Elon Musk’s Bad Historical Analogy

Construction of the Transcontinental Railroad.

By Douglas Messier
Managing Editor

During his appearance at the International Space Station R&D Conference on Wednesday, Elon Musk recited an old argument to support his plans to colonize Mars.

Back in the day,California was an empty place where almost nobody lived. At least until some crazy visionaries built the Transcontinental Railroad to it even though everyone thought it was a completely crazy thing to do.

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Brown Signs Space Property Tax Exemption

Credit: Steven Pavlov
California Capitol Building. Credit: Steven Pavlov

California Gov. Jerry Brown has signed a measure that will give SpaceX and other aerospace companies a decade-long exemption from property taxes for launch vehicle propulsion systems.

Assemblyman Al Muratsuchi (D-Torrance), who sponsored the measure, said the new law will qualify rocket propulsion systems for an existing business inventory tax exemption. The goal is to help keep the growing entrepreneurial space sector in California.

“California’s aerospace industry is a vital part of our history and at the center of technological innovations shaping our future. I am pleased my colleagues from both sides of the aisle are united in their support of AB 777,” Muratsuchi said in a statement.

Report: California Should Improve Business Environment for Aerospace

California_Great_SealCalifornia Aerospace Industry Economic Impact Study Summary

A.T. Kearney

Aerospace is one of California’s most important sources of jobs and revenues. The state must take steps to support it into the future.

California has been at the forefront of the aerospace industry for more than a century.1 California-based aerospace businesses and government organizations play crucial roles in commercial, civil, and national security programs, and the industry is a crucial source of high-paying jobs, tax revenues, and technological innovation.

A.T. Kearney recently conducted an independent study on the aerospace industry’s impact on California’s economy. This study shows the importance of this industry’s revenue impact, employment impact, and share of the global aerospace market.

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Study Outlines Importance of California Aerospace Market

 California_Great_SealEl Segundo, Ca, March 31, 2014 (A.T. Kearney PR) — Global management consulting firm A.T. Kearney today released an original study on the essential role the aerospace industry plays in sustaining the California economy. The study finds that in 2012 aerospace companies manufacturing or providing aerospace-related services in California accounted for $62 billion in revenues, representing 21 percent of the U.S. aerospace market and 9 percent of the global market.

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Knight Introduces California Aerospace Innovation Hub Act

State Sen. Steve Knight
State Sen. Steve Knight

Rep. Steve Knight (R-Palmdale) has introduced the California Aerospace Innovation Hub Act, which would allow for the creation of special zones where aerospace companies would enjoy tax and regulatory privileges.

“It is the intent of the Legislature to enact legislation that would create geographically based aerospace hubs around existing aerospace manufacturing clusters, and that within the aerospace hubs aerospace manufacturers and related businesses would benefit from special tax preferences, streamlined regulations, and work schedule flexibility,” the measure reads.

According to the Legislative Counsel’s digest of the bill, the law currently provides incentives to encourage industry to locate in California. Examples of such incentives include

“a program that allows local governments to establish a capital investment incentive program to pay a capital investment incentive amount to the proponents of a qualified manufacturing facility in the aerospace business, and a sales and use tax exemption for the gross receipts from the sale of, and the storage, use, or other consumption of, qualified tangible personal property purchased by a person engaged in aerospace products and parts manufacturing for use primarily in manufacturing, processing, refining, fabricating, or recycling of property.”

Knight introduced the measure on Feb. 13. It is now before the Senate Rules Committee.

Spaceflight Liability Changes Advance in California Legislature

State Sen. Steve Knight
State Sen. Steve Knight

The California State Senate is moving forward with changes to a law that limits the liability of spacecraft operators and their suppliers for any injuries or deaths they cause to participants.

The measure, sponsored by State Sen. Steve Knight (R-Lancaster), would require spacecraft operators to enter into a “reciprocal waiver of claims with its contractors, subcontractors, customers, participants, and contractors and subcontractors of the customers or participants” to hold each other blameless in the event of an incident.

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AIAA Backs California Aerospace Tax Credit Measure

aiaaRESTON, Virg., June 3, 2013 (AIAA PR) – The American Institute of Aeronautics and Astronautics (AIAA) endorses California State Assembly Bill 927, the “Aerospace Tax Credit Act.” The bill, sponsored by Assemblyman Al Muratsuchi (Dem. – 66th Dist.) would give tax credits to firms that show a net increase in their aerospace sector workforce.

AIAA President Mike Griffin stated: “California Assembly Bill 927, the ‘Aerospace Tax Credit Act,’ is a critical piece of legislation that will ensure that California’s aerospace sector will remain vibrant and strong.

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McCarthy and Knight Urge Passage of California Spacecraft Liability Expansion

State Sen. Steve Knight
State Sen. Steve Knight

U.S. Rep. Kevin McCarthy, R-Bakersfield, and State Sen. Steve Knight, R-Palmdale, have penned an op-ed for the Sacramento Bee promoting an effort to expand liability protections to spacecraft manufacturers and equipment suppliers:

Last year, the California Legislature passed the Space Flight Liability and Immunity Act, and Gov. Jerry Brown signed it into law, assisting space tourism firms by providing limited indemnification. The California Senate is now considering Senate Bill 415 to extend the liability limitation to manufacturers and suppliers, which is critical to ensure that California stays competitive with states such as New Mexico and Texas.

