SHIPS UNDER CONSTRUCTION at Bath Iron Works.

SHIPS UNDER CONSTRUCTION at Bath Iron Works.

BATH

A bill seeking to extend tax breaks for Bath Iron Works — set to expire in a little more than a year — will be considered by the Maine Legislature in its second session.

Since the late-1990s, the Bath shipyard has benefited from Maine’s Shipbuilding Facility Credit, which provides a tax credit up to $3.5 million annually, not to exceed $60 million over 20 years. In return, BIW is required to invest $200 million in its shipbuilding facility. According to a 2016 report by Maine Revenue Services, BIW had invested $464,004,067 in its facility as of 2015.

While the tax credit is scheduled to sunset at the end of 2018, BIW argues that the tax credit must continue in some form in order for it to stay competitive. LR 2789, “An Act To Encourage Major Investments in Shipbuilding Facilities and the Preservation of Jobs,” is a step in that direction.

“We are pleased that the Legislative Council has agreed unanimously to allow LR 2789 to be one of a small group of new bills to be considered in the next session of the Legislature,” said BIW spokesman David Hench. “It is very important to our future and the jobs of 5,700 men and women who work at BIW.”

The bill is sponsored by Rep. Jennifer DeChant, D-Bath. While the bill is still in the early stages of being drafted, she noted that it may not be a simple extension or renewal of the current tax credit.

“To what extent it is modified has yet to be determined. This is the exact time and space to have that discussion and better understanding,” DeChant said. “When any sort of tax-centered program comes up, that is the time for tweaking it or evaluating it.”

She added that any changes were likely to be minor, but she was in discussions with workers and the company as to what alterations might be appropriate at this time.

BIW claims that the tax credit is an important part of keeping the shipyard competitive.

“We have never operated in a more competitive environment for new ships, and allowing the tax benefits we currently receive to continue is a significant contributor to that effort,” said Hench. “We look forward to making our case to the full Legislature next year.”

BIW’s main competitor for building Arleigh Burke-class destroyers, Huntington Ingalls of Mississippi, has also received state assistance over the years. In 2016, Mississippi passed a bond bill that included $45 million for Ingalls Shipbuilding, and the shipyard received $20 million from Mississippi taxpayers the year before that.

The Maine Legislature returns for its second session in January.

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Others do it

ONE OF BIW’s main competitors, Huntington Ingalls of Mississippi, has received state assistance. In 2016, Mississippi passed a bond bill that included $45 million for Ingalls Shipbuilding, and the shipyard received $20 million from Mississippi taxpayers the year before that.


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