[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 3785 Introduced in Senate (IS)]

111th CONGRESS
  2d Session
                                S. 3785

 To amend the Internal Revenue Code of 1986 to encourage investment in 
  commercial spaceflight facilities and equipment, research, and job 
                   training, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 15, 2010

 Mr. Nelson of Florida (for himself and Mr. Brownback) introduced the 
 following bill; which was read twice and referred to the Committee on 
                                Finance

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to encourage investment in 
  commercial spaceflight facilities and equipment, research, and job 
                   training, 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 ``Commercial Space Jobs and Investment 
Act of 2010''.

SEC. 2. COMMERCIAL SPACE CAPITAL FORMATION CREDIT.

    (a) In General.--Subpart B of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by inserting after 
section 30D the following new section:

``SEC. 30E. COMMERCIAL SPACE CAPITAL FORMATION CREDIT.

    ``(a) Allowance of Credit.--There shall be allowed as a credit 
against the tax imposed by this chapter for the taxable year an amount 
equal to 20 percent of the qualified equity investment paid by the 
taxpayer during the taxable year.
    ``(b) Qualified Equity Investment.--For purposes of this section--
            ``(1) In general.--The term `qualified equity investment' 
        means any equity investment in a qualified commercial space 
        entity if--
                    ``(A) such investment is acquired by the taxpayer 
                at its original issue (directly or through an 
                underwriter) in exchange for cash, and
                    ``(B) such investment is designated for purposes of 
                this section by the qualified commercial space entity.
            ``(2) Treatment of subsequent purchasers.--The term 
        `qualified equity investment' includes any equity investment 
        which would (but for paragraph (1)(A)) be a qualified equity 
        investment in the hands of the taxpayer if such investment was 
        a qualified equity investment in the hands of a prior holder.
            ``(3) Redemptions.--A rule similar to the rule of section 
        1202(c)(3) shall apply for purposes of this subsection.
            ``(4) Equity investment.--The term `equity investment' 
        means--
                    ``(A) any stock (other than nonqualified preferred 
                stock as defined in section 351(g)(2)) in an entity 
                which is a corporation, and
                    ``(B) any capital interest in an entity which is a 
                partnership.
    ``(c) Qualified Commercial Space Entity.--For purposes of this 
section--
            ``(1) In general.--The term `qualified commercial space 
        entity' means any domestic corporation or partnership the 
        principal trade or business of which is the commercial 
        development of space and the principal place of business is 
        located in a Commercial Space Enterprise Zone designated under 
        subsection (g).
            ``(2) Commercial development of space.--The term 
        `commercial development of space' means--
                    ``(A) the development of private space launch 
                vehicles, reentry vehicles, and related equipment,
                    ``(B) the development, provision, and operation of 
                private space launching, reentry, and related services, 
                and
                    ``(C) other specific activities identified by the 
                Secretary in rules, regulations, or formal guidance 
                consistent with the purposes of this section.
    ``(d) Recapture of Credit.--If--
            ``(1) the taxpayer fails to hold the qualified equity 
        investment the 5-year period beginning on the date such 
        investment was acquired by the taxpayer, or
            ``(2) during such 5-year period, the entity ceases to be 
        qualified commercial space entity,
then notwithstanding any other provision of this subtitle, the tax 
imposed by this chapter on the taxpayer for the taxable year beginning 
in the calendar year in which such cessation occurred shall be 
increased by the amount of credit allowed under subsection (a) to the 
taxpayer with respect to such investment.
    ``(e) Basis Adjustments.--For purposes of this subtitle, if a 
credit is allowed under this section for the acquisition of any 
investment--
            ``(1) the increase in the basis of such investment which 
        would (but for this subsection) result from such acquisition 
        shall be reduced by the amount of the credit so allowed, and
            ``(2) the basis of such investment shall be increased by 
        the amount of any increase in tax by reason of subsection (d).
    ``(f) Application With Other Credits.--
            ``(1) Business credit treated as part of general business 
        credit.--Except with respect to a taxpayer described in 
        paragraph (2), the credit allowed under subsection (a) for any 
        taxable year shall be treated as a credit listed in section 
        38(b) for such taxable year (and not allowed under subsection 
        (a)).
