The New Mexican standoff has ended. Legislators have reached a compromise to resolve a liability that threatened to turn Spaceport America into a ghost town.

The issue hinges on liability waivers for spaceflight participants, who fly under the FAA’s doctrine of “informed consent.” The state needs to pass legislation to ensure that those waivers will stand up in court. This is similar to liability protection which the state provides for other industries, such as skiing and horseback riding, where the participant accepts a risk.

New Mexico has existing legislation that protects space-vehicle operators from lawsuits by spaceflight participants, but the existing legislation does not extend to vehicle and part manufacturers. That is a big concern for Virgin Galactic, which recently acquired 100% ownership in The SpaceShip Company, making it the manufacturer as well as operator. Virgin Galactic is the anchor tenant at SpacePort America, and there was concern that Virgin might pull out if the law was not extended to cover manufacturers.

Adding to New Mexico’s woes is the fact that other states, such as Texas, have already passed liability legislation that covers manufacturers.

New Mexico lawmakers have been trying to pass a more comprehensive spaceflight-participant liability bill since 2011, but their efforts have been blocked by the lobbying of trial lawyers.

Yesterday, it was announced that the two sides had reached a compromise which will allow legislation to pass this year. According to the Santa Fe New Mexican, the new bill will allow lawsuits against manufacturers but impose a cap on damages. In return, Virgin Galactic would extend its lease on facilities at Spaceport America, which is currently set to expire in 2018.

Virgin Galactic appears pleased with the bill. Virgin Galactic CEO George Whitesides said, “The natural attributes of New Mexico make it a perfect leader for commercial space. That includes everything from the spaceport facility itself to the weather, to the altitude, the airspace, to the 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.”

A spokesman for New Mexico Governor Susana Martinez said that “Protecting the $209 million taxpayer investment in the Spaceport by passing a bill preventing lawsuit abuse is one of Governor Martinez’s top priorities for this session. The governor met with leaders from Virgin Galactic today and is hopeful that the final legislation that passes will lead to the company’s commitment to stay in New Mexico, and that it will lead to making New Mexico capable of attracting other space industry business.”

Legislators from both parties expressed confidence that the compromise legislation would pass and New Mexico’s investment would be protected. “There is no longer uncertainty in the market,” said Rep. Antonio Maestas (D-Albuquerque).

The bill itself has yet to be drafted, however, so complete details are not available. There is talk of a cap and possible insurance requirements, but we don’t know how high that cap might be. Obviously, it is a figure which Virgin Galactic finds acceptable. It remains to be seen if other companies might not agree. The bill also requires Spaceport companies to obtain insurance coverage of at least $1 million for all spaceflight activities, according to the Las Cruces Sun-News. Presumably, this insurance is meant to cover spaceflight participants and not part of the third-party liability insurance already required by the FAA.

The Las Cruces Sun-News reports that Governor Martinez mentioned spaceport lawsuit abuse in her State of the Union address and said that New Mexico had already lost one space company because of it.

If other companies that don’t find the New Mexican compromise to their liking, or if Virgin changes its mind, we hope they’ll remember the words of Lyle Lovett:

Written by Astro1 on January 23rd, 2013 , Spaceports, Virgin Galactic

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