A bill to amend the National Telecommunications and Information Administration Organization Act to facilitate the reallocation of spectrum from governmental to commercial users.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Commercial Spectrum Enhancement 
Act''.

SEC. 2. RELOCATION OF ELIGIBLE FEDERAL ENTITIES FOR THE REALLOCATION OF 
              SPECTRUM FOR COMMERCIAL PURPOSES.

    Section 113(g) of the National Telecommunications and Information 
Administration Organization Act (47 U.S.C. 923(g)) is amended by 
striking paragraphs (1) through (3) and inserting the following:--
            ``(1) Eligible federal entities.--Any Federal entity that 
        operates a Federal Government station assigned to a band of 
        frequencies specified in paragraph (2) and that incurs 
        relocation costs because of the reallocation of frequencies 
        from Federal use to non-Federal use shall receive payment for 
        such costs from the Spectrum Relocation Fund, in accordance 
        with section 118 of this Act. For purposes of this paragraph, 
        Federal power agencies exempted under subsection (c)(4) that 
        choose to relocate from the frequencies identified for 
        reallocation pursuant to subsection (a), are eligible to 
        receive payment under this paragraph.
            ``(2) Eligible frequencies.--The bands of eligible 
        frequencies for purposes of this section are as follows:
                    ``(A) the 216-220 megahertz band, the 1432-1435 
                megahertz band, the 1710-1755 megahertz band, and the 
                2385-2390 megahertz band of frequencies; and
                    ``(B) any other band of frequencies reallocated 
                from Federal use to non-Federal use after January 1, 
                2003, that is assigned by competitive bidding pursuant 
                to section 309(j) of the Communications Act of 1934 (47 
                U.S.C. 309(j)), except for bands of frequencies 
                previously identified by the National 
                Telecommunications and Information Administration in 
                the Spectrum Reallocation Final Report, NTIA Special 
                Publication 95-32 (1995).
            ``(3) Definition of relocation costs.--For purposes of this 
        subsection, the term `relocation costs' means the costs 
        incurred by a Federal entity to achieve comparable capability 
        of systems, regardless of whether that capability is achieved 
        by relocating to a new frequency assignment or by utilizing an 
        alternative technology. Such costs include--
                    ``(A) the costs of any modification or replacement 
                of equipment, software, facilities, operating manuals, 
                training costs, or regulations that are attributable to 
                relocation;
                    ``(B) the costs of all engineering, equipment, 
                software, site acquisition and construction costs, as 
                well as any legitimate and prudent transaction expense, 
                including outside consultants, and reasonable 
                additional costs incurred by the Federal entity that 
                are attributable to relocation, including increased 
                recurring costs associated with the replacement 
                facilities;
                    ``(C) the costs of engineering studies, economic 
                analyses, or other expenses reasonably incurred in 
                calculating the estimated relocation costs that are 
                provided to the Commission pursuant to paragraph (4) of 
                this subsection;
                    ``(D) the one-time costs of any modification of 
                equipment reasonably necessary to accommodate 
                commercial use of such frequencies prior to the 
                termination of the Federal entity's primary allocation 
                or protected status, when the eligible frequencies as 
                defined in paragraph (2) of this subsection are made 
                available for private sector uses by competitive 
                bidding and a Federal entity retains primary allocation 
                or protected status in those frequencies for a period 
                of time after the completion of the competitive bidding 
                process; and
                    ``(E) the costs associated with the accelerated 
                replacement of systems and equipment if such 
                acceleration is necessary to ensure the timely 
                relocation of systems to a new frequency assignment.
            ``(4) Notice to commission of estimated relocation costs.--
                    ``(A) The Commission shall notify the NTIA at least 
                18 months prior to the commencement of any auction of 
                eligible frequencies defined in paragraph (2). At least 
                6 months prior to the commencement of any such auction, 
                the NTIA, on behalf of the Federal entities and after 
                review by the Office of Management and Budget, shall 
                notify the Commission of estimated relocation costs and 
                timelines for such relocation.
                    ``(B) Upon timely request of a Federal entity, the 
                NTIA shall provide such entity with information 
                regarding an alternative frequency assignment or 
                assignments to which their radiocommunications 
                operations could be relocated for purposes of 
                calculating the estimated relocation costs and 
                timelines to be submitted to the Commission pursuant to 
subparagraph (A).
                    ``(C) To the extent practicable and consistent with 
                national security considerations, the NTIA shall 
                provide the information required by subparagraphs (A) 
                and (B) by the geographic location of the Federal 
                entities' facilities or systems and the frequency bands 
                used by such facilities or systems.
            ``(5) Notice to congressional committees and gao.--The NTIA 
        shall, at the time of providing an initial estimate of 
        relocation costs to the Commission under paragraph (4)(A), 
        submit to the Committees on Appropriations and Energy and 
        Commerce of the House of Representatives, the Committees on 
        Appropriations and Commerce, Science, and Transportation of the 
        Senate, and the Comptroller General a copy of such estimate and 
        the timelines for relocation.
            ``(6) Implementation of procedures.--The NTIA shall take 
        such actions as necessary to ensure the timely relocation of 
        Federal entities' spectrum-related operations from frequencies 
        defined in paragraph (2) to frequencies or facilities of 
        comparable capability. Upon a finding by the NTIA that a 
        Federal entity has achieved comparable capability of systems by 
        relocating to a new frequency assignment or by utilizing an 
        alternative technology, the NTIA shall terminate the entity's 
        authorization and notify the Commission that the entity's 
        relocation has been completed. The NTIA shall also terminate 
        such entity's authorization if the NTIA determines that the 
        entity has unreasonably failed to comply with the timeline for 
        relocation submitted by the Director of the Office of 
        Management and Budget under section 118(d)(2)(B).''.