            ``(2) Personal credit.--
                    ``(A) In general.--For purposes of this title, the 
                credit allowed under subsection (a) for any taxable 
                year to a taxpayer other than a corporation shall be 
                treated as a credit allowable under subpart A for such 
                taxable year.
                    ``(B) Limitation based on amount of tax.--In the 
                case of a taxable year to which section 26(a)(2) does 
                not apply, the credit allowed under subsection (a) for 
                any taxable year by reason of the application of 
                subparagraph (A) shall not exceed the excess of--
                            ``(i) the sum of the regular tax liability 
                        (as defined in section 26(b)) plus the tax 
                        imposed by section 55, over
                            ``(ii) the sum of the credits allowable 
                        under subpart A (other than this section and 
                        sections 23, 25D, 30, and 30D) and section 27 
                        for the taxable year.
    ``(g) Designation of Commercial Space Enterprise Zones.--
            ``(1) In general.--From among the areas nominated for 
        designation under this subsection, the Secretary of Commerce 
        shall designate not more than 5 Commercial Space Enterprise 
        Zones.
            ``(2) Limitations on designation.--No area may be 
        designated under paragraph (1) unless--
                    ``(A) the area is nominated by a State,
                    ``(B) the State provides written assurances and 
                other documentation satisfactory to the Secretary of 
                Commerce that--
                            ``(i) the nominated area has a presence of 
                        high unemployment and economic dislocation in 
                        public sector, space-related jobs,
                            ``(ii) the nominated area has a presence of 
                        well-developed human and capital infrastructure 
                        and the capacity to effectively use Federal tax 
                        incentives to promote progress in commercial 
                        space capability, including crew and cargo 
                        transportation systems, research and technology 
                        development, and other potential activities in 
                        low-Earth orbit, and
                            ``(iii) State and local officials, business 
                        community, and local population have developed 
                        a unified, feasible, and effective strategy for 
                        contributing to, and increasing, United States 
                        competitiveness in the commercial space sector, 
                        and
                    ``(C) the Secretary of Commerce determines that any 
                information furnished is reasonably accurate.
            ``(3) Application and designation timing.--
                    ``(A) Issuance of applications.--The Secretary of 
                Commerce shall issue Commercial Space Enterprise Zone 
                nomination applications and instructions not later than 
                the date which is 45 days after the date of the 
                enactment of the Commercial Space Jobs and Investment 
                Act of 2010.
                    ``(B) Submission of applications.--A State shall 
                submit a Commercial Space Enterprise Zone nomination 
                application not later than the date which is 4 months 
                after such applications are issued under subparagraph 
                (A).
                    ``(C) Designations.--The Secretary of Commerce 
                shall make Commercial Space Enterprise Zone 
                designations not later than the date which is 3 months 
                after the application deadline under subparagraph (B).
    ``(h) Termination.--This section shall not apply to investments 
acquired after December 31, 2019.''.
    (b) Conforming Amendments.--
            (1) Section 38(b) of the Internal Revenue Code of 1986 is 
        amended by striking ``plus'' at the end of paragraph (35), by 
        striking the period at the end of paragraph (36) and inserting 
        ``, plus'', and by adding at the end the following new 
        paragraph:
            ``(37) the portion of the commercial space capital 
        formation credit to which section 30E(f)(1) applies.''.
            (2) Section 1016(a) of such Code is amended by striking 
        ``and'' at the end of paragraph (36), by striking the period at 
        the end of paragraph (37) and inserting ``, and'', and by 
        adding at the end the following new paragraph:
            ``(38) to the extent provided in section 30E(e)(1).''.
            (3) The table of sections for subpart B of part IV of 
        subchapter A of chapter 1 of such Code is amended by inserting 
        after the item relating to section 30D the following new item:

``Sec. 30E. Commercial space capital formation credit.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to investments acquired after the date of the enactment of this 
Act.

SEC. 3. COMMERCIAL SPACE RESEARCH CREDIT.

