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                                                       Calendar No. 561
115th Congress     }                             {  
                                 SENATE
                                                                 Report
 2d Session        }                             {              115-329
_______________________________________________________________________

                                     

                                                       

         POST OFFICE DISCONTINUANCE ACCOUNTABILITY ACT OF 2017

                               __________

                              R E P O R T

                                 of the

                   COMMITTEE ON HOMELAND SECURITY AND

                          GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                              to accompany

                                S. 1204

            TO AUTHORIZE THE UNITED STATES POSTAL SERVICE TO
           CARRY OUT EMERGENCY SUSPENSIONS OF POST OFFICES IN
       ACCORDANCE WITH CERTAIN PROCEDURES, AND FOR OTHER PURPOSES






[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]









               September 4, 2018.--Ordered to be printed
                                   ______

                    U.S. GOVERNMENT PUBLISHING OFFICE 

79-010                       WASHINGTON : 2018
               
               
               
               
               
        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                    RON JOHNSON, Wisconsin, Chairman
JOHN McCAIN, Arizona                 CLAIRE McCASKILL, Missouri
ROB PORTMAN, Ohio                    THOMAS R. CARPER, Delaware
RAND PAUL, Kentucky                  HEIDI HEITKAMP, North Dakota
JAMES LANKFORD, Oklahoma             GARY C. PETERS, Michigan
MICHAEL B. ENZI, Wyoming             MAGGIE HASSAN, New Hampshire
JOHN HOEVEN, North Dakota            KAMALA D. HARRIS, California
STEVE DAINES, Montana                DOUG JONES, Alabama

                  Christopher R. Hixon, Staff Director
                Gabrielle D'Adamo Singer, Chief Counsel
              Jennifer L. Selde, Professional Staff Member
               Margaret E. Daum, Minority Staff Director
       Charles A. Moskowitz, Minority Senior Legislative Counsel
                     Laura W. Kilbride, Chief Clerk








                                                       Calendar No. 561
115th Congress     }                             {  
                                 SENATE
                                                                 Report
 2d Session        }                             {              115-329

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



 
               POST OFFICE DISCONTINUANCE ACCOUNTABILITY 
                              ACT OF 2017

                                _______
                                

               September 4, 2018.--Ordered to be printed

                                _______
                                

 Mr. Johnson, from the Committee on Homeland Security and Governmental 
                    Affairs, submitted the following

                              R E P O R T

                         [To accompany S. 1204]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Homeland Security and Governmental 
Affairs, to which was referred the bill (S. 1204) to authorize 
the United States Postal Service to carry out emergency 
suspensions of post offices in accordance with certain 
procedures, and for other purposes, having considered the same, 
reports favorably thereon with an amendment in the nature of a 
substitute and recommends that the bill, as amended, do pass.

                                CONTENTS

                                                                   Page
  I. Purpose and Summary..............................................1
 II. Background and Need for the Legislation..........................2
III. Legislative History..............................................4
 IV. Section-by-Section Analysis......................................5
  V. Evaluation of Regulatory Impact..................................5
 VI. Congressional Budget Office Cost Estimate........................6
VII. Changes in Existing Law Made by the bill, as Reported............6

                         I. Purpose and Summary

    The purpose of S. 1204, the Post Office Discontinuance 
Accountability Act of 2018, is to establish procedures that the 
United States Postal Service (Postal Service) must follow when 
suspending operations at post offices in cases of emergencies.

