To amend the National Telecommunications and Information Administration Organization Act to facilitate the reallocation of spectrum from governmental to commercial users.

April 10, 2003

Mr. MCCAIN (for himself, Mr. DORGAN, Mr. BROWNBACK, and Mr. ENSIGN) introduced the following bill; which was read twice and referred to the Committee on Commerce, Science, and Transportation

To amend the National Telecommunications and Information Administration Organization Act to facilitate the reallocation of spectrum from governmental to commercial users.

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 `Commercial Spectrum Enhancement Act'.

SEC. 2. RELOCATION OF ELIGIBLE FEDERAL ENTITIES FOR THE REALLOCATION OF SPECTRUM FOR COMMERCIAL PURPOSES.

Section 113(g) of the National Telecommunications and Information Administration Organization Act (47 U.S.C. 923(g)) is amended by striking paragraphs (1) through (3) and inserting the following:--

`(1) ELIGIBLE FEDERAL ENTITIES- Any Federal entity that operates a Federal Government station assigned to a band of frequencies specified in paragraph (2) and that incurs relocation costs because of the reallocation of frequencies from Federal use to non-Federal use shall receive payment for such costs from the Spectrum Relocation Fund, in accordance with section 118 of this Act. For purposes of this paragraph, Federal power agencies exempted under subsection (c)(4) that choose to relocate from the frequencies identified for reallocation pursuant to subsection (a), are eligible to receive payment under this paragraph.

`(2) ELIGIBLE FREQUENCIES- The bands of eligible frequencies for purposes of this section are as follows:

`(A) the 216-220 megahertz band, the 1432-1435 megahertz band, the 1710-1755 megahertz band, and the 2385-2390 megahertz band of frequencies; and

`(B) any other band of frequencies reallocated from Federal use to non-Federal use after January 1, 2003, that is assigned by competitive bidding pursuant to section 309(j) of the Communications Act of 1934 (47 U.S.C. 309(j)), except for bands of frequencies previously identified by the National Telecommunications and Information Administration in the Spectrum Reallocation Final Report, NTIA Special Publication 95-32 (1995).

`(3) DEFINITION OF RELOCATION COSTS- For purposes of this subsection, the term `relocation costs' 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. Such costs include--

`(A) the costs of any modification or replacement of equipment, software, facilities, operating manuals, training costs, or regulations that are attributable to relocation;

`(B) 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;

`(C) the costs of engineering studies, economic analyses, or other expenses reasonably incurred in calculating the estimated relocation costs that are provided to the Commission pursuant to paragraph (4) of this subsection;

`(D) the one-time costs of any modification of equipment reasonably necessary to accommodate commercial use of such frequencies prior to the termination of the Federal entity's primary allocation or protected status, when the eligible frequencies as defined in paragraph (2) of this subsection 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

`(E) 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.

`(4) NOTICE TO COMMISSION OF ESTIMATED RELOCATION COSTS-

`(A) The Commission shall notify the NTIA at least 18 months prior to the commencement of any auction of eligible frequencies defined in paragraph (2). At least 6 months prior to the commencement of any such auction, the NTIA, on behalf of the Federal entities and after review by the Office of Management and Budget, shall notify the Commission of estimated relocation costs and timelines for such relocation.

`(B) Upon timely request of a Federal entity, the NTIA shall provide such entity with information regarding an alternative frequency assignment or assignments to which their radiocommunications operations could be relocated for purposes of calculating the estimated relocation costs and timelines to be submitted

to the Commission pursuant to subparagraph (A).

`(C) To the extent practicable and consistent with national security considerations, the NTIA shall provide the information required by subparagraphs (A) and (B) by the geographic location of the Federal entities' facilities or systems and the frequency bands used by such facilities or systems.

`(5) NOTICE TO CONGRESSIONAL COMMITTEES AND GAO- The NTIA shall, at the time of providing an initial estimate of relocation costs to the Commission under paragraph (4)(A), submit to the Committees on Appropriations and Energy and Commerce of the House of Representatives, the Committees on Appropriations and Commerce, Science, and Transportation of the Senate, and the Comptroller General a copy of such estimate and the timelines for relocation.

