[Congressional Record Volume 152, Number 96 (Thursday, July 20, 2006)]
[Senate]
[Pages S8066-S8068]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. MARTINEZ (for himself, Mrs. Feinstein, Mr. Nelson of 
        Florida, Mrs. Hutchison, Mr. Sessions, Mr. Bingaman, and Mr. 
        Cornyn):
  S. 3706. 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.
  Mr. MARTINEZ. Mr. President, today I rise with my colleagues, 
Senators Feinstein, Nelson of Florida, Hutchison, and Bingaman, on the 
37th anniversary of the lunar landing when American astronauts Neil 
Armstrong and Edwin Aldrin set foot on the Moon, to introduce the 
Spaceport Equity Act of 2006--a bill to help bring additional 
investment to the space transportation industry.
  On June 18th, the Washington Post reported on the launching of 
Kazakhstan's first satellite and their catapult into the space 
transportation industry. Home to the world's largest space center, the 
Baikonur Consmodrome, this ex-Soviet state is joining the list of 
rivals to the U.S. space industry. America's competitive edge is 
declining and will continue to do so unless we act now. My colleagues 
and I recognize this, and that is why we are introducing this most 
important legislation.
  U.S. satellite manufacturers face increasing pressure to consider the 
use of foreign launch vehicles and launch sites, due to the lack of a 
sufficient domestic launch capability. The United States once dominated 
the commercial satellite-manufacturing field with an average market 
share of 83 percent;

[[Page S8067]]

however, that market share has since declined to 50 percent. An even 
smaller share of U.S.-manufactured satellites is actually launched from 
U.S. spaceports. This comes at an estimated loss of $1.5 to $3.0 
billion to the U.S. economy.
  The space economy is made up infrastructure of manufacturers, service 
providers, and technologists in both the Government and private sector 
that deploy and operate launch vehicles, satellites, and space 
platforms. Many everyday goods and services rely on space 
infrastructure, including broadcast, cable, and satellite television, 
global internet services, satellite radio, cellular and international 
phone calls, etc.
  Satellites are also used for global positioning systems, known as 
GPS, which enable us to have hands-on directions in our cars and 
vehicles. GPS is also influential in the trucking, aviation, and 
maritime industries for day-to-day operations and for our Nation's 
military operations. Thousands of gas stations use inexpensive small 
satellite dishes to connect to credit card networks so customers can 
pay instantly at the pump. Satellites also generate 90 percent of the 
weather forecasting data in the United States and are used to track 
hurricanes, tsunamis, and other weather phenomenon.
  These satellites are launched vertically atop of rockets, propelling 
them into orbit in space. Because most U.S. space-launch facilities are 
operated by NASA, priority for launches at these facilities is given to 
Government projects. This means our commercial satellite needs take a 
back seat to Government operations. This often leaves U.S. commercial 
satellite ventures without reliable launch availability. This in turn 
has forced many companies seeking manufacturing and launch services 
toward our international competitors.
  Spaceports are subdivisions of State governments that provide 
additional launch infrastructure than that available at Federal 
facilities. They attract and promote the U.S. commercial space 
transportation industry. Spaceport authorities function much like 
airport and port authorities by providing economic and transportation 
incentives to the industry, which in turn benefits the surrounding 
communities. Many States are forming space authorities to pursue ways 
of developing space transportation infrastructure.
  The Florida Space Authority was the first such entity, which was 
created as a subdivision of the Florida State government by Florida's 
Governor and State legislature in 1989. Florida Space Authority is 
focused on leading the State's space industry in new directions through 
partnering with the commercial space industry to improve space 
transportation and provide innovative, forward-thinking solutions to 
the challenges facing this evolving industry.
  The last few years have begun a new phase in space exploration. 
Spaceports presently operate in Florida, California, Virginia, and 
Alaska, but efforts are underway to establish 13 additional commercial 
spaceports in Alabama, California, Montana, Nevada, Oklahoma, South 
Dakota, Texas, Utah, Washington, and Wisconsin.
  The commercial space transportation industry includes not only 
spaceports themselves but also companies that develop the needed 
infrastructure for testing and servicing launch vehicles. When 
including these industry partners with spaceports, at least 23 States 
are directly impacted by the commercial space transportation industry. 
Both spaceports and industry partners face increasing pressure from 
government-sponsored or subsidized competitors in Europe, China, Japan, 
India, Australia, Russia, and now Kazakhstan.
  Commercial space transportation is a growing part of the U.S. 
economy. In 2004, this industry alone generated a total of nearly $98.1 
billion dollars in economic activity, over $25 billion in earnings, and 
over 550,000 jobs; and $56.5 billion, more than half of this economic 
activity, was from satellite services. A 2004 Gallup poll shows 
overwhelming public support for space exploration. Roughly 80 percent 
of Americans agree that ``America's space program helps give America 
the scientific and technological edge it needs to compete in the 
international marketplace.'' And 76 percent agree that our space 
program ``benefits the nation's economy'' and inspires ``students to 
pursue careers in technical fields.''
  The space industry has also led to a number of ``spin-off'' 
technologies--those influenced by space technology research and 
development. Home roof insulation and air filtration, antilock brakes, 
athletic shoes, vehicle protective airbags, cellular phones, and lasik 
surgery all owe thanks to NASA and space-based research. The list of 
space ``spin-off' technologies is estimated to exceed 40,000. These 
related technologies have helped employ tens of millions of Americans. 
Encouraging commercial investment in the space industry and increasing 
U.S. marketshare in this industry will certainly lead to additional 
innovation and technology that will impact other fields.
  As you can see, this once government-dominated industry is now 
becoming a diverse mix of government and commercial entities--also 
leading way into future avenues of commercial space transportation, 
such as space tourism.
  The increase in recent commercial launches includes the debut of the 
first commercial crewed suborbital launches of SpaceShipOne--leading 
the way to public space travel. ``Space tourism,'' as public space 
travel is now referred, has the potential to become a major growth 
industry. Recent market studies have shown space tourism has the 
potential to become a billion-dollar industry within 20 years.
  Even though the average American may not be able to participate in 
public space travel, its potential impact on our economy and 
international competitiveness is something to be appreciated. Space 
tourism industry players expect there to be a market demand of at least 
15,000 Americans per year to travel into suborbit and orbital flights. 
This would require an estimated 665 launches per year by 2010. If the 
United States continues as is, we will only be able to capture 10 
percent market share, at best, of this emerging industry. If needed 
infrastructure is added, however, the United States is expected to pick 
up 60 to 70 percent of space flight demand by 2010. Every launch that 
we do not provide for in the United States means a loss to our economy 
and a gain for our international competitors. The Federal Aviation 
Administration's Commercial Space Transportation Division expects a $3 
billion dollar loss to our economy if we do not meet the rising demand 
for space tourism.
  Currently, U.S. launch facilities are few and most are owned and 
operated by the Federal Government, putting commercial users in direct 
competition with the U.S. military, NASA, and other Government 
entities, which get priority over commercial projects. If the United 
States is to remain competitive in the commercial space industry, added 
and improved infrastructure will be needed to support this growing 
industry.
  On a more local note, my own State of Florida could stand to gain 
much by way of economic development from increased investment in 
spaceport infrastructure. According to recent studies by the Florida 
Space Authority, increase spaceport infrastructure and activity in 
Florida could mean as much as $29.7 million in additional economic 
activity by the year 2015--this does not include the economic activity 
generated from impacted tourism, secondary contracts, and spinoff 
technologies.
  Other modes of transportation--highways, airports, and seaports--
currently enjoy a tax incentive for meeting their infrastructure needs, 
so why not spaceports?
  This Spaceport Equity Act of 2006 would provide spaceports with the 
same treatment provided for airports, seaports, rail, and other transit 
projects under the exempt facility bond rules. With international 
competition on the rise, our Nation's spaceports are a vital component 
of the infrastructure needed to expand and enhance the U.S. role in the 
international space arena. The Spaceport Equity Act is an important 
step to increasing our competitiveness in this field because it will 
stimulate investment in expanding and modernizing our space launch 
facilities and lower the costs of financing spaceport projects.
  Since 1968, tax-exempt bonds have played a crucial role in meeting 
airport investment needs, with 50 percent or more of major airport 
projects being financed through municipal tax-exempt