              II. Background and the Need for Legislation

    The Postal Service is an independent government agency, 
established to provide postal services to the United States 
which are paid for by customers through postage rate income.\1\ 
In addition to receiving, transmitting, and delivering mail 
throughout the United States, the Postal Service is responsible 
for establishing and maintaining ``postal facilities of such 
character and in such locations, that postal patrons throughout 
the Nation will, consistent with reasonable economies of postal 
operations, have ready access to essential postal 
services.''\2\ To fulfill this responsibility, Congress 
provided the Postal Service authority to determine the need for 
post offices and postal facilities.\3\
---------------------------------------------------------------------------
    \1\39 U.S.C. Sec. Sec.  101(d), 201 (2008).
    \2\39 U.S.C. Sec.  403(b)(3) (1979).
    \3\39 U.S.C. Sec.  404 (a)(3) (2006).
---------------------------------------------------------------------------
    There are limits to this authority. Before the Postal 
Service may close or consolidate a post office, it must follow 
specific procedures outlined in section 404(d) of title 39, 
United States Code. First, the Postal Service must consider a 
number of factors regarding the closure or consolidation 
including: the impact of the action on the community served by 
the post office and the employees of the post office; the 
ability of the Postal Service to continue to provide effective 
and regular postal services to rural areas after the proposed 
action; and the anticipated economic savings for the Postal 
Service from the proposed action.\4\
---------------------------------------------------------------------------
    \4\Id.
---------------------------------------------------------------------------
    After this step, the Postal Service must provide written 
notice of its intention to close a post office to those served 
by the post office at least 60 days in advance of the action 
including the findings of the above considerations.\5\ Any 
individual served by the post office may then appeal the 
closure or consolidation within 30 days to the Postal 
Regulatory Commission (Commission) for review.\6\ The 
Commission may then review the decision of the Postal Service 
and either affirm the decision or return it to the Postal 
Service for further consideration.\7\ The Commission has 
further clarified these procedures, including how and when 
affected individuals may participate in the appeal and how the 
Postal Service may respond.\8\ The Postal Service also has 
guidelines about how management may discontinue operations at a 
post office, which are described in the Postal Service-Operated 
Retail Facilities Discontinuance Guide (Handbook PO-101).\9\
---------------------------------------------------------------------------
    \5\Id.
    \6\Id.
    \7\Id.
    \8\See generally 39 C.F.R. Sec.  3025 (2012).
    \9\U.S. Postal Service, Handbook PO-101, Postal Service-Operated 
Retail Facilities Discontinuance Guide (2012) (on file with Committee 
staff).
---------------------------------------------------------------------------
    There is no statutory restriction on the Postal Service 
temporarily suspending operations at a post office. District 
managers can suspend operations at a post office under certain 
circumstances, including: natural disasters; termination of a 
lease or rental agreement when no suitable alternative quarters 
exists in the community; severe damage to or destruction of the 
office; or lack of qualified personnel to operate the office. 
Suspension procedures are also laid out in Handbook PO-101 and 
include instructions on how to notify Postal Service management 
and affected customers, reassign employees, and provide 
alternative service.
    Although suspensions are supposed to be used by the Postal 
Service only in emergency situations, the Commission has raised 
concerns that the Postal Service may suspend or not restore 
services at some post offices to avoid the closure process.\10\ 
Since 2009, the Commission has reported on the number of post 
office suspensions in its Annual Compliance Determination (ACD) 
Report, which focuses on Postal Service compliance with pricing 
and service performance standards.\11\ In the fiscal year (FY) 
2013 ACD, the Commission recommended that the Postal Service 
``proceed expeditiously in either discontinuing offices under 
suspension or reopening them,''\12\recommendation 
which has been reiterated in each subsequent ACD.\13\
---------------------------------------------------------------------------
    \10\U.S. Postal Regulatory Comm'n, Order No. 335, 3 (Nov. 2009) 
available at https://www.prc.gov/docs/65/65562/Order_No_335.pdf.
    \11\See generally U.S. Postal Regulatory Comm'n, Ann. Compliance 
Determination Rep. (2009-2017) available at https://www.prc.gov/prc-
reports?keys=&field;_report_type_
value=Annual%20Compliance%20Reports.
    \12\U.S. Postal Regulatory Comm'n, Ann. Compliance Determination 
Rep., 121 (2013) available at https://www.prc.gov/docs/89/89500/
2013%20ACD%20Final%20(2).pdf.
    \13\U.S. Postal Regulatory Comm'n, supra note 7.
---------------------------------------------------------------------------
    Despite this recommendation, post office suspensions 
reached their peak at the beginning of FY 2017, with 662 retail 
facilities suspended.\14\ As a result, the Commission directed 
the Postal Service to provide quarterly reports on the number 
of retail suspensions and establish a proposed timeline for 
