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113th Congress  }                                      {  Rept. 113-670
                        HOUSE OF REPRESENTATIVES
 2d Session     }                                      {         Part 1

======================================================================



 
                 FEDERAL SPECTRUM INCENTIVE ACT OF 2013

                                _______
                                

 December 12, 2014.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

  Mr. Upton, from the Committee on Energy and Commerce, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 3674]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 3674) to amend the National Telecommunications 
and Information Administration Organization Act to provide 
incentives for the reallocation of Federal Government spectrum 
for commercial use, and for other purposes, having considered 
the same, report favorably thereon without amendment and 
recommend that the bill do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     2
Background and Need for Legislation..............................     2
Hearings.........................................................     3
Committee Consideration..........................................     3
Committee Votes..................................................     3
Committee Oversight Findings.....................................     3
Statement of General Performance Goals and Objectives............     3
New Budget Authority, Entitlement Authority, and Tax Expenditures     4
Earmark, Limited Tax Benefits, and Limited Tariff Benefits.......     4
Committee Cost Estimate..........................................     4
Congressional Budget Office Estimate.............................     4
Federal Mandates Statement.......................................     7
Duplication of Federal Programs..................................     7
Disclosure of Directed Rule Makings..............................     7
Advisory Committee Statement.....................................     7
Applicability to Legislative Branch..............................     8
Section-by-Section Analysis of the Legislation...................     8
Changes in Existing Law Made by the Bill, as Reported............     9

                          Purpose and Summary

    H.R. 3674, the ``Federal Spectrum Incentive Act of 2013,'' 
amends the Commercial Spectrum Enhancement Act (CSEA) to 
provide Federal users an additional option for relinquishing 
spectrum for commercial auction. The legislation would allow 
Federal users to relocate or terminate their operations in 
exchange for a percentage of the net auction proceeds from 
auction of such spectrum. Funds from the proceeds would be 
placed into a fund at the Office of Management and Budget to be 
used for relocation costs or to offset budget sequestration 
under the Budget Control Act of 2011.

                  Background and Need for Legislation

    Today's wireless industry is thriving thanks to the 
introduction of smartphones and advances in spectrum access 
technology. In order to meet consumer demand for more and 
faster wireless broadband service, additional spectrum 
resources are needed. However, the finite amounts of spectrum 
suitable for commercial wireless deployment are becoming 
increasingly congested, limiting their ability to meet growing 
commercial wireless needs. As a result, it has become crucial 
to explore and promote the most efficient uses of this valuable 
resource.
    The Federal government is the biggest single user of 
spectrum. To date, there have been two primary approaches to 
making Federal spectrum available for auction to support 
commercial services: relocation of radio systems to alternate 
spectrum bands and spectrum sharing. Of the two approaches, 
Congress has expressed its preference for relocation as the 
resulting spectrum is better suited to commercial use and will 
likely result in higher auction proceeds for the Treasury. To 
achieve this goal, the 2004 Commercial Spectrum Enhancement Act 
created a centralized and streamlined mechanism for Federal 
agencies to recover the costs associated with relocating their 
radio frequency assignments from spectrum bands made available 
for contingent auction by the Federal Communications Commission 
(FCC). If the proceeds of the auction cover the cost of 
relocating the Federal agencies by 110 percent, the winning 
bidders receive licenses and the Federal agencies receive 
relocation funding.
    Perhaps the best example of the success of this approach 
was the 2006 auction of the AWS-1 band (1710-1755 MHz and 2110-
2155 MHz). The auction raised more than $13 billion dollars for 
the Treasury and made 90 MHz of spectrum available for 
commercial deployment--spectrum that now powers many of the 4G 
networks across the country. Despite the successful outcome, 
however, there were unintended consequences for both government 
and commercial participants. The lessons learned in the AWS-1 
auction were incorporated into the CSEA framework through 
provisions in the Middle Class Tax Relief and Job Creation Act 
of 2012 that were designed to smooth the process of clearing, 
to enable recovery of costs associated with spectrum sharing 
with non-Federal users, to provide funding for advance 
planning, and to facilitate system upgrades.
    Subcommittee Chairman Walden and Ranking Member Eshoo 
established the Federal Spectrum Working Group within the 
Subcommittee on Communications and Technology in 2012 to 
continue to examine how the Federal government can use the 
nation's spectrum resources more efficiently. The bipartisan 
working group, led by Representatives Guthrie and Matsui, held 
numerous meetings with government agencies to discuss creative 
ways to achieve this goal. H.R. 3674, the Federal Spectrum 
Incentive Act of 2013, is the product of the working group and 
those discussions.
    H.R. 3674 builds upon previous legislation by further 
incentivizing Federal agencies to make their use of spectrum 
more efficient. For Federal users that choose to make spectrum 
available for auction through discontinuing radio operations 
without relocating to other frequencies or through relocating 
operations to spectrum bands shared by another Federal user, 
this legislation provides a path for them to receive a 
percentage of the auction proceeds the spectrum generates.

