February 24, 2000
Section 1. Short Title.
The "Launching Our Communities’ Access to Local Television Act of 2000."
Section 2. Purpose.
To facilitate access, on a technologically neutral basis and by December 31, 2006, to signals of local television stations for households in unserved and underserved areas.
Section 3. LOCAL Television Loan Guarantee Board.
Establishes this 3-member Board consisting of the Secretary of the Treasury, the Chairman of the Federal Reserve Board, and the Secretary of Agriculture, or their designees. Designees must be hold appointive positions by and with the consent of the Senate. The Board is to determine whether or not to approve loan guarantees under the Act. In carrying out its functions, the Board is authorized to consult with other Federal departments and agencies as it deems appropriate. Departments or agencies consulted are to provide the Board with necessary assistance to help the Board carry out its functions. The Board’s approval of a loan guarantee must be by a majority vote of the Board.
Section 4. Approval of Loan Guarantees.
(a) Authority to Approve Loan Guarantees. Authorizes the Board to approve loan guarantees under this Act.
(1) Requirements. Instructs the Board to prescribe regulations implementing the Act.
(2) Elements. The regulations should include:
(A) the form of application to be submitted to the Board;
(B) periods of application review by the Board;
(C) appropriate safeguards against evasions of the Act;
(D) circumstances in which an applicant, together with any affiliate, would be treated as an applicant for a loan guarantee;
(E) requirements for the submission of documents and assurances to the Board;
(F) other provisions deemed appropriate by the Board.
(3) Construction. (A) Permits the Board to require that an affiliate of an applicant for a loan guarantee be subject to certain obligations of the applicant as a condition for the approval or maintenance of a loan guarantee under the Act. (B) Contains a savings provision preserving the effect of those provisions not deemed invalid by a court of competent jurisdiction.
(c) Authority Limited by Appropriations Acts. The Board may approve loan guarantees under the Act only if provided for in advance in appropriations Acts.
(d) Requirements and Criteria Applicable to Approval.
(1) In General. In approving applications for loan guarantees under the Act, the Board must utilize underwriting criteria developed under subsection (g) and the relevant information provided by the Federal departments and agencies consulted.
(2) Prerequisites. In addition to meeting the Board’s underwriting criteria, a loan may not be guaranteed unless–
(A) the loan is made generally to finance the acquisition, improvement, construction, launch, or rehabilitation of the means by which local television broadcast signals will be delivered to unserved or underserved areas;
(B) the proceeds of the loan are not used for operating expenses;
(C) the Board determines, in consultation with the National Telecommunications and Information Administration, that the project is not likely to have a substantial adverse impact on competition that outweighs the benefits of improving access to the signals of a local television station in unserved and underserved areas;
(D) the loan is provided by an FDIC-insured institution acceptable to the Board and the terms of the loan are consistent in material respects with those of similar obligations in the private capital market;
(E) repayment of the loan is to be made within the lesser of 25 years from the execution of the loan, or the economically useful life of the primary asset to be used in delivering the signals; and
(F) the loan meets any additional criteria developed by the Board under subsection (g).
(3) Protection of United States Financial Interests. The Board is not permitted to approve a loan guarantee under the Act unless:
(A) the Board receives the documents, assurances, and access to persons and information that it needs to address relevant issues; and
(B) the Board makes a determination in writing as to various issues, including the adequacy of security and the reasonable expectation that the loan being guaranteed will be repaid.
(e) Priority Considerations.
(1) Type of Market.
(A) Priority Consideration to Unserved Areas. To the maximum extent practicable, the Board must give priority in the approval of loan guarantees to projects that will serve unserved and underserved areas.
(B) Prohibition. The Board may not approve a loan guarantee under the Act for a project that will serve one or more of the 40 most populated designated market areas (as defined in section 122(j) of title 17, United States Code.
(2) Projects that Would Reduce Consumer Costs. To the maximum extent practicable, the Board also must give priority in the approval of loan guarantees to projects that would (A) offer a separate tier of local broadcast signals, but for applicable Federal, State, or local laws or regulations; (B) provider lower projected costs to consumers of such separate tier; and (C) enable the delivery of local broadcast signals by a means reasonably compatible with existing systems or devices predominantly in use.
