Public Meeting; Notice

DEPARTMENT OF TRANSPORTATION

Office of Commercial Space Transportation

[Docket 49815 (Licensing Commercial Space Launch Activities); and

Docket No. 43098 (Financial Responsibility Requirements); Notice 94-17]

RIN 2105-AB85; 2105-AA26

Public Meeting; Notice

AGENCY: Office of the Secretary, Office of Commercial Space

Transportation, DOT.

ACTION: Notice of public meeting.

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SUMMARY: The Department of Transportation's (DOT) Office of Commercial

Space Transportation (OCST) is holding a public meeting to obtain

industry input to assist it with rulemaking activities currently under

consideration. OCST seeks information that will assist it in developing

a notice of proposed rulemaking (NPRM) addressing specific requirements

for launch and launch site operator license applications submitted to

OCST. OCST seeks to standardize its review of license applications

while at the same time allowing prospective licensees design and

operational flexibility for their proposals. OCST also plans to develop

a second NPRM addressing implementation of financial responsibility

requirements and allocation of risks associated with the conduct of

licensed activities. Accordingly, OCST seeks views concerning the range

of activities that may be covered by these requirements and the scope

of the U.S. Government's payment of third-party claims that exceed the

amount of required liability insurance.

DATES: The meeting is scheduled to take place on October 27 and 28,

1994, from 9:30 a.m. to 5:00 p.m. each day, in Room 2230 of the

Department of Transportation's Nassif Building, 400 Seventh Street SW.,

Washington, DC.

ADDRESSES: Written submissions may be provided to OCST in addition to

or in place of oral remarks presented at the public meeting. We would

appreciate receiving each submission in triplicate with an indication

of the Docket Number (listed above) to which it refers. One submission

may be used to address both the licensing and financial responsibility

dockets. Submissions should be sent to Docket Clerk, Department of

Transportation, 400 7th Street SW., Room 4107, Washington, DC 20590.

Comments will be available for public inspection at this address from

9:00 a.m. to 5:30 p.m., Monday through Friday. Written submissions

should be provided by November 14, 1994.

FOR FURTHER INFORMATION CONTACT: Ms. Linda Strine, Deputy Assistant

Director for Program Affairs, OCST, (202) 366-2980.

SUPPLEMENTARY INFORMATION-

Background-

The Commercial Space Launch Act of 1984, 49 U.S.C. 2601-2623, as

recodified at 49 U.S.C. Subtitle IX--Commercial Space Transportation,

ch. 701, Commercial Space Launch Activities, 49 U.S.C. 70101-70119

(1994) (the Act), authorizes the Secretary of Transportation to oversee

and regulate commercial launch activities and the commercial operation

of launch sites carried out within the United States or by its

citizens. The Act requires that this responsibility be exercised to

protect the public health and safety, safety of property, and national

security and foreign policy interests of the United States. The

Secretary's responsibilities under the Act, including licensing

commercial launches and the operation of launch sites, as well as the

obligation to encourage, facilitate and promote establishment of a

competitive United States commercial space transportation industry, are

implemented by OCST. -

OCST implements its licensing and regulatory authority through the

Commercial Space Transportation Licensing Regulations (Regulations), 14

C.F.R. Ch. III. At the time the Regulations were published in April

1988, no commercial launches had yet taken place. In adopting its

approach to licensing commercial launch activities, as reflected in the

Regulations, OCST recognized the need to establish a regulatory

environment responsive to the needs of an emerging industry while

assuring the public that commercial launch activities would be

conducted safely and responsibly. At that time, OCST indicated that it

would ``continue to evaluate and, when necessary, re-shape its program

in response to growth, innovation, and diversity in this critically

important industry.'' 53 Fed. Reg. 11006. -

Both OCST's experience in administering the Act and launch

companies' experience in operating in a commercial environment subject

to DOT's regulatory oversight have evolved with time. OCST now seeks to

streamline its licensing process while continuing to ensure safety and

preserving the flexibility necessary to address myriad launch

technologies and associated issues. Accordingly, OCST contemplates

issuing rules of general applicability to enhance industry certainty

regarding what is required of an applicant in the licensing process and

what is required of a licensee after a license has been issued.

-Launch and Launch Site Operator Licensing Procedures

Under the Act, a DOT license is required for any person to launch a

launch vehicle or operate a launch site within the United States. In

addition, a license is also required for a U.S. citizen to launch a

launch vehicle or operate a launch site outside the United States.

