Text: H.R.2177 — 107th Congress (2001-2002)All Information (Except Text)

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Introduced in House (06/14/2001)

 
[Congressional Bills 107th Congress]
[From the U.S. Government Printing Office]
[H.R. 2177 Introduced in House (IH)]







107th CONGRESS
  1st Session
                                H. R. 2177

  To amend the Internal Revenue Code of 1986 to encourage the timely 
  development of a more cost effective United States commercial space 
            transportation industry, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 14, 2001

Mr. Calvert (for himself, Mr. Ortiz, Mr. Lucas of Oklahoma, Mr. Foley, 
     Mr. Bartlett of Maryland, Mr. Baca, Mr. McKeon, Mr. Lewis of 
 California, Mr. Sensenbrenner, Mr. Skeen, Mr. Weldon of Florida, Mr. 
    Rehberg, Mr. Sandlin, Mr. Reyes, and Mrs. Capps) introduced the 
 following bill; which was referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
  To amend the Internal Revenue Code of 1986 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 ``Invest in Space 
Now Act of 2001''.
    (b) Table of Contents.--

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Purposes.
Sec. 4. Definitions.
Sec. 5. Credit for purchase of space transportation vehicle provider 
                            stock.
Sec. 6. United States commercial space transportation vehicle 
                            authorization.

SEC. 2. FINDINGS.

    The Congress hereby finds that:
            (1) The United States commercial space transportation 
        industry is an essential part of the national economy.
            (2) Opportunities for United States commercial providers 
        are growing as international markets expand.
            (3) The development of the United States commercial space 
        transportation industry is consistent with the national 
        security needs and foreign policy interests of the United 
        States.
            (4) 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.
            (5) Because United States incentives for space 
        transportation development have historically focused on civil 
        and military rather than commercial use, United States space 
        transportation costs have remained comparatively high, and 
        United States space transportation technology has not been 
        commercially focused.
            (6) As a result, the United States share of the world 
        commercial market for space transportation has decreased from 
        nearly 100 percent 20 years ago to approximately 47 percent in 
        1998.
            (7) In order to avoid undue reliance on foreign space 
        transportation services, the United States must strive to have 
        sufficient domestic capacity as well as the highest quality and 
        the lowest cost per service provided.
            (8) A successful high quality, lower cost United States 
        commercial space transportation industry should also lead to 
        substantial United States taxpayer savings through collateral 
        lower United States Government costs for its space access 
        requirements.
            (9) Opening the commercial opportunities of space to the 
        American aerospace industry must be a high priority of the 
        United States Government as we begin the 21st century.
            (10) Opening space and maintaining United States leadership 
        in the world market does not require massive Government 
        intrusion, but enough Government support on an incremental and 
        timely basis to enable the more cost effective United States 
        private sector to build lower cost space transportation 
        vehicles.
            (11) 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.
            (12) 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 United States 
        Government to provide limited incentives industry wide to 
        assist qualifying United States private sector companies obtain 
        otherwise unavailable private equity financing for the critical 
        development stages of a project, while at the same time keeping 
        Government involvement at a minimum.

SEC. 3. PURPOSES.

    The purposes of this Act are--
            (1) to ensure availability of otherwise unavailable private 
        sector equity financing for United States private sector 
        development of commercial space transportation vehicles which 
        will have transportation costs significantly below current 
        levels; and
            (2) 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 open the space frontier to the American 
                people.

SEC. 4. DEFINITIONS.

    In this Act:
            (1) Secretary.--The term ``Secretary'' means the Secretary 
        of Transportation.
            (2) 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, whether real or personal property, which are 
necessary to conduct a launch, whether on land, sea, in the Earth's 
atmosphere, or beyond the Earth's atmosphere.
            (3) Space transportation vehicle.--The term ``space 
        transportation vehicle'' includes all types of vehicles, 
        whether now in existence, developed in the future, or currently 
        under design, development, construction, reconstruction, or 
        reconditioning, which are constructed in the United States by a 
        United States commercial provider and owned by the commercial 
        provider, for the purpose of operating in, or transporting a 
        payload to, from, or within, outer space, or in suborbital 
        trajectory.
            (4) State.--The term ``State'' means any State in the 
        United States, 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.
            (5) 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 as 
        a corporation or a Limited Liability Company (LLC).
            (6) 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, and 
        producing commercial space transportation vehicles.
            (7) United states commercial space transportation vehicle 
        industry.--The term ``United States commercial space 
        transportation vehicle industry'' means the collection of 
        United States commercial space transportation vehicle 
        providers.
            (8) Space transportation costs significantly below current 
        levels.--The term ``space transportation costs significantly 
        below current levels'' means at the time of application, for 
        that market segment for which, or in which, the space 
        transportation vehicle is designed, developed, produced, 
        maintained, or operated, the cost of producing, maintaining, 
        and operating the vehicle is 50 percent of the then space 
        transportation costs in that market segment as estimated by the 
        Secretary. If no market exists for the transportation proposed 
        at the time of application, the 50 percent requirement of the 
        preceding sentence shall be treated as being met if the vehicle 
        has a reasonable possibility of creating the market proposed.

