Committee tables bill to change spaceport tax‑district representation and bond rules after schools and Sierra County object

Representative (noted in transcript as introducing the item) brought House Bill 396 to the committee. The bill would amend the regional spaceport district act to change board composition, limit bond issuance and require gross-receipts-tax (GRT) revenue associated with the district be used solely for bond repayment; sponsors also proposed language to sunset the county GRT after bonds are discharged.

The bill’s principal witness was Shannon Reynolds, a Doña Ana County commissioner and a long-serving director on the spaceport tax district board. Reynolds told the committee Doña Ana County has shouldered most of the tax burden for the spaceport and that current board representation — two members for Doña Ana County, two for Sierra County and state appointees — does not reflect contributions. She said Doña Ana County contributed roughly $15 million annually while Sierra County contributed far less and that the county seeks board seats tied to contributions, with one seat per $1 million contributed (capped at four). Reynolds also described past actions in which the board moved excess reserves into projects and referenced an attorney general finding that $7 million had been misappropriated in 2017; she said HB 396 would clarify that GRT revenue must be used to service bonds and allow the county to sunset the tax once bonds are discharged.

Opponents included Las Cruces Public Schools lobbyist Chris Valzano, who said the bill would divert a significant funding stream that supports school capital projects and payroll across multiple districts and asked the committee to send the matter to the interim for stakeholder discussion. School witnesses including Rebecca Bartu (Truth or Consequences schools) and Christy Lafont (Truth or Consequences school board president) said STEM and hands-on educational programs funded by the GRT would be harmed and noted their districts serve high proportions of students in poverty, English-language learners and special education populations.

Sierra County officials and legal counsel warned of constitutional concerns. The Sierra County attorney told the committee HB 396 would impair contractual obligations protected by the U.S. Constitution’s Contract Clause (Article I, Section 10) and the comparable New Mexico provision (Article II, Section 19) because the parties negotiated equal representation in 2008 and that representation was a material term. Sierra County residents and teachers testified the change would reduce their voice while they remain taxed.

Committee members pressed the sponsor and the Doña Ana County witness on stakeholder outreach and overlapping recent legislation. Representative Mason and others said there had been little prior engagement with Sierra County and the affected school districts; members also noted House Bill 261 (passed earlier in the interim) changed some flexibility for the tax board and that the two bills may conflict. Members asked the New Mexico Finance Authority and other fiscal authorities be consulted on bond-market impacts; spaceport authority analysis submitted to the committee warned that changing payment pledges for bond repayment could reduce investor confidence and affect bond ratings.

Representative Dela Cruz moved to table HB 396; the motion passed on a 10-0 roll call. Committee chairs recommended the sponsor take the bill back to discuss it with Sierra County, affected school districts and other stakeholders and consider an interim process.