[Congressional Record Volume 153, Number 77 (Thursday, May 10, 2007)]
[Senate]
[Pages S5932-S5934]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. MARTINEZ (for himself, Mr. Bingaman, Mr. Nelson of 
        Florida, Mrs. Hutchison, Mrs. Feinstein, Mrs. Dole, and Mr. 
        Domenici):
  S. 1355. 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 Bingaman, Nelson of Florida, Hutchison, Domenici, Feinstein, 
and Dole, to introduce the Spaceport Equality Act of 2007, a bill to 
help bring additional investment to the space transportation industry.
  Last summer, Kazakhstan launched its first satellite, catapulting 
them into the space transportation industry. Also joining the race for 
space launch capacity are Singapore, Australia, Canada, and the United 
Arab Emirates, with seven new commercial spaceports proposed between 
the four countries. With new entrants being added to the space 
transportation marketplace, is the U.S. falling behind in the race for 
access to space?
  The U.S. once dominated the commercial satellilte-manufacturing field 
with an average market share of 83 percent; however, that market share 
has since declined to below 50 percent. The U.S. satellite industry 
faces increasing pressure to consider the use of foreign launch 
vehicles and launch sites, due to the lack of sufficient domestic 
launch capability. An even smaller share of U.S. manufactured 
satellites is actually launched from U.S. spaceports.
  This past year, only 2 of the 21 commercial launches worldwide were 
launched from locations in the United States, that is less than 10 
percent of the market share. This comes at a loss of billions of 
dollars to the U.S. economy.
  These are just some of the many reasons why my colleagues and I are 
introducing the Spaceport Equality Act.
  The space economy is made up 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; and cellular and international phone calls.
  Satellites are also used global positioning systems, known as GPS, 
which enables us to have hands-on directions in our cars and other 
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 U.S., 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 and the Air Force, priority for launches at these 
facilities is given to government projects. This means our commercial 
satellite needs take a backseat 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.
  Commercial spaceports are subdivisions of State governments that 
provide additional launch infrastructure than that which is 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, now known as ``Space Florida,'' was the 
first such entity, and was created as a subdivision of the Florida 
State Government by Florida's Governor and State legislature in 1989. 
Space Florida focuses on expanding and strengthening my state's space 
industry through partnering with the commercial space industry to 
improve space transportation and to 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, and efforts are currently underway in New Mexico and Oklahoma 
to establish spaceports for the new emerging space tourism industry. 
Still additional commercial spaceports have been considered in the 
following states: 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 affected by the commercial space transportation industry. 
Both spaceports and industry partners face increasing pressure from 
Government sponsored or subsidized competitors in various countries 
across Europe, and also in China, Japan, India, and Russia. And soon 
they will face new competitors in Australia, Canada, Singapore, and the 
United Arab Emirates.
  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 in economic activity, more than $25 billion in earnings, and 
over 550,000 jobs. The Federal Aviation Administration, FAA, recently 
issued a report on 2006 launch activities, in that report, it was noted 
that in 2006, U.S. launches generated approximately $140 million in 
revenues.
  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,

[[Page S5933]]

those influenced by space technology research and development.
  Home roof insulation and air filtration, anti-lock brakes, athletic 
shoes, vehicle protective airbags, cellular phones, and Lasik surgery 
all owe their development to space-based research and technology. 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. market share in this industry will certainly lead to 
additional innovation and technology that will positively influence 
other fields.
  As you can see, this once Government-dominated industry is now 
becoming a diverse mix of Government and commercial entities, also 
leading the 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, the 
beginnings of public space travel. ``Space tourism,'' as public space 
travel is now referred to, has the potential to become a major growth 
industry. Recent market studies have shown that, within 20 years, space 
tourism has the potential to become a multibillion-dollar industry.
  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 U.S. continues as is, we will only be able to capture a 10-
percent market share, at best, of this emerging industry. If needed 
infrastructure is added, however, the U.S. could potentially pick up 60 
to 70 percent of space flight demand by 2010. Every launch that we do 
not provide for in the U.S. 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 
that, as I mentioned earlier, receive priority over commercial 
projects.
  Recently, the U.S. Air Force provided license to Space Exploration 
Technologies, known as SpaceX, to utilize one of the decommissioned 
launch complexes at Cape Canaveral Air Force Station for its commercial 
launch ventures.
  The utilization of existing Federal resources by commercial ventures 
will open up opportunity for further commercial launches, but this 
alone will not afford America the resources it needs to remain 
competitive internationally. If the U.S. 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, increased 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 increased tourism, secondary contracts, and 
spin-off technologies.
  Other modes of transportation, highways, airports, and seaports, 
currently enjoy a tax incentive for meeting their infrastructure needs, 
so why not spaceports? Perhaps this policy made sense in the past, when 
space did not have the enormous potential for commercial growth that it 
now does. Our ability to utilize space is more apparent than ever 
before; we need to acknowledge this emerging reality.
  This Spaceport Equality Act of 2007 would provide spaceports with the 
same tax incentives granted to 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 Equality 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 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 to our 
commercial space transportation industry, but rather, it 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 the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 1355

       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 
     2007''.

     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).''.

[[Page S5934]]

       (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.
                                 ______