(d) DEPOSIT
OF
AUCTION
PROCEEDS.—Section 
309(j)(8) of the Communications Act of 1934 (47 U.S.C. 
309(j)(8)) is amended— 
(1) 
in 
subparagraph 
(C)(i), 
by 
striking 
‘‘(D)(ii)’’ and inserting ‘‘(D)(ii), (D)(iii)’’; and 
(2) in subparagraph (D)— 
(A) in clause (i), by striking ‘‘clause (ii)’’ 
and inserting ‘‘clauses (ii) and (iii)’’; and 
(B) by adding at the end the following: 
‘‘(iii) FEDERAL
SPECTRUM
INCEN-
TIVES.—Notwithstanding 
subparagraph 
(A) and except as provided in subpara-
graph (B) and clause (ii) of this subpara-
graph, in the case of proceeds (including 
deposits and upfront payments from suc-
cessful bidders) attributable to the auction 
of eligible frequencies described in section 
113(g)(2) of the National Telecommuni-
cations and Information Administration 
Organization Act with respect to which the 
Commission has received notice under sec-
tion 113(g)(4)(A)(ii) of such Act, 1 per-
cent of such proceeds shall be deposited in 
the Federal Spectrum Incentive Fund es-
tablished by section 120 of such Act and 
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shall be available in accordance with such 
section. The remainder of such proceeds 
shall be deposited in the general fund of 
the Treasury, where such proceeds shall be 
dedicated for the sole purpose of deficit re-
duction.’’. 
(e) FEDERAL SPECTRUM INCENTIVE FUND.—Part B 
of the National Telecommunications and Information Ad-
ministration Organization Act (47 U.S.C. 921 et seq.) is 
amended by adding at the end the following: 
‘‘SEC. 120. FEDERAL SPECTRUM INCENTIVE FUND. 
‘‘(a) ESTABLISHMENT.—There is established in the 
Treasury of the United States a fund to be known as the 
Federal Spectrum Incentive Fund (in this section referred 
to as the ‘Fund’), which shall be administered by the Of-
fice of Management and Budget (in this section referred 
to as ‘OMB’), in consultation with the NTIA. 
‘‘(b) TRANSFER OF FUNDS.—The Director of OMB 
shall transfer from the Fund to a Federal entity an 
amount equal to the amount deposited in accordance with 
section 309(j)(8)(D)(iii) of the Communications Act of 
1934 that is attributable to the auction of eligible fre-
quencies described in section 113(g)(2) of this Act being 
vacated by such entity. Such amount shall be available to 
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the Federal entity in accordance with subsection (c) and 
shall remain available until expended. 
‘‘(c) USE OF FUNDS.—A Federal entity may use an 
amount transferred under subsection (b) for the following 
purposes: 
‘‘(1) OFFSET OF SEQUESTRATION.—Any pur-
poses permitted under the terms and conditions of 
an appropriations account of the Federal entity that 
was subject to sequestration for any fiscal year 
under the Balanced Budget and Emergency Deficit 
Control Act of 1985. The amount used for such pur-
poses under this paragraph may not exceed the 
amount by which the amount available to such entity 
under such account was reduced by sequestration for 
such fiscal year. 
‘‘(2) TRANSFER TO INCUMBENT FEDERAL EN-
TITY.—In the case of a Federal entity that is relo-
cating operations to frequencies assigned to an in-
cumbent Federal entity in order for such entities to 
share such frequencies, to transfer an amount to the 
incumbent Federal entity for any purposes permitted 
under this subsection (except this paragraph). The 
transferred amount shall remain available to the in-
cumbent Federal entity until expended. 
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‘‘(d) PROHIBITION ON DUPLICATIVE PAYMENTS.—If 
the 
Commission 
receives 
notice 
under 
section 
113(g)(4)(A)(ii) of a discontinuance of operations on or 
relocation from eligible frequencies by a Federal entity 
that has received, from the Spectrum Relocation Fund in 
accordance with section 118(d)(3), relocation or sharing 
costs related to pre-auction estimates or research with re-
spect to such frequencies, the Director of OMB shall de-
duct from the amount to be transferred to such entity 
under subsection (b) an amount equal to such costs and 
shall transfer such amount to the Spectrum Relocation 
Fund.’’. 
(f) DEPARTMENT OF DEFENSE SPECTRUM.—Section 
1062(b) of the National Defense Authorization Act for 
Fiscal Year 2000 (Public Law 106–65) does not apply to 
frequencies with respect to which the Federal Communica-
tions Commission has received notice under section 
113(g)(4)(A)(ii) of the National Telecommunications and 
Information Administration Organization Act (47 U.S.C. 
923(g)(4)(A)(ii)). 
SEC. 3. COSTS OF INCUMBENT FEDERAL ENTITIES RE-
LATED TO SPECTRUM SHARING. 
(a) DESCRIPTION
OF ELIGIBLE FEDERAL ENTI-
TIES.—Section 113(g)(1) of the National Telecommuni-
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cations and Information Administration Organization Act 
(47 U.S.C. 923(g)(1)) is amended— 
(1) by striking ‘‘authorized to use a band of eli-
gible frequencies described in paragraph (2)’’; 
(2) by striking ‘‘spectrum frequencies’’ the first 
place it appears and inserting ‘‘eligible frequencies 
described in paragraph (2)’’; and 
(3) by striking ‘‘spectrum frequencies’’ the sec-
ond place it appears and inserting ‘‘eligible fre-
quencies described in such paragraph’’. 
(b) DEFINITION
OF
RELOCATION
OR
SHARING 
COSTS.—Section 113(g)(3)(A) of the National Tele-
communications and Information Administration Organi-
zation Act (47 U.S.C. 923(g)(3)(A)) is amended— 
(1) in clause (iv)(II), by striking ‘‘and’’ at the 
end; 
(2) in clause (v), by striking the period and in-
serting ‘‘; and’’; and 
(3) by adding at the end the following: 
‘‘(vi) the costs incurred by an incum-
bent Federal entity to accommodate shar-
ing the spectrum frequencies assigned to 
such entity with a Federal entity the oper-
ations of which are being relocated from el-
igible frequencies described in paragraph 
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(2), unless the Commission receives notice 
under paragraph (4)(A)(ii)(II) with respect 
to the relocation of such operations.’’. 
(c) SPECTRUM RELOCATION FUND.—Section 118 of 
the National Telecommunications and Information Ad-
ministration Organization Act (47 U.S.C. 928) is amend-
ed— 
(1) in subsection (c), by striking ‘‘with respect 
to’’ and all that follows and inserting the following: 
‘‘with respect to— 
‘‘(1) relocation from or sharing of such eligible 
frequencies; or 
‘‘(2) in the case of an incumbent Federal entity 
described in section 113(g)(3)(A)(vi), accommo-
dating sharing the spectrum frequencies assigned to 
such entity with a Federal entity the operations of 
which are being relocated from such eligible fre-
quencies.’’; and 
(2) in subsection (d)— 
(A) in paragraph (2)(A), by inserting ‘‘(or, 
in the case of an incumbent Federal entity de-
scribed in section 113(g)(3)(A)(vi), the eligible 
Federal entity the operations of which are being 
relocated has submitted such a plan)’’ after 
‘‘transition plan’’; and 
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