsection (a) shall be 
        decided without debate.
  (e) Consideration by Other House.--
          (1) In general.--If, before the passage by one House of a 
        resolution of that House described in subsection (a), that 
        House receives from the other House a resolution described in 
        subsection (a), then the following procedures shall apply:
                  (A) The resolution of the other House shall not be 
                referred to a committee and may not be considered in 
                the House receiving it except in the case of final 
                passage as provided in subparagraph (B)(ii).
                  (B) With respect to a resolution described in 
                subsection (a) of the House receiving the resolution--
                          (i) the procedure in that House shall be the 
                        same as if no resolution had been received from 
                        the other House; but
                          (ii) the vote on final passage shall be on 
                        the resolution of the other House.
          (2) Disposition of a resolution.--Upon disposition of the 
        resolution received from the other House, it shall no longer be 
        in order to consider the resolution that originated in the 
        receiving House.
  (f) Rules of the Senate and House.--This section is enacted by 
Congress--
          (1) as an exercise of the rulemaking power of the Senate and 
        House of Representatives, respectively, and as such it is 
        deemed a part of the rules of each House, respectively, but 
        applicable only with respect to the procedure to be followed in 
        that House in the case of a resolution described in subsection 
        (a), and it supersedes other rules only to the extent that it 
        is inconsistent with such rules; and
          (2) with full recognition of the constitutional right of 
        either House to change the rules (so far as relating to the 
        procedure of that House) at any time, in the same manner, and 
        to the same extent as in the case of any other rule of that 
        House.

                  TITLE III--POSTAL SERVICE WORKFORCE

                     Subtitle A--General Provisions

SEC. 301. MODIFICATIONS RELATING TO DETERMINATION OF PAY COMPARABILITY.

  (a) Postal Policy.--The first sentence of section 101(c) is amended--
          (1) by inserting ``total'' before ``rates and types of 
        compensation''; and
          (2) by inserting ``entire'' before ``private sector''.
  (b) Employment Policy.--The second sentence of section 1003(a) is 
amended--
          (1) by inserting ``total'' before ``compensation and 
        benefits'' each place it appears; and
          (2) by inserting ``entire'' before ``private sector''.
  (c) Considerations.--For purposes of the amendments made by this 
section, any determination of ``total rates and types of compensation'' 
or ``total compensation and benefits'' shall, at a minimum, take into 
account pay, health benefits, retirement benefits, life insurance 
benefits, leave, holidays, and continuity and stability of employment.

SEC. 302. LIMITATION ON POSTAL CONTRIBUTIONS UNDER FEGLI AND FEHBP.

  Section 1003 is amended by adding at the end the following:
  ``(e)(1) At least 1 month before the start of each fiscal year as 
described in paragraph (2), the Postmaster General shall transmit to 
the Postal Regulatory Commission certification (together with such 
supporting documentation as the Postal Regulatory Commission may 
require) that contributions of the Postal Service for such fiscal year 
will not exceed--
          ``(A) in the case of life insurance under chapter 87 of title 
        5, the Government contributions determined under section 8708 
        of such title; and
          ``(B) in the case of health insurance under chapter 89 of 
        title 5, the Government contributions determined under 8906 of 
        such title.
  ``(2) This subsection applies with respect to--
          ``(A) except as provided in subparagraph (B), each fiscal 
        year beginning after September 30, 2013; and
          ``(B) in the case of officers and employees of the Postal 
        Service covered by a collective bargaining agreement which is 
        in effect on the date of the enactment of this subsection--
                  ``(i) each fiscal year beginning after the expiration 
                date of such agreement, including
                  ``(ii) for the fiscal year in which such expiration 
                date occurs, any portion of such fiscal year remaining 
                after such expiration date.
  ``(3)(A) If, after reasonable notice and opportunity for hearing is 
afforded to the Postal Service, the Postal Regulatory Commission finds 
that the contributions of the Postal Service for a fiscal year will 
exceed or are exceeding the limitation specified in subparagraph (A) or 
(B) of paragraph (1), the Commission shall order that the Postal 
Service take such action as the Commission considers necessary to 
achieve full and immediate compliance with the applicable limitation or 
limitations.
  ``(B) Sections 3663 and 3664 shall apply with respect to any order 
issued by the Postal Regulatory Commission under subparagraph (A).
  ``(C) Nothing in this paragraph shall be considered to permit the 
issuance of an order requiring reduction of contributions below the 
level specified by the provision of law cited in subparagraph (A) or 
(B) of paragraph (1), as applicable.''.

SEC. 303. REPEAL OF PROVISION RELATING TO OVERALL VALUE OF FRINGE 
                    BENEFITS.

  The last sentence of section 1005(f) is repealed.

SEC. 304. APPLICABILITY OF REDUCTION-IN-FORCE PROCEDURES.

  Section 1206 is amended by adding at the end the following:
  ``(d) Collective-bargaining agreements between the Postal Service and 
bargaining representatives recognized under section 1203, ratified 
after the date of enactment of this subsection, shall contain no 
provision restricting the applicability of reduction-in-force 
procedures under title 5 with respect to members of the applicable 
bargaining unit.
  ``(e) Any collective-bargaining agreement between the Postal Service 
and the bargaining representatives recognized under section 1203 
ratified before the date of enactment of this Act that contain any 
provision violating subsection (d) shall be renegotiated with a new 
collective-bargaining agreement to be ratified or imposed through an 
arbitration decision under section 1207 within 9 months after such date 
of enactment.
  ``(f)(1) If a collective-bargaining agreement between the Postal 
Service and bargaining representatives recognized under section 1203, 
ratified after the date of enactment of this subsection, includes 
reduction-in-force procedures which can be applied in lieu of 
reduction-in-force procedures under title 5, the Postal Service may, in 
its discretion, apply with respect to members of the applicable 
bargaining unit--
          ``(A) the alternative procedures (or, if 2 or more are agreed 
        to, 1 of the alternative procedures); or
          ``(B) the reduction-in-force procedures under title 5.
  ``(2) In no event may, if procedures for the resolution of a dispute 
or impasse arising in the negotiation of a collective-bargaining 
agreement (whether through binding arbitration or otherwise) are 
invoked under this chapter, the award or other resolution reached under 
such procedures provide for the elimination of, or the substitution of 
any alternative procedures in lieu of, reduction-in-force procedures 
under title 5.''.

SEC. 305. MODIFICATIONS RELATING TO COLLECTIVE BARGAINING.

  Section 1207 is amended by striking subsections (c) and (d) and 
inserting the following:
  ``(c)(1) If no agreement is reached within 30 days after the 
appointment of a mediator under subsection (b), or if the parties 
decide upon arbitration before the expiration of the 30-day period, an 
arbitration board shall be established consisting of 1 member selected 
by the Postal Service (from the list under paragraph (2)), 1 member 
selected by the bargaining representative of the employees (from the 
list under paragraph (2)), and the mediator appointed under subsection 
(b).
  ``(2) Upon receiving a request from either of the parties referred to 
in paragraph (1), the Director of the Federal Mediation and 
Conciliation Service shall provide a list of not less than 9 
individuals who are well qualified to serve as neutral arbitrators. 
Each person listed shall be an arbitrator of nationwide reputation and 
professional nature, a member of the National Academy of Arbitrators, 
and an individual whom the Director has determined to be willing and 
available to serve. If, within 7 days after the list is provided, 
either of the parties has not selected an individual from the list, the 
Director shall make the selection within 3 days.
  ``(3) The arbitration board shall give the parties a full and fair 
hearing, including an opportunity to present evidence in support of 
their claims, and an opportunity to present their case in person, by 
counsel, or by other representative as they may elect. The hearing 
shall be concluded no more than 40 days after the arbitration board is 
established.
  ``(4) No more than 7 days after the hearing is concluded, each party 
shall submit to the arbitration board 2 offer packages, each of which 
packages shall specify the terms of a proposed final agreement.
  ``(5) If no agreement is reached within 7 days after the last day 
date for the submission of an offer package under paragraph (4), each 
party shall submit to the arbitration board a single final offer 
package specifying the terms of a proposed final agreement.
  ``(6) No later than 3 days after the submission of the final offer 
packages under paragraph (5), the arbitration board shall select 1 of 
those packages as its tentative award, subject to paragraph (7).
  ``(7)(A) The arbitration board may not select a final offer package 
under paragraph (6) unless it satisfies each of the following:
          ``(i) The offer complies with the requirements of sections 
        101(c) and 1003(a).
          ``(ii) The offer takes into account the current financial 
        condition of the Postal Service.
          ``(iii) The offer takes into account the long-term financial 
        condition of the Postal Service.
  ``(B)(i) If the board unanimously determines, based on clear and 
convincing evidence presented during the hearing under paragraph (3), 
that neither final offer package satisfies the conditions set forth in 
subparagraph (A), the board shall by majority vote--
          ``(I) select the package that best meets such conditions; and
          ``(II) modify the package so selected to the minimum extent 
        necessary to satisfy such conditions.
  ``(ii) If modification (as described in subparagraph (B)(i)(II)) is 
necessary, the board shall have an additional 7 days to render its 
tentative award under this subparagraph.
  ``(8) The parties may negotiate a substitute award to replace the 
tentative award selected under paragraph (6) or rendered under 
paragraph (7) (as the case may be). If no agreement on a substitute 
award is reached within 10 days after the date on which the tentative 
award is so selected or rendered, the tentative award shall become 
final.
  ``(9) The arbitration board shall review any substitute award 
negotiated under paragraph (8) to determine if it satisfies the 
conditions set forth in paragraph (7)(A). If the arbitration board, by 
a unanimous vote taken within 3 days after the date on which the 
agreement on the substitute award is reached under paragraph (8), 
determines that the substitute award does not satisfy such conditions, 
the tentative award shall become final. In the absence of a vote, as 
described in the preceding sentence, the substitute agreement shall 
become final.
  ``(10) If, under paragraph (5), neither party submits a final offer 
package by the last day allowable under such paragraph, the arbitration 
board shall develop and issue a final award no later than 20 days after 
such last day.
  ``(11) A final award or agreement under this subsection shall be 
conclusive and binding upon the parties.
  ``(12) Costs of the arbitration board and mediation shall be shared 
equally by the Postal Service and the bargaining representative.
  ``(d) In the case of a bargaining unit whose recognized collective-
bargaining representative does not have an agreement with the Postal 
Service, if the parties fail to reach agreement within 90 days after 
the commencement of collective bargaining, a mediator shall be 
appointed in accordance with the provisions of subsection (b), unless 
the parties have previously agreed to another procedure for a binding 
resolution of their differences. If the parties fail to reach agreement 
within 180 days after the commencement of collective bargaining, an 
arbitration board shall be established to provide conclusive and 
binding arbitration in accordance with the provisions of subsection 
(c).''.

SEC. 306. ONE-TIME TRANSFER OF NET SURPLUS POSTAL RETIREMENT 
                    CONTRIBUTIONS.

  (a) Transfer Requirement.--Not later than 2 weeks after the date of 
enactment of this Act, there shall be appropriated to the Postal 
Service Fund, from the Postal Service Federal Employee Retirement 
System account within the Civil Service Retirement and Disability Fund, 
an amount equal to the absolute value of the amount computed as of 
September 30, 2010, under section 8423(b)(1)(B) of title 5, United 
States Code, less the sum of--
          (1) the Postal supplemental liability, calculated as of 
        September 30, 2010, under section 8348(h) of title 5, United 
        States Code; and
          (2) any contribution required by section 8423 of such title 
        that the Postal Service has not made during fiscal years 2011 
        or 2012, as determined by the Office of Personnel Management no 
        later than one week after the date of enactment of this Act
  (b) Limitations on Use.--The amount transferred to the Postal Service 
Fund under this section--
          (1) may be used for such purposes as the Postal Service 
        considers appropriate; except that
          (2) if any amounts so transferred remain in the Postal 
        Service Fund after September 30, 2015, such amounts shall be 
        used--
                  (A) first, to satisfy any supplemental liability 
                computed under section 8423(b)(1)(B) of title 5, United 
                States Code;
                  (B) second, to satisfy any supplemental liability 
                computed under section 8348(h) of title 5, United 
                States Code; and
                  (C) third, to satisfy any obligations of the Postal 
                Service under section 2005 of title 39, United States 
                Code.
  (c) Definitions.--For purposes of this section--
          (1) the term ``Civil Service Retirement and Disability Fund'' 
        refers to the fund under section 8348 of title 5, United States 
        Code; and
          (2) the term ``Postal Service Fund'' refers to the fund under 
        section 2003 of title 39, United States Code.
  (d) Sense of Congress.--It is the sense of Congress that the Postal 
Service should use any funds under subsection (b)(1) for separation 
incentives for Postal employees.

        Subtitle B--Postal Service Workers' Compensation Reform

SEC. 311. POSTAL SERVICE WORKERS' COMPENSATION REFORM.

  (a) In General.--Effective 12 months after the triggering date of 
this section (as defined in subsection (e)(2)), section 1005 is amended 
by striking subsection (c) and inserting the following:
  ``(c)(1) For purposes of this subsection--
          ``(A) the term `postal employee' means an officer or employee 
        of the Postal Service or the former Post Office Department;
          ``(B) the term `retirement age' has the meaning given such 
        term under section 216(l)(1) of the Social Security Act; and
          ``(C) the term `appropriate committees of Congress' means--
                  ``(i) the Committee on Oversight and Government 
                Reform of the House of Representatives; and
                  ``(ii) the Committee on Homeland Security and 
                Governmental Affairs of the Senate.
  ``(2) The Postal Service shall design and administer a program for 
the payment of benefits for the disability or death of an individual 
resulting from personal injury sustained while in the performance of 
such individual's duties as a postal employee.
  ``(3) The program under this subsection--
          ``(A) shall be designed by the Postal Service in consultation 
        with appropriate employee representatives;
          ``(B) shall not provide for any amount payable to a disabled 
        postal employee to be augmented on the basis of number of 
        dependents; and
          ``(C) shall include provisions for automatic transition, upon 
        attainment of retirement age, to benefits involving, 
        coordinated with, or otherwise determined by reference to 
        retirement benefits.''.
  (b) Recommendations.--Not later than 6 months after the triggering 
date--
          (1) the Office of Personnel Management shall submit to the 
        appropriate committees of Congress recommendations for any 
        legislation or administrative actions which the Office 
        considers necessary to carry out the purposes of this section 
        with respect to any matter within the jurisdiction of the 
        Office, including any amendments which may be necessary with 
        respect to chapter 87 or 89 of title 5, United States Code; and
          (2) the Postal Service shall submit to the appropriate 
        committees of Congress recommendations for any legislation 
        which the Postal Service considers necessary to carry out the 
        purposes of this section with respect to any matter within the 
        jurisdiction of the Postal Service.
  (c) Notification Requirements.--Not later than 9 months after the 
triggering date, the Postal Service shall submit to the appropriate 
committees of Congress and shall cause to be published in the Federal 
Register a description of the program proposed by the Postal Service 
for implementation under section 1005(c) of title 39, United States 
Code, as amended by subsection (a). Included in the notification 
provided under the preceding sentence shall be--
          (1) a detailed statement of the benefits to be offered and 
        the persons eligible to receive those benefits;
          (2) provisions to ensure an orderly transition to the system 
        proposed to be implemented; and
          (3) such other information as the Postal Service considers 
        appropriate.
  (d) Commencement Date.--The program under section 1005(c) of title 
39, United States Code, as amended by this section--
          (1) shall begin to operate on such date as the Postmaster 
        General shall determine, except that such date shall be a date 
        occurring--
                  (A) not earlier than 12 months after the triggering 
                date; and
                  (B) not later than 24 months after the triggering 
                date; and
          (2) shall apply with respect to amounts payable for periods 
        beginning on or after the date on which the program begins to 
        operate, irrespective of date of the disability or death to 
        which such amounts relate.
  (e) Condition Precedent.--
          (1) In general.--The preceding provisions of this section 
        shall not become effective until the date on which a Postal 
        Service Financial Responsibility and Management Assistance 
        Authority (established under section 202)--
                  (A) makes a written determination that conditions 
                warrant their implementation; and
                  (B) submits such written determination to the Postal 
                Service, the Office of Personnel Management, and the 
                appropriate committees of Congress (within the meaning 
                of the amendment made by subsection (a)).
          (2) Triggering date.--For purposes of this section, the term 
        ``triggering date of this section'' or ``triggering date'' 
        means the date described in paragraph (1).

                    TITLE IV--POSTAL SERVICE REVENUE

SEC. 401. ADEQUACY, EFFICIENCY, AND FAIRNESS OF POSTAL RATES.

  (a) In General.--Section 3622(d) is amended--
          (1) in paragraph (1)--
                  (A) by redesignating subparagraphs (B) through (E) as 
                subparagraph (D) through (G), respectively; and
                  (B) by inserting after subparagraph (A) the 
                following:
                  ``(B) subject to the limitation under subparagraph 
                (A), establish postal rates to fulfill the requirement 
                that each market-dominant class, product, and type of 
                mail service (except for an experimental product or 
                service) bear the direct and indirect postal costs 
                attributable to such class, product, or type through 
                reliably identified causal relationships plus that 
                portion of all other costs of the Postal Service 
                reasonably assignable to such class, product, or type;
                  ``(C) establish postal rates for each group of 
                functionally equivalent agreements between the Postal 
                Service and users of the mail that--
                          ``(i) cover attributable cost; and
                          ``(ii) improve the net financial position of 
                        the Postal Service;
                for purposes of this subparagraph, a group of 
                functionally equivalent agreements shall consist of all 
                service agreements that are functionally equivalent to 
                each other within the same market-dominant product, but 
                shall not include agreements within an experimental 
                product;''; and
          (2) by adding at the end the following:
          ``(4) PRC study.--
                  ``(A) In general.--Within 90 days after the end of 
                the first fiscal year beginning after the date of 
                enactment of the Postal Reform Act of 2011, the Postal 
                Regulatory Commission shall complete a study to 
                determine the quantitative impact of the Postal 
                Service's excess capacity on the direct and indirect 
                postal costs attributable to any class that bears less 
                than 100 percent of its costs attributable (as 
                described in paragraph (1)(B)), according to the most 
                recent annual determination of the Postal Regulatory 
                Commission under section 3653.
                  ``(B) Requirements.--The study required under 
                subparagraph (A) shall--
                          ``(i) be conducted pursuant to regulations 
                        that the Postal Regulatory Commission shall 
                        prescribe within 90 days after the date of 
                        enactment of the Postal Reform Act of 2011, 
                        taking into account existing regulations for 
                        proceedings to improve the quality, accuracy, 
                        or completeness of ratemaking information under 
                        section 3652(e)(2) in effect on such date; and
                          ``(ii) for any year in which any class of 
                        mail bears less than 100 percent of its costs 
                        attributable (as described in paragraph 
                        (1)(B)), be updated annually by the Postal 
                        Service and included in its annual report to 
                        the Commission under section 3652, using such 
                        methodologies as the Commission shall by 
                        regulation prescribe.
          ``(5) Additional rates.--Starting not earlier than 12 months 
        and not later than 18 months after the date on which the first 
        study described in paragraph (4) is completed, and at least 
        once in each subsequent 12-month period, the Postal Service 
        shall establish postal rates for each loss-making class of mail 
        to eliminate such losses (other than those caused by the Postal 
        Service's excess capacity) by exhausting all unused rate 
        authority as well as maximizing incentives to reduce costs and 
        increase efficiency, subject to the following:
                  ``(A) The term `loss-making', as used in this 
                paragraph with respect to a class of mail, means a 
                class of mail that bears less than 100 percent of its 
                costs attributable (as described in paragraph (1)(B)), 
                according to the most recent annual determination of 
                the Postal Regulatory Commission under section 3653, 
                adjusted to account for the quantitative effect of 
                excess capacity on the costs attributable of the class 
                (as described in paragraph (1)(C)).
                  ``(B) Unused rate authority shall be annually 
                increased by 2 percent for each class of mail that 
                bears less than 90 percent of its costs attributable 
                (as described in paragraph (1)(B)), according to the 
                most recent annual determination of the Postal 
                Regulatory Commission under section 3653, adjusted to 
                account for the quantitative effect of excess capacity 
                on the costs attributable of the class (as described in 
                paragraph (1)(C)), with such increase in unused rate 
                authority to take effect 30 days after the date that 
                the Commission issues such determination.''.
  (b) Conforming Amendment.--Subparagraph (A) of section 3622(c)(10) is 
amended to read as follows:
                  ``(A) improve the net financial position of the 
                Postal Service through reducing Postal Service costs or 
                increasing the overall contribution to the 
                institutional costs of the Postal Service; and''.
  (c) Exception.--Section 3622(d) is amended by adding after paragraph 
(5) (as added by subsection (a)(2)) the following:
          ``(6) Exception.--The requirements of paragraph (1)(B) shall 
        not apply to a market-dominant product for which a substantial 
        portion of the product's mail volume consists of inbound 
        international mail with terminal dues rates determined by the 
        Universal Postal Union (and not by bilateral agreements or 
        other arrangements).''.

SEC. 402. REPEAL OF RATE PREFERENCES FOR QUALIFIED POLITICAL 
                    COMMITTEES.

  Subsection (e) of section 3626 is repealed.

SEC. 403. RATE PREFERENCES FOR NONPROFIT ADVERTISING.

  (a) Provisions Relating to Former Section 4358(f).--Section 
3626(a)(5) is amended by adding at the end the following: 
``Notwithstanding any other provision of this paragraph, the percentage 
specified in the preceding sentence shall be increased by an additional 
2 percentage points as of the first day of each calendar year beginning 
at least 3 years after the date of the enactment of the Postal Reform 
Act of 2011, until such percentage reaches 80 percent.''.
  (b) Provisions Relating to Former Section 4452 (b) and (c).--Section 
3626(a)(6) is amended by inserting after subparagraph (C) the following 
(as a flush left sentence):
  ``Notwithstanding any other provision of this paragraph, the 
percentage specified in subparagraph (A) shall be increased by an 
additional 2 percentage points as of the first day of each calendar 
year beginning at least 3 years after the date of the enactment of the 
Postal Reform Act of 2011, until such percentage reaches 80 percent.''.

SEC. 404. STREAMLINED REVIEW OF QUALIFYING SERVICE AGREEMENTS FOR 
                    COMPETITIVE PRODUCTS.

  Section 3633 is amended by adding at the end the following:
  ``(c) Streamlined Review.--Within 90 days after the date of the 
enactment of this subsection, after notice and opportunity for public 
comment, the Postal Regulatory Commission shall promulgate (and may 
from time to time thereafter revise) regulations for streamlined after-
the-fact review of new agreements between the Postal Service and users 
of the mail that provide rates not of general applicability for 
competitive products, and are functionally equivalent to existing 
agreements that have collectively covered attributable costs and 
collectively improved the net financial position of the Postal Service. 
Streamlined review will be concluded within 5 working days after the 
agreement is filed with the Commission and shall be limited to approval 
or disapproval of the agreement as a whole based on the Commission's 
determination of its functional equivalence. Agreements not approved 
may be resubmitted without prejudice under section 3632(b)(3).''.

SEC. 405. SUBMISSION OF SERVICE AGREEMENTS FOR STREAMLINED REVIEW.

  Section 3632(b) is amended--
          (1) by redesignating paragraph (4) as paragraph (5); and
          (2) by inserting after paragraph (3) the following:
          ``(4) Rates for streamlined review.--In the case of rates not 
        of general applicability for competitive products that the 
        Postmaster General considers eligible for streamlined review 
        under section 3633(c), the Postmaster General shall cause each 
        agreement to be filed with the Postal Regulatory Commission by 
        such date, on or before the effective date of any new rate, as 
        the Postmaster General considered appropriate.''.

SEC. 406. TRANSPARENCY AND ACCOUNTABILITY FOR SERVICE AGREEMENTS.

  Section 3653 is amended--
          (1) by redesignating subsections (c) through (e) as 
        subsections (d) through (f), respectively; and
          (2) by inserting after subsection (b) the following:
  ``(c) Each annual written determination of the Commission under 
section 3653 shall include the following written determinations:
          ``(1) Whether each product covered its costs, and if it did 
        not, the determination shall state that such product is in 
        noncompliance under section 3653(c).
          ``(2) For each group of functionally equivalent agreements 
        between the Postal Service and users of the mail, whether it 
        fulfilled requirements to--
                  ``(A) cover attributable costs; and
                  ``(B) improve the net financial position of the 
                Postal Service.
          ``(3) Any group of functionally equivalent agreements (as 
        referred to in subparagraph (B)) not meeting subparagraphs (A) 
        and (B) of paragraph (2) shall be determined to be in 
        noncompliance under this subsection.
          ``(4) For purposes of this subsection, a group of 
        functionally equivalent agreements (as referred to in paragraph 
        (2)) shall consist of all service agreements that are 
        functionally equivalent to each other within the same market-
        dominant or competitive product, but shall not include 
        agreements within an experimental product.''.

SEC. 407. NONPOSTAL SERVICES.

  (a) Nonpostal Services.--
          (1) In general.--Part IV is amended by adding after chapter 
        36 the following:

                    ``CHAPTER 37--NONPOSTAL SERVICES

``Sec.
``3701. Purpose.
``3702. Definitions.
``3703. Postal Service advertising program.
``3704. Postal Service program for State governments.
``3705. Postal Service program for other government agencies.
``3706. Transparency and accountability for nonpostal services.

``Sec. 3701. Purpose

  ``This chapter is intended to enable the Postal Service to increase 
its net revenues through specific nonpostal products and services that 
are expressly authorized by this chapter. Postal Service revenues and 
expenses under this chapter shall be funded through the Postal Service 
Fund.

``Sec. 3702. Definitions

  ``As used in this chapter--
          ``(1) the term `nonpostal services' is limited to services 
        offered by the Postal Service that are expressly authorized by 
        this chapter and are not postal products or services;
          ``(2) the term `Postal Service advertising program' means a 
        program, managed by the Postal Service, by which the Postal 
        Service receives revenues from entities which advertise at 
        Postal Service facilities and on Postal Service vehicles;
          ``(3) the term `Postal Service program for State governments' 
        means a program, managed by the Postal Service, by which the 
        Postal Service receives revenue from State governments 
        (including their agencies) for providing services on their 
        behalf at Postal Service facilities;
          ``(4) the term `attributable costs' has the same meaning as 
        is given such term in section 3631; and
          ``(5) the term `year' means a fiscal year.

``Sec. 3703. Postal Service advertising program

  ``Notwithstanding any other provision of this title, the Postal 
Service may establish and manage a program that allows entities to 
advertise at Postal Service facilities and on Postal Service vehicles. 
Such a program shall be subject to the following requirements:
          ``(1) The Postal Service shall at all times ensure 
        advertising it permits is consistent with the integrity of the 
        Postal Service.
          ``(2) Any advertising program is required to cover a minimum 
        of 200 percent of its attributable costs in each year.
          ``(3) All advertising expenditures and revenues are subject 
        to annual compliance determination (including remedies for 
        noncompliance) applicable to nonpostal products.
          ``(4) Total advertising expenditures and revenues must be 
        disclosed in Postal Service annual reports.

``Sec. 3704. Postal Service program for State governments

  ``(a) In General.--Notwithstanding any other provision of this title, 
the Postal Service may establish a program to provide services for 
agencies of State governments within the United States, but only if 
such services--
          ``(1) shall provide enhanced value to the public, such as by 
        lowering the cost or raising the quality of such services or by 
        making such services more accessible;
          ``(2) do not interfere with or detract from the value of 
        postal services, including--
                  ``(A) the cost and efficiency of postal services; and
                  ``(B) access to postal retail service, such as 
                customer waiting time and access to parking; and
          ``(3) provide a reasonable contribution to the institutional 
        costs of the Postal Service, defined as reimbursement for each 
        service and to each agency covering at least 150 percent of the 
        attributable costs of such service in each year.
  ``(b) Public Notice.--At least 90 days before offering any services 
under this section, the Postal Service shall make each agreement with 
State agencies readily available to the public on its website, 
including a business plan that describes the specific services to be 
provided, the enhanced value to the public, terms of reimbursement, the 
estimated annual reimbursement to the Postal Service, and the estimated 
percentage of attributable Postal Service costs that will be covered by 
reimbursement (with documentation to support these estimates). The 
Postal Service shall solicit public comment for at least 30 days, with 
comments posted on its website, followed by its written response posted 
on its website at least 30 days before offering such services.
  ``(c) Approval Required.--The Governors of the Postal Service shall 
approve the provision of services under this section by a recorded 
vote, with at least \2/3\ of its membership voting for approval, with 
the vote publicly disclosed on the Postal Service website.
  ``(d) Classification of Services.--All services for a given agency 
provided under this section shall be classified as a separate activity 
subject to the requirements of annual reporting under section 3706. 
Such reporting shall also include information on the quality of service 
and related information to demonstrate that it satisfied the 
requirements of subsection (a). Information provided under this section 
shall be according to requirements that the Postal Regulatory 
Commission shall by regulation prescribe.
  ``(e) Definitions.--For the purpose of this section--
          ``(1) the term `State' includes the District of Columbia, the 
        Commonwealth of Puerto Rico, the United States Virgin Islands, 
        Guam, American Samoa, the Commonwealth of the Northern Mariana 
        Islands, and any other territory or possession of the United 
        States; and
          ``(2) the term `United States', when used in a geographical 
        sense, means the States.

``Sec. 3705. Postal Service program for other government agencies

  ``(a) In General.--The Postal Service may establish a program to 
provide property and services for other government agencies within the 
meaning of section 411, but only if such program provides a reasonable 
contribution to the institutional costs of the Postal Service, defined 
as reimbursement by each agency that covers at least 100 percent of the 
attributable costs of all property and service provided by the Postal 
Service in a each year to such agency.
  ``(b) Classification of Services.--For each agency, all property and 
services provided by the Postal Service under this section shall be 
classified as a separate activity subject to the requirements of annual 
reporting under section 3706. Information provided under this section 
shall be according to requirements that the Postal Regulatory 
Commission shall by regulation prescribe.

