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§ 5402. —  Contracts for transportation of mail by air.



[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
  January 24, 2002 and December 19, 2002]
[CITE: 39USC5402]

 
                        TITLE 39--POSTAL SERVICE
 
                     PART V--TRANSPORTATION OF MAIL
 
                CHAPTER 54--TRANSPORTATION OF MAIL BY AIR
 
Sec. 5402. Contracts for transportation of mail by air

    (a) In this section--
        (1) the term ``acceptance point'' means the point at which 
    nonpriority bypass mail originates;
        (2) the terms ``air carrier'', ``interstate air 
    transportation'', and ``foreign air transportation'' have the 
    meanings given such terms in section 40102(a) of title 49, United 
    States Code;
        (3) the term ``base fare'' means the fare paid to the carrier 
    issuing the passenger ticket or carrying nonmail freight which may 
    entail service being provided by more than 1 carrier;
        (4) the term ``bush carrier'' means a carrier operating aircraft 
    certificated within the payload capacity requirements of subsection 
    (g)(1)(D)(i) on a city pair route;
        (5) the term ``bush passenger carrier'' means a passenger 
    carrier that meets the requirements of subsection (g)(1)(D)(i) and 
    provides passenger service on a city pair route;
        (6) the term ``bush route'' means an air route in which only a 
    bush carrier is tendered nonpriority bypass mail between the 
    origination point, being either an acceptance point or a hub, as 
    determined by the Postal Service, and the destination city;
        (7) the term ``city pair'' means service between an origin and 
    destination city pair;
        (8) the term ``composite rate''--
            (A) means a combination of mainline and bush rates paid to a 
        bush carrier for a direct flight from an acceptance point to a 
        bush destination beyond a hub point; and
            (B) shall be based on the mainline rate paid to the hub, 
        plus the lowest bush rate paid to bush carriers in the State of 
        Alaska for the distance traveled from the hub point to the 
        destination point;

        (9) the term ``equitable tender'' means the practice of the 
    Postal Service of equitably distributing mail on a fair and 
    reasonable basis between those air carriers that offer equivalent 
    services and costs between 2 communities in accordance with the 
    regulations of the Postal Service;
        (10) the term ``existing mainline carrier'' means a mainline 
    carrier (as defined in this subsection) that on January 1, 2001, 
    was--
            (A) certified under part 121;
            (B) qualified to provide mainline nonpriority bypass mail 
        service; and
            (C) actually engaged in the carriage of mainline nonpriority 
        bypass mail through scheduled service in the State of Alaska;

        (11) the term ``mainline carrier'' means a carrier operating 
    aircraft under part 121 and certificated within the payload capacity 
    requirements of subsection (g)(1)(D)(ii) on a given city pair route;
        (12) the term ``mainline route'' means a city pair in which a 
    mainline carrier is tendered nonpriority bypass mail;
        (13) the term ``new'', when referencing a carrier, means a 
    carrier that--
            (A) meets the respective requirements of clause (i) or (ii) 
        of subsection (g)(1)(D), depending on the type of route being 
        served and the size of aircraft being used to provide service; 
        and
            (B) began providing nonpriority bypass mail service on a 
        city pair route in the State of Alaska after January 1, 2001;

        (14) the term ``part 121'' means part 121 of title 14, Code of 
    Federal Regulations;
        (15) the term ``part 135'' means part 135 of title 14, Code of 
    Federal Regulations;
        (16) the term ``scheduled service'' means--
            (A) flights are operated in common carriage available to the 
        general public under a published schedule;
            (B) flight schedules are announced in advance in systems 
        specified by the Postal Service, in addition to the Official 
        Airline Guide or the air cargo equivalent of that Guide;
            (C) flights depart whether full or not; and
            (D) customers contract for carriage separately on a regular 
        basis;

        (17) the term ``Secretary'' means the Secretary of 
    Transportation;
        (18) the term ``121 bush passenger carrier'' means a bush 
    passenger carrier providing passenger service on bush routes under 
    part 121;
        (19) the term ``121 mainline passenger carrier'' means a 
    mainline carrier providing passenger service through scheduled 
    service on routes under part 121;
        (20) the term ``121 passenger aircraft'' means an aircraft 
    flying passengers on a city pair route that is operated under part 
    121;
        (21) the term ``121 passenger carrier'' means a passenger 
    carrier that provides scheduled service under part 121;
        (22) the term ``135 bush passenger carrier'' means a bush 
    passenger carrier providing passenger service through scheduled 
    service on bush routes under part 135; and
        (23) the term ``135 passenger carrier'' means a passenger 
    carrier that provides scheduled service under part 135.

