The House Subcommittee on Space & Aeronautics held a hearing on Thursday, October 30, to gather testimony on proposed legislation to expand NASA's ability to grant indemnification and cross-waiver authority for experimental launchers and other vehicles.
Before the hearing got underway, Subcommittee Chairman Dana Rohrabacher (R-CA) announced that Cong. Bud Cramer (D-AL), the ranking Democrat, will be joining the Appropriations Committee and thus will be stepping down from his subcommittee position. Who will replace Cramer has yet to be decided. Possibilities being discussed include Cong. James Traficant (D-OH), Cong. Bart Gordon (D-TN) and Cong. Tim Roemer (D-IN).
Both Rohrabacher and Cramer also paid tribute to Cong. Walter Capps (D-CA), a member of the subcommittee, who died of a heart attack earlier this week.
Indemnification & Cross-Waiver Authority
NASA currently has authority to indemnify -- or provide protection from liabilities above a set amount of money -- for expendable launch vehicles and the Space Shuttle. Users of the Shuttle are still obligated to purchase insurance, but their liability for damage or injury from third parties is limited.
While indemnification authority relates to third-party liability, cross-waiver authority relates to first-party and second-party liability. Since the 1970s, NASA has included cross-waiver authority in all of its launch services agreements and cooperative space programs.
Cross-waiver authority means "each party agrees to bear its own risk of participation in a joint space activity." Thus, one party is not liable for the other's contribution to a project. By allowing cross-waiver authority, insurance for the entire project is not duplicated by both parties, reducing costs. Not all claims are waived, however, only those of the parties and their contractors and subcontractors. Claims by employees, for instance, are not waived.
The House NASA Authorization bill contains legislation to expand and permanently authorize NASA to provide indemnification and cross-waivers for the X-33 and X-34 vehicles, as well as other spacecraft in the future. Indemnification and cross-waivers would be granted on a case-by-case basis, based on safety, oversight, and insurance requirements.
The Senate NASA Authorization bill limits indemnification and cross-waiver authority to only the X-33 and X-34 programs. It "sunsets" the authority in 2002 or, at the discretion of the NASA administrator, in 2005.
Ms. June Edwards testified on behalf of NASA in support of the House legislation that grants broader and permanent indemnification and cross-waiver authority to the space agency.
Jerry Rising, Vice President of the X-33 program at Lockheed Martin, also endorsed the broader legislation. "We strongly and urgently request the Congress," he said, "to consider passage of third party insurance and indemnification legislative language so that flight testing the X-33 can proceed." Without the legislation, he said it could cost up to $20 million to insure each flight of the X-33.
Dr. Robert Lindberg, Vice President of Orbital Sciences Corporation and Program Manager of the X-34, said the Senate legislation goes a long way toward addressing its needs. "If this Nation is to develop low cost access to space anytime in the foreseeable future, the U.S. Government must bear its share of the risk in the form of indemnifying and providing cross-waivers of liability for flight programs with experimental technologies. Failure to do so will bring to a halt our progress in achieving NASA's and industry's shared goals," Lindberg said.
The Boeing Company submitted testimony for the record. It supports the "enhanced indemnification authority for aerospace vehicles and operations and to establish a clear statutory basis for NASA's long-standing practice of utilizing cross-waivers of liability in its space and aeronautical activities."
The Boeing Company offered draft legislation to expand the House language to not only cover experimental vehicles, such as the X-33, but also "nonexperimental" vehicles such as the space station.
The final bill language for indemnification and cross-waiver authority is expected to be resolved during conference of the House and Senate Authorization bills.
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