(6) 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 corpora-
tion or a Limited Liability Company (LLC). 
(7) 
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, and pro-
ducing commercial space transportation vehicles.
(8) 
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. 
(9) SPACE
TRANSPORTATION
COSTS
SIGNIFI-
CANTLY
BELOW
CURRENT
LEVELS.—The term 
‘‘space transportation costs significantly below cur-
rent 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 pro-
ducing, 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 require-
ment 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 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 by the tax-
payer 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—
2004, 2005, and 2006 ..................................................
2007 .............................................................................
2008 .............................................................................
2009 .............................................................................
2010 and 2011 .............................................................
2012 and thereafter .....................................................
0.
‘‘(b) MAXIMUM CREDIT.—
‘‘(1) LIMITATION FOR EACH PROVIDER.—
‘‘(A) 
LARGE
CAPITALIZATION
PRO-
VIDERS.—The credit allowed under this section 
with respect to the stock of each large capital-
ization space transportation vehicle provider 
purchased during a calendar year shall not ex-
ceed—
‘‘(i) $50,000,000 for 2004, 
‘‘(ii) $100,000,000 for 2005, 
‘‘(iii) $125,000,000 for 2006, 
‘‘(iv) $175,000,000 for 2007, 
‘‘(v) $200,000,000 for 2008, 
‘‘(vi) $50,000,000 for 2009, and 
‘‘(vii) $0 for 2010 and 2011. 
‘‘(B) 
SMALL
CAPITALIZATION
PRO-
VIDERS.—The credit allowed under this section 
with respect to the stock of each small capital-
ization space transportation vehicle provider
purchased during a calendar year shall not ex-
ceed—
‘‘(i) $35,000,000 for 2004, 
‘‘(ii) $40,000,000 for 2005, 
‘‘(iii) $45,000,000 for 2006, 
‘‘(iv) $50,000,000 for each of 2007 
and 2008, 
‘‘(v) $40,000,000 for 2009, and 
‘‘(vi) $35,000,000 for each of 2010 
and 2011. 
‘‘(2) AGGREGATE LIMIT.—The aggregate credit 
allowed under this section with respect to the stock 
of all space transportation vehicle providers pur-
chased during a calendar year shall not exceed—
‘‘(A) $395,000,000 for 2004, 
‘‘(B) $580,000,000 for 2005, 
‘‘(C) $690,000,000 for 2006, 
‘‘(D) $875,000,000 for 2007, 
‘‘(E) $950,000,000 for 2008, 
‘‘(F) $430,000,000 for 2009, 
‘‘(G) $245,000,000 for 2010, and 
‘‘(H) $245,000,000 for 2011.
‘‘(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 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 the Invest in Space Now Act 
of 2003 with its application for authorization. 
‘‘(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 Invest in Space Now Act
of 2003) 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 subpara-
graph (B), designate each qualified space trans-
portation vehicle provider as a large capitaliza-
tion 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 2003, publish guidelines 
under which qualified space transportation vehi-
cle providers are classified into large capitaliza-
tion providers and small capitalization pro-
viders. The guidelines shall be based on factors 
particular to the space transportation industry, 
including—
‘‘(i) the capital requirements nec-
essary to support the type of provider the 
taxpayer is or is trying to become,
‘‘(ii) the payload size of space trans-
portation vehicles developed or used by the 
taxpayer, 
‘‘(iii) the markets in which the tax-
payer is participating, and 
‘‘(iv) whether human spaceflight is in-
cluded. 
‘‘(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 pur-
chased by the taxpayer, or 
‘‘(2) during such 3-year period, the issuer of 
such stock ceases to meet the requirements of sec-
tion 6 of the Invest in Space Now Act of 2003, 
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 sec-
tion—
‘‘(1) CERTAIN PURCHASES BY CORPORATION OF 
ITS OWN STOCK.—Rules similar to the rules of sec-
tion 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 pur-
poses of this section. A person treated as unre-
lated to the taxpayer under the previous sen-
tence shall not be the same capitalization status 
(determined under subsection (c)(3) as the tax-
payer. 
‘‘(C) RELATED
PERSONS.—For purposes 
of this paragraph, a person is a related person 
to another person if—
‘‘(i) the relationship between such per-
sons 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 ap-
pears 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 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) CONFORMING AMENDMENT.—Subsection (a) of 
section 1016 of such Code is amended by striking ‘‘and’’ 
at the end of paragraph (27), by striking the period at
the end of paragraph (28) and inserting ‘‘; and’’, and by 
adding at the end the following new paragraph: 
‘‘(29) 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, 2003. 
SEC. 6. UNITED STATES COMMERCIAL SPACE TRANSPOR-
TATION VEHICLE AUTHORIZATION. 
(a) UNITED STATES COMMERCIAL SPACE TRANS-
PORTATION VEHICLE INDUSTRY AUTHORIZATION PRO-
GRAM.—
(1) ESTABLISHMENT
OF
PROGRAM.—There 
shall be a United States Commercial Space Trans-
portation 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 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 authorization. 
(3) SCOPE OF PROGRAM.—
(A) 
TEMPORARY
GOVERNMENT
SUP-
PORT.—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 trans-
portation vehicle development ventures during 
their startup phases. 
(B) 
EXCLUSION
OF
SPACE
LAUNCH 
SITES.—The program does not provide author-
ization pertaining to the construction, recon-
struction, or reconditioning of space launch 
sites. 
(C) EXCLUSION OF NONRELATED ACTIVI-
TIES.—The program does not provide author-
ization 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 prod-
uct which is integral to the design, develop-
ment, construction, reconstruction, or recondi-
tioning of a space transportation vehicle as de-
scribed in subsection (b). 
(4) NONDISCLOSURE OF CONFIDENTIAL MATE-
RIALS.—Materials that are submitted by a United 
States commercial space transportation vehicle pro-
vider to the Secretary in connection with an applica-
tion submitted under the United States Commercial 
Space Transportation Vehicle Authorization Pro-
gram and deemed by the commercial provider to be 
confidential, and that contain trade secrets or pro-
prietary commercial, financial, or technical informa-
tion of a kind not customarily disclosed to the pub-
lic, shall not be disclosed by the Secretary to persons 
other than Government officers or employees not-
withstanding any other provision of law.
(5) CONSULTATION.—The Secretary shall con-
sult to the extent deemed necessary for effective im-
plementation 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 au-
thorize vehicle providers who demonstrate by 
the submission of technical and financial infor-
mation 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.— Author-
ization by the Secretary is deemed granted un-
less within 120 days of application submission 
the Secretary determines that the provider has 
no reasonable possibility of significantly low-
ering space transportation costs.
(2) POSSIBLE
COMMERCIAL
VIABILITY
AND 
CAPITAL
REQUIREMENT
TO
QUALIFY
STOCK
FOR 
CREDIT.—To demonstrate possible commercial via-
bility the United States commercial space transpor-
tation vehicle provider must raise $5,000,000 of eq-
uity 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 ad-
ditional 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 ve-
hicle provider must submit to the Secretary 
each year a certified audit opinion letter 
verifying its use of funds in substantial compli-
ance with its application. 
(B) CONSEQUENCE OF FAILURES.—
(i) Failure to submit a certified audit 
opinion letter verifying substantial compli-
ance with its application will result in de-
authorization 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 transpor-
tation costs significantly below current lev-
els will result in deauthorization. Failure 
to achieve success will not result in de-
authorization.
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