[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4676 Introduced in House (IH)]







106th CONGRESS
  2d Session
                                H. R. 4676

  To amend the Internal Revenue Code of 1986 to encourage the timely 
  development of a more cost effective United States commercial space 
            transportation industry, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 15, 2000

   Mr. Cook 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 encourage the timely 
  development of a more cost effective United States commercial space 
            transportation industry, 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; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Space 
Transportation Investment Act of 2000''.
    (b) Table of Contents.--

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Purposes.
Sec. 4. Definitions.
Sec. 5. Credit for purchase of space transportation vehicle provider 
                            stock.
Sec. 6. United States commercial space transportation vehicle 
                            certification.

SEC. 2. FINDINGS.

    The Congress hereby finds that:
            (1) The United States commercial space transportation 
        industry is an essential part of the national economy and 
        opportunities for United States commercial providers are 
        growing as international markets expand.
            (2) The development of the United States commercial space 
        transportation industry is consistent with the national 
        security interests and foreign policy interests of the United 
        States.
            (3) United States trading partners have been able to lower 
        their commercial space transportation prices aggressively 
        either through direct cash payments for commercially targeted 
        product development or with indirect benefits derived from 
        nonmarket economy status.
            (4) Because United States incentives for space 
        transportation development have historically focused on civil 
        and military rather than commercial use, United States space 
        transportation costs have remained comparatively high, and 
        United States space transportation technology has not been 
        commercially focused.
            (5) As a result, the United States share of the world 
        commercial market for space transportation has decreased from 
        nearly 100 percent 20 years ago to approximately 47 percent in 
        1998.
            (6) In order to avoid undue reliance on foreign space 
        transportation services, the United States must strive to have 
        sufficient domestic capacity as well as the highest quality and 
        the lowest cost per service provided.
            (7) A successful high quality, lower cost United States 
        commercial space transportation industry should also lead to 
        substantial United States taxpayer savings through collateral 
        lower United States Government costs for its space access 
        requirements.
            (8) Opening the space frontier to the American people must 
        be a high priority of the United States Government as we begin 
        the 21st century.
            (9) Opening this frontier and maintaining United States 
        leadership in the world market does not require another massive 
        Government program, but rather provision of just enough 
        Government support on an incremental and timely basis to enable 
        the more cost effective United States private sector to build 
        lower cost space transportation vehicles.
            (10) Private sector companies across the United States are 
        already attempting to develop a variety of lower cost space 
        transportation vehicles, but lack of sufficient private 
        financing, particularly in the early stages of development, has 
        proven to be a major obstacle, an obstacle our trading partners 
        have removed by providing direct access to Government funding.
            (11) Given the strengths and creativity of private industry 
        in the United States, a more effective alternative to the 
        approach of our trading partners is for the United States 
        Government to provide limited incentives industry wide to help 
        qualifying United States private sector companies obtain 
        otherwise unavailable private equity financing for the critical 
        development stages of a project, while at the same time keeping 
        Government involvement at a minimum.

SEC. 3. PURPOSES.

    The purposes of this Act are--
            (1) to ensure availability of otherwise unavailable private 
        sector equity financing for United States private sector 
        development of commercial space transportation vehicles which 
will have transportation costs significantly below current levels; and
            (2) as a result--
                    (A) to avoid undue reliance on foreign space 
                transportation services;
                    (B) to reduce substantially United States 
                Government space transportation expenditures;
                    (C) to increase the international competitiveness 
                of the United States space industry;
                    (D) to encourage the growth of space-related 
                commerce in the United States and internationally; and
                    (E) to open the space frontier to the American 
                people.

SEC. 4. DEFINITIONS.

