COMMERCIAL IN-DEPTH

Commercial space capital requirements and risks are sizeable.  The United States commercial space industry must be provided maximum regulatory certainty with minimal regulatory burden.  Regulators must be properly funded to provide licenses and reviews in a timely manner.  Regulations must be updated so innovative, non-traditional activities, such as on-orbit servicing and human habitats, are in compliance with international treaty obligations and provided a level of regulatory certainty.  Regulations must also be updated to allow spaceflight participants to receive training in space support vehicles.

Commercial solutions must be considered when assessing government missions.  Commercial service providers maintain distributed, disaggregated, and rapidly refreshed constellations that add resilience to space architectures while sharing costs across numerous non-government market segments.  Traditional methods of acquiring government owned and operated space systems often cannot keep pace with the technological and cost reduction capabilities of commercial service providers.

A 2013 study by the Inter-Agency Space Debris Coordination Committee determined that the debris population in low Earth orbit will continue to grow due to collisions even if nothing new is launched, with catastrophic collisions occurring every five to nine years.  However, launches will continue with increased frequency, meaning the space environment will become unsustainable if not for responsible leadership.  It is time for a new approach to the monitoring and management of the space environment.  A commercialized conjunction analysis and warning center, overseen by a civil agency, should fuse unclassified Defense data with data from international and commercial sensors to provide a single integrated space picture.  Eventually, this information should be used by a civilian agency with authority to take action to minimize collisions in space.  This will preserve space access for generations to come.

SECTION-BY-SECTION WITH EXPLAINERS

Importance of FAA/AST – Finds that the commercial space industry is a source of economic growth for the United States.  Recognizes the role the Office of Commercial Space Transportation (FAA/AST) plays in facilitating this industry and its need for adequate resources.

Given the importance of commercial space transportation, the Associate Administrator of FAA/AST must at the table when national transportation issues are discussed at the highest level.

New Assistant Secretary of Transportation – Establishes the position of Assistant Secretary of Transportation for Commercial Space Transportation and designates this person as the Associate Administrator of FAA/AST.

Currently, AST does not have the resources to efficiently or effectively carry out its duties, and will only be further stretched as commercial space activity expands. Additionally, the ASRA grants AST numerous responsibilities and requirements that will be impossible to complete or carry out without the requisite resources.

FAA/AST Appropriations – Authorizes appropriations for AST for fiscal years 2017 through 2021. For FY 2017, $43,200,000; FY 2018, $55,500,000; FY 2019, $66,000,000; FY 2020, $80,500,000; FY 2021, $99,000,000.

The current primary metric for the workload of FAA/AST is the number of launches taking place in a year. While useful, it does not fully capture the office’s workload, which involves engaging in pre-application discussions with industry, launch and reentry licenses, launch site operators’ licenses, experimental permits, safety approvals, payload reviews, and spaceport environmental reviews, and more. A limited metric such as number of launches does not fully inform Congress on the justification for AST’s funding.

FAA/AST Workload Metric – Requires AST to develop a new metric to represent the workload of the office.  Current metric is number of launches. New metric will be utilized in budget requests for AST beginning with FY18.

The commercial space industry is rapidly advancing and will continue doing so at a greater pace. In order to provide this industry with minimal regulatory burden, regulations enforced by AST need to keep pace with capabilities and technological change.

Regulatory Update – Directs AST to begin updating regulations within one year.  Requires regulations to be reviewed and updated at least once every three years.

Defines spaceport.

If commercial space is to be a successful industry in this country, the infrastructure that facilitates these activities is as important as the launch vehicles and spacecraft themselves. The United States needs a robust, efficient network of launch and reentry sites that are modern and capable of handling the activity that is coming in the near future.

Office of Spaceports – Establishes an Office of Spaceports within AST to support and promote current and potential future commercial spaceports.

Robust infrastructure requires funding for capital improvements. The Space Transportation Infrastructure Matching Grants program was implemented in 2010, but has not been funded since 2012.

Space Transportation Infrastructure Matching Grants – Updates the Space Transportation Infrastructure Matching Grants program and funds it by setting aside one half of one percent of funding in the Airport and Airway Trust Fund.  Designates the Director of the Office of Spaceports as the agent acting on behalf of the Secretary of Transportation to carry out this program.

To be an equal partner and user of the national airspace, commercial space will need to contribute more to funding mechanisms.

GAO Report – Requires a GAO report on spaceport activities, user fees, and application process.

