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applicant and any affiliate is not
at least equal to the Amount, the
collateral from such affiliate rep-
resents all of such affiliate’s as-
sets;
(iv) 
all 
necessary 
and 
re-
quired regulatory and other ap-
provals, spectrum rights, and de-
livery permissions have been re-
ceived for the loan, the project
under the loan, and the Other
Debt, if any, under subsection
(f)(2)(B);
(v) the loan would not be
available on reasonable terms and
conditions without a loan guar-
antee under this Act; and
(vi) repayment of the loan can
reasonably be expected.
(e) CONSIDERATIONS.—
(1) TYPE OF MARKET.—
(A) PRIORITY CONSIDERATIONS.—To
the maximum extent practicable, the
Board shall give priority in the ap-
proval of loan guarantees under this
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Act to projects that will serve the
greatest number of households in
unserved areas. In each instance, the
Board shall consider the project’s es-
timated cost per household to be
served.
(B) PROHIBITION.—The Board may
not approve a loan guarantee under
this Act for a project that is designed
primarily to serve 1 or more of the 40
most populated designated market
areas (as that term is defined in sec-
tion 122(j) of title 17, United States
Code).
(2) 
OTHER
CONSIDERATIONS.—The
Board shall consider other factors, which
shall include projects that would—
(A) offer a separate tier of local
broadcast signals;
(B) provide lower projected costs
to consumers of such separate tier;
and
(C) enable the delivery of local
broadcast signals consistent with the
purpose of this Act by a means rea-
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sonably compatible with existing sys-
tems or devices predominantly in use.
(f) GUARANTEE LIMITS.—
(1) LIMITATION ON AGGREGATE VALUE OF
LOANS.—The aggregate value of all loans
for which loan guarantees are issued
under 
this 
Act 
(including 
the
unguaranteed portion of loans issued
under paragraph (2)(A)) and Other Debt
under paragraph (2)(B) may not exceed
$1,000,000,000.
(2) GUARANTEE
LEVEL.—A loan guar-
antee issued under this Act—
(A) may not exceed an amount
equal to 80 percent of a loan meeting
in its entirety the requirements of
subsection (d)(2)(A). If only a portion
of a loan meets the requirements of
that subsection, the Board shall de-
termine that percentage of the loan
meeting such requirements (the ‘‘ap-
plicable portion’’) and may issue a
loan guarantee in an amount not ex-
ceeding 80 percent of the applicable
portion; or
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(B) may, as to a loan meeting in
its entirety the requirements of sub-
section (d)(2)(A), cover the amount of
such loan only if that loan is for an
amount not exceeding 80 percent of
the total debt financing for the
project, and other debt financing
(also meeting in its entirety the re-
quirements of subsection (d)(2)(A))
from the same source for a total
amount not less than 20 percent of
the total debt financing for the
project (‘‘Other Debt’’) has been ap-
proved.
(g) UNDERWRITING CRITERIA.—Within the
period provided for under subsection (b)(1),
the Board shall, in consultation with the Di-
rector of the Office of Management and Budg-
et 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 appro-
priate collateral and cash flow levels for loans
guaranteed under this Act, and such other
matters as the Board considers appropriate.
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(h) CREDIT RISK PREMIUMS.—
(1) ESTABLISHMENT AND ACCEPTANCE.—
The Board may establish and approve the
acceptance of credit risk premiums with
respect to a loan guarantee under this
Act in order to cover the cost, as deter-
mined under section 504(b)(1) of the Fed-
eral Credit Reform Act of 1990, of the
loan guarantee. To the extent that appro-
priations of budget authority are insuffi-
cient 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 re-
spect to a loan guarantee under this
Act on the basis of—
(i) the financial and economic
circumstances of the applicant for
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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 Di-
rector of the Office of Manage-
ment 
and 
Budget 
as 
to 
the
amount of the credit risk pre-
mium.
(B) PROPORTIONALITY.—To the ex-
tent that appropriations of budget au-
thority are sufficient to cover the
cost, as determined under section
504(b)(1) of the Federal Credit Re-
form Act of 1990, of loan guarantees
under this Act, the credit risk pre-
mium with respect to each loan guar-
antee shall be reduced proportion-
ately.
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(C) PAYMENT OF PREMIUMS.—Credit
risk premiums under this subsection
shall be paid to an account (the ‘‘Es-
crow Account’’) established in the
Treasury which shall accrue interest
and such interest shall be retained by
the account, subject to subparagraph
(D).
(D) DEDUCTIONS FROM ESCROW AC-
COUNT.—If a default occurs with re-
spect to any loan guaranteed under
this Act and the default is not cured
in accordance with the terms of the
underlying loan or loan guarantee
agreement, the Administrator, in ac-
cordance with subsections (h) and (i)
of section 5 of this Act, shall liq-
uidate, or shall cause to be liq-
uidated, all assets collateralizing such
loan as to which it has a lien or secu-
rity interest. Any shortfall between
the proceeds of the liquidation net of
costs and expenses relating to the liq-
uidation, and the guarantee amount
paid pursuant to this Act shall be de-
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ducted from funds in the Escrow Ac-
count and credited to the Adminis-
trator for payment of such shortfall.
At such time as determined under
subsection (d)(2)(F) when all loans
guaranteed under this Act have been
repaid or otherwise satisfied in ac-
cordance with this Act and the regu-
lations promulgated hereunder, re-
maining funds in the Escrow Account,
if any, shall be refunded, on a pro
rata basis, to applicants whose loans
guaranteed under this Act were not
in default, or where any default was
cured in accordance with the terms
of the underlying loan or loan guar-
antee agreement.
