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Space Launch Liability Provisions Extension

Floor Speech

Location: Washington, DC


Mr. PALAZZO. Mr. Speaker, I yield myself such time as I may consume.

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.


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