Sunday, November 29, 2015

Monday Classes and Activities at Hyde Park Campus Canceled Due to Threat

The following letter was posted today on the University of Chicago campus emergency page and emailed to U of C students and staff.

Updated: Nov. 29, 2015 at 8:01 pm CST
Date: November 29, 2015
To: University of Chicago Campus Community
From:  Robert J. Zimmer
Subject: Monday Classes and Activities at Hyde Park Campus Canceled Due to Threat
The University was informed by FBI counterterrorism officials today (Sunday) that an unknown individual posted an online threat of gun violence against the University of Chicago, specifically mentioning “the campus quad” on Monday morning at 10 a.m. Based on the FBI’s assessment of this threat and recent tragic events at other campuses across the country, we have decided in consultation with federal and local law enforcement officials, to exercise caution by canceling all classes and activities on the Hyde Park campus through midnight on Monday. All non-medical faculty, students and non-essential staff are asked not to come to the Hyde Park campus on Monday, or to remain indoors as much as possible if they are on campus.  Students in College Housing are asked to stay indoors and await direct communication from College Housing Staff.
In response to the threat, the University will have an increased police and security presence on and around campus, including police personnel with visible weapons and other additional measures. University security personnel are keeping in close contact with the FBI, which is continuing to investigate the threat.
In addition to canceling all classes and events at the Hyde Park campus, the University of Chicago Laboratory Schools, the University libraries, the Quadrangle Club, and other campus facilities will be closed on Monday. The University of Chicago Medical Center will remain open to patients, with added security measures. Student Health and Counseling Services will be closed; students may consult csl.uchicago.edu for additional information. Medical Center faculty and staff involved in patient care will receive additional details later this evening.
All University staff and faculty members who do not have emergency duties or patient care responsibilities are encouraged to avoid coming to the Hyde Park campus on Monday. Individuals with questions about their status should contact their immediate supervisors. We will provide updates at the University homepage, as more information becomes available, with the expectation of resuming normal University operations on Tuesday.
If you see anything unusual or have urgent questions about security measures, please contact the Unersity [sic] of Chicago Police Department at 773-702-8181. Students living on campus who are seeking additional information should contact their resident heads.

H.R. 2262, the “U.S. Commercial Space Launch Competitiveness Act,


AT THE FIRST SESSION
Begun and held at the City of Washington on Tuesday,
the sixth day of January, two thousand and fifteen

To facilitate a pro-growth environment for the developing commercial space industry by encouraging private sector investment and creating more stable and predictable regulatory conditions, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS; REFERENCES.
(a) Short Title.—This Act may be cited as the “U.S. Commercial Space Launch Competitiveness Act”.

(b) Table Of Contents.—The table of contents of this Act is as follows:


Sec. 1. Short title; table of contents; references.
TITLE I—SPURRING PRIVATE AEROSPACE COMPETITIVENESS AND ENTREPRENEURSHIP

Sec. 101. Short title.
Sec. 102. International launch competitiveness.
Sec. 103. Indemnification for space flight participants.
Sec. 104. Launch license flexibility.
Sec. 105. Licensing report.
Sec. 106. Federal jurisdiction.
Sec. 107. Cross waivers.
Sec. 108. Space authority.
Sec. 109. Orbital traffic management.
Sec. 110. Space surveillance and situational awareness data.
Sec. 111. Consensus standards and extension of certain safety regulation requirements.
Sec. 112. Government astronauts.
Sec. 113. Streamline commercial space launch activities.
Sec. 114. Operation and utilization of the ISS.
Sec. 115. State commercial launch facilities.
Sec. 116. Space support vehicles study.
Sec. 117. Space launch system update.
TITLE II—COMMERCIAL REMOTE SENSING

Sec. 201. Annual reports.
Sec. 202. Statutory update report.
TITLE III—OFFICE OF SPACE COMMERCE

Sec. 301. Renaming of office of space commercialization.
Sec. 302. Functions of the office of space commerce.
TITLE IV—SPACE RESOURCE EXPLORATION AND UTILIZATION

Sec. 401. Short title.
Sec. 402. Title 51 amendment.
Sec. 403. Disclaimer of extraterritorial sovereignty.
(c) References To Title 51, United States Code.—Except as otherwise expressly provided, wherever in this Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of title 51, United States Code.

TITLE I—SPURRING PRIVATE AEROSPACE COMPETITIVENESS AND ENTREPRENEURSHIP

SEC. 101. SHORT TITLE.
This title may be cited as the “Spurring Private Aerospace Competitiveness and Entrepreneurship Act of 2015” or “SPACE Act of 2015”.


SEC. 102. INTERNATIONAL LAUNCH COMPETITIVENESS.
(a) Sense Of Congress.—It is the sense of Congress that it is in the public interest to update the methodology used to calculate the maximum probable loss from claims under section 50914 of title 51, United States Code, with a validated risk profile approach in order to consistently compute valid and reasonable maximum probable loss values.

(b) Implementation.—Not later than 180 days after the date of enactment of this Act, the Secretary of Transportation, in consultation with the commercial space sector and insurance providers, shall—

(1) evaluate the methodology used to calculate the maximum probable loss from claims under section 50914 of title 51, United States Code, and, if necessary, develop a plan to update that methodology;

(2) in evaluating or developing a plan under paragraph (1)—

(A) ensure that the Federal Government is not exposed to greater costs than intended and that launch companies are not required to purchase more insurance coverage than necessary; and

(B) consider the impact of the cost to both the industry and the Government of implementing an updated methodology; and

(3) submit the evaluation, and any plan, to the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Science, Space, and Technology of the House of Representatives.

(c) Independent Assessment.—Not later than 270 days after the date the evaluation is submitted under subsection (b)(3), the Comptroller General shall submit to the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Science, Space, and Technology of the House of Representatives an assessment of—

(1) the analysis and conclusions provided by the Secretary of Transportation in the evaluation, and any plan, under subsection (b);

(2) the implementation schedule proposed by the Secretary in the plan described in paragraph (1);

(3) the suitability of the plan described in paragraph (1) for implementation; and

(4) any further actions needed to implement the plan described in paragraph (1) or otherwise accomplish the purpose of this section.

(d) Launch Liability Extension.—Section 50915(f) is amended by striking “December 31, 2016” and inserting “September 30, 2025”.


SEC. 103. INDEMNIFICATION FOR SPACE FLIGHT PARTICIPANTS.
(a) In General.—Chapter 509 is amended—

(1) in section 50914(a)—

(A) in paragraph (4), by adding at the end the following:


“(E) space flight participants.”; and

(B) by adding at the end the following:


“(5) Subparagraph (E) of paragraph (4) ceases to be effective September 30, 2025.”; and

(2) in section 50915(a)—

(A) in paragraph (1), by striking “a licensee or transferee under this chapter, a contractor, subcontractor, or customer of the licensee or transferee, or a contractor or subcontractor of a customer, but not against a space flight participant,” and inserting “a person described in paragraph (3)(A)”; and

(B) by adding at the end the following:


“(3) (A) A person described in this subparagraph is—

“(i) a licensee or transferee under this chapter;

“(ii) a contractor, subcontractor, or customer of the licensee or transferee;

“(iii) a contractor or subcontractor of a customer; or

“(iv) a space flight participant.

“(B) Clause (iv) of subparagraph (A) ceases to be effective September 30, 2025.”.