SEC. 3. MINIMUM AUCTION RECEIPTS AND DISPOSITION OF PROCEEDS.

    (a) Auction Design.--Section 309(j)(3) of the Communications Act of 
1934 (47 U.S.C. 309(j)(3)) is amended--
            (1) by striking ``and'' at the end of subparagraph (D);
            (2) by striking the period at the end of subparagraph (E) 
        and inserting ``; and''; and
            (3) by adding at the end the following new subparagraph:
                    ``(F) for any auction of eligible frequencies 
                described in section 113(g)(2) of the National 
                Telecommunications and Information Administration 
                Organization Act (47 U.S.C. 923(g)(2)), the recovery of 
                110 percent of estimated relocation costs as provided 
                to the Commission pursuant to section 113(g)(4) of such 
                Act.''.
    (b) Special Auction Provisions for Eligible Frequencies.--Section 
309(j) of such Act is further amended by adding at the end the 
following new paragraph:
            ``(15) Special auction provisions for eligible 
        frequencies.--
                    ``(A) Special regulations.--The Commission shall 
                revise the regulations prescribed under paragraph 
                (4)(F) of this subsection to prescribe methods by which 
                the total cash proceeds from any auction of eligible 
                frequencies described in section 113(g)(2) of the 
                National Telecommunications and Information 
                Administration Organization Act (47 U.S.C. 923(g)(2)) 
                shall at least equal 110 percent of the total estimated 
                relocation costs provided to the Commission pursuant to 
                section 113(g)(4) of such Act.
                    ``(B) Conclusion of auctions contingent on minimum 
                proceeds.--The Commission shall not conclude any 
                auction of eligible frequencies described in section 
                113(g)(2) of such Act if the total cash proceeds 
                attributable to such spectrum are less than 110 percent 
                of the total estimated relocation costs provided to the 
                Commission pursuant to section 113(g)(4) of such Act. 
                If the Commission is unable to conclude an auction for 
                the foregoing reason, the Commission shall cancel the 
                auction, return within 45 days after the auction 
                cancellation date any deposits from participating 
                bidders held in escrow, and absolve such bidders from 
                any obligation to the United States to bid in any 
                subsequent reauction of such spectrum.
                    ``(C) Authority to issue prior to 
                deauthorization.--In any auction conducted under the 
                regulations required by subparagraph (A), the 
                Commission may grant a license assigned for the use of 
                eligible frequencies prior to the termination of an 
                eligible Federal entity's authorization. However, the 
                Commission shall condition such license by requiring 
                that the licensee cannot cause harmful interference to 
                such Federal entity until such entity's authorization 
                has been terminated by the National Telecommunications 
                and Information Administration.''.
    (c) Deposit of Proceeds.--Paragraph (8) of section 309(j) of the 
Communications Act of 1934 (47 U.S.C. 309(j)) is amended--
            (1) in subparagraph (A), by inserting ``or subparagraph 
        (D)'' after ``subparagraph (B)''; and
            (2) by adding at the end the following new subparagraph:
                    ``(D) Disposition of cash proceeds.--Cash proceeds 
                attributable to the auction of any eligible frequencies 
                described in section 113(g)(2) of the National 
                Telecommunications and Information Administration 
                Organization Act (47 U.S.C. 923(g)(2)) shall be 
                deposited in the Spectrum Relocation Fund established 
                under section 118 of such Act, and shall be available 
                in accordance with that section.''.