The commercial sector is moving toward distributed, disaggregated architectures. This trend will culminate in the launch and deployment of megaconstellations consisting of hundreds or even thousands of satellites. This will stress launch architecture.  Many of these megaconstellations will be polar orbiting, and there are few, very specific, launch sites where that orbital regime can be achieved.

Launch Demand Report – Requires the Secretary of Transportation to submit a report on the demand for launch facilities.  Instructs the Office of Spaceports to facilitate additional spaceports if needed.

A 2013 study by the Inter-Agency Space Debris Coordination Committee determined that the debris population in low earth orbit will continue to grow due to collisions even if nothing new is launched.  Catastrophic collisions such as Iridium 33-Cosmos 2251 will occur every five to nine years.  Each such collision will create thousands of pieces of debris and result in more collisions.  Instead of no new launches, however, launches will continue with increasing frequency and constellations of hundreds or even thousands of satellites will be placed in orbit.  In this environment, satellites will require shielding and, correspondingly, heavier launch solutions.  Firms will need replacement satellites, more robust distributed architectures, and higher cost insurance.  In sum, the costs will reduce investment returns, challenge capital formation, and limit the ability to maximize the utility of commercial space.

Orbital Debris – Finds that the growing number of objects and debris in Earth’s orbit pose a danger. Recognizes the need for robust space situational awareness.

To improve space situational awareness capabilities, there needs to be a conjunction analysis and warning center with a single integrated space picture that fuses data from many different sources.

Space Situational Awareness Capabilities – Authorizes the Secretary of Transportation to gather data to provide SSA services and information to customers including the Federal government, foreign countries, and commercial entities.

Commercial, academic, and international expertise on the space environment should be utilized to inform government actions.

Advisory Committee – Establishes a Space Awareness Advisory Committee made up of commercial, academic, international, and government experts to advise the Secretary on matters related to SSA services.

There are many actors providing space situational awareness information in the private sector.  In some cases, commercial SSA is detecting objects and informing operators better than the government.

Commercial SSA Capabilities – Directs the Secretary to utilize, to the extent practical, private sector capabilities to provide SSA services.

Currently, the Secretary of Defense, through the JSpOC, is the only entity with the statutory ability to provide SSA services. This is a byproduct of its mission to protect national security assets in space. The JSpOC is also providing this service for free to foreign governments and the commercial sector. Given the unique capabilities of the JSpOC, this was the right approach in times past, and commercial actors have become accustomed to a certain level of service and information, which must be maintained.

SSA Quality Assurance – Instructs the Secretary of Transportation to work with the Secretary of Defense to ensure the quality of services provided and ensures there is no gap in information to the affected stakeholders.

There is a clear difference between providing space situational awareness services and information and performing space traffic management, so the ASRA defines Space Traffic Management as “a set of technical and regulatory provisions and processes used to oversee, coordinate, regulate, and promote safe and responsible space activities.”

With the expansion of space utilization, particularly in the commercial sphere, the absence of appropriate regulation will result in de facto regulation of the industry by increasing costs and eventually thwarting access. Responsible governance of the space environment is necessary and America should be in a leadership role.

STM Lead Government Agency – Directs that a lead Government agency be designated for STM by September 30, 2020.  This agency has a mission to minimize collisions in Earth orbit utilizing information and services provided under Sec. 303.

STM Regulations – Instructs lead agency to promulgate regulations necessary to prevent collisions in Earth orbit.  Requires agency to publish a regulatory decision process that will provide clarity to all affected parties.

In many respects, the evolving space domain mirrors the changes experienced in air domain.  Congressional engagement was appropriate as the skies became more crowded, militarily contested, and commercially viable.  As the air domain matured, Congress was right to ask and help think through the answers to tough questions, such as:

  • Is the military organized, trained, and equipped to deter conflict and prevail when conflict extends into the air domain?
  • Is the national security community operating under the right policies and doctrines in the air domain?
  • What is the role of civil agencies in the air domain?
  • How should air traffic be monitored and managed?
  • How can we spur the development of commercial aviation?
  • How can integrate commercial aviation technologies and services into civil and military applications?

Answering those same questions for the space domain requires Congressional involvement.

The International Civil Aviation Organization has followed the leadership of America’s FAA providing great advantage to the United States.  America must also be the first to move on space traffic management, both to show leadership and to ensure the United States is in the driver’s seat. Space is global, and norms of behavior must be followed by everyone or they will not have the desired effect, and could put American companies at a competitive disadvantage.

International Agreements – Requires the Secretary of State to seek bi-lateral and multi-lateral agreements with spacefaring nations to standardize regulations.

Global STM – Requires Secretary of State to work through interagency and multilateral processes to develop a unified, global space traffic management architecture.