                                Hearings

    The Subcommittee on Communications and Technology held a 
hearing on June 27, 2013, entitled ``Equipping Carriers and 
Agencies in the Wireless Era.'' The Subcommittee received 
testimony from Dean Brenner, Senior Vice President of 
Government Affairs at Qualcomm; Christopher Guttman-McCabe, 
Executive Vice President of CTIA--The Wireless Association; 
Karl Nebbia, Associate Administrator of the Office of Spectrum 
Management at National Telecommunications and Information 
Administration (NTIA); and Teri Takai, Chief Information 
Officer of Department of Defense.

                        Committee Consideration

    Representative Brett Guthrie, together with Rep. Doris 
Matsui, Rep. Henry Waxman, Rep. Greg Walden, and Rep. Anna 
Eshoo, introduced H.R. 3674 on December 9, 2013. On December 10 
and 11, 2013, the Committee on Energy and Commerce met in open 
markup session and favorably reported H.R. 3674 to the House, 
without amendment, by a voice vote.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. 
There were no record votes taken in connection with ordering 
H.R. 3674 reported. A motion by Mr. Upton to order H.R. 3674 
reported to the House, without amendment, was agreed to by a 
voice vote.

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee held a hearing and made 
findings that are reflected in this report.

         Statement of General Performance Goals and Objectives

    The goal and objective of H.R. 3674, the Federal Spectrum 
Incentive Act of 2013, is to make spectrum available for 
commercial auction by providing incentives for Federal spectrum 
users to elect to relinquish spectrum through discontinuing 
their operations or through relocating their operations to 
spectrum bands shared by another Federal user.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee finds that H.R. 
3674 would result in no new or increased budget authority, 
entitlement authority, or tax expenditures or revenues.

       Earmark, Limited Tax Benefits, and Limited Tariff Benefits

    In compliance with clause 9(e), 9(f), and 9(g) of rule XXI 
of the Rules of the House of Representatives, the Committee 
finds that H.R. 3674 contains no earmarks, limited tax 
benefits, or limited tariff benefits.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                  Congressional Budget Office Estimate


H.R. 3674--Federal Spectrum Incentive Act of 2013

    Summary: H.R. 3674 would modify existing law regarding the 
management of the electromagnetic spectrum used by federal 
agencies. It would increase the amounts authorized to be spent, 
without further appropriation, to reimburse agencies that incur 
expenses when spectrum is reallocated from federal to 
commercial use. The bill also would authorize the use of 
alternative forms of compensation for agencies affected by 
spectrum reallocation efforts.
    CBO estimates that enacting H.R. 3674 would increase net 
direct spending by $30 million over the 2015-2024 period; 
therefore, pay-as-you-go procedures apply to the bill. In 
addition, CBO estimates that implementing the bill would lower 
discretionary spending by $8 million over the 2015-2019 period, 
assuming appropriations are reduced by the necessary amounts. 
Enacting this bill would not affect revenues.
    H.R. 3674 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would not affect the budgets of state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 3674 is shown in the following table. 
The costs of this legislation fall within budget function 950 
(undistributed offsetting receipts).

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                       By fiscal year, in millions of dollars--
                                                             -------------------------------------------------------------------------------------------
                                                               2015   2016   2017   2018   2019   2020   2021   2022   2023   2024  2015-2019  2015-2024
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               CHANGES IN DIRECT SPENDING
 
Spectrum Relocation Fund:\a\
    Estimated Budget Authority..............................      8      8      1      1      1      1      1      1      0      0        19         22
    Estimated Outlays.......................................      0      1      2      2      3      3      3      3      2      1         8         20
Federal Spectrum Incentive Fund:
    Estimated Budget Authority..............................      0      0      1      1      2      2      2      2      0      0         4         10
    Estimated Outlays.......................................      0      0      0      1      1      2      2      2      2      0         2         10
Total Changes:
    Estimated Budget Authority..............................      8      8      2      2      3      3      3      3      0      0        23         33
    Estimated Outlays.......................................      0      1      2      3      4      5      5      5      4      1        10         30
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\In addition, CBO estimates that implementing this provision would reduce discretionary spending by $8 million over the 2015-2019 period, assuming
  appropriations are reduced by the necessary amounts.