SEC. 5. CREDIT FOR PURCHASE OF SPACE TRANSPORTATION VEHICLE PROVIDER 
              STOCK.

    (a) In General.--Part IV of subchapter A of chapter 1 of the 
Internal Revenue Code of 1986 (relating to credits against tax) is 
amended by adding at the end the following new subpart:

                ``Subpart H--Space Transportation Credit

``SEC. 54. CREDIT FOR PURCHASE OF SPACE TRANSPORTATION VEHICLE PROVIDER 
              STOCK.

    ``(a) Allowance of Credit.--
            ``(1) In general.--There shall be allowed as a credit 
        against the tax imposed by this chapter for the taxable year an 
        amount equal to the applicable percentage of the aggregate 
        amount paid by the taxpayer during the taxable year for the 
        purchase of qualified space transportation vehicle provider 
        stock.
            ``(2) Applicable percentage.--For purposes of paragraph 
        (1), the applicable percentage is the percentage determined in 
        accordance with the following table:

                ``For taxable years beginning
                                                         The applicable
                  in calendar year--
                                                        percentage is--
                    2002, 2003, and 2004...................         50 
                    2005...................................         40 
                    2006...................................         35 
                    2007...................................         30 
                    2008 and 2009..........................         20 
                    2010 and thereafter....................         0. 
    ``(b) Maximum Credit.--
            ``(1) Limitation for each provider.--
                    ``(A) Large capitalization providers.--The credit 
                allowed under this section with respect to the stock of 
                each large capitalization space transportation vehicle 
                provider purchased during a calendar year shall not 
                exceed--
                            ``(i) $50,000,000 for 2002,
                            ``(ii) $100,000,000 for 2003,
                            ``(iii) $125,000,000 for 2004,
                            ``(iv) $175,000,000 for 2005,
                            ``(v) $200,000,000 for 2006,
                            ``(vi) $50,000,000 for 2007, and
                            ``(vii) $0 for 2008 and 2009.
                    ``(B) Small capitalization providers.--The credit 
                allowed under this section with respect to the stock of 
                each small capitalization space transportation vehicle 
                provider purchased during a calendar year shall not 
                exceed--
                            ``(i) $35,000,000 for 2002,
                            ``(ii) $40,000,000 for 2003,
                            ``(iii) $45,000,000 for 2004,
                            ``(iv) $50,000,000 for each of 2005 and 
                        2006,
                            ``(v) $40,000,000 for 2007, and
                            ``(vi) $35,000,000 for each of 2008 and 
                        2009.
            ``(2) Aggregate limit.--The aggregate credit allowed under 
        this section with respect to the stock of all space 
        transportation vehicle providers purchased during a calendar 
        year shall not exceed--
                    ``(A) $395,000,000 for 2002,
                    ``(B) $580,000,000 for 2003,
                    ``(C) $690,000,000 for 2004,
                    ``(D) $875,000,000 for 2005,
                    ``(E) $950,000,000 for 2006,
                    ``(F) $430,000,000 for 2007,
                    ``(G) $245,000,000 for 2008, and
                    ``(H) $245,000,000 for 2009.
    ``(c) Qualified Space Transportation Vehicle Provider Stock.--For 
purposes of this section--
            ``(1) In general.--The term `qualified space transportation 
        vehicle provider stock' means any common stock in a C 
        corporation or any membership unit in a State-registered 
        limited liability company (LLC) if--
                    ``(A) as of the date of issuance, such corporation 
                is a qualified space transportation vehicle provider,
                    ``(B) such stock is acquired by the taxpayer at its 
                original issue (directly or through an underwriter) in 
                exchange for money or other property (not including 
                stock), and
                    ``(C) the proceeds of such issue are used by such 
                issuer during the 36-month period beginning on the date 
                of issuance in substantial compliance with the issuer's 
                projected usage submitted to the Secretary of 
                Transportation under section 6 of the Invest in Space 
                Now Act of 2001 with its application for authorization.
            ``(2) Qualified space transportation vehicle provider.--The 
        term `qualified space transportation vehicle provider' means 
        any United States commercial space transportation vehicle 
        provider (as defined in section 4 of the Invest in Space Now 
        Act of 2001) for which an authorization is in effect under 
        section 6 of such Act.
            ``(3) Capitalization status of qualified providers.--For 