`(6) IMPLEMENTATION OF PROCEDURES- The NTIA shall take such actions as necessary to ensure the timely relocation of Federal entities' spectrum-related operations from frequencies defined in paragraph (2) to frequencies or facilities of comparable capability. Upon a finding by the NTIA that a Federal entity has achieved comparable capability of systems by relocating to a new frequency assignment or by utilizing an alternative technology, the NTIA shall terminate the entity's authorization and notify the Commission that the entity's relocation has been completed. The NTIA shall also terminate such entity's authorization if the NTIA determines that the entity has unreasonably failed to comply with the timeline for relocation submitted by the Director of the Office of Management and Budget under section 118(d)(2)(B).'.

SEC. 3. MINIMUM AUCTION RECEIPTS AND DISPOSITION OF PROCEEDS.

(a) AUCTION DESIGN- Section 309(j)(3) of the Communications Act of 1934 (47 U.S.C. 309(j)(3)) is amended--

(1) by striking `and' at the end of subparagraph (D);

(2) by striking the period at the end of subparagraph (E) and inserting `; and'; and

(3) by adding at the end the following new subparagraph:

`(F) for 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)), the recovery of 110 percent of estimated relocation costs as provided to the Commission pursuant to section 113(g)(4) of such Act.'.

(b) SPECIAL AUCTION PROVISIONS FOR ELIGIBLE FREQUENCIES- Section 309(j) of such Act is further amended by adding at the end the following new paragraph:

`(15) SPECIAL AUCTION PROVISIONS FOR ELIGIBLE FREQUENCIES-

`(A) SPECIAL REGULATIONS- The Commission shall revise the regulations prescribed under paragraph (4)(F) of this subsection to prescribe methods by which 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 costs provided to the Commission pursuant to section 113(g)(4) of such Act.

`(B) CONCLUSION OF AUCTIONS CONTINGENT ON MINIMUM PROCEEDS- The Commission shall not conclude any auction of eligible frequencies described in section 113(g)(2) of such Act if the total cash proceeds attributable to such spectrum are less than 110 percent of the total estimated relocation costs provided to the Commission pursuant to section 113(g)(4) of such Act. If the Commission is unable to conclude an auction for the foregoing reason, 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.

`(C) AUTHORITY TO ISSUE PRIOR TO DEAUTHORIZATION- In any auction conducted under the regulations required by subparagraph (A), the Commission may grant a license assigned for the use of eligible frequencies prior to the termination of an eligible Federal entity's authorization. However, the Commission shall condition such license by requiring that the licensee cannot cause harmful interference to such Federal entity until such entity's authorization has been terminated by the National Telecommunications and Information Administration.'.

(c) DEPOSIT OF PROCEEDS- Paragraph (8) of section 309(j) of the Communications Act of 1934 (47 U.S.C. 309(j)) is amended--

(1) in subparagraph (A), by inserting `or subparagraph (D)' after `subparagraph (B)'; and

(2) by adding at the end the following new subparagraph:

`(D) DISPOSITION OF CASH PROCEEDS- Cash proceeds attributable to the auction of any 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 be deposited in the Spectrum Relocation Fund established under section 118 of such Act, and shall be available in accordance with that section.'.

SEC. 4. ESTABLISHMENT OF FUND AND PROCEDURES.

Part B of the National Telecommunications and Information Administration Organization Act is amended by adding after section 117 (47 U.S.C. 927) the following new section:

`SEC. 118. SPECTRUM RELOCATION FUND.

`(a) ESTABLISHMENT OF SPECTRUM RELOCATION FUND- There is established on the books of the Treasury a separate fund to be known as the `Spectrum Relocation

Fund' (in this section referred to as the `Fund'), which shall be administered by the Office of Management and Budget (in this section referred to as `OMB'), in consultation with the NTIA.

`(b) CREDITING OF RECEIPTS- The Fund shall be credited with the amounts specified in section 309(j)(8)(D) of the Communications Act of 1934 (47 U.S.C. 309(j)(8)(D)).

`(c) USED TO PAY RELOCATION COSTS- The amounts in the Fund from auctions of eligible frequencies are authorized to be used to pay relocation costs, as defined in section 113(g)(3) of this Act, of an eligible Federal entity incurring such costs with respect to relocation from those frequencies.

