[Congressional Record Volume 159, Number 169 (Monday, December 2, 2013)]
[House]
[Pages H7369-H7371]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          SPACE LAUNCH LIABILITY INDEMNIFICATION EXTENSION ACT

  Mr. SMITH of Texas. Mr. Speaker, I move to suspend the rules and pass 
the bill (H.R. 3547) 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. 3547

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Space Launch Liability 
     Indemnification Extension Act''.

     SEC. 2. INDEMNIFICATION EXTENSION.

       Section 50915(f) of title 51, United States Code, is 
     amended by striking ``December 31, 2013'' and inserting 
     ``December 31, 2014''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Texas (Mr. Smith) and the gentlewoman from Texas (Ms. Eddie Bernice 
Johnson) each will control 20 minutes.
  The Chair recognizes the gentleman from Texas.


                             General Leave

  Mr. SMITH of Texas. 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. 3547, the bill now under 
consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Texas?
  There was no objection.
  Mr. SMITH of Texas. Mr. Speaker, I yield myself such time as I may 
consume.
  The bill we consider today provides stability for our Nation's 
commercial launch providers so that they can remain competitive in the 
international market.
  The bill extends the existing system, which requires commercial 
launch providers to purchase insurance up to the maximum probable loss. 
It then provides that the government will compensate up to $1.5 
billion, plus inflation, and any amount above that is the 
responsibility of the original commercial launch provider.
  Two weeks ago, the Space Subcommittee heard testimony from industry 
experts about the need to extend the Commercial Space Launch Act's 
risk-sharing system. Two of the witnesses who testified deal with this 
law on a regular basis.
  Mr. Stuart Witt, president of the Mojave Air and Space Port, is 
developing new launch systems and technologies that could revolutionize 
space by making it more accessible. He told the subcommittee that this 
law allows companies to continue to innovate and grow.
  Another witness, Ms. Patricia Cooper, president of the Satellite 
Industry Association, represents companies that add billions of dollars 
to the U.S. economy as a result of the current risk-sharing system. Ms. 
Cooper testified that the system's continuation is ``absolutely 
essential'' and that her association ``strongly recommends that it be 
renewed before it expires.''
  The committee also recently received a letter signed by DigitalGlobe, 
Boeing, Virgin Galactic, Lockheed Martin, American Pacific Corporation, 
Aerojet Rocketdyne, ATK, Ball, Honeywell, AMT II, and Orbital Sciences 
which advocated the renewal of the risk-sharing system in order to keep 
the U.S. competitive in the global market.
  Last year, the Space and Aeronautics Subcommittee held a separate 
hearing on indemnification and heard from the Federal Aviation 
Administration, the Government Accountability Office, DigitalGlobe, and 
the Aerospace Industries Association. At this hearing, Frank Slazer, 
with the Aerospace Industries Association, summed up his trade 
association's position by stating:

       Many foreign launch providers competing against U.S. 
     companies already benefit from generous indemnification rules 
     . . . 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 
     nonrenewal 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 launch indemnification authority has been in place for over 
20 years, and the American commercial space industry has benefited 
significantly over this time. Thankfully, the provision has never been 
triggered by a serious accident, but the stability it provides allows 
the U.S. to remain competitive in the global market and to push the 
boundaries of space technology.
  The bill before us would extend indemnification for 1 more year with 
the hope that we can address a longer-term legislative solution. I 
would have preferred a longer extension. For instance, the NASA 
Authorization Act that the Science, Space, and Technology Committee 
passed last summer extended indemnification for 5 years, but we now 
have a bipartisan bill before us that provides stability to our 
commercial space industry by protecting companies against third-party 
liability claims.
  This provision expires on December 31, so time is short. This bill 
buys us time to work on a long-term extension as part of the larger 
Commercial Space Launch Act renewal that we will take up next year. I 
urge my colleagues to support this bipartisan legislation.
  Mr. Speaker, I reserve the balance of my time.
  Ms. EDDIE BERNICE JOHNSON of Texas. Mr. Speaker, I yield myself such 
time as I may consume.
  I rise today to speak in support of H.R. 3547, a bill 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 has been extended seven 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's desk before the current authority expires.
  The liability and insurance regime that would be extended by this 
legislation is three-tiered.
  In the first tier, licensed commercial launch providers are required 
to purchase third-party liability insurance to compensate for possible 
losses from third-party claims by the uninvolved public up to the 
maximum probable loss level determined by the Federal Aviation 
Administration as part of its licensing process, or a maximum level of 
$500 million.
  In the second tier, for claims above those maximum probable losses, 
the U.S. Government may pay successful liability claims up to $1.5 
billion in 1989 dollars, or about $2.8 billion in today's dollars, 
subject to funds being appropriated by Congress for that purpose.
  In the third tier, for successful claims above the aforementioned 
$2.8 billion, the licensee assumes responsibility for payment.
  It should be noted that the U.S. Government has not appropriated a 
single dollar to pay for the third-party claims in the two-decade 
history of this program.

