[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 469 Introduced in Senate (IS)]







106th CONGRESS
  1st Session
                                 S. 469

  To encourage the timely development of a more cost effective United 
    States commercial space transportation industry, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           February 25, 1999

  Mr. Breaux (for himself, Mr. Burns, and Mr. Baucus) introduced the 
 following bill; which was read twice and referred to the Committee on 
                 Commerce, Science, and Transportation

_______________________________________________________________________

                                 A BILL


 
  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 ``Commercial Space 
Transportation Cost Reduction Act''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Purposes.
Sec. 4. Definitions.
 TITLE I--INCREASING THE AVAILABILITY OF PRIVATE SECTOR FINANCING FOR 
 THE UNITED STATES COMMERCIAL SPACE TRANSPORTATION INDUSTRY THROUGH A 
                         LOAN GUARANTEE PROGRAM

Sec. 101. United States Commercial Space Transportation Vehicle 
                            Industry Program.
Sec. 102. Functions of the Secretary of the Department of 
                            Transportation.
Sec. 103. Space Transportation Loan Guarantee Fund.
Sec. 104. Authorization of Secretary to Guarantee Obligations
Sec. 105. Eligibility for Guarantee
Sec. 106. Defaults

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) The United States commercial space transportation 
        vehicle industry is an essential part of the national economy 
        and opportunities for U.S. commercial providers are growing as 
        international markets expand.
            (2) The development of the U.S. commercial space 
        transportation vehicle 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 vehicle development have historically focused on 
        civil and military rather than commercial use, U.S. launch 
        costs have remained comparatively high, and U.S. launch 
        technology has not been commercially focused.
            (5) As a result, the U.S. share of the world commercial 
        market has decreased from nearly 100% twenty years ago to 
        approximately 47% in 1998.
            (6) In order to avoid undue reliance on foreign space 
        transportation services, the U.S. 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 U.S. commercial 
        space transportation industry should also lead to substantial 
        U.S. taxpayer savings through collateral lower U.S. government 
        costs for its space access requirements.
            (8) The key to maintaining United States leadership in the 
        world market is not another massive government program, but 
        rather provision of just enough government support on an 
        incremental and timely basis to enable the more cost effective 
        U.S. private sector to build lower-cost space transportation 
        vehicles.
            (9) 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.
            (10) 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 U.S. government to 
        provide limited incentives, including loan guarantees which 
        would help qualifying U.S. private-sector companies secure 
        otherwise unavailable private ``bridge'' financing for the 
        critical developmental stages of the project, while at the same 
        time keeping government involvement at a minimum.

SEC. 3. PURPOSES.

    Therefore the purposes of this Act are--
            (1) to ensure availability of otherwise unavailable private 
        sector ``bridge'' financing for U.S. private sector development 
        of commercial space transportation vehicles with launch costs 
        significantly below current levels;
            (2) and, 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 increase the number of high-value jobs in 
                United States space-related industries. .

SEC. 4. DEFINITIONS.

