79–008

106TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 106–579

PROVIDING FOR THE CONSIDERATION OF H.R. 3615, THE

RURAL LOCAL BROADCAST SIGNAL ACT

APRIL 12, 2000.—Referred to the House Calendar and ordered to be printed

Mr. LINDER, from the Committee on Rules,

submitted the following

REPORT

[To accompany H. Res. 475]

The Committee on Rules, having had under consideration House

Resolution 475 by a non record vote, report the same to the House

with the recommendation that the resolution be adopted.

SUMMARY OF PROVISIONS OF THE RESOLUTION

The resolution provides for the consideration of H.R. 3615, the

Rural Local Broadcast Signal Act, under a closed rule. The rule

provides one hour of debate in the House divided equally between

and controlled by the chairmen and ranking minority members of

the Committees on Agriculture and Commerce.

The rule provides that, in lieu of the amendments recommended

by the Committees on Agriculture and Commerce now printed in

the bill, the amendment in the nature of a substitute printed in

this report shall be considered as adopted. Finally, the rule provides one motion to recommit with or without instructions.

TEXT OF AMENDMENT IN THE NATURE OF A SUBSTITUTE CONSIDERED

AS ADOPTED

Strike all after the enacting clause and insert the following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) SHORT TITLE.—This Act may be cited as the ‘‘Rural Local

Broadcast Signal Act’’.

(b) TABLE OF CONTENTS.—The table of contents of this Act is as

follows:

Sec. 1. Short title; table of contents.

Sec. 2. Purpose.

Sec. 3. Rural television loan guarantee board.

Sec. 4. Approval of loan guarantees.

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Sec. 5. Administration of loan guarantees.

Sec. 6. Prohibition on use of funds for spectrum auctions.

Sec. 7. Prohibition on use of funds by incumbent cable operators.

Sec. 8. Annual audit.

Sec. 9. Exemption from must carry requirements.

Sec. 10. Additional availability of broadcast signals in rural areas.

Sec. 11. Improved cellular service in rural areas.

Sec. 12. Technical amendment.

Sec. 13. Definitions.

Sec. 14. Authorizations of appropriations.

Sec. 15. Sunset.

SEC. 2. PURPOSE.

The purpose of this Act is to facilitate access, on a technologically

neutral basis and by December 31, 2006, to signals of local television stations for households located in unserved areas and underserved areas.

SEC. 3. RURAL TELEVISION LOAN GUARANTEE BOARD.

(a) ESTABLISHMENT.—There is established the Rural Television

Loan Guarantee Board (in this Act referred to as the ‘‘Board’’).

(b) MEMBERS.—

(1) IN GENERAL.—Subject to paragraph (2), the Board shall

consist of the following members:

(A) The Secretary of the Treasury, or the designee of the

Secretary.

(B) The Secretary of Agriculture, or the designee of the

Secretary.

(C) The Secretary of Commerce, or the designee of the

Secretary.

(2) REQUIREMENT AS TO DESIGNEES.—An individual may not

be designated a member of the Board under paragraph (1) unless the individual is an officer of the United States pursuant

to an appointment by the President, by and with the advice

and consent of the Senate.

(c) FUNCTIONS OF THE BOARD.—

(1) IN GENERAL.—The Board shall determine whether or not

to approve loan guarantees under this Act. The Board shall

make such determinations consistent with the purpose of this

Act and in accordance with this subsection and section 4 of this

Act.

(2) CONSULTATION AUTHORIZED.—

(A) IN GENERAL.—In carrying out its functions under

this Act, the Board shall consult with such departments

and agencies of the Federal Government as the Board considers appropriate, including the Department of Commerce, the Department of Agriculture, the Department of

the Treasury, the Department of Justice, the Department

of the Interior, the Board of Governors of the Federal Reserve System, the Federal Communications Commission,

the Federal Trade Commission, and the National Aeronautics and Space Administration.

(B) RESPONSE.—A department or agency consulted by

the Board under subparagraph (A) shall provide the Board

such expertise and assistance as the Board requires to

carry out its functions under this Act.

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(3) APPROVAL BY MAJORITY VOTE.—The determination of the

Board to approve a loan guarantee under this Act shall be by

a vote of a majority of the Board.

SEC. 4. APPROVAL OF LOAN GUARANTEES.

(a) AUTHORITY TO APPROVE LOAN GUARANTEES.—Subject to the

provisions of this section and consistent with the purpose of this

Act, the Board may approve loan guarantees under this Act.

