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[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 2097 Introduced in Senate (IS)]

106th CONGRESS
  2d Session
                                S. 2097

  To authorize loan guarantees in order to facilitate access to local 
television broadcast signals in unserved and underserved areas, and for 
                            other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                           February 24, 2000

 Mr. Burns (for himself, Mr. Gramm, Mr. Lott, Mr. Stevens, Mr. Crapo, 
 Mr. Hutchinson, Mr. Allard, Mr. Bunning, Ms. Snowe, Ms. Collins, and 
 Mr. Grassley) introduced the following bill; which was read twice and 
    referred to the Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL

 
  To authorize loan guarantees in order to facilitate access to local 
television broadcast signals in unserved and underserved areas, and for 
                            other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Launching Our Communities' Access to 
Local Television Act of 2000''.

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 in unserved areas and underserved areas for 
the households located in such areas that seek access to such signals.

SEC. 3. LOCAL TELEVISION LOAN GUARANTEE BOARD.

    (a) Establishment.--There is established the LOCAL 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 Chairman of the Board of Governors of the 
                Federal Reserve System, or the designee of the 
                Chairman.
                    (C) The Secretary of Agriculture, 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.
            (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.
            (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 Board shall prescribe regulations to 
        implement the provisions of this Act.
            (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.
            (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 to an 
                unserved area or underserved area;
                    (B) the proceeds of the loan will not be used for 
                operating expenses;
                    (C) the proposed project, as determined by the 
                Board in consultation with 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 underserved area;
                    (D) the loan is provided by an insured depository 
                institution (as that term is defined in section 3 of 
                the Federal Deposit Insurance Act) that is acceptable 
                to the Board, and 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;
                    (E) repayment of the loan is required to be made 
                within a term of the lesser of--
                            (i) 25 years from the date of the execution 
                        of the loan; or
                            (ii) the economically useful life, as 
                        determined by the Board, of the primary assets 
                        to be used in the delivery of the signals 
                        concerned; and
                    (F) 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 and persons 
                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) 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) all necessary and required regulatory 
                        and other approvals, spectrum rights, and 
                        delivery permissions have been received for the 
                        loan and the project under the loan;
                            (iv) the loan would not be available on 
                        reasonable terms and conditions without a loan 
                        guarantee under this Act; and
                            (v) repayment of the loan can reasonably be 
                        expected.
    (e) Priority Considerations.--
            (1) Type of market.--
                    (A) Priority consideration to unserved areas.--To 
                the maximum extent practicable, the Board shall give 
                priority in the approval of loan guarantees under this 
                Act for projects that will serve unserved areas.
                    (B) Prohibition.--The Board may not approve a loan 
                guarantee under this Act for a project that is designed 
                primarily to serve one 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) Projects that would reduce consumer costs.--To the 
        maximum extent practicable, the Board shall also give priority 
        in the approval of loan guarantees under this Act to projects 
        that would--
                    (A) offer a separate tier of local broadcast 
                signals, but for applicable Federal, State, or local 
                laws or regulations;
                    (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 may not exceed $1,250,000,000.
            (2) Guarantee level.--A loan guarantee issued under this 
        Act may not exceed an amount equal to 70 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 70 percent of the applicable portion.
    (g) Underwriting Criteria.--Not later than 180 days after the date 
of the enactment of this Act, 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.--
                    (A) Authority.--The Board may establish and approve 
                the acceptance of credit risk premiums with respect to 
                a loan guarantee under this Act in order to 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.
    (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 Interests.--
            (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; and
                    (C) shall remain sufficiently capitalized.
            (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.
            (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.
            (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 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);
            (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) 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 applicant 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 
                pending sale or disposal of such property 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 State, Federal, or other court 
of competent jurisdiction against the Administrator in a proceeding for 
such action.
    (m) Fees.--
            (1) Application fee.--The Board may 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 may 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.--An affiliate of an applicant for a 
        loan guarantee under this Act shall indemnify the United States 
        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. ANNUAL AUDIT.

    (a) Requirement.--The Comptroller General of the United States 
shall conduct on an annual basis an audit of the administration of the 
provisions of this Act.
    (b) Report.--The Comptroller General shall submit to the Committee 
on Banking, Housing, and Urban Affairs of the Senate and the Committee 
on Banking and Financial Services of the House of Representatives a 
report on each audit conducted under subsection (a).

SEC. 7. SUNSET.

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

SEC. 8. RETRANSMISSION OF LOCAL TELEVISION BROADCAST STATIONS.

    An applicant 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 
applicant 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.

SEC. 9. 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.
            (2) Unserved area.--The term ``unserved area'' means any 
        area (as determined using standards employed by the Federal 
Communications Commission) that--
                    (A) is outside the grade B contour of the local 
                television broadcast signals serving a particular 
                dominant market area; and
                    (B) does not have access to such signals by other 
                widely marketed means.
            (3) Underserved area.--The term ``underserved area'' means 
        any area that does not receive local television broadcast 
        signals over a commercial for-profit direct-to-home satellite 
        distribution system.
            (4) Common terms.--Except as provided in paragraphs (1) 
        through (3), 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. 10. 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. 
661(a)), 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.
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