    (b) The Postal Service may contract with any certificated air 
carrier, without advertising for bids, in such manner and under such 
terms and conditions as it deems appropriate, for the transportation of 
mail by aircraft between any of the points in foreign air transportation 
between which the carrier is authorized by the Secretary to engage in 
the transportation of mail. Such contracts shall be for the 
transportation of at least 750 pounds of mail per flight, and no more 
than 5 percent, based on weight, of the international mail transported 
under any such contract shall consist of letter mail. Any such contract 
shall be filed with the Secretary not later than 90 days before its 
effective date. Unless the Secretary shall determine otherwise (under 
criteria prescribed by section 40101(a) of title 49) not later than 10 
days prior to the effective date of the contract, such contract shall 
become effective.
    (c) When the Postal Service deems that the transportation of mail by 
aircraft is required between points in foreign air transportation 
between which the Secretary has not authorized an air carrier or 
combination of air carriers to engage in the transportation of mail, it 
may contract with any air carrier in such manner and under such terms 
and conditions as it may deem appropriate for the transportation of any 
class or classes of mail. The transportation of mail under contracts 
entered into under this subsection is not, except for sections 40109(a) 
and (c)-(h) and 42112 of title 49, air transportation within the 
provisions of part A of subtitle VII of title 49. The Postal Service 
shall cancel such contract, in whole or in respect to certain points as 
the certificate shall require, upon the issuance by the Secretary of an 
authorization under chapters 411 and 413 of title 49 to any air carrier 
to engage in the transportation of mail by aircraft between any of the 
points named in the contract, and the inauguration of scheduled service 
by such carrier.
    (d) If the Postal Service determines that service by certificated 
air carriers or combination of air carriers between any pair or pairs of 
points in foreign air transportation is not adequate for its purposes, 
it may contract for a period of not more than 4 years, without 
advertising for bids, in such manner and under such terms and conditions 
as it may deem appropriate, with any air taxi operator or combination 
thereof for such air transportation service. Contracts made under this 
subsection may be renewed at the existing rate by mutual agreement 
between the holder and the Postal Service. The Postal Service, with the 
consent of the air taxi operator, may adjust the compensation under such 
contracts for increased or decreased costs occasioned by changed 
conditions occurring during the contract term. The Postal Service shall 
cancel such a contract when the Secretary authorizes an additional 
certificated carrier or carriers to provide service between any pair or 
pairs of points covered by the contract, and such carrier or carriers 
inaugurate schedules adequate for its purposes.
    (e)(1) The Postal Service may determine rates and contract with any 
air carrier for the transportation of mail by aircraft in interstate air 
transportation either through negotiations or competitive bidding.
    (2)(A) In the exercise of its authority under paragraph (1), the 
Postal Service may require any air carrier to accept as mail shipments 
of day-old poultry, honeybees, and such other live animals as postal 
regulations allow to be transmitted as mail matter. The authority of the 
Postal Service under this subparagraph shall not apply in the case of 
any air carrier who commonly and regularly refuses to accept any live 
animals as cargo.
    (B) Notwithstanding any other provision of law, the Postal Service 
is authorized to assess, as postage to be paid by the mailers of any 
shipments covered by subparagraph (A), a reasonable surcharge that the 
Postal Service determines in its discretion to be adequate to compensate 
air carriers for any necessary additional expense incurred in handling 
such shipments.
    (f) The authority of the Secretary and the Postal Service under 
subsections (b), (c), and (d) of this section shall also apply, and the 
authority of the Postal Service under subsection (e) shall not apply, to 
the transportation of mail by aircraft between any two points both of 
which are within the State of Alaska and between which the air carrier 
is authorized by the Secretary to engage in the transportation of mail.
    (g)(1) The Postal Service, in selecting carriers of non-priority 
bypass mail to any point served by more than one carrier in the State of 
Alaska, shall adhere to an equitable tender policy within a qualified 
group of carriers, in accordance with the regulations of the Postal 
Service, and shall, at a minimum, require that any such carrier shall--
        (A) hold a certificate of public convenience and necessity 
    issued under section 41102(a) of title 49;
        (B) operate at least 3 scheduled flights each week to such 
    point;
        (C) exhibit an adherence to such scheduled flights; and
        (D) have provided scheduled service with at least 3 scheduled 
    (noncontract) flights per week between two points within the State 
    of Alaska for at least 12 consecutive months with aircraft--
            (i) up to 7,500 pounds payload capacity before being 
        selected as a carrier of nonpriority bypass mail at an 
        applicable intra-Alaska bush service mail rate; and
            (ii) over 7,500 pounds payload capacity before being 
        selected as a carrier of nonpriority bypass mail at the intra-
        Alaska mainline service mail rate.

    (2) The Postal Service--
        (A) may provide direct mainline non-priority bypass mail service 
    to any bush point in the State of Alaska, without regard to 
    paragraph (1)(B), if such service is equal to or better than 
    interline service in cost and quality;
        (B) shall deduct the non-priority bypass mail poundage flown on 
    direct mainline flights to bush points within the State of Alaska by 
    any carrier, from such carrier's allocation of the total poundage of 
    non-priority bypass mail transported to the nearest appropriate 
    Postal Service hub point in any month;
        (C) shall offer a bush passenger carrier providing service on a 
    route in the State of Alaska between an acceptance point and a hub 
    not served by a mainline carrier the opportunity to receive 
    equitable tender of nonpriority bypass mail at mainline service 
    rates when a mainline carrier begins serving that route if the bush 
    passenger carrier--
            (i) meets the requirements of paragraph (1);
            (ii) provided at least 20 percent of the passenger service 
        (as calculated in subsection (h)(5)) between such city pair for 
        the 6 months immediately preceding the date on which the bush 
        carrier seeks such tender; and
            (iii) continues to provide not less than 20 percent of the 
        passenger service on the city pair while seeking such tender;

        (D) shall offer bush passenger carriers and nonmail freight 
    carriers the opportunity to receive equitable tender of nonpriority 
    bypass mail at mainline service rates from a hub point to a 
    destination city in the State of Alaska if the city pair is also 
    being served by a mainline carrier and--
            (i) for a passenger carrier--
                (I) the carrier meets the requirements of paragraph (1);
                (II) the carrier provided at least 20 percent of the 
            passenger service (as calculated in subsection (h)(5)) on 
            the city pair route for the 6 months immediately preceding 
            the date on which the carrier seeks such tender; and
                (III) the carrier continues to provide not less than 20 
            percent of the passenger service on the route; or

            (ii) for a nonmail freight carrier--
                (I) the carrier meets the requirements of paragraph (1); 
            and
                (II) the carrier provided at least 25 percent of the 
            nonmail freight service (as calculated in subsection (i)(6)) 
            on the city pair route for the 6 months immediately 
            preceding the date on which the carrier seeks such tender;

        (E)(i) shall not offer equitable tender of nonpriority mainline 
    bypass mail at mainline rates to a bush carrier operating from an 
    acceptance point to a hub point in the State of Alaska, except as 
    described in subparagraph (C); and
        (ii) may tender nonpriority bypass mail at bush rates to a bush 
    carrier from an acceptance point to a hub point in the State of 
    Alaska if the Postal Service determines that--
            (I) the bush carrier meets the requirements of paragraph 
        (1);
            (II) the service to be provided on such route by the bush 
        carrier is not otherwise available through direct mainline 
        service; and
            (III) tender of mail to such bush carrier will not decrease 
        the efficiency of nonpriority bypass mail service (in terms of 
        payments to all carriers providing service on the city pair 
        route and timely delivery) for the route;

        (F) may offer tender of nonpriority bypass mail to a passenger 
    carrier from an acceptance point to a destination city beyond a hub 
    point in the State of Alaska at a composite rate if the Postal 
    Service determines that--
            (i) the carrier provides passenger service in accordance 
        with the requirements of subsection (h)(2);
            (ii) the carrier qualifies under subsection (h) to be 
        tendered nonpriority bypass mail out of the hub point being 
        bypassed;
            (iii) the tender of such mail will not decrease efficiency 
        of delivery of nonpriority bypass mail service into or out of 
        the hub point being bypassed; and
            (iv) such tender will result in reduced payments to the 
        carrier by the Postal Service over flying the entire route; and

        (G) notwithstanding subparagraph (F), shall offer equitable 
    tender of nonpriority bypass mail in proportion to passenger and 
    nonmail freight mail pools described in this section between 
    qualified passenger and nonmail freight carriers on a route from an 
    acceptance point to a bush destination in the State of Alaska at a 
    composite rate if--
            (i)(I) for a passenger carrier, the carrier receiving the 
        composite rate provided 20 percent of the passenger service on 
        the city pair route for the 12 months immediately preceding the 
        date on which the carrier seeks tender of such mail; or
            (II) for a nonmail freight carrier, the carrier receiving 
        the composite rate provided at least 25 percent of the nonmail 
        freight service for the 12 months immediately preceding the date 
        on which the carrier seeks tender of such mail; and
            (ii)(I) nonpriority bypass mail was being tendered to a 
        passenger carrier or a nonmail freight carrier at a composite 
        rate on such city pair route on January 1, 2000; or
            (II) the hub being bypassed was not served by a mainline 
        carrier on January 1, 2000.