``Sec. 3706. Transparency and accountability for nonpostal services

  ``(a) Annual Reports to the Commission.--
          ``(1) In general.--The Postal Service shall, no later than 90 
        days after the end of each year, prepare and submit to the 
        Postal Regulatory Commission a report (together with such 
        nonpublic annex to the report as the Commission may require 
        under subsection (b)) which shall analyze costs, revenues, 
        rates, and quality of service for this chapter, using such 
        methodologies as the Commission shall by regulation prescribe, 
        and in sufficient detail to demonstrate compliance with all 
        applicable requirements of this chapter.
          ``(2) Audits.--The Inspector General shall regularly audit 
        the data collection systems and procedures utilized in 
        collecting information and preparing such report. The results 
        of any such audit shall be submitted to the Postal Service and 
        the Postal Regulatory Commission.
  ``(b) 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.
  ``(c) Content and Form of Reports.--
          ``(1) In general.--The Postal Regulatory Commission shall, by 
        regulation, prescribe the content and form of the public 
        reports (and any nonpublic annex and supporting matter relating 
        to the report) to be provided by the Postal Service under this 
        section. Such reports shall be included with the annual 
        compliance determination reported under section 3653. In 
        carrying out this subsection, the Commission shall give due 
        consideration to--
                  ``(A) providing the public with timely, adequate 
                information to assess compliance;
                  ``(B) avoiding unnecessary or unwarranted 
                administrative effort and expense on the part of the 
                Postal Service; and
                  ``(C) protecting the confidentiality of information 
                that is commercially sensitive or is exempt from public 
                disclosure under section 552(b) of title 5.
          ``(2) Revised requirements.--The Commission may, on its own 
        motion or on request of any interested party, initiate 
        proceedings (to 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 
                property or services under this chapter has become 
                significantly inaccurate or can be significantly 
                improved;
                  ``(B) the quality of service data provided to the 
                Commission for annual reports under this chapter has 
                become significantly inaccurate or can be significantly 
                improved; or
                  ``(C) such revisions are, in the judgment of the 
                Commission, otherwise necessitated by the public 
                interest.
  ``(d) Confidential Information.--
          ``(1) In general.--If the Postal Service determines that any 
        document or portion of a document, or other matter, which it 
        provides to the Postal Regulatory Commission in a nonpublic 
        annex under this section contains information 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).
  ``(e) Annual Compliance Determination.--
          ``(1) Opportunity for public comment.--After receiving the 
        reports required under subsection (a) for any year, the Postal 
        Regulatory Commission shall promptly provide an opportunity for 
        comment on such reports by any interested party, and an officer 
        of the Commission who shall be required to represent the 
        interests of the general public.
          ``(2) Determination of compliance or noncompliance.--Not 
        later than 90 days after receiving the submissions required 
        under subsection (a) with respect to a year, the Postal 
        Regulatory Commission shall make a written determination as to 
        whether any nonpostal activities during such year were or were 
        not in compliance with applicable provisions of this chapter 
        (or regulations promulgated under this chapter). The Postal 
        Regulatory Commission shall issue a determination of 
        noncompliance if the requirements for coverage of attributable 
        costs are not met. If, with respect to a year, no instance of 
        noncompliance is found to have occurred in such year, the 
        written determination shall be to that effect.
          ``(3) Noncompliance.--If, for a year, a timely written 
        determination of noncompliance is made under this chapter, the 
        Postal Regulatory Commission shall take appropriate action. If 
        the requirements for coverage of attributable costs specified 
        by this chapter are not met, the Commission shall, within 60 
        days after the determination, prescribe remedial action to 
        restore compliance as soon as practicable, which shall also 
        include the full restoration of revenue shortfalls during the 
        following fiscal year. The Commission may order the Postal 
        Service to discontinue a nonpostal service under section 3703 
        or 3704 that persistently fails to meet cost coverage 
        requirements.
          ``(4) Any deliberate noncompliance.--In addition, in cases of 
        deliberate noncompliance by the Postal Service with the 
        requirements of this chapter, the Postal Regulatory Commission 
        may order, based on the nature, circumstances, extent, and 
        seriousness of the noncompliance, a fine (in the amount 
        specified by the Commission in its order) for each incidence of 
        noncompliance. All receipts from fines imposed under this 
        subsection shall be deposited in the general fund of the 
        Treasury of the United States.''.
          (2) Clerical amendment.--The table of chapters at the 
        beginning of part IV is amended by adding after the item 
        relating to chapter 36 the following:

``37. Nonpostal Services....................................    3701''.

  (b) Conforming Amendments.--
          (1) Section 404(e).--Section 404(e) is amended by adding at 
        the end the following:
  ``(6) Nothing in this section shall be considered to prevent the 
Postal Service from establishing nonpostal products and services that 
are expressly authorized by chapter 37.''.
          (2) Section 411.--The last sentence of section 411 is amended 
        by striking ``including reimbursability'' and inserting 
        ``including reimbursability within the limitations of chapter 
        37''.
          (3) Treatment of existing nonpostal services.--All nonpostal 
        services continued pursuant to section 404(e) of title 39, 
        United States Code, shall be considered to be expressly 
        authorized by chapter 37 of such title (as added by subsection 
        (a)(1)) and shall be subject to the requirements of such 
        chapter.

SEC. 408. REIMBURSEMENT OF ALASKA BYPASS MAIL COSTS.

  (a) Cost Estimates by Postal Regulatory Commission.--Section 3651(b) 
is amended--
          (1) by redesignating paragraph (2) as paragraph (3); and
          (2) by inserting after paragraph (1) the following:
          ``(2) Alaska bypass mail costs.--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 Alaska bypass mail service 
        under section 5402.''.
  (b) Reimbursements.--
          (1) In general.--Chapter 54 is amended by adding at the end 
        the following:

``Sec. 5404. Reimbursement of Alaska bypass mail costs

  ``(a) In General.--The State of Alaska, on an annual basis, shall 
make a payment to the Postal Service to reimburse the Postal Service 
for its costs in providing Alaska bypass mail service under section 
5402 of this title.
  ``(b) Date of First Payment.--The State of Alaska shall make its 
first payment under subsection (a) on or before the last day of the 
first fiscal year of the State of Alaska beginning after the date of 
enactment of this section.
  ``(c) Payment Amounts.--
          ``(1) Determination of amounts.--The amount of a payment 
        under subsection (a) shall be determined based on the most 
        recent cost estimate prepared by the Postal Regulatory 
        Commission under section 3651(b)(2) of this title (in this 
        subsection referred to as the `cost estimate').
          ``(2) First payment.--The first payment under subsection (a) 
        shall be in an amount equal to 20 percent of the cost estimate.
          ``(3) Subsequent payments.--Each subsequent payment under 
        subsection (a) shall be in an amount equal to a percentage of 
        the cost estimate determined by adding 20 percent to the 
        percentage due in the prior year, except that no payment shall 
        exceed 100 percent of the cost estimate.
  ``(d) Notice of Payment Amounts.--Not later than 30 days after the 
date of issuance of a cost estimate by the Postal Regulatory Commission 
under section 3651(b)(2) of this title, the Postal Service shall 
furnish the State of Alaska with written notice of the amount of the 
next payment due under subsection (a).
  ``(e) Deposit of Payments.--Not later than the last day of the fiscal 
year of the State of Alaska in which notice of a payment is provided 
under subsection (d)--
          ``(1) the State of Alaska shall transmit the payment to the 
        Postal Service; and
          ``(2) the Postal Service shall deposit the payment in the 
        Postal Service Fund.''.
          (2) Clerical amendment.--The table of sections at the 
        beginning of chapter 54 is amended by adding at the end the 
        following:

``5404. Reimbursement of Alaska bypass mail costs.''.

SEC. 409. APPROPRIATIONS MODERNIZATION.

  (a) In General.--Section 2401 is amended by striking subsections (b) 
through (d).
  (b) Effective Date.--The amendment made by subsection (a) shall be 
effective with respect to fiscal years beginning after the date of 
enactment of this Act.

SEC. 410. RETIREE HEALTH CARE BENEFIT PAYMENT DEFERRAL.

  Section 8909a of title 5, United States Code, is amended--
          (1) in the section heading, by striking ``Benefit'' and 
        inserting ``Benefits'';
          (2) in subsection (d)(3)(A)(v), by striking 
        ``$5,500,000,000'' and inserting ``$1,000,000,000'';
          (3) in subsection (d)(3)(A)(ix), by striking 
        ``$5,700,000,000'' and inserting ``$7,950,000,000''; and
          (4) in subsection (d)(3)(A)(x), by striking 
        ``$5,800,000,000'' and inserting ``$8,050,000,000''.

                   TITLE V--POSTAL CONTRACTING REFORM

SEC. 501. CONTRACTING PROVISIONS.

  (a) In General.--Part I is amended by adding at the end the 
following:

                  ``CHAPTER 7--CONTRACTING PROVISIONS

``Sec.
``701. Definitions.
``702. Advocate for competition.
``703. Delegation of contracting authority.
``704. Posting of noncompetitive purchase requests for noncompetitive 
contracts.
``705. Review of ethical issues.
``706. Ethical restrictions on participation in certain contracting 
activity.

``Sec. 701. Definitions

  ``In this chapter--
          ``(1) the term `contracting officer' means an employee of a 
        covered postal entity who has authority to enter into a postal 
        contract;
          ``(2) the term `covered postal entity' means--
                  ``(A) the Postal Service; or
                  ``(B) the Postal Regulatory Commission;
          ``(3) the term `head of a covered postal entity' means--
                  ``(A) in the case of the Postal Service, the 
                Postmaster General; or
                  ``(B) in the case of the Postal Regulatory 
                Commission, the Chairman of the Postal Regulatory 
                Commission;
          ``(4) the term `postal contract' means--
                  ``(A) in the case of the Postal Service, any contract 
                (including any agreement or memorandum of 
                understanding) entered into by the Postal Service for 
                the procurement of goods or services; or
                  ``(B) in the case of the Postal Regulatory 
                Commission, any contract (including any agreement or 
                memorandum of understanding) in an amount exceeding the 
                simplified acquisition threshold (as defined in section 
                134 of title 41 and adjusted under section 1908 of such 
                title) entered into by the Postal Regulatory Commission 
                for the procurement of goods or services; and
          ``(5) the term `senior procurement executive' means the 
        senior procurement executive of a covered postal entity.

``Sec. 702. Advocate for competition

  ``(a) Establishment and Designation.--
          ``(1) There is established in each covered postal entity an 
        advocate for competition.
          ``(2) The head of each covered postal entity shall designate 
        for the covered postal entity 1 or more officers or employees 
        (other than the senior procurement executive) to serve as the 
        advocate for competition.
  ``(b) Responsibilities.--The advocate for competition of a covered 
postal entity shall--
          ``(1) be responsible for promoting--
                  ``(A) the contracting out of functions of the covered 
                postal entity that the private sector can perform 
                equally well or better, and at lower cost; and
                  ``(B) competition to the maximum extent practicable 
                consistent with obtaining best value by promoting the 
                acquisition of commercial items and challenging 
                barriers to competition;
          ``(2) review the procurement activities of the covered postal 
        entity; and
          ``(3) prepare and transmit the annual report required under 
        subsection (c).
  ``(c) Annual Report.--
          ``(1) Preparation.--The advocate for competition of a covered 
        postal entity shall prepare an annual report describing the 
        following:
                  ``(A) The activities of the advocate under this 
                section.
                  ``(B) Initiatives required to promote contracting out 
                and competition.
                  ``(C) Barriers to contracting out and competition.
                  ``(D) In the case of the report prepared by the 
                competition advocate of the Postal Service, the number 
                of waivers made by the Postal Service under section 
                704(c).
          ``(2) Transmission.--The report under this subsection shall 
        be transmitted--
                  ``(A) to Congress;
                  ``(B) to the head of the postal entity;
                  ``(C) to the senior procurement executive of the 
                entity;
                  ``(D) in the case of the competition advocate of the 
                Postal Service, to each member of the Postal Service 
                Board of Governors; and
                  ``(E) in the case of the competition advocate of the 
                Postal Regulatory Commission, to each of the 
                Commissioners of the Commission.

``Sec. 703. Delegation of contracting authority

  ``(a) In General.--
          ``(1) Policy.--Not later than 60 days after the date of 
        enactment of this chapter, the head of each covered postal 
        entity shall issue a policy on contracting officer delegations 
        of authority for postal contracts for the covered postal 
        entity.
          ``(2) Contents.--The policy issued under paragraph (1) shall 
        require that--
                  ``(A) notwithstanding any delegation of authority 
                with respect to postal contracts, the ultimate 
                responsibility and accountability for the award and 
                administration of postal contracts resides with the 
                senior procurement executive; and
                  ``(B) a contracting officer shall maintain an 
                awareness of and engagement in the activities being 
                performed on postal contracts of which that officer has 
                cognizance, notwithstanding any delegation of authority 
                that may have been executed.
  ``(b) Posting of Delegations.--
          ``(1) In general.--The head of each covered postal entity 
        shall make any delegation of authority for postal contracts 
        outside the functional contracting unit readily available and 
        accessible on the website of the covered postal entity.
          ``(2) Effective date.--This paragraph shall apply to any 
        delegation of authority made on or after 30 days after the date 
        of enactment of this chapter.

``Sec. 704. Posting of noncompetitive purchase requests for 
                    noncompetitive contracts

  ``(a) Posting Required.--
          ``(1) Postal regulatory commission.--The Postal Regulatory 
        Commission shall make the noncompetitive purchase request for 
        any noncompetitive award for any contract (including any 
        agreement or memorandum of understanding) entered into by the 
        Postal Regulatory Commission for the procurement of goods and 
        services, in an amount of $20,000 or more, including the 
        rationale supporting the noncompetitive award, publicly 
        available on the website of the Postal Regulatory Commission--
                  ``(A) not later than 14 days after the date of the 
                award of the noncompetitive contract; or
                  ``(B) not later than 30 days after the date of the 
                award of the noncompetitive contract, if the basis for 
                the award was a compelling business interest.
          ``(2) Postal service.--The Postal Service shall make the 
        noncompetitive purchase request for any noncompetitive award of 
        a postal contract in an amount of $250,000 or more, including 
        the rationale supporting the noncompetitive award, publicly 
        available on the website of the Postal Service--
                  ``(A) not later than 14 days after the date of the 
                award; or
                  ``(B) not later than 30 days after the date of the 
                award, if the basis for the award was a compelling 
                business interest.
          ``(3) Adjustments to the posting threshold for the postal 
        service.--
                  ``(A) Review and determination.--Not later than 
                January 31 of each year, the Postal Service shall--
                          ``(i) review the $250,000 threshold 
                        established under paragraph (2); and
                          ``(ii) based on any change in the Consumer 
                        Price Index for all-urban consumers of the 
                        Department of Labor, determine whether an 
                        adjustment to the threshold shall be made.
                  ``(B) Amount of adjustments.--An adjustment under 
                subparagraph (A) shall be made in increments of $5,000. 
                If the Postal Service determines that a change in the 
                Consumer Price Index for a year would require an 
                adjustment in an amount that is less than $5,000, the 
                Postal Service may not make an adjustment to the 
                threshold for the year.
          ``(4) Effective date.--This subsection shall apply to any 
        noncompetitive contract awarded on or after the date that is 90 
        days after the date of enactment of this chapter.
  ``(b) Public Availability.--
          ``(1) In general.--Subject to paragraph (2), the information 
        required to be made publicly available by a covered postal 
        entity under subsection (a) shall be readily accessible on the 
        website of the covered postal entity.
          ``(2) Protection of proprietary information.--A covered 
        postal entity shall--
                  ``(A) carefully screen any description of the 
                rationale supporting a noncompetitive award required to 
                be made publicly available under subsection (a) to 
                determine whether the description includes proprietary 
                data (including any reference or citation to the 
                proprietary data) or security-related information; and
                  ``(B) remove any proprietary data or security-related 
                information before making publicly available a 
                description of the rationale supporting a 
                noncompetitive award.
  ``(c) Waivers.--
          ``(1) Waiver permitted.--If the Postal Service determines 
        that making a noncompetitive purchase request for a postal 
        contract of the Postal Service publicly available would risk 
        placing the Postal Service at a competitive disadvantage 
        relative to a private sector competitor, the senior procurement 
        executive, in consultation with the advocate for competition of 
        the Postal Service, may waive the requirements under subsection 
        (a).
          ``(2) Form and content of waiver.--
                  ``(A) Form.--A waiver under paragraph (1) shall be in 
                the form of a written determination placed in the file 
                of the contract to which the noncompetitive purchase 
                agreement relates.
                  ``(B) Content.--A waiver under paragraph (1) shall 
                include--
                          ``(i) a description of the risk associated 
                        with making the noncompetitive purchase request 
                        publicly available; and
                          ``(ii) a statement that redaction of 
                        sensitive information in the noncompetitive 
                        purchase request would not be sufficient to 
                        protect the Postal Service from being placed at 
                        a competitive disadvantage relative to a 
                        private sector competitor.
          ``(3) Delegation of waiver authority.--The Postal Service may 
        not delegate the authority to approve a waiver under paragraph 
        (1) to any employee having less authority than the senior 
        procurement executive.

``Sec. 705. Review of ethical issues

  ``If a contracting officer identifies any ethical issues relating to 
a proposed contract and submits those issues and that proposed contract 
to the designated ethics official for the covered postal entity before 
the awarding of that contract, that ethics official shall--
          ``(1) review the proposed contract; and
          ``(2) advise the contracting officer on the appropriate 
        resolution of ethical issues.

``Sec. 706. Ethical restrictions on participation in certain 
                    contracting activity

  ``(a) Definitions.--In this section--
          ``(1) the term `covered employee' means--
                  ``(A) a contracting officer; or
                  ``(B) any employee of a covered postal entity whose 
                decision making affects a postal contract as determined 
                by regulations prescribed by the head of a covered 
                postal entity;
          ``(2) the term `final conviction' means a conviction, whether 
        entered on a verdict or plea, including a plea of nolo 
        contendere, for which a sentence has been imposed; and
          ``(3) the term `covered relationship' means a covered 
        relationship described in section 2635.502(b)(1) of title 5, 
        Code of Federal Regulations, or any successor thereto.
  ``(b) In General.--
          ``(1) Regulations.--The head of each covered postal entity 
        shall prescribe regulations that--
                  ``(A) require a covered employee to include in the 
                file of any noncompetitive purchase request for a 
                noncompetitive postal contract a written certification 
                that--
                          ``(i) discloses any covered relationship of 
                        the covered employee; and
                          ``(ii) states that the covered employee will 
                        not take any action with respect to the 
                        noncompetitive purchase request that affects 
                        the financial interests of a friend, relative, 
                        or person with whom the covered employee is 
                        affiliated in a nongovernmental capacity, or 
                        otherwise gives rise to an appearance of the 
                        use of public office for private gain, as 
                        described in section 2635.702 of title 5, Code 
                        of Federal Regulations, or any successor 
                        thereto;
                  ``(B) require a contracting officer to consult with 
                the ethics counsel for the covered postal entity 
                regarding any disclosure made by a covered employee 
                under subparagraph (A)(i), to determine whether 
                participation by the covered employee in the 
                noncompetitive purchase request would give rise to a 
                violation of part 2635 of title 5, Code of Federal 
                Regulations (commonly referred to as the Standards of 
                Ethical Conduct for Employees of the Executive Branch), 
                or any successor thereto;
                  ``(C) require the ethics counsel for a covered postal 
                entity to review any disclosure made by a contracting 
                officer under subparagraph (A)(i) to determine whether 
                participation by the contracting officer in the 
                noncompetitive purchase request would give rise to a 
                violation of part 2635 of title 5, Code of Federal 
                Regulations (commonly referred to as the Standards of 
                Ethical Conduct for Employees of the Executive Branch), 
                or any successor thereto;
                  ``(D) under subsections (d) and (e) of section 
                2635.502 of title 5, Code of Federal Regulations, or 
                any successor thereto, require the ethics counsel for a 
                covered postal entity to--
                          ``(i) authorize a covered employee that makes 
                        a disclosure under subparagraph (A)(i) to 
                        participate in the noncompetitive postal 
                        contract; or
                          ``(ii) disqualify a covered employee that 
                        makes a disclosure under subparagraph (A)(i) 
                        from participating in the noncompetitive postal 
                        contract;
                  ``(E) require a contractor to timely disclose to the 
                contracting officer in a bid, solicitation, award, or 
                performance of a postal contract any conflict of 
                interest with a covered employee; and
                  ``(F) include authority for the head of the covered 
                postal entity to grant a waiver or otherwise mitigate 
                any organizational or personal conflict of interest, if 
                the head of the covered postal entity determines that 
                the waiver or mitigation is in the best interests of 
                the covered postal entity.
          ``(2) Posting of waivers.--Not later than 30 days after the 
        head of a covered postal entity grants a waiver described in 
        paragraph (1)(F), the head of the covered postal entity shall 
        make the waiver publicly available on the website of the 
        covered postal entity.
  ``(c) Contract Voidance and Recovery.--
          ``(1) Unlawful conduct.--In any case in which there is a 
        final conviction for a violation of any provision of chapter 11 
        of title 18 relating to a postal contract, the head of a 
        covered postal entity may--
                  ``(A) void that contract; and
                  ``(B) recover the amounts expended and property 
                transferred by the covered postal entity under that 
                contract.
          ``(2) Obtaining or disclosing procurement information.--
                  ``(A) In general.--In any case in which a contractor 
                under a postal contract fails to timely disclose a 
                conflict of interest to the appropriate contracting 
                officer as required under the regulations promulgated 
                under subsection (b)(1)(E), the head of a covered 
                postal entity may--
                          ``(i) void that contract; and
                          ``(ii) recover the amounts expended and 
                        property transferred by the covered postal 
                        entity under that contract.
                  ``(B) Conviction or administrative determination.--A 
                case described under subparagraph (A) is any case in 
                which--
                          ``(i) there is a final conviction for an 
                        offense punishable under section 2105 of title 
                        41; or
                          ``(ii) the head of a covered postal entity 
                        determines, based upon a preponderance of the 
                        evidence, that the contractor or someone acting 
                        for the contractor has engaged in conduct 
                        constituting an offense punishable under 
                        section 2105 of such title.''.
  (b) Clerical Amendment.--The table of chapters at the beginning of 
part I is amended by adding at the end the following:

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

SEC. 502. TECHNICAL AMENDMENT TO DEFINITION.

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

                     Committee Statement and Views


                          PURPOSE AND SUMMARY

    H.R. 2309, the Postal Reform Act of 2011, would restore the 
financial solvency of the United States Postal Service (``the 
Postal Service'' or ``USPS'') and ensure the efficient and 
affordable nationwide delivery of mail. The bill makes the 
reforms necessary to return the Postal Service to solvency and 
to protect the universal service mandate without creating a 
one-time or ongoing taxpayer subsidy, or reneging on 
obligations to postal employees and retirees. To accomplish 
these objectives, the bill establishes a receiver-like entity 
to enable the Postal Service--in the event of a default on 
obligations to the Federal Government--to bring expenses in 
line with revenues in an expedited manner. Other provisions of 
the bill ensure the long-term sustainability of the Postal 
Service by eliminating a number of unfunded Congressional 
mandates, modernizing the postal workforce, rightsizing postal 
infrastructure to correspond with diminishing demand, and 
streamlining postal regulation.

                  BACKGROUND AND NEED FOR LEGISLATION

    The Postal Service is at a critical juncture. Just since 
fiscal year 2007, annual mail volume is down 21% and annual 
revenue is down more than $9 billion. The Postal Service lost a 
record $10.6 billion in Fiscal Year 2011, including a $5.5 
billion retiree health care payment that was deferred. The 
$10.6 billion deficit comes on the heels of an $8.5 billion 
deficit in fiscal year 2010. On June 24, 2011, the Postal 
Service began defaulting to the Federal Government on payments 
due for the employer portion of workers' pension contribution. 
The Postal Service is also unable to make a statutorily 
required $5.5 billion payment to prefund retiree health 
expenses for current employees originally due on September 30, 
2011. With its $15 billion line of credit with the U.S. 
Treasury virtually exhausted, the Postal Service--by its own 
admission--will likely not be able to make payroll by next 
fall.
    This is not a temporary cash-flow problem. The Postal 
Service expects the electronic diversion of mail to continue 
indefinitely. Despite shedding more than 100,000 workers 
through attrition over the last five years, the Postal Service 
has failed to cut costs fast enough to offset the drop-off in 
mail and revenue. Consequently, this venerable American 
institution rests on the brink of insolvency. Without the 
significant structural reforms prescribed by this legislation, 
eight million American jobs tied to the mailing industry could 
be put at risk.

                                HISTORY

    The existence of an American postal service predates our 
Constitution. As section 101 of title 39 of the U.S. Code 
states: ``The Postal Service shall have as its basic function 
the obligation to provide postal services to bind the Nation 
together through the personal, educational, literary, and 
business correspondence of the people.''
    While this basic mission remains unchanged today, the 
Postal Service has from its inception evolved to meet changing 
needs--primarily via the extension of new services and the 
reduction of unnecessary services. One major step toward our 
modern Postal Service came in 1863, when free home delivery 
first began in urban areas, which almost always involved letter 
carriers personally handing mail to customers. Prior to that 
date, Americans were required to venture to a post office in 
order to collect their mail. While it took several more 
decades, free home delivery began to be extended to rural areas 
in 1902. Additionally, in the early decades of the 20th 
Century, many residential addresses received mail delivery 
twice a day, and businesses received mail up to four times per 
day.
    As the use of mail changed, however, these services changed 
as well. With letter carriers waiting as long as an hour per 
day for patrons to answer the door, by 1923 the Postal Service 
required a mail slot or box for delivery. By 1950, the Postal 
Service had phased out the second residential delivery, and 
multiple deliveries to businesses disappeared soon after. 
Importantly, these changes enabled the Postal Service to become 
more efficient, keep prices down, and ultimately better serve 
the customer.

The 1970 reform

    Despite the best efforts of many involved, the postal 
system by 1970 was edging toward disarray. Conditions 
deteriorated to such a degree that in March 1970 postal worker 
strikes broke out around the nation, eventually involving more 
than 150,000 postal employees. The workers were protesting low 
wages and unsafe working conditions, but it was clear to all 
observers that the Post Office Department needed fundamental 
reform in order to properly address both the valid concerns of 
the workers and crumbling postal infrastructure. In response to 
these problems, Congress enacted the most significant postal 
reform in the Nation's history. This law, known as the Postal 
Reorganization Act, fundamentally transformed the institution 
from a taxpayer subsidized cabinet-level agency to a self-
supporting, independent entity within the executive branch.
    On July 1, 1971, the United States Postal Service replaced 
the Post Office Department as the Nation's mail service. While 
much of the customer-facing infrastructure remained unchanged, 
the institution was now essentially chartered to act in a 
business-like fashion. Prior to the 1970 reform, the law stated 
that the Post Office Department ``should be operated in an 
efficient manner,'' but ``it clearly is not a business 
enterprise.'' The 1970 law reversed this paradigm and, in the 
words of the House report on the legislation, provided the 
``authority to conduct the affairs of the Postal Establishment 
on a business-like basis.'' As a result, business principles 
largely replaced political influence in the decision-making of 
the postal establishment. After the 1970 reforms, postmasters 
were no longer appointed by the President, Congress no longer 
determined postage rate increases, and the taxpayer subsidy of 
postal operations was phased out. Under the new policy, 
postmasters began to be selected on merit rather than by 
patronage; the Postal Rate Commission was created to properly 
adjudicate rate increases; and the break-even standard came 
into force, requiring postage rates to cover the operating 
expenses of the Postal Service. Finally, postal workers were 
granted the right to collectively bargain over wages and 
benefits, a privilege that few federal employees enjoy even 
today.
    The ultimate result of the 1970 act was a ``grand bargain'' 
of sorts. To the extent practicable, it divorced the day-to-day 
operations of the Postal Service from political control as it 
gave the new entity billions of dollars of taxpayer-owned 
assets. The bargain also, however, protected the taxpayers from 
subsidizing operating costs of the new agency. Upon the 
creation of the Postal Service, the Federal Government handed 
over to the newly created Postal Service--free of charge--all 
of the assets of its predecessor, the Post Office Department. 
The transfer of assets to the Postal Service included more than 
30,000 post offices, tens of thousands of vehicles, a trained 
workforce of 700,000 employees, and a monopoly on the use of 
the mailbox. Once invested with postal assets, the Postal 
Service was expected to maintain universal access to postal 
services, run the institution at a break-even rate, pay the 
pension and retiree health care benefits of all postal workers, 
and operate without taxpayer subsidy.

The 2006 reform

    In many ways, the 1970 reform was incredibly successful. 
Labor issues were fairly addressed, and the postal 
infrastructure was modernized and automated. The break-even 
mandate, however, had the unfortunate effect of discouraging 
the Postal Service from making difficult decisions as mail 
usage began to change. The Postal Service could break even by 
choosing to raise rates rather than cut costs--the latter being 
a painful option that necessarily entailed confronting specific 
and vocal interests. At a time when the postal monopoly had 
great value, raising rates was an economically viable strategy: 
Even if postage rates increased, individuals and businesses 
often had little choice but to continue to use mail. By the 
late 1990s, however, the power of the postal monopoly became 
increasingly diluted by the emergence of more alternatives to 
the mail.
    The volume of profitable First-Class Mail peaked in 2001 as 
customers increasingly substituted electronic alternatives for 
hard-copy letters, placing the Postal Service under growing 
financial pressure. Meanwhile, USPS faced mounting obligations 
for retiree health benefits for its aging workforce because 
those benefits were financed only on a pay-as-you-go basis. 
Further, a growing consensus began to conclude that the lengthy 
rate-setting process under the 1970 law was preventing the 
Postal Service from responding quickly to an increasingly 
competitive marketplace. In short, the world was changing and 
it was becoming clear the Postal Service and postal laws would 
have to change with it.
    In 2006, after more than a decade of debate, Congress 
passed the Postal Accountability and Enhancement Act, a law 
specifically designed to prepare the Postal Service for the 
likelihood of continued declines in profitable mail volume in a 
competitive marketplace where the postal monopoly on delivery 
of hard copy mail would steadily decrease in value. The 2006 
law built on the 1970 reform by enabling the Postal Service to 
operate even more like a business. This was done by essentially 
creating a profit motive for the Postal Service. The break-even 
mandate in place since 1971 was eliminated and replaced with a 
price cap on postage rate increases. The cap prevented 
unchecked rate increases, but it also allowed the Postal 
Service to turn a profit by increasing efficiency and cutting 
costs. The cap was designed to make the Postal Service to begin 
looking inward to address budget shortfalls in the exact way 
the Postal Service would if the monopoly were to lose its value 
and if rate increases were to fail to generate the necessary 
revenue. Further, the 2006 law gave the Postal Service greater 
flexibility to set and change postal rates, especially for its 
competitive products such as Express Mail and Priority Mail. 
This greater price flexibility was balanced with protections to 
ensure fair competition, transparency, and accountability. With 
liabilities for retiree expenses continuing to accrue, the law 
required the Postal Service to begin prefunding retiree health 
care benefits for current and former employees, beginning with 
a series of ten annual lump sum ``catch-up'' payments to 
significantly reduce the unfunded liability of the retiree 
health care benefit. After the ten-year catch-up period, the 
remaining liability would be amortized over a forty year 
period, and the Postal Service would begin paying the ``normal 
cost'' for retiree health care during employees' careers on an 
accrual basis in order that the Postal Service would have fully 
funded the workers' retiree health care costs by the time of 
their retirement. This is the manner in which the Postal 
Service had long paid for retirees' pension benefits.
    Taken as a whole, the reforms packaged in the 2006 law were 
designed to prepare the Postal Service for a future where 
profitable First-Class Mail would be increasingly supplanted by 
electronic alternatives and the postal monopoly could no longer 
be counted on to provide additional revenue with every increase 
in postage rates. Unfortunately, what legislators could not 
have known at the time was that the very challenge they were 
preparing the Postal Service to face would take place far 
sooner than anyone anticipated. During the first decade of the 
new century, the internet matured, technology rapidly evolved, 
and the average consumer quickly grew to rely on and trust 
electronic communication. As a result, electronic bill payment 
has boomed since 2001. The recent recession also spurred 
business mailers to adopt less costly alternatives to mail and 
to encourage customers to do likewise. Thus, after steadily 
increasing for more than 200 years, mail volume began to fall. 
In fiscal year 2006, total mail volume peaked at 213 billion 
pieces; now, just five years later, mail volume is at levels 
unseen since the late 1980's and continues to fall at an 
unforeseen rate exceeding all expectations. The economic 
realization of significant productivity gains from the 
increasing use of e-commerce signals almost no chance that mail 
volume will return.