SEC. 104. LAUNCH LICENSE FLEXIBILITY.
Section 50906 is amended—

(1) in subsection (d)—

(A) in the matter preceding paragraph (1), by striking “that will be launched or reentered” and inserting “or reusable launch vehicles that will be launched into a suborbital trajectory or reentered under that permit”;

(B) by amending paragraph (1) to read as follows:


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

(C) in paragraph (3)—

(i) by striking “prior to obtaining a license”; and

(ii) by inserting “or vehicle” after “design of the rocket”;

(2) in subsection (e)—

(A) in paragraph (1), by striking “suborbital rocket design” and inserting “suborbital rocket or suborbital rocket design, or for a particular reusable launch vehicle or reusable launch vehicle design,”; and

(B) in paragraph (2), by inserting “or launch vehicle” after “the suborbital rocket”;

(3) by amending subsection (g) to read as follows:


“(g) The Secretary may issue a permit under this section notwithstanding any license issued under this chapter. The issuance of a license under this chapter may not invalidate a permit issued under this section.”; and

(4) in subsection (h), by inserting “or reusable launch vehicle” after “suborbital rocket”.


SEC. 105. LICENSING REPORT.
Not later than 120 days after the date of enactment of this Act, the Secretary of Transportation shall submit to the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Science, Space, and Technology of the House of Representatives a report on approaches for streamlining the licensing and permitting process of launch vehicles, reentry vehicles, or components of launch or reentry vehicles, to enable non-launch flight operations related to space transportation. The report shall include approaches to improve efficiency, reduce unnecessary costs, resolve inconsistencies, remove duplication, and minimize unwarranted constraints. The report shall also include an assessment of existing private and government infrastructure, as appropriate, in future licensing activities.


SEC. 106. FEDERAL JURISDICTION.
Section 50914 is amended by adding at the end the following:


“(g) Federal Jurisdiction.—Any claim by a third party or space flight participant for death, bodily injury, or property damage or loss resulting from an activity carried out under the license shall be the exclusive jurisdiction of the Federal courts.”.


SEC. 107. CROSS WAIVERS.
Section 50914(b)(1) is amended to read as follows:


“(1) (A) A launch or reentry license issued or transferred under this chapter shall contain a provision requiring the licensee or transferee to make a reciprocal waiver of claims with applicable parties involved in launch services or reentry services under which each party to the waiver agrees to be responsible for personal injury to, death of, or property damage or loss sustained by it or its own employees resulting from an activity carried out under the applicable license.

“(B) In this paragraph, the term ‘applicable parties’ means—

“(i) contractors, subcontractors, and customers of the licensee or transferee;

“(ii) contractors and subcontractors of the customers; and

“(iii) space flight participants.

“(C) Clause (iii) of subparagraph (B) ceases to be effective September 30, 2025.”.


SEC. 108. SPACE AUTHORITY.
(a) In General.—Not later than 120 days after the date of enactment of this Act, the Director of the Office of Science and Technology Policy, in consultation with the Secretary of State, the Secretary of Transportation, the Administrator of the National Aeronautics and Space Administration, the heads of other relevant Federal agencies, and the commercial space sector, shall—

(1) assess current, and proposed near-term, commercial non-governmental activities conducted in space;

(2) identify appropriate authorization and supervision authorities for the activities described in paragraph (1);

(3) recommend an authorization and supervision approach that would prioritize safety, utilize existing authorities, minimize burdens to the industry, promote the U.S. commercial space sector, and meet the United States obligations under international treaties; and

(4) submit to the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Science, Space, and Technology of the House of Representatives a report on the activities described in paragraphs (1), (2), and (3).

(b) Exception.—Nothing in this section shall apply to the activities of the ISS national laboratory as described in section 504 of the National Aeronautics and Space Administration Authorization Act of 2010 (42 U.S.C. 18354), including any research or development projects utilizing the ISS national laboratory.


SEC. 109. ORBITAL TRAFFIC MANAGEMENT.
(a) Sense Of Congress.—It is the sense of the Congress that an improved framework may be necessary for space traffic management of United States Government assets and United States private sector assets in outer space and orbital debris mitigation.

(b) Study.—Not later than 90 days after the date of enactment of this Act, the Administrator of the National Aeronautics and Space Administration, in consultation with the Secretary of Transportation, the Chair of the Federal Communications Commission, the Secretary of Commerce, and the Secretary of Defense, shall enter into an arrangement with an independent systems engineering and technical assistance organization to study alternate frameworks for the management of space traffic and orbital activities.

(c) Contents.—The study shall include the following:

(1) An assessment of current regulations, best practices, and industry standards that apply to space traffic management and orbital debris mitigation.

(2) An assessment of current statutory authorities granted to the Federal Communications Commission, the Department of Transportation, and the Department of Commerce that apply to space traffic management and orbital debris mitigation and how those agencies utilize and coordinate those authorities.

(3) A review of all space traffic management and orbital debris requirements under treaties and other international agreements to which the United States is a signatory, and other nonbinding international arrangements in which the United States participates, and the manner and extent to which the Federal Government complies with those requirements and arrangements.

(4) An assessment of existing Federal Government assets used to conduct space traffic management and space situational awareness.

(5) An assessment of the risk to space traffic management associated with smallsats and any necessary Government coordination for their launch and utilization to avoid congestion of the orbital environment and improve space situational awareness.

(6) An assessment of existing private sector information sharing activities associated with space situational awareness and space traffic management.

(7) Recommendations related to the appropriate framework for the protection of the health, safety, and welfare of the public and economic vitality of the space industry.

(d) Report.—Not later than 1 year after the date of enactment of this Act, the Administrator shall submit to the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Science, Space, and Technology of the House of Representatives the study required in subsection (b).

(e) Department Of Defense Authorities.—

(1) SENSE OF CONGRESS.—It is the sense of Congress that the Department of Defense plays a vital and unique role in protecting national security assets in space.

(2) RULE OF CONSTRUCTION.—Nothing in this section may be construed to affect the authority of the Secretary of Defense as it relates to safeguarding the national security.


SEC. 110. SPACE SURVEILLANCE AND SITUATIONAL AWARENESS DATA.
Not later than 120 days after the date of enactment of this Act, the Secretary of Transportation in concurrence with the Secretary of Defense shall—

(1) in consultation with the heads of other relevant Federal agencies, study the feasibility of processing and releasing safety-related space situational awareness data and information to any entity consistent with national security interests and public safety obligations of the United States; and

(2) submit a report on the feasibility study to the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Science, Space, and Technology of the House of Representatives.


SEC. 111. CONSENSUS STANDARDS AND EXTENSION OF CERTAIN SAFETY REGULATION REQUIREMENTS.
Section 50905(c) is amended—

(1) in paragraph (1), by inserting “IN GENERAL.—” before “The Secretary”;

(2) in paragraph (2), by inserting “REGULATIONS.—” before “Regulations”;

(3) by striking paragraph (3);

(4) by redesignating paragraph (4) as paragraph (10);

(5) by inserting after paragraph (2) the following:


“(3) FACILITATION OF STANDARDS.—The Secretary shall continue to work with the commercial space sector, including the Commercial Space Transportation Advisory Committee, or its successor organization, to facilitate the development of voluntary industry consensus standards based on recommended best practices to improve the safety of crew, government astronauts, and space flight participants as the commercial space sector continues to mature.

“(4) COMMUNICATION AND TRANSPARENCY.—Nothing in this subsection shall be construed to limit the authority of the Secretary to discuss potential regulatory approaches, potential performance standards, or any other topic related to this subsection with the commercial space industry, including observations, findings, and recommendations from the Commercial Space Transportation Advisory Committee, or its successor organization, prior to the issuance of a notice of proposed rulemaking. Such discussions shall not be construed to permit the Secretary to promulgate industry regulations except as otherwise provided in this section.

“(5) INTERIM VOLUNTARY INDUSTRY CONSENSUS STANDARDS REPORTS.—

“(A) IN GENERAL.—Not later than December 31, 2016, and every 30 months thereafter until December 31, 2021, the Secretary, in consultation and coordination with the commercial space sector, including the Commercial Space Transportation Advisory Committee, or its successor organization, shall submit to the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Science, Space, and Technology of the House of Representatives a report on the progress of the commercial space transportation industry in developing voluntary industry consensus standards that promote best practices to improve industry safety.