(b) REGULATIONS.— (1) REQUIREMENTS.—The Administrator (as defined in section 5 of this Act), under the direction of and for approval by

the Board, shall prescribe regulations to implement the provisions of this Act and shall do so not later than 120 days after

funds authorized to be appropriated under section 15 of this

Act have been appropriated in a bill signed into law.

(2) ELEMENTS.—The regulations prescribed under paragraph

(1) shall—

(A) set forth the form of any application to be submitted

to the Board under this Act;

(B) set forth time periods for the review and consideration by the Board of applications to be submitted to the

Board under this Act, and for any other action to be taken

by the Board with respect to such applications;

(C) provide appropriate safeguards against the evasion

of the provisions of this Act;

(D) set forth the circumstances in which an applicant, together with any affiliate of an applicant, shall be treated

as an applicant for a loan guarantee under this Act;

(E) include requirements that appropriate parties submit

to the Board any documents and assurances that are required for the administration of the provisions of this Act;

and

(F) include such other provisions consistent with the

purpose of this Act as the Board considers appropriate.

(3) CONSTRUCTION.—(A) Nothing in this Act shall be construed to prohibit the Board from requiring, to the extent and

under circumstances considered appropriate by the Board, that

affiliates of an applicant be subject to certain obligations of the

applicant as a condition to the approval or maintenance of a

loan guarantee under this Act.

(B) If any provision of this Act or the application of such provision to any person or entity or circumstance is held to be invalid by a court of competent jurisdiction, the remainder of this

Act, or the application of such provision to such person or entity or circumstance other than those as to which it is held invalid, shall not be affected thereby.

(c) AUTHORITY LIMITED BY APPROPRIATIONS ACTS.—The Board

may approve loan guarantees under this Act only to the extent provided for in advance in appropriations Acts.

(d) REQUIREMENTS AND CRITERIA APPLICABLE TO APPROVAL.—

(1) IN GENERAL.—The Board shall utilize the underwriting

criteria developed under subsection (g), and any relevant information provided by the departments and agencies with which

the Board consults under section 3, to determine which loans

may be eligible for a loan guarantee under this Act.

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(2) PREREQUISITES.—In addition to meeting the underwriting

criteria under paragraph (1), a loan may not be guaranteed

under this Act unless—

(A) the loan is made to finance the acquisition, improvement, enhancement, construction, deployment, launch, or

rehabilitation of the means by which local television broadcast signals will be delivered principally to an unserved

area or an underserved area (or both);

(B) the proceeds of the loan will not be used for operating, advertising, or promotion expenses;

(C) the proposed project, as determined by the National

Telecommunications and Information Administration, is

not likely to have a substantial adverse impact on competition that outweighs the benefits of improving access to the

signals of a local television station in an unserved area or

an underserved area (or both), and is commercially viable;

(D) the loan is provided by—

(i) an insured depository institution (as that term is

defined in section 3 of the Federal Deposit Insurance

Act) that is acceptable to the Board;

(ii) a lender that is acceptable to the Board, and—

(I) has not fewer than one issue of outstanding

debt that is related within the highest three rating categories of a nationally recognized statistical

rating agency; or

(II) has provided financing to entities with outstanding debt from the Rural Utilities Service and

which possess, in the judgment of the Board, the

expertise, capacity, and capital strength to provide

financing pursuant to this Act; or

(iii) a nonprofit corporation, including the National

Rural Utilities Cooperative Finance Corporation, engaged primarily in commercial lending, if the Board

determines that such nonprofit corporation has one or

more issues of outstanding long-term debt that is

rated within the highest 3 rating categories of a nationally recognized statistical rating organization, and,

if the Board determines that the making of the loan

by such nonprofit corporation will cause a decline in

the debt rating mentioned above, the Board at its discretion may disapprove the loan guarantee on this

basis;

(E) the loan (including Other Debt as defined in subsection (f)(2)(B)) is not provided by a lender that is a governmental entity, the Federal Agricultural Mortgage Corporation, any institution supervised by the Office of Federal Housing Enterprise Oversight, the Federal Housing

Finance Board, or any affiliate of any such entity;

(F) the loan has terms, in the judgment of the Board,

that are consistent in material respects with the terms of

similar obligations in the private capital market;

(G) repayment of the loan is required to be made within

a term of the lesser of—

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(i) 25 years from the date of the execution of the

loan; or

(ii) the economically useful life, as determined by

the Board or in consultation with persons or entities

deemed appropriate by the Board, of the primary assets to be used in the delivery of the signals concerned; and

(H) the loan meets any additional criteria developed

under subsection (g).

