[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]



 
                            COMMERCIAL SPACE

=======================================================================

                                HEARING

                               BEFORE THE

                         SUBCOMMITTEE ON SPACE

              COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                           NOVEMBER 20, 2013

                               __________

                           Serial No. 113-56

                               __________

 Printed for the use of the Committee on Science, Space, and Technology


       Available via the World Wide Web: http://science.house.gov


                                 ______

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              COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY

                   HON. LAMAR S. SMITH, Texas, Chair
DANA ROHRABACHER, California         EDDIE BERNICE JOHNSON, Texas
RALPH M. HALL, Texas                 ZOE LOFGREN, California
F. JAMES SENSENBRENNER, JR.,         DANIEL LIPINSKI, Illinois
    Wisconsin                        DONNA F. EDWARDS, Maryland
FRANK D. LUCAS, Oklahoma             FREDERICA S. WILSON, Florida
RANDY NEUGEBAUER, Texas              SUZANNE BONAMICI, Oregon
MICHAEL T. McCAUL, Texas             ERIC SWALWELL, California
PAUL C. BROUN, Georgia               DAN MAFFEI, New York
STEVEN M. PALAZZO, Mississippi       ALAN GRAYSON, Florida
MO BROOKS, Alabama                   JOSEPH KENNEDY III, Massachusetts
RANDY HULTGREN, Illinois             SCOTT PETERS, California
LARRY BUCSHON, Indiana               DEREK KILMER, Washington
STEVE STOCKMAN, Texas                AMI BERA, California
BILL POSEY, Florida                  ELIZABETH ESTY, Connecticut
CYNTHIA LUMMIS, Wyoming              MARC VEASEY, Texas
DAVID SCHWEIKERT, Arizona            JULIA BROWNLEY, California
THOMAS MASSIE, Kentucky              MARK TAKANO, California
KEVIN CRAMER, North Dakota           ROBIN KELLY, Illinois
JIM BRIDENSTINE, Oklahoma
RANDY WEBER, Texas
CHRIS STEWART, Utah
CHRIS COLLINS, New York
                                 ------                                

                         Subcommittee on Space

               HON. STEVEN M. PALAZZO, Mississippi, Chair
RALPH M. HALL, Texas                 DONNA F. EDWARDS, Maryland
DANA ROHRABACHER, California         SUZANNE BONAMICI, Oregon
FRANK D. LUCAS, Oklahoma             DAN MAFFEI, New York
MICHAEL T. McCAUL, Texas             JOSEPH KENNEDY III, Massachusetts
MO BROOKS, Alabama                   DEREK KILMER, Washington
LARRY BUCSHON, Indiana               AMI BERA, California
STEVE STOCKMAN, Texas                MARC VEASEY, Texas
BILL POSEY, Florida                  JULIA BROWNLEY, California
DAVID SCHWEIKERT, Arizona            FREDERICA S. WILSON, Florida
JIM BRIDENSTINE, Oklahoma            EDDIE BERNICE JOHNSON, Texas
CHRIS STEWART, Utah
LAMAR S. SMITH, Texas


                            C O N T E N T S

                           November 20, 2013

                                                                   Page
Witness List.....................................................     2

Hearing Charter..................................................     3

                           Opening Statements

Statement by Representative Steven Palazzo, Chairman, 
  Subcommittee on Space, Committee on Science, Space, and 
  Technology, U.S. House of Representatives......................     5
    Written Statement............................................     6

Statement by Representative Suzanne Bonamici, Subcommittee on 
  Space, Committee on Science, Space, and Technology, U.S. House 
  of Representatives.............................................     7
    Written Statement............................................     8

Submitted statement of Representative Lamar S. Smith, Chairman, 
  Committee on Science, Space, and Technology....................     9
                                                                     10

                               Witnesses:
                                Panel I

The Honorable Kevin McCarthy, Member, Majority Whip, U.S. House 
  of Representatives
    Oral Statement...............................................    11
    Written Statement............................................    14

                                Panel II

Ms. Patricia Cooper, President, Satellite Industry Association
    Oral Statement...............................................    17
    Written Statement............................................    20

Mr. Stuart Witt, CEO and General Manager, Mojave Air and Space 
  Port
    Oral Statement...............................................    30
    Written Statement............................................    32

Mr. Dennis Tito, Chairman, Inspiration Mars Foundation
    Oral Statement...............................................    40
    Written Statement............................................    42

Discussion.......................................................    79

             Appendix I: Answers to Post-Hearing Questions

Ms. Patricia Cooper, President, Satellite Industry Association...    96

Mr. Stuart Witt, CEO and General Manager, Mojave Air and Space 
  Port...........................................................   107

Mr. Dennis Tito, Chairman, Inspiration Mars Foundation...........   112

            Appendix II: Additional Material for the Record

Submitted statement of Representative Donna F. Edwards, Ranking 
  Member, Subcommittee on Space, Committee on Science, Space, and 
  Technology.....................................................   118

Submitted statement of Representative Eddie Bernice Johnson, 
  Ranking Member, Committee on Science, Space, and Technology....   119


                            COMMERCIAL SPACE

                              ----------                              


                      WEDNESDAY, NOVEMBER 20, 2013

                  House of Representatives,
                                    Subcommittee on Science
               Committee on Science, Space, and Technology,
                                                   Washington, D.C.

    The Subcommittee met, pursuant to call, at 10:02 a.m., in 
Room 2318 of the Rayburn House Office Building, Hon. Steven 
Palazzo [Chairman of the Subcommittee] presiding.

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[GRAPHIC] [TIFF OMITTED] T6894.002

[GRAPHIC] [TIFF OMITTED] T6894.003

    Chairman Palazzo. The Subcommittee on Space will come to 
order. Good morning. Welcome to today's hearing titled 
``Commercial Space.'' In front of you are packets containing 
the written testimony, biographies, and required Truth in 
Testimony disclosures for today's witnesses. I recognize myself 
for five minutes for an opening statement.
    The Commercial Space Launch Act was passed nearly 30 years 
ago and was the turning point for the growth of the commercial 
space sector in our economy. The advent of the commercial space 
industry brought with it advances in space launch: 
communications; entertainment; position, navigation, and timing 
technology; weather monitoring; remote sensing; space tourism; 
science experimentation; and expanded human spaceflight.
    The latest data available suggests the economic impact of 
the commercial space industry is approximately $208 billion. 
Congress has provided the Federal Government with various 
mechanisms to leverage the private sector, such as the 
Commercial Orbital Transportation Services Program and the 
Commercial Crew Program, FAA experimental permits, human 
spaceflight regulation moratorium, prize authority, and various 
public-private partnership authorities.
    As Congress continues to look for ways to maintain the 
United States' preeminence in space and grow our economy, it is 
clear that the promise of the commercial space industry 
warrants additional attention.
    We must ensure that export controls and International 
Trafficking in Arms Regulations are rational and productive. We 
need to provide stable, certain, and competitive regulatory 
environments at the Federal Aviation Administration, the 
Federal Communications Commission, and the National Oceanic and 
Atmospheric Administration that facilitate domestic investment.
    There is no question that our commercial partners have a 
valuable role to play in our Nation's space flight and 
exploration in the coming years. But there will be trade-offs.
    We must continue to weigh whether potential cost-savings 
come at the expense of overall capabilities, robustness, or 
safety. We must also recognize there are core, fundamental 
operations that will still need to be maintained by the Federal 
Government.
    The witnesses before us today represent a variety of 
perspectives on the commercial space industry, and I look 
forward to hearing their testimony. We are also pleased to have 
or will have the Majority Whip, Representative Kevin McCarthy, 
with us today. Representative McCarthy, along with 
Representative Bill Posey, introduced H.R. 3038, the Suborbital 
and Orbital Advancement and Regulatory Streamlining Act or 
SOARS Act.
    The Committee appreciates their leadership and willingness 
to work with us in developing policies that can grow our 
economy. Next year we hope to take up a comprehensive 
commercial space bill to address these issues, as well as many 
others.
    The commercial space industry has been invaluable to our 
successes in the past, and the future continues to look very 
bright. I look forward to working with my colleagues on both 
sides of the aisle as well as with industry stakeholders to 
come up with common-sense policies that can help put people 
back to work, retain our skilled aerospace workforce, and 
protect our industrial base.
    Finally I would like to address the perennial elephant in 
the room, commercial launch liability. This provision, which is 
so important to keeping our launch industry competitive in the 
international market, is set to expire once again at the end of 
the year. The NASA Authorization Act that passed this Committee 
over the summer included an extension for five years.
    While I would have liked to see a long-term extension, it 
appears as though we have reached an agreement with the 
minority to only extend the provision for one year and take the 
issue up more thoroughly next year as part of a larger 
Commercial Space Launch Act.
    I look forward to sponsoring this extension, along with 
Chairman Smith, Ranking Member Johnson, and Ranking Member 
Edwards. I hope we can discharge the bill and pass it under 
suspension of the rules on the House floor very shortly.
    [The prepared statement of Mr. Palazzo follows:]

  Prepared Statement of Subcommittee on Space Chairman Steven Palazzo

    The Commercial Space Launch Act was passed nearly thirty years ago 
and was the turning point for the growth of the commercial space sector 
in our economy. The advent of the commercial space industry brought 
with it advances in space launch: communications; entertainment; 
position, navigation, and timing technology; weather monitoring; remote 
sensing; space tourism; science experimentation; and expanded human 
spaceflight.
    The latest data available suggests the economic impact of the 
commercial space industry is approximately $208.3 billion. Congress has 
provided the Federal government with various mechanisms to leverage the 
private sector, such as the Commercial Orbital Transportation Services 
Program and the Commercial Crew Program, FAA experimental permits, 
human spaceflight regulation moratorium, prize authority, and various 
public-private partnership authorities.
    As Congress continues to look for ways to maintain the United 
States' preeminence in space and grow our economy, it is clear that the 
promise of the commercial space industry warrants additional attention.
    We must ensure that export controls and International Trafficking 
in Arms Regulations (ITAR) are rational and productive. We need to 
provide stable, certain, and competitive regulatory environments at the 
Federal Aviation Administration (FAA), the Federal Communications 
Commission (FCC), and the National Oceanic and Atmospheric 
Administration (NOAA) that facilitate domestic investment.
    There is no question that our commercial partners have a valuable 
role to play in our nation's space flight and exploration in the coming 
years. But there will be trade-offs.
    We must continue to weigh whether potential cost-savings come at 
the expense of overall capabilities, robustness, or safety. We must 
also recognize there are core, fundamental operations that will still 
need to be maintained by the federal government.
    The witnesses before us today represent a variety of perspectives 
on the commercial space industry and I look forward to hearing their 
testimony. We are also pleased to have the Majority Whip, 
Representative Kevin McCarthy, with us today. Representative McCarthy, 
along with Representative Bill Posey, introduced H.R. 3038, the 
Suborbital and Orbital Advancement and Regulatory Streamlining Act or 
SOARS Act.
    The Committee appreciates their leadership and willingness to work 
with us in developing policies that can grow our economy. Next year we 
hope to take up a comprehensive commercial space bill to address these 
issues, as well as many others.
    The commercial space industry has been invaluable to our successes 
in the past, and the future continues to look very bright. I look 
forward to working with my colleagues on both sides of the aisle as 
well as with industry stakeholders to come up with common-sense 
policies that can help put people back to work, retain our skilled 
aerospace workforce, and protect our industrial base.
    Finally I would like to address the perennial elephant in the 
room--commercial launch liability. This provision, which is so 
important to keeping our launch industry competitive in the 
international market, is set to expire once again at the end of the 
year. The NASA Authorization Act that passed this Committee over the 
summer included an extension for five years.
    While I would have liked to see a long term extension, it appears 
as though we have reached an agreement with the minority to only extend 
the provision for one year and take the issue up more thoroughly next 
year as part of a larger Commercial Space Launch Act. I look forward to 
sponsoring this extension, along with Chairman Smith, Ranking Member 
Johnson, and Ranking Member Edwards. I hope we can discharge the bill 
and pass it under suspension of the rules on the House floor very 
shortly.

