H.R. 3004

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3004 Introduced in House (IH)]

<DOC>

119th CONGRESS
1st Session
H. R. 3004

To amend title 39, United States Code, to modernize the Postal Service 
regulations, and for other purposes.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

April 24, 2025

Mr. Graves introduced the following bill; which was referred to the 
Committee on Oversight and Government Reform

_______________________________________________________________________

A BILL

To amend title 39, United States Code, to modernize the Postal Service 
regulations, and for other purposes.

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

SECTION 1. SHORT TITLE.

This Act may be cited as the ``USPS Services Enhancement and 
Regulatory Viability Expansion and Sustainability for the US Act'' or 
the ``USPS SERVES US Act''.

SEC. 2. COST AND EFFICIENCY REFORMS.

(a) In General.--Section 3622(d) of title 39, United States Code, 
is amended--
(1) in paragraph (1)(A), by striking ``to be set by'' and 
all that follows and inserting the following: ``equal to the 
amount that is the percentage 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 less--
``(i) 0.5 percent; or
``(ii) such other percentage as specified 
in an order by the Commission if such order 
describes the reasons of the Commission for 
selecting such other percentage and such order 
applies such other percentage with respect to 
only one such annual limitation;''; and
(2) by amending paragraph (3) to read as follows:
``(3) Revisions.--In revising the system as permitted by 
subsection (a), the Postal Regulatory Commission shall make no 
change which would cause the revised system to be inconsistent 
with this section.''.
(b) Regulations.--Not later than 60 days after the date of the 
enactment of this Act, the Postal Regulatory Commission shall issue 
such regulations as are necessary to carry out section 3622(d)(1)(A) of 
title 39, United States Code, as amended by this section.

SEC. 3. SANCTIONS FOR CERTAIN FAILURES OF SERVICE.

(a) In General.--Subchapter VII of chapter 36 of title 39, United 
States Code, is amended by adding at the end the following new section:
``Sec. 3693. Sanctions.
``(a) In General.--If, pursuant to section 3653 or a complaint 
proceeding conducted pursuant to section 3662, the Postal Regulatory 
Commission determines that the Postal Service failed to meet a target 
established under section 3692 and that such failure is a covered 
failure, the Commission may reduce the maximum amount by which the 
Postal Service may adjust the rates for the market-dominant products 
affected by such failure under section 3622, except that such reduction 
may not cause such maximum amount to be less than zero. In making such 
determination, the Commission shall consider evidence of losses 
incurred by users of the product or products concerned as a result of 
the failure.
``(b) Applicability.--
``(1) In general.--A reduction under subsection (a) to the 
maximum amount by which the Postal Service may adjust the rates 
for a market-dominant product under section 3622 shall apply 
only with respect to--
``(A) the first implementation of such an 
adjustment for such market-dominant product occurring 
during the period beginning on the date on which the 
Postal Regulatory Commission makes such reduction and 
ending on the date on which Commission determines that 
the Postal Service is meeting the target established 
under section 3692 with respect to which the Commission 
made such reduction; and
``(B) each subsequent implementation of such an 
adjustment for such market-dominant product occurring 
during such period to the extent determined appropriate 
by the Commission.
``(2) Subsequent implementation determination.--In making 
the determination described in paragraph (1)(B) with respect to 
a reduction for a failure described in subsection (a), the 
Postal Regulatory Commission shall consider evidence of losses 
incurred by users of each product affected by such failure.
``(c) Covered Failure Defined.--In this section, the term `covered 
failure' means a failure to meet a target established under section 
3692--
``(1) that is not the result of a natural disaster or 
another disruptive event the cause of which was outside the 
control of the Postal Service;
``(2) that has persisted for not less than one year; and
``(3) with respect to which the Postal Service does not 
have a credible plan for achieving and maintaining performance 
sufficient to meet the targeted level within a reasonable 
time.''.
(b) Clerical Amendment.--The table of sections for chapter 36 of 
title 39, United States Code, is amended by inserting after the item 
relating to section 3692 the following:

``3693. Sanctions.''.

SEC. 4. IMPROVING CHANGE-IN-SERVICE PROCEDURES.

