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California Weighs Property Tax Break for Space Exploration Firms

SACRAMENTO, Calif. — For-profit space explorers who make California their headquarters would not have to pay property taxes on their rockets and space stations under a bill that advanced in the state legislature on Wednesday.

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, Calif. 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.

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 Canada.

SpaceX is preparing for its third cargo run to the space station on Feb. 22. Other private space exploration companies have also set up shop in California, including Virgin Galactic.

— Reuters