    Chairman Palazzo. With that yield the remainder of my time 
to my friend from Florida, Mr. Posey.
    Mr. Posey. Thank you very much, Mr. Chairman. Over a half-
century ago Congress established the Federal Aviation 
Administration with the mission of ensuring the safety of the 
flying public. Today the FAA requires that new experimental 
vehicles designed to probe the fringes of outer space be as 
safe as a commercial airliner. Had the same stringency been 
applied to the automobile, Henry Ford's Model T might have 
never made it onto the streets. That is the situation that our 
country's space pioneers are faced with today.
    Under current U.S. law, the experimental launch vehicles 
and experimental aircraft supporting them can be designed, 
built, and flown by our most innovative companies. But they 
can't charge for their services. Representative Kevin McCarthy 
and I introduced H.R. 3038, the SOARS Act, to change that.
    There is a private company at the Kennedy Space Center 
which NASA hired and the FAA licensed to conduct astronaut 
training and payload testing. I should say was licensed. Two 
years ago the FAA decided they made a mistake in allowing the 
company to fly their FAA-defined ``experimental'' aircraft in 
support of NASA's launch activities and so the FAA grounded 
them. Now, obviously that was very bad news for the company, 
and that was a 100 percent safety record at NASA. It defies 
common sense that a long-standing NASA partner can be 
arbitrarily grounded by the FAA. We need to fix the problem by 
updating our laws so our space innovators have the freedom they 
need to innovate and regulators, such as the FAA, have the 
appropriate amount of flexibility to strike the right balance. 
Congressman McCarthy and I believe this bill will do that.
    Thank you, Mr. Chairman. I yield back.
    Chairman Palazzo. Thank you, Mr. Posey. With that I yield 
to the Ranking Member, the gentlewoman, Ms. Bonamici.
    Ms. Bonamici. Thank you very much, Mr. Chairman, for 
holding today's hearing on commercial space, and welcome to our 
witnesses. Subcommittee Ranking Member Donna Edwards will join 
us shortly, and she asked me to take her place until then.
    Mr. Chairman, the Ranking Member also asked that her 
opening statement be included for the record.
    Ms. Bonamici. As many of the Committee Members have stated, 
on several occasions, we see a strong link between the space 
program and the inspiration it provides to our younger 
generation through various STEM activities. Commercial space is 
an important component of that inspiration and a key source of 
jobs and innovation.
    The commercial satellite industry has experienced strong 
and steady growth over several years. I hope to hear today 
about what factors have contributed to such growth and how 
other commercial space ventures might learn from their 
successes.
    The audacious proposal from Mr. Tito and the 
entrepreneurial spirit overflowing at Mr. Witt's Mojave Space 
Port demonstrate that America's yearning for deep space 
exploration and thirst for innovation are alive and well. But 
maintaining such enthusiasm requires a well-oiled partnership 
between the Federal Government, states, private industry and 
academia.
    Thankfully there are many indications to show that this 
partnership is alive and well. Just yesterday the first high 
school developed CubeSat was launched along with other payloads 
aboard the Air Force's ORS-3 mission on a Minotaur 1 rocket 
from NASA's Wallop Facility. The Thomas Jefferson High School's 
CubeSat, known as TJ3Sat is a joint project between the high 
school and industry partners to design and build the CubeSat to 
increase interest in aerospace technology.
    And a few weeks ago, I was pleased to see, from my home 
state the Oregon Space Grant Consortium, which promotes STEM 
education through cooperative and interdisciplinary programs 
while recruiting and training NASA's next diverse workforce 
announced its 2013-2014 scholarship recipients. This 
consortium, part of the National Space Grant College and 
Fellowship Program, is a statewide network of universities, 
colleges, museums, educators, researchers, students and science 
professionals. Each of the scholarship recipients has expressed 
an interest in seeking a future in the aerospace, science or 
education community and has attained the highest level of 
academic achievement.
    Our partnerships among government, industry, states and 
academia need to match their goals, dedication and high 
achievement with challenging and engaging work.
    So today I hope I get to hear our witnesses discuss their 
views on the state of the U.S. space workforce, how important 
STEM activities are to cultivating the skills that commercial 
space companies need, and what it will take to build the type 
of workforce that will eventually lead to our U.S. commercial 
space activities into the next century. Let us keep their 
inspiration alive by finding greater opportunities for 
partnership.
    Thank you very much, Mr. Chairman, again for holding this 
hearing, and I yield back the balance of my time.
    [The prepared statement of Ms. Bonamici follows:]

         Prepared Statement of Representative Suzanne Bonamici

    Thank you, Mr. Chairman, for holding today's hearing on 
``Commercial Space,'' and welcome to our witnesses. Subcommittee 
Ranking Member Donna Edwards will join us shortly. She has asked me to 
take her place until then. Mr. Chairman, the Ranking Member also asked 
that her opening statement be included for the record.
    As many of the Committee Members have stated on several occasions, 
we see a strong link between the space program and the inspiration it 
provides to our younger generation through various STEM activities. 
Commercial space is an important component of that inspiration and a 
key source of jobs and innovation.
    The commercial satellite industry has experienced strong and steady 
growth over several years. I hope to hear today about what factors have 
contributed to such growth and how other commercial space ventures 
might learn from their success.
    The audacious proposal from Mr. Tito and the entrepreneurial spirit 
overflowing at Mr. Witt's Mojave Spaceport demonstrate that America's 
yearning for deep space exploration and thirst for innovation are alive 
and well. But maintaining such enthusiasm requires a well-oiled 
partnership between the federal government, states, private industry, 
and academia.
    Thankfully, there are many indications to show that this 
partnership is alive and well. Just yesterday, the first high school-
developed cubesat was launched along with other payloads aboard the Air 
Force's ORS-3 mission on a Minotaur 1 rocket from NASA's Wallops 
facility.
    The Thomas Jefferson High School's cubesat, known as TJ3SAT is a 
joint project between the High School and industry partners to design 
and build a CubeSat to increase interest in aerospace technology.
    And a few weeks ago, I was pleased to see the Oregon Space Grant 
Consortium, which promotes STEM education through cooperative and 
interdisciplinary programs while recruiting and training NASA's next 
diverse workforce, announce its 2013-14 Scholarship Recipients. The 
Consortium, part of the National Space Grant College and Fellowship 
Program, is a state-wide network of universities, colleges, museums, 
educators, researchers, students, and science professionals. Each of 
the scholarship recipients has expressed an interest in seeking a 
future in the aerospace, science, or education community and has 
attained the highest level of academic achievement.
    Our partnerships among government, industry, states, and academia 
need to match their goals, dedication, and high achievement with 
challenging and engaging work.
    So today I hope to hear our witnesses discuss their views on the 
state of the U.S. space workforce; how important STEM activities are to 
cultivating the skills that commercial space companies need; and what 
it will take to build the type of workforce that will eventually lead 
our U.S. commercial space activities into the next century. Let's keep 
their inspiration alive by finding greater opportunities for 
partnership.

    Chairman Palazzo. Thank you, Ms. Bonamici. I now recognize 
the Chairman of the Full Committee for a statement.
    Chairman Smith. Thank you, Mr. Chairman, and I thank you, 
too, for having this hearing today. And I want to thank our 
witnesses for being here as well to share their expertise on 
this subject.
    It is appropriate, and I know he will be here momentarily, 
to have Representative McCarthy join us today to discuss his 
bill, H.R. 3038, the SOARS Act. This legislation seeks to 
streamline the regulatory process. It also amends parts of the 
Commercial Space Launch Act to provide clarity regarding new 
systems and how they are defined. Reducing red tape for our 
space entrepreneurs is a necessary step to ensuring their 
continued growth.
    The commercial space industry offers improvements to the 
quality of life for every person on the planet. The discoveries 
and applications that have come from space technology number in 
the hundreds. The storied past of American ingenuity and 
exceptionalism is filled with examples of entrepreneurs who 
pushed the boundaries of the possible. The commercial space 
industry relies on this same creative spirit.
    America has always been a Nation of innovators and 
explorers. We continue to remain on the forefront of new 
discoveries and technologies. This industry could yield results 
that blur the lines between science fiction and science fact. 
Students of tomorrow could go to college to study a whole new 
field that resulted from the development of private space 
exploration.
    Perhaps in the next 20 years we will see new technologies 
and business models that result in private space laboratories. 
For example, advances in the suborbital space industry could 
yield the potential to send a package or people from New York 
to Hong Kong in a matter of minutes. The applications of this 
type of travel are limitless.
    And Mr. Chairman, I know you are going to more formally 
introduce our witnesses in just a minute, but I want to mention 
a couple of items about them as well.
    One of our witnesses today is Mr. Dennis Tito, Chairman of 
the Inspiration Mars Foundation. This foundation is the type of 
private space endeavor we should encourage. Their mission to 
send humans to orbit Mars in eight years or less, using mostly 
existing technology, might well catch the public's imagination.
    We are also pleased to have Mr. Stuart Witt, CEO of the 
Mojave Air and Space Port and a former test pilot and Top Gun 
with us today as well. There are exciting things happening in 
the Mojave Desert, and I have been there myself. The work of 
private companies and the space port add great value to our 
Nation's space assets.
    Our final witness represents an often-overlooked part of 
the commercial space industry that has actually been around for 
a long time. Patricia Cooper is the President of the Satellite 
Industry Association, and the commercial satellite industry 
provides many of our modern conveniences and we are grateful 
for her perspective as well.
    I look forward to today's hearing and to working with my 
colleagues on both sides of the aisle to develop policies that 
encourage the growth of the commercial space industry.
    Thank you Mr. Chairman for the time, and I yield back.
    [The prepared statement of Mr. Smith follows:]

    Prepared Statement of Committee on Science, Space and Technology
                        Chairman Lamar S. Smith

    Thank you Chairman Palazzo for holding this hearing. And I thank 
the witnesses for being here to share their expertise on this 
topic.It's appropriate to have Representative McCarthy join us today to 
discuss his bill, H.R. 3038, the SOARS Act. This legislation seeks to 
streamline the regulatory process.
    It also amends parts of the Commercial Space Launch Act to provide 
clarity regarding new systems and how they are defined. Reducing red 
tape for our space entrepreneurs is a necessary step to ensuring their 
continued growth.
    The commercial space industry offers improvements to the quality of 
life for every person on the planet. The discoveries and applications 
that have come from space technology number in the hundreds.
    The storied past of American ingenuity and exceptionalism is filled 
with examples of entrepreneurs who pushed the boundaries of the 
possible. The commercial space industry relies on this same creative 
spirit.
    America has always been a nation of innovators and explorers. We 
continue to remain on the forefront of new discoveries and 
technologies.
    This industry could yield results that blur the lines between 
science fiction and science fact. Students of tomorrow could go to 
college to study a whole new field that resulted from the development 
of private space exploration.
    Perhaps in the next 20 years we will see new technologies and 
business models that result in private space laboratories.
    For example, advances in the suborbital space industry could yield 
the potential to send a package--or people--from New York to Hong Kong 
in a matter of minutes. The applications of this type of travel are 
limitless.
    One of our witnesses today is Mr. Dennis Tito, Chairman of the 
Inspiration Mars Foundation. This foundation is the type of private 
space endeavor we should encourage. Their mission to send humans to 
orbit Mars in eight years or less, using mostly existing technology, 
might well catch the public's imagination.
    We are also pleased to have Mr. Stuart Witt, CEO of the Mojave Air 
and Space Port. There are exciting things happening in the Mojave 
Desert. The work of private companies and the space port add great 
value to our nation's space assets.
    Our final witness represents an often overlooked part of the 
commercial space industry that has actually been around for a long 
time. Ms. Patricia Cooper is the President of the Satellite Industry 
Association. The commercial satellite industry provides many of our 
modern conveniences and we are grateful for her perspective as well.
    I look forward to today's hearing and to working with my colleagues 
on both sides of the aisle to develop policies that encourage the 
growth of the commercial space industry.
    Thank you Mr. Chairman, and I yield back.

