Sec. 24.309  Designated entities.

    (a) Designated entities entitled to preferences in the narrowband 
PCS service are small businesses and businesses owned by members of 
minority groups and/or women as defined in Secs. 24.320(b) and 
24.320(c).
    (b) Designated entities will be eligible for certain special 
narrowband PCS provisions as follows:
    (1) Installment payments.
    (i) Small businesses, including small businesses owned by members of 
minority groups and women, will be eligible to pay the full amount of 
their winning bids on any regional, MTA or BTA license in installments 
over the term of the license pursuant to the terms set forth 
Sec. 1.2110(e) of this chapter.
    (ii) Businesses owned by members of minority groups and women that 
are winning bidders for the regional licenses indicated by an (**) in 
Sec. 24.129

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may pay the full amount of their winning bids (less the applicable 
bidding credit and down payment) in installments with
    (A) Interest imposed based on the rate for ten-year U.S. Treasury 
obligations applicable on the date the license is granted, plus 2.5 
percent;
    (B) Interest-only payments for the first two years; and
    (C) Principal and interest payments amortized over the remaining 
eight years of the license.
    (2) Bidding Credits. Businesses owned by member of minority groups 
and women, including small businesses owned by members of minority 
groups and women, will be eligible for a twenty-five (25) percent 
bidding credit when bidding on the following licenses: (i) The 
nationwide licenses on Channel 5, Channel 8 and Channel 11; (ii) All MTA 
licenses on Channel 19, Channel 22, Channel 24; and (iii) All BTA 
licenses on Channel 26. This bidding credit will reduce by 25 percent 
the bid price that businesses owned by members of minority groups and 
women will be required to pay to obtain a license. Businesses owned by 
women and/or minorities, including small businesses owned by women and/
or minorities will be eligible for a forty (40) percent bidding credit 
when bidding on all regional licenses on Channel 13 and Channel 17. In 
Sec. 24.129, the licenses that will be eligible for 25 percent bidding 
credits are indicated by an (*); the licenses that will be eligible for 
40 percent bidding credits are indicated by an (**).
    (3) Tax Certificates. Any non-controlling initial investor in a 
business owned by members of minority groups and/or women and who 
provides ``start-up'' financing, which allows such business to acquire a 
narrowband PCS license(s), and any non-controlling investor who 
purchases an interest in a narrowband PCS license held by a business 
owned by members of minority groups and/or women with the first year 
after license issuance, may, upon the sale of such investment or 
interest, request from the Commission a tax certificate. Any narrowband 
PCS licensee who assigns or transfers control of its license to a 
business owned by members of minority groups and/or women may request 
that the Commission issue the licensee a tax certificate.
    (c) Short-Form Application Certification; Long-Form Application 
Disclosure. (1) All applicants for licenses under the designated entity 
provisions set forth in this section shall certify on their short-form 
applications (Form 175) that they are eligible for those preferences 
pursuant to this section.
    (2) In addition to the requirements in subpart I, all designated 
entity applicants that are winning bidders shall, in an exhibit to their 
long-form applications--
    (i) Identify each member of the applicant's control group, 
regardless of the size of the member's total interest in the applicant, 
and each member's minority group or gender classification, if 
applicable;
    (ii) Disclose the gross revenues of the applicant and its 
affiliates, and other persons that hold interests in the applicant and 
their affiliates (including all members of the applicant's control 
group); and
    (iii) Certify that the personal net worth of the applicant (if an 
individual), each affiliate and each person that hold an interest in the 
applicant is less than $40 million.
    (d) Audits. Applicants and licensees claiming eligibility under this 
section shall be subject to random audits by the Commission.
    (e) Definitions. The terms affiliate, business owned by members of 
minority groups and women, consortium of small businesses, control 
group, gross revenues, members of minority groups, passive equity, 
personal net worth, and small business used in this section are defined 
in Sec. 24.320.
    (f) Unjust Enrichment. Designated entities using installment 
payments, bidding credits or tax certificates to obtain a narrowband PCS 
license will be subject to the following unjust enrichment provisions:
    (1) If a small business paying for a narrowband PCS license in 
installment payments seeks to transfer a license to a non-small business 
entity during the term of the license, the remaining principal balance 
must be repaid as a condition of the license transfer.
    (2) If a licensee that utilizes installment financing under this 
section

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seeks to make any change in ownership structure that would result in the 
licensee losing eligibility for installment payments, the licensees 
shall first seek Commission approval and must make full payment of the 
remaining unpaid principal and any unpaid interest accrued through the 
date of the change as a condition of approval. Increases in gross 
revenues that result from equity investments that are not attributable 
to the licensee under Sec. 24.320(b)(2)(iv), revenues from operations, 
business development or expanded service shall not be considered changes 
in ownership structure under this paragraph.
[ 59 FR 44070 , Aug. 26, 1994, as amended at  59 FR 50511 , Oct. 4, 1994]