        purposes of applying the limits under subsection (b)--
                    ``(A) Designation.--The Secretary shall, using the 
                guidelines developed under subparagraph (B), designate 
                each qualified space transportation vehicle provider as 
                a large capitalization space transportation vehicle 
                provider or a small capitalization space transportation 
                vehicle provider.
                    ``(B) Guidelines.--The Secretary of Transportation 
                shall, not later than 6 months after the date of the 
                enactment of the Invest in Space Now Act of 2001, 
                publish guidelines under which qualified space 
                transportation vehicle providers are classified into 
                large capitalization providers and small capitalization 
                providers. The guidelines shall be based on factors 
                particular to the space transportation industry, 
                including--
                            ``(i) the capital requirements necessary to 
                        support the type of provider the taxpayer is or 
                        is trying to become,
                            ``(ii) the payload size of space 
                        transportation vehicles developed or used by 
                        the taxpayer,
                            ``(iii) the markets in which the taxpayer 
                        is participating, and
                            ``(iv) whether human spaceflight is 
                        included.
    ``(d) Recapture of Credit.--If--
            ``(1) the taxpayer fails to hold qualified space 
        transportation vehicle provider stock for the 3-year period 
        beginning on the date such stock was purchased by the taxpayer, 
        or
            ``(2) during such 3-year period, the issuer of such stock 
        ceases to meet the requirements of section 6 of the Invest in 
        Space Now Act of 2001,
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 stock.
    ``(e) Special Rules.--For purposes of this section--
            ``(1) Certain purchases by corporation of its own stock.--
        Rules similar to the rules of section 1202(c)(3) shall apply.
            ``(2) Related persons.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), for purposes of subsection (b) the 
                taxpayer and any person related to the taxpayer shall 
                be treated as one person.
                    ``(B) Exception.--A taxpayer may elect to treat not 
                more than one other person who is related to such 
                taxpayer as unrelated for purposes of this section. A 
                person treated as unrelated to the taxpayer under the 
                previous sentence shall not be the same capitalization 
                status (determined under subsection (c)(3) as the 
                taxpayer.
                    ``(C) Related persons.--For purposes of this 
                paragraph, a person is a related person to another 
                person if--
                            ``(i) the relationship between such persons 
                        would result in a disallowance of losses under 
                        section 267 or 707(b), or
                            ``(ii) such persons are members of the same 
                        controlled group of corporations (as defined in 
                        section 1563(a), except that `more than 50 
                        percent' shall be substituted for `at least 80 
                        percent' each place it appears therein).
    ``(f) Basis Adjustments.--For purposes of this subtitle, if a 
credit is allowed under this section for the purchase of any stock--
            ``(1) the increase in the basis of such stock which would 
        (but for this subsection) result from such purchase shall be 
        reduced by the amount of the credit so allowed, and
            ``(2) the basis of such stock shall be increased by the 
        amount of the increase under subsection (d).
    ``(g) Application With Other Credits.--The credit allowed under 
subsection (a) for any taxable year shall not exceed the excess of--
            ``(1) the sum of the regular tax liability (as defined in 
        section 26(b)) plus the tax imposed by section 55, over
            ``(2) the sum of the credits allowable under this part 
        (other than subpart C thereof, relating to refundable 
        credits).''
    (b) Conforming Amendment.--Subsection (a) of section 1016 of such 
Code is amended by striking ``and'' at the end of paragraph (26), by 
striking the period at the end of paragraph (27) and inserting ``; 
and'', and by adding at the end the following new paragraph:
            ``(28) to the extent provided in section 54(f), in the case 
        of amounts with respect to which a credit has been allowed 
        under section 54 or a recapture imposed under section 54(d).''.
    (c) Clerical Amendment.--The table of subparts for part IV is 
amended by adding at the end the following new item:

                              ``Subpart H. Space transportation 
                                        credit.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to amounts paid after December 31, 2000.

