II
Calendar No. 525
106TH CONGRESS
2D SESSION
H. R. 3615
IN THE SENATE OF THE UNITED STATES
MAY 2, 2000
Received; read twice and placed on the calendar
AN ACT
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.
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Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Rural Local Broadcast Signal Act’’.
(b) TABLE OF CONTENTS.—The table of contents of
this Act is as follows:
Sec.
1. Short title; table of contents.
Sec.
2. Purpose.
Sec.
3. Rural Television Loan Guarantee Board.
Sec.
4. Approval of loan guarantees.
Sec.
5. Administration of loan guarantees.
Sec.
6. Prohibition on use of funds for spectrum auctions.
Sec.
7. Prohibition on use of funds by incumbent cable operators.
Sec.
8. Annual audit.
Sec.
9. Exemption from must carry requirements.
Sec. 10. Additional availability of broadcast signals in rural areas.
Sec. 11. Improved cellular service in rural areas.
Sec. 12. Technical amendment.
Sec. 13. Definitions.
Sec. 14. Authorizations of appropriations.
Sec. 15. Sunset.
SEC. 2. PURPOSE.
The purpose of this Act is to facilitate access, on a
technologically neutral basis and by December 31, 2006,
to signals of local television stations for households located
in unserved areas and underserved areas.
SEC. 3. RURAL TELEVISION LOAN GUARANTEE BOARD.
(a) ESTABLISHMENT.—There is established the
Rural Television Loan Guarantee Board (in this Act re-
ferred to as the ‘‘Board’’).
(b) MEMBERS.—
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(1) IN GENERAL.—Subject to paragraph (2),
the Board shall consist of the following members:
(A) The Secretary of the Treasury, or the
designee of the Secretary.
(B) The Secretary of Agriculture, or the
designee of the Secretary.
(C) The Secretary of Commerce, or the
designee of the Secretary.
(2) REQUIREMENT AS TO DESIGNEES.—An in-
dividual 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 ap-
pointment 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 ac-
cordance with this subsection and section 4 of this
Act.
(2) CONSULTATION AUTHORIZED.—
(A) IN
GENERAL.—In carrying out its
functions under this Act, the Board shall con-
sult with such departments and agencies of the
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Federal Government as the Board considers ap-
propriate, including the Department of Com-
merce, the Department of Agriculture, the De-
partment of the Treasury, the Department of
Justice, the Department of the Interior, the
Board of Governors of the Federal Reserve Sys-
tem, the Federal Communications Commission,
the Federal Trade Commission, and the Na-
tional Aeronautics and Space Administration.
(B) RESPONSE.—A department or agency
consulted by the Board under subparagraph (A)
shall provide the Board such expertise and as-
sistance as the Board requires to carry out its
functions under this Act.
(3) APPROVAL BY MAJORITY VOTE.—The deter-
mination 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.—
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(1) REQUIREMENTS.—The Administrator (as
defined in section 5 of this Act), under the direction
of and for approval by the Board, shall prescribe
regulations to implement the provisions of this Act
and shall do so not later than 120 days after funds
authorized to be appropriated under section 15 of
this Act have been appropriated in a bill signed into
law.
(2) ELEMENTS.—The regulations prescribed
under paragraph (1) shall—
(A) set forth the form of any application to
be submitted to the Board under this Act;
(B) set forth time periods for the review
and consideration by the Board of applications
to be submitted to the Board under this Act,
and for any other action to be taken by the
Board with respect to such applications;
(C) provide appropriate safeguards against
the evasion of the provisions of this Act;
(D) set forth the circumstances in which
an applicant, together with any affiliate of an
applicant, shall be treated as an applicant for
a loan guarantee under this Act;
(E) include requirements that appropriate
parties submit to the Board any documents and
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assurances that are required for the administra-
tion of the provisions of this Act; and
(F) include such other provisions con-
sistent 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 requir-
ing, to the extent and under circumstances consid-
ered appropriate by the Board, that affiliates of an
applicant be subject to certain obligations of the ap-
plicant as a condition to the approval or mainte-
nance of a loan guarantee under this Act.
(B) If any provision of this Act or the applica-
tion of such provision to any person or entity or cir-
cumstance is held to be invalid by a court of com-
petent 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 ap-
propriations Acts.
