```

[House Report 106-508]
[From the U.S. Government Publishing Office]

                                                                       
106th Congress                                            Rept. 106-508
                        HOUSE OF REPRESENTATIVES
 2d Session                                                      Part 1

=======================================================================

 
                    RURAL LOCAL BROADCAST SIGNAL ACT

                                _______
                                

                 March 1, 2000.--Ordered to be printed

                                _______
                                

Mr. Combest, from the Committee on Agriculture, submitted the following

                              R E P O R T

                        [To accompany H.R. 3615]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Agriculture, to whom was referred the bill 
(H.R. 3615) to amend the Rural Electrification Act of 1936 to 
ensure improved access to the signals of local television 
stations by multichannel video providers to all households 
which desire such service in unserved and underserved rural 
areas by December 31, 2006, having considered the same, report 
favorably thereon with an amendment and recommend that the bill 
as amended do pass.
  The amendment is as follows:
  Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Rural Local Broadcast Signal Act''.

SEC. 2. FINDINGS.

  Congress makes the following findings:
          (1) In 1936, most of the rural United States did not have 
        access to electrical service enjoyed by the rest of the United 
        States, and this lack of electrical service inhibited economic 
        development in the rural areas of the United States.
          (2) In response to this lack of service, Congress enacted the 
        Rural Electrification Act of 1936 (also known as the Norris-
        Rayburn Rural Electrification Act) which established the Rural 
        Electrification Administration to ensure that all Americans 
        have access to electrical service and to promote rural 
        development.
          (3) The program under the Rural Electrification Act of 1936 
        has successfully brought electricity to all parts of the rural 
        United States and has stimulated rural development throughout 
        the United States.
          (4) In 1949, most of the rural United States did not have 
        access to telephone service enjoyed by the rest of the United 
        States, and this lack of telephone service inhibited economic 
        development in the rural areas of the United States.
          (5) In response to this lack of service, Congress amended the 
        Rural Electrification Act of 1936 to assure that the rural 
        United States has access to telecommunications services, 
        including telephone services, distance learning, and 
        telemedicine in order to promote rural development.
          (6) The programs under these amendments have successfully 
        brought telecommunications to all parts of the United States 
        and has stimulated rural development throughout the United 
        States.
          (7) Public Law 93-32 amended the Rural Electrification Act of 
        1936 to establish a revolving fund for insured and guaranteed 
        loans.
          (8) The reorganization of the Department of Agriculture by 
        Public Law 103-354 created the Rural Utilities Service (RUS) 
        within the Department of Agriculture and assigned it the 
        responsibility for administering programs under the Rural 
        Electrification Act of 1936.
          (9) The Rural Utilities Service now manages a portfolio of 
        federally-guaranteed and direct loans in excess of 
        $42,000,000,000.
          (10) The Rural Utilities Service has granted loans for the 
        purpose of telecommunications services to more than 800 
        borrowers, including telephone and electricity cooperatives, in 
        all States of the United States.
          (11) Local television coverage is vitally important for rural 
        development efforts.
          (12) Local television programming broadcasts crop reports, 
        local news, weather reports, public service announcements, and 
        advertisements by local businesses, all of which are important 
        for rural development.
          (13) In today's age of modern communications, rural 
        communities often receive the majority of their information 
        from satellite platforms.
          (14) The rest of the United States, including most of the 
        rural United States, is not able to receive local television 
        signals via satellite.
          (15) Without access to local television signals, the 
        development of the rural United States is greatly inhibited.
          (16) Just as important public purposes were served by 
        bringing electricity to the rural United States and then by 
        bringing telephone service to the rural United States, so the 
        United States would be served by ensuring that the rural United 
        States can receive local television signals via satellite.
          (17) It is in the public interest that the Rural Utilities 
        Service of the Department of Agriculture utilize existing and 
        new loan guarantee programs to promote rural development by 
        ensuring that the rural United States has access to the signals 
        of local television stations by multichannel video providers.

SEC. 3. RURAL LOCAL TELEVISION SIGNALS.

  The Rural Electrification Act of 1936 (7 U.S.C. 901 et seq.) is 
amended by adding at the end the following:

               ``TITLE VI--RURAL LOCAL TELEVISION SIGNALS

``SEC. 601. DEFINITIONS.

  ``In this title:
          ``(1) Administrator.--The term `Administrator' means the 
        Administrator of the Rural Utilities Service.
          ``(2) Affiliate.--The term `affiliate' means any person or 
        entity that controls, or is controlled by, or is under common 
        control with, another person or entity.
          ``(3) Borrower.--The term `borrower' means any person or 
        entity receiving a loan guarantee under this title.
          ``(4) Cost.--
                  ``(A) In general.--The term `cost' means the 
                estimated long-term cost to the Government of a loan 
                guarantee or modification thereof, calculated on a net 
                present value basis, excluding administrative costs and 
                any incidental effects on governmental receipts or 
                outlays.
                  ``(B) Loan guarantees.--For purposes of this 
                paragraph the cost of a loan guarantee--
                          ``(i) shall be the net present value, at the 
                        time when the guaranteed loan is disbursed, of 
                        the estimated cash flows of--
                                  ``(I) payments by the Government to 
                                cover defaults and delinquencies, 
                                interest subsidies, or other payments; 
                                and
                                  ``(II) payments to the Government, 
                                including origination and other fees, 
                                penalties, and recoveries; and
                          ``(ii) shall include the effects of changes 
                        in loan terms resulting from the exercise by 
                        the guaranteed lender of an option included in 
                        the loan guarantee contract, or by the borrower 
                        of an option included in the guaranteed loan 
                        contract.
                  ``(C) Cost of modification.--The cost of the 
                modification shall be the difference between the 
                current estimate of the net present value of the 
                remaining cash flows under the terms of a loan 
                guarantee contract, and the current estimate of the net 
                present value of the remaining cash flows under the 
                terms of the contract, as modified.
                  ``(D) Discount rate.--In estimating net present 
                value, the discount rate shall be the average interest 
                rate on marketable Treasury securities of similar 
                maturity to the cash flows of the guarantee for which 
                the estimate is being made.
                  ``(E) Fiscal year assumptions.--When funds of a loan 
                guarantee under this title are obligated, the estimated 
                cost shall be based on the current assumptions, 
                adjusted to incorporate the terms of the loan contract, 
                for the fiscal year in which the funds are obligated.
          ``(5) Current.--The term `current' has the meaning given that 
        term in section 250(c)(9) of the Balanced Budget and Emergency 
        Deficit Control Act of 1985.
          ``(6) Designated market area.--The term `designated market 
        area' has the meaning given that term in section 122(j) of 
        title 17, United States Code.
          ``(7) Loan guarantee.--The term `loan guarantee' means any 
        guarantee, insurance, or other pledge with respect to the 
        payment of all or part of the principal or interest on any debt 
        obligation of a non-Federal borrower to the Federal Financing 
        Bank or a non-Federal lender, but does not include the 
        insurance of deposits, shares, or other withdrawable accounts 
        in financial institutions.
          ``(8) Modification.--The term `modification' means any 
        Government action that alters the estimated cost of an 
        outstanding loan guarantee (or loan guarantee commitment) from 
        the current estimate of cash flows, including the sale of loan 
        assets, with or without recourse, and the purchase of 
        guaranteed loans.
          ``(9) Common terms.--Except as provided in paragraphs (1) 
        through (9), any term used in this title that is defined in the 
        Communications Act of 1934 (47 U.S.C. 151 et seq.) has the 
        meaning given the term in that Act.

``SEC. 602. LOAN GUARANTEES.

  ``(a) Purpose.--The purpose of this title is to enable the 
Administrator to provide such loan guarantees as are necessary to 
ensure improved access to the signals of local television stations by 
multichannel video providers to all households which desire such 
service in unserved and underserved rural markets by December 31, 2006.
