The law is due to expire on Dec. 31.  The bill will extend the insurance, known as indemnification, for five years, until Dec. 31, 2009.  The bill, introduced by Science Committee Chairman Sherwood Boehlert (R-NY), would also require a study by a non-governmental entity of whether indemnification could be ended without unduly harming U.S. companies, and, if so, how that should be done. 

The indemnification provisions in H.R. 5245 were originally part of a larger bill, H.R. 3752, to make additional changes to the Commercial Space Launch Act.  H.R. 3752 would have set up a new regulatory regime for private human space flight.  The House Committee on Transportation and Infrastructure, which shares jurisdiction over H.R. 3752, today killed a deal on that bill that had been hammered out between the House and Senate over the past month. 

Discussing the indemnification bill,Boehlert explained, "We wanted to make sure that satellite launchers would have the insurance protection they need regardless of whether the larger commercial space bill gets signed into law.  I hope we can still get the larger bill done in November, but we must be sure that government insurance continues because it is necessary for U.S. launches to remain competitive right now."

Boehlert added, "I am not convinced, however, that the government needs to provide insurance for this industry forever.  That's why we want a study to understand exactly how the government might end indemnification and what impact that would have on U.S. companies.  That way Congress will have more information when indemnification next expires in 2009." 

Under current law, which H.R. 5245 would extend, satellite launchers must buy private insurance to cover injuries to third parties.  The insurance must cover losses up to the "maximum probable loss" level determined by the government.  The government then indemnifies the launcher for any additional losses up to about $1.5 billion per launch, meaning the government pledges to pay any claims for the private company that exceed the amount covered by private insurance.

The House had passed the larger bill, H.R. 3752, in February, and the Science Committee had been working with the Senate Committee on Commerce, Space and Transportation, and with industry since then to come up with a compromise that could pass both houses.  An agreement between those committees was finally reached last Friday. 

When H.R. 3752 passed the House, the Transportation Committee asserted its jurisdiction but expressed no concerns about the substance of the bill.  But when the Transportation Committee reviewed the final agreement this week, it expressed concerns about both original provisions of the bill and aspects of the final deal, and said it wanted to start over next year with hearings.

H.R. 3752 was introduced by Space Subcommittee Chairman Dana Rohrabacher (R-Calif.), along with Boehlert and Committee Ranking Democrat Bart Gordon (D-Tenn.).

Boehlert said, "I'm very disappointed that this bill, on which Dana Rohrabacher and I have labored so long and hard, is not going to be signed into law.  Dana has convinced all of us of the importance of this bill, of its potential to help get a new industry off the ground and to spur technology development.  I hope we will be able to revive the bill next year.  But everyone should understand that the final deal was a delicate, carefully calibrated compromise on precisely how much regulation was appropriate, and when.  Those kinds of carefully tuned instruments tend to decay pretty rapidly over time.  I fear that we're going to have to start all over next year."

House Science Committee Press Office -- 2320 Rayburn Building -- Washington, DC 20515

202-225-4275 (phone), 202-225-3170 (fax)