Commercial Space
Texas HB 3045 Offers Aerospace Tax Breaks for SpaceX Blue Origin
Texas legislation proposes tax incentives for major aerospace firms to drive innovation and job growth, amid debates over fiscal priorities.
Texas House Passes HB 3045: Franchise Tax Break for Space Companies
In a narrow 70–69 vote, the Texas House of Representatives recently approved House Bill 3045, a measure that would exempt certain space companies from paying state franchise taxes. The bill specifically targets corporations operating FAA-authorized spaceports with active U.S. Department of Defense contracts, such as Elon Musk’s SpaceX, Jeff Bezos’ Blue Origin, and Firefly Aerospace. The move is seen as a strategic effort to bolster Texas’ standing in the commercial space race while aligning with national defense priorities.
While the bill has attracted both support and criticism, it underscores the growing importance of the aerospace industry in Texas’ economic development strategy. With billions in federal contracts and thousands of high-paying jobs on the line, HB 3045 reflects broader trends in state-level policy-making aimed at attracting and retaining high-tech industries. However, concerns over public revenue loss and environmental impact have sparked a heated debate among lawmakers and advocacy groups.
As the bill heads to the Senate for consideration, its implications for the state’s fiscal policy, economic competitiveness, and environmental stewardship are under intense scrutiny.
Key Provisions and Economic Implications
Eligibility and Scope of the Tax Exemption
HB 3045 offers a franchise tax exemption to corporations that meet two specific criteria: they must operate a spaceport authorized by the Federal Aviation Administration (FAA), and they must hold active contracts with the U.S. Department of Defense. This narrow scope ensures the bill applies only to companies directly contributing to national security through spaceflight operations.
SpaceX, which operates the Starbase facility in Boca Chica, and Blue Origin, with its Van Horn launch site, are among the primary beneficiaries. Firefly Aerospace, headquartered in Cedar Park, also qualifies due to its recent defense contract for a responsive on-orbit mission. These companies are already heavily invested in Texas, contributing significantly to local economies and employment.
United Launch Alliance, a joint venture of Boeing and Lockheed Martin, may also qualify under the bill’s provisions. The company recently secured $5.3 billion in contracts for 19 Space Force missions, indicating the growing role of private firms in national defense operations.
“This is a small tool with a little bit of an incentive to say, ‘Hey, we want you to stay here and keep doing what you’re doing instead of going to Florida or California,’” — Rep. Stan Gerdes (R-Smithville)
Fiscal Impact on State Revenue
According to the Texas Comptroller and the Legislative Budget Board, the bill would result in a $2.92 million revenue loss to the Property Tax Relief Fund over the 2026–27 biennium. By 2030, the cumulative impact is projected to reach $4.6 million. Since franchise taxes contribute directly to public school funding, equivalent allocations from the General Revenue Fund would be required to maintain current funding levels.
Proponents argue that the long-term economic benefits—such as job creation, increased federal investment, and the establishment of high-tech infrastructure—will outweigh the short-term revenue losses. For instance, SpaceX’s Brownsville facility employs over 1,500 workers with average salaries exceeding $85,000, contributing significantly to the local economy.
Critics, however, warn that the exemption sets a precedent for favoring large corporations over public interest. They argue that the state should not forgo essential tax revenue, especially when the beneficiaries are billionaires like Musk and Bezos, whose companies already enjoy substantial federal contracts.
Legislative and Public Reactions
The bill’s passage was marked by unusual legislative dynamics. Following a preliminary vote that passed by a 15-vote margin, several representatives switched their votes, leading to a final tally of 70–69. The shift highlights the contentious nature of the bill, which divided both Republican and Democratic lawmakers.
Rep. John Bucy III (D-Austin) supported the bill, citing its potential benefits for his district and Williamson County, where Firefly Aerospace is based. “Being a leader in the space industry is vital, and we’ve got real competition,” Bucy said. In contrast, Rep. James Talarico (D-Austin) opposed the measure, stating, “If Elon Musk wants to establish a business here, then he should pay taxes like the rest of us.”
Environmental advocacy groups have also voiced strong opposition. The Sierra Club’s Cyrus Reed criticized the bill for prioritizing corporate interests over ecological concerns, especially in light of recent launch incidents that damaged wildlife habitats near Boca Chica.