The tender of nonpriority bypass mail under subparagraph (G) shall be on 
an equitable basis between the qualified carriers that provide the 
direct service on the city pair route and the qualified carriers that 
provide service between the hub point being bypassed and the destination 
point, based on the volume of nonpriority bypass mail on both routes.
    (3)(A) The Postal Service shall determine the bypass mail bush 
points and hub points described under paragraph (2)(B) after 
consultation with the State of Alaska and the affected local communities 
and air carriers.
    (B) Any changes in the determinations of the Postal Service under 
subparagraph (A) shall be made--
        (i) after consultation with the State of Alaska and the affected 
    local communities and air carriers; and
        (ii) after giving 12 months public notice before any such change 
    takes effect.

    (4)(A) Except as provided under subparagraph (B) and paragraph (5), 
the Postal Service shall select only existing mainline carriers to 
provide nonpriority bypass mail service between an acceptance point and 
a hub point in the State of Alaska.
    (B) The Postal Service may select a carrier other than an existing 
mainline carrier to provide nonpriority bypass mail service on a 
mainline route in the State of Alaska if--
        (i) the Postal Service determines (in accordance with criteria 
    established in advance by the Postal Service) that the mail service 
    between the acceptance point and the hub point is deficient and 
    provides written notice of the determination to existing mainline 
    carriers to the hub point; and
        (ii) after the 30-day period following issuance of notice under 
    clause (i), including notice of inadequate capacity, the Postal 
    Service determines that deficiencies in service to the hub point 
    have not been eliminated.

    (5)(A) The Postal Service shall offer equitable tender of 
nonpriority bypass mail to a new 121 mainline passenger carrier entering 
a mainline route in the State of Alaska, if the carrier--
        (i) meets the requirements of subsection (g)(1)(D)(ii); and
        (ii) has provided at least 75 percent of the number of insured 
    passenger seats as the number of available passenger seats being 
    provided by the mainline passenger carrier providing the greatest 
    number of available passenger seats on that route for the 6 months 
    immediately preceding the date on which the carrier seeks tender of 
    such mail.

    (B) A new 121 mainline passenger carrier that is tendered 
nonpriority mainline bypass mail under subparagraph (A)--
        (i) shall be eligible for equitable tender of such mail only on 
    city pair routes where the carrier meets the conditions of 
    subparagraph (A);
        (ii) may not count the passenger service provided under 
    subparagraph (A) toward the carrier meeting the minimum requirements 
    of this section; and
        (iii) shall provide at least 20 percent of the passenger service 
    (as determined for bush passenger carriers in subsection (h)(5)) on 
    such route to remain eligible to be tendered nonpriority mainline 
    bypass mail.

    (C) Notwithstanding subparagraph (A) and paragraph (1)(B), a new 121 
mainline passenger carrier, otherwise qualified under this subsection, 
may immediately receive equitable tender of nonpriority mainline bypass 
mail to a hub point in the State of Alaska if the carrier meets the 
requirements of subparagraphs (A), (C), and (D) of paragraph (1) and 
subsection (h)(2)(B) and--
        (i) all qualified 121 mainline passenger carriers discontinue 
    service on the city pair route; or
        (ii) no 121 mainline passenger carrier serves the city pair 
    route.

    (D) A carrier operating under a code share agreement on the date of 
enactment of the Rural Service Improvement Act of 2002 that received 
tender of nonpriority mainline bypass mail on a city pair route in the 
State of Alaska may count the passenger service provided under the 
entire code share arrangement on such route if the code share agreement 
terminates. That carrier shall continue to provide at least 20 percent 
of the passenger service (as determined for bush passenger carriers in 
subsection (h)(5)) between the city pair as a 121 mainline passenger 
carrier while seeking such tender.
    (6)(A) Notwithstanding paragraph (1)(B), passenger carriers 
providing essential air service under a Department of Transportation 
order issued under subchapter II of chapter 417 of title 49, United 
States Code, shall be tendered all nonpriority mail, in addition to all 
nonpriority bypass mail, by the Postal Service to destination cities in 
the State of Alaska served by the essential air service flights 
consistent with that order unless the Postal Service finds that an 
essential air service carrier's service does not meet the needs of the 
Postal Service.
    (B) Service provided under this paragraph, including service 
provided to points served in conjunction with service being subsidized 
under the Essential Air Service contract, may not be applied toward any 
of the minimum eligibility requirements of this section.
    (h)(1) Except as provided under paragraph (7), on a city pair route 
in the State of Alaska, the Postal Service shall offer equitable tender 
of 70 percent of the nonpriority bypass mail on the route to all 
carriers providing scheduled passenger service in accordance with part 
121 or part 135 that--
        (A) meet the requirements of subsection (g)(1);
        (B) provided 20 percent or more of the passenger service (as 
    calculated in paragraph (5)) between the city pair for the 12 months 
    preceding the date on which the 121 passenger aircraft or the 135 
    passenger carrier seek tender of nonpriority bypass mail; and
        (C) meet the requirements of paragraph (2).

    (2) To remain eligible for equitable tender under this subsection, 
the carrier or aircraft shall--
        (A) continue to provide not less than 20 percent of the 
    passenger service on the city pair route for which the carrier is 
    seeking the tender of such nonpriority bypass mail;
        (B)(i) for operations under part 121, operate aircraft type 
    certificated to carry at least 19 passengers;
        (ii) for operations under part 135, operate aircraft type 
    certificated to carry at least 5 passengers; or
        (iii) for operations under part 135 where only a water landing 
    is available, operate aircraft type certificated to carry at least 3 
    passengers;
        (C) insure all available passenger seats on the city pair route 
    on which the carrier seeks tender of such mail; and
        (D) operate flights under its published schedule.