    In this Act:
            (1) Total capital requirement.--The term ``total capital 
        requirement'' of a United States commercial space 
        transportation provider means the aggregate, as determined by 
        the Secretary, of all Cash Requirements paid or to be paid by 
        or on the account of the Obligor prior to the achievement by 
        the Obligor of positive cash flow generation. For the purposes 
        of this definition, the term ``Cash Requirements'' shall 
        include all cash expended or invested by the Obligor (including 
        but not limited to design, development, testing and evaluation 
        (DDT&E)), construction, reconstruction, reconditioning, placing 
        into operation, working capital, interest expense and initial 
        operating and marketing expenses in connection with space 
        transportation prior to the achievement of positive cash flow 
        generation from ongoing operations.
            (2) Loan.--The term ``loan'' means an obligation.
            (3) Obligee.--The term ``obligee'' means the holder of an 
        obligation.
            (4) Obligor.--The term ``obligor'' means any party 
        primarily liable for payment of the principal of or interest on 
        any obligation.
            (5) Obligation.--The term ``obligation'' means any note, 
        bond, debenture, or other evidence of indebtedness issued for 
        one of the purposes specified in section 105(a) of this Act.
            (6) Secretary.--The term ``Secretary'' means the Secretary 
        of the United States Department of Transportation.
            (7) 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 which are necessary to conduct a launch, 
        whether on land, sea, in the earth's atmosphere, or beyond the 
        earth's atmosphere.
            (8) Space transportation vehicle.--The term ``space 
        transportation vehicle'' includes all types of vehicles, 
        whether in existence or under design, development, 
        construction, reconstruction or reconditioning; constructed in 
        the United States by United States commercial space 
        transportation vehicle providers as defined below and owned by 
        those commercial providers, 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) State.--The term ``State'' means each of the several 
        States of the Union, 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.
            (10) United states commercial provider.--The term ``United 
        States commercial provider'' means a commercial provider, 
        organized under the laws of the United States or of a State, 
        which is--
                    (A) more than 50 percent owned by United States 
                nationals; 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, 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).
            (11) Small business.--For the purposes of this Act, a 
        ``small business'' is a commercial provider as defined by the 
        Secretary according to criteria established in consultation 
        with the commercial space transportation vehicle industry and 
        professional associations.
            (12) 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.
            (13) United states commercial space transportation vehicle 
        industry.--The term ``United States commercial space 
        transportation vehicle industry'' means the collection of 
        United States commercial providers of space transportation 
        vehicles.
            (14) Cost to the government.--``Cost to the Government'' 
        means the Risk Rate multiplied by the amount of the guarantee 
        issued by the Secretary. The Cost to the Government reduces the 
        amount of the Fund until such time as part or all of the 
        guarantee has been retired as described in Section 103 of the 
        Act.
            (15) Risk rate.--``Risk Rate'' means the percentage applied 
        to a guarantee of an entity assigned to a specific Risk 
        Category by the Secretary and used in calculating the Cost to 
        the Government of the guarantee.
            (16) Risk category.--``Risk Category'' means the category 
        into which the Secretary assigns an entity applying for a 
        guarantee based on the risk factors identified in Section 
        104(f). The Risk Category is assigned for the purpose of 
        arriving at a Risk Rate in the calculation of the Cost to the 
        Government.
            (17) Fund.--The ``Fund'' means the amount appropriated 
        under the Act as described under Section 103 of the Act.

 TITLE I--INCREASING THE AVAILABILITY OF PRIVATE SECTOR FINANCING FOR 
  THE UNITED STATES COMMERCIAL SPACE TRANSPORTATION VEHICLE INDUSTRY 
                    THROUGH A LOAN GUARANTEE PROGRAM

SEC. 101. UNITED STATES COMMERCIAL SPACE TRANSPORTATION VEHICLE 
              INDUSTRY LOAN GUARANTEE PROGRAM.

    (a) Establishment of Program.--There shall be a United States 
Commercial Space Transportation Vehicle Industry Loan Guarantee program 
to provide loan guarantees to support the private development of 
multiple qualified United States commercial space transportation 
vehicle providers with launch costs significantly below current levels.
    (b) 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 U.S. Government 
officials, and private sector representatives, as necessary, to ensure 
fair, effective and timely program administration.
    (c) Scope of Program.--
            (1) Temporary government support.--The United States 
        Commercial Space Transportation Vehicle Industry Loan Guarantee 
        program is intended to provide loan guarantees to support 
        financing of qualified commercial space transportation vehicle 
        development ventures during their startup phases and is not 
        intended as a permanent source of financing for such ventures. 
        Applications for guarantees under this program must include 
        specific plans for the timely transition from guaranteed 
        financing to standalone private sector financing as soon as the 
        venture becomes commercially viable.
            (2) Exclusion of space launch sites.--The program does not 
        provide for loan guarantees pertaining to the construction, 
        reconstruction, or reconditioning of space launch sites.
            (3) Exclusion of evolved expendable launch vehicle 
        program.--The United States Commercial Space Transportation 
        Vehicle Industry Loan Guarantee program shall not remove, 
        restrict, or replace funding provided by the Department of 
        Defense to commercial providers participating in the Evolved 
        Expendable Launch Vehicle (EELV) program. Commercial providers 
        already receiving Department of Defense funding for the 
        development of specific expendable launch vehicles under the 
        Evolved Expendable Launch Vehicle program shall not be eligible 
        to apply for loan guarantees pertaining to this same program, 
        under the United States Commercial Space Transportation Vehicle 
        Industry Loan Guarantee program.
            (4) Small business set aside.--Depending upon the number of 
        applications, not less than ten percent and up to 20 percent of 
        the loan guarantee fund shall be set aside for small businesses 
        as defined by the Secretary. In no event shall a single 
        commercial provider be the sole beneficiary of loan guarantees 
available under this Act.
            (5) Competition encouraged on initiatives attempting to 
        meet unique u.s. government specifications.--When possible and 
        economically feasible, in order to allow U.S. taxpayers to 
        receive the benefits and disciplines of private sector 
        competition, the Secretary shall administer the loan guarantee 
        program to permit the participation of multiple United States 
        space transportation vehicle commercial providers that are 
        targeting unique U.S. government specifications.
            (6) 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 Industry Loan Guarantee 
        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, 
        employees or contractors notwithstanding any other provision of 
        law.
            (d) Sunset.--This Act shall sunset 10 years from date of 
        enactment.

