article: SECTION 1. PURPOSE. The purpose of this Act is to increase telecommunications ownership opportunities for small businesses, including small businesses owned or controlled by socially disadvantaged individuals, through Small Business Administration participation in a market-oriented restructuring of the credit aspects of Federal Communications Commission telecommunications spectrum auctions. SEC. 2. ASSOCIATE ADMINISTRATOR FOR TELECOMMUNICATIONS FINANCE. (a) In General.--Section 4(b)(1) of the Small Business Act (15 U.S.C. 633(b)(1)) is amended-- (1) in the fifth sentence, by striking ``five'' and inserting ``six''; and (2) by adding at the end the following new sentence: ``One of the Associate Administrators shall be designated at the time of appointment as the Associate Administrator for Telecommunications Finance and shall have the qualifications and responsibilities specified in subsection (g).''. (b) Qualifications and Responsibilities.--Section 4 of the Small Business Act (15 U.S.C. 633) is amended by adding at the end the following new subsection: ``(g) Associate Administrator for Telecommunications Finance.-- ``(1) In general.--The Associate Administrator for Telecommunications Finance-- ``(A) shall be an employee in the competitive service or in the Senior Executive Service and a career appointee; ``(B) shall be responsible to the Administrator for the supervision and management of financing in the area of telecommunications, including the programs and other activities under section 38 and section 39; ``(C) shall establish, with respect to telecommunications concerns, the detailed definitions or standards referred to in section 3(a)(2); ``(D) shall have authority-- ``(i) to prescribe maximum amounts for loan guarantees under any program under section 38 or 39; ``(ii) to approve all loan guarantees in telecommunications; and ``(iii) to approve all direct loans under section 38(a)(1); and ``(E) in addition to any other duties under this Act, shall have authority to approve loan guarantees under section 7(a) with respect to Federal Communications Commission spectrum licenses acquired in the secondary market. ``(2) Neutrality in choice of program by applicant for loan or loan guarantee.--In the administration of the Telecommunications Spectrum Installment Loan Program under section 38 and the Telecommunications Accelerated Certified Lender Program under section 39, the Associate Administrator for Telecommunications Finance shall observe strict neutrality as to the choice that a potential applicant may make as to the appropriateness of a program for the applicant. The choice of one program over the other shall be solely that of the applicant and the Associate Administrator shall neither encourage nor discourage any applicant in that choice.''. SEC. 3. SMALL BUSINESS ADMINISTRATION FINANCING FOR ENTREPRENEUR PARTICIPATION IN TELECOMMUNICATIONS SPECTRUM AUCTIONS CONDUCTED BY FEDERAL COMMUNICATIONS COMMISSION. The Small Business Act (15 U.S.C. 631 et seq.) is amended-- (1) by redesignating section 37 as section 40; and (2) by inserting after section 36 the following new sections: ``SEC. 37. TELECOMMUNICATIONS FINANCE OFFICE. ``(a) In General.--There is established, within the Administration, an office to perform functions relating to the policies and programs of the Administration with respect to financing in the area of telecommunications. The office-- ``(1) shall be known as the `Telecommunications Finance Office'; ``(2) shall be headed by the Associate Administrator for Telecommunications Finance under section 4(g); ``(3) shall be staffed by employees who are from diverse backgrounds and who are highly skilled in the areas of telecommunications technology and telecommunications financing; and ``(4) shall be the principal entity within the Administration for implementation of the programs under sections 38 and 39. ``(b) Funding.--The expenses of the Telecommunications Finance Office shall be paid from the Telecommunications Loan Guarantee Fund, established under section 715 of the Communications Act of 1934. ``SEC. 38. TELECOMMUNICATIONS SPECTRUM INSTALLMENT LOAN PROGRAM. ``(a) In General.--There is established a program, to be known as the `Telecommunications Spectrum Installment Loan Program', under which the Administrator-- ``(1) shall make direct loans to qualified telecommunications borrowers for acquisition of spectrum licenses through Federal Communications Commission auction; and ``(2) shall guarantee loans to qualified telecommunications borrowers for telecommunications equipment and working capital in connection with any acquisition referred to in paragraph (1). ``(b) Direct Loan Conditions.-- ``(1) Limitation on disbursement.--The Administrator may not disburse any loan amount under subsection (a)(1) if the cost of the license involved exceeds the approved loan amount plus, as determined by the Administrator, cash available to the applicant for the purpose of paying the difference between the approved loan amount and the cost of the license. ``(2) Interest at market rate.--The rate of interest on a loan shall be the prime interest rate or such other competitive market rate as the Administrator determines to be appropriate. ``(3) Interest-only period.--The Administrator, in accordance with criteria established by regulation, may provide, on a case-by-case basis, for an initial period during which a borrower under subsection (a)(1) shall pay interest only. In the case of such a determination, loan principal shall be amortized over the remainder of the loan term. The maximum interest-only period under this paragraph is 6 years. ``(4) Maximum loan term.--The term of any loan under subsection (a)(1) may not exceed the term of the spectrum license involved. ``(c) Loan Guarantee Condition.--The Administrator may make loan guarantees under subsection (a)(2) to a borrower under subsection (a)(1) only for telecommunications equipment and working capital necessary to carry out the terms of the license to be financed. ``(d) Security Interest and Forced Sale Conditions for Direct Loans and Loan Guarantees.