    (3)(A) Except as provided under subparagraph (E), if a 135 passenger 
carrier serves a city pair route in the State of Alaska and meets the 
requirements of paragraph (1) or (2) when a 121 passenger carrier 
becomes qualified to be tendered nonpriority bypass mail on such route 
with a 121 passenger aircraft in accordance with paragraphs (1) and (2), 
the qualifying 135 passenger carriers on that route shall convert to 
operations with a 121 passenger aircraft within 5 years after the 121 
passenger aircraft begins receiving tender on that route in order to 
remain eligible for equitable tender under paragraph (1). The 135 
carrier shall--
        (i) begin the process of conversion not later than 2 years after 
    the 121 passenger aircraft begins carrying nonpriority bypass mail 
    on that route; and
        (ii) submit a part 121 compliance statement not later than 4 
    years after the 121 passenger aircraft begins carrying nonpriority 
    bypass mail on that route.

    (B) Completion of conversion under subparagraph (A) shall not be 
required if all 121 passenger carriers discontinue the carriage of 
nonpriority bypass mail with 121 passenger aircraft on the city pair 
route.
    (C) Any qualified carrier operating in the State of Alaska under 
this section may request a waiver from subparagraph (A). Such a request, 
at the discretion of the Secretary, may be granted for good cause shown. 
The requesting party shall state the basis for such a waiver.
    (D) If after 6 years and 3 months following the date of enactment of 
the Rural Service Improvement Act of 2002, a 135 passenger carrier is 
providing service on a city pair route in the State of Alaska and a 121 
passenger aircraft becomes eligible to receive tender of nonpriority 
bypass mail on the route, that 135 passenger carrier shall convert to 
operations under part 121 within 12 months of the 121 passenger carrier 
being tendered nonpriority bypass mail. The Postal Service shall not 
continue the tender of nonpriority bypass mail to a 135 passenger 
carrier that fails to convert to part 121 operations within 12 months 
after the 121 passenger carrier being tendered such mail under this 
paragraph.
    (E) Notwithstanding the requirements of this subsection, if only 1 
passenger carrier or aircraft is qualified to be tendered nonpriority 
bypass mail as a passenger carrier or aircraft on a city pair route in 
the State of Alaska, the Postal Service shall tender 20 percent of the 
nonpriority bypass mail described under paragraph (1) to the passenger 
carrier or aircraft providing the next highest level of passenger 
service on such route.
    (4) Qualification for the tender of mail under this subsection shall 
not be counted toward the minimum qualifications necessary to be 
tendered nonpriority bypass mail on any other route.
    (5)(A)(i) In this section, the percent of passenger service shall be 
a percentage calculated using data collected under subsection (k).
    (ii) To ensure accurate reporting of market share the Postal Service 
shall compare the resulting percentage under clause (i) to the lesser 
of--
        (I) the amount of the passenger excise tax paid by or on behalf 
    of a carrier, as determined by reviewing the collected amount of 
    base fares for passengers actually flown by a carrier from the 
    origination point to the destination point, divided by the value of 
    the total passenger excise taxes, as determined by reviewing the 
    collected amount of base fares paid by or on behalf of all passenger 
    carriers providing service from the hub point to the bush 
    destination point; or
        (II) the amount of half of the passenger excise tax paid by or 
    on behalf of a carrier, as determined by reviewing the collected 
    amount of base fares for passengers actually flown by a carrier on 
    the city pair route, divided by the value of the total passenger 
    excise taxes, as determined by reviewing the collected amount of 
    base fares paid by or on behalf of all passenger carriers providing 
    service between the origination point and the destination point.

    (B) For the purposes of calculating passenger service as described 
under subparagraph (A), a bush passenger carrier providing intervillage 
bush passenger service may include the carriage of passengers carried 
along any point of the route between the route's origination point and 
the final destination point. Such calculation shall be based only on the 
carriage of passengers on regularly scheduled flights and only on 
flights being flown in a direction away from the hub point. Passenger 
service provided on chartered flights shall not be included in the 
carrier's calculation of passenger service.
    (6)(A) The Secretary shall establish new bush rates for passenger 
carriers operating in the State of Alaska receiving tender of 
nonpriority bypass mail under this subsection.
    (B) The Secretary shall establish a bush rate based on data 
collected under subsection (k) from 121 bush passenger carriers. Such 
rates shall be paid to all bush passenger carriers operating on city 
pair routes in the State of Alaska where a 121 bush passenger carrier is 
tendered nonpriority bypass mail.
    (C) The Secretary shall establish a bush rate based on data 
collected under subsection (k) from 135 bush passenger carriers. Such 
rates shall be paid to all bush passenger carriers operating on bush 
city pair routes in the State of Alaska where no 121 bush passenger 
carrier is tendered nonpriority bypass mail.
    (D) The Secretary shall establish a bush rate based on data 
collected under subsection (k) from bush passenger carriers operating 
aircraft on city pair routes where only water landings are available. 
Such rates shall be paid to all bush passenger carriers operating on the 
city pair routes in the State of Alaska where only water landings are 
available.
    (7) The percentage rate in paragraph (1) shall be 75 percent 
beginning 3 years and 3 months after the date of enactment of the Rural 
Service Improvement Act of 2002.
    (i)(1) Except as provided under paragraph (7), on a city pair route 
in the State of Alaska, the Postal Service shall offer equitable tender 
of 20 percent of the nonpriority bypass mail on such route to those 
carriers transporting 25 percent or more of the total nonmail freight 
(in revenue or weight as determined by the Postal Service), for the 12 
months immediately preceding the date on which the freight carrier seeks 
tender of such mail.
    (2) To remain eligible for equitable tender under this subsection, a 
freight carrier shall continue to provide not less than 25 percent of 
the nonmail freight service on the city pair route for which the carrier 
is seeking tender of such mail.
    (3) If a new freight carrier enters a market, the freight carrier 
shall meet the minimum requirements of subsection (g)(1) and shall 
operate for 12 months on a city pair route in the State of Alaska before 
being eligible for equitable tender of nonpriority bypass mail on that 
route.
    (4) If no carrier qualifies for tender of nonpriority bypass mail on 
a city pair route in the State of Alaska under this subsection, such 
mail to be divided under this subsection, as described in paragraph (1), 
shall be tendered to the nonmail freight carrier providing the highest 
percentage of nonmail freight service (in terms of revenue or weight as 
determined by the Postal Service as calculated under paragraph (6)) on 
the city pair route. If no nonmail freight carrier is present on a city 
pair route in the State of Alaska to receive tender of nonpriority 
bypass mail under this paragraph, the nonpriority bypass mail to be 
divided under paragraph (1) shall be divided equitably among carriers 
qualified under subsection (h).
    (5) Qualification for the tender of mail under this subsection shall 
not be counted toward the minimum qualifications necessary to be 
tendered nonpriority bypass mail on any other route.
    (6)(A) In this subsection, the percent of nonmail freight shall be 
calculated as a percentage, using the data provided pursuant to 
subsection (k), by dividing the revenue or weight (as determined by the 
Postal Service) of nonmail freight earned by or carried by a carrier 
from the transport of nonmail freight from an origination point to a 
destination point by the total amount of revenue or weight of nonmail 
freight earned by or carried by all carriers from the transport of 
nonmail freight from the origination point to the destination point.
    (B) To ensure accurate reporting of market share the Postal Service 
shall compare the resulting percentage under subparagraph (A) to the 
lesser of--
        (i) the amount of the freight excise tax paid by or on behalf of 
    a carrier, as determined by reviewing the collected amount of base 
    fares for nonmail freight actually flown by a carrier from the 
    origination point to the destination point, divided by the value of 
    the total nonmail freight excise taxes, as determined by reviewing 
    the collected amount of base fares paid by or on behalf of all 
    nonmail freight carriers providing service from the origination 
    point to the destination point; or
        (ii) the amount of half of the nonmail freight excise tax paid 
    by or on behalf of a carrier, as determined by reviewing the 
    collected amount of base fares for nonmail freight actually flown by 
    a carrier on the city pair route, divided by the value of the total 
    nonmail freight excise taxes, as determined by reviewing the 
    collected amount of base fares paid by or on behalf of all nonmail 
    freight carriers providing service on the city pair route.