The mailing industry

    While the Postal Service is the second largest civilian 
employer in the United States, with more than 600,000 employees 
and more than $65 billion in revenue for fiscal year 2011, the 
institution is a relatively small part of the mailing industry 
as a whole. According to a 2010 industry-sponsored study, the 
mailing industry generated more than $1.1 trillion in economic 
activity in 2009 and was responsible for 8.7 million American 
jobs. This tremendous economic force, however, is very tightly 
interrelated with, and highly dependent on, a functional Postal 
Service for its continued success.
    Many Americans are unaware of the breadth of the mailing 
industry, which features jobs associated directly or indirectly 
with virtually every business, nonprofit organization, and 
government entity in the United States. The vast majority of 
all mail volume is generated by these entities, with only 
eleven percent generated by households and three percent 
representing consumer to consumer communication. The mailing 
industry is now operating on razor-thin margins after being hit 
hard by both the recession and electronic diversion. The 
fallout is stark. From June 2008 to June 2009, the paper 
industry lost 9.5% of its workforce, the publishing industry 
lost 10.4%, and the printing industry lost 13%. If the Postal 
Service destabilizes for even a short period of time, these 
industries will be seriously imperiled, with dramatic 
consequences for the broader economy in which jobs are already 
too scarce.

The challenge facing the Postal Service

    The decline in mail is not a temporary, recession-driven 
phenomenon. So far, Postal Service revenue has declined over $9 
billion (12%) from its peak of $75 billion in fiscal year 2007, 
and the Postal Service itself projects further declines for the 
foreseeable future. This revenue decrease is driven by the 
relentless decline in First-Class Mail, the Postal Service's 
highly profitable core product. First-Class Mail volume peaked 
ten years ago and has been declining at an increasingly rapid 
rate as mailed bills, statements, and communications migrate to 
electronic alternatives. First-Class Mail volume declined 25% 
in the last five years and is projected to decline an 
additional 50% by the end of the decade. Meanwhile, the volume 
of Standard Mail (primarily advertising) declined 17% over the 
past five years and is projected to stagnate for the remainder 
of this decade, in part due to increased competition from 
internet-based advertising. Importantly, while Standard Mail is 
also highly profitable, its lower total cost compared to First-
Class Mail means that it takes three pieces of Standard Mail to 
generate the revenue of one piece of First-Class Mail. Further, 
although the volume of packages delivered by the Postal Service 
is growing, they generate only a small part of revenues and 
cannot offset declines in First-Class Mail. Most troubling of 
all is that even the Postal Service's dire projections could 
prove overly optimistic if communication continues to move to 
digital technologies as quickly as in the recent past. GAO 
recently reported that such mail volume trends underscore the 
need for the Postal Service business model to undergo 
fundamental changes to reduce personnel and network-related 
costs.
    Eighty percent of the Postal Service's costs are workforce-
related, a proportion that has remained steady for many years 
despite vast changes in automation and information technology. 
These costs must be addressed as part of any serious reform 
effort. A long-standing, statutorily-mandated collective 
bargaining process tilted against Postal Service management has 
historically hindered the ability of the Postal Service to 
control these costs. This process has yielded contracts 
providing guaranteed wage increases, benefits exceeding those 
of other federal workers, and no-layoff protections that 
virtually no other federal employees enjoy. The most recent 
contract, ratified this spring by the Postal Service and the 
American Postal Workers Union (APWU), again provided guaranteed 
wage increases, failed to bring Postal Service coverage of 
health and life insurance benefits into parity with other 
federal agencies, and actually expanded no-layoff protections. 
With mail volume declining, the inability of the Postal Service 
to rightsize its workforce due to no-layoff protections has 
left the Postal Service in a situation where it must pay more 
and more workers to sit idle. The Postal Service has no 
mechanism to transition unneeded workers off the rolls and no 
money to provide incentives for employees to retire 
voluntarily. The ability to rightsize the Postal Service 
workforce is a vital component of a sustainable business model 
that will continue to provide attractive jobs and universal 
postal service. A statutory change is thus urgently needed to 
permit difficult but necessary workforce restructuring.

The alleged CSRS ``overpayment''

    One item initially left unclear by the 1970 postal reform 
was the division of responsibility for the pension obligations 
of individuals who worked for both the Post Office Department 
and its successor entity, the Postal Service. This issue was 
clarified in 1974, with the enactment of P.L. 93-349. The 1974 
law created an explicit cost allocation method requiring that 
the taxpayer pay pension costs generated by the Post Office 
Department and that the postal ratepayer pay pension costs 
generated by the Postal Service. Specifically, the law required 
the Postal Service to pay for ``any estimated increase in the 
unfunded liability'' of postal workers' pensions that was the 
result of any action on the part of the Postal Service. Due to 
the ``high three'' salary years federal pensions are based on 
and because the ``high three'' almost always occurs in the last 
three years of service, the Postal Service under this formula 
ultimately pays a greater portion of the applicable employee 
pensions than if the cost of the pensions were divided between 
the two entities based on the proportion of years an employee 
worked at each entity. Importantly, at the time this allocation 
formula was established, the parties involved recognized it as 
equitable in light of the tremendous free asset transfer of 
postal infrastructure to the Postal Service as well as the 
granting of the postal monopoly to the new entity. In a letter 
included in House Committee Report 93-120 to the bill that 
became P.L. 93-349, the Postal Service General Counsel wrote:

          After careful consideration--and in full awareness of 
        the financial burdens enactment of this bill will 
        impose--the Postal Service has concluded that it is 
        proper, as a matter of principle, for these costs to be 
        imposed on postal ratepayers rather than the taxpayers. 
        Properly understood, the principle of postal self-
        sufficiency calls for those who use postal services to 
        bear the costs of those services.

That quote addresses the fundamental point of P.L. 93-349: the 
taxpayer should not pay for raises and pension increases 
unilaterally granted by the Postal Service to postal employees.
    Even so, both the USPS Office of Inspector General (USPS 
OIG) and Postal Regulatory Commission (PRC) issued reports in 
recent years alleging that the Office of Personnel Management's 
(OPM) current method of allocating responsibility for Civil 
Service Retirement System (CSRS) pension benefits under P.L. 
93-349 requires the Postal Service to shoulder an excessive 
share of employee retirement obligations. The USPS OIG and the 
PRC proposed alternate methodologies that they estimated would 
return $56 billion to $85 billion in pension ``overpayments'' 
from the Federal Government back to the Postal Service. The 
USPS IG claimed that amendments Congress made in the 2003 
legislation actually required the Office of Personnel 
Management (OPM) to alter its allocation formula. Still, OPM, 
under both President Bush and President Obama, has stood by the 
existing allocation methodology and refutes the notion that 
there has been any CSRS ``overpayment'' by the Postal Service. 
Additionally, in February of this year, the OPM Inspector 
General (OPM IG) released a detailed report directly refuting 
the allegations raised by the USPS OIG and the PRC.
    Nevertheless, many legislators and interest groups 
continued to allege the existence of a CSRS ``overpayment'' and 
advocated that the return of the overpayment be made a central 
feature of any postal reform bill. In an effort to resolve the 
dispute, a bipartisan, bicameral group of legislators from the 
House and Senate committees of jurisdiction over the Postal 
Service requested that the non-partisan U.S. Government 
Accountability Office (GAO) look into the issue.
    GAO's report, released this past October, refuted the 
``overpayment'' argument unequivocally. It found that: OPM's 
current methodology complies with current law; no CSRS refund 
is owed to the Postal Service; and any change in the pension 
cost allocation formula that puts more of the funding burden on 
the Government would come at a dollar for dollar cost to the 
taxpayer. The GAO report stated:\1\
---------------------------------------------------------------------------
    \1\U.S. Government Accountability Office: U.S. Postal Service: 
Allocation of Responsibility for Pension Benefits between the Postal 
Service and the Federal Government, GAO-12-146, highlights, pages 9, 
18, 19. October 17, 2011. Available at http://www.gao.gov/new.items/
d12146.pdf.
---------------------------------------------------------------------------
     ``The current methodology used by OPM for 
allocating responsibility for CSRS benefits between USPS and 
the federal government is consistent with applicable law. 
Congress created USPS in 1971 as an independent, self-
sustaining entity with a package of assets and obligations as 
well as competitive advantages and disadvantages. In 1974, 
Congress explicitly allocated responsibility to USPS for CSRS 
benefits attributable to post-1971 USPS pay increases and, 
although it revised aspects of the CSRS funding process in 2003 
and 2006, it did not alter the fundamental allocation of 
responsibility for CSRS benefits.''
     ``Although the USPS OIG and PRC reports present 
alternative methodologies for determining the allocation of 
pension costs, this determination is ultimately a policy choice 
rather than a question of accounting or actuarial standards.''
     ``Some have referred to overpayments that USPS has 
made to the CSRS fund. The term ``overpayment'' can imply an 
error of some type--mathematical, actuarial, or accounting. We 
have not found evidence of error of these types. Hence, any 
reallocation of CSRS benefit responsibility would be a 
significant change from a policy that has been in place since 
1974 and not a correction of any actuarial or accounting 
methodological error.''
     ``While the USPS OIG and PRC reports make 
judgments about fairness, the 1974 law also implicitly 
reflected fairness. Congress considered that USPS was to be 
self-sustaining and that the Federal Government, which had no 
control over USPS pay increases, should not be liable for 
pension benefits attributable to those increases. Also, the 
USPS OIG and PRC reports assess the fairness of the allocation 
in isolation, looking only at pension costs. In the private 
sector, the fairness of the allocation of pension obligations 
between two businesses depends on the total package of assets 
and obligations--both pension and non-pension. Finally, the 
cost of USPS's CSRS pension allocation based on the 1974 law 
has already been reflected in postal rates for most of the past 
four decades.''
     ``The key impacts of transferring assets out of 
the CSRS fund to USPS based on the current proposals would be 
to increase the Federal Government's current and future 
unfunded pension liability by an estimated $56 billion to $85 
billion. This liability would then be funded by the Federal 
Government using tax revenue, borrowing, or both. Also, CSRS 
beneficiaries would continue to receive their benefits under 
current law, even if the Federal Government's unfunded CSRS 
liability increases, but this could indirectly create pressure 
to reduce pension benefits.''
     ``Any change in the USPS's share of responsibility 
for CSRS benefits would provide some temporary relief from the 
pressures USPS faces because of declining volume, revenue, and 
inflexible costs, but would not by itself address USPS's long-
term financial outlook. Such a transfer of CSRS funds would not 
be sufficient to repay all of USPS's debt and address current 
and future operating deficits related to USPS's inability to 
cut costs quickly enough to match declining mail volume and 
revenue.''
     ``The decline of First-Class Mail--USPS's most 
profitable product--has accelerated as Americans shift to using 
electronic communications and other payment alternatives. This 
trend exposes weaknesses in USPS's business model, which has 
relied on volume growth to help cover costs. To meet these 
changing customer needs, become more efficient, control costs, 
and keep rates affordable, USPS must modernize and restructure. 
To do so, it will need to become much leaner and more 
flexible.''

Oversight hearings on postal reform

    To determine how best to ensure the solvency and viability 
of the Postal Service, the Oversight and Government Reform 
Committee and its Subcommittee on the Federal Workforce, the 
U.S. Postal Service, and Labor Policy held four hearings on 
topics related to the Postal Service between March and June of 
this year. The first hearing, entitled ``Pushing the Envelope: 
The Looming Crisis at USPS,'' was held by the subcommittee on 
March 2, 2011. It provided a broad overview of the major 
challenges facing the Postal Service. Members of the 
Subcommittee heard testimony from Postmaster General Patrick 
Donahoe, and Phillip Herr, a Director with the Government 
Accountability Office, along with other prominent members of 
the postal community.
    A reduction in workforce costs, the testimony made clear, 
was necessary in order for the Postal Service to remain 
financially viable in the coming years. Soon after the hearing, 
however, the Postal Service announced a tentative collective 
bargaining agreement with one of its largest unions, the 
American Postal Workers Union (APWU), which appeared to move in 
the wrong direction. In order to allow the Postal Service to 
explain how the agreement was in line with the financial and 
strategic goals of postal management, a full committee hearing 
was held on April 5, 2011, entitled ``Are Postal Workforce 
Costs Sustainable?'' At the hearing, members of the Committee 
heard from two members of the Postal Service Board of 
Governors, the Postmaster General, and Cliff Guffey, President 
of APWU. At this hearing, two important facts emerged. The 
first was that the Postal Service hoped to reduce its career 
workforce by more than 200,000 employees by 2020. The second 
was that the collective bargaining arbitration system is 
effectively broken and that the Postal Service has repeatedly 
agreed to contracts that do not provide Postal Service 
management the flexibility necessary to adapt to changing 
realities.
    The Federal Workforce Subcommittee followed up with two 
additional hearings. On May 12, 2011, the hearing entitled, 
``Where Have All the Letters Gone?--The Mailing Industry and 
Its Future,'' brought together witnesses from across the 
mailing industry to help understand how they viewed the Postal 
Service and what types of reform they hoped to see. The 
witnesses, who represented paper companies, printers, First-
Class mailers, and marketing/Standard mailers, all discussed 
the significant downsizing their industries had gone through, 
the importance of a viable Postal Service to their business 
models, and the need for the Postal Service to rapidly 
rightsize its infrastructure to keep costs down. The final 
hearing, entitled, ``Postal Infrastructure: How Much Can We 
Afford?'' was held on June 15, 2011. Testimony was heard from 
the Postal Service on its plans for facility rightsizing and 
from industry experts who provided analysis on the benefits and 
drawbacks of different infrastructure-related proposals.

H.R. 2309, the Postal Reform Act of 2011

    Just one week after the Federal Workforce Subcommittee held 
its hearing on postal infrastructure, the Postal Service 
announced its intention to cease making its required employer 
contributions to the Federal Employee Retirement System as part 
of what it termed a ``cash conservation'' effort. These 
employer contributions are necessary in order to fully fund the 
pensions of postal employees. In foregoing these payments, the 
Postal Service effectively announced that its fiscal woes were 
beginning to yield real victims. Chairman Issa and Subcommittee 
Chairman Dennis Ross responded immediately. The next day, June 
23, 2011, they introduced the Postal Reform Act (PRA). The PRA 
is the most comprehensive proposed reform of the Postal Service 
since its creation in 1970. The product of several months of 
drafting efforts, the bill attempts to give the Postal Service 
the tools necessary to succeed in the 21st Century.
    The PRA is designed to meet a core group of objectives by 
using a balanced, multifaceted approach. Drawn in part from the 
testimony received at the Committee's hearings on the issue, as 
well as findings and recommendations dating back to the 2003 
Presidential Commission on the Postal Service, the objectives 
include: (1) ensuring the Postal Service can continue to 
provide effective, affordable universal service; (2) ensuring 
the Postal Service will continue to meet all of its obligations 
to its employees and retirees; (3) addressing the short-term 
liquidity crisis facing the Postal Service; (4) enabling the 
Postal Service to bring expenses into line with revenues to 
ensure medium- and long-term viability; (5) streamlining 
regulation and enable the Postal Service to act like a 
business; and (6) protecting the self-funding nature of the 
Postal Service while preventing a taxpayer funded bailout that 
would defer and complicate the process of instituting the 
necessary fundamental reforms. Given the severity of the Postal 
Service's financial situation, the Committee saw fit to 
implement an array of reforms, including: rightsizing the 
postal infrastructure; rate increases for subsidized mail; 
granting flexibility for the Postal Service to shift to 5-day 
delivery of mail; bankruptcy-like restructuring; modernization 
of collective bargaining; workers' compensation reform; 
regulatory streamlining; elimination of Congressional mandates; 
and contracting reform. This multi-pronged approach resulted in 
a bill with five titles, which address, in sequence: 
infrastructure and deregulation reforms; short-term solvency 
and restructuring; workforce flexibility; revenue enhancement 
and regulatory streamlining; and contracting reform.
    With the wide-ranging nature of the needed reforms, the 
Committee drew on many sources to help craft the text of the 
PRA.
    To facilitate rightsizing and to limit Congressional and 
stakeholder interference that has stymied past efforts, the 
bill creates the Commission on Postal Reorganization (CPR) 
based on the effective Base Realignment and Closure (BRAC) 
programs used to reduce our military footprint after the end of 
the Cold War. The CPR will be a bipartisan entity that uses a 
holistic approach to help mitigate the dangers of piecemeal 
closings' impact on service quality and to ensure that all 
Americans continue to have proper access to postal services. 
Importantly, the bill does not pre-empt or discourage any 
actions taken by the Postal Service to rightsize infrastructure 
on its own. Savings achieved by the Postal Service through 
facility rightsizing before the CPR acts will reduce dollar-
for-dollar the savings the CPR is required to achieve. 
Furthermore, in recognition of its unique knowledge of its own 
network, the Postal Service will develop all of the initial 
plans for closures and consolidations under the CPR. This gives 
the Postal Service the greatest control possible over 
rightsizing while ensuring that rightsizing will be implemented 
in a timely manner.
    Any entity that defaults on its obligations should face 
consequences. The Postal Service is on the verge of default. As 
the Postal Service is not subject to private sector bankruptcy 
rules, the Committee drew on the example of the highly 
successful D.C. Control Board. The Control Board, formally 
known as the District of Columbia Financial Responsibility and 
Management Assistance Authority, was a receiver-like entity put 
in place during the 1990s in order to restore D.C.'s solvency 
after a period of financial mismanagement. As amended during 
full committee consideration, the PRA provides the Postal 
Service with a temporary $10 billion increase in its line of 
credit to finance restructuring. If, after two years, the 
Postal Service fails to reduce its annual losses to less than 
$2 billion, including any defaults or missed payments, a new 
Financial Responsibility and Management Assistance Authority 
will take full control over the Postal Service. This is not a 
new management layer. The Authority would actually replace the 
Postal Service's existing Board of Governors as the management 
unit of the Postal Service. The Authority is given a series of 
aggressive cost-cutting targets and provided with tools to 
ensure adequate restructuring and financial improvement. For 
example, the Authority will be empowered to move the Postal 
Service away from door delivery at an annual savings of at 
least $3.5 billion, and it will be empowered to direct the 
Postal Service to create its own workers' compensation program 
for postal employees independent of the existing federal 
workers' compensation program. Once the Authority returns the 
Postal Service to profitability and promised retirement 
benefits to its employees are ensured, the Authority will 
become dormant, and the previous authority of the Board of 
Governors will be restored.
    To ensure the $10 billion in temporary borrowing is repaid, 
the Postal Service is required to repay a portion of the loan 
each year through property sales until the entire loan is 
repaid after ten years. The Postal Service owns more than $50 
billion in real property by most estimates.
    In addressing workforce modernization, the Committee drew 
on three primary sources: its own hearings, the 2003 
President's Commission on the United States Postal Service, and 
lessons from the broader federal workforce. At the Committee's 
April 5th hearing, the Postal Service's statutorily prescribed 
arbitration process was described by Postmaster General Donahoe 
as a ``roll of the dice.'' Many describe it as biased in favor 
of postal unions, and a key historical factor influencing 
Postal Service management to enter into union contracts that 
jeopardize the institution's financial condition and long-term 
viability.
    To modernize the collective bargaining process, which 
largely dates back to the 1970 Act, the Committee draws on the 
recommendations of the 2003 President's Commission by changing 
the process to a mediation-arbitration process with a defined 
timeline and requiring the arbitrator to take into account long 
neglected pay comparability requirements. The PRA process also 
includes a requirement that arbitrators take into account the 
financial condition of the Postal Service in any decision. The 
goal of this reform is to ensure that the Postal Service has 
the necessary flexibility to remain a self-sustaining entity 
under a fair collective bargaining process that benefits both 
postal workers and the Postal Service in both the short- and 
long-term.
    Lessons from the non-postal federal workforce are also 
reflected in the PRA. For instance, Section 304 of the PRA 
includes a prohibition on any provision in a collective 
bargaining agreement restricting the Postal Service's ability 
to use title 5 reduction-in-force procedures. Postal employees 
are virtually the only federal workers who enjoy such 
protections. This is no longer tenable, since the Postal 
Service is now in a position where it is unable to achieve 
necessary workforce reductions through attrition alone. The 
bill also specifically allows unions to negotiate alternate 
reduction-in-force methods that achieve needed rightsizing. In 
fact, the Committee believes that the ideal way to rightsize 
the postal workforce is to convert retirement-eligible 
employees to retirement. Since 250,000 postal employees are 
eligible for full retirement by 2015, nearly all needed 
workforce reductions can be achieved via retirement. Further, 
the Postal Service is already authorized to re-employ 
annuitants on a part-time basis, meaning retirees could work 
the minimal hours necessary to keep their pre-retirement pay. 
These reemployed annuitants could also provide the Postal 
Service with a trained, flexible pool of labor at an affordable 
cost.
    The PRA further requires that postal employees pay at least 
the same share of health and life insurance premiums as other 
federal employees. Enjoying access to the federal health and 
life insurance programs--which are generally more generous than 
plans available in the private sector for comparable jobs--
postal employees currently pay only about 21 percent of their 
health insurance premiums, as compared to 28 percent for other 
federal employees, and they pay nothing toward their life 
insurance premiums, as compared to 66 percent for other federal 
employees. Equalizing the premium contributions would save the 
Postal Service $700 million per year. This PRA provision only 
takes effect once the collective bargaining agreements 
currently being negotiated expire. In that way, it takes effect 
for all postal employees at about the same time, is implemented 
with sufficient lead time, and does not break any collective 
bargaining agreements.
    The PRA also makes an in-depth effort to unburden the 
Postal Service from unfunded mandates and over-burdensome 
regulations. It removes restrictions on the Postal Service's 
ability to manage its retail network, streamlines the post 
office closure appeal process, streamlines review of 
competitive Negotiated Service Agreements, and expedites PRC 
review of a number of Postal Service proposals. These specific, 
targeted provisions of the PRA are designed to improve utility 
and quality for the consumer and to help keep rates affordable 
while also giving greater flexibility to the Postal Service.
    For instance, the PRA incentivizes the shifting of brick-
and-mortar post offices to more cost-effective and consumer-
accessible Contract Postal Units (CPUs) by eliminating post 
office closure appeals if a CPU replaces the post office. To 
protect the consumer if a CPU that replaced a post office 
closes, individuals are empowered to petition for the post 
office's restoration. CPU's can have as little as one-tenth the 
overhead cost of a post office. Greater use of CPUs can improve 
customer accessibility while reducing expenses. A local grocery 
store that also serves as a CPU is likely to keep much longer 
hours than a stand-alone post office and is likely to be a 
frequent destination point more convenient to visit than the 
local post office. Alternative access entities such as CPUs 
will not work everywhere, particularly in some rural areas 
where there is no alternative to a post office. But there is 
great promise of savings and consumer benefit in a prudent 
shift toward non-traditional forms of access. To that end, the 
PRA encourages a retail modernization effort, albeit one in 
which proper consumer protections for postal access remain.
    The PRA also streamlines the oversight of Negotiated 
Service Agreements (NSAs) while putting in clear cost-coverage 
requirements. Currently, NSAs help the Postal Service compete 
in the package delivery market, but a complicated legal 
framework that involves both the Postal Service Board of 
Governors and the PRC restricts the Postal Service's 
responsiveness and hurts its competitiveness. The PRA amends 
NSAs to allow review of substantially similar competitive NSAs 
to be considered expeditiously after the fact, and allows 
profitability to be measured across all similar NSAs rather 
than on a one-by-one basis. Additionally, the PRA eliminates an 
existing loophole that allows the Postal Service to enter into 
NSAs that can be to the net financial harm of the Postal 
Service. Together, these two NSA reforms will enable the Postal 
Service to react in a more agile fashion when competing for 
business while also strengthening transparency and cost 
coverage requirements that protect other ratepayers, 
competitors, and the taxpayer.
    The PRA enhances the Postal Service's ability to generate 
revenue from those non-postal endeavors that are appropriately 
pursued by a Federal Government entity. A number of bills 
introduced this Congress give the Postal Service a more or less 
free hand to offer non-postal products; the PRA takes a 
noticeably more restrictive approach. It allows the Postal 
Service to sell state services, provided they do not inhibit 
postal business; to sell advertising on vehicles and property; 
and it grandfathers in those specific products and services 
approved under the 2006 reform. To manage non-postal products, 
the PRA creates a new well-defined regulatory framework that 
clarifies which non-postal services are authorized and ensures 
that non-postal products remain profitable. The Committee's 
decision not to allow banking or internet services recognizes 
the Postal Service's unique status as an establishment of the 
Federal Government. As a federal agency, the Postal Service 
enjoys a number of benefits the private sector does not. These 
benefits include exemptions from income tax and property tax, 
the ability to exercise eminent domain, preferential borrowing 
access, and implicit taxpayer backing in the event of a 
default. Serious fair competition issues arise if the Postal 
Service is permitted to leverage its property and assets--
including property received for free from the Federal 
Government when the Postal Service was created in 1971--to 
compete in areas well-served by the private sector. The Postal 
Service possesses inherent unfair advantages over the private 
sector in many potential non-postal arenas. Moreover, the 
Postal Service has an unfortunate history of taking large 
losses in its forays into new enterprises, such as e-commerce. 
The PRA's non-postal provisions therefore contain strict, but 
achievable cost coverage requirements: 150% cost coverage for 
state services and 200% cost coverage for advertising. While 
non-postal services may never produce a tremendous amount of 
new revenue for the Postal Service, the PRA maximizes whatever 
potential exists while avoiding unfair competition with the 
private sector.
    The PRA also enables the Postal Service to increase revenue 
or avoid losses by altering the manner in which some postage 
rates are determined. This includes a requirement that all 
products within a class cover attributable costs--to the extent 
that is possible under the existing price caps that limit 
annual rate hikes to rises in the Consumer Price Index (CPI). 
This change addresses an unfair status quo in which some 
businesses that use mail products which cover costs are 
effectively forced to subsidize competitors who use products 
that are significantly below cost coverage. For instance, the 
Standard Mail Flats product covered only 82% of its 
attributable costs in fiscal year 2010. Another PRA reform 
requires entire mail classes that fail to cover attributable 
costs to eventually reach a minimum of ninety percent cost 
coverage--even if that means small, gradual rate increases that 
exceed the CPI price cap. As part of an effort to ensure that 
attributable cost measures are accurate, the PRA permits a two-
year delay before the increases in excess of CPI are 
implemented. Ultimately, this change will ensure that the 
Periodicals class moves toward greater cost coverage in a fair 
manner. In fiscal year 2010, this class cost the Postal Service 
more than $600 million and lost money for the 14th straight 
year. A third significant pricing change in the PRA reduces the 
nonprofit advertising discount by 50 percent over a 13-year 
period while leaving the discount for nonprofit editorial 
matter in place. Specifically, starting three years after the 
PRA's enactment, the nonprofit advertising discount will 
decrease by two percent per year until it is reduced from its 
current level of 40 percent to 20 percent. Over the long-term, 
this should enable the Postal Service to recoup some of the 
more than $1 billion in revenue it foregoes each year due to 
the steep discounts nonprofits receive compared to normal 
postage rates. At the same time, the provision maintains a 
significant major rate preference for nonprofits and provides a 
long time-line for adaptation to a new pricing structure. One 
preference that is terminated immediately, however, is one 
allowing state and national political committees to use the 
nonprofit discount. Finally, the PRA will require the State of 
Alaska to reimburse the Postal Service for the additional costs 
it incurs to provide for bypass mail--a provision that is 
phased in over a 5-year period. Bypass mail is a unique system 
in the State of Alaska that heavily subsidizes the shipment of 
large and commercial items to the rural areas of the state, 
including groceries and construction supplies. According to PRC 
data, the program costs the Postal Service more than $100 
million per year. The Committee views this unfunded mandate on 
the Postal Service as unfair. By asking the State itself to 
sponsor the program, the PRA protects delivery at no cost to 
the Postal Service and rural Alaskans. Altogether, the 
Committee estimates the changes made to the rate structures 
will improve the fiscal standing of the Postal Service by a 
minimum of $1 billion annually, once all provisions are fully 
phased in.
    Postal reform should increase the Postal Service's 
flexibility to operate in a more efficient, businesslike manner 
while providing appropriate accountability and oversight to 
ensure fair and transparent operations. When the Postal Service 
was created as an independent establishment of the Federal 
Government, it was authorized to operate more like a business 
and exempted from most federal laws and regulations applicable 
to purchasing. Notably, the Postal Service is exempt from the 
Federal Acquisition Regulation (FAR) that establishes 
acquisition policies and procedures for all executive branch 
agencies, including the requirement that each agency maintain a 
competition advocate responsible for promoting full and open 
competition, transparency in the public reporting of 
noncompetitive contract awards and their justifications, and 
limitations on delegations of contracting authority. The Postal 
Service is also exempt from the Competition in Contracting Act 
that establishes the federal policy of ``full and open 
competition'' for most federal contracts.
    The Postal Service has, however, repeatedly abused its 
contracting flexibility in recent years, with numerous postal 
officials implicated in conflicts of interest involving 
noncompetitive contract awards to their friends and former 
associates. Other contracting problems include poor business 
practices, inadequate transparency, lax internal oversight, 
lack of accountability, and misuse of delegations of 
contracting authority.
    Considering this history, the statutory reforms in this 
bill are necessary to improve Postal Service contracting 
practices, to reduce costs through contracting out and 
competition, and to prevent the recurrence of poor contracting 
practices, lax oversight, and improper ethical behavior. The 
PRA requires the Postal Service and Postal Regulatory 
Commission to establish competition advocates to promote 
contracting out of functions that the private sector can 
perform equally well or better and at lower cost, to obtain 
best value, and to review procurement activities. Other reforms 
require high ethical standards, transparency for noncompetitive 
contracts, policies for delegations of contracting authority, 
and accountability.
    A few unfinished provisions were not included in the text 
of the PRA as introduced. This includes a planned reform to the 
workers' compensation program for postal employees, which was 
only included in the original text as a sense of Congress 
provision. Other provisions that were added after introduction 
are delivery point modernization, restructured funding of the 
Alaska Bypass mandate, and a modified reduction-in-force 
process for collective bargaining postal employees. These 
provisions were included in the amendment in the nature of a 
substitute offered by Federal Workforce Subcommittee Chairman 
Dennis Ross during Subcommittee consideration of the PRA.
    As reported from committee, the PRA would stem the growing 
tide of red ink at the Postal Service, and restores its 
solvency. In fiscal year 2011, the Postal Service estimated its 
loss to be approximately $10 billion, including the statutorily 
required retiree health care prefunding payment. Once fully 
implemented, the PRA contains $10.7 billion in annual cost 
reductions and revenue increases and billions more in other 
reforms which cannot be readily quantified. Quantifiable 
savings include a minimum annual savings of $3.5 billion from 
delivery point modernization, $2.5 billion from allowing the 
Postal Service to shift to 5-day delivery of mail, $2 billion 
from the mail processing CPR report, $1 billion from the postal 
retail CPR report, $1 billion from changes in the rate 
structure, and $700 million from the change in the premium 
share for health and life insurance for postal employees. Other 
provisions with considerable long-term savings potential 
include the enhanced control the Postal Service is granted over 
its retail network, the modernization of the collective 
bargaining process, and the streamlining of PRC regulatory 
oversight. Taken together, the various savings measures in the 
PRA are designed to be more than enough to restore the Postal 
Service's financial viability.
    The Postal Reform Act will fundamentally reshape the Postal 
Service to meet the challenges of the digital age. Americans 
are increasingly less reliant on the mail. The Postal Service, 
however, remains an indelible American institution, and its 
continued financial viability is essential to the health of our 
economy. On its current financial trajectory, the Postal 
Service will be unable to make payroll in a matter of months. 
If nothing is done, either mail delivery will come to a stop, 
or Congress will be forced to reinstate a direct taxpayer 
subsidy to the Postal Service. The American people will not 
support either of these options. Thus, inaction is not 
acceptable. The Committee crafted the Postal Reform Act to make 
the hard decisions necessary to bring the Postal Service back 
from the brink of fiscal ruin. By refusing to kick the can down 
the road, the PRA gives the Postal Service the tools it needs 
to rightsize its workforce and infrastructure and develop a 
business model that will return the institution to 
profitability, primarily by loosening Congressional control and 
enabling the Postal Service to act more like a business. For 
the Postal Service to endure as it has for the last two hundred 
years, it must make major adaptations. But its fundamental 
mission need not be sacrificed. Proper Congressional action now 
will enable the Postal Service to continue to provide necessary 
and important services to those who depend on the mail.
            Legislative history
    H.R. 2309, the Postal Reform Act of 2011, was introduced on 
June 23, 2011 by Representative Darrell E. Issa and was 
referred to the House Committee on Oversight and Government 
Reform and the House Committee on Rules. On June 30, 2011, the 
bill was referred to Oversight and Government Reform's 
Subcommittee on Federal Workforce, U.S. Postal Service, and 
Labor Policy.
    On September 21, 2011, the Subcommittee on Federal 
Workforce, U.S. Postal Service, and Labor Policy considered 
H.R. 2309. At the business meeting, Subcommittee Chairman 
Dennis Ross offered an amendment in the nature of a substitute 
(ANS) to be considered in place of H.R. 2309. The ANS added 
provisions to the bill, including: delivery point modernization 
and the phase-out of door delivery of mail; modified reduction-
in-force powers for the Authority enabling it to convert 
retirement-eligible employees to retirement; a requirement that 
the State of Alaska reimburse the Postal Service for the 
unfunded mandate imposed upon it by the Alaska Bypass mail 
program; and modernization of the federal workers' compensation 
program as it applies to postal employees. The Subcommittee 
accepted the ANS and rejected a number of amendments that would 
have removed all infrastructure and workforce-related reforms 
from the bill. On a roll call vote of 8-5, the Subcommittee 
favorably reported H.R. 2309, as amended, to the full committee 
for consideration.
    On October 13, 2011, the Oversight and Government Reform 
Committee held a business meeting to consider H.R. 2309, as 
reported by the Subcommittee. During consideration of the bill, 
Subcommittee Chairman Ross offered an ANS to the reported text. 
The ANS made a few substantial changes, the most significant 
being the addition of a section prospectively prohibiting any 
restrictions on the Postal Service's use of title 5 U.S.C. 
reduction-in-force procedures in any future postal collective 
bargaining agreements. The ANS also replaced the workers' 
compensation reform included at Subcommittee with a new 
provision giving the Authority the discretion to remove postal 
employees from the existing federal workers' compensation 
program and placing them in a new program developed by the 
Postal Service. Finally, the ANS also postponed the phase-out 
of most door delivery until two years after the initiation of a 
Control Period. A total of 13 amendments to the ANS were 
accepted--12 by voice vote--during the Business Meeting. A 
total of eight amendments were defeated and two others were 
withdrawn. As in Subcommittee, most of the defeated amendments 
would have struck large portions of the bill text. This 
included two amendments to strike the entire text of the bill; 
one would have inserted in its place the text of H.R. 1351, the 
other the text of H.R. 2967. At the conclusion of debate on 
amendments, the Committee, by a 22-18 vote, ordered H.R. 2309, 
as amended, favorably reported to the full House for 
consideration.

