Gov. Jerry Brown signs tax-credit bill for bomber project

07/10/2014 4:03 PM

08/07/2014 9:12 AM

Gov. Jerry Brown has signed legislation granting hundreds of millions of dollars in tax credits to help aerospace giants Boeing and Lockheed Martin in their bid to land a contract for a new strategic bomber project, the governor’s office announced Thursday.

Lawmakers passed the expedited legislation last week despite lobbying from an industry rival, Northrop Grumman Corp. The bill would grant $420 million in tax credits over 15 years for the bomber production project.

Proponents of Assembly Bill 2389, by Democratic Assemblyman Steve Fox and Republican Sen. Steve Knight, both of Palmdale, said the measure would help reverse years of aerospace industry decline in California. Opponents said it amounted to corporate welfare.

Senate President Pro Tem Darrell Steinberg, D-Sacramento, and other lawmakers said they were unwilling to risk losing about 350 existing jobs and 750 new jobs at stake in the Boeing-Lockheed deal.

Representatives from Northrop Grumman said the bill unfairly favored the Boeing-Lockheed partnership by limiting the tax break to a subcontractor. In an effort to appease Northrop Grumman, lawmakers promised to expedite a bill next month expanding eligibility to contractors.

The bill was one of 10 measures Brown announced signing Thursday. The Democratic governor signed the bill without comment.

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