Postal Accountability and Enhancement Act

        [Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 662 Reported in Senate (RS)]

Calendar No. 164
109th CONGRESS
1st Session
S. 662

To reform the postal laws of the United States.

_______________________________________________________________________

IN THE SENATE OF THE UNITED STATES

March 17, 2005

Ms. Collins (for herself, Mr. Carper, Mr. Voinovich, Ms. Snowe, Mr.
Dorgan, Mr. Kennedy, Mrs. Murray, Mr. Leahy, Mr. Stevens, Mr. Bingaman,
Mr. Coleman, Mr. Allen, Mr. Levin, Mrs. Lincoln, Mr. Lieberman, Mr.
Akaka, Mr. Lautenberg, Mr. Warner, Mr. Burns, Mr. Pryor, and Mr. Nelson
of Nebraska) introduced the following bill; which was read twice and
referred to the Committee on Homeland Security and Governmental Affairs

July 14, 2005

Reported by Ms. Collins, with an amendment
[Strike out all after the enacting clause and insert the part printed
in italic]

_______________________________________________________________________

A BILL

To reform the postal laws of the United States.

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

<DELETED>SECTION 1. SHORT TITLE; TABLE OF CONTENTS.</DELETED>

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

<DELETED>Sec. 1. Short title; table of contents.
<DELETED>TITLE I--DEFINITIONS; POSTAL SERVICES

<DELETED>Sec. 101. Definitions.
<DELETED>Sec. 102. Postal services.
<DELETED>TITLE II--MODERN RATE REGULATION

<DELETED>Sec. 201. Provisions relating to market-dominant products.
<DELETED>Sec. 202. Provisions relating to competitive products.
<DELETED>Sec. 203. Provisions relating to experimental and new
products.
<DELETED>Sec. 204. Reporting requirements and related provisions.
<DELETED>Sec. 205. Complaints; appellate review and enforcement.
<DELETED>Sec. 206. Clerical amendment.
<DELETED>TITLE III--MODERN SERVICE STANDARDS

<DELETED>Sec. 301. Establishment of modern service standards.
<DELETED>Sec. 302. Postal service plan.
<DELETED>TITLE IV--PROVISIONS RELATING TO FAIR COMPETITION

<DELETED>Sec. 401. Postal Service Competitive Products Fund.
<DELETED>Sec. 402. Assumed Federal income tax on competitive products
income.
<DELETED>Sec. 403. Unfair competition prohibited.
<DELETED>Sec. 404. Suits by and against the Postal Service.
<DELETED>Sec. 405. International postal arrangements.
<DELETED>TITLE V--GENERAL PROVISIONS

<DELETED>Sec. 501. Qualification and term requirements for Governors.
<DELETED>Sec. 502. Obligations.
<DELETED>Sec. 503. Private carriage of letters.
<DELETED>Sec. 504. Rulemaking authority.
<DELETED>Sec. 505. Noninterference with collective bargaining
agreements.
<DELETED>Sec. 506. Bonus authority.
<DELETED>TITLE VI--ENHANCED REGULATORY COMMISSION

<DELETED>Sec. 601. Reorganization and modification of certain
provisions relating to the Postal
Regulatory Commission.
<DELETED>Sec. 602. Authority for Postal Regulatory Commission to issue
subpoenas.
<DELETED>Sec. 603. Appropriations for the Postal Regulatory Commission.
<DELETED>Sec. 604. Redesignation of the Postal Rate Commission.
<DELETED>Sec. 605. Financial transparency.
<DELETED>TITLE VII--EVALUATIONS

<DELETED>Sec. 701. Assessments of ratemaking, classification, and other
provisions.
<DELETED>Sec. 702. Report on universal postal service and the postal
monopoly.
<DELETED>Sec. 703. Study on equal application of laws to competitive
products.
<DELETED>Sec. 704. Report on postal workplace safety and workplace-
related injuries.
<DELETED>Sec. 705. Study on recycled paper.
<DELETED>TITLE VIII--POSTAL SERVICE RETIREMENT AND HEALTH BENEFITS
FUNDING

<DELETED>Sec. 801. Short title.
<DELETED>Sec. 802. Civil Service Retirement System.
<DELETED>Sec. 803. Health insurance.
<DELETED>Sec. 804. Repeal of disposition of savings provision.
<DELETED>Sec. 805. Effective dates.
<DELETED>TITLE IX--COMPENSATION FOR WORK INJURIES

<DELETED>Sec. 901. Temporary disability; continuation of pay.
<DELETED>Sec. 902. Disability retirement for postal employees.
<DELETED>TITLE X--MISCELLANEOUS

<DELETED>Sec. 1001. Employment of postal police officers.
<DELETED>Sec. 1002. Expanded contracting authority.
<DELETED>Sec. 1003. Report on the United States Postal Inspection
Service and the Office of the Inspector
General of the United States Postal
Service.
<DELETED>Sec. 1004. Sense of Congress regarding Postal Service
purchasing reform.

<DELETED>TITLE I--DEFINITIONS; POSTAL SERVICES</DELETED>

<DELETED>SEC. 101. DEFINITIONS.</DELETED>

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

<DELETED>SEC. 102. POSTAL SERVICES.</DELETED>

<DELETED>    (a) In General.--Section 404 of title 39, United States
Code, is amended--</DELETED>
<DELETED>    (1) in subsection (a), by striking paragraph (6)
and by redesignating paragraphs (7) through (9) as paragraphs
(6) through (8), respectively; and</DELETED>
<DELETED>    (2) by adding at the end the following:</DELETED>
<DELETED>    ``(c) Except as provided in section 411, nothing in this
title shall be considered to permit or require that the Postal Service
provide any special nonpostal or similar services.''.</DELETED>
<DELETED>    (b) Conforming Amendments.--(1) Section 1402(b)(1)(B)(ii)
of the Victims of Crime Act of 1984 (98 Stat. 2170; 42 U.S.C.
10601(b)(1)(B)(ii)) is amended by striking ``404(a)(8)'' and inserting
``404(a)(7)''.</DELETED>
<DELETED>    (2) Section 2003(b)(1) of title 39, United States Code, is
amended by striking ``and nonpostal''.</DELETED>

<DELETED>TITLE II--MODERN RATE REGULATION</DELETED>

<DELETED>SEC. 201. PROVISIONS RELATING TO MARKET-DOMINANT
PRODUCTS.</DELETED>

<DELETED>    (a) In General.--Chapter 36 of title 39, United States
Code, is amended by striking sections 3621 and 3622 and inserting the
following:</DELETED>
<DELETED>``Sec. 3621. Applicability; definitions</DELETED>
<DELETED>    ``(a) Applicability.--This subchapter shall apply with
respect to--</DELETED>
<DELETED>    ``(1) first-class mail letters and sealed
parcels;</DELETED>
<DELETED>    ``(2) first-class mail cards;</DELETED>
<DELETED>    ``(3) periodicals;</DELETED>
<DELETED>    ``(4) standard mail;</DELETED>
<DELETED>    ``(5) single-piece parcel post;</DELETED>
<DELETED>    ``(6) media mail;</DELETED>
<DELETED>    ``(7) bound printed matter;</DELETED>
<DELETED>    ``(8) library mail;</DELETED>
<DELETED>    ``(9) special services; and</DELETED>
<DELETED>    ``(10) single-piece international mail,</DELETED>
<DELETED>subject to any changes the Postal Regulatory Commission may
make under section 3642.</DELETED>
<DELETED>    ``(b) Rule of Construction.--Mail matter referred to in
subsection (a) shall, for purposes of this subchapter, be considered to
have the meaning given to such mail matter under the mail
classification schedule.</DELETED>
<DELETED>``Sec. 3622. Modern rate regulation</DELETED>
<DELETED>    ``(a) Authority Generally.--The Postal Regulatory
Commission shall, within 12 months after the date of enactment of this
section, by regulation establish (and may from time to time thereafter
by regulation revise) a modern system for regulating rates and classes
for market-dominant products.</DELETED>
<DELETED>    ``(b) Objectives.--Such system shall be designed to
achieve the following objectives:</DELETED>
<DELETED>    ``(1) To reduce the administrative burden and
increase the transparency of the ratemaking process while
affording reasonable opportunities for interested parties to
participate in that process.</DELETED>
<DELETED>    ``(2) To create predictability and stability in
rates.</DELETED>
<DELETED>    ``(3) To maximize incentives to reduce costs and
increase efficiency.</DELETED>
<DELETED>    ``(4) To enhance mail security and deter terrorism
by promoting secure, sender-identified mail.</DELETED>
<DELETED>    ``(5) To allow the Postal Service pricing
flexibility, including the ability to use pricing to promote
intelligent mail and encourage increased mail volume during
nonpeak periods.</DELETED>
<DELETED>    ``(6) To assure adequate revenues, including
retained earnings, to maintain financial stability and meet the
service standards established under section 3691.</DELETED>
<DELETED>    ``(7) To allocate the total institutional costs of
the Postal Service equitably between market-dominant and
competitive products.</DELETED>
<DELETED>    ``(c) Factors.--In establishing or revising such system,
the Postal Regulatory Commission shall take into account--</DELETED>
<DELETED>    ``(1) the establishment and maintenance of a fair
and equitable schedule for rates and classification
system;</DELETED>
<DELETED>    ``(2) the value of the mail service actually
provided each class or type of mail service to both the sender
and the recipient, including but not limited to the collection,
mode of transportation, and priority of delivery;</DELETED>
<DELETED>    ``(3) the requirement that each class of mail or
type of mail service bear the direct and indirect postal costs
attributable to each class or type of mail service plus that
portion of all other costs of the Postal Service reasonably
assignable to such class or type;</DELETED>
<DELETED>    ``(4) the effect of rate increases upon the
general public, business mail users, and enterprises in the
private sector of the economy engaged in the delivery of mail
matter other than letters;</DELETED>
<DELETED>    ``(5) the available alternative means of sending
and receiving letters and other mail matter at reasonable
costs;</DELETED>
<DELETED>    ``(6) the degree of preparation of mail for
delivery into the postal system performed by the mailer and its
effect upon reducing costs to the Postal Service;</DELETED>
<DELETED>    ``(7) simplicity of structure for the entire
schedule and simple, identifiable relationships between the
rates or fees charged the various classes of mail for postal
services;</DELETED>
<DELETED>    ``(8) the relative value to the people of the
kinds of mail matter entered into the postal system and the
desirability and justification for special classifications and
services of mail;</DELETED>
<DELETED>    ``(9) the importance of providing classifications
with extremely high degrees of reliability and speed of
delivery and of providing those that do not require high
degrees of reliability and speed of delivery;</DELETED>
<DELETED>    ``(10) the desirability of special classifications
from the point of view of both the user and of the Postal
Service;</DELETED>
<DELETED>    ``(11) the educational, cultural, scientific, and
informational value to the recipient of mail matter;</DELETED>
<DELETED>    ``(12) the need for the Postal Service to increase
its efficiency and reduce its costs, including infrastructure
costs, to help maintain high quality, affordable, universal
postal service; and</DELETED>
<DELETED>    ``(13) the policies of this title as well as such
other factors as the Commission determines
appropriate.</DELETED>
<DELETED>    ``(d) Requirements.--</DELETED>
<DELETED>    ``(1) In general.--The system for regulating rates
and classes for market-dominant products shall--</DELETED>
<DELETED>    ``(A) require the Postal Regulatory
Commission to set annual limitations on the percentage
changes in rates based on the Consumer Price Index for
All Urban Consumers unadjusted for seasonal variation
over the 12-month period preceding the date the Postal
Service proposes to increase rates;</DELETED>
<DELETED>    ``(B) establish a schedule whereby rates,
when necessary and appropriate, would change at regular
intervals by predictable amounts;</DELETED>
<DELETED>    ``(C) not later than 45 days before the
implementation of any adjustment in rates under this
section--</DELETED>
<DELETED>    ``(i) require the Postal Service
to provide public notice of the
adjustment;</DELETED>
<DELETED>    ``(ii) provide an opportunity for
review by the Postal Regulatory
Commission;</DELETED>
<DELETED>    ``(iii) provide for the Postal
Regulatory Commission to notify the Postal
Service of any noncompliance of the adjustment
with the limitation under subparagraph (A);
and</DELETED>
<DELETED>    ``(iv) require the Postal Service
to respond to the notice provided under clause
(iii) and describe the actions to be taken to
comply with the limitation under subparagraph
(A); and</DELETED>
<DELETED>    ``(D) notwithstanding any limitation set
under subparagraphs (A) and (C), establish procedures
whereby rates may be adjusted on an expedited basis due
to unexpected and extraordinary
circumstances.</DELETED>
<DELETED>    ``(2) Limitations.--</DELETED>
<DELETED>    ``(A) Classes of mail.--The annual
limitations under paragraph (1)(A) shall apply to a
class of mail, as defined in the Domestic Mail
Classification Schedule as in effect on the date of
enactment of the Postal Accountability and Enhancement
Act.</DELETED>
<DELETED>    ``(B) Rounding of rates and fees.--Nothing
in this subsection shall preclude the Postal Service
from rounding rates and fees to the nearest whole
integer, if the effect of such rounding does not cause
the overall rate increase for any class to exceed the
Consumer Price Index for All Urban Consumers.</DELETED>
<DELETED>    ``(e) Workshare Discounts.--</DELETED>
<DELETED>    ``(1) Definition.--In this subsection, the term
`workshare discount' refers to rate discounts provided to
mailers for the presorting, prebarcoding, handling, or
transportation of mail, as further defined by the Postal
Regulatory Commission under subsection (a).</DELETED>
<DELETED>    ``(2) Regulations.--As part of the regulations
established under subsection (a), the Postal Regulatory
Commission shall establish rules for workshare discounts that
ensure that such discounts do not exceed the cost that the
Postal Service avoids as a result of workshare activity,
unless--</DELETED>
<DELETED>    ``(A) the discount is--</DELETED>
<DELETED>    ``(i) associated with a new postal
service, a change to an existing postal
service, or with a new workshare initiative
related to an existing postal service;
and</DELETED>
<DELETED>    ``(ii) necessary to induce mailer
behavior that furthers the economically
efficient operation of the Postal Service and
the portion of the discount in excess of the
cost that the Postal Service avoids as a result
of the workshare activity will be phased out
over a limited period of time;</DELETED>
<DELETED>    ``(B) a reduction in the discount would--
</DELETED>
<DELETED>    ``(i) lead to a loss of volume in
the affected category or subclass of mail and
reduce the aggregate contribution to the
institutional costs of the Postal Service from
the category or subclass subject to the
discount below what it otherwise would have
been if the discount had not been reduced to
costs avoided;</DELETED>
<DELETED>    ``(ii) result in a further
increase in the rates paid by mailers not able
to take advantage of the discount; or</DELETED>
<DELETED>    ``(iii) impede the efficient
operation of the Postal Service;</DELETED>
<DELETED>    ``(C) the amount of the discount above
costs avoided--</DELETED>
<DELETED>    ``(i) is necessary to mitigate
rate shock; and</DELETED>
<DELETED>    ``(ii) will be phased out over
time; or</DELETED>
<DELETED>    ``(D) the discount is provided in
connection with subclasses of mail consisting
exclusively of mail matter of educational, cultural,
scientific, or informational value.</DELETED>
<DELETED>    ``(3) Report.--Whenever the Postal Service
establishes or maintains a workshare discount, the Postal
Service shall, at the time it publishes the workshare discount
rate, submit to the Postal Regulatory Commission a detailed
report that--</DELETED>
<DELETED>    ``(A) explains the Postal Service's
reasons for establishing or maintaining the
rate;</DELETED>
<DELETED>    ``(B) sets forth the data, economic
analyses, and other information relied on by the Postal
Service to justify the rate; and</DELETED>
<DELETED>    ``(C) certifies that the discount will not
adversely affect rates or services provided to users of
postal services who do not take advantage of the
discount rate.</DELETED>
<DELETED>    ``(f) Transition Rule.--Until regulations under this
section first take effect, rates and classes for market-dominant
products shall remain subject to modification in accordance with the
provisions of this chapter and section 407, as such provisions were
last in effect before the date of enactment of this
section.''.</DELETED>
<DELETED>    (b) Repealed Sections.--Sections 3623, 3624, 3625, and
3628 of title 39, United States Code, are repealed.</DELETED>
<DELETED>    (c) Redesignation.--Chapter 36 of title 39, United States
Code (as in effect after the amendment made by section 601, but before
the amendment made by section 202) is amended by striking the heading
for subchapter II and inserting the following:</DELETED>

<DELETED>``SUBCHAPTER I--PROVISIONS RELATING TO MARKET-DOMINANT
PRODUCTS''.</DELETED>

<DELETED>SEC. 202. PROVISIONS RELATING TO COMPETITIVE
PRODUCTS.</DELETED>

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

<DELETED>``SUBCHAPTER II--PROVISIONS RELATING TO COMPETITIVE
PRODUCTS</DELETED>

<DELETED>``Sec. 3631. Applicability; definitions and updates</DELETED>
<DELETED>    ``(a) Applicability.--This subchapter shall apply with
respect to--</DELETED>
<DELETED>    ``(1) priority mail;</DELETED>
<DELETED>    ``(2) expedited mail;</DELETED>
<DELETED>    ``(3) bulk parcel post;</DELETED>
<DELETED>    ``(4) bulk international mail; and</DELETED>
<DELETED>    ``(5) mailgrams;</DELETED>
<DELETED>subject to subsection (d) and any changes the Postal
Regulatory Commission may make under section 3642.</DELETED>
<DELETED>    ``(b) Definition.--For purposes of this subchapter, the
term `costs attributable', as used with respect to a product, means the
direct and indirect postal costs attributable to such
product.</DELETED>
<DELETED>    ``(c) Rule of Construction.--Mail matter referred to in
subsection (a) shall, for purposes of this subchapter, be considered to
have the meaning given to such mail matter under the mail
classification schedule.</DELETED>
<DELETED>    ``(d) Limitation.--Notwithstanding any other provision of
this section, nothing in this subchapter shall be considered to apply
with respect to any product then currently in the market-dominant
category of mail.</DELETED>
<DELETED>``Sec. 3632. Action of the Governors</DELETED>
<DELETED>    ``(a) Authority To Establish Rates and Classes.--The
Governors, with the written concurrence of a majority of all of the
Governors then holding office, shall establish rates and classes for
products in the competitive category of mail in accordance with the
requirements of this subchapter and regulations promulgated under
section 3633.</DELETED>
<DELETED>    ``(b) Procedures.--</DELETED>
<DELETED>    ``(1) In general.--Rates and classes shall be
established in writing, complete with a statement of
explanation and justification, and the date as of which each
such rate or class takes effect.</DELETED>
<DELETED>    ``(2) Public notice; review; and compliance.--Not
later than 30 days before the date of implementation of any
adjustment in rates under this section--</DELETED>
<DELETED>    ``(A) the Governors shall provide public
notice of the adjustment and an opportunity for review
by the Postal Regulatory Commission;</DELETED>
<DELETED>    ``(B) the Postal Regulatory Commission
shall notify the Governors of any noncompliance of the
adjustment with section 3633; and</DELETED>
<DELETED>    ``(C) the Governors shall respond to the
notice provided under subparagraph (B) and describe the
actions to be taken to comply with section
3633.</DELETED>
<DELETED>    ``(c) Transition Rule.--Until regulations under section
3633 first take effect, rates and classes for competitive products
shall remain subject to modification in accordance with the provisions
of this chapter and section 407, as such provisions were as last in
effect before the date of enactment of this section.</DELETED>
<DELETED>``Sec. 3633. Provisions applicable to rates for competitive
products</DELETED>
<DELETED>    ``(a) In General.--The Postal Regulatory Commission shall,
within 180 days after the date of enactment of this section, promulgate
(and may from time to time thereafter revise) regulations to--
</DELETED>
<DELETED>    ``(1) prohibit the subsidization of competitive
products by market-dominant products;</DELETED>
<DELETED>    ``(2) ensure that each competitive product covers
its costs attributable; and</DELETED>
<DELETED>    ``(3) ensure that all competitive products
collectively cover their share of the institutional costs of
the Postal Service.</DELETED>
<DELETED>    ``(b) Review of Minimum Contribution.--Five years after
the date of enactment of this section, and every 5 years thereafter,
the Postal Regulatory Commission shall conduct a review to determine
whether the institutional costs contribution requirement under
subsection (a)(3) should be retained in its current form, modified, or
eliminated. In making its determination, the Commission shall consider
all relevant circumstances, including the prevailing competitive
conditions in the market, and the degree to which any costs are
uniquely or disproportionately associated with any competitive
products.''.</DELETED>

<DELETED>SEC. 203. PROVISIONS RELATING TO EXPERIMENTAL AND NEW
PRODUCTS.</DELETED>

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

<DELETED>``SUBCHAPTER III--PROVISIONS RELATING TO EXPERIMENTAL AND NEW
PRODUCTS</DELETED>

<DELETED>``Sec. 3641. Market tests of experimental products</DELETED>
<DELETED>    ``(a) Authority.--</DELETED>
<DELETED>    ``(1) In general.--The Postal Service may conduct
market tests of experimental products in accordance with this
section.</DELETED>
<DELETED>    ``(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.</DELETED>
<DELETED>    ``(b) Conditions.--A product may not be tested under this
section unless it satisfies each of the following:</DELETED>
<DELETED>    ``(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.</DELETED>
<DELETED>    ``(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)).</DELETED>
<DELETED>    ``(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.</DELETED>
<DELETED>    ``(c) Notice.--</DELETED>
<DELETED>    ``(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--</DELETED>
<DELETED>    ``(A) setting out the basis for the Postal
Service's determination that the market test is covered
by this section; and</DELETED>
<DELETED>    ``(B) describing the nature and scope of
the market test.</DELETED>
<DELETED>    ``(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)).</DELETED>
<DELETED>    ``(d) Duration.--</DELETED>
<DELETED>    ``(1) In general.--A market test of a product
under this section may be conducted over a period of not to
exceed 24 months.</DELETED>
<DELETED>    ``(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.</DELETED>
<DELETED>    ``(e) Dollar-Amount Limitation.--</DELETED>
<DELETED>    ``(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).</DELETED>
<DELETED>    ``(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--</DELETED>
<DELETED>    ``(A) the product is likely to benefit the
public and meet an expected demand;</DELETED>
<DELETED>    ``(B) the product is likely to contribute
to the financial stability of the Postal Service;
and</DELETED>
<DELETED>    ``(C) the product is not likely to result
in unfair or otherwise inappropriate
competition.</DELETED>
<DELETED>    ``(f) Cancellation.--If the Postal Regulatory Commission
at any time determines that a market test under this section fails 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.</DELETED>
<DELETED>    ``(g) Adjustment for Inflation.--For purposes of each year
following the year in which occurs the deadline for the Postal
Service's first report to the Postal Regulatory Commission under
section 3652(a), each dollar amount contained in this section shall be
adjusted by the change in the Consumer Price Index for such year (as
determined under regulations of the Commission).</DELETED>
<DELETED>    ``(h) Definition of a Small Business Concern.--The
criteria used in defining small business concerns or otherwise
categorizing business concerns as small business concerns shall, for
purposes of this section, be established by the Postal Regulatory
Commission in conformance with the requirements of section 3 of the
Small Business Act.</DELETED>
<DELETED>    ``(i) Effective Date.--Market tests under this subchapter
may be conducted in any year beginning with the first year in which
occurs the deadline for the Postal Service's first report to the Postal
Regulatory Commission under section 3652(a).</DELETED>
<DELETED>``Sec. 3642. New products and transfers of products between
the market-dominant and competitive categories of
mail</DELETED>
<DELETED>    ``(a) In General.--Upon request of the Postal Service or
users of the mails, or upon its own initiative, the Postal Regulatory
Commission may change the list of market-dominant products under
section 3621 and the list of competitive products under section 3631 by
adding new products to the lists, removing products from the lists, or
transferring products between the lists.</DELETED>
<DELETED>    ``(b) Criteria.--All determinations by the Postal
Regulatory Commission under subsection (a) shall be made in accordance
with the following criteria:</DELETED>
<DELETED>    ``(1) The market-dominant category of products
shall consist of each product in the sale of which the Postal
Service exercises sufficient market power that it can
effectively set the price of such product substantially above
costs, raise prices significantly, decrease quality, or
decrease output, without risk of losing substantial business to
other firms offering similar products. The competitive category
of products shall consist of all other products.</DELETED>
<DELETED>    ``(2) Exclusion of products covered by postal
monopoly.--A product covered by the postal monopoly shall not
be subject to transfer under this section from the market-
dominant category of mail. For purposes of the preceding
sentence, the term `product covered by the postal monopoly'
means any product the conveyance or transmission of which is
reserved to the United States under section 1696 of title 18,
subject to the same exception as set forth in the last sentence
of section 409(e)(1).</DELETED>
<DELETED>    ``(3) Additional considerations.--In making any
decision under this section, due regard shall be given to--
</DELETED>
<DELETED>    ``(A) the availability and nature of
enterprises in the private sector engaged in the
delivery of the product involved;</DELETED>
<DELETED>    ``(B) the views of those who use the
product involved on the appropriateness of the proposed
action; and</DELETED>
<DELETED>    ``(C) the likely impact of the proposed
action on small business concerns (within the meaning
of section 3641(h)).</DELETED>
<DELETED>    ``(c) Transfers of Subclasses and Other Subordinate Units
Allowable.--Nothing in this title shall be considered to prevent
transfers under this section from being made by reason of the fact that
they would involve only some (but not all) of the subclasses or other
subordinate units of the class of mail or type of postal service
involved (without regard to satisfaction of minimum quantity
requirements standing alone).</DELETED>
<DELETED>    ``(d) Notification and Publication Requirements.--
</DELETED>
<DELETED>    ``(1) Notification requirement.--The Postal
Service shall, whenever it requests to add a product or
transfer a product to a different category, file with the
Postal Regulatory Commission and publish in the Federal
Register a notice setting out the basis for its determination
that the product satisfies the criteria under subsection (b)
and, in the case of a request to add a product or transfer a
product to the competitive category of mail, that the product
meets the regulations promulgated by the Postal Regulatory
Commission under section 3633. The provisions of section 504(g)
shall be available with respect to any information required to be
filed.</DELETED>
<DELETED>    ``(2) Publication requirement.--The Postal
Regulatory Commission shall, whenever it changes the list of
products in the market-dominant or competitive category of
mail, prescribe new lists of products. The revised lists shall
indicate how and when any previous lists (including the lists
under sections 3621 and 3631) are superseded, and shall be
published in the Federal Register.</DELETED>
<DELETED>    ``(e) Prohibition.--Except as provided in section 3641, no
product that involves the physical delivery of letters, printed matter,
or packages may be offered by the Postal Service unless it has been
assigned to the market-dominant or competitive category of mail (as
appropriate) either--</DELETED>
<DELETED>    ``(1) under this subchapter; or</DELETED>
<DELETED>    ``(2) by or under any other provision of
law.''.</DELETED>

<DELETED>SEC. 204. REPORTING REQUIREMENTS AND RELATED
PROVISIONS.</DELETED>

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

<DELETED>``SUBCHAPTER V--POSTAL SERVICES, COMPLAINTS, AND JUDICIAL
REVIEW''; and</DELETED>

<DELETED>    (2) by striking the heading for subchapter V and
inserting the following:</DELETED>

