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F I S C A L I M P A C T R E P O R T
SPONSOR Nunez, A.
ORIGINAL DATE
LAST UPDATED
2/03/06
2/08/06 HB 473/aHTRC/aHFL#1
SHORT TITLE Regional Spaceport District Act
SB
ANALYST Earnest
APPROPRIATION (dollars in thousands)
Appropriation
Recurring
or Non-Rec
Fund
Affected
FY06
FY07
NFI
(Parenthesis ( ) Indicate Expenditure Decreases)
ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT (dollars in thousands)
FY06
FY07
FY08 3 Year
Total Cost
Recurring
or Non-Rec
Fund
Affected
Total
($0.1)
($0.1)
($0.1) Recurring General Fund
(Parenthesis ( ) Indicate Expenditure Decreases)
Relates to: HB 88, HB 89, and SB 354
Duplicates SB 348.
SOURCES OF INFORMATION
LFC Files
Responses Received From
Economic Development Department (EDD)
State Land Office (SLO)
New Mexico Finance Authority (NMFA)
Tourism Department (TD)
Office of the Attorney General (AGO)
Department of Finance and Administration (DFA)
Taxation and Revenue Department (TRD)
SUMMARY
Synopsis of HF Amendment #1
The House Floor amendment to House Bill 473 as amended by the House Taxation and Revenue
Committee incorporates a change made to the Spaceport Authority Act by House Bill 88. The
pg_0002
House Bill 473/aHTRC/aHFL#1 – Page
2
House Floor amendment prohibits the Spaceport Authority to make improvements to property
unless the property is owned by the authority, state, or other political subdivision of the state.
Synopsis of HTRC Amendment
The House Taxation and Revenue Committee amendment makes technical corrections and two
substantial changes. Under the amendment, the revenues of a district are no longer exempt from
state taxation and Spaceport Authority revenue bonds may mature any time not exceeding 20
years after issuance if secured by revenue from the county or municipal regional spaceport gross
receipts tax or 30 years if secured by revenue from other sources.
Synopsis of Original Bill
House Bill 473 amends the Spaceport Development Act to:
1.
permit the creation of Regional Spaceport Districts and define the powers and duties of
the districts, provide for the powers and responsibilities of the board of directors, and
provide for county and municipal regional spaceport gross receipts taxes;
2.
authorize municipalities and counties to impose, upon voter approval, a regional space-
port gross receipts tax, in increments of one-sixteenth percent, not to exceed one-half
percent; and
3.
allow the Spaceport Authority to contract with and issue bonds on behalf of regional
spaceport districts and receive municipal and county regional spaceport gross receipts
taxes.
FISCAL IMPLICATIONS
The revenue impact to the state is indeterminate. According to TRD, the actual fiscal impact of
the proposal is uncertain because it depends on which jurisdictions elect to participate in a
spaceport district. The revenue potential associated with each jurisdiction is presented in the at-
tached table.
There would be a reduction in general fund revenue associated with any new local option ap-
proved for the spaceport district because of the hold harmless distributions to local governments
for any food and medical deduction reported in their jurisdiction. On average statewide, these
deductions equal about 7 percent of the gross receipts tax base
According to the AGO, SB 348 imposes a duty on the Attorney General to investigate and prose-
cute violations of a certain provision of the Regional Spaceport District Act relating to conflicts
of interests by members of a district’s board of directors. This duty may have a fiscal impact on
that portion of this office’s budget dedicated to investigating and prosecuting violations of the
Governmental Conduct Act (NMSA 1978, §§ 10-16-1 through 10-16-18), although the amount
of any impact is difficult to calculate
SIGNIFICANT ISSUES
HB 473 is one of several introduced bills to further enable and promote the creation a spaceport
in southern New Mexico. Construction of the Southwest Regional Spaceport, currently planned
to be built on 27 acres of mostly state land near Upham, New Mexico, is estimated to cost $225
million. The Governor has requested approximately $100 million in capital outlay funding.
pg_0003
House Bill 473/aHTRC/aHFL#1 – Page
3
This legislation would authorize the other major funding mechanism – the imposition of local
option gross receipts taxes – which according to DFA, may generate new revenue in the range of
$26 million (at the 1/16 percent increment) to $210 million (at the full 1/2 percent increment).
