[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2731 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                H. R. 2731

  To encourage the development of a commercial space industry in the 
                 United States, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 23, 1993

  Mr. Walker (for himself, Mr. Fawell, Mr. Smith of Michigan, and Mr. 
Rohrabacher) introduced the following bill; which was referred jointly 
 to the Committees on Science, Space, and Technology, Ways and Means, 
           Natural Resources, Agriculture, and the Judiciary

_______________________________________________________________________

                                 A BILL


 
  To encourage the development of a commercial space industry in the 
                 United States, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Omnibus Space Commercialization Act 
of 1993''.

SEC. 2. FINDINGS.

    The Congress finds that--
            (1) the exploration of space holds the potential for vast 
        new enterprises which will benefit the United States and all of 
        mankind;
            (2) inevitably where exploration has taken place commercial 
        activity follows;
            (3) the development of a robust commercial space industry 
        in the United States is required to restore and maintain United 
        States world leadership in the exploration, development, 
        commercialization, and settlement of space and to maintain the 
        health and growth of the national economy, meet national 
        security objectives, and sustain the position of the United 
        States as a world power;
            (4) the United States is in danger of losing its leadership 
        position in space transportation;
            (5) the Federal Government should encourage, facilitate, 
        and promote the United States commercial space industry, 
        including the development of commercial launch facilities, in 
        order to ensure United States economic preeminence in space;
            (6) creation of a space infrastructure and transportation 
        industries in a timely, profitable, innovative, and sustainable 
        manner can be accomplished only by private enterprise;
            (7) incentives are needed to be put in place for private 
        enterprise to undertake the high risk venture of commercial 
        space industrialization; and
            (8) commercial space activity presents unique legal 
        problems that need to be clarified before the full 
        industrialization of space can go forward.

SEC. 3. DEFINITIONS.

    For purposes of this Act--
            (1) the term ``commercial provider'' means any person 
        providing space transportation services or other space-related 
        activities;
            (2) the term ``payload'' means anything that a person 
        undertakes to transport to, from, or within outer space, or in 
        suborbital trajectory, by means of a space transportation 
        vehicle, but does not include the space transportation vehicle 
        itself except for its components which are specifically 
        designed or adapted for that payload;
            (3) the term ``Secretary'' means the Secretary of 
        Transportation;
            (4) the term ``space infrastructure'' means all facilities, 
        equipment, and real property (including ranges) used to perform 
        space-related activities;
            (5) the term ``space launch and launch support facilities'' 
        means space infrastructure used--
                    (A) to prepare space transportation vehicles and 
                their payloads for transportation to, from, or within 
                outer space, or in suborbital trajectory; or
                    (B) to launch such vehicles;
            (6) the term ``space-related activities'' includes research 
        and development, manufacturing, processing, service, and other 
        associated and support activities;
            (7) the term ``space transportation services'' means the 
        preparation of a space transportation vehicle and its payloads 
        for transportation to, from, or within outer space, or in 
        suborbital trajectory, and the conduct of transporting a 
        payload to, from, or within outer space, or in suborbital 
        trajectory;
            (8) the term ``space transportation vehicle'' means any 
        vehicle constructed for the purpose of operating in, or 
        transporting a payload to, from, or within, outer space, or in 
        suborbital trajectory, and includes any component of such 
        vehicle not specifically designed or adapted for a payload;
            (9) the term ``United States person'' means an individual, 
        corporation, commercial provider, or other entity organized 
        under the laws of the United States or a State, Commonwealth, 
        territory, or possession of the United States which is--
                    (A) more than 50 percent owned by United States 
                nationals; or
                    (B) a subsidiary of a foreign company and the 
                Secretary finds that--
                            (i) such subsidiary has in the past 
                        evidenced a substantial commitment to the 
                        United States market through--
                                    (I) investments in the United 
                                States in long-term research, 
                                development, and manufacturing 
                                (including the manufacture of major 
                                components and subassemblies); and
                                    (II) significant contributions to 
                                employment in the United States; and
                            (ii) the country or countries in which such 
                        foreign company is incorporated or organized, 
                        and, if appropriate, in which it principally 
                        conducts its business, affords reciprocal 
                        treatment to companies described in 
                        subparagraph (A) comparable to that afforded to 
                        such foreign company's subsidiary in the United 
                        States, as evidenced by--
                                    (I) providing comparable 
                                opportunities for companies described 
                                in subparagraph (A) to participate in 
                                Government sponsored research and 
                                development similar to that authorized 
                                under this Act;
                                    (II) providing no barriers to 
                                companies described in subparagraph (A) 
                                with respect to local investment 
                                opportunities that are not provided to 
                                foreign companies in the United States; 
                                and
                                    (III) providing adequate and 
                                effective protection for the 
                                intellectual property rights of 
                                companies described in subparagraph 
                                (A); and
            (10) the term ``antitrust laws'' has the meaning given it 
        in section 1(a) of the Clayton Act (15 U.S.C. 12(a)), except 
        that such term includes sections 2 through 6 of the National 
        Cooperative Research Act of 1984 (15 U.S.C. 4301 through 4305), 
        and includes section 5 of the Federal Trade Commission Act to 
        the extent that such section 5 applies to unfair methods of 
        competition.

          TITLE I--SPACE LAUNCH AND LAUNCH SUPPORT FACILITIES

SEC. 101. INVENTORY OF FACILITIES.

    (a) Inventory.--The Comptroller General shall conduct a 
comprehensive inventory of all space launch and launch support 
facilities owned by the United States Government and shall identify 
such facilities that are surplus to public and national security needs. 
This subsection shall be carried out in cooperation with the Department 
of Defense, the National Aeronautics and Space Administration, the 
Department of Transportation, the Department of Commerce, and the 
General Services Administration.
    (b) Report.--Not later than 12 months after the date of enactment 
of this Act, the Comptroller General shall submit to the Congress a 
report containing the inventory and identification required under 
subsection (a), including an item by item justification of why each 
facility is or is not identified as surplus. Portions of such report 
may be classified and protected from public disclosure if such 
classification is essential to protect national security.
    (c) Referral for Sale.--All facilities identified under this 
section as surplus shall be referred to the General Services 
Administration for disposition.