(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 other-
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wise 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 appli-
cant shall agree to such terms and condi-
tions as are satisfactory, in the judgment
of the Board, to ensure that, as long as
any principal or interest is due and pay-
able on a loan guaranteed under this Act,
the applicant—
(A) shall maintain assets, equip-
ment, facilities, and operations on a
continuing basis;
(B) shall not make any discre-
tionary dividend payments that im-
pair its ability to repay obligations
guaranteed under this Act;
(C) shall remain sufficiently cap-
italized; and
(D) shall submit to, and cooperate
fully with, any audit of the applicant
under section 8(a)(2) of this Act.
(2) COLLATERAL.—
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(A) EXISTENCE
OF
ADEQUATE
COL-
LATERAL.—An applicant shall provide
the Board such documentation as is
necessary, in the judgment of the
Board, to provide satisfactory evi-
dence that appropriate and adequate
collateral secures a loan guaranteed
under this Act.
(B) FORM OF COLLATERAL.—Collat-
eral required by subparagraph (A)
shall consist solely of assets of the ap-
plicant, any affiliate of the applicant,
or both (whichever the Board con-
siders appropriate), including pri-
mary assets to be used in the delivery
of signals for which the loan is guar-
anteed.
(C) REVIEW
OF
VALUATION.—The
value of collateral securing a loan
guaranteed under this Act may be re-
viewed by the Board, and may be ad-
justed downward by the Board if the
Board reasonably believes such ad-
justment is appropriate.
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(3) LIEN
ON
INTERESTS
IN
ASSETS.—
Upon the Board’s approval of a loan guar-
antee 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 satisfac-
tory to the Board) subject to the liens
shall be at least equal to the unpaid bal-
ance of the loan amount covered by the
loan guarantee, or that value approved
by the Board under section 4(d)(3)(B)(iii)
of this Act.
(4) PERFECTED
SECURITY
INTEREST.—
With respect to a loan guaranteed under
this Act, the Administrator and the lend-
er shall have a perfected security interest
in assets securing the loan that are fully
sufficient to protect the financial inter-
ests of the United States and the lender.
(5) INSURANCE.—In accordance with
practices in the private capital market,
as determined by the Board, the appli-
cant for a loan guarantee under this Act
shall obtain, at its expense, insurance suf-
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ficient 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 re-
quirements as the Board may prescribe.
(d) MODIFICATION.—The Board may ap-
prove the modification of any term or condi-
tion of a loan guarantee or a loan guaranteed
under this Act, including the rate of interest,
time of payment of principal or interest, or se-
curity requirements only if—
(1) the modification is consistent with
the financial interests of the United
States;
(2) consent has been obtained from
the parties to the loan agreement;
(3) the modification is consistent with
the 
underwriting 
criteria 
developed
under section 4(g) of this Act;
(4) the modification does not ad-
versely affect the interest of the Federal
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Government in the assets or collateral of
the applicant;
(5) the modification does not ad-
versely 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 ap-
plicant for a loan guarantee under this
Act for a project covered by section
4(e)(1) of this Act shall enter into stipu-
lated performance schedules with the Ad-
ministrator with respect to the signals to
be provided through the project.
(2) PENALTY.—The Administrator may
assess against and collect from an appli-
cant 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.
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(f) COMPLIANCE.—The Administrator, in
cooperation with the Board and as the regula-
tions 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 sub-
mittal of such reports and documents as the
Board may require in regulations prescribed
by the Board and through regular periodic in-
spections and audits.
(g) COMMERCIAL VALIDITY.—A loan guar-
antee 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 reli-
ance thereon, unless such person or enti-
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ty (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 guar-
anteed under this Act, including the adminis-
tration of the payment of guaranteed amounts
upon default.
(i) RECOVERY OF PAYMENTS.—
(1) IN
GENERAL.—The Administrator
shall be entitled to recover from an appli-
cant 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 Ad-
ministrator shall, in an orderly and
efficient manner, sell or otherwise
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dispose of any property or other in-
terests obtained under this Act in a
manner that maximizes taxpayer re-
turn and is consistent with the finan-
cial interests of the United States.
(B) MAINTENANCE.—The Adminis-
trator shall maintain in a cost-effec-
tive 
and 
reasonable 
manner 
any
property or other interests pending
sale or disposal of such property or
other interests under subparagraph
(A).
(j) ACTION AGAINST OBLIGOR.—
(1) AUTHORITY
TO
BRING
CIVIL
AC-
TION.—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 hold-
er of a loan guarantee shall make avail-
able to the Administrator all records and
evidence necessary to prosecute the civil
action.
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(2) 
FULLY
SATISFYING
OBLIGATIONS
OWED
THE
UNITED
STATES.—The Adminis-
trator may accept property in satisfac-
tion of any sums owed the United States
as a result of a default on a loan guaran-
teed under this Act, but only to the ex-
tent that any cash accepted by the Ad-
ministrator is not sufficient to satisfy
fully the sums owed as a result of the de-
fault.
(k) BREACH OF CONDITIONS.—The Adminis-
trator shall commence a civil action in a court
of appropriate jurisdiction to enjoin any ac-
tivity 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 execu-
tion may be issued against the Administrator
or any property in the control of the Adminis-
trator pursuant to this Act before the entry of
a final judgment (as to which all rights of ap-
peal have expired) by a Federal, State, or
other court of competent jurisdiction against