Commercial space technology development can address critical government needs.

Commercial Data – Expresses a sense of Congress that Federal agencies should utilize commercial data and establish programs to enable commercial capabilities.

Currently, NOAA claims international obligations require the sharing of all weather data with the entire world for free, regardless of the source or the type. This undercuts the market before it even forms, giving companies no business case to pursue new and innovative data capabilities. The United States’ obligations are much more nuanced.

World Meteorological Organization 40 – Directs NOAA Administrator to promulgate rules on the treatment of weather data acquired from commercial space-based systems. The rules should ensure that the United States releases only the minimum amount of proprietary data required under World Meteorological Organization Resolution 40.

Earth Science Missions – Requires NASA to deliver a report within 270 days evaluating how the government can leverage industry capabilities for Earth science missions.

The Department of Commerce has several entities within it related to space. These include NOAA’s satellite office, referred to as NESDIS, the Commercial Remote Sensing Regulatory Affairs office, and the Office of Space Commerce. These offices have small budgets, small staffs, and are buried deep within the bureaucracy.

Department of Commerce Space Organizational Report – Requires the Secretary of Commerce to review the feasibility and benefits of rearranging space-related activities within the Department.  Requires the Advisory Committee for Commercial Remote Sensing to comment on the report.

The ability to image the earth from space has revolutionized life on this planet. Better routes can be found, storms can be seen as they form, and the warfighter can know where the enemy is located. The implications of seeing the big picture are enormous and extend to nearly all aspects of the human experience. As the needs for remote sensing have grown over the decades, the responsibilities for providing this service have expanded to the private sector and today this industry is booming. As the industry grows, we face two challenges – ensuring that our national security is never compromised and that capabilities are not hampered by a heavy Department of Commerce work load.

Remote Sensing Licenses – Expresses a sense of Congress that the process for licensing remote sensing systems can be unclear, puts American companies at a disadvantage, and often fails to account for mitigation practices before denials are issued.

Current law requires action to be taken on remote sensing license applications within 120 days. The Department of Commerce has in many cases missed this deadline, contributing to uncertainty, and delaying capabilities critical to our economy and national security.

License Adjudication – Amends the deadline for adjudication of remote sensing license applications to 60 days from receipt of an application with the option for the Secretary of Commerce to extend the review period for 30 days.  A second 30 day extension is allowed in the event the SECDEF or DNI determines there is a national security purpose.

The process by which license decisions are made is often unknown. When license applications are denied, justifications are often not given. This process needs to be transparent.

License Denials – Requires any license denial to include a rationale.  Provides for denials to be submitted to Congress and any applicant with the necessary security clearances.

When a license is approved, remote sensing companies make a business case and sign contracts. When the Department issues retroactive changes to a license, it can damage or bankrupt a business.

Retroactive Changes to Licenses – Establishes that retroactive changes to commercial remote sensing licenses shall only be made for national security purposes certified by the DNI.  The affected entities shall be compensated for lost revenue.

A number of foreign countries directly downlink raw data from American private remote sensing systems.  American remote sensing companies get license approvals to do this one country at a time.  This approval process has experienced long delays compelling foreign governments to go to international competitors for the service.

Foreign Country Downlinks – Requires the Secretary of Commerce, in consultation with SECDEF and DNI, to maintain a list of nations eligible for expedited licensing.  Requires Secretary to update the list every two years. 

Not all remote sensing systems are created equally. Some support academia, some are private enterprise, some don’t look at the Earth, and some have less sophisticated imaging technologies that are more equivalent to household cameras. The licensing process should take all of this into account.

Remote Sensing License Categorization – Instructs Secretary of Commerce to create categories of remote sensing licenses taking into account national security concerns.

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The private sector is very adept at improving and augmenting government capabilities. Particular types of commercial weather data, specifically hyperspectral imaging and GPS radio occultation, have applications that can vastly improve weather forecasts. They also have the ability to serve as backstops when problems inevitably plague government owned and operated satellite systems. The commercial sector can provide redundancy, support, augmentation, and improvement.

Commercial Data Budget Line Item – Instructs NOAA to include a line item for commercial space-based data buys in its annual budget request.

Commercial Options – Requires NOAA to assess all commercial options to meet its mission requirements when updating, augmenting, or following-on current programs.

Commercial Weather Data Budget – Authorizes appropriations for commercial space-based weather buys. For FY 2017, $15,000,000; FY 2018, $30,000,000; FY 2019, $55,000,000; FY 2020, $90,00,000; FY 2021, $130,000,000.

