ating payloads and associated activi-
ties; and 
(IV) do not harm historic arti-
facts; 
(iii) provision to the payload owner or 
operator of a clearly articulated rationale, 
in any case in which the Assistant Sec-
retary for Commercial Space Transpor-
tation denies or intends to deny a launch 
or reentry license application due to the 
nature of the deployed payload and associ-
ated activities, that— 
(I) shall not prejudice the Assist-
ant Secretary in a subsequent review 
of the submission with remedies ad-
dressing the rationale; and 
(II) allows the applicant to access 
all relevant classified information for 
which the applicant or its assignees 
have the required security clearance; 
(iv) a requirement that the payload 
owner or operator— 
(I) inform the Assistant Sec-
retary of any material changes to the 
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payload or any associated activities 
prior to launch; and 
(II) report to the Assistant Sec-
retary any material anomalies or de-
partures from the submitted plan dur-
ing the course of operations; and 
(v) penalties for noncompliance with 
any conditions set forth in a license issued 
for the deployment of the payload and as-
sociated activities, which may include— 
(I) a maximum civil penalty of 
$1,000,000, that shall be adjudicated 
in district courts of the United States; 
and 
(II) the forfeiture of any current, 
or denial of future, launch or reentry 
licenses by or involving the payload 
owner or operator. 
(3) EXEMPTIONS.—The following payloads, or 
classes of payload, and associated activities are ex-
empt from any regulations issued pursuant to this 
subsection: 
(A) An activity subject to regulation by the 
Federal Communications Commission under the 
Communications Act of 1934 (47 U.S.C. 151 et 
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seq.) or by the Secretary of Commerce under 
chapter 601 of title 51, United States Code. 
(B) A mission conducted for or with 1 or 
more Federal agencies, and determined to be 
subject to sufficient supervision by the en-
hanced interagency review process established 
under paragraph (2)(B). 
(b) EXEMPTION.—Chapter 509 of title 51, United 
States Code, is amended— 
(1) by adding at the end the following new sec-
tion: 
‘‘§ 50924. Exemption from non-space transportation 
vehicle regulations 
‘‘No vehicle design or mission holding a permit or li-
cense under this chapter for purposes of space transpor-
tation shall be subject to any regulations promulgated by 
the Federal Aviation Administration for purposes of regu-
lating non-space transportation vehicles.’’; and 
(2) in the analysis for such chapter, by adding 
at the end the following new item: 
‘‘50924. Exemption from non-space transportation vehicle regulations.’’. 
(c) PRIZE ACCOUNT.—Chapter 505 of title 51, 
United States Code, is amended— 
(1) by adding at the end the following new sec-
tion: 
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‘‘§ 50507. Prize for commercial space activities 
‘‘(a) ESTABLISHMENT.—The Assistant Secretary for 
Commercial Space Transportation shall establish a prize 
for certain space-related activities carried out by a United 
States-owned commercial entity for activities under a li-
cense to operate space transportation under chapter 509 
of this title. 
‘‘(b) ELIGIBLE ACTIVITIES.—The activities for which 
an entity is eligible to receive a prize under this subsection 
shall include the following: 
‘‘(1) Operation of space stations beyond low- 
Earth orbit housing space flight participants or sci-
entific experiments. 
‘‘(2) Lunar missions. 
‘‘(3) Asteroid missions. 
‘‘(4) Mars missions. 
‘‘(5) Debris clean up and salvage. 
‘‘(6) Point-to-point missions on Earth. 
‘‘(c) REQUIREMENTS.—The Assistant Secretary shall 
promulgate the requirements for qualification for a prize 
under this subsection, and the amount of such prize in 
relation to the activity accomplished.’’; and 
(2) in the analysis for such chapter, by adding 
at the end the following new item: 
‘‘50507. Prize for commercial space activities.’’. 
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100 
(d) LIABILITY INSURANCE AND FINANCIAL RESPON-
SIBILITY REQUIREMENTS.—Section 50914 of title 51, 
United States Code, is amended— 
(1) in subsection (a)(1)— 
(A) the matter preceding subparagraph 
(A) by inserting ‘‘and property’’ after ‘‘obtain 
liability’’; and 
(B) in subparagraph (B)— 
(i) by inserting ‘‘, State, or municipal 
government’’ after ‘‘United States Govern-
ment’’; and 
(ii) by striking ‘‘Government prop-
erty’’ and inserting ‘‘United States Gov-
ernment, State, or municipal property, as 
applicable,’’; and 
(2) by striking subsection (e) and inserting the 
following: 
‘‘(e) LAUNCHES OR REENTRIES INVOLVING GOVERN-
MENT FACILITIES AND PERSONNEL.—The Secretary of 
Transportation shall establish requirements consistent 
with this chapter for proof of financial responsibility and 
other assurances necessary to protect Federal, State, and 
municipal governments and their executive agencies and 
personnel from liability, death, bodily injury, or property 
damage or loss as a result of a launch site or reentry site 
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101 
or a reentry involving a facility or personnel of a Federal, 
State, or municipal government. The Secretary may not 
relieve a Federal, State, or municipal government of liabil-
ity under this subsection for death, bodily injury, or prop-
erty damage or loss resulting from the willful misconduct 
of the Federal, State, or municipal government or its 
agents.’’. 
