The House and Senate have taken different approaches to legislation to support the commercial space industry. (credit: Architect of the Capitol)

Congress launches commercial space legislation

by Jeff Foust
Tuesday, May 26, 2015

Commercial spaceflight is a topic that, not surprisingly, doesn’t get a lot of attention on Capitol Hill. As a small industry still in its early stages of development, companies developing launch vehicles and crewed spacecraft have relied on a modest set of laws and regulations to guide and oversee their work. Much of the debate that has occurred has focused on specific government-funded initiatives, like NASA’s commercial crew program, rather than on the industry in general.

Last week, though, the industry was in the congressional spotlight. A day after a Senate committee approved one bill that would extend and build upon key provisions in current commercial space law, the full House debated a more expansive bill for two hours, eventually passing it on a more than two-to-one vote. That vote, though, is unlikely to end the debate about some of its provisions.

The SPACE Act and more

The May 21 vote in the House was on HR 2262, formally known as the Spurring Private Aerospace Competitiveness and Entrepreneurship (SPACE) Act. That bill was the combination of four separate bills the House Science Committee had approved in a markup session May 13.

Two of those four bills were noncontroversial. One would require NOAA, which handles the licensing of commercial remote sensing spacecraft, to report on the status of applications filed for new licenses, and examine any needed updates to existing statues covering the field. A second bill would rename the Office of Space Commercialization within the Commerce Department the Office of Space Commerce, and delineate the small office’s responsibilities. Both won bipartisan approval by the committee.

Two other bills proved to be more contentious. One was the original text of the SPACE Act, which was primarily an update of existing commercial launch law. One of its provisions extended existing third-party launch indemnification from the end of 2016 through the end of 2023. That indemnification would allow the federal government to cover any third-party damages from a commercial launch accident above a “maximum probable loss” level that the company holding the launch license is responsible for, up to a level of approximately $3 billion. That indemnification, in place for more than a quarter of a century, has never been invoked in any commercial launch mishap.

Another provision of the SPACE Act would extend the “learning period” restricting the ability of the FAA to enact regulations regarding the safety of people flying on commercial spacecraft. Under the Commercial Space Launch Amendments Act of 2004, the FAA can only enact such regulations in the event of a serious accident or unplanned event that posed the high risk of such an accident. The intent of the restriction was to allow industry to build up experience that could serve as the basis for later regulations.

The 2004 act set the learning period to expire in eight years, under the belief that the suborbital industry in particular would, in the wake of SpaceShipOne’s winning of the Ansari X PRIZE, soon be flying commercially. With the industry’s delayed development, though, Congress extended the learning period in early 2012 to October 1 of this year. The commercial spaceflight industry has been advocating for yet another extension (see “Issues in commercial launch law”, The Space Review, February 23, 2015).

The original version of the SPACE Act offered an eight-year extension of the learning period, through the end of 2023. At the May 13 markup session, House Science Committee chairman Rep. Lamar Smith (R-TX) noted that this and other provisions of the bill had widespread support among companies and space industry organizations. “It’s our impression that every single space company has endorsed this bill, and not a single one is opposing it,” he said.

However, some Democratic members of the committee did oppose the SPACE Act, in large part because the believed the bill was too generous to the industry. “Where does the bill before us today come from? Straight from the industry,” said Rep. Eddie Bernice Johnson (D-TX), the ranking member of the committee. “Nearly every provision of this bill in every conceivable way gives preference to the priorities of the commercial space launch industry.”

Johnson and other Democrats on the committee, including Rep. Donna Edwards (D-MD), the ranking member of its space subcommittee, offered a series of amendments. They included shortening the learning period and launch indemnification extensions to five years, and removing other portions of the bill that would allow companies to hold a launch license and experimental permit simultaneously for the same vehicle, and specifying federal courts as the sole jurisdiction for any legal action arising from a licensed launch.

Edwards struck a conciliatory tone in her remarks at the markup. “I had hoped that we would be able to come to a mutual agreement in a spirit of cooperation on this legislation,” she said. However, when Smith offered to discuss her concerns if she withdrew her amendments, she declined.

Others were less conciliatory. “Any limitation of liability, any indemnification, is wrong,” said Rep. Alan Grayson (D-FL), during discussion of one amendment. Grayson called such provisions “corporate welfare” that creates a “moral hazard.” “We invite an accident, we invite a tragedy, if we limit liability,” he said.

Outside organizations also weighed in against the bill. The American Association for Justice (previously known as the Association of Trial Lawyers of America) argued against provisions in the bill that it claimed would prevent individuals from suing companies in the event of an accident. “This bill is terrifying because it says certain corporations can’t be held accountable if they cause any kind of harm to others,” said Linda Lipsen, CEO of the association, in a May 13 statement.

Those efforts to amend the bill, however, failed. Nearly all of the amendments proposed by Democrats were rejected by the committee on party-line votes. The committee, in fact, went in the opposite direction, approving an amendment by Rep. Steve Knight (R-CA) to extend launch indemnification and the learning period by two more years, through 2025.