    Chairman Palazzo. Thank you, Chairman Smith. If there are 
Members who wish to submit additional opening statements, your 
statements will be added to the record at this point.
    Chairman Smith. Mr. Chairman, may I asked to be recognized 
just for a second more? I want to apologize to the witnesses 
and express my regret that another committee that I serve on is 
having a mark-up, and I am going to have to leave soon for that 
mark-up so regret I won't be able to be here the whole time.
    Chairman Palazzo. Thank you, Chairman Smith. At this time 
we are just going to take a brief respite as we await the 
Majority Whip's arrival.
    [Recess.]
    Chairman Palazzo. At this time I would like to introduce 
our first witness, The Honorable Kevin McCarthy, the Majority 
Whip of the House of Representatives and the Representative 
from California's 23rd District. Mr. McCarthy, your spoken 
testimony is limited to five minutes. Your written testimony 
will be included in the record of the hearing. I now recognize 
our first witness, Mr. McCarthy for five minutes.

        TESTIMONY OF HON. KEVIN MCCARTHY, MAJORITY WHIP,

   A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA

    Hon. McCarthy. Well, thank you, Mr. Chairman, for holding 
this important hearing today and for allowing me the 
opportunity to testify in support of commercial space and the 
Suborbital and Orbital Advancement and Regulatory Streamlining, 
the SOARS Act. I want to also thank Congressman Posey for 
working with me to introduce this important legislation and his 
support for commercial space.
    America is built on a strong heritage of exploration, 
discovery, and innovation. From President Thomas Jefferson's 
commissioning of the Lewis and Clark Expedition to exploring 
the American West, to the Transcontinental Railway linking east 
and west together, to the public-private partnership that 
helped the airline industry grow to become a safe mode of 
travel all over the world, to the internet, which has generated 
as much economic growth in 15 years as the Industrial 
Revolution did in 50.
    Space, like the internet before the dot-com boom of the 
1990s, was originally a government-run enterprise. Many believe 
that the commercial spaceflight is poised to have its own dot-
com moment in the near future. NASA's Commercial Crew and Cargo 
program alone has already created thousands of high-quality 
jobs here in America, including many at the NASA Dryden Flight 
Research Center, which I represent. My district is also home to 
Mojave Air and Space Port where many commercial spaceflight 
companies have located to research, develop, and test their 
hardware that will soon take Americans back to space.
    This is why I support the commercial spaceflight industry: 
the creation of thousands of good paying jobs on U.S. soil and 
the continuation of America's legacy in space exploration and 
innovative technologies. Think about this: Over the last 50 
years, about 500 humans have been to space. With the commercial 
space market, the number could double over the next ten years 
with the government only serving as a customer. The next U.S. 
astronauts to fly to space on American rockets will do so 
because of this new model.
    The use of innovative public-private partnerships offers 
the government new ways of solving problems. A study shows 
these partnerships benefit the taxpayer, by providing space 
services at nearly 1/10 the cost of traditional contracting 
methods, getting results for less money, getting innovation, 
growth, and risk-sharing in the private sector. As NASA leads 
continued exploration missions and related technology 
development, entrepreneurs will follow, spending their own 
money and creating new industries.
    However, it is up to us as legislators to ensure our 
current regulatory environment is appropriate for the needs of 
the 21st Century and to make sure safety is paramount in the 
commercial spaceflight industry's endeavors. This is why I 
introduced H.R. 3038 to ensure that the U.S. commercial 
spaceflight industry has a clear path ahead as it continues to 
innovate and generate high-quality American manufacturing jobs. 
A robust commercial space industry will also help attract 
students to the STEM fields of education by inspiring the next 
generation to literally reach for the stars.
    The goal of this bill is to streamline the regulatory 
process for commercial spacecraft, ensuring that Americans 
remain a leader in commercial spaceflight, while providing the 
Secretary of Transportation the necessary tools to help the 
industry operate safely. The commercial spaceflight industry is 
one of our newest, fastest-growing, and most innovative 
industries, and I am proud that the Dryden Flight Research 
Center and the Mojave Air and Space Port are leading the way.
    And if we take the right steps, we won't be just launching 
rockets, we will be launching new careers, new industries, and 
new economic opportunities. Whenever I visit these facilities--
and I will tell you, when you hear from Stu Witt later--I go to 
Mojave Air more than any place else in my district because it 
is innovative, it is fast-moving and it is ever-changing. It is 
not just changing for California and the United States. It is 
changing the world. And we are doing it in a private-public 
partnership that has been seen no other place.
    So the real possibilities will continue to grow. Again, you 
will hear from Mojave's Executive Director, Stu Witt, who is 
also testifying today. But this legislation, along with 
Congressman Posey is very simple. It is streamlining to make 
sure we keep the safety but also maintain the growth and the 
leadership for America in spaceflight.
    Mr. Chairman, thank you for allowing me to testify today, 
and I yield back my time.
    [The prepared statement of Hon. McCarthy follows:]

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    Chairman Palazzo. I thank Mr. McCarthy for his valuable 
testimony. The witness is excused, and we will move to our 
second panel.
    Hon. McCarthy. Thank you.
    Chairman Palazzo. Our first witness is Ms. Patricia Cooper, 
President of the Satellite Industry Association. Our second 
witness is Mr. Stuart Witt, CEO and General Manager of the 
Mojave Air and Space Port, and our third witness is Mr. Dennis 
Tito, Chairman of the Inspiration Mars Foundation.
    As our witnesses should know, spoken testimony is limited 
to five minutes each after which Members of the Committee have 
five minutes each to ask questions. Your written testimony will 
be included in the record of the hearing.
    I now recognize our first witness, Ms. Cooper, for five 
minutes.

          TESTIMONY OF MS. PATRICIA COOPER, PRESIDENT,

                 SATELLITE INDUSTRY ASSOCIATION

    Ms. Cooper. Mr. Chairman, distinguished Members of the 
Subcommittee, thank you for inviting the Satellite Industry 
Association to testify today on Commercial Space.
    As the President of SIA, I am pleased to represent here the 
unified voice of the Nation's satellite industry including 
satellite operators, manufacturers, launch companies and 
service and ground equipment providers.
    Our sector pioneered the commercialization of space. Just 
over 50 years ago, Telstar 1 was launched as the first 
privately owned satellite. Today, fleets of satellites ring the 
globe, owned and operated by private companies from around the 
world.
    For the past 16 years, SIA has been tracking our sector's 
performance in an annual State of the Satellite Industry 
Report. Our most recent report, issued in October, showed 
global satellite industry revenues of nearly $190 billion last 
year, more than 60 percent of the world's entire space sector. 
The United States represents just under 45 percent of the 
global satellite industry, and U.S. satellite companies employ 
more than 225,000 Americans across all sectors.
    Commercial satellites are used to deliver services to every 
ZIP code in the United States and every continent. Satellite 
services directly for consumers are the engine driving 
industry's overall growth. Satellite TV services alone earned 
nearly $90 billion in global revenue last year, joined with 
satellite radio, satellite broadband and new services like in-
flight broadband for airline passengers.
    Satellites also deliver hundreds of channels of media and 
broadcasting content everywhere as seen in the iconic tagline 
live via satellite and the ubiquitous satellite news truck.
    Behind the scenes we also link far-flung businesses, extend 
cellular and telecom networks, power emergency communications 
for first responders and military communications for national 
security, and capture the Earth with remote-sensing imagery 
used for everything from agriculture to humanitarian assistance 
and Google Earth.
    Satellites are an instant infrastructure that is reliably 
available every day, everywhere around the world, and we look 
to governments to maintain certain policy and market conditions 
to sustain our industry and pave the way for our growth and 
ongoing innovation.
    I would like to highlight here four key aspects that drive 
the way we think about government policies. First, the 
satellite industry has particularly long business horizons. 
Satellite orders are typically placed two years before they are 
launched, and once on orbit last about 15 years.
    While economic and competitive conditions shift, satellite 
companies thrive with consistent regulatory and business 
environments. We look for swift and effective licensing for 
satellites and ground terminals and stable regulatory fees. 
Dramatic changes in government regulations and policies simply 
put at risk the hundreds of millions of dollars required to 
finance the manufacture, launch and operation of a commercial 
satellite.
    Second, the satellite industry is inherently international. 
We serve entire continents or hemispheres, and U.S. satellite 
manufacturers compete in a dynamic global marketplace. As a 
result, international policies and fair trade rules are 
essential. Congress recently took an important step to support 
U.S. satellite exports when it passed the 2013 National Defense 
Authorization Act which permits needed updates to the U.S. 
export controls on satellite technologies. These reforms, which 
are now being implemented by the Executive Branch, will assist 
the long-term competitiveness of U.S. satellite manufacturers, 
and for that we offer our appreciation.
    Third, the satellite industry relies on radio frequency 
spectrum. Not only is spectrum used to fly our satellites but 
it is the lifeblood of the vast array of communication services 
provided via satellite. Without spectrum satellites simply 
would not function.
    The telecommunications industry is currently being consumed 
by a debate over how to allocate spectrum, and satellite 
frequencies are among those targeted for sharing or wholesale 
repurposing. The satellite industry has long supported 
efficient and sensible satellite spectrum policies, but changes 
require respect for existing critical services and an 
understanding of the demands of communicating with spacecraft 
tens of thousands of miles away. Shifts in spectrum policy must 
be careful, objective and fact-driven to avert serious 
implications for satellite systems.
    Finally, the satellite industry is keenly focused on 
managing risk. Satellites must be robust enough to navigate a 
technically challenging launch campaign and survive the harsh 
environments of outer space. We have close ties with the 
financial and insurance industries that allow us to mitigate 
these unique risks and meet the high, up-front costs of these 
satellite projects. While most financing is provided by the 
private sector and rightfully so, governments around the world 
have also stepped in to provide export credit financing for 
international sales of satellites. SIA encourages Congress to 
continue to support a strong U.S. Export/Import Bank to allow 
U.S. manufacturers to compete internationally.
    Finally, governments have offered indemnification against 
lawsuits resulting from catastrophic launch failures. Although 
this protection has never been drawn upon, the U.S. Government 
should offer safeguards comparable to other leading space-
faring nations. SIA strongly supports extending this regime for 
a minimum of ten years if not permanently.
    In our more than 50 years of experience the satellite 
industry has harnessed the power of space to serve national 
security, connect every corner of the globe and deliver 
entertainment to people on every continent. We fly 1/3 of the 
satellites on orbit and have posted ten percent average annual 
growth over the past decade, sustaining a robust worldwide 
space economy. The satellite industry is proud to lead the way 
for the safe, successful and sustained commercialization of 
space.
    Mr. Chairman, distinguished Members of the Subcommittee, 
this concludes my testimony. On behalf of the members of the 
Satellite Industry Association, thank you for the opportunity 
to testify, and I look forward to your questions.
    [The prepared statement of Ms. Cooper follows:]

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    Chairman Palazzo. Thank you, Ms. Cooper. I now recognize 
our next witness, Mr. Witt.

