I
106TH CONGRESS
2D SESSION
H. R. 4676
To amend the Internal Revenue Code of 1986 to encourage the timely develop-
ment of a more cost effective United States commercial space transpor-
tation industry, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JUNE 15, 2000
Mr. COOK 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 Representa-
tives 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
‘‘Space Transportation Investment Act of 2000’’.
(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 certification.
SEC. 2. FINDINGS.
The Congress hereby finds that:
(1) The United States commercial space trans-
portation industry is an essential part of the na-
tional economy and opportunities for United States
commercial providers are growing as international
markets expand.
(2) The development of the United States com-
mercial space transportation industry is consistent
with the national security interests and foreign pol-
icy interests of the United States.
(3) United States trading partners have been
able to lower their commercial space transportation
prices aggressively either through direct cash pay-
ments for commercially targeted product develop-
ment or with indirect benefits derived from non-
market economy status.
(4) 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 re-
mained comparatively high, and United States space
transportation technology has not been commercially
focused.
(5) 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.
(6) 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.
(7) A successful high quality, lower cost United
States commercial space transportation industry
should also lead to substantial United States tax-
payer savings through collateral lower United States
Government costs for its space access requirements.
(8) Opening the space frontier to the American
people must be a high priority of the United States
Government as we begin the 21st century.
(9) Opening this frontier and maintaining
United States leadership in the world market does
not require another massive Government program,
but rather provision of just enough Government sup-
port on an incremental and timely basis to enable
the more cost effective United States private sector
to build lower cost space transportation vehicles.
(10) 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 ob-
stacle, an obstacle our trading partners have re-
moved by providing direct access to Government
funding.
(11) Given the strengths and creativity of pri-
vate industry in the United States, a more effective
alternative to the approach of our trading partners
is for the United States Government to provide lim-
ited incentives industry wide to help qualifying
United States private sector companies obtain other-
wise unavailable private equity financing for the crit-
ical 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 unavail-
able private sector equity financing for United
States private sector development of commercial
space transportation vehicles which will have trans-
portation 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 competi-
tiveness of the United States space industry;
(D) to encourage the growth of space-re-
lated commerce in the United States and inter-
nationally; 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 lo-
cated on, or components of, a launch or landing site,
whether real or personal property, which are nec-
essary to conduct a launch, whether on land, sea, in
the Earth’s atmosphere, or beyond the Earth’s at-
mosphere.
(3) SPACE
TRANSPORTATION
VEHICLE.—The
term ‘‘space transportation vehicle’’ includes all
types of vehicles, whether now in existence, devel-
oped in the future, or currently under design, devel-
opment, construction, reconstruction, or recondi-
tioning; 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, and includes any
component of such vehicle not specifically designed
or adapted for a payload.
(4) STATE.—The term ‘‘State’’ means any
State in the United States, the District of Columbia,
the Commonwealth of Puerto Rico, the Virgin Is-
lands, 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) a commercial provider organized under
the laws of the United States or of a State as
a corporation or a Limited Liability Company
(LLC), or
(B) a subsidiary of a foreign company and
the Secretary of Transportation finds that—
(i) such subsidiary has in the past evi-
denced a substantial commitment to the
United States market through—
(I) investments in the United
States in long-term research, develop-
ment, and manufacturing (including
the manufacture of major components
and subassemblies); and
(II) significant contributions to
employment in the United States; and
(ii) the country or countries in which
such foreign company is incorporated or
organized and, if appropriate, in which it
principally conducts its business, afford re-
ciprocal treatment to companies described
in subparagraph (A) comparable to that
afforded to such foreign company’s sub-
sidiary in the United States, as evidenced
by—
(I) providing comparable oppor-
tunities for companies described in
subparagraph (A) to participate in
Government-sponsored research and
development similar to that authorized
under this Act;
(II) providing no barriers to com-
panies described in subparagraph (A)
with respect to local investment op-
portunities that are not provided to
foreign companies in the United
States; and
(III) providing adequate and ef-
fective protection for the intellectual
property rights of companies de-
scribed in subparagraph (A).
(6) 
UNITED
STATES
COMMERCIAL
SPACE
TRANSPORTATION
VEHICLE
PROVIDER.—The term
‘‘United States commercial space transportation ve-
hicle provider’’ means a United States commercial
provider engaged in designing, developing, pro-
ducing, or operating commercial space transpor-
tation vehicles.
(7) 
UNITED
STATES
COMMERCIAL
SPACE
TRANSPORTATION
VEHICLE
INDUSTRY.—The term
‘‘United States commercial space transportation ve-
hicle industry’’ means the collection of United States
commercial space transportation vehicle providers.