    Basis of estimate: This legislation would modify the terms 
and procedures for transferring spectrum from federal to 
commercial use. Current law directs the National 
Telecommunications and Information Administration (NTIA) to 
identify federal spectrum that could be cleared for commercial 
use and to develop a plan for moving federal operations to 
different radio frequencies or services. Auctions of commercial 
licenses using that federal spectrum are subject to a reserve 
price set by the Federal Communications Commission (FCC) equal 
to 110 percent of the estimated cost of relocating government 
uses. The proceeds generated by those auctions are deposited in 
the Spectrum Relocation Fund (SRF) and may be spent, without 
further appropriation, to reimburse agencies for their 
relocation costs and provide additional payments under certain 
conditions.
    H.R. 3674 would allow more agencies to use money from the 
SRF and would establish a new Federal Spectrum Incentive Fund 
(FSIF) to serve as an alternative source of compensation for 
agencies that have to give up their existing frequency 
assignments. For this estimate, CBO assumes that H.R. 3674 will 
be enacted during fiscal year 2014.

Direct spending

    Spectrum Relocation Fund. Under current law, the authority 
to spend money from the SRF is limited to agencies whose 
spectrum assignments are being changed in order to clear 
frequencies for commercial use. Agencies that are indirectly 
affected by those relocation efforts--for example, those who 
are not changing frequencies but will be required to share 
their spectrum with another agency that is changing--are not 
eligible to receive money directly from the SRF to cover their 
relocation-related expenses. H.R. 3674 would amend the SRF's 
eligibility criteria to include agencies that incur such 
indirect costs.
    Based on information from NTIA, CBO expects that most 
interagency activities would involve engineering studies and 
ongoing coordination efforts that cost each affected agency 
about $1 million a year. Agencies could begin spending from the 
SRF after the proceeds from each auction are deposited in the 
fund. Because the money in the SRF generally remains available 
for a period of eight years, CBO anticipates each affected 
agency would receive a total of about $8 million from the SRF 
and that the Office of Management and Budget would record the 
use of budget authority in the budget when auction receipts are 
deposited. Outlays would be recorded in the budget as expenses 
are incurred.
    Because not all amounts deposited in the SRF are spent 
under current law, CBO estimates that authorizing new 
expenditures from the SRF would increase net direct spending by 
about $20 million over the 2015-2024 period. That estimate 
reflects projected spending of $16 million by two agencies 
involved in an upcoming auction as well as $4 million by 
agencies that may be affected by other auctions that may occur 
before the FCC's auction authority expires in 2022. Although 
the FCC would add those newly eligible costs to the reserve 
price for future auctions, CBO estimates that such adjustments 
would have a negligible effect on offsetting receipts because 
CBO expects that auction proceeds will exceed the reserve price 
by a significant margin.
    Federal Spectrum Incentive Fund. H.R. 3674 would give 
agencies a choice between having their spectrum relocation 
costs reimbursed by the SRF or receiving a lump-sum payment 
from the FSIF, subject to certain conditions. The amounts 
deposited into the FSIF would be limited to 1 percent of the 
proceeds from auctions of certain federal frequencies and 
generally could not be used to pay an agency's own relocation 
costs. Instead, the participating agency could either use the 
money for purposes specified in certain appropriation acts or 
transfer it to other federal agencies for costs they may incur 
to share spectrum with the agency. An agency's choice between 
the FSIF and SRF would be binding when the NTIA transmits the 
government's transition plan for an auction to the FCC.
    Based on information from NTIA, CBO anticipates that at 
least one agency would trigger spending by the FSIF in most 
future auctions of federal spectrum. The amount deposited in 
the fund would be proportionate to the quantity of spectrum 
contributed by the participating agencies. For example, if 
agencies relinquished assignments to use 10 megahertz (MHz) as 
part of an auction of 20 MHz of federal spectrum, the FSIF 
would receive half of 1 percent of the proceeds. Under the 
bill, all of the proceeds deposited in the fund would be spent 
without future appropriation, regardless of the number of 
agencies that choose to use this fund.
    For this estimate, CBO assumes that the FSIF would not be 
used for the upcoming auction of federal frequencies because 
the NTIA expects to submit a transition plan to the FCC before 
this bill is assumed to be enacted. Although CBO expects that 
more federal spectrum will be made available for commercial use 
in later years, the terms and conditions of those offerings 
could vary widely. Based on recent agency reports, CBO 
estimates that the net proceeds from such auctions could range 
from a few million dollars to several billion dollars, 
depending on the terms and conditions of the transactions. 
Using the current baseline projections for auction receipts and 
adjusting for the possibility that agencies may relinquish a 
portion of the spectrum being auctioned, CBO estimates that 
establishing the FSIF would lead to an increase in net direct 
spending about $10 million on an expected value basis over the 
2015-2024 period.
    Finally, any potential reduction in spending by the SRF or 
increase in auction receipts would be negligible, CBO 
estimates. Given the spending restrictions in the bill and the 
relatively small amounts that would be available, CBO expects 
that the FSIF would primarily be used when an agency could 
discontinue a spectrum operation at little or no cost and 
without any significant operational effects.