--The Administrator shall require, as a condition of any direct loan under subsection (a)(1) and any loan guarantee under subsection (a)(2), that-- ``(1) any disbursement of a loan amount be fully protected by a secured interest in the proceeds of a sale or other assignment of the license involved; and ``(2) the loan agreement contain specific measures by which, in the case of a default by the borrower, the lender may require the borrower to sell or otherwise assign the license. ``(e) General Applicability; Waiver Exception.--Loans and loan guarantees under this section shall be subject to all otherwise applicable provisions of this Act, except that the Administrator may waive any limitation on the amount of an individual loan or loan guarantee or on the total amount of loans or loan guarantees to a single borrower. ``(f) Treasury Account.--The Administrator shall notify the Secretary of the Treasury of each loan transaction entered into under subsection (a)(1). Upon receipt of notice under the preceding sentence, the Secretary shall establish an account in the Treasury for the loan. ``(g) Definitions.--As used in this section-- ``(1) the term `qualified telecommunications borrower' means a small business concern that, as determined by the Administrator, has, in addition to the other requirements of this Act, a level of specialized telecommunications expertise (including technical knowledge, business skill, and management experience) that is appropriate for the purpose for which the loan or guarantee involved is made; and ``(2) the term `Administrator' means the Administrator, acting through the Associate Administrator for Telecommunications Finance. ``(h) Collection of Data.--The Administrator shall collect data with respect to the operation of the program under this section. The data so collected-- ``(1) shall be accumulated on a calendar year basis; ``(2) shall be maintained in an electronic database; ``(3) shall include information on the ethnicity, race, and sex of all applicants, whether the applications involved are approved, denied, withdrawn, or otherwise disposed of; and ``(4) shall include other information that, as determined by the Administrator, is relevant to the disposition of applications. ``(i) Report.--Not later than December 31 of each year, the Administrator shall submit to the Congress a report, with respect to the preceding calendar year, of the status of the program under this section. The report shall include-- ``(1) a statistical analysis (without personal identifying information) of the diversity characteristics of applicants and borrowers under the program; and ``(2) a probability analysis with respect to the diversity of applicants who receive loans under the program. ``SEC. 39. TELECOMMUNICATIONS ACCELERATED CERTIFIED LENDER PROGRAM. ``(a) In General.--There is established a program, to be known as the `Telecommunications Accelerated Certified Lender Program', under which the Administrator-- ``(1) shall guarantee loans made to qualified telecommunications borrowers-- ``(A) for acquisition of spectrum licenses through Federal Communications Commission auction; and ``(B) for acquisition of spectrum licenses in the secondary market for licenses originally acquired through Federal Communications Commission auction; and ``(2) shall guarantee loans made to qualified telecommunications borrowers for telecommunications equipment and working capital in connection with any acquisition referred to in paragraph (1). ``(b) Funding.--The expenses of loan guarantees under subsection (a) shall be paid from the Telecommunications Loan Guarantee Fund, established under section 715 of the Communications Act of 1934. ``(c) Approved Lenders.--Loans guaranteed under this section shall be made by lenders that are insured depositary institutions and are approved by the Administrator. In evaluating an institution for approval, the Administrator shall take into consideration the financial stability of the institution, the experience and expertise of the institution in lending to telecommunications borrowers, and the need for diversity in the management and ownership of approved institutions. ``(d) Loan Guarantee Conditions.-- ``(1) Limitation on disbursement.--The Administrator shall require, as a condition of any loan guarantee under subsection (a)(1), that the lender may not disburse any loan amount if the cost of the license involved exceeds the approved loan amount plus, as determined by the Administrator, cash available to the applicant for the purpose of paying the difference between the approved loan amount and the cost of the license. ``(2) Security interest and forced sale requirements.--The Administrator shall require, as a condition of any loan guarantee under subsection (a), that-- ``(A) any disbursement of a loan amount be fully protected by a secured interest in the proceeds of a sale or other assignment of the license involved; and ``(B) the loan agreement contain specific measures by which, in the case of a default by the borrower, the lender may require the borrower to sell or otherwise assign the license. ``(e) General Applicability; Waiver Exception.--Loan guarantees under this section shall be subject to all otherwise applicable provisions of this Act, except that the Administrator may waive any limitation on the amount of an individual loan guarantee or on the total amount of loan guarantees to a single borrower. ``(f) Definitions.--As used in this section-- ``(1) the term `qualified telecommunications borrower' means a small business concern that, as determined by the Administrator, has, in addition to the other requirements of this Act, a level of specialized telecommunications expertise (including technical knowledge, business skill, and management experience) that is appropriate for the purpose for which the loan or guarantee involved is made; and ``(2) the term `Administrator' means the Administrator, acting through the Associate Administrator for Telecommunications Finance. ``(g) Collection of Data.