(3) PROTECTION OF UNITED STATES FINANCIAL INTERESTS.— The Board may not approve the guarantee of a loan under this

Act unless—

(A) the Board has been given documentation, assurances, and access to information, persons, and entities necessary, as determined by the Board, to address issues relevant to the review of the loan by the Board for purposes

of this Act; and

(B) the Board makes a determination in writing that—

(i) to the best of its knowledge upon due inquiry, the

assets, facilities, or equipment covered by the loan will

be utilized economically and efficiently;

(ii) the terms, conditions, security, and schedule and

amount of repayments of principal and the payment of

interest with respect to the loan protect the financial

interests of the United States and are reasonable;

(iii) to the extent possible, the value of collateral

provided by an applicant is at least equal to the unpaid balance of the loan amount covered by the loan

guarantee (the ‘‘Amount’’ for purposes of this clause);

and if the value of collateral provided by an applicant

is less than the Amount, the additional required collateral is provided by any affiliate of the applicant;

and if the combined value of collateral provided by an

applicant and any affiliate is not at least equal to the

Amount, the collateral from such affiliate represents

all of such affiliate’s assets;

(iv) all necessary and required regulatory and other

approvals, spectrum rights, and delivery permissions

have been received for the loan, the project under the

loan, and the Other Debt, if any, under subsection

(f)(2)(B);

(v) the loan would not be available on reasonable

terms and conditions without a loan guarantee under

this Act; and

(vi) repayment of the loan can reasonably be expected.

(e) CONSIDERATIONS.—

(1) TYPE OF MARKET.—

(A) PRIORITY CONSIDERATIONS.—To the maximum extent

practicable, the Board shall give priority in the approval of

loan guarantees under this Act in the following order:

First, to projects that will serve the greatest number of

households in unserved areas and the number of States

(including noncontiguous States); and second, to projects

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that will serve the greatest number of households in underserved areas. In each instance, the Board shall consider

the project’s estimated cost per household to be served.

(B) PROHIBITION.—The Board may not approve a loan

guarantee under this Act for a project that is designed primarily to serve 1 or more of the 40 most populated designated market areas (as that term is defined in section

122(j) of title 17, United States Code).

(2) OTHER CONSIDERATIONS.—The Board shall consider other

factors, which shall include projects that would—

(A) offer a separate tier of local broadcast signals;

(B) provide lower projected costs to consumers of such

separate tier; and

(C) enable the delivery of local broadcast signals consistent with the purpose of this Act by a means reasonably

compatible with existing systems or devices predominantly

in use.

(f) GUARANTEE LIMITS.— (1) LIMITATION ON AGGREGATE VALUE OF LOANS.—The aggregate value of all loans for which loan guarantees are issued

under this Act (including the unguaranteed portion of loans

issued under paragraph (2)(A)) and Other Debt under paragraph (2)(B) may not exceed $1,250,000,000.

(2) GUARANTEE LEVEL.—A loan guarantee issued under this

Act—

(A) may not exceed an amount equal to 80 percent of a

loan meeting in its entirety the requirements of subsection

(d)(2)(A). If only a portion of a loan meets the requirements of that subsection, the Board shall determine that

percentage of the loan meeting such requirements (the ‘‘applicable portion’’) and may issue a loan guarantee in an

amount not exceeding 80 percent of the applicable portion;

or

(B) may, as to a loan meeting in its entirety the requirements of subsection (d)(2)(A), cover the amount of such

loan only if that loan is for an amount not exceeding 80

percent of the total debt financing for the project, and

other debt financing (also meeting in its entirety the requirements of subsection (d)(2)(A)) from the same source

for a total amount not less than 20 percent of the total

debt financing for the project (‘‘Other Debt’’) has been approved.

(g) UNDERWRITING CRITERIA.—Within the period provided for

under subsection (b)(1), the Board shall, in consultation with the

Director of the Office of Management and Budget and an independent public accounting firm, develop underwriting criteria relating to the guarantee of loans that are consistent with the purpose

of this Act, including appropriate collateral and cash flow levels for

loans guaranteed under this Act, and such other matters as the

Board considers appropriate.

(h) CREDIT RISK PREMIUMS.—

(1) ESTABLISHMENT AND ACCEPTANCE.—The Board may establish and approve the acceptance of credit risk premiums

with respect to a loan guarantee under this Act in order to

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cover the cost, as determined under section 504(b)(1) of the

Federal Credit Reform Act of 1990, of the loan guarantee. To

the extent that appropriations of budget authority are insufficient to cover the cost, as so determined, of a loan guarantee

under this Act, credit risk premiums shall be accepted from a

non-Federal source under this subsection on behalf of the applicant for the loan guarantee.