<DELETED>``SUBCHAPTER VI--GENERAL''.</DELETED>

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

<DELETED>``SUBCHAPTER IV--REPORTING REQUIREMENTS AND RELATED
PROVISIONS</DELETED>

<DELETED>``Sec. 3651. Annual reports by the Commission</DELETED>
<DELETED>    ``(a) In General.--The Postal Regulatory Commission shall
submit an annual report to the President and the Congress concerning
the operations of the Commission under this title, including the extent
to which regulations are achieving the objectives under sections 3622,
3633, and 3691.</DELETED>
<DELETED>    ``(b) Information From Postal Service.--The Postal Service
shall provide the Postal Regulatory Commission with such information as
may, in the judgment of the Commission, be necessary in order for the
Commission to prepare its reports under this section.</DELETED>
<DELETED>``Sec. 3652. Annual reports to the Commission</DELETED>
<DELETED>    ``(a) Costs, Revenues, Rates, and Service.--Except as
provided in subsection (c), the Postal Service shall, no later than 90
days after the end of each year, prepare and submit to the Postal
Regulatory Commission a report (together with such nonpublic annex to
the report as the Commission may require under subsection (e))--
</DELETED>
<DELETED>    ``(1) which shall analyze costs, revenues, rates,
and quality of service in sufficient detail to demonstrate that
all products during such year complied with all applicable
requirements of this title; and</DELETED>
<DELETED>    ``(2) which shall, for each market-dominant
product provided in such year, provide--</DELETED>
<DELETED>    ``(A) product information, including mail
volumes; and</DELETED>
<DELETED>    ``(B) measures of the service afforded by
the Postal Service in connection with such product,
including--</DELETED>
<DELETED>    ``(i) the level of service
(described in terms of speed of delivery and
reliability) provided; and</DELETED>
<DELETED>    ``(ii) the degree of customer
satisfaction with the service
provided.</DELETED>
<DELETED>Before submitting a report under this subsection
(including any annex to the report and the information required
under subsection (b)), the Postal Service shall have the
information contained in such report (and annex) audited by the
Inspector General. The results of any such audit shall be
submitted along with the report to which it pertains.</DELETED>
<DELETED>    ``(b) Information Relating to Workshare Discounts.--The
Postal Service shall include, in each report under subsection (a), the
following information with respect to each market-dominant product for
which a workshare discount was in effect during the period covered by
such report:</DELETED>
<DELETED>    ``(1) The per-item cost avoided by the Postal
Service by virtue of such discount.</DELETED>
<DELETED>    ``(2) The percentage of such per-item cost avoided
that the per-item workshare discount represents.</DELETED>
<DELETED>    ``(3) The per-item contribution made to
institutional costs.</DELETED>
<DELETED>    ``(c) Service Agreements and Market Tests.--In carrying
out subsections (a) and (b) with respect to service agreements and
experimental products offered through market tests under section 3641
in a year, the Postal Service--</DELETED>
<DELETED>    ``(1) may report summary data on the costs,
revenues, and quality of service by service agreement and
market test; and</DELETED>
<DELETED>    ``(2) shall report such data as the Postal
Regulatory Commission requires.</DELETED>
<DELETED>    ``(d) Supporting Matter.--The Postal Regulatory Commission
shall have access, in accordance with such regulations as the
Commission shall prescribe, to the working papers and any other
supporting matter of the Postal Service and the Inspector General in
connection with any information submitted under this section.</DELETED>
<DELETED>    ``(e) Content and Form of Reports.--</DELETED>
<DELETED>    ``(1) In general.--The Postal Regulatory
Commission shall, by regulation, prescribe the content and form
of the public reports (and any nonpublic annex and supporting
matter relating to the report) to be provided by the Postal
Service under this section. In carrying out this subsection,
the Commission shall give due consideration to--</DELETED>
<DELETED>    ``(A) providing the public with timely,
adequate information to assess the lawfulness of rates
charged;</DELETED>
<DELETED>    ``(B) avoiding unnecessary or unwarranted
administrative effort and expense on the part of the
Postal Service; and</DELETED>
<DELETED>    ``(C) protecting the confidentiality of
commercially sensitive information.</DELETED>
<DELETED>    ``(2) Revised requirements.--The Commission may,
on its own motion or on request of an interested party,
initiate proceedings (to be conducted in accordance with
regulations that the Commission shall prescribe) to improve the
quality, accuracy, or completeness of Postal Service data
required by the Commission under this subsection whenever it
shall appear that--</DELETED>
<DELETED>    ``(A) the attribution of costs or revenues
to products has become significantly inaccurate or can
be significantly improved;</DELETED>
<DELETED>    ``(B) the quality of service data has
become significantly inaccurate or can be significantly
improved; or</DELETED>
<DELETED>    ``(C) such revisions are, in the judgment
of the Commission, otherwise necessitated by the public
interest.</DELETED>
<DELETED>    ``(f) Confidential Information.--</DELETED>
<DELETED>    ``(1) In general.--If the Postal Service
determines that any document or portion of a document, or other
matter, which it provides to the Postal Regulatory Commission
in a nonpublic annex under this section or under subsection (d)
contains information which is described in section 410(c) of
this title, or exempt from public disclosure under section
552(b) of title 5, the Postal Service shall, at the time of
providing such matter to the Commission, notify the Commission
of its determination, in writing, and describe with
particularity the documents (or portions of documents) or other
matter for which confidentiality is sought and the reasons
therefor.</DELETED>
<DELETED>    ``(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).</DELETED>
<DELETED>    ``(g) Other Reports.--The Postal Service shall submit to
the Postal Regulatory Commission, together with any other submission
that the Postal Service is required to make under this section in a
year, copies of its then most recent--</DELETED>
<DELETED>    ``(1) comprehensive statement under section
2401(e);</DELETED>
<DELETED>    ``(2) strategic plan under section 2802;</DELETED>
<DELETED>    ``(3) performance plan under section 2803;
and</DELETED>
<DELETED>    ``(4) program performance reports under section
2804.</DELETED>
<DELETED>``Sec. 3653. Annual determination of compliance</DELETED>
<DELETED>    ``(a) Opportunity for Public Comment.--After receiving the
reports required under section 3652 for any year, the Postal Regulatory
Commission shall promptly provide an opportunity for comment on such
reports by users of the mails, affected parties, and an officer of the
Commission who shall be required to represent the interests of the
general public.</DELETED>
<DELETED>    ``(b) Determination of Compliance or Noncompliance.--Not
later than 90 days after receiving the submissions required under
section 3652 with respect to a year, the Postal Regulatory Commission
shall make a written determination as to--</DELETED>
<DELETED>    ``(1) whether any rates or fees in effect during
such year (for products individually or collectively) were not
in compliance with applicable provisions of this chapter (or
regulations promulgated thereunder); or</DELETED>
<DELETED>    ``(2) whether any service standards in effect
during such year were not met.</DELETED>
<DELETED>If, with respect to a year, no instance of noncompliance is
found under this subsection to have occurred in such year, the written
determination shall be to that effect.</DELETED>
<DELETED>    ``(c) If Any Noncompliance Is Found.--If, for a year, a
timely written determination of noncompliance is made under subsection
(b), the Postal Regulatory Commission shall take any appropriate
remedial action authorized by section 3662(c).</DELETED>
<DELETED>    ``(d) Rebuttable Presumption.--A timely written
determination described in the last sentence of subsection (b) shall,
for purposes of any proceeding under section 3662, create a rebuttable
presumption of compliance by the Postal Service (with regard to the
matters described under paragraphs (1) and (2) of subsection (b))
during the year to which such determination relates.''.</DELETED>

<DELETED>SEC. 205. COMPLAINTS; APPELLATE REVIEW AND
ENFORCEMENT.</DELETED>

<DELETED>    Chapter 36 of title 39, United States Code, is amended by
striking sections 3662 and 3663 and inserting the following:</DELETED>
<DELETED>``Sec. 3662. Rate and service complaints</DELETED>
<DELETED>    ``(a) In General.--Any person (including an officer of the
Postal Regulatory Commission representing the interests of the general
public) who believes the Postal Service is not operating in conformance
with the requirements of chapter 1, 4, or 6, or this chapter (or
regulations promulgated under any of those chapters) may lodge a
complaint with the Postal Regulatory Commission in such form and manner
as the Commission may prescribe.</DELETED>
<DELETED>    ``(b) Prompt Response Required.--</DELETED>
<DELETED>    ``(1) In general.--The Postal Regulatory
Commission shall, within 90 days after receiving a complaint
under subsection (a), either--</DELETED>
<DELETED>    ``(A) begin proceedings on such complaint;
or</DELETED>
<DELETED>    ``(B) issue an order dismissing the
complaint (together with a statement of the reasons
therefor).</DELETED>
<DELETED>    ``(2) Treatment of complaints not timely acted
on.--For purposes of section 3663, any complaint under
subsection (a) on which the Commission fails to act in the time
and manner required by paragraph (1) shall be treated in the
same way as if it had been dismissed under an order issued by
the Commission on the last day allowable for the issuance of
such order under paragraph (1).</DELETED>
<DELETED>    ``(c) Action Required If Complaint Found To Be
Justified.--If the Postal Regulatory Commission finds the complaint to
be justified, it shall order that the Postal Service take such action
as the Commission considers appropriate in order to achieve compliance
with the applicable requirements and to remedy the effects of any
noncompliance including ordering unlawful rates to be adjusted to
lawful levels, ordering the cancellation of market tests, ordering the
Postal Service to discontinue providing loss-making products, and
requiring the Postal Service to make up for revenue shortfalls in
competitive products.</DELETED>
<DELETED>    ``(d) Authority To Order Fines in Cases of Deliberate
Noncompliance.--In addition, in cases of deliberate noncompliance by
the Postal Service with the requirements of this title, the Postal
Regulatory Commission may order, based on the nature, circumstances,
extent, and seriousness of the noncompliance, a fine (in the amount
specified by the Commission in its order) for each incidence of
noncompliance. Fines resulting from the provision of competitive
products shall be paid out of the Competitive Products Fund established
in section 2011. All receipts from fines imposed under this subsection
shall be deposited in the general fund of the Treasury of the United
States.</DELETED>
<DELETED>``Sec. 3663. Appellate review</DELETED>
<DELETED>    ``A person, including the Postal Service, adversely
affected or aggrieved by a final order or decision of the Postal
Regulatory Commission may, within 30 days after such order or decision
becomes final, institute proceedings for review thereof by filing a
petition in the United States Court of Appeals for the District of
Columbia. The court shall review the order or decision in accordance
with section 706 of title 5, and chapter 158 and section 2112 of title
28, on the basis of the record before the Commission.</DELETED>
<DELETED>``Sec. 3664. Enforcement of orders</DELETED>
<DELETED>    ``The several district courts have jurisdiction
specifically to enforce, and to enjoin and restrain the Postal Service
from violating, any order issued by the Postal Regulatory
Commission.''.</DELETED>

<DELETED>SEC. 206. CLERICAL AMENDMENT.</DELETED>

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

<DELETED>``CHAPTER 36--POSTAL RATES, CLASSES, AND SERVICES

<DELETED>``SUBCHAPTER I--PROVISIONS RELATING TO MARKET-DOMINANT
PRODUCTS

<DELETED>``Sec.
<DELETED>``3621. Applicability; definitions.
<DELETED>``3622. Modern rate regulation.
<DELETED>``[3623. Repealed.]
<DELETED>``[3624. Repealed.]
<DELETED>``[3625. Repealed.]
<DELETED>``3626. Reduced Rates.
<DELETED>``3627. Adjusting free rates.
<DELETED>``[3628. Repealed.]
<DELETED>``3629. Reduced rates for voter registration purposes.
<DELETED>``SUBCHAPTER II--PROVISIONS RELATING TO COMPETITIVE PRODUCTS

<DELETED>``3631. Applicability; definitions and updates.
<DELETED>``3632. Action of the Governors.
<DELETED>``3633. Provisions applicable to rates for competitive
products.
<DELETED>``3634. Assumed Federal income tax on competitive products.
<DELETED>``SUBCHAPTER III--PROVISIONS RELATING TO EXPERIMENTAL AND NEW
PRODUCTS

<DELETED>``3641. Market tests of experimental products.
<DELETED>``3642. New products and transfers of products between the
market-dominant and competitive categories
of mail.
<DELETED>``SUBCHAPTER IV--REPORTING REQUIREMENTS AND RELATED PROVISIONS

<DELETED>``3651. Annual reports by the Commission.
<DELETED>``3652. Annual reports to the Commission.
<DELETED>``3653. Annual determination of compliance.
<DELETED>``SUBCHAPTER V--POSTAL SERVICES, COMPLAINTS, AND JUDICIAL
REVIEW

<DELETED>``3661. Postal Services.
<DELETED>``3662. Rate and service complaints.
<DELETED>``3663. Appellate review.
<DELETED>``3664. Enforcement of orders.
<DELETED>``SUBCHAPTER VI--GENERAL

<DELETED>``3681. Reimbursement.
<DELETED>``3682. Size and weight limits.
<DELETED>``3683. Uniform rates for books; films, other materials.
<DELETED>``3684. Limitations.
<DELETED>``3685. Filing of information relating to periodical
publications.
<DELETED>``3686. Bonus authority.
<DELETED>``SUBCHAPTER VII--MODERN SERVICE STANDARDS

<DELETED>``3691. Establishment of modern service standards.''.

<DELETED>TITLE III--MODERN SERVICE STANDARDS</DELETED>

<DELETED>SEC. 301. ESTABLISHMENT OF MODERN SERVICE STANDARDS.</DELETED>

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

<DELETED>``SUBCHAPTER VII--MODERN SERVICE STANDARDS</DELETED>

<DELETED>``Sec. 3691. Establishment of modern service
standards</DELETED>
<DELETED>    ``(a) Authority Generally.--Not later than 12 months after
the date of enactment of this section, the Postal Service shall, in
consultation with the Postal Regulatory Commission, by regulation
establish (and may from time to time thereafter by regulation revise) a
set of service standards for market-dominant products consistent with
the Postal Service's universal service obligation as defined in
sections 101 (a) and (b) and 403.</DELETED>
<DELETED>    ``(b) Objectives.--Such standards shall be designed to
achieve the following objectives:</DELETED>
<DELETED>    ``(1) To enhance the value of postal services to
both senders and recipients.</DELETED>
<DELETED>    ``(2) To preserve regular and effective access to
postal services in all communities, including those in rural
areas or where post offices are not self-sustaining.</DELETED>
<DELETED>    ``(3) To reasonably assure Postal Service
customers delivery reliability, speed and frequency consistent
with reasonable rates and best business practices.</DELETED>
<DELETED>    ``(4) To provide a system of objective external
performance measurements for each market-dominant product as a
basis for measurement of Postal Service performance.</DELETED>
<DELETED>    ``(c) Factors.--In establishing or revising such
standards, the Postal Service shall take into account--</DELETED>
<DELETED>    ``(1) the actual level of service that Postal
Service customers receive under any service guidelines
previously established by the Postal Service or service
standards established under this section;</DELETED>
<DELETED>    ``(2) the degree of customer satisfaction with
Postal Service performance in the acceptance, processing and
delivery of mail;</DELETED>
<DELETED>    ``(3) the needs of Postal Service customers,
including those with physical impairments;</DELETED>
<DELETED>    ``(4) mail volume and revenues projected for
future years;</DELETED>
<DELETED>    ``(5) the projected growth in the number of
addresses the Postal Service will be required to serve in
future years;</DELETED>
<DELETED>    ``(6) the current and projected future cost of
serving Postal Service customers;</DELETED>
<DELETED>    ``(7) the effect of changes in technology,
demographics, and population distribution on the efficient and
reliable operation of the postal delivery system; and</DELETED>
<DELETED>    ``(8) the policies of this title and such other
factors as the Commission determines appropriate.</DELETED>
<DELETED>    ``(d) Review.--The regulations promulgated pursuant to
this section (and any revisions thereto) shall be subject to review
upon complaint under sections 3662 and 3663.</DELETED>

<DELETED>SEC. 302. POSTAL SERVICE PLAN.</DELETED>

<DELETED>    (a) In General.--Within 6 months after the establishment
of the service standards under section 3691 of title 39, United States
Code, as added by this Act, the Postal Service shall, in consultation
with the Postal Regulatory Commission, develop and submit to Congress a
plan for meeting those standards.</DELETED>
<DELETED>    (b) Contents.--The plan under this section shall--
</DELETED>
<DELETED>    (1) establish performance goals;</DELETED>
<DELETED>    (2) describe any changes to the Postal Service's
processing, transportation, delivery, and retail networks
necessary to allow the Postal Service to meet the performance
goals;</DELETED>
<DELETED>    (3) describe any changes to planning and
performance management documents previously submitted to
Congress to reflect new performance goals; and</DELETED>
<DELETED>    (4) contain the matters relating to postal
facilities provided under subsection (c).</DELETED>
<DELETED>    (c) Postal Facilities.--</DELETED>
<DELETED>    (1) Findings.--Congress finds that--</DELETED>
<DELETED>    (A) the Postal Service has more than 400
logistics facilities, separate from its post office
network;</DELETED>
<DELETED>    (B) as noted by the President's Commission
on the United States Postal Service, the Postal Service
has more facilities than it needs and the streamlining
of this distribution network can pave the way for the
potential consolidation of sorting facilities and the
elimination of excess costs;</DELETED>
<DELETED>    (C) the Postal Service has always revised
its distribution network to meet changing conditions
and is best suited to address its operational needs;
and</DELETED>
<DELETED>    (D) Congress strongly encourages the
Postal Service to--</DELETED>
<DELETED>    (i) expeditiously move forward in
its streamlining efforts; and</DELETED>
<DELETED>    (ii) keep unions, management
associations, and local elected officials
informed as an essential part of this effort
and abide by any procedural requirements
contained in the national bargaining
agreements.</DELETED>
<DELETED>    (2) In general.--The Postal Service plan shall
include a description of--</DELETED>
<DELETED>    (A) the long-term vision of the Postal
Service for rationalizing its infrastructure and
workforce; and</DELETED>
<DELETED>    (B) how the Postal Service intends to
implement that vision.</DELETED>
<DELETED>    (3) Content of facilities plan.--The plan under
this subsection shall include--</DELETED>
<DELETED>    (A) a strategy for how the Postal Service
intends to rationalize the postal facilities network
and remove excess processing capacity and space from
the network, including estimated timeframes, criteria,
and processes to be used for making changes to the
facilities network, and the process for engaging policy
makers and the public in related decisions;</DELETED>
<DELETED>    (B) a discussion of what impact any
facility changes may have on the postal workforce and
whether the Postal Service has sufficient flexibility
to make needed workforce changes; and</DELETED>
<DELETED>    (C) an identification of anticipated
costs, cost savings, and other benefits associated with
the infrastructure rationalization alternatives
discussed in the plan.</DELETED>
<DELETED>    (4) Annual reports.--</DELETED>
<DELETED>    (A) In general.--Not later than 90 days
after the end of each fiscal year, the Postal Service
shall prepare and submit a report to Congress on how
postal decisions have impacted or will impact
rationalization plans.</DELETED>
<DELETED>    (B) Contents.--Each report under this
paragraph shall include--</DELETED>
<DELETED>    (i) an account of actions taken
during the preceding fiscal year to improve the
efficiency and effectiveness of its processing,
transportation, and distribution networks while
preserving the timely delivery of postal
services, including overall estimated costs and
cost savings;</DELETED>
<DELETED>    (ii) an account of actions taken
to identify any excess capacity within its
processing, transportation, and distribution
networks and implement savings through
realignment or consolidation of facilities
including overall estimated costs and cost
savings;</DELETED>
<DELETED>    (iii) an estimate of how postal
decisions related to mail changes, security,
automation initiatives, worksharing,
information technology systems, excess
capacity, consolidating and closing facilities,
and other areas will impact rationalization
plans;</DELETED>
<DELETED>    (iv) identification of any
statutory or regulatory obstacles that
prevented or will prevent or hinder the Postal
Service from taking action to realign or
consolidate facilities; and</DELETED>
<DELETED>    (v) such additional topics and
recommendations as the Postal Service considers
appropriate.</DELETED>
<DELETED>    (d) Alternate Retail Options.--The Postal Service plan
shall include plans to expand and market retail access to postal
services, in addition to post offices, including--</DELETED>
<DELETED>    (1) vending machines;</DELETED>
<DELETED>    (2) the Internet;</DELETED>
<DELETED>    (3) Postal Service employees on delivery
routes;</DELETED>
<DELETED>    (4) retail facilities in which overhead costs are
shared with private businesses and other government agencies;
or</DELETED>
<DELETED>    (5) any other nonpost office access channel
providing market retail access to postal services.</DELETED>
<DELETED>    (e) Reemployment Assistance and Retirement Benefits.--The
Postal Service plan shall include--</DELETED>
<DELETED>    (1) a plan under which reemployment assistance
shall be afforded to employees displaced as a result of the
automation of any of its functions or the closing and
consolidation of any of its facilities; and</DELETED>
<DELETED>    (2) a plan, developed in consultation with the
Office of Personnel Management, to offer early retirement
benefits.</DELETED>
<DELETED>    (f) Inspector General Report.--</DELETED>
<DELETED>    (1) In general.--Before submitting the plan under
subsection (a) and each annual report under subsection (c) to
Congress, the Postal Service shall submit the plan and each
annual report to the Inspector General of the United States
Postal Service in a timely manner to carry out this
subsection.</DELETED>
<DELETED>    (2) Report.--The Inspector General shall prepare a
report describing the extent to which the Postal Service plan
and each annual report under subsection (c)--</DELETED>
<DELETED>    (A) are consistent with the continuing
obligations of the Postal Service under title 39,
United States Code;</DELETED>
<DELETED>    (B) provide for the Postal Service to meet
the service standards established under section 3691 of
title 39, United States Code; and</DELETED>
<DELETED>    (C) allow progress toward improving
overall efficiency and effectiveness consistent with
the need to maintain universal postal service at
affordable rates.</DELETED>
<DELETED>    (g) Continued Authority.--Nothing in this section shall be
construed to prohibit the Postal Service from implementing any change
to its processing, transportation, delivery, and retail networks under
any authority granted to the Postal Service for those
purposes.</DELETED>

<DELETED>TITLE IV--PROVISIONS RELATING TO FAIR COMPETITION</DELETED>

<DELETED>SEC. 401. POSTAL SERVICE COMPETITIVE PRODUCTS FUND.</DELETED>

<DELETED>    (a) Provisions Relating to Postal Service Competitive
Products Fund and Related Matters.--</DELETED>
<DELETED>    (1) In general.--Chapter 20 of title 39, United
States Code, is amended by adding at the end the
following:</DELETED>
<DELETED>``Sec. 2011. Provisions relating to competitive
products</DELETED>
<DELETED>    ``(a)(1) In this subsection, the term `costs attributable'
has the meaning given such term by section 3631.</DELETED>
<DELETED>    ``(2) There is established in the Treasury of the United
States a revolving fund, to be called the Postal Service Competitive
Products Fund, which shall be available to the Postal Service without
fiscal year limitation for the payment of--</DELETED>
<DELETED>    ``(A) costs attributable to competitive products;
and</DELETED>
<DELETED>    ``(B) all other costs incurred by the Postal
Service, to the extent allocable to competitive
products.</DELETED>
<DELETED>    ``(b) There shall be deposited in the Competitive Products
Fund, subject to withdrawal by the Postal Service--</DELETED>
<DELETED>    ``(1) revenues from competitive
products;</DELETED>
<DELETED>    ``(2) amounts received from obligations issued by
Postal Service under subsection (e);</DELETED>
<DELETED>    ``(3) interest and dividends earned on investments
of the Competitive Products Fund; and</DELETED>
<DELETED>    ``(4) any other receipts of the Postal Service
(including from the sale of assets), to the extent allocable to
competitive products.</DELETED>
<DELETED>    ``(c) If the Postal Service determines that the moneys of
the Competitive Products Fund are in excess of current needs, the
Postal Service may request the investment of such amounts as the Postal
Service determines advisable by the Secretary of the Treasury in
obligations of, or obligations guaranteed by, the Government of the
United States, and, with the approval of the Secretary, in such other
obligations or securities as the Postal Service determines
appropriate.</DELETED>
<DELETED>    ``(d) With the approval of the Secretary of the Treasury,
the Postal Service may deposit moneys of the Competitive Products Fund
in any Federal Reserve bank, any depository for public funds, or in
such other places and in such manner as the Postal Service and the
Secretary may mutually agree.</DELETED>
<DELETED>    ``(e)(1)(A) Subject to the limitations specified in
section 2005(a), the Postal Service is authorized to borrow money and
to issue and sell such obligations as the Postal Service determines
necessary to provide for competitive products and deposit such amounts
in the Competitive Products Fund.</DELETED>
<DELETED>    ``(B) Subject to paragraph (5), any borrowings by the
Postal Service under subparagraph (A) shall be supported and serviced
by--</DELETED>
<DELETED>    ``(i) the revenues and receipts from competitive
products and the assets related to the provision of competitive
products (as determined under subsection (h)); or</DELETED>
<DELETED>    ``(ii) for purposes of any period before
accounting practices and principles under subsection (h) have
been established and applied, the best information available
from the Postal Service, including the audited statements
required by section 2008(e).</DELETED>
<DELETED>    ``(2) The Postal Service may enter into binding covenants
with the holders of such obligations, and with any trustee under any
agreement entered into in connection with the issuance of such
obligations with respect to--</DELETED>
<DELETED>    ``(A) the establishment of reserve, sinking, and
other funds;</DELETED>
<DELETED>    ``(B) application and use of revenues and receipts
of the Competitive Products Fund;</DELETED>
<DELETED>    ``(C) stipulations concerning the subsequent
issuance of obligations or the execution of leases or lease
purchases relating to properties of the Postal Service;
and</DELETED>
<DELETED>    ``(D) such other matters as the Postal Service,
considers necessary or desirable to enhance the marketability
of such obligations.</DELETED>
<DELETED>    ``(3) Obligations issued by the Postal Service under this
subsection--</DELETED>
<DELETED>    ``(A) shall be in such forms and
denominations;</DELETED>
<DELETED>    ``(B) shall be sold at such times and in such
amounts;</DELETED>
<DELETED>    ``(C) shall mature at such time or
times;</DELETED>
<DELETED>    ``(D) shall be sold at such prices;</DELETED>
<DELETED>    ``(E) shall bear such rates of interest;</DELETED>
<DELETED>    ``(F) may be redeemable before maturity in such
manner, at such times, and at such redemption
premiums;</DELETED>
<DELETED>    ``(G) may be entitled to such relative priorities
of claim on the assets of the Postal Service with respect to
principal and interest payments; and</DELETED>
<DELETED>    ``(H) shall be subject to such other terms and
conditions,</DELETED>
<DELETED>as the Postal Service determines.</DELETED>
<DELETED>    ``(4) Obligations issued by the Postal Service under this
subsection--</DELETED>
<DELETED>    ``(A) shall be negotiable or nonnegotiable and
bearer or registered instruments, as specified therein and in
any indenture or covenant relating thereto;</DELETED>
<DELETED>    ``(B) shall contain a recital that such
obligations are issued under this subsection, and such recital
shall be conclusive evidence of the regularity of the issuance
and sale of such obligations and of their validity;</DELETED>
<DELETED>    ``(C) shall be lawful investments and may be
accepted as security for all fiduciary, trust, and public
funds, the investment or deposit of which shall be under the
authority or control of any officer or agency of the Government
of the United States, and the Secretary of the Treasury or any
other officer or agency having authority over or control of any
such fiduciary, trust, or public funds, may at any time sell
any of the obligations of the Postal Service acquired under
this section;</DELETED>
<DELETED>    ``(D) shall not be exempt either as to principal
or interest from any taxation now or hereafter imposed by any
State or local taxing authority; and</DELETED>
<DELETED>    ``(E) except as provided in section 2006(c), shall
not be obligations of, nor shall payment of the principal
thereof or interest thereon be guaranteed by, the Government of
the United States, and the obligations shall so plainly
state.</DELETED>
<DELETED>    ``(5)(A) Subject to subparagraph (B), the Postal Service
shall make payments of principal, or interest, or both on obligations
issued under this subsection from--</DELETED>
<DELETED>    ``(i) revenues and receipts from competitive
products and assets related to the provision of competitive
products (as determined under subsection (h)); or</DELETED>
<DELETED>    ``(ii) for purposes of any period before
accounting practices and principles under subsection (h) have
been established and applied, the best information available,
including the audited statements required by section
2008(e).</DELETED>
<DELETED>    ``(B) Based on the audited financial statements for the
most recently completed fiscal year, the total assets of the
Competitive Products Fund may not be less than the amount determined by
multiplying--</DELETED>
<DELETED>    ``(i) the quotient resulting from the total
revenue of the Competitive Products Fund divided by the total
revenue of the Postal Service; and</DELETED>
<DELETED>    ``(ii) the total assets of the Postal
Service.</DELETED>
<DELETED>    ``(f) The receipts and disbursements of the Competitive
Products Fund shall be accorded the same budgetary treatment as is
accorded to receipts and disbursements of the Postal Service Fund under
section 2009a.</DELETED>
<DELETED>    ``(g) A judgment (or settlement of a claim) against the
Postal Service or the Government of the United States shall be paid out
of the Competitive Products Fund to the extent that the judgment or
claim arises out of activities of the Postal Service in the provision
of competitive products.</DELETED>
<DELETED>    ``(h)(1)(A) The Secretary of the Treasury, in consultation
with the Postal Service and an independent, certified public accounting
firm and other advisors as the Secretary considers appropriate, shall
develop recommendations regarding--</DELETED>
<DELETED>    ``(i) the accounting practices and principles that
should be followed by the Postal Service with the objectives
of--</DELETED>
<DELETED>    ``(I) identifying and valuing the assets
and liabilities of the Postal Service associated with
providing competitive products, including the capital
and operating costs incurred by the Postal Service in
providing such competitive products; and</DELETED>
<DELETED>    ``(II) subject to subsection (e)(5),
preventing the subsidization of such products by
market-dominant products; and</DELETED>
<DELETED>    ``(ii) the substantive and procedural rules that
should be followed in determining the assumed Federal income
tax on competitive products income of the Postal Service for
any year (within the meaning of section 3634).</DELETED>
<DELETED>    ``(B) Not earlier than 6 months after the date of
enactment of this section, and not later than 12 months after such
date, the Secretary of the Treasury shall submit the recommendations
under subparagraph (A) to the Postal Regulatory Commission.</DELETED>
<DELETED>    ``(2)(A) Upon receiving the recommendations of the
Secretary of the Treasury under paragraph (1), the Commission shall
give interested parties, including the Postal Service, users of the
mails, and an officer of the Commission who shall be required to
represent the interests of the general public, an opportunity to
present their views on those recommendations through submission of
written data, views, or arguments with or without opportunity for oral
presentation, or in such other manner as the Commission considers
appropriate.</DELETED>
<DELETED>    ``(B)(i) After due consideration of the views and other
information received under subparagraph (A), the Commission shall by
rule--</DELETED>
<DELETED>    ``(I) provide for the establishment and
application of the accounting practices and principles which
shall be followed by the Postal Service;</DELETED>
<DELETED>    ``(II) provide for the establishment and
application of the substantive and procedural rules described
under paragraph (1)(A)(ii); and</DELETED>
<DELETED>    ``(III) provide for the submission by the Postal
Service to the Postal Regulatory Commission of annual and other
periodic reports setting forth such information as the
Commission may require.</DELETED>
<DELETED>    ``(ii) Final rules under this subparagraph shall be issued
not later than 12 months after the date on which recommendations are
submitted under paragraph (1) (or by such later date on which the
Commission and the Postal Service may agree). The Commission may revise
such rules.</DELETED>
<DELETED>    ``(C)(i) Reports described under subparagraph (B)(i)(III)
shall be submitted at such time and in such form, and shall include
such information, as the Commission by rule requires.</DELETED>
<DELETED>    ``(ii) The Commission may, on its own motion or on request
of an interested party, initiate proceedings (to be conducted in
accordance with such rules as the Commission shall prescribe) to
improve the quality, accuracy, or completeness of Postal Service
information under subparagraph (B)(i)(III) whenever it shall appear
that--</DELETED>
<DELETED>    ``(I) the quality of the information furnished in
those reports has become significantly inaccurate or can be
significantly improved; or</DELETED>
<DELETED>    ``(II) such revisions are, in the judgment of the
Commission, otherwise necessitated by the public
interest.</DELETED>
<DELETED>    ``(D) A copy of each report described under subparagraph
(B)(i)(III) shall be submitted by the Postal Service to the Secretary
of the Treasury and the Inspector General of the United States Postal
Service.</DELETED>
<DELETED>    ``(i)(1) The Postal Service shall submit an annual report
to the Secretary of the Treasury concerning the operation of the
Competitive Products Fund. The report shall address such matters as
risk limitations, reserve balances, allocation or distribution of
moneys, liquidity requirements, and measures to safeguard against
losses.</DELETED>
<DELETED>    ``(2) A copy of the most recent report submitted under
paragraph (1) shall be included in the annual report submitted by the
Postal Regulatory Commission under section 3652(g).''.</DELETED>
<DELETED>    (2) Clerical amendment.--The table of sections for
chapter 20 of title 39, United States Code, is amended by
adding after the item relating to section 2010 the
following:</DELETED>

