H.R. 2262, SPACE Act of 2015

H.R. 2262

SPACE Act of 2015

Date
May 21, 2015 (114th Congress, 1st Session)

Staff Contact
John Huston

Floor Situation

On Thursday, May 21, 2015, the House will consider H.R. 2262, the Spurring Private Aerospace Competitiveness and Entrepreneurship (SPACE) Act of 2015, under a structured rule.  H.R. 2262 was introduced on May 12, 2015, by Rep. Kevin McCarthy (R-CA) and was referred to the Committee on Science, Space, and Technology, which ordered the bill reported, as amended, on May 13, 2015, by a vote of 18 to 13.

Bill Summary

H.R. 2262 is intended to facilitate a pro-growth environment for the developing commercial space industry by encouraging private sector investment, creating more stable and predictable regulatory conditions, and improving safety. The bill directs the Department of Transportation (DOT), the National Aeronautics and Space Administration (NASA), and the Government Accountability Office (GAO) to submit various reports to the Congress regarding commercial space operations and services, industry practices, as well as the potential liabilities associated with commercial space launches.

Specifically, the bill addresses the following issues:

Consensus Standards- The Commercial Space Launch Amendments Act of 2004 was enacted with the intention of fostering growth in the emerging commercial human spaceflight industry.  Without launching and operating commercial human spaceflights, industry and regulators have limited data to inform safety regulations, which could lead to uninformed or unnecessary regulations that would stifle the growing industry. To account for the uncertainty surrounding the industry, the Commercial Space Launch Amendments Act of 2004 provided for a ‘regulatory learning period’ to prevent uninformed and unnecessary regulations from inhibiting the industry. The regulatory learning period is set to expire this year. H.R. 2262 extends this learning period until 2025. This bill preserves the ability of the Federal Aviation Administration (FAA) to protect the public health and safety, safety of property, national security interests, and foreign policy interests. The bill also allows the FAA to coordinate with stakeholders when creating an industry-wide concensus standard on sustainable safety practices.

International Launch Competiveness – The bill extends the authorization for risk-sharing insurance programs associated with commercial space launches for 10 years. The Commercial Space Launch Act Amendments of 1988 established a tiered risk-sharing regime for third-party liabilities associated with commercial space launch. The purpose of the regime is to share the liability of claims made by the uninvolved public between the public and private sector. The FAA determines on a case-by-case basis the maximum probable loss (MPL) liability of these companies from potential claims by a third party, but the MPL is capped at $500 million. Any loss incurred between $500 million and $1.5 billion is covered by the Federal government. As the Federal government is responsible for the licensure and range control of launches, the government also shares in the liabilities associated with the inherently risky activity of space launch. The program is set to expire on December 31, 2016.[1]

Launch License Flexibility – Current law invalidates an experimental permit issued for a particular design of a reusable suborbital rocket after a license had been issued for the launch or reentry of a rocket of that same design.  This prevents operators of launch or reentry vehicles from continually improving on their designs due to the cumbersome licensing process Additionally, if the company manufacturing the launch or reentry vehicle is a separate entity from the one operating it, the manufacturer loses all ability to test and evolve the launch or reentry vehicle once a license is issued to the operational company. According to the Committee, this permitting provision is a loophole that was inadvertently created by the Commercial Space Launch Act Amendments of 2004, which significantly stifles the ability of the industry to improve safety systems and mission critical components of their vehicles.

Government Astronauts – Federal law does not currently define the term ‘‘government astronaut’’ for the purposes of launch licensure. This presents challenges for the FAA, NASA, the Commercial Crew Contractors, and the government astronauts themselves. According to the Committee, for government astronauts to be protected under the licensing structure for launch vehicles, their roles and responsibilities must be codified in the statute. The bill requires the Administrator of NASA to determine who should or should not qualify to be considered a government astronaut.[2]