    (a) In General.--Section 41(b) of the Internal Revenue Code of 1986 
is amended by adding at the end the following new paragraph:
            ``(5) Commercial space research.--
                    ``(A) Enhanced credit.--In the case of any taxable 
                year in which the qualified research expenses of the 
                taxpayer include qualified commercial space research 
                expenses, subsection (a)(1)--
                            ``(i) shall be applied by first taking into 
                        account such qualified research expenses which 
                        are not qualified commercial space research 
                        expenses, and
                            ``(ii) shall be applied by substituting `30 
                        percent' for `20 percent' in the case of such 
                        qualified commercial space research expenses.
                    ``(B) Qualified commercial space research 
                expenses.--For purposes of this paragraph, the term 
                `qualified commercial space research expenses' means 
                qualified research expenses attributable to research 
                undertaken in a Commercial Space Enterprise Zone 
                designated under section 30E(g) for the purpose of 
                discovering information--
                            ``(i) which is technological in nature, and
                            ``(ii) the application of which is intended 
                        to be useful in the commercial development of 
                        space (as defined in section 30E(c)(2)).
                    ``(C) Termination.--This paragraph shall not apply 
                to research expenses incurred after December 31, 
                2019.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to research expenses incurred after the date of the enactment of this 
Act.

SEC. 4. SPECIAL DEPRECIATION ALLOWANCE FOR COMMERCIAL SPACE PROPERTY.

    (a) In General.--Section 168 of the Internal Revenue Code of 1986 
is amended by adding at the end the following new subsection:
    ``(o) Special Allowance for Commercial Space Property.--
            ``(1) Additional allowance.--
                    ``(A) In general.--In the case of any qualified 
                commercial space property to which this subparagraph 
                applies--
                            ``(i) the depreciation deduction provided 
                        by section 167(a) for the taxable year in which 
                        such property is placed in service shall 
                        include an allowance equal to 50 percent of the 
                        adjusted basis of the qualified commercial 
                        space property, and
                            ``(ii) the adjusted basis of the qualified 
                        commercial space property shall be reduced by 
                        the amount of such deduction before computing 
                        the amount otherwise allowable as a 
                        depreciation deduction under this chapter for 
                        such taxable year and any subsequent taxable 
                        year.
                    ``(B) Application.--Subparagraph (A) applies to 
                qualified commercial space property placed in service 
                on or after the date of the enactment of the Commercial 
                Space Jobs and Investment Act of 2010 and before 
                January 1, 2020, which is--
                            ``(i) acquired by the taxpayer on or after 
                        such date of enactment and before January 1, 
                        2020, but only if no written binding contract 
                        for the acquisition was in effect before such 
                        date of enactment, or
                            ``(ii) acquired by the taxpayer pursuant to 
                        a written binding contract which was entered 
                        into on or after such date of enactment and 
                        before January 1, 2020.
            ``(2) Qualified commercial space property.--For purposes of 
        this subsection--
                    ``(A) In general.--The term `qualified commercial 
                space property' means any private space launch vehicle, 
                reentry vehicle, launch support facilities, space 
                recovery support facilities, and other space 
                transportation infrastructure--
                            ``(i) to which this section applies,
                            ``(ii) the original use of which commences 
                        with the taxpayer on or after such date of 
                        enactment, and
                            ``(iii) substantially all of the use of 
                        which occurs in a Commercial Space Enterprise 
                        Zone designated under section 30E(g) and in the 
                        active conduct of a trade or business by the 
                        taxpayer in such Zone.
                    ``(B) Exceptions.--
                            ``(i) Bonus depreciation property under 
                        subsection (k).--The term `qualified commercial 
                        space property' shall not include any property 
                        to which subsection (k)(1) applies.
                            ``(ii) Alternative depreciation property.--
                        The term `qualified commercial space property' 
                        shall not include any property to which the 
                        alternative depreciation system under 
                        subsection (g) applies, determined without 
                        regard to paragraph (7) of subsection (g) 
                        (relating to election to have system apply).
                            ``(iii) Election out.--If a taxpayer makes 
                        an election under this clause with respect to 
                        any class of property for any taxable year, 
                        this subsection shall not apply to all property 
                        in such class placed in service during such 
                        taxable year.
                    ``(C) Definitions.--The terms `launch vehicle', 
                `launch support facilities', `space recovery support 
                facilities', and `space transportation infrastructure' 
                have the meanings given such terms under section 502 of 
                the National Aeronautics and Space Administration Act, 
                Fiscal Year 1993 (15 U.S.C. 5802).
            ``(3) Special rule for self-constructed property.--In the 
        case of a taxpayer manufacturing, constructing, or producing 
        property for the taxpayer's own use, if the taxpayer begins 
        manufacturing, constructing, or producing the property on or 
        after such date of enactment and before January 1, 2020, the 
        requirements of paragraph (1)(B) shall be treated as met.
            ``(4) Deduction allowed in computing minimum tax.--For 
        purposes of determining alternative minimum taxable income 
        under section 55, the deduction under subsection (a) for 
        qualified commercial space property shall be determined under 
        this section without regard to any adjustment under section 
        56.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to property placed in service on or after the date of the enactment of 
this Act, in taxable years ending after such date.