(8) SPACE
TRANSPORTATION
COSTS
SIGNIFI-
CANTLY
BELOW
CURRENT
LEVELS.—The term
‘‘space transportation costs significantly below cur-
rent levels’’ means, for that market segment for
which, or in which, the space transportation vehicle
is designed, developed, produced, maintained, or op-
erated, the cost of producing, maintaining, and oper-
ating the vehicle is 50 percent of the 2000 space
transportation costs in that market segment as esti-
mated by the Secretary.
SEC. 5. CREDIT FOR PURCHASE OF SPACE TRANSPOR-
TATION VEHICLE PROVIDER STOCK.
(a) IN GENERAL.—Part IV of subchapter A of chap-
ter 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 TRANSPOR-
TATION 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 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 fol-
lowing table:
‘‘For taxable years beginning
The applicable
in calendar year—
percentage is—
2001 .............................................................................
2002 .............................................................................
2003 .............................................................................
2004 and 2005 .............................................................
2006 through 2010 ......................................................
2011 and thereafter .....................................................
0.
‘‘(b) MAXIMUM CREDIT.—The credit allowed under
this section with respect to the stock of each space trans-
portation vehicle provider purchased during a calendar
year shall not exceed—
‘‘(1) $35,000,000 for 2001,
‘‘(2) $40,000,000 for 2002,
‘‘(3) $45,000,000 for 2003, and
‘‘(4) $50,000,000 for each of 2004 through
2010.
‘‘(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 stock in a
State-registered limited liability company (LLC) if—
‘‘(A) as of the date of issuance, such cor-
poration is a qualified space transportation ve-
hicle provider;
‘‘(B) such stock is acquired by the tax-
payer 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 be-
ginning on the date of issuance in substantial
compliance with the issuer’s projected usage
submitted to the Secretary of Transportation
under section 6 of such Act with its application
for certification.
‘‘(2) QUALIFIED SPACE TRANSPORTATION VEHI-
CLE PROVIDER.—The term ‘qualified space transpor-
tation vehicle provider’ means any United States
commercial space transportation vehicle provider (as
defined in section 4 of the Space Transportation In-
vestment Act of 2000) which has been certified by
the Secretary of Transportation as provided in sec-
tion 6 of such Act.
‘‘(d) RECAPTURE
OF
CREDIT
WHERE
ISSUER
CEASES TO BE QUALIFIED.—If, during the 3-year period
beginning on the date qualified space transportation vehi-
cle provider stock was purchased by the taxpayer, the
issuer of such stock ceases to meet the requirements of
section 6 of such Act, then notwithstanding any provision
of this subtitle, the tax credits shall be recaptured and
the taxpayer shall add said amount to the tax liability of
the taxpayer during the taxable year during which such
cessation occurs.
‘‘(e) 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 de-
fined in section 26(b)) plus the tax imposed by sec-
tion 55, over
‘‘(2) the sum of the credits allowable under this
part (other than subpart C thereof, relating to re-
fundable credits).’’
(b) 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.’’
SEC. 6. UNITED STATES COMMERCIAL SPACE TRANSPOR-
TATION VEHICLE CERTIFICATION.
(a) UNITED STATES COMMERCIAL SPACE TRANS-
PORTATION VEHICLE INDUSTRY CERTIFICATION PRO-
GRAM.—
(1) ESTABLISHMENT
OF
PROGRAM.—There
shall be a United States Commercial Space Trans-
portation Vehicle Industry certification program to
provide certification 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 pro-
gram shall be carried out by the Secretary of Trans-
portation under a streamlined application process
pursuant to the terms of this section and any regu-
lations that may be promulgated hereunder, in con-
sultation with other United States Government offi-
cials, and private sector representatives, as nec-
essary, to ensure fair, effective, and timely program
administration and streamlined certification.
(3) SCOPE OF PROGRAM.—
(A) 
TEMPORARY
GOVERNMENT
SUP-
PORT.—The United States Commercial Space
Transportation Vehicle Industry Certification
program is intended to provide eligibility for tax
credits under section 54 of the Internal Rev-
enue Code of 1986 to investors to support fi-
nancing of qualified commercial space transpor-
tation vehicle development ventures during their
startup phases.
(B) 
EXCLUSION
OF
SPACE
LAUNCH
SITES.—The program does not provide certifi-
cation pertaining to the construction, recon-
struction, or reconditioning of space launch
sites.
(C) EXCLUSION OF NONRELATED ACTIVI-
TIES.—The program does not provide certifi-
cation for any corporation which includes in its
operations and/or business plan, the construc-
tion, reconstruction, reconditioning, sale, or dis-
tribution of any product which is not integral to
the design, development, construction, recon-
struction, or reconditioning of a space transpor-
tation vehicle or vehicles as described in sub-
section (b).
(4) NONDISCLOSURE OF CONFIDENTIAL MATE-
RIALS.—Materials that are submitted by a United
States commercial space transportation vehicle pro-