[House Report 117-89]
[From the U.S. Government Publishing Office]


117th Congress     }                                   {  Rept. 117-89
                        HOUSE OF REPRESENTATIVES
 1st Session       }                                   {       Part 1

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



 
                   POSTAL SERVICE REFORM ACT OF 2021

                                _______
                                

                 July 16, 2021.--Ordered to be printed

                                _______
                                

 Mrs. Carolyn B. Maloney of New York, from the Committee on Oversight 
                  and Reform, submitted the following

                              R E P O R T

                        [To accompany H.R. 3076]

    The Committee on Oversight and Reform, to whom was referred 
the bill (H.R. 3076) to provide stability to and enhance the 
services of the United States Postal Service, and for other 
purposes, having considered the same, reports favorably thereon 
with an amendment and recommends that the bill as amended do 
pass.

                                CONTENTS

                                                                   Page
Summary and Purpose of Legislation...............................    17
Background and Need for Legislation..............................    17
Section-By-Section Analysis......................................    18
Legislative History..............................................    21
Committee Consideration..........................................    21
Roll Call Votes..................................................    21
Explanation of Amendments........................................    22
List of Related Committee Hearings...............................    22
Statement of Oversight Findings and Recommendations of the 
  Committee......................................................    22
Statement of General Performance Goals and Objectives............    22
Application of Law to the Legislative Branch.....................    22
Duplication of Federal Programs..................................    22
Disclosure of Directed Rule Makings..............................    22
Federal Advisory Committee Act Statement.........................    23
Unfunded Mandates Reform Act Statement...........................    23
Earmark Identification...........................................    23
Committee Cost Estimate..........................................    23
New Budget Authority and Congressional Budget Office Cost 
  Estimate.......................................................    23
Changes in Existing Law Made by the Bill, As Reported............    23

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``Postal Service 
Reform Act of 2021''.
  (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.

               TITLE I--POSTAL SERVICE FINANCIAL REFORMS

Sec. 101. Postal Service Health Benefits Program.
Sec. 102. USPS Fairness Act.
Sec. 103. Nonpostal services.

              TITLE II--POSTAL SERVICE OPERATIONAL REFORMS

Sec. 201. Performance targets and transparency.
Sec. 202. Integrated delivery network.
Sec. 203. Review of Postal Service cost attribution guidelines.
Sec. 204. Rural newspaper sustainability.
Sec. 205. Funding of Postal Regulatory Commission.
Sec. 206. Flats operations study and reform.
Sec. 207. Reporting requirements.
Sec. 208. Postal Service transportation selection policy revisions.
Sec. 209. USPS Inspector General oversight of Postal Regulatory 
Commission.

               TITLE I--POSTAL SERVICE FINANCIAL REFORMS

SEC. 101. POSTAL SERVICE HEALTH BENEFITS PROGRAM.

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

``Sec. 8903c. Postal Service Health Benefits Program

  ``(a) Definitions.--In this section--
          ``(1) the term `covered Medicare individual' means an 
        individual who is entitled to benefits under Medicare part A, 
        but excluding an individual who is eligible to enroll under 
        such part under section 1818 or 1818A of the Social Security 
        Act (42 U.S.C. 1395i-2, 1395i-2a);
          ``(2) the term `initial contract year' means the contract 
        year beginning in January of 2023;
          ``(3) the term `initial participating carrier' means a 
        carrier that enters into a contract with the Office to 
        participate in the Postal Service Health Benefits Program 
        during the initial contract year;
          ``(4) the term `Medicare part A' means part A of title XVIII 
        of the Social Security Act (42 U.S.C. 1395c et seq.);
          ``(5) the term `Medicare part B' means part B of title XVIII 
        of the Social Security Act (42 U.S.C. 1395j et seq.);
          ``(6) the term `Office' means the Office of Personnel 
        Management;
          ``(7) the term `Postal Service' means the United States 
        Postal Service;
          ``(8) the term `Postal Service annuitant' means an annuitant 
        enrolled in a health benefits plan under this chapter whose 
        Government contribution is paid pursuant to the requirements of 
        section 8906(g)(2);
          ``(9) the term `Postal Service employee' means an employee of 
        the Postal Service enrolled in a health benefits plan under 
        this chapter whose Government contribution is paid by the 
        Postal Service;
          ``(10) the term `Postal Service Medicare covered annuitant' 
        means an individual who--
                  ``(A) is a Postal Service annuitant; and
                  ``(B) is a covered Medicare individual;
          ``(11) the term `Program' means the Postal Service Health 
        Benefits Program established under subsection (c) within the 
        Federal Employees Health Benefit Program;
          ``(12) the term `Program plan' means a health benefits plan 
        offered under the Program; and
          ``(13) the terms set forth in section 8901 shall apply.
  ``(b) Application.--The requirements under this section shall--
          ``(1) apply to the initial contract year and each contract 
        year thereafter; and
          ``(2) supersede any other provision of this chapter 
        inconsistent with such requirements, as determined by the 
        Office of Personnel Management.
  ``(c) Establishment of the Postal Service Health Benefits Program.--
          ``(1) In general.--The Office shall establish the Postal 
        Service Health Benefits Program under which the Office 
        contracts with carriers to offer health benefits plans as 
        described under this section. Except as otherwise provided in 
        this section, any such contract shall be consistent with the 
        requirements of this chapter for contracts under section 8902 
        with carriers to offer health benefits plans other than under 
        this section. The Program shall--
                  ``(A) to the greatest extent practicable, include 
                plans offered by--
                          ``(i) each carrier for which the total 
                        enrollment in the plans provided under this 
                        chapter includes, in the contract year 
                        beginning in January 2022, 1,500 or more 
                        enrollees who are Postal Service employees or 
                        Postal Service annuitants; and
                          ``(ii) any other carrier determined 
                        appropriate by the Office;
                  ``(B) be available for participation by Postal 
                Service employees and Postal Service annuitants, in 
                accordance with subsection (d);
                  ``(C) provide for enrollment in a plan as an 
                individual, for self plus one, or for self and family; 
                and
                  ``(D) not be available for participation by an 
                individual who is not a Postal Service employee or 
                Postal Service annuitant (except as a member of family 
                of such an employee or annuitant or as provided under 
                paragraph (5)).
          ``(2) Separate postal service risk pool.--The Office shall 
        ensure that each Program plan includes rates that reasonably 
        and equitably reflect the cost of benefits provided to a risk 
        pool consisting solely of Postal Service employees, Postal 
        Service annuitants, and covered members of family of such 
        employees and annuitants (regardless of the health plan, 
        coverage, or benefit program in which such an employee, 
        annuitant, or member of family is enrolled), taking into 
        specific account the change in benefits cost for the Program 
        plan due to the Medicare enrollment requirements under 
        subsection (e) and any savings or subsidies resulting from 
        subsection (f).
          ``(3) Actuarially equivalent coverage.--The Office shall 
        ensure that each carrier participating in the Postal Service 
        Health Benefits Program provides coverage under the Program 
        plans offered by the carrier that is actuarially equivalent, as 
        determined by the Office, to the coverage that the carrier 
        provides under the health benefits plans offered by the carrier 
        under this chapter that are not Program plans.
          ``(4) Applicability of federal employees health benefits 
        program requirements.--Except as otherwise set forth in this 
        section, all provisions of this chapter applicable to health 
        benefits plans offered by carriers under section 8903 or 8903a 
        shall apply to plans offered under the Program.
          ``(5) Application of continuation coverage.--In accordance 
        with rules established by the Office, section 8905a shall apply 
        to health benefits plans offered under this section in the same 
        manner as such section applies to other health benefits plans 
        offered under this chapter.
  ``(d) Election of Coverage.--
          ``(1) In general.--Except as provided in paragraph (2), each 
        Postal Service employee and Postal Service annuitant who elects 
        to receive health benefits coverage under this chapter--
                  ``(A) shall be subject to the requirements of this 
                section; and
                  ``(B) may not enroll in any other health benefits 
                plan offered under any other section of this chapter.
          ``(2) Exceptions.--
                  ``(A) Lack of geographic coverage.--An individual who 
                is a Postal Service employee or Postal Service 
                annuitant may enroll in a health benefits plan offered 
                under any other section of this chapter if the 
                individual resides in a geographic area for which there 
                is not a Program plan in which the individual may 
                enroll.
                  ``(B) Annuitants as of program inception.--
                          ``(i) Current medicare covered annuitants.--
                                  ``(I) In general.--Subject to 
                                subclause (II), in the case of an 
                                individual who, as of January 1, 2023, 
                                is a Postal Service Medicare covered 
                                annuitant who has not enrolled in both 
                                Medicare part A and Medicare part B, 
                                such individual may enroll in a health 
                                benefits plan offered under any other 
                                section of this chapter, and may not 
                                enroll in a Program plan.
                                  ``(II) Program plan enrollment 
                                following medicare parts a and b 
                                enrollment.--In the case of an 
                                individual described in subclause (I) 
                                who subsequent to January 1, 2023, is 
                                enrolled in both Medicare part A and 
                                Medicare part B, beginning with the 
                                first contract year beginning after the 
                                date such individual is enrolled in 
                                both Medicare part A and Medicare part 
                                B, subclause (I) shall no longer apply 
                                to such individual and such individual 
                                may receive health benefits under this 
                                chapter only through a Program plan.
                          ``(ii) Pre-medicare annuitants.--
                                  ``(I) In general.--Subject to 
                                subclause (II), an individual who, as 
                                of January 1, 2023, is a Postal Service 
                                annuitant and is not a Postal Service 
                                Medicare annuitant (for a reason other 
                                than eligibility to enroll in Medicare 
                                part A under section 1818 or 1818A of 
                                the Social Security Act) may enroll in 
                                either a Program plan or in a health 
                                benefits plan offered under any other 
                                section of this chapter.
                                  ``(II) Exception.--In the case of an 
                                individual described in subclause (I) 
                                who enrolls in a Program plan for any 
                                contract year beginning on or after the 
                                date on which the individual becomes a 
                                Postal Service Medicare covered 
                                annuitant, beginning with such contract 
                                year, subclause (I) shall no longer 
                                apply to the individual and the 
                                individual may receive health benefits 
                                under this chapter only through 
                                enrollment in a Program plan.
                  ``(C) Certain employees as of program inception.--
                          ``(i) Legacy coverage.--A Postal Service 
                        employee who is enrolled in a health benefits 
                        plan under this chapter for the contract year 
                        immediately preceding the initial contract year 
                        that is not a health benefits plan offered by 
                        an initial participating carrier may enroll in 
                        either a Program plan or in a health benefits 
                        plan offered under any other section of this 
                        chapter, except that--
                                  ``(I) if the Postal Service employee 
                                changes enrollment to a different 
                                health benefits plan under this chapter 
                                during the open season for the initial 
                                contract year, or after the start of 
                                the initial contract year, the Postal 
                                Service employee may only enroll in a 
                                Program plan;
                                  ``(II) if the health benefits plan in 
                                which such employee is enrolled for 
                                such contract year becomes available as 
                                a Program plan, the Postal Service 
                                employee may only enroll in a Program 
                                plan; and
                                  ``(III) upon becoming a Postal 
                                Service annuitant, if the Postal 
                                Service employee elects to continue 
                                coverage under this chapter, the Postal 
                                Service employee shall enroll in a 
                                Program plan during the open season 
                                that is--
                                          ``(aa) being held when the 
                                        Postal Service employee becomes 
                                        a Postal Service annuitant; or
                                          ``(bb) if the date on which 
                                        the Postal Service employee 
                                        becomes a Postal Service 
                                        annuitant falls outside of an 
                                        open season, the first open 
                                        season following that date.
                          ``(ii) Current employees aged 64 and over.--
                                  ``(I) In general.--Subject to 
                                subclause (II), an individual who, as 
                                of January 1, 2023, is a Postal Service 
                                employee and is at least 64 years of 
                                age may enroll in either a Program plan 
                                or in a health benefits plan offered 
                                under any other section of this 
                                chapter.
                                  ``(II) Exception.--In the case of an 
                                individual described in subclause (I) 
                                who enrolls in a Program plan for any 
                                contract year beginning on or after the 
                                date on which the individual becomes a 
                                Postal Service Medicare covered 
                                annuitant, beginning with such contract 
                                year, subclause (I) shall no longer 
                                apply to the individual and the 
                                individual may receive health benefits 
                                under this chapter only through 
                                enrollment in a Program plan.
                  ``(D) Certain other annuitants.--
                          ``(i) Annuitants and family members excluded 
                        from premium-free medicare part a.--
                                  ``(I) In general.--Subject to 
                                subclause (II), a Postal Service 
                                annuitant who is eligible to enroll in 
                                Medicare Part A under section 1818 or 
                                1818A of the Social Security Act may 
                                enroll in either a Program plan or in a 
                                health benefits plan offered under any 
                                other section of this chapter if the 
                                annuitant--
                                          ``(aa) is eligible to enroll 
                                        in Medicare part A under 
                                        section 1818 or 1818A of the 
                                        Social Security Act; or
                                          ``(bb) includes in the 
                                        annuitant's plan enrollment one 
                                        or more family members who are 
                                        eligible to enroll in Medicare 
                                        part A under section 1818 or 
                                        1818A of such Act.
                                  ``(II) Exception.--In the case of an 
                                annuitant described in subclause (I) 
                                who enrolls in a Program plan for any 
                                contract year beginning on or after the 
                                date on which the annuitant or any 
                                member of family covered by the 
                                enrollment becomes eligible to enroll 
                                in Medicare part A, beginning with such 
                                contract year, subclause (I) shall no 
                                longer apply to the annuitant and the 
                                annuitant may receive health benefits 
                                under this chapter only through 
                                enrollment in a Program plan.
                          ``(ii) Limited or redundant coverage.--An 
                        individual who is a Postal Service annuitant 
                        may enroll either in a Program plan (subject to 
                        subsection (e) of this section and to sections 
                        226(j) and 1837(o)(2) of the Social Security 
                        Act) or in a health benefits plan offered under 
                        any other section of this chapter for any 
                        contract year in which the annuitant or member 
                        of family covered by the enrollment, 
                        respectively, is a covered Medicare individual 
                        and--
                                  ``(I) the annuitant or family member, 
                                respectively, resides in an area where 
                                the Office has determined that no 
                                Medicare providers are available;
                                  ``(II) the annuitant receives 
                                comprehensive medical coverage provided 
                                by the Department of Veterans Affairs 
                                under subchapter II of chapter 17 of 
                                title 38, United States Code; or
                                  ``(III) the annuitant receives 
                                comprehensive medical coverage provided 
                                by the Indian Health Service under the 
                                Indian Health Care Improvement Act (25 
                                U.S.C. 1601 et seq.).
                          ``(iii) Regulations.--Not later than 90 days 
                        after the date of enactment of this section, 
                        the Office shall, in consultation with the 
                        Secretary of Health and Human Services, the 
                        Secretary of Veterans Affairs, and the 
                        Postmaster General, promulgate any regulations 
                        necessary to implement this subparagraph.
  ``(e) Requirement of Medicare Enrollment for Certain Annuitants and 
Their Family Members.--
          ``(1) Annuitants.--Except as provided under subsection 
        (d)(2), a Postal Service Medicare covered annuitant may not 
        enroll under a Program plan unless the annuitant is enrolled in 
        both Medicare part A and Medicare part B.
          ``(2) Medicare covered family members.--In the case of a 
        Postal Service annuitant who is required under this subsection 
        to enroll in Medicare part A and Medicare part B to enroll 
        under the Program, if a member of family of such Postal Service 
        annuitant is a covered Medicare individual or is eligible to 
        enroll in Medicare Part A under section 1818 or 1818A of the 
        Social Security Act, that member of family may not enroll under 
        the Program as a member of family of the Postal Service 
        annuitant unless that member of family is enrolled in both 
        Medicare part A and Medicare part B.
          ``(3) Process for coordinated election of medicare 
        enrollment.--The Office shall establish a process under which--
                  ``(A) Postal Service annuitants and members of family 
                who are subject to the requirements of paragraph (1) or 
                (2)--
                          ``(i) are informed, prior to enrollment under 
                        this section, of such requirement; and
                          ``(ii) receive requests for any additional 
                        information necessary for enrollment in 
                        writing; and
                  ``(B) the Office provides the Secretary of Health and 
                Human Services and the Commissioner of Social Security 
                in a timely manner with such information with respect 
                to such annuitants and members of family and such 
                election as may be required to effect their enrollment 
                and coverage under Medicare part A and Medicare part B 
                and this section in a timely manner, including to 
                effect deemed enrollments, if applicable under sections 
                226(j) and 1837(o) of the Social Security Act, for such 
                continuous period as such annuitant or member of family 
                involved otherwise maintains eligibility for enrollment 
                under Medicare part A and Medicare part B, to have 
                elected to be enrolled under such part (in accordance 
                with such sections) in connection with the enrollment 
                in a Program plan under this section.
  ``(f) Medicare Coordination.--
          ``(1) In general.--The Office shall require each Program plan 
        to provide benefits for covered Medicare individuals (and 
        individuals eligible to enroll in Medicare part A pursuant to 
        section 1818 or 1818A of the Social Security Act) pursuant to 
        the same coordination of benefits method used in connection 
        with plans offered under any other section of this chapter.
          ``(2) Medicare part d prescription drug benefits.--The Office 
        shall require each Program plan to provide prescription drug 
        benefits to any Postal Service annuitant and member of family 
        of such annuitant who is a part D eligible individual (as 
        defined in section 1860D-1(a)(3)(A) of the Social Security Act) 
        through employment-based retiree health coverage (as defined in 
        section 1860D-22(c)(1) of such Act) through a prescription drug 
        plan (as defined in section 1860D-41(a)(14) of such Act).
  ``(g) Postal Service Contribution.--
          ``(1) In general.--Subject to subsection (i), for purposes of 
        applying section 8906(b) to the Postal Service, the weighted 
        average shall be calculated in accordance with paragraphs (2) 
        and (3).
          ``(2) Weighted average calculation.--Not later than October 1 
        of each year (beginning with 2022), the Office shall determine 
        the weighted average of the rates established pursuant to 
        subsection (c)(2) for Program plans that will be in effect 
        during the following contract year with respect to--
                  ``(A) enrollments for self only;
                  ``(B) enrollments for self plus one; and
                  ``(C) enrollments for self and family.
          ``(3) Weighting in computing rates for initial contract 
        year.--In determining such weighted average of the rates for 
        the initial contract year, the Office shall take into account 
        (for purposes of section 8906(a)(2)) the enrollment of Postal 
        Service employees and annuitants in the health benefits plans 
        offered by the initial participating carriers as of March 31, 
        2022.
  ``(h) Reserves.--
          ``(1) Separate reserves.--
                  ``(A) In general.--The Office shall ensure that each 
                Program plan maintains separate reserves (including a 
                separate contingency reserve) with respect to the 
                enrollees in the Program plan in accordance with 
                section 8909. All provisions of section 8909 relating 
                to contingency reserves shall apply to contingency 
                reserves of Program plans in the same manner as to 
                those of other plans under this chapter, except to the 
                extent that such provisions are inconsistent with the 
                requirements of this subsection.
                  ``(B) References.--For purposes of the Program, each 
                reference to `the Government' in section 8909 shall be 
                deemed to be a reference to the Postal Service.
                  ``(C) Amounts to be credited.--The reserves 
                (including the separate contingency reserve) maintained 
                by each Program plan shall be credited with a 
                proportionate amount of the funds in the reserves for 
                health benefits plans offered by the carrier.
          ``(2) Discontinuation of program plan.--In applying section 
        8909(e) relating to a Program plan that is discontinued, the 
        Office shall credit the separate Postal Service contingency 
        reserve maintained under paragraph (1) for that plan only to 
        the separate Postal Service contingency reserves of the Program 
        plans continuing under this chapter.
  ``(i) No Effect on Existing Law.--Nothing in this section shall be 
construed as affecting section 1005(f) of title 39 regarding 
variations, additions, or substitutions to the provisions of this 
chapter.
  ``(j) Health Benefits Education Program.--
          ``(1) Not later than 180 days after the date of enactment of 
        this section, the Postal Service shall establish a Health 
        Benefits Education Program. Under the Program, the Postal 
        Service shall--
                  ``(A) notify annuitants and employees of the Postal 
                Service about the Postal Service Health Benefits 
                Program established under subsection (c)(1);
                  ``(B) provide information regarding the Postal 
                Service Health Benefits Program to such annuitants and 
                employees, including a description of the health care 
                options available under such Program, the enrollment 
                provisions of subsection (d), and the requirement that 
                annuitants and their family members be enrolled in 
                Medicare under subsection (e); and
                  ``(C) in coordination with the Centers for Medicare & 
                Medicaid Services and the Commissioner of Social 
                Security, respond and provide answers to any inquiry 
                from such employees and annuitants about the Postal 
                Service Health Benefits Program or Medicare enrollment.
          ``(2) The Office shall timely provide the Postal Service with 
        such information as the Postal Service determines to be 
        necessary to conduct the Medicare Education Program.''.
          (2) Technical and conforming amendments.--
                  (A) Section 8903(1) of title 5, United States Code, 
                is amended by striking ``two levels of benefits'' and 
                inserting ``2 levels of benefits for enrollees under 
                this chapter generally and 2 levels of benefits for 
                enrollees under the Postal Service Health Benefits 
                Program established under section 8903c''.
                  (B) The table of sections for chapter 89 of title 5, 
                United States Code, is amended by inserting after the 
                item relating to section 8903b the following:

``8903c. Postal Service Health Benefits Program.''.

  (b) Coordination With Medicare.--
          (1) Medicare part a.--Section 226 of the Social Security Act 
        (42 U.S.C. 426) is amended by adding at the end the following 
        new subsection:
  ``(j)(1) In the case of an individual who--
                  ``(A) on or after January 1, 2023, is--
                          ``(i) a Postal Service employee;
                          ``(ii) a Postal Service annuitant who is not 
                        a Postal Service Medicare covered annuitant; or
                          ``(iii) a member of family of a Postal 
                        Service employee or of a Postal Service 
                        annuitant and who is not described in section 
                        1837(o)(1) of this Act; and
                  ``(B) enrolls in a Program plan under section 8903c 
                of title 5, United States Code,
        such individual is deemed to be enrolled under this part, 
        regardless of whether such individual has filed an application 
        under subparagraph (A) or (C) of subsection (a)(2).
          ``(2) Entitlement to hospital benefits under part A by reason 
        of paragraph (1) begins as of--
                  ``(A) in the case of an individual who is a Postal 
                Service employee or a Postal Service annuitant who is 
                eligible to become a Postal Service Medicare covered 
                annuitant, the date on which the individual becomes a 
                Postal Service Medicare covered annuitant or the date 
                of enrollment in a Program plan, whichever is later;
                  ``(B) in the case of an individual who is eligible to 
                enroll under section 1818 or 1818A, the date on which 
                the individual attains such eligibility or the date of 
                enrollment in a Program plan whichever is later; and
                  ``(C) in the case of an individual who is described 
                in paragraph (1)(A)(iii) and is eligible to become a 
                covered Medicare individual, as of the first date the 
                individual becomes a covered Medicare individual or the 
                date of enrollment in a Program plan, whichever is 
                later.
          ``(3) The definitions in section 8903c(a) of title 5, United 
        States Code, shall apply for purposes of this subsection.
          ``(4) Nothing in this subsection shall be construed to 
        deprive any individual of any other method or period of 
        enrollment to which such individual is entitled under this 
        section.''.
          (2) Medicare part b.--
                  (A) Enrollment.--Section 1837 of the Social Security 
                Act (42 U.S.C. 1395p) is amended by adding at the end 
                the following new subsection:
  ``(o)(1) In the case of an individual who--
                  ``(A) as of January 1, 2023, is--
                          ``(i) a Postal Service Medicare covered 
                        annuitant; or
                          ``(ii) a member of family of a Postal Service 
                        employee or of a Postal Service annuitant and 
                        is a covered Medicare individual;
                  ``(B) intends to enroll in a Program plan under 
                section 8903c of title 5, United States Code, for the 
                initial contract year; and
                  ``(C) is not enrolled under this part,
        the individual may elect to be enrolled under this part during 
        a special enrollment period during the 3-month period beginning 
        on January 1, 2023.
          ``(2) In the case of an individual who--
                  ``(A) on or after January 1, 2023, is--
                          ``(i) a Postal Service employee;
                          ``(ii) a Postal Service annuitant who is not 
                        a Postal Service Medicare covered annuitant; or
                          ``(iii) a member of family of a Postal 
                        Service employee or of a Postal Service 
                        annuitant and who is not described in paragraph 
                        (1); and
                  ``(B) enrolls in a Program plan under section 8903c 
                of title 5, United States Code;
        the individual shall be deemed to have enrolled in the medical 
        insurance program established by this part.
          ``(3) The definitions in section 8903c(a) of title 5, United 
        States Code, shall apply for purposes of this subsection.
          ``(4) Nothing in this subsection shall be construed to 
        deprive any individual of any other method or period of 
        enrollment to which such individual is entitled under this 
        section.''.
                  (B) Coverage periods.--Section 1838 of the Social 
                Security Act (42 U.S.C. 1395q) is amended by adding at 
                the end the following new subsection:
  ``(i) Notwithstanding subsection (a)--
          ``(1) in the case of an individual who enrolls under this 
        part pursuant to a special enrollment period under paragraph 
        (1) of section 1837(o), the coverage period under this part 
        shall begin on the date that the individual first has coverage 
        under the Program plan pursuant to the enrollment described in 
        paragraph (1)(B) of such section; and
          ``(2) in the case of an individual who is deemed enrolled 
        under paragraph (2) of section 1837(o), the coverage period 
        under this part shall begin as of--
                  ``(A) in the case of such an individual who is a 
                Postal Service employee or a Postal Service annuitant 
                who is eligible to become a Postal Service Medicare 
                covered annuitant, the date on which the individual 
                becomes a Postal Service Medicare covered annuitant or 
                the date of enrollment in a Program plan, whichever is 
                later;
                  ``(B) in the case of such an individual who is 
                eligible to enroll under section 1818 or 1818A of this 
                Social Security Act, the date on which the individual 
                attains such eligibility or the date of enrollment in a 
                Program plan, whichever is later; and
                  ``(C) in the case of an individual described in 
                paragraph (2)(A)(i)(III) of such section who is 
                eligible to become a covered Medicare individual, as of 
                the first date the individual becomes a covered 
                Medicare individual or the date of enrollment in a 
                Program plan, whichever is later.''.
          (3) Part d egwp contracting conforming amendment.--Section 
        1860D-22(b) of the Social Security Act (42 U.S.C. 1395w-132(b)) 
        is amended by inserting before the period at the end the 
        following: ``, and shall be applied in a manner to facilitate 
        the offering of prescription drug benefits under a Program plan 
        under section 8903c of title 5, United States Code, through 
        employment-based retiree health coverage through a prescription 
        drug plan, as required under subsection (f) of such section, 
        through contracts between such a Program plan and such a 
        prescription drug plan''.
          (4) Waiver of increase of medicare part b premium.--Section 
        1839(b) of the Social Security Act (42 U.S.C. 1395r(b)) is 
        amended by inserting after ``subsection (i)(4) or (l) of 
        section 1837'' the following: ``or pursuant to the special 
        enrollment period under subsection (o)(1) of such section''.

SEC. 102. USPS FAIRNESS ACT.