“(B) CONTENTS.—The report shall include, at a minimum—

“(i) any voluntary industry consensus standards that have been accepted by the industry at large;

“(ii) the identification of areas that have the potential to become voluntary industry consensus standards that are currently under consideration by the industry at large;

“(iii) an assessment from the Secretary on the general progress of the industry in adopting voluntary industry consensus standards;

“(iv) any lessons learned about voluntary industry consensus standards, best practices, and commercial space launch operations;

“(v) any lessons learned associated with the development, potential application, and acceptance of voluntary industry consensus standards, best practices, and commercial space launch operations; and

“(vi) recommendations, findings, or observations from the Commercial Space Transportation Advisory Committee, or its successor organization, on the progress of the industry in developing voluntary industry consensus standards that promote best practices to improve industry safety.

“(6) REPORT.—Not later than 270 days after the date of enactment of the SPACE Act of 2015, the Secretary, in consultation and coordination with the commercial space sector, including the Commercial Space Transportation Advisory Committee, or its successor organization, shall submit to the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Science, Space, and Technology of the House of Representatives a report specifying key industry metrics that might indicate readiness of the commercial space sector and the Department of Transportation to transition to a safety framework that may include regulations under paragraph (9) that considers space flight participant, government astronaut, and crew safety.

“(7) REPORTS.—Not later than March 31 of each of 2018 and 2022, the Secretary, in consultation and coordination with the commercial space sector, including the Commercial Space Transportation Advisory Committee, or its successor organization, shall submit to the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Science, Space, and Technology of the House of Representatives a report that identifies the activities, described in this subsection and subsection (d) most appropriate for a new safety framework that may include regulatory action, if any, and a proposed transition plan for such safety framework.

“(8) INDEPENDENT REVIEW.—Not later than December 31, 2022, an independent systems engineering and technical assistance organization or standards development organization contracted by the Secretary shall submit to the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Science, Space, and Technology of the House of Representatives an assessment of the readiness of the commercial space industry and the Federal Government to transition to a safety framework that may include regulations. As part of the review, the contracted organization shall evaluate—

“(A) the progress of the commercial space industry in adopting voluntary industry consensus standards as reported by the Secretary in the interim assessments included in the reports under paragraph (5);

“(B) the progress of the commercial space industry toward meeting the key industry metrics identified by the report under paragraph (6), including the knowledge and operational experience obtained by the commercial space industry while providing services for compensation or hire; and

“(C) whether the areas identified in the reports under paragraph (5) are appropriate for regulatory action, or further development of voluntary industry consensus standards, considering the progress evaluated in subparagraphs (A) and (B) of this paragraph.

“(9) LEARNING PERIOD.—Beginning on October 1, 2023, the Secretary may propose regulations under this subsection without regard to subparagraphs (C) and (D) of paragraph (2). The development of any such regulations shall take into consideration the evolving standards of the commercial space flight industry as identified in the reports published under paragraphs (5), (6), and (7).”; and

(6) in paragraph (10), as redesignated, by inserting “RULE OF CONSTRUCTION.—” before “Nothing”.


SEC. 112. GOVERNMENT ASTRONAUTS.
(a) Findings And Purpose.—Section 50901(15) is amended by inserting “, government astronauts,” after “crew” each place it appears.

(b) Sense Of Congress.—The National Aeronautics and Space Administration has a need to fly government astronauts (as defined in section 50902 of title 51, United States Code, as amended) within commercial launch vehicles and reentry vehicles under chapter 509 of that title. This need was identified by the Secretary of Transportation and the Administrator of the National Aeronautics and Space Administration due to the intended use of commercial launch vehicles and reentry vehicles developed under the Commercial Crew Development Program, authorized in section 402 of the National Aeronautics and Space Administration Authorization Act of 2010 (124 Stat. 2820; Public Law 111–267). It is the sense of Congress that the authority delegated to the Administration by the amendment made by subsection (d) of this section should be used for that purpose.

(c) Definition Of Government Astronaut.—Section 50902 is amended—

(1) by redesignating paragraphs (4) through (22) as paragraphs (7) through (25), respectively; and

(2) by inserting after paragraph (3) the following:


“(4) ‘government astronaut’ means an individual who—

“(A) is designated by the National Aeronautics and Space Administration under section 20113(n);

“(B) is carried within a launch vehicle or reentry vehicle in the course of his or her employment, which may include performance of activities directly relating to the launch, reentry, or other operation of the launch vehicle or reentry vehicle; and

“(C) is either—

“(i) an employee of the United States Government, including the uniformed services, engaged in the performance of a Federal function under authority of law or an Executive act; or

“(ii) an international partner astronaut.

“(5) ‘international partner astronaut’ means an individual designated under Article 11 of the International Space Station Intergovernmental Agreement, by a partner to that agreement other than the United States, as qualified to serve as an International Space Station crew member.

“(6) ‘International Space Station Intergovernmental Agreement’ means the Agreement Concerning Cooperation on the International Space Station, signed at Washington January 29, 1998 (TIAS 12927).”.

(d) Powers Of The National Aeronautics And Space Administration In Performance Of Functions.—Section 20113 is amended by adding at the end the following:


“(n) Identification Of Government Astronauts.—For purposes of a license issued or transferred by the Secretary of Transportation under chapter 509 to launch a launch vehicle or to reenter a reentry vehicle carrying a government astronaut (as defined in section 50902), the Administration shall designate a government astronaut in accordance with requirements prescribed by the Administration.”.

(e) Definition Of Launch.—Paragraph (7) of section 50902, as redesignated, is amended by striking “and any payload, crew, or space flight participant” and inserting “and any payload or human being”.

(f) Definition Of Launch Services.—Paragraph (9) of section 50902, as redesignated, is amended by striking “payload, crew (including crew training), or space flight participant” and inserting “payload, crew (including crew training), government astronaut, or space flight participant”.

(g) Definition Of Reenter And Reentry.—Paragraph (16) of section 50902, as redesignated, is amended by striking “and its payload, crew, or space flight participants, if any,” and inserting “and its payload or human beings, if any,”.

(h) Definition Of Reentry Services.—Paragraph (17) of section 50902, as redesignated, is amended by striking “payload, crew (including crew training), or space flight participant, if any,” and inserting “payload, crew (including crew training), government astronaut, or space flight participant, if any,”.

(i) Definition Of Space Flight Participant.—Paragraph (20) of section 50902, as redesignated, is amended to read as follows:


“(20) ‘space flight participant’ means an individual, who is not crew or a government astronaut, carried within a launch vehicle or reentry vehicle.”.

(j) Definition Of Third Party.—Paragraph (24)(E) of section 50902, as redesignated, is amended by inserting “, government astronauts,” after “crew”.

(k) Restrictions On Launches, Operations, And Reentries; Single License Or Permit.—Section 50904(d) is amended by striking “activities involving crew or space flight participants” and inserting “activities involving crew, government astronauts, or space flight participants”.

(l) License Applications And Requirements; Applications.—Section 50905 is amended—

(1) in subsection (a)(2), by striking “crews and space flight participants” and inserting “crew, government astronauts, and space flight participants”;

(2) in subsection (b)(2)(D), by striking “crew or space flight participants” and inserting “crew, government astronauts, or space flight participants”; and

(3) in subsection (c)—

(A) in paragraph (1), by striking “crew and space flight participants” and inserting “crew, government astronauts, and space flight participants”; and

(B) in paragraph (2), by striking “to crew or space flight participants” each place it appears and inserting “to crew, government astronauts, or space flight participants”.

(m) Monitoring Activities.—Section 50907(a) is amended by striking “at a site used for crew or space flight participant training” and inserting “at a site not owned or operated by the Federal Government or a foreign government used for crew, government astronaut, or space flight participant training”.

(n) Additional Suspensions.—Section 50908(d)(1) is amended by striking “to crew or space flight participants” each place it appears and inserting “to any human being”.