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

<DELETED>SEC. 402. ASSUMED FEDERAL INCOME TAX ON COMPETITIVE PRODUCTS
INCOME.</DELETED>

<DELETED>    Subchapter II of chapter 36 of title 39, United States
Code, as amended by section 202, is amended by adding at the end the
following:</DELETED>
<DELETED>``Sec. 3634. Assumed Federal income tax on competitive
products income</DELETED>
<DELETED>    ``(a) Definitions.--For purposes of this section--
</DELETED>
<DELETED>    ``(1) the term `assumed Federal income tax on
competitive products income' means the net income tax that
would be imposed by chapter 1 of the Internal Revenue Code of
1986 on the Postal Service's assumed taxable income from
competitive products for the year; and</DELETED>
<DELETED>    ``(2) the term `assumed taxable income from
competitive products', with respect to a year, refers to the
amount representing what would be the taxable income of a
corporation under the Internal Revenue Code of 1986 for the
year, if--</DELETED>
<DELETED>    ``(A) the only activities of such
corporation were the activities of the Postal Service
allocable under section 2011(h) to competitive
products; and</DELETED>
<DELETED>    ``(B) the only assets held by such
corporation were the assets of the Postal Service
allocable under section 2011(h) to such
activities.</DELETED>
<DELETED>    ``(b) Computation and Transfer Requirements.--The Postal
Service shall, for each year beginning with the year in which occurs
the deadline for the Postal Service's first report to the Postal
Regulatory Commission under section 3652(a)--</DELETED>
<DELETED>    ``(1) compute its assumed Federal income tax on
competitive products income for such year; and</DELETED>
<DELETED>    ``(2) transfer from the Competitive Products Fund
to the Postal Service Fund the amount of that assumed
tax.</DELETED>
<DELETED>    ``(c) Deadline for Transfers.--Any transfer required to be
made under this section for a year shall be due on or before the
January 15th next occurring after the close of such year.''.</DELETED>

<DELETED>SEC. 403. UNFAIR COMPETITION PROHIBITED.</DELETED>

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

<DELETED>``404a. Specific limitations.''.

<DELETED>SEC. 404. SUITS BY AND AGAINST THE POSTAL SERVICE.</DELETED>

<DELETED>    (a) In General.--Section 409 of title 39, United States
Code, is amended by striking subsections (d) and (e) and inserting the
following:</DELETED>
<DELETED>    ``(d)(1) For purposes of the provisions of law cited in
paragraphs (2)(A) and (2)(B), respectively, the Postal Service--
</DELETED>
<DELETED>    ``(A) shall be considered to be a `person', as
used in the provisions of law involved; and</DELETED>
<DELETED>    ``(B) shall not be immune under any other doctrine
of sovereign immunity from suit in Federal court by any person
for any violation of any of those provisions of law by any
officer or employee of the Postal Service.</DELETED>
<DELETED>    ``(2) This subsection applies with respect to--</DELETED>
<DELETED>    ``(A) the Act of July 5, 1946 (commonly referred
to as the `Trademark Act of 1946' (15 U.S.C. 1051 and
following)); and</DELETED>
<DELETED>    ``(B) the provisions of section 5 of the Federal
Trade Commission Act to the extent that such section 5 applies
to unfair or deceptive acts or practices.</DELETED>
<DELETED>    ``(e)(1) To the extent that the Postal Service, or other
Federal agency acting on behalf of or in concert with the Postal
Service, engages in conduct with respect to any product which is not
reserved to the United States under section 1696 of title 18, the
Postal Service or other Federal agency (as the case may be)--</DELETED>
<DELETED>    ``(A) shall not be immune under any doctrine of
sovereign immunity from suit in Federal court by any person for
any violation of Federal law by such agency or any officer or
employee thereof; and</DELETED>
<DELETED>    ``(B) shall be considered to be a person (as
defined in subsection (a) of the first section of the Clayton
Act) for purposes of--</DELETED>
<DELETED>    ``(i) the antitrust laws (as defined in
such subsection); and</DELETED>
<DELETED>    ``(ii) section 5 of the Federal Trade
Commission Act to the extent that such section 5
applies to unfair methods of competition.</DELETED>
<DELETED>For purposes of the preceding sentence, any private carriage
of mail allowable by virtue of section 601 shall not be considered a
service reserved to the United States under section 1696 of title
18.</DELETED>
<DELETED>    ``(2) No damages, interest on damages, costs or attorney's
fees may be recovered, and no criminal liability may be imposed, under
the antitrust laws (as so defined) from any officer or employee of the
Postal Service, or other Federal agency acting on behalf of or in
concert with the Postal Service, acting in an official
capacity.</DELETED>
<DELETED>    ``(3) This subsection shall not apply with respect to
conduct occurring before the date of enactment of this
subsection.</DELETED>
<DELETED>    ``(f) To the extent that the Postal Service engages in
conduct with respect to the provision of competitive products, it shall
be considered a person for the purposes of the Federal bankruptcy
laws.</DELETED>
<DELETED>    ``(g)(1) Each building constructed or altered by the
Postal Service shall be constructed or altered, to the maximum extent
feasible as determined by the Postal Service, in compliance with 1 of
the nationally recognized model building codes and with other
applicable nationally recognized codes. To the extent practicable,
model building codes should meet the voluntary consensus criteria
established for codes and standards as required in the National
Technology Transfer and Advancement Act of 1995 as defined in Office of
Management and Budget Circular A1190. For purposes of life safety, the
Postal Service shall continue to comply with the most current edition
of the Life Safety Code of the National Fire Protection Association
(NFPA 101).</DELETED>
<DELETED>    ``(2) Each building constructed or altered by the Postal
Service shall be constructed or altered only after consideration of all
requirements (other than procedural requirements) of zoning laws, land
use laws, and applicable environmental laws of a State or subdivision
of a State which would apply to the building if it were not a building
constructed or altered by an establishment of the Government of the
United States.</DELETED>
<DELETED>    ``(3) For purposes of meeting the requirements of
paragraphs (1) and (2) with respect to a building, the Postal Service
shall--</DELETED>
<DELETED>    ``(A) in preparing plans for the building, consult
with appropriate officials of the State or political
subdivision, or both, in which the building will be
located;</DELETED>
<DELETED>    ``(B) upon request, submit such plans in a timely
manner to such officials for review by such officials for a
reasonable period of time not exceeding 30 days; and</DELETED>
<DELETED>    ``(C) permit inspection by such officials during
construction or alteration of the building, in accordance with
the customary schedule of inspections for construction or
alteration of buildings in the locality, if such officials
provide to the Postal Service--</DELETED>
<DELETED>    ``(i) a copy of such schedule before
construction of the building is begun; and</DELETED>
<DELETED>    ``(ii) reasonable notice of their
intention to conduct any inspection before conducting
such inspection.</DELETED>
<DELETED>Nothing in this subsection shall impose an obligation
on any State or political subdivision to take any action under
the preceding sentence, nor shall anything in this subsection
require the Postal Service or any of its contractors to pay for
any action taken by a State or political subdivision to carry
out this subsection (including reviewing plans, carrying out
on-site inspections, issuing building permits, and making
recommendations).</DELETED>
<DELETED>    ``(4) Appropriate officials of a State or a political
subdivision of a State may make recommendations to the Postal Service
concerning measures necessary to meet the requirements of paragraphs
(1) and (2). Such officials may also make recommendations to the Postal
Service concerning measures which should be taken in the construction
or alteration of the building to take into account local conditions.
The Postal Service shall give due consideration to any such
recommendations.</DELETED>
<DELETED>    ``(5) In addition to consulting with local and State
officials under paragraph (3), the Postal Service shall establish
procedures for soliciting, assessing, and incorporating local community
input on real property and land use decisions.</DELETED>
<DELETED>    ``(6) For purposes of this subsection, the term `State'
includes the District of Columbia, the Commonwealth of Puerto Rico, and
a territory or possession of the United States.</DELETED>
<DELETED>    ``(h)(1) Notwithstanding any other provision of law, legal
representation may not be furnished by the Department of Justice to the
Postal Service in any action, suit, or proceeding arising, in whole or
in part, under any of the following:</DELETED>
<DELETED>    ``(A) Subsection (d) or (e) of this
section.</DELETED>
<DELETED>    ``(B) Subsection (f) or (g) of section 504
(relating to administrative subpoenas by the Postal Regulatory
Commission).</DELETED>
<DELETED>    ``(C) Section 3663 (relating to appellate
review).</DELETED>
<DELETED>The Postal Service may, by contract or otherwise, employ
attorneys to obtain any legal representation that it is precluded from
obtaining from the Department of Justice under this
paragraph.</DELETED>
<DELETED>    ``(2) In any circumstance not covered by paragraph (1),
the Department of Justice shall, under section 411, furnish the Postal
Service such legal representation as it may require, except that, with
the prior consent of the Attorney General, the Postal Service may, in
any such circumstance, employ attorneys by contract or otherwise to
conduct litigation brought by or against the Postal Service or its
officers or employees in matters affecting the Postal
Service.</DELETED>
<DELETED>    ``(3)(A) In any action, suit, or proceeding in a court of
the United States arising in whole or in part under any of the
provisions of law referred to in subparagraph (B) or (C) of paragraph
(1), and to which the Commission is not otherwise a party, the
Commission shall be permitted to appear as a party on its own motion
and as of right.</DELETED>
<DELETED>    ``(B) The Department of Justice shall, under such terms
and conditions as the Commission and the Attorney General shall
consider appropriate, furnish the Commission such legal representation
as it may require in connection with any such action, suit, or
proceeding, except that, with the prior consent of the Attorney
General, the Commission may employ attorneys by contract or otherwise
for that purpose.</DELETED>
<DELETED>    ``(i) A judgment against the Government of the United
States arising out of activities of the Postal Service shall be paid by
the Postal Service out of any funds available to the Postal Service,
subject to the restriction specified in section 2011(g).''.</DELETED>
<DELETED>    (b) Technical Amendment.--Section 409(a) of title 39,
United States Code, is amended by striking ``Except as provided in
section 3628 of this title,'' and inserting ``Except as otherwise
provided in this title,''.</DELETED>

<DELETED>SEC. 405. INTERNATIONAL POSTAL ARRANGEMENTS.</DELETED>

<DELETED>    (a) In General.--Section 407 of title 39, United States
Code, is amended to read as follows:</DELETED>
<DELETED>``Sec. 407. International postal arrangements</DELETED>
<DELETED>    ``(a) It is the policy of the United States--</DELETED>
<DELETED>    ``(1) to promote and encourage communications
between peoples by efficient operation of international postal
services and other international delivery services for
cultural, social, and economic purposes;</DELETED>
<DELETED>    ``(2) to promote and encourage unrestricted and
undistorted competition in the provision of international
postal services and other international delivery services,
except where provision of such services by private companies
may be prohibited by law of the United States;</DELETED>
<DELETED>    ``(3) to promote and encourage a clear distinction
between governmental and operational responsibilities with
respect to the provision of international postal services;
and</DELETED>
<DELETED>    ``(4) to participate in multilateral and bilateral
agreements with other countries to accomplish these
objectives.</DELETED>
<DELETED>    ``(b)(1) The Secretary of State shall be responsible for
formulation, coordination, and oversight of foreign policy related to
international postal services and shall have the power to conclude
postal treaties and conventions, except that the Secretary may not
conclude any postal treaty or convention if such treaty or convention
would, with respect to any competitive product, grant an undue or
unreasonable preference to the Postal Service, a private provider of
international postal services, or any other person.</DELETED>
<DELETED>    ``(2) In carrying out the responsibilities specified in
paragraph (1), the Secretary of State shall exercise primary authority
for the conduct of foreign policy with respect to international postal
services, including the determination of United States positions and
the conduct of United States participation in negotiations with foreign
governments and international bodies. In exercising this authority, the
Secretary--</DELETED>
<DELETED>    ``(A) shall coordinate with other agencies as
appropriate, and in particular, should consider the authority
vested by law or Executive order in the Postal Regulatory
Commission, the Department of Commerce, the Department of
Transportation, and the Office of the United States Trade
Representative in this area;</DELETED>
<DELETED>    ``(B) shall maintain continuing liaison with other
executive branch agencies concerned with postal and delivery
services;</DELETED>
<DELETED>    ``(C) shall maintain continuing liaison with the
Committee on Homeland Security and Governmental Affairs of the
Senate and the Committee on Government Reform of the House of
Representatives;</DELETED>
<DELETED>    ``(D) shall maintain appropriate liaison with both
representatives of the Postal Service and representatives of
users and private providers of international postal services
and other international delivery services to keep informed of
their interests and problems, and to provide such assistance as
may be needed to ensure that matters of concern are promptly
considered by the Department of State or (if applicable, and to
the extent practicable) other executive branch agencies;
and</DELETED>
<DELETED>    ``(E) shall assist in arranging meetings of such
public sector advisory groups as may be established to advise
the Department of State and other executive branch agencies in
connection with international postal services and international
delivery services.</DELETED>
<DELETED>    ``(3) The Secretary of State shall establish an advisory
committee (within the meaning of the Federal Advisory Committee Act) to
perform such functions as the Secretary considers appropriate in
connection with carrying out subparagraphs (A) through (D) of paragraph
(2).</DELETED>
<DELETED>    ``(c) Before concluding any postal treaty or convention
that establishes a rate or classification for a product subject to
subchapter I of chapter 36, the Secretary of State shall request the
Postal Regulatory Commission to submit its views on whether such rate
or classification is consistent with the standards and criteria
established by the Commission under section 3622.</DELETED>
<DELETED>    ``(d) Nothing in this section shall be considered to
prevent the Postal Service from entering into such commercial or
operational contracts related to providing international postal
services as it deems appropriate, except that--</DELETED>
<DELETED>    ``(1) any such contract made with an agency of a
foreign government (whether under authority of this subsection
or otherwise) shall be solely contractual in nature and may not
purport to be binding under international law; and</DELETED>
<DELETED>    ``(2) a copy of each such contract between the
Postal Service and an agency of a foreign government shall be
transmitted to the Secretary of State and the Postal Regulatory
Commission not later than the effective date of such
contract.</DELETED>
<DELETED>    ``(e)(1) With respect to shipments of international mail
that are competitive products within the meaning of section 3631 that
are exported or imported by the Postal Service, the Customs Service and
other appropriate Federal agencies shall apply the customs laws of the
United States and all other laws relating to the importation or
exportation of such shipments in the same manner to both shipments by
the Postal Service and similar shipments by private
companies.</DELETED>
<DELETED>    ``(2) In exercising the authority under subsection (b) to
conclude new postal treaties and conventions related to international
postal services and to renegotiate such treaties and conventions, the
Secretary of State shall, to the maximum extent practicable, take such
measures as are within the Secretary's control to encourage the
governments of other countries to make available to the Postal Service
and private companies a range of nondiscriminatory customs procedures
that will fully meet the needs of all types of American shippers. The
Secretary of State shall consult with the United States Trade
Representative and the Commissioner of Customs in carrying out this
paragraph.</DELETED>
<DELETED>    ``(3) The provisions of this subsection shall take effect
6 months after the date of enactment of this subsection or such earlier
date as the Customs Service may determine in writing.''.</DELETED>
<DELETED>    (b) Effective Date.--Notwithstanding any provision of the
amendment made by subsection (a), the authority of the United States
Postal Service to establish the rates of postage or other charges on
mail matter conveyed between the United States and other countries
shall remain available to the Postal Service until--</DELETED>
<DELETED>    (1) with respect to market-dominant products, the
date as of which the regulations promulgated under section 3622
of title 39, United States Code (as amended by section 201(a))
take effect; and</DELETED>
<DELETED>    (2) with respect to competitive products, the date
as of which the regulations promulgated under section 3633 of
title 39, United States Code (as amended by section 202) take
effect.</DELETED>

<DELETED>TITLE V--GENERAL PROVISIONS</DELETED>

<DELETED>SEC. 501. QUALIFICATION AND TERM REQUIREMENTS FOR
GOVERNORS.</DELETED>

<DELETED>    (a) Qualifications.--</DELETED>
<DELETED>    (1) In general.--Section 202(a) of title 39,
United States Code, is amended by striking ``(a)'' and
inserting ``(a)(1)'' and by striking the fourth sentence and
inserting the following: ``The Governors shall represent the
public interest generally, and shall be chosen solely on the
basis of their demonstrated ability in managing organizations
or corporations (in either the public or private sector) of
substantial size. Experience in the fields of law and
accounting shall be considered in making appointments of
Governors. The Governors shall not be representatives of
specific interests using the Postal Service, and may be removed
only for cause.''.</DELETED>
<DELETED>    (2) Applicability.--The amendment made by
paragraph (1) shall not affect the appointment or tenure of any
person serving as a Governor of the United States Postal
Service under an appointment made before the date of enactment
of this Act however, when any such office becomes vacant, the
appointment of any person to fill that office shall be made in
accordance with such amendment. The requirement set forth in
the fourth sentence of section 202(a)(1) of title 39, United
States Code (as amended by subsection (a)) shall be met
beginning not later than 9 years after the date of enactment of
this Act.</DELETED>
<DELETED>    (b) Consultation Requirement.--Section 202(a) of title 39,
United States Code, is amended by adding at the end the
following:</DELETED>
<DELETED>    ``(2) In selecting the individuals described in paragraph
(1) for nomination for appointment to the position of Governor, the
President should consult with the Speaker of the House of
Representatives, the minority leader of the House of Representatives,
the majority leader of the Senate, and the minority leader of the
Senate.''.</DELETED>
<DELETED>    (c) 5-Year Terms.--</DELETED>
<DELETED>    (1) In general.--Section 202(b) of title 39,
United States code, is amended in the first sentence by
striking ``9 years'' and inserting ``5 years''.</DELETED>
<DELETED>    (2) Applicability.--</DELETED>
<DELETED>    (A) Continuation by incumbents.--The
amendment made by paragraph (1) shall not affect the
tenure of any person serving as a Governor of the
United States Postal Service on the date of enactment
of this Act and such person may continue to serve the
remainder of the applicable term.</DELETED>
<DELETED>    (B) Vacancy by incumbent before 5 years of
service.--If a person who is serving as a Governor of
the United States Postal Service on the date of
enactment of this Act resigns, is removed, or dies
before the expiration of the 9-year term of that
Governor, and that Governor has served less than 5
years of that term, the resulting vacancy in office
shall be treated as a vacancy in a 5-year
term.</DELETED>
<DELETED>    (C) Vacancy by incumbent after 5 years of
service.--If a person who is serving as a Governor of
the United States Postal Service on the date of
enactment of this Act resigns, is removed, or dies
before the expiration of the 9-year term of that
Governor, and that Governor has served 5 years or more
of that term, that term shall be deemed to have been a
5-year term beginning on its commencement date for
purposes of determining vacancies in office. Any
appointment to the vacant office shall be for a 5-year
term beginning at the end of the original 9-year term
determined without regard to the deeming under the
preceding sentence. Nothing in this subparagraph shall
be construed to affect any action or authority of any
Governor or the Board of Governors during any portion
of a 9-year term deemed to be 5-year term under this
subparagraph.</DELETED>
<DELETED>    (d) Term Limitation.--</DELETED>
<DELETED>    (1) In general.--Section 202(b) of title 39,
United States Code, is amended--</DELETED>
<DELETED>    (A) by inserting ``(1)'' after ``(b)'';
and</DELETED>
<DELETED>    (B) by adding at the end the
following:</DELETED>
<DELETED>    ``(2) No person may serve more than 3 terms as a
Governor.''.</DELETED>
<DELETED>    (2) Applicability.--The amendments made by
paragraph (1) shall not affect the tenure of any person serving
as a Governor of the United States Postal Service on the date
of enactment of this Act with respect to the term which that
person is serving on that date. Such person may continue to
serve the remainder of the applicable term, after which the
amendments made by paragraph (1) shall apply.</DELETED>

<DELETED>SEC. 502. OBLIGATIONS.</DELETED>

<DELETED>    (a) Purposes for Which Obligations May Be Issued.--The
first sentence of section 2005(a)(1) of title 39, United States Code,
is amended by striking ``title.'' and inserting ``title, other than any
of the purposes for which the corresponding authority is available to
the Postal Service under section 2011.''.</DELETED>
<DELETED>    (b) Increase Relating to Obligations Issued for Capital
Improvements.--Section 2005(a)(1) of title 39, United States Code, is
amended by striking the third sentence.</DELETED>
<DELETED>    (c) Amounts Which May Be Pledged.--</DELETED>
<DELETED>    (1) Obligations to which provisions apply.--The
first sentence of section 2005(b) of title 39, United States
Code, is amended by striking ``such obligations,'' and
inserting ``obligations issued by the Postal Service under this
section,''.</DELETED>
<DELETED>    (2) Assets, revenues, and receipts to which
provisions apply.--Subsection (b) of section 2005 of title 39,
United States Code, is amended by striking ``(b)'' and
inserting ``(b)(1)'', and by adding at the end the
following:</DELETED>
<DELETED>    ``(2) Notwithstanding any other provision of this
section--</DELETED>
<DELETED>    ``(A) the authority to pledge assets of the Postal
Service under this subsection shall be available only to the
extent that such assets are not related to the provision of
competitive products (as determined under section 2011(h) or,
for purposes of any period before accounting practices and
principles under section 2011(h) have been established and
applied, the best information available from the Postal
Service, including the audited statements required by section
2008(e)); and</DELETED>
<DELETED>    ``(B) any authority under this subsection relating
to the pledging or other use of revenues or receipts of the
Postal Service shall be available only to the extent that they
are not revenues or receipts of the Competitive Products
Fund.''.</DELETED>