At least 75 percent of the new revenue would be dedicated to financing, planning, designing, en-
gineering, and construction of a regional spaceport. Up to 25 percent of the revenue may be re-
tained by the local government for local spaceport-related projects. EDD indicates that $30 mil-
lion is a reasonably conservative estimate of local government funding for spaceport construc-
tion.
Regional spaceport districts may be created by contract by two or more governmental units (the
state, a county or municipality, or an Indian nation, tribe or pueblo) and are to be governed by a
board composed of representatives of district members. The regional spaceport districts would
be political subdivisions of the state. Any city or county can join the district if it imposes a re-
gional spaceport gross receipts tax.
PERFORMANCE IMPLICATIONS
There are no performance measures to gauge the activities of the Spaceport Authority.
ADMINISTRATIVE IMPLICATIONS
HB 473 will impose additional responsibility on the Spaceport Authority. The bill enables the
Spaceport Authority to enter into contracts with spaceport districts for the purpose of financing
the purchase, construction, renovation, equipping or furnishing of a regional spaceport. Under
this legislation the Authority may also receive municipal and county gross receipts tax revenues.
Under separate legislation, EDD has requested the transfer of personnel and resources from the
Office of Space at EDD to the Spaceport Authority, which is administratively attached to the de-
partment.
CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP
Relates to:
•
House Bill 88, “Expenditure of Spaceport Development Funds”
•
House Bill 89, “Abolish Space Commission and Transfer Funds
•
Senate Bill 354, “Spaceport Development Fund”
Duplicates:
•
Senate Bill 348, “Regional Spaceport District Act”
OTHER SUBSTANTIVE ISSUES
According to the AGO, section 5.E of SB 348, relating to the conflict of interests of a director or
employee of a regional spaceport district board, does not exempt the officers or employees from
the Governmental Conduct Act (NMSA 1978, §§ 10-16-1 through 10-16-18). It also duplicates
only certain provisions of the Governmental Conduct Act, i.e.:
•
a public officer shall disqualify himself from engaging in any official act directly affecting
his financial interest (NMSA 1978, § 10-16-4),
pg_0004
House Bill 473/aHTRC/aHFL#1 – Page
4
•
no legislator, public officer or employee shall use confidential information acquired by vir-
tue of his state employment or office for his or another’s private gain (NMSA 1978, § 10-16-
6), and
•
a state agency shall not enter into any contract with a public officer or employee of the state
or with a business in which the public officer or employee has a substantial interest unless
the public officer or employee has disclosed his substantial interest and unless the contract is
awarded pursuant to the Procurement Code (NMSA 1978, § 10-16-7).
More problematic is that Section 5.E of SB 348 not only prohibits a director of a regional space-
port district board from voting on an issue when the director has a conflict of interest, consistent
with NMSA 1978, § 10-16-4 of the Governmental Conduct Act, but also prohibits a director, of-
ficer, or employee of a regional spaceport district board from acquiring a financial interest in a
new or existing business venture of any kind when the person believes or has reason to believe
the financial interest will be directly affected by an official act of that director, officer or em-
ployee. This particular clause may be too broad and viewed as a form of prior restraint on an in-
dividual’s property interests.
Even though the Attorney General is charged with investigating and prosecuting violations of
Section 5.E, it does not carry a civil or criminal penalty. The Governmental Conduct Act author-
izes the Attorney General or District Attorney to initiate enforcement action for violations of that
Act, but under Section 5.F of SB 348, only the Attorney General may initiate actions for viola-
tions of Section 5.E. This raises the question whether the Legislature intends that a director, of-
ficer, or employee of a regional spaceport district board may be subject to prosecution under both
the Governmental Conduct Act and Section 5.E for the same violation.