Spending subject to appropriation

    Reimbursing certain indirect costs from the SRF would 
reduce the need for appropriations for those activities. 
Assuming appropriations are reduced by corresponding amounts, 
CBO estimates that implementing H.R. 3674 would reduce 
discretionary costs by $8 million over the 2015-2019 period.
    Pay-As-You-Go considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget-reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. The net changes in outlays that are subject to those 
pay-as-you-go procedures are shown in the following table.

       CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 3674 AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON ENERGY AND COMMERCE ON DECEMBER 11, 2013
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    By fiscal year, in millions of dollars--
                                                      --------------------------------------------------------------------------------------------------
                                                        2014   2015   2016   2017   2018   2019   2020   2021   2022   2023   2024  2014-2019  2014-2024
--------------------------------------------------------------------------------------------------------------------------------------------------------
Statutory Pay-As-You-Go Impact.......................      0      0      1      2      3      4      5      5      5      4      1        10         30
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Intergovernmental and private-sector impact: H.R. 3674 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would not affect the budgets of state, 
local, or tribal governments.
    Estimate prepared by: Federal Costs: Kathleen Gramp; Impact 
on state, local, and tribal governments: Melissa Merrell; 
Impact on the private sector: Marin Burnett.
    Estimate approved by: Peter H. Fontaine, Assistant Director 
for Budget Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                    Duplication of Federal Programs

    No provision of H.R. 3674 establishes or reauthorizes a 
program of the Federal Government known to be duplicative of 
another Federal program, a program that was included in any 
report from the Government Accountability Office to Congress 
pursuant to section 21 of Public Law 111-139, or a program 
related to a program identified in the most recent Catalog of 
Federal Domestic Assistance.

                  Disclosure of Directed Rule Makings

    H.R. 3674 directs no specific rule makings within the 
meaning of 5 U.S.C. 551 be completed.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             Section-by-Section Analysis of the Legislation


Section 1. Short title

    Section 1 provides the short title of the ``Federal 
Spectrum Incentive Act of 2013.''

Section 2. Federal spectrum incentives

    Section 2(a) amends the procedures for notification to the 
FCC. Presently, the CSEA only contemplates notification 
procedures for entities relocating systems to comparable 
spectrum or sharing spectrum with non-Federal users. Section 
2(a) adds language to accommodate Federal entities 
relinquishing spectrum in exchange for a percentage of auction 
proceeds through discontinuing their operations entirely or 
through relocating their operations to frequencies already 
assigned to another Federal entity for the purpose of spectrum 
sharing.
    Section 2(b) amends the CSEA transition plan requirements 
to account for Federal entities that opt to discontinue 
operations or share frequency assignments with another Federal 
user in exchange for a percentage of auction proceeds. 
Specifically, the required transition plan must elect whether 
the Federal entity intends to engage in activities entitling it 
either to recover relocation or sharing costs through the 
Spectrum Relocation Fund or to payment from the Federal 
Spectrum Incentive Fund.
    Section 2(c) amends existing language to prioritize both 
discontinuance of Federal assignments in a band as well as 
relocation of such assignments to a different band over 
spectrum sharing with non-Federal users.
    Section 2(d) and 2(e) establish the mechanism to segregate 
1 percent of auction proceeds attributable to the auction of 
spectrum relinquished by Federal users to be deposited in the 
new Federal Spectrum Incentive Fund created by this 
legislation. These subsections also establish that the Fund 
will be administered by the Office of Management and Budget, in 
consultation with NTIA, and that eligible uses of such funds 
are limited to the offset of budget sequestration or for costs 
associated with an incumbent Federal agency's efforts to 
accommodate a relocating Federal operation to its band. A 
federal entity receiving payment from the Federal Spectrum 
Incentive Fund cannot receive duplicative payments from the 
Spectrum Relocation Fund for costs associated with the same 
effort.
    Section 2(f) clarifies that a requirement under the 2000 
National Defense Authorization Act for the Department of 
Defense to certify it has received comparable spectrum in 
exchange of reallocation does not apply to discontinuance of 
operations or to sharing of frequency bands with another 
Federal user. Should the Department of Defense elect to 
discontinue its operations rather than to relocate, such 
certification would be unnecessary and contradictory.

