[Congressional Record Volume 158, Number 144 (Tuesday, November 13, 2012)]
[House]
[Pages H6335-H6336]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




              SPACE LAUNCH LIABILITY PROVISIONS EXTENSION

  Mr. PALAZZO. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 6586) to extend the application of certain space launch 
liability provisions through 2014.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 6586

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. EXTENSION.

       Section 50915(f) of title 51, United States Code, is 
     amended by striking ``December 31, 2012'' and inserting 
     ``December 31, 2014''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Mississippi (Mr. Palazzo) and the gentleman from Illinois (Mr. 
Costello) each will control 20 minutes.
  The Chair recognizes the gentleman from Mississippi.

                              {time}  1750


                             General Leave

  Mr. PALAZZO. Mr. Speaker, I ask unanimous consent that all Members 
may have 5 legislative days to revise and extend their remarks and to 
include extraneous material on H.R. 6586, the bill now under 
consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Mississippi?
  There was no objection.
  Mr. PALAZZO. Mr. Speaker, I yield myself such time as I may consume.

[[Page H6336]]

  I want to begin by thanking Members for their bipartisan support of 
this legislation.
  H.R. 6586 is a very simple bill. It extends for 2 years a commercial 
space transportation risk-sharing and liability regime that was 
established by Congress in 1988 with passage and enactment of the 
Commercial Space Launch Act Amendments. The structure of the liability 
regime is modeled on the Price-Anderson Act that governs risk-sharing 
for the nuclear power industry.
  There are several features of the Commercial Space Launch Act 
Amendments, but one that is central to today's debate is indemnifying 
commercial launch and reentry operators against catastrophic losses 
suffered by the uninvolved public, or ``third parties.''
  Since 1988, the Office of Commercial Space Transportation has 
licensed more than 200 commercial space launches and three reentries 
without any claims for Federal coverage for loss of life, serious 
injury, or significant property claims. The 1988 Act was driven in part 
by the emergence of foreign launch services companies that were made 
competitive through government subsidies and preferential foreign 
national laws, including indemnification.
  Foreign launch companies continue to be formidable competitors. If 
this program were allowed to lapse, it would threaten our domestic 
market for launches, as the cost of insurance would significantly 
increase.
  The Office of Commercial Space Transportation, as part of its 
licensing and permitting mission, administers financial responsibility 
and risk-sharing requirements for commercial launch and reentry 
operators. They calculate the required amount of financial 
responsibility based on the maximum probable loss of the license 
applicant's proposed launch or reentry. In the event there is a 
catastrophic accident, the operator's insurance coverage would be first 
in line. The government's liability would then cover excess claims 
above the insured amounts, but not to exceed $2.7 billion. And I also 
want to note that to trigger Federal indemnification, the 
administration must submit a request to Congress for claims in excess 
of insurance coverage, and Congress must, in turn, pass a separate 
appropriation bill to fund the request. Responsibility for any claims 
above the Federal cap would revert to the launch or reentry operator.
  The Space and Aeronautics Subcommittee held two hearings this 
Congress examining the activities of the Office of Commercial Space 
Transportation and the performance of its licensing and indemnification 
regime. Administration and industry witnesses provided compelling 
evidence that indemnification for third-party claims is needed to 
preserve the U.S. commercial launch market. I want to reiterate that 
the Federal Government's exposure is only for third-party claims and 
only for amounts that exceed the maximum probable loss determined by 
the Office of Commercial Space Transportation.
  Mr. Speaker, our commercial space launch industry needs this 
extension. While there are only a small number of commercial launches 
occurring today from domestic spaceports, this is about to change.
  First, NASA relies on commercial providers to carry cargo, and 
eventually crew, to and from the international space station. SpaceX 
has already flown its first mission to ISS earlier this fall, and 
together with Orbital Sciences Corporation, these two companies are 
under contract to complete 20 cargo missions before the end of 2016.
  Secondly, commercial manned spaceflights--orbital and suborbital--
will require indemnification in order to launch from U.S. spaceports. 
While it's not clear when these types of services will begin, just like 
today's commercial communications satellite customers, launch customers 
will rely on an indemnification regime for third-party claims, or the 
business is at risk of going offshore.
  I urge all Members to support this legislation, and I reserve the 
balance of my time.
  Mr. COSTELLO. Mr. Speaker, I yield myself such time as I may consume.
  I rise in support of H.R. 6586, to extend the application of certain 
space launch liability provisions through 2014.
  First established by Congress as part of the Commercial Space Launch 
Act Amendments of 1988, the commercial space transportation risk-
sharing liability and insurance regime is a vital program for the 
commercial space industry and has been extended five times since its 
original enactment.
  The current extension expires on December 31 of this year, so it is 
important for Congress to act now so that there is sufficient time for 
this legislation to make its way to the President before the current 
authority expires.
  Under the current three-tier regime, commercial space launch 
providers are required to purchase third-party liability insurance to 
compensate for maximum probable losses from third-party claims up to a 
level of $500 million. For claims above those maximum probable losses, 
the U.S. Government may pay successful liability claims up to $1.5 
billion above that insured level subject to funds being appropriated by 
Congress for that purpose. Finally, for successful claims above the 
government indemnification, the launch providers assume responsibility 
for payment.

