Bill-Nelson_08172010_001.txt

CAPE CANAVERAL, FL — U.S. Sen. Bill Nelson, in a move to further lessen the impact from the wind-down of the space shuttle, this morning announced a plan aimed at boosting the commercial rocket industry and attracting thousands of jobs to Florida’s Space Coast.

In meetings with representatives from NASA and various commercial aerospace ventures at Cape Canaveral on Tuesday, Nelson touted a new measure that would create up to five regional business enterprise zones around the country as magnets for commercial space ventures – which in turn would attract jobs to areas where there are lots of scientists and engineers. 
 
More specifically, his office said, the Commercial Space Jobs and Investment Act would allow space-related businesses - situated around places like the Kennedy Space Center ( KSC ) - to qualify for major tax breaks and other incentives.
 
“President Kennedy was right when he predicted that space exploration would create a great number of new companies and strengthen our economy,” Nelson said.  “What we’re doing now is everything we can to ensure KSC’s continued importance to our nation’s space exploration effort, while also broadening the economic opportunities along our Space Coast.”
 
Nelson said this new measure ( below ) is the next critical step to spurring space-industry job growth in the region.  Earlier this month, the U.S. Senate quickly and unanimously passed a different Nelson-engineered plan, and the U.S. House of Representatives is considering a comparable measure.  The Senate-approved plan provides enough money for another space shuttle flight next year, for jump-starting NASA’s new heavy-lift rocket, and for developing the commercial rocket industry – all of which will save jobs of thousands of displaced shuttle workers.
The new proposal - to give tax breaks to commercial space entrepreneurs - is drawing the support of aerospace industry leaders including those from Space Florida, the state-backed organization charged with promoting the development of commercial rocketry and related undertakings.

"The Commercial Space Jobs and Investment Act symbolizes a significant step forward in ensuring the right incentives are in place to attract industry to Florida, and the broader domestic marketplace," said Frank DiBello, Space Florida president.  "This bill will stimulate the commercial space industry to create jobs in our state, at a time when we need it most."
 
 
 
A copy of the bill follows:
 
