To amend the Small Business Act and the Communications Act of 1934 to increase participation by small businesses in spectrum auctions conducted by the Federal Communications Commission.

SECTION 1. PURPOSE.

    The purpose of this Act is to increase telecommunications ownership 
opportunities for small businesses, including small businesses owned or 
controlled by socially disadvantaged individuals, through Small 
Business Administration participation in a market-oriented 
restructuring of the credit aspects of Federal Communications 
Commission telecommunications spectrum auctions.

SEC. 2. ASSOCIATE ADMINISTRATOR FOR TELECOMMUNICATIONS FINANCE.

    (a) In General.--Section 4(b)(1) of the Small Business Act (15 
U.S.C. 633(b)(1)) is amended--
            (1) in the fifth sentence, by striking ``five'' and 
        inserting ``six''; and
            (2) by adding at the end the following new sentence: ``One 
        of the Associate Administrators shall be designated at the time 
        of appointment as the Associate Administrator for 
        Telecommunications Finance and shall have the qualifications 
        and responsibilities specified in subsection (g).''.
    (b) Qualifications and Responsibilities.--Section 4 of the Small 
Business Act (15 U.S.C. 633) is amended by adding at the end the 
following new subsection:
    ``(g) Associate Administrator for Telecommunications Finance.--
            ``(1) In general.--The Associate Administrator for 
        Telecommunications Finance--
                    ``(A) shall be an employee in the competitive 
                service or in the Senior Executive Service and a career 
                appointee;
                    ``(B) shall be responsible to the Administrator for 
                the supervision and management of financing in the area 
                of telecommunications, including the programs and other 
                activities under section 38 and section 39;
                    ``(C) shall establish, with respect to 
                telecommunications concerns, the detailed definitions 
                or standards referred to in section 3(a)(2);
                    ``(D) shall have authority--
                            ``(i) to prescribe maximum amounts for loan 
                        guarantees under any program under section 38 
                        or 39;
                            ``(ii) to approve all loan guarantees in 
                        telecommunications; and
                            ``(iii) to approve all direct loans under 
                        section 38(a)(1); and
                    ``(E) in addition to any other duties under this 
                Act, shall have authority to approve loan guarantees 
                under section 7(a) with respect to Federal 
                Communications Commission spectrum licenses acquired in 
                the secondary market.
            ``(2) Neutrality in choice of program by applicant for loan 
        or loan guarantee.--In the administration of the 
        Telecommunications Spectrum Installment Loan Program under 
        section 38 and the Telecommunications Accelerated Certified 
        Lender Program under section 39, the Associate Administrator 
        for Telecommunications Finance shall observe strict neutrality 
        as to the choice that a potential applicant may make as to the 
        appropriateness of a program for the applicant. The choice of 
        one program over the other shall be solely that of the 
        applicant and the Associate Administrator shall neither 
        encourage nor discourage any applicant in that choice.''.

SEC. 3. SMALL BUSINESS ADMINISTRATION FINANCING FOR ENTREPRENEUR 
              PARTICIPATION IN TELECOMMUNICATIONS SPECTRUM AUCTIONS 
              CONDUCTED BY FEDERAL COMMUNICATIONS COMMISSION.

    The Small Business Act (15 U.S.C. 631 et seq.) is amended--
            (1) by redesignating section 37 as section 40; and
            (2) by inserting after section 36 the following new 
        sections:

``SEC. 37. TELECOMMUNICATIONS FINANCE OFFICE.

    ``(a) In General.--There is established, within the Administration, 
an office to perform functions relating to the policies and programs of 
the Administration with respect to financing in the area of 
telecommunications. The office--
            ``(1) shall be known as the `Telecommunications Finance 
        Office';
            ``(2) shall be headed by the Associate Administrator for 
        Telecommunications Finance under section 4(g);
            ``(3) shall be staffed by employees who are from diverse 
        backgrounds and who are highly skilled in the areas of 
        telecommunications technology and telecommunications financing; 
        and
            ``(4) shall be the principal entity within the 
        Administration for implementation of the programs under 
        sections 38 and 39.
    ``(b) Funding.--The expenses of the Telecommunications Finance 
Office shall be paid from the Telecommunications Loan Guarantee Fund, 
established under section 715 of the Communications Act of 1934.

