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Clock runs out on film-tax credit bill

Bryan P. Sears//Daily Record Business Writer//April 7, 2014

Clock runs out on film-tax credit bill

By Bryan P. Sears

//Daily Record Business Writer

//April 7, 2014

ANNAPOLIS—If the General Assembly were a movie, an 11th hour negotiation would have resulted in an agreement to expand the state’s tax credit for film production.

Instead, a late night conference committee between the House and Senate ended in acrimony in the House lounge and both sides parted without a deal that would have provided more than $18 million to popular productions including Veep and House of Cards.

“You did a good job of running out the clock, that’s all I can say,” Sen. James E. “Ed” DeGrange Sr., D-Anne Arundel, said as he and other senators left the lounge minutes before the end of the session.

“We’re not giving up,” said Sen. Verna Jones-Rodwell, D-Baltimore City. “They’re not willing to compromise.”

At issue was language in a House committee amendment that would have given the Department of Business and Economic Development the authority to revoke tax credits for productions that leave the state.

“The Senate wanted to get rid of that,” said Del. Kumar P. Barve, D-Montgomery and a House conferee. “That clause was the guts of what we wanted to do.”

And Senate Bill 1051, sponsored by Sen. Edward J. Kasemeyer, D-Howard and Baltimore Counties, died.

The budget passed by the General Assembly still contains about $15 million—a pot slightly smaller than Kasemeyer’s bill.

It’s not clear if it will be enough to retain House of Cards, the largest recipient of film production tax credits.

Capital Rights Media, the production company that films the popular Netflix drama, threatened in a letter to pull out of the state if the tax credits were not expanded.

“I’m CPA,” Barve said. “I can read a balance sheet. I can read an profit and loss statement but I can’t read people’s minds.”

Kevin Spacey, who plays the show’s ambitious main character Rep. Frank Underwood, came to Annapolis last month to rub elbows with legislators at a reception designed to garner support for the expansion.

But just days after that reception, Del. C. William Frick sponsored an amendment that would grant the state the power of eminent domain and allow the Department of Business and Economic Development the power to condemn the show’s offices, property and intellectual rights.

“I think there were some members who were concerned about the tone of the letter,” said House Speaker Michael E. Busch, D-Anne Arundel.

Gov. Martin J. O’Malley said he would prefer the legislature give the executive branch more authority to negotiate with individual production companies based “on the individual project, how many people they expect to hire and how many seasons.”

“Our legislature tends to hold much much tighter reins when it comes to flexibility of the the executive branch to negotiate such things,” O’Malley said.

O’Malley said he understands the arguments being made to keep shows such as House of Cards in Maryland but said there is no guarantee and expanded tax credit would keep the show in the state and no guarantee it will leave without it.

“Everybody always threatens to leave if they don’t get what they want,” O’Malley said. “That’s what they say. And sometimes when they get what they want, they go home.”


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