SEC. 102. FUNCTIONS OF THE SECRETARY OF TRANSPORTATION.

    The Secretary shall carry out the following functions:
            (1) Consultation.--Consultation, to the extent deemed 
        necessary for effective implementation of the Act with 
        appropriate federal agencies, Congressional, and space 
        transportation industry representatives, and members of the 
        risk management industry concerning--
                    (A) assessments of international competition, 
                potential markets for space transportation vehicles, 
                and availability of private investment capital;
                    (B) recommendations of commercial entities, 
                partnerships, joint ventures, or consortia regarding 
                effective implementation of the loan guarantee program; 
                and,
                    (C) recommendations on how to make U.S. government 
                space access requirements more compatible with U.S. 
                commercial space transportation assets.
            (2) Program management.--Management of the loan guarantee 
        program consistent with the purposes of this Act.

SEC. 103. AUTHORIZATION OF APPROPRIATION OF FUNDS.

    (a) The Act authorizes the appropriation of the sum of $500,000,000 
and such other annual sums as may be necessary to be deposited in a 
Fund to be used by the Secretary for the purpose of carrying out the 
provisions of the Act. The Fund will be reduced by the Cost to the 
Government (as defined) of each loan guarantee extended by the 
Secretary as further described in Section 104(f). As an Obligor 
releases its government guarantees on the schedule agreed to up front 
with the Secretary, this Cost to the Government shall be reduced or 
eliminated, thus replenishing the Fund for new guarantees.

SEC. 104. AUTHORIZATION OF SECRETARY TO GUARANTEE OBLIGATIONS.