Section 3661 of title 39, United States Code, is amended--
(1) in subsection (b)--
(A) by striking ``When the'' and insert ``(1) When 
the'';
(B) by striking ``advisory opinion'' and inserting 
``a decision''; and
(C) by adding at the end the following new 
paragraph:
``(2)(A) In the absence of a decision with respect to a 
proposal under paragraph (1), if the Commission determines that 
a plan or initiative of the Postal Service clearly indicates 
the need for a change described in such paragraph but such plan 
or initiative does not explicitly make such a change a purpose 
or goal of such plan or initiative, the Commission shall order 
the Postal Service to explain why the Postal Service determined 
that the Postal Service did not need to submit a proposal to 
the Commission under such paragraph with respect to such plan 
or initiative.
``(B) An order under subparagraph (A) pursuant to a 
determination of the Commission described in such 
subparagraph shall include an explanation of the 
reasoning for such determination.
``(C)(i) If the Commission determines that the 
explanation of the Postal Service provided pursuant to 
subparagraph (A) is not sufficient to support the 
determination of the Postal Service that the Postal 
Service did not need to submit a proposal to the 
Commission under paragraph (1) with respect to a plan 
or initiative, the Postal Service shall justify the 
change in the nature of postal services implied by the 
plan or initiative and, to the extent necessary, 
justify the underlying plan or initiative in a hearing 
before the Commission.
``(ii) Each hearing under clause (i) shall 
be conducted in accordance with sections 556 
and 556 of title 5.
``(3) Each decision of the Postal Regulatory Commission 
under this subsection shall be transmitted to the Governors of 
the Postal Service. The Governors may accept the decision or, 
by unanimous written decision, reject the decision and adopt 
the original proposal of the Postal Service, in the case of a 
request by the Postal Service for a decision, or approve the 
plan or initiative found by the Commission to have required a 
decision under paragraph (2). The decision of the Governors 
shall be a final order for purposes of section 3663 of this 
title. If the Governors have not acted upon a Commission 
decision within 60 days of receiving it, the Commission 
decision will be deemed a final order for purposes of section 
3663 of this title.''; and
(2) in subsection (c)--
(A) by inserting ``designated pursuant to section 
505 of this title'' after ``officer of the 
Commission''; and
(B) by striking ``his judgment'' and inserting 
``the judgment of such Commissioner''.

SEC. 5. ONE RATE INCREASE ANNUALLY.

Section 3622(d)(1)(B) of title 39, United States Code, is amended 
by inserting after ``amounts'' the following: ``, except that rates may 
not change more frequently than once every 12 months''.

SEC. 6. LIMIT ON UNDERWATER SURCHARGES.

Section 3622(d)(2) of title 39, United States Code, is amended by 
adding at the end the following new subparagraph:
``(D) Use of rate authority for non-compensatory 
classes.--
``(i) Limitation.--Notwithstanding 
paragraph (1)(A), the Commission may authorize 
the Postal Service to increase the rates for a 
non-compensatory class in excess of annual 
limitation under paragraph (1)(A) if--
``(I) the change in the 
attributable cost (as such term is 
defined in section 3631) per piece of 
mail for such class does not exceed the 
annual limitation under paragraph 
(1)(A), as determined by the Commission 
using year-to-year comparable costing 
methodologies;
``(II) in the immediately preceding 
fiscal year, the Postal Service has--
``(aa) pursuant to section 
3652 and without the use of any 
proxy data not approved by the 
Commission, directly measured 
and reported the compliance of 
the Postal Service with the 
targets established under 
section 3692 for each product 
in such class for such fiscal 
year; and
``(bb) met each such target 
for such fiscal year; and
``(III) no target described in 
subclause (II) for the immediately 
preceding fiscal year was reduced from 
the preceding fiscal year.
``(ii) Non-compensatory class defined.--In 
this subparagraph, the term `non-compensatory 
class' means a class of mail for which the 
attributable costs (as defined in section 
3631(b)) of the Postal Service exceed revenues 
of the Postal Service attributable to such 
class of mail.''.

SEC. 7. CASE-SPECIFIC OBJECTIVES.

Section 3622 of title 39, United States Code, is amended--
(1) in subsection (b), in the matter preceding paragraph 
(1), by inserting ``, and all of which shall be applied to each 
class or type of mail service and product'' after ``others''; 
and
(2) in subsection (c), in the matter preceding paragraph 
(1), by inserting after ``such system,'' the following: ``or 
when evaluating whether a class or type of mail service or 
product complies with the applicable provisions of this chapter 
and the regulations issues under such provisions,''.

SEC. 8. RETAINED EARNINGS FROM COST SAVINGS.

