BIW: Renewal of tax credit program essential to 'our future'

File photo / Bath Iron Works A deckhouse is lifted into place at Bath Iron Works in this file photo of a Zumwalt-class destroyer under construction at the Bath shipyard.

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Bath Iron Works is asking Maine lawmakers to renew a tax break due to expire at the end of 2018, stating that the yearly tax credit of up to $3.5 million it’s been receiving since the late 1990s is essential for it to remain competitive in a tough bidding environment for a limited number of U.S. Navy contracts.

The Times Record reported that LR 2789, “An Act To Encourage Major Investments in Shipbuilding Facilities and the Preservation of Jobs,” sponsored by Rep. Jennifer DeChant, D-Bath, is one of a handful of bills to be considered in the next session of the Legislature, which begins in January.

Looming in the background is the high-stakes $19 billion bidding competition to build 20 frigates for the U.S. Navy that BIW has entered against five other shipyards.

Under Maine’s Shipbuilding Facility Credit that’s due to sunset next year, BIW was required to invest $200 million in its shipbuilding facilities in order to receive a tax credit of up to $3.5 million annually, with the total credit not to exceed $60 million over 20 years. BIW had invested more than $460 million as of 2015, the newspaper reported.

“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,” BIW spokesman David Hench told the newspaper. “It is very important to our future and the jobs of 5,700 men and women who work at BIW. 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. We look forward to making our case to the full Legislature next year.”

BIW’s arch-rival, Huntington Ingalls of Mississippi, received $20 million for Mississippi taxpayers in 2015 and was the beneficiary of a $45 million bond approved in 2016 for its shipyard in Pascagoula, Miss., the newspaper reported.