Non-traditional space activities like human habitats, on orbit servicing, and resource extraction are getting ahead of regulatory updates.  Without clarifying the regulatory environment, these ventures could be at risk. At present, the State Department, as part of the interagency process which examines payloads, does not believe it has the mechanism to ensure non-traditional activities of commercial space companies are in compliance with the Outer Space Treaty. This uncertainty limits capital formation and innovation.

Regulatory Certainty – Expresses a sense of Congress that the Secretary of Transportation has authorities to determine compliance with the Outer Space Treaty.  Directs AST to enhance the payload review process to include conditions on deployed payloads.

Aviation regulations applied to space transportation vehicles would be devastating for the industry. Unfortunately, the International Civil Aviation Organization recently stated its intention to begin crafting guidelines for “space tourism.” This is unacceptable, and cannot be allowed to happen in the United States. Space transportation needs to be recognized as an equal user of the air space, rather than a subordinate.

Space Launch Vehicle Uniqueness – Prevents any commercial space launch vehicle or mission with an AST permit or license from being subjected to other regulations governing non-space transportation vehicles.

As space ventures retire risk, the investment community gains confidence, and innovation thrives.  Industry should be incentivized to take risks on lofty objectives that will result in generational breakthroughs.

Prize Account – Establishes a prize account, administered by AST, for commercial space activities such as lunar, asteroid, and Mars missions, debris clean up, and point to point missions on Earth.

The investments of individual states and their taxpayers have played a significant role improving the launch infrastructure in the United States. However, the current FAA licensing process requires a launch provider to have insurance for every type of property that could be damaged, except for state and local property. The regulations governing this process have not been updated to reflect the fact that state and local governments are also partners in space transportation.

Updates the definition of government property to include state, local, and federal.

The United States needs to have a robust space industrial base for national security. Payloads should be launched from the United States.

Domestic Launch Payload Tax Credit – Creates a space payload tax credit equal to 10 percent of the insured value of a payload if launched by a domestic launch provider or on a vehicle that meets the requirements of the Buy American Act.

Ensuring access to space requires protecting the American space launch industry from foreign subsidized vehicles.

GAO Study on Indian Launch Impacts – Requires that before any restriction is lifted on Indian space launch vehicles, GAO must do a study on how the domestic launch industry would be affected.  After the study is finalized, requires the USTR to allow a 30 day public comment period if the USTR decides to move forward with lifting the restriction.

The space industry is critical to American security and often requires financing not available in commercial markets.  We cannot allow lapses in the Export-Import bank to threaten our national security.

Domestic Space Industry Loan Guarantee Program – Establishes a loan guarantee program within the Department of Commerce to support a domestic space industrial base for national security.  Directs the Secretary of Commerce with the Secretary of Transportation, the NASA Administrator, SECDEF, and DNI to develop a list of activities eligible for loans.

Commercial launch providers must apply for access to electromagnetic spectrum. Access is on a case by case basis and runs out at a date certain.  It does not take into account potential launch delays, necessitating the provider to go through the arduous process again.

Electromagnetic Spectrum – Expresses a sense of Congress that commercial launch providers require access to spectrum during launch.  Requires NTIA and FCC to ensure access to frequencies and reduce the number of authorizations required per launch.

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Soon, boarding a spacecraft will be like boarding an airplane – routine and simple.  Until then, there needs to be a robust spaceflight training industry to support the spaceflight industry. Many of the types of vehicles that can be used to simulate spaceflight are experimental and can’t be used to carry people for compensation. This is government regulation preventing a market from forming.

Spaceflight Training Aircraft – Permits Secretary of Transportation to allow experimental aircraft to be used for commercial compensation for spaceflight training.  Requires passenger notification and informed consent.  Requires these flights to originate and terminate at an FAA-licensed spaceport.

Commercial space development schedules occur over decades rather than months or years. A company’s first revenue can take years to develop, so many space companies operate like start-ups for long periods of time. They are unable to offer salaries at the same levels as traditional technology or engineering firms, and often compete for talent by offering stock options as compensation. These employees are taxed for the value of their stock options, which is not cash.  This increases the tax burden without increasing the cash to pay the tax.  In order to help space companies remain competitive, and prevent their employees from getting punished by the tax code, the ASRA addresses this tax provision.

Deferred Employee Tax Liability on Stock Options – Recognizes that startup space companies are often limited in their ability to offer cash compensation to employees.  For stock or option compensation, defers employee tax liability until liquidation.  This applies only for domestic commercial space companies and to employees who own less than one percent of their company.

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