U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

1 

49–010 

" ! SENATE 113TH CONGRESS

2d Session 

REPORT

2014

113–318 

Calendar No. 612 

A BILL TO IMPROVE THE TRANSITION BETWEEN 

EXPERIMENTAL PERMITS AND COMMERCIAL LICENSES FOR COMMERCIAL REUSABLE LAUNCH VEHICLES 

R E P O R T 

OF THE

COMMITTEE ON COMMERCE, SCIENCE, AND 

TRANSPORTATION 

ON

S. 2140 

DECEMBER 12, 2014.—Ordered to be printed 


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(II) 

SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION 

ONE HUNDRED THIRTEENTH CONGRESS

SECOND SESSION

JOHN D. ROCKEFELLER IV, West Virginia, Chairman 

BARBARA BOXER, California JOHN THUNE, South Dakota 

BILL NELSON, Florida ROGER F. WICKER, Mississippi 

MARIA CANTWELL, Washington ROY BLUNT, Missouri 

MARK PRYOR, Arkansas MARCO RUBIO, Florida 

CLAIRE MCCASKILL, Missouri KELLY AYOTTE, New Hampshire 

AMY KLOBUCHAR , Minnesota DEAN HELLER, Nevada 

MARK BEGICH, Alaska DANIEL COATS, Indiana 

RICHARD BLUMENTHAL, Connecticut TIM SCOTT, South Carolina 

BRIAN SCHATZ, Hawaii TED CRUZ, Texas 

ED MARKEY, Massachusetts DEB FISCHER, Nebraska 

CORY BOOKER, New Jersey RON JOHNSON, Wisconsin 

JOHN WALSH, Montana 

ELLEN DONESKI, Staff Director 

JOHN WILLIAMS, General Counsel 

DAVID SCHWIETERT, Republican Staff Director 

NICK ROSSI, Republican Deputy Staff Director 

REBECCA SEIDEL, Republican General Counsel 


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Calendar No. 612 

113TH CONGRESS REPORT " ! SENATE 2d Session 113–318 

A BILL TO IMPROVE THE TRANSITION BETWEEN EXPERIMENTAL PERMITS 

AND COMMERCIAL LICENSES FOR COMMERCIAL REUSABLE LAUNCH 

VEHICLES 

DECEMBER 12, 2014.—Ordered to be printed 

Mr. ROCKEFELLER, from the Committee on Commerce, Science, and 

Transportation, submitted the following 

R E P O R T 

[To accompany S. 2140] 

The Committee on Commerce, Science, and Transportation, to 

which was referred a bill to improve the transition between experimental permits and commercial licenses for commercial reusable 

launch vehicles (S. 2140), having considered the same, reports favorably thereon with an amendment (in the nature of a substitute) 

and recommends that the bill (as amended) do pass. 

PURPOSE OF THE BILL

The purpose of S. 2140, as reported, is to improve the transition 

between experimental permits and commercial licenses of commercial reusable suborbital launch vehicles. 

BACKGROUND AND NEEDS

Under the Commercial Space Launch Act (CSLA) (98 Stat. 3055), 

as amended by the Commercial Space Launch Amendments Act of 

2004 (118 Stat. 3974), the Federal Aviation Administration (FAA) 

Office of Commercial Space Transportation (AST) issues both experimental permits for launch vehicle testing and separate licenses 

for operational activities. Commercial space companies in the reusable suborbital vehicle (RSV) market are in the process of testing 

vehicle designs under AST experimental permits. These permits 

are valid for a one-year, renewable term and allow for unlimited 

testing of new design concepts, equipment, or operating techniques; 

for demonstrating compliance with requirements to obtain a launch 

or reentry license; and for training crew. AST also determines the 

scope of design changes permissible before requiring another, sepaVerDate Sep 11 2014 21:02 Dec 31, 2014 Jkt 049010 PO 00000 Frm 00003 Fmt 6659 Sfmt 6602 E:\HR\OC\SR318.XXX SR318

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rate experimental permit. Under current law, experimental permits 

are limited to non-revenue flights or activities. 

After obtaining a license from AST, companies may initiate revenue-generating flights—carrying cargo or crew for compensation— 

and gain coverage under the Federal Government’s launch indemnification regime. Under current law (51 U.S.C. 50906), however, 

once AST issues a launch or reentry license for a particular vehicle 

design (including for an RSV), the experimental permit ceases to be 

valid. In practice, the issuance of a license for operational flights 

could therefore impede commercial companies from continuing 

flight tests to improve the vehicle design, even if operational and 

experimental flights occurred on different launch vehicles of the 

same design. Companies have expressed concern that this restriction, in forcing an immediate transition between vehicle testing 

and commercial operation, is inefficient and limits safety and performance improvements. Further, they argue that delaying a license application in order to continue experimental tests could 

complicate efforts to seek capital. The bill would therefore address 

these concerns by more clearly establishing the flexibility to continue vehicle testing after a launch license has been granted. 

