Procedural Protections of ASCFEA

As noted last week, the recently marked-up American Space Commerce Free Enterprise Act would require a non-governmental U.S. entity operating a space object to obtain certification  from the Department of Commerce. Last week’s post addressed some of the substantive issues in the bill. This week, we’ll take a look at the procedural protections the bill would offer.

Organizations: The first item of interest is the location of the regulator. Although the Federal Aviation Administration’s (FAA) Office of Commercial Space Transportation (AST) has issued a handful of payload reviews over the years for non-traditional space operations, the House Committee does not believe all space activities will have a transportation nexus requiring the FAA’s regulatory culture. Accordingly, the bill would place regulatory oversight and certification authority in the Department of Commerce’s Office of Space Commerce. The ASCFEA would provide that a space object whose operations are certificated by Commerce would not require an FAA payload review for purposes of determining consistency with national security, foreign policy, or international obligations. The FAA would, however, keep its authority to conduct a payload review for public health and safety and the safety of property. Presumably this means the FAA’s safety oversight would be confined to the safety of a launch or reentry, and not address the safety of an orbital habitat, lunar harpist, or Martian distillery. Some clarification may be in order if that is the case.

Numbers: The bill appears to require—but for all practical purposes at best encourages—the Secretary of Commerce to require, to the maximum extent practicable, only one certification for multiple operations of a single space object, for multiple space objects that carry out substantially similar operations, and for the use of multiple space objects to carry out a single operation. Although this language leaves much to the Secretary to decide about what constitutes an operation and whether it is single or multiple, there are advantages to the bill’s encouragement. First, it encourages the Secretary to treat certifications more like a driver’s license.  I go back to the State of Maryland in seven years for my license renewal, rather than every time I plan to get in my car.  This is more efficient.  The FAA offers a similar authorization called the launch operator license. Inspection of the active license list shows that it issues both launch operator, which is like a driver’s license, and launch specific–which applies to only particular launches–licenses. (Yes, the terminology is confusing because all operators of a launch vehicle are called launch operators.) For a Secretary so inclined, certification may efficiently cover more activities than not. A disadvantage to the bill’s approach is that it leaves that determination up to the Secretary, who may have a very narrow definition as to whether another operation is substantially similar enough to come under a single certification or not. Operators would have to seek interpretations from the Secretary repeatedly so as not to run afoul of the law, an exercise which may cause delay as much as obtaining a modification to an existing certification would.

Application requirements: Interestingly, the proposed legislation spells out the application requirements, thus limiting the ability of the Secretary to engage in far-ranging fishing expeditions. Typically, legislation does not do this, which means that a regulatory agency may ask for any information that may arguably fit within its authority. Additionally, a regulatory agency might ask for highly detailed information, but the bill states that an application “shall include only the following information….” (emphasis added).

After reviewing the application, if the Secretary determines that the application satisfies the statutory requirements, the Secretary must approve the application. If the Secretary denies the application (and only the Secretary may issue a denial), the Secretary must provide the applicant in writing a clearly articulated rationale for the denial that provides the applicant guidance on how to address the issue in a subsequent application. The Secretary must also inform the Congressional oversight committee of the reason for the denial. We may hope that Congressional oversight would ensure that any denial was solidly grounded in a statutory basis.

If the Secretary does not make a determination within the deadline, the certification “shall be approved without condition.” This provides an obvious incentive for the Secretary to make a determination because failing to decide means approving. Even if the Secretary’s review is slowed by other agencies, their failure to provide a response in a timely way will not mean that the decision gets put off but that a decision is forced. This would likely provide a disincentive for consulting with other agencies in the interest of time, and it might force other agencies who do get consulted to be able to explain themselves very quickly if they have a serious issue.

Tolling:  The Secretary may not toll the review period. This is also rather clever.  Review of a similar scenario may provide context.  The FAA has a statutory limit on how long it may take to conduct a review of a launch, reentry, or site license. If the FAA’s review takes longer than 180 days, the FAA must notify the House oversight committee within 30 days. In an attempt to be nice to applicants who submit incomplete applications, which happens, the FAA instituted the practice of tolling—stopping the clock from running on the 180 days—if the FAA has to wait for additional information for the application to be complete. This is nice (and, yes, “nice” is a legal principle) because, while it saves the FAA from having to deny an application for incomplete information, it saves the applicant from being denied a license and having to start the 180-day clock all over again from the beginning.