<DELETED>SEC. 503. PRIVATE CARRIAGE OF LETTERS.</DELETED>

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

<DELETED>SEC. 504. RULEMAKING AUTHORITY.</DELETED>

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

<DELETED>SEC. 505. NONINTERFERENCE WITH COLLECTIVE BARGAINING
AGREEMENTS.</DELETED>

<DELETED>    (a) Labor Disputes.--Section 1207 of title 39, United
States Code, is amended to read as follows:</DELETED>
<DELETED>``Sec. 1207. Labor disputes</DELETED>
<DELETED>    ``(a) If there is a collective-bargaining agreement in
effect, no party to such agreement shall terminate or modify such
agreement unless the party desiring such termination or modification
serves written notice upon the other party to the agreement of the
proposed termination or modification not less than 90 days prior to the
expiration date thereof, or not less than 90 days prior to the time it
is proposed to make such termination or modification. The party serving
such notice shall notify the Federal Mediation and Conciliation Service
of the existence of a dispute within 45 days after such notice, if no
agreement has been reached by that time.</DELETED>
<DELETED>    ``(b) If the parties fail to reach agreement or to adopt a
procedure providing for a binding resolution of a dispute by the
expiration date of the agreement in effect, or the date of the proposed
termination or modification, the Director of the Federal Mediation and
Conciliation Service shall within 10 days appoint a mediator of
nationwide reputation and professional stature, and who is also a
member of the National Academy of Arbitrators. The parties shall
cooperate with the mediator in an effort to reach an agreement and
shall meet and negotiate in good faith at such times and places that
the mediator, in consultation with the parties, shall direct.</DELETED>
<DELETED>    ``(c)(1) If no agreement is reached within 60 days after
the expiration or termination of the agreement or the date on which the
agreement became subject to modification under subsection (a) of this
section, or if the parties decide upon arbitration but do not agree
upon the procedures therefore, an arbitration board shall be
established consisting of 3 members, 1 of whom shall be selected by the
Postal Service, 1 by the bargaining representative of the employees,
and the third by the 2 thus selected. If either of the parties fails to
select a member, or if the members chosen by the parties fail to agree
on the third person within 5 days after their first meeting, the
selection shall be made from a list of names provided by the Director.
This list shall consist of not less then 9 names of arbitrators of
nationwide reputation and professional nature, who are also members of
the National Academy of Arbitrators, and whom the Director has
determined are available and willing to serve.</DELETED>
<DELETED>    ``(2) The arbitration board shall give the parties a full
and fair hearing, including an opportunity to present evidence in
support of their claims, and an opportunity to present their case in
person, by counsel or by other representative as they may elect.
Decisions of the arbitration board shall be conclusive and binding upon
the parties. The arbitration board shall render its decision within 45
days after its appointment.</DELETED>
<DELETED>    ``(3) Costs of the arbitration board and mediation shall
be shared equally by the Postal Service and the bargaining
representative.</DELETED>
<DELETED>    ``(d) In the case of a bargaining unit whose recognized
collective-bargaining representative does not have an agreement with
the Postal Service, if the parties fail to reach the agreement within
90 days after the commencement of collective bargaining, a mediator
shall be appointed in accordance with the terms in subsection (b) of
this section, unless the parties have previously agreed to another
procedure for a binding resolution of their differences. If the parties
fail to reach agreement within 180 days after the commencement of
collective bargaining, and if they have not agreed to another procedure
for binding resolution, an arbitration board shall be established to
provide conclusive and binding arbitration in accordance with the terms
of subsection (c) of this section.''.</DELETED>
<DELETED>    (b) Noninterference With Collective Bargaining
Agreements.--Except as otherwise provided by the amendment made by
subsection (a), nothing in this Act shall restrict, expand, or
otherwise affect any of the rights, privileges, or benefits of either
employees of or labor organizations representing employees of the
United States Postal Service under chapter 12 of title 39, United
States Code, the National Labor Relations Act, any handbook or manual
affecting employee labor relations within the United States Postal
Service, or any collective bargaining agreement.</DELETED>
<DELETED>    (c) Free Mailing Privileges Continue Unchanged.--Nothing
in this Act or any amendment made by this Act shall affect any free
mailing privileges accorded under section 3217 or sections 3403 through
3406 of title 39, United States Code.</DELETED>

<DELETED>SEC. 506. BONUS AUTHORITY.</DELETED>

<DELETED>    Chapter 36 of title 39, United States Code, is amended by
inserting after section 3685 the following:</DELETED>
<DELETED>``Sec. 3686. Bonus authority</DELETED>
<DELETED>    ``(a) In General.--The Postal Service may establish 1 or
more programs to provide bonuses or other rewards to officers and
employees of the Postal Service in senior executive or equivalent
positions to achieve the objectives of this chapter.</DELETED>
<DELETED>    ``(b) Limitation on Total Compensation.--</DELETED>
<DELETED>    ``(1) In general.--Under any such program, the
Postal Service may award a bonus or other reward in excess of
the limitation set forth in the last sentence of section
1003(a), if such program has been approved under paragraph (2).
Any such award or bonus may not cause the total compensation of
such officer or employee to exceed the total annual
compensation payable to the Vice President under section 104 of
title 3 as of the end of the calendar year in which the bonus
or award is paid.</DELETED>
<DELETED>    ``(2) Approval process.--If the Postal Service
wishes to have the authority, under any program described in
subsection (a), to award bonuses or other rewards in excess of
the limitation set forth in the last sentence of section
1003(a)--</DELETED>
<DELETED>    ``(A) the Postal Service shall make an
appropriate request to the Board of Governors of the
Postal Service in such form and manner as the Board
requires; and</DELETED>
<DELETED>    ``(B) the Board of Governors shall approve
any such request if the Board certifies, for the annual
appraisal period involved, that the performance
appraisal system for affected officers and employees of
the Postal Service (as designed and applied) makes
meaningful distinctions based on relative
performance.</DELETED>
<DELETED>    ``(3) Revocation authority.--If the Board of
Governors of the Postal Service finds that a performance
appraisal system previously approved under paragraph (2)(B)
does not (as designed and applied) make meaningful distinctions
based on relative performance, the Board may revoke or suspend
the authority of the Postal Service to continue a program
approved under paragraph (2) until such time as appropriate
corrective measures have, in the judgment of the Board, been
taken.</DELETED>
<DELETED>    ``(c) Reporting Requirement Relating to Bonuses or Other
Rewards.--Included in its comprehensive statement under section 2401(e)
for any period shall be--</DELETED>
<DELETED>    ``(1) the name of each person receiving a bonus or
other reward during such period which would not have been
allowable but for the provisions of subsection (b);</DELETED>
<DELETED>    ``(2) the amount of the bonus or other reward;
and</DELETED>
<DELETED>    ``(3) the amount by which the limitation referred
to in subsection (b)(1) was exceeded as a result of such bonus
or other reward.''.</DELETED>

<DELETED>TITLE VI--ENHANCED REGULATORY COMMISSION</DELETED>

<DELETED>SEC. 601. REORGANIZATION AND MODIFICATION OF CERTAIN
PROVISIONS RELATING TO THE POSTAL REGULATORY
COMMISSION.</DELETED>

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

<DELETED>``CHAPTER 5--POSTAL REGULATORY COMMISSION</DELETED>

<DELETED>``Sec.
<DELETED>``501. Establishment.
<DELETED>``502. Commissioners.
<DELETED>``503. Rules; regulations; procedures.
<DELETED>``504. Administration.
<DELETED>``505. Officer of the Postal Regulatory Commission
representing the general public.
<DELETED>``Sec. 501. Establishment</DELETED>
<DELETED>    ``The Postal Regulatory Commission is an independent
establishment of the executive branch of the Government of the United
States.</DELETED>
<DELETED>``Sec. 502. Commissioners</DELETED>
<DELETED>    ``(a) The Postal Regulatory Commission is composed of 5
Commissioners, appointed by the President, by and with the advice and
consent of the Senate. The Commissioners shall be chosen solely on the
basis of their technical qualifications, professional standing, and
demonstrated expertise in economics, accounting, law, or public
administration, and may be removed by the President only for cause.
Each individual appointed to the Commission shall have the
qualifications and expertise necessary to carry out the enhanced
responsibilities accorded Commissioners under the Postal Accountability
and Enhancement Act. Not more than 3 of the Commissioners may be
adherents of the same political party.</DELETED>
<DELETED>    ``(b) No Commissioner shall be financially interested in
any enterprise in the private sector of the economy engaged in the
delivery of mail matter.</DELETED>
<DELETED>    ``(c) A Commissioner may continue to serve after the
expiration of his term until his successor has qualified, except that a
Commissioner may not so continue to serve for more than 1 year after
the date upon which his term otherwise would expire under subsection
(f).</DELETED>
<DELETED>    ``(d) One of the Commissioners shall be designated as
Chairman by, and shall serve in the position of Chairman at the
pleasure of, the President.</DELETED>
<DELETED>    ``(e) The Commissioners shall by majority vote designate a
Vice Chairman of the Commission. The Vice Chairman shall act as
Chairman of the Commission in the absence of the Chairman.</DELETED>
<DELETED>    ``(f) The Commissioners shall serve for terms of 6
years.'';</DELETED>
<DELETED>    (2) by striking, in subchapter I of chapter 36 (as
in effect before the amendment made by section 201(c)), the
heading for such subchapter I and all that follows through
section 3602;</DELETED>
<DELETED>    (3) by redesignating sections 3603 and 3604 as
sections 503 and 504, respectively, and transferring such
sections to the end of chapter 5 (as inserted by paragraph
(1)); and</DELETED>
<DELETED>    (4) by adding after such section 504 the
following:</DELETED>
<DELETED>``Sec. 505. Officer of the Postal Regulatory Commission
representing the general public</DELETED>
<DELETED>    ``The Postal Regulatory Commission shall designate an
officer of the Postal Regulatory Commission in all public proceedings
who shall represent the interests of the general public.''.</DELETED>
<DELETED>    (b) Applicability.--The amendment made by subsection
(a)(1) shall not affect the appointment or tenure of any person serving
as a Commissioner on the Postal Regulatory Commission (as so
redesignated by section 604) under an appointment made before the date
of enactment of this Act or any nomination made before that date, but,
when any such office becomes vacant, the appointment of any person to
fill that office shall be made in accordance with such
amendment.</DELETED>
<DELETED>    (c) Clerical Amendment.--The analysis for part I of title
39, United States Code, is amended by inserting after the item relating
to chapter 4 the following:</DELETED>

<DELETED>``5. Postal Regulatory Commission....                501''

<DELETED>SEC. 602. AUTHORITY FOR POSTAL REGULATORY COMMISSION TO ISSUE
SUBPOENAS.</DELETED>

<DELETED>    Section 504 of title 39, United States Code (as so
redesignated by section 601) is amended by adding at the end the
following:</DELETED>
<DELETED>    ``(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.</DELETED>
<DELETED>    ``(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--
</DELETED>
<DELETED>    ``(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</DELETED>
<DELETED>    ``(B) order the taking of depositions and
responses to written interrogatories by a covered
person.</DELETED>
<DELETED>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.</DELETED>
<DELETED>    ``(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.</DELETED>
<DELETED>    ``(4) For purposes of this subsection, the term `covered
person' means an officer, employee, agent, or contractor of the Postal
Service.</DELETED>
<DELETED>    ``(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).</DELETED>
<DELETED>    ``(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)--</DELETED>
<DELETED>    ``(A) use such information for purposes other than
the purposes for which it is supplied; or</DELETED>
<DELETED>    ``(B) permit anyone who is not an officer or
employee of the Commission to have access to any such
information.</DELETED>
<DELETED>    ``(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.</DELETED>
<DELETED>    ``(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.''.</DELETED>

<DELETED>SEC. 603. APPROPRIATIONS FOR THE POSTAL REGULATORY
COMMISSION.</DELETED>

<DELETED>    (a) Authorization of Appropriations.--Subsection (d) of
section 504 of title 39, United States Code (as so redesignated by
section 601) is amended to read as follows:</DELETED>
<DELETED>    ``(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.''.</DELETED>
<DELETED>    (b) Budget Program.--</DELETED>
<DELETED>    (1) In general.--The next to last sentence of
section 2009 of title 39, United States Code, is amended to
read as follows: ``The budget program shall also include
separate statements of the amounts which (1) the Postal Service
requests to be appropriated under subsections (b) and (c) of
section 2401, (2) the Office of Inspector General of the United
States Postal Service requests to be appropriated, out of the
Postal Service Fund, under section 8G(f) of the Inspector
General Act of 1978, and (3) the Postal Regulatory Commission
requests to be appropriated, out of the Postal Service Fund,
under section 504(d) of this title.''.</DELETED>
<DELETED>    (2) Conforming amendment.--Section 2003(e)(1) of
title 39, United States Code, is amended by striking the first
sentence and inserting the following: ``The Fund shall be
available for the payment of (A) all expenses incurred by the
Postal Service in carrying out its functions as provided by
law, subject to the same limitation as set forth in the
parenthetical matter under subsection (a); (B) all expenses of
the Postal Regulatory Commission, subject to the availability
of amounts appropriated under section 504(d); and (C) all
expenses of the Office of Inspector General, subject to the
availability of amounts appropriated under section 8G(f) of the
Inspector General Act of 1978.''.</DELETED>
<DELETED>    (c) Effective Date.--</DELETED>
<DELETED>    (1) In general.--The amendments made by this
section shall apply with respect to fiscal years beginning on
or after October 1, 2002.</DELETED>
<DELETED>    (2) Savings provision.--The provisions of title
39, United States Code, that are amended by this section shall,
for purposes of any fiscal year before the first fiscal year to
which the amendments made by this section apply, continue to
apply in the same way as if this section had never been
enacted.</DELETED>

<DELETED>SEC. 604. REDESIGNATION OF THE POSTAL RATE
COMMISSION.</DELETED>

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

<DELETED>SEC. 605. FINANCIAL TRANSPARENCY.</DELETED>

<DELETED>    (a) In General.--Section 101 of title 39, United States
Code, is amended--</DELETED>
<DELETED>    (1) by redesignating subsections (d) through (g)
as subsections (e) through (h), respectively; and</DELETED>
<DELETED>    (2) by inserting after subsection (c) the
following:</DELETED>
<DELETED>    ``(d) As an independent establishment of the executive
branch of the Government of the United States, the Postal Service shall
be subject to a high degree of transparency to ensure fair treatment of
customers of the Postal Service's market-dominant products and
companies competing with the Postal Service's competitive
products.''.</DELETED>
<DELETED>    (b) Financial Reporting Requirements and Enforcement
Powers Applicable to Postal Service.--Section 503 of title 39, United
States Code (as so redesignated by section 601 and 604) is amended by--
</DELETED>
<DELETED>    (1) inserting ``(a)'' before ``The Postal
Regulatory Commission shall promulgate''; and</DELETED>
<DELETED>    (2) adding at the end the following:</DELETED>
<DELETED>    ``(b)(1) Beginning with the first full fiscal year
following the date of enactment of the Postal Accountability and
Enhancement Act, the Postal Service shall file with the Postal
Regulatory Commission --</DELETED>
<DELETED>    ``(A) within 35 days after the end of each fiscal
quarter, a quarterly report containing the information
prescribed in Form 10-Q of the Securities and Exchange
Commission under section 13 of the Securities Exchange Act of
1934 (15 U.S.C. 78m), or any revised or successor
form;</DELETED>
<DELETED>    ``(B) within 60 days after the end of each fiscal
year, an annual report containing the information prescribed in
Form 10-K of the Securities and Exchange Commission under
section 13 of the Securities Exchange Act of 1934 (15 U.S.C.
78m), or any revised or successor form; and</DELETED>
<DELETED>    ``(C) periodic reports within the time frame and
containing the information prescribed in Form 8-K of the
Securities and Exchange Commission under section 13 of the
Securities Exchange Act of 1934 (15 U.S.C. 78m), or any revised
or successor form.</DELETED>
<DELETED>    ``(2) For purposes of preparing the reports required under
paragraph (1), the Postal Service shall be deemed to be the registrant
described in the Securities and Exchange Commission forms, and
references contained in such forms to Securities and Exchange
Commission regulations are applicable.</DELETED>
<DELETED>    ``(3) For purposes of preparing the reports required under
paragraph (1), the Postal Service shall comply with the rules
prescribed by the Securities and Exchange Commission implementing
section 404 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7262; Public
Law 107-204) beginning with fiscal year 2007 and in each fiscal year
thereafter.</DELETED>
<DELETED>    ``(c)(1) The reports required under subsection (b)(1)(B)
shall include, with respect to the financial obligations of the Postal
Service under chapters 83, 84, and 89 of title 5 for retirees of the
Postal Service--</DELETED>
<DELETED>    ``(A) the funded status of such obligations of the
Postal Service;</DELETED>
<DELETED>    ``(B) components of the net change in the fund
balances and obligations and the nature and cause of any
significant changes;</DELETED>
<DELETED>    ``(C) components of net periodic costs;</DELETED>
<DELETED>    ``(D) cost methods and assumptions underlying the
relevant actuarial valuations;</DELETED>
<DELETED>    ``(E) the effect of a one-percentage point
increase in the assumed health care cost trend rate for each
future year on the service and interest costs components of net
periodic cost and the accumulated obligation of the Postal
Service under chapter 89 of title 5 for retirees of the Postal
Service;</DELETED>
<DELETED>    ``(F) actual contributions to and payments from
the funds for the years presented and the estimated future
contributions and payments for each of the following 5
years;</DELETED>
<DELETED>    ``(G) the composition of plan assets reflected in
the fund balances; and</DELETED>
<DELETED>    ``(H) the assumed rate of return on fund balances
and the actual rates of return for the years
presented.</DELETED>
<DELETED>    ``(2)(A) Beginning with the fiscal year 2007 and in each
fiscal year thereafter, for purposes of the reports required under
subsection (b)(1) (A) and (B), the Postal Service shall include segment
reporting.</DELETED>
<DELETED>    ``(B) The Postal Service shall determine the appropriate
segment reporting under subparagraph (A), after consultation with the
Postal Regulatory Commission.</DELETED>
<DELETED>    ``(d) For purposes of the annual reports required under
subsection (b)(1)(B), the Postal Service shall obtain an opinion from
an independent auditor on whether the information listed under
subsection (c) is fairly stated in all material respects, either in
relation to the basic financial statements as a whole or on a stand-
alone basis.</DELETED>
<DELETED>    ``(e) The Postal Regulatory Commission shall have access
to the audit documentation and any other supporting matter of the
Postal Service and its independent auditor in connection with any
information submitted under subsection (b)(1)(B).</DELETED>
<DELETED>    ``(f) The Postal Regulatory Commission may, on its own
motion or on request of an interested party, initiate proceedings (to
be conducted in accordance with regulations that the Commission shall
prescribe) to improve the quality, accuracy, or completeness of Postal
Service data required by the Commission under this section whenever it
shall appear that the data--</DELETED>
<DELETED>    ``(1) have become significantly
inaccurate;</DELETED>
<DELETED>    ``(2) can be significantly improved; or</DELETED>
<DELETED>    ``(3) are not cost beneficial.''.</DELETED>

<DELETED>TITLE VII--EVALUATIONS</DELETED>

<DELETED>SEC. 701. ASSESSMENTS OF RATEMAKING, CLASSIFICATION, AND OTHER
PROVISIONS.</DELETED>

<DELETED>    (a) In General.--The Postal Regulatory Commission shall,
at least every 3 years, submit a report to the President and Congress
concerning--</DELETED>
<DELETED>    (1) the operation of the amendments made by this
Act; and</DELETED>
<DELETED>    (2) recommendations for any legislation or other
measures necessary to improve the effectiveness or efficiency
of the postal laws of the United States.</DELETED>
<DELETED>    (b) Postal Service Views.--A report under this section
shall be submitted only after reasonable opportunity has been afforded
to the Postal Service to review the report and to submit written
comments on the report. Any comments timely received from the Postal
Service under the preceding sentence shall be attached to the report
submitted under subsection (a).</DELETED>

<DELETED>SEC. 702. REPORT ON UNIVERSAL POSTAL SERVICE AND THE POSTAL
MONOPOLY.</DELETED>

<DELETED>    (a) Report by the Postal Regulatory Commission.--
</DELETED>
<DELETED>    (1) In general.--Not later than 12 months after
the date of enactment of this Act, the Postal Regulatory
Commission shall submit a report to the President and Congress
on universal postal service and the postal monopoly in the
United States (in this section referred to as ``universal
service and the postal monopoly''), including the monopoly on
the delivery of mail and on access to mailboxes.</DELETED>
<DELETED>    (2) Contents.--The report under this subsection
shall include--</DELETED>
<DELETED>    (A) a comprehensive review of the history
and development of universal service and the postal
monopoly, including how the scope and standards of
universal service and the postal monopoly have evolved
over time for the Nation and its urban and rural
areas;</DELETED>
<DELETED>    (B) the scope and standards of universal
service and the postal monopoly provided under current
law (including sections 101 and 403 of title 39, United
States Code), and current rules, regulations, policy
statements, and practices of the Postal
Service;</DELETED>
<DELETED>    (C) a description of any geographic areas,
populations, communities (including both urban and
rural communities), organizations, or other groups or
entities not currently covered by universal service or
that are covered but that are receiving services
deficient in scope or quality or both; and</DELETED>
<DELETED>    (D) the scope and standards of universal
service and the postal monopoly likely to be required
in the future in order to meet the needs and
expectations of the United States public, including all
types of mail users, based on discussion of such
assumptions, alternative sets of assumptions, and
analyses as the Postal Service considers
plausible.</DELETED>
<DELETED>    (b) Recommended Changes to Universal Service and the
Monopoly.--The Postal Regulatory Commission shall include in the report
under subsection (a), and in all reports submitted under section 701 of
this Act--</DELETED>
<DELETED>    (1) any recommended changes to universal service
and the postal monopoly as the Commission considers
appropriate, including changes that the Commission may
implement under current law and changes that would require
changes to current law, with estimated effects of the
recommendations on the service, financial condition, rates, and
security of mail provided by the Postal Service;</DELETED>
<DELETED>    (2) with respect to each recommended change
described under paragraph (1)--</DELETED>
<DELETED>    (A) an estimate of the costs of the Postal
Service attributable to the obligation to provide
universal service under current law; and</DELETED>
<DELETED>    (B) an analysis of the likely benefit of
the current postal monopoly to the ability of the
Postal Service to sustain the current scope and
standards of universal service, including estimates of
the financial benefit of the postal monopoly to the
extent practicable, under current law; and</DELETED>
<DELETED>    (3) such additional topics and recommendations as
the Commission considers appropriate, with estimated effects of
the recommendations on the service, financial condition, rates,
and the security of mail provided by the Postal
Service.</DELETED>

<DELETED>SEC. 703. STUDY ON EQUAL APPLICATION OF LAWS TO COMPETITIVE
PRODUCTS.</DELETED>

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

<DELETED>SEC. 704. REPORT ON POSTAL WORKPLACE SAFETY AND WORKPLACE-
RELATED INJURIES.</DELETED>

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

<DELETED>SEC. 705. STUDY ON RECYCLED PAPER.</DELETED>

<DELETED>    (a) In General.--Within 12 months after the date of
enactment of this Act, the Government Accountability Office shall study
and submit to the Congress, the Board of Governors of the Postal
Service, and to the Postal Regulatory Commission a report concerning--
</DELETED>
<DELETED>    (1) the economic and environmental efficacy of
establishing rate incentives for mailers linked to the use of
recycled paper;</DELETED>
<DELETED>    (2) a description of the accomplishments of the
Postal Service in each of the preceding 5 years involving
recycling activities, including the amount of annual revenue
generated and savings achieved by the Postal Service as a
result of its use of recycled paper and other recycled products
and its efforts to recycle undeliverable and discarded mail and
other materials; and</DELETED>
<DELETED>    (3) additional opportunities that may be available
for the United States Postal Service to engage in recycling
initiatives and the projected costs and revenues of undertaking
such opportunities.</DELETED>
<DELETED>    (b) Recommendations.--The report shall include
recommendations for any administrative or legislative actions that may
be appropriate.</DELETED>

<DELETED>TITLE VIII--POSTAL SERVICE RETIREMENT AND HEALTH BENEFITS
FUNDING</DELETED>

<DELETED>SEC. 801. SHORT TITLE.</DELETED>

<DELETED>    This title may be cited as the ``Postal Civil Service
Retirement and Health Benefits Funding Amendments of 2004''.</DELETED>

<DELETED>SEC. 802. CIVIL SERVICE RETIREMENT SYSTEM.</DELETED>

<DELETED>    (a) In General.--Chapter 83 of title 5, United States
Code, is amended--</DELETED>
<DELETED>    (1) in section 8334(a)(1)(B), by striking clause
(ii) and inserting the following:</DELETED>
<DELETED>    ``(ii) In the case of an employee of the United States
Postal Service, no amount shall be contributed under this
subparagraph.''; and</DELETED>
<DELETED>    (2) by amending section 8348(h) to read as
follows:</DELETED>
<DELETED>    ``(h)(1) In this subsection, the term `Postal surplus or
supplemental liability' means the estimated difference, as determined
by the Office, between--</DELETED>
<DELETED>    ``(A) the actuarial present value of all future
benefits payable from the Fund under this subchapter to current
or former employees of the United States Postal Service and
attributable to civilian employment with the United States
Postal Service; and</DELETED>
<DELETED>    ``(B) the sum of--</DELETED>
<DELETED>    ``(i) the actuarial present value of
deductions to be withheld from the future basic pay of
employees of the United States Postal Service currently
subject to this subchapter under section
8334;</DELETED>
<DELETED>    ``(ii) that portion of the Fund balance,
as of the date the Postal surplus or supplemental
liability is determined, attributable to payments to
the Fund by the United States Postal Service and its
employees, minus benefit payments attributable to
civilian employment with the United States Postal
Service, plus the earnings on such amounts while in the
Fund; and</DELETED>
<DELETED>    ``(iii) any other appropriate amount, as
determined by the Office in accordance with generally
accepted actuarial practices and principles.</DELETED>
<DELETED>    ``(2)(A) Not later than June 15, 2006, the Office shall
determine the Postal surplus or supplemental liability, as of September
30, 2005. If that result is a surplus, the amount of the surplus shall
be transferred to the Postal Service Retiree Health Benefits Fund
established under section 8909a by June 30, 2006. If the result is a
supplemental liability, the Office shall establish an amortization
schedule, including a series of annual installments commencing
September 30, 2006, which provides for the liquidation of such
liability by September 30, 2043.</DELETED>
<DELETED>    ``(B) The Office shall redetermine the Postal surplus or
supplemental liability as of the close of the fiscal year, for each
fiscal year beginning after September 30, 2006, through the fiscal year
ending September 30, 2038. If the result is a surplus, that amount
shall remain in the Fund until distribution is authorized under
subparagraph (C), and any prior amortization schedule for payments
shall be terminated. If the result is a supplemental liability, the
Office shall establish a new amortization schedule, including a series
of annual installments commencing on September 30 of the subsequent
fiscal year, which provides for the liquidation of such liability by
September 30, 2043.</DELETED>
<DELETED>    ``(C) As of the close of the fiscal years ending September
30, 2015, 2025, 2035, and 2039, if the result is a surplus, that amount
shall be transferred to the Postal Service Retiree Health Benefits
Fund, and any prior amortization schedule for payments shall be
terminated.</DELETED>
<DELETED>    ``(D) Amortization schedules established under this
paragraph shall be set in accordance with generally accepted actuarial
practices and principles, with interest computed at the rate used in
the most recent valuation of the Civil Service Retirement
System.</DELETED>
<DELETED>    ``(E) The United States Postal Service shall pay the
amounts so determined to the Office, with payments due not later than
the date scheduled by the Office.</DELETED>
<DELETED>    ``(3) Notwithstanding any other provision of law, in
computing the amount of any payment under any other subsection of this
section that is based upon the amount of the unfunded liability, such
payment shall be computed disregarding that portion of the unfunded
liability that the Office determines will be liquidated by payments
under this subsection.''.</DELETED>
<DELETED>    (b) Credit Allowed for Military Service.--In the
application of section 8348(g)(2) of title 5, United States Code, for
the fiscal year 2006, the Office of Personnel Management shall include,
in addition to the amount otherwise computed under that paragraph, the
amounts that would have been included for the fiscal years 2003 through
2005 with respect to credit for military service of former employees of
the United States Postal Service as though the Postal Civil Service
Retirement System Funding Reform Act of 2003 (Public Law 108-18) had
not been enacted, and the Secretary of the Treasury shall make the
required transfer to the Civil Service Retirement and Disability Fund
based on that amount.</DELETED>

<DELETED>SEC. 803. HEALTH INSURANCE.</DELETED>

<DELETED>    (a) In General.--</DELETED>
<DELETED>    (1) Funding.--Chapter 89 of title 5, United States
Code, is amended--</DELETED>
<DELETED>    (A) in section 8906(g)(2)(A), by striking
``shall be paid by the United States Postal Service.''
and inserting ``shall be paid first from the Postal
Service Retiree Health Benefits Fund up to the amount
contained in the Fund, with any remaining amount paid
by the United States Postal Service.''; and</DELETED>
<DELETED>    (B) by inserting after section 8909 the
following:</DELETED>
<DELETED>``Sec. 8909a. Postal Service Retiree Health Benefit
Fund</DELETED>
<DELETED>    ``(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.</DELETED>
<DELETED>    ``(b) The Fund is available without fiscal year limitation
for payments required under section 8906(g)(2)(A).</DELETED>
<DELETED>    ``(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.</DELETED>
<DELETED>    ``(d)(1) Not later than June 30, 2006, 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.</DELETED>
<DELETED>    ``(2)(A) Not later than June 30, 2006, the Office shall
compute, and by June 30 of each succeeding year, the Office shall
recompute the difference between--</DELETED>
<DELETED>    ``(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</DELETED>
<DELETED>    ``(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</DELETED>
<DELETED>    ``(II) the net present value computed under
paragraph (1).</DELETED>
<DELETED>    ``(B) Not later than June 30, 2006, the Office shall
compute, and by June 30 of each succeeding year shall recompute, an
amortization schedule including a series of annual installments which
provide for the liquidation by September 30, 2045, 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.</DELETED>
<DELETED>    ``(3) Not later than September 30, 2006, and by September
30 of each succeeding year, the United States Postal Service shall pay
into such Fund--</DELETED>
<DELETED>    ``(A) the net present value computed under
paragraph (1); and</DELETED>
<DELETED>    ``(B) the annual installment computed under
paragraph (2)(B).</DELETED>
<DELETED>    ``(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.</DELETED>
<DELETED>    ``(5) After consultation with the United States Postal
Service, the Office shall promulgate any regulations the Office
determines necessary under this subsection.''.</DELETED>
<DELETED>    (2) Technical and conforming amendment.--The table
of sections for chapter 89 of title 5, United States Code, is
amended by inserting after the item relating to section 8909
the following:</DELETED>

