HR6407DEC8

The bill addresses what it calls modernization of postal services, postal rates, service standards, regulations, work injuries, retirement funding and fair competition regarding the US Postal Service.

Postage rates will be established yearly by setting an annual limitation of percentage changes that will be equal to the change in the Consumer Price Index for urban consumers. The rates would be adjusted for seasonal variation over the most recent twelve month period prior to notification of the rate increase. The ultimate goal is rate increases that, when necessary, would change at regular intervals by predictable amounts. If the USPS establishes the maximum rate adjustment but does not increase rates to that amount, the maximum rate adjustment can be used in part of in whole, any of the five years following the adjustment. The system will be reviewed in ten years to see if it is achieving the objectives of making rate increases more predictable, to maximize incentives to reduce costs and increase efficiency, maintain high service standards, allow pricing flexibility, assure adequate revenues to maintain financial stability, enhance mail security and deter terrorism, and to allocate USPS costs between market-dominant and competitive products.

The rate increases must take into account the value of the mail service provided each class or type of mail service to both the sender and the recipient, the requirement that each class or type of mail service bear the direct and indirect postal costs attributed to those types of mail service, the effect of rate increases on the general public, business mail, private sector enterprises also engaged in mail delivery other than letters, the availability of alternatives means of sending and receiving letters at reasonable costs, the degree of preparation by the mailer.

Competitive products, those services that are also provided by private industry carriers, are to be rated to carry their own rate without being subsidized by higher profits from other services sold and must profit the USPS as a whole. The system will be evaluated in five years.

New products must be marketed and tested so not to disrupt the market and give the USPS an unfair competitive advantage. If the USPS anticipates that the new product will generate over $50 million in any year then it may put the product or service in play without a market test. The product must meet a demand, must contribute to the USPS financial stability, and is not likely to result in unfair competition.

Complaints would be dealt with first by a determination that it has merit or by discharging it for no merit. If the complaint is not acted on in 90 days it is considered dismissed. The Postal Regulatory Commission will make a final decision and if their decision is not acceptable it can be taken to the US Court of Appeals in D.C.. Complaints would be those of unfair competition or objections by consumers and competitors. Anti-trust complaints looking for damages may not be directed at a postal employee but rather the USPS itself.

Modernizing its services means that the USPS will reasonably assure reliable, speedy and frequent delivery consistent with rates, enhance value to senders and recipients, preserve regular access to services including rural areas, and implement performance standards. Congress would receive a report in six months of the modernizing plan.

The USPS is encouraged to move forward in streamlining the extraneous facilities it continues to maintain, to keep union, management associations and local elected officials informed of any downsizing as it relates to bargaining agreements.

Market access is to be included in plans to use additional vending machines, the Internet, postage meters, stamps by mail and employees on delivery routes, sharing retail overhead with private businesses, postal kiosks. A retirement plan is to be developed to take care of employees displaced due to automation.

Profits on competitive products will be kept in a separate account and the USPS will pay taxes on those profits in the same manner a corporation would id the corporation was in the same business and offering the same products. The USPS is prohibited from establishing any rule or regulation that precludes competition or even establishes terms of competition unless the USPS shows that the regulation does not create and unfair competitive advantage fro itself or any entity it funds, compel the disclosure or transfer of intellectual property to any third party or obtains information from a person that provides any product and then offer a post office product based on that information without the consent of the person providing the information.

Private carriage of letters is regulated such that the amount paid for private carriage is at least equal to 6 times the rate for the 1^st ounce of a single-piece first class letter and the letter must weigh 12 ½ ounces.

Collective bargaining agreements may be discontinued if one party to the agreement serves written notice within 90 days of the expiration date of the agreement.

A single unified zip code will be assigned to Auburn Township, OH; Hanahan, SC; Bradbury, CA; and Discovery Bay, CA and retail hours at the USPS Fairport Harbor Branch shall be changed to those in effect on December 1, 2005.

Some materials are hazardous and may not be mailed. A person knowingly violating the rules can face a civil fine of at least $250 but no more than $100,000 and the costs of any clean up if there is an accident.

Sponsor: Rep. Tom Davis (R-VA 11^th)

Vote: Passed House by voice vote December 8, 206. Passed Senate by Unanimous Consent December 9, 2006.