Broader Industry Trends and Strategic Context
Texas as a Space Industry Hub
Texas has emerged as a key player in the commercial space sector, thanks to strategic investments and favorable regulatory frameworks. The state is home to major spaceports and manufacturing facilities operated by SpaceX, Blue Origin, and Firefly Aerospace. The 2023 creation of the Texas Space Commission further exemplifies the state’s commitment to capturing a share of the projected $1.5 trillion global space economy by 2040.
Other states, such as Florida and Alabama, are also aggressively courting the aerospace industry. Florida’s Cape Canaveral supports a $4.3 billion annual economic impact and employs over 24,000 workers in the sector. Alabama’s Huntsville region is another hotspot, driven by NASA’s Space Launch System programs.
HB 3045 is seen as part of Texas’ broader strategy to remain competitive in this high-stakes industry. Without such incentives, proponents argue, companies may relocate to states offering more attractive tax and infrastructure packages.
Federal–State Policy Alignment
The bill aligns with national policy trends, particularly the National Defense Authorization Act of 2024, which allocated $30 billion for commercial space partnerships. Texas lawmakers have also introduced Senate Concurrent Resolution 12, urging Congress to expand tax-exempt bonds for spaceport infrastructure, and SB 2188, which aims to preempt local regulation of spaceflight activities.
These initiatives reflect a coordinated effort to integrate state-level economic development with federal defense and space exploration goals. By offering targeted incentives, Texas aims to secure its position as a key partner in national security and technological innovation.
However, critics caution that such alignment should not come at the expense of public accountability and environmental safeguards. They call for more stringent oversight mechanisms to ensure that the benefits of these policies are broadly distributed.
Environmental and Regulatory Challenges
One of the major criticisms of HB 3045 is its lack of environmental provisions. SpaceX’s Starbase conducted 32 launches in the first quarter of 2024 alone, raising concerns about coastal erosion, air pollution, and endangered species displacement. The FAA recorded a 48% increase in commercial launches in 2023, indicating a trend that could strain local ecosystems.
Additionally, space launches require significant airspace closures, which disrupt commercial aviation and impose logistical burdens on the FAA. Each SpaceX launch necessitates 4–6 hours of airspace shutdown, costing the FAA approximately $2.8 million annually in un-reimbursed coordination efforts.
Environmental groups argue that tax incentives should be tied to compliance with ecological standards and mitigation measures. They advocate for conditional exemptions that require companies to invest in habitat restoration and emissions reduction technologies.
Conclusion
House Bill 3045 represents a pivotal moment in Texas’ approach to economic development and space policy. By offering targeted tax exemptions to defense-aligned space companies, the state aims to solidify its leadership in the commercial space sector. The bill has the potential to attract significant investment, create high-paying jobs, and enhance national security capabilities.
However, the measure also raises important questions about fiscal responsibility, environmental sustainability, and equitable policy-making. As the bill moves to the Senate, lawmakers must weigh these competing interests carefully. Future amendments could include conditional tax breaks, transparency requirements, and stronger environmental protections to ensure that the benefits of space industry growth are shared by all Texans.
FAQ
What is House Bill 3045?
HB 3045 is a Texas legislative measure that exempts space companies with U.S. Department of Defense contracts from paying state franchise taxes, provided they operate FAA-authorized spaceports.
Which companies benefit from this bill?
Companies like SpaceX, Blue Origin, and Firefly Aerospace are the primary beneficiaries due to their existing operations and defense contracts in Texas.
How much revenue will the state lose?
The Texas Comptroller estimates a $2.92 million loss to the Property Tax Relief Fund over the next two years, with a projected $4.6 million loss by 2030.
Are there environmental concerns?
Yes, critics argue the bill incentivizes rapid expansion without ecological safeguards, citing launch-related damage to coastal habitats and increased airspace congestion.
What’s next for the bill?
HB 3045 will now move to the Texas Senate for review and potential amendments before it can become law.