  (a) Short Title.--This section may be cited as the ``USPS Fairness 
Act''.
  (b) Rational Benefits Funding and Accounting.--
          (1) In general.--Section 8909a of title 5, United States 
        Code, is amended by striking subsection (d) and inserting the 
        following:
  ``(d)(1) Not later than June 30, 2024, and by June 30 of each 
succeeding year, the Office shall compute, for the most recently 
concluded fiscal year, the difference between--
                  ``(A) any Government contributions required to be 
                paid from the Fund under section 8906(g)(2)(A); and
                  ``(B) the net claims costs under the enrollment of 
                the individuals described in section 8906(g)(2)(A).
          ``(2) Not later than September 30 of each year in which the 
        Office makes a computation under paragraph (1), the United 
        States Postal Service shall pay into the Fund the difference 
        computed in such paragraph.
  ``(e) Any computation of the liability of the Fund required by law 
shall be based on--
          ``(1) the net present value of the future net claims costs 
        with respect to--
                  ``(A) current annuitants of the United States Postal 
                Service as of the end of the fiscal year ending on 
                September 30 of the relevant reporting year; and
                  ``(B) current employees of the United States Postal 
                Service who would, as of September 30 of that year,--
                          ``(i) be eligible to become annuitants 
                        pursuant to section 8901(3)(A); and
                          ``(ii) if they were retired as of that date, 
                        meet the criteria for coverage of annuitants 
                        under section 8905(b);
          ``(2) economic and actuarial methods and assumptions 
        consistent with the methods and assumptions used in determining 
        the Postal surplus or supplemental liability under section 
        8348(h); and
          ``(3) any other methods and assumptions, including a health 
        care cost trend rate, that the Director of the Office 
        determines to be appropriate.
  ``(f) After consultation with the United States Postal Service, the 
Office shall promulgate any regulations the Office determines necessary 
under this subsection.
  ``(g) For purposes of this section, the term `net claims costs' shall 
mean the difference between--
          ``(1) the sum of--
                  ``(A) the costs incurred by a carrier in providing 
                health services to, paying for health services provided 
                to, or reimbursing expenses for health services 
                provided to, annuitants of the United States Postal 
                Service and any other persons covered under the 
                enrollment of such annuitants; and
                  ``(B) an amount of indirect expenses reasonably 
                allocable to the provision, payment, or reimbursement 
                described in subparagraph (A), as determined by the 
                Office; and
          ``(2) the amount withheld from the annuity of or paid by 
        annuitants of the United States Postal Service under section 
        8906.''.
          (2) Clerical amendment.--The heading of section 8909a of 
        title 5, United States Code, is amended by striking ``Benefit'' 
        and inserting ``Benefits''.
  (c) Application.--
          (1) Cancellation of payments.--Any payment required from the 
        Postal Service under section 8909a of title 5, United States 
        Code, as in effect on the day before the date of enactment of 
        this Act that remains unpaid as of such date of enactment is 
        canceled.
          (2) Effect of this act.--In any determination relating to the 
        future liability for retiree health benefits of the United 
        States Postal Service or the Postal Service Retiree Health 
        Benefits Fund, the Office of Personnel Management shall take 
        into account the actual and reasonably expected effects of this 
        Act.
  (d) Use of Funds From Sale of Real Property for Certain Payments.--
          (1) In general.--Chapter 29 of title 39, United States Code, 
        is amended by adding at the end the following:

``Sec. 2903. Use of funds from sale of property

  ``In the event that the Postal Service permanently ceases operations, 
any funds derived from the sale of any real property owned by the 
Postal Service shall be used to pay any outstanding liability with 
respect to the salaries and expenses of any Postal Service employee. 
The balance of any remaining funds shall be deposited into the Postal 
Service Retiree Health Benefits Fund established under section 8909a of 
title 5.''.
          (2) Clerical amendment.--The table of sections of such 
        chapter is amended by adding after the item relating to section 
        2902 the following new item:

``2903. Use of funds from sale of property.''.

SEC. 103. NONPOSTAL SERVICES.

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

                    ``CHAPTER 37--NONPOSTAL SERVICES

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

``Sec. 3701. Purpose

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

``Sec. 3702. Definitions

  ``In this chapter--
          ``(1) the term `nonpostal services' is limited to services 
        offered by the Postal Service that are expressly authorized by 
        this chapter and are not postal products or services;
          ``(2) the term `attributable costs' has the meaning given 
        such term in section 3631; and
          ``(3) the term `year' means a fiscal year.

``Sec. 3703. Postal Service program for State governments

  ``(a) In General.--Notwithstanding any other provision of this title, 
the Postal Service may establish a program to enter into agreements 
with an agency of any State government, local government, or tribal 
government to provide property and services on behalf of such agencies 
for non-commercial products and services, but only if such property and 
services--
          ``(1) provide enhanced value to the public, such as by 
        lowering the cost or raising the quality of such services or by 
        making such services more accessible;
          ``(2) do not interfere with or detract from the value of 
        postal services, including--
                  ``(A) the cost and efficiency of postal services; and
                  ``(B) unreasonably restricting access to postal 
                retail service, such as customer waiting time and 
                access to parking; and
          ``(3) provide a reasonable contribution to the institutional 
        costs of the Postal Service, defined as reimbursement that 
        covers at least 100 percent of attributable costs of all 
        property and services provided under each relevant agreement in 
        each year.
  ``(b) Public Notice.--At least 90 days before offering a service 
under the program, the Postal Service shall make available to the 
public on its website--
          ``(1) the agreement with the agency regarding such service; 
        and
          ``(2) a business plan that describes the specific service to 
        be provided, the enhanced value to the public, terms of 
        reimbursement, the estimated annual reimbursement to the Postal 
        Service, and the estimated percentage of attributable Postal 
        Service costs that will be covered by reimbursement (with 
        documentation to support the estimates).
  ``(c) Public Comment.--Before offering a service under the program, 
the Postal Service shall provide for a public comment period of at 
least 30 days that allows the public to post comments relating to the 
provision of such services on the Postal Service website. The Postal 
Service shall make reasonable efforts to provide written responses to 
the comments on such website at least 30 days before offering such 
services.
  ``(d) Approval Required.--The Postal Service may not establish the 
program under subsection (a) unless the Governors of the Postal Service 
approve such program by a recorded vote that is publicly disclosed on 
the Postal Service website with a majority of the total Governors 
voting for approval.
  ``(e) Application of Reporting Requirements.--For purposes of the 
reporting requirements under section 3705, the Postal Service shall 
submit a separate report for each agreement with an agency entered into 
under subsection (a) analyzing the costs, revenues, rates, and quality 
of service for the provision of all services under such agreement, 
including information demonstrating that the agreement satisfies the 
requirements of paragraphs (1) through (3) of subsection (a).
  ``(f) Regulations Required.--The Postal Regulatory Commission shall 
issue such regulations as are necessary to carry out this section.
  ``(g) Definitions.--For the purpose of this section--
          ``(1) the term `local government' means a county, 
        municipality, city, town, township, local public authority, 
        school district, special district, intrastate district, council 
        of governments, or regional or interstate government entity;
          ``(2) the term `State government' includes the government of 
        the District of Columbia, the Commonwealth of Puerto Rico, the 
        United States Virgin Islands, Guam, American Samoa, the 
        Commonwealth of the Northern Mariana Islands, and any other 
        territory or possession of the United States;
          ``(3) the term `tribal government' means the government of an 
        Indian tribe, as that term is defined in section 4(e) of the 
        Indian Self-Determination Act (25 U.S.C. 450b(e)); and
          ``(4) the term `United States', when used in a geographical 
        sense, means the States, the District of Columbia, the 
        Commonwealth of Puerto Rico, the United States Virgin Islands, 
        Guam, American Samoa, the Commonwealth of the Northern Mariana 
        Islands, and any other territory or possession of the United 
        States.
  ``(h) Confidential Information.--Subsection (b) or (c) shall not be 
construed as requiring the Postal Service to disclose to the public any 
information--
          ``(1) described in section 410(c); or
          ``(2) exempt from public disclosure under section 552(b) of 
        title 5.

``Sec. 3704. Postal Service program for other Government agencies

  ``(a) In General.--The Postal Service may establish a program to 
provide property and services to other Government agencies within the 
meaning of section 411, but only if such program provides a reasonable 
contribution to the institutional costs of the Postal Service, defined 
as reimbursement by each agency that covers at least 100 percent of the 
attributable costs of all property and service provided by the Postal 
Service in each year to such agency.
  ``(b) Application of Reporting Requirements.--For purposes of the 
reporting requirements under section 3705, the Postal Service shall 
submit a separate report for each agreement with an agency entered into 
under subsection (a) analyzing the costs, revenues, rates, and quality 
of service for the provision of all services under such agreement, 
including information demonstrating that the agreement satisfies the 
requirements of subsection (a).

``Sec. 3705. Transparency and accountability for nonpostal services

  ``(a) Annual Report to the Commission.--
          ``(1) In general.--Not later than 90 days after the last day 
        of each year, the Postal Service shall submit to the Postal 
        Regulatory Commission a report that analyzes costs, revenues, 
        rates, and quality of service for each agreement for the 
        provision of property and services under this chapter, using 
        such methodologies as the Commission may prescribe, and in 
        sufficient detail to demonstrate compliance with the 
        requirements of this chapter.
          ``(2) Supporting matter.--A report submitted under paragraph 
        (1) shall include any nonpublic annex, the working papers, and 
        any other supporting matter of the Postal Service and the 
        Inspector General related to the information submitted in such 
        report.
  ``(b) Content and Form of Report.--
          ``(1) In general.--The Postal Regulatory Commission shall, by 
        regulation, prescribe the content and form of the report 
        required under subsection (a). In prescribing such regulations, 
        the Commission shall give due consideration to--
                  ``(A) providing the public with timely, adequate 
                information to assess compliance;
                  ``(B) avoiding unnecessary or unwarranted 
                administrative effort and expense on the part of the 
                Postal Service; and
                  ``(C) protecting the confidentiality of information 
                that is commercially sensitive or is exempt from public 
                disclosure under section 552(b) of title 5.
          ``(2) Revised requirements.--The Commission may, on its own 
        motion or on request of any interested party, initiate 
        proceedings to improve the quality, accuracy, or completeness 
        of Postal Service data required by the Commission if--
                  ``(A) the attribution of costs or revenues to 
                property or services under this chapter has become 
                significantly inaccurate or can be significantly 
                improved;
                  ``(B) the quality of service data provided to the 
                Commission for a report under this chapter has become 
                significantly inaccurate or can be significantly 
                improved; or
                  ``(C) such revisions are, in the judgment of the 
                Commission, otherwise necessitated by the public 
                interest.
  ``(c) Audits.--The Inspector General shall regularly audit the data 
collection systems and procedures used in collecting information and 
preparing the report required under subsection (a). The results of any 
such audit shall be submitted to the Postal Service and the Postal 
Regulatory Commission.
  ``(d) Confidential Information.--
          ``(1) In general.--If the Postal Service determines that any 
        document or portion of a document, or other matter, which it 
        provides to the Postal Regulatory Commission in a nonpublic 
        annex under this section contains information described in 
        section 410(c), or exempt from public disclosure under section 
        552(b) of title 5, the Postal Service shall, at the time of 
        providing such matter to the Commission, notify the Commission 
        of its determination, in writing, and describe with 
        particularity the documents (or portions of documents) or other 
        matter for which confidentiality is sought and the reasons 
        therefor.
          ``(2) Treatment.--Any information or other matter described 
        in paragraph (1) to which the Commission gains access under 
        this section shall be subject to paragraphs (2) and (3) of 
        section 504(g) in the same way as if the Commission had 
        received notification with respect to such matter under section 
        504(g)(1).
  ``(e) Annual Compliance Determination.--
          ``(1) Opportunity for public comment.--Upon receiving a 
        report required under subsection (a), the Postal Regulatory 
        Commission shall promptly--
                  ``(A) provide an opportunity for comment on such 
                report by any interested party; and
                  ``(B) appoint an officer of the Commission to 
                represent the interests of the general public.
          ``(2) Determination of compliance or noncompliance.--Not 
        later than 90 days after receiving a report required under 
        subsection (a), the Postal Regulatory Commission shall make a 
        written determination as to whether the nonpostal activities 
        carried out during the applicable year were or were not in 
        compliance with the provisions of this chapter. For purposes of 
        this paragraph, any case in which the requirements for coverage 
        of attributable costs have not been met shall be considered to 
        be a case of noncompliance. If, with respect to a year, no 
        instance of noncompliance is found to have occurred, the 
        determination shall be to that effect. Such determination of 
        noncompliance shall be included with the annual compliance 
        determination required under section 3653.
          ``(3) Noncompliance.--If a timely written determination of 
        noncompliance is made under paragraph (2), the Postal 
        Regulatory Commission shall take appropriate action. If the 
        requirements for coverage of attributable costs specified by 
        this chapter are not met, the Commission shall, within 60 days 
        after the determination, prescribe remedial action to restore 
        compliance as soon as practicable, including the full 
        restoration of revenue shortfalls during the following year. 
        The Commission may order the Postal Service to discontinue a 
        nonpostal service under section 3703 that persistently fails to 
        meet cost coverage requirements.
          ``(4) Deliberate noncompliance.--In the case of deliberate 
        noncompliance by the Postal Service with the requirements of 
        this chapter, the Postal Regulatory Commission may order, based 
        on the nature, circumstances, extent, and seriousness of the 
        noncompliance, a fine (in the amount specified by the 
        Commission in its order) for each incidence of such 
        noncompliance. All receipts from fines imposed under this 
        subsection shall be deposited in the general fund of the 
        Treasury.
  ``(f) Regulations Required.--The Postal Regulatory Commission shall 
issue such regulations as are necessary to carry out this section.''.
          (2) Clerical amendment.--The table of chapters for part IV of 
        title 39, United States Code, is amended by adding after the 
        item relating to chapter 36 the following:

``37. Nonpostal services....................................    3701''.

  (b) Conforming Amendments.--
          (1) Section 404.--Section 404(e) of title 39, United States 
        Code, is amended--
                  (A) in paragraph (2), by inserting after 
                ``subsection'' the following: ``, or any nonpostal 
                products or services authorized by chapter 37''; and
                  (B) by adding at the end the following:
  ``(6) Licensing which, before the date of enactment of this 
paragraph, has been authorized by the Postal Regulatory Commission for 
continuation as a nonpostal service may not be used for any purpose 
other than--
          ``(A) to continue to provide licensed mailing, shipping, or 
        stationery supplies offered as of June 23, 2011; or
          ``(B) to license other goods, products, or services, the 
        primary purpose of which is to promote and enhance the image or 
        brand of the Postal Service.
  ``(7) Nothing in this section shall be construed to prevent the 
Postal Service from establishing nonpostal products and services that 
are expressly authorized by chapter 37.''.
          (2) Section 411.--The last sentence of section 411 of title 
        39, United States Code, is amended by striking ``including 
        reimbursability'' and inserting ``including reimbursability 
        within the limitations of chapter 37''.
          (3) Treatment of existing nonpostal services.--All individual 
        nonpostal services, provided directly or through licensing, 
        that are continued pursuant to section 404(e) of title 39, 
        United States Code, shall be considered to be expressly 
        authorized by chapter 37 of such title (as added by subsection 
        (a)(1)) and shall be subject to the requirements of such 
        chapter.
          (4) Repeal of certain limitations on experimental products.--
        Section 3641 of title 39, United States Code, is amended--
                  (A) by striking subsections (b), (d), and (e); and
                  (B) by redesignating--
                          (i) subsection (c) as subsection (b); and
                          (ii) subsections (f), (g), (h), and (i) as 
                        subsections (c), (d), (e), and (f), 
                        respectively.

              TITLE II--POSTAL SERVICE OPERATIONAL REFORMS

SEC. 201. PERFORMANCE TARGETS AND TRANSPARENCY.

  (a) In General.--Subchapter VII of chapter 36 of title 39, United 
States Code, is amended by inserting after section 3691 the following:

``Sec. 3692. Performance targets and transparency

  ``(a) Performance Targets.--Each year, to ensure that mail service 
for postal customers meets the service standards for market-dominant 
products, established under section 3691, the Postal Service shall--
          ``(1) at least 60 days before the beginning of the fiscal 
        year in which they will apply, establish and provide to the 
        Postal Regulatory Commission reasonable targets for 
        performance; and
          ``(2) provide the previous fiscal years' performance targets 
        in its Annual Compliance Report to the Postal Regulatory 
        Commission for evaluation of compliance.
  ``(b) Public Performance Dashboard.--
          ``(1) In general.--The Postal Service shall develop and 
        maintain a publicly available Website with an interactive web-
        tool that provides performance information for market-dominant 
        products that is updated on a weekly basis.
          ``(2) Performance information.--The performance information 
        provided on the Website shall include--
                  ``(A) the type of market-dominant product;
                  ``(B) geographic area at the nationwide, Area, and 
                District level;
                  ``(C) time periods showing performance information in 
                annual, quarterly, monthly, and weekly segments;
                  ``(D) comparisons of performance information for 
                market-dominant products for previous time periods to 
                facilitate identification of performance trends; and
                  ``(E) the current performance targets and previous 
                fiscal year performance targets, established under 
                subsection (a)(1).
          ``(3) Comprehensibility.--The Website shall include plain 
        language descriptions of the elements required under paragraph 
        (2) and information on the collection process, measurement 
        methodology, completeness, accuracy, and validity of the 
        performance information provided on the Website.
          ``(4) Address search functionality.--The Website shall 
        include functionality to enable a user to search for 
        performance information by street address, ZIP Code, or post 
        office box.
          ``(5) Format.--The performance information provided on the 
        Website shall be made available--
                  ``(A) in a manner that--
                          ``(i) presents the information referenced 
                        under paragraph (2) on an interactive 
                        dashboard;
                          ``(ii) is searchable and may be sorted and 
                        filtered by the elements described in paragraph 
                        (2); and
                          ``(iii) to the extent practicable, enables 
                        any person or entity to download in bulk--
                                  ``(I) such performance information; 
                                and
                                  ``(II) the results of a search by the 
                                elements described in paragraph (2);
                  ``(B) in an open format that permits any individual 
                or entity to reuse and analyze the performance 
                information; and
                  ``(C) in a structured data format, to the extent 
                practicable.
          ``(6) Consultation.--The Postal Service shall regularly 
        consult with the Postal Regulatory Commission on appropriate 
        features and information to be included on the Website.
          ``(7) Public input.--The Postal Service shall--
                  ``(A) solicit public input on the design and 
                implementation of the Website; and
                  ``(B) maintain a public feedback tool, to ensure 
                features of, and information on, the Website is usable 
                and understandable.
          ``(8) Deadline.--The Website shall be implemented and made 
        available to the public not later than the date on which the 
        performance targets are provided to the Postal Regulatory 
        Commission under subsection (a)(1).
          ``(9) Availability.--A link and plain language description of 
        the Website shall be made available on the website where the 
        performance targets and measurements established under 
        subsection (a)(1) are made available.
          ``(10) Reporting.--The dashboard referred to in paragraph 
        (5)(A)(i) shall be referenced in the Annual Performance Plan 
        under section 2803, the Annual Performance Report under section 
        2804, and the Annual Report under section 2402.
          ``(11) Definitions.--In this subsection--
                  ``(A) Performance information.--The term `performance 
                information' means the objective external performance 
                measurements established under section 3691(b)(1)(D).
                  ``(B) Website.--The term `Website' means the website 
                described in paragraph (1).''.
  (b) Clerical Amendment.--The table of sections for such subchapter is 
amended by inserting after the item relating to section 3691 the 
following:

``3692. Performance targets and transparency.''.

SEC. 202. INTEGRATED DELIVERY NETWORK.

  Section 101(b) of title 39, United States Code, is amended by 
inserting before ``The Postal Service'' the following: ``The Postal 
Service shall maintain an integrated network for the delivery of 
market-dominant and competitive products (as defined in chapter 36 of 
this title). Delivery shall occur at least six days a week, except 
during weeks that include a Federal holiday or in emergency situations, 
such as natural disasters.''.

SEC. 203. REVIEW OF POSTAL SERVICE COST ATTRIBUTION GUIDELINES.

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

SEC. 204. RURAL NEWSPAPER SUSTAINABILITY.

  Section 3626(h) of title 39, United States Code, is amended by 
striking ``10 percent'' and inserting ``50 percent''.

SEC. 205. FUNDING OF POSTAL REGULATORY COMMISSION.

  (a) In General.--Subsection (d) of section 504 of title 39, United 
States Code, is amended to read as follows:
  ``(d)(1) Not later than September 1 of each fiscal year (beginning 
with fiscal year 2022), the Postal Regulatory Commission shall submit 
to the Postal Service a budget of the Commission's expenses, including 
expenses for facilities, supplies, compensation, and employee benefits, 
for the following fiscal year. Any such budget shall be deemed approved 
as submitted if the Governors fail to adjust the budget in accordance 
with paragraph (2).
  ``(2)(A) Not later than 30 days after receiving a budget under 
paragraph (1), the Governors holding office, by unanimous written 
decision, may adjust the total amount of funding requested in such 
budget. Nothing in this subparagraph may be construed to authorize the 
Governors to adjust any activity proposed to be funded by the budget.
  ``(B) If the Governors adjust the budget under subparagraph (A), the 
Postal Regulatory Commission shall adjust the suballocations within 
such budget to reflect the total adjustment made by the Governors. The 
budget shall be deemed approved on the date the Commission makes any 
such adjustments. The Commission may make further adjustments to the 
suballocations within such budget as necessary.
  ``(3) Expenses incurred under any budget approved under this 
subsection shall be paid out of the Postal Service Fund established 
under section 2003.''.
  (b) Conforming Amendments.--Title 39, United States Code, is 
amended--
          (1) in section 2003(e), by striking ``(B) all expenses of the 
        Postal Regulatory Commission, subject to the availability of 
        amounts appropriated under section 504(d);'' and inserting 
        ``(B) all expenses of the Postal Regulatory Commission, 
        pursuant to section 504(d);''; and
          (2) in section 2009--
                  (A) by striking ``, (2)'' and inserting ``, and 
                (2)''; and
                  (B) by striking ``, and (3) the Postal Regulatory 
                Commission requests to be appropriated, out of the 
                Postal Service Fund, under section 504(d) of this 
                title''.

SEC. 206. FLATS OPERATIONS STUDY AND REFORM.

  (a) Flats Operations Study.--
          (1) In general.--The Postal Regulatory Commission, in 
        consultation with the Inspector General of the United States 
        Postal Service, shall conduct a study to--
                  (A) comprehensively identify the causes of 
                inefficiencies in the collection, sorting, 
                transportation, and delivery of Flats; and
                  (B) quantify the effects of the volume trends, 
                investments decisions, excess capacity, and operational 
                inefficiencies of the Postal Service on the direct and 
                indirect costs of the Postal Service that are 
                attributable to Flats.
          (2) Postal service assistance.--For the purposes of carrying 
        out the study under paragraph (1), the Postal Service shall, 
        upon request by the Postal Regulatory Commission, consult with 
        the Postal Regulatory Commission and provide--
                  (A) access to Postal Service facilities to personnel 
                of the Postal Regulatory Commission; and
                  (B) information and records necessary to conduct such 
                study.
          (3) Report.--Not later than one year after the date of the 
        enactment of this Act, the Postal Regulatory Commission shall 
        submit to Congress and the Postmaster General a report on the 
        findings of the study conducted under paragraph (1).
          (4) Flats defined.--In this subsection, the term ``Flats'' 
        means products that meet the physical standards described in 
        the Domestic Mail Manual (as in effect on the date of the 
        enactment of this Act) for Flats mail for any class of mail.
  (b) Flats Operations Reform.--
          (1) In general.--Not later than six months after the date on 
        which the Postal Regulatory Commission submits the report 
        described in subsection (a)(3), the Postal Service shall--
                  (A) develop and implement a plan to remedy each 
                inefficiency identified in the study conducted under 
                subsection (a)(1) to the extent practicable; and
                  (B) if the Postal Service determines that remedying 
                any such inefficiency is not practicable, provide to 
                Congress and the Postal Regulatory Commission an 
                explanation why remedying such inefficiency is not 
                practicable, including whether it may become 
                practicable to remedy such inefficiency at a later 
                time.
          (2) Implementation requirements.--Prior to implementing the 
        plan described in paragraph (1)--
                  (A) the Postal Regulatory Commission must approve the 
                plan; and
                  (B) the Postal Service shall provide an adequate 
                opportunity for public comment on the plan.
          (3) Completion notice.--On the date on which the plan 
        described in paragraph (1) is fully implemented, as determined 
        by the Postmaster General, the Postmaster General shall submit 
        to Congress and the Postal Regulatory Commission a written 
        notice of such implementation.
  (c) Subsequent Rate Adjustments.--During the five-year period 
beginning on the date on which the Postmaster General submits the 
notice under subsection (b)(3), the Postal Service shall consider the 
findings of the report described in subsection (a)(3) and the efficacy 
of the plan described in subsection (b)(1) in remedying the 
inefficiencies identified in the study conducted under subsection 
(a)(1) when making any adjustment to the rate of a market-dominant 
product (as defined in section 102 of title 39, United States Code).

SEC. 207. REPORTING REQUIREMENTS.

  (a) In General.--Not later than six months after the date of the 
enactment of this Act, and every six months thereafter, the Postmaster 
General shall submit to the President, the Postal Regulatory 
Commission, the Committee on Homeland Security and Governmental Affairs 
of the Senate, and the Committee on Oversight and Reform of the House 
of Representatives a report on the operations and financial condition 
of the Postal Service during the six-month period ending on the date on 
which the Postmaster General submits such report.
  (b) Contents.--Each report submitted under this section shall include 
updates, details of changes from previous standards and requirements, 
and assessments of progress being made on the operations and financial 
condition of the Postal Service, including--
          (1) the actual mail and package volume growth relative to any 
        mail or package volume growth projections previously made or 
        relied upon by the Postal Service, including a discussion of 
        the reasons for the differences in projections and the 
        associated adjustments being made in order to accommodate any 
        such differences;
          (2) the effect of pricing changes on product volume for 
        market-dominant and competitive products, and associated 
        revenue effects on financial projections, including a 
        discussion of the reasons behind the differences in projections 
        and associated adjustments being made;
          (3) customer use of network distribution centers and 
        processing and distribution centers, and associated costs and 
        revenue effects;
          (4) the status of, and any substantial programmatic changes 
        to, the USPS Connect program relative to previous plans by the 
        Postal Service, including online sales and customer 
        expectations regarding shipping speeds and shopping preferences 
        relative to projections, as well as associated implementation 
        costs and revenue effects on the financial projects;
          (5) the use of Priority Mail, Priority Mail Express, First-
        Class Package Service, and Parcel Select services (as such 
        terms are defined in the Domestic Mail Classification Schedule 
        as in effect on the date of the enactment of this Act) among 
        businesses of various sizes, and associated revenue effects;
          (6) the use of USPS Connect Returns service among customers, 
        and associated implementation costs and revenue effects;
          (7) the use of USPS E-Commerce Marketplace among customers, 
        and associated implementation costs and revenue effects;
          (8) updates on the reliability, efficiency, and cost-
        effectiveness of the transportation network, including the 
        manner in which ground transportation is utilized over air 
        transportation for types of products;
          (9) a review of efforts to enhance employee training, safety, 
        and wellbeing, including associated effects on employee 
        recruitment, satisfaction, and retention;
          (10) a review of efforts being made to improve employee 
        allocation, including changes of non-career employees to career 
        status, and any associated impacts to operational expenses and 
        processing, transportation, and delivery efficiency;
          (11) the rate of planned investment into Postal Service 
        processing, transportation, and delivery equipment and 
        infrastructure for market-dominant and competitive products, 
        and a review of any associated effects on operational expenses 
        and efficiency;
          (12) changes to network distribution centers and the 
        expansion of regional distribution centers, including costs 
        associated with the changes and any realized reduction in 
        operational expenses or improved resource efficiencies;
          (13) a review of the ability of the Postal Service to meet 
        performance targets established under section 3692(a)(1)(A) of 
        title 39, United States Code;
          (14) a discussion of the progress of the Postal Service in 
        achieving any new, self-funded investments, including the 
        amounts realized and expended to date, and a discussion of the 
        reasons behind any disparities in the assumptions regarding the 
        expected progress of the Postal Service getting new, self-
        funded investments to accommodate changes; and
          (15) any other information the Postal Service determines 
        relevant, such as barriers or unanticipated events, in order to 
        help the Postal Regulatory Commission, Congress, the President, 
        and the American public evaluate the success or difficulties 
        faced by the Postal Service in implementing the reform plan.
  (c) Confidential Information.--
          (1) In general.--The report required under this subsection 
        shall be submitted in a form that excludes any proprietary or 
        confidential information and trade secrets.
          (2) Notification.--If the Postal Service determines that any 
        information must be excluded under paragraph (1), the Postal 
        Service shall, at the time of submitting the report, notify the 
        President, the Committee on Oversight and Reform of the House 
        of Representatives, the Committee on Homeland Security and 
        Governmental Affairs of the Senate, and the Postal Regulatory 
        Commission in writing of its determination and describe in 
        detail the information for which confidentiality is sought and 
        the reasons therefor.
          (3) Annexes.--The Postal Service shall submit to the persons 
        and entities notified under paragraph (2) any information 
        excluded under paragraph (1) in an annex that shall be treated 
        as confidential in accordance with paragraph (4).
          (4) Treatment.--No person may, with respect to any 
        information which such person receives under paragraph (4)--
                  (A) use such information for purposes other than the 
                purposes for which it is supplied; or
                  (B) permit any person or entity other than a person 
                or entity notified under paragraph (2), or the staff 
                thereof, to have access to any such information.
  (d) Termination.--This subsection shall terminate on the date that is 
five years after the date on which the first report required by this 
section is submitted.

SEC. 208. POSTAL SERVICE TRANSPORTATION SELECTION POLICY REVISIONS.

  Section 101(f) of title 39, United States Code, is amended--
          (1) by striking ``prompt and economical'' and inserting 
        ``prompt, economical, consistent, and reliable'';
          (2) by inserting after ``all mail'' the following: ``in a 
        manner that increases operational efficiency and reduces 
        complexity'';
          (3) by inserting ``cost-effective'' after ``to achieve''; and
          (4) by inserting ``also'' after ``Nation shall''.

SEC. 209. USPS INSPECTOR GENERAL OVERSIGHT OF POSTAL REGULATORY 
                    COMMISSION.

