COMSTAC Briefing: Human Spaceflight Legislation in Virginia and Florida

1
COMSTAC BriefingHuman Spaceflight Legislation
in Virginia and Florida

• James E. Dunstan
• Garvey Schubert Barer
• May 16, 2007

2
Setting the Stage
How do we get from this
To this
Flying Test Pilots
Flying Paying Passengers
3
States Have Impact in Three Areas

• State tort law (immunity and liability
  legislation)
• Conducive business and tax environment
• Launch infrastructure development

4
State Liability and Immunity Acts

• Virginia Space Liability and Immunity Act
• Florida Informed Consent For Spaceflight Act

5
Tort Law Air Transportation As Context

• 1918
• Air mail service well established
• Airplane reliability 90
• 1919 First regularly scheduled service between
  London and Paris
• 1925 Air Mail Act Passed, guaranteeing air mail
  contracts
• 1929 Warsaw Convention adopted, limiting
  liability for passenger fatality on international
  flights to 10,000. Passenger fatality rate of
  45 persons per million miles flown
• 1966 Montreal Convention Upped damage cap
  to 75,000

6
CSLAA and FAA/AST Regulations

• Congress passed the Commercial Space Launch Act
  Amendment in 2004
• The goal of safely opening space to the American
  people and their private commercial, scientific,
  and cultural enterprises should guide Federal
  space investments, policies, and regulations
• Directed the FAA through AST to promulgate rules
• Specifically precluded AST from adopting any
  specific vehicle safety regulations until 2012
• AST adopted final rules December 15, 2006 in
  Human Space Flight Requirements for Crew and
  Space Flight Participants

7
FAA Regulations

• Limited reach
• Specific requirements as to crew safety and
  training
• Much looser requirements as to SFP
• Reciprocal waiver regime to protect the
  government (all crew and SFPs must agree not to
  sue the Federal government for injury)
• Informed Consent regime for SFP

8
Virginia Space Liability and Immunity Act

• Effective July 1, 2007
• Adds New Article 24 in Chapter 3 in Title 8.01
  (Civil Remedies and Procedure), Section
  8.01-227.8 et seq.
• Has a sunset of July 1, 2013

9
Virginia Space Liability and Immunity Act

• Keyed to FAA Regulations
• Provides limited immunity for spaceflight
  entities, which includes manufacturers or
  suppliers of components, services or vehicles
  that have been reviewed by the FAA as part of
  the federal licensing process
• Informed consent regime
• Specific statutory language warning potential
  participants of the danger and that they are
  waiving rights to sue space flight entities in
  the case of an accident

10
VA Statutory Warning

• "WARNING AND ACKNOWLEDGEMENT I understand and
  acknowledge that, under Virginia law, there is no
  civil liability for bodily injury, including
  death, emotional injury, or property damage
  sustained by a participant in space flight
  activities provided by a space flight entity if
  such injury or damage results from the risks of
  the space flight activity. I have given my
  informed consent to participate in space flight
  activities after receiving a description of the
  risks of space flight activities as required by
  federal law pursuant to 49 U.S.C. 70105 and 14
  C.F.R. 460.45. The consent that I have given
  acknowledges that the risks of space flight
  activities include, but are not limited to, risks
  of bodily injury, including death, emotional
  injury, and property damage. I understand and
  acknowledge that I am participating in space
  flight activities at my own risk. I have been
  given the opportunity to consult with an attorney
  before signing this statement."

11
Florida Informed Consent For Spaceflight Act

• Effective October 1, 2008
• Creates Part III of Chapter 331 of the Florida
  Statutes, Section 331.501 et seq.
• No sunset
• Virginia Statute used as model

12
Florida Informed Consent For Spaceflight Act

• Keyed to FAA Regs, including referencing the
  Federal definition of spaceflight activities
  limiting the reach of the statute to sub-orbital
  flights only
• Provides a release from liability for spaceflight
  entities, but limits them only to those entities
  actually holding an FAA license
• Specifically states that there will be no cause
  of action for injury occurring during spaceflight
• Statutory warning language required

13
FL Statutory Warning

• "WARNING Under Florida law, there is no
  liability for an injury to or death of a
  participant in a spaceflight activity provided by
  a spaceflight entity if such injury or death
  results from the inherent risks of the
  spaceflight activity. Inherent risks of
  spaceflight activities include, among others,
  risks of injury to land, equipment, persons, and
  animals, as well as the potential for you to act
  in a negligent manner that may contribute to your
  injury or death. You are assuming the risk of
  participating in this spaceflight activity."