On October 31, 2014, the RSV SpaceShipTwo disintegrated during a flight test as part of the development and test program by 

the vehicle’s manufacturer, Scaled Composites. Tragically, the accident resulted in the injury of the pilot and in the death of the copilot. The flight test occurred under an experimental permit issued 

to Scaled Composites. Virgin Galactic, a commercial space company, had planned to obtain a license to begin operating the vehicle 

for revenue upon completion of the flight test and development program underway by Scaled Composites, as early as 2015. The accident and the ongoing National Transportation Safety Board investigation, however, will likely alter Virgin Galactic’s flight schedule 

and testing plan, making S. 2140 less time sensitive. Nonetheless, 

the flexibility afforded by S. 2140 could prove useful to other commercial space companies that eventually transition from experimental permits to commercial licenses. 

SUMMARY OF PROVISIONS

S. 2140 would amend section 50906 of title 51, United States 

Code, clarifying the purposes and limitations of experimental permits for RSVs. The bill would expand eligibility for experimental 

permits to include reusable suborbital rockets or rocket designs 

that have been issued a license for operational activities. In addition, commercial companies would gain the ability to launch and 

reenter RSVs to test existing design concepts, equipment, and operating techniques under an experimental permit. Current law, conversely, restricts permit eligibility to the testing of new design concepts, equipment, or operating techniques. 

LEGISLATIVE HISTORY

S. 2140 was introduced on March 13, 2014, by Senators Heinrich, 

Rubio, and Tom Udall and referred to the Committee on Commerce, Science, and Transportation. Senators Feinstein, Wicker, 

and Cornyn have since been added as cosponsors. On April 9, 2014, 

the Committee met in open Executive Session and, by voice vote, 


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1Senate Committee on Commerce, Science, and Transportation, Written testimony of Commercial Spaceflight Federation President Capt. Michael Lopez-Alegria, (USN Ret.), Hearing on 

Partnerships to Advance the Business of Space, 113th Cong. (May 16, 2013). 

ordered S. 2140 to be reported favorably with an amendment in the 

nature of a substitute. 

On May 16, 2013, the Science and Space Subcommittee held a 

hearing on ‘‘Partnerships to Advance the Business of Space.’’ The 

hearing focused on Federal oversight of emerging orbital and suborbital commercial space companies and the potential economic 

benefits of these activities. In written testimony, multiple witnesses advocated for greater flexibility in the use of experimental 

permits, arguing that the current, legislative restrictions could stymie growth in the commercial space industry. According to a witness, removing the automatic revocation of experimental permits 

would help the industry grow by enabling ‘‘flight-testing of new vehicles as they enter service, something required as the industry 

matures into operating fleets of vehicles.’’ 1

On August 2, 2013, in the House of Representatives, Representatives McCarthy and Posey introduced the Suborbital and Orbital 

Advancement and Regulatory Streamlining (SOARS) Act. The 

SOARS Act is broader than S. 2140, as it seeks to streamline the 

permit/license process overall, would revise the CSLA definition of 

‘‘launch services,’’ and would establish a demonstration project related to the use of experimental aircraft in launch and reentry activities. 

ESTIMATED COSTS

In accordance with paragraph 11(a) of rule XXVI of the Standing 

Rules of the Senate and section 403 of the Congressional Budget 

Act of 1974, the Committee provides the following cost estimate, 

prepared by the Congressional Budget Office: 

S. 2140—A bill to improve the transition between experimental permits and commercial licenses for commercial reusable launch 

vehicles 

The Department of Transportation (DOT) regulates commercial 

launches of orbital and suborbital rockets. Firms that engage in 

such launches must obtain either an experimental permit—which 

allows repeated launches to test rocket design concepts and operating procedures—or a commercial license, which goes beyond an 

experimental permit by also allowing the licensee to transport commercial passengers. Under current law, obtaining a commercial license effectively negates the licensee’s experimental permits. 

S. 2140 would amend current law to specify that a firm could obtain a commercial license without relinquishing its experimental 

permits, and make other clarifications to activities that could be 

pursued under experimental permits. 

CBO estimates that enacting the legislation would not significantly affect the federal budget. Based on information from DOT, 

we expect the proposed change would have a negligible effect on 

the department’s administrative costs. S. 2140 would not affect direct spending or revenues; therefore, pay-as-you-go procedures do 

not apply. 


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S. 2140 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would 

impose no costs on state, local, or tribal governments. 

The CBO staff contact for this estimate is Megan Carroll. The estimate was approved by Theresa Gullo, Deputy Assistant Director 

for Budget Analysis. 

REGULATORY IMPACT

In accordance with paragraph 11(b) of rule XXVI of the Standing 

Rules of the Senate, the Committee provides the following evaluation of the regulatory impact of the legislation, as reported: 

NUMBER OF PERSONS COVERED

The bill would affect FAA’s AST and those entities already subject to FAA rules and regulations. The number of persons covered 

should therefore be consistent with the current levels of individuals 

or businesses impacted under the provisions that are addressed in 

the bill. As a result of provisions under this bill, companies testing 

reusable suborbital vehicles should see increased flexibility for testing to continue to improve vehicle safety and performance, and 

crew training. Changes would include: 

∑ Eliminating the prohibition on RSV or RSV designs holding 

both an experimental permit and operational license. 