                           Section-by-Section


                 TITLE I--POSTAL SERVICE MODERNIZATION


            Subtitle A--Commission on Postal Reorganization


Sec. 1. Short title; table of contents; references

    Identifies that the bill may be referred to as the Postal 
Reform Act of 2011, lists the table of contents, and provides 
that any references not expressly provided refer to title 39, 
United States Code.

Sec. 101. Short title

    Identifies that the subtitle may be referred to as the 
``Commission on Postal Reorganization Act,'' or the ``CPR 
Act.''

Sec. 102. Definitions

    Defines a number of terms used in the title. This includes 
the terms ``postal retail facility,'' ``mail processing 
facility,'' ``district office,'' ``area office,'' ``baseline 
year,'' and ``Member of Congress.''

Sec. 103. Commission on Postal Reorganization

    Establishes the Commission on Postal Reorganization (CPR) 
not later than 90 days after enactment. The CPR will be 
composed of five members appointed by the President. One member 
shall be selected by each of the following: the Speaker of the 
House, the Majority Leader of the Senate, the Minority Leader 
of the House, the Minority Leader of the Senate, and the 
Comptroller General of the United States. The Chairman of the 
CPR shall be selected by the President during the selection of 
CPR members.
    No member of the CPR may be representative of specific 
interests using the Postal Service and no member may serve if 
they are a Member of Congress or have worked for the United 
States Postal Service (USPS), the Postal Regulatory Commission 
(PRC), or any USPS-related labor organization in the previous 
three years. Additionally, no more than three commissioners may 
be of the same political party. The Commissioners are appointed 
for the life of the CPR and are paid at a per diem rate of 
$40,000 per year.
    Provides for CPR staff and CPR procedures. Includes the 
authorization for a Director and other employees as the 
Director finds appropriate. Additionally authorizes federal 
employees to be detailed to the CPR for more than one year, at 
the request of the Director, and limits the number of 
individuals detailed from USPS or the PRC to a combined number 
of no more than one-third of the total staff.
    Allows the CPR to hire consultants and lease space and 
acquire property to the extent funds are available. Requires 
the CPR to issue annual financial statements and establish 
proper controls over its financial reporting, including 
internal audits and annual certification from an independent 
certified public accounting firm. The Comptroller General is 
also authorized to audit the CPR at such times as the 
Comptroller General deems necessary.
    Provides a one-time appropriation of $20,000,000 from the 
Postal Service Fund to pay for all expenses of the CPR during 
its existence. Terminates the CPR sixty days after the 
submission of its final reports.

Sec. 104. Recommendations for closures and consolidations

    Requires the Postal Service to prepare a plan, in 
consultation with the PRC, to close or consolidate Postal 
Service retail facilities in order to achieve a minimum $1 
billion reduction in retail expenditures relative to the last 
full fiscal year prior to enactment. The plan is due not later 
than 120 days after enactment.
    Requires the Postal Service to prepare a plan, in 
consultation with the USPS Inspector General (IG), to close or 
consolidate Postal Service processing facilities in order to 
achieve a minimum annual reduction of $2 billion in mail 
processing expenditures relative to the last full fiscal year 
prior to enactment. The plan must include sufficient closures 
and consolidations to limit Postal Service excess mail 
processing capacity to no more than ten percent of total mail 
processing capacity. Subsection (b)(4) requires the CPR to 
notice a proposed definition of ``excess mail processing 
capacity'' in the Federal Register within 120 days of enactment 
and to allow for a thirty day notice and comment period, with a 
final definition noticed within 180 days of enactment. The plan 
is due 300 days after enactment.
    Requires the Postal Service to prepare a plan, in 
consultation with the USPS IG, to reduce the number of Postal 
Service Area and District Offices by at least thirty percent 
relative to the last full fiscal year before enactment. The 
plan is due 300 days after enactment.
    Each completed plan is submitted to the CPR, which has the 
opportunity to review and amend the plans. After the submission 
of a plan to the CPR, the CPR issues an Initial Report to 
Congress on its findings. The CPR has sixty days to issue its 
report for the retail plan and ninety days to do so for both 
the mail processing plan and the Area and District office plan. 
In the initial reports, the CPR is required to explain and 
justify any changes it makes to the plans proposed by the 
Postal Service. The CPR must hold at least five public hearings 
on each Initial Report within sixty days of its filing, with 
the hearings to be held in geographically distinct locations. 
Hearing testimony must be taken under oath.
    Once the final public hearing is held on a plan, the CPR 
must issue a Final Report on that plan within sixty days. The 
Final Report must contain a summary of the results of the 
hearings and the final closure and consolidation 
recommendations for Congress. Recommendations of each Final 
Report, including any CPR modifications to the Postal Service's 
plan, must be approved by a minimum of four members of the 
Commission. If the $2 billion mail processing savings goal or 
the 30 percent Area and District office closure goal are not 
met, however, the CPR may, by a unanimous vote, lower the 
requirements by not more than 25 percent. Upon approval, plans 
are submitted to Congress.
    Under the Postal Service plan and the CPR reports on postal 
retail closure and consolidation, no more than ten percent of 
the facilities recommended for closure or consolidation may be 
post offices determined to be within K or L cost ascertainment 
groupings combined. Such post offices have the least revenues 
and generally are small post offices located in rural areas.
    Requires the Postal Service to report on the impacts of 
Postal Service closures and consolidations on the employment of 
preference-eligible veterans within the Postal Service. Reports 
must be issued annually for five years.

Sec. 105. Implementation of closures and consolidations

    Closures and consolidations recommended by the CPR must be 
completed within two years of the submission of the relevant 
plan to Congress. Congress may prevent the implementation of 
all recommendations in a CPR Final Report if a Joint Resolution 
of disapproval is enacted within thirty days of the submission 
of a plan to Congress.

Sec. 106. Congressional consideration of final CPR Reports

    Provides for the construction of a Joint Resolution of 
disapproval and sets the terms for the debate and consideration 
of such a resolution.

Sec. 107. Nonappealability of decisions

    Provides that the closure or consolidation of a facility 
carried out as a result of this Act shall not be subject to 
appeal to the PRC or the subject of an advisory opinion issued 
by the PRC. Exempts all processes, reports, recommendations, 
and other actions by the CPR from judicial review.

Sec. 108. Rules of construction

    Expressly allows the Postal Service to continue the closing 
or consolidation of any existing postal facilities in 
accordance with non-CPR authority before, during, and after CPR 
activity.

Sec. 109. GAO study and report

    Requires the Comptroller General to conduct a study of the 
effect on the unemployment rate of minority communities of the 
proposed closures and consolidations of postal facilities under 
this subtitle. Requires the Comptroller General to submit a 
report on the findings of the study within one year of 
enactment.

                      Subtitle B--Other Provisions


Sec. 111. Implementation of discretionary non-mail delivery days

    Amends section 404 of title 39 to allow the Postal Service 
to select up to twelve non-mail holidays per year in any year 
for which six-day delivery is otherwise required. The Postal 
Service must submit the requested days to the Postal Service 
Board of Governors. The days may not be: Sundays, legal public 
holidays, or within the thirty-day period prior to a general 
election for Federal office.
    Allows the Postal Service to submit a proposal under 
section 3661 of title 39 for a nationwide change in service to 
reduce mail delivery from six to five days per week not less 
than six months after enactment. The Postal Service is required 
to maintain six-day delivery service until ninety days after 
the rendering of an advisory opinion on five-day delivery by 
the Postal Regulatory Commission. After such period, the Postal 
Service may adopt five-day delivery as the standard mail 
delivery schedule.

Sec. 112. Efficient and flexible universal postal service

    Removes a Postal Service prohibition on closing a post 
office solely for operating at a deficit.
    Requires the Postal Service to provide effective and 
regular postal services to rural areas, communities, and small 
towns where post offices are not self-sustaining.
    Reduces the deadline for PRC review of post office closures 
from 120 days to sixty days.
    Excludes any post office from the PRC appeals process if a 
contract postal unit (CPU) is opened within two miles of the 
applicable post office. Any exclusion must take place on a one-
for-one basis. The CPU must be opened within fifteen days of 
the post office's closure and must stay open for a minimum of 
two years. If the CPU is closed before the end of a two-year 
period, an appeal may be made to the PRC for the reopening of 
the post office.
    Expedites PRC advisory opinions concerning Postal Service 
plans to close or consolidate post offices on a level affecting 
service on a nationwide basis and on matters that are 
substantially identical to matters on which the PRC has issued 
an opinion within the preceding five years.

Sec. 113. Enhanced reporting on Postal Service efficiency

    Requires the Postal Service to use a PRC-recommended 
formula to determine changes in Postal Service productivity and 
the resulting effect on overall costs.

Sec. 114. Applicability of procedures relating to closures and 
        consolidations

    Defines ``post office'' in subsection 404(d) of title 39 as 
any Postal Service operated retail facility as described by 
section 102(2) of this bill, which includes post offices, 
branches, and stations. This change is effective sixty days 
after enactment.

   TITLE II--POSTAL SERVICE FINANCIAL RESPONSIBILITY AND MANAGEMENT 
                          ASSISTANCE AUTHORITY


               Subtitle A--Establishment and Organization


Sec. 201. Purposes

    States the purposes of the title. The purposes include 
eliminating Postal Service budget deficits, protecting the 
universal service mandate during a period of fiscal emergency, 
determining the fiscal status and operational efficiency of the 
Postal Service, helping the Postal Service to implement 
necessary rightsizing and to meet all fiscal obligations, 
providing a temporary increase in borrowing authority to fund 
restructuring, and ensuring the long-term vitality of the 
Postal Service.
    Clarifies that nothing in this title may be construed as 
relieving any existing obligations of the Postal Service or 
limiting the authority of Congress to exercise ultimate 
legislative authority over the Postal Service.

Sec. 202. Establishment of the Authority

    Creates the ``Postal Service Financial Responsibility and 
Management Assistance Authority,'' an entity referred to in the 
bill as the ``Authority.''
    Defines a Control Period as any period where the Postal 
Service is in default to the Federal Government for more than 
thirty days. Upon the commencement of a Control Period, the 
Authority is established. The Authority immediately takes over 
all roles and responsibilities of the Postal Service Board of 
Governors and becomes the top management agent of the Postal 
Service. For the remainder of a Control Period, the Board of 
Governors may act only in an advisory capacity.
    For the purposes of the first Control Period, an advisory 
period is put into effect upon triggering of the Control 
Period. During the advisory period the Authority is 
constituted, but operates exclusively in an advisory capacity 
for two full fiscal years. At the completion of the second full 
fiscal year, or any year thereafter during the first Control 
Period, if the Postal Service annual deficit is greater than 
$2,000,000,000, the Authority shall be given full control over 
the Postal Service. During an advisory period, the Authority 
may not employ staff and the Postal Service is ordered to 
designate a Level-Two Postal Service Executive as a liaison 
with the members of the Authority.
    During an advisory period, any provision of this title 
requiring action on the part of the Postal Service or the 
Authority shall be delayed. Should the Authority be given full 
control due to the Postal Service's failure to make sufficient 
budgetary progress, the Control Period (excluding limitations 
specific to the advisory period) shall be deemed to have 
started on the date of the Authority's assumption of power. 
Also, during an advisory period, the Postal Service is 
authorized to access funds made available under section 222 
without the approval of the Authority. Whether or not the 
Authority takes full effect, the process for ending a Control 
Period must be completed.
    Provides that during the length of a Control Period, Postal 
Service senior executives are ineligible for any deferred 
compensation or bonus and that, notwithstanding any employment 
contracts, they serve at the pleasure of the Authority.
    Provides for the termination of a Control Period once the 
following requirements are satisfied: (1) two consecutive years 
of profit; (2) an Authority-approved budget forecast showing 
profits for the next three fiscal years; and (3) a financial 
plan that repays any supplemental debt acquired via section 222 
of this title and properly funds employee pensions and retiree 
health benefits. The Authority must certify that these 
requirements are satisfied with the concurrence of the 
Secretary of the Treasury and the Director of the Office of 
Personnel Management.

Sec. 203. Membership and qualification requirements

    Sets up the Authority as a five-member panel appointed by 
the President. One member each shall be recommended by the 
following: the Speaker of the House, the Majority Leader in the 
Senate, the Minority Leader in the House, the Minority Leader 
in the Senate, and the Comptroller General of the United 
States. Authorizes the President to designate one member as 
Chair. No more than three members may be of the same political 
party and it is the sense of Congress that the President shall 
appoint all members within thirty days of the commencement of a 
Control Period.
    Provides for an initial appointment for members of three 
years. The subsequent terms are staggered before returning to 
three-year terms for all future appointments to ensure that no 
more than two members are appointed in any one year. Members 
are to serve without pay, but are eligible for reimbursement of 
reasonable and necessary expenses incurred due to service with 
the Authority. No member may be representative of specific 
interests using the Postal Service. Any individual who has 
worked for the Postal Service or the PRC in the five years 
preceding any potential appointment to the Authority is 
disqualified from being a member.

Sec. 204. Organization

    Provides for the adoption of by-laws for Authority 
business.
    Identifies actions that require a majority vote of the 
members of the Authority: (1) approval or disapproval a Postal 
Service financial plan; (2) implementation of recommendations 
authorized by section 226; (3) removal of a senior Postal 
Service executive; and (4) initiation of the establishment of a 
new workers' compensation program.

Sec. 205. Executive director and staff

    Allows for the appointment of an Executive Director and 
staff of the Authority. Allows the Authority to appoint the 
Executive Director and staff of the Authority without regard to 
title 5 competitive service requirements and compensate such 
individuals without regard to General Schedule pay rates. 
Allows staff from other federal agencies to be detailed to the 
Authority on a reimbursable or non-reimbursable basis.

Sec. 206. Funding

    Sets the maximum funding level for the Authority at $10 
million per year, to be appropriated from the Postal Service 
Fund. Requires the Authority to include a budget of its 
expenses within the Postal Service's annual budgetary 
submission to Congress.

                  Subtitle B--Powers of the Authority


Sec. 211. Powers

    Authorizes an agent or member of the Authority to take an 
action which the Authority is authorized to take, upon the 
approval of the Authority.
    Requires the Postal Service to grant the Authority access 
to any records, documents, or data the Authority believes it 
needs to carry out its duties.
    Allows the Authority to accept, use, and dispose of gifts 
for the purpose of aiding or facilitating the work for the 
Authority.
    Allows the Administrator of General Services to provide 
support services to the Authority on a reimbursable basis, upon 
the request of the Authority.
    Authorizes the Executive Director (subject to the approval 
of the Chair of the Authority) to enter into such contracts as 
necessary to carry out the duties of the Authority.
    Authorizes the Authority to seek judicial enforcement of 
its authority to carry out its duties under this title.
    Subjects to administrative discipline those Postal Service 
employees who by action or inaction fail to comply with an 
order of the Authority.
    Expresses the sense of Congress that in making 
determinations that affect prior collective bargaining 
agreements, or any form of restructuring that reduces the 
workforce, the Postal Service shall ensure that employees 
receive the full benefits to which they are entitled.

Sec. 212. Exemption from liability for claims

    Exempts the Authority and its members from any liability 
for any obligation of, or claim against, the Postal Service 
resulting from actions taken as a result of this title.

Sec. 213. Treatment of actions arising under this title

    Establishes jurisdiction for petitions against actions of 
the Authority in the Court of Appeals for the District of 
Columbia Circuit. Requires the petition to be filed within 
thirty days after the applicable order or decision. Limits 
judicial review to whether the Authority acted in excess of its 
statutory authority.
    Allows an appeal to the Supreme Court of a decision of the 
Court of Appeals if the appeal is filed within ten days of the 
decision.
    Prohibits declaratory or injunctive relief against the 
Authority during the pendency of the action before a court.
    Indicates that it shall be the duty of the Court of Appeals 
for the District of Columbia and the Supreme Court of the 
United States to advance and expedite to the greatest possible 
extent any matter brought under this section.

Sec. 214. Delivery point modernization

    Requires the Postal Service to convert 75 percent of 
addresses currently receiving door delivery of mail to curbside 
delivery or clusterbox delivery within two years of the 
initiation of a Control Period fully in effect without the 
limitations of the advisory period specified in section 202. 
Requires a minimum savings of $3.5 billion annually from such 
transition. Requires 90 percent of door delivery points be 
converted to curb or clusterbox delivery within four years of 
the initiation of a Control Period that is fully in effect.
    In determining which areas shall continue to receive door 
delivery, the Postal Service shall consider poverty rates, 
population density, and whether a locality is in a registered 
historic district or on the National Register of Historic 
Places.
    Establishes clusterbox delivery as the default delivery 
form for new addresses, with curbside to be used where 
clusterbox delivery is impractical.
    Provides for a hardship waiver for individuals with 
physical hardships. Also authorizes the Postal Service to 
create a voucher program to defray conversion costs incurred by 
postal customers. Eligibility is to be based on criteria 
determined by the Postal Service. Funding for the program may 
be provided by the Postal Service Competitive Products Fund.

Subtitle C--Establishment and Enforcement of Financial Plan and Budget 
                         for the Postal Service


Sec. 221. Development of financial plan and budget for the postal 
        service

    Requires the Postmaster General to submit a financial plan 
to the Authority for each fiscal year during a Control Period. 
The financial plan must include the Congressional budget 
submission, cash flow forecasts, a breakdown of estimations and 
significant assumptions, and any other criteria the Authority 
requires.
    Requires that in the second full fiscal year and each 
subsequent fiscal year of a Control Period, budgeted revenues 
shall exceed budgeted expenses. Also requires that the Postal 
Service make significant progress toward long-term fiscal 
solvency in each period and include a plan for paying off any 
supplemental debt accrued under section 222.

Sec. 222. Supplementary borrowing authority during a control period

    Authorizes supplemental borrowing authority of the Postal 
Service in the amount of $10 billion during a Control Period. 
This authorization expires after ten years, at which time the 
Postal Service is required to dispose of sufficient real 
property assets to repay any obligation still outstanding from 
this borrowing authority. Any amounts received by the Postal 
Service under this section shall be deposited in the Postal 
Service Fund.
    All borrowing that takes place as a result of this section 
must be approved by the Authority, except as provided under 
section 202, and the Postal Service must provide an appropriate 
level of Postal Service property assets as collateral for any 
funds received under this section.
    Requires that for each fiscal year in which any 
supplemental funds are outstanding, the Postal Service dispose 
of real property of sufficient value to repay at least ten 
percent of the total outstanding balance.

Sec. 223. Process of submission and approval of financial plan and 
        budget

    Describes the process for the approval of the financial 
plan and budget required by section 221.
    Requires the Postmaster General to develop a preliminary 
financial plan and budget by February 1 and a final budget by 
August 1 of each year. The Authority may approve or disapprove 
of the budget based on whether it satisfies the requirements of 
section 221. If it disapproves the budget, the Postmaster 
General shall submit a revised plan. If the revision is also 
disapproved, the Authority is required to amend the plan so as 
to satisfy section 221. Requires the Authority to submit an 
approved financial plan and budget by September 30 of each 
year.
    Provides for a process for the Postmaster General to submit 
revisions to the financial plan throughout the year.

Sec. 224. Responsibilities of the authority

    Requires the Authority to use its powers to determine 
overall strategies, organizational structure, senior management 
staffing, major policies, budgets, capital projects, rate 
changes, and new products for the Postal Service. It is also 
responsible for approving annual Postal Service reports; 
formulating positions on postal public policy matters before 
Congress; ensuring overall responsiveness to Congress, the PRC 
and the rest of the Federal Government; and carrying out all 
responsibilities of the Board of Governors.
    Requires the Postmaster General to submit to the Authority 
all proposals that substantially impact the aforementioned 
responsibilities. Allows the Authority to approve, deem 
approved, deny, or deny and recommend changes to any proposal.
    Requires the Authority to examine all senior Postal Service 
management contracts and collective bargaining agreements in 
effect at the commencement of a Control Period. If any senior 
management contract is not in accordance with the fiscal plan 
of the Postal Service, the Authority is directed to take 
actions within its powers to revise the contract.

Sec. 225. Effect of finding noncompliance with financial plan and 
        budget

    Requires the Postmaster General to file quarterly revenue 
and expense reports with the Authority. If the quarterly 
results vary from the financial plan, a revision to the plan or 
remedial action to correct the variance is required.

Sec. 226. Recommendations regarding financial stability, etc.

    Authorizes the Authority to make recommendations to the 
Postmaster General and Congress concerning actions that could 
be taken to ensure compliance by the Postal Service with its 
financial plan. Includes a list of areas of potential 
recommendations.
    For Authority recommendations the Postal Service may adopt 
on its own, requires the Postmaster General to indicate within 
ninety days of receipt of the recommendations whether the 
recommendations will be adopted. If the Postmaster General 
declines to implement the recommendations, the Authority may, 
by a majority vote, implement the recommendations.

Sec. 227. Special rules for fiscal year in which control period 
        commences

    Provides for an abbreviated process to adopt a transition 
budget to act as a financial plan until one is approved under 
the process described in section 223.

Sec. 228. Assistance in achieving financial stability, etc.

    Authorizes the Authority to undertake cooperative efforts 
to assist the Postal Service in addition to the actions 
identified elsewhere, including making recommendations to 
change federal law in a manner that would assist the Postal 
Service in achieving financial sustainability.

Sec. 229. Obtaining reports

    Authorizes the Authority to require the Postal Service or 
the USPS IG to prepare any reports the Authority considers 
appropriate to carry out its duties.

Sec. 230. Reports and comments

    Requires the Authority to submit to Congress annual reports 
on its actions, and on the progress of the Postal Service in 
returning to solvency.
    Requires the Authority to review all annual reports the 
Postmaster General files with Congress and the PRC, and to 
submit a report to Congress analyzing each report's accuracy 
and completeness.
    Authorizes the Authority to report to Congress on any 
action taken by the Postal Service contrary to recommendations 
of the Authority that are likely to have a significant adverse 
impact on the finances of the Postal Service.
    Authorizes the Authority to report to Congress and the 
President on the impact of newly enacted statutes on the 
financial plan of the Postal Service.
    Requires any report submitted under this section to be made 
publicly available electronically, except for information the 
Authority deems confidential.

              Subtitle D--Termination of a Control Period


Sec. 231. Termination of a control period, etc.

    Upon the completion of the requirements to end a Control 
Period described in section 202, the Authority is required to 
submit a recommendation to Congress to terminate the Control 
Period, disband the Authority, and return control of the Postal 
Service to the Board of Governors. A Joint Resolution must be 
approved by Congress within thirty days of the Authority's 
recommendation in order that the Control Period be terminated.

Sec. 232. Congressional consideration of recommendation

    Provides for the terms of a Joint Resolution to end a 
Control Period and establishes rules of consideration of the 
resolution in each chamber.

                  TITLE III--POSTAL SERVICE WORKFORCE


                     Subtitle A--General Provisions


Sec. 301. Modifications relating to determination of pay comparability

    Clarifies existing postal pay comparability standards to 
refer to total compensation and the entire private sector.

Sec. 302. Limitation on postal contributions under FEGLI and FEHBP

    Places a cap on the portion of employees' health and life 
insurance premiums that the Postal Service can pay. The cap is 
the level that the Federal Government pays on behalf of the 
broader federal workforce, as defined in title 5. The 
requirement is phased in so that it applies to non-bargaining 
postal employees in 2013 and for bargaining employees at the 
beginning of the first fiscal year after which applicable 
contracts in effect in 2013 expire.

Sec. 303. Repeal of provision relating to overall value of fringe 
        benefits

    Repeals a provision requiring the overall value of fringe 
benefits to be equal to that of fringe benefits available in 
1971.

Sec. 304. Applicability of reduction-in-force procedures

    Prospectively prohibits Postal Service collective 
bargaining agreements from containing provisions that restrict 
the use of title 5 reduction-in-force procedures.
    Requires any collective bargaining agreement ratified prior 
to date of enactment to be renegotiated within 9 months of the 
date of enactment if the agreement includes any restrictions on 
the Postal Service's ability to use title 5 reduction-in-force 
procedures.
    Authorizes the Postal Service and a union to agree to 
additional forms of reduction-in-force procedures other than 
those specified in title 5. Such non-title 5 procedures are 
explicitly banned from inclusion in any collective bargaining 
agreement without the consent of the applicable union.

Sec. 305. Modifications relating to collective bargaining

    Reforms the collective bargaining process to contain a 
mediation-arbitration process with a defined timeline modeled 
after recommendations of the 2003 President's Commission on the 
Postal Service. Creates an arbitration board of three neutral 
individuals. Any arbitration award is required to take into 
account both pay comparability with the private sector and the 
financial condition of the Postal Service. Further, once the 
arbitration stage has been reached, any agreement reached by 
the Postal Service and a union independent of the arbitration 
panel must also satisfy these same requirements. If such an 
agreement fails to do so, the arbitration panel is required to 
amend the agreement in a manner that does satisfy the 
requirements.

Sec. 306. One-time transfer of net surplus postal retirement 
        contributions

    Calculates a combined Postal Service pension surplus by 
subtracting from any projected FERS surplus any projected CSRS 
deficit and further subtracting the value of any FERS payments 
the Postal Service has failed to make. Any resulting surplus is 
immediately transferred to the Postal Service.
    The transferred funds are made available for such purposes 
as the Postal Service considers appropriate. If transferred 
funds remain by 2015, however, the Postal Service must use the 
funds to pay off any extant Postal Service FERS or CSRS pension 
liability, or to pay down Postal Service debt. Expresses the 
sense of Congress that the Postal Service should use any funds 
made available under this section for separation incentives for 
postal employees.

        Subtitle B--Postal Service Workers' Compensation Reform


Sec. 311. Postal Service workers' compensation reform

    Following written notification by the Authority established 
under section 202, the Postmaster General is to establish a 
workers' compensation program for Postal Service employees. The 
program, developed in consultation with employee 
representatives, must transition postal employees receiving 
workers' compensation to retirement benefits when the employees 
reach retirement age, and may not provide augmented 
compensation for dependents. The Postal Service must provide 
the Congressional committees of jurisdiction with a detailed 
description of the program, and publish such information in the 
Federal Register no later than nine months following the 
Authority's aforementioned written notification.

                    TITLE IV--POSTAL SERVICE REVENUE


Sec. 401. Adequacy, efficiency, and fairness of postal rates

    Each market-dominant product must cover its costs, while 
maintaining the statutory price cap based on the Consumer Price 
Index.
    Rates for any market-dominant class of mail covering less 
than ninety percent of costs must, after a two-year delay, 
increase annually at a rate of two percent above the rate of 
inflation.
    Requires the PRC to conduct a study during the two-year 
delay period to determine the impact of Postal Service excess 
capacity on attributable costs of loss-making classes of mail, 
and to factor this impact into their costs for the purposes of 
the rate adjustments required by this section. Market-dominant 
classes include First-Class Mail, Standard Mail (mainly 
advertising), Periodicals (mainly magazines and newspapers), 
and Package Services (mainly single-piece Parcel Post, Media 
Mail, library mail, and bound printed matter). Rates for any 
market-dominant class that does not cover 100 percent of its 
costs must be established so as to maximize incentives to 
reduce costs and increase efficiency.

