[Federal Register: December 29, 2005 (Volume 70, Number 249)]
[Proposed Rules]               
[Page 77261-77290]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29de05-24]                         


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Part II





Department of Transportation





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Federal Aviation Administration



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14 CFR Parts 401, 415 et al.



Human Space Flight Requirements for Crew and Space Flight Participants; 
Proposed Rule


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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Parts 401, 415, 431, 435, 440, 450, and 460

[Docket No. FAA-2005-23449; Notice No. 05-17]
RIN 2120-AI57

 
Human Space Flight Requirements for Crew and Space Flight 
Participants

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: The FAA proposes requirements for human space flight of crew 
and space flight participants as required by the Commercial Space 
Launch Amendments Act of 2004. If adopted, this rulemaking would 
establish requirements for crew qualifications, training, and 
notification. It would also establish training and informed consent 
requirements for space flight participants. The rulemaking would also 
modify existing financial responsibility requirements to account for 
the FAA's new authority for space flight participants and crew, and to 
issue experimental permits. The experimental permit is the subject of a 
separate rulemaking. The FAA is conducting this rulemaking in order to 
fulfill its responsibilities under the new act. The requirements are 
designed to provide an acceptable level of safety to the general 
public, and to notify individuals on board of the risks associated with 
a launch or reentry.

DATES: Send your comments on or before February 27, 2006.

ADDRESSES: You may send comments [identified by Docket Number FAA-2005-
23449] using any of the following methods:
     DOT Docket Web site: Go to http://dms.dot.gov and follow 

the instructions for sending your comments electronically.
     Government-wide rulemaking Web site: Go to http://www.regulations.gov
 and follow the instructions for sending your 

comments electronically.
     Mail: Docket Management Facility; U.S. Department of 
Transportation, 400 Seventh Street, SW., Nassif Building, Room PL-401, 
Washington, DC 20590.
     Fax: 1-202-493-2251.
     Hand Delivery: Room PL-401 on the plaza level of the 
Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9 
a.m. and 5 p.m., Monday through Friday, except Federal holidays.

    For more information on the rulemaking process, see the 
SUPPLEMENTARY INFORMATION section of this document.
    Privacy: We will post all comments we receive, without change, to 
http://dms.dot.gov, including any personal information you provide. For 

more information, see the Privacy Act discussion in the SUPPLEMENTARY 
INFORMATION section of this document.
    Docket: To read background documents or comments received, go to 
http://dms.dot.gov at any time or to Room PL-401 on the plaza level of 

the Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9 
a.m. and 5 p.m., Monday through Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT: For technical information, contact 
Kenneth Wong, Deputy Manager, Licensing and Safety Division, Commercial 
Space Transportation, AST-200, Federal Aviation Administration, 800 
Independence Avenue, SW., Washington, DC 20591; telephone (202) 267-
8465; facsimile (202) 267-3686, e-mail ken.wong@faa.gov. For legal 
information, contact Laura Montgomery, Senior Attorney, Office of the 
Chief Counsel, Federal Aviation Administration, 800 Independence 
Avenue, SW., Washington, DC 20591; telephone (202) 267-3150; facsimile 
(202) 267-7971, e-mail laura.montgomery@faa.gov.

SUPPLEMENTARY INFORMATION:

Comments Invited

    The FAA invites interested persons to participate in this 
rulemaking by submitting written comments, data, or views. We also 
invite comments relating to the economic, environmental, energy, or 
federalism impacts that might result from adopting the proposals in 
this document. The most helpful comments reference a specific portion 
of the proposal, explain the reason for any recommended change, and 
include supporting data. We ask that you send us two copies of written 
comments.
    We will file in the docket all comments we receive, as well as a 
report summarizing each substantive public contact with FAA personnel 
concerning this proposed rulemaking. The docket is available for public 
inspection before and after the comment closing date. If you wish to 
review the docket in person, go to the address in the ADDRESSES section 
of this preamble between 9 a.m. and 5 p.m., Monday through Friday, 
except Federal holidays. You may also review the docket using the 
Internet at the web address in the ADDRESSES section.
    Privacy Act: Using the search function of our docket Web site, 
anyone can find and read the comments received into any of our dockets, 
including the name of the individual sending the comment (or signing 
the comment on behalf of an association, business, labor union, etc.). 
You may review DOT's complete Privacy Act Statement in the Federal 
Register published on April 11, 2000 (65 FR 19477-78) or you may visit 
http://dms.dot.gov.

    Before acting on this proposal, we will consider all comments we 
receive on or before the closing date for comments. We will consider 
comments filed late if it is possible to do so without incurring 
expense or delay. We may change this proposal in light of the comments 
we receive.
    If you want the FAA to acknowledge receipt of your comments on this 
proposal, include with your comments a pre-addressed, stamped postcard 
on which the docket number appears. We will stamp the date on the 
postcard and mail it to you.

Proprietary or Confidential Business Information

    Do not file in the docket information that you consider to be 
proprietary or confidential business information. Send or deliver this 
information directly to the person identified in the FOR FURTHER 
INFORMATION CONTACT section of this document. You must mark the 
information that you consider proprietary or confidential. If you send 
the information on a disk or CD ROM, mark the outside of the disk or CD 
ROM and also identify electronically within the disk or CD ROM the 
specific information that is proprietary or confidential.
    Under 14 CFR 11.35(b), when we are aware of proprietary information 
filed with a comment, we do not place it in the docket. We hold it in a 
separate file to which the public does not have access, and place a 
note in the docket that we have received it. If we receive a request to 
examine or copy this information, we treat it as any other request 
under the Freedom of Information Act (5 U.S.C. 552). We process such a 
request under the DOT procedures found in 49 CFR part 7.

Availability of Rulemaking Documents

    You can get an electronic copy using the Internet by:
    (1) Searching the Department of Transportation's electronic Docket 
Management System (DMS) Web page (http://dms.dot.gov/search);    (2) Visiting the Office of Rulemaking's Web page at http://

http://www.faa.gov/avr/arm/index.cfm; or


[[Page 77263]]

    (3) Accessing the Government Printing Office's Web page at http://www.gpoaccess.gov/fr/index.html
.

    You can also get a copy by sending a request to the Federal 
Aviation Administration, Office of Rulemaking, ARM-1, 800 Independence 
Avenue, SW., Washington, DC 20591, or by calling (202) 267-9680. Make 
sure to identify the docket number, notice number, or amendment number 
of this rulemaking.

Authority for This Rulemaking

    The FAA's authority to issue rules regarding commercial space 
transportation safety is found under the general rulemaking authority, 
49 U.S.C. 322(a), of the Secretary of Transportation to carry out 
Subtitle IX, Chapter 701, 49 U.S.C. 70101-70121 (Chapter 701). 
Additionally, the recently enacted Commercial Space Launch Amendments 
Act of 2004 (the CSLAA), describes in more detail the scope of the 
agency's authority. Under 49 U.S.C. 70105(b)(4), no holder of a license 
or permit may launch or reenter crew unless the crew has received 
training and has satisfied medical or other standards specified in a 
license or permit in accordance with FAA regulations. This rulemaking 
would impose crew qualification and training requirements and implement 
the statutory requirement that an operator advise the flight crew that 
the U.S. Government has not certified the launch vehicle as safe. 
Section 70105(b)(5) provides for the FAA to promulgate regulations for 
the holder of a license or permit to inform a space flight participant 
in writing about the risks of launch or reentry. Under the FAA's public 
safety mandate, the FAA here proposes training and security 
requirements for a space flight participant.

Table of Contents

I. Background
II. General Discussion of the Proposals
    A. Launch and Reentry With Crew
    1. Definitions Applicable to Crew
    2. Authority and Process
    3. Pilot and Remote Operator Qualifications
    4. Medical Standards for Crew
    5. Crew Training
    6. Crew Notification
    7. Environmental Control and Life Support System
    8. Smoke Detection and Fire Suppression
    9. Human Factors
    10. Verification Program
    11. Crew and Space Flight Participant Waiver of Claims Against 
U.S. Government
    B. Launch and Reentry With a Space Flight Participant
    1. Risk to Space Flight Participants
    2. Informed Consent
    3. Physical Examination
    4. Space Flight Participant Training
    5. Security Requirements
    C. Financial Responsibility and Waiver of Liability
    1. Proposal To Combine Parts 440 and 450
    2. Customers of Permittee
    3. Space Flight Participants and Crew
III. Rulemaking Analyses and Notices
IV. The Proposed Amendment

I. Background

    Chapter 701 authorizes the Secretary of Transportation and, through 
delegations, the FAA's Associate Administrator for Commercial Space 
Transportation, to oversee, license, and regulate both launches and 
reentries, and the operation of launch and reentry sites when carried 
out by U.S. citizens or within the United States. 49 U.S.C. 70104, 
70105; U.S. Federal Aviation Administration, Commercial Space 
Transportation Delegations of Authority, N1100.240 (Nov. 21, 1995). 
Chapter 701 directs the FAA to exercise this responsibility consistent 
with public health and safety, safety of property, and the national 
security and foreign policy interests of the United States, and to 
encourage, facilitate, and promote commercial space launch and reentry 
by the private sector. 49 U.S.C. 70105, 70103.
    In September 2000, the FAA issued regulations for licensing 
reusable launch vehicle (RLV) missions and for the conduct of space 
reentry activities. Commercial Space Transportation Reusable Launch 
Vehicle and Reentry Licensing Regulations; Final Rule, 65 FR 56618, 
56620 (Sept. 19, 2000). Later, the FAA developed ``Draft Guidelines for 
Licensed Suborbital RLV Operations With Flight Crew,'' (Oct. 7, 2003).
    Historically, license applicants have consisted of operators of 
expendable launch vehicles, which do not carry crew or passengers. 
Accordingly, the FAA's regulation of space launch activities has mainly 
addressed the safety of the uninvolved public from launch hazards. New 
developments in technology, potential markets, and the law have changed 
this. Lured by a prize of $10 million, a group of inventors and 
entrepreneurs began working to create suborbital reusable launch 
vehicles to take private citizens into space for short periods of 
weightlessness and a view of outer space and their home planet. The X 
Prize Foundation, which set up a $10 million prize for this contest, 
modeled the prize after early aviation prizes, intending the X Prize to 
jumpstart the space tourism industry.
    The FAA in April 2004, issued two RLV mission specific licenses: 
one for Scaled Composites and one for XCOR Aerospace in accordance with 
14 CFR parts 431 and 440. These licenses apply to suborbital RLV 
missions with a pilot on board.\1\ The FAA used the draft flight crew 
guidelines to assist in these two license application evaluations. To 
protect the safety of the uninvolved public, the FAA imposed 
operational requirements, as well as a system safety process to 
identify hazards and risk mitigation measures, including operational 
constraints. Operational constraints included restraints on the 
trajectory of SpaceShipOne over specific populated areas.
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    \1\ The FAA treats a pilot as part of a flight safety system for 
protecting the public.
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    Scaled Composites won the X Prize on October 4, 2004, by being the 
first to finance privately, build, and launch a vehicle able to carry 
three people to an altitude of 100 kilometers (62 statute miles). 
Scaled Composites' SpaceShipOne had to return safely to Earth, and then 
repeat the trip within two weeks.
    Although Scaled Composites won the prize, other developers were 
contestants and are still working to reach space. More than 20 teams 
from seven countries registered to compete. Concurrent with Scaled 
Composites winning the X Prize, a new company, Virgin Galactic, 
announced that it would offer rides to space on a new model of the 
vehicle that won the prize. Space may soon open up to citizen 
explorers, businesses, and tourists.
    In December 2004, Congress passed the Commercial Space Launch 
Amendments Act. The CSLAA requires that a phased approach be used in 
regulating commercial human space flight; that is, regulatory standards 
governing human space flight must evolve as the industry matures. In 
the near term, the CSLAA requires that the FAA: (1) Issue guidelines or 
advisory circulars to guide the implementation of the CSLAA as soon as 
practical after the date of its enactment; (2) issue proposed 
regulations relating to crew, space flight participants, and permits 
for launch or reentry of reusable suborbital rockets not later than 
December 23, 2005; and (3) issue final regulations not later than June 
23, 2006. On February 11, 2005, the FAA issued ``Draft Guidelines for 
Commercial Suborbital Reusable Launch Vehicle Operations With Flight 
Crew'' and ``Draft Guidelines for Commercial Suborbital Reusable Launch 
Vehicle Operations With Space Flight Participants.''
    The CSLAA made the FAA responsible for the safety of space flight 
participants and crew. The CSLAA limits, however, the FAA's ability to

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carry out that responsibility for eight years from the date of 
enactment. The CSLAA requires that a space flight participant be 
informed of the risks of taking a ride on a rocket, and the FAA may 
issue regulations requiring space flight participants to undergo an 
appropriate physical examination.\2\
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    \2\ The FAA has decided against prescribing specific medical 
requirements for space flight participants at this time. Instead, 
the FAA issued guidelines recommending that space flight 
participants obtain an evaluation of their medical history to 
determine whether a physical examination might be appropriate. 
``Draft Guidelines for Commercial Suborbital Reusable Launch Vehicle 
Operations with Space Flight Participants,'' Federal Aviation 
Administration (Feb. 11, 2005).
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    These rules also would apply to expendable launch vehicle (ELV) 
launches with humans on board. Although the FAA prepared this NPRM to 
accommodate reentry and reusable launch vehicles, the FAA is aware that 
there are plans to launch crewed vehicles on ELVs. Expendable launch 
vehicles could carry humans on board as they did during the Mercury, 
Gemini and Apollo programs. This could involve mounting crew capsules 
on ELVs in order to launch crew or space flight participants to orbit. 
Unless the National Aeronautics & Space Administration (NASA) or the 
Department of Defense conducted the launch for the Federal Government, 
the FAA would license these activities as commercial launches and 
reentries and the requirements proposed here would apply.
    The requirements proposed as a new part 460 would apply to 
licensees and permittees under Chapter 701, and to crew and space 
flight participants on board a launch vehicle and to a remote operator. 
This rulemaking proposes crew notification, medical, qualification, and 
training requirements. The FAA would also establish requirements 
governing environmental control and life support systems, smoke 
detection and fire suppression, and human factors. The FAA would 
require an operator to account for human factors whenever the crew must 
perform safety-critical roles. Additionally, the FAA proposes to 
require an operator to implement a verification program sufficient to 
verify the integrated performance of a vehicle's hardware and any 
software in an operational flight environment before allowing a space 
flight participant to be on board.
    The FAA would also impose requirements for space flight 
participants. This rulemaking would require an operator to inform a 
space flight participant of the risks of space travel generally and of 
the operator's vehicle in particular. An operator would also have to 
advise a space flight participant that the U.S. Government has not 
certified the vehicle as safe for carrying flight crew or space flight 
participants. Although the FAA continues to recommend that a 
prospective space flight participant obtain a physical examination 
before embarking on a journey to space, the FAA does not propose to 
require it here. This rulemaking would require training and general 
security requirements for a space flight participant.
    Finally, the FAA proposes to implement the changes to its financial 
risk sharing and responsibility requirements due to the recently 
enacted Commercial Space Launch Amendments Act of 2004. In brief, the 
CSLAA requires crew and space flight participants to enter into 
reciprocal waivers of claims with the U.S. Government. Crew includes 
flight crew and any remote operator. The CSLAA expressly excludes space 
flight participants for eligibility from indemnification against third 
party claims. Launches and reentries performed pursuant to a permit are 
also excluded from eligibility for indemnification. The FAA is 
otherwise addressing its new authority under the CSLAA to issue permits 
in a separate rulemaking.

II. General Discussion of the Proposals

    The proposed requirements would apply to licensees and permittees 
under Chapter 701, and to crew and space flight participants on board a 
launch vehicle. This rulemaking would define crew and flight crew and 
propose crew notification, medical, qualification, and training 
requirements. It would also impose informed consent and training 
requirements for space flight participants.

A. Launch and Reentry With Crew

1. Definitions Applicable to Crew
    This rulemaking would apply to flight crew and any remote operator 
not on board the vehicle. The only ground crew to which this rulemaking 
would apply is a remote operator.
    In keeping with the statutory definition, the FAA would define crew 
to mean any employee or independent contractor of a licensee, 
transferee, or permittee, or of a contractor or subcontractor of a 
licensee, transferee, or permittee, who performs activities in the 
course of that employment directly relating to the launch, reentry, or 
other operation of or in a launch vehicle or reentry vehicle that 
carries human beings. Although the CSLAA only mentions employees as 
being eligible for the status of crew, the FAA considers flight crew 
part of the flight safety system. Therefore the FAA proposes to treat 
as crew any human being who is part of the flight safety system, 
regardless of whether the person's status is that of an employee or 
independent contractor. The FAA would treat as crew those persons on 
board a vehicle and any remote operator of the vehicle. A remote 
operator would only include someone engaged actively in controlling the 
vehicle, and not someone with some ability to affect the vehicle but no 
ability to control its course. Congress provided the agency some 
latitude in determining what individuals on the ground to include in 
the definition of crew. This has implications for safety, notification 
requirements, and crew waivers of liability against the U.S. 
Government. The CSLAA itself defines crew broadly to include a person 
``who performs activities in the course of that employment directly 
relating to the launch, reentry, or other operation of or in a launch 
vehicle or reentry vehicle that carries human beings.'' 49 U.S.C. 
70102(2). The House proposed this definition in H.R. 3752, a 
predecessor bill to H.R. 5382, which was enacted as the CSLAA. 
Accordingly, the House Report accompanying H.R. 3752 may be useful in 
interpreting the CSLAA. The report states that the FAA should not 
interpret the definition of crew ``overly broadly'' to encompass 
individuals with peripheral roles, such as sales agents or insurance 
providers. Commercial Space Launch Amendments Act, H.R. 3752, H. Rep. 
429, 108th Cong., 2d Sess. (Mar. 1, 2004). Nonetheless, the House 
Science Committee contemplated that the FAA would apply it more broadly 
than pilots or remote operators of a launch vehicle. Id.
    The FAA's proposed definition of crew would include all crew on 
board, namely the flight crew \3\, as part of the crew, and thus give a 
broader meaning to ``crew'' than one consisting of only a pilot or 
remote operator. Because Congress contemplated operation of or in a 
vehicle (emphasis added), Congress appears to have intended some 
persons on the ground to be included as part of the crew. A remote 
operator of a vehicle satisfies the Congressional direction to include 
some ground crew as part of the crew. Also, a remote operator is 
someone whose employment would directly relate to a launch or reentry, 
thus satisfying the other statutory prong.
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    \3\ The FAA proposes to define flight crew as crew that is on 
board a vehicle during a launch or reentry.

