CONTRACTS FOR TRANSPORTATION OF MAIL BY AIR.

SEC. 1005. CONTRACTS FOR TRANSPORTATION OF MAIL BY AIR.(a) Definitions.—Section 5402(a) of title 39, United States Code, is amended—(1) in paragraph (4), by striking “(g)(1)(D)(i)” and inserting “(g)(1)(A)(iv)(I)”;(2) in paragraph (5), by striking “(g)(1)(D)(i)” and inserting “(g)(1)(A)(iv)(I)”;(3) in paragraph (8), by striking “rates paid to a bush carrier” and inserting “linehaul rates and a single terminal handling payment at a bush terminal handling rate paid to a bush carrier”;(4) in paragraph (11), by striking “(g)(1)(D)(ii)” and inserting “(g)(1)(A)(iv)(II)”; and(5) in paragraph (13)—(A) in subparagraph (A)—(i) by striking “clause (i) or (ii) of subsection (g)(1)(D)” and inserting “subclause (I) or (II) of subsection (g)(1)(A)(iv)”; and(ii) by striking “and” after the semicolon;(B) in subparagraph (B), by adding “and” after the semicolon; and(C) by adding at the end the following:“(C) is not comprised of previously qualified existing mainline carriers as a result of merger or sale;”.(b) Nonpriority Bypass Mail.—Section 5402(g) of title 39, United States Code, is amended—(1) in paragraph (3), by adding at the end the following:“(C) When a new hub results from a change in a determination under subparagraph (B), mail tender from that hub during the 12-month period beginning on the 120 STAT. 3257 effective date of that change shall be based on the passenger and freight shares to the destinations of the affected hub or hubs resulting in the new hub.”; and(2) in paragraph (5)(A)(i), by striking “(g)(1)(D)(ii)” and inserting “(g)(1)(A)(iv)(II)”.(c) Equitable Tender.—Section 5402(h) of title 39, United States Code, is amended—(1) in paragraph (1), by inserting “bush” after “providing scheduled”;(2) by striking paragraph (3) and inserting the following:“(3)(A) Except as provided under subparagraph (C), a new or existing 121 bush passenger carrier qualified under subsection (g)(1) shall be exempt from the requirements under paragraphs (1)(B) and (2)(A) on a city pair route for a period which shall extend for—“(i) 1 year;“(ii) 1 year in addition to the extension under clause (i) if, as of the conclusion of the first year, such carrier has been providing not less than 5 percent of the passenger service on that route (as calculated under paragraph (5)); and“(iii) 1 year in addition to the extension under clause (ii) if, as of the conclusion of the second year, such carrier has been providing not less than 10 percent of the passenger service on that route (as calculated under paragraph (5)).“(B)(i) The first 3 121 bush passenger carriers entitled to the exemptions under subparagraph (A) on any city pair route shall divide no more than an additional 10 percent of the mail, apportioned equally, comprised of no more than—“(I) 5 percent of the share of each qualified passenger carrier servicing that route that is not a 121 bush passenger carrier; and“(II) 5 percent of the share of each nonpassenger carrier servicing that route that transports 25 percent or more of the total nonmail freight under subsection (i)(1).“(ii) Additional 121 bush passenger carriers entering service on that city pair route after the first 3 shall not receive any additional mail share.“(iii) If any 121 bush passenger carrier on a city pair route receiving an additional share of the mail under clause (ii) discontinues service on that route, the 121 bush passenger carrier that has been providing the longest period of service on that route and is otherwise eligible but is not receiving a share by reason of clause (ii), shall receive the share of the carrier discontinuing service.“(C) 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 at least 10 percent of the passenger service on such route.”;(3) in paragraph (5)(A)—(A) by striking “(i)” after “(A)”; and(B) by striking clause (ii).120 STAT. 3258(d) Percent of Nonmail Freight.—Section 5402(i)(6) of title 39, United States Code, is amended—(1) by striking “(A)” after “(6)”; and(2) by striking subparagraph (B).(e) Percent of Tender Rate.—Section 5402(j)(3)(B) of title 39, United States Code, is amended by striking “bush routes in the State of Alaska” and inserting “routes served exclusively by bush carriers in the State of Alaska”.(f) Determination of Rates.—Section 5402(k) of title 39, United States Code, is amended by striking paragraph (5).(g) Technical and Conforming Amendment.—Section 5402(p)(3) of title 39, United States Code, is amended by striking “(g)(1)(D)” and inserting “(g)(1)(A)(iv)”.(h) Effective Date.—(1) In general.—Except as provided under paragraph (2), this section shall take effect on the date of enactment of this Act.(2) Equitable tender.—Subsection (c) shall take effect on December 1, 2006.