                 TESTIMONY OF MR. STUART WITT,

                    CEO AND GENERAL MANAGER,

                   MOJAVE AIR AND SPACE PORT

    Mr. Witt. Chairman Palazzo, Representative Bonamici, 
Chairman Smith, Mr. McCarthy, Members of the Subcommittee, I 
want to thank you for the opportunity of addressing you this 
morning and the invitation to Congress.
    My name is Stuart Witt, and I am the CEO of the Mojave Air 
and Space Port located in southeast Kern County, California. 
Today our topic is America's commercial space industry, and my 
message to you from the high desert is that American engineers 
and entrepreneurs in Mojave and other places across this great 
Nation are successfully revolutionizing America's future in 
space. My story today is 100% a good news story that didn't 
just happen. This Committee enacted into law a Commercial Space 
Launch Amendments Act in 2004 sponsored by Mr. Rohrabacher that 
created an informed consent regime for commercial human space 
flight. By giving us permission to take risks, you enabled us 
to create a new industry which is freeing up NASA and others to 
pioneer deep space exploration.
    I personally want to thank Committee Members Takano, Mr. 
Rohrabacher, Mr. Bridenstine and Chairman Smith who have made 
visits to Mojave on multiple occasions and witnessed firsthand 
the private sector innovations I am addressing today.
    Chairman Palazzo has requested my attention to four 
specific questions which I will answer in summary here, but I 
have gone into far greater detail in my written testimony.
    Question number one. Please summarize the work underway by 
commercial space companies at Mojave Air and Space Port. There 
is enormous interest in what we offer. Many have asked me, how 
did I manage to attract firms to Mojave over the past 12 years 
doing orbital research, suborbital research and development, 
deep space propulsion system development, and specifically 
demonstrated by entrepreneurs and high net-worth investors. My 
response is simple. In a word, I offer permission. We don't 
advertise. We just deliver, just as our tenants deliver. We set 
reasonable constraints, provide value-added services to test 
operators and allow the developers to conduct and manage their 
own programs with remarkable results. What sounds incredibly 
simple is actually in practice somewhat complex and very 
rigorous. But again, the results speak for themselves.
    Mojave Air and Space Port currently has 17 firms engaged in 
commercial space research leading to production of manned and 
unmanned space systems with 19 separate rocket test sites. 
Mojave now hosts 156 separate business contracts employing 
nearly 3,000 professionals. Specific emphasis is centered on 
green, non-toxic, liquid and hybrid rocket propulsion systems. 
Privately funded complete launch systems to orbit and suborbit 
and components for such systems are in development for 
commercial and government clients.
    Question number two. The potential future suborbital space 
market? To your question, Mr. Chairman, Mojave is far more than 
suborbital. Mojave entered this game in the orbital market and 
found a way to back in to the suborbital market. I view this 
discussion similar to the discussion the world had about steam 
175 years ago. Obviously investors knew it had potential, but 
they didn't know the answer to the basic question you ask. 
Today the majority of the world's power systems are based on 
steam. We all know the investment in suborbital tourism. It is 
in the press every day. But beyond that is an emerging new 
interest being led by the world's high net-worth investors who 
are visiting Mojave because they know investment in hypersonic, 
high mach business travel, is ripe for suborbit. This is where 
I see the needle moving, and my written testimony goes into far 
greater detail on the subject.
    Question three. The challenges and opportunities faced by 
the suborbital space market. A. The industry needs regulatory 
certainty, but the learning period restriction on 
unsubstantiated safety regulations expires in less than two 
years and the risk-sharing indemnification regime expires at 
the end of next month. For regulatory certainty, extension of 
both is required now.
    The Administration's proposed changes to ITAR pose a 
restriction to extending the peaceful exploration of space to a 
thirsty world market seeking suborbit vehicles. ITAR as it 
currently stands is more than a speed bump to expanding the 
markets internationally.
    Question four, your thoughts on H.R. 3038, the Suborbital 
and Orbital Advancement and Regulatory Streamlining Act. I 
strongly support two elements of H.R. 3038 contained in Section 
2, but the third element, contained in Section 3, to me is 
ambiguous and requires further discussion and clarity.
    From my 44 years as a professional aviator, test pilot and 
business executive if taken at current words, it may take the 
FAA and the industry into that mysterious land of unintended 
consequences if we don't spend just a little time and get it 
right.
    Again, I thank you for your invitation to present the good 
news coming out of Mojave, and I look forward to your 
questions.
    [The prepared statement of Mr. Witt follows:]

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    Chairman Palazzo. Thank you, Mr. Witt. I now recognize our 
final witness, Mr. Tito.

            TESTIMONY OF MR. DENNIS TITO, CHAIRMAN,

                  INSPIRATION MARS FOUNDATION

    Mr. Tito. Thank you very much, Mr. Chairman and Members of 
the Subcommittee. I can't think of a better way to begin 
today's discussion--
    Chairman Palazzo. Your mike, please, if you can turn it on?
    Mr. Tito. Thank you. I can't think of a better way to begin 
today's discussion on the public-private ventures in space than 
to propose one.
    At the Inspiration Mars Foundation, we have designed the 
architecture for a mission carrying two astronauts to the far 
side of Mars and back. It would be a voyage of around 800 
million miles around the Sun in 501 days. We propose to do this 
in collaboration with NASA as a partner in a NASA mission in 
the name of America and for the good of humanity. The endeavor 
is not motivated by business desires but to inspire Americans 
in a bold adventure in space that reinvigorates space 
exploration. In fact, the capabilities developed through 
private funding belong to NASA for this and future missions. 
The partnership is a new model for a space mission. It is not 
the model of traditional contracts or subsidies for vehicle 
developments, although these models are imbedded in the NASA 
programs to be leveraged for this mission. It is a 
philanthropic partnership with government to augment resources 
and achieve even greater goals than is possible otherwise. 
Philanthropy has historically benefitted society beyond what 
governments can afford or justify. What better use is there for 
private funding than to challenge the imaginations of people 
all over the world by providing the spark that invigorates the 
space program to further human destiny, to learn more and 
improve our civilization. Just as exciting times in the space 
program have motivated young people to study math, science and 
engineering in the past, benefitting all parts of U.S. 
industry, this mission will surely provide that benefit.
    No longer is a Mars flyby mission just one more theoretical 
big idea. It can be done, not in a matter of decades, but in a 
few years. Moreover, the mission might just show the way for a 
new model for joint effort and financing. It would attract 
significant private funding, while enabling NASA to do what it 
does best, and to confirm that the United States is the 
unquestioned leader in space.
    The work of this Subcommittee has helped to prepare the way 
with the 2010 authorization. That gave NASA the Space Launch 
System, the Orion program, and new commercial capabilities. We 
propose to combine all of these elements, as we have explained 
in the Architecture Study Report released this week.
    We can accomplish this flyby within a set launch schedule 
using rockets, systems, hardware already in testing and meeting 
established objectives that is a part of space policy for 
sending people to explore Mars.
    But if the technology, the rockets, and the systems are all 
virtually there, why not move this mission to the here and now 
and not wait until the '30s?
    There is a compelling reason to do that--in a word, 
opportunity. Every 15 years or so there is a rare planetary 
alignment relying on the gravitational forces of Mars, Sun, and 
Earth. An American spacecraft would have to be on its way in 
the first days of 2018. Otherwise, we are looking at another 15 
years before that alignment happens again.
    If we need a Plan B, there is a mission 80 days longer that 
flies behind Venus before going to Mars, being a unique 
trajectory that could be flown in 2021. However by then, 
another country, almost surely China, will have seen our missed 
opportunity and taken the lead for themselves.
    May I offer a frank word to the Subcommittee? The United 
States will carry out a flyby mission or we will watch as 
others do it. If America is ever going to do a flyby mission of 
Mars then we are going to have to do it in 2018. Given the 
Russian recognition and value of accomplishments in human space 
exploration, they have announced that they will recommercialize 
the Energia rocket and make that available. They also have 
upgrades to their capabilities which would allow them to fly in 
2017.
    We feel it is our civic duty to bring this attention to the 
executive and legislative branches of government.
    In 2019, it will be 50 years since we landed on the Moon. 
Let us hope that we can look back and say that we have 
accomplished something in that 50 years. Thank you very much, 
Mr. Chairman and the Subcommittee, and I would be happy to 
answer your questions.
    [The prepared statement of Mr. Tito follows:]