    (a) Principal and Interest.--The Secretary is authorized to 
guarantee, and to enter into commitments to guarantee, the payment of 
the interest on, and the unpaid balance of the principal of, any 
obligation which is eligible to be guaranteed under this Act. A 
guarantee, or commitment to guarantee, made by the Secretary under this 
Act shall cover 100 percent of the amount of the principal and interest 
of the obligation.
    (b) Security Interest.--No obligation shall be guaranteed under 
this Act unless the obligor conveys or agrees to convey to the 
Secretary a security interest such as the Secretary may reasonably 
require to protect the interests of the United States.
    (c) Private Insurance.--If the Secretary determines that other 
potential measures, as described in this Act, are not sufficient to 
provide adequate security, the Secretary, as a condition of processing 
or approving an application for guarantee of an obligation, may require 
that the obligor obtain private insurance with respect to a portion of 
the government's risk of default by the obligor on the obligation, 
including both the amount of the obligation still outstanding and the 
accrued interest. Such private insurance may be funded from the 
proceeds of any obligation guaranteed under this Act. If the obligor 
fails to renew such private insurance on a timely basis, the Secretary 
may take such action as deemed necessary, with regard to seizure of 
security interest conveyed by the obligor or the assessment of 
additional fees to the obligor, to ensure that the appropriate 
insurance renewal is obtained without delay.
    (d) Pledge of United States.--The full faith and credit of the 
United States is pledged to the payment of all guarantees made under 
this Act with respect to both principal and interest, including 
interest, as may be provided for in the guarantee, accruing between the 
date of default under a guaranteed obligation and the payment in full 
of the guarantee.
    (e) Proof of Obligations.--Any guarantee, or commitment to 
guarantee, made by the Secretary under this Act shall be conclusive 
evidence of the eligibility of the obligations for such guarantee, and 
the validity of any guarantee, or commitment to guarantee, so made 
shall be incontestable. Notwithstanding an assumption of an obligation 
by the Secretary under section 106(a) or (b) of this Act, the validity 
of the guarantee of an obligation made by the Secretary under this Act 
is unaffected and the guarantee remains in full force and effect.
    (f) Determination of Estimated Benefit and Cost to Government for 
Loan Guarantee Program.--
            (1) The Secretary shall in consultation with the private 
        risk management industry and consistent with the Federal Credit 
        Reform Act of 1990 (2 U.S.C. 661a et seq.).--
                    (A) establish in accordance with this subsection a 
                system of risk categories for obligations guaranteed 
                under this Act, that categorizes the relative risk of 
                guarantees made under this Act with respect to the risk 
                factors set forth in paragraph (3); and
                    (B) determine for each of the risk categories a 
                risk rate equivalent to the cost of obligations in the 
                category, expressed as a percentage of the amount 
                guaranteed under this Act for obligations in the 
                category.
            (2) Before making a guarantee under this section for an 
        obligation, the Secretary shall apply the risk factors set 
        forth in paragraph (3) to place the obligation in a risk 
        category established under paragraph (1)(A).
            (3) The risk factors referred to in paragraphs (1) and (2) 
        are the following:
                    (A) The technological feasibility of the proposed 
                venture and the magnitude of its projected overall 
                space launch cost reduction;
                    (B) The period for which an obligation is to be 
                guaranteed, such period not exceeding 12 years;
                    (C) The amount of obligations which are guaranteed 
                or to be guaranteed, in relation to the Total Capital 
                Requirement of the proposed venture;.
                    (D) The financial condition of the applicant;
                    (E) The availability of private financing, 
                including guarantees (other than the guarantees issued 
                pursuant to this Act) and private insurance, for the 
                proposed venture;
                    (F) The projected commercial and government 
                utilization of each space transportation vehicle or 
                other article to be financed by debt guaranteed 
                pursuant to this Act (including any contracts, letters 
                of intent, or other expressions of agreement under 
                which the applicant will provide launch services using 
                a space transportation vehicle or other article 
                financed by debt guaranteed pursuant to this Act);
                    (G) The adequacy of collateral provided in exchange 
                for a guarantee issued pursuant to this Act;
                    (H) The management and operating experience of the 
                applicant;
                    (I) Commercial viability of the business plan for 
                the venture of the Obligor.
                    (J) The extent of private equity capital in the 
                project;
                    (K) The applicant's plans for achieving a 
                transition from Government-guaranteed financing to 
                private financing;
                    (L) The likelihood that the venture would serve an 
                identifiable national interest;
                    (M) The likelihood that the successful completion 
                of the project would result in savings that would 
                offset anticipated Government expenditures for space-
                related activities;
                    (N) The likelihood that the project will open new 
                markets or result in the development of significant new 
                technologies;
                    (O) other relevant criteria; and
            (4) The amount of appropriated funds required by the 
        Federal Credit Reform Act of 1990 in advance of the Secretary's 
        issuance of a guarantee of an obligation, or a commitment to 
        guarantee an obligation, may be provided, in whole or in part, 
        by a non-Federal source and deposited by the Secretary in the 
        financing account established under the Federal Credit Reform 
        Act of 1990 for obligation guarantees issued by the Secretary. 
        These non-Federal source funds may be in lieu of or combined 
        with Federal funds appropriated for the purpose of satisfying 
        the requirements of the Federal Credit Reform Act of 1990. The 
        non-Federal source funds deposited into that financing account 
        shall be held and applied by the Secretary in accordance with 
        the provisions of the Federal Credit Reform Act of 1990, in the 
        same manner as that legislation controls the use and 
        disposition of Federally appropriated funds. Non-Federal source 
        funds must be paid to the Secretary in cash prior to the 
        issuance of any guarantee or commitment to guarantee an 
        obligation. The payment of said non-Federal source funds shall 
        not, in any way, relieve any entity from its responsibility to 
        meet any other provision of this Act or its implementing 
        regulations relating to the application for, issuance of, or 
        administration of a guarantee of an obligation.
            (5) In this subsection, the term ``cost'' has the meaning 
        given that term in the Federal Credit Reform Act of 1990 (2 
        U.S.C. 661a).

SEC. 105. ELIGIBILITY FOR GUARANTEE.

