For the first time in 7 years, the Aviation Subcommittee of the House Transportation and Infrastructure (T&I) Committee held a hearing on commercial space transportation issues on Wednesday. Several Members were in attendance, some of whom acknowledged constituent interests in these issues, but there was no special focus other than getting an update from government and industry experts.

Congress assigned the Department of Transportation (DOT) the dual roles of both facilitating and regulating the commercial space launch industry in the 1984 Commercial Space Launch Act (CSLA), which has been amended several times, most recently in 2004. All the legislation originated in the House Science, Space, and Technology (SS&T) Committee (and its predecessors), not T&I. The SS&T website clearly states that it has jurisdiction over “commercial space activities relating to the Department of Transportation…”

For the first 10 years, commercial space launch activities were handled in the Office of the Secretary of Transportation, but in 1995 it was delegated to the FAA (part of DOT). FAA thereupon created the Office of Commercial Space Transportation (AST).

FAA/AST is under the jurisdiction of House SS&T, but the House T&I committee oversees the FAA itself and some of the issues involve other parts of the FAA. For example, for FY2017, in addition to the $19.8 million request for AST, FAA is requesting $2.953 million for commercial space transportation safety-related activities as part of the Research, Engineering and Development (RE&D) budget and $2 million for integrating commercial space launches into the National Air Space in the Facilities and Equipment (F&E) budget. Thus, T&I does have an oversight interest.

Subcommittee chairman Frank LoBiondo (R-NJ) noted that the FAA Tech Center in his district is involved in space debris modeling and subcommittee ranking member Rick Larsen (D-WA) is from the Seattle area where a number of traditional and entrepreneurial space companies are headquartered or have facilities. Larsen even noted that the NewSpace2016 conference was underway in Seattle as the hearing was taking place. He and full committee ranking member Peter DeFazio (D-OR) seemed to have the keenest interest in these issues and Larsen said he hoped the subcommittee would have another hearing early in the next Congress.

The five witnesses were: George Nield, FAA/AST Associate Administrator; Gerald Dillingham, Government Accountability Office (GAO); Mike Gold, chairman of the FAA’s Commercial Space Transportation Advisory Committee (COMSTAC); Michael Lopez-Alegria, COMSTAC Vice Chair; and Taber MacCallum, World View Enterprises.

The hearing covered a potpourri of issues.

FAA’s Dual Role to Facilitate and Regulate. DeFazio made it clear that he has long been skeptical that one agency can successfully facilitate and regulate an industry at the same time, an issue that has been debated since the 1984 CSLA was enacted. He argued that the Department of Commerce should be in charge of facilitating and promoting the industry, while FAA regulates it. Nield explained that having a dual role does not mean that one company is favored over another or that public safety is compromised. He pointed out that commercial space launch companies have a perfect record so far in terms of public safety, with no deaths or injuries to the general public.

DeFazio, however, pressed Nield on the National Transportation Safety Board’s (NTSB’s) finding in the 2014 Scaled Composites/Virgin Galactic SpaceShipTwo accident that FAA/AST did not allow its staff to ask questions of Scaled if they were not directly related to public safety in order to “reduce the burden” on Scaled. While no member of the public has died as a result of commercial space launches, DeFazio insisted, someone did die in that case. Nield replied that FAA/AST’s responsibility is public safety. DeFazio then asked Dillingham for GAO’s view and Dillingham said that GAO has expressed concern in the past about the dual role and further study is needed.

Article VI and Mission Authorizations. Gold pleaded – literally – with the subcommittee to resolve the problem with U.S. compliance with Article VI of the Outer Space Treaty, which requires governments to authorize and continually supervise the space activities of non-government entities, like companies. Gold currently works for SSL, which is developing satellite servicing technologies, and previously worked for Bigelow Aerospace, which wants to build habitats in orbit, on the Moon and elsewhere. No U.S. government agency has been assigned responsibility for authorizing or supervising such activities, leaving them in regulatory limbo. A recent report from the White House Office of Science and Technology Policy recommended that DOT be assigned that role and issue “mission authorizations” for companies wanting to engage in those and other new types of commercial space activities such as asteroid mining. Gold exclaimed “I come to you today begging you for a resolution” so the United States can be a global leader in these emerging industries. He asked the subcommittee to deal with the issue “with alacrity” and direct the FAA/AST to update its regulations to include mission authorizations.

