NOTE: As provided in LFC policy, this report is intended for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used in any other situation.

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(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to SB 479, HB 551

SOURCES OF INFORMATION

LFC Files

Economic Development Department

SUMMARY

Synopsis of Bill

The bill would appropriate $1.6 million general fund in FY2000 and FY2001 to develop the southwest regional spaceport to conduct environmental impact studies, obtain water resources and develop a proposal in response to Lockheed Martin's site selection process. The bill includes an emergency clause.

Significant Issues

In January 1998, Lockheed Martin initiated a process to choose one or more spaceport sites for launching and landing the VentureStar reuseable launch vehicle (RLV), the next generation of space vehicles after the space shuttle. As many as 14 states, including New Mexico, are in competition to become the spaceport site.

In preparing New Mexico's response to the request for proposals (RFP) from Lockheed Martin, the Office of Space Commercialization (OSC) in the Economic Development Department has identified two alternative New Mexico sites-Upham (about 35 miles north of Las Cruces) and Orogrande (at the southeast corner of White Sands Missile Range)-which could be submitted to Lockheed Martin. Depending on which site Lockheed Martin prefers, the OSC would require as much as $1.81 million to purchase water rights and to prepare an environmental impact statement. If the Orogrande site were selected as a finalist, the OSC would need to complete a new environmental impact statement at a cost of about $1,015.0. If the Upham site were selected as a finalist, the OSC would need about $500.0 to update an existing environmental impact statement. For either site, the OSC would need about $400.0 to purchase water rights. Additionally, the OSC has requested $260.0 in contractual services for project management and technical support in preparation of New Mexico's response to the Lockheed Martin RFP.

This bill provides funds for the environmental impact statement and purchase of water rights under the worst case scenario ($1,550.0), but includes only $50.0 for RFP preparation.

CONFLICT/DUPLICATION/COMPANIONSHIP/RELATIONSHIP

This bill relates to SB479 which would provide all of the funds ($1.81 million) requested by the OSC. However, SB479 contains a technical error in placing the spaceport sites in Doña Ana county. The bill also relates to HB551 which fully funds the OSC request without the Doña Ana county language.

TECHNICAL ISSUES

This bill could be modified to make the appropriations contingent upon the specific site selected by Lockheed Martin.

OTHER SUBSTANTIVE ISSUES

During the 1998 special session, the New Mexico legislature appropriated $350.0 general fund to the economic development department (EDD) in House Bill 2 for the southwest regional spaceport. These funds were targeted for the state's RFQ reply. Additionally, the legislature passed Senate Bill 1 and House Bill 16, which appropriate $8.6 million from the general fund operating reserve for construction of roads, runways and other infrastructure for a spaceport site, which was contingent upon a nine to one match from federal or private sector sources and upon selection of New Mexico for development of a spaceport site for reusable aerospace launch vehicles. Since 1994, New Mexico has spent over $2.5 million on the spaceport effort.

Estimates of potential economic impact of the spaceport, prepared by the Physical Science Laboratory at New Mexico State University, indicate that about 2,500 direct jobs would be created and over 3,000 indirect jobs through multiplier effects. These positions would be responsible for assembling the RLVs as well as for operating the spaceport facilities and would result in total direct personal income from the spaceport exceeding $120 million.

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