; and (B) by adding at the end the following: (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. . (e) Federal Spectrum Incentive Fund Part B of the National Telecommunications and Information Administration Organization Act ( 47 U.S.C. 921 et seq.) is amended by adding at the end the following: 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