SEC. 102. COMMERCIAL SPACE CENTERS.

    (a) Designation.--The Secretary shall establish criteria for the 
designation of Commercial Space Centers. The Secretary shall, in 
accordance with such criteria, designate appropriate launch facilities 
as Commercial Space Centers.
    (b) Benefits of Designation.--Commercial Space Centers, all 
property located therein, all space transportation services and space-
related activities carried out therein, and all products and services 
created, processed, manufactured, or otherwise arising from such space 
transportation services and space-related activities, including such 
services and activities in space as are launched from a Commercial 
Space Center and products created, manufactured, or processed in 
connection therewith, and proceeds from insurance policies insuring 
such services and activities, shall be exempt from--
            (1) all Federal corporate income and other taxes; and
            (2) all Federal excises, imposts, duties, and any and all 
        other Federal tariffs.

SEC. 103. PUBLIC LAND FOR NEW SPACE LAUNCH AND LAUNCH SUPPORT 
              FACILITIES.

    (a) Facilitation of Proposals.--The Secretary of the Interior and 
the Secretary of Agriculture shall facilitate proposals by commercial 
providers, with or without the participation of State and local 
governments, to establish new space launch and launch support 
facilities on public lands administered through their respective 
departments through sale, lease, grant of overflight and clearance 
easements, or other transfer of such lands, and shall ensure timely 
review and decision regarding such proposals.
    (b) Leases.--Leases described in subsection (a) shall be to 
commercial providers for periods of 30 years, with options to extend 
for an additional 20 years. Parties signing such a lease shall enjoy 
occupation and use of the lands without charge for the first 10 years 
of the term of the lease. The annual lease price for the remaining 20 
years, and for any period of extension, of the lease shall be based on 
fair market value at the time of the submission of the initial request 
for use of the land, except that lands used for livestock grazing at 
the time of the signing of a lease shall be leased at the rate charged 
for grazing access.
    (c) Wilderness, Recreation, and Park Areas.--(1) Except as provided 
in paragraph (2), no wilderness area, national recreation area, or 
national park, or any part thereof, shall be transferred as described 
in subsection (a).
    (2) Overflight easements for extra-atmospheric flight may be 
granted over such areas if the Secretary of Transportation finds that 
danger to the general public is not significantly increased thereby.
    (d) Noncontiguous Land Parcels.--Land parcels sold, leased, or 
otherwise made available under this section need not be contiguous. 
Road and communication easements shall be granted wherever practical to 
link such parcels.
    (e) Compatible Uses.--Proposers shall be encouraged to submit 
proposals compatible with--
            (1) existing uses, including livestock grazing, mining, and 
        forest activities;
            (2) scientific activities, including aircraft research and 
        test flights; and
            (3) other space-related activities.

          TITLE II--PURCHASE OF SPACE TRANSPORTATION SERVICES

SEC. 201. SHORT TITLE.

    This title may be cited as the ``Space Transportation Services 
Purchase Act of 1993''.

SEC. 202. REQUIREMENT TO PROCURE COMMERCIAL LAUNCH SERVICES.

    Section 204 of the Launch Services Purchase Act of 1990 (42 U.S.C. 
2465d) is amended to read as follows:

``SEC. 204. REQUIREMENT TO PROCURE COMMERCIAL LAUNCH SERVICES.

    ``(a) In General.--Except as otherwise provided in this section, 
the Federal Government shall purchase launch services from commercial 
providers whenever such services are required in the course of its 
activities.
    ``(b) Exceptions.--The Federal Government shall not be required to 
purchase launch services as provided in subsection (a) if, on a case by 
case basis the Administrator of the National Aeronautics and Space 
Administration (hereafter in this section referred to as the 
`Administrator'), or the Secretary of Defense, as the case may be, 
determines that--
            ``(1) the payload requires the unique capabilities of the 
        space shuttle;
            ``(2) commercial launch services to meet specific mission 
        requirements are not reasonably available or would not be 
        reasonably available when required;
            ``(3) the use of commercial launch services poses an 
        unacceptable risk of loss of a unique scientific opportunity; 
        or
            ``(4) the payload serves national security or foreign 
        policy purposes.
Any determination of such circumstances shall be made by the 
Administrator or the Secretary of Defense and shall not be delegated. 
The Administrator, or the Secretary of Defense, as the case may be, 
shall, within 30 days after such determination, notify the Committee on 
Science, Space, and Technology and the Committee on Armed Services of 
the House of Representatives and the Committee on Commerce, Science, 
and Transportation of the Senate in writing of the determination and 
its rationale.
    ``(c) Federal Government Launch Vehicles.--Launch vehicles shall be 
acquired or owned by the Federal Government only--
            ``(1) as required under circumstances described in 
        subsection (b); or
            ``(2) for conducting research and development on, and 
        testing of, launch technology.
    ``(d) Phase-In Period.--Subsections (a) and (c) shall not apply to 
launch services and launch vehicles for which a purchase contract has 
been signed before the date of enactment of this Act.
    ``(e) Historical Purposes.--This title shall not be interpreted to 
prohibit the Federal Government from acquiring, owning, or maintaining 
launch vehicles solely for historical display purposes.''.

SEC. 203. PURCHASE OF LAUNCH SERVICES.

    Section 205 of the Launch Services Purchase Act of 1990 (42 U.S.C. 
2465e) is amended to read as follows:

``SEC. 205. PURCHASE OF LAUNCH SERVICES.

