Senate OKs Liability Limits for Space Companies

February 1, 2013

A proposal to help New Mexico attract commercial space travel companies is speeding through the Legislature.

The Senate unanimously approved legislation on Wednesday to protect spacecraft manufacturers along with their parts suppliers from most damage lawsuits by passengers on space tourism flights.

British billionaire Richard Branson’s Virgin Galactic plans to fly tourists into outer space at $200,000-a-ticket from Spaceport America, near the community of Truth or Consequences.

A 2010 state law shields Virgin Galactic from being sued in most cases for damages by passengers or their families if there was an accident. The legislation will provide similar liability limitations for the suppliers and manufacturers of spacecraft and their components.

Liability restriction proposals have failed in the Legislature in the past two years, but a compromise was negotiated by Virgin Galactic and the New Mexico Trial Lawyers Association.

Under the latest measure, Virgin Galactic and other space companies must carry $1 million in insurance to qualify for the liability limitations. Supporters say the insurance coverage will help guarantee people are compensated in the few instances that damage lawsuits are allowed, such as when a spacecraft company knew there was a defect or dangerous condition or if they acted recklessly.

Virgin Galactic officials and spaceport promoters have said the proposed liability limitations were needed to attract companies to New Mexico’s spaceport, which has cost taxpayers more than $200 million.

The legislation heads to the House, which is expected to approve it.

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