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    Chairman Palazzo. Thank you, Mr. Tito. I thank the 
witnesses for being available for questioning today, reminding 
Members that Committee rules limit questioning to five minutes. 
The Chair will at this point open the round of questions. The 
Chair recognizes himself for five minutes.
    The current third-party liability risk-sharing regime has 
been in place for almost two decades. The purpose of this 
regime was to assist a nascent industry that needed a backstop 
for possible third-party claims in the event of an accident. 
Please explain to the Committee why the indemnification regime 
is still necessary and what reforms to the current regimes are 
needed. Mr. Witt, Ms. Cooper, you briefly touched on this 
topic. Will you please explain in detail or elaborate in 
detail? Thank you. Ms. Cooper?
    Ms. Cooper. Thank you, Mr. Chairman. The Commercial Space 
Launch Act risk management provision is absolutely essential 
and an appropriate use for government in the view of the 
members of the Satellite Industry Association. We strongly 
recommend that it be renewed before it expires.
    The government's role in safeguarding for launch services 
is only at a very extraordinary circumstance. Under the FAA 
rules and the rules set out under the Launch Act, launch 
providers themselves are responsible for the bulk of damages 
that might occur if the unthinkable were to happen. The FAA 
sets a maximum probable loss limit of $500 million and expects 
their licensees to take responsibility for those damages, 
usually in the form of private launch insurance.
    And I would note that those maximum probable losses cover 
not only all parties involved in the launch, including third 
parties, but also damages to U.S. Government property.
    Damages in excess of that maximum probable loss limit of 
$500 million up to a cap of $1.5 million are what are at stake 
here in this launch liability provision. This was not just to 
protect a nascent industry but to ensure that the risk of 
launching a satellite or any other payload didn't require the 
company to pretty much bet the company every time they 
launched. This allowed the largest, most catastrophic damages 
to be safeguarded by the government.
    I would note that this is appropriate. I looked back a 
little bit in 1988 when the first Commercial Space Launch Act 
was passed. The environment today in the marketplace with not 
only several commercial launch companies looking at launching 
satellites but also the extraordinary proliferation of interest 
and investment and exploration of commercial launch for other 
purposes is an environment far more like the 1988 environment 
than it was five years ago.
    I would also note that international competition is far 
more intense, and other governments, the hosts of those other 
launch providers, offer comparable safeguards from significant 
damage.
    And finally, I would just note that the U.S. Government 
itself carries liability that it has taken on under several 
treaties, the Outer Space Treaty, the Space Liability Treaty, 
and these are satisfied by the commercial space launch 
indemnification provisions, and we certainly think that it is 
an appropriate role for government and one that this Committee 
we hope will support extending. Thank you.
    Mr. Witt. Mr. Chair? I have to learn my protocols. Mr. 
Chairman, this particular question to me is just foundational 
of the right way to do business. There seems to be a perception 
and then there is a reality, and the perception is that there 
is no skin in the game on the part of the operators. And the 
reality is, the way the law is written, there is $500 million 
at stake to the operator, plus they play this little game every 
day in Mojave called let us bet the company every time they 
fly. There is certainly no motivation to fail. There is 
certainly a motivation to be rigorous. But for a license 
launch, when it comes down to actually launching, the FAA, the 
Federal Government, makes the determination of the maximum 
probable loss and caps it, and it is the operator that has to 
find the insurance or post a bond if you will that they have 
financial solvency to cover any losses up to that limit. For 20 
years the government has not been placed at risk. If a program 
that was put in place is working that well, I would look for 
some compelling reason to change it. I think it should be 
extended indefinitely. That is my opinion.
    Chairman Palazzo. Thank you. Mr. Tito, in your testimony 
you talk about a public-private partnership with NASA for a 
deep space mission and that in contrast to past development 
programs would be funded at least in part by private 
investment. How much do you expect this mission to cost private 
investors? Would those investors expect a return on their 
investment or would they be considered donations? And do you 
intend to ask for NASA for funding, and if so, how much do you 
plan on asking for?
    Mr. Tito. Well, this is a philanthropic effort, so you 
would not consider any contribution an investment. Once a 
mission was established and ongoing, I think there would be the 
prospect of raising several hundred million dollars 
philanthropically but not until we actually have a mission on 
the manifest.
    As far as overall cost over and above what NASA is already 
spending on existing programs, I would say that it would be 
less than $1 billion, and you subtract roughly $300 million 
which I think could be raised philanthropically over the five-
year period between now and the end of the mission, it would 
cost the government about $700 million or about a little over 
$100 million a year.
    Chairman Palazzo. Well, thank you. My time is expired. I 
now recognize Ms. Bonamici.
    Ms. Bonamici. Thank you very much, Mr. Chairman, and thank 
you to the witnesses for your testimony. One of the things that 
I have emphasized since joining the Subcommittee last year is 
the importance of educating the public about the benefits of 
space exploration and justifying the investment which, those of 
us on this Subcommittee all believe in. And one of the things I 
wanted to point out and thank you for, Mr. Witt, is in your 
testimony talking about how there has been this spinoff 
potential beyond aerospace, especially with the discoveries 
being applied to, for example, conventional internal combustion 
engines, and I think the more the public knows about benefits 
beyond that in all-important leadership the more that we can 
convince the public that these are wise investments in space. 
So thank you for bringing that to our attention.
    Ms. Cooper, the commercial satellite industry is one of the 
first commercial space industries and has really seen 
significant growth over the years. So as you consider the range 
of activities and issues being discussed here today, can you 
tell us from your experience what lessons have been learned 
that could benefit the other emerging space enterprises?
    Ms. Cooper. Thank you. I think the commercial satellite 
industry in its origin has some similarities to other younger 
space ventures in that there were assumptions of a government 
role at the outset. There was an assumption that the idea of 
launching a satellite and building one was too complex, too 
costly, too risky for an individual company or country even to 
undertake it.
    As the experience grew and the confidence in the capability 
on orbit grew and also as the idea of services and what was the 
value of those satellites grew, companies naturally entered the 
arena. I think that was a critical part for government 
regulation to establish rules of the road for a competitive 
environment, to allow enabling an environment, but also to 
establish how those companies would be able to compete with 
each other and for them what they needed.
    For the commercial satellite industry, it is absolutely 
orbital slots which is an international regime managed by the 
International Telecommunications Union but also satellite 
spectrum which is needed not only to manage the spacecraft but 
also to deliver communication services.
    That is probably our biggest challenge right now is that we 
have become almost so ubiquitous and so relied upon that the 
communications industry may forget that we are delivering these 
services from 22,000 miles away and that there are significant 
considerations when you figure out how you might be able to 
share that spectrum.
    I would also just note the other consideration is safety 
and safety of flight. That is a genuine role for government 
regulation, and I think the partnership between industry and 
government is essential there to establish an understanding of 
what is in space and an understanding of what the private and 
government actors in space are doing for the safety of all in 
space. Thank you.
    Ms. Bonamici. Thank you very much. And for all of you, the 
work that your organizations are performing calls for 
innovation is certainly a highly skilled workforce to achieve 
the goals in certainly a competitive environment. So how 
important is the workforce to the growth of commercial space, 
and from your perspective, what is the most important thing we 
can do to ensure the future viability and sustainability of a 
workforce that is prepared for this type of work? I will start 
with Mr. Witt. Your thoughts on that?
    Mr. Witt. Ms. Bonamici, that is a great question. That goes 
right to my heart. The last ten years I have served--11 years 
served on a college board, and I have learned a little bit 
about the education process in America. But for the last 20 
years in my businesses and in my current business, I have 
required each one of my employees to spend four hours a year in 
a classroom.
    Ms. Bonamici. That is good.
    Mr. Witt. And to a person. When I had my company here, when 
my current--everybody said only four hours? And I said, just 
curious, but how many did you do last year? And we all know the 
answer to that, don't we? Zero. And to set a standard in your 
own business and from your seats as Members of Congress, you 
have the opportunity to speak to people all over this Nation 
all the time. You all get invited for public events. People 
listen to your words, your policy and your words. Make it part 
of your daily speech to promote science and technology 
nationwide in this Nation. Do the little things. When you walk 
into a Masten space system and you--and I bring in teachers. We 
brought in students, but we now found out, you know, teachers 
in classrooms--I think I learned in our discussion at lunch one 
day--they have all the kids. If we bring them in for an hour, 
we have 100 kids and me for an hour. But these teachers have 
the kids all year long. Bring the teachers in. Spend the day 
with 30 teachers, and they have access to these kids for a 
year. Show them the passion. Show them the people. Take them 
into a Masten space systems and let them ask an engineer, if 
you could talk to your science teacher today in high school, 
what would you tell him? I remember that question specifically. 
And the kid with the wrenches and the T-shirts building a 
rocket says it would have been nice of you to come by my desk 
every now and then, but you are always worried about the lowest 
kid in the class or the brightest kid in the class. But 
somewhere I was lost in the middle. Those are powerful things 
to learn on the shop floor of a rocket factory.
    But those are lessons we can extend, and you can extend in 
all of your daily activities in lunch rooms. Make it the 
standard that people make every employee that works for them 
spend four hours a year in a classroom. My janitor, who is 
trilingual, spends four hours a year in a classroom. There is a 
job for every kid, and their job is important.
    Ms. Bonamici. That is great. Thank you very much. I am 
afraid I have run out of time. I yield back. Thank you, Mr. 
Chairman.
    Chairman Palazzo. I now recognize Mr. Rohrabacher.
    Mr. Rohrabacher. I thought I was going to be down the line 
a bit. Well, thank you very much and appreciate the witnesses 
and certainly appreciate the leadership of the Chairman on 
this, making sure that we focus on this element of America's 
space program. This element of America's space program is 
playing an ever-increasingly vital role. I would like to first 
of all give my regards to Dennis Tito here who years ago took 
the initiative to show that one person could make a difference 
and could inspire a whole Nation. It is one thing to have a 
group of people working for the government, working together to 
accomplish something. It is one thing for this guy to on his 
own decide he is going to get something done and go out and do 
it. And I remember the first time I met Mr. Tito. We went out 
for dinner, and the waiter in the restaurant where we went 
asked, ``Aren't you the guy who went into space?'' And talk 
about inspiring people. I mean, this was--he was inspiring 
regular Americans out there. Thanks for doing that, Dennis, and 
not giving up on that job of inspiring people. I will hopefully 
work with you on your project. I don't know if we can get it 
done, but we will see what we can do. And it is inspiring to 
see you doing this.
    Ms. Cooper, I want to get to some really basics here. One 
of the things that are limiting our ability to use space, 
commercial space and otherwise, is orbital debris. At what 
point, are we reaching a point now where we are going to have 
to put the lid on what we are doing in space because of this 
problem?
    Ms. Cooper. Thank you, Mr. Rohrabacher. For the commercial 
satellite industry we do not think that the orbital debris 
environment is limiting our ability to deploy new satellites. 
It does affect our operations. I will say that the commercial 
satellite industry takes extremely seriously its 
responsibilities to operate in space and to assist in the 
larger question of debris.
    I want to point to a private initiative that many of the 
satellite operators have undertaken called the Space Data 
Association in which a number of satellite companies have 
pooled their resources to explain where they are in very 
specific ephemeris data, also to share information about what 
they see on orbit and also discuss EMI/RFI interference issues.
    Mr. Rohrabacher. Well, that is the--
    Ms. Cooper. They share that with the Strategic Command as 
well.
    Mr. Rohrabacher. Well, that is very commendable that this 
is happening on a voluntary basis with your industry. I would 
suggest, Mr. Chairman, that dealing with the ever-increasing 
level of space debris might be one use of commercial space. 
There might be commercial people, people who commercially would 
like to go out and get the contract to dealing with space 
debris. And rather than simply make this a government program, 
it could be--we could look at it as a potential commercial 
program.
    And I would also like to--I mentioned--Mr. Tito, I would 
like to mention Jim Muncy who is sitting back behind the panel 
today who never got credit for enormous things that were 
getting done in this Committee and in commercial space. Thank 
you, Mr. Muncy.
    One note about how--Mr. Tito mentioned the Chinese might be 
doing things. I would suggest this, however. The Chinese get a 
lot of their technology by stealing it, and I would hope that 
we don't let thieves beat us to various important goals in 
space. But I would also hope that we don't partner with 
thieves. And until we see reform in China, we should not be 
partnering in space ventures with the world's worst human 
rights abuser.
    Finally, Mr. Witt, what would you say--you know, you are 
right there in the front. I just mentioned space debris. Could 
you give us a couple of ideas of where commercial space--are we 
going to have a ride between--are we going to be able to 
deliver a FedEx package yesterday to Tokyo?
    Mr. Witt. It is certainly in the possibility. I think one 
of the Members have recently asked me what is the timeframe for 
point-to-point suborbit travel, halfway around the world. Is it 
five years, ten years, 50 years? I think the answer is it could 
be in the ten-year regime. It is more likely going to be in the 
out years, but we certainly ought to be thinking there now. It 
is time for us to take the long view of the future and start 
setting the stage for policies and planning for it today. This 