Section 3. Cost of incumbent Federal entities related to spectrum 
        sharing

    Section 3 makes conforming changes to the existing 
Commercial Spectrum Enhancement Act's definitions to 
accommodate the recovery of costs incurred by incumbent Federal 
entity.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

NATIONAL TELECOMMUNICATIONS AND INFORMATION ADMINISTRATION ORGANIZATION 
ACT

           *       *       *       *       *       *       *



TITLE I--NATIONAL TELECOMMUNICATIONS AND INFORMATION ADMINISTRATION

           *       *       *       *       *       *       *


PART B--TRANSFER OF AUCTIONABLE FREQUENCIES

           *       *       *       *       *       *       *


SEC. 113. IDENTIFICATION OF REALLOCABLE FREQUENCIES.

  (a) * * *

           *       *       *       *       *       *       *

  (g) Relocation of and Spectrum Sharing by Federal Government 
Stations.--
          (1) Eligible federal entities.--Any Federal entity 
        that operates a Federal Government station [authorized 
        to use a band of eligible frequencies described in 
        paragraph (2)] and that incurs relocation or sharing 
        costs because of planning for an auction of [spectrum 
        frequencies] eligible frequencies described in 
        paragraph (2) or the reallocation of [spectrum 
        frequencies] eligible frequencies described in such 
        paragraph from Federal use to exclusive non-Federal use 
        or to shared use shall receive payment for such 
        relocation or sharing costs from the Spectrum 
        Relocation Fund, in accordance with this section and 
        section 118. 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.

           *       *       *       *       *       *       *

          (3) Relocation or sharing costs defined.--
                  (A) In general.--For purposes of this section 
                and section 118, the term ``relocation or 
                sharing costs'' means the costs incurred by a 
                Federal entity in connection with the auction 
                of spectrum frequencies previously assigned to 
                such entity or the sharing of spectrum 
                frequencies assigned to such entity (including 
                the auction or a planned auction of the rights 
                to use spectrum frequencies on a shared basis 
                with such entity) in order to achieve 
                comparable capability of systems as before the 
                relocation or sharing arrangement. Such term 
                includes, with respect to relocation or 
                sharing, as the case may be--
                          (i) * * *

           *       *       *       *       *       *       *

                          (iii) the costs of research, 
                        engineering studies, economic analyses, 
                        or other expenses reasonably incurred 
                        in connection with--
                                  (I) calculating the estimated 
                                relocation or sharing costs 
                                that are provided to the 
                                Commission pursuant to 
                                [paragraph (4)(A)] paragraph 
                                (4)(A)(i);

           *       *       *       *       *       *       *

                          (iv) the one-time costs of any 
                        modification of equipment reasonably 
                        necessary--
                                  (I) * * *
                                  (II) in the case of eligible 
                                frequencies reallocated for 
                                exclusive non-Federal use and 
                                assigned through a system of 
                                competitive bidding under 
                                section 309(j) of the 
                                Communications Act of 1934 (47 
                                U.S.C. 309(j)) but with respect 
                                to which a Federal entity 
                                retains primary allocation or 
                                protected status for a period 
                                of time after the completion of 
                                the competitive bidding 
                                process, to accommodate shared 
                                Federal and non-Federal use of 
                                such frequencies for such 
                                period; [and]
                          (v) the costs associated with the 
                        accelerated replacement of systems and 
                        equipment if the acceleration is 
                        necessary to ensure the timely 
                        relocation of systems to a new 
                        frequency assignment or the timely 
                        accommodation of sharing of Federal 
                        frequencies[.]; and
                          (vi) the costs incurred by an 
                        incumbent Federal entity to accommodate 
                        sharing the spectrum frequencies 
                        assigned to such entity with a Federal 
                        entity the operations of which are 
                        being relocated from eligible 
                        frequencies described in paragraph (2), 
                        unless the Commission receives notice 
                        under paragraph (4)(A)(ii)(II) with 
                        respect to the relocation of such 
                        operations.