    (7) The percentage rate in paragraph (1) shall be 25 percent 
beginning 3 years and 3 months after the date of enactment of the Rural 
Service Improvement Act of 2002.
    (j)(1) Except as provided by paragraph (3), there shall be equitable 
tender of 10 percent of the nonpriority bypass mail to all carriers on 
each city pair route in the State of Alaska meeting the requirements of 
subsection (g)(1) that do not otherwise qualify for tender under 
subsection (h) or (i).
    (2) If no carrier qualifies under this subsection with respect to a 
city pair route, the 10 percent of nonpriority bypass mail allocated 
under paragraph (1) shall be divided evenly between the pools described 
under subsections (h) and (i) to be equitably tendered among qualified 
carriers under such subsections, such that--
        (A) the amount of nonpriority bypass mail available for tender 
    among qualified carriers under subsection (h) shall be 75 percent; 
    and
        (B) the amount of nonpriority bypass mail available for tender 
    among qualified carriers under subsection (i) shall be 25 percent.

    (3)(A) Except as provided by subparagraph (B), the percentage rate 
under paragraph (1) shall be 0 percent beginning 3 years and 3 months 
after the date of enactment of the Rural Service Improvement Act of 
2002.
    (B) The percentage rate under paragraph (1) shall remain 10 percent 
for equitable tender for 6 years and 3 months after the date of 
enactment of the Rural Service Improvement Act of 2002 for a nonpriority 
bypass mail carrier on bush routes in the State of Alaska originating 
from the main hub of the carrier designated under subparagraph (C), if 
the carrier seeking the tender of such mail--
        (i) meets the requirements of subsection (g)(1);
        (ii) is not qualified under subsection (h) or (i);
        (iii) operates routes originating from the main hub of the 
    carrier designated under subparagraph (C); and
        (iv) has invested at least $500,000 in a physical hanger 
    facility prior to January 1, 2002 in such a hub city.

    (C) For purposes of subparagraph (B), a carrier may designate only 
one hub city as its main hub and once such designation is transmitted to 
the Postal Service it may not be changed. Such selection and 
transmission must be transmitted to the Postal Service within 6 months 
of the date of enactment of the Rural Service Improvement Act of 2002. A 
carrier attempting to receive tender of nonpriority bypass mail under 
this subsection shall not be eligible for such tender after the carrier 
becomes qualified for tender of nonpriority bypass mail under subsection 
(h) or (i) on any route. The purchase of another carrier's hanger 
facility after such date of enactment shall not be considered sufficient 
to meet the requirement of subparagraph (B)(iv).
    (k)(1) At least once every 2 years, in conjunction with annual 
updates, the Secretary shall review the need for a bush mail rate 
investigation. The Secretary shall use show cause procedures to speedily 
and more accurately determine the cost of providing bush mail service. 
In determining such rates, the Secretary shall not take into account the 
cost of passenger insurance rates or premiums paid by the passenger 
carriers or other costs associated with passenger service.
    (2) In order to ensure sufficient, reliable, and timely traffic data 
to meet the requirements of this subsection, the Secretary shall 
require--
        (A) the monthly submission of the bush carrier's data on T-100 
    diskettes, or any other suitable form of data collection, as 
    determined by the Secretary; and
        (B) the carriers to retain all books, records, and other source 
    and summary documentation to support their reports and to preserve 
    and maintain such documentation in a manner that readily permits the 
    audit and examination by representatives of the Postal Service or 
    the Secretary.

    (3) Documentation under paragraph (2) shall be retained for 7 years 
or until the Secretary indicates that the records may be destroyed. 
Copies of flight logs for aircraft sold or disposed of shall be 
retained.
    (4) Carriers qualified to be tendered nonpriority bypass mail shall 
submit to the Secretary the number and type of aircraft in the carrier's 
fleet, the level of passenger insurance covering its fleet, and the name 
of the insurance company providing such coverage.
    (5) Not later than 30 days after the last day of each calendar 
month, carriers qualified or attempting to be qualified to be tendered 
nonpriority bypass mail shall report to the Secretary the excise taxes 
paid by city pair to the Department of the Treasury and the weight of 
and revenue earned by the carriage of nonmail freight. Final compiled 
data shall be made available to carriers providing service in the hub.
    (l) No qualified carrier may be tendered nonpriority bypass mail 
under subsections (h) and (i) simultaneously on a route unless no other 
carrier is tendered mail under either subsection.
    (m)(1) Carriers qualifying for tender of nonpriority bypass mail 
under subsections (h) and (i) simultaneously shall be tendered such mail 
under subsection (h).
    (2) A carrier shall be tendered nonpriority bypass mail under 
subsection (i) if that carrier--
        (A) was qualified under both subsections (h) and (i) 
    simultaneously; and
        (B) becomes unqualified under subsection (h) but remains 
    qualified under subsection (i).