is not revolutionary. This is frankly evolutionary. It is going 
from props to jets. Now we are going from jets to faster jets 
and air breathers and using a different band of the atmosphere. 
But it is certainly possible. And I hope it happens in my 
lifetime, Mr. Rohrabacher.
    Mr. Rohrabacher. Mr. Chairman, thank you again for your 
leadership, and let me just note on the last point that was 
made that suborbital space and the development of that for the 
benefit of mankind is being done basically through private 
investment, and that is something that we can be very proud of, 
that our innovators are capitalists. And Mr. Tito, by the way, 
is the ultimate capitalist involved in this, that people are 
putting their own resources to this and suborbital space could 
change the very nature of transportation and again lead us to a 
new era of humankind. Thank you very much, Mr. Chairman.
    Chairman Palazzo. I now recognize Mr. Bera.
    Mr. Bera. Great. Thank you, Mr. Chairman. You know, as a 
child who grew up in the 1960s and early '70s in the heart of 
the space race, obviously it captured our imagination. I think 
everyone in this room who grew up in that era would love to see 
that sense of curiosity, that sense of awe and wonder that 
inspired multiple industries, inspired many of us to go into 
science and inspired a generation.
    The challenge I have right now is my one year in Congress. 
And I will ask the members on the panel, could you in a 
sentence clearly define what NASA's mission is today, what we 
are trying to accomplish in a way that President Kennedy 
clearly defined what we were aspiring to within a specific 
timeframe and so forth. And, as a Member of the Space 
Committee, I think I have a hard time. So I would ask you what 
our mission is today, the one that inspires folks that has been 
clearly articulated to the public?
    Ms. Cooper. The commercial satellite industry is a little 
bit adjacent to NASA, so I am going to yield to my colleagues 
on the panel.
    Mr. Bera. Okay.
    Mr. Witt. Sir, it is outside my area of expertise, but I do 
get asked that regularly, and my answer has not changed. 
America deserves, expects and demands a forward-leaning, well-
funded, laser-focused national space agency, focused on the big 
jobs, the big deals. Where the commercial industry should fill 
gaps, we should fill the gaps and we should be allowed to fill 
those gaps in earnest, and it is private enterprise. But we 
deserve, expect and demand a forward-leaning, well-funded 
laser-focused national space agency.
    Mr. Bera. Mr. Tito?
    Mr. Tito. Well, in 1957 when the Soviets launched Sputnik, 
that changed the world as far as I was concerned and put 
America in the minds of a lot of people in the world as number 
two technologically. And one of our responses was to form NASA 
to lead our space program. And the role of NASA of course was 
for scientific purposes, to develop technology like the 
preceding firm NACA did for the aircraft industry. But the real 
mission of NASA at the beginning as we all know was to win the 
space race. And we did win it after ten years, and somehow we 
don't have that drive that we had 50 years ago. And we may be 
in a position of having Sputnik occur again. Sputnik will be in 
flight to Mars by either China or Russia.
    Mr. Bera. Well, would it be reasonable then to push the 
administration as well as the NASA Administrator to perhaps 
define manned space travel, human space travel, to Mars within 
a certain timeframe as a mission that the public can grasp that 
then within that context we could look at what is the role of 
the private sector and commercial space travel to help us get 
there, as well as what is the role of the Federal sector in 
terms of NASA and the funds that we would have to appropriate? 
But you know, again, I would challenge the administration as 
well as the NASA Administrator to clearly define that because 
then it makes our jobs a lot easier to say, okay, what 
framework allows us to both take the public sector and the 
private sector working together in an innovative way to go out 
there, capture the public imagination?
    Mr. Tito. Look, we are at a point where we have to make a 
decision as a Nation. We can either make a decision to spend a 
relatively small amount of additional funds to a very expensive 
human exploration program now that does not have a mission and 
make a mission out of it, and be the first to get to Mars, or 
by not making a decision, we will be forfeiting that 
opportunity.
    Now in 2021, we could get to Mars, but we may not be the 
only ones. It is an interesting mission. It is Venus and Mars, 
and of course, we are proposing a man and a woman. That would 
make a very interesting combination.
    But I think we have to really look at this opportunity very 
seriously and decide one way or another as to whether the 
United States should pass on it or act on it.
    Mr. Bera. Great. I think that is a great place to end. I 
will yield back.
    Chairman Palazzo. Just to add, you know, Mr. Bera asked the 
same question a lot of us have been asking ourselves, and we 
get asked it a lot. And I would just like to reiterate that is 
one of the reasons why the NASA Authorization Act is so 
important. It does establish a roadmap for NASA so we can come 
up with a timeline, destinations and focus, laser-like focus 
and back it up with our resources to achieve that objective.
    At this time I recognize Mr. Bridenstine.
    Mr. Bridenstine. Thank you, Mr. Chairman, and I would just 
really like to thank the panel. You know, I firmly believe we 
do have an opportunity to advance rocket science and space 
technology in the private sector in many cases apart from the 
whimsical budgets of us politicians. And what you guys are 
doing in that area is unique and special, and you are really 
leading the way and I appreciate that very much.
    What I would like to ask Mr. Witt, part of your testimony 
you talked about ITAR, and some of the regulations that are 
affecting the commercial space flight industry, maybe space 
tourism. Would you share with us a little bit about how ITAR is 
affecting the businesses and the industry at the Mojave Air and 
Space Port?
    Mr. Witt. Sure, Mr. Bridenstine. Did I get that right?
    Mr. Bridenstine. Yes, sir.
    Mr. Witt. ITAR. If you have a rocket and you have a human 
attached to that rocket, you are born into ITAR. So you are 
regulated by the International Treaty and Arms Regulations.
    The developers at Mojave, let us just put a name to them, 
Masten, XCOR and Virgin Galactic, all seek to make their 
industry a worldwide industry. They want to take American 
products and extend them around the globe. One of those 
investors happens to be an international investor, Sir Richard 
Branson. So isn't it ironic that an international investor 
developing a system in the United States currently under 
current law can't fly it outside the United States?
    I believe we have grown up in a new day. There are new 
products. We have agreements all around the world with nations 
that want to explore space for peaceful purposes. Space tourism 
is a great example. If I could choose a location where I would 
like to fly, a suborbital space flight, I would like to fly 
through the aurora borealis out of northern Sweden. It is fast. 
Why not? Fly at night. Do something that no one else has done, 
like Mr. Tito suggests.
    This is what is possible. But unless we find some relief on 
the ITAR regulations and really crack that can open and take a 
look, I don't think we are going to be able to extend these 
things internationally and we need to. It is good for American 
business.
    Mr. Bridenstine. When you think about the market for 
whether it is space tourism or private space suborbital science 
experiments and exploration, that market exists in large part 
outside our own country, while it does exist in our own 
country. Could you give maybe an example of how big that market 
would be if we were able to take that market outside the United 
States?
    Mr. Witt. The Tauri Group is a great place to ask that 
question. I am not an expert in that, but I do know the studies 
are out there and the numbers exist. And I would recommend to 
the Committee that you ask for that, maybe through the CSF.
    But it is a market. Like Mr. Tito said, if we don't provide 
the services, they are going to buy the services from providers 
that are willing to provide the services. They are out there.
    Mr. Bridenstine. Right.
    Mr. Witt. I think we need to be in the game in all corners, 
and I think if you are not trying to find relief--I totally 
agree with Mr. Rohrabacher's comments. But ITAR is more than a 
speed bump as currently written.
    Mr. Bridenstine. When you think about investment in the 
private space flight industry, we think about high net-worth 
investors. Can you share, what is the resistance or is there 
resistance to receiving investment from institutional 
investors? Is it happening, is it slow to happen? Can you share 
a little bit about that?
    Mr. Witt. I don't have any examples of that currently. The 
majority of my tenants are the high net-worth investor. Some 
institutional investing is starting to show up. I have said for 
years we will have an industry when we have an underwriter----
    Mr. Bridenstine. Right.
    Mr. Witt. --and we have Wall Street. We are starting to 
show signs of both. But I think it took some successes and 
namely by SpaceX, now Orbital Sciences, now Boeing. It is going 
to take a new day, new players in the system showing enormous 
successes to start drawing in the more institutional, 
conventional investment. And I think it is beginning to happen.
    Mr. Bridenstine. And of course, indemnification, which you 
guys are very interested in is a key piece of attracting that 
kind of institutional investor, is that correct?
    Mr. Witt. It brings certainty to the game, absolutely. And 
I think we look to the government to be a good partner. We 
can't keep moving the goal posts or changing the rules. The 
indemnification regime is sound policy. It has worked.
    Mr. Bridenstine. Right.
    Mr. Witt. And the operators have the skin in the game 
first, and the government portion has never been used.
    Mr. Bridenstine. Roger that. Thank you. I yield back.
    Chairman Palazzo. I now recognize Mr. Veasey.
    Mr. Veasey. Thank you, Mr. Chairman. I want to ask you a 
little bit about commercial space activities and pop culture. I 
know that you probably have saw that Lady Gaga was going to be 
the first person to perform in space. I think that is going to 
happen sometime in 2015, and I believe she is going to--I think 
it is in conjunction with Richard Branson. I was just wondering 
what you thought of pop culture and how maybe it can play a 
role in sort of aiding or just getting people more interested 
in what is going on in commercial space travel.
    Mr. Witt. Is that for me, Mr. Veasey?
    Mr. Veasey. Yes.
    Mr. Witt. Okay. Lady Gaga. Okay. I got to admit, I didn't 
know I was going to get this question in front of Congress.
    I will tell you, I do have an answer for that. I think you 
raise a valid question. When you talk about the totality of an 
industry, industries usually come along with different things 
like fashion, food, housing, all those certain elements are key 
to commercial space. What will you take? What provisions do you 
need? How long do you plan to be on this journey? What do you 
wear? All these questions.
    But the industry on the ground around that tends to mirror 
trends. And I don't know anything about the Lady Gaga, Sir 
Richard Branson thing you mentioned. It is a little out of 
scope for Mojave. But I do know that fashion design and pop 
culture--I mean, Rocket Man.
    Mr. Veasey. Elton John.
    Mr. Witt. Elton John.
    Mr. Veasey. Right.
    Mr. Witt. I mean, there you go. I play it every time we 
launch a rocket. So it is certainly important to capture the 
young people and to get them engaged. It certainly has a role, 
and I think it is greater than just the pop culture. It is more 
fashion, design, food, the whole industry.
    Mr. Veasey. Do you think there is anything that NASA could 
possibly learn as a--you know, because one of the things about 
Richard Branson, like for instance even in commercial air 
travel, if you go to his airline, whenever you are getting your 
ticket at the kiosk, they are playing Red Hot Chili Peppers, 
there is a different sort of a vibe. And obviously some of the 
things that they are doing with pop culture and this Lady Gaga 
flight is really interesting.
    Do you think that is something that NASA can learn in order 
to maybe inspire a lot of young people that may be interested 
in space travel or may even maybe be able to sort of catapult 
space travel to what it probably was like back in the 1970s and 
early '80s for a lot of young people?
    Mr. Witt. It is possible, but it is an engineering 
organization, and engineers don't tend to think in terms of pop 
culture. It doesn't come oozing out of them naturally. But 
certainly NASA could use a dose of marketing skills that come 
from the Branson organization. They are expert at that and 
selling the brand and selling the concept. You would think that 
the NASA experience that I grew up with and watched on TV that 
brought me into this industry, it could use a jolt of 
reinvention. And what I think you are really asking is what is 
the value to the buying public? If you have a choice of buying 
airlines--if you have ridden on a Virgin flight, they are 
different, they are fun. That brings value to exchanging money 
for your ticket. Maybe there is a value proposition that needs 
to be revisited in the rebranding, rediscovery of the future 
NASA.
    Mr. Veasey. Thank you. Mr. Chairman, I yield back my time.
    Chairman Palazzo. I now recognize Mr. Schweikert.
    Mr. Schweikert. Thank you, Mr. Chairman, though I don't 
know if I am going to be able to reach the heights of pop 
culture sort of inquiry, but I guess I could embarrass my wife 
and go, who is Lady Gaga?
    But in all sincerity, okay, privatization, private 
ventures, now the next question is on the financing, the access 
to capital. When I look at much of what I see in the private 
investments and what is going on in Mojave, I don't want to--
well, I am going to refer to it somewhat as vanity capital. You 
know, some of the ventures are funded substantially with a 
handful of high net-worth individuals, with great hopes and 
dreams because it is their interest, their hobby. Where are we 
going on the financing mechanisms where the investment side--
now, we know the satellite industry now has some terrific rates 
of return. Where is the next level of investment where I see an 
investment index that is where it is a more referred to as sort 
of egalitarian investment mechanic? How far away? Please, give 
me some concepts of where the money is going and coming from.
    Mr. Tito. About ten years ago I actually did consider 
making an investment in one of those organizations that you 
referred to at Mojave, and somehow I just wasn't able to pencil 
it together as an investment that would provide return on 
investment given the risk involved. And one of the problems 
with investing in space programs is that you have to develop a 
business model, and the business model is how much are people 
going to pay to participate in the sort of mission? And as you 
know, there were seven people that paid to fly orbiting the 
Earth on the Space Station with the Russians at a fairly high 
price. And you know, that market is limited.
    Mr. Schweikert. And maybe part of this is for Ms. Cooper. 
We do now see I guess a series of very standardized structured 
investments to finance communication satellites, satellites 
that drive data. From your view of the world from the satellite 
industry, is that the future for other types of financing 
mechanisms?
    Ms. Cooper. Thank you. Certainly the experience in the 
commercial satellite industry is three parts, inspiration, the 
creative aspects, which sometimes comes from governments or 
countries or multilateral groups. But the satellite industry 
certainly has had individual high net-worth investors, like 
Rene Anselmo who founded PanAmSat, the first company I worked 
at, ----
    Mr. Schweikert. But literally--your third?