(2) CREDIT RISK PREMIUM AMOUNT.— (A) IN GENERAL.—The Board shall determine the amount

of any credit risk premium to be accepted with respect to

a loan guarantee under this Act on the basis of—

(i) the financial and economic circumstances of the

applicant for the loan guarantee, including the amount

of collateral offered;

(ii) the proposed schedule of loan disbursements;

(iii) the business plans of the applicant for providing

service;

(iv) any financial commitment from a broadcast signal provider; and

(v) the concurrence of the Director of the Office of

Management and Budget as to the amount of the credit risk premium.

(B) PROPORTIONALITY.—To the extent that appropriations of budget authority are sufficient to cover the cost, as

determined under section 504(b)(1) of the Federal Credit

Reform Act of 1990, of loan guarantees under this Act, the

credit risk premium with respect to each loan guarantee

shall be reduced proportionately.

(C) PAYMENT OF PREMIUMS.—Credit risk premiums

under this subsection shall be paid to an account (the ‘‘Escrow Account’’) established in the Treasury which shall accrue interest and such interest shall be retained by the account, subject to subparagraph (D).

(D) DEDUCTIONS FROM ESCROW ACCOUNT.—If a default

occurs with respect to any loan guaranteed under this Act

and the default is not cured in accordance with the terms

of the underlying loan or loan guarantee agreement, the

Administrator, in accordance with subsections (h) and (i) of

section 5 of this Act, shall liquidate, or shall cause to be

liquidated, all assets collateralizing such loan as to which

it has a lien or security interest. Any shortfall between the

proceeds of the liquidation net of costs and expenses relating to the liquidation, and the guarantee amount paid pursuant to this Act shall be deducted from funds in the Escrow Account and credited to the Administrator for payment of such shortfall. At such time as determined under

subsection (d)(2)(G) when all loans guaranteed under this

Act have been repaid or otherwise satisfied in accordance

with this Act and the regulations promulgated hereunder,

remaining funds in the Escrow Account, if any, shall be refunded, on a pro rata basis, to applicants whose loans

guaranteed under this Act were not in default, or where

any default was cured in accordance with the terms of the

underlying loan or loan guarantee agreement.

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(i) JUDICIAL REVIEW.—The decision of the Board to approve or

disapprove the making of a loan guarantee under this Act shall not

be subject to judicial review.

SEC. 5. ADMINISTRATION OF LOAN GUARANTEES.

(a) IN GENERAL.—The Administrator of the Rural Utilities Service (in this Act referred to as the ‘‘Administrator’’) shall issue and

otherwise administer loan guarantees that have been approved by

the Board in accordance with sections 3 and 4 of this Act.

(b) SECURITY FOR PROTECTION OF UNITED STATES FINANCIAL IN- TERESTS.—

(1) TERMS AND CONDITIONS.—An applicant shall agree to

such terms and conditions as are satisfactory, in the judgment

of the Board, to ensure that, as long as any principal or interest is due and payable on a loan guaranteed under this Act,

the applicant—

(A) shall maintain assets, equipment, facilities, and operations on a continuing basis;

(B) shall not make any discretionary dividend payments

that impair its ability to repay obligations guaranteed

under this Act;

(C) shall remain sufficiently capitalized; and

(D) shall submit to, and cooperate fully with, any audit

of the applicant under section 8(a)(2) of this Act.

(2) COLLATERAL.— (A) EXISTENCE OF ADEQUATE COLLATERAL.—An applicant

shall provide the Board such documentation as is necessary, in the judgment of the Board, to provide satisfactory evidence that appropriate and adequate collateral secures a loan guaranteed under this Act.

(B) FORM OF COLLATERAL.—Collateral required by subparagraph (A) shall consist solely of assets of the applicant, any affiliate of the applicant, or both (whichever the

Board considers appropriate), including primary assets to

be used in the delivery of signals for which the loan is

guaranteed.

(C) REVIEW OF VALUATION.—The value of collateral securing a loan guaranteed under this Act may be reviewed

by the Board, and may be adjusted downward by the

Board if the Board reasonably believes such adjustment is

appropriate.

