Highlights of the Postal Service Reform Act of 2017

On January 31st the House Oversight and Government Reform Committee leaders introduced H.R. 756, the Postal Service Reform Act of 2017. The bill addresses unfunded liabilities of the USPS®, makes reforms to keep mailing costs affordable for consumers, and encourages innovation, all without additional borrowing capacity from the U.S. taxpayer.

The legislation is outlined under four main sections;

• Title 1 – Postal Service Benefits Reform
• Title II – Postal Service Operations Reform
• Title III – Postal Service Personnel
• Title IV – Postal Contracting Reform

Title I Postal Service Benefits Reform focuses on three significant employee benefit programs; the Health Benefit Program, Retiree Heath Care Benefit Funding Reform and Pension Funding Reform. Of significance is that the Postal Service Retiree Health Care Benefit Funding Reform Act addresses the prefunding schedule established in the Postal Accountability and Enhancement Act of 2006.

Title II Postal Service Operations Reform allows the Postal Service to increase postal rates for market-dominant products by 2.15%, 1 cent, for a First-Class stamp. Of significant importance in the Nonprofit Mail Industry is that this Act eliminates state and national political committees’ eligibility for non-profit mail rates.

In addition Title II includes:

• Language around the Postal Rate Commission (PRC) Rate Review which requires the PRC to complete its full review of the market-dominant rate system by January 1, 2018. It also establishes priority factors for consideration in the PRC’s rate review, including the Postal Service’s financial stability, the effect of rate increases upon users of the mail, the reliability of delivery timelines and service standards, the available alternative means of communicating and sharing information, and the requirement that all costs incurred are appropriately covered by the revenue from the product for which they were incurred.
• A section on Conversion to Secure, Centralized Delivery which requires the incremental conversion to centralized delivery of business addresses identified by the Postal Service including the voluntary conversion to centralized or cluster box delivery of residential addresses identified by the Postal Service where 40% of the residents consent to conversion. It maintains door delivery of mail for residents who do not consent to voluntary conversion; however, any future or new residents of an area that has been converted will receive the converted delivery type.
• Regulations on Nonpostal Services by authorizing the Postal Service to provide nonpostal services to state, local, and tribal governments and other federal agencies. Requires public notice and comment and approval by Board of Governors before the Postal Service offers such service. The PRC must then make a compliance determination and noncompliance constitutes failure of the price charged for the service to fully cover the Postal Service’s costs.
• Rules around Closing Post Offices which requires the Postal Service to consider additional factors when evaluating whether or not to close a post office: distance to next post office, characteristics of the location, including weather and terrain, and the availability of broadband. Shortens the deadline for the PRC to review the Postal Service’ s decision to close or consolidate a post office from 120 to 60 days. Allows communities the opportunity to provide input on their preference as to the closing or consolidation or alternative options for access to postal services. Permits appeals regarding the closing or consolidation of post office stations and branches.
• A Review of Postal Service Cost Allocation Guidelines with requires the PRC to conduct a one-time review of the Postal Service’s cost allocation methodologies.

Title III Postal Service Personnel requires the Postal Service to establish and appoint a Chief Innovation Officer to manage the Postal Service’s development and implementation of innovative postal and nonpostal products and services. It also consolidates the Postal Service and the PRC Offices of Inspector General into a newly established Inspector General for the Postal Community as well as provides non-bargaining, non-supervisory employees access to the Merit Systems protection Board under a section titled MSPB Appeals Rights.

Title IV Postal Contracting Reform requires the Postal Service and PRC to issue a policy on the delegation of contracting authority, post noncompetitive contract awards meeting certain dollar value thresholds, and improve oversight and response to potential conflicts of interest regarding contracting.

House Oversight and Government Reform Committee leaders released the following statement upon introduction:

“This bipartisan measure will make the policy changes that are most urgently needed to put the Postal Service on sound and sustainable long-term financial footing. This collaborative reform effort places the Postal Service on a path toward a viable future.”

You can learn more by following the links below and feel free to contact a member of our Client Relationship or Business Development teams if you have questions.

Click here for Full Text Of Postal Service Reform Act of 2017

Click here for Summary of Postal Service Reform Act of 2017

Click here for Notables Changes To Proposed Act of 2016