Section 3622(b)(5) of title 39, United States Code, is amended by 
inserting after ``retained earnings'' the following: ``resulting from 
improvements in efficiency or reductions in cost only''.

SEC. 9. OFFICE OF THE CUSTOMER ADVOCATE.

(a) In General.--Section 505 of title 39, United States Code, is 
amended to read as follows:
``Sec. 505. Office of the Customer Advocate
``(a) In General.--The Postal Regulatory Commission shall establish 
in the Postal Regulatory Commission an Office of the Customer Advocate 
(in this section referred to as the `Office').
``(b) Representation.--
``(1) In general.--The Office shall represent the interests 
of the general public in all public proceedings of the 
Commission, including the interests of customers of market-
dominant products and classes.
``(2) Rights and limits.--
``(A) In general.--The Office--
``(i) shall have the same right as any 
interested person to lodge a complaint with or 
petition the Commission, or otherwise seek to 
have the Commission initiate a public 
proceeding, including rulemakings; and
``(ii) is subject to the same ex parte 
rules and limitations as any other litigant 
with respect to communication with the 
Commission, Commissioners, and the advisory 
staff of the Commission.
``(B) Represent conflicting interest.--
``(i) In general.--The Office may represent 
conflicting interests of the general public in 
a public proceeding of the Commission to the 
extent that the head of the Office determines 
necessary for the Office to effectively 
represent the interests of the general public 
in such proceeding.
``(ii) Separate representatives.--If the 
Office is representing conflicting interests of 
the general public in a public proceeding of 
the Commission, the head of the Office shall 
ensure that such conflicting interests are 
represented by different individuals to the 
extent and in such manner as the head of the 
Office determines necessary for the Office to 
effectively represent the interests of the 
general public in such proceeding.
``(3) Office autonomy.--The Commission may not terminate or 
otherwise take adverse employment action against any employee 
of or individual detailed to the Office based on the 
representation of the interests of the general public by such 
employee or detailee as an employee of or detailee to the 
Office, respectively, in a public proceeding of the Commission, 
except for cause.
``(c) Research Authority.--The Office may--
``(1) conduct research and policy development for the 
purposes of representing the interests of the general public, 
including research and policy development that is unrelated to 
a specific proceeding of the Commission; and
``(2) subject to the availability of funds, obtain the 
temporary or intermittent services of experts or consultants 
for such purposes.
``(d) Outside Consultation.--The Office shall consult with outside 
persons and organizations the postal interests of which are relevant to 
the mission of the Office, including those persons and organizations 
that are actual or potential litigants before the Commission.
``(e) Rate and Classification Inquiry.--The Office shall inquire 
into the rates and classifications of competitive products only to the 
extent necessary to evaluate compliance with sections 3622(b)(8) and 
3622(b)(9) of this title, subchapter II of chapter 36 of this title, 
and the regulations issued under such subchapter.
``(f) Office Staff.--The Commission shall ensure that, to the 
extent practicable, the Office has employees of a sufficient quantity 
and quality for the Office to effectively carry out the 
responsibilities of the Office under this section, including by 
maximizing the duration of the detail of individuals detailed to the 
Office.''.
(b) Clerical Amendment.--The table of sections for chapter 5 of 
title 39, United States Code, is amended by striking the item relating 
to section 505 and inserting the following:

``505. Office of the Customer Advocate.''.

SEC. 10. COMPLAINT PROCESS IMPROVEMENT.

