Reconciling S. 1297, H.R. 2262 and the Threat Posed By and To The Space Resource Utilization Act

With the threat of a government shutdown looming, the 114th Congress seems unlikely to meet an important deadline in reconciling two important bills addressing commercial space activities. The two bills, S. 1297 and H.R. 2262, have both passed their respective forums but have yet to be reconciled. Both bills are intended to amend Title 51 of the United States Code, and one provision in particular addresses the mandated moratorium that prevents the FAA from implementing regulation on the fledgling commercial space industry.

Beginning October 1, 2015, 51 U.SC. § 50905(c)(3) allows the Secretary of Transportation through the FAA to propose regulations that take into consideration the evolving standards of safety in the commercial space flight industry. The two bills provide competing amendments that would require § 50905(c)(3) to be amended so that the beginning date would start on October 1, 2020 in S. 1297 and October 1, 2025 per H.R. 2262. The short-term effect of these two bills not being reconciled, passed and signed into law is that starting October 1, 2015 the FAA technically could begin to consider safety regulations for the commercial space industry. However, as noted by George Nield, FAA associate administrator for commercial space transportation, even if § 50905(c)(3) is not amended in time, it is likely that Congress will pass an extension, and therefore it is unlikely the FAA will start considering new regulations.  When and if the bill and the subsequent extension of § 50905(c)(3) occurs will depend on how quickly the two bills can be reconciled and passed onto the President for signature, although there is the possibility this provision could be made part of a continuing resolution to keep the government open

There are controversial differences between S. 1297 and per H.R. 2262, which make a quick settlement unlikely. The House bill in particular contains generous provisions for the commercial space industry, which are not reflected in the more conservative Senate version. For instance, as noted earlier the House bill extends the moratorium in § 50905(c)(3) to ten years versus the Senate’s grant of five years. There are also significant differences regarding language related to launch insurance indemnification.

Under § 50914(a)(1), which took effect in 2010, the recipient of a launch/reentry license is required to obtain liability insurance or demonstrate financial responsibility in amounts to compensate for the maximum probable loss from claims by a third party for death, bodily injury, or property damage or loss resulting from an activity carried out under the license; and the United States Government against a person for damage or loss to Government property resulting from an activity carried out under the license.

Per § 50914(a)(3), for the total claims related to one launch or reentry, the holder of a launch/reentry license is not required to obtain insurance or demonstrate financial responsibility of more than $500,000,000 for damages to third parties or $100,000,000 for damage to government property. The indemnification regime in place under § 50914 is set to expire on December 31, 2016, and S. 1297 seeks to extend the expiration until December 21, 2020; H.R. 2262 seeks to extend the indemnification regime until December 21, 2025.

While these differences are important, it is the different tacks in policy each bill takes that makes reconciliation difficult. S. 1297 takes a straight tack to amend existing commercial space launch statutes under Title 51, Chapter 509.   On the other hand, H.R. 2262 not only seeks to amend existing commercial space launch statutes as indicated above, but it also takes a direction to address commercial space resource utilization by combining H.R. 1508, Space Resource Utilization Act of 2015 within H.R. 2262. The House bill also seeks to address and amend commercial remote sensing laws under 51 U.S.C. §§ 60101 – 60506 and overhauling the Office of Space Commercialization in the Department of Commerce. Notably, the Senate does not include any of these provisions, although it does have a reciprocal bill to H.R. 1508 dealing with space resource utilization with S. 976. Moreover, S. 1297 extends International Space Station operations from 2020 to 2024, which is not included in H.R. 2262.

