Bill would expand stealth bomber tax credit

Bill at governor's desk would expand stealth bomber tax credit to dueling bidders

Associated Press

SACRAMENTO, Calif. (AP) -- Dueling bidders for a major Pentagon stealth bomber contract would be eligible for massive tax credits under a bill that's on Gov. Jerry Brown's desk.

Brown has been pushing for an aerospace tax credit that could help companies create thousands of jobs near Palmdale.

In July, lawmakers grudgingly approved a $420 million tax credit that would benefit a joint bid being submitted by Boeing Co. and Lockheed Martin Corp. The governor signed the fast-tracked AB2389 into law after his office assured competitor Northrop Grumman Corp. that it would receive a similar deal.

SB718 by Sens. Richard Roth, D-Riverside, and Stephen Knight, R-Palmdale, would expand the tax credit to Northrop. It sailed through the Legislature this week, including a 73-0 Assembly vote Monday and 32-4 Senate vote Wednesday.

Northrop Grumman said it would create 1,500 new jobs in Palmdale under the $55 billion bomber contract, even without a tax subsidy. But the company objected to the tax credit being originally offered to only one bidder, saying the Legislature was putting it at a competitive disadvantage.

Both Northrop and Lockheed have facilities near Palmdale in the desert northeast of Los Angeles.

The credits only apply if one the bomber contract is awarded and the winner builds it in California.

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