           *       *       *       *       *       *       *

          (4) [Notice to commission of estimated relocation or 
        sharing costs.--] Notice to commission._
                  (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 
                or sharing costs and timelines for such 
                relocation or sharing.] shall notify the 
                Commission--
                          (i) of estimated relocation or 
                        sharing costs and timelines for such 
                        relocation or sharing; or
                          (ii) that, instead of relocation or 
                        sharing costs under this subsection and 
                        section 118, a Federal entity will 
                        receive payment under section 120 
                        because such entity is--
                                  (I) discontinuing the 
                                operations that the Federal 
                                entity conducts on such 
                                eligible frequencies without 
                                relocating such operations to 
                                other frequencies; or
                                  (II) relocating such 
                                operations to frequencies 
                                assigned to another Federal 
                                entity in order for such 
                                entities to share such 
                                frequencies.
                  (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 or sharing costs and 
                timelines to be submitted to the Commission 
                pursuant to [subparagraph (A)] subparagraph 
                (A)(i).
                  (C) To the extent practicable and consistent 
                with national security considerations, the NTIA 
                shall provide the information required by 
                [subparagraphs (A) and (B)] subparagraphs 
                (A)(i) and (B) by the geographic location of 
                the Federal entities' facilities or systems and 
                the frequency bands used by such facilities or 
                systems.
                  (D) This subsection and section 118 shall not 
                apply with respect to the discontinuance of 
                operations on eligible frequencies or the 
                relocation of such operations by a Federal 
                entity after the Commission receives notice 
                under subparagraph (A)(ii) with respect to such 
                discontinuance or relocation.
          (5) Notice to congressional committees and gao.--The 
        NTIA shall, at the time of providing an initial 
        estimate of relocation or sharing costs to the 
        Commission under [paragraph (4)(A)] paragraph 
        (4)(A)(i), submit to Committees on Appropriations and 
        Energy and Commerce of the House of Representatives for 
        approval, to the Committees on Appropriations and 
        Commerce, Science, and Transportation of the Senate for 
        approval, and to the Comptroller General a copy of such 
        estimate and the timelines for relocation or sharing. 
        Unless disapproved within 30 days, the estimate shall 
        be approved. If disapproved, the NTIA may resubmit a 
        revised initial estimate.

           *       *       *       *       *       *       *

  (h) Development and Publication of [Relocation or Sharing] 
Transition Plans.--
          [(1) Development of transition plan by federal 
        entity.--Not later than 240 days before the 
        commencement of any auction of eligible frequencies 
        described in subsection (g)(2), a Federal entity 
        authorized to use any such frequency shall submit to 
        the NTIA and to the Technical Panel established by 
        paragraph (3) a transition plan for the implementation 
        by such entity of the relocation or sharing 
        arrangement. The NTIA shall specify, after public 
        input, a common format for all Federal entities to 
        follow in preparing transition plans under this 
        paragraph.]
          (1) Development of transition plan by federal 
        entity.--
                  (A) In general.--Not later than 240 days 
                before the commencement of any auction of 
                eligible frequencies described in subsection 
                (g)(2), a Federal entity authorized to use any 
                such frequency shall submit to the NTIA and to 
                the Technical Panel established by paragraph 
                (3) a transition plan in which the Federal 
                entity--
                          (i) declares the intention of such 
                        entity--
                                  (I) to share such eligible 
                                frequencies with a non-Federal 
                                user or to relocate to other 
                                frequencies, and to receive 
                                relocation or sharing costs 
                                from the Spectrum Relocation 
                                Fund established by section 
                                118; or
                                  (II) to discontinue the 
                                operations that the Federal 
                                entity conducts on such 
                                eligible frequencies without 
                                relocating such operations to 
                                other frequencies or to 
                                relocate such operations to 
                                frequencies assigned to another 
                                Federal entity in order for 
                                such entities to share such 
                                frequencies, and to receive 
                                payment from the Federal 
                                Spectrum Incentive Fund 
                                established by section 120; and
                          (ii) describes how the entity will 
                        implement the relocation, sharing, or 
                        discontinuance arrangement.
                  (B) Common format.--The NTIA shall specify, 
                after public input, a common format for all 
                Federal entities to follow in preparing 
                transition plans under this paragraph.
          (2) Contents of transition plan.--The transition plan 
        required by paragraph (1) shall include the following 
        information:
                  (A) * * *

           *       *       *       *       *       *       *

                  (D) The steps to be taken by the Federal 
                entity to relocate its spectrum use from such 
                frequencies, to discontinue such use, or to 
                share such frequencies, including timelines for 
                specific geographic locations in sufficient 
                detail to indicate when use of such frequencies 
                at such locations will be discontinued by the 
                Federal entity or shared between the Federal 
                entity and non-Federal users.