    (a) Purpose of Obligations.--Pursuant to the authority granted 
under section 104(a) of this Act, the Secretary, upon such terms as he 
shall prescribe, consistent with the provisions and purpose of the Act, 
may guarantee or make a commitment to guarantee, payment of the 
principal of and interest on an obligation for the purpose of--
            (1) financing the Total Capital Requirement, as defined, of 
        the DDT& E, construction, reconstruction, reconditioning, 
        placing into operation, working capital, interest expense, and 
        initial operating and marketing expenses in connection with 
        space transportation vehicles with launch costs significantly 
        below current levels.
            (2) financing the purchase, reconstruction, or 
        reconditioning of space transportation vehicles to achieve 
        launch costs significantly below current levels for which 
        obligations were guaranteed under this Act that, under the 
        provisions of section 106 of this Act are space transportation 
        vehicles for which obligations were accelerated and paid and 
        that have been repossessed by the Secretary or sold at 
        foreclosure instituted by the Secretary.
    (b) Contents of Obligations.--Obligations guaranteed under this 
Act--
            (1) shall have an obligor approved by the Secretary as 
        responsible and possessing or having the ability to obtain the 
        technical capability, experience, financial resources, and 
        other qualifications necessary to the adequate development, 
        operation and maintenance of the space transportation vehicle 
        or space transportation vehicles which serve as security for 
        the guarantee of the Secretary;
            (2) subject to the provisions of subsection (c)(1) of this 
        section, shall be in an aggregate principal amount which does 
        not exceed 80 per centum of the Total Capital Requirement, as 
        determined by the Secretary, of the space transportation 
        vehicle which is used as security for the guarantee of the 
        Secretary;
            (3) shall have maturity dates satisfactory to the Secretary 
        but, subject to the provisions of paragraph (2) of subsection 
        (c) of this section, not to exceed twelve years from the date 
        of the issuance of the guarantee.
            (4) shall provide for payments by the obligor satisfactory 
        to the Secretary;
            (5) shall provide, or a related agreement shall provide 
        that the space transportation vehicle shall meet such safety, 
        reliability, and performance standards as are necessary for U. 
        S. commercial licensing; and
            (6) shall provide that the space transportation vehicle 
        provider guarantee to the United States Government, launch 
        services at the targeted significantly reduced launch cost or 
        the prevailing commercial launch cost, which ever is lower.
    (c) Security.--
            (1) The security for the guarantee of an obligation by the 
        Secretary under this Act may relate to more than one space 
        transportation vehicle and may consist of any combination of 
        types of security. The aggregate principal amount of 
        obligations which have more than one space transportation 
        vehicle as security for the guarantee of the Secretary under 
        this Act may equal, but not exceed, the sum of the principal 
        amount of obligations permissible with respect to each space 
        transportation vehicle.
            (2) If the security for the guarantee of an obligation by 
        the Secretary under this Act relates to more than one space 
        transportation vehicle, such obligation may have the latest 
        maturity date permissible under subsection (b) of this section 
        with respect to any of such space transportation vehicles: 
        Provided, that the Secretary may require such payments of 
        principal, prior to maturity, with respect to all related 
        obligations as he deems necessary in order to maintain adequate 
        security for the guarantee.
    (d) Restrictions.--
            (1) Restriction on used space transportation vehicles.--No 
        commitment to guarantee, or guarantee of an obligation may be 
        made by the Secretary under this Act for the purchase of a used 
        space transportation vehicle unless--
                    (A) the used space transportation vehicle will be 
                reconstructed or reconditioned in the United States and 
                will contribute to the development of the United States 
                commercial space transportation vehicle industry; and
                    (B) the reconstruction or reconditioning of the 
                used space transportation vehicle will result in a 
                magnitude of projected space transportation cost 
                reduction comparable to that which development of new 
                space transportation vehicles would be required to 
                project, in order to be eligible for guarantee of 
                obligations.
    (e) Application and Administrative Fees.--
            (1) The Secretary may assess a fee for applications for 
        loan guarantees submitted under this Act and/ or a fee for 
        administration of an obligation under this Act.
            (2) Application fees under this subsection shall be 
        assessed and collected at the time a U.S. commercial space 
        transportation vehicle provider submits an application for loan 
        guarantees an application for loan guarantees under this Act. 
        Administrative fees under this section shall be assessed and 
        collected not later than the date of issuance of the debt 
        guaranteed pursuant to this Act
            (3) Administrative fees collected under this subsection 
        shall not exceed one-eighth of one percent of the guaranteed 
        amount of the face value of the debt covered by the guarantee.
            (4) A fee paid under this subsection is generally not 
        refundable. However, an obligor shall receive credit for the 
        amount paid for the remaining term of the guaranteed obligation 
        if the obligation is refinanced and guaranteed under this Act 
        after such refinancing.
            (5) A fee paid under this subsection shall be included in 
        the amount of the actual cost of the obligation guaranteed 
        under this Act and is eligible to be financed under this Act.
            (6) There are authorized to be appropriated such sums as 
        may be necessary for salaries and expenses to carry out the 
        responsibilities under this title.
    (f) Additional Requirements.--Obligations guaranteed under this Act 
and agreements relating thereto shall contain such other provisions 
with respect to the protection of the financial security interests of 
the United States as the Secretary may, in his or her discretion, 
prescribe.