(3) LIEN ON INTERESTS IN ASSETS.—Upon the Board’s approval of a loan guarantee under this Act, the Administrator

shall have liens on assets securing the loan, which shall be superior to all other liens on such assets, and the value of the

assets (based on a determination satisfactory to the Board)

subject to the liens shall be at least equal to the unpaid balance of the loan amount covered by the loan guarantee, or that

value approved by the Board under section 4(d)(3)(B)(iii) of this

Act.

(4) PERFECTED SECURITY INTEREST.—With respect to a loan

guaranteed under this Act, the Administrator and the lender

shall have a perfected security interest in assets securing the

loan that are fully sufficient to protect the financial interests

of the United States and the lender.

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(5) INSURANCE.—In accordance with practices in the private

capital market, as determined by the Board, the applicant for

a loan guarantee under this Act shall obtain, at its expense, insurance sufficient to protect the financial interests of the

United States, as determined by the Board.

(c) ASSIGNMENT OF LOAN GUARANTEES.—The holder of a loan

guarantee under this Act may assign the loan guaranteed under

this Act in whole or in part, subject to such requirements as the

Board may prescribe.

(d) MODIFICATION.—The Board may approve the modification of

any term or condition of a loan guarantee or a loan guaranteed

under this Act, including the rate of interest, time of payment of

principal or interest, or security requirements only if—

(1) the modification is consistent with the financial interests

of the United States;

(2) consent has been obtained from the parties to the loan

agreement;

(3) the modification is consistent with the underwriting criteria developed under section 4(g) of this Act;

(4) the modification does not adversely affect the interest of

the Federal Government in the assets or collateral of the applicant;

(5) the modification does not adversely affect the ability of

the applicant to repay the loan; and

(6) the National Telecommunications and Information Administration has been consulted by the Board regarding the

modification.

(e) PERFORMANCE SCHEDULES.— (1) PERFORMANCE SCHEDULES.—An applicant for a loan guarantee under this Act for a project covered by section 4(e)(1) of

this Act shall enter into stipulated performance schedules with

the Administrator with respect to the signals to be provided

through the project.

(2) PENALTY.—The Administrator may assess against and

collect from an applicant described in paragraph (1) a penalty

not to exceed 3 times the interest due on the guaranteed loan

of the applicant under this Act if the applicant fails to meet

its stipulated performance schedule under that paragraph.

(f) COMPLIANCE.—The Administrator, in cooperation with the

Board and as the regulations of the Board may provide, shall enforce compliance by an applicant, and any other party to a loan

guarantee for whose benefit assistance under this Act is intended,

with the provisions of this Act, any regulations under this Act, and

the terms and conditions of the loan guarantee, including through

the submittal of such reports and documents as the Board may require in regulations prescribed by the Board and through regular

periodic inspections and audits.

(g) COMMERCIAL VALIDITY.—A loan guarantee under this Act

shall be incontestable—

(1) in the hands of an applicant on whose behalf the loan

guarantee is made, unless the applicant engaged in fraud or

misrepresentation in securing the loan guarantee; and

(2) as to any person or entity (or their respective successor

in interest) who makes or contracts to make a loan to the apVerDate 20-MAR-2000 05:35 Apr 13, 2000 Jkt 079008 PO 00000 Frm 00009 Fmt 6659 Sfmt 6602 E:\HR\OC\HR579.XXX pfrm01 PsN: HR579
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plicant for the loan guarantee in reliance thereon, unless such

person or entity (or respective successor in interest) engaged in

fraud or misrepresentation in making or contracting to make

such loan.

(h) DEFAULTS.—The Board shall prescribe regulations governing

defaults on loans guaranteed under this Act, including the administration of the payment of guaranteed amounts upon default.

(i) RECOVERY OF PAYMENTS.—

(1) IN GENERAL.—The Administrator shall be entitled to recover from an applicant for a loan guarantee under this Act

the amount of any payment made to the holder of the guarantee with respect to the loan.

(2) SUBROGATION.—Upon making a payment described in

paragraph (1), the Administrator shall be subrogated to all

rights of the party to whom the payment is made with respect

to the guarantee which was the basis for the payment.

(3) DISPOSITION OF PROPERTY.—

(A) SALE OR DISPOSAL.—The Administrator shall, in an

orderly and efficient manner, sell or otherwise dispose of

any property or other interests obtained under this Act in

a manner that maximizes taxpayer return and is consistent with the financial interests of the United States.

(B) MAINTENANCE.—The Administrator shall maintain in

a cost-effective and reasonable manner any property or

other interests pending sale or disposal of such property or

other interests under subparagraph (A).