``SEC. 38. TELECOMMUNICATIONS SPECTRUM INSTALLMENT LOAN PROGRAM.

    ``(a) In General.--There is established a program, to be known as 
the `Telecommunications Spectrum Installment Loan Program', under which 
the Administrator--
            ``(1) shall make direct loans to qualified 
        telecommunications borrowers for acquisition of spectrum 
        licenses through Federal Communications Commission auction; and
            ``(2) shall guarantee loans to qualified telecommunications 
        borrowers for telecommunications equipment and working capital 
        in connection with any acquisition referred to in paragraph 
        (1).
    ``(b) Direct Loan Conditions.--
            ``(1) Limitation on disbursement.--The Administrator may 
        not disburse any loan amount under subsection (a)(1) if the 
        cost of the license involved exceeds the approved loan amount 
        plus, as determined by the Administrator, cash available to the 
        applicant for the purpose of paying the difference between the 
        approved loan amount and the cost of the license.
            ``(2) Interest at market rate.--The rate of interest on a 
        loan shall be the prime interest rate or such other competitive 
        market rate as the Administrator determines to be appropriate.
            ``(3) Interest-only period.--The Administrator, in 
        accordance with criteria established by regulation, may 
        provide, on a case-by-case basis, for an initial period during 
        which a borrower under subsection (a)(1) shall pay interest 
        only. In the case of such a determination, loan principal shall 
        be amortized over the remainder of the loan term. The maximum 
        interest-only period under this paragraph is 6 years.
            ``(4) Maximum loan term.--The term of any loan under 
        subsection (a)(1) may not exceed the term of the spectrum 
        license involved.
    ``(c) Loan Guarantee Condition.--The Administrator may make loan 
guarantees under subsection (a)(2) to a borrower under subsection 
(a)(1) only for telecommunications equipment and working capital 
necessary to carry out the terms of the license to be financed.
    ``(d) Security Interest and Forced Sale Conditions for Direct Loans 
and Loan Guarantees.--The Administrator shall require, as a condition 
of any direct loan under subsection (a)(1) and any loan guarantee under 
subsection (a)(2), that--
            ``(1) any disbursement of a loan amount be fully protected 
        by a secured interest in the proceeds of a sale or other 
        assignment of the license involved; and
            ``(2) the loan agreement contain specific measures by 
        which, in the case of a default by the borrower, the lender may 
        require the borrower to sell or otherwise assign the license.
    ``(e) General Applicability; Waiver Exception.--Loans and loan 
guarantees under this section shall be subject to all otherwise 
applicable provisions of this Act, except that the Administrator may 
waive any limitation on the amount of an individual loan or loan 
guarantee or on the total amount of loans or loan guarantees to a 
single borrower.
    ``(f) Treasury Account.--The Administrator shall notify the 
Secretary of the Treasury of each loan transaction entered into under 
subsection (a)(1). Upon receipt of notice under the preceding sentence, 
the Secretary shall establish an account in the Treasury for the loan.
    ``(g) Definitions.--As used in this section--
            ``(1) the term `qualified telecommunications borrower' 
        means a small business concern that, as determined by the 
        Administrator, has, in addition to the other requirements of 
        this Act, a level of specialized telecommunications expertise 
        (including technical knowledge, business skill, and management 
        experience) that is appropriate for the purpose for which the 
        loan or guarantee involved is made; and
            ``(2) the term `Administrator' means the Administrator, 
        acting through the Associate Administrator for 
        Telecommunications Finance.
    ``(h) Collection of Data.--The Administrator shall collect data 
with respect to the operation of the program under this section. The 
data so collected--
            ``(1) shall be accumulated on a calendar year basis;
            ``(2) shall be maintained in an electronic database;
            ``(3) shall include information on the ethnicity, race, and 
        sex of all applicants, whether the applications involved are 
        approved, denied, withdrawn, or otherwise disposed of; and
            ``(4) shall include other information that, as determined 
        by the Administrator, is relevant to the disposition of 
        applications.
    ``(i) Report.--Not later than December 31 of each year, the 
Administrator shall submit to the Congress a report, with respect to 
the preceding calendar year, of the status of the program under this 
section. The report shall include--
            ``(1) a statistical analysis (without personal identifying 
        information) of the diversity characteristics of applicants and 
        borrowers under the program; and
            ``(2) a probability analysis with respect to the diversity 
        of applicants who receive loans under the program.