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    If Congress meant to include as ground crew those who are involved 
only in preparation but who are not on board during flight, certain 
perverse consequences would ensue. For example, under such an 
interpretation, the CSLAA would require an operator to inform employees 
working on the ground that the U.S. Government has not certified a 
vehicle as safe for carrying crew or space flight participants. 49 
U.S.C. 70105(b)(4)(B). In light of the fact that those employees would 
not be on board, this would not be a meaningful exercise because they 
do not need the warning. A statute should not be read to reach an 
irrational result, and the FAA will not do so here.
    XCOR commented on the FAA's February 11, 2005 draft guidelines on 
flight crew. Those comments are available in the docket. XCOR commented 
that flight crew, in the RLV community, is usually taken to mean those 
crewmembers whose roles are essential to public safety. XCOR believes 
that the definition of flight crew in the guidelines is too broad 
because it would include a pilot, a flight engineer, and a steward. 
XCOR maintains that although a pilot's function is essential to public 
safety, and a flight engineer's function may be essential to public 
safety, a steward's duty to maintain the safety and comfort of 
passengers is not essential to public safety if the vehicle is designed 
or operated so that unruly or panicked passengers cannot interfere with 
the operation of the vehicle. Consequently, XCOR would define what 
commercial aviation calls ``cabin crew,'' those crewmembers aboard a 
vehicle whose roles are not essential to public safety, to distinguish 
them from those crewmembers aboard the vehicle whose roles are 
essential to public safety. Furthermore, XCOR recommends a definition 
of flight crew that excludes cabin crew so that the qualification, 
training, and medical guidelines for flight crew would not apply to 
such cabin crew as a steward.
    The FAA's training proposal should alleviate XCOR's concerns in 
this area. Although the FAA proposes to employ a definition of flight 
crew that would encompass the same persons as the definition of the 
draft guidelines, the FAA would not require all members of a flight 
crew to undergo the same training or to possess the same 
qualifications. Most of a flight attendant's or steward's duties will 
not affect public safety. Those duties would not be the subject of 
regulatory oversight. However, some duties might affect public safety, 
such as preventing space flight participants from having access to the 
flight deck and interfering with the pilot. In order to address the 
various flight crew roles and responsibilities, the FAA proposes that 
each flight crew member train for his or her role. This would mean that 
a flight attendant or steward would not be required to undergo 
unnecessary training, only that required for his or her role.
2. Authority and Process
    The CSLAA allows the FAA to impose crew training requirements. 
Additionally, the FAA retains full authority to continue protecting the 
uninvolved public. Accordingly, as it has in the past, the FAA finds 
that it needs to protect the crew when it is part of the flight safety 
system, and proposes crew training requirements that are intended for 
the safety of members of the public, including those on the ground, in 
the air, and in space. In a piloted vehicle, the vehicle's flight crew 
is an integral part of its flight safety system. This is because they 
are in a position to respond to risk to the public, such as aborting 
the flight or maneuvering a vehicle away from populated areas. For 
purposes of public safety, therefore, the FAA proposes a number of crew 
training requirements.
    In brief, the FAA would require that crew be properly trained. As 
authorized by the CSLAA, the FAA would require each crew member to 
receive training and satisfy medical or other standards as specified in 
a license or permit. 49 U.S.C. 70105(b)(4)(A). As is the case now, this 
means that the FAA will be able to add terms and conditions specific to 
a particular vehicle to a license or permit. If for example, a 
particular situation required additional training measures, the FAA 
would impose them through the license or permit process. Where the FAA 
proposes a performance standard, the agency also proposes that an 
operator describe to the FAA during the license or permit process the 
measures it would take to satisfy that performance standard. 
Accordingly, the FAA proposes some changes to parts 415, 431 and 435 to 
ensure that an operator demonstrates how it will achieve compliance 
before it obtains a license.\4\ Where the FAA requirements would be 
more specific, the FAA does not propose to require a demonstration from 
an applicant, merely compliance. For example, an applicant would not 
have to demonstrate that informed consent has been obtained from a 
space flight participant as part of its application process.
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    \4\ Likewise, for an applicant seeking an experimental permit 
under 49 U.S.C. 70105a, the FAA is currently conducting another 
rulemaking to ensure that a permit applicant demonstrates compliance 
with proposed part 460.
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3. Pilot and Remote Operator Qualifications
    The FAA would require, for purposes of proposed part 460, that a 
pilot and any remote operator of a launch or reentry vehicle that will 
operate in the National Airspace System (NAS), possess an FAA pilot 
certificate with an instrument rating and that they demonstrate the 
knowledge of the NAS necessary to operate the vehicle. The pilot or 
remote operator would also need to have the aeronautical experience and 
skills necessary to pilot and control the vehicle. In order to obtain a 
pilot certificate, a person must become educated in the rules of 
operating in the NAS. A pilot certificate also provides evidence of a 
person's skill level. When the FAA licensed SpaceShipOne missions, the 
agency accepted the pilots' commercial pilot certificates as 
demonstrating adequate skills. A person holding a sport pilot 
certificate or a student pilot would be unlikely to satisfy this 
standard.
    The FAA does not propose to specify the particular kind of pilot 
certificate required nor what category, class, type or instrument 
ratings are needed because different operators are proposing vehicles 
of varied and unique designs. For example, there are numerous possible 
vehicle configurations and operations: vertical take-off and landing 
and horizontal take-off and landing. A vehicle may or may not be a 
winged vehicle, and it may or may not be air launched. It may land 
powered like an airplane or unpowered like a glider. Accordingly, the 
FAA would assess, through the licensing or permitting process, the type 
of pilot certificate, flight experience, and mission-specific training 
for proposed operations that a pilot possessed. For example, during its 
licensing evaluation, the FAA took into consideration the extensive 
mission-specific training that the SpaceShipOne pilots underwent with a 
ground simulator and aircraft with operating characteristics similar to 
SpaceShipOne and that these pilots possessed commercial pilot 
certificates.
    The FAA proposes to require an instrument rating as well. The FAA 
anticipates that regardless of the kind of vehicle used, there will be 
times when a pilot will be relying on instrument skills and competency. 
Accordingly, a person who held an instrument rating would indicate an 
appropriate level of skill and competency to pilot these launch and 
reentry vehicles.

[[Page 77266]]

    The FAA's February 11, 2005 draft crew guidelines recommend that a 
pilot hold ratings to operate one or more aircraft with similar 
characteristics for as many phases of the mission as practicable. The 
guidelines use the term ``as practicable'' because the FAA realizes 
that some launch vehicles will not possess operating characteristics 
similar to existing aircraft. The FAA continues to consider this 
advisable, but because of the differences in proposed vehicles and the 
likelihood that there will be vehicles without characteristics similar 
to aircraft, the FAA will not, other than an instrument rating, mandate 
such a requirement through regulation. Nonetheless, if an operator 
proposed to demonstrate the adequacy of the training of its crew by 
showing that a pilot held ratings for similar operations, the FAA would 
look favorably on such a demonstration. In addition to holding 
commercial pilot certificates, the SpaceShipOne pilots held ratings to 
operate aircraft with similar characteristics for certain phases of 
flight of SpaceShipOne and underwent rigorous training.
    The FAA considered two alternatives to its proposed requirements. 
The FAA considered not requiring a pilot certificate at all, and only 
relying on the proposed performance requirement that a pilot possess 
the necessary skills and experience. This is because possession of a 
pilot certificate could demonstrate that a pilot possessed the skills 
and experience necessary to control the vehicle. Thus, a requirement to 
possess a pilot certificate might be redundant. Alternatively, the FAA 
could require that the pilot or any remote operator possess a 
commercial pilot certificate to demonstrate the minimum pilot skills 
required by 14 CFR part 61. In that case, the FAA would likely require 
in the final rule that a pilot or any remote operator hold a valid and 
current commercial pilot certificate with an instrument rating. 
Additionally, the FAA would require that the pilot or remote operator 
possess aeronautical experience and skills necessary to pilot and 
control the launch and reentry vehicle being applied for. The 
aeronautical experience would include a certain amount of aeronautical 
experience in an aircraft in flight, instrument training, and training 
in the launch and reentry vehicle being applied for. The FAA may still 
adopt one of these proposals and requests comment on these options as 
well.
    Conversely, the FAA considered proposing that a remote operator not 
be required to possess a pilot certificate. In this case, a remote 
operator would still have to demonstrate knowledge of the NAS and have 
the aeronautical experience and skills necessary to pilot and control 
the vehicle. In aviation, there is no consensus on whether requiring 
piloting experience is necessary or appropriate for remote operators. 
The U.S. Air Force currently requires such experience for remote 
operators of unmanned aerial vehicles (UAVs).\5\ Thus, U.S. Air Force 
remote operators are experienced pilots who have at least one 
operational tour of duty in another combat aircraft. Unlike the U.S. 
Air Force, the U.S. Army does not require a remote operator of a UAV to 
be a pilot.
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    \5\ The applicability depends, at least in part, on whether 
controlling the vehicle involves ``stick-and-rudder'' control 
inputs, or simply punching buttons to send commands to a vehicle 
autopilot.
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    Regardless of vehicle design, having a pilot certificate and 
aeronautical experience provides evidence of a basic level of knowledge 
of and experience with the NAS, such as communications, navigation, 
airspace limitations, and other aircraft traffic avoidance, that will 
help promote public safety. Furthermore, a pilot with an instrument 
rating has been trained to fly and navigate entirely by reference to 
flight instruments.
    The FAA requests comments on whether a remote operator of a launch 
or reentry vehicle with a human on board should possess a pilot 
certificate. The FAA anticipates that a pilot certificate would serve 
as the clearest indication that a person has the necessary knowledge of 
the NAS and safety issues. The FAA recognizes, however, that there may 
be other, less burdensome methods of demonstrating compliance and 
requests comment accordingly.
4. Medical Standards for Crew
    The FAA would require that each member of the flight crew and any 
remote operator possess and carry a second-class airman medical 
certificate issued in accordance with 14 CFR part 67 and issued within 
12 months prior to launch or reentry. The physical and mental state of 
the flight crew has to be sufficient to perform safety-related roles.
    Second-class airman medical certification standards have provided 
an acceptable level of safety for commercial pilots for many years. 
Commercial pilots are medically certificated to a level between a 
private pilot and an airline transport pilot; the former requiring less 
stringent vision standards and having longer certificate validity, and 
the latter requiring more stringent cardiovascular and certificate 
validity standards. An FAA second-class airman medical certificate is 
issued to an applicant who may reasonably be expected, for the year-
long duration of the certificate, to perform safely the duties required 
to exercise commercial pilot privileges.
    Different aviation pilot certificates require different medical 
certificates. The validity of a particular airman medical certificate 
relates to the aviation privilege being exercised. For example, a 
first-class airman medical certificate is valid for 6 months for 
aviation privileges requiring a first-class airman medical certificate, 
for 12 months for those requiring a second-class airman medical 
certificate, and for 24 or 36 months for those requiring a third-class 
airman medical certificate. Because space operations are not defined in 
terms of privileges being exercised, the FAA does not need to set forth 
a particular validity structure. Furthermore, for purposes of space 
operations, the FAA does not need to describe a medical certificate by 
the aviation operations for which it is valid. In the space context, 
the FAA only requires that it be issued within the past 12 months, in 
keeping with the 12-month validity period used in aviation for pilots 
exercising commercial pilot privileges.
    Applicants for any class of airman medical certificate must meet 
minimum vision, hearing, mental, neurological, and basic cardiovascular 
standards. Such standards are required to ensure that pilots are able 
to perform their aviation duties safely. For example, commercial pilots 
need adequate intermediate vision to monitor aircraft instruments, and 
other cockpit equipment, and adequate color vision to be able to 
distinguish aviation signal colors. They need an acceptable level of 
hearing to be able to communicate with Air Traffic Control, any flight 
crew, other crewmembers, or passengers. They require mental stability 
to exercise sound judgment.
    Part 67 was developed for aviation. The FAA will, through licensing 
and permitting, acquire experience with medical certification of space 
flight crews. The FAA considers, however--at least during these early 
stages, primarily of suborbital space flight--that second-class airman 
medical certification standards would provide a minimum level of 
medical certification adequate for space flight crews to perform 
safety-critical roles.
    In addition to requiring a second-class medical certificate, the 
FAA proposes a performance standard, which could be tailored to the 
different stresses caused by different vehicles. The performance 
standard would require each member of the crew to be able to withstand 
the

[[Page 77267]]

stresses of space flight sufficiently to carry out his or her role on 
board so that the vehicle will not harm the public.
    The FAA does not, at this early stage of development of the 
industry, presume to anticipate what environmental stresses any 
particular crew member may have to endure to operate a vehicle. 
Nonetheless, although different vehicles may impose different stresses, 
those stresses are likely to include microgravity, acceleration, and 
vibration. Different vehicles and flight profiles may subject those on 
board to different stresses. The FAA therefore would not want yet to 
impose requirements that apply across the board, preferring, instead, 
to evaluate each separately through the licensing or permitting 
process. For example, SpaceShipOne's pilots underwent training that 
included aerobatic maneuvers and unusual attitude recovery training to 
match the anticipated stresses of the eventual flight environment. 
Unusual attitudes may include high rates of roll and all-attitude 
spins. The FAA found that SpaceShipOne's pilot training demonstrated 
the ability to withstand the anticipated stresses, such as those due to 
vehicle acceleration and deceleration.
    The FAA would implement this broad performance standard on a case-
by-case basis. An operator would have to demonstrate satisfaction of 
this standard in the course of applying for a license, a permit or a 
modification to a license or permit. Grant of a license or permit would 
be conditioned, as it is now, on an operator abiding by the 
representations made in its application. The FAA anticipates that an 
operator may change crew members from time to time. Because the initial 
grant of a license or permit may have been conditioned on the 
acceptability of the original crew, the FAA would have to modify the 
license. Alternatively, the FAA could foresee an operator describing 
its testing process sufficiently to demonstrate that the operator would 
be able to ascertain whether an individual crew member could withstand 
the specific stresses of a given vehicle.
    The case-by-case assessments of whether a flight crew member 
satisfied the proposed performance standard of withstanding the 
stresses of space flight would serve two purposes. The assessments 
would ensure that any particular member of the flight crew could 
perform his or her duties in whatever environment was proposed. 
Additionally, these assessments would provide data for the FAA to 
develop more concrete standards as the industry progresses. The FAA 
does not expect orbital commercial human space flight to occur in the 
immediate future. Nonetheless, it does anticipate its eventual 
appearance, and recognizes that different standards may be required for 
orbital and suborbital flights. The FAA will gather data for the 
development of those standards over time.
5. Crew Training
    The FAA would require each member of a crew be trained to ensure 
that the vehicle will not harm the public. The crew would also be 
trained to respond to planned and anomalous events. The FAA would 
require an operator to develop a mission- and configuration-specific 
training program for a pilot and any remote operator and define 
standards by which the pilot and remote operator would be trained so 
that the vehicle would not harm the public. The operator's training 
program would include for each mission, either simulation training, 
training on a similar aircraft, flight testing, or another training 
method approved by the FAA.
    The FAA would require an operator to ensure that any crew-training 
device used to meet the training program requirements realistically 
represented the vehicle's configuration and mission or the operator 
would have to inform the crew member being trained of the differences. 
XCOR through its comments on the FAA's February 11, 2005 draft 
guidelines on flight crew states that some early flight crew training 
devices will not be realistic. According to XCOR, this lack of realism 
will not mean they are useless as training devices because it may be 
better to train the flight crew on a simulator with known differences 
from the flight article than not to train them on a simulator at all. 
XCOR recommended that training devices with known dissimilarities be 
allowed but the dissimilarities should be minimized, and flight crew 
should be aware of the differences in behavior between the training 
device and the flight article.
    The FAA would require crew training to include nominal (i.e., 
normal) and non-nominal flight conditions. Training to respond to 
planned and unplanned events would allow the crew to better respond to 
emergencies. The crew would obtain a competent understanding of vehicle 
systems, vehicle characteristics, and vehicle capabilities, as well as 
operational, malfunction, and contingency procedures. The non-nominal 
situations would include aborts and emergencies.
    The FAA would require additional training for a pilot and any 
remote operator of a launch or reentry vehicle. A pilot would have to 
undergo training in procedures that direct the vehicle away from the 
public in the event the flight crew had to abandon the vehicle during 
flight. The pilot and any remote operator would also have to train in 
each mode of control or propulsion, including any transition between 
modes, so that the pilot would be able to control the vehicle 
throughout the flight regime. For example, the pilot and any remote 
operator would have to be able to maintain control of a vehicle during 
a transition from aerodynamic control surfaces to a reaction control 
system and vice versa. Likewise, training would be necessary for any 
transition from an air-breathing to a rocket propulsion system and 
vice-versa.
    The FAA proposes a number of requirements for a training program. 
The FAA would require an operator to continually update its training 
program to ensure that training incorporated lessons-learned from both 
training and operational missions. This would be accomplished with a 
documented system to track revisions and updates. To that end, the FAA 
would require a training program to capture, in writing, lessons-
learned as experience was gained. Experience will reveal additional 
events and anomalies to which a crew would have to respond. The flight 
crew should be prepared for events and anomalies discovered during 
training and mission operations. The FAA would require a licensee or 
permittee to document the training completed by each member of the crew 
and maintain the documentation for each active member of the crew. 
Accurate documentation is important for tracking and ensuring that crew 
are up-to-date with their training requirements.
    The FAA would require an operator to establish a recurrent training 
schedule and ensure that all crew qualifications and training were 
current before starting to operate a vehicle with humans on board. This 
would ensure that all crew were qualified and had received the 
necessary training at the time of operation. The FAA's February 11, 
2005 crew guidelines recommended that prior to each mission, the flight 
crew receive vehicle and mission-specific training. Rocketplane 
Limited, Inc. through its April 28, 2005 comments on the FAA's crew 
guidelines stated that retraining would be an important requirement if 
there were periods of inactivity between flights. Rocketplane Limited, 
Inc. recommended retraining be required when more than thirty days 
elapsed between flights rather than

[[Page 77268]]

requiring it prior to each mission. XCOR stated that common sense 
should determine the appropriate level of training necessary to safely 
conduct the flight. Hence, the FAA would require an operator to 
establish a recurrent training schedule.
6. Crew Notification
    The FAA would require an operator to inform, in writing, any 
individual serving as flight crew and each remote operator, that the 
United States Government has not certified the launch vehicle as safe 
for carrying crew or space flight participants. If someone is operating 
a vehicle remotely, the FAA believes that Congress intended that the 
operator advise the remote operator of the risks he or she is taking 
with the people on board.
7. Environmental Control and Life Support System
    The proper functioning of the crew is necessary to ensure 
protection of the public. The FAA would require an operator to provide 
atmospheric conditions adequate to sustain life and consciousness for 
all inhabited areas within a launch or reentry vehicle. The flight crew 
could perform the roles necessary to carry out this proposed 
requirement. Proper environmental control is essential for people and 
for the functioning of safety-critical equipment on board a vehicle.
    There are many aspects to controlling the atmosphere of a vehicle 
that an operator would have to consider. The FAA proposes to require an 
operator to monitor and control the composition and any revitalization 
of the atmosphere to maintain safe levels for flight crew respiration 
during nominal and non-nominal operations. The atmosphere in inhabited 
areas should have safe levels of oxygen and carbon dioxide to allow 
normal respiration. Because of normal human metabolic effluent, carbon 
dioxide will accumulate and it may be necessary for it to be 
removed.\6\
---------------------------------------------------------------------------

    \6\ Guidance on environmental control and life support systems 
may be found in ``Designing For Human Presence in Space: An 
Introduction to Environmental Control and Life Support Systems'' 
(NASA RP-1324) and ``Man-Systems Integration Standards'' (NASA-STD-
3000).
---------------------------------------------------------------------------

    The FAA would require a licensee, permittee or flight crew to 
monitor and control the pressure of the atmosphere to maintain safe 
levels for flight crew respiration. An essential aspect of the body's 
ability to absorb oxygen from the air is the atmospheric pressure, 
specifically the partial pressure of oxygen (pO2). Total 
pressure and the partial pressure of carbon dioxide should also be 
monitored and kept at levels sufficient to ensure consciousness and 
proper functioning of the crew.
    An operator would have to monitor and control the temperature of 
the atmosphere to maintain safe levels for the flight crew. Although 
humans can survive in a relatively wide range of temperatures, it is 
essential to regulate the temperature within a cabin or suit. Requiring 
proper temperature control would ensure the flight crew maintained a 
degree of situational awareness sufficient for these individuals to 
perform their job. An operator would also have to monitor and control 
the ventilation and circulation of the cabin atmosphere to maintain 
safe levels for the flight crew. Requiring proper ventilation would 
ensure the flight crew maintained situational awareness by reducing 
stagnant air, which could contain a high concentration of carbon 
dioxide.
    The FAA proposes to require an operator to monitor and control the 
humidity of the cabin atmosphere to maintain safe levels for the flight 
crew. If a flight crew depended on visual information through a window, 
humidity control would be necessary to avoid windows fogging and 
condensation that can hinder the pilot's vision. The FAA proposes to 
require an operator to control contamination and particulate 
concentrations for the flight crew to prevent interference with the 
crew's ability to operate the vehicle. The atmosphere should be free 
from harmful or hazardous concentrations of gases, vapors, and 
particulates that can be inhaled.
    The FAA proposes to require an operator to provide an adequate 
redundant or secondary oxygen supply for the flight crew due to the 
extreme importance of having sufficient oxygen to enable the flight 
crew to function. In the event of a failure of the primary atmospheric 
control system, the redundant or secondary system would supply oxygen 
for the flight crew.
    Lastly, the operator would have to provide a redundant means of 
preventing cabin depressurization or prevent incapacitation of the 
flight crew in the event of a loss of cabin pressure. If a loss of 
pressure were to occur, it could have serious physiological effects on 
the flight crew, including hypoxia, decompression sickness, 
hypothermia, and vaporization of tissue fluids. This performance 
standard could be satisfied by different means. For example, in 
addition to conducting ground tests and prelaunch cabin leak checks, 
Scaled Composites used dual pane windows, dual seals on cabin pass-
throughs, dual door seals, and dual pressurization systems for 
SpaceShipOne. Use of a pressure suit to prevent incapacitation of the 
flight crew if there were a loss of cabin pressure could be another 
means to satisfy this performance standard.
8. Smoke Detection and Fire Suppression
    The FAA would require an operator or flight crew to have the 
ability to detect smoke and suppress a cabin fire to prevent 
incapacitation of the flight crew. Prior to a fire occurring, smoke can 
rapidly incapacitate a pilot or obscure the pilot's vision such that 
the vehicle cannot be flown safely. A crew should be able to respond to 
a vehicle fire so as not to risk the public.
9. Human Factors
    The FAA would require an operator to account for human factors so 
that the flight crew could perform safety-critical roles. Human factors 
engineering is a discipline that applies knowledge of human 
capabilities and limitations to the design of systems, machines, work 
environment, and operations. Human factors considerations draw on 
multiple disciplines such as psychology, physiology, engineering, 
ergonomics, and medicine. The design and layout of displays and 
controls and the amount of crew workload can affect the ability of the 
crew to perform safety-critical roles. Therefore, the FAA would require 
an operator to account for human factors that can affect the flight 
crew's ability to perform safety-critical roles.
    Mockups, simulators, and human factors analyses such as functional 
and task analyses are examples of human factors-related applications to 
assess human-machine interfaces or human-in-the loop functions and 
performance. ``The Human Factors Design Standard'' (HF-STD-001, FAA), 
``DOD Design Criteria Standard--Human Engineering'' (MIL-STD-1472), 
``Flying Qualities of Piloted Aircraft'' (MIL-HDBK-1797), and ``Man-
Systems Integration Standards'' (NASA-STD-3000) may provide guidance on 
applying human factors engineering. Human-related factors account for 
the majority of fatal aircraft accidents. Conversely, aircraft system 
malfunctions are involved in a relatively small fraction of aircraft 
incidents and accidents. Some human factors-related lessons learned 
from aviation may apply to suborbital RLVs with a flight crew on board.
    The FAA proposes to require an operator to make provisions for 
restraint or stowage of all individuals and objects in a cabin, so 
moving objects would not interfere with the flight crew's operation of 
the vehicle during flight. The FAA does not expect that this 
requirement would prevent an operator from