(o) Relationship To Other Executive Agencies, Laws, And International Obligations; Nonapplication.—Section 50919(g) is amended to read as follows:


“(g) Nonapplication.—

“(1) IN GENERAL.—This chapter does not apply to—

“(A) a launch, reentry, operation of a launch vehicle or reentry vehicle, operation of a launch site or reentry site, or other space activity the Government carries out for the Government; or

“(B) planning or policies related to the launch, reentry, operation, or activity under subparagraph (A).

“(2) RULE OF CONSTRUCTION.—The following activities are not space activities the Government carries out for the Government under paragraph (1):

“(A) A government astronaut being carried within a launch vehicle or reentry vehicle under this chapter.

“(B) A government astronaut performing activities directly relating to the launch, reentry, or other operation of the launch vehicle or reentry vehicle under this chapter.”.


SEC. 113. STREAMLINE COMMERCIAL SPACE LAUNCH ACTIVITIES.
(a) Sense Of Congress.—It is the sense of Congress that eliminating duplicative requirements and approvals for commercial launch and reentry operations will promote and encourage the development of the commercial space sector.

(b) Reaffirmation Of Policy.—Congress reaffirms that the Secretary of Transportation, in overseeing and coordinating commercial launch and reentry operations, should—

(1) promote commercial space launches and reentries by the private sector;

(2) facilitate Government, State, and private sector involvement in enhancing U.S. launch sites and facilities;

(3) protect public health and safety, safety of property, national security interests, and foreign policy interests of the United States; and

(4) consult with the head of another executive agency, including the Secretary of Defense or the Administrator of the National Aeronautics and Space Administration, as necessary to provide consistent application of licensing requirements under chapter 509 of title 51, United States Code.

(c) Requirements.—

(1) IN GENERAL.—The Secretary of Transportation under section 50918 of title 51, United States Code, and subject to section 50905(b)(2)(C) of that title, shall consult with the Secretary of Defense, the Administrator of the National Aeronautics and Space Administration, and the heads of other executive agencies, as appropriate—

(A) to identify all requirements that are imposed to protect the public health and safety, safety of property, national security interests, and foreign policy interests of the United States relevant to any commercial launch of a launch vehicle or commercial reentry of a reentry vehicle; and

(B) to evaluate the requirements identified in subparagraph (A) and, in coordination with the licensee or transferee and the heads of the relevant executive agencies—

(i) determine whether the satisfaction of a requirement of one agency could result in the satisfaction of a requirement of another agency; and

(ii) resolve any inconsistencies and remove any outmoded or duplicative requirements or approvals of the Federal Government relevant to any commercial launch of a launch vehicle or commercial reentry of a reentry vehicle.

(2) REPORTS.—Not later than 180 days after the date of enactment of this Act, and annually thereafter until the Secretary of Transportation determines no outmoded or duplicative requirements or approvals of the Federal Government exist, the Secretary of Transportation, in consultation with the Secretary of Defense, the Administrator of the National Aeronautics and Space Administration, the commercial space sector, and the heads of other executive agencies, as appropriate, shall submit to the Committee on Commerce, Science, and Transportation of the Senate, the Committee on Science, Space, and Technology of the House of Representatives, and the congressional defense committees a report that includes the following:

(A) A description of the process for the application for and approval of a permit or license under chapter 509 of title 51, United States Code, for the commercial launch of a launch vehicle or commercial reentry of a reentry vehicle, including the identification of—

(i) any unique requirements for operating on a United States Government launch site, reentry site, or launch property; and

(ii) any inconsistent, outmoded, or duplicative requirements or approvals.

(B) A description of current efforts, if any, to coordinate and work across executive agencies to define interagency processes and procedures for sharing information, avoiding duplication of effort, and resolving common agency requirements.

(C) Recommendations for legislation that may further—

(i) streamline requirements in order to improve efficiency, reduce unnecessary costs, resolve inconsistencies, remove duplication, and minimize unwarranted constraints; and

(ii) consolidate or modify requirements across affected agencies into a single application set that satisfies the requirements identified in paragraph (1)(A).

(3) DEFINITIONS.—For purposes of this subsection—

(A) any applicable definitions set forth in section 50902 of title 51, United States Code, shall apply;

(B) the terms “launch”, “reenter”, and “reentry” include landing of a launch vehicle or reentry vehicle; and

(C) the terms “United States Government launch site” and “United States Government reentry site” include any necessary facility, at that location, that is commercially operated on United States Government property.


SEC. 114. OPERATION AND UTILIZATION OF THE ISS.
(a) Sense Of Congress.—It is the sense of Congress that—

(1) maximum utilization of partnerships, scientific research, commercial applications, and exploration test bed capabilities of the ISS is essential to ensuring the greatest return on investments made by the United States and its international partners in the development, assembly, and operations of that unique facility; and

(2) every effort should be made to ensure that decisions regarding the service life of the ISS are based on the station's projected capability to continue providing effective and productive research and exploration test bed capabilities.

(b) Continuation Of The International Space Station.—

(1) IN GENERAL.—Section 501 of the National Aeronautics and Space Administration Authorization Act of 2010 (42 U.S.C. 18351) is amended—

(A) in the heading, by striking “THROUGH 2020”; and

(B) in subsection (a), by striking “through at least 2020” and inserting “through at least 2024”.

(2) MAINTENANCE OF THE UNITED STATES SEGMENT AND ASSURANCE OF CONTINUED OPERATIONS OF THE INTERNATIONAL SPACE STATION.—Section 503 of the National Aeronautics and Space Administration Authorization Act of 2010 (42 U.S.C. 18353) is amended—

(A) in subsection (a), by striking “through at least September 30, 2020” and inserting “through at least September 30, 2024”; and

(B) in subsection (b)(1), by striking “In carrying out subsection (a), the Administrator” and inserting “The Administrator”.

(3) RESEARCH CAPACITY ALLOCATION AND INTEGRATION OF RESEARCH PAYLOADS.—Section 504(d) of the National Aeronautics and Space Administration Authorization Act of 2010 (42 U.S.C. 18354(d)) is amended by striking “September 30, 2020” each place it appears and inserting “at least September 30, 2024”.

(4) MAINTAINING USE THROUGH AT LEAST 2024.—Section 70907 is amended to read as follows:

Ҥ 70907. Maintaining use through at least 2024

“(a) Policy.—The Administrator shall take all necessary steps to ensure that the International Space Station remains a viable and productive facility capable of potential United States utilization through at least September 30, 2024.

“(b) NASA Actions.—In furtherance of the policy under subsection (a), the Administrator shall ensure, to the extent practicable, that the International Space Station, as a designated national laboratory—

“(1) remains viable as an element of overall exploration and partnership strategies and approaches;

“(2) is considered for use by all NASA mission directorates, as appropriate, for technically appropriate scientific data gathering or technology risk reduction demonstrations; and

“(3) remains an effective, functional vehicle providing research and test bed capabilities for the United States through at least September 30, 2024.”.

(5) TECHNICAL AND CONFORMING AMENDMENTS.—

(A) TABLE OF CONTENTS OF 2010 ACT.—The item relating to section 501 in the table of contents in section 1(b) of the National Aeronautics and Space Administration Authorization Act of 2010 (124 Stat. 2806) is amended by striking “through 2020”.

(B) TABLE OF CONTENTS OF CHAPTER 709.—The table of contents for chapter 709 is amended by amending the item relating to section 70907 to read as follows:


“70907. Maintaining use through at least 2024.”.