``SEC. 39. TELECOMMUNICATIONS ACCELERATED CERTIFIED LENDER PROGRAM.

    ``(a) In General.--There is established a program, to be known as 
the `Telecommunications Accelerated Certified Lender Program', under 
which the Administrator--
            ``(1) shall guarantee loans made to qualified 
        telecommunications borrowers--
                    ``(A) for acquisition of spectrum licenses through 
                Federal Communications Commission auction; and
                    ``(B) for acquisition of spectrum licenses in the 
                secondary market for licenses originally acquired 
                through Federal Communications Commission auction; and
            ``(2) shall guarantee loans made to qualified 
        telecommunications borrowers for telecommunications equipment 
        and working capital in connection with any acquisition referred 
        to in paragraph (1).
    ``(b) Funding.--The expenses of loan guarantees under subsection 
(a) shall be paid from the Telecommunications Loan Guarantee Fund, 
established under section 715 of the Communications Act of 1934.
    ``(c) Approved Lenders.--Loans guaranteed under this section shall 
be made by lenders that are insured depositary institutions and are 
approved by the Administrator. In evaluating an institution for 
approval, the Administrator shall take into consideration the financial 
stability of the institution, the experience and expertise of the 
institution in lending to telecommunications borrowers, and the need 
for diversity in the management and ownership of approved institutions.
    ``(d) Loan Guarantee Conditions.--
            ``(1) Limitation on disbursement.--The Administrator shall 
        require, as a condition of any loan guarantee under subsection 
        (a)(1), that the lender may not disburse any loan amount if the 
        cost of the license involved exceeds the approved loan amount 
        plus, as determined by the Administrator, cash available to the 
        applicant for the purpose of paying the difference between the 
        approved loan amount and the cost of the license.
            ``(2) Security interest and forced sale requirements.--The 
        Administrator shall require, as a condition of any loan 
        guarantee under subsection (a), that--
                    ``(A) any disbursement of a loan amount be fully 
                protected by a secured interest in the proceeds of a 
                sale or other assignment of the license involved; and
                    ``(B) the loan agreement contain specific measures 
                by which, in the case of a default by the borrower, the 
                lender may require the borrower to sell or otherwise 
                assign the license.
    ``(e) General Applicability; Waiver Exception.--Loan guarantees 
under this section shall be subject to all otherwise applicable 
provisions of this Act, except that the Administrator may waive any 
limitation on the amount of an individual loan guarantee or on the 
total amount of loan guarantees to a single borrower.
    ``(f) Definitions.--As used in this section--
            ``(1) the term `qualified telecommunications borrower' 
        means a small business concern that, as determined by the 
        Administrator, has, in addition to the other requirements of 
        this Act, a level of specialized telecommunications expertise 
        (including technical knowledge, business skill, and management 
        experience) that is appropriate for the purpose for which the 
        loan or guarantee involved is made; and
            ``(2) the term `Administrator' means the Administrator, 
        acting through the Associate Administrator for 
        Telecommunications Finance.
    ``(g) Collection of Data.--The Administrator shall collect data 
with respect to the operation of the program under this section. The 
data so collected--
            ``(1) shall be accumulated on a calendar year basis;
            ``(2) shall be maintained in an electronic database;
            ``(3) shall include information on the ethnicity, race, and 
        sex of all applicants, whether the applications involved are 
        approved, denied, withdrawn, or otherwise disposed of; and
            ``(4) shall include other information that, as determined 
        by the Administrator, is relevant to the disposition of 
        applications.
    ``(h) Report.--Not later than December 31 of each year, the 
Administrator shall submit to the Congress a report, with respect to 
the preceding calendar year, of the status of the program under this 
section. The report shall include--
            ``(1) a statistical analysis (without personal identifying 
        information) of the diversity characteristics of applicants and 
        borrowers under the program; and
            ``(2) a probability analysis with respect to the diversity 
        of applicants who receive loans under the program.''.

SEC. 4. TELECOMMUNICATIONS LOAN GUARANTEE FUND.