  This risk-sharing regime has been vitally important for the 
development of a commercial space launch industry in the United States. 
Moreover, to date, the regime has not cost the U.S. Government a penny 
in third-party claims.
  However, I would be remiss if I did not note some concerns about the 
program in its current form. Congress has not updated the program since 
its inception in 1988. This has resulted in an increased liability 
exposure for the U.S. taxpayer, and that exposure grows every year. I 
am concerned that taxpayer liability exposure is growing at the same 
time the industry and its associated insurance market is maturing. One 
would tend to think that the opposite should be the case. I hope that 
we can begin to address these issues before the next extension is 
necessary in 2014.
  I want to thank Chairman Hall and Subcommittee Chairman Palazzo for 
working with us on this bill, and I reserve the balance of my time.
  Mr. PALAZZO. Mr. Speaker, I yield 3 minutes to the gentleman from 
Texas, Chairman Hall of the Science, Space, and Technology Committee.
  Mr. HALL. Mr. Speaker, I, of course, rise in support of H.R. 6586, to 
extend the application of certain space launch liability regimes.
  Everybody is hoping that the House won't be divided, that we're all 
going to work together. This is a good chance to show them that we are 
all together on a good bill.
  Commercial launch in the United States has a very enviable record. 
Our rockets are highly reliable, and SpaceX, which has flown two Falcon 
9 rockets to the international space station and returned two payloads, 
is the first commercial company to successfully reenter payloads from 
space. And in the next 2 months, Orbital Sciences Corporation is 
scheduled to launch its new rocket that is designed to carry cargo to 
the space station.
  No matter these successes, our industry faces serious pricing 
challenges from foreign operators. They are able to offer substantially 
cheaper launch costs because of industrial policy and less expensive 
labor costs. They also offer generous indemnification coverage. In a 
report released earlier this summer, the Government Accountability 
Office stated:

       The United States provides less total third-party liability 
     coverage than China, France, or Russia--the primary countries 
     that have conducted commercial space launches in the last 5 
     years.

  As Chairman Palazzo mentioned a few minutes ago, commercial launch 
activity in the United States is expected to pick up in the years to 
come: first through NASA's reliance on commercial launch companies to 
ferry cargo and astronauts to and from the international space station, 
and second, through the introduction of commercial human spaceflight 
services.
  The bill before us would extend the indemnification regime for 2 
years to December 31, 2014. It's important that we pass this bill to 
ensure that we do not jeopardize the ability of NASA to get cargo 
flights to the space station or inhibit our commercial launch 
operators' ability to compete for future payloads.
  The Committee on Science, Space, and Technology will continue to 
monitor the activities of the Office of Commercial Space Transportation 
and the

[[Page H6337!]]

evolving space launch market to ensure that the current risk-sharing 
and liability regime, including indemnification, is properly 
structured.
  I thank Chairman Palazzo of Mississippi and Ranking Member Costello 
of Illinois for sponsoring and supporting this bill, and I urge all 
Members to support it as well.
  Mr. COSTELLO. I continue to reserve the balance of my time.
  Mr. PALAZZO. Mr. Speaker, I yield 2 minutes to the gentleman from 
Texas (Mr. Smith).
  Mr. SMITH of Texas. I thank the chairman for yielding.
  First of all, I do want to thank the chairman of the Space 
Subcommittee, Steve Palazzo of Mississippi, for bringing this must-pass 
legislation to the floor today. I also want to thank my friend and 
colleague from Texas, Ralph Hall, the chairman of the Science 
Committee, and the professional staff of the committee for shepherding 
this bill and getting us to the point where we are now.