(j) ACTION AGAINST OBLIGOR.—

(1) AUTHORITY TO BRING CIVIL ACTION.—The Administrator

may bring a civil action in an appropriate district court of the

United States in the name of the United States or of the holder

of the obligation in the event of a default on a loan guaranteed

under this Act. The holder of a loan guarantee shall make

available to the Administrator all records and evidence necessary to prosecute the civil action.

(2) FULLY SATISFYING OBLIGATIONS OWED THE UNITED

STATES.—The Administrator may accept property in satisfaction of any sums owed the United States as a result of a default on a loan guaranteed under this Act, but only to the extent that any cash accepted by the Administrator is not sufficient to satisfy fully the sums owed as a result of the default.

(k) BREACH OF CONDITIONS.—The Administrator shall commence

a civil action in a court of appropriate jurisdiction to enjoin any activity which the Board finds is in violation of this Act, the regulations under this Act, or any conditions which were duly agreed to,

and to secure any other appropriate relief, including relief against

any affiliate of the applicant.

(l) ATTACHMENT.—No attachment or execution may be issued

against the Administrator or any property in the control of the Administrator pursuant to this Act before the entry of a final judgment (as to which all rights of appeal have expired) by a Federal,

State, or other court of competent jurisdiction against the Administrator in a proceeding for such action.

(m) FEES.—

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(1) APPLICATION FEE.—The Board shall charge and collect

from an applicant for a loan guarantee under this Act a fee to

cover the cost of the Board in making necessary determinations and findings with respect to the loan guarantee application under this Act. The amount of the fee shall be reasonable.

(2) LOAN GUARANTEE ORIGINATION FEE.—The Board shall

charge, and the Administrator may collect, a loan guarantee

origination fee with respect to the issuance of a loan guarantee

under this Act.

(3) USE OF FEES COLLECTED.—Any fee collected under this

subsection shall be used to offset administrative costs under

this Act, including costs of the Board and of the Administrator.

(n) REQUIREMENTS RELATING TO AFFILIATES.—

(1) INDEMNIFICATION.—The United States shall be indemnified by any affiliate (acceptable to the Board) of an applicant

for a loan guarantee under this Act for any losses that the

United States incurs as a result of—

(A) a judgment against the applicant or any of its affiliates;

(B) any breach by the applicant or any of its affiliates of

their obligations under the loan guarantee agreement;

(C) any violation of the provisions of this Act, and the

regulations prescribed under this Act, by the applicant or

any of its affiliates;

(D) any penalties incurred by the applicant or any of its

affiliates for any reason, including violation of a stipulated

performance schedule under subsection (e); and

(E) any other circumstances that the Board considers appropriate.

(2) LIMITATION ON TRANSFER OF LOAN PROCEEDS.—An applicant for a loan guarantee under this Act may not transfer any

part of the proceeds of the loan to an affiliate.

(o) EFFECT OF BANKRUPTCY.—(1) Notwithstanding any other provision of law, whenever any person or entity is indebted to the

United States as a result of any loan guarantee issued under this

Act and such person or entity is insolvent or is a debtor in a case

under title 11, United States Code, the debts due to the United

States shall be satisfied first.

(2) A discharge in bankruptcy under title 11, United States Code,

shall not release a person or entity from an obligation to the

United States in connection with a loan guarantee under this Act.

SEC. 6. PROHIBITION ON USE OF FUNDS FOR SPECTRUM AUCTIONS.

Notwithstanding any other provision of this Act, no loan guarantee under this Act may be granted or used to provide funds for

the acquisition of licenses for the use of spectrum in any competitive bidding under section 309(j) of the Communications Act of

1934 (47 U.S.C. 309(j)).

SEC. 7. PROHIBITION ON USE OF FUNDS BY INCUMBENT CABLE OPERATORS.

Notwithstanding any other provision of this Act, no loan guarantee under this Act may be granted or used to provide funds for—

(1) the extension of any cable system to any area or areas

for which the cable operator of such cable system has a cable

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franchise, if such franchise obligates the operator to extend

such system to such area or areas; or

(2) the upgrading or enhancement of the services provided

over any cable system, unless such upgrading or enhancement

is principally undertaken to extend services to areas outside of

the previously existing franchise area of the cable operator.

SEC. 8. ANNUAL AUDIT.

(a) REQUIREMENT.—The Comptroller General of the United

States shall conduct on an annual basis an audit of—

(1) the administration of the provisions of this Act; and

(2) the financial position of each applicant who receives a

loan guarantee under this Act, including the nature, amount,

and purpose of investments made by the applicant.

(b) REPORT.—The Comptroller General shall submit to the Congress a report on each audit conducted under subsection (a).