Section 3662 of title 39, United States Code, is amended--
(1) in subsection (b)--
(A) in paragraph (1)--
(i) in the matter preceding subparagraph 
(A)--
(I) by striking ``The Postal'' and 
inserting ``With respect to a complaint 
received under subsection (a), the 
Postal''; and
(II) by striking ``, within 90 days 
after receiving a complaint under 
subsection (a)''; and
(ii) in subparagraph (A)--
(I) by striking clause (i) and 
inserting the following:
``(i) begin proceedings on such complaint--
``(I) immediately after the 
expiration of the period described in 
paragraph (3) if the Commission finds 
that such complaint raises material 
issues of fact or law and no motion 
described in clause (ii) with respect 
to such complaint is filed in such 
period;
``(II) immediately after the 
Commission denies all motions described 
in clause (ii) with respect to such 
complaint that were filed during the 
period described in paragraph (3) if 
the Commission finds that such 
complaint raises material issues of 
fact or law and all such motions are 
denied not later than 45 days after the 
date on which the Commission received 
such complaint under such subsection; 
or
``(III) not later than 45 days 
after the date on which the Commission 
receives such complaint under such 
subsection if subclause (I) and (II) do 
not apply with respect to such 
complaint; or''; and
(II) in clause (ii)--
(aa) by inserting before 
``issue'' the following: ``if 
the Commission finds that, 
after consideration of any 
motion asserting that such 
complaint raises no material 
issues of law or fact, that 
such complaint raises no such 
issue, upon making such 
finding''; and
(bb) by inserting ``within 
45 days after receiving such 
complaint under such 
subsection'' after ``dismissing 
the complaint''; and
(B) by adding at the end the following new 
paragraph:
``(3) Prompt motions.--A motion described in subparagraph 
(A)(ii) with respect to a complaint may only be filed during 
the 25-day period beginning on date on which such complaint is 
filed, or during such shorter period as the Postal Regulatory 
Commission may prescribed by regulation.''; and
(2) in subsection (c)--
(A) by striking ``or requiring'' and inserting 
``requiring''; and
(B) by inserting after ``competitive products'' the 
following: ``or, upon a finding that the Postal Service 
has unreasonably delayed the proceeding, ordering 
reimbursement consistent with section 3681''.

SEC. 11. REIMBURSEMENT OF UNLAWFUL RATES; PENALTY FOR UNREASONABLE 
DELAY.

Section 3681 of title 39, United States Code, is amended--
(1) by striking ``No mailer'' and inserting ``(a) No 
mailer'';
(2) by striking ``through 3664 of this title, or is 
superseded by a lower rate or fee established under subchapter 
II of this chapter''; and
(3) by adding at the end the following new subsection:
``(b)(1)(A) If the Postal Regulatory Commissions determines that a 
rate or fee for a product is unlawful in a review conducted pursuant to 
section 3653 of this title or in a complaint proceeding conducted 
pursuant to section 3662 of this title, the Commission shall order the 
price increase authority for such product and all other products in the 
class of mail containing such product to be reduced (but not below 
zero) for the next following price adjustment and each succeeding price 
adjustments until the amount of foregone revenue is equal to amount of 
revenue received by the Postal Service from the portion of such rate or 
fee that exceeded the lawful amount such rate or fee.
``(B) In this paragraph, the term `foregone revenue' means 
the difference between--
``(i) the revenue that the Postal Service would 
have received from the sale of the products subject to 
an order under subparagraph (A) during the period that 
the Postal Service is unable to increase the prices of 
such products pursuant to such order if--
``(I) the Commission had not issued such 
order; and
``(II) the rate or fee for the product with 
the unlawful rate or fee for which the 
Commission issued such order was the maximum 
lawful rate or fee for such product at the time 
the Commission issued such order; and
``(ii) the revenue the Postal Service receives from 
the sale of the products subject to such order during 
such period.
``(2)(A) In a complaint proceeding conducted pursuant to section 
3662 of this title, if the Postal Regulatory Commission finds that the 
Postal Service has unreasonably delayed the proceeding, the Commission 
may order a reduction in the price increase authority for the product 
or products whose rate or fee it has determined to be unlawful to the 
extent that the unreasonable delay caused by the Postal Service has 
extended the time during which users of such product or products have 
paid the unlawful rate or fee.
``(B) A reduction under subparagraph (A) shall be in 
addition to any reduction under paragraph (1).
``(C) The Commission shall include in an order under 
subparagraph (A) with respect to the unreasonably delay of a 
proceeding an explanation of the basis for the determination of 
the Commission regarding the time such proceeding would have 
required absent such unreasonable delay.''.

SEC. 12. MAIL VOLUME SYSTEM OBJECTIVE.

Section 3622(b) of title 39, United States Code, is amended--
(1) by redesignating paragraph (9) as paragraph (10); and
(2) by inserting after paragraph (8) the following new 
paragraph:
``(9) To maintain and, to the extent practicable, increase 
the volume of market-dominant mail, with due regard to total 
contribution to the institutional costs of the Postal 
Service.''.

SEC. 13. NEW PRODUCT DEFINITION CRITERIA.

Section 3642(b)(3) of title 39, United States Code, is amended--
(1) in subparagraph (B), by striking ``and'';
(2) in subparagraph (C), by striking the period at the end 
and inserting ``; and''; and
(3) by adding at the end the following new subparagraph:
``(D) the importance of paragraphs (7), (8), and 
(11) of section 3622(c) of this title in the 
appropriate definition of market-dominant products.''.