    In this Act:
            (1) Secretary.--The term ``Secretary'' means the Secretary 
        of Transportation.
            (2) Space launch site.--The term ``space launch site'' 
        means a location from which a launch or landing takes place and 
        includes all facilities located on, or components of, a launch 
        or landing site, whether real or personal property, which are 
        necessary to conduct a launch, whether on land, sea, in the 
        Earth's atmosphere, or beyond the Earth's atmosphere.
            (3) Space transportation vehicle.--The term ``space 
        transportation vehicle'' includes all types of vehicles, 
        whether now in existence, developed in the future, or currently 
        under design, development, construction, reconstruction, or 
        reconditioning; constructed in the United States by a United 
        States commercial provider and owned by the commercial 
        provider, 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.
            (4) State.--The term ``State'' means any State in the 
        United States, the District of Columbia, the Commonwealth of 
        Puerto Rico, the Virgin Islands, Guam, American Samoa, the 
        Commonwealth of the Northern Mariana Islands, and any other 
        commonwealth, territory, or possession of the United States.
            (5) United states commercial provider.--The term ``United 
        States commercial provider'' means--
                    (A) a commercial provider organized under the laws 
                of the United States or of a State as a corporation or 
                a Limited Liability Company (LLC), or
                    (B) a subsidiary of a foreign company and the 
                Secretary of Transportation 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, afford 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).
            (6) United states commercial space transportation vehicle 
        provider.--The term ``United States commercial space 
transportation vehicle provider'' means a United States commercial 
provider engaged in designing, developing, producing, or operating 
commercial space transportation vehicles.
            (7) United states commercial space transportation vehicle 
        industry.--The term ``United States commercial space 
        transportation vehicle industry'' means the collection of 
        United States commercial space transportation vehicle 
        providers.
            (8) Space transportation costs significantly below current 
        levels.--The term ``space transportation costs significantly 
        below current levels'' means, for that market segment for 
        which, or in which, the space transportation vehicle is 
        designed, developed, produced, maintained, or operated, the 
        cost of producing, maintaining, and operating the vehicle is 50 
        percent of the 2000 space transportation costs in that market 
        segment as estimated by the Secretary.

SEC. 5. CREDIT FOR PURCHASE OF SPACE TRANSPORTATION VEHICLE PROVIDER 
              STOCK.

    (a) In General.--Part IV of subchapter A of chapter 1 of the 
Internal Revenue Code of 1986 (relating to credits against tax) is 
amended by adding at the end the following new subpart:

                ``Subpart H--Space Transportation Credit

``SEC. 54. CREDIT FOR PURCHASE OF SPACE TRANSPORTATION VEHICLE PROVIDER 
              STOCK.

    ``(a) Allowance of Credit.--
            ``(1) In general.--There shall be allowed as a credit 
        against the tax imposed by this chapter for the taxable year an 
        amount equal to the applicable percentage of the aggregate 
        amount paid during the taxable year for the purchase of 
        qualified space transportation vehicle provider stock.
            ``(2) Applicable percentage.--For purposes of paragraph 
        (1), the applicable percentage is the percentage determined in 
        accordance with the following table:

                ``For taxable years beginning
                                                         The applicable
                  in calendar year--
                                                        percentage is--
                    2001...................................         50 
                    2002...................................         40 
                    2003...................................         30 
                    2004 and 2005..........................         20 
                    2006 through 2010......................         10 
                    2011 and thereafter....................         0. 
    ``(b) Maximum Credit.--The credit allowed under this section with 
respect to the stock of each space transportation vehicle provider 
purchased during a calendar year shall not exceed--
            ``(1) $35,000,000 for 2001,
            ``(2) $40,000,000 for 2002,
            ``(3) $45,000,000 for 2003, and
            ``(4) $50,000,000 for each of 2004 through 2010.
    ``(c) Qualified Space Transportation Vehicle Provider Stock.--For 
purposes of this section--
            ``(1) In general.--The term `qualified space transportation 
        vehicle provider stock' means any common stock in a C 
        corporation or any stock in a State-registered limited 
        liability company (LLC) if--
                    ``(A) as of the date of issuance, such corporation 
                is a qualified space transportation vehicle provider;
                    ``(B) such stock is acquired by the taxpayer at its 
                original issue (directly or through an underwriter) in 
                exchange for money or other property (not including 
                stock); and
                    ``(C) the proceeds of such issue are used by such 
                issuer during the 36-month period beginning on the date 
                of issuance in substantial compliance with the issuer's 
                projected usage submitted to the Secretary of 
                Transportation under section 6 of such Act with its 
                application for certification.
            ``(2) Qualified space transportation vehicle provider.--The 
        term `qualified space transportation vehicle provider' means 
        any United States commercial space transportation vehicle 
        provider (as defined in section 4 of the Space Transportation 
        Investment Act of 2000) which has been certified by the 
        Secretary of Transportation as provided in section 6 of such 
        Act.
    ``(d) Recapture of Credit Where Issuer Ceases To Be Qualified.--If, 
during the 3-year period beginning on the date qualified space 
transportation vehicle provider stock was purchased by the taxpayer, 
the issuer of such stock ceases to meet the requirements of section 6 
of such Act, then notwithstanding any provision of this subtitle, the 
tax credits shall be recaptured and the taxpayer shall add said amount 
to the tax liability of the taxpayer during the taxable year during 
which such cessation occurs.
    ``(e) Application With Other Credits.--The credit allowed under 
subsection (a) for any taxable year shall not exceed the excess of--
            ``(1) the sum of the regular tax liability (as defined in 
        section 26(b)) plus the tax imposed by section 55, over
            ``(2) the sum of the credits allowable under this part 
        (other than subpart C thereof, relating to refundable 
        credits).''
    (b) Clerical Amendment.--The table of subparts for part IV is 
amended by adding at the end the following new item:

                              ``Subpart H. Space transportation 
                                        credit.''

SEC. 6. UNITED STATES COMMERCIAL SPACE TRANSPORTATION VEHICLE 
              CERTIFICATION.

    (a) United States Commercial Space Transportation Vehicle Industry 
Certification Program.--
            (1) Establishment of program.--There shall be a United 
        States Commercial Space Transportation Vehicle Industry 
        certification program to provide certification for tax credit 
        qualification under section 54 of the Internal Revenue Code of 
        1986 to multiple United States commercial space transportation 
        vehicle providers developing vehicles with space transportation 
        costs significantly below current levels.
            (2) Administration of program.--The program shall be 
        carried out by the Secretary of Transportation under a 
        streamlined application process pursuant to the terms of this 
        section and any regulations that may be promulgated hereunder, 
        in consultation with other United States Government officials, 
        and private sector representatives, as necessary, to ensure 
        fair, effective, and timely program administration and 
        streamlined certification.
            (3) Scope of program.--
                    (A) Temporary government support.--The United 
                States Commercial Space Transportation Vehicle Industry 
                Certification program is intended to provide 
                eligibility for tax credits under section 54 of the 
                Internal Revenue Code of 1986 to investors to support 
                financing of qualified commercial space transportation 
                vehicle development ventures during their startup 
                phases.
                    (B) Exclusion of space launch sites.--The program 
                does not provide certification pertaining to the 
                construction, reconstruction, or reconditioning of 
                space launch sites.
                    (C) Exclusion of nonrelated activities.--The 
                program does not provide certification for any 
                corporation which includes in its operations and/or 
                business plan, the construction, reconstruction, 
                reconditioning, sale, or distribution of any product 
                which is not integral to the design, development, 
                construction, reconstruction, or reconditioning of a 
                space transportation vehicle or vehicles as described 
                in subsection (b).
            (4) Nondisclosure of confidential materials.--Materials 
        that are submitted by a United States commercial space 
        transportation vehicle provider to the Secretary in connection 
        with an application submitted under the United States 
        Commercial Space Transportation Vehicle certification program 
        and deemed by the commercial provider to be confidential, and 
        that contain trade secrets or proprietary commercial, 
        financial, or technical information of a kind not customarily 
        disclosed to the public, shall not be disclosed by the 
        Secretary to persons other than Government officers or 
        employees notwithstanding any other provision of law.
            (5) Consultation.--The Secretary shall consult to the 
        extent deemed necessary for effective implementation of the Act 
        with appropriate Federal agencies, congressional, and space 
        transportation industry representatives.
            (6) Program management.--The Secretary shall manage the 
        certification program consistent with the purposes of this Act.
    (b) Authorization of Secretary To Certify Vehicle Providers.--
            (1) In general.--The Secretary shall certify vehicle 
        providers who demonstrate by the submission of technical and 
        financial information that they have a reasonable possibility 
        of developing, operating, or maintaining a space transportation 
        vehicle or vehicles with space transportation costs 
        significantly below current levels. Authorization by the 
        Secretary is deemed granted unless within 120 days of 
        application submission the Secretary determines that the 
        provider has no reasonable possibility of significantly 
        lowering space transportation costs. Once certified, a vehicle 
        provider must submit to the Secretary each year a certified 
        audit opinion letter verifying its use of funds in substantial 
        compliance with its application.
            (2) Consequence of failures.--
                    (A) Failure to submit a certified audit opinion 
                letter verifying substantial compliance with its 
                application will result in decertification of the 
                vehicle provider.
                    (B) Failure to use funds received after 
                certification for the development of a space 
                transportation vehicle or vehicles with the goal to 
                reduce space transportation costs significantly below 
                current levels will result in decertification.
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