SEC. 5. COMMERCIAL SPACE EDUCATION AND JOB TRAINING CREDIT.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by adding at the end 
the following:

``SEC. 45S. COMMERCIAL SPACE EDUCATION AND JOB TRAINING CREDIT.

    ``(a) In General.--For the purposes of section 38, the commercial 
space education and job training credit determined under this section 
with respect to any eligible employer for the taxable year is an amount 
equal to the commercial space educational assistance program expenses 
for such taxable year.
    ``(b) Dollar Limitation.--The credit allowed under subsection (a) 
in any taxable year shall not exceed $2,000 per employee of the 
employer that participates in a commercial space educational assistance 
program in such taxable year.
    ``(c) Commercial Space Educational Assistance Program Expenses; 
Other Definitions.--For purposes of this section--
            ``(1) In general.--The term `commercial space educational 
        assistance program expenses' means expenses paid or incurred by 
        an eligible employer for a commercial space educational 
        assistance program.
            ``(2) Commercial space educational assistance program.--The 
        term `commercial space educational assistance program' means an 
        educational assistance program which--
                    ``(A) meets the requirements of section 127(b) 
                (other than paragraph (5) thereof), and
                    ``(B) provides to employees of the eligible 
                employer educational assistance which seeks to enhance 
                an employee's knowledge skills, and training applicable 
                to the commercial development of space.
            ``(3) Eligible employer.--The term `eligible employer' 
        means an employer which is a qualified commercial space entity 
        (as defined in section 30E(c)(1)).
            ``(4) Other definitions.--
                    ``(A) In general.--The terms `employee', 
                `employer', and `educational assistance' have meanings 
                given such terms under section 127(c).
                    ``(B) Commercial development of space.--The term 
                `commercial development of space' has the meaning given 
                such term under section 30E(c)(2).
    ``(d) Aggregation Rule.--For purposes of this section, all persons 
treated as a single employer under subsection (a) or (b) or section 52, 
or subsection (m) or (o) of section 414, shall be treated as one 
person.
    ``(e) Denial of Double Benefit.--No deduction or credit shall be 
allowed under any other provision of this chapter for any amount taken 
into account in determining the credit under this section.
    ``(f) Election To Have Credit Not Apply.--A taxpayer may elect (at 
such time and in such manner as the Secretary may by regulations 
prescribe) to have this section not apply for any taxable year.''.
    (b) Credit To Be Part of General Business Credit.--Section 38(b) of 
the Internal Revenue Code of 1986, as amended by this Act, is amended 
by striking ``plus'' at the end of paragraph (36), by striking the 
period at the end of paragraph (37) and inserting ``, plus'', and by 
adding at the end the following new paragraph:
            ``(38) the commercial space education and job training 
        credit determined under section 45S(a).''.
    (c) Conforming Amendment.--Section 6501(m) of the Internal Revenue 
Code of 1986 is amended by inserting ``45S(f),'' before ``or 51(j)''.
    (d) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new item:

``45S. Commercial space education and job training credit.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
                                 <all>