           *       *       *       *       *       *       *

                  (F) The name of the officer or employee of 
                the Federal entity who is responsible for the 
                relocation, discontinuance, or sharing efforts 
                of the entity and who is authorized to meet and 
                negotiate with non-Federal users regarding the 
                transition.
                  (G) [The plans] To the extent applicable 
                given the intention declared by the entity 
                under paragraph (1)(A)(i), the plans and 
                timelines of the Federal entity for--
                          (i) * * *

           *       *       *       *       *       *       *

          (4) Review of plan by technical panel.--
                  (A) In general.--Not later than 30 days after 
                the submission of the plan under paragraph (1), 
                the Technical Panel shall submit to the NTIA 
                and to the Federal entity a report on the 
                sufficiency of the plan, including whether the 
                plan includes the information required by 
                paragraph (2) and an assessment of the 
                reasonableness of the proposed timelines and 
                (if applicable) estimated relocation or sharing 
                costs, including the costs of any proposed 
                expansion of the capabilities of a Federal 
                system in connection with relocation or 
                sharing.

           *       *       *       *       *       *       *

          (6) Updates of transition plan.--As the Federal 
        entity implements the transition plan, it shall 
        periodically update the plan to reflect any changed 
        circumstances, including changes in estimated 
        relocation or sharing costs (if applicable) or the 
        timeline for relocation, discontinuance, or sharing. 
        The NTIA shall make the updates available on its 
        website.
          (7) Classified and other sensitive information.--
                  (A) Classified information.--If any of the 
                information required to be included in the 
                transition plan of a Federal entity is 
                classified information (as defined in section 
                798(b) of title 18, United States Code), the 
                entity shall--
                          (i) * * *
                          (ii) discuss as a factor under 
                        paragraph (2)(H) the extent of the 
                        classified information and the effect 
                        of such information on the 
                        implementation of the relocation, 
                        discontinuance, or sharing arrangement.

           *       *       *       *       *       *       *

  (j) Relocation or Discontinuance Prioritized Over Sharing.--
          (1) In general.--In evaluating a band of frequencies 
        for possible reallocation for exclusive non-Federal use 
        or shared use, the NTIA shall give priority to options 
        involving reallocation of the band for exclusive non-
        Federal use and shall choose options involving shared 
        use only when it determines, in consultation with the 
        Director of the Office of Management and Budget, that 
        relocation of a Federal entity from the band or 
        discontinuance of the operations that the Federal 
        entity conducts on the band is not feasible because of 
        technical or cost constraints.
          (2) Notification of congress when sharing chosen.--If 
        the NTIA determines under paragraph (1) that relocation 
        of a Federal entity from the band or discontinuance of 
        the operations that the Federal entity conducts on the 
        band is not feasible, the NTIA shall notify the 
        Committee on Commerce, Science, and Transportation of 
        the Senate and the Committee on Energy and Commerce of 
        the House of Representatives of the determination, 
        including the specific technical or cost constraints on 
        which the determination is based.

           *       *       *       *       *       *       *


SEC. 118. SPECTRUM RELOCATION FUND.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Use of Funds.--The amounts in the Fund from auctions of 
eligible frequencies are authorized to be used to pay 
relocation or sharing costs of an eligible Federal entity 
incurring such costs [with respect to relocation from or 
sharing of those frequencies.] with respect to--
          (1) relocation from or sharing of such eligible 
        frequencies; or
          (2) in the case of an incumbent Federal entity 
        described in section 113(g)(3)(A)(vi), accommodating 
        sharing the spectrum frequencies assigned to such 
        entity with a Federal entity the operations of which 
        are being relocated from such eligible frequencies.
  (d) Fund Availability.--
          (1) * * *
          (2) Transfer conditions.--None of the funds provided 
        under this subsection may be transferred to any 
        eligible Federal entity--
                  (A) unless the eligible Federal entity has 
                submitted a transition plan (or, in the case of 
                an incumbent Federal entity described in 
                section 113(g)(3)(A)(vi), the eligible Federal 
                entity the operations of which are being 
                relocated has submitted such a plan) to the 
                NTIA as required by paragraph (1) of section 
                113(h), the Technical Panel has found such plan 
                sufficient under paragraph (4) of such section, 
                and the NTIA has made available such plan on 
                its website as required by paragraph (5) of 
                such section;

           *       *       *       *       *       *       *

        Unless disapproved within 30 days, the amounts in the 
        Fund shall be available immediately. If the plan is 
        disapproved, the Director may resubmit a revised plan.
          (3) Transfers for pre-auction costs.--
                  (A) * * *
                  (B) Notification.--No funds may be 
                transferred pursuant to subparagraph (A) 
                unless--
                          (i) * * *
                          (ii) except in the case of an 
                        incumbent Federal entity described in 
                        section 113(g)(3)(A)(vi), the 
                        transition plan submitted by the 
                        eligible Federal entity under section 
                        113(h)(1) provides--
                                  (I) * * *

           *       *       *       *       *       *       *


SEC. 120. FEDERAL SPECTRUM INCENTIVE FUND.