[[Page 77269]]

allowing space flight participants to experience weightlessness during 
a part of the mission. In order to allow this experience, the FAA would 
look at whether the restraints on space flight participants would keep 
those participants from interfering with flight crew activities. For 
example, space flight participants separated by a bulkhead might be 
considered adequately restrained.
10. Verification Program
    The FAA proposes to require an operator to implement a verification 
program sufficient to verify the integrated performance of a vehicle's 
hardware and any software in an operational flight environment. The FAA 
would require this verification program to include flight testing and 
the program would have to be successfully completed before allowing any 
space flight participant on board during a flight. An operator needs to 
establish a safety record to disclose to a space flight participant as 
required by the CSLAA. Furthermore, a space flight participant could 
not be present during flight testing in order to avoid distracting the 
flight crew from its public safety mission. The FAA intends early, 
experimental flight testing to take place with the flight crew's entire 
attention dedicated to the vehicle, not to anyone else on board.
    XCOR through its comments on the FAA's February 11, 2005 draft 
guidelines on space flight participants states that flight testing 
plays an integral role in the provision of informed consent. Without a 
flight test plan, and some number of flight tests, the RLV operator 
cannot provide the space flight participant with a valid number \7\ for 
demonstrated reliability. XCOR further noted that if an operator cannot 
provide a valid number for demonstrated reliability, then the space 
flight participant cannot give informed consent, and the operator 
cannot fly the space flight participant.
---------------------------------------------------------------------------

    \7\ The FAA interprets XCOR's use of the term ``valid number'' 
to mean a reliability number based on experience.
---------------------------------------------------------------------------

    In addition to avoiding distraction of the crew and establishing a 
safety record for disclosure to a space flight participant, flight 
testing provides other benefits. Flight testing provides data to 
validate analytical tools and models used to predict environments and 
responses. The initial flights and envelope expansion flights of a new 
vehicle typically pose the highest risk. Although flight testing does 
not eliminate risk, it does mitigate risk by potentially uncovering 
safety-related problems that may go undetected if relying only on 
analysis and ground testing. Verification of performance by flight 
testing can provide more information than ground testing and analysis 
and should be conducted to the maximum extent possible. Ground testing 
and analysis are often based on estimates and approximations, and may 
not fully simulate possible subsystem interactions in flight 
environments or may not accurately simulate actual flight conditions.
    The FAA will initially determine the amount of verification and, 
specifically, flight testing of launch or reentry vehicles on a case-
by-case basis through the licensing or permitting process. The 
appropriate level of testing depends on many factors, including the 
vehicle's mission profile, operational restrictions, test and flight 
history, component and subsystem heritage, and design and operating 
margins.
11. Crew and Space Flight Participant Waiver of Claims Against U.S. 
Government
    The CSLAA requires crew and each space flight participant to 
execute a reciprocal waiver of claims with the FAA. 49 U.S.C. 
70112(b)(2). This requirement would not apply to ground crew other than 
remote operators.
    The CSLAA does not require crew and space flight participants to 
waive claims against each other or against a licensee or permittee. The 
CSLAA does not, however, prevent an operator from making a waiver of 
liability a condition of an agreement between it and a space flight 
participant or crew.

B. Launch and Reentry With a Space Flight Participant

    This rulemaking would also establish informed consent and training 
requirements for a space flight participant on board a launch or 
reentry authorized by the FAA. Regardless of whether a space flight 
participant pays for a ride, the space flight participant must provide 
informed consent and be trained.\8\
---------------------------------------------------------------------------

    \8\ Although under the CSLAA a space flight participant may not 
provide compensation for a space flight on a launch authorized by an 
FAA permit, Congress did not foreclose the presence of a space 
flight participant on a permitted launch. Under the CSLAA, the FAA 
may issue a permit only for a reusable suborbital rocket that will 
be launched or reentered solely for research and development to test 
new design concepts, new equipment or new operating techniques; 
showing compliance with requirements as part of the process for 
obtaining a license under Chapter 701; or crew training prior to 
obtaining a license for a launch or reentry using the design of the 
rocket for which the permit would be issued. 49 U.S.C. 70105a(d)(1)-
(3). Although a space flight participant could not pay to ride on a 
rocket operated under a permit, a space flight participant could be 
on board. Congress contemplated as much in section 70105(b)(5), when 
it imposed conditions on holders of a license or permit launching or 
reentering a space flight participant.
---------------------------------------------------------------------------

1. Risk to Space Flight Participants
    The CSLAA characterizes what is commonly referred to as a passenger 
as a ``space flight participant.'' The statute defines this person to 
mean ``an individual, who is not crew, carried within a launch vehicle 
or reentry vehicle.'' 49 U.S.C. 70102(17). This characterization 
signifies that someone on board a launch vehicle or reentry vehicle is 
not a typical passenger with typical expectations of transport, but 
someone going on an adventure ride.
    Space flight remains inherently risky. Testimony concerning a 
predecessor to the CSLAA highlights the situation. Michael S. Kelly, of 
Northrop-Grumman/Xon Tech, testified that ``space flight is years from 
being routine, or even a mode of transportation per se. Transportation 
refers to reaching a desired destination. Space flight, for the 
foreseeable future, will be an end in itself.'' Commercial Space Act of 
2003, H.R. 3245, 108th Cong., (Nov. 5, 2003) (statement of Michael 
Kelly). Mr. Kelly characterized the experience as an adventure ride. 
Others have compared it to mountain climbing, skydiving, not wearing a 
helmet while riding a motorcycle, and other risky endeavors.
    New technologies carry new risks. Nonetheless, Congress recognizes 
that ``private industry has begun to develop commercial launch vehicles 
capable of carrying human beings into space, and greater private 
investment in these efforts will stimulate the Nation's commercial 
space transportation industry as a whole.'' 49 U.S.C. 70101(11). To 
that end, the CSLAA finds that ``the public interest is served by 
creating a clear legal, regulatory, and safety regime for commercial 
human space flight.'' 49 U.S.C. 70101(14). With an infant industry, 
Congress notes, ``regulatory standards must evolve as the industry 
matures, so that regulations neither stifle technology development nor 
expose crew or space flight participants to avoidable risks as the 
public comes to expect greater safety for crew and space flight 
participants from the industry.'' 49 U.S.C. 70101(15). The CSLAA is 
structured to allow the same kind of risk that mountain climbers and 
other adventurers seek in the context of space flight.
    The CSLAA provides the FAA authority to issue rules to protect 
space flight participants. 49 U.S.C. 70103. That authority, however, is 
limited. The FAA is only able to impose ``additional

[[Page 77270]]

license requirements for a launch vehicle carrying a human being for 
compensation or hire, necessary to protect the health and safety of 
flight crew or space flight participants,'' if such requirements are 
imposed pursuant to final regulations. 49 U.S.C. 70105(b)(2)(D). This 
provision appears to limit the FAA's current approach of imposing 
requirements on a case-by-case basis through license terms and 
conditions. For purposes of protecting the public on the ground, when 
an applicant proposes an operation not covered by existing rules, the 
FAA has the ability to impose license restrictions to address new 
proposals. For purposes of protecting space flight participants and 
crew, however, Congress has limited the FAA's ability to impose safety 
requirements until the FAA passes regulations. Space flight 
participants should therefore have no expectations that the FAA is 
imposing individualized or tailored requirements designed to achieve 
their protection.
    Those regulations, in turn, may only be promulgated under certain 
circumstances. 49 U.S.C. 70105(c). For eight years, the CSLAA only 
permits the FAA to issue regulations restricting or prohibiting design 
features or operating practices that result in a serious injury, 
fatality or a close call to those on board during an FAA authorized 
flight. This means that the FAA has to wait for harm to occur or almost 
occur before it can impose restrictions, even against foreseeable harm. 
Instead, Congress requires that space flight participants be informed 
of the risks. To that end, the FAA proposes notification requirements 
in subpart B of proposed part 460.
2. Informed Consent
    Congress requires that a licensed or permitted operator inform a 
space flight participant in writing about the risks of the launch and 
reentry, including the safety record of the launch or reentry vehicle 
type. 49 U.S.C. 70105(b)(5)(A). The FAA's Sec.  460.45 would implement 
this statutory provision. Additionally, the proposed regulations would 
require an operator to describe these hazards and risks in a manner 
that is understandable to the space flight participant. As with crew, 
the CSLAA requires an operator to inform each space flight participant 
that the United States Government has not certified the launch vehicle 
as safe for carrying crew or space flight participants. The FAA would 
also require a space flight participant to provide his or her consent 
in writing before boarding a vehicle.
    More specifically, under Sec.  460.45, an operator would have to 
provide the safety record of all launch or reentry vehicles that have 
carried one or more persons on board, including both U.S. Government 
and private sector vehicles. The development of commercial launch 
vehicles to carry space flight participants is in the early stages. 
Consequently, newly developed launch vehicles will not have the 
extensive flight-test history or operational experience that exists for 
commercial airplanes. Because of the lack of flight-test and 
operational experience, the risks of the operator's particular launch 
vehicle and of vehicles like it should be disclosed. The House 
Committee on Science report, H. Rep. 108-429, clarifies that Congress 
intended all government and private sector vehicles to be included in 
this disclosure. Because most human space flight to date has taken 
place under government auspices, the government safety record currently 
provides the most data. The operator should provide a record of all 
vehicles that have carried a person because they are the most relevant 
to what the operators propose. Regardless of whether humans traveled to 
space on board a vehicle destined for a suborbital or orbital mission, 
those persons traveled on new and unproven vehicles based on technology 
as new then, as what may be developed now. The vehicle and technology 
were therefore as risky. Likewise, because those vehicles were intended 
for a human on board, greater care was likely to have been taken in its 
design and construction. The same should be expected for commercial 
human space flight. Accordingly, the historical record of human space 
flight provides an appropriate and reasonable basis for comparison of 
risks to current human space flight.
    Additionally, this section would also require an operator to 
describe the safety record of its own vehicle to each space flight 
participant. The operator's safety record would have to include the 
number of vehicle flights, the number of safety-related anomalies or 
failures, including on the ground or in flight, and whether any 
corrective actions were taken to resolve these anomalies or failures. 
If a space flight participant requested more detail, the operator would 
have to provide a description of the safety-related anomalies or 
failures and what the corrective actions were. For the general public, 
this technical information will not likely be useful, and the FAA does 
not want the more dire possibilities obscured by a deluge of technical 
data. Nonetheless, there will be space flight participants who will be 
able to obtain useful information from this data and make better 
informed choices as to whether they want to ride that particular 
vehicle. Accordingly, the FAA proposes to require an operator to inform 
each space flight participant that the safety-related data is available 
and provide the data upon request.
    In its February 11, 2005, guidelines, the FAA recommended that an 
operator provide space flight participants an opportunity to ask 
questions orally to acquire a better understanding of the hazards and 
risks of the mission. An opportunity to ask questions allows a space 
flight participant a chance to get clarification on any information 
that may be confusing or unclear. Although the FAA does not now propose 
to require this recommendation, the FAA continues to consider this good 
practice, and believes such opportunities should be provided.
    The CSLAA requires that before receiving compensation from a space 
flight participant or making an agreement to fly a space flight 
participant, an operator inform the space flight participant in writing 
that the U.S. Government has not certified the launch vehicle as safe 
for carrying crew or space flight participants. 49 U.S.C. 
70105(b)(5)(B). Accordingly, the FAA proposes to implement this 
statutory requirement in proposed 460.45(b).
3. Physical Examination
    In its February 11, 2005 guidelines, the FAA recommended that a 
space flight participant provide his or her medical history to a 
physician experienced or trained in the concepts of aerospace medicine. 
The physician would determine whether the space flight participant 
should undergo an appropriate physical examination before boarding a 
vehicle destined for space flight. 49 U.S.C. 70105(b)(6)(A). Guidance 
for the medical assessment of space flight participants is provided in 
a memorandum, ``Guidance for Medical Screening of Commercial Aerospace 
Space Flight Participants,'' (Mar. 31, 2003). The Federal Air Surgeon 
of the FAA's Office of Aerospace Medicine and the Director of the FAA's 
Civil Aerospace Medical Institute provided this guidance to the 
Associate Administrator for Commercial Space Transportation. Medical 
conditions that may indicate that an individual should not participate 
in a mission should be identified so that participation may be avoided 
where a space flight participant's involvement in a mission could 
aggravate or exacerbate a pre-existing medical condition that could put 
the flight crew or other space flight participants at risk. The FAA 
does not intend to propose that this

[[Page 77271]]

recommendation become a requirement, unless a clear public safety need 
is identified. It is, of course, in a space flight participant's own 
interest to obtain such medical advice for both suborbital and orbital 
missions, and the FAA will rely on that self-interest until a 
demonstrable need arises to mandate this through regulation. The FAA 
highly recommends that a space flight participant seek such medical 
advice if he or she plans to be on an orbital mission. Orbital missions 
are longer in duration than suborbital missions and space flight 
participants are exposed to flight conditions or environments such as 
microgravity and radiation for a longer period of time.
4. Space Flight Participant Training
    The FAA would require an operator to train each space flight 
participant before flight on how to respond to emergency situations, 
including loss of cabin pressure, fire, smoke, and emergency egress. If 
a space flight participant did not receive this training, he or she 
might interfere with the crew's ability to protect public safety.
5. Security Requirements
    The FAA proposes to require an operator to implement security 
requirements to prevent any space flight participant from jeopardizing 
the safety of the flight crew or the public. Security restrictions 
currently apply to passengers for airlines. Some of the restrictions 
prohibit a person carrying explosives, firearms, knives, or other 
weapons from boarding an airplane. Similar types of security 
restrictions for launch or reentry vehicles would contribute to the 
safety of the public by preventing a space flight participant from 
potentially interfering with the flight crew's operation of the 
vehicle. Any such interference might jeopardize the flight crew's 
ability to protect the public. The FAA notes that one means of 
satisfying part of this requirement would be for an operator to consult 
the ``no-fly'' list of the Transportation Security Administration.

C. Financial Responsibility and Waiver of Liability

    Under Chapter 701, Congress establishes risk sharing for licensees 
by providing for the conditional payment of claims by the United States 
Government of those claims in excess of the required financial 
responsibility up to $1,500,000,000 for third party liability. After 
those limits, the licensee is responsible for all claims. The U.S. 
Government waives its claims for Government range property damage in 
excess of required maximum probable loss (MPL)-based property 
insurance. Under a permit, the Government is responsible for claims in 
excess of the required insurance amount for Government range property 
claims and the holder of the permit is responsible for all other 
claims. In short, the Government property provisions remain the same 
for both licensees and permittees. A licensee remains eligible for 
indemnification from third party claims, however a permittee is not.
    The FAA proposes to combine and modify 14 CFR parts 440 and 450, 
which govern financial responsibility requirements for launch and 
reentry. These proposed changes indicate where the CSLAA includes 
permittees in the statutory scheme for financial and liability risk 
sharing. Combining the two parts is intended only to streamline the 
regulations, not to effect any substantive changes. In particular, 
licensees who operate expendable launch vehicles without humans on 
board should experience no change.
    The CSLAA made changes to the financial responsibility and legal 
risk sharing regime of Chapter 701. In brief, the CSLAA requires crew 
and space flight participants to enter into reciprocal waiver of claims 
with the U.S. Government. Crew includes flight crew and any remote 
operator. The CSLAA expressly excludes space flight participants from 
indemnification eligibility against third party claims. Launches 
performed pursuant to a permit are also excluded from eligibility for 
indemnification against third party claims.
    The Committee Report accompanying H.R. 3752 explains Congress' 
reasoning behind excluding space flight participants from eligibility 
for indemnification. Commercial Space Launch Amendments Act of 2004, 
H.R. 3752, H.R. Rep. 429, 11108th Cong., 2d Sess. (Mar. 1, 2004). The 
Science Committee notes that a space flight participant is not subject 
to any substantive government regulation. Additionally, a space flight 
participant can purchase insurance, or a licensee or permittee may 
purchase insurance that would cover claims against a space flight 
participant.
    The Report also addresses indemnification and insurance for 
activities authorized by experimental permits. Again, because the 
Committee anticipates that permitted activities will be more lightly 
regulated and thus possess a correspondingly greater risk to the 
federal government, the CSLAA does not provide for the possibility of 
indemnification.
1. Proposal To Combine Parts 440 and 450
    The FAA proposes, for purposes of efficiency, to combine parts 440 
and 450. This has advantages and disadvantages, and the FAA requests 
comment on the utility of this approach. When it first promulgated 
parts 440 and 450 as separate parts, the FAA did so in order to avoid 
confusing separate activities. It treated launch and reentry as 
separate activities.\9\ A commercial equivalent to the U.S. Shuttle 
would likely be operated by a single operator rather than the two 
distinct operators currently contemplated under the approach to part 
450. Accordingly, the FAA had to decide how to accommodate both the 
suborbital missions and those that may eventually take place to orbit. 
They each have a launch and reentry component. With a suborbital launch 
it is harder to tell where launch ends and reentry begins. Given that a 
suborbital flight is a single event with FAA jurisdiction covering the 
entire flight, the distinction does not matter. However, with a vehicle 
akin to the U.S. Space Shuttle, an operator would have to obtain 
separate maximum probable loss determinations for launch and reentry, 
and would enter into two sets of cross waivers with the government and 
any customers, under proposed parts 1 and 2 of appendix B to part 440.
---------------------------------------------------------------------------

    \9\ The 1998 legislation responded to a reentry vehicle called 
COMET--a reentry vehicle with different launch and reentry 
operators. Hence, there could be two licensees or permittees.
---------------------------------------------------------------------------

2. Customers of Permittee
    The proposed requirements account for the possibility that a 
permittee may have a customer. This is so even in light of the 
statutory prohibition on a permittee offering to carry people or 
property for compensation or hire. Because a permittee may carry people 
or property for free, there may be situations where someone places 
property such as a research experiment on board a vehicle operating 
under a permit. This may, for example, include a student owned payload. 
The FAA would consider the owner of the experiment a customer required 
to sign a cross waiver under section 440.17. The FAA would not consider 
a space flight participant riding for free a customer under this 
requirement. A space flight participant remains subject to the rules 
governing space flight participants.
3. Space Flight Participants and Crew
    Proposed section 440.17 contains some differences from the current

[[Page 77272]]

scheme for a space flight participant. The CSLAA does not require a 
space flight participant or crew to ``flow down'' to its contractors 
the waiver of claims as Chapter 701 otherwise requires of licensees and 
customers. Accordingly, the FAA does not propose to require that a 
space flight participant or crew implement a reciprocal waiver of 
claims with each of his or her customers, contractors or 
subcontractors. They are all free to do so, of course, if they choose.
    Likewise, as mentioned earlier in this notice, the CSLAA does not 
require crew and space flight participants to waive claims against each 
other or against a licensee or permittee. The CSLAA does not, however, 
prevent an operator from making a waiver of liability a condition of an 
agreement between it and a space flight participant or crew.
4. Waiver of Claims for U.S. Government Employees in Permittee Cross-
Waivers
    Congress excluded permittees from eligibility for indemnification 
against third party claims. The FAA treats employees of the U.S. 
Government as third parties for purposes of implementing the financial 
responsibility requirements of Chapter 701. 14 CFR 440.3(15)(ii). 
Accordingly, because permittees are not eligible for third party 
indemnification, the FAA does not propose that the U.S. Government 
waive claims for bodily injury or property damage sustained by U.S. 
Government personnel in excess of required insurance.

III. Rulemaking Analyses and Notices

Paperwork Reduction Act

    This proposal contains the following new information collection 
requirements. As required by the Paperwork Reduction Act of 1995 (44 
U.S.C. 3507(d)), the FAA has submitted the information requirements 
associated with this proposal to the Office of Management and Budget 
for its review.
    Title: Human Space Flight Requirements for Flight Crew and Space 
Flight Participants
    Summary: This proposal requires the FAA to regulate private human 
space flight. President Bush signed into law on December 23, 2004, the 
Commercial Space Launch Amendments Act of 2004. The CSLAA promotes the 
development of the emerging commercial space flight industry and makes 
the DOT and the FAA responsible for regulating commercial human space 
flight under 49 U.S.C. Subtitle IX, Chapter 701. CSLAA required the FAA 
to: (1) Issue guidelines or advisory circulars to guide the 
implementation of the CSLAA as soon as practical after the date of its 
enactment on December 23, 2004; (2) issue proposed regulations that 
include those relating to crew, space flight participants, and permits 
for launch or reentry of reusable suborbital rockets not later than 
December 23, 2005; and (3) issue final regulations not later than June 
23, 2006.
    Use of: This proposal would support the information needs of the 
FAA to protect public safety and notify individuals on board of the 
risks they face from launch or reentry.
    Respondents (including number of): The likely respondents to this 
proposed information requirement are commercial operators planning to 
perform human space flight with crew and space flight participants. The 
FAA estimates that there will be five to six companies that would offer 
human space flight.
    Frequency: The FAA finds that the frequency of information 
requirements is dependent on the number of space flights, and estimates 
that this number can range from one to more than 100 space flights 
annually.
    Annual Burden Estimate: The FAA expects that this proposed rule 
would impose additional reporting and recordkeeping requirements on 
launch operators who are subject to its provisions; it would have the 
following impacts for each year over a 10-year period:
     For the high mission scenario, the FAA estimates that it 
would take 3,946.9 hours annually for the paperwork to inform flight 
crew and space flight participants of the launch risks and to prepare 
reciprocal waivers for flight crew and space flight participants. The 
estimated cost would be $273,915.
     For the low cost scenario, the FAA estimates that it would 
take 2,003.2 hours annually for the paperwork to inform flight crew and 
space flight participants of the launch risks and to prepare reciprocal 
waivers for flight crew and space flight participants. The estimated 
cost would be $139,023.

