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Tax credit review legislation wins tentative approval in House of Delegates

ANNAPOLIS — The House of Delegates gave preliminary approval Saturday to legislation that would require the review of 31 of the state’s 341 tax breaks, many of which go to businesses and industries.

HB 764 would force the review of 31 credits, separated into four groups and spread over four years. The first deadline for review would be June 1, 2014 and the last would come on June 1, 2017.

A legislative committee would review each credit in consultation with the Comptroller’s Office, the Department of Budget and Management and the Department of Legislative Services.

Tax credits could be eliminated through legislation if the committee decides that the credits were not in the best interest of the state. The state does not keep reliable records of how well its many tax break breaks work.

A House floor amendment pushed back the first review date from June 2013 to June 2014. It also altered which credits would be reviewed.

The credits subject to review by June 2014 are: enterprise zones, taxes paid to another state, installment sales, earned income, job creation, sustainable communities, neighborhood and community assistance contributions and film production. A review of the coal mining tax credit was delayed until June 2014.

Del. Bill Frick, D-Montgomery, the bill’s sponsor, had proposed that specified credits be terminated starting in June 2013 unless they were proven to be effective and were re-instated through legislation. But after hearing testimony from the Maryland Chamber of Commerce and others, the Ways and Means Committee adopted an amendment that stripped the automatic termination language.