`(d) FUND AVAILABILITY-

`(1) APPROPRIATION- There are hereby appropriated from the Fund such sums as are required to pay the relocation costs specified in subsection (c).

`(2) TRANSFER CONDITIONS- None of the funds provided under this subsection may be transferred to any eligible Federal entity--

`(A) unless the Director of OMB has determined, in consultation with the NTIA, the appropriateness of such costs and the timeline for relocation; and

`(B) until 30 days after the Director of the OMB has submitted to the Committees on Appropriations and Energy and Commerce of the House of Representatives, the Committees on Appropriations and Commerce, Science, and Transportation of the Senate, and the Comptroller General a detailed plan describing how the sums transferred from the Fund will be used to pay relocation costs in accordance with such subsection and the timeline for such relocation.

`(3) REVERSION OF UNUSED FUNDS- Any unexpended balances in the Fund that are remaining after the payment of the relocation costs that are payable from the Fund shall revert to and be deposited in the general fund of the Treasury not later than 8 years after the date of the initial deposit to the Fund.

`(e) TRANSFER TO ELIGIBLE FEDERAL ENTITIES-

`(1) TRANSFER-

`(A) Amounts made available pursuant to subsection (d) shall be transferred to eligible Federal entities, as defined in section 113(g)(1) of this Act.

`(B) An eligible Federal entity may receive more than one such transfer, but if the sum of the subsequent transfer or transfers exceeds 10 percent of the original transfer--

`(i) such subsequent transfers are subject to prior approval by the Director of OMB as required by subsection (d)(2)(A);

`(ii) the notice to the committees containing the plan required by subsection (d)(2)(B) shall be not less than 45 days prior to the date of the transfer that causes such excess above 10 percent;

`(iii) such notice shall include, in addition to such plan, a explanation of need for such subsequent transfer or transfers; and

`(iv) the Comptroller General shall, within 30 days after receiving such plan, review such plan and submit to such committees an assessment of the explanation for the subsequent transfer or transfers.

`(C) Such transferred amounts shall be credited to the appropriations account of the eligible Federal entity which has incurred, or will incur, such costs, and shall, subject to paragraph (2), remain available until expended.

`(2) RETRANSFER TO FUND- An eligible Federal entity that has received such amounts shall report its expenditures to OMB and shall transfer any amounts in excess of actual relocation costs back to the Fund immediately after the NTIA has notified the Commission that the entity's relocation is complete, or has determined that such entity has unreasonably failed to complete such relocation in accordance with the timeline required by subsection (d)(2)(A).'.

SEC. 5. TELECOMMUNICATIONS DEVELOPMENT FUND.

Section 714(f) of the Communications Act of 1934 (47 U.S.C. 614(f)) is amended to read as follows:

`(f) LENDING AND CREDIT OPERATIONS- Loans or other extensions of credit from the Fund shall be made available to an eligible small business on the basis of--

`(1) the analysis of the business plan of the eligible small business;

`(2) the reasonable availability of collateral to secure the loan or credit extension;

`(3) the extent to which the loan or credit extension promotes the purposes of this section; and

`(4) other lending policies as defined by the Board.'.

SEC. 6. CONSTRUCTION.

Nothing in this Act is intended to modify section 1062(b) of the National Defense Authorization Act for Fiscal Year 2000 (Public Law 106-65).

SEC. 7. EXEMPTION FROM SEQUESTRATION.

The Spectrum Relocation Fund shall be exempt from reduction under any order issued under section 254 of the Balanced Budget and Emergency Deficit Control Act of 1985, as amended.

SEC. 8. REPORT.

The National Telecommunications and Information Administration shall submit an annual report to the Committees on Appropriations and Energy and Commerce of the House of Representatives, the Committees on Appropriations and Commerce, Science, and Transportation of the Senate, and the Comptroller General on--

(1) the progress made in adhering to the timelines applicable to relocation from eligible frequencies required under section 118(d)(2)(A) of the National Telecommunications and Information Administration Organization Act, separately stated on a communication system-by-system basis and on an auction-by-auction basis; and

(2) with respect to each relocated communication system and auction, a statement of the estimate of relocation costs required under section 113(g)(4) of such Act, the actual relocations costs incurred, and the amount of such costs paid from the Spectrum Relocation Fund.

END