TECHNICAL ISSUES
TRD indicates that, in most cases, local option tax statutes stipulate that any new option would
take effect on a January 1 or July 1 so that these changes can be incorporated into the regular
CRS system mailings and workshops. The term “district” should be more strictly defined. The
term “district” is a “body politic and corporate” but it is also being used when discussing land
mass, property and territory. Section 5, Subsection D (page 6) provides that each governmental
unit shall have a board member and that such director shall be an “elected official or his desig-
nee.” But Section 5, subsection B (page 6) provides that only an “elected official” may vote on
land acquisition or bonding issues. It is unclear what would happen to the assets of the district if
the district would dissolve at the end of the contract.
WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL
If HB 473 is not enacted, a significant element of the funding package for the spaceport project
will not materialize. If local funding is not available, the funding of this project will be in jeop-
ardy and other financial resources will have to be identified.
BE/nt:mt
pg_0005
House Bill 473/aHTRC/aHFL#1 – Page
5
Regional Spaceport Districts
Revenue Potential from Jurisdictions
1/16
th
increment
County / City
FY 2007 Taxable Gross
Receipts
1/16th% tax (.0625%)*
75% to Spaceport Dis-
trict**
Bernalillo (Remainder)
2,461,603,168 1,538,502 1,153,876
Albuquerque
13,737,100,767 8,585,688 6,439,266
State Fairgrounds (Rmndr)
21,389,320 13,368 10,026
Los Ranchos de Albuq.
82,584,892 51,616 38,712
Tijeras
30,736,574 19,210 14,408
Corrales
26,493,388 16,558 12,419
Rio Rancho
128,636,423 80,398 60,298
County Total
16,488,544,531 10,305,340 7,729,005
- -
Catron (Remainder)
31,622,471 19,764 14,823
Reserve
5,821,303 3,638 2,729
County Total
37,443,774 23,402 17,552
- -
Chaves (Remainder)
137,278,597 85,799 64,349
Roswell
843,861,401 527,413 395,560
Dexter
21,132,334 13,208 9,906
Hagerman
10,472,936 6,546 4,909
Lake Arthur
1,278,359 799 599
County Total
1,014,023,627 633,765 475,324
- -
Cibola (Remainder)
29,586,198 18,491 13,869
Milan
63,882,331 39,926 29,945
Grants
168,388,248 105,243 78,932
County Total
261,856,777 163,660 122,745
Colfax (Remainder)
57,016,242 35,635 26,726
Raton
118,244,980 73,903 55,427
Maxwell
2,430,692 1,519 1,139
Springer
8,731,101 5,457 4,093
Cimarron
9,230,545 5,769 4,327
Eagle Nest
5,759,279 3,600 2,700
Angel Fire
77,040,691 48,150 36,113
County Total
278,453,529 174,033 130,525
Curry (Remainder)
99,358,406 62,099 46,574
pg_0006
House Bill 473/aHTRC/aHFL#1 – Page
6
Clovis
630,554,787 394,097 295,573
Clovis Airport (Rmndr)
30,815,763 19,260 14,445
Grady
936,090 585 439
Texico
4,974,080 3,109 2,332
Melrose
4,574,159 2,859 2,144
County Total
771,213,285 482,008 361,506
- -
De Baca (Remainder)
4,783,900 2,990 2,242
Fort Sumner
13,908,442 8,693 6,520
County Total
18,692,343 11,683 8,762
Dona Ana (Remainder)
562,352,195 351,470 263,603
Las Cruces
2,077,185,817 1,298,241 973,681
Hatch
22,363,256 13,977 10,483
Mesilla