Sec. 402. Repeal of rate preferences for qualified political committees

    National and state political committees are made ineligible 
for rate preferences that are received by nonprofit 
organizations.

Sec. 403. Rate preferences for nonprofit advertising

    Effective the first day of the first calendar year 
beginning three years after enactment, the discount for 
nonprofit advertising is reduced by two-percent annually, until 
the current forty percent discount off the most closely 
corresponding commercial rate is reduced to twenty percent.

Sec. 404. Streamlined review of qualifying service agreements for 
        competitive products

    The Postal Regulatory Commission (PRC) is required to 
conduct streamlined after-the-fact review of new negotiated 
service agreements for competitive products if they are 
functionally equivalent to existing agreements that have 
collectively covered costs and improved the Postal Service's 
net financial position.

Sec 405. Submission of service agreements for streamlined review

    The Postal Service Board of Governors is given the 
flexibility to delegate to the Postmaster General the 
submission to the PRC of qualifying negotiated service 
agreements in section 404.

Sec. 406. Transparency and accountability for service agreements

    Each group of functionally equivalent negotiated service 
agreements, including those covering market-dominant and 
competitive products, is required to cover its costs and 
improve the Postal Service's net financial position. This 
section is intended to ensure that these agreements will cover 
costs and improve the Postal Service's net financial position.

Sec. 407. Nonpostal services

    Creates a new Chapter, 37--Nonpostal Services, in title 39:
    Sec. 3701. Purpose--The purpose of this section is to 
enable the Postal Service to increase its net revenues through 
specific nonpostal products and services expressly authorized 
by law. Postal Service revenues and expenses for these specific 
nonpostal products and services are required to be funded 
through the Postal Service Fund.
    Sec. 3702. Definitions--This section defines key terms. One 
key term, ``nonpostal services,'' is defined as specific 
nonpostal services that are expressly authorized by this 
legislation and that are not postal products or services.
    Sec. 3703. Postal Service Advertising Program--The Postal 
Service is authorized under this section to establish and 
manage a program that allows entities to advertise at its 
facilities and on its vehicles, provided that the advertising 
is consistent with the integrity of the Postal Service, covers 
at least 200 percent of its costs, and is subject to the PRC's 
annual compliance review. The Postal Service must publicly 
disclose expenditures and revenues for this program in its 
Annual Reports.
    Sec. 3704. Postal Service Program for State Governments--
This section authorizes the Postal Service to establish a 
program to provide services for State agencies, subject to 
safeguards to ensure that these services provide enhanced value 
to the public, do not interfere with or detract from the value 
of postal services, and provide a reasonable contribution to 
Postal Service overhead costs by covering at least 150 percent 
of costs. To provide transparency and an opportunity for 
stakeholder input, the Postal Service is required to publish 
its business plan for State services it plans to offer, 
followed by a public comment period and a published Postal 
Service response. At least two-thirds of the presidentially-
appointed Postal Service Governors must approve of USPS 
providing specific State services by a publicly recorded vote.
    Sec. 3705. Postal Service Program for Other Government 
Agencies--The Postal Service is authorized to continue 
providing property and services for other federal agencies and 
the Government Printing Office, provided it receives 
reimbursement covering 100 percent of its costs. This cost-
coverage requirement is intended to ensure that ratepayers do 
not subsidize services provided for other federal agencies.
    Sec. 3706. Transparency and Accountability for Nonpostal 
Services--The Postal Service must annually report financial 
results, rates, and the quality of its nonpostal services 
within ninety days after the end of each fiscal year, with 
proprietary data protected from disclosure. The PRC must 
annually review compliance that nonpostal services meet cost-
coverage and other requirements; order remedial action to 
remedy any noncompliance; and can initiate proceedings to 
improve data quality and completeness. The Postal Service IG 
must regularly audit applicable data collection systems and 
procedures. These provisions are modeled after existing 
provisions for market-dominant products.
    Clarifies that all nonpostal services continued pursuant to 
404(e) of title 39 are considered expressly authorized by 
chapter 37 of title 39 and are subject to the same transparency 
and accountability requirements as other nonpostal services.

Sec. 408. Reimbursement of Alaska bypass mail costs

    Requires the State of Alaska to reimburse the Postal 
Service for the expenses incurred in excess of revenue in 
providing Alaska bypass mail as required under section 5402 of 
title 39. Alaska is required to pay twenty percent of the full 
cost in the first year, and an additional twenty percent each 
year until 100 percent cost coverage is attained. The PRC is 
required to calculate the costs to be reimbursed. The PRC has 
previously estimated these costs as part of its annual report 
on the estimated costs to the Postal Service of providing 
universal service. Its most recent report estimated that bypass 
mail cost the Postal Service $121 million in FY2009, the most 
recent data available.

Sec. 409. Appropriations modernization

    Eliminates a provision in law allowing the Postal Service 
to ask for a public service taxpayer subsidy and eliminates two 
other provisions that constitute the last remaining direct 
taxpayer expenditures in support of the Postal Service.

Sec. 410. Retiree health care benefit payment deferral

    Defers $4,500,000,000 of the Postal Service's retiree 
health prefunding payment of $5,500,000,000 for fiscal year 
2011. The retiree health prefunding payment sums scheduled for 
fiscal year 2015 and 2016 are each increased by $2,250,000,000.

                   TITLE V--POSTAL CONTRACTING REFORM


Sec. 501. Contracting provisions

    This section is intended to improve Postal Service 
contracting practices and reduce costs. Similar requirements 
are applied to the PRC.
    Sec. 701. Definitions--Terms used in this title are 
defined. ``Postal contract'' is defined as any contract for the 
procurement of goods or service, including any agreement or 
memorandum of understanding entered into by the Postal Service 
or the PRC. As applied to the PRC, postal contracts are defined 
as those in excess of the Simplified Acquisition Threshold, 
currently $150,000.
    Sec. 702. Advocate for competition--The Postal Service and 
PRC must establish competition advocates responsible for 
promoting the contracting out of functions that the private 
sector can perform equally well or better and at lower cost. 
The competition advocates are to promote competition to the 
maximum extent practicable consistent with obtaining best 
value, and to review procurement activities. Each competition 
advocate must report annually on initiatives to promote 
outsourcing and competition, and on any existing barriers. 
Currently, there are no statutory requirements for any officers 
of these organizations to seek any level of competition.
    Sec. 703. Delegation of contracting authority--The Postal 
Service and PRC must issue policies on contracting officer 
delegations of authority. Any delegation of authority for 
postal contracts outside the functional contracting unit must 
be made readily available and accessible on its website. No 
excuses policies clearly establish responsibility and 
accountability for postal contracts. A contracting officer is 
required to maintain an awareness of and engagement in the 
activities being performed on all postal contracts of which 
that officer has cognizance, including contracts involving 
delegations of authority. The senior procurement executive is 
given ultimate responsibility and accountability for the award 
and administration of postal contracts.
    Sec. 704. Posting of noncompetitive purchase requests for 
noncompetitive contracts--The Postal Service must publicly post 
the noncompetitive purchase request for any noncompetitive 
award for postal contracts of at least $250,000, with this 
amount adjusted annually based on inflation. These postings are 
subject to proprietary information exceptions and competitive 
disadvantage waivers. The PRC must post noncompetitive purchase 
requests of at least $20,000.
    Sec. 705. Review of ethical issues--Ethics officials at the 
Postal Service and PRC are required to review any ethical 
issues relating to a proposed contract before it is awarded and 
advise the contracting officer on their appropriate resolution.
    Sec. 706. Ethical restrictions on participation in certain 
contracting activity--The Postal Service and PRC are required 
to establish regulations that limit contracting officers from 
entering into a postal contract with any party with whom the 
contracting officer has a personal or business relationship, as 
defined in the Standards of Ethical Conduct for Employees of 
the Executive Branch. The heads of these entities may grant 
waivers for contracts in their respective organizations, but 
such waivers must be posted on their respective websites. They 
also may void any contract and recover amounts expended under 
the contract in any cases where there is a final conviction of 
bribery or conflict of interest.

Sec. 502. Technical amendment to definition

    Corrects a technical amendment made in the 2006 amendments 
to the Contract Disputes Act that inadvertently deleted the 
Postal Service and PRC from the definition of executive 
agencies covered by this act. This correction will resolve any 
ambiguity and clarify that that Act applies to the Postal 
Service and the PRC, as it has since its enactment in 1978.

                       Explanation of Amendments

    The following amendments were offered to the Ross amendment 
in the nature of a substitute during consideration of H.R. 2309 
by the full committee on October 13, 2011:
    Rep. Lankford offered an amendment reducing from $5.5 
billion to $1 billion the statutorily required fiscal year 2011 
payment to prefund Postal Service retiree health benefits. To 
recoup this deferral, the amendment requires the Postal Service 
pay an additional $2.25 billion in prefunding in both fiscal 
years 2015 and 2016. The deferral is designed to give the 
Postal Service an opportunity to implement the reforms in H.R. 
2309, enabling it to make all future payments. The amendment 
was agreed to by voice vote.
    Rep. Cummings offered an amendment to strike the text of 
the bill and insert the text of the Innovate to Deliver Act, 
H.R. 2967. This amendment would have broadly authorized the 
Postal Service to offer non-postal services, established a 
Chief Innovation Officer, required postal rates to be raised so 
as to cover all costs, and revised the retiree health care 
prefunding schedule, among other provisions. The amendment was 
defeated by a vote of 16-17.
    Rep. Ross offered an amendment establishing a two-year 
delay to ensure proper cost attribution for underwater classes 
of mail. It stipulates that, after the two year delay, rate 
hikes of two-percent above inflation are implemented annually 
until these classes reach a minimum of ninety-percent cost 
coverage. The amendment was agreed to by voice vote.
    Rep. Lynch offered an amendment to strike the text of the 
bill and insert the text of H.R. 1351. This amendment would 
have reallocated approximately $50-$75 billion in postal worker 
pension liability from the Postal Service to the taxpayer, 
using these reallocated funds to pay down the unfunded retiree 
health care liability. The amendment was defeated by a vote of 
17-20.
    Rep. Chaffetz offered an amendment allowing the Postal 
Service to immediately deem twelve days per year as ``non-
mail'' delivery days as long as six-day delivery is the 
standard mail delivery. The amendment authorizes the Postal 
Service to file, six months after enactment, an advisory 
opinion request with the Postal Regulatory Commission (PRC) to 
shift to five-day delivery. The PRC will have no more than 
ninety days to file its advisory opinion, and ninety days after 
the release of the opinion the Postal Service will be allowed 
to move to five-day delivery service. The amendment was agreed 
to by voice vote.
    Rep. Clay offered an amendment to strike a provision to the 
bill that would create an advocate for competition within the 
Postal Service. The amendment was defeated by a vote of 16-22.
    Rep. Buerkle offered an amendment limiting to no more than 
ten percent the portion of post offices closed or consolidated 
by the CPR that can be small and rural post offices. Small and 
rural post offices are defined as those grouped under Cost 
Ascertainment Grouping K and L levels, the traditional 
groupings of small and rural post offices. This amendment was 
agreed to by a vote of 21-17.
    Rep. Norton offered an amendment expressing the sense of 
Congress that in any postal reform effort, postal employees 
receive their full and proper pensions and benefits, and 
collective bargaining agreements are honored. The amendment was 
adopted by unanimous consent.
    Rep. Chaffetz offered an amendment defining the term 
``economic savings'' in section 211(g) to include savings 
achieved through the prevention of planned in-sourcing of 
activities currently contracted out by the Postal Service. The 
amendment was agreed to by voice vote. Although this amendment 
was accepted, the provision of the bill this amendment modified 
(section 211(g)) was removed from the bill text as a result of 
the Meehan Amendment; therefore, the text of this amendment is 
not included in the final text of the reported legislation.
    Rep. Norton offered an amendment to strike subsection 
112(c) of the bill and insert provisions substituting a 
different method than the one in the base bill for providing 
alternative access to postal services. The amendment was 
defeated by a vote of 16-22.
    Rep. Meehan offered an amendment making several substantive 
changes to the bill. It requires any future collective 
bargaining agreements entered into by the Postal Service to 
authorize its use of title 5 reduction-in-force procedures. It 
requires the renegotiation of any extant collective bargaining 
agreement prohibiting the use of title 5 reduction-in-force 
procedures with respect to any bargaining unit members.
    The amendment stipulates that the solvency Authority will 
initially be activated in an advisory capacity only for two 
years. If the Postal Service fails to reduce its deficit to 
less than $2 billion within two years, the Authority goes into 
full effect, assuming operational control of the Postal 
Service. In any subsequent year when a control period is still 
in effect, if the Postal Service deficit exceeds $2 billion, 
the Authority immediately assumes operational control. The $2 
billion includes all operating losses, including those 
attributable to workers' compensation and retiree health care 
prefunding obligations.
    Under the advisory period created by the amendment, the 
Postal Service may access the collateralized loan described in 
the base bill. The loan is subject to the same terms and 
conditions as if the Authority were in full effect.
    The amendment deletes the Authority's power to alter 
collective bargaining agreements, since, under the amendment, 
the granting of such powers is unnecessary to ensure the Postal 
Service will possess reduction-in-force authority.
    The amendment also returns any combined Postal Service 
pension surplus to the Postal Service to use as it deems fit. 
It expresses the sense of Congress, however, that the money be 
used for workforce reduction. In calculating a Postal Service 
pension surplus, the amendment considers both any extant Postal 
Service FERS surplus and any extant Postal Service CSRS 
deficit, as well as the required employer FERS payment 
contributions foregone by the Postal Service since June, 2011.
    Rep. Platts offered a second degree amendment to the Meehan 
amendment explicitly authorizing postal unions to negotiate 
other forms of reduction-in-force authority as alternatives to 
the existing procedures authorized under title 5. This allows 
postal unions to negotiate to allow retirement conversion 
before resorting to the last-in-first-out method prescribed 
under title 5. The amendment does not, however, allow the 
imposition by arbitrators of a non-title 5 reduction-in-force 
process without the approval of the applicable union. The 
amendment was agreed to by voice vote. The Meehan amendment was 
agreed to by voice vote, as amended by the Platts amendment.
    Rep. Connolly offered an amendment that would strike titles 
I, II, and III of the bill and insert provisions granting the 
PRC the authority to establish the level of retiree health care 
prefunding required of the Postal Service. In so doing, this 
amendment would transfer the responsibility of ensuring postal 
employee retiree health care benefits from the Office of 
Personnel Management to the Postal Regulatory Commission. The 
amendment was defeated by a vote of 17-22.
    Rep. Turner offered an en bloc amendment incorporating the 
text of three different amendments.
    The first amendment requires the Authority to submit within 
one year of its inception a savings report to Congress on the 
savings achieved through delivery point modernization. The 
report may recommend to Congress legislative changes concerning 
delivery point modernization.
    The second amendment clarifies that, in the delivery point 
modernization section, whether a locale is in a ``registered 
historic district'' is a factor to be considered, and refers to 
one listed in the National Register of Historic Places.
    The third amendment creates a contractor hiring preference 
by the Postal Service contractors for postal employees subject 
to a reduction in force under section 211. The preference would 
last for 78 weeks and would be open to individuals not fully 
retirement eligible at the time of their separation from the 
Postal Service. Although this amendment was accepted as part of 
the en bloc amendment, the provision of the bill this amendment 
modified (section 211(i)) was removed from the bill text as a 
result of Rep. Meehan's amendment; therefore the text of this 
amendment was not included in the final text of the reported 
legislation.
    This amendment en bloc was agreed to by voice vote.
    Rep. Davis offered an amendment to strike section 311 
(``Postal Service Workers' Compensation Reform''). The 
amendment was withdrawn.
    Rep. Davis offered an amendment to strike section 403 
concerning nonprofit mail rates that was struck and replaced by 
unanimous consent with the text of Issa Amendment 105. Issa 
Amendment 105 allows for a three-year continuation of the 
current non-profit rate preference. After the three-year 
period, the preference for non-profit advertising (currently 
calculated at forty percent, under the existing cost structure 
of the Postal Service) is reduced by two percent annually until 
it reaches twenty percent. The amendment was agreed to by voice 
vote.
    Rep. Lankford offered an amendment allowing for the 
decisions to close Post Office Branches and Post Office 
Classified Stations to be appealed to the Postal Regulatory 
Commission. The amendment was agreed to by voice vote.
    Rep. Towns offered an amendment requiring a GAO study on 
the effects of postal rightsizing on minority communities to be 
completed within 1 year. The amendment was agreed to by voice 
vote.
    Rep. Murphy offered an amendment to strike subsections 
211(g) and 211(i) and sections 304 and 305 of the bill. This 
amendment would remove all provisions of the bill that would 
allow the Postal Service the ability to rightsize its workforce 
and strike a modernized collective bargaining process for union 
contracts. The amendment was defeated by a vote of 17-22.
    Rep. Murphy offered an amendment to strike section 112(c) 
of the bill and insert other language (``Reaffirmation of 
Public Appeal''). The amendment was withdrawn.
    Rep. Braley offered an amendment to strike subtitle A 
(``Commission on Postal Reorganization'') of title I of the 
bill, and to strike section 112 (``Efficient and Flexible 
Universal Postal Service'') of the bill. The amendment was 
defeated by a roll call vote of 17-22.
    Rep. Braley offered an amendment requiring the Commission 
on Postal Rightsizing to file a report to Congress on the 
employment impacts of the closure and consolidation 
recommendations the Commission makes. The report added by the 
amendment is to be made following the submission of the final 
report of the Commission described in the base bill. The 
amendment was agreed to by voice vote.
    Rep. Yarmuth offered an amendment to strike section 409 of 
the bill. This amendment would delete from the bill the 
provisions eliminating from statute all existing authorizations 
of appropriations to the Postal Service. The amendment was 
defeated by a vote of 17-23.

                        Committee Consideration

    On October 13, 2011, the Committee met in open session and 
ordered reported favorably the bill, H.R. 2309, as amended, by 
a recorded vote of 22 Ayes to 18 Nays, a quorum being present.

                             Rollcall Votes

    The following votes were taken during consideration of H.R. 
2309 on October 13, 2011:
    1. Mr. Cummings offered a substitute to the Ross ANS. The 
amendment was defeated by a recorded vote of 16 Ayes to 17 
Nays.
    Voting Aye: Cummings, Towns, Maloney, Norton, Kucinich, 
Tierney, Clay, Lynch, Cooper, Connolly, Quigley, Davis, Braley, 
Welch, Yarmuth, and Murphy.
    Voting Nay: Issa, Burton, Mica, Platts, Turner, McHenry, 
Chaffetz, Mack, Walberg, Lankford, Amash, Meehan, DesJarlais, 
Gowdy, Ross, Farenthold, and Kelly.
    2. Mr. Lynch offered a substitute to the Ross ANS. The 
amendment was defeated by a recorded vote of 17 Ayes to 20 
Nays.
    Voting Aye: Platts, Cummings, Towns, Maloney, Norton, 
Kucinich, Tierney, Clay, Lynch, Cooper, Connolly, Quigley, 
Davis, Braley, Welch, Yarmuth, and Murphy.
    Voting Nay: Issa, Burton, Mica, Turner, McHenry, Jordan, 
Chaffetz, Mack, Walberg, Lankford, Amash, Buerkle, Gosar, 
Labrador, Meehan, DesJarlais, Gowdy, Ross, Farenthold, and 
Kelly.
    3. Mr. Clay offered an amendment to the Ross ANS to strike 
part of Sec. 501 (Sec. 702. ``Advocate for competition''). The 
amendment failed by a recorded vote of 16 Ayes to 22 Nays.
    Voting Aye: Cummings, Towns, Maloney, Norton, Kucinich, 
Tierney, Clay, Lynch, Cooper, Connolly, Quigley, Davis, Braley, 
Welch, Yarmuth, and Murphy.
    Voting Nay: Issa, Burton, Mica, Platts, Turner, McHenry, 
Jordan, Chaffetz, Mack, Walberg, Lankford, Amash, Buerkle, 
Gosar, Labrador, Meehan, DesJarlais, Gowdy, Ross, Guinta, 
Farenthold, and Kelly.
    4. Ms. Buerkle offered an amendment to the Ross ANS to add 
language at the end of Sec. 104 regarding limiting retail 
facilities identified for closure. The amendment was agreed to 
by a recorded vote of 21 Ayes to 17 Nays.
    Voting Aye: Issa, Burton, Mica, Platts, Turner, McHenry, 
Jordan, Chaffetz, Mack, Walberg, Lankford, Buerkle, Gosar, 
Labrador, Meehan, DesJarlais, Gowdy, Ross, Guinta, Farenthold, 
and Kelly.
    Voting Nay: Amash, Cummings, Towns, Maloney, Norton, 
Kucinich, Tierney, Clay, Lynch, Cooper, Connolly, Quigley, 
Davis, Braley, Welch, Yarmuth, and Murphy.
    5. Ms. Norton offered an amendment to the Ross ANS striking 
subsection (c) of Sec. 112 (``Efficient and Flexible Universal 
Postal Service'') and replacing it with new language. The 
amendment failed by a recorded vote of 16 Ayes to 22 Nays.
    Voting Aye: Cummings, Towns, Maloney, Norton, Kucinich, 
Tierney, Clay, Lynch, Cooper, Connolly, Quigley, Davis, Braley, 
Welch, Yarmuth, and Murphy.
    Voting Nay: Issa, Burton, Mica, Platts, Turner, McHenry, 
Jordan, Chaffetz, Mack, Walberg, Lankford, Amash, Buerkle, 
Gosar, Labrador, Meehan, DesJarlais, Gowdy, Ross, Guinta, 
Farenthold, and Kelly.
    6. Mr. Connolly offered an amendment to the Ross ANS to 
strike titles I, II, and III of the bill and insert a new title 
I. The amendment was defeated by a recorded vote of 17 Ayes to 
22 Nays.
    Voting Aye: Cummings, Towns, Maloney, Norton, Kucinich, 
Tierney, Clay, Lynch, Cooper, Connolly, Quigley, Davis, Braley, 
Welch, Yarmuth, Murphy, and Speier.
    Voting Nay: Issa, Burton, Mica, Platts, Turner, McHenry, 
Jordan, Chaffetz, Mack, Walberg, Lankford, Amash, Buerkle, 
Gosar, Labrador, Meehan, DesJarlais, Gowdy, Ross, Guinta, 
Farenthold, and Kelly.
    7. Mr. Murphy offered an amendment to strike subsections 
(g) and (i) of section 211, and to strike sections 304 and 305 
of the bill. The amendment was defeated by a recorded vote of 
17 Ayes to 22 Nays.
    Voting Aye: Cummings, Towns, Maloney, Norton, Kucinich, 
Tierney, Clay, Lynch, Cooper, Connolly, Quigley, Davis, Braley, 
Welch, Yarmuth, Murphy, and Speier.
    Voting Nay: Issa, Burton, Mica, Platts, Turner, McHenry, 
Jordan, Chaffetz, Mack, Walberg, Lankford, Amash, Buerkle, 
Gosar, Labrador, Meehan, DesJarlais, Gowdy, Ross, Guinta, 
Farenthold, and Kelly.
    8. Mr. Braley offered an amendment to the Ross ANS to 
strike subtitle A (``Commission on Postal Reorganization'') of 
title I of the bill, and to strike section 112 (``Efficient and 
Flexible Universal Postal Service'') of the bill. The amendment 
was defeated by a recorded vote of 17 Ayes to 22 Nays.
    Voting Aye: Cummings, Towns, Maloney, Norton, Kucinich, 
Tierney, Clay, Lynch, Cooper, Connolly, Quigley, Davis, Braley, 
Welch, Yarmuth, Murphy, and Speier.
    Voting Nay: Issa, Burton, Mica, Platts, Turner, McHenry, 
Jordan, Chaffetz, Mack, Walberg, Lankford, Amash, Buerkle, 
Gosar, Labrador, Meehan, DesJarlais, Gowdy, Ross, Guinta, 
Farenthold, and Kelly.
    9. Mr. Yarmuth offered an amendment to the Ross ANS to 
strike section 409 (``Appropriations Modernization'') of the 
bill. The amendment was defeated by a recorded vote of 17 Ayes 
to 23 Nays.
    Voting Aye: Cummings, Towns, Maloney, Norton, Kucinich, 
Tierney, Clay, Lynch, Cooper, Connolly, Quigley, Davis, Braley, 
Welch, Yarmuth, Murphy, and Speier.
    Voting Nay: Issa, Burton, Mica, Platts, Turner, McHenry, 
Jordan, Chaffetz, Mack, Walberg, Lankford, Amash, Buerkle, 
Gosar, Labrador, Meehan, DesJarlais, Walsh, Gowdy, Ross, 
Guinta, Farenthold, and Kelly.
    10. The bill, H.R. 2309, as amended, was favorably reported 
to the House, a quorum being present, by a recorded vote of 22 
Ayes to 18 Nays.
    Voting Aye: Issa, Burton, Mica, Turner, McHenry, Jordan, 
Chaffetz, Mack, Walberg, Lankford, Amash, Buerkle, Gosar, 
Labrador, Meehan, DesJarlais, Walsh, Gowdy, Ross, Guinta, 
Farenthold, and Kelly.
    Voting Nay: Platts, Cummings, Towns, Maloney, Norton, 
Kucinich, Tierney, Clay, Lynch, Cooper, Connolly, Quigley, 
Davis, Braley, Welch, Yarmuth, Murphy, and Speier.

              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 would restore the financial solvency of the United 
States Postal Service and ensure the efficient and affordable 
nationwide delivery of mail. As such this bill does not relate 
to employment or access to public services and accommodations.

  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.

                     Federal Advisory Committee Act

    The Committee finds that the legislation does not establish 
or authorize the establishment of an advisory committee within 
the definition of 5 U.S.C. App., Section 5(b).

                       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 as to 
whether the provisions of the reported include unfunded 
mandates. In compliance with this requirement the Committee has 
received a letter from the Congressional Budget Office included 
herein.

                         Earmark Identification

    H.R. 2309 does not include any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of rule XXI.

                           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. 2309. 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. 2309 from the Director of 
Congressional Budget Office:

                                                  December 1, 2011.
Hon. Darrell Issa,
Chairman, Committee on Oversight and Government Reform,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2309, the Postal 
Reform Act of 2011.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Mark 
Grabowicz.
            Sincerely,
                                              Douglas W. Elmendorf.
    Enclosure.

H.R. 2309--Postal Reform Act of 2011

    Summary: H.R. 2309 would change the laws that govern the 
operation of the United States Postal Service (USPS). Major 
provisions of the bill would:
           Permit the Postal Service to reduce mail 
        delivery from six to five days per week;
           Transfer about $11 billion in surplus 
        retirement contributions from the Civil Service 
        Retirement and Disability Fund (CSRDF) to the Postal 
        Service Fund;
           Reduce the contribution made by the Postal 
        Service for employees' health nd life insurance 
        premiums;
           Change the payments that the Postal Service 
        is required to make to the Postal Service Retiree 
        Health Benefits Fund (PSRHBF); and
           Eliminate annual appropriations made to the 
        Postal Service for free and reduced rate mail.
    In addition, other provisions of H.R. 2309 would aim to 
help the Postal Service reduce its costs and increase its 
income.
    CBO estimates that enacting the bill would result in off-
budget savings totaling $26.2 billion and on-budget costs of 
$7.7 billion over the 2012-2021 period. (USPS cash flows are 
recorded in the federal budget in the Postal Service Fund and 
are classified as off-budget, while the cash flows of the 
PSRHBF and CSRDF are on-budget.)
    Combining those effects, CBO estimates that the net savings 
to the unified budget from enacting H.R. 2309 would be $18.5 
billion over the 2012-2021 period. All of those effects reflect 
changes in direct spending. Enacting H.R. 2309 would not affect 
revenues. Pay-as-you-go procedures apply because enacting the 
legislation would increase on-budget direct spending.
    In addition, CBO estimates that H.R. 2309 would affect 
spending subject to appropriation. Assuming that future 
appropriations for the Postal Service are reduced consistent 
with the bill's provisions, we estimate that implementing H.R. 
2309 would yield discretionary savings of $880 million over the 
10-year period.
    H.R. 2309 would impose intergovernmental and private-sector 
mandates, as defined in the Unfunded Mandates Reform Act 
(UMRA), on some groups of mailers by increasing postage rates.
    The bill also would impose an intergovernmental mandate on 
the state of Alaska by requiring the state to reimburse the 
USPS for costs it incurs to provide bypass mail service in 
Alaska. Assuming that the requirement on Alaska is enforceable, 
CBO estimates that the costs of complying with the 
intergovernmental mandates in the bill would exceed the annual 
threshold established in UMRA beginning in 2015. CBO projects 
that the intergovernmental threshold in 2015 will be $76 
million, including adjustments for inflation.
    CBO estimates that the costs to the private sector to 
comply with the mandates would fall below the annual threshold 
for private-sector mandates established in UMRA ($142 million 
in 2011, adjusted annually for inflation) in the first five 
years the mandates are in effect.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 2309 is shown in Table 1. The costs of 
this legislation fall within budget functions 370 (commerce and 
housing credit) and 600 (income security).
    Basis of estimate: For this estimate, CBO assumes that H.R. 
2309 will be enacted before the end of calendar year 2011. The 
bill would affect outlays of the off-budget Postal Service Fund 
and the on-budget PSRHBF and CSRDF. CBO estimates that net 
savings to the unified budget would total $18.5 billion over 
the 2012-2021 period.

                                                        TABLE 1--SUMMARY OF BUDGETARY IMPACT OF H.R. 2309, THE POSTAL REFORM ACT OF 2011
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                             By fiscal year, in millions of dollars--
                                                                 -------------------------------------------------------------------------------------------------------------------------------
                                                                    2012      2013      2014      2015      2016      2017      2018      2019      2020      2021      2012-2016     2012-2021
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              OFF-BUDGET CHANGES IN DIRECT SPENDING

Estimated Budget Authority......................................    -5,450      -925    -2,300      -639      -765    -3,341    -3,280    -3,222    -3,166    -3,107       -10,079       -26,195
Estimated Outlays...............................................    -5,450      -925    -2,300      -639      -765    -3,341    -3,280    -3,222    -3,166    -3,107       -10,079       -26,195

                                                                              ON-BUDGET CHANGES IN DIRECT SPENDING

Estimated Budget Authority......................................    10,900         0         0    -2,250    -2,250       260       260       260       260       260         6,400         7,700
Estimated Outlays...............................................    10,900         0         0    -2,250    -2,250       260       260       260       260       260         6,400         7,700

                                                                            UNIFIED BUDGET CHANGES IN DIRECT SPENDING

Estimated Budget Authority......................................     5,450      -925    -2,300    -2,889    -3,015    -3,081    -3,020    -2,962    -2,906    -2,847        -3,679       -18,495
Estimated Outlays...............................................     5,450      -925    -2,300    -2,889    -3,015    -3,081    -3,020    -2,962    -2,906    -2,847        -3,679       -18,495

                                                                          CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Estimated Authorization Level...................................        20      -100      -100      -100      -100      -100      -100      -100      -100      -100          -380          -880
Estimated Outlays...............................................         5       -85      -100      -100      -100      -100      -100      -100      -100      -100          -380         -880
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Positive numbers indicate increases in costs; negative numbers indicate reductions in costs.

