Bill To Extend U.S. Launch Indemnity Slated for Vote in House

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WASHINGTON — The U.S. government’s commercial space-launch indemnity regime, under which it assumes liability for launch-related damages that exceed the $500 million threshold, would remain unchanged through 2014 under a bill to be considered Nov. 13 by the U.S. House of Representatives.

The six-line bill (H.R. 6586) was introduced in the House Nov. 8 by Rep. Steven Palazzo (R-Miss.), chairman of the House Science space and aeronautics subcommittee. Other than extending the sunset date, the bill makes no changes to the U.S. government’s commercial launch indemnification program, which is set to expire Dec. 31.

Under the indemnification regime, the U.S. government must cover any damages to uninvolved parties resulting from commercial launch activities above the $500 million level, to a maximum of $2.7 billion. The indemnification is considered necessary to keep the U.S. commercial launch industry viable.

The website for House Majority Leader Eric Cantor (R-Va.) indicates that Palazzo’s bill has been scheduled for a Nov. 13 floor vote, which will take place no earlier than 6:30 p.m. Eastern time.

If the bill passes the House, it would have to be approved by the full Senate and signed by U.S. President Barack Obama before it becomes law.

Alex Saltman, executive director for the Washington-based Commercial Spaceflight Federation, said Nov. 12 that he did not expect Palazzo’s bill to be controversial. Congress has extended commercial space-launch indemnity five times since it was established in 1988 as part of the Commercial Space Launch Act Amendments. The last indemnity extension was in 2009.

Per U.S. law, commercial space-launch providers must insure against the maximum probable loss associated with every domestic launch they conduct. The maximum probable loss for a single launch is capped at $500 million.

The government’s method for calculating maximum probable loss has not changed substantially in more than two decades. A July report from the Government Accountability Office (GAO) recommended that U.S. officials review the methodology and update it where appropriate.

Most commercial space launches are conducted outside the United States. France-based Arianespace, which launches from French Guiana near the equator, is the market leader.