Committee Documents Online -- 106th Congress

Original Sponsors: Sen. Burns and Sen. Gramm

• The "Launching Our Communities' Access to Local Televison Act of 2000" (the "LOCAL TV Act of 2000") will facilitate access, on a technologically neutral basis, to signals of local television stations in unserved areas and underserved areas.

• Priority is given to the provision of local television signals to "unserved" areas, defined as any area that is outside the grade B contour of the local television broadcast signals serving its dominant market area and that does not have access to such signals by other widely marketed means. An "underserved" area is defined as any area that does not receive local television broadcast signals over a commercial for-profit direct-to-home satellite distribution system.

• The Act establishes a three-member Board consisting of the Secretary of the Treasury, the Chairman of the Board of the Federal Reserve System, and the Secretary of Agriculture, and each member may appoint an appropriate designee. A majority vote of the Board is required for approval of any loan guarantee. The Board will consult with Federal Government departments and agencies as needed to carry out its responsibility under this Act, and departments or agencies so consulted will supply such assistance.

• The Act also assigns to the Administrator of the Rural Utilities Service the responsibility for providing information and other assistance to the Board, issuing and administering the loan guarantees approved by the Board, and monitoring and enforcing compliance by all applicants for loan guarantees.

• The Board also will develop underwriting criteria for approval of loan guarantees in consultation with the Office of Management and Budget and an independent accounting firm. The Board may guarantee up to 70 percent of any loan, to the extent it will be used to provide local television signals. The Board shall determine whether collateral provided by an applicant is appropriate, and the Board may require that affiliates of an applicant be subject to the obligations of the applicant. The Board may establish and accept credit risk premiums with respect to loan guarantees under this Act to offset the predicted risk of default. To the extent that appropriations do not cover the subsidy cost of loan guarantees under this Act, credit risk premiums must be accepted. The Board may charge a loan origination fee to offset the administration expenses of the program, to the extent appropriations are not available.

• The Act is designed to minimize the burden on taxpayers by ensuring that the private sector participates in any guaranteed loan, adequate collateral is available to secure the loan, and the rights of the federal government are protected in case of default. Since such requirements lower the probability of default, they also help raise the likelihood that projects with loans guaranteed under this Act will continue to provide local television signals for years to come.