H.R. 1931, H.R. 2177, and H.R. 2504: A Trio of Bills to Support the Commercial Development of Space (Opinion)

By dennis_wingo
July 25, 2001
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  • H.R. 2504 “Zero Gravity, Zero Tax Act of 2001”

  • H.R. 2177 “Invest in Space Now Act of 2001”

  • H.R. 1931 “Spaceport Equality Act”

    In 1968 in the second year of the 22nd century television adventure known as Star Trek a vision of space was presented on the silver screen that was much closer in time. That vision was inspired by Arthur C. Clark and rendered onto celluloid by Stanley Kubrick.

    That vision was of the year two thousand and one, the year in which we currently live. That vision, apart from its fictional monolith, was one that most though would be fully in place by this time. The beautiful artwork by Robert McCall of a huge rotating space station serviced by sleek Pan American spaceships was rendered with the technology of the day into a seriously believable motion picture. Human drama and fictional monoliths were orchestrated together in a way that spellbound movie goers of the time and still to this day carries its weight in believability. What went wrong? What happened on the road between the vision and the reality of today?

    Let us forget for a minute the death of the Apollo program, let us also ignore the lost promise of the Space Shuttle as a low cost space transportation system. Let us even pass over the multibillion dollar overruns of the nascent International Space Station Alpha. What is the common thread that defines all of those efforts? They are all examples of space activity by our nation but taken together they are an anomaly in history. That anomaly is that they are all programs of, by, and for the government.

    This has not always been the case. Space is such a vast new frontier for the American people that the only thing that we can measure it by is the westward expansion of the last century. In developing the west the frontier was bridged by the greed of the Forty Niner’s and their lust for gold, the Oregon trail settlers, and the Mormons of Utah. The vast frontier between the Mississippi river and the Sierra Nevada was called the great American desert.

    Asa Whitney was the first to seriously propose the bridging of the American continent by a national railroad. This was first done in 1844 but gathered steam as the discoveries and the mass exodus to the gold fields commenced in 1849. Mr. Whitney presented his plan for a national railroad year after year to an interested but uncommitted congress. His plans were not to be acted on for all of his efforts. The New York Herald blasted the idea in this manner.

    “…He will never get the aid of the United States, in any way, to his scheme, by a donation of lands or otherwise. The road, if made, will be made by piecemeal, and be connected from time to time, as the settlements progress westward from the Atlantic, and eastward from the pacific coast. A road, to extend upwards of two thousand miles, through a desert, through rugged and snow covered mountains, and a country peopled by warlike savages, is a work of a quarter of a century. Mr. Whitney’s scheme is the most chimerical of all that have been proposed….”

    It took 13 years of hard work by many men before congress finally passed the 1862 Pacific Railroad Act. This act was the only way that a national railroad could be built. It is interesting in the extreme that by this time the congress was so convinced of its importance that millions of dollars were allocated to support the project during the middle of our war between the states.

    The Pacific Railroad Act of 1862 provided for loans to cover the cost of construction in such a way as to guarantee a profit for the builders. If the loan rate was $16,000 per mile on level ground it usually only cost $12,000 per mile to build the road. In the worst areas of the Sierra Nevada mountains the rate was as high as $98,000 dollars per mile. What the railroad companies did is to issue bonds in direct proportion to the amount of track that was built plus tens to hundreds of miles beyond. The bonds were sold at a discount on their face value and would be paid back from the government loan money as the track was built and certified. Also, the companies (The Central Pacific and the Union Pacific) sold stock and were able to make money from their partially built roads. However, it is crystal clear that if the congress had not taken the risk and passed the loan bills that allowed the bonds to be sold, we would have had to wait decades for a transcontinental railroad and our nation would have developed much more slowly and today we would all be much poorer as a nation and a people. The same is true of the Panama Canal, the TVA and many of our other national infrastructure programs that were supported out of the congress and had a material benefit to our people and our national economy.

    We do not have a national space economy in place today because there was no one asking for it in congress during the Moon race. In 1968 there was no Asa Whitney to propose a space transportation system for the American people. There was no Colis Huntington to lobby congress for the good of the nation and for their own self interest. Actually we did not have this in any substantive form until the mid 1990’s.

    In a very interesting way the congress of the United States has always been amenable to the will of the American people who make the time and spend the effort to make their wishes known. I have personally spent a great deal of time in congressional offices as a citizen space activist and know the truth of this. Many times we were able to present our case to our representatives and their staffs while NASA contractor lobbyists waited. We do have a wonderful system and the proof of our diligent efforts and congress’s ability to listen can be seen in the three bills that have been introduced into congress in this session.

    Just as the Pacific Railroad Act of 1862 opened the door that united a nation after the civil war, the three bills, HR 1931, HR 2177, and HR 2504 are a trio of bills that promise to blast open the closed door to a national space economy after the end of the cold war.

    HR 1931 is a bill that gives equal status to Spaceports that airports enjoy today. Just as the aviation bonds bills of the past has enabled the building of an airports around the nation and has made air travel cheaper than driving, the “Spaceport Equality Act of 2001” will help to lower the cost of travel to that great Hilton Hotel in the sky that will be built as a result of HR 2504, the Zero G Zero Tax Act of 2001.

    The Zero G Zero Tax Act of 2001 will remove federal taxes on space activities outside of those common today such as remote sensing and Earth orbital communications. Furthermore it will remove taxes for a ten year period on the capital gain on the sale of stock from a qualified space company. This will help to enable the provision of risk capital in the equity markets for qualified space companies and will be a key enabler of space commerce in the early 21st century. In order to help lower the cost of transportation to that hotel in the sky another bill, HR 2177 has also been introduced. This bill is the “Invest in Space Now Act of 2001”

    This bill gives tax breaks to companies that invest money in space launch vehicle companies. It will provide tax breaks equivalent to the amount of money invested up to a maximum rate that is set on a yearly basis between 2002 and 2007. This bill will lower the risk to companies that seek to build any kind of launch vehicle system and it is the intent of the congress that this lead to lower launch costs that will far outweigh the tax breaks given to the investors in space launch companies.

    These three bills, when considered together, provide the framework that will get us to that grand vision embodied in Arthur Clarke’s masterpiece. NASA will never do it. This is not because NASA is evil or anti space but it is because NASA is simply not structurally designed to be able to do this necessary task. However, the passage of these bills will dramatically improve NASA’s ability to do their missions to the far frontier of Mars by lowering the cost of cargo to space, provide for multiple locations for training and habitation, as well as giving the entire nation a reason to turn their eyes toward the heavens and dream once again that they may be able to participate in that future.

    The flight of Dennis Tito in many ways was a watershed event. It has opened the eyes of many that at least the dream of 2001 is still alive. We really have had the first tourist in space in this year with others soon to be on the way. However, if we seek to open the space frontier to all Americans, instead of the superrich few we must pass these bills! The congress of the United States has always seen its duty to the future in supporting the development of infrastructure that the private sector uses to increase commerce, settlement, and reach out to the future.

    All we ask is that today you examine these bills. Evaluate them and their potential benefit to the nation. Ignore the obsolete metric of static scoring that would have never allowed the railroad bill to become law. Remember that the investment that congress makes today is paid back a thousand fold over the next several decades as this new frontier develops and the promise of the future energizes our people.

    Today a congressional roundtable will be held to inform fellow congresspersons and staffers of the benefits of this bill. Remember that history is made every day in those halls but that some days more history is made than on other days. This day is one of those historical days. Carp Diem.