for purposes of this clause); and if the value of collateral provided by an applicant is less than the Amount, the additional required collateral is provided by any affiliate of the applicant;

(iv) all necessary and required regulatory and other approvals, spectrum licenses, and delivery permissions have been received for the loan and the project under the loan;

(v) the loan would not be available on reasonable terms and conditions without a loan guarantee under this Act; and

(vi) repayment of the loan can reasonably be expected.

(e) CONSIDERATIONS.—

(1) TYPE OF MARKET.—

(A) PRIORITY CONSIDERATIONS.-To the maximum extent practicable, the Board shall give priority in the approval of loan guarantees under this Act in the following order:

(i) First, to projects that will serve households in nonserved areas. In considering such projects, the Board shall balance projects that will serve the largest number of households with projects that will serve remote, isolated communities (including noncontiguous States) in areas that are unlikely to be served through market mechanisms.

(ii) Second, to projects that will serve households in underserved areas. In considering such projects, the Board shall balance projects that will serve the largest number of households with projects that will serve remote, isolated communities (including noncontiguous States) in areas that are unlikely to be served through market mechanisms.

Within each category, the Board shall consider the project's estimated cost per household and shall give priority to those projects that provide the highest quality service at the lowest cost per household.

(B) ADDITIONAL CONSIDERATION.-The Board should give additional consideration to projects that also provide high-speed Internet service.

(C) PROHIBITIONS.-The Board may not approve a loan guarantee under this Act for a project that

(i) is designed primarily to serve one or more of the top 40 designated market areas (as that term is defined in section 122(j) of title 17, United States Code); or

(ii) would alter or remove National Weather Service warnings from local broadcast signals.

(2) OTHER CONSIDERATIONS.-The Board shall consider other factors, which shall include projects that would—

(A) offer a separate tier of local broadcast signals, but for applicable Federal, State, or local laws or regulations; (B) provide lower projected costs to consumers of such separate tier; and

(C) enable the delivery of local broadcast signals consistent with the purpose of this Act by a means reasonably compatible with existing systems or devices predominantly in use.

(3) FURTHER CONSIDERATION. In implementing this Act, the Board shall support the use of loan guarantees for projects that would serve households not likely to be served in the absence of loan guarantees under this Act.

(f) GUARANTEE LIMITS.

(1) LIMITATION ON AGGREGATE VALUE OF LOANS.-The aggregate value of all loans for which loan guarantees are issued under this Act (including the unguaranteed portion of such loans) may not exceed $1,250,000,000.

(2) GUARANTEE LEVEL.-A loan guarantee issued under this Act may not exceed an amount equal to 80 percent of a loan meeting in its entirety the requirements of subsection (d)(2)(A). If only a portion of a loan meets the requirements of that subsection, the Board shall determine that percentage of the loan meeting such requirements (the "applicable portion") and may issue a loan guarantee in an amount not exceeding 80 percent of the applicable portion.

(g) UNDERWRITING CRITERIA.-Within the period provided for under subsection (b)(1), the Board shall, in consultation with the Director of the Office of Management and Budget and an independent public accounting firm, develop underwriting criteria relating to the guarantee of loans that are consistent with the purpose of this Act, including appropriate collateral and cash flow levels for loans guaranteed under this Act, and such other matters as the Board considers appropriate.

(h) CREDIT RISK PREMIUMS.—

(1) ESTABLISHMENT AND ACCEPTANCE.

(A) IN GENERAL.-The Board may establish and approve the acceptance of credit risk premiums with respect to a loan guarantee under this Act in order to cover the cost, as defined in section 502(5) of the Federal Credit Reform Act of 1990, of the loan guarantee.

(B) AUTHORITY LIMITED BY APPROPRIATIONS ACTS.— Credit risk premiums under this subsection shall be imposed only to the extent provided for in advance in appropriations Acts. To the extent that appropriations of budget authority are insufficient to cover the cost, as so defined, of a loan guarantee under this Act, credit risk premiums shall be accepted from a non-Federal source under this subsection on behalf of the applicant for the loan guarantee.

(2) CREDIT RISK PREMIUM AMOUNT.

(A) IN GENERAL.-The Board shall determine the amount of any credit risk premium to be accepted with respect to a loan guarantee under this Act on the basis of(i) the financial and economic circumstances of the applicant for the loan guarantee, including the amount of collateral offered;

(ii) the proposed schedule of loan disbursements;

(iii) the business plans of the applicant for providing service;

(iv) any financial commitment from a broadcast signal provider; and

(v) the concurrence of the Director of the Office of Management and Budget as to the amount of the credit risk premium.

(B) PROPORTIONALITY.-To the extent that appropriations of budget authority are sufficient to cover the cost, as determined under section 502(5) of the Federal Credit Reform Act of 1990, of loan guarantees under this Act, the credit risk premium with respect to each loan guarantee shall be reduced proportionately.

(C) PAYMENT OF PREMIUMS.-Credit risk premiums under this subsection shall be paid to an account (the “Escrow Account") established in the Treasury which shall accrue interest and such interest shall be retained by the account, subject to subparagraph (D).

(D) DEDUCTIONS FROM ESCROW ACCOUNT.-If a default occurs with respect to any loan guaranteed under this Act and the default is not cured in accordance with the terms of the underlying loan or loan guarantee agreement, the Administrator, in accordance with subsections (i) and (j) of section 5, shall liquidate, or shall cause to be liquidated, all assets collateralizing such loan as to which it has a lien or security interest. Any shortfall between the proceeds of the liquidation net of costs and expenses relating to the liquidation, and the guarantee amount paid pursuant to this Act shall be deducted from funds in the Escrow Account and credited to the Administrator for payment of such shortfall. At such time as determined under subsection (d)(2)(E) of this section when all loans guaranteed under this Act have been repaid or otherwise satisfied in accordance with this Act and the regulations promulgated hereunder, remaining funds in the Escrow Account, if any, shall be refunded, on a pro rata basis, to applicants whose loans guaranteed under this Act were not in default, or where any default was cured in accordance with the terms of the underlying loan or loan guarantee agreement.