SEC. 6. UNITED STATES COMMERCIAL SPACE TRANSPORTATION VEHICLE 
              AUTHORIZATION.

    (a) United States Commercial Space Transportation Vehicle Industry 
Authorization Program.--
            (1) Establishment of program.--There shall be a United 
        States Commercial Space Transportation Vehicle Industry 
        Authorization Program to provide authorization for tax credit 
        qualification under section 54 of the Internal Revenue Code of 
        1986 to multiple United States commercial space transportation 
        vehicle providers developing vehicles with space transportation 
        costs significantly below current levels.
            (2) 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 United States Government officials, 
        and private sector representatives, as necessary, to ensure 
        fair, effective, and timely program administration and 
        streamlined authorization.
            (3) Scope of program.--
                    (A) Temporary government support.--The United 
                States Commercial Space Transportation Vehicle Industry 
                Authorization Program is intended to provide 
                eligibility for tax credits under section 54 of the 
                Internal Revenue Code of 1986 to investors to support 
                financing of qualified commercial space transportation 
                vehicle development ventures during their startup 
                phases.
                    (B) Exclusion of space launch sites.--The program 
                does not provide authorization pertaining to the 
                construction, reconstruction, or reconditioning of 
                space launch sites.
                    (C) Exclusion of nonrelated activities.--The 
                program does not provide authorization for any 
                corporation unless its business plan provides that the 
                main core mission of the corporation is the 
                construction, reconstruction, reconditioning, sale, or 
                distribution of any product which is integral to the 
                design, development, construction, reconstruction, or 
                reconditioning of a space transportation vehicle as 
                described in subsection (b).
            (4) 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 Authorization 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 or 
        employees notwithstanding any other provision of law.
            (5) Consultation.--The Secretary shall consult to the 
        extent deemed necessary for effective implementation of this 
        Act with appropriate Federal agencies and congressional and 
        space transportation industry representatives.
            (6) Program management.--The Secretary shall manage the 
        authorization program consistent with the purposes of this Act.
    (b) Authorization of Vehicle Providers.--
            (1) Authorization based on reasonable possibility of 
        success.--
                    (A) In general.--The Secretary shall authorize 
                vehicle providers who demonstrate by the submission of 
                technical and financial information that they have a 
                reasonable possibility of developing, operating, and 
                maintaining a space transportation vehicle or vehicles 
                with space transportation costs significantly below 
                current levels.
                    (B) Response by secretary.-- Authorization by the 
                Secretary is deemed granted unless within 120 days of 
                application submission the Secretary determines that 
                the provider has no reasonable possibility of 
                significantly lowering space transportation costs.
            (2) Possible commercial viability and capital requirement 
        to qualify stock for credit.--To demonstrate possible 
        commercial viability the United States commercial space 
        transportation vehicle provider must raise $10,000,000 of 
        equity investment during the year of application in order to 
        qualify its stock investors for credit under this Act. Equity 
        raised in order to meet commercial viability tests is eligible 
        for credit once authorization has been completed. The United 
        States commercial space transportation vehicle provider may 
        qualify additional stock for investor credit up to the maximum, 
        as provided, in section 54(b) of the Internal Revenue Code of 
        1986, as added by section 5 of this Act.
            (3) Annual verification of substantial compliance.--
                    (A) In general.--Once authorized, a vehicle 
                provider must submit to the Secretary each year a 
                certified audit opinion letter verifying its use of 
                funds in substantial compliance with its application.
                    (B) Consequence of failures.--
                            (i) Failure to submit a certified audit 
                        opinion letter verifying substantial compliance 
                        with its application will result in 
                        deauthorization of the vehicle provider.
                            (ii) Failure to use funds received after 
                        authorization for the development of a space 
                        transportation vehicle or vehicles with the 
                        goal to reduce space transportation costs 
                        significantly below current levels will result 
                        in deauthorization. Failure to achieve success 
                        will not result in deauthorization.
                                 <all>

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