    (n)(1) A carrier operation resulting from a merger or acquisition 
between any 2 carriers operating between points in the State of Alaska 
shall have the passenger and nonmail freight of all such merged or 
acquired carriers on the applicable route counted toward meeting the 
resulting carrier's minimum requirements to receive equitable tender of 
nonpriority bypass mail on such route for the 12-month period following 
the date of the merger or acquisition.
    (2) After the 12-month period described under paragraph (1), the 
carrier resulting from the merger or acquisition shall demonstrate that 
the carrier meets the minimum passenger or nonmail freight carriage 
requirements of this section to continue receiving tender of such mail.
    (o) In addition to any penalties applied to a carrier by the Federal 
Aviation Administration or the Secretary, any carrier that significantly 
misstates passenger or nonmail freight data required to be reported 
under this section on any route, in an attempt to qualify for tender of 
nonpriority bypass mail, shall receive--
        (1) a 1-month suspension of tender of nonpriority bypass mail on 
    the route where the data was misstated for the first offense;
        (2) a 6-month suspension of tender of nonpriority bypass mail on 
    the route where the data was misstated for the second offense;
        (3) a 1-year suspension of tender of all nonpriority bypass mail 
    in the entire State of Alaska for the third offense in the State; 
    and
        (4) a permanent suspension of tender of all nonpriority bypass 
    mail in the entire State of Alaska for the fourth offense in the 
    State.

    (p)(1) The Postal Service or the Secretary, in carrying out 
subsection (g)(2), (h), or (i), may deny equitable tender to an 
otherwise qualified carrier that does not operate under this section in 
good faith or under the intent of this section.
    (2) The Postal Service or the Secretary may waive any provision of 
subsection (h) or (i), if the carrier provides substantial passenger or 
nonmail freight service on the route in the State of Alaska where the 
carrier seeks tender of nonpriority mail and nonpriority bypass mail.
    (3) To ensure adequate competition among passenger carriers on a 
mainline route in the State of Alaska the Postal Service or the 
Secretary may waive the requirements of subsection (g)(1)(D), (g)(2)(E), 
(g)(4), or (g)(5), or any provision of subsection (h) if a 121 bush 
passenger carrier seeks tender of nonpriority bypass mail on a mainline 
route in the State of Alaska not served by a 121 mainline passenger 
carrier and the 121 bush passenger carrier provides substantial 
passenger service on the route. Waivers provided for under this 
paragraph shall be granted only in extreme cases of lack of competition 
and only to extent that are absolutely necessary to meet the minimum 
needs of the community. Waivers granted under this subsection shall 
cease to be valid once a qualified mainline passenger carrier begins 
providing service and seeks tender of nonpriority bypass mail in 
accordance with this section on the city pair route. The receipt of 
waivers and subsequent operation of service on a city pair route under 
this subsection shall not be counted towards meeting the requirements of 
any part of this section for any other city pair route.
    (4) In granting waivers for or denying tender to carriers under this 
subsection, the Postal Service or the Secretary shall consider in the 
following order of importance--
        (A) the passenger needs of the destination to be served 
    (including amount and level);
        (B) the nonmail freight needs of the destination to be served;
        (C) the amount of nonpriority bypass mail service already 
    available to the destination;
        (D) the mail needs of the destination to be served;
        (E) the savings to the Postal Service in terms of payments made 
    to carriers;
        (F) the amount or level of passenger service already available 
    to the destination; and
        (G) the amount of nonmail freight service already available to 
    the destination.

    (q) The Secretary shall make a regular review of carriers receiving, 
or attempting to qualify to receive, equitable tender of nonpriority 
bypass mail on a city pair route in the State of Alaska. If the 
Secretary suspends or revokes an operating certificate, the Secretary 
shall notify the Postal Service. Upon such notification, the Postal 
Service shall cease tender of mail to such carrier until the Secretary 
certifies the carrier is operating in a safe manner. Upon such receipt, 
the carrier shall demonstrate that it otherwise meets the minimum 
carriage requirements of this section before being tendered mail under 
this section.
    (r) The Postal Service shall have the authority to tender 
nonpriority bypass mail to any carrier that meets the requirements of 
subsection (g)(1) on any city pair route in the State of Alaska on an 
emergency basis. Such emergency tender shall cease when a carrier 
qualifies for tender on such route under the terms of this section.
    (s) Notwithstanding any other provision of law, and except for 
written contracts authorized under subsections (b), (c) and (d), tender 
by the Postal Service of any category of mail to a carrier for 
transportation between any two points in the State of Alaska shall not 
give rise to any contract between the Postal Service and a carrier, nor 
shall any such carrier acquire any right in continued or future tender 
of such mail by virtue of past or present receipt of such mail. This 
subsection shall apply to any case commenced before, on, or after the 
date of enactment of this subsection.

(Pub. L. 91-375, Aug. 12, 1970, 84 Stat. 772; Pub. L. 98-443, 
Sec. 9(g)(4), Oct. 4, 1984, 98 Stat. 1707; Pub. L. 100-238, title I, 
Sec. 137, Jan. 8, 1988, 101 Stat. 1767; Pub. L. 103-272, Sec. 4(g)(2), 
July 5, 1994, 108 Stat. 1364; Pub. L. 103-429, Sec. 5, Oct. 31, 1994, 
108 Stat. 4378; Pub. L. 104-52, title VI, Sec. 631(a), Nov. 19, 1995, 
109 Stat. 505; Pub. L. 107-67, title VI, Sec. 651, Nov. 12, 2001, 115 
Stat. 557; Pub. L. 107-171, title X, Sec. 10501, May 13, 2002, 116 Stat. 
509; Pub. L. 107-206, title III, Sec. 3002(c), (e)(1), Aug. 2, 2002, 116 
Stat. 911, 924.)

                       References in Text

    The date of enactment of the Rural Service Improvement Act of 2002, 
referred to in subsecs. (g)(5)(D), (h)(3)(D), (7), (i)(7), and (j)(3), 
is the date of enactment of Pub. L. 107-206, which was approved Aug. 2, 
2002.
    The date of enactment of this subsection, referred to in subsec. 
(s), is the date of enactment of Pub. L. 107-206, which was approved 
Aug. 2, 2002.