    ``(a) Competitive Bidding.--(1) Contracts to provide launch 
services to the Federal Government under section 204 shall be awarded 
subject to applicable Federal law requiring full, fair, and open 
competition, consistent with section 2304 of title 10, United States 
Code, and section 311 of the National Aeronautics and Space Act of 
1958.
    ``(2) Submission of cost or pricing data for the purpose of 
supporting a bid or proposal or for the fulfillment of a contract shall 
not be required of the bidders, except in cases where only one credible 
bid meeting minimal technical standards as set forth in the original 
solicitation is received.
    ``(b) Specification Systems.--Reasonable performance 
specifications, rather than Federal civilian or military design or 
construction specifications, shall be used to the maximum extent 
feasible to define requirements for a commercial provider bidding to 
provide launch services. This subsection shall not preclude the Federal 
Government from requiring compliance with applicable safety 
standards.''.

SEC. 204. COMMERCIAL SPACE LAUNCH ACT AMENDMENTS.

    (a) Amendments.--The Commercial Space Launch Act (49 U.S.C. App. 
2601 et seq.) is amended--
            (1) in section 4--
                    (A) by inserting ``from Earth'' after ``if any,'' 
                in paragraph (2);
                    (B) by redesignating paragraphs (9) through (12) as 
                paragraphs (11) through (14), respectively; and
                    (C) by inserting after paragraph (8) the following 
                new paragraphs:
            ``(9) `reenter' and `reentry' mean to return purposefully, 
        or attempt to return, a reentry vehicle and payload, if any, 
        from Earth orbit or outer space to Earth;
            ``(10) `reentry vehicle' means any vehicle designed to 
        return from Earth orbit or outer space to Earth substantially 
        intact;'';
            (2) in section 6(a), by inserting ``, or reenter a reentry 
        vehicle,'' after ``operate a launch site'' each place it 
        appears;
            (3) in section 6(a) (2) and (3), by striking ``section 
        4(11)'' each place it appears and inserting in lieu thereof 
        ``section 4(12)'';
            (4) in section 6(a)(3)(A), by inserting ``or reentry'' 
        after ``such launch or operation'';
            (5) in section 6(a)(3), by inserting ``, or reentry of a 
        reentry vehicle,'' after ``operation of a launch site'' each 
        place it appears;
            (6) in section 6(b)(1)--
                    (A) by striking ``launch license'' and inserting in 
                lieu thereof ``license'';
                    (B) by inserting ``or reenter'' after ``shall not 
                launch'';
                    (C) by inserting ``or reentry'' after ``relate to 
                the launch''; and
                    (D) by inserting ``or reentered'' after ``to be 
                launched'';
            (7) in section 6(b)(2)--
                    (A) by inserting ``or reentry'' after ``prevent the 
                launch'';
                    (B) by striking ``holder of a launch license'' and 
                inserting in lieu thereof ``licensee''; and
                    (C) by inserting ``or reentry'' after ``determines 
                that the launch'';
            (8) in section 6(c)(1), by inserting ``or reentry of a 
        reentry vehicle'' after ``operation of a launch site'';
            (9) in section 7, by striking ``both'' and inserting in 
        lieu thereof ``for reentering one or more reentry vehicles'';
            (10) in sections 8(a), 9(b), 11(a), 11(b), 12(a)(2)(B), and 
        12(b), by inserting ``, or reentry of a reentry vehicle,'' 
        after ``operation of a launch site'' each place it appears;
            (11) in section 8(b), by inserting ``and the reentry of 
        reentry vehicles,'' after ``operation of launch sites,'';
            (12) in section 11(a), by inserting ``or reentry'' after 
        ``launch or operation'';
            (13) in section 12(a)(1), by inserting ``or reentry'' after 
        ``prevent the launch'';
            (14) in section 12(b), by inserting ``or reentry'' after 
        ``prevent the launch'';
            (15) in section 14(a)(1)--
                    (A) by inserting ``or reentry site'' after 
                ``observers at any launch site''; and
                    (B) by inserting ``or reentry vehicle'' after 
                ``assembly of a launch vehicle'';
            (16) in section 15(b)(4)(A)--
                    (A) by inserting ``and reentries'' after ``ensure 
                that the launches'';
                    (B) by inserting ``or reentry date commitment'' 
                after ``launch date commitment'';
                    (C) by inserting ``or reentry'' after ``obtained 
                for a launch'';
                    (D) by inserting ``, reentry sites,'' after 
                ``United States launch sites'';
                    (E) by inserting ``or reentry site'' after ``access 
                to a launch site'';
                    (F) by inserting ``, or services related to a 
                reentry,'' after ``amount for launch services''; and
                    (G) by inserting ``or reentry'' after ``the 
                scheduled launch'';
            (17) in section 15(b)(4)(B), by inserting ``or reentry'' 
        after ``prompt launching'';
            (18) in section 15(c), by inserting ``or reentry'' after 
        ``launch site'';
            (19) in section 16(a)(1) (A) and (B), by inserting ``or 
        reentry'' after ``any particular launch'' each place it 
        appears;
            (20) in section 16(a)(1) (C) and (D), by inserting ``or a 
        reentry'' after ``launch services'' each place it appears;
            (21) in section 16(a)(2), by inserting ``or reentry'' after 
        ``launch services'';
            (22) in section 16(b)(1) and (4) (A) and (B), by inserting 
        ``or reentry'' after ``particular launch'' each place it 
        appears;
            (23) in section 17(b)(2)(A)--
                    (A) by inserting ``reentry site,'' after ``launch 
                site,''; and
                    (B) by inserting ``or reentry vehicle'' after 
                ``site of a launch vehicle'';
            (24) in section 21(a), by inserting ``and reentry'' after 
        ``approval of space launch'';
            (25) in section 21(b)--
                    (A) by inserting ``, reentry vehicle,'' after ``A 
                launch vehicle''; and
                    (B) by inserting ``or reentry'' after ``the 
                launching'';
            (26) in section 21(c)(1)--
                    (A) by striking ``or'' in subparagraph (B);
                    (B) by redesignating subparagraph (C) as 
                subparagraph (D); and
                    (C) by inserting after subparagraph (B) the 
                following new subparagraph:
                    ``(C) reentry of a reentry vehicle, or'';
            (27) in section 21(c)(2), by inserting ``reentry,'' after 
        ``launch,''; and
            (28) in section 22(a)--
                    (A) by striking ``ending after the date of 
                enactment of this Act and before October 1, 1989''; and
                    (B) by inserting ``and reentries'' after ``further 
                commercial launches''.
    (b) Report to Congress.--The Secretary of Transportation shall 
submit to Congress an annual report to accompany the President's budget 
request which reviews the performance of the regulatory activities and 
the effectiveness of the Office of Commercial Space Transportation.