      OFF-BUDGET CHANGES IN DIRECT SPENDING (POSTAL SERVICE FUND)

    CBO estimates that enacting H.R. 2309 would reduce net USPS 
spending by $26.2 billion over the 10-year period; such 
spending is classified as off-budget. Lower spending would 
result mainly from authorizing the Postal Service to reduce 
mail service from six days per week to five. Details of changes 
in spending from the Postal Service Fund are shown in Table 2 
and discussed in the following subsections.
    Reduction of Mail Delivery. H.R. 2309 would authorize the 
Postal Service to deliver mail five days per week, beginning in 
fiscal year 2013. As a result, the Postal Service expects that 
it would eliminate mail delivery on Saturdays. The Postal 
Service estimates that this reduction in service would result 
in net savings of $3.1 billion annually, mostly in personnel 
and transportation costs. The Postal Regulatory Commission 
(PRC) estimates that reduction of mail delivery from six to 
five days per week would save only $1.7 billion per year. The 
PRC estimates lower net savings largely because it disagrees 
with the Postal Service's assumption that most mail currently 
delivered on Saturdays could be delivered on Mondays with 
minimal increased costs. PRC's estimate therefore includes a 
bigger expected offset to the gross savings for eliminating 
Saturday deliveries.

                                                                 TABLE 2--OFF-BUDGET CHANGES IN DIRECT SPENDING UNDER H.R. 2309
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          By fiscal year, in millions of dollars 2012--
                                                                --------------------------------------------------------------------------------------------------------------------------------
                                                                    2012       2013       2014       2015       2016       2017       2018       2019       2020       2021        2012-2021
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Reduction of Mail Delivery:
    Estimated Budget Authority.................................          0     -1,000     -2,000     -2,500     -2,500     -2,500     -2,400     -2,300     -2,200     -2,100            -19,000
    Estimated Outlays..........................................          0     -1,000     -2,000     -2,500     -2,500     -2,500     -2,400     -2,300     -2,200     -2,100            -19,000
Transfer of Surplus Postal Retirement Contributions:
    Estimated Budget Authority.................................    -10,900          0          0          0          0          0          0          0          0          0            -10,900
    Estimated Outlays..........................................    -10,900          0          0          0          0          0          0          0          0          0            -10,900
USPS Changes in Spending:
    Estimated Budget Authority.................................      5,450          0          0          0          0          0          0          0          0          0              5,450
    Estimated Outlays..........................................      5,450          0          0          0          0          0          0          0          0          0              5,450
Limit Postal Contributions for Health and Life Insurance:
    Estimated Budget Authority.................................          0          0       -350       -413       -529       -555       -584       -611       -640       -671             -4,353
    Estimated Outlays..........................................          0          0       -350       -413       -529       -555       -584       -611       -640       -671             -4,353
Changes in Payments to the PSRHBF:
    Estimated Budget Authority.................................          0          0          0      2,250      2,250       -260       -260       -260       -260       -260              3,200
    Estimated Outlays..........................................          0          0          0      2,250      2,250       -260       -260       -260       -260       -260              3,200
Payment from the State of Alaska:
    Estimated Budget Authority.................................          0          0        -25        -50        -76       -101       -126       -126       -126       -126               -882
    Estimated Outlays..........................................          0          0        -25        -50        -76       -101       -126       -126       -126       -126               -882
Elimination of Annual Appropriations:
    Estimated Budget Authority.................................          0        100        100        100        100        100        100        100        100        100                900
    Estimated Outlays..........................................          0        100        100        100        100        100        100        100        100        100                900
Changes in Rates for Mail Services:
    Estimated Budget Authority.................................          0          0          0          0        -15          0        -10        -25        -40        -50               -110
    Estimated Outlays..........................................          0          0          0          0        -15          0        -10        -25        -40        -50               -110
Total Off-budget Changes:
    Estimated Budget Authority.................................     -5,450       -925     -2,300       -639       -765     -3,341     -3,280     -3,222     -3,166     -3,107            -26,195
    Estimated Outlays..........................................     -5,450       -925     -2,300       -639       -765     -3,341     -3,280     -3,222     -3,166     -3,107           -26,195
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note: PSRHBF = Postal Service Retiree Health Benefits Fund.

    Based on the estimates prepared by USPS and the PRC, CBO 
estimates that reducing mail delivery from six to five days per 
week would save about $2.5 billion annually by fiscal year 2015 
(roughly the midpoint of the USPS and PRC estimates). Estimated 
savings in 2013 and 2014 would be lower--about $1 billion and 
$2 billion, respectively--as the Postal Service increases 
efficiency under the new delivery system. Beginning in 2018, we 
expect that annual savings would gradually decline as those 
funds would likely be spent by the Postal Service or returned 
to mailers in the form of lower rates rather than accumulating 
as large annual surpluses in the Postal Service Fund. We 
estimate that annual savings would fall to $2.1 billion by 
2021.
    Transfer of Surplus Postal Retirement Contributions. Within 
two weeks of enactment, H.R. 2309 would transfer to the Postal 
Service Fund any surplus in the USPS Federal Employee 
Retirement Systems (FERS) account within the CSRDF as of 
September 30, 2010, less any required contributions to FERS 
that the Postal Service has not made during fiscal years 2011 
and 2012. The amount transferred to the Postal Service Fund 
would also be reduced by the amount of any liability for USPS 
retirement contributions for employees enrolled in CSRS as of 
September 30, 2010.
    The Office of Personnel Management (OPM) estimates that the 
Postal Service's surplus for its FERS account in the CSRDF was 
$10.9 billion as of September 30, 2010. According to OPM, there 
is a surplus--not a liability--for USPS retirement 
contributions for employees enrolled in CSRS as of September 
30, 2010, so that calculation would not affect the amount 
transferred. The Postal Service stopped making FERS 
contributions in June 2011, but the agency expects to make any 
unpaid contributions in December 2011, so there would be no 
reduction to the amount transferred to the Postal Service Fund.
    Therefore, under the bill, CBO estimates that $10.9 billion 
would be transferred from the CSRDF to the Postal Service Fund 
in fiscal year 2012. This transfer would be classified as a 
savings of $10.9 billion in off-budget direct spending for the 
Postal Service Fund in 2012. (This also would result in a cost 
of $10.9 billion to the on-budget CSRDF, as discussed below.)
    USPS Changes in Spending. H.R. 2309 would permit the Postal 
Service to use the $10.9 billion transferred from the CSRDF for 
purposes that it considers appropriate. Based on information 
from the Postal Service, we expect that the agency would use 
the amount transferred to make payments to the PSRHBF, pay off 
its debt to the U.S. Treasury, fund employee buyout plans, or 
for other expenses.
    We expect that use of those transfers would effectively 
lower the net expenses of the Postal Service by $10.9 billion 
in 2012; that reduction would lead the agency to modify its 
ongoing efforts under current law to reduce spending. Faced 
with an imbalance of receipts from postal customers and 
operational costs, the Postal Service has made significant 
efforts to reduce spending in recent years. For example, early 
in 2009, the Postal Service announced plans to cut spending by 
$5.9 billion over the 2009-2010 period. Just a few months later 
in response to worsening financial conditions, the agency 
accelerated the plan to cut $5.9 billion in 2009 alone. Since 
then, the Postal Service has announced the possibility of 
closing post offices, laying off employees, and making major 
reductions in service.
    CBO expects that the transfer of $10.9 billion to the 
Postal Service would lead the agency to alter its cost-
reduction program by cutting spending less aggressively than it 
would without the legislation. Thus, CBO anticipates that 
enacting this legislation would lead USPS to increase other 
expenses relative to current law. We estimate that this 
increase in other postal expenses would be about half of the 
$10.9 billion that would be transferred--$5.45 billion in 2012.
    Limit Postal Contributions for Health and Life Insurance. 
Currently, the Postal Service pays 78.5 percent of the health 
insurance premiums and 100 percent of the life insurance 
premiums for most of its employees. H.R. 2309 would lower those 
employer contributions to about 70 percent for health insurance 
and 33 percent for life insurance. For employees covered by a 
collective bargaining agreement, the lower employer 
contributions would take effect after the expiration of the 
agreement. For other employees, the lower contributions would 
begin in fiscal year 2014.
    In fiscal year 2011, the Postal Service paid about $4.8 
billion for health insurance premiums and about $187 million 
for life insurance premiums for active employees. Based on 
those current payments, CBO estimates that the lower employer 
contributions in H.R. 2309 would save about $700 million in 
2014, with potential savings growing to more than $1 billion by 
2016 when all employees would be subject to this provision. For 
this estimate, CBO anticipates that some individuals who face 
lower employer contributions would either leave the Federal 
Employees Health Benefits (FEHB) program or switch to lower-
cost plans.
    However, as with the savings from the $10.9 billion 
transferred from CSRDF, we anticipate that enacting this 
provision would lead the agency to cut expenses less 
aggressively than it otherwise would and thereby lead to an 
increase in other postal expenses. For example, the Postal 
Service has sharply curtailed its capital spending in recent 
years and could apply savings from the lower employer 
contributions to enhancements in facilities or other postal 
infrastructure. CBO estimates that net savings to the Postal 
Service would be about half of the potential savings--about 
$350 million in 2014, $529 million by 2016, and $671 million by 
2021.
    Changes in Payments to the PSRHBF. Under current law, over 
the 2012-2016 period the Postal Service is required to make 
specified annual payments ranging from $5.6 billion to $5.8 
billion to the PSRHBF, an on-budget account established by the 
Postal Accountability and Enhancement Act (Public Law 109-435) 
to prefund future retirees' health benefits. Beginning in 2017, 
the agency is required to make annual payments amortized over 
40 years to liquidate the unfunded liability for retirees' 
health benefits. The unfunded liability is the total liability 
accrued to date for retirees' health benefits minus the PSRHBF 
balance; that is, the amount that has not been set aside to 
cover future liabilities.
    H.R. 2309 would increase the specified payment to the 
PSRHBF for fiscal year 2015 from $5.7 billion to $7.95 billion 
and would increase the 2016 payment from 5.8 billion to $8.05 
billion.
    This provision would increase off-budget costs by $2.25 
billion in both 2015 and 2016. In addition, OPM estimates that 
it would decrease the amortization payments required over the 
2017-2021 period by about $260 million annually. (This also 
would result in savings in 2015 and 2016 and costs over the 
2017-2021 period to the on-budget PSRHBF, as discussed below.)
    Payments from the State of Alaska. H.R. 2309 would direct 
the state of Alaska, beginning in fiscal year 2013, to make 
annual payments to the Postal Service to cover the costs of 
providing certain mail service (known as ``bypass mail'') in 
the state provided by private air carriers. The amount of the 
payment for a full year would be estimated by the PRC. Under 
the bill's provisions, the state's first payment would be equal 
to 20 percent of the full-year estimate, with payments for each 
subsequent year growing by an additional 20 percent of the PRC 
estimate.
    For this estimate, CBO assumes that USPS could enforce this 
requirement on the state, and that Alaska would make the 
payments as directed by the bill. Based on information from the 
PRC, CBO estimates that the payment to the Postal Service would 
be about $25 million in 2013, increasing to $126 million by 
2017. (If the provision was found by courts to be 
unenforceable, we expect that USPS would continue to provide 
such services to customers in Alaska and that this provision of 
the bill would result in no savings to the Postal Service.)
    Elimination of Annual Appropriations. H.R. 2309 would 
eliminate the annual appropriation to reimburse the Postal 
Service for delivery of free and reduced rate mail, including 
mail for overseas voting and mail for the blind. Based on the 
amounts appropriated in recent years, CBO estimates that this 
provision would replace discretionary spending of $100 million 
per year with direct spending from the Postal Service Fund, 
beginning in fiscal year 2013, assuming that future 
appropriations for the Postal Service are reduced consistent 
with this estimate. (Reductions in spending subject to 
appropriation are discussed below.)
    Changes in Rates for Mail Services. H.R. 2309 would direct 
the Postal Service to gradually increase rates for nonprofit 
advertising mail, beginning no earlier than three years after 
the bill's enactment to equal 80 percent of the rate charged to 
deliver commercial advertising. The nonprofit rates are 
currently between 60 percent and 75 percent of the commercial 
rate. Because there is an annual cap on rate increases for each 
class of mail, raising rates for nonprofit advertising would 
require lowering rates for other mail products in the same 
class. Based on information from the Postal Service about the 
anticipated responses to price changes by users of nonprofit 
mail and other mail products in that class, we estimate that 
this provision would result in a net decrease in USPS revenues 
in 2016 of about $15 million but would increase revenues over 
the 2016-2021 period by $110 million. (USPS revenues are a 
credit against direct spending by the agency.)
    The bill also would direct the Postal Service to set 
postage rates (within the annual cap on rate increases in 
current law) so that most types of mail products cover the 
costs attributable to them. In addition, H.R. 2309 would 
require the Postal Service to raise rates each year on those 
classes of mail with delivery costs that exceed revenues, 
beginning at the end of 2015. Those increases would depend on 
the outcome of a study to be prepared by the PRC in 2014 
concerning excess capacity within USPS.
    In general, the Postal Service aims to set rates to 
maximize total mail revenue. CBO anticipates that the Postal 
Service will continue to attempt to maximize revenue while 
decreasing costs although we cannot predict the extent to which 
revenue for certain classes of mail will cover their costs in 
2015. (The PRC has already directed the Postal Service to 
increase the cost coverage for certain products.) It is unclear 
whether changing rates or reallocating price increases under 
the current cap on rate increases to ensure the cost coverage 
of certain products would significantly increase or decrease 
total revenue in the future.

                  ON-BUDGET CHANGES IN DIRECT SPENDING

    CBO estimates that enacting H.R. 2309 would increase on-
budget direct spending by $5.8 billion over the 2012-2021 
period. Those costs result from changes in the cash flows of 
the CSRDF and the PSRHBF as shown in Table 3 and discussed in 
the following subsections.

                                       TABLE 3--CHANGES IN DIRECT SPENDING FOR ON-BUDGET ACCOUNTS UNDER H.R. 2309
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                         By fiscal year, in millions of dollars--
                                                                ----------------------------------------------------------------------------------------
                                                                   2012    2013   2014    2015      2016     2017   2018   2019   2020   2021  2012-2021
--------------------------------------------------------------------------------------------------------------------------------------------------------
Transfer of Surplus Postal Retirement Contributions:
    Estimated Budget Authority.................................   10,900      0      0         0         0      0      0      0      0      0     10,900
    Estimated Outlays..........................................   10,900      0      0         0         0      0      0      0      0      0     10,900
Changes in Payments to the PSRHBF:
    Estimated Budget Authority.................................        0      0      0    -2,250    -2,250    260    260    260    260    260     -3,200
    Estimated Outlays..........................................        0      0      0    -2,250    -2,250    260    260    260    260    260     -3,200
Total On-budget Changes:
    Estimated Budget Authority.................................   10,900      0      0    -2,250    -2,250    260    260    260    260    260      7,700
    Estimated Outlays..........................................   10,900      0      0    -2,250    -2,250    260    260    260    260    260     7,700
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: PSRHBF = Postal Service Retiree Health Benefits Fund.

    Transfer of Surplus Postal Retirement Contributions. As 
discussed previously, H.R. 2309 would transfer to the Postal 
Service Fund any surplus in the USPS FERS account within the 
CSRDF as of September 30, 2010, with certain adjustments made 
to that amount. Based on information from OPM, CBO estimates 
that $10.9 billion would be transferred from the CSRDF to the 
Postal Service Fund in 2012. This transfer would increase on-
budget spending from the CSRDRF by $10.9 billion in 2012.
    Changes in Payments to the PSRHBF. As discussed previously, 
H.R. 2309 would increase the specified payment from the Postal 
Service to the PSRHBF from $5.7 billion to $7.95 billion for 
fiscal year 2015 and from $5.8 billion to $8.05 billion for 
fiscal year 2016.
    By increasing receipts to the PSRHBF, this provision would 
decrease on-budget costs by $2.25 billion in both 2015 and 
2016. In addition, OPM estimates that it would decrease the 
amortization payments paid to the PSRHBF by the Postal Service 
over the 2017-2021 period by $260 million annually (the 
reductions in payments would be recorded as on-budget costs).

           OTHER PROVISIONS THAT COULD AFFECT DIRECT SPENDING

    Several other provisions of H.R. 2309 could help the Postal 
Service in its efforts to lower costs; however, CBO has not 
estimated additional savings for those provisions because it is 
not clear that any such savings would exceed what we expect 
could be achieved under current law or under other provisions 
of the legislation.
    The bill would: establish a commission to recommend 
closures and consolidations of postal facilities; direct 
arbitrators involved in future labor negotiations to consider 
the financial condition of the Postal Service when mediating 
disputes between USPS and its labor unions; and reform Postal 
Service contracting practices. Those provisions might reduce 
USPS costs, but CBO expects that any net savings probably would 
be indistinguishable from savings that could result from the 
Postal Service's current efforts to close facilities or 
negotiate more favorable labor contracts and improve 
procurement practices.
    H.R. 2309 also would authorize the Postal Service to 
establish a program to allow advertising at USPS facilities and 
on USPS vehicles and a program to provide services for agencies 
of state governments or federal agencies for a fee. 
Implementing these programs would require the Postal Service to 
compete with the various media currently available to 
advertisers and to offer cost-effective alternatives for 
services to state or federal agencies. Those proposed programs 
might increase USPS revenues but also would add to costs. CBO 
has no information to predict the cost-effectiveness of such 
new ventures undertaken by the Postal Service.
    Finally, under the bill, if the Postal Service were in 
default for more than 30 days to the U.S. Treasury with respect 
to any form of borrowing, or for any scheduled payments to any
fund in the U.S. Treasury, the proposed Postal Service 
Financial Responsibility and Management Assistance Authority 
would be established. That new authority would be a new entity 
that would advise and potentially control the Postal Service. 
CBO cannot judge whether the new management entity would be 
more successful than the existing USPS management structure; 
however, because the bill would transfer an estimated nearly 
$11 billion to the Postal Service in 2012, CBO does not expect 
that USPS would be in a financial situation that required the 
new management authority to be created for the foreseeable 
future.

                   SPENDING SUBJECT TO APPROPRIATION

    H.R. 2309 would authorize the appropriation of $20 million 
from the Postal Service Fund for the Commission on Postal 
Reorganization that would be established by the bill. The 
commission would evaluate and recommend potential closures and 
consolidations of postal facilities and carry out other duties. 
CBO estimates that the commission would spend about $5 million 
in fiscal year 2012 and about $15 million in 2013, assuming 
appropriation of the authorized amounts.
    H.R. 2309 also would eliminate the annual appropriation to 
reimburse the Postal Service for the delivery of free and 
reduced rate mail, including overseas voting materials and mail 
for the blind. Based on the amounts appropriated in recent 
years, CBO estimates that this provision would save about $100 
million per year, beginning in fiscal year 2013, assuming 
future appropriations for the Postal Service are reduced 
consistent with this estimate.
    Pay-as-You-Go considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget-reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. The net changes in outlays that are subject to those 
pay-as-you-go procedures are shown in the following table. 
(Enacting H.R. 2309 would not affect revenues.) Only on-budget 
changes to outlays or revenues are subject to pay-as-you-go 
procedures.

     CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 2309, THE POSTAL REFORM ACT OF 2011, AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON OVERSIGHT AND
                                                          GOVERNMENT REFORM ON OCTOBER 13, 2011
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                   By fiscal year, in millions of dollars--
                                                     ---------------------------------------------------------------------------------------------------
                                                        2012    2013   2014    2015      2016     2017   2018   2019   2020   2021  2012-2016  2012-2021
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                NET INCREASE OR DECREASE (-) IN THE ON-BUDGET THE DEFICIT

Statutory Pay-As-You-Go Impact......................   10,900      0      0    -2,250    -2,250    260    260    260    260    260     6,400      7,700
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Intergovernmental and private-sector impact: H.R. 2309 
would impose intergovernmental and private-sector mandates, as 
defined in UMRA, on some groups of mailers and on the state of 
Alaska. Assuming that the requirement on Alaska is enforceable, 
CBO estimates that the costs of complying with the 
intergovernmental mandates in the bill would exceed the annual 
threshold established in UMRA beginning in 2015. CBO projects 
that the intergovernmental threshold in 2015 will be $76 
million, including adjustments for inflation. CBO estimates 
that the costs to the private sector to comply with the 
mandates would fall below the annual threshold for private-
sector mandates established in UMRA ($142 million in 2011, 
adjusted annually for inflation) in the first five years the 
mandates are in effect.

        MANDATES THAT APPLY TO BOTH PUBLIC AND PRIVATE ENTITIES

    H.R. 2309 contains intergovernmental and private-sector 
mandates because it would increase the postage rates for 
advertising paid by nonprofits and entities that mail 
agricultural periodicals three years after enactment. Based on 
the current postal price structure, an increase in the rates 
for standard nonprofit mailers would result in a decrease in 
the rates paid by standard commercial mailers. The net increase 
for standard mailers would total about $60 million over the 
first five years the mandates are in effect. (Nonprofit and 
commercial standard mailers include both public and private 
entities.) Because the bill would increase postage rates for 
governmental mailers, such as public libraries and schools, and 
would decrease costs for agencies of state and local 
governments that pay regular rates, CBO estimates that the net 
costs, if any, to public entities would be small.

              MANDATE THAT APPLIES TO PUBLIC ENTITIES ONLY

    The bill would impose an intergovernmental mandate on the 
state of Alaska by requiring the state to reimburse the USPS 
for costs it incurs to provide bypass mail service in Alaska. 
Bypass mail is mail that is prepared by a pre-qualified shipper 
and delivered directly to the recipient by a private air 
carrier. The USPS pays the private air carrier a set rate for 
the delivery. Assuming that the requirement on the state of 
Alaska to pay the reimbursement is enforceable, CBO estimates 
that the cost to the state would be about $25 million in 2013 
and would increase to about $130 million by 2017.

             MANDATE THAT APPLIES TO PRIVATE ENTITIES ONLY

    In addition, the bill would increase the postage rate paid 
by national and state political committees by repealing their 
current discount. Based on information from the USPS, CBO 
estimates that the cost to those mailers would be small and 
would fall well below the annual threshold beginning the first 
year after enactment.
    Estimate prepared by: Federal Costs: Julia Mitchell--FEHB 
Costs; Mark Grabowicz--All Other Costs. Impact on State, Local, 
and Tribal Governments: Elizabeth Cove Delisle. Impact on the 
Private Sector: Paige Piper/Bach.
    Estimate approved by: Theresa Gullo, 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

                             PART I. GENERAL

Chapter.                                                            Sec.
      Postal Policy and Definitions..................................101
     * * * * * * *
      Contracting Provisions.........................................701
     * * * * * * *

                          PART IV. MAIL MATTER

      Nonmailable Matter............................................3001
     * * * * * * *
3701Nonpostal Services................................................

           *       *       *       *       *       *       *


                CHAPTER 1--POSTAL POLICY AND DEFINITIONS

Sec. 101. Postal policy

  (a) * * *
  [(b) The Postal Service shall provide a maximum degree of 
effective and regular postal services to rural areas, 
communities, and small towns where post offices are not self-
sustaining. No small post office shall be closed solely for 
operating at a deficit, it being the specific intent of the 
Congress that effective postal services be insured to residents 
of both urban and rural communities.]
  (b) The Postal Service shall provide effective and regular 
postal services to rural areas, communities, and small towns 
where post offices are not self-sustaining.
  (c) As an employer, the Postal Service shall achieve and 
maintain compensation for its officers and employees comparable 
to the total rates and types of compensation paid in the entire 
private sector of the economy of the United States. It shall 
place particular emphasis upon opportunities for career 
advancements of all officers and employees and the achievement 
of worthwhile and satisfying careers in the service of the 
United States.

           *       *       *       *       *       *       *


CHAPTER 4--GENERAL AUTHORITY

           *       *       *       *       *       *       *


Sec. 403. General duties

  (a) * * *
  (b) It shall be the responsibility of the Postal Service--
          (1) * * *

           *       *       *       *       *       *       *

          [(3) to establish and maintain postal facilities of 
        such character and in such locations, that postal 
        patrons throughout the Nation will, consistent with 
        reasonable economies of postal operations, have ready 
        access to essential postal services.]
          (3) to ensure that postal patrons throughout the 
        Nation will, consistent with reasonable economies of 
        postal operations, have ready access to essential 
        postal services.

           *       *       *       *       *       *       *


Sec. 404. Specific powers

  (a) * * *

           *       *       *       *       *       *       *

  (d)(1) * * *
  (2) The Postal Service, in making a determination whether or 
not to close or consolidate a post office--
          (A) shall consider--
                  (i) * * *

           *       *       *       *       *       *       *

                  [(iii) whether such closing or consolidation 
                is consistent with the policy of the 
                Government, as stated in section 101(b) of this 
                title, that the Postal Service shall provide a 
                maximum degree of effective and regular postal 
                services to rural areas, communities, and small 
                towns where post offices are not self-
                sustaining;]
                  (iii) whether such closing or consolidation 
                is consistent with the policy of the 
                Government, as stated in section 101(b), that 
                the Postal Service shall provide effective and 
                regular postal services to rural areas, 
                communities, and small towns where post offices 
                are not self-sustaining;

           *       *       *       *       *       *       *

  (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 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] 60 days after receiving any appeal under this 
paragraph. The Commission shall set aside any determination, 
findings, and conclusions found to be--
          (A) * * *

           *       *       *       *       *       *       *

The Commission may affirm the determination of the Postal 
Service or order that the entire matter be returned for further 
consideration, but the Commission may not modify the 
determination of the Postal Service. The Commission may suspend 
the effectiveness of the determination of the Postal Service 
until the final disposition of the appeal. The provisions of 
section 556, section 557, and chapter 7 of title 5 shall not 
apply to any review carried out by the Commission under this 
paragraph.

           *       *       *       *       *       *       *

  (7)(A) The appeals process set forth in paragraph (5) shall 
not apply to a determination of the Postal Service to close a 
post office if there is located, within 2 miles of such post 
office, a qualified contract postal unit.
  (B) For purposes of this paragraph--
          (i) the term ``contract postal unit'' means a store 
        or other place of business which--
                  (I) is not owned or operated by the Postal 
                Service; and
                  (II) in addition to its usual operations, 
                provides postal services to the general public 
                under contract with the Postal Service; and
          (ii) the term ``qualified contract postal unit'', as 
        used in connection with a post office, means a contract 
        postal unit which--
                  (I) begins to provide postal services to the 
                general public during the period--
                          (aa) beginning 1 year before the date 
                        on which the closure or consolidation 
                        of such post office is scheduled to 
                        take effect; and
                          (bb) ending on the 15th day after the 
                        date on which the closure or 
                        consolidation of such post office is 
                        scheduled to take effect; and
                  (II) has not, pursuant to subparagraph (A), 
                served as the basis for exempting any other 
                post office from the appeals process set forth 
                in paragraph (5).
  (C)(i) If the contract postal unit (which is providing postal 
services that had been previously provided by the post office 
that was closed) does not continue to provide postal services, 
as required by subparagraph (B)(i)(II), for at least the 2-year 
period beginning on the date on which such post office was 
closed, the contract postal unit shall be subject to a closure 
determination by the Postal Service to decide whether a post 
office must be reopened within the area (delimited by the 2-
mile radius referred to in subparagraph (A)).
  (ii) A decision under clause (i) not to reopen a post office 
may be appealed to the Postal Regulatory Commission under 
procedures which the Commission shall by regulation prescribe. 
Such procedures shall be based on paragraph (5), except that, 
for purposes of this clause, paragraph (5)(C) shall be applied 
by substituting ``in violation of section 101(b), leaving 
postal patrons without effective and regular access to postal 
services'' for ``unsupported by substantial evidence on the 
record''.
  (8) For purposes of this subsection, the term ``post office'' 
means a post office and any other facility described in section 
102(2) of the Postal Reform Act of 2011.
  (e)(1) * * *

           *       *       *       *       *       *       *

  (6) Nothing in this section shall be considered to prevent 
the Postal Service from establishing nonpostal products and 
services that are expressly authorized by chapter 37.
  (f)(1) The Postmaster General may, with respect to any year 
for which 6-day delivery is otherwise required, declare up to 
12 non-mail delivery days. Not later than 1 month before the 
beginning of the year, the Postmaster General shall submit to 
the Board of Governors a report listing the non-mail delivery 
days in such year.
  (2) A non-mail delivery day under this subsection shall be a 
day other than--
          (A) a Sunday;
          (B) a legal public holiday listed in section 6103(a) 
        of title 5 or any other day declared to be a holiday by 
        Federal statute or Executive order; or
          (C) during the 30-day period that ends on the date of 
        a regularly scheduled general election for Federal 
        office.
  (3) Any day which is declared under this subsection to be a 
non-mail delivery day--
          (A) shall, for purposes of mail delivery and such 
        other postal operations as the Postal Service may by 
        regulation prescribe, be treated as if it were a 
        Sunday; except that
          (B) an employee of the Postal Service (other than one 
        who is prevented from working on such day by reason of 
        this subsection) shall be entitled to the same pay and 
        benefits for that day as if this subsection had not 
        been enacted.
  (4)(A) The 6-day mail delivery requirement shall not apply 
with respect to a week in which a non-mail delivery day under 
this subsection occurs.
  (B) The authority to declare a non-mail delivery day under 
this subsection shall be considered to be within the right of 
the Postal Service to determine the methods, means, and 
personnel by which postal operations are to be conducted.
  (5) Not less than 6 months after the date of enactment of 
this subsection, the Postal Service may submit a proposal under 
section 3661 for a nationwide change in service to reduce mail 
delivery from 6 days to 5 days each week. Notwithstanding any 
other provision of law, the Postal Service shall maintain 6-day 
delivery service as the standard mail delivery schedule until 
90 days following the rendering of an advisory opinion on 5-day 
delivery by the Postal Regulatory Commission.

           *       *       *       *       *       *       *


Sec. 411. Cooperation with other Government agencies

  Executive agencies within the meaning of section 105 of title 
5 and the Government Printing Office are authorized to furnish 
property, both real and personal, and personal and nonpersonal 
services to the Postal Service, and the Postal Service is 
authorized to furnish property and services to them. The 
furnishing of property and services under this section shall be 
under such terms and conditions, [including reimbursability] 
including reimbursability within the limitations of chapter 37, 
as the Postal Service and the head of the agency concerned 
shall deem appropriate.