Cost to the taxpayers: “CBO estimates that H.R. 6407 will result in on-budget savings of $44.2 billion and off budget costs of $45.7 billion over the 2007-2016 period. (The net expenditures of the USPS are classified as “off-budget.”) Thus, CBO estimates the net cost to the unified budget will be $1.5 billion over the 2007-2016 period.”

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MORE INFORMATION

It is the policy of the United States--

`(1) to promote and encourage communications between peoples by efficient operation of international postal services and other international delivery services for cultural, social, and economic purposes;

`(2) to promote and encourage unrestricted and undistorted competition in the provision of international postal services and other international delivery services, except where provision of such services by private companies may be prohibited by law of the United States;

`(3) to promote and encourage a clear distinction between governmental and operational responsibilities with respect to the provision of international postal services and other international delivery services by the Government of the United States and by intergovernmental organizations of which the United States is a member; and

`(4) to participate in multilateral and bilateral agreements with other countries to accomplish these objectives.

`(b)(1) The Secretary of State shall be responsible for formulation, coordination, and oversight of foreign policy related to international postal services and other international delivery services and shall have the power to conclude postal treaties, conventions, and amendments related to international postal services and other international delivery services, except that the Secretary may not conclude any treaty, convention, or other international agreement (including those regulating international postal services) if such treaty, convention, or agreement would, with respect to any competitive product, grant an undue or unreasonable preference to the Postal Service, a private provider of international postal or delivery services, or any other person.

`(2) In carrying out the responsibilities specified in paragraph (1), the Secretary of State shall exercise primary authority for the conduct of foreign policy with respect to international postal services and international delivery services, including the determination of United States positions and the conduct of United States participation in negotiations with foreign governments and international bodies. In exercising this authority, the Secretary--

`(A) shall coordinate with other agencies as appropriate, and in particular, shall give full consideration to the authority vested by law or Executive order in the Postal Regulatory Commission, the Department of Commerce, the Department of Transportation, and the Office of the United States Trade Representative in this area;

`(B) shall maintain continuing liaison with other executive branch agencies concerned with postal and delivery services;

`(C) shall maintain continuing liaison with the Committee on Homeland Security and Governmental Affairs of the Senate and the Committee on Government Reform of the House of Representatives;

`(D) shall maintain appropriate liaison with both representatives of the Postal Service and representatives of users and private providers of international postal services and other international delivery services to keep informed of their interests and problems, and to provide such assistance as may be needed to ensure that matters of concern are promptly considered by the Department of State or (if applicable, and to the extent practicable) other executive branch agencies; and

`(E) shall assist in arranging meetings of such public sector advisory groups as may be established to advise the Department of State and other executive branch agencies in connection with international postal services and international delivery services.

`(3) The Secretary of State shall establish an advisory committee (within the meaning of the Federal Advisory Committee Act) to perform such functions as the Secretary considers appropriate in connection with carrying out subparagraphs (A) through (D) of paragraph (2).

`(c)(1) Before concluding any treaty, convention, or amendment that establishes a rate or classification for a product subject to subchapter I of chapter 36, the Secretary of State shall request the Postal Regulatory Commission to submit its views on whether such rate or classification is consistent with the standards and criteria established by the Commission under section 3622.

`(2) The Secretary shall ensure that each treaty, convention, or amendment concluded under subsection (b) is consistent with the views submitted by the Commission pursuant to paragraph (1), except if, or to the extent, the Secretary determines, in writing, that it is not in the foreign policy or national security interest of the United States to ensure consistency with the Commission's views. Such written determination shall be provided to the Commission together with a full explanation of the reasons thereof, provided that the Secretary may designate which portions of the determination or explanation shall be kept confidential for reasons of foreign policy or national security.

`(d) Nothing in this section shall be considered to prevent the Postal Service from entering into such commercial or operational contracts related to providing international postal services and other international delivery services as it deems appropriate, except that--

`(1) any such contract made with an agency of a foreign government (whether under authority of this subsection or otherwise) shall be solely contractual in nature and may not purport to be international law; and

`(2) a copy of each such contract between the Postal Service and an agency of a foreign government shall be transmitted to the Secretary of State and the Postal Regulatory Commission not later than the effective date of such contract.

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