BATH — A potential $45 million tax break for Bath Iron Works became law April 4 when it was signed by Gov. Paul LePage.

The governor’s signature followed a 117-31 approval of LD 1781 in the state House of Representatives March 27, and 25-9 support in the Senate the next day. The votes followed a 11-2 decision March 6 by the Legislature’s Joint Committee on Taxation that the bill “ought to pass as amended.”

The law, which renews a benefit established in 1997, will provide the shipyard an income-tax incentive in return for making investments in facilities and preserving jobs.

As originally proposed, the rule would have allowed BIW to receive an annual refundable corporate income tax credit for up to 20 years that equals 3 percent of its $100 million qualified investment. The credit would have been capped at $60 million, or 3 percent of $100 million, over the course of 20 years.

To qualify, BIW had to invest at least $100 million in the facility and preserve at least 5,000 jobs. The shipyard reports having about 5,700 employees.

The Joint Committee on Taxation recommended the bill’s passage, but with the tax break capped at $45 million, or $15 million less than initially proposed.


In the incentive’s first phase (years 1-10), BIW must make a $100 million investment, receiving as much as $3 million a year in return, up to $30 million. In the second phase (years 11-15), the shipyard has to make a second $100 million investment, receiving up to $3 million back a year, capped at $15 million.

The tax break will total $45 million over 15 years for a $200 million investment, according to bill sponsor Rep. Jennifer DeChant, D-Bath.

Praising the “strong bipartisan support” the bill received, and its support by LePage, DeChant said in an email April 5, “this has been a classic process of crafting public policy from beginning to end. The result is stronger reporting and evaluation conditions while incentivizing facility and personnel investment from the largest manufacturer in the state. Bath Iron Works is an economic driver who employees more than 5,000 people with good salary and benefits.”

Bruce Gagnon, coordinator of the Global Network Against Weapons & Nuclear Power in Space, offered an opposing view of the bill that he sought to stymie, in part through a 37-day hunger strike.

“It’s a terrible waste of $45 million for a company that doesn’t need it,” Gagnon said in an interview April 5. “… This company doesn’t need that money.”

In the end, the effort he and others put into railing publicly against the bill “was definitely worth it,” Gagnon said. “We’re very proud that we got it reduced. If we’d had more help we could have reduced it more. If the liberal Democrats who by and large supported it had helped us more, God knows how far we could have gone.”

Alex Lear can be reached at 781-3661 ext. 113 or [email protected]. Follow him on Twitter: @learics.

A potential 15-year, $45 million tax break for Bath Iron Works was signed into law April 4 by Gov. Paul LePage, after the Legislature pared down an original proposal worth up to $60 million over 20 years.

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