    (a) In General.--Title VII of the Communications Act of 1934 is 
amended by inserting after section 714 (42 U.S.C. 614) the following 
new section:

``SEC. 715. TELECOMMUNICATIONS LOAN GUARANTEE FUND.

    ``(a) Establishment.--
            ``(1) In general.--There is hereby established the 
        Telecommunications Loan Guarantee Fund (hereafter in this 
        section referred to as the `Fund') in the Department of the 
        Treasury under the control of the Secretary of the Treasury 
        (hereafter in this section referred to as the `Secretary').
            ``(2) Initial capitalization of fund.--The first 
        $10,000,000,000 of proceeds received from the auction of 
        spectrum licenses by the Federal Communications Commission 
        after the date of the enactment of this section shall be 
        deposited in the Fund and shall constitute the capitalization 
        of the Fund.
    ``(b) Maintenance of Fund.--
            ``(1) In general.--Amounts in the Fund shall be deposited 
        by the Secretary in depositaries designated by the Secretary 
        which have also been designated by the Telecommunications 
        Finance Office of the Small Business Administration as 
        certified telecommunications lenders.
            ``(2) Interest.--Interest paid by depositaries on amounts 
        deposited in accordance with paragraph (1) shall be deposited 
        in the Fund and be available for the purposes of the Fund.
    ``(c) Purpose of Fund.--Amounts in the Fund shall be available to 
meet any obligation of the Small Business Administration arising under 
a loan guarantee issued by the Telecommunications Finance Office of the 
Small Business Administration in connection with a loan under section 
38(a)(2) or section 39(a) of the Small Business Act.''.

SEC. 5. PARTICIPATION IN SPECTRUM AUCTIONS.

    Section 309(j)(5) of the Communications Act of 1934 (47 U.S.C. 
309(j)(5)) is amended--
            (1) by striking ``No person'' and inserting the following:
                    ``(A) In general.--No person''; and
            (2) by adding at the end the following:
                    ``(B) Qualified telecommunications borrowers.--With 
                respect to any person that meets the qualification 
                requirements of this paragraph and that is a qualified 
                telecommunications borrower under section 38 or 39 of 
                the Small Business Act, the Commission shall accept, in 
                lieu of any upfront payment or earnest money deposit 
                required by Commission regulation, a letter of credit 
                provided to such borrower under such section that 
                equals or exceeds the amount of such required payment 
                or deposit. In any competitive bidding conducted under 
                this subsection in which the Commission identifies any 
                such qualified telecommunications borrower as the high 
                bidder at the time of declaring that the bidding has 
                closed, the Commission shall notify the Administrator 
                of the Small Business Administration of the identity of 
                such bidder, the amount of the high bid, and the total 
                amount required to be deposited with the Commission to 
                qualify for the award of the license under Commission 
                regulations. In the case of a qualified 
                telecommunications borrower under section 38, the 
                amount of such deposit may be satisfied by debiting the 
                loan account of the borrower at the Treasury.''.

Summary: Amends the Small Business Act to establish within the Small Business Administration (SBA) an Associate Administrator for Telecommunications Finance to supervise and manage SBA financing in the area of telecommunications. Authorizes the Associate Administrator to approve SBA loan guarantees with respect to Federal Communications Commission (FCC) spectrum licenses acquired in the secondary market. Establishes a Telecommunications Finance Office. Establishes the Telecommunications Spectrum Installment Loan Program to: (1) make direct loans to qualified telecommunications borrowers (borrowers) for the acquisition of spectrum licenses through FCC auction. And (2) guarantee loans to borrowers for telecommunications equipment and working capital in connection with spectrum license acquisitions. Establishes the Telecommunications Accelerated Certified Lender Program for the guarantee by certified lenders of loans made to borrowers for: (1) the acquisition of spectrum licenses through either FCC auction or the secondary market. And (2) telecommunications equipment and working capital in connection with spectrum license acquisitions. Requires certified lenders to be insured depository institutions approved by the SBA. Amends the Communications Act of 1934 to: (1) establish the Telecommunications Loan Guarantee Fund for financing loans authorized under this Act. And (2) require the FCC, with respect to FCC spectrum auctions, to accept from a borrower a letter of credit in lieu of any upfront payment or other earnest money required by FCC regulation.