Sources: Austin American-Statesman, Reuters, FAA, Texas Taxpayers and Research Association
Photo Credit: ArsTechnica
Commercial Space
Starfighters Space Plans STARLAUNCH 1 Captive-Carry Flight Test
Starfighters Space schedules a December 2026 captive-carry flight of STARLAUNCH 1 aboard an F-104 Starfighter from Kennedy Space Center.
Starfighters Space, Inc. (NYSE American: FJET) will conduct the first captive-carry flight test of its STARLAUNCH 1 suborbital development vehicle using a Lockheed F-104 Starfighter in December 2026. The mission marks the program’s transition from ground-based design to active flight testing, establishing operational procedures for future drop tests and powered launches.
In a press release issued on October 13, 2026, the company confirmed that the airframe design for STARLAUNCH 1 has been finalized and inert flight hardware has been ordered. The December 2026 flight will originate from the company’s base at the National Aeronautics and Space Administration (NASA) Kennedy Space Center and proceed to the Federal Aviation Administration (FAA) licensed Cecil Spaceport in Jacksonville, Florida.
Transitioning to active flight testing
The upcoming captive-carry flight represents a critical milestone for the STARLAUNCH program. Inert flight hardware is expected to arrive at the Kennedy Space Center hangar in November 2026. Engineering teams will then begin assembly and testing of the rocket-aircraft interface to ensure the Lockheed F-104 Starfighter can safely carry the suborbital vehicle.
Tim Franta, CEO of Starfighters Space, stated that the planned captive-carry flight will move STARLAUNCH 1 from design and ground-based development directly into flight testing.
“Our approach is deliberately incremental: build the hardware, integrate it with the aircraft, fly it, collect data, and use those results to advance toward separation and powered flight. This work on STARLAUNCH 1 is also expected to generate engineering and operational experience to inform the future development of STARLAUNCH 2.”
The December 2026 mission is designed to test aircraft integration, evaluate aerodynamic behavior, and establish operational procedures. Piercarlo Ciacchi, Director of Flight Operations and Chief Pilot of Starfighters Space, noted that the flight will capture essential data for the FAA and the United States Space Force (USSF).
“December’s captive-carry mission would essentially be step one of a multi-flight campaign, building processes for our launch team while capturing data for the FAA and the Space Force as we move toward propulsive air launch.”
Following the December 2026 captive-carry mission, the company plans to conduct a drop test over the Atlantic Ocean. This will be followed by a demonstration of the integrated propulsion system.
Hardware integration and propulsion development
The December 2026 flight may also serve a dual purpose by incorporating hardware from the company’s Wind Tunnel in the Sky program. On October 8, 2026, Starfighters Space announced the completion of its first flight hardware for this initiative, manufactured by Italian engineering firm Robby Moto Engineering S.R.L. (RME). The assembled flight articles measure 3.65 meters in length and 178 millimeters in diameter.
During the STARLAUNCH 1 flight, the company may fly this newly completed Wind Tunnel in the Sky hardware under the opposite wing of the Lockheed F-104 Starfighter on a customer-funded rideshare mission. In this configuration, the hardware will simultaneously serve as an aerodynamic counterweight for the STARLAUNCH 1 vehicle.
Propulsion development is also advancing in parallel. On September 9, 2026, Starfighters Space signed a Memorandum of Understanding with Florida-based Vaya Defense & Space to evaluate the Vortex-Hybrid rocket engine for the STARLAUNCH system. Data collected during the December 2026 flight will support Vaya Defense & Space in developing a hybrid rocket motor aligned with the specific requirements of STARLAUNCH 1.
The STARLAUNCH development pathway
Starfighters Space operates the world’s only commercial fleet of flight-ready Mach 2+ supersonic aircraft. Based at the Kennedy Space Center, the company utilizes its fleet to provide pilot training, in-flight testing, and microgravity research, while actively developing air-launch capabilities for space payloads.
The STARLAUNCH program is the company’s primary air-launch initiative. STARLAUNCH 1 serves as the initial suborbital development vehicle, designed to pave the way for STARLAUNCH 2, a larger vehicle intended for orbital launches.
The program has met several technical milestones throughout the year. On January 21, 2026, the company announced the successful completion of subsonic and supersonic wind tunnel testing for STARLAUNCH 1. These tests demonstrated clean separation behavior at Mach 0.85 and Mach 1.3. Subsequently, on February 20, 2026, the program advanced to a Critical Design Review (CDR) with support from GE Aerospace to confirm design maturity.