                               Amendments

    2002--Subsec. (a). Pub. L. 107-206, Sec. 3002(c)(1)(C), added 
subsec. (a). Former subsec. (a) redesignated (b).
    Subsecs. (b), (c). Pub. L. 107-206, Sec. 3002(e)(1)(A), substituted 
``Secretary'' for ``Secretary of Transportation'' wherever appearing.
    Pub. L. 107-206, Sec. 3002(c)(1)(B), redesignated subsecs. (a) and 
(b) as (b) and (c), respectively. Former subsec. (c) redesignated (d).
    Subsec. (d). Pub. L. 107-206, Sec. 3002(e)(1)(A), substituted 
``Secretary'' for ``Secretary of Transportation''.
    Pub. L. 107-206, Sec. 3002(c)(1)(B), redesignated subsec. (c) as 
(d). Former subsec. (d) redesignated (e).
    Subsec. (d)(2)(A). Pub. L. 107-171, Sec. 10501(1), inserted ``, 
honeybees,'' after ``poultry''.
    Subsec. (d)(2)(C). Pub. L. 107-171, Sec. 10501(2), struck out 
subpar. (C) which read as follows: ``The authority of the Postal Service 
under subparagraph (B) shall apply during the period beginning on 
November 12, 2001, and ending June 30, 2002.''
    Pub. L. 107-206, Sec. 3002(c)(1)(A), (B), redesignated subsec. (d) 
as (e) and struck out former subsec. (e) which read as follows: ``For 
purposes of this section, the terms `air carrier', `interstate air 
transportation', and `foreign air transportation' have the meanings 
given such terms in section 40102(a) of title 49.''
    Subsec. (f). Pub. L. 107-206, Sec. 3002(e)(1), substituted 
``Secretary'' for ``Secretary of Transportation'', ``subsections (b), 
(c), and (d)'' for ``subsections (a), (b), and (c)'', and ``subsection 
(e)'' for ``subsection (d)''.
    Subsec. (g)(1). Pub. L. 107-206, Sec. 3002(c)(2)(A), inserted 
``shall adhere to an equitable tender policy within a qualified group of 
carriers, in accordance with the regulations of the Postal Service, 
and'' after ``in the State of Alaska,'' in introductory provisions.
    Subsec. (g)(1)(C). Pub. L. 107-206, Sec. 3002(c)(2)(B), struck out 
``to the best of the abilities of such carrier'' before semicolon.
    Subsec. (g)(1)(D). Pub. L. 107-206, Sec. 3002(c)(2)(C), inserted 
``with at least 3 scheduled (noncontract) flights per week between two 
points'' after ``scheduled service'' in introductory provisions.
    Subsec. (g)(2). Pub. L. 107-206, Sec. 3002(c)(3), added subpars. (C) 
to (G) and concluding provisions.
    Subsec. (g)(4) to (6). Pub. L. 107-206, Sec. 3002(c)(4), added pars. 
(4) to (6).
    Subsecs. (h) to (s). Pub. L. 107-206, Sec. 3002(c)(5), added 
subsecs. (h) to (s).
    2001--Subsec. (d). Pub. L. 107-67 designated existing provisions as 
par. (1) and added par. (2).
    1995--Subsec. (f). Pub. L. 104-52, Sec. 631(a)(1), substituted 
``The'' for ``During the period beginning January 1, 1985, and ending 
January 1, 1999, the''.
    Subsec. (g)(1)(D). Pub. L. 104-52, Sec. 631(a)(2), amended subpar. 
(D) generally. Prior to amendment, subpar. (D) read as follows: ``have 
provided scheduled service within the State of Alaska for at least 12 
months before being selected as a carrier of non-priority bypass mail.''
    1994--Subsec. (a). Pub. L. 103-272, Sec. 4(g)(2)(A), substituted 
``section 40101(a) of title 49'' for ``section 1302 of title 49''.
    Subsec. (b). Pub. L. 103-272, Sec. 4(g)(2)(B), substituted 
``sections 40109(a) and (c)-(h) and 42112 of title 49'' for ``sections 
1371(k) and 1386(b) of title 49'', ``part A of subtitle VII of title 
49'' for ``sections 1301-1542 of title 49'', and ``chapters 411 and 413 
of title 49'' for ``sections 1371-1386 of title 49''.
    Subsec. (d). Pub. L. 103-272, Sec. 4(g)(2)(C), inserted ``determine 
rates and'' after ``Service may'' and struck out ``and overseas'' after 
``in interstate''.
    Subsec. (e). Pub. L. 103-272, Sec. 4(g)(2)(D), struck out `` 
`overseas air transportation','' before ``and `foreign'', and 
substituted ``section 40102(a) of title 49'' for ``section 101 of the 
Federal Aviation Act of 1958 (49 U.S.C. 1301)''.
    Subsec. (g)(1)(A). Pub. L. 103-429 substituted ``section 41102(a) of 
title 49'' for ``section 401 of the Federal Aviation Act of 1958 (49 
U.S.C. 1371)''.
    1988--Subsec. (f). Pub. L. 100-238, Sec. 137(1), substituted 
``January 1, 1999'' for ``January 1, 1989''.
    Subsec. (g). Pub. L. 100-238, Sec. 137(2), added subsec. (g).
    1984--Subsec. (a). Pub. L. 98-443, Sec. 9(g)(4)(A)-(C), substituted 
``Secretary of Transportation'' for ``Civil Aeronautics Board'' wherever 
appearing, substituted ``between any of the points in foreign air 
transportation'' for ``between any of the points'', and struck out ``10 
percent of the domestic mail transported under any such contract or'' 
before ``5 percent''.
    Subsec. (b). Pub. L. 98-443, Sec. 9(g)(4)(A), (D), substituted 
``Secretary of Transportation'' for ``Civil Aeronautics Board'' wherever 
appearing and ``required between points in foreign air transportation'' 
for ``required between points''.
    Subsec. (c). Pub. L. 98-443, Sec. 9(g)(4)(A), (E), substituted 
``Secretary of Transportation'' for ``Civil Aeronautics Board'' and 
``pairs of points in foreign air transportation is not adequate'' for 
``pairs of points is not adequate''.
    Subsecs. (d) to (f). Pub. L. 98-443, Sec. 9(g)(4)(F), added subsecs. 
(d) to (f).