              TITLE III--INTELLECTUAL PROPERTY DISPOSITION

SEC. 301. RESEARCH UNDER CONTRACT WITH FEDERAL GOVERNMENT.

    Any commercial provider making an invention under contract with the 
Federal Government shall have the same rights with respect to such 
invention as would a small business firm under chapter 38 of title 35, 
United States Code.

SEC. 302. COOPERATIVE RESEARCH AND DEVELOPMENT AGREEMENTS.

    Section 12 of the Stevenson-Wydler Technology Innovation Act of 
1980 (15 U.S.C. 3710a) is amended--
            (1) in subsection (a) by striking ``may permit'' and 
        inserting in lieu thereof ``shall permit, under authority of 
        this or any other appropriate Act,''; and
            (2) in subsection (d)(1) by inserting ``intellectual 
        property,'' after ``equipment,'' both places it appears.

        TITLE IV--TAX INCENTIVES FOR COMMERCIAL SPACE ACTIVITIES

SEC. 401. SHORT TITLE.

    This title may be cited as the ``Space Business Incentives Act of 
1993''.

SEC. 402. DEDUCTION FOR PURCHASE OF COMMERCIAL SPACE CENTER STOCK.

    (a) In General.--Part VI of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 (relating to itemized deductions for 
individuals and corporations) is amended by adding at the end thereof 
the following new section:

``SEC. 197. DEDUCTION FOR PURCHASE OF COMMERCIAL SPACE CENTER STOCK.

