Senate approves $45M shipyard credit

NOTE: This story has been updated with information pertaining to the bill’s passage in the Senate.

BATH

The Maine Senate passed a bill that would give Bath Iron Works a tax credit of up to $45 million by an overwhelming margin of 25 to 9.

The vote follows a similar action in the House yesterday, where the bill was approved 117 to 31.

Sen. Dana Dow, R-Lincoln, introduced an amendment to the bill further clarifying that the recipients of the new tax credit could not also qualify for Pine Tree Development Benefits. That was an important point for the Taxation Committee, which Dow chairs. The final amendment included language to that extent, but Dow’s amendment is intended to further clarify that point.

Due to the amendment, the bill will return to the House for approval. It is unlikely that the amendment will change that result.

“I was proud to join my colleagues on both sides of (the) aisle in supporting Maine’s shipbuilders,” said Rep. Jennifer DeChant, D-Bath, regarding the bill’s initial passage in the house, who sponsored the legislation. “Bath Iron Works is the last union shipyard on the East Coast.

“It supports over 5,000 good manufacturing jobs,” she added. “I’m grateful that both BIW and organized labor were willing to work with us to make sure this tax credit comes with taxpayer safeguards, real guarantees about investment and hiring and a way to review and revoke the credit if it doesn’t help Maine workers.”

The bill effectively renews a 20-year, $60 million tax credit that was custom made for BIW for another 15 years, albeit with some significant changes. The new $45 million tax credit would be contingent on more investment and higher employment, require more reporting, and cover a shorter time period.

As amended, the bill would provide a $30 million tax credit over a 10-year period to BIW, contingent on the company maintaining employment at more than 5,500 and investing $100 million in its facilities. It can qualify for an additional five years and $15 million if it makes a second investment of $100 million. If employment dips below 5,500 – or increases significantly – the company would qualify for decelerated or accelerated annual tax credits. The credit is not refundable and cannot carry forward.

The bill also increases reporting requirements from the prior shipbuilding facility tax credit, calling for a report on the tax credit from the Office of Program Evaluation and Government Accountability by 2024.

Grassroots activists have opposed the legislation, calling it corporate welfare. Dedicated protesters have gathered outside of the shipyard and in Augusta to voice their opposition to the tax credit.

“We thank all those who helped build this important campaign to stand against corporate welfare and in support of the many human needs that are going unmet across Maine,” said Bruce Gagnon in response to the House vote Tuesday. “We will not ever shirk from continuing to fight for the people who have been cast aside by our state legislature.”

The House voted in favor of the bill as amended, 117- 31, with all of the representatives in the Midcoast region supporting the tax credit. The legislation is scheduled to be voted on by the Senate today.

nstrout@timesrecord.com

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