II 113th CONGRESS 2d Session S. 2155 IN THE SENATE OF THE UNITED STATES March 25, 2014 Mr. Kirk introduced the following bill; which was read twice and referred to the Committee on Commerce, Science, and Transportation A BILL To amend the National Telecommunications and Information Administration Organization Act to create a Federal Spectrum Reallocation Commission, to provide for the use of a portion of the proceeds from the auction of reallocated Federal spectrum for deficit reduction, and for other purposes.

1. Short title This Act may be cited as the Maximizing Spectrum Efficiency and Value Act of 2014 . 2. Findings Congress finds the following: (1) Demand for electromagnetic spectrum is sharply rising due to the growing advanced network of communications devices that rely on spectrum to transmit and receive information. (2) It is necessary for the United States to maintain its investments in innovation of spectrum and broadband infrastructure to ensure the United States is a global leader in the wireless age. (3) Spectrum is a finite resource, and in order to spur innovation, the United States must provide for better and more efficient spectrum management. (4) Many spectrum holders do not efficiently use their frequency assignments, and a restructuring of the usable spectrum is a viable solution to make up for this lost opportunity. (5) Making available additional spectrum to meet the demands of broadband technologies and services will prevent dropped connections, blocked service, decreased connection speed, and even higher prices for certain advanced applications. (6) The availability of increased spectrum will allow advanced technologies such as 4G mobile services, high-speed wireless, high definition television, and more to continue operating without network problems and interference. (7) The United States public debt totals not less than $14,300,000,000,000. (8) Congress should look for ways to increase Federal Government revenues without creating additional burdens on taxpayers. (9) Auctioning spectrum is the most economically sound method for accurate valuation and assignment of spectrum to develop the next generation of wireless technologies, expand broadband service to underserved areas of the country, develop an interoperable public safety network, and reduce the deficit. (10) Certain frequencies of spectrum have substantial market value and could raise significant new revenue in a public auction. (11) Barriers to a spectrum auction such as regulatory and administrative delays are not conducive to the free-market approach and can hurt innovation. (12) Federal Government spectrum, while extremely important, is vast and should be included in any spectrum reform initiative. 3. Federal Spectrum Reallocation Commission (a) In general Part B of title I of the National Telecommunications and Information Administration Organization Act ( 47 U.S.C. 921 et seq. ) is amended by adding at the end the following: 120. Federal Spectrum Reallocation Commission (a) Definitions In this section— (1) the term appropriate congressional committees means— (A) the Committee on Appropriations of the Senate; (B) the Committee on Appropriations of the House of Representatives; (C) the Committee on Commerce, Science, and Transportation of the Senate; and (D) the Committee on Energy and Commerce of the House of Representatives; (2) the term Chairperson means the chairperson of the Reallocation Commission designated under subsection (b)(3)(B); (3) the term Director means the Director of the Reallocation Commission appointed under subsection (b)(5)(A); (4) the term Executive agency has the meaning given the term in section 105 of title 5, United States Code; (5) the term Federal entity means any department, agency, or other instrumentality of the Federal Government that utilizes a Government station license obtained under section 305 of the Communications Act of 1934 (47 U.S.C. 305); (6) the term Reallocation Commission means the Federal Spectrum Reallocation Commission established under subsection (b)(1); and (7) the term relocation or sharing costs — (A) means the costs incurred by a Federal entity to achieve comparable capability of systems, regardless of whether that capability is achieved by relocating to a new frequency assignment or by utilizing an alternative technology; and (B) includes— (i) the costs of any modification or replacement of equipment, software, facilities, operating manuals, training costs, or regulations that are attributable to relocation; (ii) the costs of all engineering, equipment, software, site acquisition, and construction costs, as well as any legitimate and prudent transaction expense, including outside consultants, and reasonable additional costs incurred by the Federal entity that are attributable to relocation, including increased recurring costs associated with the replacement facilities; (iii) the costs of engineering studies, economic analyses, or other expenses reasonably incurred in calculating the estimated relocation or sharing costs that are provided to the Commission under subsection (e)(1)(C) and approved by the Director of the Office of Management and Budget under subsection (e)(1)(D); (iv) the one-time costs of any modification of equipment reasonably necessary to accommodate commercial use of reallocated frequencies prior to the termination of the Federal entity’s primary allocation or protected status, when the frequencies are made available for private-sector uses by competitive bidding and a Federal entity retains primary allocation or protected status in those