29,661,542 18,538 13,904
Sunland Park
100,678,662 62,924 47,193
Spaceport City
- - -
County Total
2,792,241,472 1,745,151 1,308,863
- -
Eddy (Remainder)
648,665,110 405,416 304,062
Carlsbad
563,331,636 352,082 264,062
Artesia
372,844,843 233,028 174,771
Hope
333,508 208 156
Loving
9,298,253 5,811 4,359
County Total
1,594,473,350 996,546 747,409
- -
Grant (Remainder)
147,729,168 92,331 69,248
Silver City
261,195,842 163,247 122,436
Bayard
16,368,679 10,230 7,673
Santa Clara (Central)
3,363,093 2,102 1,576
Hurley
9,886,982 6,179 4,635
County Total
438,543,764 274,090 205,567
- -
Guadalupe (Remainder)
20,097,512 12,561 9,421
Santa Rosa
63,524,533 39,703 29,777
Vaughn
7,446,033 4,654 3,490
County Total
91,068,078 56,918 42,688
- -
Harding (Remainder)
4,544,413 2,840 2,130
Roy
3,015,613 1,885 1,414
Mosquero
949,925 594 445
County Total
8,509,951 5,319 3,989
- -
Hidalgo (Remainder)
19,837,545 12,398 9,299
Lordsburg
43,867,639 27,417 20,563
Virden
168,296 105 79
County Total
63,873,480 39,921 29,941
- - -
pg_0007
House Bill 473/aHTRC/aHFL#1 – Page
7
Lea (Remainder)
579,732,935 362,333 271,750
Hobbs
1,157,901,835 723,689 542,766
Lovington Industrial Park (Rmndr) 17,658,202 11,036 8,277
Eunice
67,856,021 42,410 31,808
Jal
24,996,841 15,623 11,717
Lovington
163,893,220 102,433 76,825
Tatum
17,095,062 10,684 8,013
County Total
2,029,134,116 1,268,209 951,157
- - -
Lincoln (Remainder)
123,586,618 77,242 57,931
Ruidoso
268,176,171 167,610 125,708
Capitan
13,076,153 8,173 6,129
Carrizozo
11,015,797 6,885 5,164
Corona
2,655,965 1,660 1,245
Ruidoso Downs
93,877,132 58,673 44,005
County Total
512,387,836 320,242 240,182
- - -
Los Alamos (Remainder)
- -
Los Alamos
721,396,842 450,873 338,155
County Total
721,396,842 450,873 338,155
- - -
Luna (Remainder)
64,968,862 40,606 30,454
Deming
227,014,539 141,884 106,413
Deming Industrial Park (Rmndr) 5,151,591 3,220 2,415
Columbus
5,959,260 3,725 2,793
County Total
303,094,252 189,434 142,075
- -
McKinley (Remainder)
445,847,375 278,655 208,991
Gallup
611,027,755 381,892 286,419
County Total
1,056,875,130 660,547 495,410
- - -
Mora (Remainder)
20,670,679 12,919 9,689
Wagon Mound
5,805,157 3,628 2,721
County Total
26,475,836 16,547 12,411
- - -
Otero (Remainder)
188,592,751 117,870 88,403
Alamogordo
535,022,265 334,389 250,792
Cloudcroft
22,588,900 14,118 10,589
Tularosa
23,338,497 14,587 10,940
County Total
769,542,414 480,964 360,723
- - -
Quay (Remainder)
52,292,163 32,683 24,512
Tucumcari
89,515,212 55,947 41,960
Tucumcari Airport
- -
San Jon
6,754,934 4,222 3,166
Logan
10,000,654 6,250 4,688
House
3,330,504 2,082 1,561
County Total
161,893,466 101,183 75,888
- -
pg_0008
House Bill 473/aHTRC/aHFL#1 – Page
8
Rio Arriba (Remainder)
215,934,483 134,959 101,219
Chama
24,069,734 15,044 11,283
Espanola
251,471,957 157,170 117,877
County Total
491,476,174 307,173 230,379
- -
Roosevelt (Remainder)
36,683,777 22,927 17,196
Portales
159,275,267 99,547 74,660
Elida
1,912,996 1,196 897
Dora
2,117,447 1,323 993
Causey
348,788 218 163
Floyd
3,119,891 1,950 1,462
County Total
203,458,166 127,161 95,371