  ``(b) Assistance to Borrowers.--Subject to the appropriations 
limitation under subsection (c)(2), the Administrator may provide loan 
guarantees to borrowers to finance projects to provide local television 
broadcast signals by providers of multichannel video services including 
direct broadcast satellite licensees and licensees of multichannel 
multipoint distribution systems, to areas that do not receive local 
television broadcast signals over commercial for-profit direct-to-home 
satellite distribution systems. A borrower that receives a loan 
guarantee under this title may not transfer any part of the proceeds of 
the monies from the loans guaranteed under this program to an affiliate 
of the borrower.
  ``(c) Underwriting Criteria; Prerequisites.--
          ``(1) In general.--The Administrator shall administer the 
        underwriting criteria developed under subsection (f)(1) to 
        determine which loans are eligible for a guarantee under this 
        title.
          ``(2) Authority to make loan guarantees.--The Administrator 
        shall be authorized to guarantee loans under this title only to 
        the extent provided for in advance by appropriations Acts.
          ``(3) Prerequisites.--In addition to meeting the underwriting 
        criteria under paragraph (1), a loan is not eligible for a loan 
        guarantee under this title unless--
                  ``(A) the loan is made to finance the acquisition, 
                improvement, enhancement, construction, deployment, 
                launch, or rehabilitation of the means, including 
                spectrum rights, by which local television broadcast 
                signals will be delivered to an area not receiving such 
                signals over commercial for-profit direct-to-home 
                satellite distribution systems;
                  ``(B) the proceeds of the loan will not be used for 
                operating expenses;
                  ``(C) the total amount of all such loans may not 
                exceed in the aggregate $1,250,000,000;
                  ``(D) the loan does not exceed $100,000,000, except 
                that 1 loan under this title may exceed $100,000,000, 
                but shall not exceed $625,000,000;
                  ``(E) the loan bears interest and penalties which, in 
                the Administrator's judgment, are not unreasonable, 
                taking into consideration the prevailing interest rates 
                and customary fees incurred under similar obligations 
                in the private capital market; and
                  ``(F) the Administrator determines that taking into 
                account the practices of the private capital markets 
                with respect to the financing of similar projects, the 
                security of the loan is adequate.
          ``(4) Additional criteria.--In addition to the requirements 
        of paragraphs (1), (2), and (3), a loan for which a guarantee 
        is sought under this title shall meet any additional criteria 
        promulgated under subsection (f)(1).
  ``(d) Additional Requirements.--The Administrator may not make a loan 
guarantee under this title unless--
          ``(1) repayment of the loan is required to be made within a 
        term of the lesser of--
                  ``(A) 25 years from the date of its execution; or
                  ``(B) the useful life of the primary assets used in 
                the delivery of relevant signals;
          ``(2) the Administrator has been given the assurances and 
        documentation necessary to review and approve the guaranteed 
        loans; and
          ``(3) the Administrator makes a determination in writing 
        that--
                  ``(A) the applicant has given reasonable assurances 
                that the assets, facilities, or equipment will be 
                utilized economically and efficiently;
                  ``(B) necessary and sufficient regulatory approvals, 
                spectrum rights, and delivery permissions have been 
                received or will be obtained by project participants to 
                assure the financial feasibility of the project; and
                  ``(C) repayment of the loan can reasonably be 
                expected, including the use of an appropriate 
                combination of credit risk premiums and collateral 
                offered by the applicant to protect the Federal 
                Government.
  ``(e) Approval of NTIA Required.--
          ``(1) In general.--The Administrator may not issue a loan 
        guarantee under this title unless the National 
        Telecommunications and Information Administration consults with 
        the Administrator and certifies that the issuance of the loan 
        guarantee is consistent with subsection (a).
          ``(2) Certification.--The Administrator shall provide the 
        appropriate information on each loan guarantee application 
        recommended by the Administrator to the National 
        Telecommunications and Information Administration for 
        certification. If the National Telecommunications and 
        Information Administration fails to make the required 
        determination within 90 days after receiving the information 
        from the Administrator with respect to a particular loan 
        guarantee application, the certification shall be deemed to 
        have been granted.
  ``(f) Requirements.--
          ``(1) In general.--Not later than 180 days after the date of 
        enactment of this title, the Administrator shall consult with 
        an appropriate independent consultant, including a public 
        accounting firm, to develop underwriting criteria relating to 
        the issuance of loan guarantees, appropriate collateral and 
        cash flow levels for the types of loan guarantees that might be 
        issued under this title, and such other matters as the 
        Administrator determines appropriate.
          ``(2) Authority of administrator.--In lieu of or in 
        combination with appropriations of budget authority to cover 
        the costs of loan guarantees as required under section 
        504(b)(1) of the Federal Credit Reform Act of 1990, the 
        Administrator may accept on behalf of an applicant for 
        assistance under this title a commitment from a non-Federal 
        source to fund in whole or in part the credit risk premiums 
        with respect to the applicant's loan. The aggregate of 
        appropriations of budget authority and credit risk premiums 
        described in this paragraph with respect to a loan guarantee 
        may not be less than the cost of that loan guarantee.
          ``(3) Credit risk premium amount.--The Administrator shall 
        determine the amount required for credit risk premiums under 
        this subsection on the basis of--
                  ``(A) the circumstances of the applicant, including 
                the amount of collateral offered;
                  ``(B) the proposed schedule of loan disbursements;
                  ``(C) the borrower's business plans for providing 
                service;
                  ``(D) financial commitment from the broadcast signal 
                provider; and
                  ``(E) any other factors the Administrator considers 
                relevant.
          ``(4) Payment of premiums.--Credit risk premiums under this 
        subsection shall be paid to an account established in the 
        Treasury which shall accrue interest and such interest shall be 
        retained by the account. In addition, the Administrator may 
        accept credit risk premiums in the form of letters of credit or 
        other forms of non-cash instruments, which shall not accrue 
        interest. As obligations attached to a cohort of loans 
        established under paragraph (5) are being satisfied, credit 
        risk premiums for the cohort, and interest accrued thereon, 
        which are not required to mitigate losses shall be returned to 
        the original source on a pro rata basis.
          ``(5) Cohorts of loans.--In order to maintain sufficient 
        balances of credit risk premiums to adequately protect the 
        Federal Government from risk of default, while minimizing the 
        length of time the Government retains possession of those 
        balances, the Administrator in consultation with the Office of 
        Management and Budget shall establish cohorts of loans.
  ``(g) Conditions of Assistance.--A borrower shall agree to such terms 
and conditions as are sufficient, in the judgment of the Administrator 
to ensure that, as long as any principal or interest is due and payable 
on such obligation, the borrower--
          ``(1) will maintain assets, equipment, facilities, and 
        operations on a continuing basis;
          ``(2) will not make any discretionary dividend payments that 
        reduce the ability to repay obligations incurred under this 
        section; and
          ``(3) will remain sufficiently capitalized.
  ``(h) Lien on Interests in Assets.--Upon providing a loan guarantee 
to a borrower under this title, the Administrator shall have liens 
which shall be superior to all other liens on assets of the borrower 
equal to the unpaid balance of the loan subject to such guarantee.
  ``(i) Subordination or Sharing of Liens.--Notwithstanding subsection 
(h), at the request of a private lender providing financing to the 
borrower for the purposes set forth in subsection (a), the 
Administrator may offer--
          ``(1) to share the Government's lien on the borrower's 
        assets; or
          ``(2) to subordinate the Government's lien on the borrower's 
        assets.
  ``(j) Perfected Interest.--The Administrator and the lender shall 
have a perfected security interest in those assets of the borrower 
fully sufficient to protect the Administrator and the lender.
  ``(k) Insurance Policies.--In accordance with practices of private 
lenders, as determined by the Administrator, the borrower shall obtain, 
at its expense, insurance sufficient to protect the interests of the 
Federal Government, as determined by the Administrator.