frequencies for a period of time after the completion of the competitive bidding process; and (v) the costs associated with the accelerated replacement of systems and equipment if such acceleration is necessary to ensure the timely relocation of systems to a new frequency assignment. (b) Establishment and operation of Reallocation Commission (1) Establishment There is established an independent commission to be known as the Federal Spectrum Reallocation Commission . (2) Duties The Reallocation Commission shall carry out the duties described in this section. (3) Membership (A) Appointments (i) In general The Reallocation Commission shall be composed of 9 members appointed by the President, by and with the advice and consent of the Senate. (ii) Requirements for membership (I) In general Of the 9 members appointed by the President under clause (i)— (aa) not more than 1 member may be a current employee or contractor of the Department of Defense; (bb) not more than 1 member may be former employee or contractor of the Department of Defense; (cc) not fewer than 1 member shall be a representative of the commercial mobile technology industry; and (dd) not fewer than 1 member shall be a representative from a standards-setting body that is accredited by the American National Standards Institute to develop voluntary industry standards. (II) Private-sector representation In making appointments under clause (i), the President shall ensure that there is robust private-sector representation on the Reallocation Commission. (iii) Transmission of nominations Not later than 180 days after the date of enactment of this section, the President shall transmit to the Senate the nominations for appointment to the Commission. (iv) Consultation In selecting individuals for nominations for appointments to the Reallocation Commission, the President shall consult with— (I) the Speaker of the House of Representatives concerning the appointment of 3 members; (II) the majority leader of the Senate concerning the appointment of 3 members; (III) the minority leader of the House of Representatives concerning the appointment of 1 member; and (IV) the minority leader of the Senate concerning the appointment of 1 member. (v) Nonpolitical nature of appointment No political test or qualification may be used in selecting, appointing, promoting, or taking other personnel actions with respect to members, officers, agents, or employees of the Reallocation Commission. (B) Chairperson At the time the President nominates individuals for appointments under subparagraph (A), the President shall designate 1 of the individuals nominated to serve as the Chairperson of the Reallocation Commission. (C) Terms (i) In general Each member of the Reallocation Commission may serve until the Commission sunsets under paragraph (12). (ii) Chairperson The Chairperson may serve until the confirmation of a successor. (iii) Vacancies Any vacancy in the Reallocation Commission shall be filled in the same manner as the original appointment. (D) Compensation of members (i) In general Each member of the Reallocation Commission, other than the Chairperson, shall be paid at a rate equal to the daily equivalent of the minimum annual rate of basic pay payable for level IV of the Executive Schedule under section 5315 of title 5, United States Code, for each day (including travel time) during which the member is engaged in the actual performance of duties vested in the Reallocation Commission. (ii) Chairperson The Chairperson shall be paid for each day referred to in clause (i) at a rate equal to the daily equivalent of the minimum annual rate of basic pay payable for level III of the Executive Schedule under section 5314 of title 5, United States Code. (4) Meetings (A) In general Each meeting of the Reallocation Commission, other than meetings in which classified information is to be discussed, shall be open to the public. (B) Access to information All of the proceedings, information, and deliberations of the Commission shall be open, upon request, to— (i) the Chairman and the ranking member of the Subcommittee on Communications, Technology, and the Internet of the Committee on Commerce, Science, and Transportation of the Senate, or such other members of the Subcommittee designated by the Chairman or ranking member of the Subcommittee; (ii) the Chairman and the ranking member of the Subcommittee on Communications and Technology of the Committee on Energy and Commerce of the House of Representatives, or such other members of the Subcommittee designated by the Chairman or ranking member of the Subcommittee; and (iii) the Chairmen and ranking members of the Subcommittees on Commerce, Justice, Science, and Related Agencies and on Financial Services and General Government of the Committees on Appropriations of the Senate and of the House of Representatives, or such other members of the Subcommittees designated by such Chairmen or ranking members. (5) Director of staff (A) In general The Reallocation Commission shall, without regard to the provisions of title 5, United States Code, governing appointments in the competitive service, appoint a Director. (B) Pay The Director shall, without regard to the provisions of chapter 51 and subchapter III of chapter 53 of such title (relating to classification and General Schedule pay rates), be paid at the rate of basic pay payable for level IV of the Executive Schedule under section 5315 of title 5, United States Code. (6) Staff (A) In general Subject to subparagraphs (B) and (C), the Director, with the approval of the Reallocation