  (a) In General.--Section 8G of the Inspector General Act of 1978 (5 
U.S.C. App.) is amended--
          (1) in subsection (a)(2), by striking ``the Postal Regulatory 
        Commission,''; and
          (2) in subsection (f)(2)--
                  (A) by striking ``(2) In carrying'' and inserting 
                ``(2)(A) In carrying''; and
                  (B) by adding at the end the following:
          ``(B) In carrying out the duties and responsibilities 
        specified in this Act, the Inspector General of the United 
        States Postal Service shall function as the Inspector General 
        for the Postal Regulatory Commission, and shall have equal 
        responsibility over the United States Postal Service and the 
        Postal Regulatory Commission. The Commission shall comply with 
        the Inspector General's oversight as if the Commission were a 
        designated Federal entity under paragraph (a)(2) of this 
        section.''.
  (b) Savings Provision.--
          (1) Legal documents.--Any order, determination, rule, 
        regulation, permit, grant, loan, contract, agreement, 
        certificate, license, or privilege that has been issued, made, 
        granted, or allowed to become effective that is in effect on 
        the effective date of this section shall continue in effect 
        according to their terms until modified, terminated, 
        superseded, set aside, or revoked in accordance with law.
          (2) Proceedings.--This section and the amendments made by 
        this section shall not affect any proceeding pending on the 
        effective date of this section before an office transferred by 
        either such subsection, but such proceeding shall be continued. 
        Nothing in this paragraph shall be considered to prohibit the 
        discontinuance or modification of any such proceeding under the 
        same terms and conditions and to the same extent that such 
        proceeding could have been discontinued or modified if this 
        section or such amendments had not been enacted.
          (3) Suits.--This section and the amendments made by this 
        section shall not affect any suit commenced before the 
        effective date of this section, and in any such suit, 
        proceeding shall be had, appeals taken, and judgments rendered 
        in the same manner and with the same effect as if this section 
        or such amendments had not been enacted.
          (4) References.--Any reference in any other Federal law, 
        Executive order, rule, regulation, or delegation of authority, 
        or any document relating to the Inspector General of the Postal 
        Regulatory Commission shall be deemed to refer to the Inspector 
        General of the United States Postal Service.
  (c) Technical and Conforming Amendment.--Section 504 of title 39, 
United States Code, is amended by striking subsection (h).
  (d) Effective Date.--This section and the amendments made by this 
section shall take effect on the date that is 180 days after the date 
of enactment of this Act.

                   Summary and Purpose of Legislation

    H.R. 3076, the Postal Service Reform Act, eliminates direct 
financial liabilities of the United States Postal Service by 
requiring eligible Postal Service retirees to enroll in 
Medicare and repealing the requirement to prefund retiree 
health benefits. Additionally, H.R. 3076 requires transparency 
in Postal Service performance data, codifies aspects of the 
Postal Service's operations, and requires additional reporting 
on and reviews of various facets of the Postal Service's 
operations and finances.

                  Background and Need for Legislation

    A number of factors have caused the Postal Service's 
financial condition to deteriorate over the past decade, 
including a decline in first-class mail, expenses increasing 
more rapidly than revenues, and the requirement to pre-fund 
retiree health benefits. The Postal Service is expected to 
provide affordable, quality, and universal postal service to 
all parts of the country while remaining self-sufficient. As a 
result of being unable to fund its current level of services 
and financial obligations from its revenues, the Postal Service 
faces challenges in maintaining sufficient cash on hand to 
conduct its operations. For these reasons, the Government 
Accountability Office (GAO) has placed the Postal Service's 
financial condition on its ``high-risk'' list since 2009. The 
provisions included in this bill are essential to helping the 
Postal Service remain financially viable going forward.

                      Section-by-Section Analysis


                                TITLE I

Section 101--Postal Service health benefits program (i.e., Medicare 
        Integration)

    While Postal Service employees currently pay into Medicare 
and are eligible to enroll when they reach the age 65, roughly 
25% of the Postal Service workforce never enrolls. Requiring 
Postal Service employees to enroll in Medicare when they become 
eligible to do so would help improve the long-term financial 
viability of the Postal Service. This requirement already 
exists for most private sector employees. If all Postal Service 
employees were required to enroll in Medicare when eligible, 
the Postal Service estimates that it would save roughly $36 
billion over a 10-year period.
    This section creates new Postal Service-only medical plans 
with a separate risk pool from the current Federal Employee 
Health Benefit (FEHB) plans. While the majority of existing 
employees would be required to enroll in these plans and enroll 
in Medicare when they become eligible, there are several 
exceptions for current annuitants and employees approaching 
retirement to protect them from being forced into changes to 
their health benefits late in their careers or retirement. 
Current annuitants would retain the option of not enrolling in 
Medicare, as would current employees age 64 or older.

Section 102--USPS Fairness Act (i.e., Eliminating requirement to pre-
        fund retiree health benefits)

    In 2006, Congress enacted the Postal Accountability and 
Enhancement Act (PAEA) (P.L. 109-435). The PAEA required the 
Postal Service ``to start fully `prefunding' retiree health 
benefits'' by making ``annual prefunding payments to a newly 
established fund to build up funds to cover the Postal 
Service's share of future retiree health benefit costs'' for 
all employees--not just those who are eligible to retire.\1\ No 
other federal agency is required to pre-fund retiree health 
benefits, and it is not a normal practice in the private 
sector.
---------------------------------------------------------------------------
    \1\Government Accountability Office, Postal Retiree Health 
Benefits: Unsustainable Finances Need to be Addressed (Aug. 2018) (GAO-
18-602) (online at www.gao.gov/assets/700/694188.pdf).
---------------------------------------------------------------------------
    The PAEA required the Postal Service to pay annual amounts 
ranging from $5.4 billion to $5.8 billion into the Postal 
Service Retiree Health Benefit Fund between 2007 and 2016. At 
the end of that 10-year period, these pre-funding payments 
ended, and the Postal Service was allowed to return to lower 
annual payments based on a 40-year amortization schedule for 
Postal Service retiree health benefits and the ``normal costs'' 
of retiree health benefits for current employees.\2\
---------------------------------------------------------------------------
    \2\Id.
---------------------------------------------------------------------------
    Before 2006, the Postal Service maintained a pay-as-you-go 
system for retiree health benefits, under which it paid its 
annual share of premiums for employees participating in the 
FEHB Program. Since 2007 the Postal Service has been struggling 
to comply with this requirement to make billions of dollars of 
payments each year to pre-fund retiree health benefits.
    The PAEA was enacted in 2006 after the Postal Service had 
earned ``modest profits from FY2004 through FY2006,'' with the 
expectation that the Postal Service would continue to be on 
relatively sound financial footing.\3\ Unfortunately, that has 
not been the case. The Postal Service currently has 
approximately $35 billion in unfunded retiree health benefit 
liabilities and has not paid into the fund for a decade. 
Eliminating this requirement would eliminate the liability and 
improve the Postal Service's financial picture.
---------------------------------------------------------------------------
    \3\Congressional Research Service, The Postal Accountability and 
Enhancement Act: Overview and Issues for Congress (Dec. 14, 2009) 
(online at https://fas.org/sgp/crs/misc/R40983.pdf).
---------------------------------------------------------------------------
    This section eliminates the prefunding requirement put in 
place by the PAEA, which eliminates these outstanding debts 
from the Postal Service's books. It requires the Postal Service 
to pay a single yearly ``top-up'' amount to account for the 
costs incurred by actual usage by Postal Service annuitants. 
These payments will increase the longevity of the Retiree 
Health Benefit Fund while still protecting the Postal Service 
from carrying substantial unpaid liabilities on its books.

Section 103--Non-postal services

    This section enables the Postal Service to enter into 
agreements with state, local, and tribal governments to provide 
non-postal services to increase revenue for the Postal Service. 
Services must provide enhanced value, not detract from postal 
services, and provide reasonable contributions to the 
institutional costs of the Postal Service. The bill would 
require any new program entered into by the Postal Service to 
be approved by the Postal Service Board of Governors.

                                TITLE II

Section 201--Performance targets and transparency

    The COVID-19 pandemic caused widespread Postal Service 
workforce sick leave and led to an unprecedented rise in 
package volume due to a rapid increase in e-commerce demand. 
The Postal Service also implemented operational changes in mid-
July 2020 that negatively impacted service performance. The 
combination of these events exacerbated existing problems 
within the Postal Service's operations and further stressed an 
already strained delivery system. Overall delivery performance 
remained historically low for 2020 and the early part of 2021, 
with on-time delivery of first-class mail falling below 63% the 
week before the 2020 holiday season. While service has 
rebounded to around 89% of first-class mail being delivered on 
time as of the week ending on July 3, 2021, first-class mail 
service has still not returned to pre-July 2020 levels.
    This section would require the Postal Service to establish 
and provide the Postal Regulatory Commission (PRC) with 
reasonable performance targets based on its service standards 
at least 60 days before the start of each fiscal year. The 
Postal Service would also be required to provide the PRC with 
the previous fiscal year's performance targets to allow the PRC 
to review them for compliance.
    The Postal Service would also be required to post weekly 
updates on its service performance at national, regional, and 
local levels for market dominant mail products on a publicly 
available online dashboard. This provision would ensure greater 
performance transparency and enable Congress, the public, and 
industry stakeholders to hold the Postal Service more 
accountable.

Section 202--Integrated delivery network

    Since 1983, the Financial Services and General Government 
Appropriations Act has included an annual rider requiring the 
Postal Service to deliver mail six days per week. This section 
of the bill would put that requirement in statute. The section 
includes an exception allowing the Postal Service to not 
deliver six days a week during weeks with a federal holiday or 
during unforeseen emergencies such as natural disasters.
    In addition, this section would require the Postal Service 
to operate using an integrated network for both mail and 
packages.

Section 203--Review of Postal Service cost attribution guidelines

    This section would require the PRC to perform a review of 
the allocation of Postal Service costs that are attributed to 
competitive and market-dominant products to ensure that these 
allocations are accurate. The review shall consider the 
underlying methodologies used to determine cost allocation and, 
if necessary, consider options to revise these methodologies. 
If the PRC determines that revisions are necessary, it shall 
make necessary modifications. These changes will be subject to 
a public notice and comment period.

Section 204--Rural newspaper sustainability

    Local newspapers sent within the same county in which they 
are printed can currently take advantage of a statutory 
provision that allows a special rate lower than first-class 
mail to send sample copies. Currently, up to 10% of these 
newspapers can be sent to non-subscribers. This section would 
raise this number to up to 50%. This would allow local 
newspapers to increase revenue through advertising and reach 
possible subscribers at a time when local newspapers are 
disappearing at a rapid rate.

Section 205--Funding of Postal Regulatory Commission

    The PRC currently has its funding, which is derived via a 
transfer from the Postal Service Fund, approved through the 
annual appropriations process, and PRC cannot operate when the 
federal government shuts down. However, the Postal Service 
continues to operate during a government shutdown, as it does 
not receive federal funding. As a result, the Postal Service 
continues operating without oversight from its federal 
regulator during a government shutdown.
    This section would allow the PRC to submit its yearly 
budget request directly to the Postal Service Board of 
Governors, which would then have the authority to approve the 
budget with or without adjustments, but not make changes to any 
allocations within the budget. Should the Board of Governors 
make changes to the overall budget request, the PRC would make 
changes to suballocations within the request to ensure 
compliance. The PRC's budget would be paid directly out of the 
Postal Service Fund, allowing it to continue operating 
regardless of the federal government's appropriations status.

Section 206--Flats operations study and reform

    This section would require the PRC, in consultation with 
the United States Postal Service Inspector General (IG), to 
conduct a study to identify the causes of inefficiencies in the 
collection, sorting, transportation, and delivery of flats--a 
category which most prominently includes magazines. Within 180 
days after the enactment of this bill, the PRC would have to 
submit to Congress and the Postmaster General a report on the 
findings of this study.
    In addition, within six months of completion of the PRC 
study, the Postal Service would be required to develop and 
implement a plan to remedy inefficiencies identified by the 
study. The implementation plan would have to be approved by the 
PRC, and a period of public comment would be required.

Section 207--Reporting requirements

    This section would require the Postal Service to submit 
reports to Congress every six months on a number of Postal 
Service operations, as well as its financial performance, 
including the actual and projected volume of mail and packages, 
the effects of any rate changes, the allocation of employees in 
career and non-career status, and planned and actual 
investments by the Postal Service in its network. These reports 
will help enable Congress to know what changes are being made 
and their impact on the Postal Service.

Section 208--Postal Service transportation selection

    This section would make minor adjustments to the 
considerations the Postal Service must make when deciding which 
modes of transportation should be used to deliver mail. 
Specifically, the section would add the requirement that 
transportation not only be prompt and economical but also 
consistent and reliable.

Section 209--USPS Inspector General oversight of Postal Regulatory 
        Commission

    There is currently a Postal Service Inspector General as 
well as an Inspector General for the PRC. This section would 
create a single Inspector General of the United States Postal 
Service with authority over both the Postal Service and the 
PRC.

                          Legislative History

    H.R. 3076, the Postal Service Reform Act, was introduced by 
Chairwoman Maloney and Ranking Member Comer on May 11, 2021. 
The Committee held a legislative hearing on an earlier version 
of this bill on February 24, 2021. The Committee considered 
H.R. 3076 at a business meeting on May 13, 2021, and ordered 
the bill as amended favorably reported by voice vote.

                        Committee Consideration

    On May 13, 2021, the Committee met in open session and, 
with a quorum being present, ordered the bill as amended 
favorably reported by voice vote.

                            Roll Call Votes

    There were no roll call votes during consideration of H.R. 
3076.

                       Explanation of Amendments

    Chairwoman Maloney offered an amendment in the nature of a 
substitute (ANS) that made technical changes to the bill. The 
ANS passed by voice vote.

                   List of Related Committee Hearings

    The Committee on Oversight and Reform held a hearing on 
February 24, 2021, entitled ``Legislative Proposals to Put the 
Postal Service on Sustainable Financial Footing'' at which a 
draft version of the legislation was discussed.

  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 previous sections 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 
goal or objective of this bill is to improve the financial 
position of the Postal Service while increasing transparency 
and accountability of the Postal Service's operations, 
finances, and performance.

              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 change the structure of health benefits 
offered, without making changes to who is eligible to receive 
health benefits, and would make changes to financial, 
operational, and service requirements of the Postal Service. As 
such, this bill does not relate to employment or access to 
public services and accommodations.

                    Duplication of Federal Programs

    In accordance with clause 2(c)(5) of rule XIII, no 
provision of this bill establishes or reauthorizes a program of 
the Federal Government known to be duplicative of another 
Federal program, a program that was included in any report from 
the Government Accountability Office to Congress pursuant to 
section 21 of Public Law 111-139, or a program related to a 
program identified in the most recent Catalog of Federal 
Domestic Assistance.

                  Disclosure of Directed Rule Makings

    This bill does not direct the completion of any specific 
rule makings within the meaning of section 551 of title 5, 
United States Code.

                     Federal Advisory Committee Act

    This bill does not establish or authorize the establishment 
of an advisory committee within the definition of Section 5(b) 
of the appendix to title 5, United States Code.

                      Unfunded Mandates Statement

    Pursuant to section 423 of the Congressional Budget Act of 
1974, the Committee has included a letter received from the 
Congressional Budget Office below.

                         Earmark Identification

    This bill does not include any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of rule XXI of the House of Representatives.

                           Committee Estimate

    Pursuant to clause 3(d)(2)(B) of rule XIII of the Rules of 
the House of Representatives and section 402 of the 
Congressional Budget Act, the Committee has requested, but not 
yet received, a cost estimate of the bill prepared by the 
Director of the Congressional Budget Office.

   New Budget Authority and Congressional Budget Office Cost Estimate

    Pursuant to clause 3(d)(2)(B) of rule XIII of the Rules of 
the House of Representatives and section 402 of the 
Congressional Budget Act, the Committee has requested, but not 
yet received, a cost estimate of the bill prepared by the 
Director of the Congressional Budget Office.

         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 italics, and existing law in which no 
change is proposed is shown in roman):

                      TITLE 5, UNITED STATES CODE




           *       *       *       *       *       *       *
PART III--EMPLOYEES

           *       *       *       *       *       *       *


SUBPART G--INSURANCE AND ANNUITIES

           *       *       *       *       *       *       *


                      CHAPTER 89--HEALTH INSURANCE


Sec.
8901. Definitions.
     * * * * * * *
8903c. Postal Service Health Benefits Program.

           *       *       *       *       *       *       *


Sec. 8903. Health benefits plans

  The Office of Personnel Management may contract for or 
approve the following health benefits plans:
          (1) Service Benefit Plan.--One Government-wide plan, 
        which may be underwritten by participating affiliates 
        licensed in any number of States, offering [two levels 
        of benefits] 2 levels of benefits for enrollees under 
        this chapter generally and 2 levels of benefits for 
        enrollees under the Postal Service Health Benefits 
        Program established under section 8903c, under which 
        payment is made by a carrier under contracts with 
        physicians, hospitals, or other providers of health 
        services for benefits of the types described by section 
        8904(1) of this title given to employees, annuitants, 
        members of their families, former spouses, or persons 
        having continued coverage under section 8905a of this 
        title, or, under certain conditions, payment is made by 
        a carrier to the employee, annuitant, family member, 
        former spouse, or person having continued coverage 
        under section 8905a of this title.
          (2) Indemnity Benefit Plan.--One Government-wide 
        plan, offering two levels of benefits, under which a 
        carrier agrees to pay certain sums of money, not in 
        excess of the actual expenses incurred, for benefits of 
        the types described by section 8904(2) of this title.
          (3) Employee Organization Plans.--Employee 
        organization plans which offer benefits of the types 
        referred to by section 8904(3) of this title, which are 
        sponsored or underwritten, and are administered, in 
        whole or substantial part, by employee organizations 
        described in section 8901(8)(A) of this title, which 
        are available only to individuals, and members of their 
        families, who at the time of enrollment are members of 
        the organization.
          (4) Comprehensive Medical Plans.--
                  (A) Group-practice prepayment plans.--Group-
                practice prepayment plans which offer health 
                benefits of the types referred to by section 
                8904(4) of this title, in whole or in 
                substantial part on a prepaid basis, with 
                professional services thereunder provided by 
                physicians practicing as a group in a common 
                center or centers. The group shall include at 
                least 3 physicians who receive all or a 
                substantial part of their professional income 
                from the prepaid funds and who represent 1 or 
                more medical specialties appropriate and 
                necessary for the population proposed to be 
                served by the plan.
                  (B) Individual-practice prepayment plans.--
                Individual-practice prepayment plans which 
                offer health services in whole or substantial 
                part on a prepaid basis, with professional 
                services thereunder provided by individual 
                physicians who agree, under certain conditions 
                approved by the Office, to accept the payments 
                provided by the plans as full payment for 
                covered services given by them including, in 
                addition to in-hospital services, general care 
                given in their offices and the patients' homes, 
                out-of-hospital diagnostic procedures, and 
                preventive care, and which plans are offered by 
                organizations which have successfully operated 
                similar plans before approval by the Office of 
                the plan in which employees may enroll.
                  (C) Mixed model prepayment plans.--Mixed 
                model prepayment plans which are a combination 
                of the type of plans described in subparagraph 
                (A) and the type of plans described in 
                subparagraph (B).

           *       *       *       *       *       *       *


Sec. 8903c. Postal Service Health Benefits Program

  (a) Definitions.--In this section--
          (1) the term ``covered Medicare individual'' means an 
        individual who is entitled to benefits under Medicare 
        part A, but excluding an individual who is eligible to 
        enroll under such part under section 1818 or 1818A of 
        the Social Security Act (42 U.S.C. 1395i-2, 1395i-2a);
          (2) the term ``initial contract year'' means the 
        contract year beginning in January of 2023;
          (3) the term ``initial participating carrier'' means 
        a carrier that enters into a contract with the Office 
        to participate in the Postal Service Health Benefits 
        Program during the initial contract year;
          (4) the term ``Medicare part A'' means part A of 
        title XVIII of the Social Security Act (42 U.S.C. 1395c 
        et seq.);
          (5) the term ``Medicare part B'' means part B of 
        title XVIII of the Social Security Act (42 U.S.C. 1395j 
        et seq.);
          (6) the term ``Office'' means the Office of Personnel 
        Management;
          (7) the term ``Postal Service'' means the United 
        States Postal Service;
          (8) the term ``Postal Service annuitant'' means an 
        annuitant enrolled in a health benefits plan under this 
        chapter whose Government contribution is paid pursuant 
        to the requirements of section 8906(g)(2);
          (9) the term ``Postal Service employee'' means an 
        employee of the Postal Service enrolled in a health 
        benefits plan under this chapter whose Government 
        contribution is paid by the Postal Service;
          (10) the term ``Postal Service Medicare covered 
        annuitant'' means an individual who--
                  (A) is a Postal Service annuitant; and
                  (B) is a covered Medicare individual;
          (11) the term ``Program'' means the Postal Service 
        Health Benefits Program established under subsection 
        (c) within the Federal Employees Health Benefit 
        Program;
          (12) the term ``Program plan'' means a health 
        benefits plan offered under the Program; and
          (13) the terms set forth in section 8901 shall apply.
  (b) Application.--The requirements under this section shall--
          (1) apply to the initial contract year and each 
        contract year thereafter; and
          (2) supersede any other provision of this chapter 
        inconsistent with such requirements, as determined by 
        the Office of Personnel Management.
  (c) Establishment of the Postal Service Health Benefits 
Program.--
          (1) In general.--The Office shall establish the 
        Postal Service Health Benefits Program under which the 
        Office contracts with carriers to offer health benefits 
        plans as described under this section. Except as 
        otherwise provided in this section, any such contract 
        shall be consistent with the requirements of this 
        chapter for contracts under section 8902 with carriers 
        to offer health benefits plans other than under this 
        section. The Program shall--
                  (A) to the greatest extent practicable, 
                include plans offered by--
                          (i) each carrier for which the total 
                        enrollment in the plans provided under 
                        this chapter includes, in the contract 
                        year beginning in January 2022, 1,500 
                        or more enrollees who are Postal 
                        Service employees or Postal Service 
                        annuitants; and
                          (ii) any other carrier determined 
                        appropriate by the Office;
                  (B) be available for participation by Postal 
                Service employees and Postal Service 
                annuitants, in accordance with subsection (d);
                  (C) provide for enrollment in a plan as an 
                individual, for self plus one, or for self and 
                family; and
                  (D) not be available for participation by an 
                individual who is not a Postal Service employee 
                or Postal Service annuitant (except as a member 
                of family of such an employee or annuitant or 
                as provided under paragraph (5)).
          (2) Separate postal service risk pool.--The Office 
        shall ensure that each Program plan includes rates that 
        reasonably and equitably reflect the cost of benefits 
        provided to a risk pool consisting solely of Postal 
        Service employees, Postal Service annuitants, and 
        covered members of family of such employees and 
        annuitants (regardless of the health plan, coverage, or 
        benefit program in which such an employee, annuitant, 
        or member of family is enrolled), taking into specific 
        account the change in benefits cost for the Program 
        plan due to the Medicare enrollment requirements under 
        subsection (e) and any savings or subsidies resulting 
        from subsection (f).
          (3) Actuarially equivalent coverage.--The Office 
        shall ensure that each carrier participating in the 
        Postal Service Health Benefits Program provides 
        coverage under the Program plans offered by the carrier 
        that is actuarially equivalent, as determined by the 
        Office, to the coverage that the carrier provides under 
        the health benefits plans offered by the carrier under 
        this chapter that are not Program plans.
          (4) Applicability of federal employees health 
        benefits program requirements.--Except as otherwise set 
        forth in this section, all provisions of this chapter 
        applicable to health benefits plans offered by carriers 
        under section 8903 or 8903a shall apply to plans 
        offered under the Program.
          (5) Application of continuation coverage.--In 
        accordance with rules established by the Office, 
        section 8905a shall apply to health benefits plans 
        offered under this section in the same manner as such 
        section applies to other health benefits plans offered 
        under this chapter.
  (d) Election of Coverage.--
          (1) In general.--Except as provided in paragraph (2), 
        each Postal Service employee and Postal Service 
        annuitant who elects to receive health benefits 
        coverage under this chapter--
                  (A) shall be subject to the requirements of 
                this section; and
                  (B) may not enroll in any other health 
                benefits plan offered under any other section 
                of this chapter.
          (2) Exceptions.--
                  (A) Lack of geographic coverage.--An 
                individual who is a Postal Service employee or 
                Postal Service annuitant may enroll in a health 
                benefits plan offered under any other section 
                of this chapter if the individual resides in a 
                geographic area for which there is not a 
                Program plan in which the individual may 
                enroll.
                  (B) Annuitants as of program inception.--
                          (i) Current medicare covered 
                        annuitants.--
                                  (I) In general.--Subject to 
                                subclause (II), in the case of 
                                an individual who, as of 
                                January 1, 2023, is a Postal 
                                Service Medicare covered 
                                annuitant who has not enrolled 
                                in both Medicare part A and 
                                Medicare part B, such 
                                individual may enroll in a 
                                health benefits plan offered 
                                under any other section of this 
                                chapter, and may not enroll in 
                                a Program plan.
                                  (II) Program plan enrollment 
                                following medicare parts a and 
                                b enrollment.--In the case of 
                                an individual described in 
                                subclause (I) who subsequent to 
                                January 1, 2023, is enrolled in 
                                both Medicare part A and 
                                Medicare part B, beginning with 
                                the first contract year 
                                beginning after the date such 
                                individual is enrolled in both 
                                Medicare part A and Medicare 
                                part B, subclause (I) shall no 
                                longer apply to such individual 
                                and such individual may receive 
                                health benefits under this 
                                chapter only through a Program 
                                plan.
                          (ii) Pre-medicare annuitants.--
                                  (I) In general.--Subject to 
                                subclause (II), an individual 
                                who, as of January 1, 2023, is 
                                a Postal Service annuitant and 
                                is not a Postal Service 
                                Medicare annuitant (for a 
                                reason other than eligibility 
                                to enroll in Medicare part A 
                                under section 1818 or 1818A of 
                                the Social Security Act) may 
                                enroll in either a Program plan 
                                or in a health benefits plan 
                                offered under any other section 
                                of this chapter.
                                  (II) Exception.--In the case 
                                of an individual described in 
                                subclause (I) who enrolls in a 
                                Program plan for any contract 
                                year beginning on or after the 
                                date on which the individual 
                                becomes a Postal Service 
                                Medicare covered annuitant, 
                                beginning with such contract 
                                year, subclause (I) shall no 
                                longer apply to the individual 
                                and the individual may receive 
                                health benefits under this 
                                chapter only through enrollment 
                                in a Program plan.
                  (C) Certain employees as of program 
                inception.--
                          (i) Legacy coverage.--A Postal 
                        Service employee who is enrolled in a 
                        health benefits plan under this chapter 
                        for the contract year immediately 
                        preceding the initial contract year 
                        that is not a health benefits plan 
                        offered by an initial participating 
                        carrier may enroll in either a Program 
                        plan or in a health benefits plan 
                        offered under any other section of this 
                        chapter, except that--
                                  (I) if the Postal Service 
                                employee changes enrollment to 
                                a different health benefits 
                                plan under this chapter during 
                                the open season for the initial 
                                contract year, or after the 
                                start of the initial contract 
                                year, the Postal Service 
                                employee may only enroll in a 
                                Program plan;
                                  (II) if the health benefits 
                                plan in which such employee is 
                                enrolled for such contract year 
                                becomes available as a Program 
                                plan, the Postal Service 
                                employee may only enroll in a 
                                Program plan; and
                                  (III) upon becoming a Postal 
                                Service annuitant, if the 
                                Postal Service employee elects 
                                to continue coverage under this 
                                chapter, the Postal Service 
                                employee shall enroll in a 
                                Program plan during the open 
                                season that is--
                                          (aa) being held when 
                                        the Postal Service 
                                        employee becomes a 
                                        Postal Service 
                                        annuitant; or
                                          (bb) if the date on 
                                        which the Postal 
                                        Service employee 
                                        becomes a Postal 
                                        Service annuitant falls 
                                        outside of an open 
                                        season, the first open 
                                        season following that 
                                        date.
                          (ii) Current employees aged 64 and 
                        over.--
                                  (I) In general.--Subject to 
                                subclause (II), an individual 
                                who, as of January 1, 2023, is 
                                a Postal Service employee and 
                                is at least 64 years of age may 
                                enroll in either a Program plan 
                                or in a health benefits plan 
                                offered under any other section 
                                of this chapter.
                                  (II) Exception.--In the case 
                                of an individual described in 
                                subclause (I) who enrolls in a 
                                Program plan for any contract 
                                year beginning on or after the 
                                date on which the individual 
                                becomes a Postal Service 
                                Medicare covered annuitant, 
                                beginning with such contract 
                                year, subclause (I) shall no 
                                longer apply to the individual 
                                and the individual may receive 
                                health benefits under this 
                                chapter only through enrollment 
                                in a Program plan.
                  (D) Certain other annuitants.--
                          (i) Annuitants and family members 
                        excluded from premium-free medicare 
                        part a.--
                                  (I) In general.--Subject to 
                                subclause (II), a Postal 
                                Service annuitant who is 
                                eligible to enroll in Medicare 
                                Part A under section 1818 or 
                                1818A of the Social Security 
                                Act may enroll in either a 
                                Program plan or in a health 
                                benefits plan offered under any 
                                other section of this chapter 
                                if the annuitant--
                                          (aa) is eligible to 
                                        enroll in Medicare part 
                                        A under section 1818 or 
                                        1818A of the Social 
                                        Security Act; or
                                          (bb) includes in the 
                                        annuitant's plan 
                                        enrollment one or more 
                                        family members who are 
                                        eligible to enroll in 
                                        Medicare part A under 
                                        section 1818 or 1818A 
                                        of such Act.
                                  (II) Exception.--In the case 
                                of an annuitant described in 
                                subclause (I) who enrolls in a 
                                Program plan for any contract 
                                year beginning on or after the 
                                date on which the annuitant or 
                                any member of family covered by 
                                the enrollment becomes eligible 
                                to enroll in Medicare part A, 
                                beginning with such contract 
                                year, subclause (I) shall no 
                                longer apply to the annuitant 
                                and the annuitant may receive 
                                health benefits under this 
                                chapter only through enrollment 
                                in a Program plan.
                          (ii) Limited or redundant coverage.--
                        An individual who is a Postal Service 
                        annuitant may enroll either in a 
                        Program plan (subject to subsection (e) 
                        of this section and to sections 226(j) 
                        and 1837(o)(2) of the Social Security 
                        Act) or in a health benefits plan 
                        offered under any other section of this 
                        chapter for any contract year in which 
                        the annuitant or member of family 
                        covered by the enrollment, 
                        respectively, is a covered Medicare 
                        individual and--
                                  (I) the annuitant or family 
                                member, respectively, resides 
                                in an area where the Office has 
                                determined that no Medicare 
                                providers are available;
                                  (II) the annuitant receives 
                                comprehensive medical coverage 
                                provided by the Department of 
                                Veterans Affairs under 
                                subchapter II of chapter 17 of 
                                title 38, United States Code; 
                                or
                                  (III) the annuitant receives 
                                comprehensive medical coverage 
                                provided by the Indian Health 
                                Service under the Indian Health 
                                Care Improvement Act (25 U.S.C. 
                                1601 et seq.).
                          (iii) Regulations.--Not later than 90 
                        days after the date of enactment of 
                        this section, the Office shall, in 
                        consultation with the Secretary of 
                        Health and Human Services, the 
                        Secretary of Veterans Affairs, and the 
                        Postmaster General, promulgate any 
                        regulations necessary to implement this 
                        subparagraph.
  (e) Requirement of Medicare Enrollment for Certain Annuitants 
and Their Family Members.--
          (1) Annuitants.--Except as provided under subsection 
        (d)(2), a Postal Service Medicare covered annuitant may 
        not enroll under a Program plan unless the annuitant is 
        enrolled in both Medicare part A and Medicare part B.
          (2) Medicare covered family members.--In the case of 
        a Postal Service annuitant who is required under this 
        subsection to enroll in Medicare part A and Medicare 
        part B to enroll under the Program, if a member of 
        family of such Postal Service annuitant is a covered 
        Medicare individual or is eligible to enroll in 
        Medicare Part A under section 1818 or 1818A of the 
        Social Security Act, that member of family may not 
        enroll under the Program as a member of family of the 
        Postal Service annuitant unless that member of family 
        is enrolled in both Medicare part A and Medicare part 
        B.
          (3) Process for coordinated election of medicare 
        enrollment.--The Office shall establish a process under 
        which--
                  (A) Postal Service annuitants and members of 
                family who are subject to the requirements of 
                paragraph (1) or (2)--
                          (i) are informed, prior to enrollment 
                        under this section, of such 
                        requirement; and
                          (ii) receive requests for any 
                        additional information necessary for 
                        enrollment in writing; and
                  (B) the Office provides the Secretary of 
                Health and Human Services and the Commissioner 
                of Social Security in a timely manner with such 
                information with respect to such annuitants and 
                members of family and such election as may be 
                required to effect their enrollment and 
                coverage under Medicare part A and Medicare 
                part B and this section in a timely manner, 
                including to effect deemed enrollments, if 
                applicable under sections 226(j) and 1837(o) of 
                the Social Security Act, for such continuous 
                period as such annuitant or member of family 
                involved otherwise maintains eligibility for 
                enrollment under Medicare part A and Medicare 
                part B, to have elected to be enrolled under 
                such part (in accordance with such sections) in 
                connection with the enrollment in a Program 
                plan under this section.
  (f) Medicare Coordination.--
          (1) In general.--The Office shall require each 
        Program plan to provide benefits for covered Medicare 
        individuals (and individuals eligible to enroll in 
        Medicare part A pursuant to section 1818 or 1818A of 
        the Social Security Act) pursuant to the same 
        coordination of benefits method used in connection with 
        plans offered under any other section of this chapter.
          (2) Medicare part d prescription drug benefits.--The 
        Office shall require each Program plan to provide 
        prescription drug benefits to any Postal Service 
        annuitant and member of family of such annuitant who is 
        a part D eligible individual (as defined in section 
        1860D-1(a)(3)(A) of the Social Security Act) through 
        employment-based retiree health coverage (as defined in 
        section 1860D-22(c)(1) of such Act) through a 
        prescription drug plan (as defined in section 1860D-
        41(a)(14) of such Act).
  (g) Postal Service Contribution.--
          (1) In general.--Subject to subsection (i), for 
        purposes of applying section 8906(b) to the Postal 
        Service, the weighted average shall be calculated in 
        accordance with paragraphs (2) and (3).
          (2) Weighted average calculation.--Not later than 
        October 1 of each year (beginning with 2022), the 
        Office shall determine the weighted average of the 
        rates established pursuant to subsection (c)(2) for 
        Program plans that will be in effect during the 
        following contract year with respect to--
                  (A) enrollments for self only;
                  (B) enrollments for self plus one; and
                  (C) enrollments for self and family.
          (3) Weighting in computing rates for initial contract 
        year.--In determining such weighted average of the 
        rates for the initial contract year, the Office shall 
        take into account (for purposes of section 8906(a)(2)) 
        the enrollment of Postal Service employees and 
        annuitants in the health benefits plans offered by the 
        initial participating carriers as of March 31, 2022.
  (h) Reserves.--
          (1) Separate reserves.--
                  (A) In general.--The Office shall ensure that 
                each Program plan maintains separate reserves 
                (including a separate contingency reserve) with 
                respect to the enrollees in the Program plan in 
                accordance with section 8909. All provisions of 
                section 8909 relating to contingency reserves 
                shall apply to contingency reserves of Program 
                plans in the same manner as to those of other 
                plans under this chapter, except to the extent 
                that such provisions are inconsistent with the 
                requirements of this subsection.
                  (B) References.--For purposes of the Program, 
                each reference to ``the Government'' in section 
                8909 shall be deemed to be a reference to the 
                Postal Service.
                  (C) Amounts to be credited.--The reserves 
                (including the separate contingency reserve) 
                maintained by each Program plan shall be 
                credited with a proportionate amount of the 
                funds in the reserves for health benefits plans 
                offered by the carrier.
          (2) Discontinuation of program plan.--In applying 
        section 8909(e) relating to a Program plan that is 
        discontinued, the Office shall credit the separate 
        Postal Service contingency reserve maintained under 
        paragraph (1) for that plan only to the separate Postal 
        Service contingency reserves of the Program plans 
        continuing under this chapter.
  (i) No Effect on Existing Law.--Nothing in this section shall 
be construed as affecting section 1005(f) of title 39 regarding 
variations, additions, or substitutions to the provisions of 
this chapter.
  (j) Health Benefits Education Program.--
          (1) Not later than 180 days after the date of 
        enactment of this section, the Postal Service shall 
        establish a Health Benefits Education Program. Under 
        the Program, the Postal Service shall--
                  (A) notify annuitants and employees of the 
                Postal Service about the Postal Service Health 
                Benefits Program established under subsection 
                (c)(1);
                  (B) provide information regarding the Postal 
                Service Health Benefits Program to such 
                annuitants and employees, including a 
                description of the health care options 
                available under such Program, the enrollment 
                provisions of subsection (d), and the 
                requirement that annuitants and their family 
                members be enrolled in Medicare under 
                subsection (e); and
                  (C) in coordination with the Centers for 
                Medicare & Medicaid Services and the 
                Commissioner of Social Security, respond and 
                provide answers to any inquiry from such 
                employees and annuitants about the Postal 
                Service Health Benefits Program or Medicare 
                enrollment.
          (2) The Office shall timely provide the Postal 
        Service with such information as the Postal Service 
        determines to be necessary to conduct the Medicare 
        Education Program.