For purposes of this analysis, the FAA will assume the mid-point 
between these two scenarios in estimating total cost and time; thus, 
this proposed rulemaking would take 2,975.05 hours per year, costing 
$206,469 annually.
    The proposed regulation would cause increased paperwork for the 
Federal Government, as it would have to review each mission and 
ascertain compliance during oversight activities at commercial operator 
facilities. The proposed rule would have the following impacts on the 
Federal Government over a 10-year period:
     For the high cost scenario, the FAA estimates that it 
would take 2,028.4 hours annually, costing $105,558 in resources 
expended.
     For the low cost scenario, the FAA estimates that it would 
take 1,016.2 hours annually, costing $52,883 in resources expended.

For purposes of this analysis, the FAA will assume the mid-point 
between these two scenarios in estimating Federal Government revenues 
expended; thus, this proposed rulemaking would take 1,522.3 hours per 
year, costing $79,221 annually.
    The agency is soliciting comments to--
    (1) Evaluate whether the proposed information required is necessary 
for the proper performance of the roles of the agency, including 
whether the information will have practical utility;
    (2) Evaluate the accuracy of the agency's estimate of the burden;
    (3) Enhance the quality, utility, and clarity of the information to 
be collected; and
    (4) Minimize the burden of the collection of information on those 
who are to respond, including through the use of appropriate automated, 
electronic, mechanical, or other technological collection techniques or 
other forms of information technology.
    Individuals and organizations may submit comments on the 
information collection requirement by February 27, 2006, and should 
direct them to the address listed in the ADDRESSES section of this 
document. Comments also should be submitted to the Office of 
Information and Regulatory Affairs, OMB, New Executive Building, Room 
10202, 725 17th Street, NW., Washington, DC 20053, Attention: Desk 
Officer for FAA.
    According to the 1995 amendments to the Paperwork Reduction Act (5 
CFR 1320.8(b)(2)(vi)), an agency may not collect or sponsor the 
collection of information, nor may it impose an information collection 
requirement unless it displays a currently valid OMB control number. 
The OMB control number for this information collection will be 
published in the Federal Register, after the Office of Management and 
Budget approves it.

Regulatory Evaluation

    Changes to Federal regulations must undergo several economic 
analyses. First, Executive Order 12866 directs that each Federal agency 
shall propose or adopt a regulation only upon a reasoned determination 
that the benefits of the intended regulation justify its costs.

[[Page 77273]]

Second, the Regulatory Flexibility Act of 1980 requires agencies to 
analyze the economic impact of regulatory changes on small entities. 
Third, the Trade Agreements Act, (19 U.S.C. 2531-2533), prohibits 
agencies from setting standards that create unnecessary obstacles to 
the foreign commerce of the United States. In developing U.S. 
standards, this Trade Act requires agencies to consider international 
standards and, where appropriate, to use the international standards as 
the basis for U.S. standards. Fourth, the Unfunded Mandates Reform Act 
of 1995 (Public Law 104-4) requires agencies to prepare a written 
assessment of the costs, benefits, and other effects of proposed or 
final rules that include a Federal mandate likely to result in the 
expenditure by State, local, or tribal governments, in the aggregate, 
or by the private sector, of $100 million or more annually as adjusted 
for inflation.
    In conducting these analyses, FAA has determined this rule: (1) Has 
benefits that justify its costs, (2) is a ``significant regulatory 
action'' for non-economical reasons as defined in Executive Order 
12866, and is ``significant'' as defined in DOT's Regulatory Policies 
and Procedures; (3) will not have a significant economic impact on a 
substantial number of small entities; (4) will not reduce barriers to 
international trade; and (5) does not impose an unfunded mandate on 
state, local, or tribal governments, or on the private sector. These 
analyses are available in the docket.
1. Potentially Impacted Parties
Private Sector
     Commercial operators who will be operating launch or 
reentry vehicles with crew and space flight participants on board.
     Flight crew.
     Remote operator.
     Space flight participants.
Government
     Federal Aviation Administration.
2. Assumptions and Ground Rules Used in Analysis (Discount Rate, Period 
of Analysis, Value of Life, Cost of Injuries)
     All monetary values are expressed in 2004 dollars.
     The time horizon for the analysis is 10 years (2006 to 
2016).
     Costs are discounted at 7%.
     Hourly Burdened Industry Rate is $69.40
     Hourly Burdened Government Rate is $52.04
     The high launch forecast used in the analysis is 10,142 
over ten years.
     The low launch forecast used in the analysis is 5,081 over 
ten years.
     Proposed requirements that were fulfilled by the 
SpaceShipOne launches or that constitute prudent business practice do 
not impose costs.
     Preparation time expended by commercial entities for 
specific requirements that might cause industry to incur costs because 
the proposed requirements are not current practice is as follows:
Benefits
    The proposed rule would offer some benefit impacts that are not 
readily quantified. The principal benefit would be to ensure that the 
human commercial space flight industry understands and adheres to the 
current practices that have worked thus far to protect public safety. 
The proposed rule would help preserve the level of public safety 
already achieved by commercial operations. Additionally, informing 
space flight participants of mission hazards and risks may help 
mitigate any behavior or reaction during space flight that would 
jeopardize mission success and consequently public safety. For example, 
a surprise noise or abrupt vehicle motion during flight could frighten 
an ``uninformed'' space flight participant, causing that person to 
behave or act (e.g., panic) in a manner that could adversely impact 
mission performance and jeopardize public safety by causing a crash or 
falling debris from an airborne explosion. Informing candidate space 
flight participants of risks may deter an individual from participating 
in space flight who otherwise would panic during flight and possibly 
create a situation that would jeopardize public safety.
Total Costs
    The proposed rule would result in a total cost impact ranging from 
$1.9 to $3.8 million over the ten-year period from 2006 through 2015 
(undiscounted 2004 dollars). The human space flight industry would 
incur 72 percent of the total costs, ranging from $1.4 million to $2.7 
million to comply with the proposed rule. The FAA would incur 28 
percent of the total costs, ranging from $529,000 to $1.1 million to 
administer the proposed regulatory requirements. Costs are summarized 
in the following table.

  Summary of Incremental Cost Impacts Attributable to the Proposed Rule Over the Ten-Year Period, 2006 Through
                                                      2015
                                                (In 2004 dollars)
----------------------------------------------------------------------------------------------------------------
                                                           Undiscounted                    Discounted a
                    Category                     ---------------------------------------------------------------
                                                    Upper bound     Lower bound     Upper bound     Lower bound
----------------------------------------------------------------------------------------------------------------
Human Space Flight Industry Compliance Costs....      $2,739,149      $1,390,221      $1,728,231        $876,863
Federal Aviation Administration Administrative         1,055,579         528,830         656,445         328,890
 Costs..........................................
                                                 -----------------
    Total Costs Attributable to the Proposed           3,794,728       1,919,051       2,384,676      1,205,753
     Rule.......................................
----------------------------------------------------------------------------------------------------------------
a Calculated using a discount factor of seven percent over a ten-year period.

Comparison of Benefits and Costs
    The principal benefit of the proposed rule would be to ensure that 
the human commercial space flight industry understands and adheres to 
the current practices that have worked thus far to protect public 
safety. Additionally, by requiring an operator to inform the crew and 
space flight participants of the risks of spaceflight, the proposed 
rule would protect the public from the hazards an uninformed crew 
member or space flight participants could pose to the mission. We have 
not quantified these benefits, but the FAA believes that the benefits 
justify the costs of the proposed rule.

Regulatory Flexibility Determination

    The Regulatory Flexibility Act of 1980 (RFA) establishes ``as a 
principle of regulatory issuance that agencies shall endeavor, 
consistent with the objective

[[Page 77274]]

of the rule and of applicable statutes, to fit regulatory and 
informational requirements to the scale of the business, organizations, 
and governmental jurisdictions subject to regulation.'' To achieve that 
principle, the RFA requires agencies to solicit and consider flexible 
regulatory proposals and to explain the rationale for their actions. 
The RFA covers a wide-range of small entities, including small 
businesses, not-for-profit organizations and small governmental 
jurisdictions. Agencies must perform a review to determine whether a 
proposed rule would have a significant economic impact on a substantial 
number of small entities. If the agency determines that it will, the 
agency must prepare a regulatory flexibility analysis as described in 
the Act.
    However, if an agency determines that a proposed rule is not 
expected to have a significant economic impact on a substantial number 
of small entities, section 605(b) of the 1980 RFA provides that the 
head of the agency may so certify and a regulatory flexibility analysis 
is not required. The certification must include a statement providing 
the factual basis for this determination, and the reasoning should be 
clear.
    The proposed rule would not have a significant economic impact on a 
substantial number of small entities. Because almost all the companies 
in the fledgling industry are small, the FAA concludes that a 
substantial number of small entities in the human space flight industry 
would be affected by the rule. However, we believe that the rule would 
not have a significant impact on these entities as explained below.
    The proposed rule would require launch and reentry operators to 
perform certain actions that, although they may be considered prudent, 
may not be performed in current practice in all instances. These 
actions would cause a space transportation operator to incur minimal 
additional costs relative to current practice.
    The North American Industry Classification System does not have a 
discrete code for commercial space transportation per se. However, it 
does have the following codes that collectively capture entities 
engaged in commercial space transportation: 336414, ``Guided Missile 
and Space Vehicle Manufacturing,'' 336415, ``Guided Missile and Space 
Vehicle Propulsion Unit and Parts Manufacturing,'' and 336419, ``Other 
Guided Missile and Space Vehicle Parts and Auxiliary Equipment 
Manufacturing.'' The Small Business Administration (SBA) has defined 
small business entities engaged in the aforementioned activities as 
those employing no more than 1,000 employees. Further, the SBA does not 
apply a size standard based on maximum annual receipts to define small 
business entities engaged in the above industries.
    A substantial number of firms entering the human space flight 
industry are very small. Because the industry is a nascent industry, it 
is difficult to state how many and which entities will succeed in the 
industry. There are two companies licensed to perform launches with 
humans on board: Scaled Composites with about 135 employees and XCOR 
with about 10 employees. Only Scaled Composites has actually launched 
as of the date of this report: The industry therefore currently 
consists of one company. There are about six more companies that the 
FAA considers serious candidates in the industry because they have 
committed financial resources and another twenty companies that have 
expressed interest in entering the human spaceflight industry. The 
number of employees of these companies ranges from 5 to 40. Based on 
the definition of small business for the launch industry of entities 
employing no more than 1,000 employees, all of the above mentioned 
companies are small businesses with the exception of one: Virgin 
Galactic which may be considered a large business because it is a 
subsidiary of Virgin Airways which has over 1,000 employees. One may 
therefore conclude that a substantial number of companies that are 
either in the industry or interested in entering the industry are small 
businesses with fewer than 136 employees.
    The FAA estimates that five to six companies will successfully 
enter the human space flight industry in the next ten years. We cannot 
yet divide this small number into categories by size; we only know that 
the vast majority of companies interested in entering the industry are 
very small (from 5 to 135 employees). We expect that these companies 
will be about the size of Scaled Composites, the only company thus far 
to have launched humans, once they start launching. Given the 
information we currently have the firms offering launches are very 
small.
    The FAA has determined that the impacts are not significant. In 
order to make this estimate, we compared the incremental cost per 
mission and the total cost to estimated revenue. It should be noted 
that all of these estimates are extremely speculative due to the 
difficulty of predicting the structure of such a nascent industry; 
however, our projections of cost as a percent of revenue is extremely 
small.
    The first input to the calculation is the number of expected 
missions, which FAA tentatively estimates is between 5,081 and 10,142 
over the next 10 years, based on written proprietary information 
received from three companies expecting to offer launch services. To 
the extent that the industry develops more slowly than expected, these 
may be overestimates. The incremental cost per expected flight, 
however, is not affected by the estimated total number of flights.
    The second input is the cost for the incremental safety activity 
required by this rulemaking. In the absence of this regulation, 
companies would certainly voluntarily engage in extensive testing and 
safety training, therefore the cost per mission of less than $300 does 
not represent the total investment in safety expected in this industry, 
but rather the incremental increase in safety related activity expected 
as a result of this regulation. As it is difficult to speculate on the 
amount of safety improving behavior undertaken in the absence of this 
regulation, FAA invites specific comment on this issue.
    Putting the two inputs together, we estimate costs to perform 
10,142 missions (upper bound) over ten years are $2,739,149 or an 
average of $270 per mission. We estimate costs to perform 5,081 (lower 
bound) over ten years are $1,390,221 or an average of $274 per mission. 
Since the industry is in its infancy and has not yet begun offering 
commercial flights, per mission costs and revenues are not known. 
However, prospective companies have quoted ticket prices of $102,000 to 
$250,000 per seat for early flights (with some predicting prices could 
fall to about $25,000 per seat after eight or nine years). If these 
prospective ticket prices and costs are accurate, then even under the 
lowest ticket prices quoted above, the regulatory cost per mission 
would be significantly less than 1% of revenues. The estimated $270 per 
mission cost that the rule would impose would therefore not be 
economically significant.
    The FAA invites comments on the validity of the FAA's information, 
assumptions and estimates and any potential impacts.
    Accordingly, pursuant to the Regulatory Flexibility Act, 5 U.S.C. 
605(b), the FAA Administrator certifies that the proposed rule would 
not have a significant economic impact on a substantial number of small 
entities.

[[Page 77275]]

International Trade Impact Assessment

    The Trade Agreement Act of 1979 prohibits Federal agencies from 
establishing any standards or engaging in related activities that 
create unnecessary obstacles to the foreign commerce of the United 
States. Legitimate domestic objectives, such as safety, are not 
considered unnecessary obstacles. Because this rulemaking would be 
largely consistent with current or prudent practice, it would not 
create obstacles. The statute also requires consideration of 
international standards and where appropriate, that they be the basis 
for U.S. standards. The FAA has assessed the potential effect of this 
proposed rule and determined that it would impose the same costs on 
domestic and international entities, and thus has a neutral trade 
impact.

Unfunded Mandates Assessments

    The Unfunded Mandates Reform Act of 1995 (the Act) is intended, 
among other things, to curb the practice of imposing unfunded Federal 
mandates on State, local, and tribal governments. Title II of the Act 
requires each Federal agency to prepare a written statement assessing 
the effects of any Federal mandate in a proposed or final agency rule 
that may result in an expenditure of $100 million or more (adjusted 
annually for inflation) in any one year by State, local, and tribal 
governments, in the aggregate, or by the private sector; such a mandate 
is deemed to be a ``significant regulatory action.'' The FAA currently 
uses an inflation-adjusted value of $120.7 million in lieu of $100 
million. This proposed rule does not contain such a mandate. The 
requirements of Title II do not apply.

Executive Order 13132, Federalism

    The FAA has analyzed this proposed rule under the principles and 
criteria of Executive Order 13132, Federalism. We determined that this 
action would not have a substantial direct effect on the States, on the 
relationship between the National Government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government, and therefore would not have federalism implications.

Environmental Analysis

    FAA Order 1050.1E identifies FAA actions that are categorically 
excluded from preparation of an environmental assessment or 
environmental impact statement under the National Environmental Policy 
Act in the absence of extraordinary circumstances. The FAA has 
determined this proposed rulemaking action qualifies for the 
categorical exclusion identified in paragraph (4i) appendix F and 
involves no extraordinary circumstances.

Regulations That Significantly Affect Energy Supply, Distribution, or 
Use

    The FAA has analyzed this NPRM under Executive Order 13211, Actions 
Concerning Regulations that Significantly Affect Energy Supply, 
Distribution, or Use (May 18, 2001). We have determined that it is not 
a ``significant energy action'' under the executive order because it is 
not a ``significant regulatory action'' under Executive Order 12866, 
and it is not likely to have a significant adverse effect on the 
supply, distribution, or use of energy.

List of Subjects

14 CFR Part 401

    Human space flight, Organization and functions (Government 
agencies), Space safety, Space transportation and exploration.

14 CFR Part 415

    Human space flight, Rockets, Space safety, Space transportation and 
exploration.

14 CFR Part 431

    Human space flight, Reporting and recordkeeping requirements, 
Rockets, Space safety, Space transportation and exploration.

14 CFR Part 435

    Human space flight, Reporting and recordkeeping requirements, 
Rockets, Space safety, Space transportation and exploration.

14 CFR Part 440

    Armed forces, Federal buildings and facilities, Government 
property, Indemnity payments, Insurance, Reporting and recordkeeping 
requirements, Space transportation and exploration.

14 CFR Part 450

    Armed forces, Federal buildings and facilities, Government 
property, Human space flight, Indemnity payments, Insurance, Reporting 
and recordkeeping requirements, Space transportation and exploration.

14 CFR Part 460

    Human space flight, Reporting and recordkeeping requirements, 
Rockets, Space safety, Space transportation and exploration.

IV. The Proposed Amendment

    In consideration of the foregoing, the Federal Aviation 
Administration proposes to amend parts 401, 415, 431, 435, and 440; 
remove and reserve part 450 of Chapter III of title 14, Code of Federal 
Regulations; and add part 460 as follows--

PART 401--ORGANIZATION AND DEFINITIONS

    1. The authority citation for part 401 continues to read as 
follows:

    Authority: 49 U.S.C. 70101-70121.

    2. Section 401.5 is amended by adding the following definitions in 
alphabetical order to read as follows:


Sec.  401.5  Definitions.

* * * * *
    Crew means any employee or independent contractor of a licensee, 
transferee, or permittee, or of a contractor or subcontractor of a 
licensee, transferee, or permittee, who performs activities in the 
course of that employment directly relating to the launch, reentry, or 
other operation of or in a launch vehicle or reentry vehicle that 
carries human beings. A crew consists of flight crew and any remote 
operator.
* * * * *
    Flight crew means crew that is on board a vehicle during a launch 
or reentry.
* * * * *
    Operator means a holder of a license or permit under 49 U.S.C. 
Subtitle IX, chapter 701.
* * * * *
    Pilot means a flight crew member who has the ability to control, in 
real time, a launch or reentry vehicle's flight path.
* * * * *
    Remote operator means a crew member who
    (1) Has the ability to control, in real time, a launch or reentry 
vehicle's flight path, and
    (2) Is not on board the controlled vehicle.
* * * * *
    Space flight participant means an individual, who is not crew, 
carried within a launch vehicle or reentry vehicle.
    Suborbital rocket means a vehicle, rocket-propelled in whole or in 
part, intended for flight on a suborbital trajectory, and the thrust of 
which is greater than its lift for the majority of the rocket-powered 
portion of its ascent.
    Suborbital trajectory means the intentional flight path of a launch 
vehicle, reentry vehicle, or any portion thereof, whose vacuum 
instantaneous impact point does not leave the surface of the Earth.
* * * * *

[[Page 77276]]

PART 415--LAUNCH LICENSE

Subpart A--General

    3. The authority citation for part 415 continues to read as 
follows:

    Authority: 49 U.S.C. 70101-70121.

    4. Add Sec.  415.8 to read as follows:


Sec.  415.8  Human space flight.

    To obtain a launch license, an applicant proposing to conduct a 
launch with flight crew or a space flight participant on board must 
provide documentation demonstrating compliance with Sec. Sec.  460.5, 
460.7, 460.11, 460.13, 460.15, 460.17, 460.51 and 460.53 of this 
subchapter.

PART 431--LAUNCH AND REENTRY OF A REUSABLE LAUNCH VEHICLE (RLV)

    5. The authority citation for part 431 continues to read as 
follows:

    Authority: 49 U.S.C. 70101-70121.

    6. Add Sec.  431.8 to read as follows:


Sec.  431.8  Human space flight.

    To obtain a license, an applicant proposing to conduct a reusable 
launch vehicle mission with flight crew or a space flight participant 
on board must provide documentation demonstrating compliance with 
Sec. Sec.  460.5, 460.7, 460.11, 460.13, 460.15, 460.17, 460.51 and 
460.53 of this subchapter.

PART 435--REENTRY OF A REENTRY VEHICLE OTHER THAN A REUSABLE LAUNCH 
VEHICLE (RLV)

    7. The authority citation for part 435 continues to read as 
follows:

    Authority: 49 U.S.C. 70101-70121.

