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The Commercial Spaceflight Federation Supports S. 1753 to Extend Government-Industry Risk-Sharing Regime

Press Release From: Commercial Spaceflight Federation
Posted: Thursday, November 21, 2013

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The Commercial Spaceflight Federation strongly supports S. 1753 to extend government risk-sharing for U.S. commercial launch companies for three years. Current law that provides risk-sharing for these companies is set to expire in less than two months, on December 31, 2013.

The bill, introduced by Senate Committee on Commerce, Science and Transportation, Science and Space Subcommittee Chairman Bill Nelson with significant bipartisan support, calls for extension of a liability risk-sharing regime that was created in 1988 and has never led to any cost for the taxpayer. The provision requires commercial launch companies to show financial responsibility (usually in the form of insurance) for liability resulting from damages to third parties, including the government, up to a value that, as calculated by the FAA, would only be exceeded in a 1-in-10 million chance accident. If such an unlikely event occurred, the law would then allow the Secretary of Transportation to seek expedited appropriations for funds above the insured amount but below another statutory limit. According to testimony given by the GAO in June 2012, the other major space-launching countries (China, Russia, and France) offer their industries stronger third-party risk protection than the current U.S. risk-sharing regime.

"The arrangement struck in the Commercial Space Launch Act was that launch companies would be required to buy very comprehensive insurance that would protect the public and the government, and the government would in turn step in in the extremely unlikely case that the insurance were insufficient," said CSF President Michael Lopez-Alegria. "At no cost to the taxpayers, government risk-sharing provides the necessary certainty for our industry to be competitive internationally and to continue to create high-tech jobs in the U.S."

Lopez-Alegria continued, "I applaud Senator Nelson as well as cosponsors on both sides of the aisle, led by Senator Thune, for advancing this important issue, and I look forward to our continued work together to create a permanent risk-sharing regime as well as a full reauthorization of the Commercial Space Launch Act to remove regulatory uncertainty for companies in this rapidly growing industry."

In a hearing held yesterday by the House Science, Space and Technology Subcommittee on Space, Stuart Witt, CEO of Mojave Air and Space Port and current CSF Board Chairman, said: "There is certainly a motivation [for commercial launch companies] to be rigorous. For 20 years, the government has not been placed at risk. If a program that is put in place is working that well, I would [need] a compelling reason to change it. I would extend it indefinitely."

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