Addressing the hypersonic testing bottleneck
The aerospace and defense industries are currently facing a significant bottleneck in hypersonic testing. Traditional ground-based wind tunnels are heavily oversubscribed and typically offer only seconds of test time per run. Airborne platforms like the Lockheed F-104 Starfighter fleet offer sustained testing at speeds exceeding Mach 2 in real atmospheric conditions.
This capability provides a complementary method to compress development timelines for defense primes and commercial space companies, allowing them to gather sustained aerodynamic data outside of traditional laboratory environments.
AirPro News analysis
We view the activation of the STARLAUNCH flight test campaign as a notable indicator of the shifting economics in high-speed aerospace testing. By utilizing legacy supersonic platforms to bypass the constraints of ground-based infrastructure, commercial operators are positioning themselves to capture overflow demand from defense primes and space launch developers. If the December 2026 captive-carry flight successfully validates the aerodynamic integration, it will likely accelerate the timeline for propulsive air-launch systems, offering a viable alternative to traditional vertical launch architectures for smaller payloads.
The dual-use nature of the December 2026 flight, which tests the launch vehicle while simultaneously flying a commercial payload as a counterweight, demonstrates a highly efficient approach to flight test monetization. This strategy allows the operator to offset development costs while proving out multiple distinct business lines on a single sortie.
Photo Credit: Starfighters Space
Commercial Space
Space Cargo Unlimited Books SpaceX Starfall for 2028 Mission
Space Cargo Unlimited signs with SpaceX to launch a 1-tonne in-space factory on Starfall in 2028, its first European customer.
Luxembourg-based startups Space Cargo Unlimited has secured a contract with SpaceX to launch a one-tonne modular space factory aboard the new Starfall reentry capsule. The mission, targeted for 2028, marks a significant capacity increase for commercial in-space manufacturing and establishes the company as the first known European customer for the Starfall vehicle.
Announced on September 15, 2026, the agreement will utilize Space Cargo Unlimited’s BentoBox payload platform to produce materials in Low Earth Orbit (LEO) before returning them to Earth. According to Reuters, the startup is currently in discussions with more than 100 potential customers, with approximately 40 percent originating from the life sciences and biotechnology sectors.
Scaling up microgravity production
The upcoming 2028 mission represents a tenfold increase in payload capacity for Space Cargo Unlimited. The company previously operated missions with a 100-kilogram limit. The Starfall contract expands that capacity to 1,000 kilograms, or one metric ton.
In a press release detailing the agreement, Space Cargo Unlimited Co-founder and CEO Nicolas Gaume highlighted the historical barriers to orbital production.
“For more than thirty years, we’ve known that manufacturing in microgravity can create materials and products that simply cannot be produced on Earth. The challenge has never been the science. The challenge has been making access commercially practical, repeatable and scalable.”
Demand for the expanded capacity appears robust. Reporting by Payload indicates that Space Cargo Unlimited has already sold one-third of its 1,000-kilogram allocation for the 2028 flight.
Starfall and the commercialization of Starship
The Space Cargo Unlimited contract is part of a broader commercial rollout for SpaceX’s Starfall reentry vehicle, which is designed to fly on the heavy-lift Starship launch system. SpaceX conducted the first demonstration mission of the Starfall capsule on a Falcon 9 rocket on June 23, 2026.
Other aerospace integrators are also securing space on future Starfall flights. In August 2026, Redwire subsidiary SpaceMD announced plans to fly 32 variants of its PIL-BOX payloads on a 2028 Starfall mission to research microgravity drug development. On September 21, 2026, German launch integrator Exolaunch confirmed an agreement for a Starfall mission scheduled for no earlier than 2029.
SpaceX is actively transitioning the Starship program from developmental testing to revenue-generating operations. Speaking to the vehicle’s long-term capabilities, SpaceX CEO Elon Musk noted the company’s aspirations are to deliver well over one million tons to orbit annually.
While Space Cargo Unlimited has publicized the 2028 target for its BentoBox mission, SpaceX has not officially confirmed the specific timetable for this flight.