Foreign corporations, partnerships, joint ventures, associations or

other entities controlled by U.S. citizens do not need licenses to

conduct these activities from foreign territory unless the foreign

nation involved has agreed that the United States shall exercise

jurisdiction over the activity. In exercising this licensing authority

under the Act, the Secretary must protect public health and safety,

safety of property, and national security and foreign policy interests

of the United States. -

The Regulations issued in 1988 reflect OCST's approach to

evaluating license applications on a case-by-case basis. To date, OCST

has relied on these Regulations, and on guidelines it makes available

upon applicant request, to advise prospective applicants of the

information OCST requires to perform safety and mission reviews of a

launch license application. Having obtained six years of experience in

evaluating launch proposals and conducting safety research, OCST is now

prepared to streamline the launch licensing process by standardizing

requirements wherever possible without impeding innovation. In response

to industry requests for greater certainty in the application process,

and in order to achieve consistency, OCST proposes to codify certain

specific information requirements in regulations. In doing so, the

issues to be addressed include: (1) the scope of launch licenses; (2)

risk management techniques that enable license applicants to

demonstrate acceptable levels of safety; (3) application information

requirements; (4) relationship to and consistency with Federal range

requirements; and (5) reliance by license applicants on, among other

things, industry standards. With respect to launch license application

reviews, OCST is interested in obtaining views on at least the

following:-

What elements of a launch proposal must OCST evaluate to

assure launch safety;-

Which pre-launch or launch processing operations and

procedures should OCST assess to assure launch safety;-

What safety methodologies do launch operators currently

utilize to assure safe launch operations, and what approaches are

available to evaluate these methodologies;-

How should OCST utilize the analyses of Federal ranges in

its licensing review process;-

What information must launch license applicants submit to

other federal agencies, including federal ranges, that must also be

submitted to OCST as part of the license application review? Can OCST

utilize that information to avoid duplicative document preparation and

submissions by license applicants; and-

What should OCST require with respect to on orbit safety.-

When the Regulations were published in 1988, OCST indicated that it

would handle commercial launch site proposals on a case-by-case basis

while safety studies and research were ongoing. Since 1988, the vast

majority of licensing proposals submitted to OCST have been for

commercial launches of launch vehicles from a Federal range. However,

in light of the growing and intensified interest in operating

commercial launch sites, OCST has determined that establishing

certainty in the site operator licensing process through rules of

general applicability is necessary to facilitate this burgeoning

industry. With respect to OCST's approach to reviewing applications for

a license to operate a commercial launch site, OCST seeks views

concerning such matters as: (1) the scope of launch site operator

licenses; (2) risk management techniques that enable license applicants

to demonstrate acceptable levels of safety; (3) application information

requirements; (4) reliance by license applicants on industry standards;

and (5) reliance by license applicants on other Federal safety

standards. With respect to site operator license applications, OCST is

interested in obtaining views on at least the following:-

How should OCST assess a proposed launch site with respect

to geography, meteorology, proximity to population, risk to downrange

population, and other characteristics associated with the physical

site;-

What process and standards should OCST utilize, including

safety methodologies, to assess the capability of a launch site

operator to manage safety; -

What is the relationship between a site operator license

and its associated safety reviews, and a launch license authorizing a

launch from a commercial launch site and its associated safety

reviews;-

For launches conducted from a commercial launch site, how

should responsibility for safety be allocated between the launch

licensee and the site operator; and-

Given that OCST must evaluate flight safety functions,

such as flight termination or tracking, to assure the safety of launch

operations, how should those functions be addressed by the licensing

process when the launch will be conducted from a commercial launch

site. -

Scope of Financial Responsibility Requirements-

In 1988, Congress amended the Act to require that licensees obtain

liability insurance or otherwise demonstrate financial responsibility

up to a statutory limit of $500,000,000, in order to protect launch

participants from third-party claims resulting from activities carried

out under a license in connection with a particular launch. Licensees

must also obtain liability insurance or otherwise demonstrate financial

responsibility up to $100,000,000, to compensate the U.S. Government

for damage or loss to its property resulting from those activities.

Reciprocal waivers of claims are also required whereby each party

involved in launch services agrees to be responsible for certain losses

it may sustain and losses sustained by its own employees resulting from

an activity carried out under the license. -

The 1988 Amendments further provide that, to the extent provided in

advance in an appropriation law or authorized by statute, the Secretary

of Transportation shall provide for the payment by the U.S. Government

of successful third-party claims against a licensee, contractor,

subcontractor, or customer of the licensee, or a contractor or

subcontractor of a customer, resulting from an activity carried out

under a license, to the extent the total amount of claims arising out

of any one launch exceeds the amount of third-party liability insurance

required of the licensee, up to a total of $1.5 billion above that

amount. The U.S. Government bears the risk of government property

losses that exceed the level of insurance coverage required of the

licensee. -OCST prescribes financial responsibility requirements for

licensees on a case-by-case basis after analyzing the maximum probable

third-party and government property losses associated with proposed

licensed activities. Those requirements are imposed on licensees in

license orders. Currently, license orders issued by OCST reflect

insurance requirements for both launches and launch site operations

associated with the conduct of those launches. Concerns have arisen

over the extent to which pre-launch activities are intended to be

covered by the financial responsibility requirements of the Act, and

the Government payment of excess third-party claims provision.

