[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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