SEC. 9. EXEMPTION FROM MUST CARRY REQUIREMENTS.

A facility of a satellite carrier, cable system, or other multichannel video programming distributor that is financed with a loan

guaranteed under this Act and that delivers local broadcast signals

in a television market pursuant to the provisions of section 338,

614, or 615 of the Communications Act of 1934 (47 U.S.C. 338, 534,

or 535) shall not be required to carry in such market a greater

number of local broadcast signals than the number of such signals

that is carried by the cable system serving the largest number of

subscribers in such market.

SEC. 10. ADDITIONAL AVAILABILITY OF BROADCAST SIGNALS IN

RURAL AREAS.

(a) OPENING OF FILING FOR ADDITIONAL TRANSLATOR AND LOW- POWER STATIONS.—The Federal Communications Commission

shall, in accordance with its regulations, open a filing period window for the acceptance of applications for television translator stations and low-power television stations in rural areas.

(b) DEADLINES FOR NOTICE.—The Commission shall announce the

filing period window no less than 90 days prior to the commencement of the window.

SEC. 11. IMPROVED CELLULAR SERVICE IN RURAL AREAS.

(a) REINSTATEMENT OF APPLICANTS AS TENTATIVE SELECTEES.— (1) IN GENERAL.—Notwithstanding the order of the Federal

Communications Commission in the proceeding described in

paragraph (3), the Commission shall—

(A) reinstate each applicant as a tentative selectee under

the covered rural service area licensing proceeding; and

(B) permit each applicant to amend its application, to

the extent necessary to update factual information and to

comply with the rules of the Commission, at any time before the Commission’s final licensing action in the covered

rural service area licensing proceeding.

(2) EXEMPTION FROM PETITIONS TO DENY.—For purposes of

the amended applications filed pursuant to paragraph (1)(B),

the provisions of section 309(d)(1) of the Communications Act

of 1934 (47 U.S.C. 309(d)(1)) shall not apply.

(3) PROCEEDING.—The proceeding described in this paragraph is the proceeding of the Commission In re Applications

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of Cellwave Telephone Services L.P, Futurewave General Partners L.P., and Great Western Cellular Partners, 7 FCC Rcd

No. 19 (1992).

(b) CONTINUATION OF LICENSE PROCEEDING; FEE ASSESSMENT.— (1) AWARD OF LICENSES.—The Commission shall award licenses under the covered rural service area licensing proceeding within 90 days after the date of the enactment of this

Act.

(2) SERVICE REQUIREMENTS.—The Commission shall provide

that, as a condition of an applicant receiving a license pursuant to the covered rural service area licensing proceeding, the

applicant shall provide cellular radiotelephone service to subscribers in accordance with sections 22.946 and 22.947 of the

Commission’s rules (47 CFR 22.946, 22.947); except that the

time period applicable under section 22.947 of the Commission’s rules (or any successor rule) to the applicants identified

in subparagraphs (A) and (B) of subsection (d)(1) shall be 3

years rather than 5 years and the waiver authority of the Commission shall apply to such 3-year period.

(3) CALCULATION OF LICENSE FEE.— (A) FEE REQUIRED.—The Commission shall establish a

fee for each of the licenses under the covered rural service

area licensing proceeding. In determining the amount of

the fee, the Commission shall consider—

(i) the average price paid per person served in the

Commission’s Cellular Unserved Auction (Auction No.

12); and

(ii) the settlement payments required to be paid by

the permittees pursuant to the consent decree set

forth in the Commission’s order, In re the Tellesis

Partners (7 FCC Rcd 3168 (1992)), multiplying such

payments by two.

(B) NOTICE OF FEE.—Within 30 days after the date an

applicant files the amended application permitted by subsection (a)(1)(B), the Commission shall notify each applicant of the fee established for the license associated with

its application.

(4) PAYMENT FOR LICENSES.—No later than 18 months after

the date that an applicant is granted a license, each applicant

shall pay to the Commission the fee established pursuant to

paragraph (3) for the license granted to the applicant under

paragraph (1).

(5) AUCTION AUTHORITY.—If, after the amendment of an application pursuant to subsection (a)(1)(B), the Commission

finds that the applicant is ineligible for grant of a license to

provide cellular radiotelephone services for a rural service area

or the applicant does not meet the requirements under paragraph (2) of this subsection, the Commission shall grant the license for which the applicant is the tentative selectee (pursuant to subsection (a)(1)(B) by competitive bidding pursuant to

section 309(j) of the Communications Act of 1934 (47 U.S.C.