SEC. 14. MAIL VOLUME ESTIMATION MODEL.

(a) In General.--Not later than 120 days after the date of the 
enactment of this Act, the Postal Regulatory Commission shall develop a 
model for estimating the demand for postal services.
(b) Independent Development.--The Commission may not consider any 
models for estimating demand developed by the Postal Service when 
developing the model required under this section.
(c) Public Comment.--In developing the model required under this 
section, the Postal Regulatory Commission shall solicit and provide 
adequate opportunity for public comment regarding the model.
(d) Regulations.--The Postal Regulatory Commission may issue such 
regulations, after notice and comment in accordance with section 553 of 
title 5, United States Code, as the Commission determines necessary to 
develop the model required under this section.
(e) Expert Advisors.--The Commission may obtain the temporary or 
intermittent services of experts or consultants to facilitate the 
development of the model required under this section.

SEC. 15. INVESTMENT OF THE POSTAL SERVICE RETIREE HEALTH BENEFITS 
FUNDS.

Section 8909a(c) of title 5, United States Code, is amended--
(1) by striking ``(c) The Secretary'' and inserting 
``(c)(1) Subject to paragraph (2), the Secretary''; and
(2) by adding at the end the following:
``(2)(A) The Secretary of the Treasury shall immediately 
invest a specified percentage of the Fund, using one or more 
qualified professional asset managers, in index funds modeled 
after those established under subparagraphs (B), (C), (D), and 
(E) of section 8438(b)(1). The Secretary shall ensure, to the 
maximum extent practicable, that the investment replicates the 
performance of the longest-term target date asset allocation 
investment fund established by the Federal Retirement Thrift 
Investment Board.
``(B) In exercising authority under subparagraph 
(A), including in the selection of specific qualified 
professional asset managers and in the development of 
specific investment guidelines to meet the requirement 
of such subparagraph, the Secretary shall consult with 
the Postal Service Retiree Health Benefits Fund 
Investment Committee.
``(C)(i) There is established a Postal Service 
Retiree Health Benefits Fund Investment Committee that 
shall consist of--
``(I) the Secretary;
``(II) the Chair of the Board of 
Governors of the United States Postal 
Service;
``(III) the Chairman of the Federal 
Retirement Thrift Investment Board; and
``(IV) two members, appointed by 
the President, who--
``(aa) shall represent the 
interests of Postal Service 
employees and annuitants;
``(bb) have experience and 
expertise in the management of 
financial investments and 
Postal Service employee 
benefits; and
``(cc) shall serve for a 
term of 3 years.
``(ii) Subsections (b)(1) and (c)(2) of 
section 8477 shall apply with respect to the 
Postal Service Retiree Health Benefits Fund 
Investment Committee and each member of the 
Postal Service Retiree Health Benefits Fund 
Investment Committee in the same manner as such 
subsections apply to a fiduciary with respect 
to the Thrift Savings Fund.
``(D)(i) The Secretary shall annually engage an 
independent qualified public accountant (as defined in 
section 8439) to audit and provide a report on the 
financial statements of the investments made pursuant 
to subparagraph (A).
``(ii) Not later than 180 days after the 
end of each fiscal year beginning after the 
date of the enactment of this paragraph, the 
Secretary shall submit to Congress an annual 
management report regarding the Fund that 
includes--
``(I) a statement of financial 
position;
``(II) a statement of operations;
``(III) a statement of cash flows;
``(IV) a statement on internal 
accounting and administrative control 
systems;
``(V) the most recent report 
resulting from an audit of the 
financial statements of the investments 
conducted under clause (i); and
``(VI) any other comments and 
information the Secretary determines 
necessary to inform the Congress about 
the operations and financial condition 
of the investments.
``(E) In this paragraph--
``(i) the term `specified percentage' means 
25 percent of the currently available portions 
of the Fund as are not immediately required for 
payments from the Fund, except that the Postal 
Service Retiree Health Benefits Fund Investment 
Committee may specify a higher percentage, not 
to exceed 30 percent, not earlier than 5 years 
after the date of enactment of the Postal 
Service Financial Improvement Act of 2019, and 
as appropriate thereafter; and
``(ii) the term `qualified professional 
asset manager' has the meaning given that term 
in section 8438(a).''.
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