Another bill that generated debate was the Space Resource Exploration and Utilization Act of 2015, introduced by Reps. Bill Posey (R-FL) and Derek Kilmer (D-WA). The bill was similar to bill they introduced last year that provided property rights to space resources obtained by American companies (see “The ASTEROIDS Act and hearing: some observations on international obligations”, The Space Review, September 22, 2014).

Democrats on the committee, though, raised concerns about whether the bill would comply with international treaties, like the Outer Space Treaty. “We’re not going to be able to resolve any of these issues today, and so I think we need to take a step back and get the information we must have to make an informed policy decisions,” Johnson said, introducing and amendment to replace the bill with one that called for an interagency study on the legal issues of space resource property rights.

Posey, who serves on the science committee, objected to the amendment, saying the reports would take years to complete and could delay the progress of commercial asteroid mining ventures. “We won’t be providing any of the leadership or certainty that American companies need to move forward,” he said.

Johnson’s amendment failed on party lines, and the committee eventually approved both that bill and the SPACE Act, again with Republicans voting for the bills and Democrats opposing them.

Senate moves forward on its own

While the House Science Committee pressed ahead with the SPACE Act and its companion legislation despite opposition from Democrats, events unfolded differently in the Senate.

Earlier in the month, Sen. Ted Cruz (R-TX), chairman of the space subcommittee of the Senate Commerce Committee, formally introduced the Commercial Space Launch Competitiveness Act. That bill contains many of the same provisions as the House’s SPACE Act, although its extension of the learning period and launch indemnification only runs through 2020. The Senate bill also includes language authorizing the extension of International Space Station operations through 2024.

Unlike the House bill, the Senate bill, S. 1297, had bipartisan support. Its cosponsors included Sen. Bill Nelson (D-FL), ranking member of the full committee, and Sen. Gary Peters (D-MI), ranking member of the space subcommittee. “We need to make it less cumbersome to launch from Florida’s Space Coast so private companies won't take their business elsewhere,” Nelson said in a May 12 statement announcing the bill’s introduction.

The full Senate Commerce Committee approved the bill with virtually no debate during a markup session on May 20, one of thirteen bills and three nominations handled by the committee that day.

“Our legislation reflects the needs of a changing and growing industry, and aims to encourage the competitiveness of the US commercial space industry,” Cruz said in remarks at the session, after the committee approved the bill on a voice vote.

Showdown on the House floor

A day after the Senate Commerce Committee approved its bill, the SPACE Act, now incorporating all four bills the House Science Committee approved the prior week, made it to the House floor for debate. It marked the most extensive debate on commercial space legislation since at least the November 2004 debate on the Commercial Space Launch Amendments Act.

Leading the debate for the bill was its main sponsor, House Majority Leader Kevin McCarthy (R-CA), whose district includes the Mojave Air and Space Port. McCarthy, in his comments, took a very big picture view of the legislation. “This bill asks us to make a decision,” he said. “Do we concede our future to one of managed decline where others lead, or do we make a future where America and her people guide us in our journey to the stars?”

Edwards, leading the debate against the bill, said she and many other members supported the commercial space industry in general, but thought the consideration of the SPACE Act was too rushed. “HR 2262 is an unbalanced bill that simply doesn’t adequately protect the public’s interest” regarding the safety of both the general public and spaceflight participants, she said.

Both sides brought up a Statement of Administration Policy issued earlier in the week by the White House’s Office of Management and Budget. Bill proponents noted that the administration did not oppose the bill, while opponents called attention to “serious concerns” it had with both the length of the learning period extension and the space resource property rights provisions.

Edwards, in a final effort to alter the bill, proposed an amendment that would replace the text of the bill with the Senate’s commercial launch bill. She argued for the amendment on pragmatic grounds. “We can pass bipartisan legislation that could be on its way to the President for enactment in a matter of weeks,” she said. By contrast, she argued HR 2262 had little chance of passing the Senate. “Pursuing House passage of a bill that is going nowhere in the Senate seems to me to be the ultimate exercise in futility.”

Republicans, though, opposed the amendment, noting that the Senate bill did not contain many of the provisions of the House bill, in part because the House bill combined four separate pieces of legislation. The House ultimately voted down the amendment on a 173–236 vote that went almost exactly on party lines.

The House, which previously approved several minor amendments on voice votes, then took up the full bill. The SPACE Act passed on a 284–133 vote, with nearly 50 Democratic members joining nearly all the Republicans in the House to pass the bill.

The bill’s future, though is uncertain. With the Senate expected to take up its own, bipartisan bill, the SPACE Act would likely have to be reconciled with the Commercial Space Launch Competitiveness Act in a House-Senate conference. The length of the extensions for the learning period and launch indemnification would be up for discussion, as well as other provisions that don’t match up between the two bills.

Industry is hoping for a happy ending of some kind when the legislative process ends. “We look forward to continuing work with both parties in both houses of Congress towards a bipartisan bill that the President can sign into law this year,” Commercial Spaceflight Federation president Eric Stallmer said in a statement after the House passed the SPACE Act. Whether Congress can act that quickly—particularly with the learning period expiring on October 1—remains to be seen.

Jeff Foust (jeff@thespacereview.com) is the editor and publisher of The Space Review, and a senior staff writer with SpaceNews. He also operates the Spacetoday.net web site. Views and opinions expressed in this article are those of the author alone.

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