SEC. 106. DEFAULTS.

    (a) Rights of Obligee.--In the event of a default, which has 
continued for thirty days, in any payment by the obligor of principal 
or interest due under an obligation guaranteed under this Act, the 
obligee or his agent shall have the right to demand (unless the 
Secretary shall, upon such terms as may be provided in the obligation 
or related agreements, prior to that demand, have assumed the obligor's 
rights and duties under the obligation and agreements and shall have 
made any payments in default), at or before the expiration of such 
period as may be specified in the guarantee or related agreements, but 
not later than ninety days from the date of such default, payment by 
the Secretary of the unpaid principal amount of said obligation and of 
the unpaid interest thereon to the date of payment. Within such period 
as may be specified in the guarantee or related agreements, but not 
later than thirty days from the date of such demand, the Secretary 
shall promptly pay to the obligee or his agent the unpaid principal 
amount of said obligation and unpaid interest thereon to the date of 
payment: Provided, That the Secretary shall not be required to make 
such payment if prior to the expiration of said period he shall find 
that there was no default by the obligor in the payment of principal or 
interest or that such default has been remedied prior to any such 
demand.
    (b) Notice of Default.--In the event of a default under a mortgage, 
loan agreement, or other security agreement between the obligor and the 
Secretary, the Secretary may upon such terms as may be provided in the 
obligation or related agreement, either:
            (1) assume the obligor's rights and duties under the 
        agreement, make any payment in default, and notify the obligee 
        or the obligee's agent of the default and the assumption by the 
        Secretary; or
            (2) notify the obligee or the obligee's agent of the 
        default, and the obligee or the obligee's agent shall have the 
        right to demand at or before the expiration of such period as 
        may be specified in the guarantee or related agreements, but 
        not later than 60 days from the date of such notice, payment by 
        the Secretary of the unpaid principal amount of said obligation 
        and of the unpaid interest thereon. Within such period as may 
        be specified in the guarantee or related agreements, but not 
        later than 30 days from the date of such demand, the Secretary 
        shall promptly pay to the obligee or the obligee's agent the 
        unpaid principal amount of said obligation and unpaid interest 
        thereon to the date of payment.
    (c) To Complete, Sell or Operate Property.--In the event of any 
payment or assumption by the Secretary under subsection (a) or (b) of 
this section, the Secretary shall have all rights in any security held 
by him relating to his guarantee of such obligations as are conferred 
upon him under any security agreement with the obligor. Notwithstanding 
any other provision of law relating to the acquisition, handling, or 
disposal of property by the United States, the Secretary shall have the 
right, in his discretion, to complete, recondition, reconstruct, 
renovate, repair, maintain, operate, charter, or sell any property 
acquired by him pursuant to a security agreement with the obligor. The 
terms of the sale shall be as approved by the Secretary.
    (d) Actions Against Obligor.--In the event of a default under any 
guaranteed obligation or any related agreement, the Secretary shall 
take such action against the obligor or any other parties liable 
thereunder that, in his discretion, may be required to protect the 
interests of the United States. Any suit may be brought in the name of 
the United States or in the name of the obligee and the obligee shall 
make available to the United States all records and evidence necessary 
to prosecute any such suit. The Secretary shall have the right, in his 
discretion, to accept a conveyance of Act to and possession of property 
from the obligor or other parties liable to the Secretary, and may 
purchase the property for an amount not greater than the unpaid 
principal amount of such obligation and interest thereon. In the event 
that the Secretary shall receive through the sale of property an amount 
of cash in excess of the unpaid principal amount of the obligation and 
unpaid interest on the obligation and the expenses of collection of 
those amounts, the Secretary shall pay the excess to the obligor.
                                 <all>