Clarification is needed to provide certainty to the industry so that it

may manage risks appropriately.-

The Act provides guidance on these issues. To the extent the Act

provides for payment by the U.S. Government of successful third-party

claims in excess of required insurance, it is only available for claims

``resulting from an activity carried out under the license issued or

transferred under [chapter 701] for death, bodily injury, or property

damage or loss resulting from an activity carried out under the

license.'' 49 U.S.C. 70113(a)(1)(emphasis added). Moreover, claims may

be paid under this provision of the Act only to the extent the total

amount of successful claims related to one launch exceeds the required

amount of third-party liability insurance and does not exceed $1.5

billion above that amount. 49 U.S.C. 70113(a)(1)(emphasis added). -

Licenses are available to authorize the conduct of a launch, as

defined in the Act, or the operation of a launch site. Because the U.S.

Government payment of excess third-party claims provision is only

available for claims resulting from an activity carried out under the

license for damage or loss resulting from an activity carried out under

a license, and because the Act defines launch as ``to place or try to

place'' a launch vehicle and any payload in a suborbital trajectory, in

Earth orbit in outer space or otherwise in outer space, 49 U.S.C.

70102(3), one interpretation of this language is that, with respect to

launches, it only extends to claims resulting from ignition and flight

of a launch vehicle. In other words, it may not be available for claims

resulting from preparatory activities conducted at the launch site.

Alternatively, some preparatory activities may reasonably be considered

integral to the launch itself or part of the launch process. OCST seeks

industry views on what those activities are and why they may fall

within the statutory definition of a ``launch.'' -

OCST plans to adopt specific criteria for determining when an

activity would be considered part of a launch for purposes of imposing

financial responsibility requirements and to determine when U.S.

Government payment of excess third-party claims may be available. OCST

also seeks industry views on how the U.S. Government payment of excess

third-party claims provision applies to licensed site operators, if at

all. Diverse points of view exist regarding these issues, and OCST

seeks information regarding the basis for each point of view as well as

recommendations as to which should be adopted.-

OCST recognizes that many other issues are associated with

implementation of the financial responsibility and allocation of risk

requirements of the Act. The issues presented in this Notice are

limited in scope because their resolution will necessarily affect

OCST's approach to licensing launch activities and site operators. At

the meeting, OCST will welcome any other comments on financial

responsibility matters, as time allows. -

Standards-

In accordance with the Presidential Decision Directive, NSTC-4,

outlining the National Space Transportation Policy issued August 5,

1994, OCST would like to work with the U.S. commercial space sector to

promote the establishment of technical standards for commercial space

products and services. OCST solicits industry views on what safety

standards should be developed to support this goal, and how they should

be implemented.

Meeting Schedule-

Because of time constraints and the need to ensure that each

subject area is fully aired, OCST intends that one full meeting day be

accorded to licensing issues and one-half day to issues concerning the

scope of financial responsibility requirements. Licensing issues will

be discussed on October 27, 1994. Financial responsibility issues will

be addressed in the morning session on October 28, 1994. If licensing

issues are exhausted before the time allotted on October 27th, the

meeting will move directly to financial responsibility issues. -

OCST looks forward to an informative and interactive discussion of

the issues among the participants at the meeting, as opposed to a forum

for the presentation of prepared statements. However, persons wishing

to present prepared remarks at the meeting, whether in a personal or a

representative capacity on behalf of an organization, will be given an

opportunity to do so during the afternoon session on October 28, 1994,

between 1:30 p.m. and 4:00 p.m., and may reserve between five and 15

minutes to do so. In addition, OCST plans to reserve an hour at the end

of each day to discuss technical standards and other issues of concern

to participants that may not be part of the rulemaking activity. Any

time remaining on October 28, 1994, may be used for further discussion

of the issues related to rulemaking activities.-

Those who are interested in presenting remarks at the meeting

should notify OCST no later than October 17, 1994, to reserve up to 15

minutes of time. If possible, OCST will notify interested persons if

additional time is available. DOT officials chairing the meeting may

take additional time to ask clarifying questions of the speaker. To

reserve speaking time, please telephone Ms. Linda Strine (202) 366-

2980.

Issued in Washington, DC, October 6, 1994.-

Frank C. Weaver, -

Director, Office of Commercial Space Transportation.

[FR Doc. 94-25314 Filed 10-12-94; 8:45 am]

BILLING CODE 4910-62-U