Nelson wants tax breaks for space industry
August 17, 2010
By MIKE SCHNEIDER
ORLANDO, Fla. - U.S. Sen. Bill Nelson wants to create five business enterprise zones around the country, most likely in places that already have NASA centers, where investors who put their money in commercial space ventures would get major tax breaks.
The Florida Democrat will show legislation Tuesday that would give tax breaks worth 20 percent of their outlays to investors in private space-related businesses. The Commercial Space Jobs and Investment Act would help attract engineers and scientists to the zones and create jobs in a space industry facing uncertainty, 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 in a statement.
The U.S. space program is undergoing its biggest transformation in a generation with the last space shuttle flight scheduled for next year. Thousands of workers are expected to lose their jobs when the program ends.
The Obama administration has pledged $40 million to Florida's Space Coast to help ease the transition from the program. Another $60 million has been proposed for other regions that will be hit by its closure.
Members of a committee chaired by NASA Administrator Charles Bolden and U.S. Commerce Secretary Gary Locke, that is looking into how to spend the $40 million for Florida, planned to recommend Tuesday that $35 million go to competitive grants for Space Coast businesses. The competition would start in September.
The goal is to create clusters of businesses in the aviation and aerospace, clean energy, homeland security, information technology and life science industries, said two high-level federal officials who spoke to reporters Monday about the task force's recommendations on the condition their names not be used.
The task force is recommending that the remaining $5 million go toward creating a commercial spaceflight technical center that would be part of the Federal Aviation Administration. The center would support commercial launch and re-entry activities.
The goal is to encourage private investment in space and not have government the only investor in the development of space ventures, the federal officials said.
Nelson's bill would amend the 1986 tax code to give investors a credit worth 20 percent of their investment in businesses that create launch vehicles, re-entry vehicles, related equipment or are part of those operations. The investment would have to be for no less than five years.
The bill also would raise a tax credit for research and development in these zones from 20 percent to 30 percent if it is conducted on space-related tests in those enterprise zones.
States vying to get the enterprise zones would have to show they have been impacted by the loss of space jobs and already have space-related infrastructure in place. The zones would be chosen by the U.S. Commerce Secretary, said Bryan Gulley, Nelson's press secretary.
"You couldn't do it where there is no space industry and no high unemployment," Gulley said. "Clearly, it's intended to help communities where there already has been an established space industry, and communities where NASA already has a presence."