SEC. 4. ESTABLISHMENT OF FUND AND PROCEDURES.

    Part B of the National Telecommunications and Information 
Administration Organization Act is amended by adding after section 117 
(47 U.S.C. 927) the following new section:

``SEC. 118. SPECTRUM RELOCATION FUND.

    ``(a) Establishment of Spectrum Relocation Fund.--There is 
established on the books of the Treasury a separate fund to be known as 
the `Spectrum Relocation Fund' (in this section referred to as the 
`Fund'), which shall be administered by the Office of Management and 
Budget (in this section referred to as `OMB'), in consultation with the 
NTIA.
    ``(b) Crediting of Receipts.--The Fund shall be credited with the 
amounts specified in section 309(j)(8)(D) of the Communications Act of 
1934 (47 U.S.C. 309(j)(8)(D)).
    ``(c) Used To Pay Relocation Costs.--The amounts in the Fund from 
auctions of eligible frequencies are authorized to be used to pay 
relocation costs, as defined in section 113(g)(3) of this Act, of an 
eligible Federal entity incurring such costs with respect to relocation 
from those frequencies.
    ``(d) Fund Availability.--
            ``(1) Appropriation.--There are hereby appropriated from 
        the Fund such sums as are required to pay the relocation costs 
        specified in subsection (c).
            ``(2) Transfer conditions.--None of the funds provided 
        under this subsection may be transferred to any eligible 
        Federal entity--
                    ``(A) unless the Director of OMB has determined, in 
                consultation with the NTIA, the appropriateness of such 
                costs and the timeline for relocation; and
                    ``(B) until 30 days after the Director of the OMB 
                has submitted to the Committees on Appropriations and 
                Energy and Commerce of the House of Representatives, 
                the Committees on Appropriations and Commerce, Science, 
                and Transportation of the Senate, and the Comptroller 
                General a detailed plan describing how the sums 
                transferred from the Fund will be used to pay 
                relocation costs in accordance with such subsection and 
                the timeline for such relocation.
            ``(3) Reversion of unused funds.--Any unexpended balances 
        in the Fund that are remaining after the payment of the 
        relocation costs that are payable from the Fund shall revert to 
        and be deposited in the general fund of the Treasury not later 
        than 8 years after the date of the initial deposit to the Fund.
    ``(e) Transfer to Eligible Federal Entities.--
            ``(1) Transfer.--
                    ``(A) Amounts made available pursuant to subsection 
                (d) shall be transferred to eligible Federal entities, 
                as defined in section 113(g)(1) of this Act.
                    ``(B) An eligible Federal entity may receive more 
                than one such transfer, but if the sum of the 
                subsequent transfer or transfers exceeds 10 percent of 
                the original transfer--
                            ``(i) such subsequent transfers are subject 
                        to prior approval by the Director of OMB as 
                        required by subsection (d)(2)(A);
                            ``(ii) the notice to the committees 
                        containing the plan required by subsection 
                        (d)(2)(B) shall be not less than 45 days prior 
                        to the date of the transfer that causes such 
                        excess above 10 percent;
                            ``(iii) such notice shall include, in 
                        addition to such plan, a explanation of need 
                        for such subsequent transfer or transfers; and
                            ``(iv) the Comptroller General shall, 
                        within 30 days after receiving such plan, 
                        review such plan and submit to such committees 
                        an assessment of the explanation for the 
                        subsequent transfer or transfers.
                    ``(C) Such transferred amounts shall be credited to 
                the appropriations account of the eligible Federal 
                entity which has incurred, or will incur, such costs, 
                and shall, subject to paragraph (2), remain available 
                until expended.
            ``(2) Retransfer to fund.--An eligible Federal entity that 
        has received such amounts shall report its expenditures to OMB 
        and shall transfer any amounts in excess of actual relocation 
        costs back to the Fund immediately after the NTIA has notified 
        the Commission that the entity's relocation is complete, or has 
        determined that such entity has unreasonably failed to complete 
        such relocation in accordance with the timeline required by 
        subsection (d)(2)(A).''.