Commission, may appoint and fix the pay of additional personnel as may be necessary to enable the Reallocation Commission to perform the duties of the Reallocation Commission. (B) Limitation The Director may make such appointments without regard to the provisions of title 5, United States Code, governing appointments in the competitive service, and any personnel so appointed may be paid without regard to the provisions of chapter 51 and subchapter III of chapter 53 of that title relating to classification and General Schedule pay rates, except that an individual appointed under this paragraph may not receive pay in excess of the annual rate of basic pay payable for GS–18 of the General Schedule. (C) Detail of Government employees Upon request of the Director, the Secretary may detail any of the personnel of the Department of Commerce to the Reallocation Commission to assist the Reallocation Commission in carrying out its duties. (D) GAO agreement The Comptroller General of the United States shall provide assistance, including the detailing of employees, to the Reallocation Commission in accordance with an agreement entered into with the Reallocation Commission. (7) Procurement of temporary and intermittent services The Chairperson may procure temporary and intermittent services under section 3109 of title 5, United States Code, at rates for individuals that do not exceed the daily equivalent of the annual rate of basic pay prescribed for level V of the Executive Schedule under section 5316 of such title. (8) Property The Chairperson may lease space and acquire personal property to the extent funds are available. (9) Postal and printing services The Reallocation Commission may use the United States mails and obtain printing and binding services in the same manner and under the same conditions as other agencies of the United States. (10) Obtaining information The Reallocation Commission may secure directly from any agency or department of the United States information necessary to enable it to carry out its duties under this section. Upon request of any member of the Reallocation Commission, the head of that agency or department shall furnish that information to the Reallocation Commission in a full and timely manner. (11) Funding There are authorized to be transferred to the Reallocation Commission $13,000,000 from the Spectrum Relocation Fund established under section 118 to carry out the duties of the Reallocation Commission under this section, and such funds shall remain available until the term of the Reallocation Commission sunsets under paragraph (12). The funds remaining after the sunset of the Commission shall be returned to the Treasury for the sole purpose of deficit reduction. (12) Sunset This subsection is repealed effective 60 days after the date on which the President approves the recommendations of the Reallocation Commission pursuant to subsection (d)(4). (c) Spectrum utilization plan (1) In general As part of the budget justification documents submitted to Congress in support of the budget submitted under section 1105 of title 31, United States Code, for each fiscal year, the head of each Federal entity shall include a spectrum utilization plan. (2) Contents A spectrum utilization plan submitted by the head of a Federal entity under paragraph (1) shall include— (A) the total spectrum authorized for the entity (in percentage terms and in sum) in each band the entity uses; (B) the approximate number of transmitters, end-user terminals, or receivers, excluding unintended radiators, that have been deployed by the entity or authorized to be used by the entity; (C) if such information is available— (i) the type of transmitters, end-user terminals, or receivers, excluding unintended radiators, operated by the entity and whether they are space-, air-, or ground-based; (ii) the type of transmitters, end-user terminals, or receivers, excluding unintended radiators, authorized to be operated by the entity and whether they are space-, air-, or ground-based; (iii) contour maps or other information that illustrates the coverage area, receiver performance, and other parameters relevant to an assessment of the availability of spectrum in each band used by the entity; (iv) the approximate geolocation of base stations or fixed transmitters used by the entity; (v) the approximate extent of use, by geography, of each band of frequencies used by the entity, such as the amount and percentage of time of use, number of end-users, or other measures as appropriate to the particular band; (vi) the activities, capabilities, functions, or missions supported by the transmitters, end-user terminals, or receivers used by the entity; and (vii) the types of unlicensed devices authorized to be operated by the entity; (D) the opportunity cost borne by the entity for each spectrum band the entity uses; (E) the planned uses of technologies or expanded services requiring spectrum for a period of time agreed to by the entity; and (F) suggested spectrum-efficient approaches to meeting the spectrum requirements identified under subparagraph (E). (3) Requirement The head of each Federal entity required to submit a spectrum utilization plan under paragraph (1) shall submit a copy of each plan submitted under such paragraph to the Reallocation Commission, the Secretary, and the NTIA. (4) National security; classified information (A) National security If the head of a Federal entity determines that disclosure of information required under paragraph (1) would be harmful to the national security of the United States, such head