309(j)).

(c) PROHIBITION OF TRANSFER.—During the 5-year period that begins on the date that an applicant is granted any license pursuant

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to subsection (a), the Commission may not authorize the transfer

or assignment of that license under section 310 of the Communications Act of 1934 (47 U.S.C. 310). Nothing in this Act may be construed to prohibit any applicant granted a license pursuant to subsection (a) from contracting with other licensees to improve cellular

telephone service.

(d) DEFINITIONS.—For the purposes of this section, the following

definitions shall apply:

(1) APPLICANT.—The term ‘‘applicant’’ means—

(A) Great Western Cellular Partners, a California general partnership chosen by the Commission as tentative

selectee for RSA #492 on May 4, 1989;

(B) Monroe Telephone Services L.P., a Delaware limited

partnership chosen by the Commission as tentative selectee for RSA #370 on August 24, 1989 (formerly Cellwave

Telephone Services L.P.); and

(C) FutureWave General Partners L.P., a Delaware limited partnership chosen by the Commission as tentative selectee for RSA #615 on May 25, 1990.

(2) COMMISSION.—The term ‘‘Commission’’ means the Federal Communications Commission.

(3) COVERED RURAL SERVICE AREA LICENSING PROCEEDING.—

The term ‘‘covered rural service area licensing proceeding’’

means the proceeding of the Commission for the grant of cellular radiotelephone licenses for rural service areas #492 (Minnesota 11), #370 (Florida 11), and #615 (Pennsylvania 4).

(4) TENTATIVE SELECTEE.—The term ‘‘tentative selectee’’

means a party that has been selected by the Commission under

a licensing proceeding for grant of a license, but has not yet

been granted the license because the Commission has not yet

determined whether the party is qualified under the Commission’s rules for grant of the license.

SEC. 12. TECHNICAL AMENDMENT.

Section 339(c) of the Communications Act of 1934 (47 U.S.C.

339(c)) is amended by adding at the end the following new paragraph:

‘‘(5) DEFINITION.—Notwithstanding subsection (d)(4), for purposes of paragraphs (2) and (4) of this subsection, the term

‘satellite carrier’ includes a distributor (as defined in section

119(d)(1) of title 17, United States Code), but only if the satellite distributor’s relationship with the subscriber includes

billing, collection, service activation, and service deactivation.’’.

SEC. 13. DEFINITIONS.

In this Act:

(1) AFFILIATE.—The term ‘‘affiliate’’—

(A) means any person or entity that controls, or is controlled by, or is under common control with, another person or entity; and

(B) may include any individual who is a director or senior management officer of an affiliate, a shareholder controlling more than 25 percent of the voting securities of an

affiliate, or more than 25 percent of the ownership interest

in an affiliate not organized in stock form.

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(2) UNSERVED AREA.—The term ‘‘unserved area’’ means any

area that—

(A) is outside the grade B contour (as determined using

standards employed by the Federal Communications Commission) of the local television broadcast signals serving a

particular designated market area; and

(B) does not have access to local television broadcast signals from any commercial, for-profit multichannel video

programming provider.

(3) UNDERSERVED AREA.—The term ‘‘underserved area’’

means any area that—

(A) is outside the grade A contour (as determined using

standards employed by the Federal Communications Commission) of the local television broadcast signals serving a

particular designated market area; and

(B) has access to local television broadcast signals from

not more than one commercial, for-profit multichannel

video provider.

(4) COMMON TERMS.—Except as provided in paragraphs (1)

through (4), any term used in this Act that is defined in the

Communications Act of 1934 (47 U.S.C. 151 et seq.) has the

meaning given that term in the Communications Act of 1934.

SEC. 14. AUTHORIZATIONS OF APPROPRIATIONS.

(a) COST OF LOAN GUARANTEES.—For the cost of the loans guaranteed under this Act, including the cost of modifying the loans, as

defined in section 502 of the Congressional Budget Act of 1974 (2

U.S.C. 661a), there are authorized to be appropriated for fiscal

years 2001 through 2006, such amounts as may be necessary.

(b) COST OF ADMINISTRATION.—There is hereby authorized to be

appropriated such sums as may be necessary to carry out the provisions of this Act, other than to cover costs under subsection (a).

(c) AVAILABILITY.—Any amounts appropriated pursuant to the

authorizations of appropriations in subsections (a) and (b) shall remain available until expended.

SEC. 15. SUNSET.

No loan guarantee may be approved under this Act after December 31, 2006.

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