  ``(l) Authorization of Appropriations.--For the additional costs of 
the loans guaranteed under this title, including the cost of modifying 
the loans as defined in section 502 of the Congressional Budget Act of 
1974 (2 U.S.C. 661(a)), there are authorized to be appropriated for 
fiscal years 2000 through 2006, such amounts as may be necessary. In 
addition there are authorized to be appropriated such sums as may be 
necessary to administer this title. Any amounts appropriated under this 
subsection shall remain available until expended.

``SEC. 603. ADMINISTRATION OF LOAN GUARANTEES.

  ``(a) Applications.--The Administrator shall prescribe the form and 
contents for an application for a loan guarantee under section 602.
  ``(b) Assignment of Loan Guarantees.--The holder of a loan guaranteed 
under this title may assign the loan guarantee in whole or in part, 
subject to such requirements as the Administrator may prescribe.
  ``(c) Modifications.--The Administrator may approve the modification 
of any term or condition of a loan guarantee including the rate of 
interest, time of payment of interest or principal, or security 
requirements, if--
          ``(1) the Administrator finds in writing that--
                  ``(A) the modification is equitable and is in the 
                overall best interests of the United States;
                  ``(B) consent has been obtained from the borrower and 
                the lender;
                  ``(C) the modification is consistent with the 
                objective underwriting criteria developed in 
                consultation with an appropriate independent 
                consultant, including a public accounting firm, under 
                section 602(f);
                  ``(D) the modification does not adversely affect the 
                Federal Government's interest in the entity's assets or 
                loan collateral; and
                  ``(E) the modification does not adversely affect the 
                entity's ability to repay the loan; and
          ``(2) the National Telecommunications and Information 
        Administration does not object to the modification on the 
        ground that it is inconsistent with the certification under 
        section 602(e).
  ``(d) Priority Markets.--
          ``(1) In general.--To the maximum extent practicable, the 
        Administrator shall give priority to projects which serve the 
        most underserved rural markets, as determined by the 
        Administrator. In making prioritization determinations, the 
        Administrator shall consider prevailing market conditions, 
        feasibility of providing service, population, terrain, and 
        other factors the Administrator determines appropriate.
          ``(2) Priority relating to consumer costs and separate tier 
        of signals.--The Administrator shall give priority to projects 
        that--
                  ``(A) offer a separate tier of local broadcast 
                signals; and
                  ``(B) provide lower projected costs to consumers of 
                such separate tier.
          ``(3) Performance schedules.--Applicants under this section 
        shall enter into stipulated performance schedules with the 
        Administrator.
          ``(4) Penalty.--In addition to any other authority of the 
        Administrator, the Administrator may assess a borrower a 
        penalty not to exceed 3 times the interest due on the 
        guaranteed loan, if the borrower fails to meet its stipulated 
        performance schedule. The penalty shall be paid to the account 
        established under section 602.
          ``(5) Limitation on consideration of most populated areas.--
        The Administrator shall not provide a loan guarantee for a 
        project that is primarily designed to serve the 40 most 
        populated designated market areas and shall take into 
        consideration the importance of serving rural markets that are 
        not likely to be otherwise offered service under section 122 of 
        title 17, United States Code, except through the loan guarantee 
        program under this title.
  ``(e) Compliance.--The Administrator shall enforce compliance by an 
applicant and any other party to the loan guarantee for whose benefit 
assistance is intended, with the provisions of this title, regulations 
issued hereunder, and the terms and conditions of the loan guarantee, 
including through regular periodic inspections and audits.
  ``(f) Commercial Validity.--For purposes of claims by any party other 
than the Administrator, a loan guarantee shall be conclusive evidence 
that the underlying obligation is in compliance with the provisions of 
the title, and that such obligation has been approved and is legal as 
to principal, interest, and other terms. Such a guarantee shall be 
valid and incontestable in the hands of a holder thereof, including the 
original lender or any other holder, as of the date when the 
Administrator granted the application therefore, except as to fraud or 
material misrepresentation by such holder.
  ``(g) Defaults.--The Administrator shall prescribe regulations 
governing a default on a loan guaranteed under this title.
  ``(h) Rights of the Administrator.--
          ``(1) Subrogation.--If the Administrator authorizes payment 
        to a holder, or a holder's agent, under subsection (g) in 
        connection with a loan guarantee made under section 602, the 
        Administrator shall be subrogated to all of the rights of the 
        holder with respect to the obligor under the loan.
          ``(2) Disposition of property.--The Administrator may 
        complete, recondition, reconstruct, renovate, repair, maintain, 
        operate, rent, sell, or otherwise dispose of any property or 
        other interests obtained under this title in a manner that 
        maximizes taxpayer return and is consistent with the public 
        convenience and necessity.
  ``(i) Action Against Obligor.--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 title. The holder of 
a guarantee shall make available to the Administrator all records and 
evidence necessary to prosecute the civil action. The Administrator may 
accept property in full or partial satisfaction of any sums owed as a 
result of default. If the Administrator receives, through the sale or 
other disposition of such property, an amount greater than the 
aggregate of--
          ``(1) the amount paid to the holder of a guarantee under 
        subsection (g); and
          ``(2) any other cost to the United States of remedying the 
        default, the Administrator shall pay such excess to the 
        obligor.
  ``(j) Breach of Conditions.--The Attorney General shall commence a 
civil action in a court of appropriate jurisdiction to enjoin any 
activity which the Administrator finds is in violation of this title, 
regulations issued hereunder, or any conditions which were duly agreed 
to, and to secure any other appropriate relief, including relief 
against any affiliate of the borrower.
  ``(k) Attachment.--No attachment or execution may be issued against 
the Administrator or any property in the control of the Administrator 
prior to the entry of final judgment to such effect in any State, 
Federal, or other court.
  ``(l) Investigation Charge and Fees.--
          ``(1) Appraisal fee.--The Administrator may charge and 
        collect from an applicant a reasonable fee for appraisal for 
        the value of the equipment or facilities for which the loan 
        guarantee is sought, and for making necessary determinations 
        and findings. The fee may not, in the aggregate, be more than 
        one-half of one percent of the principal amount of the 
        obligation.
          ``(2) Loan origination fee.--The Administrator may charge a 
        loan origination fee.
          ``(3) Use of fees.--Fees collected pursuant to this 
        subsection shall be credited to the account which administers 
        the loan guarantee program under this title. Such fees shall be 
        made available to the Administrator without further 
        appropriation and shall remain available until expended.
  ``(m) Annual Audit.--The Comptroller General of the United States 
shall annually audit the administration of this title and report the 
results of the audit to the Committee on Agriculture, Nutrition, and 
Forestry of the Senate and the Committee on Agriculture of the House of 
Representatives.
  ``(n) Indemnification.--An affiliate of the borrower shall indemnify 
the Government for any losses it incurs as a result of--
          ``(1) a judgment against the borrower;
          ``(2) any breach by the borrower of its obligations under the 
        loan guarantee agreement;
          ``(3) any violation of the provisions of this title by the 
        borrower;
          ``(4) any penalties incurred by the borrower for any reason, 
        including the violation of the stipulated performance; and
          ``(5) any other circumstances that the Administrator 
        determines to be appropriate.
  ``(o) Sunset.--The Administrator may not approve a loan guarantee 
under this title after December 31, 2006.

``SEC. 604. RETRANSMISSION OF LOCAL TELEVISION BROADCAST STATIONS.

  ``A borrower shall be subject to applicable rights, obligations, and 
limitations of title 17, United States Code. If a local broadcast 
station requests carriage of its signal and is located in a market not 
served by a satellite carrier providing service under a statutory 
license under section 122 of title 17, United States Code, the borrower 
shall carry the signal of that station without charge and shall be 
subject to the applicable rights, obligations, and limitations of 
sections 338, 614, and 615 of the Communications Act of 1934.''.