<DELETED>``8909a. Postal Service Retiree Health Benefits Fund.''.
<DELETED>    (b) Transitional Adjustment for Fiscal Year 2006.--For
fiscal year 2006, the amounts paid by the Postal Service in Government
contributions under section 8906(g)(2)(A) of title 5, United States
Code, for fiscal year 2006 contributions shall be deducted from the
initial payment otherwise due from the Postal Service to the Postal
Service Retiree Health Benefits Fund under section 8909a(d)(3) of such
title as added by this section.</DELETED>

<DELETED>SEC. 804. REPEAL OF DISPOSITION OF SAVINGS
PROVISION.</DELETED>

<DELETED>    Section 3 of the Postal Civil Service Retirement System
Funding Reform Act of 2003 (Public Law 108-18) is repealed.</DELETED>

<DELETED>SEC. 805. EFFECTIVE DATES.</DELETED>

<DELETED>    (a) In General.--Except as provided under subsection (b),
this title shall take effect on October 1, 2005.</DELETED>
<DELETED>    (b) Termination of Employer Contribution.--The amendment
made by paragraph (1) of section 802(a) shall take effect on the first
day of the first pay period beginning on or after October 1,
2005.</DELETED>

<DELETED>TITLE IX--COMPENSATION FOR WORK INJURIES</DELETED>

<DELETED>SEC. 901. TEMPORARY DISABILITY; CONTINUATION OF PAY.</DELETED>

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

<DELETED>SEC. 902. DISABILITY RETIREMENT FOR POSTAL
EMPLOYEES.</DELETED>

<DELETED>    (a) Total Disability.--Section 8105 of title 5, United
States Code, is amended--</DELETED>
<DELETED>    (1) in subsection (a), by adding at the end the
following: ``This section applies to a Postal Service employee,
except as provided under subsection (c).''; and</DELETED>
<DELETED>    (2) by adding at the end the following:</DELETED>
<DELETED>    ``(c)(1) In this subsection, the term `retirement age' has
the meaning given under section 216(l)(1) of the Social Security Act
(42 U.S.C. 416(l)(1)).</DELETED>
<DELETED>    ``(2) Notwithstanding any other provision of law, for any
injury occurring on or after the date of enactment of the Postal
Accountability and Enhancement Act, and for any new claim for a period
of disability commencing on or after that date, the compensation
entitlement for total disability is converted to 50 percent of the
monthly pay of the employee on the later of--</DELETED>
<DELETED>    ``(A) the date on which the injured employee
reaches retirement age; or</DELETED>
<DELETED>    ``(B) 1 year after the employee begins receiving
compensation.''.</DELETED>
<DELETED>    (b) Partial Disability.--Section 8106 of title 5, United
States Code, is amended--</DELETED>
<DELETED>    (1) in subsection (a), by adding at the end the
following: ``This section applies to a Postal Service employee,
except as provided under subsection (d).''; and</DELETED>
<DELETED>    (2) by adding at the end the following:</DELETED>
<DELETED>    ``(d)(1) In this subsection, the term `retirement age' has
the meaning given under section 216(l)(1) of the Social Security Act
(42 U.S.C. 416(l)(1)).</DELETED>
<DELETED>    ``(2) Notwithstanding any other provision of law,
for any injury occurring on or after the date of enactment of
this subsection, and for any new claim for a period of
disability commencing on or after that date, the compensation
entitlement for partial disability is converted to 50 percent
of the difference between the monthly pay of an employee and
the monthly wage earning capacity of the employee after the
beginning of partial disability on the later of--</DELETED>
<DELETED>    ``(A) the date on which the injured
employee reaches retirement age; or</DELETED>
<DELETED>    ``(B) 1 year after the employee begins
receiving compensation.''.</DELETED>

<DELETED>TITLE X--MISCELLANEOUS</DELETED>

<DELETED>SEC. 1001. EMPLOYMENT OF POSTAL POLICE OFFICERS.</DELETED>

<DELETED>    Section 404 of title 39, United States Code (as amended by
this Act), is further amended by adding at the end the
following:</DELETED>
<DELETED>    ``(d) The Postal Service may employ guards for all
buildings and areas owned or occupied by the Postal Service or under
the charge and control of the Postal Service, and may give such guards,
with respect to such property, any of the powers of special policemen
provided under section 1315 of title 40. The Postmaster General, or the
designee of the Postmaster General, may take any action that the
Secretary of Homeland Security may take under section 1315 of title 40,
with respect to that property.</DELETED>

<DELETED>SEC. 1002. EXPANDED CONTRACTING AUTHORITY.</DELETED>

<DELETED>    (a) Amendment to Title 39, United States Code.--</DELETED>
<DELETED>    (1) Contracts with air carriers.--Subsection (e)
of section 5402 of title 39, United States Code, is amended--
</DELETED>
<DELETED>    (A) by striking the matter preceding
paragraph (2) and inserting the following:</DELETED>
<DELETED>    ``(e)(1) The Postal Service may contract with any air
carrier for the transportation of mail by aircraft in interstate air
transportation, including the rates for that transportation, either
through negotiations or competitive bidding.'';</DELETED>
<DELETED>    (B) by redesignating paragraph (2) as
paragraph (4); and</DELETED>
<DELETED>    (C) by inserting after paragraph (1) the
following:</DELETED>
<DELETED>    ``(2) Notwithstanding subsections (b) through (d), the
Postal Service may contract with any air carrier or foreign air carrier
for the transportation of mail by aircraft in foreign air
transportation, including the rates for that transportation, either
through negotiations or competitive bidding, except that--</DELETED>
<DELETED>    ``(A) any such contract may be awarded only to--
</DELETED>
<DELETED>    ``(i) an air carrier holding a certificate
required by section 41101 of title 49 or an exemption
therefrom issued by the Secretary of
Transportation;</DELETED>
<DELETED>    ``(ii) a foreign air carrier holding a
permit required by section 41301 of title 49 or an
exemption therefrom issued by the Secretary of
Transportation; or</DELETED>
<DELETED>    ``(iii) a combination of such air carriers
or foreign air carriers (or both);</DELETED>
<DELETED>    ``(B) mail transported under any such contract
shall not be subject to any duty-to-carry requirement imposed
by any provision of subtitle VII of title 49 or by any
certificate, permit, or corresponding exemption authority
issued by the Secretary of Transportation under that
subtitle;</DELETED>
<DELETED>    ``(C) during the 5-year period beginning 1 year
after the date of enactment of the Postal Accountability and
Enhancement Act, the Postal Service may not under this
paragraph--</DELETED>
<DELETED>    ``(i) contract for service between a pair
or combination of pairs of points in foreign air
transportation with--</DELETED>
<DELETED>    ``(I) a foreign air carrier;
or</DELETED>
<DELETED>    ``(II) an air carrier to the
extent that service provided would be offered
through a code sharing arrangement in which the
air carrier's designator code is used to
identify a flight operated by a foreign air
carrier; or</DELETED>
<DELETED>    ``(ii) tender mail in foreign air
transportation under contracts providing for the
carriage of mail in foreign air transportation over all
(or substantially all, as determined by the Postal
Service) of a carrier's routes or all or substantially
all of a carrier's routes within a geographic area
determined by the Postal Service on the basis of a
common unit price per mile and a separate terminal
price to--</DELETED>
<DELETED>    ``(I) a foreign air carrier;
or</DELETED>
<DELETED>    ``(II) an air carrier to the
extent that service provided would be offered
through a code sharing arrangement in which the
air carrier's designator code is used to
identify a flight operated by a foreign air
carrier, unless--</DELETED>
<DELETED>    ``(aa) with respect to
clause (i) and this clause, fewer than
2 air carriers capable of providing
service to the Postal Service adequate
for its purposes between the pair or
combination of pairs of points in
foreign air transportation offer
scheduled service between the pair or
combination of pairs of points in
foreign air transportation which are
the subject of the contract or
tender;</DELETED>
<DELETED>    ``(bb) with respect to
clause (i), after competitive
solicitation, the Postal Service has
not received at least 2 offers from
eligible air carriers capable of
providing service to the Postal Service
adequate for its purposes between the
pair of combination of pairs of points
in foreign air transportation;
or</DELETED>
<DELETED>    ``(cc) with respect to
this clause, after competitive
solicitation, fewer than 2 air carriers
under contract with the Postal Service
offer service adequate for the Postal
Service's purposes between the pair or
combination of pairs of points in
foreign air transportation for which
tender is being made;</DELETED>
<DELETED>    ``(D) beginning 6 years after the date of
enactment of the Postal Accountability and Enhancement Act,
every contract that the Postal Service awards to a foreign air
carrier under this paragraph shall be subject to the continuing
requirement that air carriers shall be afforded the same
opportunity to carry the mail of the country to and from which
the mail is transported and the flag country of the foreign air
carrier, if different, as the Postal Service has afforded the
foreign air carrier; and</DELETED>
<DELETED>    ``(E) the Postmaster General shall consult with
the Secretary of Defense concerning actions that affect the
carriage of military mail transported in foreign air
transportation.</DELETED>
<DELETED>    ``(3) Paragraph (2) shall not be interpreted as suspending
or otherwise diminishing the authority of the Secretary of
Transportation under section 41310 of title 49.''.</DELETED>
<DELETED>    (2) Definitions.--Section 5402(a) of title 39,
United States Code, is amended by striking paragraph (2) and
inserting the following:</DELETED>
<DELETED>    ``(2) The terms `air carrier', `air transportation',
`foreign air carrier', `foreign air transportation', `interstate air
transportation', and `mail' have the meanings given such terms in
section 40102(a) of title 49.''.</DELETED>
<DELETED>    (b) Amendments to Title 49, United States Code.--
</DELETED>
<DELETED>    (1) Authority of postal service to provide for
interstate air transportation of mail.--Section 41901(a) of
title 49, United States Code, is amended to read as
follows:</DELETED>
<DELETED>    ``(a) Title 39.--The United States Postal Service may
provide for the transportation of mail by aircraft in air
transportation under this chapter and under chapter 54 of title
39.''.</DELETED>
<DELETED>    (2) Schedules for certain transportation of
mail.--Section 41902 of title 49, United States Code, is
amended--</DELETED>
<DELETED>    (A) by striking subsection (b) and
inserting the following:</DELETED>
<DELETED>    ``(b) Statements on Places and Schedules.--Every air
carrier shall file with the Secretary of Transportation and the United
States Postal Service a statement showing--</DELETED>
<DELETED>    ``(1) the places between which the carrier is
authorized to transport mail in Alaska;</DELETED>
<DELETED>    ``(2) every schedule of aircraft regularly
operated by the carrier between places described under
paragraph (1) and every change in each schedule; and</DELETED>
<DELETED>    ``(3) for each schedule, the places served by the
carrier and the time of arrival at, and departure from, each
place.'';</DELETED>
<DELETED>    (B) in subsection (c), by striking
``(b)(3)'' and inserting ``(b)''; and</DELETED>
<DELETED>    (C) in subsection (d), in the first
sentence, by striking ``(b)(3)'' and inserting
``(b)''.</DELETED>
<DELETED>    (3) Prices for foreign transportation of mail.--
Section 41907 of title 49, United States Code, is amended--
</DELETED>
<DELETED>    (A) by striking ``(a) Limitations.--'';
and</DELETED>
<DELETED>    (B) by striking subsection (b).</DELETED>
<DELETED>    (4) Technical and conforming amendments.--Sections
41107, 41901(b)(1), 41902(a), and 41903 (a) and (b) of title
49, United States Code, are amended by striking ``in foreign
air transportation or''.</DELETED>
<DELETED>    (c) Effective Date.--The amendments made by this section
shall take effect 1 year after the date of enactment of this
Act.</DELETED>

<DELETED>SEC. 1003. REPORT ON THE UNITED STATES POSTAL INSPECTION
SERVICE AND THE OFFICE OF THE INSPECTOR GENERAL OF THE
UNITED STATES POSTAL SERVICE.</DELETED>

<DELETED>    (a) In General.--Not later than 1 year after the date of
enactment of this Act, the Government Accountability Office shall
review the functions, responsibilities, and areas of possible
duplication of the United States Postal Inspection Service and the
Office of the Inspector General of the United States Postal Service and
submit a report on the review to the Committee on Homeland Security and
Governmental Affairs of the Senate.</DELETED>
<DELETED>    (b) Contents.--The report under this section shall include
recommendations for legislative actions necessary to clarify the roles
of the United States Postal Inspection Service and the Office of the
Inspector General of the United States Postal Service to strengthen
oversight of postal operations.</DELETED>

<DELETED>SEC. 1004. SENSE OF CONGRESS REGARDING POSTAL SERVICE
PURCHASING REFORM.</DELETED>

<DELETED>    It is the sense of Congress that the Postal Service
should--</DELETED>
<DELETED>    (1) ensure the fair and consistent treatment of
suppliers and contractors in its current purchasing policies
and any revision or replacement of such policies, such as
through the use of competitive contract award procedures,
effective dispute resolution mechanisms, and socioeconomic
programs; and</DELETED>
<DELETED>    (2) implement commercial best practices in Postal
Service purchasing policies to achieve greater efficiency and
cost savings as recommended in July 2003 by the President's
Commission on the United States Postal Service, in a manner
that is compatible with the fair and consistent treatment of
suppliers and contractors, as befitting an establishment in the
United States Government.</DELETED>

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

Sec. 1. Short title; table of contents.

TITLE I--DEFINITIONS; POSTAL SERVICES

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

TITLE II--MODERN RATE REGULATION

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

TITLE III--MODERN SERVICE STANDARDS

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

TITLE IV--PROVISIONS RELATING TO FAIR COMPETITION

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

TITLE V--GENERAL PROVISIONS

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

TITLE VI--ENHANCED REGULATORY COMMISSION

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

TITLE VII--EVALUATIONS

Sec. 701. Assessments of ratemaking, classification, and other
provisions.
Sec. 702. Report on universal postal service and the postal monopoly.
Sec. 703. Study on equal application of laws to competitive products.
Sec. 704. Report on postal workplace safety and workplace-related
injuries.
Sec. 705. Study on recycled paper.

TITLE VIII--POSTAL SERVICE RETIREMENT AND HEALTH BENEFITS FUNDING

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

TITLE IX--COMPENSATION FOR WORK INJURIES

Sec. 901. Temporary disability; continuation of pay.
Sec. 902. Disability retirement for postal employees.

TITLE X--MISCELLANEOUS

Sec. 1001. Employment of postal police officers.
Sec. 1002. Obsolete provisions.
Sec. 1003. Reduced rates.
Sec. 1004. Sense of Congress regarding Postal Service purchasing
reform.

TITLE I--DEFINITIONS; POSTAL SERVICES

SEC. 101. DEFINITIONS.

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

SEC. 102. POSTAL SERVICES.

(a) In General.--Section 404 of title 39, United States Code, is
amended--
(1) in subsection (a), by striking paragraph (6) and by
redesignating paragraphs (7) through (9) as paragraphs (6)
through (8), respectively; and
(2) by adding at the end the following:
``(c) Except as provided in section 411, nothing in this title
shall be considered to permit or require that the Postal Service
provide any special nonpostal or similar services.''.
(b) Conforming Amendments.--(1) Section 1402(b)(1)(B)(ii) of the
Victims of Crime Act of 1984 (98 Stat. 2170; 42 U.S.C.
10601(b)(1)(B)(ii)) is amended by striking ``404(a)(8)'' and inserting
``404(a)(7)''.
(2) Section 2003(b)(1) of title 39, United States Code, is amended
by striking ``and nonpostal''.

TITLE II--MODERN RATE REGULATION

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

(a) In General.--Chapter 36 of title 39, United States Code, is
amended by striking sections 3621 and 3622 and inserting the following:
``Sec. 3621. Applicability; definitions
``(a) Applicability.--This subchapter shall apply with respect to--
``(1) first-class mail letters and sealed parcels;
``(2) first-class mail cards;
``(3) periodicals;
``(4) standard mail;
``(5) single-piece parcel post;
``(6) media mail;
``(7) bound printed matter;
``(8) library mail;
``(9) special services; and
``(10) single-piece international mail,
subject to any changes the Postal Regulatory Commission may make under
section 3642.
``(b) Rule of Construction.--Mail matter referred to in subsection
(a) shall, for purposes of this subchapter, be considered to have the
meaning given to such mail matter under the mail classification
schedule.
``Sec. 3622. Modern rate regulation
``(a) Authority Generally.--The Postal Regulatory Commission shall,
within 12 months after the date of enactment of this section, by
regulation establish (and may from time to time thereafter by
regulation revise) a modern system for regulating rates and classes for
market-dominant products.
``(b) Objectives.--Such system shall be designed to achieve the
following objectives:
``(1) To reduce the administrative burden and increase the
transparency of the ratemaking process while affording
reasonable opportunities for interested parties to participate
in that process.
``(2) To create predictability and stability in rates.
``(3) To maximize incentives to reduce costs and increase
efficiency.
``(4) To enhance mail security and deter terrorism by
promoting secure, sender-identified mail.
``(5) To allow the Postal Service pricing flexibility,
including the ability to use pricing to promote intelligent
mail and encourage increased mail volume during nonpeak
periods.
``(6) To assure adequate revenues, including retained
earnings, to maintain financial stability and meet the service
standards established under section 3691.
``(7) To allocate the total institutional costs of the
Postal Service equitably between market-dominant and
competitive products.
``(c) Factors.--In establishing or revising such system, the Postal
Regulatory Commission shall take into account--
``(1) the establishment and maintenance of a fair and
equitable schedule for rates and classification system;
``(2) the value of the mail service actually provided each
class or type of mail service to both the sender and the
recipient, including but not limited to the collection, mode of
transportation, and priority of delivery;
``(3) the requirement that each class of mail or type of
mail service bear the direct and indirect postal costs
attributable to each class or type of mail service through
reliably identified causal relationships plus that portion of
all other costs of the Postal Service reasonably assignable to
such class or type;
``(4) the effect of rate increases upon the general public,
business mail users, and enterprises in the private sector of
the economy engaged in the delivery of mail matter other than
letters;
``(5) the available alternative means of sending and
receiving letters and other mail matter at reasonable costs;
``(6) the degree of preparation of mail for delivery into
the postal system performed by the mailer and its effect upon
reducing costs to the Postal Service;
``(7) simplicity of structure for the entire schedule and
simple, identifiable relationships between the rates or fees
charged the various classes of mail for postal services;
``(8) the importance of pricing flexibility to encourage
increased mail volume and operational efficiency;
``(9) the relative value to the people of the kinds of mail
matter entered into the postal system and the desirability and
justification for special classifications and services of mail;
``(10) the importance of providing classifications with
extremely high degrees of reliability and speed of delivery and
of providing those that do not require high degrees of
reliability and speed of delivery;
``(11) the desirability of special classifications from the
point of view of both the user and of the Postal Service;
``(12) the educational, cultural, scientific, and
informational value to the recipient of mail matter;
``(13) the need for the Postal Service to increase its
efficiency and reduce its costs, including infrastructure
costs, to help maintain high quality, affordable, universal
postal service; and
``(14) the policies of this title as well as such other
factors as the Commission determines appropriate.
``(d) Requirements.--
``(1) In general.--The system for regulating rates and
classes for market-dominant products shall--
``(A) include an annual limitation on the
percentage changes in rates to be set by the Postal
Regulatory Commission that will be equal to the change
in the Consumer Price Index for All Urban Consumers
unadjusted for seasonal variation over the most recent
available 12-month period preceding the date the Postal
Service files notice of its intention to increase
rates;
``(B) establish a schedule whereby rates, when
necessary and appropriate, would change at regular
intervals by predictable amounts;
``(C) not later than 45 days before the
implementation of any adjustment in rates under this
section--
``(i) require the Postal Service to provide
public notice of the adjustment;
``(ii) provide an opportunity for review by
the Postal Regulatory Commission;
``(iii) provide for the Postal Regulatory
Commission to notify the Postal Service of any
noncompliance of the adjustment with the
limitation under subparagraph (A); and
``(iv) require the Postal Service to
respond to the notice provided under clause
(iii) and describe the actions to be taken to
comply with the limitation under subparagraph
(A);
``(D) establish procedures whereby the Postal
Service may adjust rates not in excess of the annual
limitations under subparagraph (A); and
``(E) notwithstanding any limitation set under
subparagraphs (A) and (C), establish procedures whereby
rates may be adjusted on an expedited basis due to
unexpected and extraordinary circumstances.
``(2) Limitations.--
``(A) Classes of mail.--The annual limitations
under paragraph (1)(A) shall apply to a class of mail,
as defined in the Domestic Mail Classification Schedule
as in effect on the date of enactment of the Postal
Accountability and Enhancement Act.
``(B) Rounding of rates and fees.--Nothing in this
subsection shall preclude the Postal Service from
rounding rates and fees to the nearest whole integer,
if the effect of such rounding does not cause the
overall rate increase for any class to exceed the
Consumer Price Index for All Urban Consumers.
``(C) Banking unused pricing authority.--
Notwithstanding paragraph (1), for any class or service
that failed to recover its attributable costs in the
previous fiscal year, or for all classes and services
when the Postal Service has operated at a loss for the
last 2 years, rate increases may exceed Consumer Price
Index for All Urban Consumers by the amount rate
increases in the previous year were less than Consumer
Price Index for All Urban Consumers.
``(e) Workshare Discounts.--
``(1) Definition.--In this subsection, the term `workshare
discount' refers to rate discounts provided to mailers for the
presorting, prebarcoding, handling, or transportation of mail,
as further defined by the Postal Regulatory Commission under
subsection (a).
``(2) Regulations.--As part of the regulations established
under subsection (a), the Postal Regulatory Commission shall
establish rules for workshare discounts that ensure that such
discounts do not exceed the cost that the Postal Service avoids
as a result of workshare activity, unless--
``(A) the discount is--
``(i) associated with a new postal service,
a change to an existing postal service, or with
a new workshare initiative related to an
existing postal service; and
``(ii) necessary to induce mailer behavior
that furthers the economically efficient
operation of the Postal Service and the portion
of the discount in excess of the cost that the
Postal Service avoids as a result of the
workshare activity will be phased out over a
limited period of time;
``(B) a reduction in the discount would--
``(i) lead to a loss of volume in the
affected category or subclass of mail and
reduce the aggregate contribution to the
institutional costs of the Postal Service from
the category or subclass subject to the
discount below what it otherwise would have
been if the discount had not been reduced to
costs avoided;
``(ii) result in a further increase in the
rates paid by mailers not able to take
advantage of the discount; or
``(iii) impede the efficient operation of
the Postal Service;
``(C) the amount of the discount above costs
avoided--
``(i) is necessary to mitigate rate shock;
and
``(ii) will be phased out over time; or
``(D) the discount is provided in connection with
subclasses of mail consisting exclusively of mail
matter of educational, cultural, scientific, or
informational value.
``(3) Report.--Whenever the Postal Service establishes or
maintains a workshare discount, the Postal Service shall, at
the time it publishes the workshare discount rate, submit to
the Postal Regulatory Commission a detailed report that--
``(A) explains the Postal Service's reasons for
establishing or maintaining the rate;
``(B) sets forth the data, economic analyses, and
other information relied on by the Postal Service to
justify the rate; and
``(C) certifies that the discount will not
adversely affect rates or services provided to users of
postal services who do not take advantage of the
discount rate.
``(f) Transition Rule.--Until regulations under this section first
take effect, rates and classes for market-dominant products shall
remain subject to modification in accordance with the provisions of
this chapter and section 407, as such provisions were last in effect
before the date of enactment of this section.''.
(b) Repealed Sections.--Sections 3623, 3624, 3625, and 3628 of
title 39, United States Code, are repealed.
(c) Redesignation.--Chapter 36 of title 39, United States Code (as
in effect after the amendment made by section 601, but before the
amendment made by section 202) is amended by striking the heading for
subchapter II and inserting the following:

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

SEC. 202. PROVISIONS RELATING TO COMPETITIVE PRODUCTS.

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

``SUBCHAPTER II--PROVISIONS RELATING TO COMPETITIVE PRODUCTS

``Sec. 3631. Applicability; definitions and updates
``(a) Applicability.--This subchapter shall apply with respect to--
``(1) priority mail;
``(2) expedited mail;
``(3) bulk parcel post;
``(4) bulk international mail; and
``(5) mailgrams;
subject to subsection (d) and any changes the Postal Regulatory
Commission may make under section 3642.
``(b) Definition.--For purposes of this subchapter, the term `costs
attributable', as used with respect to a product, means the direct and
indirect postal costs attributable to such product through reliably
identified causal relationships.
``(c) Rule of Construction.--Mail matter referred to in subsection
(a) shall, for purposes of this subchapter, be considered to have the
meaning given to such mail matter under the mail classification
schedule.
``(d) Limitation.--Notwithstanding any other provision of this
section, nothing in this subchapter shall be considered to apply with
respect to any product then currently in the market-dominant category
of mail.
``Sec. 3632. Action of the Governors
``(a) Authority To Establish Rates and Classes.--The Governors,
with the written concurrence of a majority of all of the Governors then
holding office, shall establish rates and classes for products in the
competitive category of mail in accordance with the requirements of
this subchapter and regulations promulgated under section 3633.
``(b) Procedures.--
``(1) In general.--Rates and classes shall be established
in writing, complete with a statement of explanation and
justification, and the date as of which each such rate or class
takes effect.
``(2) Public notice; review; and compliance.--Not later
than 30 days before the date of implementation of any
adjustment in rates under this section--
``(A) the Governors shall provide public notice of
the adjustment and an opportunity for review by the
Postal Regulatory Commission;
``(B) the Postal Regulatory Commission shall notify
the Governors of any noncompliance of the adjustment
with section 3633; and
``(C) the Governors shall respond to the notice
provided under subparagraph (B) and describe the
actions to be taken to comply with section 3633.
``(c) Transition Rule.--Until regulations under section 3633 first
take effect, rates and classes for competitive products shall remain
subject to modification in accordance with the provisions of this
chapter and section 407, as such provisions were as last in effect
before the date of enactment of this section.
``Sec. 3633. Provisions applicable to rates for competitive products
``(a) In General.--The Postal Regulatory Commission shall, within
180 days after the date of enactment of this section, promulgate (and
may from time to time thereafter revise) regulations to--
``(1) prohibit the subsidization of competitive products by
market-dominant products;
``(2) ensure that each competitive product covers its costs
attributable; and
``(3) ensure that all competitive products collectively
cover their share of the institutional costs of the Postal
Service.
``(b) Review of Minimum Contribution.--Five years after the date of
enactment of this section, and every 5 years thereafter, the Postal
Regulatory Commission shall conduct a review to determine whether the
institutional costs contribution requirement under subsection (a)(3)
should be retained in its current form, modified, or eliminated. In
making its determination, the Commission shall consider all relevant
circumstances, including the prevailing competitive conditions in the
market, and the degree to which any costs are uniquely or
disproportionately associated with any competitive products.''.