∑ Permitting RSV to test existing design concepts, equipment, 

and operating techniques under an experimental permit. 

ECONOMIC IMPACT

The bill would not authorize any new funding and is therefore 

not expected to have an inflationary or adverse impact on the Nation’s economy. It is anticipated that there would be a positive economic impact for companies testing and operating reusable suborbital vehicles since the language would allow for ongoing improvements for vehicle safety and performance. 

PRIVACY

S. 2140 would not have an adverse impact on the personal privacy of individuals. 

PAPERWORK

S. 2140 is not expected to increase the paperwork requirements 

for private individuals or businesses since the bill would only impact businesses already subject to the FAA’s permitting and licensing requirements. 

CONGRESSIONALLY DIRECTED SPENDING

In compliance with paragraph 4(b) of rule XLIV of the Standing 

Rules of the Senate, the Committee provides that no provisions 

contained in the bill, as reported, meet the definition of congressionally directed spending items under the rule. 


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SECTION-BY-SECTION ANALYSIS

Section 1. Commercial space launch licensing. 

This section would amend the current limitation where an experimental permit for a suborbital rocket design ceases to be valid 

when a license is issued for launch or reentry of that same design. 

Allowable testing under an experimental permit would be broadened to include research and development for existing—rather than 

solely for new—design concepts, equipment, or operating techniques. 

CHANGES IN EXISTING LAW

In compliance with paragraph 12 of rule XXVI of the Standing 

Rules of the Senate, changes in existing law made by the bill, as 

reported, are shown as follows (existing law proposed to be omitted 

is enclosed in black brackets, new material is printed in italic, existing law in which no change is proposed is shown in roman): 

TITLE 51. NATIONAL AND COMMERCIAL SPACE PROGRAMS 

SUBTITLE V. PROGRAMS TARGETING COMMERCIAL OPPORTUNITIES

CHAPTER 509. COMMERCIAL SPACE LAUNCH ACTIVITIES

§ 50906. Experimental permits 

(a) A person may apply to the Secretary of Transportation for an 

experimental permit under this section in the form and manner the 

Secretary prescribes. Consistent with the protection of the public 

health and safety, safety of property, and national security and foreign policy interests of the United States, the Secretary, not later 

than 120 days after receiving an application pursuant to this section, shall issue a permit if the Secretary decides in writing that 

the applicant complies, and will continue to comply, with this chapter and regulations prescribed under this chapter. The Secretary 

shall inform the applicant of any pending issue and action required 

to resolve the issue if the Secretary has not made a decision not 

later than 90 days after receiving an application. The Secretary 

shall transmit to the Committee on Science of the House of Representatives and Committee on Commerce, Science, and Transportation of the Senate a written notice not later than 15 days after 

any occurrence when the Secretary has failed to act on a permit 

within the deadline established by this section. 

(b) In carrying out subsection (a), the Secretary may establish 

procedures for safety approvals of launch vehicles, reentry vehicles, 

safety systems, processes, services, or personnel that may be used 

in conducting commercial space launch or reentry activities pursuant to a permit. 

(c) In order to encourage the development of a commercial space 

flight industry, the Secretary may when issuing permits use the 

authority granted under section 50905(b)(2)(C). 

(d) The Secretary may issue a permit only for reusable suborbital 

rockets that will be ølaunched or reentered¿ launched or reentered 

under that permit solely for— 

ø(1) research and development to test new design concepts, 

new equipment, or new operating techniques;¿ 


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(1) research and development to test design concepts, equipment, or operating techniques; 

(2) showing compliance with requirements as part of the 

process for obtaining a license under this chapter; or 

(3) crew training øprior to obtaining a license¿ for a launch 

or reentry using the design of the rocket for which the permit 

would be issued. 

(e) Permits issued under this section shall— 

(1) authorize an unlimited number of launches and reentries 

for a particular øsuborbital rocket design¿ suborbital rocket or 

rocket design for the uses described in subsection (d); and 

(2) specify the type of modifications that may be made to the 

suborbital rocket without changing the design to an extent that 

would invalidate the permit. 

(f) Permits shall not be transferable. 

ø(g) A permit may not be issued for, and a permit that has already been issued shall cease to be valid for, a particular design 

for a reusable suborbital rocket after a license has been issued for 

the launch or reentry of a rocket of that design.¿ 

(g) The Secretary may issue a permit under this section notwithstanding any license issued under this chapter. The issuance of a 

license under this chapter may not invalidate a permit under this 

section. 

(h) No person may operate a reusable suborbital rocket under a 

permit for carrying any property or human being for compensation 

or hire. 

(i) For the purposes of sections 50907, 50908, 50909, 50910, 

50912, 50914, 50917, 50918, 50919, and 50923 of this chapter— 

(1) a permit shall be considered a license; 

(2) the holder of a permit shall be considered a licensee; 

(3) a vehicle operating under a permit shall be considered to 

be licensed; and 

(4) the issuance of a permit shall be considered licensing. 

This subsection shall not be construed to allow the transfer of a 

permit. 

Æ 


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