Hugh McQuaid photo
The House overwhelmingly approved legislation Thursday to allow United Technologies Corp. to use $400 million in unused tax credits to reduce their tax liability and expand their facilities.

The bill passed 134-4. Four Republicans, Reps. Richard Smith, Robert Sampson, David Labriola, and Terrie Wood, voted against the bill.

“We should be leveling the playing field,” Wood said. “We shouldn’t just be allowing one company to benefit.”

Without the legislation, the company would be unable to use these tax credits they’ve accumulated over the years.

Labriola said he didn’t like the idea that the tax credit could still be used even if the company decided to shed jobs.

“There are insufficient guarantees as to whether UTC will actually lay off employees,” Labriola said following the vote.

The largest aerospace company in the state is expected to invest up to $500 million in capital improvements over the next five years and the tax offsets from the state of Connecticut will be extended over 14 years. The total income tax credits for the various entities cannot exceed $400 million.

The deal also ensures that Pratt & Whitney stays in Connecticut for a minimum of 15 years and keeps Sikorsky’s corporate headquarters in Stratford for a minimum of five years. In addition it creates a customer training center at UTC Aerospace Systems in Windsor Locks and new labs at the United Technologies Research Center.

The centerpiece of the new agreement will be a 425,000-square-foot global headquarters and world-class engineering building for Pratt & Whitney in East Hartford. UTC also will build a new 12,000-square-foot global customer training center at its Aerospace Systems business in Windsor Locks. The deal also includes capital improvements at Sikorsky. Construction on the projects would begin this year and continue through 2018.

In order to receive the full compliment of tax credits, Pratt & Whitney, UTC Aerospace Systems, and United Technologies Research Center would need to, at the very least, retain the workforce they currently have in order to access 90 percent of the tax credits.

Pratt & Whitney, UTC Aerospace Systems, and the United Technologies Research Center currently employ 14,100 workers and 4,900 engineers. In order to qualify for the full credit, it needs to employ 5,000 engineers and 14,400 workers.

House Minority Leader Lawrence Cafero, R-Norwalk, said he was conflicted about the deal because it gives one corporation the ability to use the tax credits in a way that other companies can’t.

He eventually voted in favor of the bill, but not before raising questions about how many jobs would be created as a result.

“They said they could actually, according to this chart, layoff 1,650 people, 550 of which could be engineers, and still get to use 35 percent of the money,” Cafero said. “Huh?”

Rep. Patricia Widlitz, D-Guilford, said the Department of Economic and Community Development will be measuring on a sliding scale the increase or decrease in jobs and other criteria the company must meet in order to use the credits.

In the first five years of the contract there will be a cap of $20 million per year that will be allowed against these credits, Widlitz said. The contract between the aerospace company and the state could be inked as soon as 2015.

“There are very few bills that get the support of CBIA [Connecticut Business and Industry Association] and the labor community,” Widlitz said.

She said the bill passed the Finance Committee without one single vote against. She said it was one of the most significant actions the legislature will take this year.

“UTC is the catalyst of this initiative, but the investments called for in this bill go well beyond one company,” Gov. Dannel P. Malloy said after the vote. “The agreement will have a direct impact on employment in almost every city and town in Connecticut, not just at the UTC companies, but also in the hundreds of aerospace supply chain companies throughout the state and the region.

The bill now heads to the state Senate.