If we are truly committed to economic prosperity, we need to continue to reduce over-regulation and over-litigation. As Californians, rather than allowing California’s unfriendly business climate to restrict opportunity and increase costs that stifle future innovation, we must instead champion solutions that create a new business climate that preserves the California Dream, where an individual can still dream big, take risks and make the impossible a reality.

A legislative committee held a public hearing last week and took testimony on the issue. Legislators have delayed consideration of the bill until January 2014.

Read the full essay.

Action on Extending California’s Spaceflight Liability Law Postponed to January

California_Great_SealSACRAMENTO (Steve Knight PR) — A measure to address an emerging commercial space travel industry in California authored by Senator Steve Knight (R-Antelope Valley) was held in the Senate Judiciary Committee today in order to work with committee members and industry leaders on the best strategy to move forward in California.

Senate Bill 415 seeks to extend limited liability protections that now cover spaceflight operators to include commercial space manufacturers and suppliers. The bill will be heard again in January 2014, when a vote will be taken before the bill continues through the legislative process.

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Spaceflight Informed Consent, Tax Relief Measures Advance in California

steve-knight
Sen. Steve Knight

By Douglas Messier
Parabolic Arc Managing Editor

Last week, State Sen. Steve Knight introduced measures that would amend California’s spaceflight informed consent law to include vehicle manufacturers, suppliers and service providers, and also exempt aerospace products used in manufacturing and research and development (R&D) from sales and use taxes.

These measures are in addition to a separate bill that Knight introduced in December that would provide sales and use tax exemptions on equipment and materials used for the renovation, reconstruction and rehabilitation of commercial space launch sites.

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California Aerospace Week Set for March

2rd Annual California Aerospace Week

Dates: 12 – 13 March 2013
Location: Sacramento, California
Venue: State Capitol Building, Govenor’s Council’s Chamber

A multiple day event at the California State Capitol intended to educate and stimulate state lawmakers on the crucial California aerospace industry. Beginning Tuesday, 12 March, at 0900 hrs, AIAA will host a breakfast panel discussion in the Governor’s Council’s Chambers for members and staff of the California state government. Followed over the next several days with meetings with individual offices, and special events to be announced.

For more information on this event contact Ross B. Garelick Bell at rossb@aiaa.org.

Jerry Brown Signs California’s Commercial Space Liability Bill

Gov. Jerry Brown

SACRAMENTO (Gov. Brown’s Office) -– Governor Edmund G. Brown Jr. today signed a bill to boost the commercial space-travel sector in California. Assembly Bill 2243 (Knight) limits liability for space-flight companies.

“California aerospace pioneers like Virgin Galactic, SpaceX and the Spaceship Company are blazing a path to the stars with commercial space travel,” said Governor Brown. “This bill allows commercial space-travel companies to innovate and explore without the worry of excessive liability.”

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California Legislators Water Down Spaceflight Informed Consent Measure

By Douglas Messier
Parabolic Arc Managing Editor

California legislators have significantly watered down a proposed law that would have held human spacecraft operators, manufacturers and suppliers not liable for injuries or deaths sustained by passengers if the participant signed an informed consent agreement acknowledging the inherent danger of their flights.

Under amendments to the bill, companies would have “limited civil liability” even if they were not grossly negligent or intentionally caused injuries. Legislators have also removed vehicle manufacturers and component suppliers from coverage under the measure.

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AIAA Panel Urges California to Undertake Major Reforms or Lose Aerospace Industry

By Duane Hyland, AIAA Communications

California’s aerospace industry dwarfs both Hollywood and Agriculture as the state’s primary source of jobs, an AIAA panel reminded representatives of the California state legislature at the California State Capitol Building, Sacramento, Calif., on Tuesday, 8 August. The event’s theme was: “California Aerospace: Stuck in the Past, or Rocketing into the Future?”

The panel was moderated by Ivan Rosenburg, management consultant at Frontier Associates, and was composed of: Lt. Gen. Gene Tattini, U.S. Air Force (retired), Deputy Director, NASA Joint Propulsion Laboratory, and former Commander, U.S. Air Force Space and Missile Systems Center; Ken Guss, former CEO, Klune Industries; Randy Garber, partner, A.T. Kearney Global Management Consultants, who led A.T. Kearney’s analysis of the Californian aerospace industry in 2008; Gregory C. Hill, director of marketing, Ordnance Systems, Meggit Defense Systems; and Ross G. Bell, AIAA, who spent an hour and a half reviewing the current state of California aerospace and the possible dark future of the industry in California, unless substantive governmental reforms are made.

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Witt: California Governor’s Office to Send Advance Team to Mojave

By Douglas Messier
Parabolic Arc Managing Editor

Mojave Air and Space Port General Manager Stu Witt is making some progress in his campaign to get Sacramento to provide more support for his facility and the aerospace industry across California.

Witt told the East Kern Airport District Board of Directors on Tuesday that he recently got a call from the office of Gov. Jerry Brown, which will be sending an advance team from the state’s Office of Economic Development for a one-day visit to the desert spaceport. The call came after a letter of support from Larry Adams and Jay Sprague, president and vice president, respectively, of the California City Development Corporation.

Although the Mojave spaceport is thriving as an R&D center, it is doing so in spite of a terrible business climate caused by high taxes and burdensome regulations, Witt believes. The state is under serious threat of losing its innovative aerospace companies to other states that are offering financial incentives and looser regulations. The state earlier lost its aircraft industry in a similar manner.

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