September 29, 2009 |
2009-R-0333 | |
GOVERNOR'S PROPOSED INCENTIVES FOR PRATT & WHITNEY | ||
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By: John Rappa, Principal Analyst | ||
You wanted to know the details of the governor's September 3 Pratt & Whitney assistance plan. You specifically wanted to know if (1) the law allows the governor to provide the assistance and (2) other companies would qualify for it.
The governor's September 3 press release announcing the plan listed its general components but provided no details. We based most of the information in this report on that press release. On September 8, we requested details about the plan from the Department of Economic and Community Development's (DECD) chief of staff, Joseph Oros, who indicated DECD would process our request and get back to us.
On September 22, we followed up with Oros, who replied, but did not provide the details we requested. Oros told us that the proposal was moot because Pratt & Whitney rejected it and added that nothing was agreed to or finalized with the company prior to the rejection, and that some of the details that were discussed involve proprietary financial information.
The table below identifies the plan's elements the press release specified and our analysis of whether the law currently authorizes them. The answer to some of your questions requires a legal opinion, which the Office of Legislative Research cannot give. Consequently, you should not regard this report as providing one.
Statutory Authority for Governor's Pratt & Whitney Assistance Plan
Element |
Authorization |
Available to other Companies |
Lift the 70% cap on corporate business tax credits for United Technology Corporation (UTC) |
CGS § 12-217zz caps the total amount of credits a business can claim in an income year at 70% of its tax liability for that year; it does not authorize the governor or the DECD commissioner to waive that cap |
No, because the press release mentions lifting the cap for only UTC |
Training Assistance |
Job training and other specified business support services qualify for Manufacturing Assistance Act funding (CGS § 32-222 (b)). Businesses also qualify for 5% job training tax credit (CGS § 12-217x) |
Yes |
Creation of a new Job Retention Tax Credit |
No. The law authorizes tax credits for hiring displaced workers (CGS §12-217hh), creating new jobs (CGS §§ 12-217ee and 12-217ii), and creating jobs in enterprise zones and targeted investment communities (CGS §§ 12-217e, 12-217u, and 12-217v) |
Uncertain; DECD provided no details, |
Investments in machinery and equipment |
Depends on the type of assistance (i.e., loans and tax incentives). DECD and the Connecticut Development Authority provide financing for machines, equipment, and other fixed assets. Businesses qualify for tax credits for fixed capital investments (CGS § 12-217w) and manufacturers pay no property taxes on machinery and equipment (CGS § 12-81 (72)) |
Same as above |
Construction of an Engineering Center of Excellence |
No. The legislature would likely have to authorize bonds for the constructing the center |
Same as above |
JR:ts