(e) CREDIT FOR PAYLOADS LAUNCHED BY DOMES-
TIC LAUNCH PROVIDERS.— 
(1) IN GENERAL.—Subpart D of part IV of 
subchapter A of chapter 1 of the Internal Revenue 
Code of 1986 is amended by adding at the end the 
following new section: 
‘‘SEC. 45S. SPACE PAYLOADS LAUNCHED BY DOMESTIC 
LAUNCH PROVIDERS. 
‘‘(a) IN GENERAL.—For purposes of section 38, the 
space payload credit determined under this section for the 
taxable year is an amount equal to 10 percent of the sum 
of the insured value of all payloads of the taxpayer 
launched by a domestic launch provider, or on a launch 
vehicle that meets the requirements of the Buy American 
Act (41 U.S.C. 8301 et seq.), during the taxable year. 
‘‘(b) DOMESTIC LAUNCH PROVIDER.—The term ‘do-
mestic launch provider’ means a domestic C corporation 
or partnership in the trade or business of providing launch 
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102 
services for space transportation pursuant to a license or 
permit under chapter 509 of title 51, United States Code, 
to conduct launch activities. 
‘‘(c) LAUNCH.—A space flight vehicle shall be treated 
as launched if the ignition of a main engine occurs on a 
launch pad, a spaceport runway, or when released from 
an airborne platform.’’. 
(2) CREDIT MADE PART OF GENERAL BUSINESS 
CREDIT.—Subsection (b) of section 38 of such Code 
is amended by striking ‘‘plus’’ at the end of para-
graph (35), by striking the period at the end of 
paragraph (36) and inserting ‘‘, plus’’, and by add-
ing at the end the following new paragraph: 
‘‘(37) the space payload credit determined 
under section 45S(a).’’. 
(3) CLERICAL AMENDMENT.—The table of sec-
tions for subpart D of part IV of subchapter A of 
chapter 1 of such Code is amended by adding at the 
end the following new item: 
‘‘Sec. 45S. Space payloads launched by domestic launch providers.’’. 
(4) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to taxable years begin-
ning after the date of the enactment of this Act. 
(f) STUDY ON LIFTING CERTAIN LAUNCH RESTRIC-
TIONS.— 
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103 
(1) IN GENERAL.—Prior to any decision by the 
United States Trade Representative to lift a restric-
tion on a commercial company utilizing an Indian 
launch vehicle, the United States Trade Representa-
tive shall— 
(A) notify the Comptroller General of the 
United States of the intent to lift such restric-
tion; and 
(B) allow for a public 30-day comment pe-
riod, beginning not earlier than the date of the 
submission of the study under paragraph (2), 
on the proposed decision and the results of such 
study. 
(2) STUDY.—Not later than 30 days after re-
ceiving a notification under paragraph (1), the 
Comptroller General of the United States shall sub-
mit to Congress and the United States Trade Rep-
resentative a study on the ramifications of lifting 
such restriction on the domestic launch industry. 
(g) LOAN GUARANTEE PROGRAM.— 
(1) ESTABLISHMENT.—The Secretary of Com-
merce shall establish a program to make loan guar-
antees to eligible entities to carry out eligible activi-
ties. 
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104 
(2) OBJECTIVES.—The objectives of the pro-
gram established under paragraph (1) are— 
(A) to promote the creation of jobs in the 
United States space sector, including in manu-
facturing, operations, and construction; and 
(B) to encourage startup companies. 
(3) ELIGIBLE ACTIVITIES.— 
(A) IN GENERAL.—The Secretary, in con-
sultation with the Secretary of Transportation, 
the Administrator of the National Aeronautics 
and Space Administration, the Director of Na-
tional Intelligence, and the Secretary of De-
fense, shall develop a list of activities that may 
qualify for a loan guarantee under this sub-
section. 
(B) CONSIDERATIONS.—In developing the 
list of activities under subparagraph (A), the 
Secretary shall consider the following: 
(i) Manufacturing— 
(I) satellites; 
(II) space transportation vehicles; 
and 
(III) habitats. 
(ii) Hardware necessary for operations 
of satellites and other space vehicles, such 
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105 
as control centers and other ground sta-
tions. 
(iii) Construction of, upgrades to, and 
maintenance of infrastructure necessary to 
support the space industry. 
(iv) Technology research and develop-
ment activities determined by the Sec-
retary to have the potential to advance the 
state of space-related technology in the 
United States. 
(4) ELIGIBLE
ENTITY
DEFINED.—The term 
‘‘eligible entity’’ means— 
(A) a commercial entity that is domesti-
cally owned or a domestic subsidiary; or 
(B) an FAA-licensed spaceport. 
(5) TERMS AND CONDITIONS.—The Secretary 
shall ensure that any guarantee made pursuant to 
this subsection is made in accordance with the same 
or substantially similar terms and conditions as con-
tained in section 1702 of the Energy Policy Act of 
2005 (42 U.S.C. 16512). 