- -
Sandoval (Remainder)
272,563,520 170,352 127,764
Bernalillo
88,814,862 55,509 41,632
Jemez Springs
5,039,609 3,150 2,362
Cuba
18,130,291 11,331 8,499
San Ysidro
3,640,508 2,275 1,706
Corrales
57,629,661 36,019 27,014
Rio Rancho
742,458,847 464,037 348,028
County Total
1,188,277,298 742,673 557,005
- - -
San Juan (Remainder)
1,252,483,176 782,802 587,101
Farmington
1,844,084,469 1,152,553 864,415
Aztec
121,428,469 75,893 56,920
Bloomfield
168,808,279 105,505 79,129
County Total
3,386,804,394 2,116,753 1,587,565
- - -
San Miguel (Remainder)
49,382,955 30,864 23,148
Las Vegas
251,137,343 156,961 117,721
Pecos
9,435,352 5,897 4,423
Mosquero
66,676 42 31
County Total
310,022,327 193,764 145,323
- - -
Santa Fe (Remainder)
655,259,044 409,537 307,153
Santa Fe
2,774,832,035 1,734,270 1,300,703
Santa Fe Airport (remainder) 17,332,970 10,833 8,125
Espanola
40,459,656 25,287 18,965
Edgewood
63,097,742 39,436 29,577
County Total
3,550,981,447 2,219,363 1,664,523
- - -
Sierra (Remainder)
28,114,837 17,572 13,179
Truth or Consequences
79,083,643 49,427 37,070
T or C Airport (rmndr)
1,460,878 913 685
Williamsburg
1,915,879 1,197 898
Elephant Butte
12,157,619 7,599 5,699
County Total
122,732,857 76,708 57,531
- - -
Socorro (Remainder)
29,446,881 18,404 13,803
pg_0009
House Bill 473/aHTRC/aHFL#1 – Page
9
Socorro
119,902,020 74,939 56,204
Socorro Industrial Park (Rmndr) 5,508,572 3,443 2,582
Magdalena
9,615,836 6,010 4,507
County Total
164,473,309 102,796 77,097
- -
Taos (Remainder)
192,741,116 120,463 90,347
Taos
332,313,194 207,696 155,772
Questa Airport (Rmndr)
672,622 420 315
Taos Airport (Rmndr)
1,253,492 783 588
Questa
13,014,146 8,134 6,100
Red River
33,036,735 20,648 15,486
Taos Ski Valley
39,019,588 24,387 18,290
County Total
612,050,893 382,532 286,899
- - -
Torrance (Remainder)
57,985,641 36,241 27,181
Mountainair
10,515,977 6,572 4,929
Moriarty Airport (Rmndr)
535,196 334 251
Moriarty
73,077,699 45,674 34,255
Willard
511,306 320 240
Encino
981,740 614 460
Estancia
27,041,598 16,901 12,676
County Total
170,649,158 106,656 79,992
- - -
Union (Remainder)
34,045,467 21,278 15,959
Clayton
33,919,508 21,200 15,900
Des Moines
2,555,911 1,597 1,198
Grenville
67,859 42 32
Folsom
464,933 291 218
County Total
71,053,677 44,409 33,306
- - -
Valencia (Remainder)
120,715,178 75,447 56,585
Belen
187,404,376 117,128 87,846
Alexander Airport (Rmndr)
746,277 466 350
Los Lunas
299,844,585 187,403 140,552
Bosque Farms
40,783,817 25,490 19,117
County Total
649,494,233 405,934 304,450
*The impact to the local governments could increase eight-fold if all areas enact the local spaceport gross
receipts tax up to the maximum of one-half of one percent.
**At least seventy-five percent of the revenues collected from the local spaceport gross receipts tax must
be transferred to the regional spaceport district.
Note: The projected revenues for each area do not include the hold harmless distribution. The hold harm-
less distribution will increase the amount distributed to the districts.
Source: Taxation and Revenue Department