What happened, however, was that rather than appreciating the niceness no one liked being tolled. This provision may reflect that distaste. With the statute spelling out relatively straightforward application requirements, tolling should be unnecessary.  Additionally, with the shorter review period, it looks like it will be less painful to have to re-submit an application.  The lack of tolling would force a very clear decision process on the Secretary.  If an applicant failed to provide all required information or attestations, the Secretary (without delegating to the Office of Space Commerce) would have to deny the application him or herself. This would involve the Secretary in oversight of the application review period, which could lead to inquiries as to why the applicant wasn’t told sooner that information was missing.

What is most interesting, however, is that lacking the ability to toll makes it hard for the regulator to ask follow-up questions that may exceed the information required by statute. Any request for “more” that might result in issuing a denial will reach the attention of both the Secretary and the House oversight committee. A request for “more’ that merely misses the deadline will result in approval.  This may help keep the regulator confined to its statutory mission rather than seeking to add to it.  Fishing expeditions that exceeded the agency’s statutory authority would result in the clock running out and the deadline being missed.  If the Secretary is not able to articulate a rational basis for a denial, approval would be automatic.  In short, although at any given moment an applicant might wish tolling was available, in the long run its lack should force everyone to communicate issues more quickly so they might be solved, or recognize that they are too amorphous to reduce to a clearly articulated rationale, which is what would be necessary for a lawful denial.

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For Whom the Clock Starts, For Whom it Stops, and Tolling

When a launch or reentry operator applies for a launch or reentry license from the Federal Aviation Administration, the FAA has 180 days to determine whether to grant the license or not. This time limit comes from  the Commercial Space Launch Act (CSLA), 51 U.S.C. ch. 509, and the FAA has to follow it. This sounds very simple, but, of course, it isn’t. Because Congress did not specify how the FAA is to count the days, the FAA’s regulations, which it must follow under Supreme Court case law, start and stop the clock based on whether the FAA has enough information in the application to start working on it.

The clock starts. When does the clock start counting down? Might an applicant submit its name and address and have the clock start running? No.

Under the FAA’s rules the clock starts when an applicant submits an accepted application.  An accepted license application is one that is “complete enough for the FAA to start its review.” In other words, the applicant has to provide enough information for the FAA to start figuring out if the operator can satisfy, among other things, the FAA’s safety and financial requirements. That’s when the clock starts ticking.

The FAA can afford this approach because it has the ability to “toll” its review: it can stop the clock. As the regulations note, “[t]he FAA’s acceptance of an application does not mean it has determined that the application is complete.”

The clock stops. If the FAA has an application that does not contain all the necessary information, the FAA will toll the review period under section 413.15(b). To do that, the FAA writes to the applicant and requests the missing information. Although this part is not in the rules, the FAA’s notification of the applicant that the agency needs more information will contain a date by which the applicant should submit the information to avoid tolling. If the applicant provides the information before that date, the clock does not stop. If the FAA does not receive the requested information, the clock stops on the specified date. For example, let’s say that on Day 50 of the review period the FAA writes the applicant requesting information about an applicant’s safety official because the applicant doesn’t seem to have one. The FAA requests the information by April 5, which is Day 60. The applicant does not provide the information. Although the FAA may keep working on the application, it will toll the review period, and the clock doesn’t start again until May 1, when the applicant finally provides the FAA the identity of its safety official.

This system is actually a great benefit to the applicant. If tolling were unavailable, the FAA would have to deny the license application at 180 days for missing information, and the clock would reset to Day 0.

Another interesting point is that both the CSLA and the FAA’s regulations state that the FAA must inform the applicant in writing of any additional information the agency needs if it hasn’t made its final determination at 120 days.

Thus we see that the FAA, in accordance with Congressional direction and expectations, structured its regulations on this topic to allow an applicant to submit an incomplete application, albeit one that is “complete enough” for the FAA to start its review. Were the FAA to change this approach it would have to change its regulations.

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