           *       *       *       *       *       *       *


                   CHAPTER 7--CONTRACTING PROVISIONS

Sec.
701. Definitions.
702. Advocate for competition.
703. Delegation of contracting authority.
704. Posting of noncompetitive purchase requests for noncompetitive 
          contracts.
705. Review of ethical issues.
706. Ethical restrictions on participation in certain contracting 
          activity.

Sec. 701. Definitions

  In this chapter--
          (1) the term ``contracting officer'' means an 
        employee of a covered postal entity who has authority 
        to enter into a postal contract;
          (2) the term ``covered postal entity'' means--
                  (A) the Postal Service; or
                  (B) the Postal Regulatory Commission;
          (3) the term ``head of a covered postal entity'' 
        means--
                  (A) in the case of the Postal Service, the 
                Postmaster General; or
                  (B) in the case of the Postal Regulatory 
                Commission, the Chairman of the Postal 
                Regulatory Commission;
          (4) the term ``postal contract'' means--
                  (A) in the case of the Postal Service, any 
                contract (including any agreement or memorandum 
                of understanding) entered into by the Postal 
                Service for the procurement of goods or 
                services; or
                  (B) in the case of the Postal Regulatory 
                Commission, any contract (including any 
                agreement or memorandum of understanding) in an 
                amount exceeding the simplified acquisition 
                threshold (as defined in section 134 of title 
                41 and adjusted under section 1908 of such 
                title) entered into by the Postal Regulatory 
                Commission for the procurement of goods or 
                services; and
          (5) the term ``senior procurement executive'' means 
        the senior procurement executive of a covered postal 
        entity.

Sec. 702. Advocate for competition

  (a) Establishment and Designation.--
          (1) There is established in each covered postal 
        entity an advocate for competition.
          (2) The head of each covered postal entity shall 
        designate for the covered postal entity 1 or more 
        officers or employees (other than the senior 
        procurement executive) to serve as the advocate for 
        competition.
  (b) Responsibilities.--The advocate for competition of a 
covered postal entity shall--
          (1) be responsible for promoting--
                  (A) the contracting out of functions of the 
                covered postal entity that the private sector 
                can perform equally well or better, and at 
                lower cost; and
                  (B) competition to the maximum extent 
                practicable consistent with obtaining best 
                value by promoting the acquisition of 
                commercial items and challenging barriers to 
                competition;
          (2) review the procurement activities of the covered 
        postal entity; and
          (3) prepare and transmit the annual report required 
        under subsection (c).
  (c) Annual Report.--
          (1) Preparation.--The advocate for competition of a 
        covered postal entity shall prepare an annual report 
        describing the following:
                  (A) The activities of the advocate under this 
                section.
                  (B) Initiatives required to promote 
                contracting out and competition.
                  (C) Barriers to contracting out and 
                competition.
                  (D) In the case of the report prepared by the 
                competition advocate of the Postal Service, the 
                number of waivers made by the Postal Service 
                under section 704(c).
          (2) Transmission.--The report under this subsection 
        shall be transmitted--
                  (A) to Congress;
                  (B) to the head of the postal entity;
                  (C) to the senior procurement executive of 
                the entity;
                  (D) in the case of the competition advocate 
                of the Postal Service, to each member of the 
                Postal Service Board of Governors; and
                  (E) in the case of the competition advocate 
                of the Postal Regulatory Commission, to each of 
                the Commissioners of the Commission.

Sec. 703. Delegation of contracting authority

  (a) In General.--
          (1) Policy.--Not later than 60 days after the date of 
        enactment of this chapter, the head of each covered 
        postal entity shall issue a policy on contracting 
        officer delegations of authority for postal contracts 
        for the covered postal entity.
          (2) Contents.--The policy issued under paragraph (1) 
        shall require that--
                  (A) notwithstanding any delegation of 
                authority with respect to postal contracts, the 
                ultimate responsibility and accountability for 
                the award and administration of postal 
                contracts resides with the senior procurement 
                executive; and
                  (B) a contracting officer shall maintain an 
                awareness of and engagement in the activities 
                being performed on postal contracts of which 
                that officer has cognizance, notwithstanding 
                any delegation of authority that may have been 
                executed.
  (b) Posting of Delegations.--
          (1) In general.--The head of each covered postal 
        entity shall make any delegation of authority for 
        postal contracts outside the functional contracting 
        unit readily available and accessible on the website of 
        the covered postal entity.
          (2) Effective date.--This paragraph shall apply to 
        any delegation of authority made on or after 30 days 
        after the date of enactment of this chapter.

Sec. 704. Posting of noncompetitive purchase requests for 
                    noncompetitive contracts

  (a) Posting Required.--
          (1) Postal regulatory commission.--The Postal 
        Regulatory Commission shall make the noncompetitive 
        purchase request for any noncompetitive award for any 
        contract (including any agreement or memorandum of 
        understanding) entered into by the Postal Regulatory 
        Commission for the procurement of goods and services, 
        in an amount of $20,000 or more, including the 
        rationale supporting the noncompetitive award, publicly 
        available on the website of the Postal Regulatory 
        Commission--
                  (A) not later than 14 days after the date of 
                the award of the noncompetitive contract; or
                  (B) not later than 30 days after the date of 
                the award of the noncompetitive contract, if 
                the basis for the award was a compelling 
                business interest.
          (2) Postal service.--The Postal Service shall make 
        the noncompetitive purchase request for any 
        noncompetitive award of a postal contract in an amount 
        of $250,000 or more, including the rationale supporting 
        the noncompetitive award, publicly available on the 
        website of the Postal Service--
                  (A) not later than 14 days after the date of 
                the award; or
                  (B) not later than 30 days after the date of 
                the award, if the basis for the award was a 
                compelling business interest.
          (3) Adjustments to the posting threshold for the 
        postal service.--
                  (A) Review and determination.--Not later than 
                January 31 of each year, the Postal Service 
                shall--
                          (i) review the $250,000 threshold 
                        established under paragraph (2); and
                          (ii) based on any change in the 
                        Consumer Price Index for all-urban 
                        consumers of the Department of Labor, 
                        determine whether an adjustment to the 
                        threshold shall be made.
                  (B) Amount of adjustments.--An adjustment 
                under subparagraph (A) shall be made in 
                increments of $5,000. If the Postal Service 
                determines that a change in the Consumer Price 
                Index for a year would require an adjustment in 
                an amount that is less than $5,000, the Postal 
                Service may not make an adjustment to the 
                threshold for the year.
          (4) Effective date.--This subsection shall apply to 
        any noncompetitive contract awarded on or after the 
        date that is 90 days after the date of enactment of 
        this chapter.
  (b) Public Availability.--
          (1) In general.--Subject to paragraph (2), the 
        information required to be made publicly available by a 
        covered postal entity under subsection (a) shall be 
        readily accessible on the website of the covered postal 
        entity.
          (2) Protection of proprietary information.--A covered 
        postal entity shall--
                  (A) carefully screen any description of the 
                rationale supporting a noncompetitive award 
                required to be made publicly available under 
                subsection (a) to determine whether the 
                description includes proprietary data 
                (including any reference or citation to the 
                proprietary data) or security-related 
                information; and
                  (B) remove any proprietary data or security-
                related information before making publicly 
                available a description of the rationale 
                supporting a noncompetitive award.
  (c) Waivers.--
          (1) Waiver permitted.--If the Postal Service 
        determines that making a noncompetitive purchase 
        request for a postal contract of the Postal Service 
        publicly available would risk placing the Postal 
        Service at a competitive disadvantage relative to a 
        private sector competitor, the senior procurement 
        executive, in consultation with the advocate for 
        competition of the Postal Service, may waive the 
        requirements under subsection (a).
          (2) Form and content of waiver.--
                  (A) Form.--A waiver under paragraph (1) shall 
                be in the form of a written determination 
                placed in the file of the contract to which the 
                noncompetitive purchase agreement relates.
                  (B) Content.--A waiver under paragraph (1) 
                shall include--
                          (i) a description of the risk 
                        associated with making the 
                        noncompetitive purchase request 
                        publicly available; and
                          (ii) a statement that redaction of 
                        sensitive information in the 
                        noncompetitive purchase request would 
                        not be sufficient to protect the Postal 
                        Service from being placed at a 
                        competitive disadvantage relative to a 
                        private sector competitor.
          (3) Delegation of waiver authority.--The Postal 
        Service may not delegate the authority to approve a 
        waiver under paragraph (1) to any employee having less 
        authority than the senior procurement executive.

Sec. 705. Review of ethical issues

  If a contracting officer identifies any ethical issues 
relating to a proposed contract and submits those issues and 
that proposed contract to the designated ethics official for 
the covered postal entity before the awarding of that contract, 
that ethics official shall--
          (1) review the proposed contract; and
          (2) advise the contracting officer on the appropriate 
        resolution of ethical issues.

Sec. 706. Ethical restrictions on participation in certain contracting 
                    activity

  (a) Definitions.--In this section--
          (1) the term ``covered employee'' means--
                  (A) a contracting officer; or
                  (B) any employee of a covered postal entity 
                whose decision making affects a postal contract 
                as determined by regulations prescribed by the 
                head of a covered postal entity;
          (2) the term ``final conviction'' means a conviction, 
        whether entered on a verdict or plea, including a plea 
        of nolo contendere, for which a sentence has been 
        imposed; and
          (3) the term ``covered relationship'' means a covered 
        relationship described in section 2635.502(b)(1) of 
        title 5, Code of Federal Regulations, or any successor 
        thereto.
  (b) In General.--
          (1) Regulations.--The head of each covered postal 
        entity shall prescribe regulations that--
                  (A) require a covered employee to include in 
                the file of any noncompetitive purchase request 
                for a noncompetitive postal contract a written 
                certification that--
                          (i) discloses any covered 
                        relationship of the covered employee; 
                        and
                          (ii) states that the covered employee 
                        will not take any action with respect 
                        to the noncompetitive purchase request 
                        that affects the financial interests of 
                        a friend, relative, or person with whom 
                        the covered employee is affiliated in a 
                        nongovernmental capacity, or otherwise 
                        gives rise to an appearance of the use 
                        of public office for private gain, as 
                        described in section 2635.702 of title 
                        5, Code of Federal Regulations, or any 
                        successor thereto;
                  (B) require a contracting officer to consult 
                with the ethics counsel for the covered postal 
                entity regarding any disclosure made by a 
                covered employee under subparagraph (A)(i), to 
                determine whether participation by the covered 
                employee in the noncompetitive purchase request 
                would give rise to a violation of part 2635 of 
                title 5, Code of Federal Regulations (commonly 
                referred to as the Standards of Ethical Conduct 
                for Employees of the Executive Branch), or any 
                successor thereto;
                  (C) require the ethics counsel for a covered 
                postal entity to review any disclosure made by 
                a contracting officer under subparagraph (A)(i) 
                to determine whether participation by the 
                contracting officer in the noncompetitive 
                purchase request would give rise to a violation 
                of part 2635 of title 5, Code of Federal 
                Regulations (commonly referred to as the 
                Standards of Ethical Conduct for Employees of 
                the Executive Branch), or any successor 
                thereto;
                  (D) under subsections (d) and (e) of section 
                2635.502 of title 5, Code of Federal 
                Regulations, or any successor thereto, require 
                the ethics counsel for a covered postal entity 
                to--
                          (i) authorize a covered employee that 
                        makes a disclosure under subparagraph 
                        (A)(i) to participate in the 
                        noncompetitive postal contract; or
                          (ii) disqualify a covered employee 
                        that makes a disclosure under 
                        subparagraph (A)(i) from participating 
                        in the noncompetitive postal contract;
                  (E) require a contractor to timely disclose 
                to the contracting officer in a bid, 
                solicitation, award, or performance of a postal 
                contract any conflict of interest with a 
                covered employee; and
                  (F) include authority for the head of the 
                covered postal entity to grant a waiver or 
                otherwise mitigate any organizational or 
                personal conflict of interest, if the head of 
                the covered postal entity determines that the 
                waiver or mitigation is in the best interests 
                of the covered postal entity.
          (2) Posting of waivers.--Not later than 30 days after 
        the head of a covered postal entity grants a waiver 
        described in paragraph (1)(F), the head of the covered 
        postal entity shall make the waiver publicly available 
        on the website of the covered postal entity.
  (c) Contract Voidance and Recovery.--
          (1) Unlawful conduct.--In any case in which there is 
        a final conviction for a violation of any provision of 
        chapter 11 of title 18 relating to a postal contract, 
        the head of a covered postal entity may--
                  (A) void that contract; and
                  (B) recover the amounts expended and property 
                transferred by the covered postal entity under 
                that contract.
          (2) Obtaining or disclosing procurement 
        information.--
                  (A) In general.--In any case in which a 
                contractor under a postal contract fails to 
                timely disclose a conflict of interest to the 
                appropriate contracting officer as required 
                under the regulations promulgated under 
                subsection (b)(1)(E), the head of a covered 
                postal entity may--
                          (i) void that contract; and
                          (ii) recover the amounts expended and 
                        property transferred by the covered 
                        postal entity under that contract.
                  (B) Conviction or administrative 
                determination.--A case described under 
                subparagraph (A) is any case in which--
                          (i) there is a final conviction for 
                        an offense punishable under section 
                        2105 of title 41; or
                          (ii) the head of a covered postal 
                        entity determines, based upon a 
                        preponderance of the evidence, that the 
                        contractor or someone acting for the 
                        contractor has engaged in conduct 
                        constituting an offense punishable 
                        under section 2105 of such title.

           *       *       *       *       *       *       *


PART II--PERSONNEL

           *       *       *       *       *       *       *


CHAPTER 10--EMPLOYMENT WITHIN THE POSTAL SERVICE

           *       *       *       *       *       *       *


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, 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 total compensation and benefits for all officers and 
employees on a standard of comparability to the total 
compensation and benefits paid for comparable levels of work in 
the entire 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.

           *       *       *       *       *       *       *

  (e)(1) At least 1 month before the start of each fiscal year 
as described in paragraph (2), the Postmaster General shall 
transmit to the Postal Regulatory Commission certification 
(together with such supporting documentation as the Postal 
Regulatory Commission may require) that contributions of the 
Postal Service for such fiscal year will not exceed--
          (A) in the case of life insurance under chapter 87 of 
        title 5, the Government contributions determined under 
        section 8708 of such title; and
          (B) in the case of health insurance under chapter 89 
        of title 5, the Government contributions determined 
        under 8906 of such title.
  (2) This subsection applies with respect to--
          (A) except as provided in subparagraph (B), each 
        fiscal year beginning after September 30, 2013; and
          (B) in the case of officers and employees of the 
        Postal Service covered by a collective bargaining 
        agreement which is in effect on the date of the 
        enactment of this subsection--
                  (i) each fiscal year beginning after the 
                expiration date of such agreement, including
                  (ii) for the fiscal year in which such 
                expiration date occurs, any portion of such 
                fiscal year remaining after such expiration 
                date.
  (3)(A) If, after reasonable notice and opportunity for 
hearing is afforded to the Postal Service, the Postal 
Regulatory Commission finds that the contributions of the 
Postal Service for a fiscal year will exceed or are exceeding 
the limitation specified in subparagraph (A) or (B) of 
paragraph (1), the Commission shall order that the Postal 
Service take such action as the Commission considers necessary 
to achieve full and immediate compliance with the applicable 
limitation or limitations.
  (B) Sections 3663 and 3664 shall apply with respect to any 
order issued by the Postal Regulatory Commission under 
subparagraph (A).
  (C) Nothing in this paragraph shall be considered to permit 
the issuance of an order requiring reduction of contributions 
below the level specified by the provision of law cited in 
subparagraph (A) or (B) of paragraph (1), as applicable.

           *       *       *       *       *       *       *


Sec. 1005. Applicability of laws relating to Federal employees

  (a) * * *

           *       *       *       *       *       *       *

  [(c) Officers and employees of the Postal Service shall be 
covered by subchapter I of chapter 81 of title 5, relating to 
compensation for work injuries.]
  (c)(1) For purposes of this subsection--
          (A) the term ``postal employee'' means an officer or 
        employee of the Postal Service or the former Post 
        Office Department;
          (B) the term ``retirement age'' has the meaning given 
        such term under section 216(l)(1) of the Social 
        Security Act; and
          (C) the term ``appropriate committees of Congress'' 
        means--
                  (i) the Committee on Oversight and Government 
                Reform of the House of Representatives; and
                  (ii) the Committee on Homeland Security and 
                Governmental Affairs of the Senate.
  (2) The Postal Service shall design and administer a program 
for the payment of benefits for the disability or death of an 
individual resulting from personal injury sustained while in 
the performance of such individual's duties as a postal 
employee.
  (3) The program under this subsection--
          (A) shall be designed by the Postal Service in 
        consultation with appropriate employee representatives;
          (B) shall not provide for any amount payable to a 
        disabled postal employee to be augmented on the basis 
        of number of dependents; and
          (C) shall include provisions for automatic 
        transition, upon attainment of retirement age, to 
        benefits involving, coordinated with, or otherwise 
        determined by reference to retirement benefits.

           *       *       *       *       *       *       *

  (f) Compensation, benefits, and other terms and conditions of 
employment in effect immediately prior to the effective date of 
this section, whether provided by statute or by rules and 
regulations of the former Post Office Department or the 
executive branch of the Government of the United States, shall 
continue to apply to officers and employees of the Postal 
Service, until changed by the Postal Service in accordance with 
this chapter and chapter 12 of this title. Subject to the 
provisions of this chapter and chapter 12 of this title, the 
provisions of subchapter I of chapter 85 and chapters 87, 89, 
89A, and 89B of title 5 shall apply to officers and employees 
of the Postal Service, unless varied, added to, or substituted 
for, under this subsection. [No variation, addition, or 
substitution with respect to fringe benefits shall result in a 
program of fringe benefits which on the whole is less favorable 
to the officers and employees than fringe benefits in effect on 
the effective date of this section, and as to officers and 
employees for whom there is a collective-bargaining 
representative, no such variation, addition, or substitution 
shall be made except by agreement between the collective-
bargaining representative and the Postal Service.]

           *       *       *       *       *       *       *


CHAPTER 12--EMPLOYEE-MANAGEMENT AGREEMENTS

           *       *       *       *       *       *       *


Sec. 1206. Collective-bargaining agreements

  (a) * * *

           *       *       *       *       *       *       *

  (d) Collective-bargaining agreements between the Postal 
Service and bargaining representatives recognized under section 
1203, ratified after the date of enactment of this subsection, 
shall contain no provision restricting the applicability of 
reduction-in-force procedures under title 5 with respect to 
members of the applicable bargaining unit.
  (e) Any collective-bargaining agreement between the Postal 
Service and the bargaining representatives recognized under 
section 1203 ratified before the date of enactment of this Act 
that contain any provision violating subsection (d) shall be 
renegotiated with a new collective-bargaining agreement to be 
ratified or imposed through an arbitration decision under 
section 1207 within 9 months after such date of enactment.
  (f)(1) If a collective-bargaining agreement between the 
Postal Service and bargaining representatives recognized under 
section 1203, ratified after the date of enactment of this 
subsection, includes reduction-in-force procedures which can be 
applied in lieu of reduction-in-force procedures under title 5, 
the Postal Service may, in its discretion, apply with respect 
to members of the applicable bargaining unit--
          (A) the alternative procedures (or, if 2 or more are 
        agreed to, 1 of the alternative procedures); or
          (B) the reduction-in-force procedures under title 5.
  (2) In no event may, if procedures for the resolution of a 
dispute or impasse arising in the negotiation of a collective-
bargaining agreement (whether through binding arbitration or 
otherwise) are invoked under this chapter, the award or other 
resolution reached under such procedures provide for the 
elimination of, or the substitution of any alternative 
procedures in lieu of, reduction-in-force procedures under 
title 5.

Sec. 1207. Labor disputes

  (a) * * *

           *       *       *       *       *       *       *

  [(c)(1) If no agreement is reached within 60 days after the 
expiration or termination of the agreement or the date on which 
the agreement became subject to modification under subsection 
(a) of this section, or if the parties decide upon arbitration 
but do not agree upon the procedures therefore, an arbitration 
board shall be established consisting of 3 members, 1 of whom 
shall be selected by the Postal Service, 1 by the bargaining 
representative of the employees, and the third by the 2 thus 
selected. If either of the parties fails to select a member, or 
if the members chosen by the parties fail to agree on the third 
person within 5 days after their first meeting, the selection 
shall be made from a list of names provided by the Director. 
This list shall consist of not less then 9 names of arbitrators 
of nationwide reputation and professional nature, who are also 
members of the National Academy of Arbitrators, and whom the 
Director has determined are available and willing to serve.
  [(2) The arbitration board shall give the parties a full and 
fair hearing, including an opportunity to present evidence in 
support of their claims, and an opportunity to present their 
case in person, by counsel or by other representative as they 
may elect. Decisions of the arbitration board shall be 
conclusive and binding upon the parties. The arbitration board 
shall render its decision within 45 days after its appointment.
  [(3) Costs of the arbitration board and mediation shall be 
shared equally by the Postal Service and the bargaining 
representative.
  [(d) In the case of a bargaining unit whose recognized 
collective-bargaining representative does not have an agreement 
with the Postal Service, if the parties fail to reach the 
agreement within 90 days after the commencement of collective 
bargaining, a mediator shall be appointed in accordance with 
the terms in subsection (b) of this section, unless the parties 
have previously agreed to another procedure for a binding 
resolution of their differences. If the parties fail to reach 
agreement within 180 days after the commencement of collective 
bargaining, and if they have not agreed to another procedure 
for binding resolution, an arbitration board shall be 
established to provide conclusive and binding arbitration in 
accordance with the terms of subsection (c) of this section.]
  (c)(1) If no agreement is reached within 30 days after the 
appointment of a mediator under subsection (b), or if the 
parties decide upon arbitration before the expiration of the 
30-day period, an arbitration board shall be established 
consisting of 1 member selected by the Postal Service (from the 
list under paragraph (2)), 1 member selected by the bargaining 
representative of the employees (from the list under paragraph 
(2)), and the mediator appointed under subsection (b).
  (2) Upon receiving a request from either of the parties 
referred to in paragraph (1), the Director of the Federal 
Mediation and Conciliation Service shall provide a list of not 
less than 9 individuals who are well qualified to serve as 
neutral arbitrators. Each person listed shall be an arbitrator 
of nationwide reputation and professional nature, a member of 
the National Academy of Arbitrators, and an individual whom the 
Director has determined to be willing and available to serve. 
If, within 7 days after the list is provided, either of the 
parties has not selected an individual from the list, the 
Director shall make the selection within 3 days.
  (3) The arbitration board shall give the parties a full and 
fair hearing, including an opportunity to present evidence in 
support of their claims, and an opportunity to present their 
case in person, by counsel, or by other representative as they 
may elect. The hearing shall be concluded no more than 40 days 
after the arbitration board is established.
  (4) No more than 7 days after the hearing is concluded, each 
party shall submit to the arbitration board 2 offer packages, 
each of which packages shall specify the terms of a proposed 
final agreement.
  (5) If no agreement is reached within 7 days after the last 
day date for the submission of an offer package under paragraph 
(4), each party shall submit to the arbitration board a single 
final offer package specifying the terms of a proposed final 
agreement.
  (6) No later than 3 days after the submission of the final 
offer packages under paragraph (5), the arbitration board shall 
select 1 of those packages as its tentative award, subject to 
paragraph (7).
  (7)(A) The arbitration board may not select a final offer 
package under paragraph (6) unless it satisfies each of the 
following:
          (i) The offer complies with the requirements of 
        sections 101(c) and 1003(a).
          (ii) The offer takes into account the current 
        financial condition of the Postal Service.
          (iii) The offer takes into account the long-term 
        financial condition of the Postal Service.
  (B)(i) If the board unanimously determines, based on clear 
and convincing evidence presented during the hearing under 
paragraph (3), that neither final offer package satisfies the 
conditions set forth in subparagraph (A), the board shall by 
majority vote--
          (I) select the package that best meets such 
        conditions; and
          (II) modify the package so selected to the minimum 
        extent necessary to satisfy such conditions.
  (ii) If modification (as described in subparagraph 
(B)(i)(II)) is necessary, the board shall have an additional 7 
days to render its tentative award under this subparagraph.
  (8) The parties may negotiate a substitute award to replace 
the tentative award selected under paragraph (6) or rendered 
under paragraph (7) (as the case may be). If no agreement on a 
substitute award is reached within 10 days after the date on 
which the tentative award is so selected or rendered, the 
tentative award shall become final.
  (9) The arbitration board shall review any substitute award 
negotiated under paragraph (8) to determine if it satisfies the 
conditions set forth in paragraph (7)(A). If the arbitration 
board, by a unanimous vote taken within 3 days after the date 
on which the agreement on the substitute award is reached under 
paragraph (8), determines that the substitute award does not 
satisfy such conditions, the tentative award shall become 
final. In the absence of a vote, as described in the preceding 
sentence, the substitute agreement shall become final.
  (10) If, under paragraph (5), neither party submits a final 
offer package by the last day allowable under such paragraph, 
the arbitration board shall develop and issue a final award no 
later than 20 days after such last day.
  (11) A final award or agreement under this subsection shall 
be conclusive and binding upon the parties.
  (12) Costs of the arbitration board and mediation shall be 
shared equally by the Postal Service and the bargaining 
representative.
  (d) In the case of a bargaining unit whose recognized 
collective-bargaining representative does not have an agreement 
with the Postal Service, if the parties fail to reach agreement 
within 90 days after the commencement of collective bargaining, 
a mediator shall be appointed in accordance with the provisions 
of subsection (b), unless the parties have previously agreed to 
another procedure for a binding resolution of their 
differences. If the parties fail to reach agreement within 180 
days after the commencement of collective bargaining, an 
arbitration board shall be established to provide conclusive 
and binding arbitration in accordance with the provisions of 
subsection (c).

           *       *       *       *       *       *       *


PART III--MODERNIZATION AND FISCAL ADMINISTRATION

           *       *       *       *       *       *       *


CHAPTER 20--FINANCE

           *       *       *       *       *       *       *


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 (1) the Postal Service requests 
to be appropriated under subsections (b) and (c) of section 
2401, (2) the Office of Inspector General of the United States 
Postal Service requests to be appropriated, out of the Postal 
Service Fund, under section 8G(f) of the Inspector General Act 
of 1978[, and (3)], (3) the Postal Regulatory Commission 
requests to be appropriated, out of the Postal Service Fund, 
under section 504(d) of this title[.], and (4) the Postal 
Service Financial Responsibility and Management Assistance 
Authority requests to be appropriated, out of the Postal 
Service Fund, under section 206 of the Postal Reform Act of 
2011. 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)(1) * * *
  (2) There is established in the Treasury of the United States 
a revolving fund, to be called the Postal Service Competitive 
Products Fund, which shall be available to the Postal Service 
without fiscal year limitation for the payment of--
          (A) costs attributable to competitive products; [and]
          (B) all other costs incurred by the Postal Service, 
        to the extent allocable to competitive products[.]; and
          (C) vouchers under the program described in section 
        214(f)(1) of the Postal Reform Act of 2011.

           *       *       *       *       *       *       *


CHAPTER 24--APPROPRIATIONS AND ANNUAL REPORT

           *       *       *       *       *       *       *


Sec. 2401. Appropriations

  (a) * * *
  [(b)(1) As reimbursement to the Postal Service for public 
service costs incurred by it in providing a maximum degree of 
effective and regular postal service nationwide, in communities 
where post offices may not be deemed self-sustaining, as 
elsewhere, there are authorized to be appropriated to the 
Postal Service the following amounts:
          [(A) for each of the fiscal years 1972 through 1979, 
        an amount equal to 10 percent of the sum appropriated 
        to the former Post Office Department by Act of Congress 
        for its use in fiscal year 1971;
          [(B) for fiscal year 1980, an amount equal to 9 
        percent of such sum for fiscal year 1971;
          [(C) for fiscal year 1981, $486,000,000;
          [(D) for fiscal year 1982, $250,000,000;
          [(E) for fiscal year 1983, $100,000,000;
          [(F) for fiscal year 1984, no funds are authorized to 
        be appropriated; and
          [(G) except as provided in paragraph (2) of this 
        subsection, for each fiscal year thereafter an amount 
        equal to 5 percent of such sum for fiscal year 1971.
  [(2) After fiscal year 1984, the Postal Service may reduce 
the percentage figure in paragraph (1)(G) of this subsection, 
including a reduction to 0, if the Postal Service finds that 
the amounts determined under such paragraph are no longer 
required to operate the Postal Service in accordance with the 
policies of this title.
  [(c) There are authorized to be appropriated to the Postal 
Service each year a sum determined by the Postal Service to be 
equal to the difference between the revenues the Postal Service 
would have received if sections 3217 and 3403 through 3406 had 
not been enacted and the estimated revenues to be received on 
mail carried under such sections. In requesting an 
appropriation under this subsection for a fiscal year, the 
Postal Service shall include an amount to reconcile sums 
authorized to be appropriated for prior fiscal years on the 
basis of estimated mail volume.
  [(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.]

           *       *       *       *       *       *       *


PART IV--MAIL MATTER

           *       *       *       *       *       *       *


            CHAPTER 36--POSTAL RATES, CLASSES, AND SERVICES

SUBCHAPTER I--PROVISIONS RELATING TO MARKET-DOMINANT PRODUCTS

           *       *       *       *       *       *       *


Sec. 3622. Modern rate regulation

  (a) * * *

           *       *       *       *       *       *       *

  (c) Factors.--In establishing or revising such system, the 
Postal Regulatory Commission shall take into account--
          (1) * * *

           *       *       *       *       *       *       *

          (10) the desirability of special classifications for 
        both postal users and the Postal Service in accordance 
        with the policies of this title, including agreements 
        between the Postal Service and postal users, when 
        available on public and reasonable terms to similarly 
        situated mailers, that--
                  [(A) either--
                          [(i) improve the net financial 
                        position of the Postal Service through 
                        reducing Postal Service costs or 
                        increasing the overall contribution to 
                        the institutional costs of the Postal 
                        Service; or
                          [(ii) enhance the performance of mail 
                        preparation, processing, 
                        transportation, or other functions; 
                        and]
                  (A) improve the net financial position of the 
                Postal Service through reducing Postal Service 
                costs or increasing the overall contribution to 
                the institutional costs of the Postal Service; 
                and

           *       *       *       *       *       *       *

  (d) Requirements.--
          (1) In general.--The system for regulating rates and 
        classes for market-dominant products shall--
                  (A) * * *
                  (B) subject to the limitation under 
                subparagraph (A), establish postal rates to 
                fulfill the requirement that each market-
                dominant class, product, and type of mail 
                service (except for an experimental product or 
                service) bear the direct and indirect postal 
                costs attributable to such class, product, or 
                type through reliably identified causal 
                relationships plus that portion of all other 
                costs of the Postal Service reasonably 
                assignable to such class, product, or type;
                  (C) establish postal rates for each group of 
                functionally equivalent agreements between the 
                Postal Service and users of the mail that--
                          (i) cover attributable cost; and
                          (ii) improve the net financial 
                        position of the Postal Service;
                for purposes of this subparagraph, a group of 
                functionally equivalent agreements shall 
                consist of all service agreements that are 
                functionally equivalent to each other within 
                the same market-dominant product, but shall not 
                include agreements within an experimental 
                product;
                  [(B)] (D) establish a schedule whereby rates, 
                when necessary and appropriate, would change at 
                regular intervals by predictable amounts;
                  [(C)] (E) not later than 45 days before the 
                implementation of any adjustment in rates under 
                this section, including adjustments made under 
                subsection (c)(10)--
                          (i) * * *

           *       *       *       *       *       *       *

                  [(D)] (F) establish procedures whereby the 
                Postal Service may adjust rates not in excess 
                of the annual limitations under subparagraph 
                (A); and
                  [(E)] (G) notwithstanding any limitation set 
                under subparagraphs (A) and (C), and provided 
                there is not sufficient unused rate authority 
                under paragraph (2)(C), establish procedures 
                whereby rates may be adjusted on an expedited 
                basis due to either extraordinary or 
                exceptional circumstances, provided that the 
                Commission determines, after notice and 
                opportunity for a public hearing and comment, 
                and within 90 days after any request by the 
                Postal Service, that such adjustment is 
                reasonable and equitable and necessary to 
                enable the Postal Service, under best practices 
                of honest, efficient, and economical 
                management, to maintain and continue the 
                development of postal services of the kind and 
                quality adapted to the needs of the United 
                States.