111TH CONGRESS
2D SESSION S. ll
To amend the Internal Revenue Code of 1986 to encourage investment in
commercial spaceflight facilities and equipment, research, and job training,
and for other purposes.
IN THE SENATE OF THE UNITED STATES
llllllllll
Mr. NELSON of Florida introduced the following bill; which was read twice and
referred to the Committee on llllllllll
A BILL
To amend the Internal Revenue Code of 1986 to encourage
investment in commercial spaceflight facilities and equipment,
research, and job training, and for other purposes.
1 Be it enacted by the Senate and House of Representa2
tives of the United States of America in Congress assembled,
3 SECTION 1. SHORT TITLE.
4 This Act may be cited as the ‘‘Commercial Space
5 Jobs and Investment Act of 2010’’.
6 SEC. 2. COMMERCIAL SPACE CAPITAL FORMATION CREDIT.
7 (a) IN GENERAL.—Subpart B of part IV of sub8
chapter A of chapter 1 of the Internal Revenue Code of
2
MAT10618 S.L.C.
1 1986 is amended by inserting after section 30D the fol2
lowing new section:
3 ‘‘SEC. 30E. COMMERCIAL SPACE CAPITAL FORMATION
4 CREDIT.
5 ‘‘(a) ALLOWANCE OF CREDIT.—There shall be al6
lowed as a credit against the tax imposed by this chapter
7 for the taxable year an amount equal to 20 percent of the
8 qualified equity investment paid by the taxpayer during
9 the taxable year.
10 ‘‘(b) QUALIFIED EQUITY INVESTMENT.—For pur11
poses of this section—
12 ‘‘(1) IN GENERAL.—The term ‘qualified equity
13 investment’ means any equity investment in a quali14
fied commercial space entity if—
15 ‘‘(A) such investment is acquired by the
16 taxpayer at its original issue (directly or
17 through an underwriter) in exchange for cash,
18 and
19 ‘‘(B) such investment is designated for
20 purposes of this section by the qualified com21
mercial space entity.
22 ‘‘(2) TREATMENT OF SUBSEQUENT PUR23
CHASERS.—The term ‘qualified equity investment’
24 includes any equity investment which would (but for
25 paragraph (1)(A)) be a qualified equity investment
3
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1 in the hands of the taxpayer if such investment was
2 a qualified equity investment in the hands of a prior
3 holder.
4 ‘‘(3) REDEMPTIONS.—A rule similar to the rule
5 of section 1202(c)(3) shall apply for purposes of this
6 subsection.
7 ‘‘(4) EQUITY INVESTMENT.—The term ‘equity
8 investment’ means—
9 ‘‘(A) any stock (other than nonqualified
10 preferred stock as defined in section 351(g)(2))
11 in an entity which is a corporation, and
12 ‘‘(B) any capital interest in an entity
13 which is a partnership.
14 ‘‘(c) QUALIFIED COMMERCIAL SPACE ENTITY.—For
15 purposes of this section—
16 ‘‘(1) IN GENERAL.—The term ‘qualified com17
mercial space entity’ means any domestic corpora18
tion or partnership the principal trade or business of
19 which is the commercial development of space and
20 the principal place of business is located in a Com21
mercial Space Enterprise Zone designated under
22 subsection (g).
23 ‘‘(2) COMMERCIAL DEVELOPMENT OF SPACE.—
24 The term ‘commercial development of space’
25 means—
4
MAT10618 S.L.C.
1 ‘‘(A) the development of private space
2 launch vehicles, reentry vehicles, and related
3 equipment,
4 ‘‘(B) the development, provision, and oper5
ation of private space launching, reentry, and
6 related services, and
7 ‘‘(C) other specific activities identified by
8 the Secretary in rules, regulations, or formal
9 guidance consistent with the purposes of this
10 section.
11 ‘‘(d) RECAPTURE OF CREDIT.—If—
12 ‘‘(1) the taxpayer fails to hold the qualified eq13
uity investment the 5-year period beginning on the
14 date such investment was acquired by the taxpayer,
15 or
16 ‘‘(2) during such 5-year period, the entity
17 ceases to be qualified commercial space entity,
18 then notwithstanding any other provision of this subtitle,
19 the tax imposed by this chapter on the taxpayer for the
20 taxable year beginning in the calendar year in which such
21 cessation occurred shall be increased by the amount of
22 credit allowed under subsection (a) to the taxpayer with
23 respect to such investment.
5
MAT10618 S.L.C.
1 ‘‘(e) BASIS ADJUSTMENTS.—For purposes of this
2 subtitle, if a credit is allowed under this section for the
3 acquisition of any investment—
4 ‘‘(1) the increase in the basis of such invest5
ment which would (but for this subsection) result
6 from such acquisition shall be reduced by the
7 amount of the credit so allowed, and
8 ‘‘(2) the basis of such investment shall be in9