  The existence of the liability risk-sharing regime has helped enable 
the development and the sustainment of a commercial space launch 
industry in the United States, including the emergence of several new 
companies in recent years. In addition, the regime has

[[Page H7370]]

allowed U.S. companies to remain competitive with their international 
counterparts, almost all of whose governments provide similar or more 
generous risk-sharing liability regimes to that of the U.S.
  The commercial space transportation liability and insurance regime 
has worked. It has not cost the American taxpayer a single dollar in 
claims, and it has strengthened U.S. competitiveness in commercial 
space launch--and this is not a blank check since any potential 
payments for claims would be subject to prior congressional 
appropriation.
  The bill before us today extends the liability risk-sharing regime 
for a period of 1 year. While that is less than some in the industry 
would like, I believe it is an appropriate length. That is because much 
has changed since the risk-sharing liability and indemnification regime 
was established in 1988 and because the commercial space launch 
industry continues to evolve over time.
  Commercial providers are delivering spacecraft to orbit and 
commercial resupply services to the international space station, and 
companies are working hard toward providing commercial human 
spaceflight. I am excited about the entrepreneurial spirit many of 
these new companies exhibit, and I want them to succeed, but I also 
want to ensure that the Nation's commercial space transportation 
legislation reflects the changing industry and protects the American 
public.
  The commercial space industry has been evolving in ways that were not 
envisioned when the risk regime was first established, and we need to 
evaluate if changes are needed to this decades-old law. The 1-year 
extension provides the Congress with the time to conduct necessary 
hearings, perform our due diligence, and enable the enactment of a 
comprehensive update to existing commercial space legislation.
  Mr. Speaker, in closing, I would like to thank the chairman of the 
Science, Space, and Technology Committee, Mr. Lamar Smith; the chairman 
of the Space Subcommittee, Steve Palazzo; and the subcommittee's 
ranking member, Donna Edwards, for cosponsoring this bill with me. This 
is a good, bipartisan bill, and I urge Members to support it.
  I reserve the balance of my time.
  Mr. SMITH of Texas. Mr. Speaker, I yield 3 minutes to the gentleman 
from California (Mr. Rohrabacher), who is the vice chairman of the 
Science, Space, and Technology Committee.
  Mr. ROHRABACHER. Mr. Speaker, I rise in strong support of H.R. 3547, 
the Space Launch Liability Indemnification Extension Act.
  I want to congratulate the chairman and the ranking member for again 
demonstrating the type of bipartisan support that we have for 
legitimate science and space projects here in the United States 
Congress.
  People say we can't work together. We can keep our eyes on the stars 
and on the positive things, and we are working together. This piece of 
legislation proves just that. It wasn't so long ago that there were a 
lot of people who were skeptical about the commercial space industry, 
and it is heartening to see that we now have gathered together to make 
sure that our American entrepreneurs--our space entrepreneurs--are 
successful and that they do, indeed, launch not only rockets into space 
but launch a whole new industry, providing great jobs for the American 
people into space and, thus, benefiting all of us. That is why it is a 
bipartisan effort that we are talking about today.
  Space launch liability indemnification is important for the American 
launch industry, which is, once again, as I said, regaining a global 
market share to maintain the global market expectations. It is also 
important to maintain standards that have been long expected of 
American companies. I fully support a deeper look into this issue, 
which this legislation provides, because I know that our 
indemnification structure is not just right for industry--it is right 
for the American people.

