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.

    Subsection (g) of section 113 of the National Telecommunications 
and Information Administration Organization Act (47 U.S.C. 923(g)) is 
amended to read as follows:
    ``(g) Relocation of Eligible Federal Entities for the Reallocation 
of Spectrum for Commercial Purposes.--
            ``(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 is eligible for 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, 1432-1435 
                megahertz band, 1710-1755 megahertz band, and 2385-2390 
                megahertz band of frequencies; and
                    ``(B) any other band of frequencies reallocated 
                from Federal use to non-Federal use after January 1, 
                2002.
            ``(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 
                9 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) 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 from the auction 
                cancellation date any deposits from participating 
                bidders held in escrow, and absolve such bidders from 
                any obligation 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)). The proceeds attributable to each 
auction of any eligible frequencies described in section 113(g)(2) of 
this Act shall be deposited in a separate account in the Fund.
    ``(c) Used To Pay Relocation Costs.--The amounts in an account in 
the Fund from an auction 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 
                Office of Management and Budget has submitted to the 
                House and Senate Committees on Appropriations, the 
                House Committee on Energy and Commerce, and the Senate 
                Committee on Commerce, Science, and Transportation 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 
        of an account in the Fund that are remaining after the payment 
        of the relocation costs that are payable from such account 
        shall revert to and be deposited in the general fund of the 
        Treasury. Such reversion and deposit shall be made not later 
        than the end of the fiscal year in which the NTIA has notified 
        the Commission that all of the entities whose relocation costs 
        are payable from such account have either--
                    ``(A) completed their relocation; or
                    ``(B) been determined by NTIA to have unreasonably 
                failed to complete such relocation in accordance with 
                the timeline required by paragraph (2)(A).
    ``(e) Transfer to Eligible Federal Entities.--
            ``(1) Transfer.--Amounts made available pursuant to 
        subsection (d) shall be transferred to eligible Federal 
        entities, as defined in section 113(g)(1) of this Act. An 
        eligible Federal entity may, subject to subsection (d)(2) of 
        this section and the availability of funds in the relevant 
        account, receive more than one such transfer, but all such 
        transfers are subject to prior approval by the Director of OMB. 
        Such transferred amounts shall be credited to the account of 
        the eligible Federal entity which has incurred, or will incur, 
        such costs, and shall remain available until the NTIA has 
        notified the Commission that the Federal entity has completed 
        the relocation, or the NTIA has determined that such entity has 
        unreasonably failed to complete such relocation in accordance 
        with the timeline required by paragraph (2)(A).
            ``(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 account in the Fund from which it was 
        transferred 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 
        paragraph (2)(A).''.

SEC. 5. 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. 6. 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. 7. 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 and the Committees 
on Appropriations and Commerce, Science, and Transportation of the 
Senate 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. Makes any Federal entity that operates a Government station assigned within a specified band of frequencies and that incurs relocation costs due to reallocation to non-Federal use eligible for reimbursement from the Spectrum Relocation Fund established in this Act. Requires the National Telecommunications and Information Administration to notify the Federal Communications Commission (FCC) of estimated relocation costs at least six months prior to the commencement of any auction of eligible frequencies. 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.