    Ms. Cooper. And then you have to--if I may go then to the 
second piece which is you have to show a certain technical 
capability to deliver the service. And finally, you have to 
close a business case to show how you are going to sustain what 
is typically a high, up-front investment cost. That, at that 
third phase, on a sustainable rate of return kind of approach 
is where the more traditional investors respond.
    Mr. Schweikert. Yeah, I mean, let us say it was this 
afternoon, and we decided that I am putting money into a 
satellite. My understanding is most satellite launches are 
sponsored. It is, you know, we are a company. It is 
communication. We need 40 percent of the bandwidth capacity. 
The rest will be sold off. The ability to--do they sell 
interest in that? Could I find an exchange or a broker or a 
platform to buy and sell and finance that launch?
    Ms. Cooper. I am not aware of any exchanges for the launch. 
What I can say is that the commercial satellite piece of it----
    Mr. Schweikert. And when I say that I mean the whole 
package.
    Ms. Cooper. The commercial satellite nowadays is almost--
the financial environments reward a satellite with an 
established, pre-launch customer base. Often as much as 80 
percent of the satellite's capability is booked pre-launch.
    Mr. Schweikert. Okay.
    Ms. Cooper. And then the excess of that is sold after 
launch, after the satellite has been put in orbit over the 
course of its 15-year lifespan. There are certainly satellites 
that are speculative, that are built with a customer base to be 
determined.
    Mr. Schweikert. I would like to learn more about that 
because a year ago I was approached by some folks that 
literally wanted to set up--the closest thing I could refer to 
it is like a REIT that would be based in financing, the 
construction, the maintenance, the launch of the satellite and 
you know, literally selling its bandwidth.
    Mr. Chairman, with that I yield back.
    Chairman Palazzo. I now recognize Ms. Edwards.
    Ms. Edwards. Thank you, Mr. Chairman. Thank you, Mr. 
Chairman, and thank you very much to Ms. Bonamici for sitting 
in for me earlier. I had a conflict. I really appreciate our 
witnesses here today. Mr. Tito, it is good to see you again.
    I want to reiterate, and I know my statements has been 
submitted for the record, but I want to reiterate to Chairman 
Palazzo my commitment to working with him and with the Chairman 
and the Ranking Member for a clean one year extension of the 
commercial launch indemnification provisions, and I hope that 
over this next year we really will take to the task of doing 
the kind of oversight hearings that we need to give the 
commercial space industry, the kind of certainty that we need 
with respect to indemnification, and we can only do that if we 
get the FAA in here and get experts in so that we can look at 
the future environment and climate with respect to commercial 
activity. But I do support a clean one-year extension as we are 
approaching that date of December 31.
    To all of the panelists, I think that much of what we think 
of as commercial space really involves a lot of significant 
government contribution, and sometimes we don't hear that. And 
in fact, the delineation between public and private appears 
increasingly blurred. As somebody who came out of NASA, I think 
it has always been a little blurred, and that is okay. But how 
should Congress and its oversight role look at the role of 
public-private relationships to ensure that both taxpayers and 
commercial entities' interest are appropriately considered? And 
then I would like each of you if you would give me an 
indication as to whether you know how much in fact taxpayers 
have contributed to the current commercial environment?
    Ms. Cooper. For the commercial satellite sector, there is 
not a taxpayer contribution. These are privately financed, 
privately launched, privately operated satellites. Obviously 
there is government regulatory regimes that license and oversee 
those. It is my understanding at the FCC for example that those 
license fees are cost-based in terms of the agencies.
    Ms. Edwards. What about the technology that went into the 
commercial satellite industry? Any idea of the contribution of 
NASA or any of our agencies in terms of their contribution?
    Ms. Cooper. I am not aware of any government programs to 
develop commercial satellite technology. There certainly is an 
interplay between the commercial satellite sector and the 
broader space enterprise where products that are developed in 
the NASA context may later be commercialized.
    Ms. Edwards. Okay. Mr. Tito, in the Architecture Report 
that is attached to your statement it says that, ``perhaps 
several hundred million dollars in new Federal spending could 
make this mission happen.'' Are you suggesting that the mission 
couldn't be undertaken without additional NASA funding? And is 
there evidence in the current fiscal environment that those 
several hundred million dollars would be available?
    Mr. Tito. Well, right now I don't see a lot of evidence 
that money is available. We do have an opportunity in four 
years, but we have an opportunity in eight years and a lot can 
happen.
    Ms. Edwards. So when you say several hundred million 
dollars would be required from NASA. Is that $100 million? Is 
it $900 million?
    Mr. Tito. Well, I think initially we are talking about per 
year basis, so it might be $100 to 200 million a year would be 
needed to fund the dual use upper stage which the Nation needs 
anyway to provide heavy lift capability. So that would be one 
project that would have to take place.
    Ms. Edwards. And that would require taxpayer support, 
right?
    Mr. Tito. Yes.
    Ms. Edwards. Okay.
    Mr. Tito. And it is already planned, but it is not funded 
yet over the longer time period.
    Ms. Edwards. And Mr. Witt, do you have an idea of how much 
taxpayer support has gone into the commercial activities that 
you are engaged in or that others of your partners are?
    Mr. Witt. Well, Ms. Edwards, I can only speak to Mojave Air 
and Space Port. We are a California special district, so we are 
a quasi-government entity that can qualify for Federal grants 
from the FAA and others. And I think I gave that to the 
committee, and I could give you a number but the exact number 
was submitted in my packet. But it was a good question, and we 
did extend a runway and we bought a fire truck. So we are 
talking in terms of a couple million dollars. But my 
organization, if we don't make money, I don't pay my employees. 
I don't get any operational funds from anyone. I have to run as 
a business. And so there has been some public investment, but 
in terms of my total operation, it is small.
    Ms. Edwards. And I will close, Mr. Chairman. I guess the 
point is--and I don't mind that and I really do understand the 
point of the commercial space industry is to make money. But I 
think sometimes the public gets confused as though somehow this 
industry would just be off and going on its own without the 
requisite support of technology and other kinds of development 
and investment that the taxpayers made. And I think we get a 
great benefit for the bargain, but I don't want to pretend that 
we can engage in this activity without the hand of the taxpayer 
in there helping it out. Thank you very much, Mr. Chairman.
    Chairman Palazzo. I now recognize Ms. Wilson.
    Ms. Wilson. Thank you, Mr. Chair. This is a very 
interesting hearing this morning, and bringing in Lady Gaga 
just made it even more exciting for people to look forward to.
    I have a question for Ms. Cooper. In your statement you 
note the satellite industry association support for extending 
the U.S. commercial launch indemnification regime which expires 
at the end of this year. How in concrete terms would the 
absence of the indemnification provisions affect the U.S. 
commercial satellite industry in terms of price, market share 
or revenues? And on what data do you base your conclusions?
    Ms. Cooper. Thank you. I don't have any statistical surveys 
for that question specifically. I will note that the commercial 
satellite sector primarily has not been launched by U.S. launch 
vehicles over the past five years certainly. Those launches are 
primarily held by European or Russian satellite launch 
operators. But there is a great deal of interest in the 
emerging capabilities of new and existing satellite launch 
providers for the United States. Absent the commercial launch 
indemnification, we expect that the prices for launches would 
have to incorporate additional risk assumed by the launch 
providers, perhaps affecting the competitiveness of those U.S. 
providers in that international launch community. I don't have 
data on how much--that would be speculation. Thank you.
    Ms. Wilson. Okay. Thank you. Mr. Witt, the SOARS Act seeks 
to introduce a number of provisions to streamline commercial 
space flight. I would like to understand from your perspective 
what is missing from the existing law that needs fixing and how 
in your view the SOARS Act would address those issues.
    Mr. Witt. Okay, Ms. Wilson. The SOARS Act as presented has 
two provisions I believe in Section 2 and one in Section 3, and 
the two in Section 2 basically provide one-stop shopping for an 
applicant seeking a license to operate and currently--almost 
have to understand the FAA to understand the provision in the 
law. But the way the FAA is organized, they have people that 
manage air traffic control, they have people who fund airports, 
they have people who license pilots in aircraft and 
maintainers. And then they have people who license launches. 
Well, we have a new day. Now we have airplanes, purpose-built 
airplanes that are stage one that carry a rocket aloft and then 
launch. So you have this hybrid. Where does it fit? And it 
creates again some uncertainty in the current law because we 
have new developments. And the law just aims to streamline that 
in Section 2. The Section 3 provision, and it really is a great 
provision, where commercial companies can provide training for 
participants who choose to buy tickets to go to suborbit on 
commercial lines. It is a mechanism for training these people 
to make them aeronautically adaptable to the flight they are 
about to take. If you can imagine being in a very confined 
space with six colleagues for an hour to go to space, it 
would--I think if you spend $250,000 or $100,000 for that 
experience, it is reasonable from a business perspective to 
assume that all of you had similar training before the 
experience so you could handle it physiologically.
    That is what provision three intends to allow. The question 
I had in my testimony was does that belong under AVS at FAA or 
does it belong under AST? When I reasoned myself through that 
and spoke to the experts of which I am probably one with, I had 
questions about it. I think we could, if we don't get it right 
and I think it is a good measure--I just want to get it right 
the first time where we are not going down the land of 
unintended consequences because of how you work within the FAA. 
I think you could leave it up to the Administrator or leave it 
up to the Secretary of Transportation to solve it. I think they 
will find a way to solve it within the Agency. But I think it 
is a good provision. I just don't know if the way it is written 
is clean.
    Ms. Wilson. Thank you.
    Mr. Witt. Yes, ma'am.
    Ms. Wilson. I yield back the balance of my time.
    Chairman Palazzo. All right. At this time without objection 
the Chair recognizes Mr. Takano for five minutes.
    Mr. Takano. Thank you, Mr. Chair. I appreciate this 
opportunity. Mr. Witt, I really did enjoy my visit to Space 
Port. What you have there is a tremendous ecosystem of 
entrepreneurs and researchers, and it calls to mind the early 
days of Silicon Valley, and I wish you well in your enterprise.
    Ms. Cooper, I am curious about your comments about the 
spectrum. What are you specifically saying that needs to be 
done? Do we need to preserve a certain part of that spectrum 
for your industry? And tell me, is it not possible for your 
industry to actually compete in an auction for the spectrum 
vis-`-vis the communication companies?
    Ms. Cooper. The commercial use of radio frequencies 
spectrum is regulated by the FCC and coordinated 
internationally with the International Telecommunications 
Union. There are existing allocations for satellite services of 
a variety of different ways. It is enormously complex. We have 
a number of different swaths of the radio spectrum.
    The issue today comes from this press towards trying to 
find additional spectrum to allow new services, more broadband 
to your mobile phone, more services throughout the 
telecommunications world. And how can we share and make 
efficient use of that spectrum. The concern that the satellite 
industry has is that those ideas of collaborating and sharing 
frequencies need to be thought of a little differently for 
satellite services. We need very clean spectrum to communicate 
so far away, and we file regularly at the FCC and engage 
regularly with both--the FCC is the regulator of commercial 
spectrum and NTIA at Commerce, the regulator of the Federal 
spectrum--to make sure that if they are considering adding 
another unlicensed user or co-primary or secondary user in the 
frequencies we are already using, have invested in it and have 
spacecraft, you know, spinning away for 15 years, that we can 
continue to use that frequency not only with high reliability 
but with the high level of quality that media customers, 
broadband customers, U.S. military require.
    Mr. Takano. Well, thank you. Mr. Witt, I also visited the 
Dryden Space Center at Edwards along with my visit to you at 
Space Port. What struck me there was the tremendous research 
going on there. And you and I talked about the role of basic 
scientific research or the partnership. I am concerned about 
our country losing its preeminence or its exceptionalism in 
research and development of new technologies. Would you support 
more money available for aerospace research or that end of 
NASA? People forget that NASA also has aeronautical as part of 
its mission.
    Mr. Witt. Mr. Takano, yes, in a short version. And we have 
done something beyond that. David McBride, the Center Director 
of NASA Dryden, and I were on a trip to Europe together. And we 
decided we would do a home-on-home. We would actually trade 
engineers for a year. An engineer from NASA Dryden would come 
to work for me, and we would find a way to work in kind the 
other way. So they found out there was a mechanism within NASA 
to do that, and we are just completing that first year.
    Mr. John Kelly worked with us at Mojave, and it was a way 
that we thought was a fantastic way to share ideas, best 
practices, to actually institutionalize some of these lessons 
learned, the people's investment if you will, back to Mojave, 
and with the other companies.
    There is a lot that can be done in no atmospheric research 
by the national space agency through Dryden, very much so. I 
would very much support.
    Mr. Takano. Real quick. Can anyone tell me, who indemnifies 
the European launches since they are, so many of our 
satellites--do we know if the European Union subsidizes those 
or not? It would be interesting to find that out.
    Also, I want to put a plug in for the wonderful simulator 
experience I had, and I would love to see more opportunities 
for young people to visit the Dryden Center and also 
participate in some of their experimental flights. That would 
be a great way to try to promote STEM education. I appreciate 
the common interest that I share with my conservative friend, 
Mr. Rohrabacher, and private space--in California. That is one 
where you and I share a common interest. I yield back, sir.
    Chairman Palazzo. The gentleman yields back. I want to 
thank the witnesses for their valuable testimony and the 
Members for their questions. The Members of the Committee may 
have additional questions for you, and we will ask you to 
respond to those in writing. The record will remain open for 
two weeks for additional comments and written questions from 
Members. The witnesses are excused, and this hearing is 
adjourned.
    [Whereupon, at 11:36 a.m., the Subcommittee was adjourned.]