                              {time}  1715

  It is important to note that indemnification is not a one-way street 
with the government just protecting industry. The original policy back 
in 1988 was designed to protect the government as well as industry. 
When companies buy the insurance required by law, they protect the 
Federal Government against damages and against damage claims up to the 
maximum probable loss.
  I would also note that the requirement for commercial launch 
providers to purchase insurance and protect the Federal Government 
against its liability never expires. We should permanently extend the 
space launch liability indemnification. I look forward to working with 
the chairmen and ranking members to accomplish just that as we go into 
next year.
  I again rise in strong support and thank my colleagues for joining me 
in this effort to make sure we launch this whole new industry for 
America.
  Ms. EDDIE BERNICE JOHNSON of Texas. Mr. Speaker, I yield 3 minutes to 
the gentleman from California (Mr. Takano).
  Mr. TAKANO. Mr. Speaker, I thank the ranking member for yielding me 
time.
  I rise today in support of H.R. 3547, the Space Launch Liability 
Indemnification Extension Act.
  As a proud member of the Science, Space, and Technology Committee, I 
am encouraged to hear about the exciting and innovative ways that the 
commercial space industry is pushing the bounds of space exploration. 
The legislation on the floor today helps to ensure that the industry 
will flourish and continue to create new, high-tech jobs.
  In southern California, the Hawthorne-based SpaceX company employs 
nearly 4,000 workers and has cemented itself as one of the premier 
commercial space enterprises by developing several launch vehicles and 
reusable spacecraft. In 2012, SpaceX successfully delivered cargo to 
the international space station using its Dragon capsule.
  The Mojave Space Port is another bright light in the commercial space 
industry. At Mojave, more than 70 companies are working on highly 
advanced aerospace design and flight test research. Just 2 months ago, 
the Sierra Nevada Corporation completed its first free-flight test of 
the Dream Chaser, a winged spacecraft that could one day take 
astronauts to the international space station.
  But as commercial space companies such as SpaceX, Sierra Nevada, 
Virgin Galactic, and others continue to test new technologies, it is 
important for the Federal Government to help alleviate some of the risk 
involved in undertaking such projects. By providing third-party 
indemnification, these companies can continue their work without 
risking their entire assets. In fact, Russia, China, France, and Japan 
all offer liability protections that exceed the United States' 
standard. Without this important protection, some companies could be 
forced to exit the market, costing the United States hundreds, if not 
thousands, of high-tech jobs. We cannot allow that to happen.
  I am proud to support this legislation so that American commercial 
space companies can continue to grow and expand the possibilities of 
what mankind can achieve. I urge my colleagues to support this bill.
  Mr. SMITH of Texas. Mr. Speaker, we have no other speakers at this 
time, and I reserve the balance of my time.
  Ms. EDDIE BERNICE JOHNSON of Texas. Mr. Speaker, I yield 5 minutes to 
the gentlelady from Maryland (Ms. Edwards).
  Ms. EDWARDS. Mr. Speaker, I probably will not use all of the 5 
minutes, but I wanted to be here today, Mr. Speaker, to support H.R. 
3547, the Space Launch Liability Indemnification Extension Act, of 
which I am an original cosponsor.
  I want to thank both our chairmen--the chairman of our subcommittee, 
Mr. Palazzo, and Chairman Smith--and, of course, our ranking Democrat 
on the committee, Ms. Johnson, because we would not have been able to 
get to this point if we hadn't been able collectively, across the 
aisle, to work on a 1-year extension that would be provided for in 
Commercial Space Launch Act Amendments of 1988 that established the 
government-private risk-sharing regime for third-party liability. 
Should a launch accident occur, the effects that involve the public and 
property on the ground in this indemnification provision would cover 
such losses.
  It turns out that commercial space launch capacity in the industry is 
really at a critical point in our Nation's development of our space 
infrastructure. Both the Federal and commercial

[[Page H7371]]

customers rely on commercial space launch, the industry for safe, 
reliable, and effective service, and delivering payloads in orbit and 
providing related space transportation services.
  Just recently, in September of this year, a commercial space launch 
provider successfully lofted a cargo capsule into space to carry 
supplies to the international space station. This is exactly what we 
have in mind when we talk about integrating our commercial launch 
capacity with what we do already at NASA in terms of our scientific 
endeavors.
  Mr. Speaker, commercial space transportation services have really 
always been carried out in partnership with the United States 
Government through the use of Federal launch ranges and services, for 
example, and through the government risk-sharing regime for protecting 
the uninvolved public and property should an accident occur. So it 
seems quite fitting that we have reached this point today.
  Unfortunately, the reason that we are only able to do a 1-year 
extension and can agree on that is because there are also some other 
things that we need to figure out for the future with respect to the 
involvement of the commercial industry. It is my hope that over the 
course of this 1 year we will use that time wisely here in the Congress 
to have the kind of oversight hearings that we need to bring in the FAA 
so that we can make sure that we are venturing in this direction in the 
right kind of way that really takes into consideration what we are 
doing in the 21st century.
  New entrants are delivering spacecraft to orbit, commercial resupply 
services to the international space station, and companies are working 
toward providing commercial human spaceflight on both reusable 
suborbital vehicles and orbital human spaceflight systems.