(i) LIMITATIONS ON GUARANTEES FOR CERTAIN CABLE OPERATORS.-Notwithstanding any other provision of this Act, no loan guarantee under this Act may be granted or used to provide funds for a project that upgrades or enhances the services provided over any cable system, nor for a project that extends the services provided by a cable operator, or its successor or assignee, over any cable system to an area that, as of the date of enactment of this Act, is covered by a cable franchise agreement that obligates a cable system operator to serve such area.

(j) JUDICIAL REVIEW.-The decision of the Board to approve or disapprove the making of a loan guarantee under this Act shall not be subject to judicial review.

(k) APPLICABILITY OF APA-Except as otherwise provided in subsection (j), the provisions of subchapter II of chapter 5 and chapter 7 of title 5, United States Code (commonly referred to as

the Administrative Procedure Act), shall apply to actions taken under this Act.

SEC. 1005. [47 U.S.C. 1104] ADMINISTRATION OF LOAN GUARANTEES.

(a) IN GENERAL.-The Administrator of the Rural Utilities Service (in this Act referred to as the "Administrator") shall issue and otherwise administer loan guarantees that have been approved by the Board in accordance with sections 3 and 4.

(b) SECURITY FOR PROTECTION OF UNITED STATES FINANCIAL INTERESTS.

(1) TERMS AND CONDITIONS.-An applicant shall agree to such terms and conditions as are satisfactory, in the judgment of the Board, to ensure that, as long as any principal or interest is due and payable on a loan guaranteed under this Act, the applicant

(A) shall maintain assets, equipment, facilities, and operations on a continuing basis;

(B) shall not make any discretionary dividend payments that impair its ability to repay obligations guaranteed under this Act;

(C) shall remain sufficiently capitalized; and

(D) shall submit to, and cooperate fully with, any audit of the applicant under section 6(a)(2). (2) COLLATERAL.

(A) EXISTENCE OF ADEQUATE COLLATERAL.-An applicant shall provide the Board such documentation as is necessary, in the judgment of the Board, to provide satisfactory evidence that appropriate and adequate collateral secures a loan guaranteed under this Act.

(B) FORM OF COLLATERAL.-Collateral required by subparagraph (A) shall consist solely of assets of the applicant, any affiliate of the applicant, or both (whichever the Board considers appropriate), including primary assets to be used in the delivery of signals for which the loan is guaranteed.

(C) REVIEW OF VALUATION.-The value of collateral securing a loan guaranteed under this Act may be reviewed by the Board, and may be adjusted downward by the Board if the Board reasonably believes such adjustment is appropriate.

(3) LIEN ON INTERESTS IN ASSETS.-Upon the Board's approval of a loan guarantee under this Act, the Administrator shall have liens on assets securing the loan, which shall be superior to all other liens on such assets, and the value of the assets (based on a determination satisfactory to the Board) subject to the liens shall be at least equal to the unpaid balance of the loan amount covered by the loan guarantee, or that value approved by the Board under section 4(d)(3)(B)(iii).

(4) PERFECTED SECURITY INTEREST.-With respect to a loan guaranteed under this Act, the Administrator and the lender shall 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.-In accordance with practices in the private capital market, as determined by the Board, the applicant for a loan guarantee under this Act shall 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 guarantee under this Act may assign the loan guaranteed under this Act in whole or in part, subject to such requirements as the Board may prescribe.

(d) EXPIRATION OF LOAN GUARANTEE UPON STRIPPING.-Notwithstanding subsections (c), (e), and (h), a loan guarantee under this Act shall have no force or effect if any part of the guaranteed portion of the loan is transferred separate and apart from the unguaranteed portion of the loan.

(e) ADJUSTMENT.-The Board may approve the adjustment of any term or condition of a loan guarantee or a loan guaranteed under this Act, including the rate of interest, time of payment of principal or interest, or security requirements only if

(1) the adjustment is consistent with the financial interests of the United States;

(2) consent has been obtained from the parties to the loan agreement;

(3) the adjustment is consistent with the underwriting criteria developed under section 4(g);

(4) the adjustment does not adversely affect the interest of the Federal Government in the assets or collateral of the applicant;

(5) the adjustment does not adversely affect the ability of the applicant to repay the loan; and

(6) the National Telecommunications and Information Administration has been consulted by the Board regarding the adjustment.

(f) PERFORMANCE SCHEDULES.—

(1) PERFORMANCE SCHEDULES.-An applicant for a loan guarantee under this Act for a project covered by section 4(e)(1) shall enter into stipulated performance schedules with the Administrator with respect to the signals to be provided through the project.

(2) PENALTY.-The Administrator may assess against and collect from an applicant described in paragraph (1) a penalty not to exceed three times the interest due on the guaranteed loan of the applicant under this Act if the applicant fails to meet its stipulated performance schedule under that paragraph.

(g) COMPLIANCE.-The Administrator, in cooperation with the Board and as the regulations of the Board may provide, shall enforce compliance by an applicant, and any other party to a loan guarantee for whose benefit assistance under this Act is intended, with the provisions of this Act, any regulations under this Act, and the terms and conditions of the loan guarantee, including through the submittal of such reports and documents as the Board may require in regulations prescribed by the Board and through regular periodic inspections and audits.