shall— (i) notify the Secretary of such determination; and (ii) provide to the Secretary— (I) the other publicly releasable information required under paragraph (1); (II) to the maximum extent practicable, a summary description of the information with respect to which the determination was made; and (III) an annex containing the information with respect to which the determination was made. (B) Classified information If the head of a Federal entity determines that any information required under paragraph (1) is classified in accordance with Executive Order 13526 ( 50 U.S.C. 435 note) or any successor Executive order establishing or modifying the uniform system for classifying, safeguarding, and declassifying national security information, such head shall— (i) notify the Secretary of such determination; and (ii) provide to the Secretary— (I) the information required under paragraph (1) that is not classified; (II) to the maximum extent practicable, a summary description of the information that is classified; and (III) an annex containing the information that is classified. (C) Annex restriction (i) Availability to NTIA and Relocation Commission The Secretary shall make an annex described in subparagraph (A)(ii)(III) or (B)(ii)(III) available to the NTIA and the Relocation Commission. (ii) No public availability The NTIA, the Secretary, and the Relocation Commission shall not make an annex described in subparagraph (A)(ii)(III) or (B)(ii)(III) available to the public or to any unauthorized person through any means. (d) Procedure for making recommendations for spectrum reallocation (1) Recommendations by Secretary of Commerce Not later than 18 months after the date on which the President submits the budget documents that include spectrum utilization plans described in subsection (c) to Congress for the first fiscal year following the date of enactment of this section, the Secretary shall prepare and submit to the appropriate congressional committees, the Comptroller General of the United States, and the Reallocation Commission a report identifying and recommending for reallocation bands of frequencies— (A) that are allocated on a primary basis for Federal Government use; (B) that— (i) are not required for the needs of the Federal Government at the time the report is submitted; or (ii) will not be required for such needs in the identifiable future; and (C) that can feasibly be made available, as of the date of submission of the report or at any time during the 5-year period beginning on such date, for assignment through a system of competitive bidding under section 309(j) of the Communications Act of 1934 ( 47 U.S.C. 309(j) ). (2) Criteria for identification (A) Needs of the Federal Government In determining whether a band of frequencies meets one of the criteria specified in paragraph (1)(B), the Secretary shall— (i) consider whether the band of frequencies is used to provide a communications service that is or could be available from a commercial provider or other vendor, or whether the communications services provided on such frequencies could be relocated to other frequencies used by the Federal Government; (ii) seek to promote— (I) the maximum practicable reliance on commercially available substitutes; (II) the efficient use of spectrum by Federal Government stations; (III) the development and use of new communications technologies; and (IV) the use of nonradiating communications systems where practicable; and (iii) seek to avoid— (I) serious degradation of Federal Government services and operations; (II) excessive costs to the Federal Government and users of Federal Government services; and (III) excessive disruption of existing use of Federal Government frequencies by amateur radio licensees. (B) Direct discussions (i) In general The Secretary shall encourage and provide opportunities for direct discussions among commercial representatives and Federal Government users of the spectrum to aid the Secretary in determining which frequencies to recommend for reallocation under paragraph (1). (ii) Hearings and public comment (I) In general As part of the discussions required under clause (i), the Secretary shall conduct public hearings and accept public comment on the recommendations. (II) Testimony under oath All testimony before the Secretary at a public hearing conducted under this clause shall be presented under oath. (III) Publication on website All testimony and public comments collected under this clause shall be made available on a public website. (iii) Representation A representative of the Reallocation Commission, and of the Secretary at the election of the Secretary, may attend any discussion held under clause (i). (iv) Further comment The Secretary shall provide the public and the Reallocation Commission with an opportunity to comment on the results of a discussion held under clause (i) before the Secretary submits the recommendation required under paragraph (1). (3) Review and recommendations by the Reallocation Commission (A) Review (i) In general After receiving the recommendations from the Secretary under paragraph (1), the Reallocation Commission shall review and analyze the recommendations. (ii) New and innovative management techniques and technologies In conducting the review and analysis under clause (i), the Reallocation Commission shall give priority to recommendations that make accommodation for new and innovative management techniques and technologies for maximizing the value and use of spectrum. (iii) Hearings (I) In general As part of the review and analysis required under clause (i), the Reallocation Commission shall conduct public hearings on the recommendations. (II) Testimony under oath All testimony before the Reallocation Commission at a public hearing conducted under this clause shall be presented under oath. (B) Recommendations (i) In general Not later than 180 days after the date on which the Secretary submits recommendations under paragraph (1) to the Reallocation Commission, the Reallocation Commission shall submit to the President and the appropriate congressional committees a report on the findings and conclusions of the Reallocation Commission from the review and analysis conducted under subparagraph (A), including any recommendations for Federal spectrum reallocation. (ii) Requirement A report submitted under clause (i) shall contain an explanation and justification of any recommendation for Federal spectrum reallocation included in the report that is different from the recommendations submitted by the Secretary under paragraph (1). (C) Transmission of information to Congress After the Reallocation Commission submits recommendations to the President under subparagraph (B), upon request by a Member of Congress, the Reallocation Commission shall provide to the Member of Congress any information used by the Reallocation Commission in making the recommendations. (D) GAO requirements The Comptroller General of the United States shall— (i) assist the Reallocation Commission, to the extent requested, in the review and analysis under subparagraph (A); and (ii) not later than 90 days after the date on which the Secretary makes recommendations under paragraph (1), submit to Congress and to the Reallocation Commission a report that contains a detailed analysis of the recommendations and selection process of the Secretary. (4) Review by the President (A) In general Not later than 30 days after the date on which the Reallocation Commission submits recommendations for Federal spectrum reallocation under paragraph (3)(B), the President shall— (i) determine whether to approve the recommendations made by the Reallocation Commission; and (ii) submit to Congress and the Reallocation Commission a report that describes the determination made under clause (i). (B) Approval If the President approves the recommendations under subparagraph (A)(i), the President shall submit a copy of the recommendations to Congress. (C) Disapproval (i) In general If the President disapproves the recommendations under subparagraph (A)(i), the President shall submit to Congress and to the Reallocation Commission a report that describes the reasons that the President disapproves of the recommendations. (ii) Reallocation Commission revisions Not later than 60 days after the date on which the President submits to the Reallocation Commission a report under clause (i), the Reallocation Commission shall submit to the President a revised list of recommendations for reallocation of Federal spectrum. (iii) Approval and disapproval of revisions (I) Approval If the President approves the revised list of recommendations submitted by the Reallocation Commission under clause (ii), the President shall submit the revised list to Congress. (II) Disapproval If the President disapproves the revised list of recommendations submitted by the Reallocation Commission under clause (ii), the President and the Reallocation Commission shall complete the requirements described in clauses (i) and (ii) until the President approves recommendations from the Reallocation Commission. (5) Public disclosure and nondisclosure (A) In general If the head of an Executive agency or Federal entity, the Chairperson, or the President determines that public disclosure of any information contained in the reports, recommendations, testimony, or comments required under this section would reveal classified national security information or other information for which there is a legal basis for nondisclosure and such public disclosure would be detrimental to national security, homeland security, or public safety or would jeopardize law enforcement investigations, the head of the Executive agency or Federal entity, the Chairperson, or the President shall notify the Secretary of that determination prior to release of such information. (B) Annex (i) In general If the head of an Executive agency or Federal entity, the Chairperson, or the President notifies the Secretary of a determination under subparagraph (A), the information required to be disclosed under this section shall be included in a separate classified annex, as needed. (ii) Requirement A classified annex described under clause (i)— (I) shall be provided to the subcommittees of primary jurisdiction of the committees of primary jurisdiction of the Senate and House of Representatives in accordance with appropriate national security stipulations; and (II) shall not be disclosed to the public or provided to any unauthorized person through any means. (e) Reallocation of Federal Spectrum (1) Agency action (A) NTIA requirement Not later than 180 days after the date on which the President submits approved recommendations for the reallocation of Federal spectrum to Congress under subparagraph (B) or (C)(iii)(I) of subsection (d)(4), the NTIA shall provide to each Federal entity that is required to take action under the recommendations information regarding an alternative frequency assignment to which the radio communications operations of the Federal entity could be relocated for purposes of calculating the estimated relocation or sharing costs and timeline required under subparagraph (C). (B) Requirement