Wednesday, January 30, 2013

Warp Speed for Spaceport Bill

People who observe the Legislature often complain that the legislative process is way too slow. But that’s certainly not the case with the bill that would limit lawsuits against parts suppliers and manufacturers involved in building spacecraft used in Virgin Galactic’s operation at the $209 million spaceport in southern New Mexico.

After reaching agreement between the New Mexico Trail Lawyers Association and Virgin Galactic late last week, Senate Bill 240, sponsored by Senate President Pro-tem Mary Kay Papen, D-Las Cruces, zipped through the Senate at warp speed. After a quick and positive hearing at the Senate Judiciary Committee earlier this week the full Senate on Wednesday voted unanimously to pass it with no discussion.

The bill goes on to the House.

The liability issue has been a major hangup in Virgin beginning its New Mexico operation. Bills that would have prevented passengers who sign “informed consent” waivers from suing the suppliers and manufacturers have stalled in previous legislative sessions.

Papen’s bill would require suppliers and manufacturers to have $ 1 million in liability insurance for the suppliers and manufacturers. It also would extend the contract between the spaceport and Virgin to 2021. Currently, the contract expires in 2018. Negotiations between the company and the trial lawyers began last year at the urging of legislative leaders.

Even though Papen’s bill apparently is on the fast track, there are some serious issues between the state and Virgin Galactic.

Earlier this week, the Associated Press reported that Virgin Galactic has agreed to start paying rent at the spaceport, but is doing so under protest and without waiving its right to walk away from the project

According to a Jan. 16 email to the New Mexico Spaceport Authority obtained by the wire service, Virgin Galactic said it does not believe the state has finished the work necessary to trigger activation of its $1 million annual rent obligation, and said if the work is not complete to its satisfaction by March 31, it ‘‘may either stop paying rent, pay reduced rent or give notice to terminate’’ its lease.

The company has publicly expressed concerns about the state’s inability to attract more businesses to the project and has hinted it could leave if lawmakers refuse for a third year in a row to expand liability exemptions for the commercial space industry.

In an interview with The New Mexican last week, Virgin Galactic president and chief executive officer George Whitesides said his company wants to operate in New Mexico’s spaceport.

“What we have been saying for a long time is that the natural attributes of New Mexico make it a perfect leader for commercial space,” he said. “That includes everything from, obviously, the spaceport facility itself to the weather, to the altitude, the airspace, to the [proximity to] federal facilities. What is necessary is continued efforts by the New Mexico Spaceport Authority to recruit additional businesses and, frankly, I think another big part of it is for us to get through the end of our development program and start operating.”

Whitesides said commercial space flights by Virgin Galactic using the spaceport could begin as soon as the end of the year — assuming the company’s test-flight program, currently taking place in Mojave, Calif., is successful.

More in tomorrow's New Mexican.

UPDATE: 1:40 pm I clarified a line about the suppliers and manufacturers having to have $1 in liability insurance. (Thanks, Jim)