           *       *       *       *       *       *       *


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

  (a) There is in the Treasury of the United States a Postal 
Service Retiree Health Benefits Fund which is administered by 
the Office of Personnel Management.
  (b) The Fund is available without fiscal year limitation for 
payments required under section 8906(g)(2)(A).
  (c) The Secretary of the Treasury shall immediately invest, 
in interest-bearing securities of the United States such 
currently available portions of the Fund as are not immediately 
required for payments from the Fund. Such investments shall be 
made in the same manner as investments for the Civil Service 
Retirement and Disability Fund under section 8348.
  [(d)(1) Not later than June 30, 2007, and by June 30 of each 
succeeding year, the Office shall compute the net present value 
of the future payments required under section 8906(g)(2)(A) and 
attributable to the service of Postal Service employees during 
the most recently ended fiscal year.
  [(2)(A) Not later than June 30, 2007, the Office shall 
compute, and by June 30 of each succeeding year, the Office 
shall recompute the difference between--
          [(i) the net present value of the excess of future 
        payments required under section 8906(g)(2)(A) for 
        current and future United States Postal Service 
        annuitants as of the end of the fiscal year ending on 
        September 30 of that year; and
          [(ii)(I) the value of the assets of the Postal 
        Retiree Health Benefits Fund as of the end of the 
        fiscal year ending on September 30 of that year; and
          [(II) the net present value computed under paragraph 
        (1).
  [(B) Not later than June 30, 2017, the Office shall compute, 
and by June 30 of each succeeding year shall recompute, a 
schedule including a series of annual installments which 
provide for the liquidation of any liability or surplus by 
September 30, 2056, or within 15 years, whichever is later, of 
the net present value determined under subparagraph (A), 
including interest at the rate used in that computation.
  [(3)(A) The United States Postal Service shall pay into such 
Fund--
          [(i) $5,400,000,000, not later than September 30, 
        2007;
          [(ii) $5,600,000,000, not later than September 30, 
        2008;
          [(iii) $1,400,000,000, not later than September 30, 
        2009;
          [(iv) $5,500,000,000, not later than September 30, 
        2010;
          [(v) $5,500,000,000, not later than August 1, 2012;
          [(vi) $5,600,000,000, not later than September 30, 
        2012;
          [(vii) $5,600,000,000, not later than September 30, 
        2013;
          [(viii) $5,700,000,000, not later than September 30, 
        2014;
          [(ix) $5,700,000,000, not later than September 30, 
        2015; and
          [(x) $5,800,000,000, not later than September 30, 
        2016.
  [(B) Not later than September 30, 2017, and by September 30 
of each succeeding year, the United States Postal Service shall 
pay into such Fund the sum of--
          [(i) the net present value computed under paragraph 
        (1); and
          [(ii) any annual installment computed under paragraph 
        (2)(B).
  [(4) Computations under this subsection shall be made 
consistent with the assumptions and methodology used by the 
Office for financial reporting under subchapter II of chapter 
35 of title 31.
  [(5)(A)(i) Any computation or other determination of the 
Office under this subsection shall, upon request of the United 
States Postal Service, be subject to a review by the Postal 
Regulatory Commission under this paragraph.
  [(ii) Upon receiving a request under clause (i), the 
Commission shall promptly procure the services of an actuary, 
who shall hold membership in the American Academy of Actuaries 
and shall be qualified in the evaluation of healthcare 
insurance obligations, to conduct a review in accordance with 
generally accepted actuarial practices and principles and to 
provide a report to the Commission containing the results of 
the review. The Commission, upon determining that the report 
satisfies the requirements of this subparagraph, shall approve 
the report, with any comments it may choose to make, and submit 
it with any such comments to the Postal Service, the Office of 
Personnel Management, and Congress.
  [(B) Upon receiving the report under subparagraph (A), the 
Office of Personnel Management shall reconsider its 
determination or redetermination in light of such report, and 
shall make any appropriate adjustments. The Office shall submit 
a report containing the results of its reconsideration to the 
Commission, the Postal Service, and Congress.
  [(6) After consultation with the United States Postal 
Service, the Office shall promulgate any regulations the Office 
determines necessary under this subsection.]
  (d)(1) Not later than June 30, 2024, and by June 30 of each 
succeeding year, the Office shall compute, for the most 
recently concluded fiscal year, the difference between--
                  (A) any Government contributions required to 
                be paid from the Fund under section 
                8906(g)(2)(A); and
                  (B) the net claims costs under the enrollment 
                of the individuals described in section 
                8906(g)(2)(A).
          (2) Not later than September 30 of each year in which 
        the Office makes a computation under paragraph (1), the 
        United States Postal Service shall pay into the Fund 
        the difference computed in such paragraph.
  (e) Any computation of the liability of the Fund required by 
law shall be based on--
          (1) the net present value of the future net claims 
        costs with respect to--
                  (A) current annuitants of the United States 
                Postal Service as of the end of the fiscal year 
                ending on September 30 of the relevant 
                reporting year; and
                  (B) current employees of the United States 
                Postal Service who would, as of September 30 of 
                that year,--
                          (i) be eligible to become annuitants 
                        pursuant to section 8901(3)(A); and
                          (ii) if they were retired as of that 
                        date, meet the criteria for coverage of 
                        annuitants under section 8905(b);
          (2) economic and actuarial methods and assumptions 
        consistent with the methods and assumptions used in 
        determining the Postal surplus or supplemental 
        liability under section 8348(h); and
          (3) any other methods and assumptions, including a 
        health care cost trend rate, that the Director of the 
        Office determines to be appropriate.
  (f) After consultation with the United States Postal Service, 
the Office shall promulgate any regulations the Office 
determines necessary under this subsection.
  (g) For purposes of this section, the term ``net claims 
costs'' shall mean the difference between--
          (1) the sum of--
                  (A) the costs incurred by a carrier in 
                providing health services to, paying for health 
                services provided to, or reimbursing expenses 
                for health services provided to, annuitants of 
                the United States Postal Service and any other 
                persons covered under the enrollment of such 
                annuitants; and
                  (B) an amount of indirect expenses reasonably 
                allocable to the provision, payment, or 
                reimbursement described in subparagraph (A), as 
                determined by the Office; and
          (2) the amount withheld from the annuity of or paid 
        by annuitants of the United States Postal Service under 
        section 8906.

           *       *       *       *       *       *       *

                              ----------                              


                          SOCIAL SECURITY ACT



           *       *       *       *       *       *       *
TITLE II--FEDERAL OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE BENEFITS

           *       *       *       *       *       *       *


               entitlement to hospital insurance benefits

  Sec. 226. (a) Every individual who--
          (1) has attained age 65, and
          (2)(A) is entitled to monthly insurance benefits 
        under section 202, would be entitled to those benefits 
        except that he has not filed an application therefor 
        (or application has not been made for a benefit the 
        entitlement to which for any individual is a condition 
        of entitlement therefor), or would be entitled to such 
        benefits but for the failure of another individual, who 
        meets all the criteria of entitlement to monthly 
        insurance benefits, to meet such criteria throughout a 
        month, and, in conformity with regulations of the 
        Secretary, files an application for hospital insurance 
        benefits under part A of title XVIII,
          (B) is a qualified railroad retirement beneficiary, 
        or
          (C)(i) would meet the requirements of subparagraph 
        (A) upon filing application for the monthly insurance 
        benefits involved if medicare qualified government 
        employment (as defined in section 210(p)) were treated 
        as employment (as defined in section 210(a)) for 
        purposes of this title, and (ii) files an application, 
        in conformity with regulations of the Secretary, for 
        hospital insurance benefits under part A of title 
        XVIII,
shall be entitled to hospital insurance benefits under part A 
of title XVIII for each month for which he meets the condition 
specified in paragraph (2), beginning with the first month 
after June 1966 for which he meets the conditions specified in 
paragraphs (1) and (2).
  (b) Every individual who--
          (1) has not attained age 65, and
          (2)(A) is entitled to, and has for 24 calendar months 
        been entitled to, (i) disability insurance benefits 
        under section 223 or (ii) child's insurance benefits 
        under section 202(d) by reason of a disability (as 
        defined in section 223(d)) or (iii) widow's insurance 
        benefits under section 202(e) or widower's insurance 
        benefits under section 202(f) by reason of a disability 
        (as defined in section 223(d)), or
          (B) is, and has been for not less than 24 months, a 
        disabled qualified railroad retirement beneficiary, 
        within the meaning of section 7(d) of the Railroad 
        Retirement Act of 1974, or
          (C)(i) has filed an application, in conformity with 
        regulations of the Secretary, for hospital insurance 
        benefits under part A of title XVIII pursuant to this 
        subparagraph, and
          (ii) would meet the requirements of subparagraph (A) 
        (as determined under the disability criteria, including 
        reviews, applied under this title), including the 
        requirement that he has been entitled to the specified 
        benefits for 24 months, if--
                  (I) medicare qualified government employment 
                (as defined in section 210(p)) were treated as 
                employment (as defined in section 210(a)) for 
                purposes of this title, and
                  (II) the filing of the application under 
                clause (i) of this subparagraph were deemed to 
                be the filing of an application for the 
                disability-related benefits referred to in 
                clause (i), (ii), or (iii) of subparagraph (A),
shall be entitled to hospital insurance benefits under part A 
of title XVIII for each month beginning with the later of (I) 
July 1973 or (II) the twenty-fifth month of his entitlement or 
status as a qualified railroad retirement beneficiary described 
in paragraph (2), and ending (subject to the last sentence of 
this subsection) with the month following the month in which 
notice of termination of such entitlement to benefits or status 
as a qualified railroad retirement beneficiary described in 
paragraph (2) is mailed to him, or if earlier, with the month 
before the month in which he attains age 65. In applying the 
previous sentence in the case of an individual described in 
paragraph (2)(C), the ``twenty-fifth month of his entitlement'' 
refers to the first month after the twenty-fourth month of 
entitlement to specified benefits referred to in paragraph 
(2)(C) and ``notice of termination of such entitlement'' refers 
to a notice that the individual would no longer be determined 
to be entitled to such specified benefits under the conditions 
described in that paragraph. For purposes of this subsection, 
an individual who has had a period of trial work which ended as 
provided in section 222(c)(4)(A), and whose entitlement to 
benefits or status as a qualified railroad retirement 
beneficiary as described in paragraph (2) has subsequently 
terminated, shall be deemed to be entitled to such benefits or 
to occupy such status (notwithstanding the termination of such 
entitlement or status) for the period of consecutive months 
throughout all of which the physical or mental impairment, on 
which such entitlement or status was based, continues, and 
throughout all of which such individual would have been 
entitled to monthly insurance benefits under title II or as a 
qualified railroad retirement beneficiary had such individual 
been unable to engage in substantial gainful activity, but not 
in excess of 78 such months. In determining when an 
individual's entitlement or status terminates for purposes of 
the preceding sentence, the term ``36 months'' in the second 
sentence of section 223(a)(1), in section 202(d)(1)(G)(i), in 
the last sentence of section 202(e)(1), and in the last 
sentence of section 202(f)(1) shall be applied as though it 
read ``15 months''.
  (c) For purposes of subsection (a)--
          (1) entitlement of an individual to hospital 
        insurance benefits for a month shall consist of 
        entitlement to have payment made under, and subject to 
        the limitations in, part A of title XVIII on his behalf 
        for inpatient hospital services, post-hospital extended 
        care services, and home health services (as such terms 
        are defined in part C of title XVIII) furnished him in 
        the United States (or outside the United States in the 
        case of inpatient hospital services furnished under the 
        conditions described in section 1814(f)) during such 
        month; except that (A) no such payment may be made for 
        post-hospital extended care services furnished before 
        January 1967, and (B) no such payment may be made for 
        post-hospital extended care services unless the 
        discharge from the hospital required to qualify such 
        services for payment under part A of title XVIII 
        occurred (i) after June 30, 1966, or on or after the 
        first day of the month in which he attains age 65, 
        whichever is later, or (ii) if he was entitled to 
        hospital insurance benefits pursuant to subsection (b), 
        at a time when he was so entitled; and
          (2) an individual shall be deemed entitled to monthly 
        insurance benefits under section 202 or section 223, or 
        to be a qualified railroad retirement beneficiary, for 
        the month in which he died if he would have been 
        entitled to such benefits, or would have been a 
        qualified railroad retirement beneficiary, for such 
        month had he died in the next month.
  (d) For purposes of this section, the term ``qualified 
railroad retirement beneficiary'' means an individual whose 
name has been certified to the Secretary by the Railroad 
Retirement Board under section 7(d) of the Railroad Retirement 
Act of 1974. An individual shall cease to be a qualified 
railroad retirement beneficiary at the close of the month 
preceding the month which is certified by the Railroad 
Retirement Board as the month in which he ceased to meet the 
requirements of section 7(d) of the Railroad Retirement Act of 
1974.
  (e)(1)(A) For purposes of determining entitlement to hospital 
insurance benefits under subsection (b) in the case of widows 
and widowers described in paragraph (2)(A)(iii) thereof--
          (i) the term ``age 60'' in sections 202(e)(1)(B)(ii), 
        202(e)(4), 202(f)(1)(B)(ii), and 202(f)(4) shall be 
        deemed to read ``age 65''; and
          (ii) the phrase ``before she attained age 60'' in the 
        matter following subparagraph (F) of section 202(e)(1) 
        and the phrase ``before he attained age 60'' in the 
        matter following subparagraph (F) of section 202(f)(1) 
        shall each be deemed to read ``based on a disability''.
  (B) For purposes of subsection (b)(2)(A)(iii), each month in 
the period commencing with the first month for which an 
individual is first eligible for supplemental security income 
benefits under title XVI, or State supplementary payments of 
the type referred to in section 1616(a) of this Act (or 
payments of the type described in section 212(a) of Public Law 
93-66) which are paid by the Secretary under an agreement 
referred to in section 1616(a) (or in section 212(b) of Public 
Law 93-66), shall be included as one of the 24 months for which 
such individual must have been entitled to widow's or widower's 
insurance benefits on the basis of disability in order to 
become entitled to hospital insurance benefits on that basis.
  (2) For purposes of determining entitlement to hospital 
insurance benefits under subsection (b) in the case of an 
individual under age 65 who is entitled to benefits under 
section 202, and who was entitled to widow's insurance benefits 
or widower's insurance benefits based on disability for the 
month before the first month in which such individual was so 
entitled to old-age insurance benefits (but ceased to be 
entitled to such widow's or widower's insurance benefits upon 
becoming entitled to such old-age insurance benefits), such 
individual shall be deemed to have continued to be entitled to 
such widow's insurance benefits or widower's insurance benefits 
for and after such first month.
  (3) For purposes of determining entitlement to hospital 
insurance benefits under subsection (b), any disabled widow 
aged 50 or older who is entitled to mother's insurance benefits 
(and who would have been entitled to widow's insurance benefits 
by reason of disability if she had filed for such widow's 
benefits), and any disabled widower aged 50 or older who is 
entitled to father's insurance benefits (and who would have 
been entitled to widower's insurance benefits by reason of 
disability if he had filed for such widower's benefits), shall, 
upon application for such hospital insurance benefits be deemed 
to have filed for such widow's or widower's insurance benefits.
  (4) For purposes of determining entitlement to hospital 
insurance benefits under subsection (b) in the case of an 
individual described in clause (iii) of subsection (b)(2)(A), 
the entitlement of such individual to widow's or widower's 
insurance benefits under section 202(e) or (f) by reason of a 
disability shall be deemed to be the entitlement to such 
benefits that would result if such entitlement were determined 
without regard to the provisions of section 202(j)(4).
  (f) For purposes of subsection (b) (and for purposes of 
section 1837(g)(1) of this Act and section 7(d)(2)(ii) of the 
Railroad Retirement Act of 1974), the 24 months for which an 
individual has to have been entitled to specified monthly 
benefits on the basis of disability in order to become entitled 
to hospital insurance benefits on such basis effective with any 
particular month (or to be deemed to have enrolled in the 
supplementary medical insurance program, on the basis of such 
entitlement, by reason of section 1837(f)), where such 
individual had been entitled to specified monthly benefits of 
the same type during a previous period which terminated--
          (1) more than 60 months before the month in which his 
        current disability began in any case where such monthly 
        benefits were of the type specified in clause (A)(i) or 
        (B) of subsection (b)(2), or
          (2) more than 84 months before the month in which his 
        current disability began in any case where such monthly 
        benefits were of the type specified in clause (A)(ii) 
        or (A)(iii) of such subsection,
shall not include any month which occurred during such previous 
period, unless the physical or mental impairment which is the 
basis for disability is the same as (or directly related to) 
the physical or mental impairment which served as the basis for 
disability in such previous period.
  (g) The Secretary and Director of the Office of Personnel 
Management shall jointly prescribe and carry out procedures 
designed to assure that all individuals who perform medicare 
qualified government employment by virtue of service described 
in section 210(a)(5) are fully informed with respect to (1) 
their eligibility or potential eligibility for hospital 
insurance benefits (based on such employment) under part A of 
title XVIII, (2) the requirements for and conditions of such 
eligibility, and (3) the necessity of timely application as a 
condition of entitlement under subsection (b)(2)(C), giving 
particular attention to individuals who apply for an annuity 
under chapter 83 of title 5, United States Code, or under 
another similar Federal retirement program, and whose 
eligibility for such an annuity is or would be based on a 
disability.
  (h) For purposes of applying this section in the case of an 
individual medically determined to have amyotrophic lateral 
sclerosis (ALS), the following special rules apply:
          (1) Subsection (b) shall be applied as if there were 
        no requirement for any entitlement to benefits, or 
        status, for a period longer than 1 month.
          (2) The entitlement under such subsection shall begin 
        with the first month (rather than twenty-fifth month) 
        of entitlement or status.
          (3) Subsection (f) shall not be applied.
  (i) For entitlement to hospital insurance benefits in the 
case of certain uninsured individuals, see section 103 of the 
Social Security Amendments of 1965.
  (j)(1) In the case of an individual who--
                  (A) on or after January 1, 2023, is--
                          (i) a Postal Service employee;
                          (ii) a Postal Service annuitant who 
                        is not a Postal Service Medicare 
                        covered annuitant; or
                          (iii) a member of family of a Postal 
                        Service employee or of a Postal Service 
                        annuitant and who is not described in 
                        section 1837(o)(1) of this Act; and
                  (B) enrolls in a Program plan under section 
                8903c of title 5, United States Code,
such individual is deemed to be enrolled under this part, 
regardless of whether such individual has filed an application 
under subparagraph (A) or (C) of subsection (a)(2).
          (2) Entitlement to hospital benefits under part A by 
        reason of paragraph (1) begins as of--
                  (A) in the case of an individual who is a 
                Postal Service employee or a Postal Service 
                annuitant who is eligible to become a Postal 
                Service Medicare covered annuitant, the date on 
                which the individual becomes a Postal Service 
                Medicare covered annuitant or the date of 
                enrollment in a Program plan, whichever is 
                later;
                  (B) in the case of an individual who is 
                eligible to enroll under section 1818 or 1818A, 
                the date on which the individual attains such 
                eligibility or the date of enrollment in a 
                Program plan whichever is later; and
                  (C) in the case of an individual who is 
                described in paragraph (1)(A)(iii) and is 
                eligible to become a covered Medicare 
                individual, as of the first date the individual 
                becomes a covered Medicare individual or the 
                date of enrollment in a Program plan, whichever 
                is later.
          (3) The definitions in section 8903c(a) of title 5, 
        United States Code, shall apply for purposes of this 
        subsection.
          (4) Nothing in this subsection shall be construed to 
        deprive any individual of any other method or period of 
        enrollment to which such individual is entitled under 
        this section.