                    Effective Date of 2002 Amendment

    Pub. L. 107-206, title III, Sec. 3002(g), Aug. 2, 2002, 116 Stat. 
924, provided that:
    ``(1) In general.--Except as provided under paragraph (2), this 
title [amending this section, section 2703 of Title 19, Customs Duties, 
section 1626 of Title 43, Public Lands, and section 41901 of Title 49, 
Transportation, and enacting provisions set out as notes under this 
section and section 101 of this title, section 112 of Title 1, General 
Provisions, and sections 2703 and 3203 of Title 19] (including the 
amendments made by this title) shall take effect on the date of 
enactment of this Act [Aug. 2, 2002].
    ``(2) Selection of carriers.--The amendment made by subsection 
(c)(5) [amending this section] shall take effect 15 months after the 
date of enactment of this Act.''


                    Effective Date of 1995 Amendment

    Section 631(b) of Pub. L. 104-52 provided that:
    ``(1) Subject to paragraph (2), the amendment made by subsection (a) 
[amending this section] shall be effective on and after August 1, 1995.
    ``(2) Subparagraph (D) of section 5402(g)(1) title 39, United States 
Code (as in effect before the amendment made under subsection (a)), 
shall apply to a carrier, if such carrier--
        ``(A) has an application pending before the Department of 
    Transportation for approval under section 41102 or 41110(e) of title 
    39, [probably should be ``49,''] United States Code, before August 
    1, 1995; and
        ``(B) would meet the requirements of such subparagraph if such 
    application were approved and such certificate were purchased.''


                    Effective Date of 1984 Amendment

    Amendment by Pub. L. 98-443 effective Jan. 1, 1985, see section 9(v) 
of Pub. L. 98-443, set out as a note under section 5314 of Title 5, 
Government Organization and Employees.


                                Findings

    Pub. L. 107-206, title III, Sec. 3002(b), Aug. 2, 2002, 116 Stat. 
910, provided that: ``Congress makes the following findings:
        ``(1) The State of Alaska is the largest State in the Union and 
    has a very limited system of roads connecting communities.
        ``(2) Alaska has more pilots per capita than any other State in 
    the Union.
        ``(3) Pilots flying in Alaska are often the most skilled and 
    best-prepared pilots in the world.
        ``(4) Air travel within the State of Alaska is often hampered by 
    severe weather conditions and treacherous terrain.
        ``(5) The United States Government owns nearly \2/3\ of Alaska's 
    landmass, including large tracts of land separating isolated 
    communities within the State.
        ``(6) Such Federal ownership has inhibited the ability of 
    Alaskans to build roads connecting isolated communities.
        ``(7) Most communities and a large portion of the population 
    within the State can only be reached by air.
        ``(8) The vast majority of food items and everyday necessities 
    destined for these isolated communities and populations can only be 
    transported through the air.
        ``(9) The Intra-Alaska Bypass Mail system, created by Congress 
    and operated by the United States Postal Service under section 5402 
    of title 39, United States Code, with input from the Department of 
    Transportation, connecting hundreds of rural and isolated 
    communities within the State, is a critical piece of the Alaska and 
    the national transportation system. The system is like a 4-legged 
    stool, designed to--
            ``(A) provide the most affordable means of delivering food 
        and everyday necessities to these rural and isolated 
        communities;
            ``(B) establish a system whereby the Postal Service can meet 
        its obligations to deliver mail to every house and business in 
        the United States;
            ``(C) support affordable and reliable passenger service; and
            ``(D) support affordable and reliable nonmail freight 
        service.
        ``(10) Without the Intra-Alaska Bypass Mail system--
            ``(A) it would be difficult and more expensive for the 
        Postal Service to meet its obligation of delivering mail to 
        every house and business in the United States; and
            ``(B) food, medicine, freight, and everyday necessities and 
        passenger service for these rural and isolated communities would 
        cost several times the current level.
        ``(11) Attempts by Congress to support passenger and nonmail 
    freight service in Alaska using the Intra-Alaska Bypass Mail system 
    have yielded some positive results, but some carriers have been 
    manipulating the system by carrying few, if any, passengers and 
    little nonmail freight while earning most of their revenues from the 
    carriage of nonpriority bypass mail.
        ``(12) As long as the Federal Government continues to own large 
    tracts of land within the State of Alaska which impede access to 
    isolated communities, it is in the best interest of the Postal 
    Service, the residents of Alaska and the United States--
            ``(A) to ensure that the Intra-Alaska Bypass Mail system 
        remains strong, viable, and affordable for the Postal Service;
            ``(B) to ensure that residents of rural and isolated 
        communities in Alaska continue to have affordable, reliable, and 
        safe passenger service;
            ``(C) to ensure that residents of rural and isolated 
        communities in Alaska continue to have affordable, reliable, and 
        safe nonmail freight service;
            ``(D) to encourage that intra-Alaska air carriers move 
        toward safer, more secure, and more reliable air transportation 
        under the Federal Aviation Administration's guidelines and in 
        accordance with part 121 of title 14, Code of Federal 
        Regulations, where such operations are supported by the needs of 
        the community; and
            ``(E) that Congress, pursuant to the authority granted under 
        Article I, section 8 of the United States Constitution to 
        establish Post Offices and post roads, make changes to ensure 
        that the Intra-Alaska Bypass Mail system continues to be used to 
        support substantial passenger and nonmail freight service and to 
        reduce costs for the Postal Service.''


Actions of Air Carriers To Qualify as Bush Passengers or Nonmail Freight 
                                Carriers

    Pub. L. 107-206, title III, Sec. 3002(d), Aug. 2, 2002, 116 Stat. 
923, provided that: ``Beginning 6 months after the date of enactment of 
this Act [Aug. 2, 2002], if the Secretary determines, based on the 
Secretary's findings and recommendations of the Postal Service, that an 
air carrier being tendered nonpriority bush bypass mail is not taking 
actions to attempt to qualify as a bush passenger or nonmail freight 
carrier under section 5402 of title 39, United States Code (as amended 
by this title), the Postal Service shall immediately cease tender of all 
nonpriority bypass mail to such carrier.''


                           Reports to Congress

    Pub. L. 107-206, title III, Sec. 3002(f), Aug. 2, 2002, 116 Stat. 
924, provided that: ``Not later than 18 months after the date of 
enactment of this Act [Aug. 2, 2002], the Postal Service and the 
Secretary of Transportation shall submit a report to the Committee on 
Government Reform of the House of Representatives and the Committee on 
Governmental Affairs of the Senate on the progress of implementing this 
title [see Effective Date of 2002 Amendment note set out above].''

                  Section Referred to in Other Sections

    This section is referred to in section 5401 of this title; title 49 
sections 41901, 41902.



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