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F I S C A L I M P A C T R E P O R T

SPONSOR Smith

ORIGINAL DATE

LAST UPDATED

2/05/06

HB

SHORT TITLE State-Owned Spaceport Land Fund Expenditures

SB 557

ANALYST Earnest

REVENUE (dollars in thousands)

Estimated Revenue

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

FY08

See narrative

See narrative

(Parenthesis ( ) Indicate Expenditure Decreases)

Senate Bill 557 duplicates House Bill 88.

SOURCES OF INFORMATION

LFC Files

Responses Received From

Economic Development Department (EDD)

State Land Office (SLO)

SUMMARY

Synopsis of Bill

Senate Bill 557 would amend the Spaceport Development Act, Section 57-31-5 C (3) NMSA

1978, to clarify the Spaceport Authority’s limitations on expending funds or incurring debt.

Specifically, the proposed amendment will allow the NM Spaceport Authority to expend funds,

incur debt for the improvement, maintenance, repair or addition to property owned by the state or

a political subdivision of the state.

The current statute allows such activity only on land owned by the NM Spaceport Authority.

According to EDD, current law mistakenly restricts the construction of facilities on property

owned by the Authority. It is the intent of the Authority to enter into a long term lease with the

State Land Office for 27 square miles of state land on which the spaceport will be designed and

constructed. This amendment allows for construction of the spaceport on property leased from

Senate Bill 557 – Page

2

political subdivisions, i.e. State Land Office

FISCAL IMPLICATIONS

While it is unclear at this point, the state may recognize a loss in revenue, or at least a shift in

revenue source, from the change in land usage. The specific lease arrangement between the

Spaceport Authority and the State Land Office has not been negotiated or finalized.

According to the SLO, land currently under SLO agricultural lease in the desired spaceport loca-

tion is revenue producing, designated to educational and other state sponsored beneficiaries. A

separate commercial lease will need to be negotiated by the NM Spaceport Authority and the

SLO, depending on the success of this project. If this land is somehow conveyed to the NM

Spaceport Authority without due compensation, such beneficiaries will lose corresponding lease

revenue.

SIGNIFICANT ISSUES

According to the SLO, this legislation, changing subsection (3), would allow the Spaceport Au-

thority to expend funds or incur debt for the improvement, maintenance, repair or addition to

property owned by the state county or municipal governments.

Thus, the bill provides the Authority with unlimited ability to adhere to Subsection C on land

that the Authority does not want nor need. As this bill is clearly intended to remedy a situation

for one location, it may be wise to specify the location.

SLO indicates that an alternative may be to specify the precise location in the bill. For example,

“state or political subdivision land included in the proposed location for the NM Spaceport, more

commonly referred to as Range 1 West, Township 15 South, Sections 16, 17, 18, 19…etc..”

PERFORMANCE IMPLICATIONS

There are no performance measures to gauge Spaceport Authority activities.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL

EDD indicates that if the bill fails to pass, the construction of the spaceport facility on leased

property (from State Land Office) will not be possible.

SLO indicates that if the bill fails to pass, the NM Spaceport Authority will have to purchase or

lease the property proposed for the NM Spaceport.

BE/mt:nt:yr