           *       *       *       *       *       *       *


TITLE XVIII--HEALTH INSURANCE FOR THE AGED AND DISABLED

           *       *       *       *       *       *       *


   Part B--Supplementary Medical Insurance Benefits for the Aged and 
Disabled

           *       *       *       *       *       *       *


                           ENROLLMENT PERIODS

  Sec. 1837. (a) An individual may enroll in the insurance 
program established by this part only in such manner and form 
as may be prescribed by regulations, and only during an 
enrollment period prescribed in or under this section.
  (c) In the case of individuals who first satisfy paragraph 
(1) or (2) of section 1836(a) before March 1, 1966, the initial 
general enrollment period shall begin on the first day of the 
second month which begins after the date of enactment of this 
title and shall end on May 31, 1966. For purposes of this 
subsection and subsection (d), an individual who has attained 
age 65 and who satisfies paragraph (1) of section 1836(a) but 
not paragraph (2) of such section shall be treated as 
satisfying such paragraph (1) on the first day on which he is 
(or on filing application would have been) entitled to hospital 
insurance benefits under part A.
  (d) In the case of an individual who first satisfies 
paragraph (1) or (2) of section 1836(a) on or after March 1, 
1966, his initial enrollment period shall begin on the first 
day of the third month before the month in which he first 
satisfies such paragraphs and shall end seven months later. 
Where the Secretary finds that an individual who has attained 
age 65 failed to enroll under this part during his initial 
enrollment period (based on a determination by the Secretary of 
the month in which such individual attained age 65), because 
such individual (relying on documentary evidence) was mistaken 
as to his correct date of birth, the Secretary shall establish 
for such individual an initial enrollment period based on his 
attaining age 65 at the time shown in such documentary evidence 
(with a coverage period determined under section 1838 as though 
he had attained such age at that time).
  (e) There shall be a general enrollment period during the 
period beginning on January 1 and ending on March 31 of each 
year.
  (f) Any individual--
          (1) who is eligible under section 1836(a) to enroll 
        in the medical insurance program by reason of 
        entitlement to hospital insurance benefits as described 
        in paragraph (1) of such section, and
          (2) whose initial enrollment period under subsection 
        (d) begins after March 31, 1973, and
          (3) who is residing in the United States, exclusive 
        of Puerto Rico,
shall be deemed to have enrolled in the medical insurance 
program established by this part.
  (g) All of the provisions of this section shall apply to 
individuals satisfying subsection (f), except that--
          (1) in the case of an individual who satisfies 
        subsection (f) by reason of entitlement to disability 
        insurance benefits described in section 226(b), his 
        initial enrollment period shall begin on the first day 
        of the later of (A) April 1973 or (B) the third month 
        before the 25th month of such entitlement, and shall 
        reoccur with each continuous period of eligibility (as 
        defined in section 1839(d)) and upon attainment of age 
        65;
          (2)(A) in the case of an individual who is entitled 
        to monthly benefits under section 202 or 223 on the 
        first day of his initial enrollment period or becomes 
        entitled to monthly benefits under section 202 during 
        the first 3 months of such period, his enrollment shall 
        be deemed to have occurred in the third month of his 
        initial enrollment period, and
          (B) in the case of an individual who is not entitled 
        to benefits under section 202 on the first day of his 
        initial enrollment period and does not become so 
        entitled during the first 3 months of such period, his 
        enrollment shall be deemed to have occurred in the 
        month in which he files the application establishing 
        his entitlement to hospital insurance benefits provided 
        such filing occurs during the last 4 months of his 
        initial enrollment period; and
          (3) in the case of an individual who would otherwise 
        satisfy subsection (f) but does not establish his 
        entitlement to hospital insurance benefits until after 
        the last day of his initial enrollment period (as 
        defined in subsection (d) of this section), his 
        enrollment shall be deemed to have occurred on the 
        first day of the earlier of the then current or 
        immediately succeeding general enrollment period (as 
        defined in subsection (e) of this section).
  (h) In any case where the Secretary finds that an 
individual's enrollment or nonenrollment in the insurance 
program established by this part or part A pursuant to section 
1818 is unintentional, inadvertent, or erroneous and is the 
result of the error, misrepresentation, or inaction of an 
officer, employee, or agent of the Federal Government, or its 
instrumentalities, the Secretary may take such action 
(including the designation for such individual of a special 
initial or subsequent enrollment period, with a coverage period 
determined on the basis thereof and with appropriate 
adjustments of premiums) as may be necessary to correct or 
eliminate the effects of such error, misrepresentation, or 
inaction.
  (i)(1) In the case of an individual who--
          (A) at the time the individual first satisfies 
        paragraph (1) or (2) of section 1836(a), is enrolled in 
        a group health plan described in section 
        1862(b)(1)(A)(v) by reason of the individual's (or the 
        individual's spouse's) current employment status, and
          (B) has elected not to enroll (or to be deemed 
        enrolled) under this section during the individual's 
        initial enrollment period,
there shall be a special enrollment period described in 
paragraph (3). In the case of an individual not described in 
the previous sentence who has not attained the age of 65, at 
the time the individual first satisfies paragraph (1) of 
section 1836(a), is enrolled in a large group health plan (as 
that term is defined in section 1862(b)(1)(B)(iii)) by reason 
of the individual's current employment status (or the current 
employment status of a family member of the individual), and 
has elected not to enroll (or to be deemed enrolled) under this 
section during the individual's initial enrollment period, 
there shall be a special enrollment period described in 
paragraph (3)(B).
  (2) In the case of an individual who--
          (A)(i) has enrolled (or has been deemed to have 
        enrolled) in the medical insurance program established 
        under this part during the individual's initial 
        enrollment period, or (ii) is an individual described 
        in paragraph (1)(A);
          (B) has enrolled in such program during any 
        subsequent special enrollment period under this 
        subsection during which the individual was not enrolled 
        in a group health plan described in section 
        1862(b)(1)(A)(v) by reason of the individual's (or 
        individual's spouse's) current employment status; and
          (C) has not terminated enrollment under this section 
        at any time at which the individual is not enrolled in 
        such a group health plan by reason of the individual's 
        (or individual's spouse's) current employment status,
there shall be a special enrollment period described in 
paragraph (3). In the case of an individual not described in 
the previous sentence who has not attained the age of 65, has 
enrolled (or has been deemed to have enrolled) in the medical 
insurance program established under this part during the 
individual's initial enrollment period, or is an individual 
described in the second sentence of paragraph (1), has enrolled 
in such program during any subsequent special enrollment period 
under this subsection during which the individual was not 
enrolled in a large group health plan (as that term is defined 
in section 1862(b)(1)(B)(iii)) by reason of the individual's 
current employment status (or the current employment status of 
a family member of the individual), and has not terminated 
enrollment under this section at any time at which the 
individual is not enrolled in such a large group health plan by 
reason of the individual's current employment status (or the 
current employment status of a family member of the 
individual), there shall be a special enrollment period 
described in paragraph (3)(B).
  (3)(A) The special enrollment period referred to in the first 
sentences of paragraphs (1) and (2) is the period including 
each month during any part of which the individual is enrolled 
in a group health plan described in section 1862(b)(1)(A)(v) by 
reason of current employment status ending with the last day of 
the eighth consecutive month in which the individual is at no 
time so enrolled.
  (B) The special enrollment period referred to in the second 
sentences of paragraphs (1) and (2) is the period including 
each month during any part of which the individual is enrolled 
in a large group health plan (as that term is defined in 
section 1862(b)(1)(B)(iii)) by reason of the individual's 
current employment status (or the current employment status of 
a family member of the individual) ending with the last day of 
the eighth consecutive month in which the individual is at no 
time so enrolled.
  (4)(A) In the case of an individual who is entitled to 
benefits under part A pursuant to section 226(b) and--
          (i) who at the time the individual first satisfies 
        paragraph (1) of section 1836(a)--
                  (I) is enrolled in a group health plan 
                described in section 1862(b)(1)(A)(v) by reason 
                of the individual's current or former 
                employment or by reason of the current or 
                former employment status of a member of the 
                individual's family, and
                  (II) has elected not to enroll (or to be 
                deemed enrolled) under this section during the 
                individual's initial enrollment period; and
          (ii) whose continuous enrollment under such group 
        health plan is involuntarily terminated at a time when 
        the enrollment under the plan is not by reason of the 
        individual's current employment or by reason of the 
        current employment of a member of the individual's 
        family,
there shall be a special enrollment period described in 
subparagraph (B).
  (B) The special enrollment period referred to in subparagraph 
(A) is the 6-month period beginning on the first day of the 
month which includes the date of the enrollment termination 
described in subparagraph (A)(ii).
  (j) In applying this section in the case of an individual who 
is entitled to benefits under part A pursuant to the operation 
of section 226(h), the following special rules apply:
          (1) The initial enrollment period under subsection 
        (d) shall begin on the first day of the first month in 
        which the individual satisfies the requirement of 
        section 1836(a)(1).
          (2) In applying subsection (g)(1), the initial 
        enrollment period shall begin on the first day of the 
        first month of entitlement to disability insurance 
        benefits referred to in such subsection.
  (k)(1) In the case of an individual who--
          (A) at the time the individual first satisfies 
        paragraph (1) or (2) of section 1836(a), is described 
        in paragraph (3), and has elected not to enroll (or to 
        be deemed enrolled) under this section during the 
        individual's initial enrollment period; or
          (B) has terminated enrollment under this section 
        during a month in which the individual is described in 
        paragraph (3),
there shall be a special enrollment period described in 
paragraph (2).
  (2) The special enrollment period described in this paragraph 
is the 6-month period beginning on the first day of the month 
which includes the date that the individual is no longer 
described in paragraph (3).
  (3) For purposes of paragraph (1), an individual described in 
this paragraph is an individual who--
          (A) is serving as a volunteer outside of the United 
        States through a program--
                  (i) that covers at least a 12-month period; 
                and
                  (ii) that is sponsored by an organization 
                described in section 501(c)(3) of the Internal 
                Revenue Code of 1986 and exempt from taxation 
                under section 501(a) of such Code; and
          (B) demonstrates health insurance coverage while 
        serving in the program.
  (l)(1) In the case of any individual who is a covered 
beneficiary (as defined in section 1072(5) of title 10, United 
States Code) at the time the individual is entitled to part A 
under section 226(b) or section 226A and who is eligible to 
enroll but who has elected not to enroll (or to be deemed 
enrolled) during the individual's initial enrollment period, 
there shall be a special enrollment period described in 
paragraph (2).
  (2) The special enrollment period described in this 
paragraph, with respect to an individual, is the 12-month 
period beginning on the day after the last day of the initial 
enrollment period of the individual or, if later, the 12-month 
period beginning with the month the individual is notified of 
enrollment under this section.
  (3) In the case of an individual who enrolls during the 
special enrollment period provided under paragraph (1), the 
coverage period under this part shall begin on the first day of 
the month in which the individual enrolls, or, at the option of 
the individual, the first month after the end of the 
individual's initial enrollment period.
  (4) An individual may only enroll during the special 
enrollment period provided under paragraph (1) one time during 
the individual's lifetime.
  (5) The Secretary shall ensure that the materials relating to 
coverage under this part that are provided to an individual 
described in paragraph (1) prior to the individual's initial 
enrollment period contain information concerning the impact of 
not enrolling under this part, including the impact on health 
care benefits under the TRICARE program under chapter 55 of 
title 10, United States Code.
  (6) The Secretary of Defense shall collaborate with the 
Secretary of Health and Human Services and the Commissioner of 
Social Security to provide for the accurate identification of 
individuals described in paragraph (1). The Secretary of 
Defense shall provide such individuals with notification with 
respect to this subsection. The Secretary of Defense shall 
collaborate with the Secretary of Health and Human Services and 
the Commissioner of Social Security to ensure appropriate 
follow up pursuant to any notification provided under the 
preceding sentence.
  (m) Beginning January 1, 2023, the Secretary may establish 
special enrollment periods in the case of individuals who 
satisfy paragraph (1) or (2) of section 1836(a) and meet such 
exceptional conditions as the Secretary may provide.
  (n)(1) Any individual who is eligible for coverage of 
immunosuppressive drugs under section 1836(b) may enroll or be 
deemed to have enrolled only in such manner and form as may be 
prescribed by regulations, and only during an enrollment period 
described in this subsection.
  (2) An individual described in paragraph (1) whose 
entitlement for hospital insurance benefits under part A ends 
by reason of section 226A(b)(2) prior to January 1, 2023, may 
enroll beginning on October 1, 2022, or the day on which the 
individual first satisfies section 1836(b), whichever is later.
  (3) An individual described in paragraph (1) whose 
entitlement for hospital insurance benefits under part A ends 
by reason of section 226A(b)(2) on or after January 1, 2023, 
shall be deemed to have enrolled in the medical insurance 
program established by this part for purposes of coverage of 
immunosuppressive drugs.
  (4) The Secretary shall establish a process under which an 
individual described in paragraph (1) whose other coverage 
described in section 1836(b)(2)(A), or coverage under this part 
(including the medical insurance program established under this 
part for purposes of coverage of immunosuppressive drugs), is 
terminated voluntarily or involuntary may enroll or reenroll, 
if applicable, in the medical insurance program established 
under this part for purposes of coverage of immunosuppressive 
drugs.
  (o)(1) In the case of an individual who--
                  (A) as of January 1, 2023, is--
                          (i) a Postal Service Medicare covered 
                        annuitant; or
                          (ii) a member of family of a Postal 
                        Service employee or of a Postal Service 
                        annuitant and is a covered Medicare 
                        individual;
                  (B) intends to enroll in a Program plan under 
                section 8903c of title 5, United States Code, 
                for the initial contract year; and
                  (C) is not enrolled under this part,
the individual may elect to be enrolled under this part during 
a special enrollment period during the 3-month period beginning 
on January 1, 2023.
          (2) In the case of an individual who--
                  (A) on or after January 1, 2023, is--
                          (i) a Postal Service employee;
                          (ii) a Postal Service annuitant who 
                        is not a Postal Service Medicare 
                        covered annuitant; or
                          (iii) a member of family of a Postal 
                        Service employee or of a Postal Service 
                        annuitant and who is not described in 
                        paragraph (1); and
                  (B) enrolls in a Program plan under section 
                8903c of title 5, United States Code;
        the individual shall be deemed to have enrolled in the 
        medical insurance program established by this part.
          (3) The definitions in section 8903c(a) of title 5, 
        United States Code, shall apply for purposes of this 
        subsection.
          (4) Nothing in this subsection shall be construed to 
        deprive any individual of any other method or period of 
        enrollment to which such individual is entitled under 
        this section.

                            COVERAGE PERIOD

  Sec. 1838. (a) The period during which an individual is 
entitled to benefits under the insurance program established by 
this part (hereinafter referred to as his ``coverage period'') 
shall begin on whichever of the following is the latest:
          (1) July 1, 1966, or (in the case of a disabled 
        individual who has not attained age 65) July 1, 1973; 
        or
          (2)(A) in the case of an individual who enrolls 
        pursuant to subsection (d) of section 1837 before the 
        month in which he first satisfies paragraph (1) or (2) 
        of section 1836(a), the first day of such month,
          (B) in the case of an individual who first satisfies 
        such paragraph in a month beginning before January 2023 
        and who enrolls pursuant to such subsection (d)--
                  (i) in such month in which he first satisfies 
                such paragraph, the first day of the month 
                following the month in which he so enrolls,
                  (ii) in the month following such month in 
                which he first satisfies such paragraph, the 
                first day of the second month following the 
                month in which he so enrolls, or
                  (iii) more than one month following such 
                month in which he satisfies such paragraph, the 
                first day of the third month following the 
                month in which he so enrolls,
          (C) in the case of an individual who first satisfies 
        such paragraph in a month beginning on or after January 
        1, 2023, and who enrolls pursuant to such subsection 
        (d) in such month in which he first satisfies such 
        paragraph or in any subsequent month of his initial 
        enrollment period, the first day of the month following 
        the month in which he so enrolls, or
          (D) in the case of an individual who enrolls pursuant 
        to subsection (e) of section 1837 in a month 
        beginning--
                  (i) before January 1, 2023, the July 1 
                following the month in which he so enrolls; or
                  (ii) on or after January 1, 2023, the first 
                day of the month following the month in which 
                he so enrolls; or
          (3) in the case of an individual who is deemed to 
        have enrolled--
                  (A) on or before the last day of the third 
                month of his initial enrollment period, the 
                first day of the month in which he first meets 
                the applicable requirements of section 1836(a) 
                or July 1, 1973, whichever is later, or
                  (B) on or after the first day of the fourth 
                month of his initial enrollment period, and 
                where such month begins--
                          (i) before January 1, 2023, as 
                        prescribed under subparagraphs (B)(i), 
                        (B)(ii), (B)(iii), and (D)(i) of 
                        paragraph (2), or
                          (ii) on or after January 1, 2023, as 
                        prescribed under subparagraphs (C) and 
                        (D)(ii) of paragraph (2).
  (b) An individual's coverage period shall continue until his 
enrollment has been terminated--
          (1) by the filing of notice that the individual no 
        longer wishes to participate in the insurance program 
        established by this part, or
          (2) for nonpayment of premiums.
The termination of a coverage period under paragraph (1) shall 
(except as otherwise provided in section 1843(e)) take effect 
at the close of the month following the month in which the 
notice is filed. The termination of a coverage period under 
paragraph (2) shall take effect on a date determined under 
regulations, which may be determined so as to provide a grace 
period in which overdue premiums may be paid and coverage 
continued. The grace period determined under the preceding 
sentence shall not exceed 90 days; except that it may be 
extended to not to exceed 180 days in any case where the 
Secretary determines that there was good cause for failure to 
pay the overdue premiums within such 90-day period.
          
  Where an individual who is deemed to have enrolled for 
medical insurance pursuant to section 1837(f) or section 
1837(n)(3) files a notice before the first day of the month in 
which his coverage period begins advising that he does not wish 
to be so enrolled, the termination of the coverage period 
resulting from such deemed enrollment shall take effect with 
the first day of the month the coverage would have been 
effective. Where an individual who is deemed enrolled for 
medical insurance benefits pursuant to section 1837(f) or 
section 1837(n)(3) files a notice requesting termination of his 
deemed coverage in or after the month in which such coverage 
becomes effective, the termination of such coverage shall take 
effect at the close of the month following the month in which 
the notice is filed.
  (c) In the case of an individual satisfying paragraph (1) of 
section 1836(a) whose entitlement to hospital insurance 
benefits under part A is based on a disability rather than on 
his having attained the age of 65, his coverage period (and his 
enrollment under this part) shall be terminated as of the close 
of the last month for which he is entitled to hospital 
insurance benefits.
  (d) No payments may be made under this part with respect to 
the expenses of an individual unless such expenses were 
incurred by such individual during a period which, with respect 
to him, is a coverage period.
  (e) Notwithstanding subsection (a), in the case of an 
individual who enrolls during a special enrollment period 
pursuant to section 1837(i)(3) or 1837(i)(4)(B)--
          (1) in any month of the special enrollment period in 
        which the individual is at any time enrolled in a plan 
        (specified in subparagraph (A) or (B), as applicable, 
        of section 1837(i)(3) or specified in section 
        1837(i)(4)(A)(i)) or in the first month following such 
        a month, the coverage period shall begin on the first 
        day of the month in which the individual so enrolls 
        (or, at the option of the individual, on the first day 
        of any of the following three months), or
          (2) in any other month of the special enrollment 
        period, the coverage period shall begin on the first 
        day of the month following the month in which the 
        individual so enrolls.
  (f) Notwithstanding subsection (a), in the case of an 
individual who enrolls during a special enrollment period 
pursuant to section 1837(k), the coverage period shall begin on 
the first day of the month following the month in which the 
individual so enrolls.
  (g) Notwithstanding subsection (a), in the case of an 
individual who enrolls during a special enrollment period 
pursuant to section 1837(m), the coverage period shall begin on 
a date the Secretary provides in a manner consistent (to the 
extent practicable) with protecting continuity of health 
benefit coverage.
  (h) In the case of an individual described in section 
1836(b)(1), the following rules shall apply:
          (1) In the case of such an individual who is deemed 
        to have enrolled in part B for coverage of 
        immunosuppressive drugs under section 1837(n)(3), such 
        individual's coverage period shall begin on the first 
        day of the month in which the individual first 
        satisfies section 1836(b).
          (2) In the case of such an individual who enrolls (or 
        reenrolls, if applicable) in part B for coverage of 
        immunosuppressive drugs under paragraph (2) or (4) of 
        section 1837(n), such individual's coverage period 
        shall begin on January 1, 2023, or the month following 
        the month in which the individual so enrolls (or 
        reenrolls), whichever is later.
          (3) The provisions of subsections (b) and (d) shall 
        apply with respect to an individual described in 
        paragraph (1) or (2).
          (4) In addition to the reasons for termination under 
        subsection (b), the coverage period of an individual 
        described in paragraph (1) or (2) shall end when the 
        individual becomes entitled to benefits under this 
        title under subsection (a) or (b) of section 226, or 
        under section 226A, or is no longer eligible for such 
        coverage as a result of the application of section 
        1836(b)(2).
          (5) The Secretary may conduct public education 
        activities to raise awareness of the availability of 
        more comprehensive, individual health insurance 
        coverage (as defined in section 2791 of the Public 
        Health Service Act) for individuals eligible under 
        section 1836(b) to enroll or to be deemed enrolled in 
        the medical insurance program established under this 
        part for purposes of coverage of immunosuppressive 
        drugs.
  (i) Notwithstanding subsection (a)--
          (1) in the case of an individual who enrolls under 
        this part pursuant to a special enrollment period under 
        paragraph (1) of section 1837(o), the coverage period 
        under this part shall begin on the date that the 
        individual first has coverage under the Program plan 
        pursuant to the enrollment described in paragraph 
        (1)(B) of such section; and
          (2) in the case of an individual who is deemed 
        enrolled under paragraph (2) of section 1837(o), the 
        coverage period under this part shall begin as of--
                  (A) in the case of such an individual who is 
                a Postal Service employee or a Postal Service 
                annuitant who is eligible to become a Postal 
                Service Medicare covered annuitant, the date on 
                which the individual becomes a Postal Service 
                Medicare covered annuitant or the date of 
                enrollment in a Program plan, whichever is 
                later;
                  (B) in the case of such an individual who is 
                eligible to enroll under section 1818 or 1818A 
                of this Social Security Act, the date on which 
                the individual attains such eligibility or the 
                date of enrollment in a Program plan, whichever 
                is later; and
                  (C) in the case of an individual described in 
                paragraph (2)(A)(i)(III) of such section who is 
                eligible to become a covered Medicare 
                individual, as of the first date the individual 
                becomes a covered Medicare individual or the 
                date of enrollment in a Program plan, whichever 
                is later.

                          amounts of premiums

  Sec. 1839. (a)(1) The Secretary shall, during September of 
1983 and of each year thereafter, determine the monthly 
actuarial rate for enrollees age 65 and over which shall be 
applicable for the succeeding calendar year. Subject to 
paragraphs (5), (6), and (7), such actuarial rate shall be the 
amount the Secretary estimates to be necessary so that the 
aggregate amount for such calendar year with respect to those 
enrollees age 65 and older will equal one-half of the total of 
the benefits and administrative costs which he estimates will 
be payable from the Federal Supplementary Medical Insurance 
Trust Fund for services performed and related administrative 
costs incurred in such calendar year with respect to such 
enrollees. In calculating the monthly actuarial rate, the 
Secretary shall include an appropriate amount for a contingency 
margin. In applying this paragraph there shall not be taken 
into account additional payments under section 1848(o) and 
section 1853(l)(3) and the Government contribution under 
section 1844(a)(3).
  (2) The monthly premium of each individual enrolled under 
this part for each month after December 1983 shall be the 
amount determined under paragraph (3), adjusted as required in 
accordance with subsections (b), (c), (f), and (i), and to 
reflect any credit provided under section 
1854(b)(1)(C)(ii)(III).
  (3) The Secretary, during September of each year, shall 
determine and promulgate a monthly premium rate for the 
succeeding calendar year that (except as provided in subsection 
(g)) is equal to 50 percent of the monthly actuarial rate for 
enrollees age 65 and over, determined according to paragraph 
(1), for that succeeding calendar year. Whenever the Secretary 
promulgates the dollar amount which shall be applicable as the 
monthly premium rate for any period, he shall, at the time such 
promulgation is announced, issue a public statement setting 
forth the actuarial assumptions and bases employed by him in 
arriving at the amount of an adequate actuarial rate for 
enrollees age 65 and older as provided in paragraph (1).
  (4) The Secretary shall also, during September of 1983 and of 
each year thereafter, determine the monthly actuarial rate for 
disabled enrollees under age 65 which shall be applicable for 
the succeeding calendar year. Such actuarial rate shall be the 
amount the Secretary estimates to be necessary so that the 
aggregate amount for such calendar year with respect to 
disabled enrollees under age 65 will equal one-half of the 
total of the benefits and administrative costs which he 
estimates will be payable from the Federal Supplementary 
Medical Insurance Trust Fund for services performed and related 
administrative costs incurred in such calendar year with 
respect to such enrollees. In calculating the monthly actuarial 
rate under this paragraph, the Secretary shall include an 
appropriate amount for a contingency margin.
  (5)(A) In applying this part (including subsection (i) and 
section 1833(b)), the monthly actuarial rate for enrollees age 
65 and over for 2016 shall be determined as if subsection (f) 
did not apply.
  (B) Subsection (f) shall continue to be applied to paragraph 
(6)(A) (during a repayment month, as described in paragraph 
(6)(B)) and without regard to the application of subparagraph 
(A).
  (6)(A) With respect to a repayment month (as described in 
subparagraph (B)), the monthly premium otherwise established 
under paragraph (3) shall be increased by, subject to 
subparagraph (D), $3.
  (B) For purposes of this paragraph, a repayment month is a 
month during a year, beginning with 2016, for which a balance 
due amount is computed under subparagraph (C) as greater than 
zero.
  (C) For purposes of this paragraph, the balance due amount 
computed under this subparagraph, with respect to a month, is 
the amount estimated by the Chief Actuary of the Centers for 
Medicare & Medicaid Services to be equal to--
          (i) the amount transferred under subsections (d)(1) 
        and (e)(1) of section 1844; plus
          (ii) the amount that is equal to the aggregate 
        reduction, for all individuals enrolled under this 
        part, in the income related monthly adjustment amount 
        as a result of the application of paragraphs (5) and 
        (7); minus
          (iii) the amounts payable under this part as a result 
        of the application of this paragraph for preceding 
        months.
  (D) If the balance due amount computed under subparagraph 
(C), without regard to this subparagraph, for December of a 
year would be less than zero, the Chief Actuary of the Centers 
for Medicare & Medicaid Services shall estimate, and the 
Secretary shall apply, a reduction to the dollar amount 
increase applied under subparagraph (A) for each month during 
such year in a manner such that the balance due amount for 
January of the subsequent year is equal to zero.
  (7)(A) In applying this part (including subsection (i) and 
section 1833(b)), the monthly actuarial rate for enrollees age 
65 and over for 2021 shall be determined to be equal to the sum 
of--
          (i) the monthly actuarial rate for enrollees age 65 
        and over for 2020; plus
          (ii) 25 percent of the difference between such rate 
        for 2020 and the preliminary monthly actuarial rate for 
        enrollees age 65 and over for 2021 (as estimated under 
        subparagraph (B)).
  (B) For purposes of subparagraph (A)(ii), the Secretary shall 
estimate a preliminary monthly actuarial rate for enrollees age 
65 and over for 2021 using the methodology described in 
paragraph (1) and as if subparagraph (A) of this paragraph did 
not apply. The Secretary shall make the estimate under the 
previous sentence as if the transfers described in section 
1844(f)(1) have been made.
  (b) In the case of an individual whose coverage period began 
pursuant to an enrollment after his initial enrollment period 
(determined pursuant to subsection (c) or (d) of section 1837) 
and not pursuant to a special enrollment period under 
subsection (i)(4), (l), or (m) of section 1837, the monthly 
premium determined under subsection (a) (without regard to any 
adjustment under subsection (i)) shall be increased by 10 
percent of the monthly premium so determined for each full 12 
months (in the same continuous period of eligibility) in which 
he could have been but was not enrolled. For purposes of the 
preceding sentence, there shall be taken into account (1) the 
months which elapsed between the close of his initial 
enrollment period and the close of the enrollment period in 
which he enrolled, plus (in the case of an individual who 
reenrolls) (2) the months which elapsed between the date of 
termination of a previous coverage period and the close of the 
enrollment period in which he reenrolled, but there shall not 
be taken into account months for which the individual can 
demonstrate that the individual was enrolled in a group health 
plan described in section 1862(b)(1)(A)(v) by reason of the 
individual's (or the individual's spouse's) current employment 
or months during which the individual has not attained the age 
of 65 and for which the individual can demonstrate that the 
individual was enrolled in a large group health plan as an 
active individual (as those terms are defined in section 
1862(b)(1)(B)(iii)) or months for which the individual can 
demonstrate that the individual was an individual described in 
section 1837(k)(3). Any increase in an individual's monthly 
premium under the first sentence of this subsection with 
respect to a particular continuous period of eligibility shall 
not be applicable with respect to any other continuous period 
of eligibility which such individual may have. No increase in 
the premium shall be effected for a month in the case of an 
individual who enrolls under this part during 2001, 2002, 2003, 
or 2004 and who demonstrates to the Secretary before December 
31, 2004, that the individual is a covered beneficiary (as 
defined in section 1072(5) of title 10, United States Code). 
The Secretary of Health and Human Services shall consult with 
the Secretary of Defense in identifying individuals described 
in the previous sentence. For purposes of determining any 
increase under this subsection for individuals whose enrollment 
occurs on or after January 1, 2023, the second sentence of this 
subsection shall be applied by substituting ``close of the 
month'' for ``close of the period at the end of the enrollment 
sentence'' each place it appears. No increase in the premium 
shall be effected for individuals who are enrolled pursuant to 
section 1836(b) for coverage only of immunosuppressive drugs.
  (c) If any monthly premium determined under the foregoing 
provisions of this section is not a multiple of 10 cents, such 
premium shall be rounded to the nearest multiple of 10 cents.
  (d) For purposes of subsection (b) (and section 1837(g)(1)), 
an individual's ``continuous period of eligibility'' is the 
period beginning with the first day on which he is eligible to 
enroll under section 1836(a) and ending with his death; except 
that any period during all of which an individual satisfied 
paragraph (1) of section 1836(a) and which terminated in or 
before the month preceding the month in which he attained age 
65 shall be a separate ``continuous period of eligibility'' 
with respect to such individual (and each such period which 
terminates shall be deemed not to have existed for purposes of 
subsequently applying this section).
  (e)(1) Upon the request of a State (or any appropriate State 
or local governmental entity specified by the Secretary), the 
Secretary may enter into an agreement with the State (or such 
entity) under which the State (or such entity) agrees to pay on 
a quarterly or other periodic basis to the Secretary (to be 
deposited in the Treasury to the credit of the Federal 
Supplementary Medical Insurance Trust Fund) an amount equal to 
the amount of the part B late enrollment premium increases with 
respect to the premiums for eligible individuals (as defined in 
paragraph (3)(A)).
  (2) No part B late enrollment premium increase shall apply to 
an eligible individual for premiums for months for which the 
amount of such an increase is payable under an agreement under 
paragraph (1).
  (3) In this subsection:
          (A) The term ``eligible individual'' means an 
        individual who is enrolled under this part B and who is 
        within a class of individuals specified in the 
        agreement under paragraph (1).
          (B) The term ``part B late enrollment premium 
        increase'' means any increase in a premium as a result 
        of the application of subsection (b).
  (f) For any calendar year after 1988, if an individual is 
entitled to monthly benefits under section 202 or 223 or to a 
monthly annuity under section 3(a), 4(a), or 4(f) of the 
Railroad Retirement Act of 1974 for November and December of 
the preceding year, if the monthly premium of the individual 
under this section for December and for January is deducted 
from those benefits under section 1840(a)(1) or section 
1840(b)(1), and if the amount of the individual's premium is 
not adjusted for such January under subsection (i), the monthly 
premium otherwise determined under this section for an 
individual for that year shall not be increased, pursuant to 
this subsection, to the extent that such increase would reduce 
the amount of benefits payable to that individual for that 
December below the amount of benefits payable to that 
individual for that November (after the deduction of the 
premium under this section). For purposes of this subsection, 
retroactive adjustments or payments and deductions on account 
of work shall not be taken into account in determining the 
monthly benefits to which an individual is entitled under 
section 202 or 223 or under the Railroad Retirement Act of 
1974. Any increase in the premium for an individual who was 
enrolled under section 1836(b) attributable to such individual 
otherwise enrolling under this part shall not be taken into 
account in applying this subsection.
  (g) In estimating the benefits and administrative costs which 
will be payable from the Federal Supplementary Medical 
Insurance Trust Fund for a year for purposes of determining the 
monthly premium rate under subsection (a)(3), the Secretary 
shall exclude an estimate of any benefits and administrative 
costs attributable to--
          (1) the application of section 1861(v)(1)(L)(viii) or 
        to the establishment under section 1861(v)(1)(L)(i)(V) 
        of a per visit limit at 106 percent of the median 
        (instead of 105 percent of the median), but only to the 
        extent payment for home health services under this 
        title is not being made under section 1895 (relating to 
        prospective payment for home health services); and
          (2) the medicare prescription drug discount card and 
        transitional assistance program under section 1860D-31.
  (h) Potential Application of Comparative Cost Adjustment in 
CCA Areas.--
          (1) In general.--Certain individuals who are residing 
        in a CCA area under section 1860C-1 who are not 
        enrolled in an MA plan under part C may be subject to a 
        premium adjustment under subsection (f) of such section 
        for months in which the CCA program under such section 
        is in effect in such area.
          (2) No effect on late enrollment penalty or income-
        related adjustment in subsidies.--Nothing in this 
        subsection or section 1860C-1(f) shall be construed as 
        affecting the amount of any premium adjustment under 
        subsection (b) or (i). Subsection (f) shall be applied 
        without regard to any premium adjustment referred to in 
        paragraph (1).
          (3) Implementation.--In order to carry out a premium 
        adjustment under this subsection and section 1860C-1(f) 
        (insofar as it is effected through the manner of 
        collection of premiums under section 1840(a)), the 
        Secretary shall transmit to the Commissioner of Social 
        Security--
                  (A) at the beginning of each year, the name, 
                social security account number, and the amount 
                of the premium adjustment (if any) for each 
                individual enrolled under this part for each 
                month during the year; and
                  (B) periodically throughout the year, 
                information to update the information 
                previously transmitted under this paragraph for 
                the year.
  (i) Reduction in Premium Subsidy Based on Income.--
          (1) In general.--In the case of an individual whose 
        modified adjusted gross income exceeds the threshold 
        amount under paragraph (2), the monthly amount of the 
        premium subsidy applicable to the premium under this 
        section for a month after December 2006 shall be 
        reduced (and the monthly premium shall be increased) by 
        the monthly adjustment amount specified in paragraph 
        (3).
          (2) Threshold amount.--For purposes of this 
        subsection, subject to paragraph (6), the threshold 
        amount is--
                  (A) except as provided in subparagraph (B), 
                $80,000 (or, beginning with 2018, $85,000), and
                  (B) in the case of a joint return, twice the 
                amount applicable under subparagraph (A) for 
                the calendar year.
          (3) Monthly adjustment amount.--
                  (A) In general.--Subject to subparagraph (B), 
                the monthly adjustment amount specified in this 
                paragraph for an individual for a month in a 
                year is equal to the product of the following:
                          (i) Sliding scale percentage.--
                        Subject to paragraph (6), the 
                        applicable percentage specified in the 
                        applicable table in subparagraph (C) 
                        for the individual minus 25 percentage 
                        points.
                          (ii) Unsubsidized part b premium 
                        amount.--
                                  (I) 200 percent of the 
                                monthly actuarial rate for 
                                enrollees age 65 and over (as 
                                determined under subsection 
                                (a)(1) for the year); plus
                                  (II) 4 times the amount of 
                                the increase in the monthly 
                                premium under subsection (a)(6) 
                                for a month in the year (or, 
                                with respect to an individual 
                                enrolled under section 1836(b) 
                                and not otherwise enrolled 
                                under this part, 0 times the 
                                amount of such increase).
                  (B)  3-year phase in.--The monthly adjustment 
                amount specified in this paragraph for an 
                individual for a month in a year before 2009 is 
                equal to the following percentage of the 
                monthly adjustment amount specified in 
                subparagraph (A):
                          (i) For 2007, 33 percent.
                          (ii) For 2008, 67 percent.
                  (C) Applicable percentage.--
                          (i) In general.--
                                  (I) Subject to paragraphs (5) 
                                and (6), for years before 2018:

If the modified adjusted gross income is:                 The applicable
                                                          percentage is:
    More than $80,000 but not more than $100,000.............35 percent 
    More than $100,000 but not more than $150,000............50 percent 
    More than $150,000 but not more than $200,000............65 percent 
    More than $200,000.......................................80 percent.

                                  (II) Subject to paragraph 
                                (5), for 2018:


 
If the modified adjusted gross income is:                The applicable
                                                                  percentage is:
  More than $85,000 but not more than $107,000.....            35 percent
  More than $107,000 but not more than $133,500....            50 percent
  More than $133,500 but not more than $160,000....            65 percent
  More than $160,000...............................            80 percent.

                                  (III) Subject to paragraph 
                                (5), for years beginning with 
                                2019:


 
 
 
 
If the modified adjusted gross income is:.........        The applicable
                                                          percentage is:
More than $85,000 but not more than $107,000......            35 percent
More than $107,000 but not more than $133,500.....            50 percent
More than $133,500 but not more than $160,000.....            65 percent
More than $160,000 but less than $500,000.........            80 percent
At least $500,000.................................           85 percent.

                          (ii) Joint returns.--In the case of a 
                        joint return, clause (i) shall be 
                        applied by substituting dollar amounts 
                        which are twice the dollar amounts 
                        otherwise applicable under clause (i) 
                        for the calendar year except, with 
                        respect to the dollar amounts applied 
                        in the last row of the table under 
                        subclause (III) of such clause (and the 
                        second dollar amount specified in the 
                        second to last row of such table), 
                        clause (i) shall be applied by 
                        substituting dollar amounts which are 
                        150 percent of such dollar amounts for 
                        the calendar year.
                          (iii) Married individuals filing 
                        separate returns.--In the case of an 
                        individual who--
                                  (I) is married as of the 
                                close of the taxable year 
                                (within the meaning of section 
                                7703 of the Internal Revenue 
                                Code of 1986) but does not file 
                                a joint return for such year, 
                                and
                                  (II) does not live apart from 
                                such individual's spouse at all 
                                times during the taxable year,
                        clause (i) shall be applied by reducing 
                        each of the dollar amounts otherwise 
                        applicable under such clause for the 
                        calendar year by the threshold amount 
                        for such year applicable to an 
                        unmarried individual.
          (4) Modified adjusted gross income.--
                  (A) In general.--For purposes of this 
                subsection, the term ``modified adjusted gross 
                income'' means adjusted gross income (as 
                defined in section 62 of the Internal Revenue 
                Code of 1986)--
                          (i) determined without regard to 
                        sections 135, 911, 931, and 933 of such 
                        Code; and
                          (ii) increased by the amount of 
                        interest received or accrued during the 
                        taxable year which is exempt from tax 
                        under such Code.
                In the case of an individual filing a joint 
                return, any reference in this subsection to the 
                modified adjusted gross income of such 
                individual shall be to such return's modified 
                adjusted gross income.
                  (B) Taxable year to be used in determining 
                modified adjusted gross income.--
                          (i) In general.--In applying this 
                        subsection for an individual's premiums 
                        in a month in a year, subject to clause 
                        (ii) and subparagraph (C), the 
                        individual's modified adjusted gross 
                        income shall be such income determined 
                        for the individual's last taxable year 
                        beginning in the second calendar year 
                        preceding the year involved.
                          (ii) Temporary use of other data.--
                        If, as of October 15 before a calendar 
                        year, the Secretary of the Treasury 
                        does not have adequate data for an 
                        individual in appropriate electronic 
                        form for the taxable year referred to 
                        in clause (i), the individual's 
                        modified adjusted gross income shall be 
                        determined using the data in such form 
                        from the previous taxable year. Except 
                        as provided in regulations prescribed 
                        by the Commissioner of Social Security 
                        in consultation with the Secretary, the 
                        preceding sentence shall cease to apply 
                        when adequate data in appropriate 
                        electronic form are available for the 
                        individual for the taxable year 
                        referred to in clause (i), and proper 
                        adjustments shall be made to the extent 
                        that the premium adjustments determined 
                        under the preceding sentence were 
                        inconsistent with those determined 
                        using such taxable year.
                          (iii) Non-filers.--In the case of 
                        individuals with respect to whom the 
                        Secretary of the Treasury does not have 
                        adequate data in appropriate electronic 
                        form for either taxable year referred 
                        to in clause (i) or clause (ii), the 
                        Commissioner of Social Security, in 
                        consultation with the Secretary, shall 
                        prescribe regulations which provide for 
                        the treatment of the premium adjustment 
                        with respect to such individual under 
                        this subsection, including regulations 
                        which provide for--
                                  (I) the application of the 
                                highest applicable percentage 
                                under paragraph (3)(C) to such 
                                individual if the Commissioner 
                                has information which indicates 
                                that such individual's modified 
                                adjusted gross income might 
                                exceed the threshold amount for 
                                the taxable year referred to in 
                                clause (i), and
                                  (II) proper adjustments in 
                                the case of the application of 
                                an applicable percentage under 
                                subclause (I) to such 
                                individual which is 
                                inconsistent with such 
                                individual's modified adjusted 
                                gross income for such taxable 
                                year.
                  (C) Use of more recent taxable year.--
                          (i) In general.--The Commissioner of 
                        Social Security in consultation with 
                        the Secretary of the Treasury shall 
                        establish a procedures under which an 
                        individual's modified adjusted gross 
                        income shall, at the request of such 
                        individual, be determined under this 
                        subsection--
                                  (I) for a more recent taxable 
                                year than the taxable year 
                                otherwise used under 
                                subparagraph (B), or
                                  (II) by such methodology as 
                                the Commissioner, in 
                                consultation with such 
                                Secretary, determines to be 
                                appropriate, which may include 
                                a methodology for aggregating 
                                or disaggregating information 
                                from tax returns in the case of 
                                marriage or divorce.
                          (ii) Standard for granting 
                        requests.--A request under clause 
                        (i)(I) to use a more recent taxable 
                        year may be granted only if--
                                  (I) the individual furnishes 
                                to such Commissioner with 
                                respect to such year such 
                                documentation, such as a copy 
                                of a filed Federal income tax 
                                return or an equivalent 
                                document, as the Commissioner 
                                specifies for purposes of 
                                determining the premium 
                                adjustment (if any) under this 
                                subsection; and
                                  (II) the individual's 
                                modified adjusted gross income 
                                for such year is significantly 
                                less than such income for the 
                                taxable year determined under 
                                subparagraph (B) by reason of 
                                the death of such individual's 
                                spouse, the marriage or divorce 
                                of such individual, or other 
                                major life changing events 
                                specified in regulations 
                                prescribed by the Commissioner 
                                in consultation with the 
                                Secretary.
          (5) Inflation adjustment.--
                  (A) In general.--Subject to subparagraph (C), 
                in the case of any calendar year beginning 
                after 2007 (other than 2018 and 2019), each 
                dollar amount in paragraph (2) or (3) shall be 
                increased by an amount equal to--
                          (i) such dollar amount, multiplied by
                          (ii) the percentage (if any) by which 
                        the average of the Consumer Price Index 
                        for all urban consumers (United States 
                        city average) for the 12-month period 
                        ending with August of the preceding 
                        calendar year exceeds such average for 
                        the 12-month period ending with August 
                        2006 (or, in the case of a calendar 
                        year beginning with 2020, August 2018).
                  (B) Rounding.--If any dollar amount after 
                being increased under subparagraph (A) or (C) 
                is not a multiple of $1,000, such dollar amount 
                shall be rounded to the nearest multiple of 
                $1,000.
                  (C) Treatment of adjustments for certain 
                higher income individuals.--
                          (i) In general.--Subparagraph (A) 
                        shall not apply with respect to each 
                        dollar amount in paragraph (3) of 
                        $500,000.
                          (ii) Adjustment beginning 2028.--In 
                        the case of any calendar year beginning 
                        after 2027, each dollar amount in 
                        paragraph (3) of $500,000 shall be 
                        increased by an amount equal to--
                                  (I) such dollar amount, 
                                multiplied by
                                  (II) the percentage (if any) 
                                by which the average of the 
                                Consumer Price Index for all 
                                urban consumers (United States 
                                city average) for the 12-month 
                                period ending with August of 
                                the preceding calendar year 
                                exceeds such average for the 
                                12-month period ending with 
                                August 2026.
          (6) Temporary adjustment to income thresholds.--
        Notwithstanding any other provision of this subsection, 
        during the period beginning on January 1, 2011, and 
        ending on December 31, 2017--
                  (A) the threshold amount otherwise applicable 
                under paragraph (2) shall be equal to such 
                amount for 2010; and
                  (B) the dollar amounts otherwise applicable 
                under paragraph (3)(C)(i) shall be equal to 
                such dollar amounts for 2010.
          (7) Joint return defined.--For purposes of this 
        subsection, the term ``joint return'' has the meaning 
        given to such term by section 7701(a)(38) of the 
        Internal Revenue Code of 1986.
  (j) Determination of Premium for Individuals Only Eligible 
for Coverage of Immunosuppressive Drugs.--The Secretary shall, 
during September of each year (beginning with 2022), determine 
and promulgate a monthly premium rate for the succeeding 
calendar year for individuals enrolled only for the purpose of 
coverage of immunosuppressive drugs under section 1836(b). Such 
premium shall be equal to 15 percent of the monthly actuarial 
rate for enrollees age 65 and over (as would be determined in 
accordance with subsection (a)(1) if the reference to ``one-
half'' in such subsection were a reference to ``100 percent'') 
for that succeeding calendar year. The monthly premium of each 
individual enrolled for coverage of immunosuppressive drugs 
under section 1836(b) for each month shall be the amount 
promulgated in this subsection. In the case of such individual 
not otherwise enrolled under this part, such premium shall be 
in lieu of any other monthly premium applicable under this 
section. Such amount shall be adjusted in accordance with 
subsections (c), (f), and (i), but shall not be adjusted under 
subsection (b).
          * * * * * * *

          Part D--Voluntary Prescription Drug Benefit Program

          * * * * * * *

 Subpart 3--Application to Medicare Advantage Program and Treatment of 
     Employer-Sponsored Programs and Other Prescription Drug Plans

          * * * * * * *

             special rules for employer-sponsored programs

  Sec. 1860D-22. (a) Subsidy Payment.--
          (1) In general.--The Secretary shall provide in 
        accordance with this subsection for payment to the 
        sponsor of a qualified retiree prescription drug plan 
        (as defined in paragraph (2)) of a special subsidy 
        payment equal to the amount specified in paragraph (3) 
        for each qualified covered retiree under the plan (as 
        defined in paragraph (4)). This subsection constitutes 
        budget authority in advance of appropriations Acts and 
        represents the obligation of the Secretary to provide 
        for the payment of amounts provided under this section.
          (2) Qualified retiree prescription drug plan 
        defined.--For purposes of this subsection, the term 
        ``qualified retiree prescription drug plan'' means 
        employment-based retiree health coverage (as defined in 
        subsection (c)(1)) if, with respect to a part D 
        eligible individual who is a participant or beneficiary 
        under such coverage, the following requirements are 
        met:
                  (A) Attestation of actuarial equivalence to 
                standard coverage.--The sponsor of the plan 
                provides the Secretary, annually or at such 
                other time as the Secretary may require, with 
                an attestation that the actuarial value of 
                prescription drug coverage under the plan (as 
                determined using the processes and methods 
                described in section 1860D-11(c)) is at least 
                equal to the actuarial value of standard 
                prescription drug coverage, not taking into 
                account the value of any discount or coverage 
                provided during the gap in prescription drug 
                coverage that occurs between the initial 
                coverage limit under section 1860D-2(b)(3) 
                during the year and the out-of-pocket threshold 
                specified in section 1860D-2(b)(4)(B).
                  (B) Audits.--The sponsor of the plan, or an 
                administrator of the plan designated by the 
                sponsor, shall maintain (and afford the 
                Secretary access to) such records as the 
                Secretary may require for purposes of audits 
                and other oversight activities necessary to 
                ensure the adequacy of prescription drug 
                coverage and the accuracy of payments made 
                under this section. The provisions of section 
                1860D-2(d)(3) shall apply to such information 
                under this section (including such actuarial 
                value and attestation) in a manner similar to 
                the manner in which they apply to financial 
                records of PDP sponsors and MA organizations.
                  (C) Provision of disclosure regarding 
                prescription drug coverage.--The sponsor of the 
                plan shall provide for disclosure of 
                information regarding prescription drug 
                coverage in accordance with section 1860D-
                13(b)(6)(B).
          (3) Employer and union special subsidy amounts.--
                  (A) In general.--For purposes of this 
                subsection, the special subsidy payment amount 
                under this paragraph for a qualifying covered 
                retiree for a coverage year enrolled with the 
                sponsor of a qualified retiree prescription 
                drug plan is, for the portion of the retiree's 
                gross covered retiree plan-related prescription 
                drug costs (as defined in subparagraph (C)(ii)) 
                for such year that exceeds the cost threshold 
                amount specified in subparagraph (B) and does 
                not exceed the cost limit under such 
                subparagraph, an amount equal to 28 percent of 
                the allowable retiree costs (as defined in 
                subparagraph (C)(i)) attributable to such gross 
                covered prescription drug costs.
                  (B) Cost threshold and cost limit 
                applicable.--
                          (i) In general.--Subject to clause 
                        (ii)--
                                  (I) the cost threshold under 
                                this subparagraph is equal to 
                                $250 for plan years that end in 
                                2006; and
                                  (II) the cost limit under 
                                this subparagraph is equal to 
                                $5,000 for plan years that end 
                                in 2006.
                          (ii) Indexing.--The cost threshold 
                        and cost limit amounts specified in 
                        subclauses (I) and (II) of clause (i) 
                        for a plan year that ends after 2006 
                        shall be adjusted in the same manner as 
                        the annual deductible and the annual 
                        out-of-pocket threshold, respectively, 
                        are annually adjusted under paragraphs 
                        (1) and (4)(B) of section 1860D-2(b).
                  (C) Definitions.--For purposes of this 
                paragraph:
                          (i) Allowable retiree costs.--The 
                        term ``allowable retiree costs'' means, 
                        with respect to gross covered 
                        prescription drug costs under a 
                        qualified retiree prescription drug 
                        plan by a plan sponsor, the part of 
                        such costs that are actually paid (net 
                        of discounts, chargebacks, and average 
                        percentage rebates) by the sponsor or 
                        by or on behalf of a qualifying covered 
                        retiree under the plan.
                          (ii) Gross covered retiree plan-
                        related prescription drug costs.--For 
                        purposes of this section, the term 
                        ``gross covered retiree plan-related 
                        prescription drug costs'' means, with 
                        respect to a qualifying covered retiree 
                        enrolled in a qualified retiree 
                        prescription drug plan during a 
                        coverage year, the costs incurred under 
                        the plan, not including administrative 
                        costs, but including costs directly 
                        related to the dispensing of covered 
                        part D drugs during the year. Such 
                        costs shall be determined whether they 
                        are paid by the retiree or under the 
                        plan.
                  (iii) Coverage year.--The term ``coverage 
                year'' has the meaning given such term in 
                section 1860D-15(b)(4).
          (4) Qualifying covered retiree defined.--For purposes 
        of this subsection, the term ``qualifying covered 
        retiree'' means a part D eligible individual who is not 
        enrolled in a prescription drug plan or an MA-PD plan 
        but is covered under a qualified retiree prescription 
        drug plan.
          (5) Payment methods, including provision of necessary 
        information.--The provisions of section 1860D-15(d) 
        (including paragraph (2), relating to requirement for 
        provision of information) shall apply to payments under 
        this subsection in a manner similar to the manner in 
        which they apply to payment under section 1860D-15(b).
          (6) Construction.--Nothing in this subsection shall 
        be construed as--
                  (A) precluding a part D eligible individual 
                who is covered under employment-based retiree 
                health coverage from enrolling in a 
                prescription drug plan or in an MA-PD plan;
                  (B) precluding such employment-based retiree 
                health coverage or an employer or other person 
                from paying all or any portion of any premium 
                required for coverage under a prescription drug 
                plan or MA-PD plan on behalf of such an 
                individual;
                  (C) preventing such employment-based retiree 
                health coverage from providing coverage--
                          (i) that is better than standard 
                        prescription drug coverage to retirees 
                        who are covered under a qualified 
                        retiree prescription drug plan; or
                          (ii) that is supplemental to the 
                        benefits provided under a prescription 
                        drug plan or an MA-PD plan, including 
                        benefits to retirees who are not 
                        covered under a qualified retiree 
                        prescription drug plan but who are 
                        enrolled in such a prescription drug 
                        plan or MA-PD plan; or
                  (D) preventing employers to provide for 
                flexibility in benefit design and pharmacy 
                access provisions, without regard to the 
                requirements for basic prescription drug 
                coverage, so long as the actuarial equivalence 
                requirement of paragraph (2)(A) is met.
  (b) Application of MA Waiver Authority.--The provisions of 
section 1857(i) shall apply with respect to prescription drug 
plans in relation to employment-based retiree health coverage 
in a manner similar to the manner in which they apply to an MA 
plan in relation to employers, including authorizing the 
establishment of separate premium amounts for enrollees in a 
prescription drug plan by reason of such coverage and 
limitations on enrollment to part D eligible individuals 
enrolled under such coverage, and shall be applied in a manner 
to facilitate the offering of prescription drug benefits under 
a Program plan under section 8903c of title 5, United States 
Code, through employment-based retiree health coverage through 
a prescription drug plan, as required under subsection (f) of 
such section, through contracts between such a Program plan and 
such a prescription drug plan.
  (c) Definitions.--For purposes of this section:
          (1) Employment-based retiree health coverage.--The 
        term ``employment-based retiree health coverage'' means 
        health insurance or other coverage of health care costs 
        (whether provided by voluntary insurance coverage or 
        pursuant to statutory or contractual obligation) for 
        part D eligible individuals (or for such individuals 
        and their spouses and dependents) under a group health 
        plan based on their status as retired participants in 
        such plan.
          (2) Sponsor.--The term ``sponsor'' means a plan 
        sponsor, as defined in section 3(16)(B) of the Employee 
        Retirement Income Security Act of 1974, in relation to 
        a group health plan, except that, in the case of a plan 
        maintained jointly by one employer and an employee 
        organization and with respect to which the employer is 
        the primary source of financing, such term means such 
        employer.
          (3) Group health plan.--The term ``group health 
        plan'' includes such a plan as defined in section 
        607(1) of the Employee Retirement Income Security Act 
        of 1974 and also includes the following:
                  (A) Federal and state governmental plans.--
                Such a plan established or maintained for its 
                employees by the Government of the United 
                States, by the government of any State or 
                political subdivision thereof, or by any agency 
                or instrumentality of any of the foregoing, 
                including a health benefits plan offered under 
                chapter 89 of title 5, United States Code.
                  (B) Collectively bargained plans.--Such a 
                plan established or maintained under or 
                pursuant to one or more collective bargaining 
                agreements.
                  (C) Church plans.--Such a plan established 
                and maintained for its employees (or their 
                beneficiaries) by a church or by a convention 
                or association of churches which is exempt from 
                tax under section 501 of the Internal Revenue 
                Code of 1986.
          * * * * * * *
                              ----------                              


                      TITLE 39, UNITED STATES CODE

          * * * * * * *

                            PART I--GENERAL

          * * * * * * *

                CHAPTER 1--POSTAL POLICY AND DEFINITIONS

Sec. 101. Postal policy

  (a) The United States Postal Service shall be operated as a 
basic and fundamental service provided to the people by the 
Government of the United States, authorized by the 
Constitution, created by Act of Congress, and supported by the 
people. The Postal Service shall have as its basic function the 
obligation to provide postal services to bind the Nation 
together through the personal, educational, literary, and 
business correspondence of the people. It shall provide prompt, 
reliable, and efficient services to patrons in all areas and 
shall render postal services to all communities. The costs of 
establishing and maintaining the Postal Service shall not be 
apportioned to impair the overall value of such service to the 
people.
  (b) The Postal Service shall maintain an integrated network 
for the delivery of market-dominant and competitive products 
(as defined in chapter 36 of this title). Delivery shall occur 
at least six days a week, except during weeks that include a 
Federal holiday or in emergency situations, such as natural 
disasters. 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.
  (c) As an employer, the Postal Service shall achieve and 
maintain compensation for its officers and employees comparable 
to the rates and types of compensation paid in the 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.
  (d) Postal rates shall be established to apportion the costs 
of all postal operations to all users of the mail on a fair and 
equitable basis.
  (e) In determining all policies for postal services, the 
Postal Service shall give the highest consideration to the 
requirement for the most expeditious collection, 
transportation, and delivery of important letter mail.
  (f) In selecting modes of transportation, the Postal Service 
shall give highest consideration to the [prompt and economical] 
prompt, economical, consistent, and reliable delivery of all 
mail in a manner that increases operational efficiency and 
reduces complexity. Modern methods of transporting mail by 
containerization and programs designed to achieve cost-
effective overnight transportation to the destination of 
important letter mail to all parts of the Nation shall also be 
a primary goal of postal operations.
  (g) In planning and building new postal facilities, the 
Postal Service shall emphasize the need for facilities and 
equipment designed to create desirable working conditions for 
its officers and employees, a maximum degree of convenience for 
efficient postal services, proper access to existing and future 
air and surface transportation facilities, and control of costs 
to the Postal Service.
          * * * * * * *

