American Space Commerce Act of 2021

I 117TH CONGRESS 1ST SESSION H. R. 1369 To amend the Internal Revenue Code of 1986 to provide bonus depreciation for certain space launch expenditures, and for other purposes. 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. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘American Space Com- 4 merce Act of 2021’’. 5 SEC. 2. FINDINGS. 6 Congress finds the following: 7 (1) The United States is the only nation with 8 a competitive commercial space launch industry. 9 VerDate Sep 11 2014 02:02 Mar 22, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H1369.IH H1369 pbinns on DSKJLVW7X2PROD with BILLS 2 •HR 1369 IH (2) A robust domestic launch industry and ca- 1 pability is crucial to the United States’ continuing 2 economic, national security, scientific, and explo- 3 ration leadership. 4 (3) Commercial space launch vehicles manufac- 5 tured and launched in the United States by United 6 States launch service providers benefit national secu- 7 rity and the national economy, earth and space 8 science, and human spaceflight, and are enablers of 9 the global space economy. 10 (4) Commercial space launch vehicles manufac- 11 tured and launched in the United States by United 12 States launch service providers are used for virtually 13 all United States national security payloads, and 14 therefore, are indispensable to the security of the 15 United States, as well as its allies and friends. 16 (5) Multiple American companies are developing 17 small launch vehicles to compete in the domestic and 18 international commercial launch market. These com- 19 panies are financed predominately by private capital, 20 are independently developing capabilities, and are 21 primarily serving commercial customers. 22 (6) Several foreign governments have taken no- 23 tice of U.S. market growth and have begun to fund 24 their own vehicles to compete within the same mar- 25 VerDate Sep 11 2014 02:02 Mar 22, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H1369.IH H1369 pbinns on DSKJLVW7X2PROD with BILLS 3 •HR 1369 IH ket. While some of these international vehicles are 1 putatively ‘‘private,’’ most benefit from subsidies or 2 developmental support from their national govern- 3 ments. 4 (7) The 2019 Report to Congress of the United 5 States-China Economic and Security Review Com- 6 mission stated, ‘‘China is taking steps to establish a 7 commanding position in the commercial launch and 8 satellite sectors relying in part on aggressive state- 9 backed financing that foreign market-driven compa- 10 nies cannot match’’. 11 (8) The report further adds, ‘‘China has al- 12 ready succeeded in undercutting some U.S. and 13 other foreign launch and satellite providers in the 14 international market, threatening to hollow out these 15 countries’ space industrial bases’’. 16 (9) China announced a plan to advance its 17 Space ambitions by creating a Space Economic Zone 18 to generate $10 trillion annually. 19 (10) The U.S. commercial launch industry, 20 whose viability the National Aeronautics and Space 21 Administration and the Department of Defense de- 22 pend on to launch critical national assets, is forced 23 to compete with state-backed launch enterprises 24 VerDate Sep 11 2014 02:02 Mar 22, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H1369.IH H1369 pbinns on DSKJLVW7X2PROD with BILLS 4 •HR 1369 IH across the globe whose launch providers are not re- 1 quired to be profitable. 2 (11) A strong domestic space launch industry is 3 in the national security interest of the United 4 States. 5 (12) Foreign launch providers are heavily sub- 6 sidized by their governments and use these subsidies 7 to intentionally price below cost in an effort to un- 8 dercut American competition, materially harming the 9 American industrial base. 10 (13) Increased use of United States-manufac- 11 tured commercial launch vehicles launched in the 12 United States by United States launch service pro- 13 viders should be encouraged. 