SEC. 115. STATE COMMERCIAL LAUNCH FACILITIES.
(a) Sense Of Congress.—It is the sense of Congress that—

(1) State involvement, development, ownership, and operation of launch facilities can enable growth of the Nation's commercial suborbital and orbital space endeavors and support both commercial and Government space programs;

(2) State launch facilities and the people and property in the affected launch areas of those facilities may be subject to risks resulting from an activity carried out under a license under chapter 509 of title 51, United States Code; and

(3) to ensure the success of the commercial launch industry and the safety of the people and property in the affected launch areas of those facilities, States and State launch facilities should seek to take proper measures to protect themselves, to the extent of their potential liability for involvement in launch services or reentry services, and compensate third parties for possible death, bodily injury, or property damage or loss resulting from an activity carried out under a license under chapter 509 of title 51, United States Code, to which the State or State launch facility is involved in the launch services or reentry services.

(b) Report.—Not later than 1 year after the date of enactment of this Act, the Comptroller General shall submit to the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Science, Space, and Technology of the House of Representatives a report on the potential inclusion of all government property, including State and municipal property, in the existing indemnification regime established under section 50914 of title 51, United States Code.


SEC. 116. SPACE SUPPORT VEHICLES STUDY.
(a) In General.—Not later than 1 year after the date of enactment of this Act, the Comptroller General shall submit to the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Science, Space, and Technology of the House of Representatives a report on the use of space support vehicle services in the commercial space industry.

(b) Contents.—This report shall include—

(1) the extent to which launch providers rely on such services as part of their business models;

(2) the statutory, regulatory, and market barriers to the use of such services; and

(3) recommendations for legislative or regulatory action that may be needed to ensure reduced barriers to the use of such services if such use is a requirement of the industry.


SEC. 117. SPACE LAUNCH SYSTEM UPDATE.
(a) In General.—Chapter 701 is amended—

(1) in the heading by striking “SPACE SHUTTLE” and inserting “SPACE LAUNCH SYSTEM”;

(2) in section 70101—

(A) in the heading, by striking “space shuttle” and inserting “space launch system”; and

(B) by striking “space shuttle” and inserting “space launch system”;

(3) by amending section 70102 to read as follows:

Ҥ 70102. Space launch system use policy

“(a) In General.—The Space Launch System may be used for the following circumstances:

“(1) Payloads and missions that contribute to extending human presence beyond low-Earth orbit and substantially benefit from the unique capabilities of the Space Launch System.

“(2) Other payloads and missions that substantially benefit from the unique capabilities of the Space Launch System.

“(3) On a space available basis, Federal Government or educational payloads that are consistent with NASA’s mission for exploration beyond low-Earth orbit.

“(4) Compelling circumstances, as determined by the Administrator.

“(b) Agreements With Foreign Entities.—The Administrator may plan, negotiate, or implement agreements with foreign entities for the launch of payloads for international collaborative efforts relating to science and technology using the Space Launch System.

“(c) Compelling Circumstances.—Not later than 30 days after the date the Administrator makes a determination under subsection (a)(4), the Administrator shall transmit to the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Science of the House of Representatives written notification of the Administrator’s intent to select the Space Launch System for a specific mission under that subsection, including justification for the determination.”;

(4) in section 70103—

(A) in the heading, by striking “SPACE SHUTTLE” and inserting “SPACE LAUNCH SYSTEM”; and

(B) in subsection (b), by striking “space shuttle” each place it appears and inserting “space launch system”; and

(5) by adding at the end the following:

Ҥ 70104. Definition of Space Launch System

“In this chapter, the term ‘Space Launch System’ means the Space Launch System authorized under section 302 of the National Aeronautics and Space Administration Authorization Act of 2010 (42 U.S.C. 18322).”.

(b) Technical And Conforming Amendments.—

(1) TABLE OF CHAPTERS.—The table of chapters of title 51 is amended by amending the item relating to chapter 701 to read as follows:

“701. Use of space launch system or alternatives .........................
70101”.


(2) TABLE OF CONTENTS OF CHAPTER 701.—The table of contents of chapter 701 is amended—

(A) in the item relating to section 70101, by striking “space shuttle” and inserting “space launch system”;

(B) in the item relating to section 70102, by striking “Space shuttle” and inserting “Space launch system”;

(C) in the item relating to section 70103, by striking “space shuttle” and inserting “space launch system”; and

(D) by adding at the end the following:


“70104. Definition of Space Launch System.”.
(3) REQUIREMENT TO PROCURE COMMERCIAL SPACE TRANSPORTATION SERVICES.—Section 50131(a) of chapter 51 is amended by inserting “or in section 70102” after “in this section”.

TITLE II—COMMERCIAL REMOTE SENSING

SEC. 201. ANNUAL REPORTS.
(a) In General.—Subchapter III of chapter 601 is amended by adding at the end the following:

Ҥ 60126. Annual reports

“(a) In General.—The Secretary shall submit a report to the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Science, Space, and Technology of the House of Representatives not later than 180 days after the date of enactment of the U.S. Commercial Space Launch Competitiveness Act, and annually thereafter, on—

“(1) the Secretary's implementation of section 60121, including—

“(A) a list of all applications received in the previous calendar year;

“(B) a list of all applications that resulted in a license under section 60121;

“(C) a list of all applications denied and an explanation of why each application was denied, including any information relevant to the interagency adjudication process of a licensing request;

“(D) a list of all applications that required additional information; and

“(E) a list of all applications whose disposition exceeded the 120 day deadline established in section 60121(c), the total days overdue for each application that exceeded such deadline, and an explanation for the delay;

“(2) all notifications and information provided to the Secretary under section 60122; and

“(3) a description of all actions taken by the Secretary under the administrative authority granted by paragraphs (4), (5), and (6) of section 60123(a).

“(b) Classified Annexes.—Each report under subsection (a) may include classified annexes as necessary to protect the disclosure of sensitive or classified information.

“(c) Sunset.—The reporting requirement under this section terminates effective September 30, 2020.”.

(b) Table Of Contents.—The table of contents of chapter 601 is amended by inserting after the item relating to section 60125 the following:


“60126. Annual reports.”.

SEC. 202. STATUTORY UPDATE REPORT.
Not later than 1 year after the date of enactment of this Act, the Secretary of Commerce, in consultation with the heads of other appropriate Federal agencies and the National Oceanic and Atmospheric Administration's Advisory Committee on Commercial Remote Sensing, shall submit to the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Science, Space, and Technology of the House of Representatives a report on statutory updates necessary to license private remote sensing space systems. In preparing the report, the Secretary shall take into account the need to protect national security while maintaining United States private sector leadership in the field, and reflect the current state of the art of remote sensing systems, instruments, or technologies.

TITLE III—OFFICE OF SPACE COMMERCE

SEC. 301. RENAMING OF OFFICE OF SPACE COMMERCIALIZATION.
(a) Chapter Heading.—

(1) AMENDMENT.—The heading for chapter 507 is amended by striking “COMMERCIALIZATION” and inserting “COMMERCE”.

(2) CONFORMING AMENDMENT.—The item relating to chapter 507 in the table of chapters for title 51 is amended by striking “Commercialization” and inserting “Commerce”.

(b) Definition Of Office.—Section 50701 is amended by striking “Commercialization” and inserting “Commerce”.

(c) Renaming.—Section 50702(a) is amended by striking “Commercialization” and inserting “Commerce”.


SEC. 302. FUNCTIONS OF THE OFFICE OF SPACE COMMERCE.
Section 50702(c) is amended by striking “Commerce.” and inserting

““Commerce, including—
“(1) to foster the conditions for the economic growth and technological advancement of the United States space commerce industry;

“(2) to coordinate space commerce policy issues and actions within the Department of Commerce;

“(3) to represent the Department of Commerce in the development of United States policies and in negotiations with foreign countries to promote United States space commerce;

“(4) to promote the advancement of United States geospatial technologies related to space commerce, in cooperation with relevant interagency working groups; and

“(5) to provide support to Federal Government organizations working on Space-Based Positioning Navigation, and Timing policy, including the National Coordination Office for Space-Based Position, Navigation, and Timing.”.