    ``(a) In General.--At the election of the taxpayer, there shall be 
allowed as a deduction the aggregate amount paid during the taxable 
year for the purchase of Commercial Space Center stock on the original 
issue of such stock by a qualified issuer.
    ``(b) Maximum Deduction.--
            ``(1) In general.--The maximum amount allowed as a 
        deduction under subsection (a) to a taxpayer for the taxable 
        year shall not exceed $100,000.
            ``(2) Controlled groups.--For purposes of paragraph (1), 
        the taxpayer and all persons who are related persons with 
        respect to the taxpayer shall be treated as 1 person, and the 
        $100,000 amount in paragraph (1) shall be allocated among the 
        taxpayer and such persons in proportion to their respective 
        purchases of stock during the taxable year for which the 
        deduction is allowable by this section.
            ``(3) Allocation of deduction where more than $100,000 of 
        stock purchased.--If the amount of stock purchased by any 
        person exceeds the limitation under this subsection with 
        respect to such person, the deduction allowed under this 
        section shall be allocated pro rata among the stock so 
        purchased in accordance with the purchase price per share.
    ``(c) Dispositions of Stock.--
            ``(1) Gain treated as ordinary income.--If any Commercial 
        Space Center stock with respect to which a deduction was 
        allowed under this section is disposed of by the taxpayer, then 
        the lesser of--
                    ``(A) the excess of--
                            ``(i)(I) in the case of a sale or exchange, 
                        the amount realized, or
                            ``(II) in the case of any other 
                        disposition, the fair market value of the 
                        stock, over
                            ``(ii) the adjusted basis of such stock, or
                    ``(B) the amount of the deduction allowed under 
                this section with respect to such stock,
        shall be treated as ordinary income. Such gain shall be 
        recognized notwithstanding any other provision of this 
        subtitle.
            ``(2) Interest charged if disposition within 3 years of 
        purchase.--
                    ``(A) In general.--If any Commercial Space Center 
                stock is disposed of before the end of the 3-year 
                period beginning on the date such stock was purchased 
                by the taxpayer, the tax imposed by this chapter for 
                the taxable year in which such disposition occurs shall 
                be increased by the Commercial Space Center stock 
                recapture amount.
                    ``(B) Commercial space center stock recapture 
                amount.--For purposes of subparagraph (A), the term 
                `Commercial Space Center stock recapture amount' means 
                an amount equal to the amount of interest (determined 
                at the underpayment rate applicable under section 6621) 
                which would accrue--
                            ``(i) during the period beginning on the 
                        date such stock was purchased by the taxpayer 
                        and ending on the date such stock was disposed 
                        of by the taxpayer,
                            ``(ii) on the aggregate decrease in tax of 
                        the taxpayer resulting from the deduction 
                        allowed under this section with respect to the 
                        stock so disposed of.
    ``(d) Treatment Where Issuer Ceases to be Qualified.--
            ``(1) In general.--If--
                    ``(A) any qualified issuer with respect to the 
                stock of which any taxpayer has made an election under 
                this section ceases to meet the requirements of 
                subsection (e)(2)(A), and
                    ``(B) such cessation occurs at any time before the 
                close of the 5th taxable year ending after the date 
                such stock was issued,
        the tax treatment described in paragraph (2) shall apply to the 
        taxable year of the taxpayer in which such cessation occurs.
            ``(2) Tax treatment of taxpayer.--The tax treatment 
        described in this paragraph for any taxable year is--
                    ``(A) the taxpayer shall include in income as 
                ordinary income the amount of the deduction allowed 
                under this section with respect to such stock,
                    ``(B) the tax imposed by this chapter for such 
                taxable year shall be increased by an amount equal to 
                the amount of interest (determined at the underpayment 
                rate applicable under section 6621) which would 
                accrue--
                            ``(i) during the period beginning on the 
                        date such stock was purchased by the taxpayer 
                        and ending on the disqualification date,
                            ``(ii) on the aggregate decrease in tax of 
                        the taxpayer resulting from the deduction 
                        allowed under this section with respect to the 
                        stock.
            ``(3) Disqualification date.--For purposes of paragraph 
        (2), the term `disqualification date' means the last day of the 
        taxable year of the qualified issuer in which the requirements 
        of subsection (e)(2)(A) ceased to be met.
            ``(4) Exception for small investors.--In the case of an 
        individual, paragraph (1) shall not apply if, on the 
        disqualification date with respect to any qualified issuer, the 
        aggregate of the deductions allowed to the taxpayer under this 
        section with respect to stock issued by such issuer does not 
        exceed $5,000 ($10,000 in the case of a joint return).
    ``(e) Definitions.--For purposes of this section--
            ``(1) Commercial space center stock.--The term `Commercial 
        Space Center stock' means common stock issued by a qualified 
        issuer but only if the proceeds of such issue are used by such 
        issuer to establish or operate a Commercial Space Center.
            ``(2) Qualified issuer.--The term `qualified issuer' means 
        any corporation which, at the time of issuance of the stock 
        involved is conducting a business at least 75 percent of the 
        gross receipts of which for the taxable year are attributable 
        to--
                    ``(A) operations within a Commercial Space Center, 
                or
                    ``(B) the establishment or operation of a 
                Commercial Space Center,
        in the active conduct of a trade or business.
            ``(3) Related person.--A person is a related person to 
        another person if--
                    ``(A) such persons are treated as a single employer 
                under subsections (a) and (b) of section 52, or
                    ``(B) in the case of individuals, such persons are 
                husband and wife.
    ``(f) Special Rules.--
            ``(1) Amount paid after close of taxable year.--An amount 
        paid after the close of the taxable year for the purchase of 
        Commercial Space Center stock shall be treated for purposes of 
        subsection (a) as paid during such year if--
                    ``(A) such amount is so paid not later than the 
                time prescribed by law for filing the return for such 
                taxable year (including extensions thereof), and
                    ``(B) the taxpayer was under a binding contract as 
                of the close of such taxable year to purchase such 
                stock.
            ``(2) Limitation on amount of deduction.--If--
                    ``(A) any Commercial Space Center stock is issued 
                in exchange for property,
                    ``(B) the basis of such stock in the hands of the 
                taxpayer is determined by reference to the basis of 
                such property, and
                    ``(C) the adjusted basis (for determining gain) of 
                such property immediately before the exchange exceeded 
                its fair market value at such time,
        then the deduction under this section, and such adjusted basis, 
        shall both be reduced by the excess described in subparagraph 
        (C).
    ``(g) Basis Adjustment.--For purposes of this subtitle, if a 
deduction is allowed under this section with respect to the purchase of 
any stock, the basis of such stock (without regard to this subsection) 
shall be reduced by the amount of the deduction allowed with respect to 
the purchase of such stock.
    ``(h) Application of Section.--This section shall apply only to 
stock acquired after December 31, 1992, and before January 1, 2008.''
    (b) Technical Amendment.--Subsection (a) of section 1016 of such 
Code (relating to adjustments to basis) is amended by striking out 
``and'' at the end of paragraph (23), by striking out the period at the 
end of paragraph (24) and inserting in lieu thereof ``, and'', and by 
adding at the end thereof the following new paragraph:
            ``(25) to the extent provided in section 197(g), in the 
        case of stock with respect to which a deduction was allowed 
        under section 197.''
    (c) Clerical Amendment.--The table of sections for part VI of 
subchapter B of chapter 1 of such Code is amended by adding at the end 
thereof the following new item:

                              ``Sec. 197. Deduction for purchase of 
                                        Commercial Space Center 
                                        stock.''
    (d) Effective Date.--The amendments made by this section shall 
apply to stock purchased after December 31, 1992.

SEC. 403. EXCLUSION OF GAIN ON SALE OF STOCK OF CORPORATION 
              SUBSTANTIALLY ENGAGED IN SPACE-RELATED ACTIVITIES.

    (a) In General.--Part III of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 (relating to items specifically excluded 
from gross income) is amended by redesignating section 137 as section 
138 and by inserting after section 136 the following new section:

``SEC. 137. GAIN ON SPACE CORPORATION STOCK.

    ``(a) General Rule.--Gross income shall not include gain on the 
sale or exchange of space corporation stock.
    ``(b) Limitations.--
            ``(1) Maximum dollar amount.--
                    ``(A) In general.--The maximum amount excluded 
                under subsection (a) to a taxpayer for the taxable year 
                shall not exceed $100,000.
                    ``(B) Controlled groups.--For purposes of 
                subparagraph (A), the taxpayer and all persons who are 
                related persons (as defined in section 197(c)(3)) with 
                respect to the taxpayer shall be treated as 1 person, 
                and the $100,000 amount in subparagraph (A) shall be 
                allocated among the taxpayer and such persons in 
                proportion to their respective sales and exchanges of 
                stock during the calendar year in which the taxable 
                year of the taxpayer begins.
            ``(2) Excluded gain must be long-term capital gain.--
        Subsection (a) shall not apply to any gain other than long-term 
        capital gain.
    ``(c) Space Corporation Stock.--
            ``(1) In general.--The term `space corporation stock' means 
        common stock acquired by the taxpayer on its original issue by 
        a space corporation.
            ``(2) Space corporation.--The term `space corporation' 
        means any corporation which, during each of its 3 taxable years 
        ending before the date of the sale or exchange by the taxpayer, 
        derived at least 75 percent of its gross receipts of from the 
        active conduct of a trade or business involving the providing 
        of space-related products or services. For purposes of the 
        preceding sentence, gross receipts attributable to operations 
        within a Commercial Space Center, or to the establishment or 
        operation of a Commercial Space Center, shall not be taken into 
        account.
    ``(d) Application of Section.--This section shall apply only to 
stock acquired after December 31, 1992, and before January 1, 2008.''
    (b) Clerical Amendment.--The table of sections for such part III is 
amended by striking the last item and inserting the following new item:

                              ``Sec. 137. Gain on space corporation 
                                        stock.''
    (c) Effective Date.--The amendments made by this section shall 
apply to stock purchased after December 31, 1992.

SEC. 404. TREATMENT OF BONDS TO FINANCE SPACE LAUNCH AND LAUNCH SUPPORT 
              FACILITIES.

    (a) In General.--Subsection (a) of section 142 of the Internal 
Revenue Code of 1986 (defining exempt facility bond) is amended by 
striking ``or'' at the end of paragraph (10), by striking the period at 
the end of paragraph (11) and inserting ``, or'', and by adding at the 
end thereof the following:
            ``(12) space launch and launch support facilities.
Paragraph (12) shall not apply to any bond issued after December 31, 
2007.''
    (b) Space Launch and Launch Support Facilities.--Section 142 of 
such Code is amended by adding at the end thereof the following new 
subsection:
    ``(j) Space Launch and Launch Support Facilities.--For purposes of 
subsection (a)(12), the term `space launch and launch support 
facilities' means--
            ``(1) all facilities, equipment, and real property used to 
        prepare space transportation vehicles and their payloads for 
        transportation to, from, or within outer space, or in 
        suborbital trajectory or to launch such vehicles, and
            ``(2) all facilities, equipment, and real property used to 
        conduct research and development, manufacture, process, and 
        service space transportation vehicles and their payloads.
For purposes of the preceding sentence, the terms `space transportation 
vehicles' and `payloads' have the respective meanings given such terms 
by section 3 of the Omnibus Space Commercialization Act of 1993.''
    (c) Exception From Volume Cap.--Paragraph (3) of section 146(g) of 
such Code is amended by striking ``or (2)'' and inserting ``, (2), or 
(12)'' and by inserting ``and space launch and launch support 
facilities'' after ``wharves''.
    (d) Certain Additional Requirements Not To Apply to Space Launch 
and Launch Support Facilities Bonds.--
            (1) Subsection (h) of section 147 of such Code is amended 
        by adding at the end thereof the following new paragraph:
            ``(3) Space launch and launch support facilities bonds.--
        Subsections (a), (b), (c), and (d) shall not apply to any 
        exempt facility bond described in section 142(a)(12).''
            (2) The heading for subsection (h) of section 147 of such 
        Code is amended by striking ``and Qualified 501(c)(3) Bonds'' 
        and inserting ``Qualified 501(c)(3) Bonds, and Space Launch and 
        Launch Support Facilities Bonds''.
    (e) Federal Guaranteed Space Launch and Launch Support Facilities 
Bonds Permitted.--Paragraph (3) of section 149(b) of such Code is 
amended by adding at the end thereof the following new subparagraph:
                    ``(E) Exception for space launch and launch support 
                facilities bonds.--Paragraph (1) shall not apply to any 
                exempt facility bond described in section 142(a)(12) in 
                situations where the guarantee of the United States (or 
                any agency or instrumentality thereof) is the result of 
                payment of rent, user fees, or other charges by the 
                United States (or any agency or instrumentality 
                thereof) for the use of a facility financed with such a 
                bond.''
    (f) Exception From Advance Refunding Rules.--Paragraph (2) of 
section 149(d) of such Code is amended by striking ``bond).'' and 
inserting ``bond or any exempt facility bond described in section 
142(a)(12)).''
    (g) Effective Date.--The amendments made by this section shall 
apply to obligations issued after the date of the enactment of this 
Act.

SEC. 405. SPACE MANUFACTURING INCENTIVE.

    (a) In General.--Part III of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 (relating to items specifically excluded 
from gross income) is amended by inserting after section 137 the 
following new section:

``SEC. 138. SPACE MANUFACTURING INCOME.

    ``(a) General Rule.--Gross income shall not include space 
manufacturing income.
    ``(b) Space Manufacturing Income.--For purposes of this section, 
the term `space manufacturing income' means--
            ``(1) income derived from the commercial sale of any 
        product which is manufactured in outer space and returned to 
        Earth, and
            ``(2) income of an individual attributable to services 
        performed in outer space by such individual in a commercial 
        space activity.
    ``(c) Exclusion From Tariffs, Etc.--Any product which is 
manufactured in outer space and returned to Earth shall be exempt from 
all Federal excises, imposts, and duties and any other Federal tariffs.
    ``(d) Phaseout of Benefits.--In the case of a taxable year 
beginning after December 31, 2022, the amount excluded under subsection 
(a) shall be reduced (but not below zero) by x/20th's of the amount 
excludable without regard to this subsection, where `x' is the number 
of years such taxable year is after the last taxable year beginning 
before January 1, 2023. A similar rule shall apply to the benefits 
under subsection (c).''
    (b) Clerical Amendment.--The table of sections for such part III is 
amended by adding at the end the following new items:

                              ``Sec. 138. Space manufacturing income.
                              ``Sec. 139. Cross references to other 
                                        Acts.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1992.