To the extent practicable and consistent with national security considerations, the NTIA shall provide the information described in subparagraph (A) by the geographic location of the facilities or systems of the Federal entity and the frequency bands used by the facilities or systems. (C) Implementation plan (i) In general Not later than 1 year after the date on which the President submits approved recommendations for the reallocation of Federal spectrum to Congress under subparagraph (B) or (C)(iii)(I) of subsection (d)(4), the head of each Federal entity required to relocate spectrum under the recommendations shall prepare and submit to the President, the appropriate congressional committees, the NTIA, the Federal Communications Commission, the Director of the Office of Management and Budget, and the Comptroller General of the United States a plan for implementation of the recommendations related to the Federal entity. (ii) Contents An implementation plan submitted by a Federal entity under clause (i) shall include— (I) a description of how the Federal entity will comply with the approved recommendations for the reallocation of Federal spectrum submitted to Congress under subparagraph (B) or (C)(iii)(I) of subsection (d)(4); (II) any statutory or regulatory barriers that will prohibit the Federal entity from complying with the recommendations described in subclause (I); (III) the estimated cost to the Federal entity of frequency withdrawal or relocation; and (IV) the estimated timeline of the Federal entity for frequency withdrawal or relocation. (D) Review of implementation plan (i) In general Not later than 30 days after the date on which an implementation plan is submitted under subparagraph (C), the Director of the Office of Management and Budget shall review and determine whether to approve the implementation plan. (ii) Disapproval If an implementation plan submitted under subparagraph (C) is disapproved by the Director of the Office of Management and Budget, the Federal entity that submitted the implementation plan shall submit a revised implementation plan under such subparagraph, and the submission and review process shall continue until an implementation plan is approved. (iii) Approval of all plans Not later than 7 days after the date on which the Director of the Office of Management and Budget approves the plans submitted under subparagraph (C), the Director shall notify the Federal Communications Commission of the estimated relocation or sharing costs and timelines of all Federal entities required to submit a plan under such subparagraph. (iv) Review of progress (I) In general At the beginning of each fiscal year following approval of a plan required under subparagraph (C), the Director of the Office of Management and Budget shall review the progress of the Federal entity in meeting the cost and timelines of the implementation plan. (II) Enforcement by Director If, at any point while conducting a review under subclause (I), the Director determines the Federal entity will not meet the implementation plan cost or timelines, the Director shall take action to enforce the approved plan. (E) Compliance (i) Initiation of required action Not later than 2 years after the date on which the President submits approved recommendations for the reallocation of Federal spectrum to Congress under subparagraph (B) or (C)(iii)(I) of subsection (d)(4), the head of each Federal entity shall initiate all actions required to comply with the approved recommendations. (ii) Completion of required action Not later than 5 years after the date on which the President submits approved recommendations for the reallocation of Federal spectrum to Congress under subparagraph (B) or (C)(iii)(I) of subsection (d)(4), the head of each Federal entity shall complete all actions required to comply with the approved recommendations. (2) Congressional Disapproval (A) In general No Federal entity may initiate any action in accordance with the approved recommendations for the reallocation of Federal spectrum submitted to Congress by the President under subparagraph (B) or (C)(iii)(I) of subsection (d)(4) if there is enacted a joint resolution disapproving the recommendations before the earlier of— (i) the end of the 45-day period beginning on the date on which the President submits the recommendations to Congress under subparagraph (B) or (C)(iii)(I) of subsection (d)(4); or (ii) the adjournment of Congress sine die for the session during which the recommendations described in clause (i) are submitted. (B) Computation of time period The days on which either the Senate or the House of Representatives is not in session because of an adjournment for more than 3 days to a day certain shall be excluded in the computation of the time period described in subparagraph (A)(i). (3) Notification of successful relocation The President shall terminate the authorization of a Federal entity and notify the Secretary and the Federal Communications Commission of the termination if— (A) the NTIA determines that a Federal entity has achieved comparable capability of systems by relocating to a new frequency assignment or by utilizing an alternative technology; or (B) the Federal entity has unreasonably failed to comply with the timeline for relocation approved by the Director of the Office of Management and Budget under paragraph (1)(D). (f) Auction of available frequencies (1) In general Not later than 18 months after the date on which the President submits approved recommendations for the reallocation of Federal spectrum to Congress under