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

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

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

``Sec. 3641. Market tests of experimental products
``(a) Authority.--
``(1) In general.--The Postal Service may conduct market
tests of experimental products in accordance with this section.
``(2) Provisions waived.--A product shall not, while it is
being tested under this section, be subject to the requirements
of sections 3622, 3633, or 3642, or regulations promulgated
under those sections.
``(b) Conditions.--A product may not be tested under this section
unless it satisfies each of the following:
``(1) Significantly different product.--The product is,
from the viewpoint of the mail users, significantly different
from all products offered by the Postal Service within the 2-
year period preceding the start of the test.
``(2) Market disruption.--The introduction or continued
offering of the product will not create an unfair or otherwise
inappropriate competitive advantage for the Postal Service or
any mailer, particularly in regard to small business concerns
(as defined under subsection (h)).
``(3) Correct categorization.--The Postal Service
identifies the product, for the purpose of a test under this
section, as either market-dominant or competitive, consistent
with the criteria under section 3642(b)(1). Costs and revenues
attributable to a product identified as competitive shall be
included in any determination under section 3633(3)(relating to
provisions applicable to competitive products collectively).
Any test that solely affects products currently classified as
competitive, or which provides services ancillary to only
competitive products, shall be presumed to be in the
competitive product category without regard to whether a
similar ancillary product exists for market-dominant products.
``(c) Notice.--
``(1) In general.--At least 30 days before initiating a
market test under this section, the Postal Service shall file
with the Postal Regulatory Commission and publish in the
Federal Register a notice--
``(A) setting out the basis for the Postal
Service's determination that the market test is covered
by this section; and
``(B) describing the nature and scope of the market
test.
``(2) Safeguards.--For a competitive experimental product,
the provisions of section 504(g) shall be available with
respect to any information required to be filed under paragraph
(1) to the same extent and in the same manner as in the case of
any matter described in section 504(g)(1). Nothing in paragraph
(1) shall be considered to permit or require the publication of
any information as to which confidential treatment is accorded
under the preceding sentence (subject to the same exception as
set forth in section 504(g)(3)).
``(d) Duration.--
``(1) In general.--A market test of a product under this
section may be conducted over a period of not to exceed 24
months.
``(2) Extension authority.--If necessary in order to
determine the feasibility or desirability of a product being
tested under this section, the Postal Regulatory Commission may, upon
written application of the Postal Service (filed not later than 60 days
before the date as of which the testing of such product would otherwise
be scheduled to terminate under paragraph (1)), extend the testing of
such product for not to exceed an additional 12 months.
``(e) Dollar-Amount Limitation.--
``(1) In general.--A product may only be tested under this
section if the total revenues that are anticipated, or in fact
received, by the Postal Service from such product do not exceed
$10,000,000 in any year, subject to paragraph (2) and
subsection (g).
``(2) Exemption authority.--The Postal Regulatory
Commission may, upon written application of the Postal Service,
exempt the market test from the limit in paragraph (1) if the
total revenues that are anticipated, or in fact received, by
the Postal Service from such product do not exceed $50,000,000
in any year, subject to subsection (g). In reviewing an
application under this paragraph, the Postal Regulatory
Commission shall approve such application if it determines
that--
``(A) the product is likely to benefit the public
and meet an expected demand;
``(B) the product is likely to contribute to the
financial stability of the Postal Service; and
``(C) the product is not likely to result in unfair
or otherwise inappropriate competition.
``(f) Cancellation.--If the Postal Regulatory Commission at any
time determines that a market test under this section fails to meet 1
or more of the requirements of this section, it may order the
cancellation of the test involved or take such other action as it
considers appropriate. A determination under this subsection shall be
made in accordance with such procedures as the Commission shall by
regulation prescribe.
``(g) Adjustment for Inflation.--For purposes of each year
following the year in which occurs the deadline for the Postal
Service's first report to the Postal Regulatory Commission under
section 3652(a), each dollar amount contained in this section shall be
adjusted by the change in the Consumer Price Index for such year (as
determined under regulations of the Commission).
``(h) Definition of a Small Business Concern.--The criteria used in
defining small business concerns or otherwise categorizing business
concerns as small business concerns shall, for purposes of this
section, be established by the Postal Regulatory Commission in
conformance with the requirements of section 3 of the Small Business
Act.
``(i) Effective Date.--Market tests under this subchapter may be
conducted in any year beginning with the first year in which occurs the
deadline for the Postal Service's first report to the Postal Regulatory
Commission under section 3652(a).
``Sec. 3642. New products and transfers of products between the market-
dominant and competitive categories of mail
``(a) In General.--Upon request of the Postal Service or users of
the mails, or upon its own initiative, the Postal Regulatory Commission
may change the list of market-dominant products under section 3621 and
the list of competitive products under section 3631 by adding new
products to the lists, removing products from the lists, or
transferring products between the lists.
``(b) Criteria.--All determinations by the Postal Regulatory
Commission under subsection (a) shall be made in accordance with the
following criteria:
``(1) The market-dominant category of products shall
consist of each product in the sale of which the Postal Service
exercises sufficient market power that it can effectively set
the price of such product substantially above costs, raise
prices significantly, decrease quality, or decrease output,
without risk of losing substantial business to other firms
offering similar products. The competitive category of products
shall consist of all other products.
``(2) Exclusion of products covered by postal monopoly.--A
product covered by the postal monopoly shall not be subject to
transfer under this section from the market-dominant category
of mail. For purposes of the preceding sentence, the term
`product covered by the postal monopoly' means any product the
conveyance or transmission of which is reserved to the United
States under section 1696 of title 18, subject to the same
exception as set forth in the last sentence of section
409(e)(1).
``(3) Additional considerations.--In making any decision
under this section, due regard shall be given to--
``(A) the availability and nature of enterprises in
the private sector engaged in the delivery of the
product involved;
``(B) the views of those who use the product
involved on the appropriateness of the proposed action;
and
``(C) the likely impact of the proposed action on
small business concerns (within the meaning of section
3641(h)).
``(c) Transfers of Subclasses and Other Subordinate Units
Allowable.--Nothing in this title shall be considered to prevent
transfers under this section from being made by reason of the fact that
they would involve only some (but not all) of the subclasses or other
subordinate units of the class of mail or type of postal service
involved (without regard to satisfaction of minimum quantity
requirements standing alone).
``(d) Notification and Publication Requirements.--
``(1) Notification requirement.--The Postal Service shall,
whenever it requests to add a product or transfer a product to
a different category, file with the Postal Regulatory
Commission and publish in the Federal Register a notice setting
out the basis for its determination that the product satisfies
the criteria under subsection (b) and, in the case of a request
to add a product or transfer a product to the competitive
category of mail, that the product meets the regulations
promulgated by the Postal Regulatory Commission under section
3633. The provisions of section 504(g) shall be available with
respect to any information required to be filed.
``(2) Publication requirement.--The Postal Regulatory
Commission shall, whenever it changes the list of products in
the market-dominant or competitive category of mail, prescribe
new lists of products. The revised lists shall indicate how and
when any previous lists (including the lists under sections
3621 and 3631) are superseded, and shall be published in the
Federal Register.
``(e) Prohibition.--Except as provided in section 3641, no product
that involves the physical delivery of letters, printed matter, or
packages may be offered by the Postal Service unless it has been
assigned to the market-dominant or competitive category of mail (as
appropriate) either--
``(1) under this subchapter; or
``(2) by or under any other provision of law.''.

SEC. 204. REPORTING REQUIREMENTS AND RELATED PROVISIONS.

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

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

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

``SUBCHAPTER VI--GENERAL''.

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

``SUBCHAPTER IV--REPORTING REQUIREMENTS AND RELATED PROVISIONS

``Sec. 3651. Annual reports by the Commission
``(a) In General.--The Postal Regulatory Commission shall submit an
annual report to the President and the Congress concerning the
operations of the Commission under this title, including the extent to
which regulations are achieving the objectives under sections 3622,
3633, and 3691.
``(b) Information From Postal Service.--The Postal Service shall
provide the Postal Regulatory Commission with such information as may,
in the judgment of the Commission, be necessary in order for the
Commission to prepare its reports under this section.
``Sec. 3652. Annual reports to the Commission
``(a) Costs, Revenues, Rates, and Service.--Except as provided in
subsection (c), the Postal Service shall, no later than 90 days after
the end of each year, prepare and submit to the Postal Regulatory
Commission a report (together with such nonpublic annex to the report
as the Commission may require under subsection (e))--
``(1) which shall analyze costs, revenues, rates, and
quality of service in sufficient detail to demonstrate that all
products during such year complied with all applicable
requirements of this title; and
``(2) which shall, for each market-dominant product
provided in such year, provide--
``(A) product information, including mail volumes;
and
``(B) measures of the service afforded by the
Postal Service in connection with such product,
including--
``(i) the level of service (described in
terms of speed of delivery and reliability)
provided; and
``(ii) the degree of customer satisfaction
with the service provided.
Before submitting a report under this subsection (including any
annex to the report and the information required under
subsection (b)), the Postal Service shall have the information
contained in such report (and annex) audited by the Inspector
General. The results of any such audit shall be submitted along
with the report to which it pertains.
``(b) Information Relating to Workshare Discounts.--The Postal
Service shall include, in each report under subsection (a), the
following information with respect to each market-dominant product for
which a workshare discount was in effect during the period covered by
such report:
``(1) The per-item cost avoided by the Postal Service by
virtue of such discount.
``(2) The percentage of such per-item cost avoided that the
per-item workshare discount represents.
``(3) The per-item contribution made to institutional
costs.
``(c) Service Agreements and Market Tests.--In carrying out
subsections (a) and (b) with respect to service agreements and
experimental products offered through market tests under section 3641
in a year, the Postal Service--
``(1) may report summary data on the costs, revenues, and
quality of service by service agreement and market test; and
``(2) shall report such data as the Postal Regulatory
Commission requires.
``(d) Supporting Matter.--The Postal Regulatory Commission shall
have access, in accordance with such regulations as the Commission
shall prescribe, to the working papers and any other supporting matter
of the Postal Service and the Inspector General in connection with any
information submitted under this section.
``(e) Content and Form of Reports.--
``(1) In general.--The Postal Regulatory Commission shall,
by regulation, prescribe the content and form of the public
reports (and any nonpublic annex and supporting matter relating
to the report) to be provided by the Postal Service under this
section. In carrying out this subsection, the Commission shall
give due consideration to--
``(A) providing the public with timely, adequate
information to assess the lawfulness of rates charged;
``(B) avoiding unnecessary or unwarranted
administrative effort and expense on the part of the
Postal Service; and
``(C) protecting the confidentiality of
commercially sensitive information.
``(2) Revised requirements.--The Commission may, on its own
motion or on request of an interested party, initiate
proceedings (to be conducted in accordance with regulations
that the Commission shall prescribe) to improve the quality,
accuracy, or completeness of Postal Service data required by
the Commission under this subsection whenever it shall appear
that--
``(A) the attribution of costs or revenues to
products has become significantly inaccurate or can be
significantly improved;
``(B) the quality of service data has become
significantly inaccurate or can be significantly
improved; or
``(C) such revisions are, in the judgment of the
Commission, otherwise necessitated by the public
interest.
``(f) Confidential Information.--
``(1) In general.--If the Postal Service determines that
any document or portion of a document, or other matter, which
it provides to the Postal Regulatory Commission in a nonpublic
annex under this section or under subsection (d) contains
information which is described in section 410(c) of this title,
or exempt from public disclosure under section 552(b) of title
5, the Postal Service shall, at the time of providing such
matter to the Commission, notify the Commission of its
determination, in writing, and describe with particularity the
documents (or portions of documents) or other matter for which
confidentiality is sought and the reasons therefor.
``(2) Treatment.--Any information or other matter described
in paragraph (1) to which the Commission gains access under
this section shall be subject to paragraphs (2) and (3) of
section 504(g) in the same way as if the Commission had
received notification with respect to such matter under section
504(g)(1).
``(g) Other Reports.--The Postal Service shall submit to the Postal
Regulatory Commission, together with any other submission that the
Postal Service is required to make under this section in a year, copies
of its then most recent--
``(1) comprehensive statement under section 2401(e);
``(2) strategic plan under section 2802;
``(3) performance plan under section 2803; and
``(4) program performance reports under section 2804.
``Sec. 3653. Annual determination of compliance
``(a) Opportunity for Public Comment.--After receiving the reports
required under section 3652 for any year, the Postal Regulatory
Commission shall promptly provide an opportunity for comment on such
reports by users of the mails, affected parties, and an officer of the
Commission who shall be required to represent the interests of the
general public.
``(b) Determination of Compliance or Noncompliance.--Not later than
90 days after receiving the submissions required under section 3652
with respect to a year, the Postal Regulatory Commission shall make a
written determination as to--
``(1) whether any rates or fees in effect during such year
(for products individually or collectively) were not in
compliance with applicable provisions of this chapter (or
regulations promulgated thereunder); or
``(2) whether any service standards in effect during such
year were not met.
If, with respect to a year, no instance of noncompliance is found under
this subsection to have occurred in such year, the written
determination shall be to that effect.
``(c) If Any Noncompliance Is Found.--If, for a year, a timely
written determination of noncompliance is made under subsection (b),
the Postal Regulatory Commission shall take any appropriate remedial
action authorized by section 3662(c).
``(d) Rebuttable Presumption.--A timely written determination
described in the last sentence of subsection (b) shall, for purposes of
any proceeding under section 3662, create a rebuttable presumption of
compliance by the Postal Service (with regard to the matters described
under paragraphs (1) and (2) of subsection (b)) during the year to
which such determination relates.''.

SEC. 205. COMPLAINTS; APPELLATE REVIEW AND ENFORCEMENT.

Chapter 36 of title 39, United States Code, is amended by striking
sections 3662 and 3663 and inserting the following:
``Sec. 3662. Rate and service complaints
``(a) In General.--Any person (including an officer of the Postal
Regulatory Commission representing the interests of the general public)
who believes the Postal Service is not operating in conformance with
the requirements of chapter 1, 4, or 6, or this chapter (or regulations
promulgated under any of those chapters) may lodge a complaint with the
Postal Regulatory Commission in such form and manner as the Commission
may prescribe.
``(b) Prompt Response Required.--
``(1) In general.--The Postal Regulatory Commission shall,
within 90 days after receiving a complaint under subsection
(a), either--
``(A) begin proceedings on such complaint; or
``(B) issue an order dismissing the complaint
(together with a statement of the reasons therefor).
``(2) Treatment of complaints not timely acted on.--For
purposes of section 3663, any complaint under subsection (a) on
which the Commission fails to act in the time and manner
required by paragraph (1) shall be treated in the same way as
if it had been dismissed under an order issued by the
Commission on the last day allowable for the issuance of such
order under paragraph (1).
``(c) Action Required If Complaint Found To Be Justified.--If the
Postal Regulatory Commission finds the complaint to be justified, it
shall order that the Postal Service take such action as the Commission
considers appropriate in order to achieve compliance with the
applicable requirements and to remedy the effects of any noncompliance
including ordering unlawful rates to be adjusted to lawful levels,
ordering the cancellation of market tests, ordering the Postal Service
to discontinue providing loss-making products, and requiring the Postal
Service to make up for revenue shortfalls in competitive products.
``(d) Authority To Order Fines in Cases of Deliberate
Noncompliance.--In addition, in cases of deliberate noncompliance by
the Postal Service with the requirements of this title, the Postal
Regulatory Commission may order, based on the nature, circumstances,
extent, and seriousness of the noncompliance, a fine (in the amount
specified by the Commission in its order) for each incidence of
noncompliance. Fines resulting from the provision of competitive
products shall be paid out of the Competitive Products Fund established
in section 2011. All receipts from fines imposed under this subsection
shall be deposited in the general fund of the Treasury of the United
States.
``Sec. 3663. Appellate review
``A person, including the Postal Service, adversely affected or
aggrieved by a final order or decision of the Postal Regulatory
Commission may, within 30 days after such order or decision
becomes final, institute proceedings for review thereof by filing a
petition in the United States Court of Appeals for the District of
Columbia. The court shall review the order or decision in accordance
with section 706 of title 5, and chapter 158 and section 2112 of title
28, on the basis of the record before the Commission.
``Sec. 3664. Enforcement of orders
``The several district courts have jurisdiction specifically to
enforce, and to enjoin and restrain the Postal Service from violating,
any order issued by the Postal Regulatory Commission.''.

SEC. 206. CLERICAL AMENDMENT.

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

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

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

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

``SUBCHAPTER II--PROVISIONS RELATING TO COMPETITIVE PRODUCTS

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

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

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

``SUBCHAPTER IV--REPORTING REQUIREMENTS AND RELATED PROVISIONS

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

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

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

``SUBCHAPTER VI--GENERAL

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

``SUBCHAPTER VII--MODERN SERVICE STANDARDS

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

TITLE III--MODERN SERVICE STANDARDS

SEC. 301. ESTABLISHMENT OF MODERN SERVICE STANDARDS.

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

``SUBCHAPTER VII--MODERN SERVICE STANDARDS

``Sec. 3691. Establishment of modern service standards
``(a) Authority Generally.--Not later than 12 months after the date
of enactment of this section, the Postal Service shall, in consultation
with the Postal Regulatory Commission, by regulation establish (and may
from time to time thereafter by regulation revise) a set of service
standards for market-dominant products consistent with the Postal
Service's universal service obligation as defined in sections 101 (a)
and (b) and 403.
``(b) Objectives.--Such standards shall be designed to achieve the
following objectives:
``(1) To enhance the value of postal services to both
senders and recipients.
``(2) To preserve regular and effective access to postal
services in all communities, including those in rural areas or
where post offices are not self-sustaining.
``(3) To reasonably assure Postal Service customers
delivery reliability, speed and frequency consistent with
reasonable rates and best business practices.
``(4) To provide a system of objective external performance
measurements for each market-dominant product as a basis for
measurement of Postal Service performance.
``(c) Factors.--In establishing or revising such standards, the
Postal Service shall take into account--
``(1) the actual level of service that Postal Service
customers receive under any service guidelines previously
established by the Postal Service or service standards
established under this section;
``(2) the degree of customer satisfaction with Postal
Service performance in the acceptance, processing and delivery
of mail;
``(3) the needs of Postal Service customers, including
those with physical impairments;
``(4) mail volume and revenues projected for future years;
``(5) the projected growth in the number of addresses the
Postal Service will be required to serve in future years;
``(6) the current and projected future cost of serving
Postal Service customers;
``(7) the effect of changes in technology, demographics,
and population distribution on the efficient and reliable
operation of the postal delivery system; and
``(8) the policies of this title and such other factors as
the Commission determines appropriate.
``(d) Review.--The regulations promulgated pursuant to this section
(and any revisions thereto) shall be subject to review upon complaint
under sections 3662 and 3663.

SEC. 302. POSTAL SERVICE PLAN.

(a) In General.--Within 6 months after the establishment of the
service standards under section 3691 of title 39, United States Code,
as added by this Act, the Postal Service shall, in consultation with
the Postal Regulatory Commission, develop and submit to Congress a plan
for meeting those standards.
(b) Contents.--The plan under this section shall--
(1) establish performance goals;
(2) describe any changes to the Postal Service's
processing, transportation, delivery, and retail networks
necessary to allow the Postal Service to meet the performance
goals;
(3) describe any changes to planning and performance
management documents previously submitted to Congress to
reflect new performance goals; and
(4) contain the matters relating to postal facilities
provided under subsection (c).
(c) Postal Facilities.--
(1) Findings.--Congress finds that--
(A) the Postal Service has more than 400 logistics
facilities, separate from its post office network;
(B) as noted by the President's Commission on the
United States Postal Service, the Postal Service has
more facilities than it needs and the streamlining of
this distribution network can pave the way for the
potential consolidation of sorting facilities and the
elimination of excess costs;
(C) the Postal Service has always revised its
distribution network to meet changing conditions and is
best suited to address its operational needs; and
(D) Congress strongly encourages the Postal Service
to--
(i) expeditiously move forward in its
streamlining efforts; and
(ii) keep unions, management associations,
and local elected officials informed as an
essential part of this effort and abide by any
procedural requirements contained in the
national bargaining agreements.
(2) In general.--The Postal Service plan shall include a
description of--
(A) the long-term vision of the Postal Service for
rationalizing its infrastructure and workforce; and
(B) how the Postal Service intends to implement
that vision.
(3) Content of facilities plan.--The plan under this
subsection shall include--
(A) a strategy for how the Postal Service intends
to rationalize the postal facilities network and remove
excess processing capacity and space from the network,
including estimated timeframes, criteria, and processes
to be used for making changes to the facilities
network, and the process for engaging policy makers and
the public in related decisions;
(B) a discussion of what impact any facility
changes may have on the postal workforce and whether
the Postal Service has sufficient flexibility to make
needed workforce changes; and
(C) an identification of anticipated costs, cost
savings, and other benefits associated with the
infrastructure rationalization alternatives discussed
in the plan.
(4) Annual reports.--
(A) In general.--Not later than 90 days after the
end of each fiscal year, the Postal Service shall
prepare and submit a report to Congress on how postal
decisions have impacted or will impact rationalization
plans.
(B) Contents.--Each report under this paragraph
shall include--
(i) an account of actions taken during the
preceding fiscal year to improve the efficiency
and effectiveness of its processing,
transportation, and distribution networks while
preserving the timely delivery of postal
services, including overall estimated costs and
cost savings;
(ii) an account of actions taken to
identify any excess capacity within its
processing, transportation, and distribution
networks and implement savings through
realignment or consolidation of facilities
including overall estimated costs and cost
savings;
(iii) an estimate of how postal decisions
related to mail changes, security, automation
initiatives, worksharing, information
technology systems, excess capacity,
consolidating and closing facilities, and other
areas will impact rationalization plans;
(iv) identification of any statutory or
regulatory obstacles that prevented or will
prevent or hinder the Postal Service from
taking action to realign or consolidate
facilities; and
(v) such additional topics and
recommendations as the Postal Service considers
appropriate.
(d) Alternate Retail Options.--The Postal Service plan shall
include plans to expand and market retail access to postal services, in
addition to post offices, including--
(1) vending machines;
(2) the Internet;
(3) postage meters;
(4) Stamps by Mail;
(5) Postal Service employees on delivery routes;
(6) retail facilities in which overhead costs are shared
with private businesses and other government agencies; or
(7) any other nonpost office access channel providing
market retail access to postal services.
(e) Reemployment Assistance and Retirement Benefits.--The Postal
Service plan shall include--
(1) a plan under which reemployment assistance shall be
afforded to employees displaced as a result of the automation
of any of its functions or the closing and consolidation of any
of its facilities; and
(2) a plan, developed in consultation with the Office of
Personnel Management, to offer early retirement benefits.
(f) Inspector General Report.--
(1) In general.--Before submitting the plan under
subsection (a) and each annual report under subsection (c) to
Congress, the Postal Service shall submit the plan and each
annual report to the Inspector General of the United States
Postal Service in a timely manner to carry out this subsection.
(2) Report.--The Inspector General shall prepare a report
describing the extent to which the Postal Service plan and each
annual report under subsection (c)--
(A) are consistent with the continuing obligations
of the Postal Service under title 39, United States
Code;
(B) provide for the Postal Service to meet the
service standards established under section 3691 of
title 39, United States Code; and
(C) allow progress toward improving overall
efficiency and effectiveness consistent with the need
to maintain universal postal service at affordable
rates.
(g) Continued Authority.--Nothing in this section shall be
construed to prohibit the Postal Service from implementing any change
to its processing, transportation, delivery, and retail networks under
any authority granted to the Postal Service for those purposes.

TITLE IV--PROVISIONS RELATING TO FAIR COMPETITION

SEC. 401. POSTAL SERVICE COMPETITIVE PRODUCTS FUND.

(a) Provisions Relating to Postal Service Competitive Products Fund
and Related Matters.--
(1) In general.--Chapter 20 of title 39, United States
Code, is amended by adding at the end the following:
``Sec. 2011. Provisions relating to competitive products
``(a)(1) In this subsection, the term `costs attributable' has the
meaning given such term by section 3631.
``(2) There is established in the Treasury of the United States a
revolving fund, to be called the Postal Service Competitive Products
Fund, which shall be available to the Postal Service without fiscal
year limitation for the payment of--
``(A) costs attributable to competitive products; and
``(B) all other costs incurred by the Postal Service, to
the extent allocable to competitive products.
``(b) There shall be deposited in the Competitive Products Fund,
subject to withdrawal by the Postal Service--
``(1) revenues from competitive products;
``(2) amounts received from obligations issued by Postal
Service under subsection (e);
``(3) interest and dividends earned on investments of the
Competitive Products Fund; and
``(4) any other receipts of the Postal Service (including
from the sale of assets), to the extent allocable to
competitive products.
``(c) If the Postal Service determines that the moneys of the
Competitive Products Fund are in excess of current needs, the Postal
Service may request the investment of such amounts as the Postal
Service determines advisable by the Secretary of the Treasury in
obligations of, or obligations guaranteed by, the Government of the
United States, and, with the approval of the Secretary, in such other
obligations or securities as the Postal Service determines appropriate.
``(d) With the approval of the Secretary of the Treasury, the
Postal Service may deposit moneys of the Competitive Products Fund in
any Federal Reserve bank, any depository for public funds, or in such
other places and in such manner as the Postal Service and the Secretary
may mutually agree.
``(e)(1)(A) Subject to the limitations specified in section
2005(a), the Postal Service is authorized to borrow money and to issue
and sell such obligations as the Postal Service determines necessary to
provide for competitive products and deposit such amounts in the
Competitive Products Fund.
``(B) Subject to paragraph (5), any borrowings by the Postal
Service under subparagraph (A) shall be supported and serviced by--
``(i) the revenues and receipts from competitive products
and the assets related to the provision of competitive products
(as determined under subsection (h)); or
``(ii) for purposes of any period before accounting
practices and principles under subsection (h) have been
established and applied, the best information available from
the Postal Service, including the audited statements required
by section 2008(e).
``(2) The Postal Service may enter into binding covenants with the
holders of such obligations, and with any trustee under any agreement
entered into in connection with the issuance of such obligations with
respect to--
``(A) the establishment of reserve, sinking, and other
funds;
``(B) application and use of revenues and receipts of the
Competitive Products Fund;
``(C) stipulations concerning the subsequent issuance of
obligations or the execution of leases or lease purchases
relating to properties of the Postal Service; and
``(D) such other matters as the Postal Service, considers
necessary or desirable to enhance the marketability of such
obligations.
``(3) Obligations issued by the Postal Service under this
subsection--
``(A) shall be in such forms and denominations;
``(B) shall be sold at such times and in such amounts;
``(C) shall mature at such time or times;
``(D) shall be sold at such prices;
``(E) shall bear such rates of interest;
``(F) may be redeemable before maturity in such manner, at
such times, and at such redemption premiums;
``(G) may be entitled to such relative priorities of claim
on the assets of the Postal Service with respect to principal
and interest payments; and
``(H) shall be subject to such other terms and conditions,
as the Postal Service determines.
``(4) Obligations issued by the Postal Service under this
subsection--
``(A) shall be negotiable or nonnegotiable and bearer or
registered instruments, as specified therein and in any
indenture or covenant relating thereto;
``(B) shall contain a recital that such obligations are
issued under this subsection, and such recital shall be
conclusive evidence of the regularity of the issuance and sale
of such obligations and of their validity;
``(C) shall be lawful investments and may be accepted as
security for all fiduciary, trust, and public funds, the
investment or deposit of which shall be under the authority or
control of any officer or agency of the Government of the
United States, and the Secretary of the Treasury or any other
officer or agency having authority over or control of any such
fiduciary, trust, or public funds, may at any time sell any of
the obligations of the Postal Service acquired under this
section;
``(D) shall not be exempt either as to principal or
interest from any taxation now or hereafter imposed by any
State or local taxing authority; and
``(E) except as provided in section 2006(c), shall not be
obligations of, nor shall payment of the principal thereof or
interest thereon be guaranteed by, the Government of the United
States, and the obligations shall so plainly state.
``(5)(A) Subject to subparagraph (B), the Postal Service shall make
payments of principal, or interest, or both on obligations issued under
this subsection from--
``(i) revenues and receipts from competitive products and
assets related to the provision of competitive products (as
determined under subsection (h)); or
``(ii) for purposes of any period before accounting
practices and principles under subsection (h) have been
established and applied, the best information available,
including the audited statements required by section 2008(e).
``(B) Based on the audited financial statements for the most
recently completed fiscal year, the total assets of the Competitive
Products Fund may not be less than the amount determined by
multiplying--
``(i) the quotient resulting from the total revenue of the
Competitive Products Fund divided by the total revenue of the
Postal Service; and
``(ii) the total assets of the Postal Service.
``(f) The receipts and disbursements of the Competitive Products
Fund shall be accorded the same budgetary treatment as is accorded to
receipts and disbursements of the Postal Service Fund under section
2009a.
``(g) A judgment (or settlement of a claim) against the Postal
Service or the Government of the United States shall be paid out of the
Competitive Products Fund to the extent that the judgment or claim
arises out of activities of the Postal Service in the provision of
competitive products.
``(h)(1)(A) The Secretary of the Treasury, in consultation with the
Postal Service and an independent, certified public accounting firm and
other advisors as the Secretary considers appropriate, shall develop
recommendations regarding--
``(i) the accounting practices and principles that should
be followed by the Postal Service with the objectives of--
``(I) identifying and valuing the assets and
liabilities of the Postal Service associated with
providing competitive products, including the capital
and operating costs incurred by the Postal Service in
providing such competitive products; and
``(II) subject to subsection (e)(5), preventing the
subsidization of such products by market-dominant
products; and
``(ii) the substantive and procedural rules that should be
followed in determining the assumed Federal income tax on
competitive products income of the Postal Service for any year
(within the meaning of section 3634).
``(B) Not earlier than 6 months after the date of enactment of this
section, and not later than 12 months after such date, the Secretary of
the Treasury shall submit the recommendations under subparagraph (A) to
the Postal Regulatory Commission.
``(2)(A) Upon receiving the recommendations of the Secretary of the
Treasury under paragraph (1), the Commission shall give interested
parties, including the Postal Service, users of the mails, and an
officer of the Commission who shall be required to represent the
interests of the general public, an opportunity to present their views
on those recommendations through submission of written data, views, or
arguments with or without opportunity for oral presentation, or in such
other manner as the Commission considers appropriate.
``(B)(i) After due consideration of the views and other information
received under subparagraph (A), the Commission shall by rule--
``(I) provide for the establishment and application of the
accounting practices and principles which shall be followed by
the Postal Service;
``(II) provide for the establishment and application of the
substantive and procedural rules described under paragraph
(1)(A)(ii); and
``(III) provide for the submission by the Postal Service to
the Postal Regulatory Commission of annual and other periodic
reports setting forth such information as the Commission may
require.
``(ii) Final rules under this subparagraph shall be issued not
later than 12 months after the date on which recommendations are
submitted under paragraph (1) (or by such later date on which the
Commission and the Postal Service may agree). The Commission may revise
such rules.
``(C)(i) Reports described under subparagraph (B)(i)(III) shall be
submitted at such time and in such form, and shall include such
information, as the Commission by rule requires.
``(ii) The Commission may, on its own motion or on request of an
interested party, initiate proceedings (to be conducted in accordance
with such rules as the Commission shall prescribe) to improve the
quality, accuracy, or completeness of Postal Service information under
subparagraph (B)(i)(III) whenever it shall appear that--
``(I) the quality of the information furnished in those
reports has become significantly inaccurate or can be
significantly improved; or
``(II) such revisions are, in the judgment of the
Commission, otherwise necessitated by the public interest.
``(D) A copy of each report described under subparagraph
(B)(i)(III) shall be submitted by the Postal Service to the Secretary
of the Treasury and the Inspector General of the United States Postal
Service.
``(i)(1) The Postal Service shall submit an annual report to the
Secretary of the Treasury concerning the operation of the Competitive
Products Fund. The report shall address such matters as risk
limitations, reserve balances, allocation or distribution of moneys,
liquidity requirements, and measures to safeguard against losses.
``(2) A copy of the most recent report submitted under paragraph
(1) shall be included in the annual report submitted by the Postal
Regulatory Commission under section 3652(g).''.
(2) Clerical amendment.--The table of sections for chapter
20 of title 39, United States Code, is amended by adding after
the item relating to section 2010 the following:

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

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

Subchapter II of chapter 36 of title 39, United States Code, as
amended by section 202, is amended by adding at the end the following:
``Sec. 3634. Assumed Federal income tax on competitive products income
``(a) Definitions.--For purposes of this section--
``(1) the term `assumed Federal income tax on competitive
products income' means the net income tax that would be imposed
by chapter 1 of the Internal Revenue Code of 1986 on the Postal
Service's assumed taxable income from competitive products for
the year; and
``(2) the term `assumed taxable income from competitive
products', with respect to a year, refers to the amount
representing what would be the taxable income of a corporation
under the Internal Revenue Code of 1986 for the year, if--
``(A) the only activities of such corporation were
the activities of the Postal Service allocable under
section 2011(h) to competitive products; and
``(B) the only assets held by such corporation were
the assets of the Postal Service allocable under
section 2011(h) to such activities.
``(b) Computation and Transfer Requirements.--The Postal Service
shall, for each year beginning with the year in which occurs the
deadline for the Postal Service's first report to the Postal Regulatory
Commission under section 3652(a)--
``(1) compute its assumed Federal income tax on competitive
products income for such year; and
``(2) transfer from the Competitive Products Fund to the
Postal Service Fund the amount of that assumed tax.
``(c) Deadline for Transfers.--Any transfer required to be made
under this section for a year shall be due on or before the January
15th next occurring after the close of such year.''.

SEC. 403. UNFAIR COMPETITION PROHIBITED.

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

``404a. Specific limitations.''.

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

(a) In General.--Section 409 of title 39, United States Code, is
amended by striking subsections (d) and (e) and inserting the
following:
``(d)(1) For purposes of the provisions of law cited in paragraphs
(2)(A) and (2)(B), respectively, the Postal Service--
``(A) shall be considered to be a `person', as used in the
provisions of law involved; and
``(B) shall not be immune under any other doctrine of
sovereign immunity from suit in Federal court by any person for
any violation of any of those provisions of law by any officer
or employee of the Postal Service.
``(2) This subsection applies with respect to--
``(A) the Act of July 5, 1946 (commonly referred to as the
`Trademark Act of 1946' (15 U.S.C. 1051 and following)); and
``(B) the provisions of section 5 of the Federal Trade
Commission Act to the extent that such section 5 applies to
unfair or deceptive acts or practices.
``(e)(1) To the extent that the Postal Service, or other Federal
agency acting on behalf of or in concert with the Postal Service,
engages in conduct with respect to any product which is not reserved to
the United States under section 1696 of title 18, the Postal Service or
other Federal agency (as the case may be)--
``(A) shall not be immune under any doctrine of sovereign
immunity from suit in Federal court by any person for any
violation of Federal law by such agency or any officer or
employee thereof; and
``(B) shall be considered to be a person (as defined in
subsection (a) of the first section of the Clayton Act) for
purposes of--
``(i) the antitrust laws (as defined in such
subsection); and
``(ii) section 5 of the Federal Trade Commission
Act to the extent that such section 5 applies to unfair
methods of competition.
For purposes of the preceding sentence, any private carriage of mail
allowable by virtue of section 601 shall not be considered a service
reserved to the United States under section 1696 of title 18.
``(2) No damages, interest on damages, costs or attorney's fees may
be recovered, and no criminal liability may be imposed, under the
antitrust laws (as so defined) from any officer or employee of the
Postal Service, or other Federal agency acting on behalf of or in
concert with the Postal Service, acting in an official capacity.
``(3) This subsection shall not apply with respect to conduct
occurring before the date of enactment of this subsection.
``(f) To the extent that the Postal Service engages in conduct with
respect to the provision of competitive products, it shall be
considered a person for the purposes of the Federal bankruptcy laws.
``(g)(1) Each building constructed or altered by the Postal Service
shall be constructed or altered, to the maximum extent feasible as
determined by the Postal Service, in compliance with 1 of the
nationally recognized model building codes and with other applicable
nationally recognized codes. To the extent practicable, model building
codes should meet the voluntary consensus criteria established for
codes and standards as required in the National Technology Transfer and
Advancement Act of 1995 as defined in Office of Management and Budget
Circular A1190. For purposes of life safety, the Postal Service shall
continue to comply with the most current edition of the Life Safety
Code of the National Fire Protection Association (NFPA 101).
``(2) Each building constructed or altered by the Postal Service
shall be constructed or altered only after consideration of all
requirements (other than procedural requirements) of zoning laws, land
use laws, and applicable environmental laws of a State or subdivision
of a State which would apply to the building if it were not a building
constructed or altered by an establishment of the Government of the
United States.
``(3) For purposes of meeting the requirements of paragraphs (1)
and (2) with respect to a building, the Postal Service shall--
``(A) in preparing plans for the building, consult with
appropriate officials of the State or political subdivision, or
both, in which the building will be located;
``(B) upon request, submit such plans in a timely manner to
such officials for review by such officials for a reasonable
period of time not exceeding 30 days; and
``(C) permit inspection by such officials during
construction or alteration of the building, in accordance with
the customary schedule of inspections for construction or
alteration of buildings in the locality, if such officials
provide to the Postal Service--
``(i) a copy of such schedule before construction
of the building is begun; and
``(ii) reasonable notice of their intention to
conduct any inspection before conducting such
inspection.
Nothing in this subsection shall impose an obligation on any
State or political subdivision to take any action under the
preceding sentence, nor shall anything in this subsection
require the Postal Service or any of its contractors to pay for
any action taken by a State or political subdivision to carry
out this subsection (including reviewing plans, carrying out
on-site inspections, issuing building permits, and making
recommendations).
``(4) Appropriate officials of a State or a political subdivision
of a State may make recommendations to the Postal Service concerning
measures necessary to meet the requirements of paragraphs (1) and (2).
Such officials may also make recommendations to the Postal Service
concerning measures which should be taken in the construction or
alteration of the building to take into account local conditions. The
Postal Service shall give due consideration to any such
recommendations.
``(5) In addition to consulting with local and State officials
under paragraph (3), the Postal Service shall establish procedures for
soliciting, assessing, and incorporating local community input on real
property and land use decisions.
``(6) For purposes of this subsection, the term `State' includes
the District of Columbia, the Commonwealth of Puerto Rico, and a
territory or possession of the United States.
``(h)(1) Notwithstanding any other provision of law, legal
representation may not be furnished by the Department of Justice to the
Postal Service in any action, suit, or proceeding arising, in whole or
in part, under any of the following:
``(A) Subsection (d) or (e) of this section.
``(B) Subsection (f) or (g) of section 504 (relating to
administrative subpoenas by the Postal Regulatory Commission).
``(C) Section 3663 (relating to appellate review).
The Postal Service may, by contract or otherwise, employ attorneys to
obtain any legal representation that it is precluded from obtaining
from the Department of Justice under this paragraph.
``(2) In any circumstance not covered by paragraph (1), the
Department of Justice shall, under section 411, furnish the Postal
Service such legal representation as it may require, except that, with
the prior consent of the Attorney General, the Postal Service may, in
any such circumstance, employ attorneys by contract or otherwise to
conduct litigation brought by or against the Postal Service or its
officers or employees in matters affecting the Postal Service.
``(3)(A) In any action, suit, or proceeding in a court of the
United States arising in whole or in part under any of the provisions
of law referred to in subparagraph (B) or (C) of paragraph (1), and to
which the Commission is not otherwise a party, the Commission shall be
permitted to appear as a party on its own motion and as of right.
``(B) The Department of Justice shall, under such terms and
conditions as the Commission and the Attorney General shall consider
appropriate, furnish the Commission such legal representation as it may
require in connection with any such action, suit, or proceeding, except
that, with the prior consent of the Attorney General, the Commission
may employ attorneys by contract or otherwise for that purpose.
``(i) A judgment against the Government of the United States
arising out of activities of the Postal Service shall be paid by the
Postal Service out of any funds available to the Postal Service,
subject to the restriction specified in section 2011(g).''.
(b) Technical Amendment.--Section 409(a) of title 39, United States
Code, is amended by striking ``Except as provided in section 3628 of
this title,'' and inserting ``Except as otherwise provided in this
title,''.

SEC. 405. INTERNATIONAL POSTAL ARRANGEMENTS.

(a) In General.--Section 407 of title 39, United States Code, is
amended to read as follows:
``Sec. 407. International postal arrangements
``(a) It is the policy of the United States--
``(1) to promote and encourage communications between
peoples by efficient operation of international postal services
and other international delivery services for cultural, social,
and economic purposes;
``(2) to promote and encourage unrestricted and undistorted
competition in the provision of international postal services
and other international delivery services, except where
provision of such services by private companies may be
prohibited by law of the United States;
``(3) to promote and encourage a clear distinction between
governmental and operational responsibilities with respect to
the provision of international postal services; and
``(4) to participate in multilateral and bilateral
agreements with other countries to accomplish these objectives.
``(b)(1) The Secretary of State shall be responsible for
formulation, coordination, and oversight of foreign policy related to
international postal services and shall have the power to conclude
postal treaties and conventions, except that the Secretary may not
conclude any postal treaty or convention if such treaty or convention
would, with respect to any competitive product, grant an undue or
unreasonable preference to the Postal Service, a private provider of
international postal services, or any other person.
``(2) In carrying out the responsibilities specified in paragraph
(1), the Secretary of State shall exercise primary authority for the
conduct of foreign policy with respect to international postal
services, including the determination of United States positions and
the conduct of United States participation in negotiations with foreign
governments and international bodies. In exercising this authority, the
Secretary--
``(A) shall coordinate with other agencies as appropriate,
and in particular, should consider the authority vested by law
or Executive order in the Postal Regulatory Commission, the
Department of Commerce, the Department of Transportation, and
the Office of the United States Trade Representative in this
area;
``(B) shall maintain continuing liaison with other
executive branch agencies concerned with postal and delivery
services;
``(C) shall maintain continuing liaison with the Committee
on Homeland Security and Governmental Affairs of the Senate and
the Committee on Government Reform of the House of
Representatives;
``(D) shall maintain appropriate liaison with both
representatives of the Postal Service and representatives of
users and private providers of international postal services
and other international delivery services to keep informed of
their interests and problems, and to provide such assistance as
may be needed to ensure that matters of concern are promptly
considered by the Department of State or (if applicable, and to
the extent practicable) other executive branch agencies; and
``(E) shall assist in arranging meetings of such public
sector advisory groups as may be established to advise the
Department of State and other executive branch agencies in
connection with international postal services and international
delivery services.
``(3) The Secretary of State shall establish an advisory committee
(within the meaning of the Federal Advisory Committee Act) to perform
such functions as the Secretary considers appropriate in connection
with carrying out subparagraphs (A) through (D) of paragraph (2).
``(c) Before concluding any postal treaty or convention that
establishes a rate or classification for a product subject to
subchapter I of chapter 36, the Secretary of State shall request the
Postal Regulatory Commission to submit its views on whether such rate
or classification is consistent with the standards and criteria
established by the Commission under section 3622.
``(d) Nothing in this section shall be considered to prevent the
Postal Service from entering into such commercial or operational
contracts related to providing international postal services as it
deems appropriate, except that--
``(1) any such contract made with an agency of a foreign
government (whether under authority of this subsection or
otherwise) shall be solely contractual in nature and may not
purport to be binding under international law; and
``(2) a copy of each such contract between the Postal
Service and an agency of a foreign government shall be
transmitted to the Secretary of State and the Postal Regulatory
Commission not later than the effective date of such contract.
``(e)(1) With respect to shipments of international mail that are
competitive products within the meaning of section 3631 that are
exported or imported by the Postal Service, the Customs Service and
other appropriate Federal agencies shall apply the customs laws of the
United States and all other laws relating to the importation or
exportation of such shipments in the same manner to both shipments by
the Postal Service and similar shipments by private companies.
``(2) In exercising the authority under subsection (b) to conclude
new postal treaties and conventions related to international postal
services and to renegotiate such treaties and conventions, the
Secretary of State shall, to the maximum extent practicable, take such
measures as are within the Secretary's control to encourage the
governments of other countries to make available to the Postal Service
and private companies a range of nondiscriminatory customs procedures
that will fully meet the needs of all types of American shippers. The
Secretary of State shall consult with the United States Trade
Representative and the Commissioner of Customs in carrying out this
paragraph.
``(3) The provisions of this subsection shall take effect 6 months
after the date of enactment of this subsection or such earlier date as
the Customs Service may determine in writing.''.
(b) Effective Date.--Notwithstanding any provision of the amendment
made by subsection (a), the authority of the United States Postal
Service to establish the rates of postage or other charges on mail
matter conveyed between the United States and other countries shall
remain available to the Postal Service until--
(1) with respect to market-dominant products, the date as
of which the regulations promulgated under section 3622 of
title 39, United States Code (as amended by section 201(a))
take effect; and
(2) with respect to competitive products, the date as of
which the regulations promulgated under section 3633 of title
39, United States Code (as amended by section 202) take effect.

TITLE V--GENERAL PROVISIONS

SEC. 501. QUALIFICATION AND TERM REQUIREMENTS FOR GOVERNORS.

(a) Qualifications.--
(1) In general.--Section 202(a) of title 39, United States
Code, is amended by striking ``(a)'' and inserting ``(a)(1)''
and by striking the fourth sentence and inserting the
following: ``The Governors shall represent the public interest
generally, and shall be chosen solely on the basis of their
demonstrated ability in managing organizations or corporations
(in either the public or private sector) of substantial size.
Experience in the fields of law and accounting shall be
considered in making appointments of Governors. The Governors
shall not be representatives of specific interests using the
Postal Service, and may be removed only for cause.''.
(2) Applicability.--The amendment made by paragraph (1)
shall not affect the appointment or tenure of any person
serving as a Governor of the United States Postal Service under
an appointment made before the date of enactment of this Act
however, when any such office becomes vacant, the appointment
of any person to fill that office shall be made in accordance
with such amendment. The requirement set forth in the fourth
sentence of section 202(a)(1) of title 39, United States Code
(as amended by subsection (a)) shall be met beginning not later
than 9 years after the date of enactment of this Act.
(b) Consultation Requirement.--Section 202(a) of title 39, United
States Code, is amended by adding at the end the following:
``(2) In selecting the individuals described in paragraph (1) for
nomination for appointment to the position of Governor, the President
should consult with the Speaker of the House of Representatives, the
minority leader of the House of Representatives, the majority leader of
the Senate, and the minority leader of the Senate.''.
(c) 5-Year Terms.--
(1) In general.--Section 202(b) of title 39, United States
code, is amended in the first sentence by striking ``9 years''
and inserting ``5 years''.
(2) Applicability.--
(A) Continuation by incumbents.--The amendment made
by paragraph (1) shall not affect the tenure of any
person serving as a Governor of the United States
Postal Service on the date of enactment of this Act and
such person may continue to serve the remainder of the
applicable term.
(B) Vacancy by incumbent before 5 years of
service.--If a person who is serving as a Governor of
the United States Postal Service on the date of
enactment of this Act resigns, is removed, or dies
before the expiration of the 9-year term of that
Governor, and that Governor has served less than 5
years of that term, the resulting vacancy in office
shall be treated as a vacancy in a 5-year term.
(C) Vacancy by incumbent after 5 years of
service.--If a person who is serving as a Governor of
the United States Postal Service on the date of
enactment of this Act resigns, is removed, or dies
before the expiration of the 9-year term of that
Governor, and that Governor has served 5 years or more
of that term, that term shall be deemed to have been a
5-year term beginning on its commencement date for
purposes of determining vacancies in office. Any
appointment to the vacant office shall be for a 5-year
term beginning at the end of the original 9-year term
determined without regard to the deeming under the
preceding sentence. Nothing in this subparagraph shall
be construed to affect any action or authority of any
Governor or the Board of Governors during any portion
of a 9-year term deemed to be 5-year term under this
subparagraph.
(d) Term Limitation.--
(1) In general.--Section 202(b) of title 39, United States
Code, is amended--
(A) by inserting ``(1)'' after ``(b)''; and
(B) by adding at the end the following:
``(2) No person may serve more than 3 terms as a
Governor.''.
(2) Applicability.--The amendments made by paragraph (1)
shall not affect the tenure of any person serving as a Governor
of the United States Postal Service on the date of enactment of
this Act with respect to the term which that person is serving
on that date. Such person may continue to serve the remainder
of the applicable term, after which the amendments made by
paragraph (1) shall apply.

SEC. 502. OBLIGATIONS.

(a) Purposes for Which Obligations May Be Issued.--The first
sentence of section 2005(a)(1) of title 39, United States Code, is
amended by striking ``title.'' and inserting ``title, other than any of
the purposes for which the corresponding authority is available to the
Postal Service under section 2011.''.
(b) Increase Relating to Obligations Issued for Capital
Improvements.--Section 2005(a)(1) of title 39, United States Code, is
amended by striking the third sentence.
(c) Amounts Which May Be Pledged.--
(1) Obligations to which provisions apply.--The first
sentence of section 2005(b) of title 39, United States Code, is
amended by striking ``such obligations,'' and inserting
``obligations issued by the Postal Service under this
section,''.
(2) Assets, revenues, and receipts to which provisions
apply.--Subsection (b) of section 2005 of title 39, United
States Code, is amended by striking ``(b)'' and inserting
``(b)(1)'', and by adding at the end the following:
``(2) Notwithstanding any other provision of this section--
``(A) the authority to pledge assets of the Postal Service
under this subsection shall be available only to the extent
that such assets are not related to the provision of
competitive products (as determined under section 2011(h) or,
for purposes of any period before accounting practices and
principles under section 2011(h) have been established and
applied, the best information available from the Postal
Service, including the audited statements required by section
2008(e)); and
``(B) any authority under this subsection relating to the
pledging or other use of revenues or receipts of the Postal
Service shall be available only to the extent that they are not
revenues or receipts of the Competitive Products Fund.''.

SEC. 503. PRIVATE CARRIAGE OF LETTERS.

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

SEC. 504. RULEMAKING AUTHORITY.

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

SEC. 505. NONINTERFERENCE WITH COLLECTIVE BARGAINING AGREEMENTS.

(a) Labor Disputes.--Section 1207 of title 39, United States Code,
is amended to read as follows:
``Sec. 1207. Labor disputes
``(a) If there is a collective-bargaining agreement in effect, no
party to such agreement shall terminate or modify such agreement unless
the party desiring such termination or modification serves written
notice upon the other party to the agreement of the proposed
termination or modification not less than 90 days prior to the
expiration date thereof, or not less than 90 days prior to the time it
is proposed to make such termination or modification. The party serving
such notice shall notify the Federal Mediation and Conciliation Service
of the existence of a dispute within 45 days after such notice, if no
agreement has been reached by that time.
``(b) If the parties fail to reach agreement or to adopt a
procedure providing for a binding resolution of a dispute by the
expiration date of the agreement in effect, or the date of the proposed
termination or modification, the Director of the Federal Mediation and
Conciliation Service shall within 10 days appoint a mediator of
nationwide reputation and professional stature, and who is also a
member of the National Academy of Arbitrators. The parties shall
cooperate with the mediator in an effort to reach an agreement and
shall meet and negotiate in good faith at such times and places that
the mediator, in consultation with the parties, shall direct.
``(c)(1) If no agreement is reached within 60 days after the
expiration or termination of the agreement or the date on which the
agreement became subject to modification under subsection (a) of this
section, or if the parties decide upon arbitration but do not agree
upon the procedures therefore, an arbitration board shall be
established consisting of 3 members, 1 of whom shall be selected by the
Postal Service, 1 by the bargaining representative of the employees,
and the third by the 2 thus selected. If either of the parties fails to
select a member, or if the members chosen by the parties fail to agree
on the third person within 5 days after their first meeting, the
selection shall be made from a list of names provided by the Director.
This list shall consist of not less then 9 names of arbitrators of
nationwide reputation and professional nature, who are also members of
the National Academy of Arbitrators, and whom the Director has
determined are available and willing to serve.
``(2) The arbitration board shall give the parties a full and fair
hearing, including an opportunity to present evidence in support of
their claims, and an opportunity to present their case in person, by
counsel or by other representative as they may elect. Decisions of the
arbitration board shall be conclusive and binding upon the parties. The
arbitration board shall render its decision within 45 days after its
appointment.
``(3) Costs of the arbitration board and mediation shall be shared
equally by the Postal Service and the bargaining representative.
``(d) In the case of a bargaining unit whose recognized collective-
bargaining representative does not have an agreement with the Postal
Service, if the parties fail to reach the agreement within 90 days
after the commencement of collective bargaining, a mediator shall be
appointed in accordance with the terms in subsection (b) of this
section, unless the parties have previously agreed to another procedure
for a binding resolution of their differences. If the parties fail to
reach agreement within 180 days after the commencement of collective
bargaining, and if they have not agreed to another procedure for
binding resolution, an arbitration board shall be established to
provide conclusive and binding arbitration in accordance with the terms
of subsection (c) of this section.''.
(b) Noninterference With Collective Bargaining Agreements.--Except
as otherwise provided by the amendment made by subsection (a), nothing
in this Act shall restrict, expand, or otherwise affect any of the
rights, privileges, or benefits of either employees of or labor
organizations representing employees of the United States Postal
Service under chapter 12 of title 39, United States Code, the National
Labor Relations Act, any handbook or manual affecting employee labor
relations within the United States Postal Service, or any collective
bargaining agreement.
(c) Free Mailing Privileges Continue Unchanged.--Nothing in this
Act or any amendment made by this Act shall affect any free mailing
privileges accorded under section 3217 or sections 3403 through 3406 of
title 39, United States Code.

SEC. 506. BONUS AUTHORITY.

Chapter 36 of title 39, United States Code, is amended by inserting
after section 3685 the following:
``Sec. 3686. Bonus authority
``(a) In General.--The Postal Service may establish 1 or more
programs to provide bonuses or other rewards to officers and employees
of the Postal Service in senior executive or equivalent positions to
achieve the objectives of this chapter.
``(b) Limitation on Total Compensation.--
``(1) In general.--Under any such program, the Postal
Service may award a bonus or other reward in excess of the
limitation set forth in the last sentence of section 1003(a),
if such program has been approved under paragraph (2). Any such
award or bonus may not cause the total compensation of such
officer or employee to exceed the total annual compensation
payable to the Vice President under section 104 of title 3 as
of the end of the calendar year in which the bonus or award is
paid.
``(2) Approval process.--If the Postal Service wishes to
have the authority, under any program described in subsection
(a), to award bonuses or other rewards in excess of the
limitation set forth in the last sentence of section 1003(a)--
``(A) the Postal Service shall make an appropriate
request to the Board of Governors of the Postal Service
in such form and manner as the Board requires; and
``(B) the Board of Governors shall approve any such
request if the Board certifies, for the annual
appraisal period involved, that the performance
appraisal system for affected officers and employees of
the Postal Service (as designed and applied) makes
meaningful distinctions based on relative performance.
``(3) Revocation authority.--If the Board of Governors of
the Postal Service finds that a performance appraisal system
previously approved under paragraph (2)(B) does not (as
designed and applied) make meaningful distinctions based on
relative performance, the Board may revoke or suspend the
authority of the Postal Service to continue a program approved
under paragraph (2) until such time as appropriate corrective
measures have, in the judgment of the Board, been taken.
``(c) Reporting Requirement Relating to Bonuses or Other Rewards.--
Included in its comprehensive statement under section 2401(e) for any
period shall be--
``(1) the name of each person receiving a bonus or other
reward during such period which would not have been allowable
but for the provisions of subsection (b);
``(2) the amount of the bonus or other reward; and
``(3) the amount by which the limitation referred to in
subsection (b)(1) was exceeded as a result of such bonus or
other reward.''.