                      CHAPTER 4--GENERAL AUTHORITY

          * * * * * * *

Sec. 404. Specific powers

  (a) Subject to the provisions of section 404a, but otherwise 
without limitation of the generality of its powers, the Postal 
Service shall have the following specific powers, among others:
          (1) to provide for the collection, handling, 
        transportation, delivery, forwarding, returning, and 
        holding of mail, and for the disposition of 
        undeliverable mail;
          (2) to prescribe, in accordance with this title, the 
        amount of postage and the manner in which it is to be 
        paid;
          (3) to determine the need for post offices, postal 
        and training facilities and equipment, and to provide 
        such offices, facilities, and equipment as it 
        determines are needed;
          (4) to provide and sell postage stamps and other 
        stamped paper, cards, and envelopes and to provide such 
        other evidences of payment of postage and fees as may 
        be necessary or desirable;
          (5) to provide philatelic services;
          (6) to investigate postal offenses and civil matters 
        relating to the Postal Service;
          (7) to offer and pay rewards for information and 
        services in connection with violation of the postal 
        laws, and, unless a different disposal is expressly 
        prescribed, to pay one-half of all penalties and 
        forfeitures imposed for violations of law affecting the 
        Postal Service, its revenues, or property, to the 
        person informing for the same, and to pay the other 
        one-half into the Postal Service Fund; and
          (8) to authorize the issuance of a substitute check 
        for a lost, stolen, or destroyed check of the Postal 
        Service.
  (b) Except as otherwise provided, the Governors are 
authorized to establish reasonable and equitable classes of 
mail and reasonable and equitable rates of postage and fees for 
postal services in accordance with the provisions of chapter 
36. Postal rates and fees shall be reasonable and equitable and 
sufficient to enable the Postal Service, under best practices 
of honest, efficient, and economical management, to maintain 
and continue the development of postal services of the kind and 
quality adapted to the needs of the United States.
  (c) The Postal Service shall maintain one or more classes of 
mail for the transmission of letters sealed against inspection. 
The rate for each such class shall be uniform throughout the 
United States, its territories, and possessions. One such class 
shall provide for the most expeditious handling and 
transportation afforded mail matter by the Postal Service. No 
letter of such a class of domestic origin shall be opened 
except under authority of a search warrant authorized by law, 
or by an officer or employee of the Postal Service for the sole 
purpose of determining an address at which the letter can be 
delivered, or pursuant to the authorization of the addressee.
  (d)(1) The Postal Service, prior to making a determination 
under subsection (a)(3) of this section as to the necessity for 
the closing or consolidation of any post office, shall provide 
adequate notice of its intention to close or consolidate such 
post office at least 60 days prior to the proposed date of such 
closing or consolidation to persons served by such post office 
to ensure that such persons will have an opportunity to present 
their views.
  (2) The Postal Service, in making a determination whether or 
not to close or consolidate a post office--
          (A) shall consider--
                  (i) the effect of such closing or 
                consolidation on the community served by such 
                post office;
                  (ii) the effect of such closing or 
                consolidation on employees of the Postal 
                Service employed at such office;
                  (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;
                  (iv) the economic savings to the Postal 
                Service resulting from such closing or 
                consolidation; and
                  (v) such other factors as the Postal Service 
                determines are necessary; and
          (B) may not consider compliance with any provision of 
        the Occupational Safety and Health Act of 1970 (29 
        U.S.C. 651 et seq.).
  (3) Any determination of the Postal Service to close or 
consolidate a post office shall be in writing and shall include 
the findings of the Postal Service with respect to the 
considerations required to be made under paragraph (2) of this 
subsection. Such determination and findings shall be made 
available to persons served by such post office.
  (4) The Postal Service shall take no action to close or 
consolidate a post office until 60 days after its written 
determination is made available to persons served by such post 
office.
  (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 after receiving any appeal under this paragraph. The 
Commission shall set aside any determination, findings, and 
conclusions found to be--
          (A) arbitrary, capricious, an abuse of discretion, or 
        otherwise not in accordance with the law;
          (B) without observance of procedure required by law; 
        or
          (C) unsupported by substantial evidence on the 
        record.
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.
  (6) For purposes of paragraph (5), any appeal received by the 
Commission shall--
          (A) if sent to the Commission through the mails, be 
        considered to have been received on the date of the 
        Postal Service postmark on the envelope or other cover 
        in which such appeal is mailed; or
          (B) if otherwise lawfully delivered to the 
        Commission, be considered to have been received on the 
        date determined based on any appropriate documentation 
        or other indicia (as determined under regulations of 
        the Commission).
  (e)(1) In this subsection, the term ``nonpostal service'' 
means any service that is not a postal service defined under 
section 102(5).
  (2) Nothing in this section shall be considered to permit or 
require that the Postal Service provide any nonpostal service, 
except that the Postal Service may provide nonpostal services 
which were offered as of January 1, 2006, as provided under 
this subsection, or any nonpostal products or services 
authorized by chapter 37.
  (3) Not later than 2 years after the date of enactment of the 
Postal Accountability and Enhancement Act, the Postal 
Regulatory Commission shall review each nonpostal service 
offered by the Postal Service on the date of enactment of that 
Act and determine whether that nonpostal service shall 
continue, taking into account--
          (A) the public need for the service; and
          (B) the ability of the private sector to meet the 
        public need for the service.
  (4) Any nonpostal service not determined to be continued by 
the Postal Regulatory Commission under paragraph (3) shall 
terminate.
  (5) If the Postal Regulatory Commission authorizes the Postal 
Service to continue a nonpostal service under this subsection, 
the Postal Regulatory Commission shall designate whether the 
service shall be regulated under this title as a market 
dominant product, a competitive product, or an experimental 
product.
  (6) Licensing which, before the date of enactment of this 
paragraph, has been authorized by the Postal Regulatory 
Commission for continuation as a nonpostal service may not be 
used for any purpose other than--
          (A) to continue to provide licensed mailing, 
        shipping, or stationery supplies offered as of June 23, 
        2011; or
          (B) to license other goods, products, or services, 
        the primary purpose of which is to promote and enhance 
        the image or brand of the Postal Service.
  (7) Nothing in this section shall be construed to prevent the 
Postal Service from establishing nonpostal products and 
services that are expressly authorized by chapter 37.

           *       *       *       *       *       *       *


Sec. 411. Cooperation with other Government agencies

  Executive agencies within the meaning of section 105 of title 
5 and the Government Publishing 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 5--POSTAL REGULATORY COMMISSION

           *       *       *       *       *       *       *


Sec. 504. Administration

  (a) The Chairman of the Postal Regulatory Commission shall be 
the principal executive officer of the Commission. The Chairman 
shall exercise or direct the exercise of all the executive and 
administrative functions of the Commission, including functions 
of the Commission with respect to (1) the appointment of 
personnel employed under the Commission, except that the 
appointment of heads of major administrative units under the 
Commission shall require the approval of a majority of the 
members of the Commission, (2) the supervision of the personnel 
employed under the Commission and the distribution of business 
among them and among the Commissioners, and (3) the use and 
expenditure of funds.
  (b) In carrying out any of his functions under this section, 
the Chairman shall be governed by the general policies of the 
Commission.
  (c) The Chairman may obtain such facilities and supplies as 
may be necessary to permit the Commission to carry out its 
functions. Any officer or employee appointed under this section 
shall be paid at rates of compensation and shall be entitled to 
programs offering employee benefits established under chapter 
10 or chapter 12 of this title, as appropriate.
  [(d) There are authorized to be appropriated, out of the 
Postal Service Fund, such sums as may be necessary for the 
Postal Regulatory Commission. In requesting an appropriation 
under this subsection for a fiscal year, the Commission shall 
prepare and submit to the Congress under section 2009 a budget 
of the Commission's expenses, including expenses for 
facilities, supplies, compensation, and employee benefits.]
  (d)(1) Not later than September 1 of each fiscal year 
(beginning with fiscal year 2022), the Postal Regulatory 
Commission shall submit to the Postal Service a budget of the 
Commission's expenses, including expenses for facilities, 
supplies, compensation, and employee benefits, for the 
following fiscal year. Any such budget shall be deemed approved 
as submitted if the Governors fail to adjust the budget in 
accordance with paragraph (2).
  (2)(A) Not later than 30 days after receiving a budget under 
paragraph (1), the Governors holding office, by unanimous 
written decision, may adjust the total amount of funding 
requested in such budget. Nothing in this subparagraph may be 
construed to authorize the Governors to adjust any activity 
proposed to be funded by the budget.
  (B) If the Governors adjust the budget under subparagraph 
(A), the Postal Regulatory Commission shall adjust the 
suballocations within such budget to reflect the total 
adjustment made by the Governors. The budget shall be deemed 
approved on the date the Commission makes any such adjustments. 
The Commission may make further adjustments to the 
suballocations within such budget as necessary.
  (3) Expenses incurred under any budget approved under this 
subsection shall be paid out of the Postal Service Fund 
established under section 2003.
  (e) The provisions of section 410 and chapter 10 of this 
title shall apply to the Commission, as appropriate.
  (f)(1) Any Commissioner of the Postal Regulatory Commission, 
any administrative law judge appointed by the Commission under 
section 3105 of title 5, and any employee of the Commission 
designated by the Commission may administer oaths, examine 
witnesses, take depositions, and receive evidence.
  (2) The Chairman of the Commission, any Commissioner 
designated by the Chairman, and any administrative law judge 
appointed by the Commission under section 3105 of title 5 may, 
with respect to any proceeding conducted by the Commission 
under this title or to obtain information to be used to prepare 
a report under this title--
          (A) issue subpoenas requiring the attendance and 
        presentation of testimony by, or the production of 
        documentary or other evidence in the possession of, any 
        covered person; and
          (B) order the taking of depositions and responses to 
        written interrogatories by a covered person.
The written concurrence of a majority of the Commissioners then 
holding office shall, with respect to each subpoena under 
subparagraph (A), be required in advance of its issuance.
  (3) In the case of contumacy or failure to obey a subpoena 
issued under this subsection, upon application by the 
Commission, the district court of the United States for the 
district in which the person to whom the subpoena is addressed 
resides or is served may issue an order requiring such person 
to appear at any designated place to testify or produce 
documentary or other evidence. Any failure to obey the order of 
the court may be punished by the court as a contempt thereof.
  (4) For purposes of this subsection, the term ``covered 
person'' means an officer, employee, agent, or contractor of 
the Postal Service.
  (g)(1) If the Postal Service determines that any document or 
other matter it provides to the Postal Regulatory Commission 
under a subpoena issued under subsection (f), or otherwise at 
the request of the Commission in connection with any proceeding 
or other purpose under this title, contains information which 
is described in section 410(c) of this title, or exempt from 
public disclosure under section 552(b) of title 5, the Postal 
Service shall, at the time of providing such matter to the 
Commission, notify the Commission, in writing, of its 
determination (and the reasons therefor).
  (2) Except as provided in paragraph (3), no officer or 
employee of the Commission may, with respect to any information 
as to which the Commission has been notified under paragraph 
(1)--
          (A) use such information for purposes other than the 
        purposes for which it is supplied; or
          (B) permit anyone who is not an officer or employee 
        of the Commission to have access to any such 
        information.
  (3)(A) Paragraph (2) shall not prohibit the Commission from 
publicly disclosing relevant information in furtherance of its 
duties under this title, provided that the Commission has 
adopted regulations under section 553 of title 5, that 
establish a procedure for according appropriate confidentiality 
to information identified by the Postal Service under paragraph 
(1). In determining the appropriate degree of confidentiality 
to be accorded information identified by the Postal Service 
under paragraph (1), the Commission shall balance the nature 
and extent of the likely commercial injury to the Postal 
Service against the public interest in maintaining the 
financial transparency of a government establishment competing 
in commercial markets.
  (B) Paragraph (2) shall not prevent the Commission from 
requiring production of information in the course of any 
discovery procedure established in connection with a proceeding 
under this title. The Commission shall, by regulations based on 
rule 26(c) of the Federal Rules of Civil Procedure, establish 
procedures for ensuring appropriate confidentiality for 
information furnished to any party.
  [(h)(1) Notwithstanding any other provision of this title or 
of the Inspector General Act of 1978, the authority to select, 
appoint, and employ officers and employees of the Office of 
Inspector General of the Postal Regulatory Commission, and to 
obtain any temporary or intermittent services of experts or 
consultants (or an organization of experts or consultants) for 
such Office, shall reside with the Inspector General of the 
Postal Regulatory Commission.
  [(2) Except as provided in paragraph (1), any exercise of 
authority under this subsection shall, to the extent 
practicable, be in conformance with the applicable laws and 
regulations that govern selections, appointments, and 
employment, and the obtaining of any such temporary or 
intermittent services, within the Postal Regulatory 
Commission.]

           *       *       *       *       *       *       *


PART III--MODERNIZATION AND FISCAL ADMINISTRATION

           *       *       *       *       *       *       *


CHAPTER 20--FINANCE

           *       *       *       *       *       *       *


Sec. 2003. The Postal Service Fund

  (a) There is established in the Treasury of the United States 
a revolving fund to be called the Postal Service Fund which 
shall be available to the Postal Service without fiscal-year 
limitation to carry out the purposes, functions, and powers 
authorized by this title (other than any of the purposes, 
functions, or powers for which the Competitive Products Fund is 
available).
  (b) Except as otherwise provided in section 2011, there shall 
be deposited in the Fund, subject to withdrawal by check by the 
Postal Service--
          (1) revenues from postal and nonpostal services 
        rendered by the Postal Service;
          (2) amounts received from obligations issued by the 
        Postal Service;
          (3) amounts appropriated for the use of the Postal 
        Service;
          (4) interest which may be earned on investments of 
        the Fund;
          (5) any other receipts of the Postal Service;
          (6) the balance in the Post Office Department Fund 
        established under former section 2202 of title 39 as of 
        the commencement of operations of the Postal Service;
          (7) amounts (including proceeds from the sale of 
        forfeited items) from any civil forfeiture conducted by 
        the Postal Service;
          (8) any transfers from the Secretary of the Treasury 
        from the Department of the Treasury Forfeiture Fund 
        which shall be available to the Postmaster General only 
        for Federal law enforcement related purposes; and
          (9) any amounts collected under section 3018.
  (c) If the Postal Service determines that the moneys of the 
Fund are in excess of current needs, it may request the 
investment of such amounts as it deems advisable by the 
Secretary of the Treasury in obligations of, or obligations 
guaranteed by, the Government of the United States, and, with 
the approval of the Secretary, in such other obligations or 
securities as it deems appropriate.
  (d) With the approval of the Secretary of the Treasury, the 
Postal Service may deposit moneys of the Fund in any Federal 
Reserve bank, any depository for public funds, or in such other 
places and in such manner as the Postal Service and the 
Secretary may mutually agree.
  (e)(1) The Fund shall be available for the payment of (A) all 
expenses incurred by the Postal Service in carrying out its 
functions as provided by law, subject to the same limitation as 
set forth in the parenthetical matter under subsection (a); 
[(B) all expenses of the Postal Regulatory Commission, subject 
to the availability of amounts appropriated under section 
504(d);] (B) all expenses of the Postal Regulatory Commission, 
pursuant to section 504(d); and (C) all expenses of the Office 
of Inspector General, subject to the availability of amounts 
appropriated under section 8G(f) of the Inspector General Act 
of 1978. The Postmaster General shall transfer from the Fund to 
the Secretary of the Treasury for deposit in the Department of 
the Treasury Forfeiture Fund amounts appropriate to reflect the 
degree of participation of Department of the Treasury law 
enforcement organizations (described in section 9705(o) of 
title 31) in the law enforcement effort resulting in the 
forfeiture pursuant to laws enforced or administered by the 
Postal Service. Neither the Fund nor any of the funds credited 
to it shall be subject to apportionment under the provisions of 
subchapter II of chapter 15 of title 31.
  (2) Funds appropriated to the Postal Service under section 
2401 of this title shall be apportioned as provided in this 
paragraph. From the total amounts appropriated to the Postal 
Service for any fiscal year under the authorizations contained 
in section 2401 of this title, the Secretary of the Treasury 
shall make available to the Postal Service 25 percent of such 
amount at the beginning of each quarter of such fiscal year.
  (f) Notwithstanding any other provision of this section, any 
amounts appropriated to the Postal Service under subsection (d) 
of section 2401 of this title and deposited into the Fund shall 
be expended by the Postal Service only for the purposes 
provided in such subsection.
  (g) Notwithstanding any provision of section 8147 of title 5, 
whenever the Secretary of Labor furnishes a statement to the 
Postal Service indicating an amount due from the Postal Service 
under subsection (b) of that section, the Postal Service shall 
make the deposit required pursuant to that statement (and any 
additional payment under subsection (c) of that section, to the 
extent that it relates to the period covered by such statement) 
not later than 30 days after the date on which such statement 
is so furnished. Any deposit (and any additional payment) which 
is subject to the preceding sentence shall, once made, remain 
available without fiscal year limitation.
  (h) Liabilities of the former Post Office Department to the 
Employees' Compensation Fund (appropriations for which were 
authorized by former section 2004, as in effect before the 
effective date of this subsection) shall be liabilities of the 
Postal Service payable out of the Fund.

           *       *       *       *       *       *       *


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)], and (2) the Office of Inspector General of the 
United States Postal Service requests to be appropriated, out 
of the Postal Service Fund, under section 8G(f) of the 
Inspector General Act of 1978[, and (3) the Postal Regulatory 
Commission requests to be appropriated, out of the Postal 
Service Fund, under section 504(d) of this title]. The 
President shall include these amounts, with his recommendations 
but without revision, in the budget transmitted to Congress 
under section 1105 of title 31.

           *       *       *       *       *       *       *


                    CHAPTER 29--PROPERTY MANAGEMENT

Sec.
2901. Definitions.
     * * * * * * *
2903. Use of funds from sale of property.

           *       *       *       *       *       *       *


Sec. 2903. Use of funds from sale of property

  In the event that the Postal Service permanently ceases 
operations, any funds derived from the sale of any real 
property owned by the Postal Service shall be used to pay any 
outstanding liability with respect to the salaries and expenses 
of any Postal Service employee. The balance of any remaining 
funds shall be deposited into the Postal Service Retiree Health 
Benefits Fund established under section 8909a of title 5.

           *       *       *       *       *       *       *


PART IV--MAIL MATTER

           *       *       *       *       *       *       *


            CHAPTER 36--POSTAL RATES, CLASSES, AND SERVICES

      SUBCHAPTER I--PROVISIONS RELATING TO MARKET-DOMINANT PRODUCTS

Sec.
3621. Applicability; definitions.
     * * * * * * *

                SUBCHAPTER VII--MODERN SERVICE STANDARDS

     * * * * * * *
3692. Performance targets and transparency.

SUBCHAPTER I--PROVISIONS RELATING TO MARKET-DOMINANT PRODUCTS

           *       *       *       *       *       *       *


Sec. 3626. Reduced rates

  (a)(1) Except as otherwise provided in this section, rates of 
postage for a class of mail or kind of mailer under former 
section 4358, 4452(b), 4452(c), 4554(b), or 4554(c) of this 
title shall be established in accordance with section 3622.
  (2) For the purpose of this subsection, the term ``regular-
rate category'' means any class of mail or kind of mailer, 
other than a class or kind referred to in section 2401(c).
  (3) Rates of postage for a class of mail or kind of mailer 
under former section 4358(a) through (c) of this title shall be 
established so that postage on each mailing of such mail 
reflects its preferred status as compared to the postage for 
the most closely corresponding regular-rate category mailing.
  (4)(A) Except as specified in subparagraph (B), rates of 
postage for a class of mail or kind of mailer under former 
section 4358 (d) or (e) of this title shall be established so 
that postage on each mailing of such mail shall be as nearly as 
practicable 5 percent lower than the postage for a 
corresponding regular-rate category mailing.
  (B) With respect to the postage for the advertising pound 
portion of any mail matter under former section 4358 (d) or (e) 
of this title, the 5-percent discount specified in subparagraph 
(A) shall not apply if the advertising portion exceeds 10 
percent of the publication involved.
  (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.
  (6) The rates for mail matter under former sections 4452 (b) 
and (c) of this title shall be established as follows:
          (A) The estimated average revenue per piece to be 
        received by the Postal Service from each subclass of 
        mail under former sections 4452 (b) and (c) of this 
        title shall be equal, as nearly as practicable, to 60 
        percent of the estimated average revenue per piece to 
        be received from the most closely corresponding 
        regular-rate subclass of mail.
          (B) For purposes of subparagraph (A), the estimated 
        average revenue per piece of each regular-rate subclass 
        shall be calculated on the basis of expected volumes 
        and mix of mail for such subclass at current rates in 
        the test year of the proceeding.
          (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.
  (7) The rates for mail matter under former sections 4554 (b) 
and (c) of this title shall be established so that postage on 
each mailing of such mail shall be as nearly as practicable 5 
percent lower than the postage for a corresponding regular-rate 
mailing.
  (b)(1) For the purposes of this title, the term ``periodical 
publications'', as used in former section 4351 of this title, 
includes (A) any catalog or other course listing, including 
mail announcements of legal texts which are part of post-bar 
admission education issued by any institution of higher 
education or by a nonprofit organization engaged in continuing 
legal education; and (B) any looseleaf page or report 
(including any index, instruction for filing, table, or 
sectional identifier which is an integral part of such report) 
which is designed as part of a looseleaf reporting service 
concerning developments in the law or public policy.
  (2) Any material described in paragraph (1) of this 
subsection shall qualify to be entered and mailed as second 
class mail in accordance with the applicable provisions of 
former section 4352 through former section 4357 of this title.
  (3) For purposes of this subsection, the term ``institution 
of higher education'' has the meaning given it by section 101 
of the Higher Education Act of 1965, and includes a nonprofit 
organization that coordinates a network of college-level 
courses that is sponsored primarily by nonprofit educational 
institutions for an older adult constituency.
  (c) In the administration of this section, one conservation 
publication published by an agency of a State which is 
responsible for management and conservation of the fish or 
wildlife resources of such State shall be considered a 
publication of a qualified nonprofit organization which 
qualifies for rates of postage under former section 4358(d) of 
this title.
  (d)(1) For purposes of this title, the term ``agricultural'', 
as used in former sections 4358(j)(2), 4452(d), and 
4554(b)(1)(B) of this title, includes the art or science of 
cultivating land, harvesting crops or marine resources, or 
raising of livestock.
  (2) In the administration of this section, and for purposes 
of former sections 4358(j)(2), 4452(d), and 4554(b)(1)(B) of 
this title, agricultural organizations or associations shall 
include any organization or association which collects and 
disseminates information or materials relating to agricultural 
pursuits.
  (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.
  (f) In the administration of this chapter, the rates for mail 
under former section 4358(g) of this title shall be established 
without regard to either the provisions of such former section 
4358(g) or the provisions of this section.
  (g)(1) In the administration of this section, the rates for 
mail under subsections (a), (b), and (c) of former section 4358 
of this title shall not apply to an issue of a publication if 
the number of copies of such issue distributed within the 
county of publication is less than the number equal to the sum 
of 50 percent of the total paid circulation of such issue plus 
one.
  (2) Paragraph (1) of this subsection shall not apply to an 
issue of a publication if the total paid circulation of such 
issue is less than 10,000 copies.
  (3) For purposes of this section and former section 4358(a) 
through (c) of this title, those copies of an issue of a 
publication entered within the county in which it is published, 
but distributed outside such county on postal carrier routes 
originating in the county of publication, shall be treated as 
if they were distributed within the county of publication.
  (4)(A) In the case of an issue of a publication, any number 
of copies of which are mailed at the rates of postage for a 
class of mail or kind of mailer under former section 4358(a) 
through (c) of this title, any copies of such issue which are 
distributed outside the county of publication (excluding any 
copies subject to paragraph (3)) shall be subject to rates of 
postage provided for under this paragraph.
  (B) The rates of postage applicable to mail under this 
paragraph shall be established in accordance with section 3622.
  (C) This paragraph shall not apply with respect to an issue 
of a publication unless the total paid circulation of such 
issue outside the county of publication (not counting 
recipients of copies subject to paragraph (3)) is less than 
5,000.
  (h) In the administration of this section, the number of 
copies of a subscription publication mailed to nonsubscribers 
during a calendar year at rates under subsections (a), (b), and 
(c) of former section 4358 of this title may not exceed [10 
percent] 50 percent of the number of copies of such publication 
mailed at such rates to subscribers.
  (j)(1) In the administration of this section, the rates for 
mail under former section 4452(b) or 4452(c) of this title 
shall not apply to mail which advertises, promotes, offers, or, 
for a fee or consideration, recommends, describes, or announces 
the availability of--
          (A) any credit, debit, or charge card, or similar 
        financial instrument or account, provided by or through 
        an arrangement with any person or organization not 
        authorized to mail at the rates for mail under former 
        section 4452(b) or 4452(c) of this title;
          (B) any insurance policy, unless the organization 
        which promotes the purchase of such policy is 
        authorized to mail at the rates for mail under former 
        section 4452(b) or 4452(c) of this title, the policy is 
        designed for and primarily promoted to the members, 
        donors, supporters, or beneficiaries of the 
        organization, and the coverage provided by the policy 
        is not generally otherwise commercially available;
          (C) any travel arrangement, unless the organization 
        which promotes the arrangement is authorized to mail at 
        the rates for mail under former section 4452(b) or 
        4452(c) of this title, the travel contributes 
        substantially (aside from the cultivation of members, 
        donors, or supporters, or the acquisition of income or 
        funds) to one or more of the purposes which constitutes 
        the basis for the organization's authorization to mail 
        at such rates, and the arrangement is designed for and 
        primarily promoted to the members, donors, supporters, 
        or beneficiaries of the organization; or
          (D) any product or service (other than any to which 
        subparagraph (A), (B), or (C) relates), if--
                  (i) the sale of such product or the providing 
                of such service is not substantially related 
                (aside from the need, on the part of the 
                organization promoting such product or service, 
                for income or funds or the use it makes of the 
                profits derived) to the exercise or performance 
                by the organization of one or more of the 
                purposes constituting the basis for the 
                organization's authorization to mail at such 
                rates; or
                  (ii) the mail matter involved is part of a 
                cooperative mailing (as defined under 
                regulations of the Postal Service) with any 
                person or organization not authorized to mail 
                at the rates for mail under former section 
                4452(b) or 4452(c) of this title;
except that--
                  
                  (I) any determination under clause (i) that a 
                product or service is not substantially related 
                to a particular purpose shall be made under 
                regulations which shall be prescribed by the 
                Postal Service and which shall be consistent 
                with standards established by the Internal 
                Revenue Service and the courts with respect to 
                subsections (a) and (c) of section 513 of the 
                Internal Revenue Code of 1986; and
                  
                  (II) clause (i) shall not apply if the 
                product involved is a periodical publication 
                described in subsection (m)(2) (including a 
                subscription to receive any such publication); 
                and
                  
                  (III) clause (i) shall not apply to space 
                advertising in mail matter that otherwise 
                qualifies for rates under former section 
                4452(b) or 4452(c) of this title, and satisfies 
                the content requirements established by the 
                Postal Service for periodical publications: 
                Provided, That such changes in law shall take 
                effect immediately and shall stay in effect 
                hereafter unless the Congress enacts 
                legislation on this matter prior to October 1, 
                1995.
  (2) Matter shall not be excluded from being mail at the rates 
for mail under former section 4452(b) or 4452(c) of this title, 
by an organization authorized to mail at those rates solely 
because--
          (A) such matter contains, but is not primarily 
        devoted to, acknowledgements of organizations or 
        individuals who have made donations to the authorized 
        organization; or
          (B) such matter contains, but is not primarily 
        devoted to, references to and a response card or other 
        instructions for making inquiries concerning services 
        or benefits available as a result of membership in the 
        authorized organization: Provided, That advertising, 
        promotional, or application materials specifically 
        concerning such services or benefits are not included.
  (3)(A) Upon request, an organization authorized to mail at 
the rates for mail under former section 4452(b) or 4452(c) of 
this title shall furnish evidence to the Postal Service 
concerning the eligibility of any of its mail matter or 
mailings to be sent at those rates.
  (B) The Postal Service shall establish procedures to carry 
out this paragraph, including procedures for mailer 
certification of compliance with the conditions specified in 
paragraph (1)(D) or subsection (m), as applicable, and 
verification of such compliance.
  (k)(1) No person or organization shall mail, or cause to be 
mailed by contractual agreement or otherwise, at the rates for 
mail under former section 4452(b) or 4452(c) of this title, any 
matter to which those rates do not apply.
  (2) The Postal Service may assess a postage deficiency in the 
amount of the unpaid postage against any person or organization 
which violates paragraph (1) of this subsection. This 
assessment shall be deemed the final decision of the Postal 
Service, unless the party against whom the deficiency is 
assessed appeals it in writing within thirty days to the 
postmaster of the office where the mailing was entered. Such an 
appeal shall be considered by an official designated by the 
Postal Service, other than the postmaster of the office where 
the mailing was entered, who shall issue a decision as soon as 
practicable. This decision shall be deemed final unless the 
party against whom the deficiency was assessed appeals it in 
writing within thirty days to a further reviewing official 
designated by the Postal Service, who shall issue the final 
decision on the matter.
  (3) The Postal Service shall maintain procedures for the 
prompt collection of postage deficiencies arising from the 
violation of paragraph (1) of this subsection, and may in its 
discretion, follow the issuance of a final decision regarding a 
deficiency under paragraph (2) of this subsection deduct the 
amount of that deficiency incurred during the previous 12 
months from any postage accounts or other monies of the 
violator in its possession.
  (l) In the administration of this section, the term 
``advertising'', as used in former section 4358(j)(2) of this 
title, does not include the publisher's own advertising in a 
publication published by the official highway or development 
agency of a State.
  (m)(1) In the administration of this section, the rates for 
mail under former section 4452(b) or 4452(c) of this title 
shall not apply to mail consisting of products, unless such 
products--
          (A) were received by the organization as gifts or 
        contributions; or
          (B) are low cost articles (as defined by section 
        513(h)(2) of the Internal Revenue Code of 1986).
  (2) Paragraph (1) shall not apply with respect to a 
periodical publication of a qualified nonprofit organization.
  (n) In the administration of this section, matter that 
satisfies the circulation standards for requester publications 
shall not be excluded from being mailed at the rates for mail 
under former section 4358 solely because such matter is 
designed primarily for free circulation or for circulation at 
nominal rates, or fails to meet the requirements of former 
section 4354(a)(5).

