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F I S C A L I M P A C T R E P O R T
SPONSOR Robinson
ORIGINAL DATE
LAST UPDATED
2/9/07
HB
SHORT TITLE Space Program Gross Receipts
SB 809
ANALYST Schardin
REVENUE (dollars in thousands)
Estimated Revenue
Recurring
or Non-Rec
Fund
Affected
FY07
FY08
FY09
(19.8) Recurring General Fund
(13.2) Recurring Local Govern-
ment
(Parenthesis ( ) Indicate Revenue Decreases)
Duplicates HB 838
Related to SB 785 and HB 839
SOURCES OF INFORMATION
LFC Files
Response Received From
Economic Development Department (EDD)
No Response Received From
Taxation and Revenue Department (TRD)
SUMMARY
Synopsis of Bill
Senate Bill 809 will allow receipts from the provision of research, development, testing and
evaluation services for the U.S. Air Force operationally responsive space program to be deducted
from gross receipts. That program is authorized pursuant to 10 U.S.C. 2273a.
The effective date of these provisions will be July 1, 2007.
FISCAL IMPLICATIONS
According to EDD the operationally responsive space program currently consists of three part-
time contractors who earn about $500 thousand per year in salaries and benefits. Assuming the
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Senate Bill 809 – Page
2
program does not expand, taxed at the statewide rate of 6.6 percent, the bill would reduce gross
receipts tax collections by about $33 thousand. About 60 percent of this revenue loss will accrue
to the general fund and the other 40 percent will accrue to the local government in which the op-
erationally responsive space program is located.
The amount and timing of this fiscal impact depends on if and when the operationally responsive
space program locates in New Mexico. EDD believes that FY09 is the earliest time operations
could begin. EDD reports that the fiscal impacts of this deduction will grow larger over time but
cannot predict how much.
SIGNIFICANT ISSUES
The operationally responsive space program, which is part of the U.S. Department of Defense,
will provide space launch and space reconnaissance capability within days to meet national secu-
rity requirements. The program will consist of on-call space launch capability and satellites that
can be configured quickly.
According to EDD, Kirtland Air Force Base is currently being considered as a location for the
operationally responsive space program. EDD contends that if Kirtland AFB is chosen as the lo-
cation of this program, state gross receipts tax revenues could rise by several million dollars.
CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP
Senate Bill 809 duplicates House Bill 838.
Senate Bill 809 is related to Senate Bill 785 and House Bill 839. These bills create a gross re-
ceipts tax deduction for receipts from military construction services to implement special opera-
tions mission transition projects pursuant to contracts with the U.S. Department of Defense.
These bills are intended to aid Cannon AFB.
SS/mt