                              {time}  1800

  Last June, the Space and Aeronautics Subcommittee heard testimony on 
why government indemnification for commercial rocket launches must be 
extended. At that hearing, Frank Slazer from the Aerospace Industries 
Association said it best about why this indemnification is needed:

       Many foreign launch providers competing against U.S. 
     companies already benefit from generous indemnification 
     rules. For example, the European company Arianespace is 
     required to purchase insurance up to just 60 million Euros, 
     roughly $75 million. Any damages above this cap are the 
     guaranteed responsibility of the French Government.
       We cannot afford to drive away highly skilled technical 
     jobs to foreign countries where the regulatory frameworks 
     provide better critical risk management tools.
       Lastly, a non-renewal could impede new U.S. entrants to the 
     commercial launch market, discourage future space launch 
     innovation and entrepreneurial investment. Without a level 
     playing field for competition, new U.S. entrants could find 
     it highly undesirable to begin their business ventures in the 
     United States.

  The FAA's launch indemnification authority has been in place for over 
20 years, benefiting the American commercial space industry. The bill 
before us would extend indemnification for 2 more years, and I hope 
that we can address a longer-term legislative solution when addressing 
NASA reauthorization and commercial space legislation next year.
  Mr. Speaker, I wanted to thank the chairman again for yielding me 
time.
  Mr. COSTELLO. Mr. Speaker, I continue to reserve the balance of my 
time.
  Mr. PALAZZO. Mr. Speaker, I yield 3 minutes to the gentleman from 
California (Mr. Rohrabacher).
  Mr. ROHRABACHER. Mr. Speaker, first and foremost, I would like to 
thank Chairman Hall for the great leadership that he's provided to our 
committee, and also Mr. Costello, who will be voluntarily leaving this 
body, and he has done such a fine job. Both of these gentlemen deserve 
accolades for the wonderful job they've done for America's science and 
space programs, as well as for our country as a whole. So, thank you 
both very much.
  I rise in support of H.R. 6586. It extends the commonsense 
limitations on liability exposure for commercial space launches.
  A few years ago when I was the chairman of the Space and Aeronautics 
Subcommittee, the FAA was directed to provide an ongoing analysis of 
the rationale for and potential unintended consequences of this 
indemnification provision.
  According to the analysis, the two options before us then were to 
extend this liability provision, which has never cost the American 
taxpayer a dime, or option number two--though unintended--would be to 
give a competitive advantage to China and other foreign launch 
providers. This, of course, is the same choice that we are making 
today. If we give foreign rocket companies such an advantage, then we 
are costing American jobs while undermining both our economy and our 
national security.
  Back in 2004, I authored the current regulatory regime for human 
spaceflight, which has worked well beyond our expectations.
  Recently, in cooperation with our majority whip, Mr. McCarthy, and my 
friends on both sides of the aisle, we extended that regime as the 
Science Committee's part of the recent FAA reauthorization bill. It 
would be very tempting to try to revisit that regulatory issue or some 
other provisions with this legislation.
  So, I would like to thank Chairman Palazzo for offering a bill that 
asks only the critical question before us: do we extend launch 
indemnification, or do we hand the launch industry completely over to 
foreign competitors?
  The choice is clear. The answer is clear. America must remain the 
preeminent space-going Nation, which means we need to pass H.R. 6586, 
and I ask my colleagues to join me in supporting this legislation.
  Mr. COSTELLO. Mr. Speaker, I continue to reserve the balance of my 
time.
  Mr. PALAZZO. Mr. Speaker, I have no further requests for time, and if 
the gentleman is prepared to yield back, I am prepared to close.
  Mr. COSTELLO. Mr. Speaker, we have no further speakers on our side.
  I'd like to thank Chairman Hall for his services as chairman of the 
committee. He's a wonderful person. He has done a great job chairing 
the full committee, and he is one of the people that I'm going to miss 
the most here in this Congress, and my friend from California as well, 
and from Texas, and Chairman Palazzo.
  With that, Mr. Speaker, I urge passage of this legislation, and I 
yield back the balance of my time.
  Mr. PALAZZO. Mr. Speaker, I have no further requests for time, and I 
yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Mississippi (Mr. Palazzo) that the House suspend the 
rules and pass the bill, H.R. 6586.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds 
being in the affirmative, the ayes have it.
  Mr. PALAZZO. Mr. Speaker, I object to the vote on the ground that a 
quorum is not present and make the point of order that a quorum is not 
present.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further 
proceedings on this question will be postponed.

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