BILL ANALYSIS AND FISCAL IMPACT REPORT	Page 1 of  1

DATE:  March 7, 2001	Submitted by: TAXATION AND REVENUE DEPT.
	T. GLENN ELLINGTON, SECRETARY
BILL NUMBER: HB-220 as amended by Senate Finance Committee

SPONSOR: Representatives Gubbels, Varela and Taylor

BILL SHORT TITLE: Expanding Gross Receipts Tax Spaceport Deduction to Include Ground Control of Satellites

DESCRIPTION:  For a five-year trial period, the bill expands the limited spaceport gross receipts tax deduction to include ground control of satellites. A temporary compensating tax deduction included in the original bill was removed by SFC amendment. A delayed repeal of the spaceport deduction was scheduled to take effect July 1, 2001. This law repeals the delayed repeal -- Laws 1997, Chapter 73,  Section 2 is repealed.

EFFECTIVE DATE: July 1, 2001.

FISCAL IMPACT (Thousands of dollars):  		Note: Parenthesis ( ) indicate a revenue loss:
		Recurring or		
Estimated Impact on Revenues	Nonrecurring	Funds 	
	 FY 2002 	Full Year	     Impact     t     	             Affected          .             	
	*	*	Recurring	General Fund	
	*	*	Recurring	Local Governments	

Despite diligent search in the gross receipts tax records and on the Internet, Department analysts were unable to unambiguously determine if there have been any gross receipts paid on ground control of satellites by a facility in New Mexico. Aerospace Corporation, on their Internet website, asserts they have a unit of 100 employees at Kirtland/Sandia steering and placing military satellites. In any event, the current gross receipts tax payments from receipts for ground control of military or civilian satellites cannot possibly exceed $100K. 

ADMINISTRATIVE IMPACT: minimal. However, the audit staff has been made aware of analysts’ failure to find and current gross receipts for this activity.

OTHER ISSUES AND IMPACTS:
1.	SFC amendment to remove the compensating tax deduction is not material. Compensating tax is only imposed on tangible personal property which is purchased outside the state and would be gross receipts taxable if purchased inside the state. Thus, the temporary gross receipts tax deduction for preparing payloads would render any tangible personal property included in the project also exempt from compensating tax.