resolving all suspensions. By the end of FY 2017, the Postal 
Service had resolved 304 post office suspensions, and has plans 
to resolve all remaining 378 suspensions by the end of the 
third quarter of FY 2019. As of the end of the second quarter 
of FY 2018, 276 post offices remain suspended.
---------------------------------------------------------------------------
    \14\U.S. Postal Regulatory Comm'n, Ann. Compliance Determination 
Rep., 163 (2017) available at https://www.prc.gov/sites/default/files/
reports/2017_ACD.pdf.
---------------------------------------------------------------------------
    While the Postal Service has made considerable progress 
towards resolving post office suspensions, over ninety percent 
of the remaining post offices suspensions are over two years 
old and over forty percent are over five years old.\15\ The 
longest suspension dates back to April 1984. The Commission has 
recommended in its report on the effectiveness and efficiency 
of postal laws that Congress consider a maximum time a post 
office may remain in suspension status.\16\
---------------------------------------------------------------------------
    \15\See Postal Regulatory Comm'n, Ann. Compliance Review (2018) 
available at https://www.prc.gov/dockets/document/104816.
    \16\U.S. Postal Regulatory Comm'n, Section 701 Rep., Analysis of 
the Postal Accountability and Enhancement Act of 2006, 21 (2016) 
available at https://www.prc.gov/sites/default/files/reports/
Section%20701%20rpt.pdf.
---------------------------------------------------------------------------
    To address the recommendation of the Commission, as well as 
to ensure that the Postal Service cannot use suspensions as de 
facto closures, S. 1204 establishes a process which holds the 
Postal Service accountable to communities affected by post 
office suspensions, while also allowing the Postal Service to 
retain flexibility in emergency situations. The bill codifies 
the existing internal Postal Service procedures for 
suspensions, which were strengthened in 2012 to state that, 
when possible, if the circumstances of a closure are known in 
advance (such as in the case of an expired lease), a 
discontinuance study should be initiated in advance to allow 
for public input before services are suspended.\17\ This bill 
strengthens this intent by explicitly stating that the Postal 
Service should notify customers if a suspension is possible due 
to an expiration of a lease or rental agreement for the post 
office, if a new lease or rental agreement is not expected.
---------------------------------------------------------------------------
    \17\Id.
---------------------------------------------------------------------------
    While S. 1204 is not intended to limit the ability of the 
Postal Service to react to emergency situations, the bill seeks 
to prevent indefinite suspensions by requiring that after one 
year of suspension, a post office may be considered eligible 
for the closure appeal process described in section 404(d) of 
title 39, United States Code. However, the Postal Service may 
continue the suspension if it can demonstrate a need to 
continue the suspension and if the Postal Service is complying 
with the internal procedures which have been codified by this 
bill. The section also will not apply to the post offices for 
which the Commission and the Postal Service already have an 
established process for resolving the suspension, as outlined 
in the FY 2017 ACD.\18\
---------------------------------------------------------------------------
    \18\U.S. Postal Regulatory Comm'n, Ann. Compliance Determination 
Rep., 165 (2018) available at https://www.prc.gov/sites/default/files/
reports/2017_ACD.pdf.
---------------------------------------------------------------------------
    To improve the accountability to the affected community, 
particularly in the case of suspensions lasting longer than one 
year, S. 1204 requires the Postal Service to conduct a 
community meeting to present a plan of action to explain the 
suspension and present a plan of action to restore service. 
According to the existing guidelines which are codified by this 
bill, if a continued suspension is necessary the Postal Service 
should have already given notice to customers about the 
suspension and established an internal plan of action to 
restore service.\19\ This new requirement for the meeting 
aligns with Commission recommendations that Congress limit the 
length of suspension, by ensuring that in those extreme cases 
where suspensions longer than a year may be warranted, the 
affected community is well-informed of the Postal Service 
plans.
---------------------------------------------------------------------------
    \19\ U.S. Postal Service, supra note 5, at Sec. Sec.  613.3, 618.
---------------------------------------------------------------------------
    Finally, S. 1204 gives the Postal Service flexibility to 
change its internal procedures for post offices suspensions, 
provided it consults with the Commission before making changes. 
The current procedures are designed to inform affected 
customers and employees, while restoring service or permanently 
closing the post office as quickly as possible. While the 
Postal Service may need to alter the guidelines or regulations 
for suspensions to improve operations, the Commission should be 
involved in any change so as to protect those affected by 
suspensions. It is the intention of the Committee that the 
Postal Service should make available to the public a written 
copy of the suspension procedures.