SEC. 5. TELECOMMUNICATIONS DEVELOPMENT FUND.

    Section 714(f) of the Communications Act of 1934 (47 U.S.C. 614(f)) 
is amended to read as follows:
    ``(f) Lending and Credit Operations.--Loans or other extensions of 
credit from the Fund shall be made available to an eligible small 
business on the basis of--
            ``(1) the analysis of the business plan of the eligible 
        small business;
            ``(2) the reasonable availability of collateral to secure 
        the loan or credit extension;
            ``(3) the extent to which the loan or credit extension 
        promotes the purposes of this section; and
            ``(4) other lending policies as defined by the Board.''.

SEC. 6. CONSTRUCTION.

     Nothing in this Act is intended to modify section 1062(b) of the 
National Defense Authorization Act for Fiscal Year 2000 (Public Law 
106-65).

SEC. 7. EXEMPTION FROM SEQUESTRATION.

    The Spectrum Relocation Fund shall be exempt from reduction under 
any order issued under section 254 of the Balanced Budget and Emergency 
Deficit Control Act of 1985, as amended.

SEC. 8. REPORT.

    The National Telecommunications and Information Administration 
shall submit an annual report to the Committees on Appropriations and 
Energy and Commerce of the House of Representatives, the Committees on 
Appropriations and Commerce, Science, and Transportation of the Senate, 
and the Comptroller General on--
            (1) the progress made in adhering to the timelines 
        applicable to relocation from eligible frequencies required 
        under section 118(d)(2)(A) of the National Telecommunications 
        and Information Administration Organization Act, separately 
        stated on a communication system-by-system basis and on an 
        auction-by-auction basis; and
            (2) with respect to each relocated communication system and 
        auction, a statement of the estimate of relocation costs 
        required under section 113(g)(4) of such Act, the actual 
        relocations costs incurred, and the amount of such costs paid 
        from the Spectrum Relocation Fund.

Summary: Commercial Spectrum Enhancement Act - Amends the National Telecommunications and Information Administration Organization Act to revise provisions concerning the reallocation of spectrum from governmental to commercial users. Mandates that any Federal entity that operates a Government station assigned within specified bands of frequencies and that incurs relocation costs due to reallocation to non-Federal use receive reimbursement from the Spectrum Relocation Fund established in this Act. Requires the Federal Communications Commission (FCC) to notify the National Telecommunications and Information Administration (NTIA) at least 18 months prior to commencement of any auction of eligible frequencies. Requires NTIA to: (1) notify the FCC of estimated relocation costs at least six months prior to the commencement of any such auction. And (2) submit to specified congressional committees and the Comptroller General a copy of cost estimates and time lines for relocation. Amends the Communications Act of 1934 to require the FCC: (1) in designing competitive bidding under such auctions, to have as an objective the recovery of 110 percent of the estimated relocation costs. (2) prescribe methods by which the total cash proceeds from any auction equals at least 110 percent of such costs. And (3) prohibit the FCC from concluding any auction under which such goal is not reached. Authorizes the FCC to grant a license for the advance use of eligible frequencies pending an auction, on the condition that the licensee cannot cause harmful interference to the Federal entity until the entity's authorization has been terminated. Establishes the Fund. Exempts the Fund from sequestration under the Balanced Budget and Emergency Deficit Control Act of 1985. Provides the basis for loans or other extensions of credit made from the Telecommunications Development Fund .