Regulating Commercial Human Spaceflight Passenger Safety. Current law prohibits the FAA from promulgating new regulations for the safety of passengers (“spaceflight participants”) on commercial human spaceflights until 2023 — often referred to as a “moratorium” on regulations or a “learning period” for industry. Until then, companies are required only to provide for “informed consent” where customers are told the risks and they make their own decisions on whether to fly. This is a controversial issue with some arguing that commercial human spaceflight is akin to scuba diving or skydiving where the government does not get involved, while others find it more comparable to commercial airline travel where there is considerable government regulation.

MacCallum wants the informed consent regime made permanent so companies like his – which will be offering stratospheric balloon trips — are assured of the regulatory regime under which they will have to operate. He recommended that a parallel “extended license” regime be created where passenger safety would be regulated by the FAA, but it would be required only for companies offering services that fall under common carrier definitions – routine flights from one point on Earth to another. Other commercial space companies could voluntarily choose to get an extended license if they thought it would give them a competitive advantage because customers might feel safer flying with an operator who had such a license.

Larsen asked if the FAA could do that now and MacCallum said he believed so, but Nield said the law currently restricts the FAA to only working with industry on developing voluntary standards, not developing any new regulations. Lopez-Alegria, who previously was President of the Commercial Spaceflight Federation (CSF), spoke in favor of voluntary industry standards instead of government regulations. CSF is working with its member companies, although he explained how difficult it is to get a group of very disparate companies with very different vehicle designs to work on the issue, although he believes the discussions are going in the right direction.

Calculating Maximum Probable Loss for Third Party Indemnification. Dillingham pointed out that FAA/AST has not responded effectively to GAO recommendations dating back to 2012 to update the methodology it uses to calculate how much insurance commercial space launch companies must purchase to cover third-party (general public) claims in case of a launch accident. It is important because the government could be liable for a greater amount of losses if the FAA does not require companies to purchase a proper amount.

He stressed that this is becoming increasingly important as more spaceports are being licensed around the country, including inland sites like one in Midland, Texas. A three-tiered system was established in 1988 where companies must purchase insurance up to $500 million, the government then is liable (subject to appropriations) for claims between that floor and an inflation-adjusted ceiling (currently $3.06 billion), and the company is liable for any amounts above that. The “up to $500 million” is what is at issue. The FAA calculates the Maximum Probable Loss (MPL) for each launch and the company must buy that much insurance, which may be significantly less than $500 million. If the MPL is calculated to be $100 million, for example, the government’s liability would be from $100 million to $3.06 billion, not $500 million to $3.06 billion. Dillingham said the methodology is “dated by a few decades” and although Congress required FAA to review and update it and submit a report by April 2016, no report has been submitted.

Rep. John Duncan (R-TN), asked why the government indemnifies the industry at all now that the industry is mature. Nield replied that the industry believes it is essential in order to compete with other countries that do provide such indemnification. Dillingham agreed saying that while the United States has a $3.06 billion cap on what the government will pay, in Russia, for example, there is no cap. The government will pay any amount above what insurance covers.

Funding for FAA/AST. Gold passionately argued for more funding for FAA/AST warning that “it’s only a matter of time until safety suffers” because the office is underfunded. “COMSTAC at every meeting has endorsed the need for more funding. When have you seen companies asking for more funding for their regulators before?” He worries that both the safety and competitiveness of the U.S. industry is at stake. The Obama Administration is requesting $19.8 million this year, a $2 million increase over its current funding. The Senate has passed the Transportation-HUD appropriations bill with that level and the House Appropriations Committee ultimately recommended that level after an amendment was adopted during markup. Dillingham said GAO also was concerned about whether FAA/AST could fulfill all its tasks, at one point finding that it was not performing 10 percent of required safety inspections. He said GAO recommended that FAA provide more detail in its budget request to justify additional funds and the FY2017 request does that.