--The Administrator shall collect data with respect to the operation of the program under this section. The data so collected-- ``(1) shall be accumulated on a calendar year basis; ``(2) shall be maintained in an electronic database; ``(3) shall include information on the ethnicity, race, and sex of all applicants, whether the applications involved are approved, denied, withdrawn, or otherwise disposed of; and ``(4) shall include other information that, as determined by the Administrator, is relevant to the disposition of applications. ``(h) Report.--Not later than December 31 of each year, the Administrator shall submit to the Congress a report, with respect to the preceding calendar year, of the status of the program under this section. The report shall include-- ``(1) a statistical analysis (without personal identifying information) of the diversity characteristics of applicants and borrowers under the program; and ``(2) a probability analysis with respect to the diversity of applicants who receive loans under the program.''. SEC. 4. TELECOMMUNICATIONS LOAN GUARANTEE FUND. (a) In General.--Title VII of the Communications Act of 1934 is amended by inserting after section 714 (42 U.S.C. 614) the following new section: ``SEC. 715. TELECOMMUNICATIONS LOAN GUARANTEE FUND. ``(a) Establishment.-- ``(1) In general.--There is hereby established the Telecommunications Loan Guarantee Fund (hereafter in this section referred to as the `Fund') in the Department of the Treasury under the control of the Secretary of the Treasury (hereafter in this section referred to as the `Secretary'). ``(2) Initial capitalization of fund.--The first $10,000,000,000 of proceeds received from the auction of spectrum licenses by the Federal Communications Commission after the date of the enactment of this section shall be deposited in the Fund and shall constitute the capitalization of the Fund. ``(b) Maintenance of Fund.-- ``(1) In general.--Amounts in the Fund shall be deposited by the Secretary in depositaries designated by the Secretary which have also been designated by the Telecommunications Finance Office of the Small Business Administration as certified telecommunications lenders. ``(2) Interest.--Interest paid by depositaries on amounts deposited in accordance with paragraph (1) shall be deposited in the Fund and be available for the purposes of the Fund. ``(c) Purpose of Fund.--Amounts in the Fund shall be available to meet any obligation of the Small Business Administration arising under a loan guarantee issued by the Telecommunications Finance Office of the Small Business Administration in connection with a loan under section 38(a)(2) or section 39(a) of the Small Business Act.''. SEC. 5. PARTICIPATION IN SPECTRUM AUCTIONS. Section 309(j)(5) of the Communications Act of 1934 (47 U.S.C. 309(j)(5)) is amended-- (1) by striking ``No person'' and inserting the following: ``(A) In general.--No person''; and (2) by adding at the end the following: ``(B) Qualified telecommunications borrowers.--With respect to any person that meets the qualification requirements of this paragraph and that is a qualified telecommunications borrower under section 38 or 39 of the Small Business Act, the Commission shall accept, in lieu of any upfront payment or earnest money deposit required by Commission regulation, a letter of credit provided to such borrower under such section that equals or exceeds the amount of such required payment or deposit. In any competitive bidding conducted under this subsection in which the Commission identifies any such qualified telecommunications borrower as the high bidder at the time of declaring that the bidding has closed, the Commission shall notify the Administrator of the Small Business Administration of the identity of such bidder, the amount of the high bid, and the total amount required to be deposited with the Commission to qualify for the award of the license under Commission regulations. In the case of a qualified telecommunications borrower under section 38, the amount of such deposit may be satisfied by debiting the loan account of the borrower at the Treasury.''.
summary: Amends the Small Business Act to establish within the Small Business Administration (SBA) an Associate Administrator for Telecommunications Finance (Associate Administrator) to supervise and manage SBA financing in the area of telecommunications. Authorizes the Associate Administrator to approve SBA loan guarantees with respect to Federal Communications Commission (FCC) spectrum licenses (for radio and television broadcasting) acquired in the secondary market. Establishes a Telecommunications Finance Office. Establishes the Telecommunications Spectrum Installment Loan Program to: (1) make direct loans to qualified telecommunications borrowers (borrowers) for the acquisition of spectrum licenses through FCC auction; and (2) guarantee loans to borrowers for telecommunications equipment and working capital in connection with spectrum license acquisitions. Establishes the Telecommunications Accelerated Certified Lender Program for the guarantee by certified lenders of loans made to borrowers for: (1) the acquisition of spectrum licenses through either FCC auction or the secondary market; and (2) telecommunications equipment and working capital in connection with spectrum license acquisitions. Requires certified lenders to be insured depository institutions approved by the SBA. Amends the Communications Act of 1934 to: (1) establish the Telecommunications Loan Guarantee Fund for financing loans authorized under this Act; and (2) require the FCC, with respect to FCC spectrum auctions, to accept from a borrower a letter of credit in lieu of any upfront payment or other earnest money required by FCC regulation.