  (a) Establishment.--There is established in the Treasury of 
the United States a fund to be known as the Federal Spectrum 
Incentive 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) Transfer of Funds.--The Director of OMB shall transfer 
from the Fund to a Federal entity an amount equal to the amount 
deposited in accordance with section 309(j)(8)(D)(iii) of the 
Communications Act of 1934 that is attributable to the auction 
of eligible frequencies described in section 113(g)(2) of this 
Act being vacated by such entity. Such amount shall be 
available to the Federal entity in accordance with subsection 
(c) and shall remain available until expended.
  (c) Use of Funds.--A Federal entity may use an amount 
transferred under subsection (b) for the following purposes:
          (1) Offset of sequestration.--Any purposes permitted 
        under the terms and conditions of an appropriations 
        account of the Federal entity that was subject to 
        sequestration for any fiscal year under the Balanced 
        Budget and Emergency Deficit Control Act of 1985. The 
        amount used for such purposes under this paragraph may 
        not exceed the amount by which the amount available to 
        such entity under such account was reduced by 
        sequestration for such fiscal year.
          (2) Transfer to incumbent federal entity.--In the 
        case of a Federal entity that is relocating operations 
        to frequencies assigned to an incumbent Federal entity 
        in order for such entities to share such frequencies, 
        to transfer an amount to the incumbent Federal entity 
        for any purposes permitted under this subsection 
        (except this paragraph). The transferred amount shall 
        remain available to the incumbent Federal entity until 
        expended.
  (d) Prohibition on Duplicative Payments.--If the Commission 
receives notice under section 113(g)(4)(A)(ii) of a 
discontinuance of operations on or relocation from eligible 
frequencies by a Federal entity that has received, from the 
Spectrum Relocation Fund in accordance with section 118(d)(3), 
relocation or sharing costs related to pre-auction estimates or 
research with respect to such frequencies, the Director of OMB 
shall deduct from the amount to be transferred to such entity 
under subsection (b) an amount equal to such costs and shall 
transfer such amount to the Spectrum Relocation Fund.

           *       *       *       *       *       *       *

                              ----------                              


COMMUNICATIONS ACT OF 1934

           *       *       *       *       *       *       *


            TITLE III--SPECIAL PROVISIONS RELATING TO RADIO

PART I--GENERAL PROVISIONS

           *       *       *       *       *       *       *


SEC. 309. ACTION UPON APPLICATIONS; FORM OF AND CONDITIONS ATTACHED TO 
                    LICENSES.

  (a) * * *

           *       *       *       *       *       *       *

  (j) Use of Competitive Bidding.--
          (1) * * *

           *       *       *       *       *       *       *

          (8) Treatment of revenues.--
                  (A) * * *

           *       *       *       *       *       *       *

                  (C) Deposit and use of auction escrow 
                accounts.--Any deposits the Commission may 
                require for the qualification of any person to 
                bid in a system of competitive bidding pursuant 
                to this subsection shall be deposited in an 
                interest bearing account at a financial 
                institution designated for purposes of this 
                subsection by the Commission (after 
                consultation with the Secretary of the 
                Treasury). Within 45 days following the 
                conclusion of the competitive bidding--
                          (i) the deposits of successful 
                        bidders shall be paid to the Treasury, 
                        except as otherwise provided in 
                        subparagraphs [(D)(ii)] (D)(ii), 
                        (D)(iii), (E)(ii), (F), and (G);

           *       *       *       *       *       *       *

                  (D) Proceeds from reallocated federal 
                spectrum.--
                          (i) In general.--Except as provided 
                        in [clause (ii)] clauses (ii) and 
                        (iii), 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.

           *       *       *       *       *       *       *

                          (iii) Federal spectrum incentives.--
                        Notwithstanding subparagraph (A) and 
                        except as provided in subparagraph (B) 
                        and clause (ii) of this subparagraph, 
                        in the case of proceeds (including 
                        deposits and upfront payments from 
                        successful bidders) attributable to the 
                        auction of eligible frequencies 
                        described in section 113(g)(2) of the 
                        National Telecommunications and 
                        Information Administration Organization 
                        Act with respect to which the 
                        Commission has received notice under 
                        section 113(g)(4)(A)(ii) of such Act, 1 
                        percent of such proceeds shall be 
                        deposited in the Federal Spectrum 
                        Incentive Fund established by section 
                        120 of such Act and shall be available 
                        in accordance with such section. The 
                        remainder of such proceeds shall be 
                        deposited in the general fund of the 
                        Treasury, where such proceeds shall be 
                        dedicated for the sole purpose of 
                        deficit reduction.

           *       *       *       *       *       *       *


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