                           brief explanation

    H.R. 3615, the Rural Local Broadcast Signal Act amends the 
Rural Electrification Act of 1936 to authorize the 
Administrator of the Rural Utilities Service to make loan 
guarantees to providers of multichannel video services, 
including direct broadcast satellite licensees, to improve 
access to local television broadcasting to all households 
desiring such service in unserved and underserved rural areas.
    Requires certification of loan guarantee applications by 
the National Telecommunications and Information Administration, 
and authorizes appropriations for such purposes.

                            purpose and need

    H.R. 3615 is not the first legislation to address the issue 
of rural local television signal transmission over satellite. 
The Committee notes that H.R. 3615 is very similar to Title II 
of H.R. 1554, the Intellectual Property and Communications 
Omnibus Reform Act of 1999, as ordered reported by the House of 
Representatives (see House Report 106-464, November 9, 1999). 
Unfortunately, Title II of H.R. 1554 was not ultimately adopted 
by the Congress, which instead only adopted provisions 
regarding the study of rural local satellite signals that were 
part of the Senate version of the Intellectual Property and 
Communications Omnibus Reform Act of 1999 (S. 1948). The Senate 
version, S. 1948, was ultimately passed by both Houses and 
signed by the President as part of Public Law 106-113 on 
November 29, 1999.
    The Committee finds that it is very important that rural 
Americans receive the benefits of this Act along with urban 
residents. There are concerns that without this legislation, 
many rural Americans would not receive local broadcast signals. 
It is the Committee's intent that this legislation provide 
farmers, ranchers and others in rural areas up-to-the-minute 
information about weather forecasts and disaster warnings. The 
ability of rural Americans to receive their local television 
broadcast signals is essential to protect the lives of rural 
Americans.
    The Committee understands that major satellite carriers 
intend to provide local broadcast TV stations via satellite 
only in the largest markets rather than in more rural areas. 
These satellite providers have stated that is it not 
economically feasible to provide such service in rural areas at 
the present time. Many rural areas of the United States are not 
served by broadcast television or cable service.
    H.R. 3615 authorizes the Administrator of the Rural Utility 
Service, United States Department of Agriculture, to guarantee 
loans not exceeding $1.25 billion for providing local broadcast 
TV signals in rural areas. In addition, providers can offer 
other services, such as data service, should excess capacity 
permit. No single loan can exceed $625 million to any one 
provider and the rest of the loans may not exceed $100 million 
face value.
    No loan shall be guaranteed unless: (1) approved in advance 
by an appropriations Act; (2) the National Telecommunications 
and Information Administration certifies that the loan 
guarantee is consistent with the purposes of improving rural 
access to local television signals via satellites; (3) USDA has 
security that is adequate to protect the government's 
interests; (4) USDA can reasonably expect repayment ``using an 
appropriate combination of credit risk premiums and collateral 
offered by the applicant to protect the Federal Government;'' 
and, (5) the borrower has insurance sufficient to protect the 
interests of the Federal Government.
    The provisions are technology neutral in that the borrower 
can use any delivery mechanism to provide local television 
signals that otherwise meets the requirements of this title.
    The language of H.R. 3615 is similar to the Railroad 
Rehabilitation and Improvement Financing Act which provided up 
to $3.5 billion in federal loan guarantees to help shortline 
railroads serve rural America. The underwriting criteria for 
the USDA loan guarantee--such as cash flow levels and 
appropriate collateral--will be developed in consultation with 
an appropriate independent consultant and are modeled after the 
Railroad Act language.

                           section-by-section

Section 1. Short title

    This Act may be cited as the ``Rural Local Broadcast Signal 
Act.''

Sec. 2 Findings

    The Congress makes several findings regarding the 
historical role of the Department of Agriculture and the Rural 
Utilities Service in furthering economic and technological 
development in rural areas.

Sec. 3. Rural local television signals

    This section amends the Rural Electrification Act to add a 
new Title VI, called Rural Local Television Signals.

Sec. 601. Definitions

    The new Title VI includes definitions for the following 
terms: ``Administrator,'' ``Affiliate,'' ``Borrower,'' 
``Cost,'' ``Cost of Loan Guarantees,'' ``Cost of 
Modification,'' ``Discount Rate,'' ``Fiscal Year Assumptions,'' 
``current,'' ``Designated Market Area,'' ``Loan Guarantee,'' 
``Modification,'' and ``Common Terms.''

Sec. 602. Loan guarantees

    Purpose--The purpose of the Title is to authorize the 
Administrator of the Rural Utilities Service, with the 
certification of the National Telecommunications and 
Information Administration, to guarantee loans not exceeding 
$1.25 billion for the purpose of providing local broadcast TV 
signals in rural areas.
    Assistance to Borrowers--Subject to appropriations Acts, 
the Secretary of Agriculture is authorized to establish a 
program of loan guarantees to fund projects which finance the 
acquisition, improvement, enhancement, deployment, launch, or 
rehabilitation of the means, including spectrum rights, by 
which local television broadcast signals will be delivered to 
areas not receiving such signals over commercial for-profit 
direct-to-home satellite distribution systems. Borrowers who 
receive loan guarantees may not transfer any part of the 
proceeds from the loans guaranteed to an affiliate of the 
borrower.
    Underwriting Criteria--No single guaranteed loan can exceed 
$625 million to any one provider and none of the remaining 
loans may exceed $100 million in face value. Strict 
requirements for insurance, collateral, assurances of 
repayments to the Administrator, perfected interests of the 
Administrator, liens on assets, and lien subordination 
authority, and strong security provisions are set forth in the 
law. All of these provisions are designed to protect the 
interests of the taxpayers.
    Approval of NTIA Required--The Administrator may not issue 
a loan guarantee under this title unless the National 
Telecommunications and Information Administration consults with 
the Administrator and certifies that the issuance of the loan 
guarantee is consistent with the above criteria.
    Underwriting Requirements--In developing underwriting 
standards relating to the issuance of loan guarantees, 
appropriate collateral and cash flow levels, the Administrator 
is required to consult with an appropriate independent 
counsultant. In addition, the Secretary may accept on behalf of 
an applicant a commitment from a non-Federal source to fund in 
whole or in part the credit risk premiums with respect to the 
loan. The Administrator shall also establish cohorts of loans 
to minimize risk.
    Conditions of Assistance, Liens, and Insurance Policies--A 
borrower shall agree to such terms and conditions that ensure 
that the borrower will maintain assets, equipment, facilities, 
and operations on a continuing basis, will not reduce the 
ability of the borrower to repay obligations through 
discretionary dividend payments, and will remain sufficiently 
capitalized. The Administrator will also have liens which shall 
be superior to all other liens on assets of the borrower equal 
to the unpaid balance of the loan. The Administrator has 
discretion, upon the request of the borrower, to share or 
subordinate the lien. The borrower will also obtain, at its 
expense, insurance to protect the interests of the Federal 
Government, as determined by the Administrator.
    Authorization of Appropriations--Such amounts as may be 
necessary are authorized for the costs of the loans guaranteed 
and for the administration of the loan guarantees.

Sec. 603. Administration of loan guarantees

    Priority Markets--In deciding which loan guarantees to 
approve, the Administrator, to the maximum extent practicable 
shall give priority to projects which serve the most unserved 
and underserved rural markets, taking into account such factors 
as feasibility, population, terrain, prevailing market 
conditions, and projected costs to consumers. These applicants 
for priority projects shall agree to performance schedules 
which if missed make the borrower potentially subject to stiff 
penalties. Detailed subrogation, disposition of property, 
default, breach of agreement, attachment, and audit provisions 
are designed to protect the interests of the taxpayers.
