Posted: Thursday, June 14, 2001
Calvert (R-CA) today introduced legislation with Congressman
Solomon Ortiz (D-TX) to grant tax credits to investors in the
emerging commercial space launch vehicle industry. This
approach, which ProSpace has been advocating for two years, promises
to revolutionize the financing of the next generation of space
Simply stated, those who invest in companies developing commercial space launch vehicles will receive a tax credit. The legislation delineates two categories of tax credits – one for small vehicles and the other for large vehicles – thereby assuring that the investors in both small start-up aerospace launch vehicle companies and well established aerospace companies benefit.
"Today's bill represents an enormous step forward in developing the United States' commercial space transportation industry," said Rep. Calvert. "Companies that are now developing, designing and perfecting the next generation of launch vehicles are embarking on a remarkable journey into the commercial frontier of space. Right now, the United States has an embarrassingly small percentage of the global commercial space industry."
The United States has traditionally been the world leader in space, but not in the commercial space launch vehicle industry. In this field we have lagged behind France, China, Russia and Italy.
"Our bill will allow a company, due tax credits in the first years of development, to pass those credits through to the investors," observed Rep. Ortiz. "The trick here is to make it financially feasible for the private sector to fund near-Earth, next-generation vessels. Letting tax credits go through a company to their investors gives investors additional incentives to invest in broadening the commercial space industry."
"The cancellation of NASA's X-33/34 signals an end to the old approach of building a space plane for our government (one company working exclusively with NASA on a single design), and inaugurates a new approach for the country," said Rep. Calvert. He estimates the federal tax dollars this industry could generate in just two years after the new vehicles are operational would more than pay the cost of the credit.
"There will be substantial savings to be realized on government launches as well when these new vehicles fly," noted ProSpace President Marc Schlather. "The key is in the process of using some $4 billion in indirect government support to create over $12 billion in private investment. The systems built using the approach put forward by Mr. Calvert and Mr. Ortiz promise to open a whole new frontier for the United States in space – new markets, new industries, new jobs and new tax revenues. This is a win-win for all involved."
For a company to qualify for the tax credit they must demonstrate to the Secretary of Transportation that their approach is designed to develop a vehicle which can result in launch costs significantly below current levels and show commercial viability by raising a minimum of $10 million in equity capital.
At introduction this bipartisan legislation had 13 original cosponsors, including: Reps. Frank Lucas (R-OK), Mark Foley (R-FL), Joe Baca (D-CA), Howard "Buck" McKeon (R-CA), Jerry Lewis (R-CA), Roscoe Bartlett (R-MD) James Sensenbrenner (R-WI), Joe Skeen (R-NM), Dave Weldon (R-FL), Dennis Rehberg (R-MT), Max Sandlin (D-TX), Lois Capps (D-CA) and Silvestre Reyes (D-TX).
ProSpace applauds this approach and commends Mr. Calvert and Mr. Ortiz for their leadership. We also urge you to contact your representative and ask them to support HR2177.
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