(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 must obtain and any adjustments 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 §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 51 U.S.C. 50915 and §440.19 of this part. A claim of an employee of any entity listed in paragraphs (1)(ii) through (1)(iii) in the Third party definition in §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 §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) above the amount of financial responsibility required under §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 §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.

[Doc. No. FAA-2005-23449, 71 FR 75632, Dec. 15, 2006, as amended by Amdt. 440-3, 77 FR 20533, Apr. 5, 2012]