    Indemnification--The Administrator may require an affiliate 
of the borrower to indemnify the Government for any losses it 
incurs as a result of a judgment against the borrower, and 
breach of the borrower's obligations, or any violation of the 
provisions of the Act.
    Sunset Clause--The sunset clause provides that the 
Secretary may not approve a loan guarantee under this title 
after December 31, 2006.

Sec. 604. Retransmission of local television broadcast stations

    Application of Must-Carry Requirements--Borrowers shall 
have the same authority and other rights to transmit the 
signals of local television broadcast stations as provided in 
title 17 of the U.S. Code and shall carry the signals of local 
stations in accordance with the Communications Act of 1934.

                        COMMITTEE CONSIDERATION

I. Hearings

    On February 9, 2000, the Subcommittee on Department 
Operations, Oversight, Nutrition and Forestry held a public 
hearing on rural local satellite access. Testimony was taken 
from Members of Congress, the Administration, and various 
television station and trade association representatives. The 
purpose of the hearing was to review proposed legislation to 
establish a loan guarantee program to promote the delivery of 
direct-to-home satellite services in rural America. The 
predominate issue discussed was how the legislation would allow 
satellite providers to become more effective competitors with 
cable operators. Furthermore, the Subcommittee examined the 
prospects of enabling rural America to benefit from local news 
coverage, weather reports, information related to natural 
disasters or community emergencies, local sports, politics, and 
other information that is vital to the integrity of communities 
across the country.

II. Full committee

    The Committee on Agriculture met, pursuant to notice, with 
a quorum present, on February 16, 2000, to consider H.R. 3615, 
the Rural Local Broadcast Signal Act, and other pending 
business.
    Chairman Combest called the meeting to order and noted that 
the bill would be open for amendment at any point.
    Counsel was recognized to give a brief explanation of the 
bill. The Chairman and Ranking Minority Member of the 
Subcommittee on Department Operations, Oversight, Nutrition, 
and Forestry, Mr. Goodlatte and Mrs. Clayton, were recognized 
for statements in support of the bill, as was Mr. Stenholm, 
Full Committee Ranking Minority Member.
    Mr. Stenholm pointed out that the Congressional Budget 
Office (CBO) had estimated that a loan guarantee program of 
this nature would have a subsidy rate. Mr. Goodlatte indicated 
his desire to work with Mr. Stenholm and other Members, CBO and 
the Budget Committee on this issue.
    Chairman Combest noted that H.R. 3615 was reintroduced by 
Mr. Goodlatte in order to give the Committee on Agriculture 
primary jurisdiction and to establish the time frame for 
consideration of the bill.
    Mr. Goodlatte was then recognized to offer and explain an 
en bloc amendment. However, he noted that many of the changes 
were technical.
    Mr. Ose was recognized and expressed his concern over the 
circumstances under which the Administrator of the Rural 
Utilities Service would subordinate liens on borrowers' assets. 
Mr. Goodlatte indicated that he would work with Mr. Ose before 
the bill would be taken to the House Floor to address his 
concerns and to clarify what would be the role of the Rural 
Utilities Service in subordinating liens and under what 
specific circumstances.
    By voice vote and in the presence of a quorum, the 
Goodlatte en bloc amendment was adopted.
    Mr. Stenholm moved that the bill H.R. 3615, as amended, be 
reported favorably to the House. By a voice vote, the Stenholm 
motion was adopted.
    Mr. Goodlatte requested a recorded vote, and by a vote of 
41 yeas, 0 nays, and 9 not voting, H.R. 3615 was adopted, as 
amended, and ordered reported favorably to the House. (See 
Rollcall Vote No. 1.)
    All Members were given permission to submit additional 
statements for the record.
    Mr. Stenholm moved that the Committee authorize the 
Chairman to offer such motions as may be necessary in the House 
to go to conference with the Senate on the bill, H.R. 3615, or 
any similar Senate bill. By a voice vote, the motion was 
adopted.
    Chairman Combest announced that Members would be given two 
working days to file minority, supplemental, or other views.
    Without objection, the usual instructions were given to 
staff to make any necessary technical, clarifying, or 
conforming changes as were appropriate without changing the 
substance of the legislation.
    The meeting was then adjourned subject to the call of the 
Chair.

                   REPORTING THE BILL--ROLLCALL VOTES

    In compliance with clause 3(b) of Rule XIII of the House of 
Representatives, the Committee sets forth the record of the 
following rollcall votes taken with respect to H.R. 3615.

Rollcall Vote No. 1

    Summary: Final passage.
    Requested By: Mr. Goodlatte.
    Results: 41 yeas, 0 nays, 9 not voting.
    Yeas--Mr. Combest, Mr. Barrett, Mr. Ewing, Mr. Goodlatte, 
Mr. Pombo, Mr. Smith, Mr. Everett, Mr. Lucas of Oklahoma, Mr. 
Chambliss, Mr. LaHood, Mr. Moran, Mr. Thune, Mr. Jenkins, Mr. 
Calvert, Mr. Gutknecht, Mr. Riley, Mr. Walden, Mr. Simpson, Mr. 
Ose, Mr. Fletcher, Mr. Stenholm, Mr. Condit, Mr. Peterson, Mr. 
Dooley, Mrs. Clayton, Mr. Minge, Mr. Hilliard, Mr. Pomeroy, Mr. 
Holden, Mr. Thompson of Mississippi, Mr. Berry, Mr. McIntyre, 
Ms. Stabenow, Mr. Etheridge, Mr. John, Mr. Boswell, Mr. Phelps, 
Mr. Lucas of Kentucky, Mr. Thompson of California, Mr. Hill, 
and Mr. Baca.
    Not voting--Mr. Boehner, Mr. Canady, Mrs. Chenoweth-Hage, 
Mr. Hostettler, Mr. Schaffer, Mr. Cooksey, Mr. Hayes, Mr. 
Bishop, and Mr. Baldacci.

           BUDGET ACT COMPLIANCE (SECTIONS 308, 402, AND 423)

    The provisions of clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives and section 308(a)(1) of the 
Congressional Budget Act of 1974 (relating to estimates of new 
budget authority, new spending authority, new credit authority, 
or increased or decreased revenues or tax expenditures) are not 
considered applicable. The estimate and comparison required to 
be prepared by the Director of the Congressional Budget Office 
under clause 3(c)(3) of rule XIII of the Rules of the House of 
Representatives and sections 402 and 423 of the Congressional 
Budget Act of 1974 submitted to the Committee prior to the 
filing of this report are as follows:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, March 1, 2000.
Hon. Larry Combest,
Chairman, Committee on Agriculture,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3615, the Rural 
Local Broadcast Signal Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Mark Hadley.
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

               congressional budget office cost estimate

H.R. 3615--Rural Local Broadcast Signal Act

    Summary: H.R. 3615 would establish a loan guarantee program 
for certain companies to provide local television service to 
areas of the country that do not receive local television 
stations from satellite companies. The bill would authorize the 
Administrator of the Rural Utilities Service (RUS) at the 
Department of Agriculture to guarantee loans to qualified 
borrowers, totaling up to $1.25 billion. The bill would 
authorize the appropriation of amounts necessary for the costs 
of the loan guarantees and associated administrative expenses.
    Under the bill, one guaranteed loan could be as much as 
$625 million, but all other loans would have to be $100 million 
or less. Qualifying loans would be payable in full within the 
lesser of 25 years or the useful life of the assets purchased. 
H.R. 3615 would allow the government's guarantee to be 
subordinate to any private-sector financing and would give RUS 
broad authority to modify the terms and conditions of loans. 
The authority to guarantee loans would be contingent upon 
future appropriation action and would expire on December 31, 
2006.
    CBO estimates that implementing H.R. 3615 would cost about 
$365 million for loan subsidy and administrative costs over the 
2000-2005 period, assuming appropriation of the necessary 
amounts. H.R. 3615 would not affect direct spending or 
receipts; therefore, pay-as-you-go procedures would not apply. 