    8. Add Sec.  435.8 to read as follows:


Sec.  435.8  Human space flight.

    An applicant for a license to conduct a reentry with flight crew or 
a space flight participant on board the vehicle must provide 
documentation demonstrating compliance with Sec. Sec.  460.5, 460.7, 
460.11, 460.13, 460.15, 460.17, 460.51 and 460.53 of this subchapter.

PART 450--[REMOVED]

    9. Revise part 440 and remove part 450 to read as follows:

PART 440--FINANCIAL RESPONSIBILITY

Subpart A--Financial Responsibility for Licensed and Permitted 
Activities
Sec.
440.1 Scope of part.
440.3 Definitions.
440.5 General.
440.7 Determination of maximum probable loss.
440.9 Insurance requirements for licensed or permitted activities.
440.11 Duration of coverage for suborbital and launch activities; 
modifications.
440.12 Duration of coverage for reentry; modifications.
440.13 Standard conditions of insurance coverage.
440.15 Demonstration of compliance.
440.17 Reciprocal waiver of claims requirements.
440.19 United States payment of excess third-party liability claims.
Appendix A to Part 440--Information requirements for obtaining a 
maximum probable loss determination for licensed or permitted 
activities.
Appendix B to Part 440--Agreement for waiver of claims and 
assumption of responsibility for licensed launch or reentry
Appendix C to Part 440--Agreement for waiver of claims and 
assumption of responsibility for permitted activities
Appendix D to Part 440--Agreement for waiver of claims and 
assumption of responsibility for a crew member
Appendix E to Part 440--Agreement for waiver of claims and 
assumption of responsibility for a space flight participant

    Authority: 49 U.S.C. 70101-70119; 49 CFR 1.47.

Subpart A--Financial Responsibility for Licensed and Permitted 
Activities


Sec.  440.1  Scope of part.

    This part establishes financial responsibility and allocation of 
risk requirements for any launch or reentry authorized by a license or 
permit issued under this subchapter.


Sec.  440.3  Definitions.

    For purposes of this part--
    Bodily injury means physical injury, sickness, disease, disability, 
shock, mental anguish, or mental injury sustained by any person, 
including death.
    Contractors and subcontractors means those entities that are 
involved at any tier, directly or indirectly, in licensed or permitted 
activities, and includes suppliers of property and services, and the 
component manufacturers of a launch vehicle, reentry vehicle or 
payload.
    Customer means
    (1) Any person:
    (i) Who procures launch or reentry services from a licensee or 
permittee;
    (ii) To whom the customer has sold, leased, assigned, or otherwise 
transferred its rights in the payload (or any part of the payload) to 
be launched or reentered by the licensee or permittee, including a 
conditional sale, lease, assignment, or transfer of rights;
    (iii) Who has placed property on board the payload for launch, 
reentry or payload services; or
    (iv) To whom the customer has transferred its rights to the launch 
or reentry services.
    (2) A space flight participant, for the purposes of this part, is 
not a customer.
    Federal range facility means a U.S. Government-owned installation 
at which a launch or reentry takes place.
    Financial responsibility means statutorily required financial 
ability to satisfy a liability obligation as required by 49 U.S.C. 
Subtitle IX, chapter 701.
    Government personnel means employees of the United States, its 
agencies, and its contractors and subcontractors, involved in launch or 
reentry services for an activity authorized by an FAA license or 
permit. Employees of the United States include members of the Armed 
Forces of the United States.
    Hazardous operations means activities, processes, and procedures 
that, because of the nature of the equipment, facilities, personnel, 
environment involved or function being performed, may result in bodily 
injury or property damage.
    Liability means a legal obligation to pay a claim for bodily injury 
or property damage resulting from a licensed or permitted activity.
    License means an authorization the FAA issues under this subchapter 
to launch or reenter.
    Licensed activity means the launch of a launch vehicle or the 
reentry of a reentry vehicle conducted under a license the FAA issues.
    Maximum probable loss (MPL) means the greatest dollar amount of 
loss for bodily injury or property damage that is reasonably expected 
to result from a licensed or permitted activity;
    (1) Losses to third parties, excluding Government personnel and 
other launch or reentry participants' employees involved in licensed or 
permitted activities, that are reasonably expected to result from a 
licensed or permitted activity are those having a probability of 
occurrence on the order of no less than one in ten million.
    (2) Losses to Government property and Government personnel involved 
in licensed or permitted activities that are reasonably expected to 
result from licensed or permitted activities are those having a 
probability of occurrence on the order of no less than one in one 
hundred thousand.
    Permit means an authorization the FAA issues under this subchapter 
for the launch or reentry of a reusable suborbital rocket.

[[Page 77277]]

    Permitted activity means the launch or reentry of a reusable 
suborbital rocket conducted under a permit the FAA issues.
    Property damage means partial or total destruction, impairment, or 
loss of tangible property, real or personal.
    Regulations mean the Commercial Space Transportation Licensing 
Regulations codified at 14 CFR Ch. III.
    Third party means
    (1) Any person other than:
    (i) The United States, any of its agencies, and its contractors and 
subcontractors involved in launch or reentry services for a licensed or 
permitted activity;
    (ii) A licensee, permittee, and its contractors and subcontractors 
involved in launch or reentry services for a licensed or permitted 
activity;
    (iii) A customer and its contractors and subcontractors involved in 
launch or reentry services for a licensed or permitted activity;
    (iv) A member of a crew; and
    (v) A space flight participant.
    (2) Government personnel, as defined in this section, are third 
parties.
    United States means the United States Government, including each of 
its agencies.
    (b) Except as otherwise provided in this section, any term used in 
this part and defined in 49 U.S.C. 70101-70121, or in. Sec.  401.5 of 
this chapter shall have the meaning contained therein.


Sec.  440.5  General.

    (a) No person may commence or conduct any launch or reentry 
activity that requires a license or permit unless that person has 
demonstrated compliance with the requirements of this part.
    (b) The FAA will prescribe the amount of financial responsibility a 
licensee or permittee is required to obtain and any additions to or 
modifications of the amount in a license or permit order issued 
concurrent with or subsequent to the issuance of a license or a permit.
    (c) Demonstration of financial responsibility under this part shall 
not relieve a licensee of ultimate responsibility for liability, loss, 
or damage sustained by the United States resulting from a licensed 
activity, except to the extent that:
    (1) Liability, loss, or damage sustained by the United States 
results from willful misconduct of the United States or its agents;
    (2) Any covered claim of a third party for bodily injury or 
property damage arising out of any particular licensed activity exceeds 
the amount of financial responsibility required under Sec.  440.9(c) of 
this part and does not exceed $1,500,000,000 (as adjusted for inflation 
occurring after January 1, 1989) above such amount, and are payable 
pursuant to 49 U.S.C. 70113 and Sec.  440.19 of this part. A claim of 
an employee of any entity listed in subparagraphs (1)(ii) through 
(1)(iii) in the Third party definition in Sec.  440.3 of this part for 
bodily injury or property damage is not a covered claim;
    (3) A covered claim for property loss or damage exceeds the amount 
of financial responsibility required under Sec.  440.9 (e) of this part 
and does not result from willful misconduct of the licensee; or
    (4) The licensee has no liability for covered claims by third 
parties for bodily injury or property damage arising out of any 
particular launch or reentry that exceeds $1,500,000,000 (as adjusted 
for inflation occurring after January 1, 1989) above the amount of 
financial responsibility required under Sec.  440.9(c).
    (d) Demonstration of financial responsibility under this part does 
not relieve a permittee of ultimate responsibility for liability, loss, 
or damage sustained by the United States resulting from a permitted 
activity, except to the extent that:
    (1) Liability, loss, or damage sustained by the United States 
results from willful misconduct of the United States or its agents; or
    (2) A covered claim for property loss or damage to the United 
States exceeds the amount of financial responsibility required under 
Sec.  440.9(e) and does not result from willful misconduct of the 
permittee.
    (e) A licensee's or permittee's failure to comply with any 
requirement of this part may result in suspension or revocation of a 
license or permit, and subject the licensee or permittee to civil 
penalties as provided in part 405 of this chapter.


Sec.  440.7  Determination of maximum probable loss.

    (a) The FAA will determine the maximum probable loss (MPL) from 
covered claims by a third party for bodily injury or property damage, 
and the United States, its agencies, and its contractors and 
subcontractors for covered property damage or loss, resulting from a 
permitted or licensed activity. The maximum probable loss determination 
forms the basis for financial responsibility requirements issued in a 
license or permit order.
    (b) The FAA issues its determination of maximum probable loss no 
later than ninety days after a licensee or permittee has requested a 
determination and submitted all information required by the FAA to make 
the determination. The FAA will consult with Federal agencies that are 
involved in, or whose personnel or property are exposed to risk of 
damage or loss as a result of, a licensed or permitted activity before 
issuing a license or permit order prescribing financial responsibility 
requirements, and shall notify the licensee, or permittee, if 
interagency consultation may delay issuance of the MPL determination.
    (c) Appendix A of this part contains information requirements for 
obtaining a maximum probable loss determination. Any person requesting 
a determination of maximum probable loss must submit the information 
required by Appendix A, unless the FAA has waived a requirement. In 
lieu of submitting required information, a person requesting a maximum 
probable loss determination may designate and certify certain 
information previously submitted for a prior determination as complete, 
valid, and equally applicable to its current request. The requester is 
responsible for the continuing accuracy and completeness of information 
submitted under this part and must promptly report any changes in 
writing.
    (d) The FAA will amend a determination of maximum probable loss 
required under this section at any time prior to completion of licensed 
or permitted activities as warranted by supplementary information 
provided to or obtained by the FAA after the MPL determination is 
issued. Any change in financial responsibility requirements as a result 
of an amended MPL determination shall be set forth in a license or 
permit order.
    (e) The FAA may make a determination of maximum probable loss at 
any time other than as set forth in paragraph (b) of this section upon 
request by any person.


Sec.  440.9  Insurance requirements for licensed or permitted 
activities.

    (a) As a condition of each license or permit, a licensee or 
permittee must comply with all insurance requirements of this section 
and of a license or permit issued by the FAA, or otherwise demonstrate 
the required amount of financial responsibility.
    (b) A licensee or permittee must obtain and maintain in effect a 
policy or policies of liability insurance, in an amount determined by 
the FAA under paragraph (c) of this section, that protects the 
following persons as additional insureds to the extent of their 
respective potential liabilities against covered claims by a third 
party for bodily injury or property damage

[[Page 77278]]

resulting from a licensed or permitted activity:
    (1) The licensee or permittee, its customer, and their respective 
contractors and subcontractors, and the employees of each, involved in 
a licensed or permitted activity;
    (2) The United States, its agencies, and its contractors and 
subcontractors involved in a licensed or permitted activity; and
    (3) Government personnel.
    (c) The FAA will prescribe for each licensee or permittee the 
amount of insurance required to compensate the total of covered third-
party claims for bodily injury or property damage resulting from a 
licensed or permitted activity in connection with any particular launch 
or reentry. A covered third-party claim includes a claim by the United 
States, its agencies, and its contractors and subcontractors for damage 
or loss to property other than property for which insurance is required 
under paragraph (d) of this section. The amount of insurance required 
is based upon the FAA's determination of maximum probable loss; 
however, it will not exceed the lesser of:
    (1) $500 million; or
    (2) The maximum liability insurance available on the world market 
at a reasonable cost, as determined by the FAA.
    (d) The licensee or permittee must obtain and maintain in effect a 
policy or policies of insurance, in an amount determined by the FAA 
under paragraph (e) of this section, that covers claims by the United 
States, its agencies, and its contractors and subcontractors involved 
in a licensed or permitted activity for property damage or loss 
resulting from a licensed or permitted activity. Property covered by 
this insurance must include all property owned, leased, or occupied by, 
or within the care, custody, or control of, the United States and its 
agencies, and its contractors and subcontractors involved in a licensed 
or permitted activity, at a Federal range facility. Insurance must 
protect the United States and its agencies, and its contractors and 
subcontractors involved in a licensed or permitted activity.
    (e) The FAA will prescribe for each licensee or permittee the 
amount of insurance required to compensate claims for property damage 
under paragraph (d) of this section resulting from a licensed or 
permitted activity in connection with any particular launch or reentry. 
The amount of insurance is based upon a determination of maximum 
probable loss; however, it will not exceed the lesser of:
    (1) $100 million; or
    (2) The maximum available on the world market at a reasonable cost, 
as determined by the FAA.
    (f) In lieu of a policy of insurance, a licensee or permittee may 
demonstrate financial responsibility in another manner meeting the 
terms and conditions for insurance of this part. The licensee or 
permittee must describe in detail the method proposed for demonstrating 
financial responsibility and how it ensures that the licensee or 
permittee is able to cover claims as required under this part.


Sec.  440.11  Duration of coverage for suborbital and launch 
activities; modifications.

    (a) Insurance coverage required under Sec.  440.9, or other form of 
financial responsibility, shall attach when a licensed or permitted 
launch activity starts, and remain in full force and effect as follows:
    (1) Until completion of licensed or permitted launch activities at 
a launch site; and
    (2) For orbital launch, until the later of--
    (i) Thirty days following payload separation, or attempted payload 
separation in the event of a payload separation anomaly; or
    (ii) Thirty days from ignition of the launch vehicle.
    (3) For a suborbital launch, until the later of--
    (i) Motor impact and payload recovery; or
    (ii) The FAA's determination that risk to third parties and 
Government property as a result of licensed or permitted launch 
activities is sufficiently small that financial responsibility is no 
longer necessary. That determination is made through the risk analysis 
conducted before the launch to determine MPL and specified in a license 
or permit order.
    (b) Financial responsibility required under this part may not be 
replaced, canceled, changed, withdrawn, or in any way modified to 
reduce the limits of liability or the extent of coverage, nor expire by 
its own terms, prior to the time specified in a license or permit 
order, unless the FAA is notified at least 30 days in advance and 
expressly approves the modification.


Sec.  440.12  Duration of coverage for reentry; modifications.

    (a) For reentry, insurance coverage required under Sec.  440.9, or 
other form of financial responsibility, shall attach upon commencement 
of licensed or permitted reentry activities, and remain in full force 
and effect as follows:
    (1) For ground operations, until completion of licensed or 
permitted reentry activities at the reentry site; and
    (2) For other licensed or permitted reentry activities, thirty days 
from initiation of reentry flight; however, in the event of an abort 
that results in the reentry vehicle remaining on orbit, insurance shall 
remain in place until the FAA's determination that risk to third 
parties and Government property as a result of licensed or permitted 
reentry activities is sufficiently small that financial responsibility 
is no longer necessary, as determined by the FAA through the risk 
analysis conducted to determine MPL and specified in a license or 
permit order.
    (b) Financial responsibility required under this part may not be 
replaced, canceled, changed, withdrawn, or in any way modified to 
reduce the limits of liability or the extent of coverage, nor expire by 
its own terms, prior to the time specified in a license or permit 
order, unless the FAA is notified at least 30 days in advance and 
expressly approves the modification.


Sec.  440.13  Standard conditions of insurance coverage.

    (a) Insurance obtained under Sec.  440.9 must comply with each of 
the following terms and conditions of coverage:
    (1) Bankruptcy or insolvency of an insured, including any 
additional insured, shall not relieve an insurer of any of its 
obligations under any policy.
    (2) Policy limits shall apply separately to each occurrence and, 
for each occurrence to the total of claims arising out of a licensed or 
permitted activity in connection with any particular launch or reentry.
    (3) Except as provided in this section, each policy must pay claims 
from the first dollar of loss, without regard to any deductible, to the 
limits of the policy. A licensee or permittee may obtain a policy 
containing a deductible amount if the amount of the deductible is 
placed in an escrow account or otherwise demonstrated to be 
unobligated, unencumbered funds of the licensee or permittee, available 
to compensate claims at any time claims may arise.
    (4) No policy may be invalidated by any action or inaction of the 
licensee or permittee or any additional insured, even by nonpayment by 
the licensee or permittee of the policy premium, and each policy must 
insure the licensee or permittee and each additional insured regardless 
of any breach or violation of any warranties, declarations, or 
conditions contained in the policies by the licensee or permittee or 
any additional insured (other than a breach or violation by the 
licensee, permittee or

[[Page 77279]]

an additional insured, and then only as against that licensee, 
permittee or additional insured).
    (5) Each exclusion from coverage must be specified.
    (6) Insurance shall be primary without right of contribution from 
any other insurance that is carried by the licensee or permittee or any 
additional insured.
    (7) Each policy must expressly provide that all of its provisions, 
except the policy limits, operate in the same manner as if there were a 
separate policy with and covering the licensee or permittee and each 
additional insured.
    (8) Each policy must be placed with an insurer of recognized 
reputation and responsibility that either:
    (i) Is licensed to do business in any State, territory, possession 
of the United States, or the District of Columbia; or
    (ii) Includes in each of its policies or insurance obtained under 
this part a contract clause in which the insurer agrees to submit to 
the jurisdiction of a court of competent jurisdiction within the United 
States and designates an authorized agent within the United States for 
service of legal process on the insurer.
    (9) Except as to claims resulting from the willful misconduct of 
the United States or any of its agents, the insurer shall waive any and 
all rights of subrogation against each of the parties protected by 
required insurance.
    (b) [Reserved]


Sec.  440.15  Demonstration of compliance.

    (a) A licensee or permittee must submit to the FAA evidence of 
financial responsibility and compliance with allocation of risk 
requirements under this part, as follows, unless a license or permit 
order specifies otherwise due to the proximity of the intended date for 
commencement of licensed or permitted activities:
    (1) All reciprocal waiver of claims agreements required under Sec.  
440.17(c) must be submitted at least 30 days before the start of any 
licensed or permitted activity involving a customer, crew member, or 
space flight participant;
    (2) Evidence of insurance must be submitted at least 30 days before 
commencement of any licensed or permitted activity, and for reentry no 
less than 30 days before commencement of launch activities involving 
the reentry licensee;
    (3) Evidence of financial responsibility in a form other than 
insurance, as provided under Sec.  440.9(f), must be submitted at least 
60 days before commencement of a licensed or permitted activity; and
    (4) Evidence of renewal of insurance or other form of financial 
responsibility must be submitted at least 30 days in advance of its 
expiration date.
    (b) Upon a complete demonstration of compliance with financial 
responsibility and allocation of risk requirements under this part, the 
requirements of this part shall preempt each and any provision in any 
agreement between the licensee or permittee and an agency of the United 
States governing access to or use of United States launch or reentry 
property or launch or reentry services for a licensed or permitted 
activity which addresses financial responsibility, allocation of risk 
and related matters covered by 49 U.S.C. 70112, 70113.
    (c) A licensee or permittee must demonstrate compliance as follows:
    (1) The licensee or permittee must provide proof of the existence 
of the insurance required by Sec.  440.9 by:
    (i) Certifying to the FAA that it has obtained insurance in 
compliance with the requirements of this part and any applicable 
license or permit order;
    (ii) Filing with the FAA one or more certificates of insurance 
evidencing insurance coverage by one or more insurers under a currently 
effective and properly endorsed policy or policies of insurance, 
applicable to a licensed or permitted activity, on terms and conditions 
and in amounts prescribed under this part, and specifying policy 
exclusions;
    (iii) In the event of any policy exclusions or limitations of 
coverage that may be considered usual under Sec.  440.19(c), or for 
purposes of implementing the Government's waiver of claims for property 
damage under 49 U.S.C. 70112(b)(2), certifying that insurance covering 
the excluded risks is not commercially available at reasonable cost; 
and
    (iv) Submitting to the FAA, for signature by the Department on 
behalf of the United States Government, the waiver of claims and 
assumption of responsibility agreement required by Sec.  440.17(c), 
executed by the licensee or permittee and its customer.
    (v) Submitting to the FAA, for signature by the Department on 
behalf of the United States Government, an agreement to waive claims 
and assume responsibility required by Sec.  440.17(e), executed by each 
space flight participant.
    (vi) Submitting to the FAA, for signature by the Department on 
behalf of the United States Government, an agreement to waive claims 
and assume responsibility required by Sec.  440.17(f), executed by each 
member of the crew.
    (2) Any certification required by this section must be signed by a 
duly authorized officer of the licensee or permittee.
    (d) Each certificate of insurance required by paragraph (c)(1)(ii) 
of this section must be signed by the insurer issuing the policy and 
accompanied by an opinion of the insurance broker that the insurance 
obtained by the licensee or permittee complies with all the 
requirements for insurance of this part and any applicable license or 
permit order.
    (e) The licensee or permittee must maintain, and make available for 
inspection by the FAA upon request, all required policies of insurance 
and other documents necessary to demonstrate compliance with this part.
    (f) In the event the licensee or permittee demonstrates financial 
responsibility using means other than insurance, as provided under 
Sec.  440.9(f), the licensee or permittee must provide proof that it 
has met the requirements of this part and of a FAA issued license or 
permit order.


Sec.  440.17  Reciprocal waiver of claims requirements.

