I 117th CONGRESS 1st Session H. R. 1369 IN THE HOUSE OF REPRESENTATIVES February 25, 2021 Mr. Posey (for himself and Mr. Crist ) 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 provide bonus depreciation for certain space launch expenditures, and for other purposes.

1. Short title This Act may be cited as the American Space Commerce Act of 2021 . 2. Findings Congress finds the following: (1) The United States is the only nation with a competitive commercial space launch industry. (2) A robust domestic launch industry and capability is crucial to the United States’ continuing economic, national security, scientific, and exploration leadership. (3) Commercial space launch vehicles manufactured and launched in the United States by United States launch service providers benefit national security and the national economy, earth and space science, and human spaceflight, and are enablers of the global space economy. (4) Commercial space launch vehicles manufactured and launched in the United States by United States launch service providers are used for virtually all United States national security payloads, and therefore, are indispensable to the security of the United States, as well as its allies and friends. (5) Multiple American companies are developing small launch vehicles to compete in the domestic and international commercial launch market. These companies are financed predominately by private capital, are independently developing capabilities, and are primarily serving commercial customers. (6) Several foreign governments have taken notice of U.S. market growth and have begun to fund their own vehicles to compete within the same market. While some of these international vehicles are putatively “private,” most benefit from subsidies or developmental support from their national governments. (7) The 2019 Report to Congress of the United States-China Economic and Security Review Commission stated, China is taking steps to establish a commanding position in the commercial launch and satellite sectors relying in part on aggressive state-backed financing that foreign market-driven companies cannot match . (8) The report further adds, China has already succeeded in undercutting some U.S. and other foreign launch and satellite providers in the international market, threatening to hollow out these countries’ space industrial bases . (9) China announced a plan to advance its Space ambitions by creating a Space Economic Zone to generate $10 trillion annually. (10) The U.S. commercial launch industry, whose viability the National Aeronautics and Space Administration and the Department of Defense depend on to launch critical national assets, is forced to compete with state-backed launch enterprises across the globe whose launch providers are not required to be profitable. (11) A strong domestic space launch industry is in the national security interest of the United States. (12) Foreign launch providers are heavily subsidized by their governments and use these subsidies to intentionally price below cost in an effort to undercut American competition, materially harming the American industrial base. (13) Increased use of United States-manufactured commercial launch vehicles launched in the United States by United States launch service providers should be encouraged. (14) Congress supports continued United States leadership in space. 3. Special allowance for qualified domestic space launch property (a) Allowance of bonus depreciation for qualified domestic space launch property Section 168(k)(2)(A) of the Internal Revenue Code of 1986 is amended in clause (i), by striking or at the end of subclause (III), by striking or at the end of subclause (IV), by adding or at the end of subclause (V), and by adding at the end the following new subclause: (VI) which is qualified domestic space launch property (as defined in paragraph (11)), . (b) Extension of termination of bonus depreciation for qualified domestic space launch property (1) In general Section 168(k)(2)(A)(iii) of the Internal Revenue Code of 1986 is amended by striking before January 1, 2027. and inserting before January 1, 2027 (in the case of qualified domestic space launch property, before January 1, 2033). . (2) Application of applicable percentage Section 168(k)(6) of such Code is amended by adding at the end the following new subparagraph: (D) Rule for qualified domestic space launch property Notwithstanding any other provisions of this paragraph, in the case of any qualified property which is qualified domestic space launch property, the term applicable percentage means, in the case of property placed in service after December 31, 2023, and before January 1, 2033, 100 percent. . (c) Qualified domestic space launch property defined Section 168(k) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: (11) Qualified domestic space launch property defined For purposes of this subsection— (A) In general The term qualified domestic space launch property means property placed in service before January 1, 2033, that is— (i) a space transportation vehicle or payload (as such terms are defined in section 50101 of title 51, United States Code) that is launched from the United States, or (ii) other property or equipment placed in service for the purpose of facilitating a space launch from the United States. (B) Special rule for space launches from aircraft A space transportation vehicle or payload that is launched from an aircraft shall be considered to be launched from the United States if, and only if, such space transportation vehicle or payload is— (i) substantially manufactured within the United States, as determined by the Secretary, and (ii) launched from an aircraft on a flight that originated from United States soil. (C) United States The term United States includes the possessions of the United States. . (d) Effective date The amendments made by this section shall apply to property placed in service after December 31, 2023.