                               Appendix I

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                   Answers to Post-Hearing Questions

Responses by Ms. Patricia Cooper

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Responses by Mr. Stuart Witt

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Responses by Mr. Dennis Tito
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                              Appendix II

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                   Additional Material for the Record


 Submitted statement of Donna F. Edwards, Ranking Member, Subcommittee 
         on Space, Committee on Science, Space, and Technology

    Thank you, Mr. Chairman, for holding today's hearing on 
``Commercial Space,'' and welcome to our witnesses. In particular, I 
know that we will be hearing from Representative McCarthy, and I look 
forward to hearing his perspectives.
    Now, before I go any further, I'd like to congratulate NASA, and 
particularly NASA Goddard Space Flight Center near my District, as well 
as the University of Colorado Boulder, the University of California 
Berkeley, Lockheed Martin, the Jet Propulsion Laboratory, the United 
Launch Alliance, and all those involved, on the successful launch of 
the Mars Atmosphere and Volatile Evolution (MAVEN) mission. While not 
strictly a ``commercial'' mission per se, it takes a dedicated team 
including government, the private sector, and academia to accomplish 
challenging missions such as MAVEN.
    In fact, MAVEN, and its commercial partners, serves as an important 
reminder that over 80 percent of NASA's entire budget is and has been 
paid to commercial entities for products and services. And many ofthe 
commercial space activities that are being discussed today, as well as 
others, have and continue to rely on taxpayer investments, NASA 
expertise and experience, and NASA infrastructure.
    In addition, an important factor in the initiation of new 
commercial space businesses is that NASA-developed technologies have 
matured to a point that the private sector can begin to seek commercial 
uses for them. So while I'm as excited as anyone about the potential 
for growth in commercial space, whether it's in the satellite industry 
and services, commercial cargo transportation, and commercial reusable 
suborbital and orbital human spacetlight--oh, and I want to be one of 
those private passengers--I don't want to perpetuate the misconception 
that these are purely ``commercial'' endeavors.
    There are significant taxpayer dollars associated with these 
``commercial'' activities and there is much at stake for the Government 
in the successful execution of these programs. As a result, we in 
Congress need to carry out the oversight that is required to protect 
the taxpayers' investments and the Government's contributions to these 
efforts.
    Yet another important Government role in commercial space is in 
establishing regulations to ensure that commercial space programs are 
carried out safely and that the uninvolved public is not harmed, should 
an accident occur. In that regard, Congress has, over the past two 
decades, enacted provisions to support a shared government-industry 
third-party liability regime for commercial space launches. These 
provisions expire at the end of this year. And I know that many 
commercial space entities have an interest in the government-industry 
liability regime for commercial space launch, since that regime is 
active for any commercial FAA-licensed launch. That is the reason I am 
puzzled, Mr. Chairman, as to why this hearing is not focused on the 
pressing legislative issue of commercial space launch indemnification.
    Furthermore, the legislation that is being discussed today, HR 
3038--the SOARS Act--appears to deal with a number of FAA-related 
aviation and space regulatory issues, yet FAA is not represented here 
today. And I'm not aware that any of the witnesses who will testify are 
regulatory experts or can discuss the details of how this legislation 
would be implemented in practice or what the cost of its implementation 
would be.
    Mr. Chairman, my criticism should not be misconstrued. I share in 
the excitement and promise of the commercial space activities being 
discussed today and of the many innovative ideas and strengths that 
commercial enterprises bring to our nation's space activities. I stand 
ready to work with you, Mr. Chairman, through future hearings, to 
examine the whole range of issues associated with commercial space. 
These include, at a minimum, how to ensure the safety of human 
spaceflight participants; whether the existing shared-risk third-party 
liability regime requires adjustments; and how commercial space 
accidents will be investigated. And, given the looming expiration of 
the commercial space launch indemnification provisions, I am pleased to 
join Chairman Smith, Ranking Member Johnson, and Space Subcommittee 
Chairman Palazzo in introducing a clean one-year extension of the 
provisions.
    I hope that we can move the bill quickly to the floor after the 
Thanksgiving break so that we can ensure that commercial space launches 
have continued access to the existing protections while this Committee 
conducts the necessary oversight of the issues associated with a 
longer-term extension.
    Thank you and I yield back the balance of my time.

Submitted statement of Eddie Bernice Johnson, Ranking Member, Committee 
                   on Science, Space, and Technology

    Good morning. I would like to welcome each of our witnesses to 
today's hearing.
    The topic of today's hearing is an important one. About ten years 
ago, this Committee held a hearing entitled ``Commercial Human 
Spaceflight.'' Mr. Tito, who is on one of today's panels, testified at 
that hearing. A lot has happened over the course of those ten years. 
The International Space Station was completed and continues to show 
great promise as an orbital laboratory. NASA is building the next deep 
space exploration system of the future. With the Space Shuttle retired, 
cargo resupply of the ISS is being turned over to two commercial 
providers, albeit a success made possible with substantial NASA 
financial investment and technical transfer. Today, constellations of 
commercial satellites circle the Earth, performing a multitude of 
critical functions. NASA and FAA are working together in anticipation 
of future manned commercial orbital flights. And both entrepreneurs and 
established companies are actively exploring a range of commercial 
space opportunities.
    So it is fitting that we begin a comprehensive examination of what 
is needed to continue to grow commercial space. And I view today's 
hearing as exactly that, hopefully just the beginning of a series of 
hearings that will thoughtfully examine all facets of commercial space 
prior to considering any legislation that will affect commercial space 
for years to come.
    Ten years ago, Mr. Tito expressed concern about the regulations 
that might be imposed on the nascent commercial space industry. He was 
clear to say that he was not looking to escape the regulations, but 
rather wanted clarity on which government agency, and which set of 
regulations, would oversee the then-new industry.
    His questions are still valid today.
    In addition, the fact that much of what we think of as commercial 
space in reality involves such a significant governmental role, and the 
fact that the lines between public and private may be becoming blurred 
for some space activities, requires a clear understanding of the roles 
and responsibilities envisioned for these future commercial space 
endeavors.
    And, the fact that we are staring at yet another expiration of the 
risk sharing regime established in the Commercial Space Launch Act 
Amendments should not and must not detract us from the greater goal of 
examining this indemnification issue comprehensively. In the meantime, 
I am pleased to join Chairman Smith, Space Subcommittee Ranking Member 
Edwards, and Space Subcommittee Chair Palazzo in providing a clean, 
one-year extension of these provisions, while the Subcommittee has an 
opportunity to consider whether any changes are needed.
    I look forward to this and future hearings to help us forge a clear 
direction.

                                 
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