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General Assembly to consider legislation to boost Virginia’s commercial space industry

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Gov. Bob McDonnell said Tuesday he plans to support legislation designed to increase commercial space investment in Virginia.

The bill, which already has been drafted, will include recommendations from a report completed by KPMG Corporate Finance LLC on ways the Virginia Commercial Space Flight Authority (VCSFA) can improve Virginia’s ability to attract investment from the private commercial space industry.

The study was commissioned under the 2011 Virginia Appropriation Act to review the governance, organization and competitiveness of the VCSFA to identify ways to improve the Mid Atlantic Spaceport (MARS) on Wallops Island.

“The legislation currently will address the authority, its structure, governance and enable our growing space infrastructure to go to the next level,” Sean Connaughton, Virginia’s transportation secretary, said Tuesday during a phone interview. “We believe there is enormous opportunity in the Commonwealth of Virginia in commercial space, and we’re prepared to take advantage of those opportunities.”

MARS is one of four facilities in the U.S. currently licensed by the Federal Aviation Administration to send rockets into orbit. McDonnell said the private space industry has a $7.6 billion annual direct economic output and supports over 28,000 jobs in Virginia.

Connaughton would not specify how much increased investment the administration would seek, but said: “Our intention is to explore a fairly hefty increase going to the MARS facility.” He said currently the authority receives about $1.5 million each year.

The report makes the following recommendations:
1) Make increased capital investment necessary for infrastructure required to attract new customers to MARS.
2) Develop market-based usage cost rates to at least cover MARS operations.
3) Develop a long-range strategy for MARS, including whether it aggressively makes investments or making investments incrementally while evaluating the development of the space industry.
4) Reorganize board of directors by reducing the number of members from 13 to between seven and nine. Create an advisory committee made up of industry professionals to avoid perceived conflict of interest issues.
5) Restructure current agreements, including those with Maryland and Orbital Sciences Corp., the primary private user of MARS.
6) Reorganize authority, including taking over many marketing, strategy, finance and other administrative functions, many of which are currently handled by the Old Dominion University Research Foundation.

Connaughton said the administration is working with General Assembly leadership on the draft of the bill.

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