TITLE IV—SPACE RESOURCE EXPLORATION AND UTILIZATION

SEC. 401. SHORT TITLE.
This title may be cited as the “Space Resource Exploration and Utilization Act of 2015”.


SEC. 402. TITLE 51 AMENDMENT.
(a) In General.—Subtitle V is amended by adding at the end the following:


“CHAPTER 513—SPACE RESOURCE COMMERCIAL EXPLORATION AND UTILIZATION

“Sec.
“51301. Definitions.
“51302. Commercial exploration and commercial recovery.
“51303. Asteroid resource and space resource rights.
Ҥ 51301. Definitions

“In this chapter:

“(1) ASTEROID RESOURCE.—The term ‘asteroid resource’ means a space resource found on or within a single asteroid.

“(2) SPACE RESOURCE.—

“(A) IN GENERAL.—The term ‘space resource’ means an abiotic resource in situ in outer space.

“(B) INCLUSIONS.—The term ‘space resource’ includes water and minerals.

“(3) UNITED STATES CITIZEN.—The term ‘United States citizen’ has the meaning given the term ‘citizen of the United States’ in section 50902.

Ҥ 51302. Commercial exploration and commercial recovery

“(a) In General.—The President, acting through appropriate Federal agencies, shall—

“(1) facilitate commercial exploration for and commercial recovery of space resources by United States citizens;

“(2) discourage government barriers to the development in the United States of economically viable, safe, and stable industries for commercial exploration for and commercial recovery of space resources in manners consistent with the international obligations of the United States; and

“(3) promote the right of United States citizens to engage in commercial exploration for and commercial recovery of space resources free from harmful interference, in accordance with the international obligations of the United States and subject to authorization and continuing supervision by the Federal Government.

“(b) Report.—Not later than 180 days after the date of enactment of this section, the President shall submit to Congress a report on commercial exploration for and commercial recovery of space resources by United States citizens that specifies—

“(1) the authorities necessary to meet the international obligations of the United States, including authorization and continuing supervision by the Federal Government; and

“(2) recommendations for the allocation of responsibilities among Federal agencies for the activities described in paragraph (1).

Ҥ 51303. Asteroid resource and space resource rights

“A United States citizen engaged in commercial recovery of an asteroid resource or a space resource under this chapter shall be entitled to any asteroid resource or space resource obtained, including to possess, own, transport, use, and sell the asteroid resource or space resource obtained in accordance with applicable law, including the international obligations of the United States.”.

(b) Table Of Chapters.—The table of chapters for title 51 is amended by adding at the end of the items for subtitle V the following:

“513. Space resource commercial exploration and utilization .......
51301”.



SEC. 403. DISCLAIMER OF EXTRATERRITORIAL SOVEREIGNTY.
It is the sense of Congress that by the enactment of this Act, the United States does not thereby assert sovereignty or sovereign or exclusive rights or jurisdiction over, or the ownership of, any celestial body.

Attest:





Speaker of the House of Representatives.

Attest:





Vice President of the United States and  
President of the Senate.

Wednesday, November 25, 2015

Anarcho-Capitalism

Anarcho-capitalism is a political philosophy which advocates a society where there is no government or other ruling body but where there is full respect for private property.

(definition by Robert Wenzel)


Sunday, November 22, 2015

Vice Chairman Stanley Fischer At the "Policy Challenges in a Diverging Global Economy" 2015 Asia Economic Policy Conference sponsored by the Federal Reserve Bank of San Francisco, San Francisco, California

November 19, 2015
Emerging Asia in Transition

I am grateful for the opportunity to participate in the Federal Reserve Bank of San Francisco's Asia Economic Policy Conference, and I thank the organizers for inviting me.1 After a long period of rapid economic growth, Asia's emerging economies appear to have entered a transitional phase. For decades, emerging Asian economies have been among the fastest growing and most dynamic in the world. Supported by an export-oriented development model, annual growth averaged 7-1/2 percent in the three decades leading up to the global financial crisis. As shown in table 1, the fast pace of growth in emerging Asia has also supported impressive gains in per capita income within the region.

As the economies of emerging Asia have developed, they have followed a similar growth trajectory, also apparent in table 1. Along a path pioneered by Japan in the 1960s, initial integration into the global economy has been followed by a period of rapid export-led economic growth, which subsequently slows as the economy develops and incomes rise. In a process that has been likened to the pattern of flying geese, development in Japan pushed more labor-intensive production from Japan into the "Asian tigers"--that is, Hong Kong, Korea, Singapore, and Taiwan--with that set of countries experiencing rapid growth in the 1970s and 1980s. As the tigers developed, low-value-added production was pushed further on, into the group of countries known as the Association of Southeast Asian Nations (ASEAN)--primarily Indonesia, Malaysia, Thailand, and, more recently, China, where growth took off in the 1980s and accelerated through the 2000s.2 At each step in this process, the slowing of growth in the relatively developed and globally integrated Asian economies was matched by an acceleration of growth in the less developed and less integrated economies, maintaining the overall rapid pace of growth in the region.3

Now, with China perhaps beginning to follow the same trajectory of slowing growth as has been experienced by its predecessors in the East Asian growth model and without economies of sufficient scale to fill the gap (with the notable exception of India, which I will discuss later), growth for the region as a whole is declining. As shown in table 2, taken from the most recent International Monetary Fund (IMF) regional outlook for Asia, growth in emerging Asia is set to decline in 2015 and 2016, with China's growth decelerating.4 Furthermore, the IMF projections through 2020 call for almost no pickup from this slower pace.

In my discussion, I will first address some of the factors behind slowing growth in emerging Asia, importantly including demographics. I will then cover one of the global implications of this deceleration, the effect on commodity markets, before looking at the prospects for India to recharge the region's growth dynamic. I will end with some thoughts on Asia's place in the global economy both now and in the years to come.

Why Is Growth in Emerging Asia Slowing?
The first thing to say and think about Asian growth is that growth at a rate of above 6 percent is not slow; it is slower than it has been, but it remains impressive. There are four factors weighing on emerging Asian growth that I would like to highlight. First, emerging Asia continues to be negatively affected by slow demand growth elsewhere, including in the advanced economies. Second, economies generally decelerate as they develop, a pattern that has already been evidenced in many of emerging Asia's growth pioneers. Third, the tremendous growth of trade in the region, driven by the process of global integration and the growth of production-sharing networks, may have plateaued. Lastly, demographic trends in a number of emerging Asian countries are likely to affect growth in the coming years.5

Regarding the first of the factors that I just listed, contrary to often-repeated and often-resurrected stories of emerging market growth "decoupling" from that of the advanced economies, the truth is that advanced-economy demand continues to play a key role in emerging Asia's economic conditions.6 And, as we all know, advanced-economy demand for imports in recent years has been lackluster. Real goods imports in the United States, Japan, and the euro area have all increased at an average annual pace of about 3-1/2 percent over the past three years, in all cases about half the average pace recorded in the two decades leading up to the financial crisis.

Regarding the second factor, as is well established by theory and supported by empirical experience, economic growth tends to decelerate as a country develops. In a capital-poor developing economy, initial increases in investment generally have high returns, which then decline as capital accumulates. Likewise, the initial phase of integration with the global economy is typically marked by strong gains in productivity as methods and technologies are adopted from more advanced economies. Over time, the boost to growth from this catch-up in productivity fades. Also, as incomes rise and consumption grows, there is a tendency for a relatively rapid increase in demand for services. The shift of domestic resources toward the production of services, which are typically associated with lower productivity growth, tends to further lower trend growth.

The factors that have tended to temper growth as economies develop appear to be at play in China. Following years of exceptionally high investment, the return on capital appears to be moderating, and the ratio of investment to gross domestic product (GDP), after peaking near 50 percent of GDP in 2011, has begun to edge down. As viewed in the context of the Lewis model, China could be reaching the stage at which the supply of labor from the subsistence agricultural sector becomes a constraint on growth. Further, productivity growth, though robust by global standards, has been declining.