(h) ELECTROMAGNETIC SPECTRUM
FOR COMMER-
CIAL SPACE LAUNCH ACTIVITIES.— 
(1) SENSE OF CONGRESS.—It is the sense of 
Congress that— 
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106 
(A) commercial space launch services have 
expanded over the past several years and are 
expected to continue growing, to the benefit of 
national security and civil space interests; and 
(B) commercial space launch services will 
require assured access to the appropriate elec-
tromagnetic spectrum for their launch-related 
mission requirements. 
(2) SPECTRUM ALLOCATION AND AUTHORIZA-
TIONS.—Not later than 180 days after the date of 
the enactment of this Act, the Federal Communica-
tions Commission and the Assistant Secretary of 
Commerce for Communications and Information, in 
order to streamline the process for obtaining any 
necessary authorization to use electromagnetic spec-
trum for commercial space launch activities and 
thereby ensure certainty of access to the spectrum 
required for a robust and active commercial space 
launch services sector, shall take such actions as are 
necessary to— 
(A) ensure that the process for obtaining 
such an authorization (including the application 
process and the process for coordination be-
tween the Commission and the Assistant Sec-
retary and coordination between commercial 
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107 
space launch companies and other users of the 
spectrum) is standardized and clearly defined; 
(B) minimize the number and complexity 
of such authorizations required per launch mis-
sion, to the extent practicable; and 
(C) allocate electromagnetic spectrum for 
commercial space launch activities on a co-pri-
mary, interference-protected basis. 
SEC. 310. SPACE TRAINING AIRCRAFT. 
(a) ESTABLISHMENT.—The Secretary of Transpor-
tation shall establish a program to allow commercial enti-
ties to operate space training flights using aircraft with 
valid airworthiness certificates, including those in an ex-
perimental category, issued by the Federal Aviation Ad-
ministration. 
(b) EXEMPTIONS.—A space training flight operating 
under the program shall not be subject to— 
(1) the aircraft certification requirements of 
part 121 of title 14, Code of Federal Regulations; 
and 
(2) the prohibition on the operation of aircraft 
with experimental certificates carrying persons or 
property for compensation or hire under part 91 of 
title 14, Code of Federal Regulations. 
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108 
(c) ELIGIBILITY.—A space training flight is eligible 
for the exemptions under subsection (b) if— 
(1) such flight originates and terminates at an 
FAA-licensed spaceport; 
(2) the commercial entity operating the space 
training flight provides written notification to all 
passengers describing the exemptions such flight 
qualifies for under this section; and 
(3) all passengers of the flight provide the com-
mercial entity with written consent. 
(d) STATUTORY CONSTRUCTION.—Nothing in this 
section shall be construed to prohibit a commercial entity 
from operating a flight using an experimental aircraft if 
such operation is otherwise permitted by law. 
SEC. 311. WORKFORCE ENHANCEMENT. 
Section 83 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following: 
‘‘(i) STOCK
OR OPTION-RELATED COMPENSATION 
TRANSFERRED BY A STARTUP DOMESTIC COMMERCIAL 
SPACE COMPANY.— 
‘‘(1) IN
GENERAL.—Any person described in 
paragraph (2) may elect to include in his gross in-
come for the taxable year in which such person sells 
or otherwise disposes of stock or options described in 
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109 
paragraph (2) in an arm’s length transaction, the 
excess of— 
‘‘(A) the fair market value of such prop-
erty at the time of such sale or disposition (de-
termined without regard to any restriction other 
than a restriction which by its terms will never 
lapse), over 
‘‘(B) the amount (if any) paid for such 
property. 
If such election is made, subsection (a) shall not 
apply with respect to the transfer of such stock or 
option. 
‘‘(2) PERSON
DESCRIBED.—A person is de-
scribed in this paragraph if the person— 
‘‘(A) performs services in connection with 
which stock or option-related compensation is 
transferred by a domestic commercial space 
company during any taxable year in which the 
company incurs start-up expenditures (whether 
or not claimed by such company), and 
‘‘(B) does not own or is considered as not 
owning within the meaning of section 318— 
‘‘(i) more than 1 percent of the out-
standing stock of the corporation or stock 
possessing more than 1 percent of the total 
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110 
combined voting power of all stock of the 
corporation, or 
‘‘(ii) if the employer is not a corpora-
tion, does not own more than 1 percent of 
the capital or profits interest in the em-
ployer. 
‘‘(3) DOMESTIC
COMMERCIAL
SPACE
COM-
PANY.—The term ‘domestic commercial space com-
pany’ means a company engaging in a line of busi-
ness unique to a space company, such as launch, 
satellite operations, software development, satellite 
manufacturing, spacecraft manufacturing, and space 
transportation vehicle manufacturing, with oper-
ations and employees based in the United States. 
‘‘(4) START-UP
EXPENDITURES.—The term 
‘start-up expenditures’ has the meaning given such 
term by section 195.’’. 
Æ 
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