SEC. 406. STATE TAX BENEFITS FOR COMMERCIAL SPACE ACTIVITIES TO BE 
              ENCOURAGED.

    The President shall encourage State and local governments to offer 
tax and other incentives to encourage commercial space activities.

                         TITLE V--MISCELLANEOUS

SEC. 501. ANTITRUST EXEMPTIONS.

    (a) Standing To Conduct Certain Litigation.--Notwithstanding 
sections 4 and 4C of the Clayton Act (15 U.S.C. 15 and 15C) and section 
4 (a) and (b) of the National Cooperative Research Act of 1984 (15 
U.S.C. 4303 (a) and (b)), standing to conduct litigation arising from 
causes of action under such Acts arising out of activities carried out 
under this Act is reserved to the Department of Justice under the 
direction of the Attorney General and the Federal Trade Commission.
    (b) Limitation on Relief.--Notwithstanding section 4(a) of the 
Clayton Act (15 U.S.C. 15(a)) and section 4 of the National Cooperative 
Research Act of 1984 (15 U.S.C. 4303), and in lieu of the relief 
specified in such sections, the sole relief available to the United 
States acting on its own behalf or on the behalf of any State or 
persons, in causes of action under such Acts arising out of activities 
carried out under this Act, shall be injunctive relief.

SEC. 502. EVIDENCE.

    In any action against a commercial provider arising in connection 
with activities carried out under this Act, evidence of the failure of 
such commercial provider to follow military specifications or National 
Aeronautics and Space Administration specifications shall not, in and 
of itself, constitute proof of negligence on the part of a commercial 
provider, except where such specifications are specifically required by 
contract or in cases concerning emergency flight termination (range 
safety) equipment when flights are made from launch sites owned by the 
Federal Government.

SEC. 503. REPORT ON LAWS THAT AFFECT SPACE COMMERCIALIZATION.

    Within one year after the date of enactment of this Act, the 
Director of the National Space Council, in cooperation with the 
Director of the Office of Space Commerce, shall report to the Committee 
on Science, Space, and Technology of the House of Representatives and 
the Committee on Commerce, Science, and Transportation of the Senate on 
the status of laws and treaties in the United States and 
internationally that affect the ability of the United States to 
commercially exploit space. Such report shall include recommendations 
for any changes to such laws or treaties that may be desirable.

SEC. 504. OFFICE OF SPACE COMMERCE.

    (a) Establishment.--There is established within the Department of 
Commerce an Office of Space Commerce.
    (b) Functions.--The Office of Space Commerce shall be the principal 
unit for the coordination of space-related issues, programs, and 
initiatives within the Department of Commerce. The Office's primary 
responsibilities shall include--
            (1) promoting private sector investment in space activities 
        by collecting, analyzing, and disseminating information on 
        space markets, and conducting workshops and seminars to 
        increase awareness of commercial space opportunities;
            (2) assisting commercial space companies in their efforts 
        to do business with the United States Government, and acting as 
        an industry advocate within the executive branch to ensure that 
        the Federal Government meets its space-related requirement, to 
        the fullest extent feasible, with commercially available space 
        goods and services;
            (3) ensuring that the United States Government does not 
        compete with the private sector in the provision of space 
        hardware and services otherwise available from the private 
        sector;
            (4) promoting the export of space-related goods and 
        services;
            (5) representing the Department of Commerce in the 
        development of United States policies and in negotiations with 
        foreign countries to ensure free and fair trade internationally 
        in the area of space commerce;
            (6) seeking the removal of legal, policy, and institutional 
        impediments to space commerce; and
            (7) licensing private sector parties to operate private 
        remote sensing space systems and supporting the private 
        sector's role in the commercial development of Landsat remote 
        sensing data distribution.

SEC. 505. SPACE-RELATED RESEARCH.

    (a) Required Reports.--Each Federal agency or department covered by 
this section shall, within 1 year after the appropriation of the amount 
that brings the agency or department under the coverage of this 
section, submit a report to Congress containing a plan for activities 
to support space-related research appropriate to the mission of such 
agency or department. Once every 2 years after the submission of such 
report, the agency or department shall report to Congress on progress 
made in implementing such plan, together with suggestions for any 
policy or legislative changes necessary to enhance the agency's or 
department's ability to implement that plan.
    (b) Coverage.--A Federal agency or department shall be covered by 
this section if it has an annual research and development budget, for a 
fiscal year ending after the date of enactment of this Act, greater 
than $100,000,000.

SEC. 506. COMMERCIAL ADVERTISING.

    To the extent that safety is not compromised, the United States 
shall accommodate commercial advertising--
            (1) by its contractors or their assigns providing space 
        transportation vehicles, space infrastructure, payloads, or 
        space launch or launch support facilities; or
            (2) by persons who are engaged in activities which reuse or 
        recycle space transportation vehicles, space infrastructure, 
        payloads, or space launch or launch support facilities.

SEC. 507. PURCHASE OF SPACE SCIENCE DATA.

    (a) In General.--To the maximum extent possible, the National 
Aeronautics and Space Administration shall purchase from the private 
sector space science data. Examples of such data include scientific 
data concerning the elemental and mineralogical resources of the moon 
and the planets, Earth environmental data obtained through remote 
sensing observations, and solar storm monitoring.
    (b) Competitive Bidding.--(1) Contracts for the purchase of space 
science data shall be awarded in a process of full, fair, and open 
competitive bidding among United States persons.
    (2) Submission of cost data either for the purposes of supporting 
the bid or for the fulfillment of the contract shall not be required of 
bidders.
    (3) Conformance with military specifications (Milspec) or National 
Aeronautics and Space Administration specification systems with respect 
to the design, construction, or operation of equipment used in 
obtaining space science data for the Federal Government shall not be a 
requirement for a commercial provider bidding to provide such services.
    (4) Contracts under this section shall not provide for the Federal 
Government to obtain ownership of data not specifically sought by the 
Federal Government.