    (a) As a condition of each license or permit, the licensee or 
permittee must comply with the reciprocal waiver of claims requirements 
of this section.
    (b) The licensee or permittee shall implement a reciprocal waiver 
of claims with each of its contractors and subcontractors, each 
customer and each of the customer's contractors and subcontractors, 
under which each party waives and releases claims against all the other 
parties to the waiver and agrees to assume financial responsibility for 
property damage it sustains and for bodily injury or property damage 
sustained by its own employees, and to hold harmless and indemnify each 
other from bodily injury or property damage sustained by its employees, 
resulting from a licensed or permitted activity, regardless of fault.
    (c) For each licensed or permitted activity in which the U.S. 
Government, any agency, or its contractors and subcontractors is 
involved or where property insurance is required under Sec.  440.9(d), 
the Federal Aviation Administration of the Department of 
Transportation, the licensee or permittee, and its customer shall enter 
into a three-party reciprocal waiver of claims agreement. The three-
party reciprocal waiver of claims shall be in the form set forth in 
Appendix B, for licensed activity, or Appendix C, for permitted 
activity, of this part or in a form that satisfies the requirements.
    (d) The licensee or permittee, its customer, and the Federal 
Aviation Administration of the Department of

[[Page 77280]]

Transportation on behalf of the United States and its agencies but only 
to the extent provided in legislation, must agree in any waiver of 
claims agreement required under this part to indemnify another party to 
the agreement from claims by the indemnifying party's contractors and 
subcontractors arising out of the indemnifying party's failure to 
implement properly the waiver requirement.
    (e) For each licensed or permitted activity in which the U.S. 
Government, any of its agencies, or its contractors and subcontractors 
are involved, the Federal Aviation Administration of the Department of 
Transportation and each space flight participant shall enter into or 
have in place a reciprocal waiver of claims agreement in the form of 
the agreement in Appendix E of this part or that satisfies its 
requirements.
    (f) For each licensed or permitted launch or reentry in which the 
U.S. Government, any of its agencies, or its contractors and 
subcontractors is involved, the Federal Aviation Administration of the 
Department of Transportation and each crew member shall enter into or 
have in place a reciprocal waiver of claims agreement in the form of 
the agreement in Appendix D of this part or that satisfies its 
requirements.


Sec.  440.19  United States payment of excess third-party liability 
claims.

    (a) The United States pays successful covered claims (including 
reasonable expenses of litigation or settlement) of a third party 
against a licensee, a customer, and the contractors and subcontractors 
of the licensee and the customer, and the employees of each involved in 
licensed activities, and the contractors and subcontractors of the 
United States and its agencies, and their employees, involved in 
licensed activities to the extent provided in an appropriation law or 
other legislative authority providing for payment of claims in 
accordance with 49 U.S.C. 70113, and to the extent the total amount of 
such covered claims arising out of any particular launch or reentry:
    (1) Exceeds the amount of insurance required under Sec.  440.9(b); 
and
    (2) Is not more than $1,500,000,000 (as adjusted for inflation 
occurring after January 1, 1989) above that amount.
    (b) Payment by the United States under paragraph (a) of this 
section shall not be made for any part of such claims for which bodily 
injury or property damage results from willful misconduct by the party 
seeking payment.
    (c) The United States shall provide for payment of claims by third 
parties for bodily injury or property damage that are payable under 49 
U.S.C. 70113 and not covered by required insurance under Sec.  
440.9(b), without regard to the limitation under paragraph (a)(1) of 
this section, because of an insurance policy exclusion that is usual. A 
policy exclusion is considered usual only if insurance covering the 
excluded risk is not commercially available at reasonable rates. The 
licensee must submit a certification in accordance with Sec.  
440.15(c)(1)(iii) of this part for the United States to cover the 
claims.
    (d) Upon the expiration of the policy period prescribed in 
accordance with Sec.  440.11(a), the United States shall provide for 
payment of claims that are payable under 49 U.S.C. 70113 from the first 
dollar of loss up to $1,500,000,000 (as adjusted for inflation 
occurring after January 1, 1989).
    (e) Payment by the United States of excess third-party claims under 
49 U.S.C. 70113 shall be subject to:
    (1) Prompt notice by the licensee to the FAA that the total amount 
of claims arising out of licensed activities exceeds, or is likely to 
exceed, the required amount of financial responsibility. For each 
claim, the notice must specify the nature, cause, and amount of the 
claim or lawsuit associated with the claim, and the party or parties 
who may otherwise be liable for payment of the claim;
    (2) Participation or assistance in the defense of the claim or 
lawsuit by the United States, at its election;
    (3) Approval by the FAA of any settlement, or part of a settlement, 
to be paid by the United States; and
    (4) Approval by Congress of a compensation plan prepared by the FAA 
and submitted by the President.
    (f) The FAA will:
    (1) Prepare a compensation plan outlining the total amount of 
claims and meeting the requirements set forth in 49 U.S.C. 70113;
    (2) Recommend sources of funds to pay the claims; and
    (3) Propose legislation as required to implement the plan.
    (g) The FAA may withhold payment of a claim if it finds that the 
amount is unreasonable, unless it is the final order of a court that 
has jurisdiction over the matter.

Appendix A to Part 440--Information Requirements for Obtaining a 
Maximum Probable Loss Determination for Licensed or Permitted 
Activities

    Any person requesting a maximum probable loss determination shall 
submit the following information to the FAA, unless the FAA has waived 
a particular information requirement under 14 CFR 440.7(c):

Part 1: Information Requirements for Licensed Suborbital and Launch 
Activities

I. General Information

    A. Mission description.
    1. A description of mission parameters, including:
    a. Launch trajectory;
    b. Orbital inclination; and
    c. Orbit altitudes (apogee and perigee).
    2. Flight sequence.
    3. Staging events and the time for each event.
    4. Impact locations.
    5. Identification of the launch site facility, including the launch 
complex on the site, planned date of launch, and launch windows.
    6. If the applicant has previously been issued a license or permit 
to conduct licensed or permitted activities using the same vehicle from 
the same launch site, a description of any differences planned in the 
conduct of proposed activities.
    B. Launch vehicle description.
    1. General description of the launch vehicle and its stages, 
including dimensions.
    2. Description of major systems, including safety systems.
    3. Description of rocket motors and type of fuel used.
    4. Identification of all propellants to be used and their hazard 
classification under the Hazardous Materials Table, 49 CFR 172.101.
    5. Description of hazardous components.
    C. Payload.
    1. General description of the payload, including type (e.g., 
telecommunications, remote sensing), propellants, and hazardous 
components or materials, such as toxic or radioactive substances.
    D. Flight safety system.
    1. Identification of any flight safety system (FSS) on the vehicle, 
including a description of operations and component location on the 
vehicle.

II. Pre-Flight Processing Operations

    A. General description of pre-flight operations including vehicle 
processing consisting of an operational flow diagram showing the 
overall sequence and location of operations, commencing with arrival of 
vehicle components at the launch site facility through final safety 
checks and countdown sequence, and designation of hazardous operations, 
as defined in 14 CFR 440.3. For purposes of these information 
requirements, payload processing, as opposed to integration, is not a 
hazardous operation.

[[Page 77281]]

    B. For each hazardous operation, including but not limited to 
fueling, solid rocket motor build-up, ordnance installation, ordnance 
checkout, movement of hazardous materials, and payload integration:
    1. Identification of location where each operation will be 
performed, including each building or facility identified by name or 
number.
    2. Identification of facilities adjacent to the location where each 
operation will be performed and therefore exposed to risk, identified 
by name or number.
    3. Maximum number of Government personnel and individuals not 
involved in licensed or permitted activities who may be exposed to risk 
during each operation. For Government personnel, identification of his 
or her employer.
    4. Identification of launch site policies or requirements 
applicable to the conduct of operations.

III. Flight Operations

    A. Identification of launch site facilities exposed to risk during 
licensed or permitted flight.
    B. Identification of accident failure scenarios, probability 
assessments for each, and estimation of risks to Government personnel, 
individuals not involved in licensed or permitted activities, and 
Government property, due to property damage or bodily injury. The 
estimation of risks for each scenario shall take into account the 
number of such individuals at risk as a result of lift-off and flight 
of a launch vehicle (on-range, off-range, and down-range) and specific, 
unique facilities exposed to risk. Scenarios shall cover the range of 
launch trajectories, inclinations and orbits for which authorization is 
sought in the license or permit application.
    C. On-orbit risk analysis assessing risks posed by a launch vehicle 
to operational satellites.
    D. Reentry risk analysis assessing risks to Government personnel 
and individuals not involved in licensed or permitted launch activities 
as a result of reentering debris or reentry of the launch vehicle or 
its components.
    E. Trajectory data as follows: Nominal and 3-sigma lateral 
trajectory data in x, y, z and x (dot), y (dot), z (dot) coordinates in 
one-second intervals, data to be pad-centered with x being along the 
initial launch azimuth and continuing through impact for suborbital 
flights, and continuing through orbital insertion or the end of powered 
flight for orbital flights.
    F. Tumble-turn data for guided vehicles only, as follows: For 
vehicles with gimbaled nozzles, tumble turn data with zeta angles and 
velocity magnitudes stated. A separate table is required for each 
combination of fail times (every two to four seconds), and significant 
nozzle angles (two or more small angles, generally between one and five 
degrees).
    G. Identification of debris lethal areas and the projected number 
and ballistic coefficient of fragments expected to result from flight 
termination, initiated either by command or self-destruct mechanism, 
for lift-off, land overflight, and reentry.

IV. Post-Flight Processing Operations

    A. General description of post-flight ground operations including 
overall sequence and location of operations for removal of vehicle 
components and processing equipment from the launch site facility and 
for handling of hazardous materials, and designation of hazardous 
operations.
    B. Identification of all facilities used in conducting post-flight 
processing operations.
    C. For each hazardous operation:
    1. Identification of location where each operation is performed, 
including each building or facility identified by name or number.
    2. Identification of facilities adjacent to location where each 
operation is performed and exposed to risk, identified by name or 
number.
    3. Maximum number of Government personnel and individuals not 
involved in licensed or permitted launch activities that may be exposed 
to risk during each operation. For Government personnel, identification 
of his or her employer.
    4. Identification of launch site facility policies or requirements 
applicable to the conduct of operations.

Part 2: Information Requirements for Licensed Reentry

I. General Information

    A. Reentry mission description.
    1. A description of mission parameters, including:
    a. Orbital inclination; and
    b. Orbit altitudes (apogee and perigee).
    c. Reentry trajectories.
    2. Reentry flight sequences.
    3. Reentry initiation events and the time for each event.
    4. Nominal landing location, alternative landing sites and 
contingency abort sites.
    5. Identification of landing facilities, (planned date of reentry), 
and reentry windows.
    6. If the applicant has previously been issued a license or permit 
to conduct reentry activities using the same reentry vehicle to the 
same reentry site facility, a description of any differences planned in 
the conduct of proposed activities.
    B. Reentry vehicle description.
    1. General description of the reentry vehicle, including 
dimensions.
    2. Description of major systems, including safety systems.
    3. Description of propulsion system (reentry initiation system) and 
type of fuel used.
    4. Identification of all propellants to be used and their hazard 
classification under the Hazardous Materials Table, 49 CFR 172.101.
    5. Description of hazardous components.
    C. Payload.
    1. General description of any payload, including type (e.g., 
telecommunications, remote sensing), propellants, and hazardous 
components or materials, such as toxic or radioactive substances.
    D. Flight termination system or flight safety system.
    1. Identification of any flight termination system or flight safety 
system on the reentry vehicle, including a description of operations 
and component location on the vehicle.

II. Flight Operations

    A. Identification of reentry site facilities exposed to risk during 
vehicle reentry and landing.
    B. Identification of accident failure scenarios, probability 
assessments for each, and estimation of risks to Government personnel, 
individuals not involved in licensed or permitted reentry activities, 
and Government property, due to property damage or bodily injury. The 
estimation of risks for each scenario shall take into account the 
number of such individuals at risk as a result of reentry (flight) and 
landing of a reentry vehicle (on-range, off-range, and down-range) and 
specific, unique facilities exposed to risk. Scenarios shall cover the 
range of reentry trajectories for which authorization is sought.
    C. On-orbit risk analysis assessing risks posed by a reentry 
vehicle to operational satellites during reentry.
    D. Reentry risk analysis assessing risks to Government personnel 
and individuals not involved in licensed or permitted reentry 
activities as a result of inadvertent or random reentry of the launch 
vehicle or its components.
    E. Nominal and 3-sigma dispersed trajectories in one-second 
intervals, from reentry initiation through landing or impact. 
(Coordinate system will be specified on a case-by-case basis).
    F. Three-sigma landing or impact dispersion area in downrange 
() and crossrange () measured from the nominal 
and contingency landing or

[[Page 77282]]

impact target. The applicant is responsible for including all 
significant landing or impact dispersion constituents in the 
computations of landing or impact dispersion areas. The dispersion 
constituents should include, but not be limited to: Variation in 
orbital position and velocity at the reentry initiation time; variation 
in re-entry initiation time offsets, either early or late; variation in 
the bodies' ballistic coefficient; position and velocity variation due 
to winds; and variations in re-entry retro-maneuvers.
    G. Malfunction turn data (tumble, trim) for guided (controllable) 
vehicles. The malfunction turn data shall include the total angle 
turned by the velocity vector versus turn duration time at one second 
intervals; the magnitude of the velocity vector versus turn duration 
time at one second intervals; and an indication on the data where the 
re-entry body will impact the Earth, or breakup due to aerodynamic 
loads. A malfunction turn data set is required for each malfunction 
time. Malfunction turn start times shall not exceed four-second 
intervals along the trajectory.
    H. Identification of debris casualty areas and the projected number 
and ballistic coefficient of fragments expected to result from each 
failure mode during reentry, including random reentry.

III. Post-Flight Processing Operations

    A. General description of post-flight ground operations including 
overall sequence and location of operations for removal of vehicle and 
components and processing equipment from the reentry site facility and 
for handling of hazardous materials, and designation of hazardous 
operations.
    B. Identification of all facilities used in conducting post-flight 
processing operations.
    C. For each hazardous operation:
    1. Identification of location where each operation is performed, 
including each building or facility identified by name or number.
    2. Identification of facilities adjacent to location where each 
operation is performed and exposed to risk, identified by name or 
number.
    3. Maximum number of Government personnel and individuals not 
involved in licensed or permitted reentry activities who may be exposed 
to risk during each operation. For Government personnel, identification 
of his or her employer.
    4. Identify and provide reentry site facility policies or 
requirements applicable to the conduct of operations.

Part 3: Information Requirements for Permitted Activities

    In addition to the information required in part 437 subpart B, an 
applicant for an experimental permit must provide, for each permitted 
pre-flight and post-flight operation, the following information to the 
FAA:
    A. Identification of location where each operation will be 
performed, including any U.S. Government or third party facilities 
identified by name or number.
    B. Identification of any U.S. Government or third party facilities 
adjacent to the location where each operation will be performed and 
therefore exposed to risk, identified by name or number.
    C. Maximum number of Government personnel and individuals not 
involved in permitted activities that may be exposed to risk during 
each operation. For Government personnel, identification of his or her 
employer.

Appendix B to Part 440--Agreement for Waiver of Claims and Assumption 
of Responsibility for Licensed Launch or Reentry

Part 1--Waiver of Claims and Assumption of Responsibility for Licensed 
Launches

    This agreement is entered into this ----day of ----, by and among 
[Licensee] (the ``Licensee''), [Customer] (the ``Customer'') and the 
Federal Aviation Administration of the Department of Transportation, on 
behalf of the United States Government (collectively, the ``Parties''), 
to implement the provisions of section 440.17(c) of the Commercial 
Space Transportation Licensing Regulations, 14 CFR Ch. III (the 
``Regulations'').
    In consideration of the mutual releases and promises contained 
herein, the Parties hereby agree as follows:

1. Definitions

    Customer means the above-named Customer on behalf of the Customer 
and any person described in Sec.  440.3 of the Regulations.
    License means License No. ------issued on ------, by the Associate 
Administrator for Commercial Space Transportation, Federal Aviation 
Administration, Department of Transportation, to the Licensee, 
including all license orders issued in connection with the License.
    Licensee means the Licensee and any transferee of the Licensee 
under 49 U.S.C. Subtitle IX, ch. 701.
    United States means the United States and its agencies involved in 
Licensed Launch Activities.
    Except as otherwise defined herein, terms used in this Agreement 
and defined in 49 U.S.C. Subtitle IX, ch. 701--Commercial Space Launch 
Activities, or in the Regulations, shall have the same meaning as 
contained in 49 U.S.C. Subtitle IX, ch. 701, or the Regulations, 
respectively.

2. Waiver and Release of Claims

    (a) Licensee hereby waives and releases claims it may have against 
Customer and the United States, and against their respective 
Contractors and Subcontractors, for Property Damage it sustains and for 
Bodily Injury or Property Damage sustained by its own employees, 
resulting from Licensed Launch Activities, regardless of fault.
    (b) Customer hereby waives and releases claims it may have against 
Licensee and the United States, and against their respective 
Contractors and Subcontractors, for Property Damage it sustains and for 
Bodily Injury or Property Damage sustained by its own employees, 
resulting from Licensed Launch Activities, regardless of fault.
    (c) The United States hereby waives and releases claims it may have 
against Licensee and Customer, and against their respective Contractors 
and Subcontractors, for Property Damage it sustains, and for Bodily 
Injury or Property Damage sustained by its own employees, resulting 
from Licensed Launch Activities, regardless of fault, to the extent 
that claims it would otherwise have for such damage or injury exceed 
the amount of insurance or demonstration of financial responsibility 
required under sections 440.9(c) and (e), respectively, of the 
Regulations.

3. Assumption of Responsibility

    (a) Licensee and Customer shall each be responsible for Property 
Damage it sustains and for Bodily Injury or Property Damage sustained 
by its own employees, resulting from Licensed Launch Activities, 
regardless of fault. Licensee and Customer shall each hold harmless and 
indemnify each other, the United States, and the Contractors and 
Subcontractors of each Party, for Bodily Injury or Property Damage 
sustained by its own employees, resulting from Licensed Launch 
Activities, regardless of fault.
    (b) The United States shall be responsible for Property Damage it 
sustains, and for Bodily Injury or Property Damage sustained by its own 
employees, resulting from Licensed Launch Activities, regardless of 
fault, to the extent that claims it would otherwise have for such 
damage or injury exceed the amount of insurance

[[Page 77283]]

or demonstration of financial responsibility required under sections 
440.9(c) and (e), respectively, of the Regulations.

4. Extension of Assumption of Responsibility and Waiver

    (a) Licensee shall extend the requirements of the waiver and 
release of claims, and the assumption of responsibility, hold harmless, 
and indemnification, as set forth in paragraphs 2(a) and 3(a), 
respectively, to its Contractors and Subcontractors by requiring them 
to waive and release all claims they may have against Customer and the 
United States, and against the respective Contractors and 
Subcontractors of each, and to agree to be responsible, for Property 
Damage they sustain and to be responsible, hold harmless and indemnify 
Customer and the United States, and the respective Contractors and 
Subcontractors of each, for Bodily Injury or Property Damage sustained 
by their own employees, resulting from Licensed Launch Activities, 
regardless of fault.
    (b) Customer shall extend the requirements of the waiver and 
release of claims, and the assumption of responsibility, hold harmless, 
and indemnification, as set forth in paragraphs 2(b) and 3(a), 
respectively, to its Contractors and Subcontractors by requiring them 
to waive and release all claims they may have against Licensee and the 
United States, and against the respective Contractors and 
Subcontractors of each, and to agree to be responsible, for Property 
Damage they sustain and to be responsible, hold harmless and indemnify 
Licensee and the United States, and the respective Contractors and 
Subcontractors of each, for Bodily Injury or Property Damage sustained 
by their own employees, resulting from Licensed Launch Activities, 
regardless of fault.
    (c) The United States shall extend the requirements of the waiver 
and release of claims, and the assumption of responsibility as set 
forth in paragraphs 2(c) and 3(b), respectively, to its Contractors and 
Subcontractors by requiring them to waive and release all claims they 
may have against Licensee and Customer, and against the respective 
Contractors and Subcontractors of each, and to agree to be responsible, 
for any Property Damage they sustain and for any Bodily Injury or 
Property Damage sustained by their own employees, resulting from 
Licensed Launch Activities, regardless of fault, to the extent that 
claims they would otherwise have for such damage or injury exceed the 
amount of insurance or demonstration of financial responsibility 
required under sections 440.9(c) and (e), respectively, of the 
Regulations.