(d) REQUIREMENTS AND CRITERIA APPLICABLE TO
APPROVAL.—
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(1) IN GENERAL.—The Board shall utilize the
underwriting criteria developed under subsection (g),
and any relevant information provided by the de-
partments 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 acqui-
sition, improvement, enhancement, construction,
deployment, launch, or rehabilitation of the
means by which local television broadcast sig-
nals will be delivered principally to an unserved
area or an underserved area (or both);
(B) the proceeds of the loan will not be
used for operating, advertising, or promotion
expenses;
(C) the proposed project, as determined by
the National Telecommunications and Informa-
tion Administration, is not likely to have a sub-
stantial adverse impact on competition that out-
weighs the benefits of improving access to the
signals of a local television station in an
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unserved area or an underserved area (or both),
and is commercially viable;
(D)(i) the loan (including Other Debt, as
defined in subsection (f)(2)(B))—
(I) is provided by any entity engaged
in the business of commercial lending—
(aa) if the loan is made in ac-
cordance 
with 
loan-to-one-borrower
and affiliate transaction restrictions to
which the entity is subject under ap-
plicable law; or
(bb) if item (aa) does not apply,
the loan is made only to a borrower
that is not an affiliate of the entity
and only if the amount of the loan
and all outstanding loans by that enti-
ty to that borrower and any of its af-
filiates does not exceed 10 percent of
the net equity of the entity; or
(II) is provided by a nonprofit cor-
poration, including the National Rural
Utilities Cooperative Finance Corporation,
engaged primarily in commercial lending, if
the Board determines that such nonprofit
corporation has one or more issues of out-
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standing long-term debt that is rated with-
in the highest 3 rating categories of a na-
tionally recognized statistical rating orga-
nization, and, if the Board determines that
the making of the loan by such nonprofit
corporation will cause a decline in the debt
rating mentioned above, the Board at its
discretion may disapprove the loan guar-
antee on this basis;
(ii)(I) no loan (including Other Debt as de-
fined in subsection (f)(2)(B)) may be made for
purposes of this Act by a governmental entity
or affiliate thereof, or by the Federal Agricul-
tural Mortgage Corporation, or any institution
supervised by the Office of Federal Housing
Enterprise Oversight, the Federal Housing Fi-
nance Board, or any affiliate of such entities;
(II) any loan (including Other Debt as de-
fined in subsection (f)(2)(B)) must have terms,
in the judgment of the Board, that are con-
sistent in material respects with the terms of
similar obligations in the private capital mar-
ket;
(III) for purposes of clause (i)(I)(bb), the
term ‘‘net equity’’ means the value of the total
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assets of the entity, less the total liabilities of
the entity, as recorded under generally accepted
accounting principles for the fiscal quarter
ended immediately prior to the date on which
the subject loan is approved; and
(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 exe-
cution of the loan; or
(ii) the economically useful life, as de-
termined by the Board or in consultation
with persons or entities deemed appro-
priate 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
FINAN-
CIAL INTERESTS.—The Board may not approve the
guarantee of a loan under this Act unless—
(A) the Board has been given documenta-
tion, assurances, and access to information,
persons, and entities necessary, as determined
by the Board, to address issues relevant to the
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review of the loan by the Board for purposes of
this Act; and
(B) the Board makes a determination in
writing that—
(i) to the best of its knowledge upon
due inquiry, the assets, facilities, or equip-
ment 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 in-
terests of the United States and are rea-
sonable;
(iii) to the extent possible, the value
of collateral provided by an applicant is at
least equal to the unpaid balance of the
loan amount covered by the loan guarantee
(the ‘‘Amount’’ for purposes of this
clause); and if the value of collateral pro-
vided by an applicant is less than the
Amount, the additional required collateral
is provided by any affiliate of the appli-
cant; and if the combined value of collat-
eral provided by an applicant and any affil-
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iate is not at least equal to the Amount,
the collateral from such affiliate represents
all of such affiliate’s assets;
(iv) all necessary and required regu-
latory and other approvals, spectrum
rights, and delivery permissions have been
received for the loan, the project under the
loan, and the Other Debt, if any, under
subsection (f)(2)(B);
(v) the loan would not be available on
reasonable terms and conditions without a
loan guarantee under this Act; and
(vi) repayment of the loan can reason-
ably be expected.
(e) CONSIDERATIONS.—
(1) TYPE OF MARKET.—
(A) PRIORITY
CONSIDERATIONS.—To the
maximum extent practicable, the Board shall
give priority in the approval of loan guarantees
under this Act in the following order: First, to
projects that will serve the greatest number of
households in unserved areas and the number
of States (including noncontiguous States); and
second, to projects that will serve the greatest
number of households in underserved areas. In