SEC. 508. PROCUREMENT.

    (a) Procurement Demonstration Program.--
            (1) In general.--The Administrator shall establish within 
        the Office of Advanced Concepts and Technology a program of 
        expedited technology procurement for the purpose of 
        demonstrating how innovative technology concepts can rapidly be 
        brought to bear upon space missions of the National Aeronautics 
        and Space Administration.
            (2) Procedures and evaluation.--The Administrator shall 
        establish procedures for actively seeking from nongovernment 
        persons innovative technology concepts relating to the 
        provision of space hardware, technology, or services to the 
        National Aeronautics and Space Administration, and for the 
        evaluation of such concepts by the National Aeronautics and 
        Space Administration's Advisory Council against mission 
        requirements.
            (3) Requirement.--At least 10 percent of amounts authorized 
        to be appropriated for Commercial Programs, Research and 
        Development, for each fiscal year shall be used for innovative 
        technology procurements that are determined under paragraph (2) 
        to meet mission requirements.
            (4) Special authority.--Notwithstanding any other provision 
        of Federal law or regulation, in order to carry out this 
        subsection the Administrator shall recruit and hire for limited 
        term appointments persons from the nongovernmental sector with 
        special expertise and experience related to the innovative 
        technology concepts with respect to which procurements are made 
        under this subsection. Further, in carrying out this subsection 
        the Administrator may waive--
                    (A) Federal Acquisition Regulations;
                    (B) Military Specifications; and
                    (C) cost data requirements.
    (b) Report.--The Office of Space Commerce shall, within 6 months 
after the date of enactment of this Act, submit a report to the 
President and the Congress containing recommendations for procuring 
space infrastructure, space launch and launch support facilities, and 
payloads using proof of concept methods and unsolicited proposals. In 
preparing such report, the Office of Space Commerce shall consult with 
appropriate persons in the private sector.

SEC. 509. LAND REMOTE SENSING POLICY ACT OF 1992 AMENDMENTS.

    Section 105(a) of the Land Remote Sensing Policy Act of 1992 is 
amended--
            (1) by striking paragraphs (1), (3), and (4);
            (2) by redesignating paragraphs (2), (5), and (6) as 
        paragraphs (3), (4), and (7), respectively;
            (3) by inserting before paragraph (3), as so redesignated, 
        the following new paragraphs:
            ``(1) define the roles and responsibilities of various 
        public and private sector entities that would be involved in 
        the acquisition, processing, distribution, and archiving of 
        Landsat 7 data and in the operations of the Landsat 7 
        spacecraft;
            ``(2) ensure that unenhanced data shall be provided to the 
        United States Government and its affiliated users at the cost 
        of fulfilling user requests, and that such data may be 
        reproduced and disseminated to other Federal agencies and 
        affiliated users, on the condition that such unenhanced data is 
        used solely for noncommercial purposes;'';
            (4) in paragraph (4), as so redesignated by paragraph (2) 
        of this section, by striking ``and'' at the end; and
            (5) by inserting after such paragraph (4) the following new 
        paragraphs:
            ``(5) ensure that instructional data sets, selected from 
        the Landsat data archives, shall be made available to 
        educational institutions exclusively for noncommercial, 
        educational purposes at the cost of fulfilling user requests;
            ``(6) ensure that the proposed data distribution system 
        contributes to the goal of the commercialization of land remote 
        sensing; and''.

SEC. 510. LAND REMOTE SENSING FOR AGRICULTURAL MANAGEMENT.

    (a) Findings.--The Congress finds that--
            (1) the use of land remote sensing data is potentially a 
        valuable resource to the agricultural community;
            (2) land remote sensing data can inform the agricultural 
        community as to the condition of crops and the land which 
        sustains those crops;
            (3) land remote sensing data can be useful for farmers 
        engaged in prescription farming;
            (4) land remote sensing data on agricultural conditions can 
        be valuable, when received on a timely basis; and
            (5) the National Aeronautics and Space Administration, 
        using the expertise of the Earth Observations Commercialization 
        Applications Program, and the Department of Agriculture should 
        work in tandem to aid farmers to obtain data which would be 
        conducive to sound agricultural management and greater crop 
        yields.
    (b) Definitions.--For the purposes of this section--
            (1) the term ``Administrator'' means the Administrator of 
        the National Aeronautics and Space Administration;
            (2) the term ``prescription farming'' means a method by 
        which farmers can regulate the application rates of pesticides, 
        nutrients, and water, among other inputs, to farmlands in the 
        exact amount necessary to maximize crop yield, without harming 
        the environment; and
            (3) the term ``data voucher'' means a grant to enable 
        farmers to purchase land remote sensing information from 
        commercial entities.
    (c) Data Vouchers.--The Secretary of Agriculture and the 
Administrator shall jointly develop a mechanism to provide farmers with 
data vouchers. Data vouchers shall be distributed to farmers through 
the Agricultural Extension Service, which shall contract with 
commercial entities to provide farmers engaged in prescription farming 
with timely data on crop conditions, fertilization and irrigation 
needs, pest infiltration, and soil conditions.
    (d) Training.--The Secretary of Agriculture and the Administrator 
shall jointly establish a program to train farmers in the use and 
interpretation of land remote sensing data for prescription farming.
    (e) Authorization.--Funds necessary for carrying out this section 
shall be derived from funds otherwise authorized for the Agricultural 
Extension Service.
    (f) Sunset.--The provisions of this section shall expire 5 years 
after the date of enactment of this Act.

SEC. 511. SUNSET.

    Sections 102(b), 501, 502, 503, and 505 shall expire 15 years after 
the date of enactment of this Act.

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