[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3898 Introduced in House (IH)]







106th CONGRESS
  2d Session
                                H. R. 3898

  To amend the Internal Revenue Code of 1986 to exclude from Federal 
 taxation certain income derived from the manufacture of products and 
                 provision of services in outer space.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 9, 2000

Mr. Rohrabacher (for himself, Mr. Sensenbrenner, Mr. Hall of Texas, Mr. 
 Gordon, Mr. Weldon of Florida, Mr. Calvert, Mr. Bartlett of Maryland, 
    Mr. Lucas of Oklahoma, Mr. Cook, and Ms. Jackson-Lee of Texas) 
 introduced the following bill; which was referred to the Committee on 
                             Ways and Means

_______________________________________________________________________

                                 A BILL


 
  To amend the Internal Revenue Code of 1986 to exclude from Federal 
 taxation certain income derived from the manufacture of products and 
                 provision of services in outer space.

    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 ``Zero Gravity, Zero Tax Act of 
2000''.

SEC. 2. SPACE-RELATED INCOME.

    (a) Exclusion From Gross Income.--
            (1) 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 139 as section 140 and inserting after 
        section 138 the following new section:

``SEC. 139. SPACE-RELATED INCOME.

    ``(a) General Rule.--Gross income shall not include space-related 
income.
    ``(b) Space-Related Income.--
            ``(1) In general.--For purposes of this section, the term 
        `space-related income' means--
                    ``(A) income derived from the sale by the taxpayer 
                to an unrelated person of--
                            ``(i) any product which is manufactured by 
                        the taxpayer in outer space, and
                            ``(ii) any service provided by the taxpayer 
                        in or from outer space, and
                    ``(B) income of an individual attributable to 
                services performed in or from outer space by such 
                individual in a trade or business.
            ``(2) Exception for telecommunications services, etc.--
        Paragraph (1)(A)(ii) shall not apply to any telecommunications 
        service, any service provided by a weather or other earth 
        observation satellite, and any service of transporting property 
        to or from outer space.
    ``(c) Exclusion From Tariffs, Etc.--Any product--
            ``(1) which is manufactured in outer space, and
            ``(2) which was--
                    ``(A) launched from, and returned to Earth, within 
                the United States, or
                    ``(B) manufactured at a facility in outer space 
                which is owned by 1 or more United States persons,
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, 2025, 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, 2026. A similar rule shall apply to the benefits 
under subsection (c).''
            (2) Clerical amendment.--The table of sections for part III 
        of such Code is amended by striking the last item and inserting 
        the following new items:

                              ``Sec. 139. Space-related income.
                              ``Sec. 140. Cross references to other 
                                        Acts.''
    (b) Capital Gains Exclusion.--
            (1) In general.--Part I of subchapter P of such Code 
        (relating to treatment of capital gains) is amended by adding 
        at the end the following new section:

``SEC. 1203. EXCLUSION FOR GAINS OF QUALIFIED SPACE CORPORATIONS.

    ``(a) In General.--Gross income shall not include gain on the sale 
or exchange of any stock of a qualified space corporation.
    ``(b) Qualified Space Corporation.--For purposes of subsection (a), 
the term `qualified space corporation' means, with respect to any 
taxable year, a domestic corporation which is a C corporation if--
            ``(1) such corporation is organized exclusively for 
        providing to unrelated persons--
                    ``(A) any product which is manufactured by the 
                corporation in outer space, or
                    ``(B) any service provided by the corporation in or 
                from outer space, and
            ``(2) such corporation derives at least 90 percent of its 
        gross receipts from the active conduct of a trade or business 
        of providing a product or service described in paragraph (1).
Such term shall not include a corporation providing a service or 
product described in section 139(b)(2).''.
            (2) Clerical amendment.--The table of sections for part I 
        of subchapter P of such Code is amended by adding at the end 
        the following new item:

                              ``Sec. 1203. Exclusion for gains of 
                                        qualified space 
                                        corporations.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1999.
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