[Congressional Record Volume 145, Number 86 (Thursday, June 17, 1999)]
[Senate]
[Pages S7228-S7229]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GRAHAM (for himself, Mr. Mack, Mr. Bingaman, Mr. Inouye, 
        Mr. Inhofe, Mr. Burns, Mr. Baucus, Mr. Crapo, Mr. Craig, and 
        Mrs. Feinstein):
  S. 1239. A bill to amend the Internal Revenue Code of 1986 to treat 
spaceports like airports under the exempt facility bond rules; to the 
Committee on Finance.


                        spaceport investment act

  Mr. GRAHAM. Mr. President, today I rise with my colleagues, Senators 
Mack, Bingaman, Inouye, Inhofe, Burns, Baucus, Crapo, Craig, and 
Feinstein, to introduce legislation entitled the Spaceport Investment 
Act.

  On May 25th, the Cox Commission Report revealed alarming and long-
standing instances of Chinese espionage that have damaged our national 
security. In addition to the theft of nuclear secrets at our National 
Laboratories, the Cox Report highlighted assistance provided by U.S. 
satellite manufacturers to Chinese military and civilian launch 
vehicles. Mr. President, we have helped to create the conditions 
leading to this sorry state of affairs. To borrow from Pogo, we have 
met the enemy, and it is us.
  U.S. satellite manufacturers have faced increasing pressure to 
consider the use of foreign launch vehicles, due to a lack of a 
sufficient domestic launch capability.
  The Cox Report recognized these facts specifically at recommendation 
number 24. I quote from the Report: ``In light of the impact on U.S. 
national security of insufficient domestic, commercial space-launch 
capacity and competition, the Select Committee recommends that 
appropriate congressional committees report legislation to encourage 
and stimulate further the expansion of such capacity and competition.''
  Mr. President, we must address this problem.
  Last year, along with Senator Mack, I proposed, Congress passed, and 
the President signed into law the Commercial Space Act. Congressman 
Dave Weldon provided crucial leadership in the House on this issue.
  The Commercial Space Act helped break the federal government's 
monopoly on space travel by establishing a licensing framework for 
private sector reusable launch vehicles. The Act also provided for the 
conversion of excess ballistic missiles into space transportation 
vehicles, helping to reduce the cost of access to space.
  Mr. President, to follow-up on the Commercial Space Act this year, I 
plan to introduce a number of initiatives to further help the 
commercial space industry in this country. The first of these 
initiatives is my proposal to stimulate infrastructure development by 
attracting private sector investment capital to our nation's launch 
facilities. My proposal achieves this purpose by addressing an issue of 
great importance to our country's commercial space transportation 
industry--tax exempt status for spaceport facility bonds. The 
legislation clarifies that spaceports are eligible for tax exempt 
financing to the same extent as publicly-owned airports and seaports. 
This bill will stimulate the growth of spaceports in this country by 
attracting private sector investment capital for infrastructure 
improvement, leading directly to the expansion of U.S. launch capacity 
and competition.
  Spaceports are subdivisions of state government. They attract and 
promote the U.S. commercial space transportation industry by providing 
launch infrastructure in addition to that available at federal 
facilities. Spaceport authorities operate much like airport authorities 
by providing economic and transportation incentives to industry and 
surrounding communities.
  The Spaceport Florida Authority was the first such entity, created as 
a subdivision of state government by Florida's Governor and State 
Legislature in 1989. Its purpose is to attract space related businesses 
by providing a supportive and coordinated environment for space related 
economic growth and educational development. Since its creation, 
Spaceport Florida estimates that it has been involved in space-related 
construction and investment projects worth more than $100 million. 
These efforts include the modification and conversion of Launch Complex 
46 from a military to commercial facility. NASA's Lunar Prospector was 
launched from this site on January 6, 1998, the first launch conducted 
from a spaceport.
  There are presently four spaceports throughout the country in 
Florida, California, Virginia, and Alaska, and more than ten others are 
under consideration. States considering the development of spaceports 
include Mississippi, Texas, New Mexico, Oklahoma, Montana, Nevada, 
North Carolina, Louisiana, Utah, and Idaho.
  Our Nation's commercial space transportation industry includes not 
only spaceports themselves and providers of launch services, but also 
companies which develop needed infrastructure for testing and servicing 
launch vehicles and their components. This industry faces increasing 
pressure from government sponsored or subsidized competition from 
Europe, China, Japan, India, Australia, and Russia. The French 
Government, for example, indirectly provides Arianespace with most of 
its infrastructure, including real and personal property. In countries 
with non-market economies, such as China, the government provides all 
real and personal property as well as labor necessary to build 
satellites and launch vehicles.
  Mr. President, my proposal does not provide direct federal spending 
for our commercial space transportation industry. Instead, it creates 
the conditions necessary to stimulate private sector capital investment 
in infrastructure. This is an efficient means of achieving our ends.
  Mr. President, to be state of the art in space requires state of the 
art financing on the ground.
  I urge my colleagues in the Senate to join us in this important 
effort by co-sponsoring this bill.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1239

       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 ``Spaceport Investment Act''.

     SEC. 2. SPACEPORTS TREATED LIKE AIRPORTS UNDER EXEMPT 
                   FACILITY BOND RULES.

       (a) In General.--Paragraph (1) of section 142(a) of the 
     Internal Revenue Code of 1986 (relating to exempt facility 
     bond) is amended to read as follows:
       ``(1) airports and spaceports,''.
       (b) Treatment of Ground Leases.--Paragraph (1) of section 
     142(b) of the Internal Revenue Code of 1986 (relating to 
     certain facilities must be governmentally owned) is amended 
     by adding at the end the following new subparagraph:
       ``(C) Special rule for spaceport ground leases.--For 
     purposes of subparagraph (A), spaceport property which is 
     located on land owned by the United States and which is used 
     by a governmental unit pursuant to a lease (as defined in 
     section 168(h)(7)) from the United States shall be treated as 
     owned by such unit if--
       ``(i) the lease term (within the meaning of section 
     168(i)(3)) is at least 15 years, and
       ``(ii) such unit would be treated as owning such property 
     if such lease term were equal to the useful life of such 
     property.''.
       (c) Bond May Be Federally Guaranteed.--Paragraph (3) of 
     section 149(b) of the Internal Revenue Code of 1986 (relating 
     to exceptions) is amended by adding at the end the following 
     new subparagraph:
       ``(E) Exception for spaceports.--Paragraph (1) shall not 
     apply to any exempt facility bond issued as part of an issue 
     described in paragraph (1) of section 142(a) to provide a 
     spaceport in situations where--
       ``(i) the guarantee of the United States (or an 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), and
       ``(ii) the payment of the rent, user fees, or other charges 
     is for, and conditioned upon,

[[Page S7229]]

     the use of the spaceport by the United States (or any agency 
     or instrumentality thereof).''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to obligations issued after the date of the 
     enactment of this Act.
                                 ______