[[Page S8068]]

bonds. By extending this favorable tax treatment to spaceports, this 
bill will help meet spaceport needs and increase our Nation's ability 
to compete with expanded international interests in space exploration 
and technology. Similar legislation has been considered since the 
1980s, and we cannot afford to wait any longer to address the needs of 
this important sector.
  This proposal does not provide direct Federal spending for our 
commercial space transportation industry but, rather, creates the 
conditions necessary to stimulate private capital investment in 
industry infrastructure. By issuing tax-free bonds to finance spaceport 
infrastructure, space authorities could provide site-specific and 
vehicle-specific tailoring to promote the competition and innovation 
necessary to maintain the U.S. competitive edge in the space 
transportation industry.
  This is an efficient means for achieving our space transportation 
needs, and I urge my colleagues in the Senate to join us in this most 
important effort by cosponsoring this bill.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 3706

       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 Equality Act of 
     2006''.

     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 
     bonds) 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) Definition of Spaceport.--Section 142 of the Internal 
     Revenue Code of 1986 is amended by adding at the end the 
     following new subsection:
       ``(n) Spaceport.--
       ``(1) In general.--For purposes of subsection (a)(1), the 
     term `spaceport' means--
       ``(A) any facility directly related and essential to 
     servicing spacecraft, enabling spacecraft to launch or 
     reenter, or transferring passengers or space cargo to or from 
     spacecraft, but only if such facility is located at, or in 
     close proximity to, the launch site or reentry site, and
       ``(B) any other functionally related and subordinate 
     facility at or adjacent to the launch site or reentry site at 
     which launch services or reentry services are provided, 
     including a launch control center, repair shop, maintenance 
     or overhaul facility, and rocket assembly facility.
       ``(2) Additional terms.--For purposes of paragraph (1)--
       ``(A) Space cargo.--The term `space cargo' includes 
     satellites, scientific experiments, other property 
     transported into space, and any other type of payload, 
     whether or not such property returns from space.
       ``(B) Spacecraft.--The term `spacecraft' means a launch 
     vehicle or a reentry vehicle.
       ``(C) Other terms.--The terms `launch', `launch site', 
     `launch services', `launch vehicle', `payload', `reenter', 
     `reentry services', `reentry site', and `reentry vehicle' 
     shall have the respective meanings given to such terms by 
     section 70102 of title 49, United States Code (as in effect 
     on the date of enactment of this subsection).''.
       (d) Exception From Federally Guaranteed Bond Prohibition.--
     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, the use of the spaceport by the 
     United States (or any agency or instrumentality thereof).''.
       (e) Conforming Amendment.--The heading for section 142(c) 
     of the Internal Revenue Code of 1986 is amended by inserting 
     ``Spaceports,'' after ``Airports,''.
       (f) Effective Date.--The amendments made by this section 
     shall apply to obligations issued after the date of the 
     enactment of this Act.
                                 ______