creased by the amount of any increase in tax by rea10
son of subsection (d).
11 ‘‘(f) APPLICATION WITH OTHER CREDITS.—
12 ‘‘(1) BUSINESS CREDIT TREATED AS PART OF
13 GENERAL BUSINESS CREDIT.—Except with respect
14 to a taxpayer described in paragraph (2), the credit
15 allowed under subsection (a) for any taxable year
16 shall be treated as a credit listed in section 38(b) for
17 such taxable year (and not allowed under subsection
18 (a)).
19 ‘‘(2) PERSONAL CREDIT.—
20 ‘‘(A) IN GENERAL.—For purposes of this
21 title, the credit allowed under subsection (a) for
22 any taxable year to a taxpayer other than a cor23
poration shall be treated as a credit allowable
24 under subpart A for such taxable year.
6
MAT10618 S.L.C.
1 ‘‘(B) LIMITATION BASED ON AMOUNT OF
2 TAX.—In the case of a taxable year to which
3 section 26(a)(2) does not apply, the credit al4
lowed under subsection (a) for any taxable year
5 by reason of the application of subparagraph
6 (A) shall not exceed the excess of—
7 ‘‘(i) the sum of the regular tax liabil8
ity (as defined in section 26(b)) plus the
9 tax imposed by section 55, over
10 ‘‘(ii) the sum of the credits allowable
11 under subpart A (other than this section
12 and sections 23, 25D, 30, and 30D) and
13 section 27 for the taxable year.
14 ‘‘(g) DESIGNATION OF COMMERCIAL SPACE ENTER15
PRISE ZONES.—
16 ‘‘(1) IN GENERAL.—From among the areas
17 nominated for designation under this subsection, the
18 Secretary of Commerce shall designate not more
19 than 5 Commercial Space Enterprise Zones.
20 ‘‘(2) LIMITATIONS ON DESIGNATION.—No area
21 may be designated under paragraph (1) unless—
22 ‘‘(A) the area is nominated by a State,
23 ‘‘(B) the State provides written assurances
24 and other documentation satisfactory to the
25 Secretary of Commerce that—
7
MAT10618 S.L.C.
1 ‘‘(i) the nominated area has a pres2
ence of high unemployment and economic
3 dislocation in public sector, space-related
4 jobs,
5 ‘‘(ii) the nominated area has a pres6
ence of well-developed human and capital
7 infrastructure and the capacity to effec8
tively use Federal tax incentives to pro9
mote progress in commercial space capa10
bility, including crew and cargo transpor11
tation systems, research and technology
12 development, and other potential activities
13 in low-Earth orbit, and
14 ‘‘(iii) State and local officials, busi15
ness community, and local population have
16 developed a unified, feasible, and effective
17 strategy for contributing to, and increas18
ing, United States competitiveness in the
19 commercial space sector, and
20 ‘‘(C) the Secretary of Commerce deter21
mines that any information furnished is reason22
ably accurate.
23 ‘‘(3) APPLICATION AND DESIGNATION TIM24
ING.—
8
MAT10618 S.L.C.
1 ‘‘(A) ISSUANCE OF APPLICATIONS.—The
2 Secretary of Commerce shall issue Commercial
3 Space Enterprise Zone nomination applications
4 and instructions not later than the date which
5 is 45 days after the date of the enactment of
6 the Commercial Space Jobs and Investment Act
7 of 2010.
8 ‘‘(B) SUBMISSION OF APPLICATIONS.—A
9 State shall submit a Commercial Space Enter10
prise Zone nomination application not later
11 than the date which is 4 months after such ap12
plications are issued under subparagraph (A).
13 ‘‘(C) DESIGNATIONS.—The Secretary of
14 Commerce shall make Commercial Space Enter15
prise Zone designations not later than the date
16 which is 3 months after the application deadline
17 under subparagraph (B).
18 ‘‘(h) TERMINATION.—This section shall not apply to
19 investments acquired after December 31, 2019.’’.
20 (b) CONFORMING AMENDMENTS.—
21 (1) Section 38(b) of the Internal Revenue Code
22 of 1986 is amended by striking ‘‘plus’’ at the end of
23 paragraph (35), by striking the period at the end of
24 paragraph (36) and inserting ‘‘, plus’’, and by add25
ing at the end the following new paragraph:
9
MAT10618 S.L.C.
1 ‘‘(37) the portion of the commercial space cap2
ital formation credit to which section 30E(f)(1) ap3
plies.’’.
4 (2) Section 1016(a) of such Code is amended
5 by striking ‘‘and’’ at the end of paragraph (36), by
6 striking the period at the end of paragraph (37) and
7 inserting ‘‘, and’’, and by adding at the end the fol8
lowing new paragraph:
9 ‘‘(38) to the extent provided in section
10 30E(e)(1).’’.
11 (3) The table of sections for subpart B of part
12 IV of subchapter A of chapter 1 of such Code is
13 amended by inserting after the item relating to sec14
tion 30D the following new item:
‘‘Sec. 30E. Commercial space capital formation credit.’’.