           *       *       *       *       *       *       *


  SUBCHAPTER III--PROVISIONS RELATING TO EXPERIMENTAL AND NEW PRODUCTS

Sec. 3641. Market tests of experimental products

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

           *       *       *       *       *       *       *


SUBCHAPTER VII--MODERN SERVICE STANDARDS

           *       *       *       *       *       *       *


Sec. 3692. Performance targets and transparency

  (a) Performance Targets.--Each year, to ensure that mail 
service for postal customers meets the service standards for 
market-dominant products, established under section 3691, the 
Postal Service shall--
          (1) at least 60 days before the beginning of the 
        fiscal year in which they will apply, establish and 
        provide to the Postal Regulatory Commission reasonable 
        targets for performance; and
          (2) provide the previous fiscal years' performance 
        targets in its Annual Compliance Report to the Postal 
        Regulatory Commission for evaluation of compliance.
  (b) Public Performance Dashboard.--
          (1) In general.--The Postal Service shall develop and 
        maintain a publicly available Website with an 
        interactive web-tool that provides performance 
        information for market-dominant products that is 
        updated on a weekly basis.
          (2) Performance information.--The performance 
        information provided on the Website shall include--
                  (A) the type of market-dominant product;
                  (B) geographic area at the nationwide, Area, 
                and District level;
                  (C) time periods showing performance 
                information in annual, quarterly, monthly, and 
                weekly segments;
                  (D) comparisons of performance information 
                for market-dominant products for previous time 
                periods to facilitate identification of 
                performance trends; and
                  (E) the current performance targets and 
                previous fiscal year performance targets, 
                established under subsection (a)(1).
          (3) Comprehensibility.--The Website shall include 
        plain language descriptions of the elements required 
        under paragraph (2) and information on the collection 
        process, measurement methodology, completeness, 
        accuracy, and validity of the performance information 
        provided on the Website.
          (4) Address search functionality.--The Website shall 
        include functionality to enable a user to search for 
        performance information by street address, ZIP Code, or 
        post office box.
          (5) Format.--The performance information provided on 
        the Website shall be made available--
                  (A) in a manner that--
                          (i) presents the information 
                        referenced under paragraph (2) on an 
                        interactive dashboard;
                          (ii) is searchable and may be sorted 
                        and filtered by the elements described 
                        in paragraph (2); and
                          (iii) to the extent practicable, 
                        enables any person or entity to 
                        download in bulk--
                                  (I) such performance 
                                information; and
                                  (II) the results of a search 
                                by the elements described in 
                                paragraph (2);
                  (B) in an open format that permits any 
                individual or entity to reuse and analyze the 
                performance information; and
                  (C) in a structured data format, to the 
                extent practicable.
          (6) Consultation.--The Postal Service shall regularly 
        consult with the Postal Regulatory Commission on 
        appropriate features and information to be included on 
        the Website.
          (7) Public input.--The Postal Service shall--
                  (A) solicit public input on the design and 
                implementation of the Website; and
                  (B) maintain a public feedback tool, to 
                ensure features of, and information on, the 
                Website is usable and understandable.
          (8) Deadline.--The Website shall be implemented and 
        made available to the public not later than the date on 
        which the performance targets are provided to the 
        Postal Regulatory Commission under subsection (a)(1).
          (9) Availability.--A link and plain language 
        description of the Website shall be made available on 
        the website where the performance targets and 
        measurements established under subsection (a)(1) are 
        made available.
          (10) Reporting.--The dashboard referred to in 
        paragraph (5)(A)(i) shall be referenced in the Annual 
        Performance Plan under section 2803, the Annual 
        Performance Report under section 2804, and the Annual 
        Report under section 2402.
          (11) Definitions.--In this subsection--
                  (A) Performance information.--The term 
                ``performance information'' means the objective 
                external performance measurements established 
                under section 3691(b)(1)(D).
                  (B) Website.--The term ``Website'' means the 
                website described in paragraph (1).

                     CHAPTER 37--NONPOSTAL SERVICES

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

Sec. 3701. Purpose

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

Sec. 3702. Definitions

  In this chapter--
          (1) the term ``nonpostal services'' is limited to 
        services offered by the Postal Service that are 
        expressly authorized by this chapter and are not postal 
        products or services;
          (2) the term ``attributable costs'' has the meaning 
        given such term in section 3631; and
          (3) the term ``year'' means a fiscal year.

Sec. 3703. Postal Service program for State governments

  (a) In General.--Notwithstanding any other provision of this 
title, the Postal Service may establish a program to enter into 
agreements with an agency of any State government, local 
government, or tribal government to provide property and 
services on behalf of such agencies for non-commercial products 
and services, but only if such property and services--
          (1) provide enhanced value to the public, such as by 
        lowering the cost or raising the quality of such 
        services or by making such services more accessible;
          (2) do not interfere with or detract from the value 
        of postal services, including--
                  (A) the cost and efficiency of postal 
                services; and
                  (B) unreasonably restricting access to postal 
                retail service, such as customer waiting time 
                and access to parking; and
          (3) provide a reasonable contribution to the 
        institutional costs of the Postal Service, defined as 
        reimbursement that covers at least 100 percent of 
        attributable costs of all property and services 
        provided under each relevant agreement in each year.
  (b) Public Notice.--At least 90 days before offering a 
service under the program, the Postal Service shall make 
available to the public on its website--
          (1) the agreement with the agency regarding such 
        service; and
          (2) a business plan that describes the specific 
        service to be provided, the enhanced value to the 
        public, terms of reimbursement, the estimated annual 
        reimbursement to the Postal Service, and the estimated 
        percentage of attributable Postal Service costs that 
        will be covered by reimbursement (with documentation to 
        support the estimates).
  (c) Public Comment.--Before offering a service under the 
program, the Postal Service shall provide for a public comment 
period of at least 30 days that allows the public to post 
comments relating to the provision of such services on the 
Postal Service website. The Postal Service shall make 
reasonable efforts to provide written responses to the comments 
on such website at least 30 days before offering such services.
  (d) Approval Required.--The Postal Service may not establish 
the program under subsection (a) unless the Governors of the 
Postal Service approve such program by a recorded vote that is 
publicly disclosed on the Postal Service website with a 
majority of the total Governors voting for approval.
  (e) Application of Reporting Requirements.--For purposes of 
the reporting requirements under section 3705, the Postal 
Service shall submit a separate report for each agreement with 
an agency entered into under subsection (a) analyzing the 
costs, revenues, rates, and quality of service for the 
provision of all services under such agreement, including 
information demonstrating that the agreement satisfies the 
requirements of paragraphs (1) through (3) of subsection (a).
  (f) Regulations Required.--The Postal Regulatory Commission 
shall issue such regulations as are necessary to carry out this 
section.
  (g) Definitions.--For the purpose of this section--
          (1) the term ``local government'' means a county, 
        municipality, city, town, township, local public 
        authority, school district, special district, 
        intrastate district, council of governments, or 
        regional or interstate government entity;
          (2) the term ``State government'' includes the 
        government of the District of Columbia, the 
        Commonwealth of Puerto Rico, the United States Virgin 
        Islands, Guam, American Samoa, the Commonwealth of the 
        Northern Mariana Islands, and any other territory or 
        possession of the United States;
          (3) the term ``tribal government'' means the 
        government of an Indian tribe, as that term is defined 
        in section 4(e) of the Indian Self-Determination Act 
        (25 U.S.C. 450b(e)); and
          (4) the term ``United States'', when used in a 
        geographical sense, means the States, the District of 
        Columbia, the Commonwealth of Puerto Rico, the United 
        States Virgin Islands, Guam, American Samoa, the 
        Commonwealth of the Northern Mariana Islands, and any 
        other territory or possession of the United States.
  (h) Confidential Information.--Subsection (b) or (c) shall 
not be construed as requiring the Postal Service to disclose to 
the public any information--
          (1) described in section 410(c); or
          (2) exempt from public disclosure under section 
        552(b) of title 5.

Sec. 3704. Postal Service program for other Government agencies

  (a) In General.--The Postal Service may establish a program 
to provide property and services to other Government agencies 
within the meaning of section 411, but only if such program 
provides a reasonable contribution to the institutional costs 
of the Postal Service, defined as reimbursement by each agency 
that covers at least 100 percent of the attributable costs of 
all property and service provided by the Postal Service in each 
year to such agency.
  (b) Application of Reporting Requirements.--For purposes of 
the reporting requirements under section 3705, the Postal 
Service shall submit a separate report for each agreement with 
an agency entered into under subsection (a) analyzing the 
costs, revenues, rates, and quality of service for the 
provision of all services under such agreement, including 
information demonstrating that the agreement satisfies the 
requirements of subsection (a).

Sec. 3705. Transparency and accountability for nonpostal services

  (a) Annual Report to the Commission.--
          (1) In general.--Not later than 90 days after the 
        last day of each year, the Postal Service shall submit 
        to the Postal Regulatory Commission a report that 
        analyzes costs, revenues, rates, and quality of service 
        for each agreement for the provision of property and 
        services under this chapter, using such methodologies 
        as the Commission may prescribe, and in sufficient 
        detail to demonstrate compliance with the requirements 
        of this chapter.
          (2) Supporting matter.--A report submitted under 
        paragraph (1) shall include any nonpublic annex, the 
        working papers, and any other supporting matter of the 
        Postal Service and the Inspector General related to the 
        information submitted in such report.
  (b) Content and Form of Report.--
          (1) In general.--The Postal Regulatory Commission 
        shall, by regulation, prescribe the content and form of 
        the report required under subsection (a). In 
        prescribing such regulations, the Commission shall give 
        due consideration to--
                  (A) providing the public with timely, 
                adequate information to assess compliance;
                  (B) avoiding unnecessary or unwarranted 
                administrative effort and expense on the part 
                of the Postal Service; and
                  (C) protecting the confidentiality of 
                information that is commercially sensitive or 
                is exempt from public disclosure under section 
                552(b) of title 5.
          (2) Revised requirements.--The Commission may, on its 
        own motion or on request of any interested party, 
        initiate proceedings to improve the quality, accuracy, 
        or completeness of Postal Service data required by the 
        Commission if--
                  (A) the attribution of costs or revenues to 
                property or services under this chapter has 
                become significantly inaccurate or can be 
                significantly improved;
                  (B) the quality of service data provided to 
                the Commission for a report under this chapter 
                has become significantly inaccurate or can be 
                significantly improved; or
                  (C) such revisions are, in the judgment of 
                the Commission, otherwise necessitated by the 
                public interest.
  (c) Audits.--The Inspector General shall regularly audit the 
data collection systems and procedures used in collecting 
information and preparing the report required under subsection 
(a). The results of any such audit shall be submitted to the 
Postal Service and the Postal Regulatory Commission.
  (d) Confidential Information.--
          (1) In general.--If the Postal Service determines 
        that any document or portion of a document, or other 
        matter, which it provides to the Postal Regulatory 
        Commission in a nonpublic annex under this section 
        contains information described in section 410(c), or 
        exempt from public disclosure under section 552(b) of 
        title 5, the Postal Service shall, at the time of 
        providing such matter to the Commission, notify the 
        Commission of its determination, in writing, and 
        describe with particularity the documents (or portions 
        of documents) or other matter for which confidentiality 
        is sought and the reasons therefor.
          (2) Treatment.--Any information or other matter 
        described in paragraph (1) to which the Commission 
        gains access under this section shall be subject to 
        paragraphs (2) and (3) of section 504(g) in the same 
        way as if the Commission had received notification with 
        respect to such matter under section 504(g)(1).
  (e) Annual Compliance Determination.--
          (1) Opportunity for public comment.--Upon receiving a 
        report required under subsection (a), the Postal 
        Regulatory Commission shall promptly--
                  (A) provide an opportunity for comment on 
                such report by any interested party; and
                  (B) appoint an officer of the Commission to 
                represent the interests of the general public.
          (2) Determination of compliance or noncompliance.--
        Not later than 90 days after receiving a report 
        required under subsection (a), the Postal Regulatory 
        Commission shall make a written determination as to 
        whether the nonpostal activities carried out during the 
        applicable year were or were not in compliance with the 
        provisions of this chapter. For purposes of this 
        paragraph, any case in which the requirements for 
        coverage of attributable costs have not been met shall 
        be considered to be a case of noncompliance. If, with 
        respect to a year, no instance of noncompliance is 
        found to have occurred, the determination shall be to 
        that effect. Such determination of noncompliance shall 
        be included with the annual compliance determination 
        required under section 3653.
          (3) Noncompliance.--If a timely written determination 
        of noncompliance is made under paragraph (2), the 
        Postal Regulatory Commission shall take appropriate 
        action. If the requirements for coverage of 
        attributable costs specified by this chapter are not 
        met, the Commission shall, within 60 days after the 
        determination, prescribe remedial action to restore 
        compliance as soon as practicable, including the full 
        restoration of revenue shortfalls during the following 
        year. The Commission may order the Postal Service to 
        discontinue a nonpostal service under section 3703 that 
        persistently fails to meet cost coverage requirements.
          (4) Deliberate noncompliance.--In the case of 
        deliberate noncompliance by the Postal Service with the 
        requirements of this chapter, the Postal Regulatory 
        Commission may order, based on the nature, 
        circumstances, extent, and seriousness of the 
        noncompliance, a fine (in the amount specified by the 
        Commission in its order) for each incidence of such 
        noncompliance. All receipts from fines imposed under 
        this subsection shall be deposited in the general fund 
        of the Treasury.
  (f) Regulations Required.--The Postal Regulatory Commission 
shall issue such regulations as are necessary to carry out this 
section.

           *       *       *       *       *       *       *

                              ----------                              


                     INSPECTOR GENERAL ACT OF 1978



           *       *       *       *       *       *       *
   requirements for federal entities and designated federal entities

  Sec. 8G. (a) Notwithstanding section 12 of this Act, as used 
in this section--
          (1) the term ``Federal entity'' means any Government 
        corporation (within the meaning of section 103(1) of 
        title 5, United States Code), any Government controlled 
        corporation (within the meaning of section 103(2) of 
        such title), or any other entity in the Executive 
        branch of the Government, or any independent regulatory 
        agency, but does not include--
                  (A) an establishment (as defined under 
                section 12(2) of this Act) or part of an 
                establishment;
                  (B) a designated Federal entity (as defined 
                under paragraph (2) of this subsection) or part 
                of a designated Federal entity;
                  (C) the Executive Office of the President;
                  (D) the Central Intelligence Agency;
                  (E) the General Accounting Office; or
                  (F) any entity in the judicial or legislative 
                branches of the Government, including the 
                Administrative Office of the United States 
                Courts and the Architect of the Capitol and any 
                activities under the direction of the Architect 
                of the Capitol;
          (2) the term ``designated Federal entity'' means 
        Amtrak, the Appalachian Regional Commission, the Board 
        of Governors of the Federal Reserve System and the 
        Bureau of Consumer Financial Protection, the Board for 
        International Broadcasting, the Committee for Purchase 
        From People Who Are Blind or Severely Disabled, the 
        Commodity Futures Trading Commission, the Consumer 
        Product Safety Commission, the Corporation for Public 
        Broadcasting, the Defense Intelligence Agency, the 
        Equal Employment Opportunity Commission, the Farm 
        Credit Administration, the Federal Deposit Insurance 
        Corporation, the Federal Election Commission, the 
        Election Assistance Commission, the Federal Housing 
        Finance Board, the Federal Labor Relations Authority, 
        the Federal Maritime Commission, the Federal Trade 
        Commission, the Legal Services Corporation, the 
        National Archives and Records Administration, the 
        National Credit Union Administration, the National 
        Endowment for the Arts, the National Endowment for the 
        Humanities, the National Geospatial-Intelligence 
        Agency, the National Labor Relations Board, the 
        National Science Foundation, the Panama Canal 
        Commission, the Peace Corps, the Pension Benefit 
        Guaranty Corporation, the Securities and Exchange 
        Commission, the Smithsonian Institution, the United 
        States International Development Finance Corporation, 
        the United States International Trade Commission, [the 
        Postal Regulatory Commission,] and the United States 
        Postal Service;
          (3) the term ``head of the Federal entity'' means any 
        person or persons designated by statute as the head of 
        a Federal entity, and if no such designation exists, 
        the chief policymaking officer or board of a Federal 
        entity as identified in the list published pursuant to 
        subsection (h)(1) of this section;
          (4) the term ``head of the designated Federal 
        entity'' means the board or commission of the 
        designated Federal entity, or in the event the 
        designated Federal entity does not have a board or 
        commission, any person or persons designated by statute 
        as the head of a designated Federal entity and if no 
        such designation exists, the chief policymaking officer 
        or board of a designated Federal entity as identified 
        in the list published pursuant to subsection (h)(1) of 
        this section, except that--
                  (A) with respect to the National Science 
                Foundation, such term means the National 
                Science Board;
                  (B) with respect to the United States Postal 
                Service, such term means the Governors (within 
                the meaning of section 102(3) of title 39, 
                United States Code);
                  (C) with respect to the Federal Labor 
                Relations Authority, such term means the 
                members of the Authority (described under 
                section 7104 of title 5, United States Code);
                  (D) with respect to the Committee for 
                Purchase From People Who Are Blind or Severely 
                Disabled, such term means the Chairman of the 
                Committee for Purchase From People Who Are 
                Blind or Severely Disabled;
                  (E) with respect to the National Archives and 
                Records Administration, such term means the 
                Archivist of the United States;
                  (F) with respect to the National Credit Union 
                Administration, such term means the National 
                Credit Union Administration Board (described 
                under section 102 of the Federal Credit Union 
                Act (12 U.S.C. 1752a);
                  (G) with respect to the National Endowment of 
                the Arts, such term means the National Council 
                on the Arts;
                  (H) with respect to the National Endowment 
                for the Humanities, such term means the 
                National Council on the Humanities;
                  (I) with respect to the Peace Corps, such 
                term means the Director of the Peace Corps; and
                  (J) with respect to the United States 
                International Development Finance Corporation, 
                such term means the Board of Directors of the 
                United States International Development Finance 
                Corporation;
          (5) the term ``Office of Inspector General'' means an 
        Office of Inspector General of a designated Federal 
        entity; and
          (6) the term ``Inspector General'' means an Inspector 
        General of a designated Federal entity.
  (b) No later than 180 days after the date of the enactment of 
this section, there shall be established and maintained in each 
designated Federal entity an Office of Inspector General. The 
head of the designated Federal entity shall transfer to such 
office the offices, units, or other components, and the 
functions, powers, or duties thereof, that such head determines 
are properly related to the functions of the Office of 
Inspector General and would, if so transferred, further the 
purposes of this section. There shall not be transferred to 
such office any program operating responsibilities.
  (c) Except as provided under subsection (f) of this section, 
the Inspector General shall be appointed by the head of the 
designated Federal entity in accordance with the applicable 
laws and regulations governing appointments within the 
designated Federal entity. Each Inspector General shall be 
appointed without regard to political affiliation and solely on 
the basis of integrity and demonstrated ability in accounting, 
auditing, financial analysis, law, management analysis, public 
administration, or investigations. For purposes of implementing 
this section, the Chairman of the Board of Governors of the 
Federal Reserve System shall appoint the Inspector General of 
the Board of Governors of the Federal Reserve System and the 
Bureau of Consumer Financial Protection. The Inspector General 
of the Board of Governors of the Federal Reserve System and the 
Bureau of Consumer Financial Protection shall have all of the 
authorities and responsibilities provided by this Act with 
respect to the Bureau of Consumer Financial Protection, as if 
the Bureau were part of the Board of Governors of the Federal 
Reserve System.
  (d)(1) Each Inspector General shall report to and be under 
the general supervision of the head of the designated Federal 
entity, but shall not report to, or be subject to supervision 
by, any other officer or employee of such designated Federal 
entity. Except as provided in paragraph (2), the head of the 
designated Federal entity shall not prevent or prohibit the 
Inspector General from initiating, carrying out, or completing 
any audit or investigation, or from issuing any subpoena during 
the course of any audit or investigation.
  (2)(A) The Secretary of Defense, in consultation with the 
Director of National Intelligence, may prohibit the inspector 
general of an element of the intelligence community specified 
in subparagraph (D) from initiating, carrying out, or 
completing any audit or investigation, or from accessing 
information available to an element of the intelligence 
community specified in subparagraph (D),, or from accessing 
information available to an element of the intelligence 
community specified in subparagraph (D), if the Secretary 
determines that the prohibition is necessary to protect vital 
national security interests of the United States.
  (B) If the Secretary exercises the authority under 
subparagraph (A), the Secretary shall submit to the committees 
of Congress specified in subparagraph (E) an appropriately 
classified statement of the reasons for the exercise of such 
authority not later than 7 days after the exercise of such 
authority.
  (C) At the same time the Secretary submits under subparagraph 
(B) a statement on the exercise of the authority in 
subparagraph (A) to the committees of Congress specified in 
subparagraph (E), the Secretary shall notify the inspector 
general of such element of the submittal of such statement and, 
to the extent consistent with the protection of intelligence 
sources and methods, provide such inspector general with a copy 
of such statement. Such inspector general may submit to such 
committees of Congress any comments on a notice or statement 
received by the inspector general under this subparagraph that 
the inspector general considers appropriate.
  (D) The elements of the intelligence community specified in 
this subparagraph are as follows:
          (i) The Defense Intelligence Agency.
          (ii) The National Geospatial-Intelligence Agency.
          (iii) The National Reconnaissance Office.
          (iv) The National Security Agency.
  (E) The committees of Congress specified in this subparagraph 
are--
          (i) the Committee on Armed Services and the Select 
        Committee on Intelligence of the Senate; and
          (ii) the Committee on Armed Services and the 
        Permanent Select Committee on Intelligence of the House 
        of Representatives.
  (e)(1) In the case of a designated Federal entity for which a 
board, chairman of a committee, or commission is the head of 
the designated Federal entity, a removal under this subsection 
may only be made upon the written concurrence of a \2/3\ 
majority of the board, committee, or commission.
  (2) If an Inspector General is removed from office or is 
transferred to another position or location within a designated 
Federal entity, the head of the designated Federal entity shall 
communicate in writing the reasons for any such removal or 
transfer to both Houses of Congress, not later than 30 days 
before the removal or transfer. Nothing in this subsection 
shall prohibit a personnel action otherwise authorized by law, 
other than transfer or removal.
  (f)(1) For purposes of carrying out subsection (c) with 
respect to the United States Postal Service, the appointment 
provisions of section 202(e) of title 39, United States Code, 
shall be applied.
  [(2) In carrying] (2) (A) In carrying  out the duties and 
responsibilities specified in this Act, the Inspector General 
of the United States Postal Service (hereinafter in this 
subsection referred to as the ``Inspector General'') shall have 
oversight responsibility for all activities of the Postal 
Inspection Service, including any internal investigation 
performed by the Postal Inspection Service. The Chief Postal 
Inspector shall promptly report the significant activities 
being carried out by the Postal Inspection Service to such 
Inspector General.
          (B) In carrying out the duties and responsibilities 
        specified in this Act, the Inspector General of the 
        United States Postal Service shall function as the 
        Inspector General for the Postal Regulatory Commission, 
        and shall have equal responsibility over the United 
        States Postal Service and the Postal Regulatory 
        Commission. The Commission shall comply with the 
        Inspector General's oversight as if the Commission were 
        a designated Federal entity under paragraph (a)(2) of 
        this section.
  (3)(A)(i) Notwithstanding subsection (d), the Inspector 
General shall be under the authority, direction, and control of 
the Governors with respect to audits or investigations, or the 
issuance of subpoenas, which require access to sensitive 
information concerning--
          (I) ongoing civil or criminal investigations or 
        proceedings;
          (II) undercover operations;
          (III) the identity of confidential sources, including 
        protected witnesses;
          (IV) intelligence or counterintelligence matters; or
          (V) other matters the disclosure of which would 
        constitute a serious threat to national security.
  (ii) With respect to the information described under clause 
(i), the Governors may prohibit the Inspector General from 
carrying out or completing any audit or investigation, or from 
issuing any subpoena, after such Inspector General has decided 
to initiate, carry out, or complete such audit or investigation 
or to issue such subpoena, if the Governors determine that such 
prohibition is necessary to prevent the disclosure of any 
information described under clause (i) or to prevent the 
significant impairment to the national interests of the United 
States.
  (iii) If the Governors exercise any power under clause (i) or 
(ii), the Governors shall notify the Inspector General in 
writing stating the reasons for such exercise. Within 30 days 
after receipt of any such notice, the Inspector General shall 
transmit a copy of such notice to the Committee on Governmental 
Affairs of the Senate and the Committee on Government Reform 
and Oversight of the House of Representatives, and to other 
appropriate committees or subcommittees of the Congress.
  (B) In carrying out the duties and responsibilities specified 
in this Act, the Inspector General--
          (i) may initiate, conduct and supervise such audits 
        and investigations in the United States Postal Service 
        as the Inspector General considers appropriate; and
          (ii) shall give particular regard to the activities 
        of the Postal Inspection Service with a view toward 
        avoiding duplication and insuring effective 
        coordination and cooperation.
  (C) Any report required to be transmitted by the Governors to 
the appropriate committees or subcommittees of the Congress 
under section 5(d) shall also be transmitted, within the seven-
day period specified under such section, to the Committee on 
Governmental Affairs of the Senate and the Committee on 
Government Reform and Oversight of the House of 
Representatives.
  (4) Nothing in this Act shall restrict, eliminate, or 
otherwise adversely affect any of the rights, privileges, or 
benefits of either employees of the United States Postal 
Service, or labor organizations representing employees of the 
United States Postal Service, under chapter 12 of title 39, 
United States Code, the National Labor Relations Act, any 
handbook or manual affecting employee labor relations with the 
United States Postal Service, or any collective bargaining 
agreement.
  (5) As used in this subsection, the term ``Governors'' has 
the meaning given such term by section 102(3) of title 39, 
United States Code.
          (6) There are authorized to be appropriated, out of 
        the Postal Service Fund, such sums as may be necessary 
        for the Office of Inspector General of the United 
        States Postal Service.
  (g)(1) Sections 4, 5, 6 (other than subsections (a)(7) and 
(a)(8) thereof), and 7 of this Act shall apply to each 
Inspector General and Office of Inspector General of a 
designated Federal entity and such sections shall be applied to 
each designated Federal entity and head of the designated 
Federal entity (as defined under subsection (a)) by 
substituting--
          (A) ``designated Federal entity'' for 
        ``establishment''; and
          (B) ``head of the designated Federal entity'' for 
        ``head of the establishment''.
  (2) In addition to the other authorities specified in this 
Act, an Inspector General is authorized to select, appoint, and 
employ such officers and employees as may be necessary for 
carrying out the functions, powers, and duties of the Office of 
Inspector General and to obtain the temporary or intermittent 
services of experts or consultants or an organization thereof, 
subject to the applicable laws and regulations that govern such 
selections, appointments, and employment, and the obtaining of 
such services, within the designated Federal entity.
  (3) Notwithstanding the last sentence of subsection (d) of 
this section, the provisions of subsection (a) of section 8D 
(other than the provisions of subparagraphs (A), (B), (C), and 
(E) of subsection (a)(1)) shall apply to the Inspector General 
of the Board of Governors of the Federal Reserve System and the 
Bureau of Consumer Financial Protection and the Chairman of the 
Board of Governors of the Federal Reserve System in the same 
manner as such provisions apply to the Inspector General of the 
Department of the Treasury and the Secretary of the Treasury, 
respectively.
          (4) Each Inspector General shall--
  (A) in accordance with applicable laws and regulations 
governing appointments within the designated Federal entity, 
appoint a Counsel to the Inspector General who shall report to 
the Inspector General;
  (B) obtain the services of a counsel appointed by and 
directly reporting to another Inspector General on a 
reimbursable basis; or
  (C) obtain the services of appropriate staff of the Council 
of the Inspectors General on Integrity and Efficiency on a 
reimbursable basis.
  (h)(1) No later than April 30, 1989, and annually thereafter, 
the Director of the Office of Management and Budget, after 
consultation with the Comptroller General of the United States, 
shall publish in the Federal Register a list of the Federal 
entities and designated Federal entities and if the designated 
Federal entity is not a board or commission, include the head 
of each such entity (as defined under subsection (a) of this 
section).
  (2) Beginning on October 31, 1989, and on October 31 of each 
succeeding calendar year, the head of each Federal entity (as 
defined under subsection (a) of this section) shall prepare and 
transmit to the Director of the Office of Management and Budget 
and to each House of the Congress a report which--
          (A) states whether there has been established in the 
        Federal entity an office that meets the requirements of 
        this section;
          (B) specifies the actions taken by the Federal entity 
        otherwise to ensure that audits are conducted of its 
        programs and operations in accordance with the 
        standards for audit of governmental organizations, 
        programs, activities, and functions issued by the 
        Comptroller General of the United States, and includes 
        a list of each audit report completed by a Federal or 
        non-Federal auditor during the reporting period and a 
        summary of any particularly significant findings; and
          (C) summarizes any matters relating to the personnel, 
        programs, and operations of the Federal entity referred 
        to prosecutive authorities, including a summary 
        description of any preliminary investigation conducted 
        by or at the request of the Federal entity concerning 
        these matters, and the prosecutions and convictions 
        which have resulted.

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