                        III. Legislative History

    Senator Claire McCaskill (D-MO) introduced S. 1204, the 
Post Office Discontinuance Accountability Act of 2017, on May 
23, 2017, with Senator Jerry Moran (R-KS). The bill was 
referred to the Committee on Homeland Security and Governmental 
Affairs.
    The Committee considered S. 1204 at a business meeting on 
June 13, 2018. During the business meeting, a modified 
substitute amendment was offered by Chairman Ron Johnson and 
Ranking Member McCaskill and accepted by unanimous consent. The 
amendment codifies the existing Postal Service procedures for 
post office suspensions, while adding the requirement that the 
Postal Service provide updates to communities affected by 
suspensions after one year. The amendment also allows the 
Postal Service to change their suspension procedures with input 
from the Commission.
    The bill, as amended, was ordered reported favorably by 
voice vote en bloc. Senators present for the vote were Johnson, 
Portman, Lankford, Enzi, McCaskill, Carper, Peters, Hassan, 
Harris, and Jones.

        IV. Section-by-Section Analysis of the Bill, as Reported


Section 1. Short title

    This section designates the short title of the bill as the 
``Post Office Discontinuance Accountability Act of 2018.''

Sec. 2. Emergency suspensions of post offices

    Section 2 adds a new subparagraph following section 404(d) 
of title 39, United States Code, to codify Postal Services 
procedures for emergency suspensions of post offices.
    New subparagraph (7)(A) requires the Postal Service to 
follow established procedures to temporarily suspend operations 
at post offices. Specifically, the Postal Service must follow 
existing procedures as described in Postal Service Handbook PO-
101.
    New subparagraph (7)(B) requires the Postal Service to 
notify affected customers of a post office with an expired 
lease or rental agreement if it does not reasonably expect to 
reach a new lease or rental agreement for the post office.
    New subparagraph (7)(C) states that after a post office has 
been suspended for more than one year, postal customers may 
appeal to the Commission and force the Postal Service through 
the closure procedures for the post office. The Postal Service 
is exempt from this requirement if there is a demonstrated need 
for suspension and the Postal Service is following the 
procedures in Handbook PO-101, or if the Commission has already 
established procedures for resolving the suspension.
    New subparagraph (7)(D) states that if the Postal Service 
demonstrates the need to continue the suspension, it must 
conduct a community meeting to explain the suspension, gather 
customer opinions, and present a plan of action to return 
service. The Postal Service must also periodically update the 
community if service is not restored according to the plan 
presented in the meeting.
    New subparagraph (7)(E) requires the Postal Service to 
consult with the Postal Regulatory Commission if it makes any 
changes to the suspension procedures in Postal Service Handbook 
PO-101.
    Finally, new subparagraph (7)(F) clarifies that any 
reference in the bill to the Postal Service Handbook PO-101 is 
referring to the document titled ``Postal Service-Operated 
Retail Facilities Discontinuance Guide'' published in October 
2012 or any appropriate successor to that document.

                   V. Evaluation of Regulatory Impact

    Pursuant to the requirements of paragraph 11(b) of rule 
XXVI of the Standing Rules of the Senate, the Committee has 
considered the regulatory impact of this bill and determined 
that the bill will have no regulatory impact within the meaning 
of the rules. The Committee agrees with the Congressional 
Budget Office's statement that the bill contains no 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandates Reform Act (UMRA) and would impose no costs 
on state, local, or tribal governments.

             VI. Congressional Budget Office Cost Estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, July 9, 2018.
Hon. Ron Johnson, Chairman,
Committee on Homeland Security and Governmental Affairs,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 1204, the Post 
Office Discontinuance Accountability Act of 2018.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Mark 
Grabowicz.
            Sincerely,
                                                Keith Hall,
                                                          Director.
    Enclosure.