14 (14) Congress supports continued United States 15 leadership in space. 16 SEC. 3. SPECIAL ALLOWANCE FOR QUALIFIED DOMESTIC 17 SPACE LAUNCH PROPERTY. 18 (a) ALLOWANCE OF BONUS DEPRECIATION FOR 19 QUALIFIED DOMESTIC SPACE LAUNCH PROPERTY.—Sec- 20 tion 168(k)(2)(A) of the Internal Revenue Code of 1986 21 is amended in clause (i), by striking ‘‘or’’ at the end of 22 subclause (III), by striking ‘‘or’’ at the end of subclause 23 (IV), by adding ‘‘or’’ at the end of subclause (V), and by 24 adding at the end the following new subclause: 25 VerDate Sep 11 2014 02:02 Mar 22, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H1369.IH H1369 pbinns on DSKJLVW7X2PROD with BILLS 5 •HR 1369 IH ‘‘(VI) which is qualified domestic 1 space launch property (as defined in 2 paragraph (11)),’’. 3 (b) EXTENSION OF TERMINATION OF BONUS DEPRE- 4 CIATION FOR QUALIFIED DOMESTIC SPACE LAUNCH 5 PROPERTY.— 6 (1) IN GENERAL.—Section 168(k)(2)(A)(iii) of 7 the Internal Revenue Code of 1986 is amended by 8 striking ‘‘before January 1, 2027.’’ and inserting 9 ‘‘before January 1, 2027 (in the case of qualified do- 10 mestic space launch property, before January 1, 11 2033).’’. 12 (2) APPLICATION OF APPLICABLE PERCENT- 13 AGE.—Section 168(k)(6) of such Code is amended 14 by adding at the end the following new subpara- 15 graph: 16 ‘‘(D) RULE FOR QUALIFIED DOMESTIC 17 SPACE LAUNCH PROPERTY.—Notwithstanding 18 any other provisions of this paragraph, in the 19 case of any qualified property which is qualified 20 domestic space launch property, the term ‘appli- 21 cable percentage’ means, in the case of property 22 placed in service after December 31, 2023, and 23 before January 1, 2033, 100 percent.’’. 24 VerDate Sep 11 2014 02:02 Mar 22, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H1369.IH H1369 pbinns on DSKJLVW7X2PROD with BILLS 6 •HR 1369 IH (c) QUALIFIED DOMESTIC SPACE LAUNCH PROP- 1 ERTY DEFINED.—Section 168(k) of the Internal Revenue 2 Code of 1986 is amended by adding at the end the fol- 3 lowing new paragraph: 4 ‘‘(11) QUALIFIED DOMESTIC SPACE LAUNCH 5 PROPERTY DEFINED.—For purposes of this sub- 6 section— 7 ‘‘(A) IN GENERAL.—The term ‘qualified 8 domestic space launch property’ means property 9 placed in service before January 1, 2033, that 10 is— 11 ‘‘(i) a space transportation vehicle or 12 payload (as such terms are defined in sec- 13 tion 50101 of title 51, United States Code) 14 that is launched from the United States, or 15 ‘‘(ii) other property or equipment 16 placed in service for the purpose of facili- 17 tating a space launch from the United 18 States. 19 ‘‘(B) SPECIAL RULE FOR SPACE LAUNCHES 20 FROM AIRCRAFT.—A space transportation vehi- 21 cle or payload that is launched from an aircraft 22 shall be considered to be launched from the 23 United States if, and only if, such space trans- 24 portation vehicle or payload is— 25 VerDate Sep 11 2014 02:02 Mar 22, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H1369.IH H1369 pbinns on DSKJLVW7X2PROD with BILLS 7 •HR 1369 IH ‘‘(i) substantially manufactured within 1 the United States, as determined by the 2 Secretary, and 3 ‘‘(ii) launched from an aircraft on a 4 flight that originated from United States 5 soil. 6 ‘‘(C) UNITED STATES.—The term ‘United 7 States’ includes the possessions of the United 8 States.’’. 9 (d) EFFECTIVE DATE.—The amendments made by 10 this section shall apply to property placed in service after 11 December 31, 2023. 12 Æ VerDate Sep 11 2014 02:02 Mar 22, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6301 E:\BILLS\H1369.IH H1369 pbinns on DSKJLVW7X2PROD with BILLS