BUDGET TO HELP AEROSPACE FIRMS; TAX CREDITS WILL BE INCLUDED IN STATE SPENDING PLAN.

Byline: Jim Skeen Daily News Staff Writer

Two bills aimed at creating aerospace jobs in California - particularly in the Antelope Valley - will be part of the state budget negotiated by Gov. Pete Wilson and Democratic leaders of the state Legislature.

The $76 billion budget will include provisions contained in Assembly Bill 1779, which provides tax credits for work on a new jet fighter, and AB 1765, which eliminates a sales tax on commercial space operations.

``Obviously we were proud of that,'' said Assemblyman George Runner, R-Lancaster, who authored both bills. ``It was one of things where we were able to structure bipartisan support.''

The state will offer wage and property credits to companies performing work on the joint strike fighter, which will replace the Air Force F-16, the Navy FA-18 and the Marine Corps AV-8B Harrier. The tax credits are intended to bring as much work on the 20,000-job project to California as possible.

The commercial space sales tax credit will be funded provided that Proposition 7 fails, according to budget negotiations concluded Wednesday.

Proposition 7 would provide $218 million in tax credits to businesses that exchange high-polluting machinery for cleaner operating equipment. If the measure passes, it would absorb money allocated for other tax credits, including the space sales tax credit, officials said.

Runner said he will work to try to separate the commercial space sales tax credits from Proposition 7.

The state Legislative Analyst's Office estimates the joint strike fighter credits would provide $154 million in tax breaks for aerospace companies. The bill is projected to pay for itself through increased revenues from the jobs it would bring to the state, the analysis said.

Antelope Valley leaders are lobbying to have joint strike fighter production conducted at Air Force Plant 42 in Palmdale. The contracting teams competing for the production contract - Lockheed Martin and Boeing - are both assembling their joint strike fighter prototypes at Plant 42.

The commercial space sales tax credit would make statewide a sales-tax exclusion that was granted to Vandenberg Air Force Base for commercial space operations sites. When the tax exclusion was granted to Vandenberg in 1993, the base was the only site of commercial space operations in California.

AB 1765 is aimed at bolstering the Antelope Valley's efforts to be selected as the launch site for the VentureStar, a reusable spaceship being developed by Lockheed Martin Corp.'s Skunk Works in Palmdale.

Several regions, including Vandenberg, Florida, New Mexico and Alaska are vying to be selected for the launch site.

VentureStar will take off vertically but will not shed any of its parts like a space shuttle during launch. VentureStar will land like an airplane.

The company expects to begin flight testing the $4.5 billion spacecraft in 2004.

Antelope Valley officials believe Edwards Air Force Base would be ideal for launching VentureStar.

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2 Photos

PHOTO (1--Color) (Ran in AV Edition only) An illustration depicts Boeing's concept of the joint strike fighter.

(2) (Ran in AV Edition only) Lockheed Martin engineers also have designed a joint strike fighter.