TITLE VI--ENHANCED REGULATORY COMMISSION

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

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

``CHAPTER 5--POSTAL REGULATORY COMMISSION

``Sec.
``501. Establishment.
``502. Commissioners.
``503. Rules; regulations; procedures.
``504. Administration.
``505. Officer of the Postal Regulatory Commission representing the
general public.
``Sec. 501. Establishment
``The Postal Regulatory Commission is an independent establishment
of the executive branch of the Government of the United States.
``Sec. 502. Commissioners
``(a) The Postal Regulatory Commission is composed of 5
Commissioners, appointed by the President, by and with the advice and
consent of the Senate. The Commissioners shall be chosen solely on the
basis of their technical qualifications, professional standing, and
demonstrated expertise in economics, accounting, law, or public
administration, and may be removed by the President only for cause.
Each individual appointed to the Commission shall have the
qualifications and expertise necessary to carry out the enhanced
responsibilities accorded Commissioners under the Postal Accountability
and Enhancement Act. Not more than 3 of the Commissioners may be
adherents of the same political party.
``(b) No Commissioner shall be financially interested in any
enterprise in the private sector of the economy engaged in the delivery
of mail matter.
``(c) A Commissioner may continue to serve after the expiration of
his term until his successor has qualified, except that a Commissioner
may not so continue to serve for more than 1 year after the date upon
which his term otherwise would expire under subsection (f).
``(d) One of the Commissioners shall be designated as Chairman by,
and shall serve in the position of Chairman at the pleasure of, the
President.
``(e) The Commissioners shall by majority vote designate a Vice
Chairman of the Commission. The Vice Chairman shall act as Chairman of
the Commission in the absence of the Chairman.
``(f) The Commissioners shall serve for terms of 6 years.'';
(2) by striking, in subchapter I of chapter 36 (as in
effect before the amendment made by section 201(c)), the
heading for such subchapter I and all that follows through
section 3602;
(3) by redesignating sections 3603 and 3604 as sections 503
and 504, respectively, and transferring such sections to the
end of chapter 5 (as inserted by paragraph (1)); and
(4) by adding after such section 504 the following:
``Sec. 505. Officer of the Postal Regulatory Commission representing
the general public
``The Postal Regulatory Commission shall designate an officer of
the Postal Regulatory Commission in all public proceedings who shall
represent the interests of the general public.''.
(b) Applicability.--The amendment made by subsection (a)(1) shall
not affect the appointment or tenure of any person serving as a
Commissioner on the Postal Regulatory Commission (as so redesignated by
section 604) under an appointment made before the date of enactment of
this Act or any nomination made before that date, but, when any such
office becomes vacant, the appointment of any person to fill that
office shall be made in accordance with such amendment.
(c) Clerical Amendment.--The analysis for part I of title 39,
United States Code, is amended by inserting after the item relating to
chapter 4 the following:

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

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

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

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

(a) Postal Regulatory Commission.--Subsection (d) of section 504 of
title 39, United States Code (as so redesignated by section 601) is
amended to read as follows:
``(d) There are authorized to be appropriated, out of the Postal
Service Fund, such sums as may be necessary for the Postal Regulatory
Commission. In requesting an appropriation under this subsection for a
fiscal year, the Commission shall prepare and submit to the Congress
under section 2009 a budget of the Commission's expenses, including
expenses for facilities, supplies, compensation, and employee
benefits.''.
(b) Office of Inspector General of the United States Postal
Service.--Section 8G(f) of the Inspector General Act of 1978 (5 U.S.C.
App.) is amended--
(1) by redesignating paragraph (4) as paragraph (5);
(2) by redesignating the second paragraph (3) (relating to
employees and labor organizations) as paragraph (4); and
(3) by adding at the end the following:
``(6) There are authorized to be appropriated, out of the
Postal Service Fund, such sums as may be necessary for the
Office of Inspector General of the United States Postal
Service.''.
(c) Budget Program.--
(1) In general.--The next to last sentence of section 2009
of title 39, United States Code, is amended to read as follows:
``The budget program shall also include separate statements of
the amounts which (1) the Postal Service requests to be
appropriated under subsections (b) and (c) of section 2401, (2)
the Office of Inspector General of the United States Postal
Service requests to be appropriated, out of the Postal Service
Fund, under section 8G(f) of the Inspector General Act of 1978,
and (3) the Postal Regulatory Commission requests to be
appropriated, out of the Postal Service Fund, under section
504(d) of this title.''.
(2) Conforming amendment.--Section 2003(e)(1) of title 39,
United States Code, is amended by striking the first sentence
and inserting the following: ``The Fund shall be available for
the payment of (A) all expenses incurred by the Postal Service
in carrying out its functions as provided by law, subject to
the same limitation as set forth in the parenthetical matter
under subsection (a); (B) all expenses of the Postal Regulatory
Commission, subject to the availability of amounts appropriated
under section 504(d); and (C) all expenses of the Office of
Inspector General, subject to the availability of amounts
appropriated under section 8G(f) of the Inspector General Act
of 1978.''.
(d) Effective Date.--
(1) In general.--The amendments made by this section shall
apply with respect to fiscal years beginning on or after
October 1, 2005.
(2) Savings provision.--The provisions of title 39, United
States Code, and the Inspector General Act of 1978 (5 U.S.C.
App.) that are amended by this section shall, for purposes of
any fiscal year before the first fiscal year to which the
amendments made by this section apply, continue to apply in the
same way as if this section had never been enacted.

SEC. 604. REDESIGNATION OF THE POSTAL RATE COMMISSION.

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

SEC. 605. FINANCIAL TRANSPARENCY.

(a) In General.--Section 101 of title 39, United States Code, is
amended--
(1) by redesignating subsections (d) through (g) as
subsections (e) through (h), respectively; and
(2) by inserting after subsection (c) the following:
``(d) As an independent establishment of the executive branch of
the Government of the United States, the Postal Service shall be
subject to a high degree of transparency to ensure fair treatment of
customers of the Postal Service's market-dominant products and
companies competing with the Postal Service's competitive products.''.
(b) Financial Reporting Requirements and Enforcement Powers
Applicable to Postal Service.--Section 503 of title 39, United States
Code (as so redesignated by section 601 and 604) is amended by--
(1) inserting ``(a)'' before ``The Postal Regulatory
Commission shall promulgate''; and
(2) adding at the end the following:
``(b)(1) Beginning with the first full fiscal year following the
date of enactment of the Postal Accountability and Enhancement Act, the
Postal Service shall file with the Postal Regulatory Commission --
``(A) within 35 days after the end of each fiscal quarter,
a quarterly report containing the information prescribed in
Form 10-Q of the Securities and Exchange Commission under
section 13 of the Securities Exchange Act of 1934 (15 U.S.C.
78m), or any revised or successor form;
``(B) within 60 days after the end of each fiscal year, an
annual report containing the information prescribed in Form 10-
K of the Securities and Exchange Commission under section 13 of
the Securities Exchange Act of 1934 (15 U.S.C. 78m), or any
revised or successor form; and
``(C) periodic reports within the time frame and containing
the information prescribed in Form 8-K of the Securities and
Exchange Commission under section 13 of the Securities Exchange
Act of 1934 (15 U.S.C. 78m), or any revised or successor form.
``(2) For purposes of preparing the reports required under
paragraph (1), the Postal Service shall be deemed to be the registrant
described in the Securities and Exchange Commission forms, and
references contained in such forms to Securities and Exchange
Commission regulations are applicable.
``(3) For purposes of preparing the reports required under
paragraph (1), the Postal Service shall comply with the rules
prescribed by the Securities and Exchange Commission implementing
section 404 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7262; Public
Law 107-204) beginning with fiscal year 2007 and in each fiscal year
thereafter.
``(c)(1) The reports required under subsection (b)(1)(B) shall
include, with respect to the financial obligations of the Postal
Service under chapters 83, 84, and 89 of title 5 for retirees of the
Postal Service--
``(A) the funded status of such obligations of the Postal
Service;
``(B) components of the net change in the fund balances and
obligations and the nature and cause of any significant
changes;
``(C) components of net periodic costs;
``(D) cost methods and assumptions underlying the relevant
actuarial valuations;
``(E) the effect of a one-percentage point increase in the
assumed health care cost trend rate for each future year on the
service and interest costs components of net periodic cost and
the accumulated obligation of the Postal Service under chapter
89 of title 5 for retirees of the Postal Service;
``(F) actual contributions to and payments from the funds
for the years presented and the estimated future contributions
and payments for each of the following 5 years;
``(G) the composition of plan assets reflected in the fund
balances; and
``(H) the assumed rate of return on fund balances and the
actual rates of return for the years presented.
``(2)(A) Beginning with the fiscal year 2007 and in each fiscal
year thereafter, for purposes of the reports required under subsection
(b)(1) (A) and (B), the Postal Service shall include segment reporting.
``(B) The Postal Service shall determine the appropriate segment
reporting under subparagraph (A), after consultation with the Postal
Regulatory Commission.
``(d) For purposes of the annual reports required under subsection
(b)(1)(B), the Postal Service shall obtain an opinion from an
independent auditor on whether the information listed under subsection
(c) is fairly stated in all material respects, either in relation to
the basic financial statements as a whole or on a stand-alone basis.
``(e) The Postal Regulatory Commission shall have access to the
audit documentation and any other supporting matter of the Postal
Service and its independent auditor in connection with any information
submitted under subsection (b)(1)(B).
``(f) The Postal Regulatory Commission may, on its own motion or on
request of an interested party, initiate proceedings (to be conducted
in accordance with regulations that the Commission shall prescribe) to
improve the quality, accuracy, or completeness of Postal Service data
required by the Commission under this section whenever it shall appear
that the data--
``(1) have become significantly inaccurate;
``(2) can be significantly improved; or
``(3) are not cost beneficial.''.

TITLE VII--EVALUATIONS

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

(a) In General.--The Postal Regulatory Commission shall, at least
every 3 years, submit a report to the President and Congress
concerning--
(1) the operation of the amendments made by this Act; and
(2) recommendations for any legislation or other measures
necessary to improve the effectiveness or efficiency of the
postal laws of the United States.
(b) Postal Service Views.--A report under this section shall be
submitted only after reasonable opportunity has been afforded to the
Postal Service to review the report and to submit written comments on
the report. Any comments timely received from the Postal Service under
the preceding sentence shall be attached to the report submitted under
subsection (a).

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

(a) Report by the Postal Regulatory Commission.--
(1) In general.--Not later than 24 months after the date of
enactment of this Act, the Postal Regulatory Commission shall
submit a report to the President and Congress on universal
postal service and the postal monopoly in the United States (in
this section referred to as ``universal service and the postal
monopoly''), including the monopoly on the delivery of mail and
on access to mailboxes.
(2) Contents.--The report under this subsection shall
include--
(A) a comprehensive review of the history and
development of universal service and the postal
monopoly, including how the scope and standards of
universal service and the postal monopoly have evolved
over time for the Nation and its urban and rural areas;
(B) the scope and standards of universal service
and the postal monopoly provided under current law
(including sections 101 and 403 of title 39, United
States Code), and current rules, regulations, policy
statements, and practices of the Postal Service;
(C) a description of any geographic areas,
populations, communities (including both urban and
rural communities), organizations, or other groups or
entities not currently covered by universal service or
that are covered but that are receiving services
deficient in scope or quality or both; and
(D) the scope and standards of universal service
and the postal monopoly likely to be required in the
future in order to meet the needs and expectations of
the United States public, including all types of mail
users, based on discussion of such assumptions,
alternative sets of assumptions, and analyses as the
Postal Service considers plausible.
(b) Recommended Changes to Universal Service and the Monopoly.--The
Postal Regulatory Commission shall include in the report under
subsection (a), and in all reports submitted under section 701 of this
Act--
(1) any recommended changes to universal service and the
postal monopoly as the Commission considers appropriate,
including changes that the Commission may implement under
current law and changes that would require changes to current
law, with estimated effects of the recommendations on the
service, financial condition, rates, and security of mail
provided by the Postal Service;
(2) with respect to each recommended change described under
paragraph (1)--
(A) an estimate of the costs of the Postal Service
attributable to the obligation to provide universal
service under current law; and
(B) an analysis of the likely benefit of the
current postal monopoly to the ability of the Postal
Service to sustain the current scope and standards of
universal service, including estimates of the financial
benefit of the postal monopoly to the extent
practicable, under current law; and
(3) such additional topics and recommendations as the
Commission considers appropriate, with estimated effects of the
recommendations on the service, financial condition, rates, and
the security of mail provided by the Postal Service.

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

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

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

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

SEC. 705. STUDY ON RECYCLED PAPER.

(a) In General.--Within 12 months after the date of enactment of
this Act, the Government Accountability Office shall study and submit
to the Congress, the Board of Governors of the Postal Service, and to
the Postal Regulatory Commission a report concerning--
(1) the economic and environmental efficacy of establishing
rate incentives for mailers linked to the use of recycled
paper;
(2) a description of the accomplishments of the Postal
Service in each of the preceding 5 years involving recycling
activities, including the amount of annual revenue generated
and savings achieved by the Postal Service as a result of its
use of recycled paper and other recycled products and its
efforts to recycle undeliverable and discarded mail and other
materials; and
(3) additional opportunities that may be available for the
United States Postal Service to engage in recycling initiatives
and the projected costs and revenues of undertaking such
opportunities.
(b) Recommendations.--The report shall include recommendations for
any administrative or legislative actions that may be appropriate.

TITLE VIII--POSTAL SERVICE RETIREMENT AND HEALTH BENEFITS FUNDING

SEC. 801. SHORT TITLE.

This title may be cited as the ``Postal Civil Service Retirement
and Health Benefits Funding Amendments of 2004''.

SEC. 802. CIVIL SERVICE RETIREMENT SYSTEM.

(a) In General.--Chapter 83 of title 5, United States Code, is
amended--
(1) in section 8334(a)(1)(B), by striking clause (ii) and
inserting the following:
``(ii) In the case of an employee of the United States Postal
Service, no amount shall be contributed under this subparagraph.''; and
(2) by amending section 8348(h) to read as follows:
``(h)(1) In this subsection, the term `Postal surplus or
supplemental liability' means the estimated difference, as determined
by the Office, between--
``(A) the actuarial present value of all future benefits
payable from the Fund under this subchapter to current or
former employees of the United States Postal Service and
attributable to civilian employment with the United States
Postal Service; and
``(B) the sum of--
``(i) the actuarial present value of deductions to
be withheld from the future basic pay of employees of
the United States Postal Service currently subject to
this subchapter under section 8334;
``(ii) that portion of the Fund balance, as of the
date the Postal surplus or supplemental liability is
determined, attributable to payments to the Fund by the
United States Postal Service and its employees, minus
benefit payments attributable to civilian employment
with the United States Postal Service, plus the
earnings on such amounts while in the Fund; and
``(iii) any other appropriate amount, as determined
by the Office in accordance with generally accepted
actuarial practices and principles.
``(2)(A) Not later than June 15, 2006, the Office shall determine
the Postal surplus or supplemental liability, as of September 30, 2005.
If that result is a surplus, the amount of the surplus shall be
transferred to the Postal Service Retiree Health Benefits Fund
established under section 8909a by June 30, 2006. If the result is a
supplemental liability, the Office shall establish an amortization
schedule, including a series of annual installments commencing
September 30, 2006, which provides for the liquidation of such
liability by September 30, 2043.
``(B) The Office shall redetermine the Postal surplus or
supplemental liability as of the close of the fiscal year, for each
fiscal year beginning after September 30, 2006, through the fiscal year
ending September 30, 2038. If the result is a surplus, that amount
shall remain in the Fund until distribution is authorized under
subparagraph (C), and any prior amortization schedule for payments
shall be terminated. If the result is a supplemental liability, the
Office shall establish a new amortization schedule, including a series
of annual installments commencing on September 30 of the subsequent
fiscal year, which provides for the liquidation of such liability by
September 30, 2043.
``(C) As of the close of the fiscal years ending September 30,
2015, 2025, 2035, and 2039, if the result is a surplus, that amount
shall be transferred to the Postal Service Retiree Health Benefits
Fund, and any prior amortization schedule for payments shall be
terminated.
``(D) Amortization schedules established under this paragraph shall
be set in accordance with generally accepted actuarial practices and
principles, with interest computed at the rate used in the most recent
valuation of the Civil Service Retirement System.
``(E) The United States Postal Service shall pay the amounts so
determined to the Office, with payments due not later than the date
scheduled by the Office.
``(3) Notwithstanding any other provision of law, in computing the
amount of any payment under any other subsection of this section that
is based upon the amount of the unfunded liability, such payment shall
be computed disregarding that portion of the unfunded liability that
the Office determines will be liquidated by payments under this
subsection.''.
(b) Credit Allowed for Military Service.--In the application of
section 8348(g)(2) of title 5, United States Code, for the fiscal year
2006, the Office of Personnel Management shall include, in addition to
the amount otherwise computed under that paragraph, the amounts that
would have been included for the fiscal years 2003 through 2005 with
respect to credit for military service of former employees of the
United States Postal Service as though the Postal Civil Service
Retirement System Funding Reform Act of 2003 (Public Law 108-18) had
not been enacted, and the Secretary of the Treasury shall make the
required transfer to the Civil Service Retirement and Disability Fund
based on that amount.
(c) Review.--
(1) In general.--
(A) Request for review.--Notwithstanding any other
provision of this section (including any amendment made
by this section), any determination or redetermination
made by the Office of Personnel Management under this
section (including any amendment made by this section)
shall, upon request of the United States Postal
Service, be subject to a review by the Postal
Regulatory Commission under this subsection.
(B) Report.--Upon receiving a request under
subparagraph (A), the Commission shall promptly procure
the services of an actuary, who shall hold membership
in the American Academy of Actuaries and shall be
qualified in the evaluation of pension obligations, to
conduct a review in accordance with generally accepted
actuarial practices and principles and to provide a
report to the Commission containing the results of the
review. The Commission, upon determining that the
report satisfies the requirements of this paragraph,
shall approve the report, with any comments it may
choose to make, and submit it with any such comments to
the Postal Service, the Office of Personnel Management,
and Congress.
(2) Reconsideration.--Upon receiving the report from the
Commission under paragraph (1), the Office of Personnel
Management shall reconsider its determination or
redetermination in light of such report, and shall make any
appropriate adjustments. The Office shall submit a report
containing the results of its reconsideration to the
Commission, the Postal Service, and Congress.

SEC. 803. HEALTH INSURANCE.

(a) In General.--
(1) Funding.--Chapter 89 of title 5, United States Code, is
amended--
(A) in section 8906(g)(2)(A), by striking ``shall
be paid by the United States Postal Service.'' and
inserting ``shall be paid first from the Postal Service
Retiree Health Benefits Fund up to the amount contained
in the Fund, with any remaining amount paid by the
United States Postal Service.''; and
(B) by inserting after section 8909 the following:
``Sec. 8909a. Postal Service Retiree Health Benefit Fund
``(a) There is in the Treasury of the United States a Postal
Service Retiree Health Benefits Fund which is administered by the
Office of Personnel Management.
``(b) The Fund is available without fiscal year limitation for
payments required under section 8906(g)(2)(A).
``(c) The Secretary of the Treasury shall immediately invest, in
interest-bearing securities of the United States such currently
available portions of the Fund as are not immediately required for
payments from the Fund. Such investments shall be made in the same
manner as investments for the Civil Service Retirement and Disability
Fund under section 8348.
``(d)(1) Not later than June 30, 2006, 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, 2006, 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, 2006, the Office shall compute, and
by June 30 of each succeeding year shall recompute, an amortization
schedule including a series of annual installments which provide for
the liquidation by September 30, 2045, 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) Not later than September 30, 2006, and by September 30 of
each succeeding year, the United States Postal Service shall pay into
such Fund--
``(A) the net present value computed under paragraph (1);
and
``(B) the annual installment computed under paragraph
(2)(B).
``(4) Computations under this subsection shall be made consistent
with the assumptions and methodology used by the Office for financial
reporting under subchapter II of chapter 35 of title 31.
``(5)(A)(i) Any computation or other determination of the Office
under this subsection shall, upon request of the United States Postal
Service, be subject to a review by the Postal Regulatory Commission
under this paragraph.
``(ii) Upon receiving a request under clause (i), the Commission
shall promptly procure the services of an actuary, who shall hold
membership in the American Academy of Actuaries and shall be qualified
in the evaluation of healthcare insurance obligations, to conduct a
review in accordance with generally accepted actuarial practices and
principles and to provide a report to the Commission containing the
results of the review. The Commission, upon determining that the report
satisfies the requirements of this subparagraph, shall approve the
report, with any comments it may choose to make, and submit it with any
such comments to the Postal Service, the Office of Personnel
Management, and Congress.
``(B) Upon receiving the report under subparagraph (A), the Office
of Personnel Management shall reconsider its determination or
redetermination in light of such report, and shall make any appropriate
adjustments. The Office shall submit a report containing the results of
its reconsideration to the Commission, the Postal Service, and
Congress.
``(6) After consultation with the United States Postal Service, the
Office shall promulgate any regulations the Office determines necessary
under this subsection.''.
(2) Technical and conforming amendment.--The table of
sections for chapter 89 of title 5, United States Code, is
amended by inserting after the item relating to section 8909
the following:

``8909a. Postal Service Retiree Health Benefits Fund.''.
(b) Review.--
(1) In general.--
(A) Request for review.--Any regulation established
under section 8909a(d)(5) of title 5, United States
Code (as added by subsection (a)), shall, upon request
of the United States Postal Service, be subject to a
review by the Postal Regulatory Commission under this
paragraph.
(B) Report.--Upon receiving a request under
subparagraph (A), the Commission shall promptly procure
the services of an actuary, who shall hold membership
in the American Academy of Actuaries and shall be
qualified in the evaluation of healthcare insurance
obligations, to conduct a review in accordance with
generally accepted actuarial practices and principles
and to provide a report to the Commission containing
the results of the review. The Commission, upon
determining that the report satisfies the requirements
of this paragraph, shall approve the report, with any
comments it may choose to make, and submit it with any
such comments to the Postal Service, the Office of
Personnel Management, and Congress.
(2) Reconsideration.--Upon receiving the report under
paragraph (1), the Office of Personnel Management shall
reconsider its determination or redetermination in light of
such report, and shall make any appropriate adjustments. The
Office shall submit a report containing the results of its
reconsideration to the Commission, the Postal Service, and
Congress.
(c) Transitional Adjustment for Fiscal Year 2006.--For fiscal year
2006, the amounts paid by the Postal Service in Government
contributions under section 8906(g)(2)(A) of title 5, United States
Code, for fiscal year 2006 contributions shall be deducted from the
initial payment otherwise due from the Postal Service to the Postal
Service Retiree Health Benefits Fund under section 8909a(d)(3) of such
title as added by this section.

SEC. 804. REPEAL OF DISPOSITION OF SAVINGS PROVISION.

Section 3 of the Postal Civil Service Retirement System Funding
Reform Act of 2003 (Public Law 108-18) is repealed.

SEC. 805. EFFECTIVE DATES.

(a) In General.--Except as provided under subsection (b), this
title shall take effect on October 1, 2005.
(b) Termination of Employer Contribution.--The amendment made by
paragraph (1) of section 802(a) shall take effect on the first day of
the first pay period beginning on or after October 1, 2005.

TITLE IX--COMPENSATION FOR WORK INJURIES

SEC. 901. TEMPORARY DISABILITY; CONTINUATION OF PAY.

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

SEC. 902. DISABILITY RETIREMENT FOR POSTAL EMPLOYEES.

(a) Total Disability.--Section 8105 of title 5, United States Code,
is amended--
(1) in subsection (a), by adding at the end the following:
``This section applies to a Postal Service employee, except as
provided under subsection (c).''; and
(2) by adding at the end the following:
``(c)(1) In this subsection, the term `retirement age' has the
meaning given under section 216(l)(1) of the Social Security Act (42
U.S.C. 416(l)(1)).
``(2) Notwithstanding any other provision of law, for any injury
occurring on or after the date of enactment of the Postal
Accountability and Enhancement Act, and for any new claim for a period
of disability commencing on or after that date, the compensation
entitlement for total disability is converted to 50 percent of the
monthly pay of the employee on the later of--
``(A) the date on which the injured employee reaches
retirement age; or
``(B) 1 year after the employee begins receiving
compensation.''.
(b) Partial Disability.--Section 8106 of title 5, United States
Code, is amended--
(1) in subsection (a), by adding at the end the following:
``This section applies to a Postal Service employee, except as
provided under subsection (d).''; and
(2) by adding at the end the following:
``(d)(1) In this subsection, the term `retirement age' has the
meaning given under section 216(l)(1) of the Social Security Act (42
U.S.C. 416(l)(1)).
``(2) Notwithstanding any other provision of law, for any
injury occurring on or after the date of enactment of this
subsection, and for any new claim for a period of disability
commencing on or after that date, the compensation entitlement
for partial disability is converted to 50 percent of the
difference between the monthly pay of an employee and the
monthly wage earning capacity of the employee after the
beginning of partial disability on the later of--
``(A) the date on which the injured employee
reaches retirement age; or
``(B) 1 year after the employee begins receiving
compensation.''.

TITLE X--MISCELLANEOUS

SEC. 1001. EMPLOYMENT OF POSTAL POLICE OFFICERS.

Section 404 of title 39, United States Code (as amended by this
Act), is further amended by adding at the end the following:
``(d) The Postal Service may employ guards for all buildings and
areas owned or occupied by the Postal Service or under the charge and
control of the Postal Service, and may give such guards, with respect
to such property, any of the powers of special policemen provided under
section 1315 of title 40. The Postmaster General, or the designee of
the Postmaster General, may take any action that the Secretary of
Homeland Security may take under section 1315 of title 40, with respect
to that property.

SEC. 1002. OBSOLETE PROVISIONS.

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

SEC. 1003. REDUCED RATES.

Section 3626 of title 39, United States Code, is amended--
(1) in subsection (a), by striking all before paragraph (4)
and inserting the following:
``(a)(1) Except as otherwise provided in this section, rates of
postage for a class of mail or kind of mailer under former section
4358, 4452(b), 4452(c), 4554(b), or 4554(c) of this title shall be
established in accordance with section 3622.
``(2) For the purpose of this subsection, the term `regular-rate
category' means any class of mail or kind of mailer, other than a class
or kind referred to in section 2401(c).
``(3) Rates of postage for a class of mail or kind of mailer under
former section 4358(a) through (c) of this title shall be established
so that postage on each mailing of such mail reflects its preferred
status as compared to the postage for the most closely corresponding
regular-rate category mailing.'';
(2) in subsection (g), by adding at the end the following:
``(3) For purposes of this section and former section 4358(a)
through (c) of this title, those copies of an issue of a publication
entered within the county in which it is published, but distributed
outside such county on postal carrier routes originating in the county
of publication, shall be treated as if they were distributed within the
county of publication.
``(4)(A) In the case of an issue of a publication, any number of
copies of which are mailed at the rates of postage for a class of mail
or kind of mailer under former section 4358(a) through (c) of this
title, any copies of such issue which are distributed outside the
county of publication (excluding any copies subject to paragraph (3))
shall be subject to rates of postage provided for under this paragraph.
``(B) The rates of postage applicable to mail under this paragraph
shall be established in accordance with section 3622.
``(C) This paragraph shall not apply with respect to an issue of a
publication unless the total paid circulation of such issue outside the
county of publication (not counting recipients of copies subject to
paragraph (3)) is less than 5,000.''; and
(3) by adding at the end the following:
``(n) In the administration of this section, matter that satisfies
the circulation standards for requester publications shall not be
excluded from being mailed at the rates for mail under former section
4358 solely because such matter is designed primarily for free
circulation or for circulation at nominal rates, or fails to meet the
requirements of former section 4354(a)(5).''.

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

It is the sense of Congress that the Postal Service should--
(1) ensure the fair and consistent treatment of suppliers
and contractors in its current purchasing policies and any
revision or replacement of such policies, such as through the
use of competitive contract award procedures, effective dispute
resolution mechanisms, and socioeconomic programs; and
(2) implement commercial best practices in Postal Service
purchasing policies to achieve greater efficiency and cost
savings as recommended in July 2003 by the President's
Commission on the United States Postal Service, in a manner
that is compatible with the fair and consistent treatment of
suppliers and contractors, as befitting an establishment in the
United States Government.
Calendar No. 164

109th CONGRESS

1st Session

S. 662

_______________________________________________________________________

A BILL

To reform the postal laws of the United States

_______________________________________________________________________

July 14, 2005

Reported with an amendment