This decrease is likely due, at least in part, to the rapid growth of services consumption. One of the most noteworthy aspects of China's recent GDP data has been the strength of services, with services now accounting for half of the value added in GDP, up from just over 40 percent in 2008.

Next, I would like to discuss the third factor weighing on Asian growth--trade. Global integration and trade growth have played a key role in the Asian economic success story, and the recent slowdown in global trade, over and above what might be expected given the weakness of advanced-economy demand discussed earlier, is likely to affect emerging Asian growth prospects.

During the financial crisis, global trade collapsed. After the immediate crisis faded, trade bounced back in many cases. But the bounceback was more limited than the decline, with the increase in the volume of trade since 2012 only matching the pace of global output growth, a considerable deceleration from the previous two decades, when trade increased at twice the pace of global output. While the legacy of the crisis, particularly the continued weakness of traded-good-intensive investment in many economies, has likely contributed to the weakness of global trade, a slowdown in intra-Asian regional trade also appears to be a factor. After increasing at an average rate of about 15 percent a year through the 2000s, nominal intra-Asian trade flows have flattened out considerably over the past couple of years, in part reflecting a slowdown in the growth of production sharing within the region.

The outlook for a renewed surge in intra-Asian trade does not appear to be promising. The growth of production-sharing networks in Asia has been tied to the region's export-oriented growth model. In particular, China's integration into the global economy as the hub of this production network provided a significant boost to the development and growth of these networks. As China and the region shift toward domestic demand and away from external demand, it seems unlikely that trade growth in the region will return to its earlier exceptional pace.

To the extent that the expansion of these networks was tied to export-led growth that depended partly on preferential treatment of the export sector, more-balanced growth in these economies may also result in a better allocation of production across countries. If growth of trade is lower as a result, that is not necessarily a problem. However, there is a well-established literature indicating that trade encourages greater efficiency, along with the dissemination of technological innovation, and slower growth of trade could reduce this effect.

It also bears noting that Asian trade growth has been accompanied by the creation of a variety of intraregional and broader trade agreements--including the 10-nation ASEAN and membership in the World Trade Organization, which China achieved in 2001 and Vietnam in 2007--as well as a host of bilateral agreements, both within and outside the region. I will return briefly to the Trans-Pacific Partnership (TPP) at the end of the talk.

Finally, demographics are an additional factor likely to lower growth in the region, particularly in Hong Kong, Korea, Singapore, Thailand, and China, notwithstanding the recent relaxation of the one-child policy. As shown in table 3, both China and Thailand have a median population age of about 37 years, about the same as the median in the United States. The median age is even higher in Hong Kong, Korea, and Singapore, all of which have medians of 40 years or more. Relatedly, as shown in the second column of the table, China, Thailand, and the relatively developed emerging Asian economies are expected to have a significant percentage of their populations older than 65 years by 2030, with the proportion similar to that in the United States, though still below those in Germany and Japan. In contrast, demographics are less of an issue elsewhere in the region, particularly in India and most of ASEAN, including Indonesia, Malaysia, the Philippines, and Vietnam, which have medians of 30 years or less. Just as slowing workforce growth is likely to be a drag on growth in many developed countries, trend growth is likely to be held back by demographic developments in relatively elderly emerging Asian economies as well.

Up to this point, I have discussed a number of factors that are likely to lower emerging Asia's growth trajectory in the coming years. However, the overall message is not a pessimistic one; rather, for the most part, the slowing of growth is a natural transition and an outcome of Asia's remarkable economic success.

As many have noted over the years, maintaining growth sufficiently rapid to meet the development aspirations of the region will require a transition toward an economic paradigm more rooted in domestic demand, particularly consumption. The need for this transition, or rebalancing, is most apparent and also widely acknowledged in China, the current hub of emerging Asia's export-led model. The need for these economies--primarily China, but also those economies that export through China--to switch toward domestic demand largely reflects their having become too big and too important to rely to the extent they have on the export-led models of the past.

On growth, the bottom line that should be emphasized is that even with a diminished pace of growth, the region is still expected to significantly outpace the global economy and make by far the largest contribution to global growth in the years ahead.

Spillovers from Asia's Economic Transition: Commodity Markets
I will now focus on an area where the spillovers of Asia' economic transition are likely to be substantial--global commodity markets.

Emerging Asia has played an outsized role in commodity markets for some time now. Specifically, China, with its investment-heavy growth model, has accounted for a substantial amount of incremental commodity demand over the past two decades. Since 2000, China has accounted for roughly 40 percent of the increase in global demand for oil and 80 percent of the growth in demand for steel. For copper, all of the incremental rise in global demand has come from China, with demand excluding China falling over the period.

The strength of emerging Asian demand growth pushed commodity prices up sharply over most of the past decade, at least temporarily reversing what seemed to be an inexorable decline in both commodity prices and the terms of trade of commodity producers in the preceding two decades. Higher prices were a tremendous boon to commodity producers and supported a decade of strong growth in a number of emerging market economies, as well as commodity sectors in certain advanced economies, including Australia and the United States.

Since mid-2014, commodity prices have plummeted, with oil prices falling almost 60 percent and a broad index of metals prices losing about one-third of its value, dragging down growth in many commodity producers. Although rapid commodity output growth in recent years, which has reflected in part the response of producers to previous price increases, has certainly contributed to the fall in commodity prices, the slowing of demand growth from China and emerging Asia has also been an important factor.

While the path ahead for commodity prices is, as always, uncertain, declining investment rates in emerging Asia, particularly China, present the prospect of a prolonged decline in the growth rate of commodity demand. And prices could remain low for quite some time, which seems particularly true for metals, such as copper and steel, used heavily in construction and investment. However, for oil, the implications of a shift from investment-led growth to a consumption-led model are less certain. On a per capita basis, China's consumption of oil remains far below that of advanced economies, in line with China's lower rate of car ownership. Per capita oil consumption tends to increase with wealth, such that further income growth in China has the potential to provide strong support for the oil market in the coming years.

Indeed, more generally, the world stands to benefit from a transition to more consumption-led growth in emerging Asia. Under a successful transition toward more-balanced growth, emerging Asia can be expected to import a broader array of goods and services both from within the region and globally. Whether a country benefits from or is harmed by emerging Asia's transition is likely to be determined by the flexibility of that country's economy in adapting to shifts in Asian demand away from commodities and inputs for assembly into the region's exports and toward services and goods to meet Asian final demand.

To recap, the transition to slower growth in the emerging Asian economies, as well as a shift toward domestic demand and consumption and away from external demand and investment in the region, is likely to have profound implications for the global economy. For one, trade growth is unlikely to resume its rapid pace of recent decades, and the long climb in commodity prices, which has benefited commodity producers, appears to have come to an end.

Can India Recharge Growth in Emerging Asia?
One source of uncertainty in this outlook, as alluded to earlier, is the prospect for India to provide a new growth engine for Asian development. In principle, India has enormous potential to recharge the Asian growth engine. For one, India is relatively unintegrated into global production-sharing networks. For example, machinery and electrical products, which feature heavily in production-sharing and which make up about half of exports in other emerging Asian economies, account for only 15 percent of India's exports. Foreign direct investment into India is about half the size of similar flows into China as a percentage of GDP, and GDP per capita, at $1,600 in 2014, remains considerably below emerging Asia's average.

All told, while the export-led growth model that propelled growth in China and other economies in emerging Asia has matured, pushing down growth rates, India remains at a relatively early stage of its development trajectory. Further capital deepening and the potential for further productivity gains suggest that India could maintain rapid economic growth for a number of years. As mentioned previously, India is also a young country, with a relatively low dependency ratio and a growing workforce. By United Nations estimates, India is set to overtake China during the next decade as the world's most populous nation.

