The move is aimed at stopping an effort by Los Angeles County to
collect levies on equipment owned by the privately held SpaceX in
Hawthorne, California. It is part of a broader effort by lawmakers
to revitalize California's flagging aerospace sector, once among the
nation's largest and key to the state's economy.
"This bill will create thousands of new, high-paying jobs right here
in California," said state Democratic Assemblyman Al Muratsuchi, the
bill's author. His measure passed the Assembly 64-5, and will now go
to the state Senate.
Muratsuchi said he submitted his measure after Los Angeles County
presented Space Exploration Technologies, or SpaceX, with a property
tax bill on rockets and other equipment.
The company, which did not immediately respond to a request for
comment from Reuters, is in the midst of appealing the tax demand, a
Muratsuchi aide said.
SpaceX, founded by PayPal entrepreneur Elon Musk, has already won
tax credits at the local level, resulting in a commitment to stay in
Hawthorne, a Los Angeles suburb.
The company, along with Virginia-based Orbital Sciences Corp, have
NASA contracts worth a combined $3.5 billion for a total of 20 cargo
flights to the International Space Station, a $100 billion research
complex owned by the United States, Russia, Europe, Japan and
SpaceX is preparing for its third cargo run to the space station on
February 22. Other private space exploration companies have also set
up shop in California, including Virgin Galactic.
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Assemblyman Jeff Gorell, a Republican whose district north of Los
Angeles is near the Virgin Galactic headquarters, said lawmakers
were working hard to restore California's glory as a hub for
"The golden days of aerospace were in California," Gorell said.
"It's not that case anymore. We have to really focus and fight to
keep those jobs here in California."
The state's huge population growth after World War Two was due in
part to plentiful jobs at such aerospace giants as Douglas Aircraft,
Hughes Aircraft and Lockheed Corp. But the industry shrank
dramatically in the early 1990s, contributing to a crash in the
state's economy from which some areas have never recovered.
The tax exemption bill was opposed by the California State
Association of Counties, whose 58 members collect property taxes,
which are then used to help fund local governments and schools.
The state will lose about $1 million annually in tax revenues if the
bill is passed, the state's analysis of the bill predicted.
(Reporting by Sharon Bernstein; editing by Cynthia Johnston and Lisa
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