(f) Guarantee Limits.
(1) Limitation on Aggregate Value of Loans. The value of all loans for which loan guarantees are issued under this Act cannot exceed $1.25 billion.
(2) Guarantee Level. A loan guarantee under the Act may be for an amount not exceeding 70% of the amount of an eligible loan, or eligible portion of a loan.
(g) Underwriting Criteria. The Board is directed to develop underwriting criteria in consultation with the Director of the Office of Management and Budget and an independent public accounting firm. This must be done within 180 days of the date of enactment.
(h) Credit Risk Premiums.
(1) Establishment and Acceptance.
(A) Authority. The Board is authorized to establish and approve the acceptance of credit risk premiums with respect to a loan guarantee to cover the cost of the loan guarantee. If appropriations of budget authority are insufficient to cover the cost of loan guarantees issued, credit risk premiums must be accepted from a non-Federal source on behalf of the applicant.
(2) Credit Risk Premium Amount.
(A) In General. This section lists a number of factors for the Board’s consideration in determining the amount of any credit risk premium to be accepted with respect to a loan guarantee.
(B) Proportionality. To the extent that appropriations of budget authority are sufficient to cover the cost of loan guarantees under the Act, the credit risk premium with respect to each loan guarantee will be reduced proportionately.
(i) Judicial Review. Decisions of the Board to approve or disapprove the making of a loan guarantee are not subject to judicial review.
Section 5. Administration of Loan Guarantees.
(a) In General. Administration of the loan guarantee program will be conducted by the Administrator of the Rural Utilities Service, U.S. Department of Agriculture.
(b) Security for Protection of United States Financial Interests.
(1) Terms and Conditions. Requires an applicant to agree to terms and conditions satisfactory to the Board to assure that the applicant maintains assets and operations on a continuing basis; does not make discretionary dividend payments impairing its ability to repay obligations guaranteed under the Act; and remains sufficiently capitalized.
(A) Existence of Adequate Collateral. An applicant is required to provide the Board with satisfactory evidence that appropriate and adequate collateral secures a loan guaranteed under the Act.
(B) Form of Collateral. The Board has the discretion to require that collateral consist of assets of the applicant, any affiliate, or both.
(C) Review of Valuation. The Board is authorized to make downward adjustments to collateral valuation if it reasonably believes that such an adjustment is appropriate.
(3) Lien on Interests in Assets. Once a loan is guaranteed under the Act, the Administrator will have liens on assets securing the loan and those liens will be superior to all other liens on such assets. The value of the assets subject to the liens must be at least equal to the unpaid balance of the loan amount covered by the loan guarantee.
(4) Perfected Security Interest. With respect to a loan guaranteed under this Act, the Administrator and the lender will have a perfected security interest in assets securing the loan that are fully sufficient to protect the financial interests of the United States and the lender.
(5) Insurance. The applicant for a loan guarantee under this Act must obtain, at its expense, insurance sufficient to protect the financial interests of the United States, as determined by the Board.
(c) Assignment of Loan Guarantees. The holder of a loan guaranteed under the Act may assign the loan guarantee, in whole or in part, subject to requirements imposed by the Board.
(d) Modification. The Board may permit modification of any term of condition of a loan guarantee only if the modification, among other factors, is consistent with the financial interests of the United States and the parties to the loan agreement consent. The Board also must have consulted the National Telecommunications and Information Administration regarding the modification.
(e) Performance Schedules.
(1) Performance Schedules. An applicant for a loan guarantee is required to enter into stipulated performance schedules with the Administrator with respect to signals to be provided through the project.
(2) Penalty. A penalty in an amount up to 3 times the interest due on the guaranteed loan of the applicant may be assessed and collected for failure to meet the stipulated performance schedules.
(f) Compliance. The Administrator, in cooperation with the Board, will enforce compliance with the Act and regulations issued under the Act. Compliance with the Act will include the submittal of reports and documents as the Board may require and through regular periodic inspections and audits.