H.R. 3615 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would not affect the budgets of state, local, or tribal 
governments.
    Estimated cost to the Federal Government: For the purpose 
of this estimate, CBO assumes that H.R. 3615 and related 
supplemental appropriations will be enacted in fiscal year 
2000. The estimated budgetary impact ofH.R. 3615 is shown in 
the following table. The costs of this legislation fall within budget 
function 370 (commerce and housing credit).

----------------------------------------------------------------------------------------------------------------
                                                                  By fiscal year, in millions of dollars--
                                                           -----------------------------------------------------
                                                              2000     2001     2002     2003     2004     2005
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION

Estimated authorization level.............................        5      352        2        2        2        2
Estimated outlays.........................................        2      233      124        2        2        2
----------------------------------------------------------------------------------------------------------------

    Basis of estimate: Under procedures established by the 
Federal Credit Reform Act of 1990, the subsidy cost of a loan 
guarantee is the estimated long-term cost to the government, 
calculated on a net present value basis (excluding 
administrative costs). We estimate that the loan guarantees 
provided under the bill would cost about 28 percent of the 
total amount guaranteed--or $350 million, subject to the 
availability of appropriated funds. In addition, CBO estimates 
that administering the program would cost about $5 million in 
2000 and about $2 million in each subsequent year. The bill 
would authorize the Secretary of Agriculture to charge fees, 
which could offset some of the subsidy or administrative costs, 
but this estimate assumes no fees would be charged.
    To prepare this estimate, CBO consulted with industry 
experts and investment analysis and examined the credit ratings 
of firms in the satellite television and related industries. 
The information on credit ratings is useful because different 
credit ratings reflect analysts' expectations of defaults. 
Based on this information, we assume that the rural television 
loans likely to be guaranteed under this bill would have a 
credit risk comparable to debt rated as ``B'' or ``CCC,'' which 
typically have default rates ranging from about 30 percent to 
45 percent, respectively. We also estimate that provisions in 
H.R. 3615 allowing the government's guarantee to be subordinate 
to private-sector financing would increase the subsidy cost of 
such guarantees. Subordination would reduce the incentive for 
lenders to assess the riskiness of the loan and increase the 
likelihood that if a default occurred, the government's loss 
would be significant. Recoveries from subordinated debt have 
been lower than recoveries from senior debt in both federal 
credit programs and the private debt market.
    Pay-as-you-go considerations: None.
    Intergovernmental and private-sector impact: H.R. 3615 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would not affect the budgets of state, 
local, or tribal governments.
    Estimate prepared by: Mark Hadley.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

                        COMMITTEE COST ESTIMATE

    Pursuant to clause 3(d)(2) of rule XIII of the Rules of the 
House of Representatives, the Committee report incorporates the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to sections 402 and 423 of the 
Congressional Budget Act of 1974.

                   CONSTITUTIONAL AUTHORITY STATEMENT

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds the 
Constitutional authority for this legislation in Article I, 
clause 8, section 18, that grants Congress the power to make 
all laws necessary and proper for carrying out the powers 
vested by Congress in the Constitution of the United States or 
in any department or officer thereof.

                          OVERSIGHT STATEMENT

    No summary of oversight findings and recommendations made 
by the Committee on Government Reform, as provided for in 
clause 3(c)(4) of rule XIII of the Rules of the House of 
Representatives, was available to the Committee with reference 
to the subject matter specifically addressed by H.R. 3615.

                      COMMITTEE OVERSIGHT FINDINGS

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee on Agriculture's 
oversight findings and recommendations are reflected in the 
body of this report.

                      ADVISORY COMMITTEE STATEMENT

    No advisory committee within the meaning of section 5(b) of 
the Federal Advisory Committee Act was created by this 
legislation.

                APPLICABILITY TO THE LEGISLATIVE BRANCH

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act (Public Law 
104-1).

                       FEDERAL MANDATES STATEMENT

    The Committee adopted as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act (Public Law 104-4).

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italic and existing law in which no change is 
proposed is shown in roman):

RURAL ELECTRIFICATION ACT OF 1936

           *       *       *       *       *       *       *

                TITLE VI--RURAL LOCAL TELEVISION SIGNALS

SEC. 601. DEFINITIONS.

  In this title:
          (1) Administrator.--The term ``Administrator'' means 
        the Administrator of the Rural Utilities Service.
          (2) Affiliate.--The term ``affiliate'' means any 
        person or entity that controls, or is controlled by, or 
        is under common control with, another person or entity.
          (3) Borrower.--The term ``borrower'' means any person 
        or entity receiving a loan guarantee under this title.
          (4) Cost.--
                  (A) In general.--The term ``cost'' means the 
                estimated long-term cost to the Government of a 
                loan guarantee or modification thereof, 
                calculated on a net present value basis, 
                excluding administrative costs and any 
                incidental effects on governmental receipts or 
                outlays.
                  (B) Loan guarantees.--For purposes of this 
                paragraph the cost of a loan guarantee--
                          (i) shall be the net present value, 
                        at the time when the guaranteed loan is 
                        disbursed, of the estimated cash flows 
                        of--
                                  (I) payments by the 
                                Government to cover defaults 
                                and delinquencies, interest 
                                subsidies, or other payments; 
                                and
                                  (II) payments to the 
                                Government, including 
                                origination and other fees, 
                                penalties, and recoveries; and
                          (ii) shall include the effects of 
                        changes in loan terms resulting from 
                        the exercise by the guaranteed lender 
                        of an option included in the loan 
                        guarantee contract, or by the borrower 
                        of an option included in the guaranteed 
                        loan contract.
                  (C) Cost of modification.--The cost of the 
                modification shall be the difference between 
                the current estimate of the net present value 
                of the remaining cash flows under the terms of 
                a loan guarantee contract, and the current 
                estimate of the net present value of the 
                remaining cash flows under the terms of the 
                contract, as modified.
                  (D) Discount rate.--In estimating net present 
                value, the discount rate shall be the average 
                interest rate on marketable Treasury securities 
                of similar maturity to the cash flows of the 
                guarantee for which the estimate is being made.
                  (E) Fiscal year assumptions.--When funds of a 
                loan guarantee under this title are obligated, 
                the estimated cost shall be based on the 
                current assumptions, adjusted to incorporate 
                the terms of the loan contract, for the fiscal 
                year in which the funds are obligated.
          (5) Current.--The term ``current'' has the meaning 
        given that term in section 250(c)(9) of the Balanced 
        Budget and Emergency Deficit Control Act of 1985.
          (6) Designated market area.--The term ``designated 
        market area'' has the meaning given that term in 
        section 122(j) of title 17, United States Code.
          (7) Loan guarantee.--The term ``loan guarantee'' 
        means any guarantee, insurance, or other pledge with 
        respect to the payment of all or part of the principal 
        or interest on any debt obligation of a non-Federal 
        borrower to the Federal Financing Bank or a non-Federal 
        lender, but does not include the insurance of deposits, 
        shares, or other withdrawable accounts in financial 
        institutions.
          (8) Modification.--The term ``modification'' means 
        any Government action that alters the estimated cost of 
        an outstanding loan guarantee (or loan guarantee 
        commitment) from the current estimate of cash flows, 
        including the sale of loan assets, with or without 
        recourse, and the purchase of guaranteed loans.
          (9) Common terms.--Except as provided in paragraphs 
        (1) through (9), any term used in this title that is 
        defined in the Communications Act of 1934 (47 U.S.C. 
        151 et seq.) has the meaning given the term in that 
        Act.

SEC. 602. LOAN GUARANTEES.

