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Friday, November 23, 2012

Virgin Galactic Threatens to Depart New Mexico Over Liability Waivers for Suppliers

There's real concern that the quarter of a billion dollars New Mexico has invested in Spaceport America could be gone if the New Mexico legislature does not enact a spaceflight liability  extending protection to commercial space launch firm suppliers, according to KTSM-TV (news video) and SpaceNews.

Virgin Galactic CEO George T. Whitesides says the legislature's failure to pass the law next year could force his company to rethink plans to base its business at Spaceport America. Virgin Galactic signed an agreement to become the $209 million Spaceport's anchor tenant, reports KTSM-TV.

"We are going to look hard at what happens this session in terms of our future stance with the spaceport," Whitesides told KRQE. "The deal we signed up for was a bustling spaceport that had multiple tenants there," Whitesides continued. "I have to tell you, spaceport is losing opportunity to get new business."

The Save our Spaceport Coalition group has formed to seek state passage of a new law limiting the liability for space accidents in order to ensure the future of Spaceport America and save thousands of jobs in aerospace, tourism, and construction. The legislation, twice rejected by the New Mexico state legislature, would seek to prevent lawsuits against the manufacturers and suppliers of space vehicles for human commercial space flight.

Virginia was the first state in the nation to pass liability immunity for commercial human spaceflight firms and their suppliers in 2007. Since that time, Virginia passed into law a state income tax exemption for business profits earned in space or for spaceflight training and dedicated nearly $50-million to the well-equipped commercial spaceport co-located on the NASA Wallops Flight Facility on Virginia's Eastern Shore.

Virginia was followed by Florida, Texas, and Colorado in the adoption of spaceflight liability and immunity for commercial space launch firms and their suppliers. The current New Mexico law, like California, provides protection to the commercial space launch operators, not spacecraft part suppliers.

At the 2012 FAA/AST conference in Washington last February, Virginia Governor Bob McDonnell specifically mentioned Virgin Galactic as a potential tenant should it look for business expansion. Space business friendly, the Commonwealth state is now boasting a number of Washington Capitol Hill political leaders who may make a difference for the development of the Virginia spaceport.

Advocates of human spaceflight liability and immunity are also considering federal legislation to give national primacy recognition to such state laws. Virginia Congressman Bob Goodlatte (R-Roanoke) is expected to chair the House Judiciary Committee in the new Congress. 


The Line opinion panel discusses the future of New Mexico's Spaceport America. The venture faces stiff competition from spaceports in other states. Is the facility's anchor tenant - Sir Richard Branson's Virgin Galactic - enough to attract more business? Or do liability laws need to be changed to entice companies in the industry? New Mexico spent $209 million building the spaceport, and residents of three Southern New Mexico counties currently pay a special sales tax designated for the project.


Scott Weaver said...

These are interesting comments from Mr. Whitesides. Why would Virgin care how many other tenants there might be at the NM Spaceport? This seems irrelevant to me. Do these other states have the runway and the other facilities to host Virgin? I do not think so. Nevertheless, I believe the state legislature will pass the requested insurance laws that Virgin is needing. Just don't understand the implied threats from them.

JackKennedy said...

Virgin Galactic suppliers would be at risk under the present state law. It also adds to affilated firm costs of doing business.

Other states, like Virginia, Florida, Colorado, California and Oklahoma have access to similar runways.

Possible insight: Virgin Galactic may gain more business overtures from other states as a result of the implied threat to move - as they look to expand, perhaps to point-to-point suborbital domestic transport.

New Mexico should have been the first to adopt liability and immunity in the nation. It took Virginia to lead the way as the 'change agent.' I too believe the New Mexico legislature will adopt liability immunity for suppliers and other commercial space launch firms. It is simply too important in the face of competition and the effort to reduce operational costs in this emerging business niche.