  In fact, although I have been, admittedly, a skeptic, I am excited 
about the potential of the industry and I want it to succeed. Just last 
year, in a hearing on launch indemnification before the committee's 
Space Subcommittee of which I am the ranking member, a senior official 
representing the Aerospace Industries Association characterized the 
continuation of U.S. space launch indemnification as providing 
``substantial upside potential to enable new markets, create jobs, and 
assure U.S. space technology leadership for the 21st century.''
  It is easy to see how that upside is both national and local in 
scope. The launch capability at nearby Wallace air facility on the 
eastern shore is becoming a critical link to resupplying the 
international space station.
  Commercial space companies make investments in our economy and create 
jobs all across the country. Specifically, in my home State of 
Maryland, companies like Lockheed Martin, Orbital, and Northrop Grumman 
employ thousands of people in my district alone creating high-tech 
jobs, high-skilled jobs in the local community. ATK is a leading 
aerospace provider and has its main headquarters right up in 
Beltsville, Maryland, not very far from here.
  Mr. Speaker, I want to ensure that our legislation and policies 
regarding commercial space transportation reflect the changing 
industry, changes and activities that may not have been contemplated 
when the liability indemnification regime was first established. This 
1-year extension provides Congress the opportunity to consider any 
potential changes that might be needed to ensure the continued safety 
of the public.
  Mr. Speaker, I urge our colleagues to join us today in supporting 
H.R. 3547.
  Mr. SMITH of Texas. Mr. Speaker, I am prepared to yield back the 
balance of my time if the gentlewoman from Texas (Ms. Johnson) is 
prepared to yield back her time.
  Ms. EDDIE BERNICE JOHNSON of Texas. Mr. Speaker, I have no further 
requests for time.
  I urge support of the bill, and I yield back the balance of my time.
  Mr. SMITH of Texas. Mr. Speaker, I yield back the balance of my time.
  Ms. JACKSON LEE. Mr. Speaker, I rise in strong support of H.R. 3547, 
the Space Launch Liability Indemnification Extension Act.
  The United States space program has existed for over half a century 
and my commitment to providing NASA with the resources to carry the 
agency forward with its ambitious agenda of research, exploration, and 
discovery is unwavering.
  In June 2012, the Federal Aviation Administration (FAA) and NASA 
signed an agreement to coordinate standards for commercial space travel 
of government and non-government astronauts to and from low-Earth orbit 
and the International Space Station (ISS).
  The FAA regulates and licenses all U.S. private companies and 
individuals seeking to engage in commercial space transportation. The 
FAA's Office of Commercial Space Transportation has licensed 207 
successful launches, including two non-orbital commercial human space 
flights in 2004 and the recent first launch to the ISS and re-entry of 
a non-manned commercial spacecraft. For details on FAA commercial space 
transportation responsibilities, visit:
  The two agencies agreed to join efforts to expand commercial and non-
commercial space exploration by creating a framework for the U.S. space 
industry. The two agencies will be able to avoid conflict regarding 
requirements and standards for the purpose of advancing both public and 
crew safety.
  This is an important collaboration that for the private sector is a 
good sign for companies seeking to reap commercial benefits that may be 
found in spaceflight investments.
  NASA continues to push the boundaries of what is possible, keeping 
our Nation on the forefront of innovation and exploration. It is the 
responsibility of this Congress to ensure that the future of NASA is 
one of continued progress.
  Space exploration remains a part of our national destiny. It inspires 
our children to look to the stars and dream of what they too, one day, 
may achieve. Space exploration allows us to push the bounds of our 
scientific knowledge, as we carry out research projects not possible 
within the constraints of the planet Earth.
  Because of the ground breaking work of NASA commercial applications 
for space, such as commercial satellites have become critical for 
mobile communication services.
  Smartphones rely upon commercial satellite to function, which makes 
possible the communication revolution we are witnessing today.
  Today, the ground work done to advance knowledge regarding space 
exploration has reached a point where private sector companies are 
exploring ways to commercialize space exploration.
  For example, Companies like Virgin now operates Virgin Galactic has 
completed its second test flight for commercialization of space travel 
and is selling passenger tickets for its first flight. However, we must 
still fully fund NASA and U.S. public space exploration.
  A critical milestone for space exploration will be successful 
commercial efforts to provide services or develop new methods of 
manufacturing that are space based or the exploration of neighboring 
bodies for discovery of rare earth minerals or discovery of more 
abundant sources of elements or resources that can aid human 
development.
  H.R. 3547, the Space Launch Liability Indemnification Extension Act 
provides a means of making it possible for private companies to pursue 
commercial space projects.
  I ask my colleagues to support this effort to make the next step in 
human development of space a successful one by joining me in voting in 
support of H.R. 3547, the Space Launch Liability Indemnification 
Extension Act.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Texas (Mr. Smith) that the House suspend the rules and 
pass the bill, H.R. 3547.
  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. SMITH of Texas. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further 
proceedings on this motion will be postponed.

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