In the 1960s and 1970s, the Indian economy grew at around 3 to 4 percent. In subsequent decades the growth rate averaged close to 6 percent, and in the early years of this century it rose further, as can be seen in Table 1. In 2015, growth in India is expected to be 7-1/4 percent, the fastest among large economies, and the IMF expects growth to pick up from this already rapid pace through the end of the decade. Growth has been supported by an improved macroeconomic policy framework, including a strengthening of the framework for conducting monetary policy, as well as legal and regulatory reform. And the authorities have embarked on an ambitious program to improve the business environment.

That said, significant roadblocks need to be overcome for India to reach its full potential. The economy continues to suffer from a number of infrastructure bottlenecks that will be alleviated only through a pronounced increase in investment rates, a process that would likely be helped by a relaxation of restrictions on foreign direct investment. Likewise, efforts at difficult reform will have to be sustained. There is much hard work ahead if India is to come closer to fulfilling the potential that it so manifestly has.

Concluding Remarks
The performance of the Asian economies--notably those of East Asia, particularly China, Japan, and Korea--especially in the past six or seven decades, is an outstanding, if not unique, episode in the history of the global economy.

What lies ahead? In the relatively near future probably some major central banks will begin gradually moving away from near-zero interest rates. The question here is whether the emerging market countries of Asia--and, indeed, of the world--are sufficiently prepared for these decisions, to the extent that potential capital flows and market adjustments can take place without major macroeconomic consequences. While we continue to scrutinize incoming data, and no final decisions have been made, we have done everything we can to avoid surprising the markets and governments when we move, to the extent that several emerging market (and other) central bankers have, for some time, been telling the Fed to "just do it."

Further ahead lies the answer to the question of whether developments in the global economy will permit the continuation of the export-centered growth strategy that underlies the Asian miracle or whether we will later conclude that this period, the period after the Great Recession and the global financial crisis, marked the beginning of a new phase in the economic history of the modern global economy.7 Either way, the question of the economic future of India is of major importance not only to the 18 percent of the world's population that lives in India, but also to the other 82 percent of the global population.

At a more structural level are three recent developments whose potential importance is currently difficult to assess: the setting up of the Asian Infrastructure Investment Bank; the likely inclusion of the Chinese yuan in the Special Drawing Rights basket; and the possible establishment of the TPP, a partnership in which China is not expected to be a founding member.8

These are interesting and potentially important developments. Underlying the answer to the questions of what they portend, is the answer to the basic question of whether the economic center of gravity of the world will continue its shift of recent decades toward Asia--in particular, to China or, perhaps, to China and India. This shift would represent a return in some key respects to the global order of two centuries ago and earlier, before the economic rise of the West.

A partial answer to that question is that China is for some time likely to continue to grow faster than the rest of the world and thus to produce an increasing share of global output. Its importance in the global economy is likely to increase, and it is probable that, one way or another, its growth will result in its playing a more decisive role in the international economy and in international economic institutions.

Finally, we need to remind ourselves that geopolitical factors will play a critical role in the unfolding of that process.

References
Brandt, Loren, and Thomas G. Rawski (2008). "China's Great Economic Transformation," in Loren Brandt and Thomas G. Rawski, eds., China's Great Economic Transformation. New York: Cambridge University Press.

Haltmaier, Jane T., Shaghil Ahmed, Brahima Coulibaly, Ross Knippenberg, Sylvain Leduc, Mario Marazzi, and Beth Anne Wilson (2007). "The Role of China in Asia: Engine, Conduit, or Steamroller? (PDF)" International Finance Discussion Papers 904. Washington: Board of Governors of the Federal Reserve System, September.

Monetary Authority of Singapore (2007). "Revisiting the US-Asia Decoupling Hypothesis," special feature B, Macroeconomic Review, vol. 6 (October), pp. 72-80.

World Bank (1993). The East Asian Miracle: Economic Growth and Public Policy Leaving the Board. Washington: WB, September.

Zheng, Kit Wei, Ong Jia Wern, and Kevin Kwan Tai You (2005). "China's Rise as a Manufacturing Powerhouse: Implications for Asia (PDF)," Leaving the Board MAS Staff Paper 42. Singapore: Monetary Authority of Singapore, December.

1. The views expressed here are my own and not necessarily those of others at the Board, on the Federal Open Market Committee, or in the Federal Reserve System. I am grateful to Joseph Gruber and Jasper Hoek for their contributions to this speech. I also thank Ravi Menon of the Monetary Authority of Singapore and Changyong Rhee, Ratna Sahay, and James Walsh of the International Monetary Fund for their assistance. Return to text

2. With some delay, the Philippines could be added to this group.

As production of labor-intensive goods has moved from one group of countries to the next, concerns have been raised about a decrease in "competitiveness" in the relatively more developed Asian economies. These concerns have been particularly pronounced in regard to China, where commentators have questioned whether China's rise has come at the expense of growth in its neighbors or provided an extra impetus to growth. Research studies (see Zheng, Wern, and You (2005) and Haltmaier and others (2007)) have generally found that China's rise has been positive for regional growth, with China's development as an export platform boosting the overall competitiveness of the region's exports.

3. In addition to integration with the global economy, a number of other factors have also contributed to the East Asian growth miracle. With regard to China, Brandt and Rawski (2008) highlight the importance of incremental reform focused on removing the most binding constraints on economic activity. Of course, reform is not independent of global integration, as the heightened international competition associated with opening an economy likely incentivizes increased reform. Return to text

4. The IMF does not include Hong Kong, Korea, Singapore, or Taiwan in its definition of emerging Asia. For the purposes of my discussion, I group these four economies along with China, India, Indonesia, Malaysia, the Philippines, Thailand, and Vietnam as emerging Asia.

5. In a speech of this length and scope, it is not possible to relate all important developments affecting Asian growth. In particular, I will not address the need for further development of financial systems and infrastructure in Asian emerging economies, which will be important factors in determining future rates of growth.

6. This point is particularly well made in Monetary Authority of Singapore (2007).
7. See World Bank (1993) for an early attempt to define the sources of East Asian growth. Return to text

8. At this point, the reader will recall the supposed remark by Chou En-lai that it is too early to assess the importance of the French revolution. The most plausible current version of that story is that Chou was answering a question about the importance of the 1968 student riots in Paris.

The countries expected to become members of the TPP are, in alphabetical order, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam.

Friday, November 20, 2015


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NYSE HOLIDAYS AND TRADING HOURS 2016

HOLIDAY
2016
New Years Day
January 1
Martin Luther King, Jr. Day
January 18
Washington's Birthday*
February 15
Good Friday
March 25
Memorial Day
May 30
Independence Day
July 4
Labor Day
September 5
Thanksgiving Day
November 24**
Christmas
December 25 (Observed December 26)
* Washington's Birthday was first declared a federal holiday by an 1879 act of Congress. The Monday Holiday Law, enacted in 1968, shifted the date of the commemoration of Washington's Birthday from February 22 to the third Monday in February, but neither that law nor any subsequent law changed the name of the holiday from Washington's Birthday to President's Day. Although the third Monday in February has become popularly known as President's Day, the NYSE's designation of Washington's Birthday as an Exchange holiday (Rule 51) follows the form of the federal holiday outlined above (section 6103(a) of title 5 of the United States Code).
** Each market will close early at 1:00 p.m. on Friday,November 25, 2016 (the day after Thanksgiving). Crossing Session orders will be accepted beginning at 1:00 p.m. for continuous executions until 1:30 p.m. on these dates.

Brown Field Investment

When a company or government entity purchases or leases existing production facilities to launch a new production activity. This is one strategy used in foreign-direct investment.

The alternative to this is a green field investment, where a new plant is constructed.

(via Investopedia)

"Greenfield" Investment

A form of foreign direct investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.

This is opposite to a brown field investment.

(via Investopedia)


Wednesday, November 18, 2015