(g) Commercial Validity. As a general rule, a loan guarantee under the Act will not be contestable by an applicant or lender unless the loan guarantee was granted based on the fraud or misrepresentation of the applicant or lender.
(h) Defaults. Regulations of the Board must address the consequences of defaults on loans guaranteed under the Act.
(i) Recovery of Payments.
(1) In General. The Administrator is empowered to recover from an applicant for a loan guaranteed under the Act any payments made to the holder of the guarantee.
(2) Subrogation. When the Administrator makes a payment to the holder of the loan guarantee, the Administrator will step into the shoes of that holder and have all rights of that holder with respect to the loan guarantee.
(3) Disposition of Property.
(A) Sale or Disposal. Property or other interests that come into the possession of the Administrator must be sold or disposed of in an orderly and efficient manner that maximizes taxpayer return and is consistent with the financial interests of the United States.
(B) Maintenance. Pending sale or disposal, property and other interests must be maintained in a cost-effective and reasonable manner.
(j) Action Against Obligor.
(1) Authority to Bring Civil Action. The Administrator is authorized to bring a civil action in an appropriate district court of the United States in the event of default on a loan guaranteed under the Act. The holder of the loan guarantee is required to cooperate fully with the Administrator by making available records and evidence necessary to prosecute the case.
(2) Fully Satisfying Obligations Owed the United States. The Administrator is authorized to accept property in satisfaction of amounts owed the United States as a result of a default on a loan guaranteed under the Act, but only to the extent that cash accepted does not fully satisfy the obligation.
(k) Breach of Conditions. The Administrator is authorized to bring a civil action in a court of appropriate jurisdiction to enjoin any activity which the Board finds is in violation of the Act or regulations thereunder.
(l) Attachment. No attachment or execution may be issued against the Administrator or any property in his control under this Act before the entry of a final judgment by a state, Federal, or other court of competent jurisdiction.
(1) Application Fee. The Board is authorized to charge an application fee for a loan guarantee. The fee must be reasonable.
(2) Loan Guarantee Origination Fee. The Board is authorized to charge and the Administrator may collect a loan guarantee origination fee.
(3) Use of Fees Collected. Fees collected are to be used to offset administrative costs of the Board and of the Administrator.
(n) Requirements Relating to Affiliates.
(1) Indemnification. An affiliate of the applicant for a loan guarantee under the Act must indemnify the United States for any losses that the United States incurs as a result of certain conduct by the applicant or under any other circumstances that the Board considers appropriate.
(2) Limitation on Transfer of Loan Proceeds. The proceeds of a loan guaranteed under the Act may not be transferred to an affiliate of the applicant.
(o) Effect of Bankruptcy. (1) Notwithstanding any other provision of law, if any person or entity indebted to the United States as a result of this Act that becomes insolvent or is in bankruptcy, the person’s or entity’s debts due to the United States must be satisfied first. (2) A discharge in bankruptcy will not release a person or entity from obligations under this Act.
Section 6. Annual Audit.
(a) Requirement. The GAO is directed to conduct an annual audit of this loan guarantee program.
(b) Report. The GAO must submit to the Senate Banking, Housing, and Urban Affairs Committee and the Committee on Banking and Financial Services of the House of Representatives reports on each audit conducted.
Section 7. Sunset.
No loan guarantee may be approved under this Act after December 31, 2006.
Section 8. Retransmission of LOCAL Television Broadcast Stations.
This section follows similar language in the Satellite Home Viewer Improvement Act of 1999. The provision prohibits a satellite carrier from charging a fee to a local television broadcast station for the retransmission of its signal.
Section 9. Definitions.
This section defines four terms.
Section 10. Authorizations of Appropriations.
(a) Cost of Loan Guarantees. The bill authorizes appropriations for the cost of loan guarantees under this Act for fiscal years 2001 through 2006.
(b) Cost of Administration. The bill authorizes appropriations of such sums as may be necessary to carry out the loan guarantee program, other than costs under subsection (a).
(c) Availability. Amounts appropriated pursuant to the authorizations of appropriations in subsections (a) and (b) will remain available until expended.