  (a) Purpose.--The purpose of this title is to enable the 
Administrator to provide such loan guarantees as are necessary 
to ensure improved access to the signals of local television 
stations by multichannel video providers to all households 
which desire such service in unserved and underserved rural 
markets by December 31, 2006.
  (b) Assistance to Borrowers.--Subject to the appropriations 
limitation under subsection (c)(2), the Administrator may 
provide loan guarantees to borrowers to finance projects to 
provide local television broadcast signals by providers of 
multichannel video services including direct broadcast 
satellite licensees and licensees of multichannel multipoint 
distribution systems, to areas that do not receive local 
television broadcast signals over commercial for-profit direct-
to-home satellite distribution systems. A borrower that 
receives a loan guarantee under this title may not transfer any 
part of the proceeds of the monies from the loans guaranteed 
under this program to an affiliate of the borrower.
  (c) Underwriting Criteria; Prerequisites.--
          (1) In general.--The Administrator shall administer 
        the underwriting criteria developed under subsection 
        (f)(1) to determine which loans are eligible for a 
        guarantee under this title.
          (2) Authority to make loan guarantees.--The 
        Administrator shall be authorized to guarantee loans 
        under this title only to the extent provided for in 
        advance by appropriations Acts.
          (3) Prerequisites.--In addition to meeting the 
        underwriting criteria under paragraph (1), a loan is 
        not eligible for a loan guarantee under this title 
        unless--
                  (A) the loan is made to finance the 
                acquisition, improvement, enhancement, 
                construction, deployment, launch, or 
                rehabilitation of the means, including spectrum 
                rights, by which local television broadcast 
                signals will be delivered to an area not 
                receiving such signals over commercial for-
                profit direct-to-home satellite distribution 
                systems;
                  (B) the proceeds of the loan will not be used 
                for operating expenses;
                  (C) the total amount of all such loans may 
                not exceed in the aggregate $1,250,000,000;
                  (D) the loan does not exceed $100,000,000, 
                except that 1 loan under this title may exceed 
                $100,000,000, but shall not exceed 
                $625,000,000;
                  (E) the loan bears interest and penalties 
                which, in the Administrator's judgment, are not 
                unreasonable, taking into consideration the 
                prevailing interest rates and customary fees 
                incurred under similar obligations in the 
                private capital market; and
                  (F) the Administrator determines that taking 
                into account the practices of the private 
                capital markets with respect to the financing 
                of similar projects, the security of the loan 
                is adequate.
          (4) Additional criteria.--In addition to the 
        requirements of paragraphs (1), (2), and (3), a loan 
        for which a guarantee is sought under this title shall 
        meet any additional criteria promulgated under 
        subsection (f)(1).
  (d) Additional Requirements.--The Administrator may not make 
a loan guarantee under this title unless--
          (1) repayment of the loan is required to be made 
        within a term of the lesser of--
                  (A) 25 years from the date of its execution; 
                or
                  (B) the useful life of the primary assets 
                used in the delivery of relevant signals;
          (2) the Administrator has been given the assurances 
        and documentation necessary to review and approve the 
        guaranteed loans; and
          (3) the Administrator makes a determination in 
        writing that--
                  (A) the applicant has given reasonable 
                assurances that the assets, facilities, or 
                equipment will be utilized economically and 
                efficiently;
                  (B) necessary and sufficient regulatory 
                approvals, spectrum rights, and delivery 
                permissions have been received or will be 
                obtained by project participants to assure the 
                financial feasibility of the project; and
                  (C) repayment of the loan can reasonably be 
                expected, including the use of an appropriate 
                combination of credit risk premiums and 
                collateral offered by the applicant to protect 
                the Federal Government.
  (e) Approval of NTIA Required.--
          (1) In general.--The Administrator may not issue a 
        loan guarantee under this title unless the National 
        Telecommunications and Information Administration 
        consults with the Administrator and certifies that the 
        issuance of the loan guarantee is consistent with 
        subsection (a).
          (2) Certification.--The Administrator shall provide 
        the appropriate information on each loan guarantee 
        application recommended by the Administrator to the 
        National Telecommunications and Information 
        Administration for certification. If the National 
        Telecommunications and Information Administration fails 
        to make the required determination within 90 days after 
        receiving the information from the Administrator with 
        respect to a particular loan guarantee application, the 
        certification shall be deemed to have been granted.
  (f) Requirements.--
          (1) In general.--Not later than 180 days after the 
        date of enactment of this title, the Administrator 
        shall consult with an appropriate independent 
        consultant, including a public accounting firm, to 
        develop underwriting criteria relating to the issuance 
        of loan guarantees, appropriate collateral and cash 
        flow levels for the types of loan guarantees that might 
        be issued under this title, and such other matters as 
        the Administrator determines appropriate.
          (2) Authority of administrator.--In lieu of or in 
        combination with appropriations of budget authority to 
        cover the costs of loan guarantees as required under 
        section 504(b)(1) of the Federal Credit Reform Act of 
        1990, the Administrator may accept on behalf of an 
        applicant for assistance under this title a commitment 
        from a non-Federal source to fund in whole or in part 
        the credit risk premiums with respect to the 
        applicant's loan. The aggregate of appropriations of 
        budget authority and credit risk premiums described in 
        this paragraph with respect to a loan guarantee may not 
        be less than the cost of that loan guarantee.
          (3) Credit risk premium amount.--The Administrator 
        shall determine the amount required for credit risk 
        premiums under this subsection on the basis of--
                  (A) the circumstances of the applicant, 
                including the amount of collateral offered;
                  (B) the proposed schedule of loan 
                disbursements;
                  (C) the borrower's business plans for 
                providing service;
                  (D) financial commitment from the broadcast 
                signal provider; and
                  (E) any other factors the Administrator 
                considers relevant.
          (4) Payment of premiums.--Credit risk premiums under 
        this subsection shall be paid to an account established 
        in the Treasury which shall accrue interest and such 
        interest shall be retained by the account. In addition, 
        the Administrator may accept credit risk premiums in 
        the form of letters of credit or other forms of non-
        cash instruments, which shall not accrue interest.As 
obligations attached to a cohort of loans established under paragraph 
(5) are being satisfied, credit risk premiums for the cohort, and 
interest accrued thereon, which are not required to mitigate losses 
shall be returned to the original source on a pro rata basis.
          (5) Cohorts of loans.--In order to maintain 
        sufficient balances of credit risk premiums to 
        adequately protect the Federal Government from risk of 
        default, while minimizing the length of time the 
        Government retains possession of those balances, the 
        Administrator in consultation with the Office of 
        Management and Budget shall establish cohorts of loans.
  (g) Conditions of Assistance.--A borrower shall agree to such 
terms and conditions as are sufficient, in the judgment of the 
Administrator to ensure that, as long as any principal or 
interest is due and payable on such obligation, the borrower--
          (1) will maintain assets, equipment, facilities, and 
        operations on a continuing basis;
          (2) will not make any discretionary dividend payments 
        that reduce the ability to repay obligations incurred 
        under this section; and
          (3) will remain sufficiently capitalized.
  (h) Lien on Interests in Assets.--Upon providing a loan 
guarantee to a borrower under this title, the Administrator 
shall have liens which shall be superior to all other liens on 
assets of the borrower equal to the unpaid balance of the loan 
subject to such guarantee.
  (i) Subordination or Sharing of Liens.--Notwithstanding 
subsection (h), at the request of a private lender providing 
financing to the borrower for the purposes set forth in 
subsection (a), the Administrator may offer--
          (1) to share the Government's lien on the borrower's 
        assets; or
          (2) to subordinate the Government's lien on the 
        borrower's assets.
  (j) Perfected Interest.--The Administrator and the lender 
shall have a perfected security interest in those assets of the 
borrower fully sufficient to protect the Administrator and the 
lender.
