March 11, 2017

Senate panel backs bill to keep some spaceport business dealings secret

Laura Paskus

Spaceport America, which has generated plenty of controversy because of the tax subsidies it receives, now says its success depends on less public scrutiny.

The Senate Public Affairs Committee obliged Friday, backing a bill to exclude many spaceport business dealings from the state’s public records law. Its members voted 5-2 to allow the spaceport to withhold information about clients in the space business.

Sens. Jeff Steinborn, D-Las Cruces, and Liz Stefanics, D-Cerrillos, dissented. Senate Bill 429 heads next to the Senate Judiciary Committee.

The spaceport’s executives say confidentiality is key to attracting business in the fiercely competitive industry of spaceflights for the wealthy and other ventures in aeronautics.

But Steinborn, Stefanics and transparency advocates say the bill would block from public view parts of a project that critics have lambasted as a boondoggle.

“The taxpayers of this state have already given hundreds of millions of dollars to the spaceport project,” Greg Williams, president of the New Mexico Foundation for Open Government, told the Public Affairs Committee. “Our citizens certainly have a great interest in how it is operated going forward.”

Under Senate Bill 429, information about the spaceport’s customers and what the bill describes as “cyber infrastructure” would be exempt from the New Mexico Inspection of Public Records Act.

Spaceport Authority CEO Daniel Hicks told the committee that companies eyeing the facility have raised concerns that trade secrets or even just the details of development plans could be obtained by competitors if they are subject to the state’s transparency law.

Hicks told lawmakers that the secrecy of his past work in national defense was nothing compared to the privacy sought by some businesses in the commercial spaceflight industry.

The spaceport, Hicks said, needs to assure businesses that sensitive information is in safe hands as the industry booms with private-sector investors planning, for example, to send a rover to Mars or send people to the moon.

According to an analysis by the Legislative Finance Committee, the bill is also designed to protect security information.

Sponsored by Sen. Mary Kay Papen, D-Las Cruces, the measure would not hide how tax dollars are spent, Hicks said.

Taxpayers have doled out about $218 million from the state general fund as well as in a gross receipts tax charged in Sierra and Dona Aña counties. And the spaceport still gets an annual appropriation from the state, expected to total about $444,000 next year.

The bill to shield some spaceport information from public view comes as it struggles to live up to the lofty promises of its development.

Then-Gov. Bill Richardson unveiled plans for the facility in December 2005 at a news conference where he was joined by Sir Richard Branson, the British tycoon who founded Virgin Galactic, now the spaceport’s anchor tenant.

Richardson said building the spaceport would be an investment in high-wage jobs and create a new industry that would transform the economy of Southern New Mexico into the center for commercial space travel.

Branson said Virgin Galactic would send 50,000 customers into space in the first 10 years of operation. The ticket price for the two-and-a-half-hour flight was set to be $200,000 per passenger.

Today, 12 years later, even the maiden voyage for commercial space travelers has yet to launch.

But in a presentation to legislators in December, newly hired Hicks said the spaceport is moving toward self-reliance and took in $2.3 million in customer revenue during the last fiscal year. New business is growing, he said.

The spaceport counts five aerospace companies as tenants and has also become a venue for a conference on drones and a rocket engineering competition, an occasional set for movies and photo shoots, as well as the course for a relay race.

Ensuring confidentiality for the private businesses that want to use the spaceport will help, Hicks argued.

But frustrations that cash-strapped New Mexico has spent too much money on the spaceport and seen too little in return were on display in the committee hearing Friday.

“I think it’s the biggest mistake we’ve made in this state besides the Rail Runner” passenger train, said Sen. Craig Brandt, R-Rio Rancho.

Steinborn said that even legislators asked to approve funding for the spaceport would not have a complete understanding of the facility’s business.

“I am concerned that it is way too broad,” he said of the bill.

Some members of the committee raised concerns about giving the spaceport’s tenants the sort of exemption from state law that is not typically provided to other businesses working with the state. Others argued it is worthwhile if the enterprise can entice companies.

“We can be the number one leader in this thing,” said Sen. Stuart Ingle, R-Portales.

If the exemption could help, he said, it is worth enacting.

Contact Andrew Oxford at 986-3093 or Follow him on Twitter at @andrewboxford.