5. Indemnification

    (a) Licensee shall hold harmless and indemnify Customer and its 
directors, officers, servants, agents, subsidiaries, employees and 
assignees, or any or them, and the United States and its agencies, 
servants, agents, subsidiaries, employees and assignees, or any or 
them, from and against liability, loss or damage arising out of claims 
that Licensee's Contractors and Subcontractors may have for Property 
Damage sustained by them and for Bodily Injury or Property Damage 
sustained by their employees, resulting from Licensed Launch 
Activities.
    (b) Customer shall hold harmless and indemnify Licensee and its 
directors, officers, servants, agents, subsidiaries, employees and 
assignees, or any or them, and the United States and its agencies, 
servants, agents, subsidiaries, employees and assignees, or any of 
them, from and against liability, loss or damage arising out of claims 
that Customer's Contractors and Subcontractors, or any person on whose 
behalf Customer enters into this Agreement, may have for Property 
Damage sustained by them and for Bodily Injury or Property Damage 
sustained by their employees, resulting from Licensed Launch 
Activities.
    (c) To the extent provided in advance in an appropriations law or 
to the extent there is enacted additional legislative authority 
providing for the payment of claims, the United States shall hold 
harmless and indemnify Licensee and Customer and their respective 
directors, officers, servants, agents, subsidiaries, employees and 
assignees, or any of them, from and against liability, loss or damage 
arising out of claims that Contractors and Subcontractors of the United 
States may have for Property Damage sustained by them, and for Bodily 
Injury or Property Damage sustained by their employees, resulting from 
Licensed Launch Activities, to the extent that claims they would 
otherwise have for such damage or injury exceed the amount of insurance 
or demonstration of financial responsibility required under sections 
440.9(c) and (e), respectively, of the Regulations.

6. Assurances Under 49 U.S.C. 70112(e)

    Notwithstanding any provision of this Agreement to the contrary, 
Licensee shall hold harmless and indemnify the United States and its 
agencies, servants, agents, employees and assignees, or any of them, 
from and against liability, loss or damage arising out of claims for 
Bodily Injury or Property Damage, resulting from Licensed Launch 
Activities, regardless of fault, except to the extent that: (i) As 
provided in section 7(b) of this Agreement, claims result from willful 
misconduct of the United States or its agents; (ii) claims for Property 
Damage sustained by the United States or its Contractors and 
Subcontractors exceed the amount of insurance or demonstration of 
financial responsibility required under section 440.9(e) of the 
Regulations; (iii) claims by a Third Party for Bodily Injury or 
Property Damage exceed the amount of insurance or demonstration of 
financial responsibility required under section 440.9(c) of the 
Regulations, and do not exceed $1,500,000,000 (as adjusted for 
inflation after January 1, 1989) above such amount, and are payable 
pursuant to the provisions of 49 U.S.C. 70113 and section 440.19 of the 
Regulations; or (iv) Licensee has no liability for claims exceeding 
$1,500,000,000 (as adjusted for inflation after January 1, 1989) above 
the amount of insurance or demonstration of financial responsibility 
required under section 440.9(c) of the Regulations.

7. Miscellaneous

    (a) Nothing contained herein shall be construed as a waiver or 
release by Licensee, Customer or the United States of any claim by an 
employee of the Licensee, Customer or the United States, respectively, 
including a member of the Armed Forces of the United States, for Bodily 
Injury or Property Damage, resulting from Licensed Launch Activities.
    (b) Notwithstanding any provision of this Agreement to the 
contrary, any waiver, release, assumption of responsibility or 
agreement to hold harmless and indemnify herein shall not apply to 
claims for Bodily Injury or Property Damage resulting from willful 
misconduct of any of the Parties, the Contractors and Subcontractors of 
any of the Parties, and in the case of Licensee and Customer and the 
Contractors and Subcontractors of each of them, the directors, 
officers, agents and employees of any of the foregoing, and in the case 
of the United States, its agents.
    (c) In the event that more than one customer is involved in 
Licensed Launch Activities, references herein to Customer shall apply 
to, and be deemed to include, each such customer severally and not 
jointly.
    (d) This Agreement shall be governed by and construed in accordance 
with United States Federal law.

[[Page 77284]]

    In Witness Whereof, the Parties to this Agreement have caused the 
Agreement to be duly executed by their respective duly authorized 
representatives as of the date written above.
Licensee

By: --------

Its: --------
Customer

By: --------

Its: --------
Federal Aviation Administration of the Department of Transportation on 
Behalf of the United States Government

By: --------

Its: --------
Associate Administrator for Commercial Space Transportation

Part 2--Waiver of Claims and Assumption of Responsibility for Licensed 
Reentries

    This Agreement is entered into this ---- day of ----, by and among 
[Licensee] (the ``Licensee''), [Customer] (the ``Customer''), and the 
Federal Aviation Administration of the Department of Transportation, on 
behalf of the United States Government (collectively, the ``Parties''), 
to implement the provisions of Sec.  440.17(c) of the Commercial Space 
Transportation Licensing Regulations, 14 CFR Ch. III (the 
``Regulations'').
    In consideration of the mutual releases and promises contained 
herein, the Parties hereby agree as follows:

1. Definitions

    Contractors and Subcontractors means entities described in Sec.  
440.3 of the Regulations.
    Customer means the above-named Customer on behalf of the Customer 
and any person described in Sec.  440.3 of the Regulations.
    License means License No. ------ issued on ------, by the Associate 
Administrator for Commercial Space Transportation, Federal Aviation 
Administration, Department of Transportation, to the Licensee, 
including all license orders issued in connection with the License.
    Licensee means the Licensee and any transferee of the Licensee 
under 49 U.S.C. Subtitle IX, ch. 701.
    United States means the United States and its agencies involved in 
Licensed Activities.
    Except as otherwise defined herein, terms used in this Agreement 
and defined in 49 U.S.C. Subtitle IX, ch. 701--Commercial Space Launch 
Activities, or in the Regulations, shall have the same meaning as 
contained in 49 U.S.C. Subtitle IX, ch. 701, or the Regulations, 
respectively.

2. Waiver and Release of Claims

    (a) Licensee hereby waives and releases claims it may have against 
Customer and the United States, and against their respective 
Contractors and Subcontractors, for Property Damage it sustains and for 
Bodily Injury or Property Damage sustained by its own employees, 
resulting from Licensed Activities, regardless of fault.
    (b) Customer hereby waives and releases claims it may have against 
Licensee and the United States, and against their respective 
Contractors and Subcontractors, for Property Damage it sustains and for 
Bodily Injury or Property Damage sustained by its own employees, 
resulting from Licensed Activities, regardless of fault.
    (c) The United States hereby waives and releases claims it may have 
against Licensee and Customer, and against their respective Contractors 
and Subcontractors, for Property Damage it sustains, and for Bodily 
Injury or Property Damage sustained by its own employees, resulting 
from Licensed Activities, regardless of fault, to the extent that 
claims it would otherwise have for such damage or injury exceed the 
amount of insurance or demonstration of financial responsibility 
required under sections 440.9(c) and (e) of the Regulations.

3. Assumption of Responsibility

    (a) Licensee and Customer shall each be responsible for Property 
Damage it sustains and for Bodily Injury or Property Damage sustained 
by its own employees, resulting from Licensed Activities, regardless of 
fault. Licensee and Customer shall each hold harmless and indemnify 
each other, the United States, and the Contractors and Subcontractors 
of each Party, for Bodily Injury or Property Damage sustained by its 
own employees, resulting from Licensed Activities, regardless of fault.
    (b) The United States shall be responsible for Property Damage it 
sustains, and for Bodily Injury or Property Damage sustained by its own 
employees, resulting from Licensed Activities, regardless of fault, to 
the extent that claims it would otherwise have for such damage or 
injury exceed the amount of insurance or demonstration of financial 
responsibility required under Sec. Sec.  440.9(c) and (e) of the 
Regulations.

4. Extension of Assumption of Responsibility and Waiver

    (a) Licensee shall extend the requirements of the waiver and 
release of claims, and the assumption of responsibility, hold harmless, 
and indemnification, as set forth in paragraphs 2(a) and 3(a), 
respectively, to its Contractors and Subcontractors by requiring them 
to waive and release all claims they may have against Customer and the 
United States, and against the respective Contractors and 
Subcontractors of each, and to agree to be responsible, for Property 
Damage they sustain and to be responsible, hold harmless and indemnify 
Customer and the United States, and the respective Contractors and 
Subcontractors of each, for Bodily Injury or Property Damage sustained 
by their own employees, resulting from Licensed Activities, regardless 
of fault.
    (b) Customer shall extend the requirements of the waiver and 
release of claims, and the assumption of responsibility, hold harmless, 
and indemnification, as set forth in paragraphs 2(b) and 3(a), 
respectively, to its Contractors and Subcontractors by requiring them 
to waive and release all claims they may have against Licensee and the 
United States, and against the respective Contractors and 
Subcontractors of each, and to agree to be responsible, for Property 
Damage they sustain and to be responsible, hold harmless and indemnify 
Licensee and the United States, and the respective Contractors and 
Subcontractors of each, for Bodily Injury or Property Damage sustained 
by their own employees, resulting from Licensed Activities, regardless 
of fault.
    (c) The United States shall extend the requirements of the waiver 
and release of claims, and the assumption of responsibility as set 
forth in paragraphs 2(c) and 3(b), respectively, to its Contractors and 
Subcontractors by requiring them to waive and release all claims they 
may have against Licensee and Customer, and against the respective 
Contractors and Subcontractors of each, and to agree to be responsible, 
for any Property Damage they sustain and for any Bodily Injury or 
Property Damage sustained by their own employees, resulting from 
Licensed Activities, regardless of fault, to the extent that claims 
they would otherwise have for such damage or injury exceed the amount 
of insurance or demonstration of financial responsibility required 
under Sec. Sec.  440.9(c) and (e) of the Regulations.

[[Page 77285]]

5. Indemnification

    (a) Licensee shall hold harmless and indemnify Customer and its 
directors, officers, servants, agents, subsidiaries, employees and 
assignees, or any or them, and the United States and its agencies, 
servants, agents, subsidiaries, employees and assignees, or any or 
them, from and against liability, loss or damage arising out of claims 
that Licensee's Contractors and Subcontractors may have for Property 
Damage sustained by them and for Bodily Injury or Property Damage 
sustained by their employees, resulting from Licensed Activities.
    (b) Customer shall hold harmless and indemnify Licensee and its 
directors, officers, servants, agents, subsidiaries, employees and 
assignees, or any of them, and the United States and its agencies, 
servants, agents, subsidiaries, employees assignees, or any of them, 
from and against liability, loss or damage arising out of claims that 
Customer's Contractors and Subcontractors, or any person on whose 
behalf Customer enters into this Agreement, may have for Property 
Damage sustained by them and for Bodily Injury or Property Damage 
sustained by their employees, resulting from Licensed Activities.
    (c) To the extent provided in advance in an appropriations law or 
to the extent there is enacted additional legislative authority 
providing for the payment of claims, the United States shall hold 
harmless and indemnify Licensee and Customer and their respective 
directors, officers, servants, agents, subsidiaries, employees and 
assignees, or any of them, from and against liability, loss or damage 
arising out of claims that Contractors and Subcontractors of the United 
States may have for Property Damage sustained by them, and for Bodily 
Injury or Property Damage sustained by their employees, resulting from 
Licensed Activities, to the extent that claims they would otherwise 
have for such damage or injury exceed the amount of insurance or 
demonstration of financial responsibility required under Sec. Sec.  
440.9(c) and (e) of the Regulations.

6. Assurances Under 49 U.S.C. 70112(e)

    Notwithstanding any provision of this Agreement to the contrary, 
Licensee shall hold harmless and indemnify the United States and its 
agencies, servants, agents, employees and assignees, or any of them, 
from and against liability, loss or damage arising out of claims for 
Bodily Injury or Property Damage, resulting from Licensed Launch 
Activities, regardless of fault, except to the extent that: (i) As 
provided in section 7(b) of this Agreement, claims result from willful 
misconduct of the United States or its agents; (ii) claims for Property 
Damage sustained by the United States or its Contractors and 
Subcontractors exceed the amount of insurance or demonstration of 
financial responsibility required under Sec.  440.9(e) of the 
Regulations; (iii) claims by a Third Party for Bodily Injury or 
Property Damage exceed the amount of insurance or demonstration of 
financial responsibility required under Sec.  440.9(c) of the 
Regulations, and do not exceed $1,500,000,000 (as adjusted for 
inflation after January 1, 1989) above such amount, and are payable 
pursuant to the provisions of 49 U.S.C. 70113 and Sec.  440.19 of the 
Regulations; or (iv) Licensee has no liability for claims exceeding 
$1,500,000,000 (as adjusted for inflation after January 1, 1989) above 
the amount of insurance or demonstration of financial responsibility 
required under Sec.  440.9(c) of the Regulations.

7. Miscellaneous

    (a) Nothing contained herein shall be construed as a waiver or 
release by Licensee, Customer or the United States of any claim by an 
employee of the Licensee, Customer or the United States, respectively, 
including a member of the Armed Forces of the United States, for Bodily 
Injury or Property Damage, resulting form Licensed Activities.
    (b) Notwithstanding any provision of this Agreement to the 
contrary, any waiver, release, assumption of responsibility or 
agreement to hold harmless and indemnify herein shall not apply to 
claims for Bodily Injury or Property Damage resulting from willful 
misconduct of any of the Parties, the Contractors and Subcontractors of 
any of the Parties, and in the case of Licensee and Customer and the 
Contractors and Subcontractors of each of them, the directors, 
officers, agents and employees of any of the foregoing, and in the case 
of the United States, its agents.
    (c) In the event that more than one customer is involved in 
Licensed Activities, references herein to Customer shall apply to, and 
be deemed to include, each such customer severally and not jointly.
    (d) This Agreement shall be governed by and construed in accordance 
with United States Federal law.
    In Witness Whereof, the Parties to this Agreement have caused the 
Agreement to be duly executed by their respective duly authorized 
representatives as of the date written above.
Licensee

By: --------

Its:--------
Customer

By: --------

Its: --------
Federal Aviation Administration of the Department of Transportation on 
Behalf of the United States Government

By: --------

Its: --------
Associate Administrator for Commercial Space Transportation

Appendix C to Part 440--Agreement for Waiver of Claims and Assumption 
of Responsibility for Permitted Activities

    THIS AGREEMENT is entered into this ------ day of ------, by and 
among [Permittee] (the ``Permittee''), [Customer] (the ``Customer'') 
and the Federal Aviation Administration of the Department of 
Transportation, on behalf of the United States Government 
(collectively, the ``Parties''), to implement the provisions of section 
440.17(c) of the Commercial Space Transportation Licensing Regulations, 
14 CFR Ch. III (the ``Regulations'').
    In consideration of the mutual releases and promises contained 
herein, the Parties hereby agree as follows:

1. Definitions

    Customer means the above-named Customer on behalf of the Customer 
and any person described in Sec.  440.3 of the Regulations.
    Permit means Permit No. ------ issued on ------, by the Associate 
Administrator for Commercial Space Transportation, Federal Aviation 
Administration, Department of Transportation, to the Permittee, 
including all permit orders issued in connection with the Permit.
    Permittee means the holder of the Permit issued under 49 U.S.C. 
Subtitle IX, ch. 701.
    United States means the United States and its agencies involved in 
Permitted Permit Activities.
    Except as otherwise defined herein, terms used in this Agreement 
and defined in 49 U.S.C. Subtitle IX, ch. 701--Commercial Space Launch 
Activities, or in the Regulations, shall have the same meaning as 
contained in 49 U.S.C. Subtitle IX, ch. 701, or the Regulations, 
respectively.

2. Waiver and Release of Claims

    (a) Permittee hereby waives and releases claims it may have against 
Customer and the United States, and

[[Page 77286]]

against their respective Contractors and Subcontractors, for Property 
Damage it sustains and for Bodily Injury or Property Damage sustained 
by its own employees, resulting from Permitted Activities, regardless 
of fault.
    (b) Customer hereby waives and releases claims it may have against 
Permittee and the United States, and against their respective 
Contractors and Subcontractors, for Property Damage it sustains and for 
Bodily Injury or Property Damage sustained by its own employees, 
resulting from Permitted Activities, regardless of fault.
    (c) The United States hereby waives and releases claims it may have 
against Permittee and Customer, and against their respective 
Contractors and Subcontractors, for Property Damage it sustains 
resulting from Permitted Activities, regardless of fault, to the extent 
that claims it would otherwise have for such damage exceed the amount 
of insurance or demonstration of financial responsibility required 
under section 440.9(e) of the Regulations.

3. Assumption of Responsibility

    (a) Permittee and Customer shall each be responsible for Property 
Damage it sustains and for Bodily Injury or Property Damage sustained 
by its own employees, resulting from Permitted Activities, regardless 
of fault. Permittee and Customer shall each hold harmless and indemnify 
each other, the United States, and the Contractors and Subcontractors 
of each Party, for Bodily Injury or Property Damage sustained by its 
own employees, resulting from Permitted Activities, regardless of 
fault.
    (b) The United States shall be responsible for Property Damage it 
sustains, resulting from Permitted Activities, regardless of fault, to 
the extent that claims it would otherwise have for such damage exceed 
the amount of insurance or demonstration of financial responsibility 
required under section 440.9(e) of the Regulations.

4. Extension of Assumption of Responsibility and Waiver

    (a) Permittee shall extend the requirements of the waiver and 
release of claims, and the assumption of responsibility, hold harmless, 
and indemnification, as set forth in paragraphs 2(a) and 3(a), 
respectively, to its Contractors and Subcontractors by requiring them 
to waive and release all claims they may have against Customer and the 
United States, and against the respective Contractors and 
Subcontractors of each, and to agree to be responsible, for Property 
Damage they sustain and to be responsible, hold harmless and indemnify 
Customer and the United States, and the respective Contractors and 
Subcontractors of each, for Bodily Injury or Property Damage sustained 
by their own employees, resulting from Permitted Activities, regardless 
of fault.
    (b) Customer shall extend the requirements of the waiver and 
release of claims, and the assumption of responsibility, hold harmless, 
and indemnification, as set forth in paragraphs 2(b) and 3(a), 
respectively, to its Contractors and Subcontractors by requiring them 
to waive and release all claims they may have against Permittee and the 
United States, and against the respective Contractors and 
Subcontractors of each, and to agree to be responsible for Property 
Damage they sustain and to be responsible, hold harmless and indemnify 
Permittee and the United States, and the respective Contractors and 
Subcontractors of each, for Bodily Injury or Property Damage sustained 
by their own employees, resulting from Permitted Activities, regardless 
of fault.
    (c) The United States shall extend the requirements of the waiver 
and release of claims, and the assumption of responsibility as set 
forth in paragraphs 2(c) and 3(b), respectively, to its Contractors and 
Subcontractors by requiring them to waive and release all claims they 
may have against Permittee and Customer, and against the respective 
Contractors and Subcontractors of each, and to agree to be responsible 
for any Property Damage they sustain, resulting from Permitted 
Activities, regardless of fault, to the extent that claims they would 
otherwise have for such damage exceed the amount of insurance or 
demonstration of financial responsibility required under section 
440.9(e) of the Regulations.

5. Indemnification

    (a) Permittee shall hold harmless and indemnify Customer and its 
directors, officers, servants, agents, subsidiaries, employees and 
assignees, or any or them, and the United States and its agencies, 
servants, agents, subsidiaries, employees and assignees, or any or 
them, from and against liability, loss or damage arising out of claims 
that Permittee's Contractors and Subcontractors may have for Property 
Damage sustained by them and for Bodily Injury or Property Damage 
sustained by their employees, resulting from Permitted Activities.
    (b) Customer shall hold harmless and indemnify Permittee and its 
directors, officers, servants, agents, subsidiaries, employees and 
assignees, or any or them, and the United States and its agencies, 
servants, agents, subsidiaries, employees and assignees, or any of 
them, from and against liability, loss or damage arising out of claims 
that Customer's Contractors and Subcontractors, or any person on whose 
behalf Customer enters into this Agreement, may have for Property 
Damage sustained by them and for Bodily Injury or Property Damage 
sustained by their employees, resulting from Permitted Activities.

6. Assurances Under 49 U.S.C. 70112(e)

    Notwithstanding any provision of this Agreement to the contrary, 
Permittee shall hold harmless and indemnify the United States and its 
agencies, servants, agents, employees and assignees, or any of them, 
from and against liability, loss or damage arising out of claims for 
Bodily Injury or Property Damage, resulting from Permitted Activities, 
regardless of fault, except to the extent that it is provided in 
section 7(b) of this Agreement, except to the extent that claims (i) 
result from willful misconduct of the United States or its agents and 
(ii) for Property Damage sustained by the United States or its 
Contractors and Subcontractors exceed the amount of insurance or 
demonstration of financial responsibility required under section 
440.9(e) of the Regulations.