           *       *       *       *       *       *       *

          (4) PRC study.--
                  (A) In general.--Within 90 days after the end 
                of the first fiscal year beginning after the 
                date of enactment of the Postal Reform Act of 
                2011, the Postal Regulatory Commission shall 
                complete a study to determine the quantitative 
                impact of the Postal Service's excess capacity 
                on the direct and indirect postal costs 
                attributable to any class that bears less than 
                100 percent of its costs attributable (as 
                described in paragraph (1)(B)), according to 
                the most recent annual determination of the 
                Postal Regulatory Commission under section 
                3653.
                  (B) Requirements.--The study required under 
                subparagraph (A) shall--
                          (i) be conducted pursuant to 
                        regulations that the Postal Regulatory 
                        Commission shall prescribe within 90 
                        days after the date of enactment of the 
                        Postal Reform Act of 2011, taking into 
                        account existing regulations for 
                        proceedings to improve the quality, 
                        accuracy, or completeness of ratemaking 
                        information under section 3652(e)(2) in 
                        effect on such date; and
                          (ii) for any year in which any class 
                        of mail bears less than 100 percent of 
                        its costs attributable (as described in 
                        paragraph (1)(B)), be updated annually 
                        by the Postal Service and included in 
                        its annual report to the Commission 
                        under section 3652, using such 
                        methodologies as the Commission shall 
                        by regulation prescribe.
          (5) Additional rates.--Starting not earlier than 12 
        months and not later than 18 months after the date on 
        which the first study described in paragraph (4) is 
        completed, and at least once in each subsequent 12-
        month period, the Postal Service shall establish postal 
        rates for each loss-making class of mail to eliminate 
        such losses (other than those caused by the Postal 
        Service's excess capacity) by exhausting all unused 
        rate authority as well as maximizing incentives to 
        reduce costs and increase efficiency, subject to the 
        following:
                  (A) The term ``loss-making'', as used in this 
                paragraph with respect to a class of mail, 
                means a class of mail that bears less than 100 
                percent of its costs attributable (as described 
                in paragraph (1)(B)), according to the most 
                recent annual determination of the Postal 
                Regulatory Commission under section 3653, 
                adjusted to account for the quantitative effect 
                of excess capacity on the costs attributable of 
                the class (as described in paragraph (1)(C)).
                  (B) Unused rate authority shall be annually 
                increased by 2 percent for each class of mail 
                that bears less than 90 percent of its costs 
                attributable (as described in paragraph 
                (1)(B)), according to the most recent annual 
                determination of the Postal Regulatory 
                Commission under section 3653, adjusted to 
                account for the quantitative effect of excess 
                capacity on the costs attributable of the class 
                (as described in paragraph (1)(C)), with such 
                increase in unused rate authority to take 
                effect 30 days after the date that the 
                Commission issues such determination.
          (6) Exception.--The requirements of paragraph (1)(B) 
        shall not apply to a market-dominant product for which 
        a substantial portion of the product's mail volume 
        consists of inbound international mail with terminal 
        dues rates determined by the Universal Postal Union 
        (and not by bilateral agreements or other 
        arrangements).

           *       *       *       *       *       *       *


Sec. 3626. Reduced rates

  (a)(1) * * *

           *       *       *       *       *       *       *

  (5) The rates for any advertising under former section 
4358(f) of this title shall be equal to 75 percent of the rates 
for advertising contained in the most closely corresponding 
regular-rate category of mail. Notwithstanding any other 
provision of this paragraph, the percentage specified in the 
preceding sentence shall be increased by an additional 2 
percentage points as of the first day of each calendar year 
beginning at least 3 years after the date of the enactment of 
the Postal Reform Act of 2011, until such percentage reaches 80 
percent.
  (6) The rates for mail matter under former sections 4452 (b) 
and (c) of this title shall be established as follows:
          (A) * * *

           *       *       *       *       *       *       *

          (C) Rate differentials within each subclass of mail 
        matter under former sections 4452 (b) and (c) shall 
        reflect the policies of this title, including the 
        factors set forth in section 3622(b) of this title.
        Notwithstanding any other provision of this paragraph, 
        the percentage specified in subparagraph (A) shall be 
        increased by an additional 2 percentage points as of 
        the first day of each calendar year beginning at least 
        3 years after the date of the enactment of the Postal 
        Reform Act of 2011, until such percentage reaches 80 
        percent.

           *       *       *       *       *       *       *

  [(e)(1) In the administration of this section, the rates for 
third-class mail matter mailed by a qualified political 
committee shall be the rates currently in effect under former 
section 4452 of this title for third-class mail matter mailed 
by a qualified nonprofit organization.
  [(2) For purposes of this subsection--
          [(A) the term ``qualified political committee'' means 
        a national or State committee of a political party, the 
        Republican and Democratic Senatorial Campaign 
        Committees, the Democratic National Congressional 
        Committee, and the National Republican Congressional 
        Committee;
          [(B) the term ``national committee'' means the 
        organization which, by virtue of the bylaws of a 
        political party, is responsible for the day-to-day 
        operation of such political party at the national 
        level; and
          [(C) the term ``State committee'' means the 
        organization which, by virtue of the bylaws of a 
        political party, is responsible for the day-to-day 
        operation of such political party at the State level.]

           *       *       *       *       *       *       *


SUBCHAPTER II--PROVISIONS RELATING TO COMPETITIVE PRODUCTS

           *       *       *       *       *       *       *


Sec. 3632. Action of the Governors

  (a) * * *
  (b) Procedures.--
          (1) * * *

           *       *       *       *       *       *       *

          (4) Rates for streamlined review.--In the case of 
        rates not of general applicability for competitive 
        products that the Postmaster General considers eligible 
        for streamlined review under section 3633(c), the 
        Postmaster General shall cause each agreement to be 
        filed with the Postal Regulatory Commission by such 
        date, on or before the effective date of any new rate, 
        as the Postmaster General considered appropriate.
          [(4)] (5) 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.

           *       *       *       *       *       *       *


Sec. 3633. Provisions applicable to rates for competitive products

  (a) * * *

           *       *       *       *       *       *       *

  (c) Streamlined Review.--Within 90 days after the date of the 
enactment of this subsection, after notice and opportunity for 
public comment, the Postal Regulatory Commission shall 
promulgate (and may from time to time thereafter revise) 
regulations for streamlined after-the-fact review of new 
agreements between the Postal Service and users of the mail 
that provide rates not of general applicability for competitive 
products, and are functionally equivalent to existing 
agreements that have collectively covered attributable costs 
and collectively improved the net financial position of the 
Postal Service. Streamlined review will be concluded within 5 
working days after the agreement is filed with the Commission 
and shall be limited to approval or disapproval of the 
agreement as a whole based on the Commission's determination of 
its functional equivalence. Agreements not approved may be 
resubmitted without prejudice under section 3632(b)(3).

           *       *       *       *       *       *       *


      SUBCHAPTER IV--REPORTING REQUIREMENTS AND RELATED PROVISIONS

Sec. 3651. Annual reports by the Commission

  (a) * * *
  (b) Additional Information.--
          (1) * * *
          (2) Alaska bypass mail costs.--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 
        Alaska bypass mail service under section 5402.
          [(2)] (3) Basis for estimates.--The Commission shall 
        detail the basis for its estimates and the statutory 
        requirements giving rise to the costs identified in 
        each report under this section.

           *       *       *       *       *       *       *


Sec. 3652. Annual reports to the Commission

  (a) Costs, Revenues, Rates, and Service.--Except as provided 
in subsection (c), the Postal Service shall, no later than 90 
days after the end of each year, prepare and submit to the 
Postal Regulatory Commission a report (together with such 
nonpublic annex to the report as the Commission may require 
under subsection (e))--
          (1) which shall analyze costs, revenues, rates, and 
        quality of service, using such methodologies as the 
        Commission shall by regulation prescribe, and in 
        sufficient detail to demonstrate that all products 
        during such year complied with all applicable 
        requirements of this title; [and]
          (2) which shall, for each market-dominant product 
        provided in such year, provide--
                  (A) * * *
                  (B) measures of the quality of service 
                afforded by the Postal Service in connection 
                with such product, including--
                          (i) * * *
                          (ii) the degree of customer 
                        satisfaction with the service 
                        provided[.]; and
          (3) which shall provide the overall change in Postal 
        Service productivity and the resulting effect of such 
        change on overall Postal Service costs during such 
        year, using such methodologies as the Commission shall 
        by regulation prescribe.
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.

           *       *       *       *       *       *       *


Sec. 3653. Annual determination of compliance

  (a) * * *

           *       *       *       *       *       *       *

  (c) Each annual written determination of the Commission under 
section 3653 shall include the following written 
determinations:
          (1) Whether each product covered its costs, and if it 
        did not, the determination shall state that such 
        product is in noncompliance under section 3653(c).
          (2) For each group of functionally equivalent 
        agreements between the Postal Service and users of the 
        mail, whether it fulfilled requirements to--
                  (A) cover attributable costs; and
                  (B) improve the net financial position of the 
                Postal Service.
          (3) Any group of functionally equivalent agreements 
        (as referred to in subparagraph (B)) not meeting 
        subparagraphs (A) and (B) of paragraph (2) shall be 
        determined to be in noncompliance under this 
        subsection.
          (4) For purposes of this subsection, a group of 
        functionally equivalent agreements (as referred to in 
        paragraph (2)) shall consist of all service agreements 
        that are functionally equivalent to each other within 
        the same market-dominant or competitive product, but 
        shall not include agreements within an experimental 
        product.
  [(c)] (d) Noncompliance With Regard to Rates or Services.--
If, for a year, a timely written determination of noncompliance 
is made under subsection (b), the Postal Regulatory Commission 
shall take appropriate action in accordance with subsections 
(c) and (e) of section 3662 (as if a complaint averring such 
noncompliance had been duly filed and found under such section 
to be justified).
  [(d)] (e) Review of Performance Goals.--The Postal Regulatory 
Commission shall also evaluate annually whether the Postal 
Service has met the goals established under sections 2803 and 
2804, and may provide recommendations to the Postal Service 
related to the protection or promotion of public policy 
objectives set out in this title.
  [(e)] (f) Rebuttable Presumption.--A timely written 
determination described in the last sentence of subsection (b) 
shall, for purposes of any proceeding under section 3662, 
create a rebuttable presumption of compliance by the Postal 
Service (with regard to the matters described under paragraphs 
(1) and (2) of subsection (b)) during the year to which such 
determination relates.

           *       *       *       *       *       *       *


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

Sec. 3661. Postal services

  (a) * * *

           *       *       *       *       *       *       *

  (d)(1) The Commission shall issue its opinion within 90 days 
after the receipt of any proposal (as referred to in subsection 
(b)) concerning--
          (A) the closing or consolidation of postal retail 
        facilities (as that term is defined in section 102(2) 
        of the Postal Reform Act of 2011) to a degree that will 
        generally affect service on a nationwide or 
        substantially nationwide basis; or
          (B) an identical or substantially identical proposal 
        on which the Commission issued an opinion within the 
        preceding 5 years.
  (2) If necessary in order to comply with the 90-day 
requirement under paragraph (1), the Commission may apply 
expedited procedures which the Commission shall by regulation 
prescribe.

           *       *       *       *       *       *       *


                     CHAPTER 37--NONPOSTAL SERVICES

Sec
3701. Purpose
3702. Definitions
3703. Postal Service advertising program
3704. Postal Service program for State governments
3705. Postal Service program for other government agencies
3706. Transparency and accountability for nonpostal services

Sec. 3701. Purpose

  This chapter is intended to enable the Postal Service to 
increase its net revenues through specific nonpostal products 
and services that are expressly authorized by this chapter. 
Postal Service revenues and expenses under this chapter shall 
be funded through the Postal Service Fund.

Sec. 3702. Definitions

  As used in this chapter--
          (1) the term ``nonpostal services'' is limited to 
        services offered by the Postal Service that are 
        expressly authorized by this chapter and are not postal 
        products or services;
          (2) the term ``Postal Service advertising program'' 
        means a program, managed by the Postal Service, by 
        which the Postal Service receives revenues from 
        entities which advertise at Postal Service facilities 
        and on Postal Service vehicles;
          (3) the term ``Postal Service program for State 
        governments'' means a program, managed by the Postal 
        Service, by which the Postal Service receives revenue 
        from State governments (including their agencies) for 
        providing services on their behalf at Postal Service 
        facilities;
          (4) the term ``attributable costs'' has the same 
        meaning as is given such term in section 3631; and
          (5) the term ``year'' means a fiscal year.

Sec. 3703. Postal Service advertising program

  Notwithstanding any other provision of this title, the Postal 
Service may establish and manage a program that allows entities 
to advertise at Postal Service facilities and on Postal Service 
vehicles. Such a program shall be subject to the following 
requirements:
          (1) The Postal Service shall at all times ensure 
        advertising it permits is consistent with the integrity 
        of the Postal Service.
          (2) Any advertising program is required to cover a 
        minimum of 200 percent of its attributable costs in 
        each year.
          (3) All advertising expenditures and revenues are 
        subject to annual compliance determination (including 
        remedies for noncompliance) applicable to nonpostal 
        products.
          (4) Total advertising expenditures and revenues must 
        be disclosed in Postal Service annual reports.

Sec. 3704. Postal Service program for State governments

  (a) In General.--Notwithstanding any other provision of this 
title, the Postal Service may establish a program to provide 
services for agencies of State governments within the United 
States, but only if such services--
          (1) shall provide enhanced value to the public, such 
        as by lowering the cost or raising the quality of such 
        services or by making such services more accessible;
          (2) do not interfere with or detract from the value 
        of postal services, including--
                  (A) the cost and efficiency of postal 
                services; and
                  (B) access to postal retail service, such as 
                customer waiting time and access to parking; 
                and
          (3) provide a reasonable contribution to the 
        institutional costs of the Postal Service, defined as 
        reimbursement for each service and to each agency 
        covering at least 150 percent of the attributable costs 
        of such service in each year.
  (b) Public Notice.--At least 90 days before offering any 
services under this section, the Postal Service shall make each 
agreement with State agencies readily available to the public 
on its website, including a business plan that describes the 
specific services to be provided, the enhanced value to the 
public, terms of reimbursement, the estimated annual 
reimbursement to the Postal Service, and the estimated 
percentage of attributable Postal Service costs that will be 
covered by reimbursement (with documentation to support these 
estimates). The Postal Service shall solicit public comment for 
at least 30 days, with comments posted on its website, followed 
by its written response posted on its website at least 30 days 
before offering such services.
  (c) Approval Required.--The Governors of the Postal Service 
shall approve the provision of services under this section by a 
recorded vote, with at least \2/3\ of its membership voting for 
approval, with the vote publicly disclosed on the Postal 
Service website.
  (d) Classification of Services.--All services for a given 
agency provided under this section shall be classified as a 
separate activity subject to the requirements of annual 
reporting under section 3706. Such reporting shall also include 
information on the quality of service and related information 
to demonstrate that it satisfied the requirements of subsection 
(a). Information provided under this section shall be according 
to requirements that the Postal Regulatory Commission shall by 
regulation prescribe.
  (e) Definitions.--For the purpose of this section--
          (1) the term ``State'' includes the District of 
        Columbia, the Commonwealth of Puerto Rico, the United 
        States Virgin Islands, Guam, American Samoa, the 
        Commonwealth of the Northern Mariana Islands, and any 
        other territory or possession of the United States; and
          (2) the term ``United States'', when used in a 
        geographical sense, means the States.

Sec. 3705. Postal Service program for other government agencies

  (a) In General.--The Postal Service may establish a program 
to provide property and services for other government agencies 
within the meaning of section 411, but only if such program 
provides a reasonable contribution to the institutional costs 
of the Postal Service, defined as reimbursement by each agency 
that covers at least 100 percent of the attributable costs of 
all property and service provided by the Postal Service in a 
each year to such agency.
  (b) Classification of Services.--For each agency, all 
property and services provided by the Postal Service under this 
section shall be classified as a separate activity subject to 
the requirements of annual reporting under section 3706. 
Information provided under this section shall be according to 
requirements that the Postal Regulatory Commission shall by 
regulation prescribe.

Sec. 3706. Transparency and accountability for nonpostal services

  (a) Annual Reports to the Commission.--
          (1) In general.--The Postal Service shall, no later 
        than 90 days after the end of each year, prepare and 
        submit to the Postal Regulatory Commission a report 
        (together with such nonpublic annex to the report as 
        the Commission may require under subsection (b)) which 
        shall analyze costs, revenues, rates, and quality of 
        service for this chapter, using such methodologies as 
        the Commission shall by regulation prescribe, and in 
        sufficient detail to demonstrate compliance with all 
        applicable requirements of this chapter.
          (2) Audits.--The Inspector General shall regularly 
        audit the data collection systems and procedures 
        utilized in collecting information and preparing such 
        report. The results of any such audit shall be 
        submitted to the Postal Service and the Postal 
        Regulatory Commission.
  (b) 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.
  (c) Content and Form of Reports.--
          (1) In general.--The Postal Regulatory Commission 
        shall, by regulation, prescribe the content and form of 
        the public reports (and any nonpublic annex and 
        supporting matter relating to the report) to be 
        provided by the Postal Service under this section. Such 
        reports shall be included with the annual compliance 
        determination reported under section 3653. In carrying 
        out this subsection, the Commission shall give due 
        consideration to--
                  (A) providing the public with timely, 
                adequate information to assess compliance;
                  (B) avoiding unnecessary or unwarranted 
                administrative effort and expense on the part 
                of the Postal Service; and
                  (C) protecting the confidentiality of 
                information that is commercially sensitive or 
                is exempt from public disclosure under section 
                552(b) of title 5.
          (2) Revised requirements.--The Commission may, on its 
        own motion or on request of any interested party, 
        initiate proceedings (to 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 
                property or services under this chapter has 
                become significantly inaccurate or can be 
                significantly improved;
                  (B) the quality of service data provided to 
                the Commission for annual reports under this 
                chapter has become significantly inaccurate or 
                can be significantly improved; or
                  (C) such revisions are, in the judgment of 
                the Commission, otherwise necessitated by the 
                public interest.
  (d) Confidential Information.--
          (1) In general.--If the Postal Service determines 
        that any document or portion of a document, or other 
        matter, which it provides to the Postal Regulatory 
        Commission in a nonpublic annex under this section 
        contains information 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).
  (e) Annual Compliance Determination.--
          (1) Opportunity for public comment.--After receiving 
        the reports required under subsection (a) for any year, 
        the Postal Regulatory Commission shall promptly provide 
        an opportunity for comment on such reports by any 
        interested party, and an officer of the Commission who 
        shall be required to represent the interests of the 
        general public.
          (2) Determination of compliance or noncompliance.--
        Not later than 90 days after receiving the submissions 
        required under subsection (a) with respect to a year, 
        the Postal Regulatory Commission shall make a written 
        determination as to whether any nonpostal activities 
        during such year were or were not in compliance with 
        applicable provisions of this chapter (or regulations 
        promulgated under this chapter). The Postal Regulatory 
        Commission shall issue a determination of noncompliance 
        if the requirements for coverage of attributable costs 
        are not met. If, with respect to a year, no instance of 
        noncompliance is found to have occurred in such year, 
        the written determination shall be to that effect.
          (3) Noncompliance.--If, for a year, a timely written 
        determination of noncompliance is made under this 
        chapter, the Postal Regulatory Commission shall take 
        appropriate action. If the requirements for coverage of 
        attributable costs specified by this chapter are not 
        met, the Commission shall, within 60 days after the 
        determination, prescribe remedial action to restore 
        compliance as soon as practicable, which shall also 
        include the full restoration of revenue shortfalls 
        during the following fiscal year. The Commission may 
        order the Postal Service to discontinue a nonpostal 
        service under section 3703 or 3704 that persistently 
        fails to meet cost coverage requirements.
          (4) Any deliberate noncompliance.--In addition, in 
        cases of deliberate noncompliance by the Postal Service 
        with the requirements of this chapter, the Postal 
        Regulatory Commission may order, based on the nature, 
        circumstances, extent, and seriousness of the 
        noncompliance, a fine (in the amount specified by the 
        Commission in its order) for each incidence of 
        noncompliance. All receipts from fines imposed under 
        this subsection shall be deposited in the general fund 
        of the Treasury of the United States.

           *       *       *       *       *       *       *


PART V--TRANSPORTATION OF MAIL

           *       *       *       *       *       *       *


               CHAPTER 54--TRANSPORTATION OF MAIL BY AIR

Sec.
5401. Authorization.
     * * * * * * *
5404. Reimbursement of Alaska bypass mail costs.
     * * * * * * *

Sec. 5404. Reimbursement of Alaska bypass mail costs

  (a) In General.--The State of Alaska, on an annual basis, 
shall make a payment to the Postal Service to reimburse the 
Postal Service for its costs in providing Alaska bypass mail 
service under section 5402 of this title.
  (b) Date of First Payment.--The State of Alaska shall make 
its first payment under subsection (a) on or before the last 
day of the first fiscal year of the State of Alaska beginning 
after the date of enactment of this section.
  (c) Payment Amounts.--
          (1) Determination of amounts.--The amount of a 
        payment under subsection (a) shall be determined based 
        on the most recent cost estimate prepared by the Postal 
        Regulatory Commission under section 3651(b)(2) of this 
        title (in this subsection referred to as the ``cost 
        estimate'').
          (2) First payment.--The first payment under 
        subsection (a) shall be in an amount equal to 20 
        percent of the cost estimate.
          (3) Subsequent payments.--Each subsequent payment 
        under subsection (a) shall be in an amount equal to a 
        percentage of the cost estimate determined by adding 20 
        percent to the percentage due in the prior year, except 
        that no payment shall exceed 100 percent of the cost 
        estimate.
  (d) Notice of Payment Amounts.--Not later than 30 days after 
the date of issuance of a cost estimate by the Postal 
Regulatory Commission under section 3651(b)(2) of this title, 
the Postal Service shall furnish the State of Alaska with 
written notice of the amount of the next payment due under 
subsection (a).
  (e) Deposit of Payments.--Not later than the last day of the 
fiscal year of the State of Alaska in which notice of a payment 
is provided under subsection (d)--
          (1) the State of Alaska shall transmit the payment to 
        the Postal Service; and
          (2) the Postal Service shall deposit the payment in 
        the Postal Service Fund.
                              ----------                              


TITLE 5, UNITED STATES CODE

           *       *       *       *       *       *       *


PART III--EMPLOYEES

           *       *       *       *       *       *       *


SUBPART G--INSURANCE AND ANNUITIES

           *       *       *       *       *       *       *


CHAPTER 89--HEALTH INSURANCE

           *       *       *       *       *       *       *


Sec. 8909a. Postal Service Retiree Health [Benefit]  Benefits Fund

  (a) * * *

           *       *       *       *       *       *       *

  (d)(1) * * *

           *       *       *       *       *       *       *

  (3)(A) The United States Postal Service shall pay into such 
Fund--
          (i) * * *

           *       *       *       *       *       *       *

          (v) [$5,500,000,000] $1,000,000,000, not later than 
        September 30, 2011;

           *       *       *       *       *       *       *

          (ix) [$5,700,000,000] $7,950,000,000, not later than 
        September 30, 2015; and
          (x) [$5,800,000,000] $8,050,000,000, not later than 
        September 30, 2016.

           *       *       *       *       *       *       *

                              ----------                              


TITLE 41, UNITED STATES CODE

           *       *       *       *       *       *       *


SUBTITLE III--CONTRACT DISPUTES

           *       *       *       *       *       *       *


                     CHAPTER 71--CONTRACT DISPUTES

Sec. 7101. Definitions

   In this chapter:
          (1) * * *

           *       *       *       *       *       *       *

          (8) Executive agency.--The term ``executive agency'' 
        means--
                  (A) * * *

           *       *       *       *       *       *       *

                  (C) an independent establishment as defined 
                in section 104 of title 5, except that the term 
                does not include the Government Accountability 
                Office; [and]
                  (D) a wholly owned Government corporation as 
                defined in section 9101(3) of title 31[.]; and
                  (E) the United States Postal Service and the 
                Postal Regulatory Commission.

           *       *       *       *       *       *       *


           MINORITY VIEWS ON H.R. 2309, THE POSTAL REFORM ACT

    We respectfully but strongly oppose H.R. 2309, the Postal 
Reform Act, as ordered reported by the Committee on October 13, 
2011.
    The United States Postal Service stands at the center of a 
trillion dollar commercial industry that is responsible for 8.3 
million Americans jobs. The Postal Service alone employs more 
than 500,000 Americans, including nearly 125,000 veterans, who 
process and distribute approximately 40% of the world's mail 
volume. In fiscal year 2011, the Postal Service delivered mail 
to more than 150 million households and businesses six days a 
week and generated approximately $66 billion in revenue.
    Over the past five years, however, total mail volume has 
declined significantly, dropping from 213 billion pieces in 
2006 to 168 billion pieces in 2011. First-class mail volume, 
which is the most profitable class of mail, continues to 
decline as customers opt for other forms of communication, such 
as e-mail, mobile telephone service, and internet-based social 
networking. According to the Postal Service, first class mail 
has dropped from approximately 100 billion pieces in 2006 to 
under 74 billion pieces in 2011.
    Compounding this problem, the Postal Service is required to 
prefund, at an accelerated and inflexible rate, retiree health 
care benefits. This burdensome requirement is not imposed upon 
any other federal government agency or private sector entity 
and has caused a severe strain on the Postal Service's 
finances.
    In addition, the Postal Service's viability is also 
hampered by various operational restrictions, as well as a 
cumbersome governance structure.
    As a result of these factors, the Postal Service faces 
significant financial challenges. For instance, between fiscal 
years 2007 and 2011, the Postal Service reported a net loss of 
over $25 billion. The Postal Service has taken on $13 billion 
in debt over the past five years in order to keep pace with 
shrinking revenue and rising costs. The Postal Service reports 
that, under its current liquidity situation, it has only 10 to 
15 days' worth of cash on hand to meet operating expenses. 
These margins that are expected to continue to decline going 
forward absent Congressional action.
    Faced with these challenges, the Postal Service has taken a 
number of actions to reduce its costs. For example, the Postal 
Service has reduced the size of its workforce by more than 
100,000 employees over the past four years. It has also worked 
with its largest employee labor union to reach a new collective 
bargaining agreement that will save approximately $3.8 billion 
over the next four and a half years. It has also increased 
mailing service prices to the fullest extent possible under the 
Congressionally mandated Consumer Price Index cap.
    Despite these reforms, the Postal Service continues to 
struggle to keep pace with a shrinking marketplace. It is clear 
that the Postal Service must continue to right-size its 
workforce, realign its network of facilities, and reorient its 
operations to meet the demands of the 21st Century economy. 
This treasured institution must reform its operations in a way 
that will enable it to continue to bind our nation together 
while enabling it to function as a self-sustaining business 
entity. The Postal Service must adapt in order to survive.
    Congress should assist the Postal Service in pursuing these 
goals through comprehensive and bipartisan postal reform 
legislation. Congress must provide the Postal Service with the 
tools necessary to reduce its workforce in a sensible and 
compassionate way, adjust its network of retail and mail 
processing facilities, and pursue new lines of business that 
meet consumers' changing needs.
    Unfortunately, H.R. 2309 fails to achieve these goals. It 
employs a heavy-handed and authoritarian approach to the effort 
to return the Postal Service to financial solvency. It also 
contains a series of unfunded intergovernmental and private 
sector mandates that raise Constitutional concerns and could 
prove counterproductive by driving more volume out of the mail 
stream. It would slash services, abrogate collective bargaining 
agreements, and maintain the onerous retiree health benefits 
prefunding requirement. The bill mandates the establishment of 
costly bureaucratic Commissions and governing Boards that may 
be no more successful than the Postal Service's existing reform 
efforts.
    Instead of pursuing policies that will essentially 
dismantle the Postal Service, Congress should be advancing 
bipartisan legislation that will enable the Postal Service to 
surmount its financial challenges by implementing reforms in 
three core areas: personnel, profitability, and performance.
    First, the Postal Service should not be forced to take on 
additional debt, but instead should be granted full access to 
the $10.9 billion surplus in its Federal Employee Retirement 
System (FERS) account--funds that rightfully belong to the 
Postal Service. This existing surplus should be used to 
incentivize the retirement of 100,000 or more active Postal 
Service employees in a compassionate manner that does not 
abrogate existing contracts between management and workers that 
were negotiated in good faith. This action will also help 
reduce the Postal Service's debt burden and allow it to pursue 
operational and capital enhancements to improve its future 
viability.
    Second, the Postal Service should be empowered to function 
more like a business by focusing on profitability and 
accountability to stakeholders, who in this case are ratepayers 
and the American public. The Postal Service should be permitted 
to leverage its unique presence in communities across the 
country to offer new and novel services and products, such as 
check-cashing, digital currency, and enhanced logistics and 
warehousing services.
    Third, the Postal Service's future profitability would be 
significantly improved if it were granted some level of 
regulatory relief, pricing flexibility through revisiting the 
composition of the rate cap, and greater leeway to reduce its 
brick and mortar footprint through a deliberative and 
transparent consolidation and co-location strategy.
    Although many of these proposals are included in H.R. 2967, 
the Innovate to Deliver Act of 2011, to date the Committee has 
declined to consider this legislation.
    The Postal Service reaches every corner of every state and 
touches the lives of millions of Americans on a daily basis. 
Rather than unilaterally advancing heavy-handed legislation 
that will devastate the Postal Service and punish workers, we 
should be working in a collaborative and bipartisan fashion to 
develop reform measures that will create the environment in 
which one of America's most trusted public institutions will be 
able to continue to implement its universal service mandate 
while meeting its operational costs.

                                   Elijah E. Cummings, Ranking Member
                                   Stephen F. Lynch, Ranking Member, 
                                       Subcommittee on Federal 
                                       Workforce, U.S. Postal Service, 
                                       and Labor Policy.

                                  
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