14
Conducive Business and Tax Environment

• Virginia
• Zero G/Zero Tax
• Florida
• Qualified Space Flight Contractor Tax Refund Act
• Reusable Space Vehicle Industry Prize

15
Virginia Zero-G/Zero Tax

• Passed both houses 2/20/08, signed into law by
  Gov. Kaine March 2, 2008
• Effective 7/1/08 for calendar tax year 2009
• Adds subsection 33 34 to 58.1-322 of the
  Virginia Tax Code (corporate tax) and subsections
  22 23 to 58.1-402 (partnership tax)

16
Virginia Zero-G/Zero Tax

• Grants a STATE income tax exemption for income
  resulting from
• the sale of launch services to space flight
  participants or launch services intended to
  provide individuals the training or experience of
  a launch, without performing an actual launch
• any gain recognized as a result of resupply
  services contracts for delivering payload entered
  into with the Commercial Orbital Transportation
  Services division of the National Aeronautics and
  Space Administration or other space flight
  entity.
• To qualify for a deduction under this
  subdivision, launch services must be performed in
  Virginia or originate from an airport or
  spaceport in Virginia

17
Florida Qualified Space Flight Contractor Tax
Refund Act

• Amended existing state statute to include space
  flight contractors to allow them to receive
  refunds for certain taxes after entering into tax
  refund agreements
• To be eligible for a refund, a new space flight
  business contract or a facility consolidation
  must result in a net increase in space flight
  business employment at an applicants Florida
  facilities

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Florida Qualified Space Flight Contractor Tax
Refund Act

• For Example
• Qualified applicants would receive a tax credit
  of 3,000 per job created or retained, but 6,000
  per job if the business is located in a rural
  area or enterprise zone and
• An additional 1,000 per job bonus when the jobs
  pay 150 percent of the average private sector
  wage in the area where the business is located,
  or a 2,000 per job bonus when the jobs pay 200
  percent of the average private-sector wage in the
  area.

19
Florida Reusable Space Vehicle Industry Prize

• Establishes a 40 million prize to encourage the
  invention of a reusable space vehicle to replace
  the Space Shuttle
• Half of money to come from state, half from
  unidentified private match (but no funds
  currently appropriated for the prize)

20
Florida Reusable Space Vehicle Industry Prize

• To be awarded to the firm or individual in the
  private sector providing the most significant
  advancements within the reusable space vehicle
  industry the period beginning January 1, 2009,
  and ending January 1, 2014
• To mirror as closely as possible the Ansari X
  Prize

21
Infrastructure Development

• Virginia
• Virginia 21st Century Capital Improvement Program
  
• Florida
• Florida appropriations to support commercial
  space activities

22
Virginia 21st Century Capital Improvement Program

• Passed both houses 5/3/08, awaiting Gov. Kaine
  signature
• Public bond package which includes new funding
  for the Virginia Commercial Space Flight
  Authority to make significant infrastructure
  upgrades to the Mid-Atlantic Regional Spaceport
  (15 million)

23
Florida Appropriations to Support Commercial Space

• 14.5 million for launch infrastructure
  modifications at the Cape Canaveral Spaceport
• 4 million for Space Florida operations
• 500K for a suborbital spaceflight research and
  training program
• 1.25 million for an aerospace workforce training
  initiative.

24
Conclusions

• Next set of major developments in commercial
  human spaceflight regulation are occurring at the
  state level
• Virginia and Florida clearly at the forefront of
  this movement
• These state actions are already having an impact
  on business decisions (Space Adventures purchase
  of Zero-G, Orbital Sciences choice of launch
  site for COTS)
• Will New Mexico, California, and Oklahoma stay in
  the game?

25

• Contact
• James E. Dunstan
• Garvey Schubert Barer
• Washington, DC
• jdunstan_at_gsblaw.com