Indemnification for Space Flight Participants –  Under current law, there is a distinction between customers that purchase a launch and a customer who sponsors the launch of a spaceflight participant and the spaceflight participants themselves, as they relate to certain insurance coverage. In practice, it forces space tourism and human commercial space operations to be the sole province of those with the means to indemnify themselves. The bill addresses the inequality presented in the current law by requiring the government and launch providers to treat spaceflight participants the same way it treats all other parties to a launch.[3]

Federal Jurisdiction – The Launch Liability Convention places international liability for space launch and reentry accidents on the Federal government. The bill ensures that Federal courts review lawsuits resulting from accidents since the Federal government is responsible under the Launch Liability Convention, not the states. This provision also prevents venue shopping to ensure that suits are treated fairly. This provision is not intended to preempt state tort law.[4]  

Orbital Traffic Management – The bill requires the Administrator of NASA to report to Congress on the current roles and responsibilities within the government, private sector, and international community related to space situational awareness, orbital traffic management, and orbital debris mitigation measures.[5]

Space Support Vehicles – The bill requires the Comptroller General to report to Congress on the use of space support vehicle services in the commercial space industry.[6]

Streamlining Commercial Space Launch Activities – In an effort to increase efficiency and transparency and reduce government bureaucracy, the bill directs the Secretary of the Department of Transportation, in consultation with other appropriate federal agencies, to identify and report duplicative requirements so that Congress may provide legislative relief in the future.[7]

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[1] See House Report 114-119 from 12-13.
[2] Id. at 15.
[3] Id.
[4] Id.
[5] Id. at 17.
[6] Id.
[7] Id.

Background

The commercial human space flight industry is still relatively young, but has grown significantly since the Commercial Space Launch Amendments Act of 2004 (CSLAA). Entrepreneurial companies have raised billions of dollars with the intent of pioneering tourism and commercial space flight. Other companies are investing and developing the technical capability to explore and utilize outer space resources. Still others are investing in space-based remote sensing technologies, an industry which is experiencing unprecedented growth.[8]

Under current law, any individual or private entity wishing to conduct a commercial space launch or reentry in the U.S., or operate a launch or reentry site in the U.S., must obtain a license from the FAA. U.S. citizens must also obtain authorization from the FAA to conduct commercial space launches or reentries or to operate launch or reentry sites abroad. DOT derives its authority over commercial space transportation from the Commercial Space Launch Act (CSLA) and has delegated that authority to the FAA’s Office of the Associate Administrator for Commercial Space Transportation (AST). AST has the dual mandate of regulating and promoting the commercial space transportation industry in the United States.[9]

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[8] Id. at 8.
[9] Id.

Cost

The Congressional Budget Office (CBO) estimates that enacting H.R. 2262 would cost “about $5 million over the next few years,” assuming the appropriation of necessary funds. Enacting H.R. 2262 would not affect direct spending or revenues; therefore, pay-as-you-go procedures do not apply.

Amendments

  1. Lamar Smith (R-TX) – The manager’s amendment makes technical corrections and requires a GAO report on state and municipal spaceports in the existing indemnification regime.
  1. Raul Grijalva (D-AZ) – The amendment broadens the coverage of experimental permits to include suborbital launch vehicles to allow for non-revenue testing.
  1. Dana Rohrabacher (R-CA) – The amendment creates an independent study regarding indemnification for spaceflight participants including options, unintended consequences, and potential costs.
  1. Joaquin Castro (D-TX) – The amendment ensures the Orbital Traffic Management study includes input from nonprofit organizations that conduct research in space traffic and orbital activities.
  1. Sheila Jackson Lee (D-TX) – The amendment facilitates outreach to minority- and women-owned businesses on business opportunities in the commercial space industry.
  1. Sheila Jackson Lee (D-TX) – The amendment facilitates the participation of HBCU, Hispanic Serving Institutions; National Indian institutions, in fellowships, work-study and employment opportunities in the emerging commercial space industry.
  1. Donna Edwards (D-MD) – The amendment substitutes the text of S. 1297 for the bill.

Additional Information

For questions or further information please contact John Huston with the House Republican Policy Committee by email or at 5-0190.