  (k) Insurance Policies.--In accordance with practices of 
private lenders, as determined by the Administrator, the 
borrower shall obtain, at its expense, insurance sufficient to 
protect the interests of the Federal Government, as determined 
by the Administrator.
  (l) Authorization of Appropriations.--For the additional 
costs of the loans guaranteed under this title, including the 
cost of modifying the loans as defined in section 502 of the 
Congressional Budget Act of 1974 (2 U.S.C. 661(a)), there are 
authorized to be appropriated for fiscal years 2000 through 
2006, such amounts as may be necessary. In addition there are 
authorized to be appropriated such sums as may be necessary to 
administer this title. Any amounts appropriated under this 
subsection shall remain available until expended.

SEC. 603. ADMINISTRATION OF LOAN GUARANTEES.

  (a) Applications.--The Administrator shall prescribe the form 
and contents for an application for a loan guarantee under 
section 602.
  (b) Assignment of Loan Guarantees.--The holder of a loan 
guaranteed under this title may assign the loan guarantee in 
whole or in part, subject to such requirements as the 
Administrator may prescribe.
  (c) Modifications.--The Administrator may approve the 
modification of any term or condition of a loan guarantee 
including the rate of interest, time of payment of interest or 
principal, or security requirements, if--
          (1) the Administrator finds in writing that--
                  (A) the modification is equitable and is in 
                the overall best interests of the United 
                States;
                  (B) consent has been obtained from the 
                borrower and the lender;
                  (C) the modification is consistent with the 
                objective underwriting criteria developed in 
                consultation with an appropriate independent 
                consultant, including a public accounting firm, 
                under section 602(f);
                  (D) the modification does not adversely 
                affect the Federal Government's interest in the 
                entity's assets or loan collateral; and
                  (E) the modification does not adversely 
                affect the entity's ability to repay the loan; 
                and
          (2) the National Telecommunications and Information 
        Administration does not object to the modification on 
        the ground that it is inconsistent with the 
        certification under section 602(e).
  (d) Priority Markets.--
          (1) In general.--To the maximum extent practicable, 
        the Administrator shall give priority to projects which 
        serve the most underserved rural markets, as determined 
        by the Administrator. In making prioritization 
        determinations, the Administrator shall consider 
        prevailing market conditions, feasibility of providing 
        service, population, terrain, and other factors the 
        Administrator determines appropriate.
          (2) Priority relating to consumer costs and separate 
        tier of signals.--The Administrator shall give priority 
        to projects that--
                  (A) offer a separate tier of local broadcast 
                signals; and
                  (B) provide lower projected costs to 
                consumers of such separate tier.
          (3) Performance schedules.--Applicants under this 
        section shall enter into stipulated performance 
        schedules with the Administrator.
          (4) Penalty.--In addition to any other authority of 
        the Administrator, the Administrator may assess a 
        borrower a penalty not to exceed 3 times the interest 
        due on the guaranteed loan, if the borrower fails to 
        meet its stipulated performance schedule. The penalty 
        shall be paid to the account established under section 
        602.
          (5) Limitation on consideration of most populated 
        areas.--The Administrator shall not provide a loan 
        guaranteefor a project that is primarily designed to 
serve the 40 most populated designated market areas and shall take into 
consideration the importance of serving rural markets that are not 
likely to be otherwise offered service under section 122 of title 17, 
United States Code, except through the loan guarantee program under 
this title.
  (e) Compliance.--The Administrator shall enforce compliance 
by an applicant and any other party to the loan guarantee for 
whose benefit assistance is intended, with the provisions of 
this title, regulations issued hereunder, and the terms and 
conditions of the loan guarantee, including through regular 
periodic inspections and audits.
  (f) Commercial Validity.--For purposes of claims by any party 
other than the Administrator, a loan guarantee shall be 
conclusive evidence that the underlying obligation is in 
compliance with the provisions of the title, and that such 
obligation has been approved and is legal as to principal, 
interest, and other terms. Such a guarantee shall be valid and 
incontestable in the hands of a holder thereof, including the 
original lender or any other holder, as of the date when the 
Administrator granted the application therefore, except as to 
fraud or material misrepresentation by such holder.
  (g) Defaults.--The Administrator shall prescribe regulations 
governing a default on a loan guaranteed under this title.
  (h) Rights of the Administrator.--
          (1) Subrogation.--If the Administrator authorizes 
        payment to a holder, or a holder's agent, under 
        subsection (g) in connection with a loan guarantee made 
        under section 602, the Administrator shall be 
        subrogated to all of the rights of the holder with 
        respect to the obligor under the loan.
          (2) Disposition of property.--The Administrator may 
        complete, recondition, reconstruct, renovate, repair, 
        maintain, operate, rent, sell, or otherwise dispose of 
        any property or other interests obtained under this 
        title in a manner that maximizes taxpayer return and is 
        consistent with the public convenience and necessity.
  (i) Action Against Obligor.--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 title. The holder of a guarantee shall make available to 
the Administrator all records and evidence necessary to 
prosecute the civil action. The Administrator may accept 
property in full or partial satisfaction of any sums owed as a 
result of default. If the Administrator receives, through the 
sale or other disposition of such property, an amount greater 
than the aggregate of--
          (1) the amount paid to the holder of a guarantee 
        under subsection (g); and
          (2) any other cost to the United States of remedying 
        the default, the Administrator shall pay such excess to 
        the obligor.
  (j) Breach of Conditions.--The Attorney General shall 
commence a civil action in a court of appropriate jurisdiction 
to enjoin any activity which the Administrator finds is in 
violation of this title, regulations issued hereunder, or any 
conditions which were duly agreed to, and to secure any other 
appropriate relief, including relief against any affiliate of 
the borrower.
  (k) Attachment.--No attachment or execution may be issued 
against the Administrator or any property in the control of the 
Administrator prior to the entry of final judgment to such 
effect in any State, Federal, or other court.
  (l) Investigation Charge and Fees.--
          (1) Appraisal fee.--The Administrator may charge and 
        collect from an applicant a reasonable fee for 
        appraisal for the value of the equipment or facilities 
        for which the loan guarantee is sought, and for making 
        necessary determinations and findings. The fee may not, 
        in the aggregate, be more than one-half of one percent 
        of the principal amount of the obligation.
          (2) Loan origination fee.--The Administrator may 
        charge a loan origination fee.
          (3) Use of fees.--Fees collected pursuant to this 
        subsection shall be credited to the account which 
        administers the loan guarantee program under this 
        title. Such fees shall be made available to the 
        Administrator without further appropriation and shall 
        remain available until expended.
  (m) Annual Audit.--The Comptroller General of the United 
States shall annually audit the administration of this title 
and report the results of the audit to the Committee on 
Agriculture, Nutrition, and Forestry of the Senate and the 
Committee on Agriculture of the House of Representatives.
  (n) Indemnification.--An affiliate of the borrower shall 
indemnify the Government for any losses it incurs as a result 
of--
          (1) a judgment against the borrower;
          (2) any breach by the borrower of its obligations 
        under the loan guarantee agreement;
          (3) any violation of the provisions of this title by 
        the borrower;
          (4) any penalties incurred by the borrower for any 
        reason, including the violation of the stipulated 
        performance; and
          (5) any other circumstances that the Administrator 
        determines to be appropriate.
  (o) Sunset.--The Administrator may not approve a loan 
guarantee under this title after December 31, 2006.

SEC. 604. RETRANSMISSION OF LOCAL TELEVISION BROADCAST STATIONS.

  A borrower shall be subject to applicable rights, 
obligations, and limitations of title 17, United States Code. 
If a local broadcast station requests carriage of its signal 
and is located in a market not served by a satellite carrier 
providing service under a statutory license under section 122 
of title 17, United States Code, the borrower shall carry the 
signal of that station without charge and shall be subject to 
the applicable rights, obligations, and limitations of sections 
338, 614, and 615 of the Communications Act of 1934.

                                

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