15 (c) EFFECTIVE DATE.—The amendments made by
16 this section shall apply to investments acquired after the
17 date of the enactment of this Act.
18 SEC. 3. COMMERCIAL SPACE RESEARCH CREDIT.
19 (a) IN GENERAL.—Section 41(b) of the Internal Rev20
enue Code of 1986 is amended by adding at the end the
21 following new paragraph:
22 ‘‘(5) COMMERCIAL SPACE RESEARCH.—
23 ‘‘(A) ENHANCED CREDIT.—In the case of
24 any taxable year in which the qualified research
25 expenses of the taxpayer include qualified com10
MAT10618 S.L.C.
1 mercial space research expenses, subsection
2 (a)(1)—
3 ‘‘(i) shall be applied by first taking
4 into account such qualified research ex5
penses which are not qualified commercial
6 space research expenses, and
7 ‘‘(ii) shall be applied by substituting
8 ‘30 percent’ for ‘20 percent’ in the case of
9 such qualified commercial space research
10 expenses.
11 ‘‘(B) QUALIFIED COMMERCIAL SPACE RE12
SEARCH EXPENSES.—For purposes of this
13 paragraph, the term ‘qualified commercial space
14 research expenses’ means qualified research ex15
penses attributable to research undertaken in a
16 Commercial Space Enterprise Zone designated
17 under section 30E(g) for the purpose of discov18
ering information—
19 ‘‘(i) which is technological in nature,
20 and
21 ‘‘(ii) the application of which is in22
tended to be useful in the commercial de23
velopment of space (as defined in section
24 30E(c)(2)).
11
MAT10618 S.L.C.
1 ‘‘(C) TERMINATION.—This paragraph shall
2 not apply to research expenses incurred after
3 December 31, 2019.’’.
4 (b) EFFECTIVE DATE.—The amendment made by
5 this section shall apply to research expenses incurred after
6 the date of the enactment of this Act.
7 SEC. 4. SPECIAL DEPRECIATION ALLOWANCE FOR COM8
MERCIAL SPACE PROPERTY.
9 (a) IN GENERAL.—Section 168 of the Internal Rev10
enue Code of 1986 is amended by adding at the end the
11 following new subsection:
12 ‘‘(o) SPECIAL ALLOWANCE FOR COMMERCIAL SPACE
13 PROPERTY.—
14 ‘‘(1) ADDITIONAL ALLOWANCE.—
15 ‘‘(A) IN GENERAL.—In the case of any
16 qualified commercial space property to which
17 this subparagraph applies—
18 ‘‘(i) the depreciation deduction pro19
vided by section 167(a) for the taxable
20 year in which such property is placed in
21 service shall include an allowance equal to
22 50 percent of the adjusted basis of the
23 qualified commercial space property, and
24 ‘‘(ii) the adjusted basis of the quali25
fied commercial space property shall be re12
MAT10618 S.L.C.
1 duced by the amount of such deduction be2
fore computing the amount otherwise al3
lowable as a depreciation deduction under
4 this chapter for such taxable year and any
5 subsequent taxable year.
6 ‘‘(B) APPLICATION.—Subparagraph (A)
7 applies to qualified commercial space property
8 placed in service on or after the date of the en9
actment of the Commercial Space Jobs and In10
vestment Act of 2010 and before January 1,
11 2020, which is—
12 ‘‘(i) acquired by the taxpayer on or
13 after such date of enactment and before
14 January 1, 2020, but only if no written
15 binding contract for the acquisition was in
16 effect before such date of enactment, or
17 ‘‘(ii) acquired by the taxpayer pursu18
ant to a written binding contract which
19 was entered into on or after such date of
20 enactment and before January 1, 2020.
21 ‘‘(2) QUALIFIED COMMERCIAL SPACE PROP22
ERTY.—For purposes of this subsection—
23 ‘‘(A) IN GENERAL.—The term ‘qualified
24 commercial space property’ means any private
25 space launch vehicle, reentry vehicle, launch
13
MAT10618 S.L.C.
1 support facilities, space recovery support facili2
ties, and other space transportation infrastruc3
ture—
4 ‘‘(i) to which this section applies,
5 ‘‘(ii) the original use of which com6
mences with the taxpayer on or after such
7 date of enactment, and
8 ‘‘(iii) substantially all of the use of
9 which occurs in a Commercial Space En10
terprise Zone designated under section
11 30E(g) and in the active conduct of a
12 trade or business by the taxpayer in such
13 Zone.
14 ‘‘(B) EXCEPTIONS.—
15 ‘‘(i) BONUS DEPRECIATION PROPERTY
16 UNDER SUBSECTION (k).—The term ‘quali17
fied commercial space property’ shall not
18 include any property to which subsection
19 (k)(1) applies.
20 ‘‘(ii) ALTERNATIVE DEPRECIATION
21 PROPERTY.—The term ‘qualified commer22
cial space property’ shall not include any
23 property to which the alternative deprecia24
tion system under subsection (g) applies,
25 determined without regard to paragraph
14