S. 1204--Post Office Discontinuance Accountability Act of 2018

    S. 1204 would set conditions and procedures for the 
temporary closing of post offices, including required 
notifications to the public by the Postal Service. The agency 
is currently following procedures that are very similar to 
those that would be required by the bill; thus, CBO estimates 
that implementing S. 1204 would have no effect on spending by 
the Postal Service.
    Enacting S. 1204 would not affect direct spending or 
revenues; therefore, pay-as-you-go procedures do not apply.
    CBO estimates that enacting S. 1204 would not increase net 
direct spending or on-budget deficits in any of the four 
consecutive 10-year periods beginning in 2029.
    S. 1204 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act.
    The CBO staff contact for this estimate is Mark Grabowicz. 
The estimate was reviewed by H. Samuel Papenfuss, Deputy 
Assistant Director for Budget Analysis.

       VII. Changes in Existing Law Made by the Bill, as Reported

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the bill, as reported, are shown as follows: (existing law 
proposed to be omitted is enclosed in brackets, new matter is 
printed in italic, and existing law in which no change is 
proposed is shown in roman):

UNITED STATES CODE

           *       *       *       *       *       *       *


TITLE 39--POSTAL SERVICE

           *       *       *       *       *       *       *


PART 1--GENERAL

           *       *       *       *       *       *       *


CHAPTER 4--GENERAL AUTHORITY

           *       *       *       *       *       *       *



SEC. 404. SPECIFIC POWERS.

    (a) * * *
    (b) * * *
    (c) * * *
    (d) * * *
          (1) * * *

           *       *       *       *       *       *       *

          (7)(A) The Postal Service may temporarily suspend 
        operations at a post office if the Postal Service 
        follows the procedures set forth in subchapter 61 of 
        Postal Service Handbook PO-101.
          (B) If the lease or rental agreement for a post 
        office expires, and the Postal Service does not 
        reasonably expect to reach a new lease or rental 
        agreement, the Postal Service shall notify the affected 
        customers of the possible suspension of the post office 
        in accordance with section 613.3 of Postal Service 
        Handbook PO-101.
          (C) If a post office has been suspended for not less 
        than 1 year, any person served by the post office may 
        file and appeal with Postal Regulatory Commission. On 
        review, the Commission may consider the suspension to 
        be an action that is subject to the procedures required 
        under paragraphs (1) through (6) unless--
                  (i) the Postal Service demonstrates that--
                          (I) the need for a suspension under 
                        sub-chapter 61 of Postal Service 
                        Handbook PO-101 continues to exist; and
                          (II) the Postal Service is complying 
                        with the applicable procedures under 
                        subchapter 61 of Postal Service 
                        Handbook PO-101; or
                  (ii) the Commission has already established a 
                process for resolving the suspension of the 
                post office.
          (D) If the Postal Service demonstrates the need for a 
        continued suspension under subparagraph (C)(i), the 
        Postal Service shall--
                  (i) conduct a community meeting to--
                          (I) explain the circumstances of the 
                        suspension and obtain customer opinion 
                        about alternate service in a manner 
                        similar to the community meeting 
                        described in part 714 of Postal Service 
                        Handbook PO-101; and
                          (II) present the plan of action to 
                        restore service required under part 618 
                        of Postal Service Handbook PO-101; and
                  (ii) periodically update the affected 
                community if service is not restored in 
                accordance with the plan described in clause 
                (i)(II) of this subparagraph.
          (E) The Postal Service shall consult with the Postal 
        Regulatory Commission in making any changes to 
        suspension procedures in Postal Service Handbook PO-
        101.
          (F) In this paragraph--
                  (i) the term ``Postal Service Handbook PO-
                101'' means the document titled ``Postal 
                Service-Operated Retail Facilities 
                Discontinuance Guide'' (Handbook PO-101), 
                published by the Postal Service in October 
                2012, or any appropriate successor to that 
                document; and
                  (ii) a reference to a provision of Postal 
                Service Handbook PO-101 shall be deemed to 
                include any appropriate successor to that 
                provision.

                                  [all]