AirPro News analysis
We view the transition from 100-kilogram research payloads to one-tonne commercial batches as a critical threshold for the in-space manufacturing sector. The high concentration of prospective biotechnology customers suggests that pharmaceuticals and advanced materials will likely drive the initial economic viability of orbital factories. If SpaceX can maintain the projected 2028 timeline for Starfall operations, the bottleneck for microgravity manufacturing will shift from launch availability to payload integration and terrestrial market demand.
Sources: Space Cargo Unlimited
Photo Credit: Space Cargo Unlimited
Commercial Space
Dawn Aerospace Aurora Spaceplane to Support Astral Materials
Dawn Aerospace will conduct up to 100 microgravity flights for Astral Materials using the Aurora spaceplane from Oklahoma starting 2028.
Astral Materials has selected Dawn Aerospace to conduct up to 100 microgravity test flights using the Aurora spaceplane to accelerate the development of next-generation semiconductor manufacturing hardware. The campaign, announced on September 1, 2026, will operate out of the Infinity One Oklahoma Spaceport in Burns Flat, Oklahoma.
In a press release issued on September 1, 2026, Dawn Aerospace detailed the agreement, which leverages the rapid reusability of the Aurora spaceplane to provide high-cadence microgravity testing. Astral Materials plans to use these flights to refine its microgravity furnace hardware. The system is designed to reduce gravity-driven defects, such as convection and sedimentation, during the growth of semiconductor crystals. These materials have potential applications in photonics, quantum computing, and high-power electronics.
Rapid iteration in suborbital flight
The Aurora spaceplane is designed to reach a top speed of Mach 3.7 and a maximum altitude of 100 kilometers, providing payloads with up to 127 seconds of microgravity per flight. According to the manufacturers, the vehicle supports a four-hour turnaround time between flights. This operational tempo allows researchers to conduct multiple tests within a single day.
Astral Materials Chief Technology Officer Jiya Janowitz highlighted the value of this cadence for hardware development, noting that payloads can be recovered in approximately 45 minutes.
“We can test an idea, recover it in around 45 minutes, make an adjustment on the ground and test it again later that same day. That kind of rapid iteration has never existed for microgravity manufacturing, and it fundamentally changes how quickly we can develop our technology.”
Astral Materials Chief Executive Officer Dr. Jessica Frick stated that the Aurora spaceplane provides a practical pathway to validate manufacturing systems before scaling to commercial production in orbit, where longer-duration microgravity is available.
Commercial operations and Oklahoma infrastructure
Commercial flight operations for the Astral Materials campaign are slated to begin in 2028 at the Infinity One Oklahoma Spaceport. The Oklahoma Space Industry Development Authority (OSIDA) welcomed the partnerships in an official social media statement on September 1, 2026, emphasizing the state’s focus on attracting high-cadence commercial spaceflight operations.
This agreement follows an April 16, 2026, announcement in which Dawn Aerospace and OSIDA launched the Suborbital Spaceplane Challenge. That initiative offered United States researchers up to 25 flights aboard the Aurora spaceplane to stimulate utilization of the Oklahoma facility.
Dawn Aerospace Chief Executive Officer Stefan Powell noted that routine access is required to transition microgravity manufacturing from a scientific curiosity to a viable industry, comparing the need for rapid experimentation to previous industrial revolutions.
AirPro News analysis
The partnership between Dawn Aerospace and Astral Materials highlights a critical gap in the current space manufacturing ecosystem. While orbital platforms like the International Space Station offer long-duration microgravity, the cost and lead times associated with orbital launches prohibit the rapid trial-and-error necessary for hardware development. Suborbital spaceplanes like Aurora serve as an essential stepping stone. By providing brief but frequent periods of microgravity, these vehicles allow companies to validate complex systems before committing to expensive orbital deployments.
We note a minor discrepancy in Dawn Aerospace’s published materials regarding the commencement of operations at the Oklahoma site. The main announcement targets 2028 for commercial flights, while the company’s boilerplate text references 2027. Regardless of the exact start date, establishing a reliable suborbital testbed will be vital for the commercial viability of in-space manufacturing applications.
Sources: Dawn Aerospace
Photo Credit: Dawn Aerospace
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