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F I S C A L I M P A C T R E P O R T
SPONSOR Boykin
DATE TYPED 02/14/05 HB 419/aHBIC
SHORT TITLE Spaceport Development Act
SB
ANALYST Ford
APPROPRIATION
Appropriation Contained Estimated Additional Impact Recurring
or Non-Rec
Fund
Affected
FY05
FY06
FY05
FY06
Indeterminate
Recurring Spaceport Authority
Fund
(Parenthesis ( ) Indicate Expenditure Decreases)
REVENUE
Estimated Revenue
Subsequent
Years Impact
Recurring
or Non-Rec
Fund
Affected
FY05
FY06
Indeterminate
Indeterminate Recurring Spaceport Authority
Fund
(Parenthesis ( ) Indicate Revenue Decreases)
Duplicates SB 165.
SOURCES OF INFORMATION
LFC Files
Responses Received From
Economic Development Department (EDD)
New Mexico Finance Authority (NMFA)
SUMMARY
Synopsis of HBIC Amendment
The House Business and Industry Committee amendment specifies that one of the 6 appointed
members shall be a resident of Sierra county.
Synopsis of Original Bill
House Bill 419 enacts the Spaceport Development Act, which creates the Spaceport Authority to
encourage and foster the development of spaceport facilities that support public and private sec-
pg_0002
House Bill 419/aHBIC -- Page 2
tor space activities within the state of New Mexico. House Bill 419 creates a special fund, the
Spaceport Development Fund, and allows the spaceport authority to issue revenue bonds. Fi-
nally, House Bill 419 creates the statutory framework for the development and operation of the
spaceport authority and associated spaceport facilities.
Significant Issues
House Bill 419 enacts the Spaceport Authority Act, creating the authority and providing for its
purpose, membership, powers and duties, and financing.
Purpose: The purpose of the spaceport authority is to foster development of spaceport facilities
in New Mexico, actively promote public and private sector infrastructure development to attract
new industries and businesses, create the statutory framework that will enable the state to design,
finance, construct, equip and operate spaceport facilities necessary to ensure the timely, planned
and efficient development of a southwest regional spaceport; and promote educational involve-
ment in spaceport education and training of the workforce.
Membership: The authority is administratively attached to the EDD and shall consist of seven
voting and two nonvoting members. Six members are appointed by the Governor with the con-
sent of the Senate. The secretary of economic development (or the secretary’s designee) shall be
the seventh voting member and shall serve as the chair of the authority. The Lieutenant Gover-
nor and the executive director of the authority shall be non-voting members. House Bill 419
further provides procedures related to the members’ terms, reimbursements, meetings, and va-
cancies.
Powers and Duties: The authority is charged with a variety of duties to develop space related
projects, expand high technology economic opportunities, provide advice and information re-
garding the southwest regional spaceport and other scientific and technological trends, and gen-
erally support efforts to develop space related technologies and industries in New Mexico. The
authority shall hire an executive director and staff to fulfill its duties.
In addition, the bill authorizes the authority to operate spaceport facilities, solicit outside funds,
issue revenue bonds, refinance projects and collect tolls (see “Financing” below).
Finally, the authority is prohibited from operating a project as a business or in any manner except
as a lessor, incurring general obligation debt, pledging the full faith and credit of the state, and
expending funds or incurring debt for the improvement, maintenance, repair or addition to prop-
erty not owned by the authority.
Financing: House Bill 419 provides for the financing of the authority. It establishes the Space-
port Authority Fund, a non-reverting special fund within the state treasury. Money shall be ap-
propriated from the fund to the authority for the purposes of carrying out the Spaceport Devel-
opment Act.
Money deposited in the fund will include:
Proceeds of the issuance of revenue bonds;
Proceeds from loans;
Tolls, fees, rentals and charges for the use of or services rendered by any authority facil-
ity, program or service;
pg_0003
House Bill 419/aHBIC -- Page 3
Interest earned upon any money in the fund;
Earnings of properties and securities acquired through the use of the fund;
Money received from public or private sources.
House Bill 419 prohibits the authority from issuing general obligation bonds or pledging the faith
and credit of the state to repay debt. The bill lays out the procedures and requirements for the
issuance of bonds and specifies that the bonds are exempt from taxation by the state or its
subdivisions.
PERFORMANCE IMPLICATIONS
EDD operates the Office for Space Commercialization as part of the Technology and Space
Commercialization program for the purpose of increasing the start-up, relocation and growth of
technology-based businesses in New Mexico. The LFC is recommending $713.8 thousand in
funding for FY 06. The program has several performance measures related to the creation of
jobs. This bill could help improve on those performance measures by developing new spaceport
facilities and attracting new businesses to the state.
However, EDD notes that the relationship between the Spaceport Authority and Office for Space
Commercialization is not defined by the bill (see “Technical Issues” below).
FISCAL IMPLICATIONS
House Bill 419 creates a Spaceport Authority Fund and appropriates money from the fund for the
purpose of carrying out the Spaceport Development Act.
The bill authorizes the Spaceport Authority to issue revenue bonds. The bill presents no direct
impact to the state’s general fund.
Continuing Appropriations
This bill creates a new fund and provides for continuing appropriations. The LFC is concerned
about including continuing appropriation language in the statutory provisions for newly created
funds. Earmarking reduces the ability of the legislature to establish spending priorities.
ADMINISTRATIVE IMPLICATIONS
Although the spaceport authority is administratively attached to the EDD, the bill provides for
the authority to hire its own staff and provide its own administrative support.
CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP
House Bill 419 duplicates Senate Bill 165.
TECHNICAL ISSUES
EDD notes that the relationship between the current Office for Space Commercialization and the
Spaceport Authority is not defined in the bill. This could cause overlap and duplication of ef-
forts.
pg_0004
House Bill 419/aHBIC -- Page 4
NMFA recommends that the authority partner with NMFA to issue bonds in order to take advan-
tage of its financial expertise.
OTHER SUBSTANTIVE ISSUES
New Mexico is in the process of establishing the southwest regional spaceport at Upham, located
approximately 45 miles north of Las Cruces and 30 miles east of Truth or Consequences. The
EDD will request $10 million for the spaceport, which is scheduled to be licensed in early 2006.
The Legislature has already appropriated $9 million for infrastructure at White Sands Missile
Range and other expenses related to the X-Prize Competition (an annual competition for reusable
space vehicles to promote space tourism and related industrial development). The X Prize Cup
has the potential to generate significant economic impact. However, as the LFC notes in its rec-
ommendations for FY 06, this impact will depend on recurring funding yet to be secured, contin-
ued competition with six other spaceports, and the X-Prize Foundation plans for expansion at
other spaceports.
Both the EDD and the NMFA believe that this bill is an economic development initiative that
will create new job opportunities, attract new industries, and improve New Mexico’s reputation
as a leader in high-technology.
EF/sb