39 U.S.C. § 2005 — Obligations

Page 54 TITLE 39—POSTAL SERVICE § 2005 Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF REPEAL Repeal effective Oct. 1, 1997, with special provisions relating to payments for fiscal year 1998, see section 7003(c) of Pub. L. 105–33, set out as an Effective Date of 1997 Amendment note under section 2003 of this title. § 2005. Obligations (a)(1) The Postal Service is authorized to bor- row money and to issue and sell such obligations as it determines necessary to carry out the pur- poses of this title, other than any of the pur- poses for which the corresponding authority is available to the Postal Service under section 2011. The aggregate amount of obligations issued by the Postal Service which may be outstanding at any one time shall not exceed the maximum amount then allowable under paragraph (2) of this subsection. In any one fiscal year, the net increase in the amount of obligations out- standing issued for the purpose of capital im- provements and the net increase in the amount of obligations outstanding issued for the purpose of defraying operating expenses of the Postal Service shall not exceed a combined total of $3,000,000,000. (2) The maximum amount allowable under this paragraph is— (A) $10,000,000,000 for fiscal year 1990; (B) $12,500,000,000 for fiscal year 1991; and (C) $15,000,000,000 for fiscal year 1992 and each fiscal year thereafter. (3) For purposes of applying the respective limitations under this subsection, the aggregate amount of obligations issued by the Postal Serv- ice which are outstanding as of any one time, and the net increase in the amount of obliga- tions outstanding issued by the Postal Service for the purpose of capital improvements or for the purpose of defraying operating expenses of the Postal Service in any fiscal year, shall be determined by aggregating the relevant obliga- tions issued by the Postal Service under this section with the relevant obligations issued by the Postal Service under section 2011. (b)(1) The Postal Service may pledge the as- sets of the Postal Service and pledge and use its revenues and receipts for the payment of the principal of or interest on obligations issued by the Postal Service under this section, for the purchase or redemption thereof, and for other purposes incidental thereto, including creation of reserve, sinking, and other funds which may be similarly pledged and used, to such extent and in such manner as it deems necessary or de- sirable. The Postal Service is authorized to enter into binding covenants with the holders of such obligations, and with the trustee, if any, under any agreement entered into in connection with the issuance thereof with respect to the es- tablishment of reserve, sinking, and other funds, application and use of revenues and receipts of the Postal Service, stipulations concerning the subsequent issuance of obligations or the execu- tion of leases or lease purchases relating to properties of the Postal Service and such other matters as the Postal Service deems necessary or desirable to enhance the marketability of such obligations. (2) Notwithstanding any other provision of this section— (A) the authority to pledge assets of the Postal Service under this subsection shall be available only to the extent that such assets are not related to the provision of competitive products (as determined under section 2011(h) or, for purposes of any period before account- ing practices and principles under section 2011(h) have been established and applied, the best information available from the Postal Service, including the audited statements re- quired by section 2008(e)); and (B) any authority under this subsection re- lating to the pledging or other use of revenues or receipts of the Postal Service shall be avail- able only to the extent that they are not reve- nues or receipts of the Competitive Products Fund. (c) Obligations issued by the Postal Service under this section— (1) shall be in such forms and denomina- tions; (2) shall be sold at such times and in such amounts; (3) shall mature at such time or times; (4) shall be sold at such prices; (5) shall bear such rates of interest; (6) may be redeemable before maturity in such manner, at such times, and at such re- demption premiums; (7) may be entitled to such relative prior- ities of claim on the assets of the Postal Serv- ice with respect to principal and interest pay- ments; and (8) shall be subject to such other terms and conditions; as the Postal Service determines. (d) Obligations issued by the Postal Service under this section shall— (1) be negotiable or nonnegotiable and bearer or registered instruments, as specified therein and in any indenture or covenant relating thereto; (2) contain a recital that they are issued under this section, and such recital shall be conclusive evidence of the regularity of the issuance and sale of such obligations and of their validity; (3) be lawful investments and may be accept- ed as security for all fiduciary, trust, and pub- lic funds, the investment or deposit of which shall be under the authority or control of any officer or agency of the Government of the United States, and the Secretary of the Treas- ury or any other officer or agency having au- thority over or control of any such fiduciary, trust, or public funds, may at any time sell any of the obligations of the Postal Service acquired under this section; (4) be exempt both as to principal and inter- est from all taxation now or hereafter imposed by any State or local taxing authority except estate, inheritance, and gift taxes; and (5) not be obligations of, nor shall payment of the principal thereof or interest thereon be guaranteed by, the Government of the United States, except as provided in section 2006(c) of this title. (Pub. L. 91–375, Aug. 12, 1970, 84 Stat. 740; Pub. L. 101–227, § 3(a), Dec. 12, 1989, 103 Stat. 1944; Pub. L. 109–435, title V, § 502, Dec. 20, 2006, 120 Stat. 3233.) Page 55 TITLE 39—POSTAL SERVICE § 2007 Editorial Notes AMENDMENTS 2006—Subsec. (a)(1). Pub. L. 109–435, § 502(c)(2), sub- stituted ‘‘obligations issued by the Postal Service which may be’’ for ‘‘any such obligations’’ in second sentence. Pub. L. 109–435, § 502(b), substituted third sentence for former third sentence which read: ‘‘In any one fiscal year the net increase in the amount of obligations out- standing issued for the purpose of capital improve- ments shall not exceed $2,000,000,000, and the net in- crease in the amount of obligations outstanding issued for the purpose of defraying operating expenses of the Postal Service shall not exceed $1,000,000,000.’’ Pub. L. 109–435, § 502(a), substituted ‘‘title, other than any of the purposes for which the corresponding au- thority is available to the Postal Service under section 2011’’ for ‘‘title’’ in first sentence. Subsec. (a)(3). Pub. L. 109–435, § 502(c)(1), added par. (3). Subsec. (b). Pub. L. 109–435, § 502(d), substituted ‘‘obli- gations issued by the Postal Service under this sec- tion,’’ for ‘‘such obligations,’’, designated existing pro- visions as par. (1), and added par. (2). 1989—Subsec. (a). Pub. L. 101–227 designated existing provisions as par. (1), substituted ‘‘the maximum amount then allowable under paragraph (2) of this sub- section’’ for ‘‘$10,000,000,000’’, ‘‘$2,000,000,000’’ for ‘‘$1,500,000,000’’, and ‘‘$1,000,000,000’’ for ‘‘$500,000,000’’ and added par. (2). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1989 AMENDMENT Pub. L. 101–227, § 3(b), Dec. 12, 1989, 103 Stat. 1944, pro- vided that: ‘‘(1) Subject to the provisions of paragraph (2), the amendments made by subsection (a) [amending this section] shall take effect on October 1, 1990. ‘‘(2) Notwithstanding any other provision of this sec- tion, the amendments made by subsection (a) shall not take effect, if no law to provide for reconciliation pur- suant to section 5 of the concurrent resolution on the budget for the fiscal year 1990 is enacted before October 1, 1990.’’ [Omnibus Budget Reconciliation Act of 1989, Pub. L. 101–239, Dec. 19, 1989, 103 Stat. 2106, was enacted Dec. 19, 1989.] EFFECTIVE DATE Section effective July 1, 1971, pursuant to Resolution No. 71–9 of the Board of Governors. See section 15(a) of Pub. L. 91–375, set out as a note preceding section 101 of this title. § 2006. Relationship between the Treasury and the Postal Service (a) At least 15 days before selling any issue of obligations under section 2005 or 2011 of this title, the Postal Service shall advise the Sec- retary of the Treasury of the amount, proposed date of sale, maturities, terms and conditions, and expected maximum rates of interest of the proposed issue in appropriate detail and shall consult with him or his designee thereon. The Secretary may elect to purchase such obliga- tions under such terms, including rates of inter- est, as he and the Postal Service may agree, but at a rate of yield no less than the prevailing yield on outstanding marketable Treasury secu- rities of comparable maturity, as determined by the Secretary. If the Secretary does not pur- chase such obligations, the Postal Service may proceed to issue and sell them to a party or par- ties other than the Secretary upon notice to the Secretary and upon consultation as to the date of issuance, maximum rates of interest, and other terms and conditions. (b) Subject to the conditions of subsection (a) of this section, the Postal Service may require the Secretary of the Treasury to purchase obli- gations of the Postal Service under section 2005 in such amounts as will not cause the holding by the Secretary of the Treasury resulting from such required purchases to exceed $2,000,000,000 at any one time. This subsection shall not be construed as limiting the authority of the Sec- retary to purchase obligations of the Postal Service under section 2005 in excess of such amount. (c) Notwithstanding section 2005(d)(5) or 2011(e)(4)(E) of this title, obligations issued by the Postal Service shall be obligations of the Government of the United States, and payment of principal and interest thereon shall be fully guaranteed by the Government of the United States, such guaranty being expressed on the face thereof, if and to the extent that— (1) the Postal Service requests the Secretary of the Treasury to pledge the full faith and credit of the Government of the United States for the payment of principal and interest thereon; and (2) the Secretary, in his discretion, deter- mines that it would be in the public interest to do so. (Pub. L. 91–375, Aug. 12, 1970, 84 Stat. 741; Pub. L. 109–435, title IV, § 401(b)(4), Dec. 20, 2006, 120 Stat. 3225.) Editorial Notes AMENDMENTS 2006—Subsec. (a). Pub. L. 109–435, § 401(b)(4)(A), in- serted ‘‘or 2011’’ after ‘‘section 2005’’ in first sentence. Subsec. (b). Pub. L. 109–435, § 401(b)(4)(B), inserted ‘‘under section 2005’’ before ‘‘in such amounts’’ in first sentence and before ‘‘in excess of such amount.’’ in sec- ond sentence. Subsec. (c). Pub. L. 109–435, § 401(b)(4)(C), inserted ‘‘or 2011(e)(4)(E)’’ after ‘‘section 2005(d)(5)’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE Section effective July 1, 1971, pursuant to Resolution No. 71–9 of the Board of Governors. See section 15(a) of Pub. L. 91–375, set out as a note preceding section 101 of this title. § 2007. Public debt character of the obligations of the Postal Service For the purpose of any purchase of the obliga- tions of the Postal Service, the Secretary of the Treasury is authorized to use as a public debt transaction the proceeds from the sale of any se- curities issued under chapter 31 of title 31, as now or hereafter in force, and the purposes for which securities may be issued under chapter 31 of title 31, as now or hereafter in force, are ex- tended to include any purchases of the obliga- tions of the Postal Service under this chapter. The Secretary of the Treasury may, at any time, sell any of the obligations of the Postal Service acquired by him under this chapter. All redemp- tions, purchases, and sales by the Secretary of the obligations of the Postal Service shall be treated as public debt transactions of the United States.