subparagraph (B) or (C)(iii)(I) of subsection (d)(4), the Federal Communications Commission shall promulgate rules for the conduct of auctions of frequencies that will be made available according to such recommendations for assignment of new initial licenses subject to new service rules or for other purposes. (2) Requirement In promulgating rules under paragraph (1), the Federal Communications Commission shall— (A) minimize the cost to the taxpayer of the transition of the spectrum to be auctioned to its newly identified use; and (B) ensure that any licensing conditions established are restricted to interference protections and ethical, geographic, and financial qualifications of licensees. (3) Schedule for auctions Not later than 2 years after the date on which the President submits approved recommendations for the reallocation of Federal spectrum to Congress under subparagraph (B) or (C)(iii)(I) of subsection (d)(4), the Federal Communications Commission shall commence auctions under this subsection. (g) Relocation of Federal Government stations (1) relocation or sharing costs Any Federal entity that operates a Federal Government station assigned to a band of frequencies and that incurs relocation or sharing costs because of the reallocation of frequencies from Federal use to non-Federal use pursuant to this section shall receive payment for such costs from the Spectrum Relocation Fund, in accordance with section 118. (2) Federal action to expedite spectrum transfer Any Federal Government station that operates on electromagnetic spectrum that has been identified in the approved recommendations for the reallocation of Federal spectrum submitted to Congress by the President under subparagraph (B) or (C)(iii)(I) of subsection (d)(4) shall, to the maximum extent practicable through the use of the authority granted under this section and any other applicable provision of law, take action to relocate its spectrum use to other frequencies that are allocated for Federal use or to consolidate its spectrum use with other Federal Government stations in a manner that maximizes the spectrum available for non-Federal use. (3) Failure to comply If a Federal entity does not comply with the timeline established in the implementation plan of the entity that was approved under subsection (e)(1)(D), Congress may decrease the amount appropriated to the entity in the following fiscal year by up to ½ of 1 percent. (4) Equipment upgrades for Department of Defense If a band of frequencies assigned to the Department of Defense is reallocated from Federal use to non-Federal use pursuant to this section, the relocation or sharing costs for which the Department may receive payment from the Spectrum Relocation Fund under section 118 shall include the costs of replacement with state-of-the-art equipment of any of the equipment used for relocated operations, whether or not such replacement is necessary to achieve comparable capability of systems, if the Secretary of Defense considers such replacement appropriate. (h) Treatment of certain spectrum subject to other reallocation processes In the case of spectrum that has been identified for reallocation, is in the process of being reallocated, or has been reallocated from Federal to non-Federal use under any other provision of law or administrative process, but with respect to relocation from which the Federal entity being relocated has not received payment for relocation or sharing costs, such spectrum shall be treated as spectrum allocated for Federal use that may be recommended for reallocation by the Secretary, the Reallocation Commission, or the President under this section. . (b) Technical and conforming amendments (1) Auction proceeds Section 309(j) of the Communications Act of 1934 (47 U.S.C. 309(j)) is amended— (A) in paragraph (3), by striking subparagraph (F) and inserting the following: (F) for any auction of— (i) eligible frequencies described in section 113(g)(2) of the National Telecommunications and Information Administration Organization Act ( 47 U.S.C. 923(g)(2) ), the recovery of 110 percent of estimated relocation or sharing costs as provided to the Commission under section 113(g)(4) of such Act; and (ii) frequencies described in section 120(f)(1) of the National Telecommunications and Information Administration Organization Act, the recovery of 110 percent of estimated relocation or sharing costs as provided to the Commission under section 120(e)(1)(D)(iii) of such Act. ; (B) in paragraph (8)(D)— (i) in clause (i), by inserting or (iii) after provided in clause (ii) ; and (ii) by adding at the end the following: (iii) Proceeds relating to Maximizing Spectrum Efficiency and Value Act of 2013 With respect to each auction of frequencies described in section 120(f)(1) of the National Telecommunications and Information Administration Organization Act— (I) an amount of the proceeds equal to the estimated relocation or sharing costs provided to the Commission under section 120(e)(1)(D)(iii) of such Act for relocation of Federal entities from the frequencies being assigned through such auction shall be deposited in the Spectrum Relocation Fund; and (II) the remainder of the proceeds shall be deposited in the general fund of the Treasury for the sole purpose of deficit reduction. ; and (C) in paragraph (16)— (i) in the header, by striking eligible frequencies and inserting reallocated Federal spectrum ; (ii) by striking subparagraphs (A) and (B) and inserting the following: (A) Special regulations The Commission shall revise the regulations prescribed under paragraph (4)(F) to prescribe methods by which— (i) the total cash proceeds from any auction of eligible frequencies described in section 113(g)(2) of the National Telecommunications and Information Administration Organization Act (47 U.S.C. 923(g)(2)) shall at least equal 110 percent of the total estimated relocation or sharing costs provided to the Commission pursuant to section 113(g)(4) of such Act; and (ii) the total cash proceeds from any auction of frequencies described in section 120(f)(1) of such Act shall at least equal 110 percent of the total estimated relocation or sharing costs provided to the Commission pursuant to section 120(e)(1)(D)(iii) of such Act. (B) Conclusion of auctions contingent on minimum proceeds (i) In general The Commission may not conclude any auction— (I) of eligible frequencies described in section 113(g)(2) of the National Telecommunications and Information Administration Organization Act ( 47 U.S.C. 923(g)(2) ) if the total cash proceeds attributable to such spectrum are less than 110 percent of the total estimated relocation or sharing costs provided to the Commission pursuant to section 113(g)(4) of such Act; or (II) of frequencies described in section 120(f)(1) of such Act if the total cash proceeds attributable to such spectrum are less than 110 percent of the total estimated relocation or sharing costs provided to the Commission pursuant to section 120(e)(1)(D)(iii) of such Act. (ii) Inability to conclude auction If the Commission is unable to conclude an auction because of the requirement of subclause (I) or (II) of clause (i), the Commission shall cancel the auction, return within 45 days after the auction cancellation date any deposits from participating bidders held in escrow, and absolve such bidders from any obligation to the United States to bid in any subsequent reauction of such spectrum. ; and (iii) in subparagraph (C)— (I) by striking eligible frequencies and inserting frequencies ; and (II) by striking an eligible Federal entity’s and inserting a Federal entity’s . (2) Separation from relocation process under section 113 of the NTIA Organization Act Section 113(g)(2)(B) of the National Telecommunications and Information Administration Organization Act (47 U.S.C. 923(g)(2)(B)) is amended by inserting before the period at the end the following: , or frequencies described in section 120(f)(1) of this Act . (3) Spectrum Relocation Fund Section 118 of the National Telecommunications and Information Administration Organization Act ( 47 U.S.C. 928 ) is amended— (A) by striking subsection (c) and inserting the following: (c) Used To pay relocation or sharing costs The amounts in the Fund— (1) from auctions of eligible frequencies described in section 113(g)(2) are authorized to be used to pay relocation or sharing costs, as defined in section 113(g)(3), of an eligible Federal entity incurring such costs with respect to relocation from or sharing of those frequencies; and (2) from auctions of frequencies described in section 120(f)(1) are authorized to be used to pay relocation or sharing costs, as defined in section 120(a)(7), of a Federal entity incurring such costs with respect to relocation from those frequencies. ; (B) in subsection (d)— (i) in paragraph (1), by striking subsection (c) of this section and inserting paragraph (1) and the relocation or sharing costs specified in paragraph (2) of subsection (c) ; and (ii) in paragraph (2)— (I) in the matter before subparagraph (A), by striking eligible ; (II) in subparagraph (C), by striking for approval each place it appears; and (III) in the matter after subparagraph (C), by striking Unless disapproved and all that follows and inserting In the case of an initial transfer to a Federal entity incurring relocation or sharing costs with respect to relocation from frequencies described in section 120(f)(1), approval of the implementation plan of the entity under section 120(e)(1)(D) constitutes approval under subparagraph (B). ; and (C) in subsection (e)— (i) in the header, by striking Eligible ; (ii) in paragraph (1)— (I) in subparagraph (A), by striking section 113(g)(1) of this Act and inserting section 113(g)(1), or Federal entities incurring relocation or sharing costs with respect to relocation from frequencies described in section 120(f)(1) ; (II) in subparagraph (B), by striking An eligible Federal entity and inserting A Federal entity ; and (III) in subparagraph (C), by striking eligible ; and (iii) in paragraph (2), by striking An eligible Federal entity and inserting A Federal entity . 4. Prohibition against certain conditions on licensure and auction participation Section 309(j) of the Communications Act of 1934, as amended by section 3(b)(1), is further amended by adding at the end the following: (18) Prohibition against certain conditions on licensure and auction participation The Commission may not— (A) establish on a license for the use of spectrum frequencies any condition relating to its Report and Order with regard to Preserving the Open Internet; Broadband Industry Practices (GN Docket No. 09–191, WC Docket No. 07–52) (adopted December 21, 2010); (B) restrict the number or type of bidders or any specific bidder from participating in any public auction for the assignment of licenses for the use of spectrum frequencies; (C) prescribe the rates or terms of or otherwise condition services that may be offered by successful bidders in any such auction; or (D) notwithstanding section 316, impose any additional license requirements or rules on successful bidders once any such auction has been completed. .