It is these policy differences that will prove to be the most problematic to reconcile the two bills, in particular the inclusion of H.R. 1508 in H.R. 2262. The inclusion of H.R. 1508 was met with fierce resistance from Democrats, including Democratic Members of the House science Committee.  In particular, Ranking Member Eddie Bernice Johnson , while not dismissive of the concept of resource rights, opposed the inclusion of H.R. 1508 noting that while Democrats see great potential in commercial space resource utilization, they believe that is premature and raises numerous unresolved legal, policy, and constitutional issues. Given these and other  partisan concerns over the inclusion of H.R. 1508, it is likely H.R. 2262 will have a difficult time settling with S. 1297 until the resource utilization provisions are removed.

Even if resource rights were included in a reconciled bill, the presence of the provisions granting resource rights could prove problematic for the bill to be signed into law. The push for resource rights is an attempt to create space policy for commercial space activities beyond that included in the National Space Policy and as such could prove unpopular with the current Administration. This and the fact that resource rights would be included strictly on a partisan vote might encourage the Executive Branch to oppose the bill in its entirety or diminish the effect of the provisions creating resource rights. The Executive Branch has two means that it can utilize to reject the presence of resource rights: a Presidential veto of the reconciled bill or a Presidential signing statement.

A Presidential veto of the bill would be a rejection of the bill in its and entirety, which would cause the bill to be returned either for a vote by the Senate to override the veto or amendment of the bill, which would strip out the resource provisions. This would not be fatal to the respective resource utilization bills and would allow the Senate and the House to preserve them for an Administration and a National Space Policy that is conducive to the idea of creating a property interest in resources mined from asteroids.

More onerous for the resource utilization provisions of a reconciled bill is a Presidential signing statement. Presidential signing statements are written comments issued by a President at the time of signing legislation. Frequently, signing statements only comment on the bill signed, by stating that the legislation is good or meets one or more pressing needs. Signing statements can also contain claims by presidents that they believe part of the legislation interferes with powers enumerated to the Executive Branch only making them unconstitutional, and they intend to ignore those parts or implement them only in ways they believe is constitutional. The use of signing statement is controversial, especially in the second instance, but it could mortally wound the issue of resource rights.

The scenario could arise where the President, eager to pass a bill to support commercial space activities consistent with the National Space Policy, could sign a reconciled bill, which includes provisions consistent with H.R. 1508 and S. 976, and incorporate a signing statement that would diminish or bring into question the legal force and effect of those specific provisions. The line of argument being that Congress’ attempt to create space policy that is inconsistent with the current National Space Policy is an attempt to circumvent the powers enumerated to the Executive Branch by the Constitution and thereby allows the Executive Branch, including the respective agencies that would be involved in creating and enforcing those rights, to implement the provisions in a manner that it deems constitutional or allow the Administration to assert that it will ignore those provisions.  Interestingly, the Administration may have taken the first steps towards a signing a statement via a May 19, 2015 Statement of Administration Policy where the Administration states:

“With respect to space resource utilization, the Administration recognizes that steps have been taken to ensure that the bill itself is consistent with the United States’ international obligations.  While the Administration strongly supports the bill’s efforts to facilitate innovative new space activities by U.S. companies, such as the commercial exploration and utilization of space resources to meet national needs, the Administration is concerned about the ability of U.S.companies to move forward with these initiatives absent additional authority to ensure continuing supervision of these initiatives by the U.S. Government as required by the Outer Space Treaty.”

This could represent a foundation whereby the Administration either vetoes a reconciled bill containing the space resource provision or sets up for a signing statement.

The end result is in their haste to create a legal environment conducive to the creation of resource rights, proponents could inadvertently steer both H.R. 1508 and S. 976 into dead political waters and deal a political black eye to the majority in both the House and the Senate, which would deter the current and a future majority from taking similar political risk and put the matter of private resource rights in jeopardy. To avoid that end, the majority in the House would be prudent to remove the provisions of H.R. 1508 from H.R. 2262 and adopt the legislative and policy approach of S. 1297, which would allow the the amendments to the Commercial Space Launch Act be implemented and preserve H.R. 1508 and S. 976 so that the issue of space resource rights can be debated in a bi-partisan manner and live to fight another day.

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