7. Miscellaneous

    (a) Nothing contained herein shall be construed as a waiver or 
release by Permittee, Customer or the United States of any claim by an 
employee of the Permittee, Customer or the United States, respectively, 
including a member of the Armed Forces of the United States, for Bodily 
Injury or Property Damage, resulting from Permitted Activities.
    (b) Notwithstanding any provision of this Agreement to the 
contrary, any waiver, release, assumption of responsibility or 
agreement to hold harmless and indemnify herein shall not apply to 
claims for Bodily Injury or Property Damage resulting from willful 
misconduct of any of the Parties, the Contractors and Subcontractors of 
any of the Parties, and in the case of Permittee and Customer and the 
Contractors and Subcontractors of each of them, the directors, 
officers, agents and employees of any of the foregoing, and in the case 
of the United States, its agents.
    (c) In the event that more than one customer is involved in 
Permitted Activities, references herein to Customer shall apply to, and 
be deemed

[[Page 77287]]

to include, each such customer severally and not jointly.
    (d) This Agreement shall be governed by and construed in accordance 
with United States Federal law.
    In witness whereof, the Parties to this Agreement have caused the 
Agreement to be duly executed by their respective duly authorized 
representatives as of the date written above.
Permittee

By: --------

Its: --------
Customer

By: --------

Its: --------
Federal Aviation Administration of the Department of Transportation on 
Behalf of the United States Government

By: --------

Its: --------
Associate Administrator for Commercial Space Transportation

Appendix D to Part 440--Agreement for Waiver of Claims and Assumption 
of Responsibility for a Crew Member

    This agreement is entered into this -------- day of --------, by 
and among [crew member] (the ``Crew Member'') and the Federal Aviation 
Administration of the Department of Transportation, on behalf of the 
United States Government (collectively, the ``Parties''), to implement 
the provisions of section 440.17(f) of the Commercial Space 
Transportation Licensing Regulations, 14 CFR Ch. III (the 
``Regulations''). In consideration of the mutual releases and promises 
contained herein, the Parties hereby agree as follows:

1. Definitions

    Crew member means the above-named crew member.
    License/Permit means License/Permit No. -------- issued on --------
, by the Associate Administrator for Commercial Space Transportation, 
Federal Aviation Administration, Department of Transportation, to the 
Licensee/Permittee, including all license/permit orders issued in 
connection with the License/Permit.
    Licensee/Permittee means the Licensee/Permittee and any transferee 
of the Licensee under 49 U.S.C. Subtitle IX, ch. 701.
    United States means the United States and its agencies involved in 
Licensed/Permitted Activities.
    Except as otherwise defined herein, terms used in this Agreement 
and defined in 49 U.S.C. Subtitle IX, ch. 701--Commercial Space Launch 
Activities, or in the Regulations, shall have the same meaning as 
contained in 49 U.S.C. Subtitle IX, ch. 701, or the Regulations, 
respectively.

2. Waiver and Release of Claims

    (a) Crew member hereby waives and releases claims it may have 
against the United States, and against their respective Contractors and 
Subcontractors, for Bodily Injury or Property Damage sustained, 
resulting from Licensed/Permitted Activities, regardless of fault.
    (b) The United States hereby waives and releases claims it may have 
against the crew member for Property Damage it sustains, and for Bodily 
Injury or Property Damage sustained by its own employees, resulting 
from Licensed/Permitted Activities, regardless of fault.

3. Assumption of Responsibility

    (a) The crew member shall be responsible for Bodily Injury or 
Property Damage sustained, resulting from Licensed/Permitted 
Activities, regardless of fault. The crew member shall hold harmless 
and indemnify the United States, and the Contractors and Subcontractors 
of each Party, for Bodily Injury or Property Damage sustained by its 
own employees, resulting from Licensed/Permitted Activities, regardless 
of fault.
    (b) The United States shall be responsible for Property Damage it 
sustains, and for Bodily Injury or Property Damage sustained by its own 
employees, resulting from Licensed Activities, regardless of fault, to 
the extent that claims it would otherwise have for such damage or 
injury exceed the amount of insurance or demonstration of financial 
responsibility required under sections 440.9(c) and (e), respectively, 
of the Regulations.
    (c) The United States shall be responsible for Property Damage it 
sustains, resulting from Permitted Activities, regardless of fault, to 
the extent that claims it would otherwise have for such damage exceed 
the amount of insurance or demonstration of financial responsibility 
required under section 440.9(e) of the Regulations.

4. Extension of Assumption of Responsibility and Waiver

    (a) The United States shall extend the requirements of the waiver 
and release of claims, and the assumption of responsibility as set 
forth in paragraphs 2(b) and 3(b), respectively, to its Contractors and 
Subcontractors by requiring them to waive and release all claims they 
may have against the crew member and to agree to be responsible for any 
Property Damage they sustain and for any Bodily Injury or Property 
Damage sustained by their own employees, resulting from Licensed 
Activities, regardless of fault.
    (b) The United States shall extend the requirements of the waiver 
and release of claims, and the assumption of responsibility as set 
forth in paragraphs 2(b) and 3(c), respectively, to its Contractors and 
Subcontractors by requiring them to waive and release all claims they 
may have against the crew member and to agree to be responsible for any 
Property Damage they sustain, resulting from Permitted Activities, 
regardless of fault.

5. Assurances Under 49 U.S.C. 70112(e)

    Notwithstanding any provision of this Agreement to the contrary, 
the crew member shall hold harmless the United States and its agencies, 
servants, agents, employees and assignees, or any of them, from and 
against liability, loss or damage arising out of claims for Bodily 
Injury or Property Damage, resulting from Licensed/Permitted 
Activities, regardless of fault, except to the extent that, as provided 
in section 6(b) of this Agreement, claims result from willful 
misconduct of the United States or its agents.

6. Miscellaneous

    (a) Nothing contained herein shall be construed as a waiver or 
release by the United States of any claim by an employee of the United 
States, respectively, including a member of the Armed Forces of the 
United States, for Bodily Injury or Property Damage, resulting from 
Licensed/Permitted Activities.
    (b) Notwithstanding any provision of this Agreement to the 
contrary, any waiver, release, assumption of responsibility or 
agreement to hold harmless and indemnify herein shall not apply to 
claims for Bodily Injury or Property Damage resulting from willful 
misconduct of any of the Parties, the Contractors and Subcontractors of 
any of the Parties, and in the case of the United States, its agents.
    (c) This Agreement shall be governed by and construed in accordance 
with United States Federal law.
    In witness whereof, the Parties to this Agreement have caused the 
Agreement to be duly executed by their respective duly authorized 
representatives as of the date written above.
Crew Member

Signature: --------

[[Page 77288]]


Printed Name: --------
Federal Aviation Administration of the Department of Transportation on 
Behalf of the United States Government

By: ------------

Its: ------------
Associate Administrator for Commercial Space Transportation

Appendix E to Part 440--Agreement for Waiver of Claims and Assumption 
of Responsibility for a Space Flight Participant

    THIS AGREEMENT is entered into this -------- day of --------, by 
and among [Space Flight Participant] (the ``Space Flight Participant'') 
and the Federal Aviation Administration of the Department of 
Transportation, on behalf of the United States Government 
(collectively, the ``Parties''), to implement the provisions of section 
440.17(e) of the Commercial Space Transportation Licensing Regulations, 
14 CFR Ch. III (the ``Regulations'').
    In consideration of the mutual releases and promises contained 
herein, the Parties hereby agree as follows:

1. Definitions

    Space Flight Participant means the above-named Space Flight 
Participant, who is not crew, and is carried within a launch or reentry 
vehicle.
    License/Permit means License/Permit No. ------ issued on ------, by 
the Associate Administrator for Commercial Space Transportation, 
Federal Aviation Administration, Department of Transportation, to the 
Licensee/Permittee, including all license/permit orders issued in 
connection with the License/Permit.
    Licensee/Permittee means the Licensee/Permittee and any transferee 
of the Licensee under 49 U.S.C. Subtitle IX, ch. 701.
    United States means the United States and its agencies involved in 
Licensed/Permitted Activities.
    Except as otherwise defined herein, terms used in this Agreement 
and defined in 49 U.S.C. Subtitle IX, ch. 701--Commercial Space Launch 
Activities, or in the Regulations, shall have the same meaning as 
contained in 49 U.S.C. Subtitle IX, ch. 701, or the Regulations, 
respectively.

2. Waiver and Release of Claims

    (a) Space Flight Participant hereby waives and releases claims it 
may have against the United States, and against its respective 
Contractors and Subcontractors, for Bodily Injury or Property Damage 
resulting from Licensed/Permitted Activities, regardless of fault.
    (b) The United States hereby waives and releases claims it may have 
against Space Flight Participant for Property Damage it sustains, and 
for Bodily Injury or Property Damage sustained by its own employees, 
resulting from Licensed/Permitted Activities, regardless of fault.

3. Assumption of Responsibility

    (a) Space Flight Participant shall each be responsible for Bodily 
Injury or Property Damage sustained resulting from Licensed/Permitted 
Activities, regardless of fault. Space Flight Participant shall hold 
harmless and indemnify the United States, and its Contractors and 
Subcontractors, for Bodily Injury or Property Damage sustained from 
Licensed/Permitted Activities, regardless of fault.
    (b) The United States shall be responsible for Property Damage it 
sustains, and for Bodily Injury or Property Damage sustained by its own 
employees, resulting from Licensed Activities, regardless of fault, to 
the extent that claims it would otherwise have for such damage or 
injury exceed the amount of insurance or demonstration of financial 
responsibility required under sections 440.9(c) and (e), respectively, 
of the Regulations.
    (c) The United States shall be responsible for Property Damage it 
sustains, resulting from Permitted Activities, regardless of fault, to 
the extent that claims it would otherwise have for such damage exceed 
the amount of insurance or demonstration of financial responsibility 
required under section 440.9(e) of the Regulations.

4. Extension of Assumption of Responsibility and Waiver

    (a) The United States shall extend the requirements of the waiver 
and release of claims, and the assumption of responsibility as set 
forth in paragraphs 2(b) and 3(b), respectively, to its Contractors and 
Subcontractors by requiring them to waive and release all claims they 
may have against Space Flight Participant, and to agree to be 
responsible, for any Property Damage they sustain and for any Bodily 
Injury or Property Damage sustained by their own employees, resulting 
from Licensed Activities, regardless of fault.
    (b) The United States shall extend the requirements of the waiver 
and release of claims, and the assumption of responsibility as set 
forth in paragraphs 2(b) and 3(c), respectively, to its Contractors and 
Subcontractors by requiring them to waive and release all claims they 
may have against the crew member and to agree to be responsible, for 
any Property Damage they sustain, resulting from Permitted Activities, 
regardless of fault.

5. Assurances Under 49 U.S.C. 70112(e)

    Notwithstanding any provision of this Agreement to the contrary, 
Space Flight Participant shall hold harmless the United States and its 
agencies, servants, agents, employees and assignees, or any of them, 
from and against liability, loss or damage arising out of claims for 
Bodily Injury or Property Damage, resulting from Licensed/Permitted 
Activities, regardless of fault, except to the extent that, as provided 
in section 6(b) of this Agreement, claims result from willful 
misconduct of the United States or its agents.

6. Miscellaneous

    (a) Nothing contained herein shall be construed as a waiver or 
release by Space Flight Participant or the United States of any claim 
by an employee of the Space Flight Participant or the United States, 
respectively, including a member of the Armed Forces of the United 
States, for Bodily Injury or Property Damage, resulting from Licensed/
Permitted Activities.
    (b) Notwithstanding any provision of this Agreement to the 
contrary, any waiver, release, assumption of responsibility or 
agreement to hold harmless and indemnify herein shall not apply to 
claims for Bodily Injury or Property Damage resulting from willful 
misconduct of any of the Parties, the Contractors, Subcontractors, and 
agents of the United States, and Space Flight Participant.
    (c) This Agreement shall be governed by and construed in accordance 
with United States Federal law.
    In witness whereof, the Parties to this Agreement have caused the 
Agreement to be duly executed by their respective duly authorized 
representatives as of the date written above.
Space Flight Participant

Signature: --------

Printed Name: --------
Federal Aviation Administration of the Department of Transportation on 
Behalf of the United States Government

By: --------

Its: --------
Associate Administrator for Commercial Space Transportation
    10. Add part 460 to read as follows:

[[Page 77289]]

PART 460--HUMAN SPACE FLIGHT REQUIREMENTS

Subpart A--Launch and Reentry With Crew
Sec.
460.1 Scope.
460.3 Applicability.
460.5 Crew qualifications and training.
460.7 Operator training of crew.
460.9 Informing crew of risk.
460.11 Environmental control and life support systems.
460.13 Smoke detection and fire suppression.
460.15 Human factors.
460.17 Verification program.
460.19 Crew waiver of claims against U.S. Government.
460.20-460.40 [Reserved]
Subpart B--Launch and Reentry With a Space Flight Participant
460.41 Scope.
460.43 Applicability.
460.45 Operator informing space flight participant of risk.
460.47 [Reserved]
460.49 Space flight participant waiver of claims against U.S. 
Government.
460.51 Space flight participant training.
460.53 Security.

    Authority: 49 U.S.C. 70105


Sec.  460.1  Scope.

    This subpart establishes requirements for crew of a vehicle whose 
operator is licensed or permitted under this chapter.


Sec.  460.3  Applicability.

    (a) This subpart applies to:
    (1) An applicant for a license or permit under this chapter who 
proposes to have flight crew on board a vehicle or proposes to employ a 
remote operator of a vehicle with a human on board.
    (2) An operator licensed or permitted under this chapter who has 
flight crew on board a vehicle or who employs a remote operator of a 
vehicle with a human on board.
    (3) A crew member participating in an activity authorized under 
this chapter.
    (b) Each member of the crew must comply with all requirements of 
the laws of the United States that apply.


Sec.  460.5  Crew qualifications and training.

    (a) Each crew member must--
    (1) Possess and carry an FAA second-class airman medical 
certificate issued in accordance with 14 CFR part 67 and issued within 
12 months prior to launch or reentry;
    (2) Complete training on how to carry out his or her role on board 
or on the ground so that the vehicle will not harm the public; and
    (3) Train for his or her role in nominal and non-nominal 
conditions. The conditions must include--
    (i) Abort scenarios; and
    (ii) Emergency operations.
    (b) Each member of a flight crew must demonstrate an ability to 
withstand the stresses of space flight, sufficiently to carry out his 
or her role on board so that the vehicle will not harm the public. The 
stresses of space flight may include high acceleration or deceleration, 
microgravity, and vibration.
    (c) A pilot and a remote operator must--
    (1) Possess and carry an FAA pilot certificate
    (i) With an instrument rating; and
    (ii) That demonstrates the knowledge of the National Airspace 
System (NAS) necessary to operate the vehicle.
    (2) Possess aeronautical experience and skills necessary to pilot 
and control the vehicle for any launch or reentry vehicle that will 
operate in the NAS. Aeronautical experience may include hours in 
flight, ratings, and training.
    (3) Receive vehicle and mission-specific training for each phase of 
flight by using one or more of the following--
    (i) A method or device that simulates the flight;
    (ii) An aircraft whose characteristics are similar to the vehicle 
or any phase of its flight;
    (iii) Flight testing; or
    (iv) An equivalent method of training as approved by the FAA 
through the licensing or permitting process.
    (4) Train in procedures that direct the vehicle away from the 
public in the event the flight crew abandons the vehicle during flight; 
and
    (5) Train for each mode of control or propulsion, including any 
transition between modes, such that the pilot or remote operator is 
able to control the vehicle.


Sec.  460.7  Operator training of crew.

    (a) Implementation of training. An operator must train each member 
of its crew and define standards for successful completion in 
accordance with Sec.  460.5.
    (b) Training device fidelity. An operator must ensure that any 
crew-training device used to meet the training requirements 
realistically represents the vehicle's configuration and mission or the 
operator must inform the crew member being trained of the differences.
    (c) Maintenance of training records. An operator must continually 
update the crew training to ensure that it incorporates lessons learned 
from training and operational missions. An operator must--
    (1) Track each revision and update in writing; and
    (2) Document the completed training for each crew member and 
maintain the documentation for each active crew member.
    (d) Current qualifications and training. An operator must establish 
a recurrent training schedule and ensure that all crew qualifications 
and training required by Sec.  460.5 are current before launch or 
reentry.


Sec.  460.9  Informing crew of risk.

    An operator must inform in writing any individual serving as crew 
that the United States Government has not certified the launch vehicle 
as safe for carrying flight crew or space flight participants. An 
operator must provide this information--
    (a) Before entering into any contract or other arrangement to 
employ that individual; or
    (b) For any crew member employed as of December 23, 2004, as early 
as possible and prior to any launch in which that individual will 
participate as crew.


Sec.  460.11  Environmental control and life support systems.

    (a) An operator must provide atmospheric conditions adequate to 
sustain life and consciousness for all inhabited areas within a 
vehicle. The operator or flight crew must monitor and control the 
following atmospheric conditions in the inhabited areas--
    (1) Composition of the atmosphere, which includes oxygen and carbon 
dioxide, and any revitalization;
    (2) Pressure, temperature and humidity;
    (3) Contaminants that include particulates and any harmful or 
hazardous concentrations of gases, or vapors; and
    (4) Ventilation and circulation.
    (b) An operator must provide an adequate redundant or secondary 
oxygen supply for the flight crew.
    (c) An operator must
    (1) Provide a redundant means of preventing cabin depressurization; 
or
    (2) Prevent incapacitation of any of the flight crew in the event 
of loss of cabin pressure.


Sec.  460.13  Smoke detection and fire suppression.

    An operator or crew must have the ability to detect smoke and 
suppress a cabin fire to prevent incapacitation of the flight crew.


Sec.  460. 15  Human factors.

    An operator must take the precautions necessary to account for 
human factors that can affect a crew's ability to perform safety-
critical roles, including in the following safety critical areas--
    (a) Design and layout of displays and controls;
    (b) Mission planning, which includes analyzing tasks and allocating 
functions between humans and equipment;

[[Page 77290]]

    (c) Restraint or stowage of all individuals and objects in a 
vehicle; and
    (d) Vehicle operation, so that the vehicle will be operated in a 
manner that flight crew can withstand any physical stress factors, such 
as acceleration, vibration, and noise.


Sec.  460.17  Verification program.

    An operator must successfully verify the integrated performance of 
a vehicle's hardware and any software in an operational flight 
environment before allowing any space flight participant on board 
during a flight. Verification must include flight testing.


Sec.  460. 19  Crew waiver of claims against U.S. Government.

    Each member of a flight crew and any remote operator must execute a 
reciprocal waiver of claims with the Federal Aviation Administration of 
the Department of Transportation in accordance with the requirements of 
part 440.


Sec. Sec.  460. 20-460.40  [Reserved]

Subpart B--Launch and reentry with a space flight participant


Sec.  460.41  Scope.

    This subpart establishes requirements for space flight participants 
on board a vehicle whose operator is licensed or permitted under this 
chapter.


Sec.  460.43  Applicability.

    This subpart applies to:
    (a) An applicant for a license or permit under this chapter who 
proposes to have a space flight participant on board a vehicle;
    (b) An operator licensed or permitted under this chapter who has a 
space flight participant on board a vehicle; and
    (c) A space flight participant participating in an activity 
authorized under this chapter.


Sec.  460.45  Operator informing space flight participant of risk.

    (a) Before receiving compensation or making an agreement to fly a 
space flight participant an operator must satisfy the requirements of 
this section. An operator must inform each space flight participant in 
writing about the risks of the launch and reentry, including the safety 
record of the launch or reentry vehicle type. An operator must present 
this information in a manner that is understandable to the space flight 
participant and must disclose in writing--
    (1) For each mission, the known hazards and risks that could result 
in a serious injury, death, disability, total or partial loss of 
physical and mental function; and
    (2) That participation in space flight may result in death, serious 
injury or total or partial loss of physical or mental function.
    (b) An operator must inform each space flight participant that the 
United States Government has not certified the launch vehicle as safe 
for carrying crew or space flight participants.
    (c) An operator must inform each space flight participant of the 
safety record of all launch or reentry vehicles that have carried one 
or more persons on board, including both U.S. government and private 
sector vehicles. This information must include--
    (1) The total number of people who have been on a suborbital or 
orbital space flight and the total number of people who have died or 
been seriously injured on these flights; and
    (2) The total number of launches and reentries conducted with 
people on board and the number of catastrophic failures of those 
launches.
    (d) An operator must describe the safety record of its vehicle to 
each space flight participant. The operator's safety record must 
include--
    (1) The number of vehicle flights;
    (2) The number of safety-related anomalies or failures that 
occurred on the ground and in flight on all past launches and reentries 
of that vehicle; and
    (3) Whether any corrective actions were taken to resolve these 
safety-related anomalies or failures.
    (e) An operator must inform a space flight participant that he may 
request additional information as described in (f) of this section.
    (f) If a space flight participant asks, an operator must describe 
the safety-related anomalies or failures that occurred on the ground 
and in flight and what corrective actions were taken, if any.
    (g) Before flight, each space flight participant must provide 
informed consent in writing to participate in a launch or reentry. The 
written informed consent must--
    (1) Identify the specific launch vehicle the consent covers;
    (2) State that the space flight participant understands the risk, 
and his or her presence on board the launch vehicle is voluntary;
    (3) Be signed and dated by the space flight participant.


Sec.  460.47  [Reserved]


Sec.  460.49  Space flight participant waiver of claims against U.S. 
Government.

    Each space flight participant must execute a reciprocal waiver of 
claims with the Federal Aviation Administration of the Department of 
Transportation in accordance with the requirements of part 440.


Sec.  460.51  Space flight participant training.

    An operator must train each space flight participant before flight 
on how to respond to emergency situations, including smoke, fire, loss 
of cabin pressure, and emergency exit.


Sec.  460.53  Security.

    An operator must implement security requirements to prevent any 
space flight participant from jeopardizing the safety of the flight 
crew or the public. A space flight participant may not carry on board 
any explosives, firearms, knives, or other weapons.

    Issued in Washington, DC, on December 22, 2005.
Patricia G. Smith,
Associate Administrator for Commercial Space Transportation.
[FR Doc. 05-24555 Filed 12-23-05; 10:26 am]

BILLING CODE 4910-13-P