House panel OKs increase for film tax credit, permits DBED to recoup funds if shows leave

A House committee voted to approve a plan Saturday to tap three sources to provide $18.5 million in fiscal 2015 for Maryland's film tax credit.

The House Ways and Means Committee voted to raise the allocation in the general fund from $7.5 million to $11 million for the film credit. An additional $7.5 million could be drawn from the state's Sunny Day Fund and Cultural Arts Fund to fund the increase, under the House committee's approved plan.

A different version of Senate Bill 1051 approved by the Senate would provide $18.5 million for the credit out of the general fund alone.

The House committee also agreed to an amended bill that would allow the Department of Business and Economic Development, or DBED, to recoup money from a film production company if the company left Maryland before finishing the work it was awarded for.

DBED could also enter contracts with film production companies that would provide certainties to the state, lawmakers supportive of the measure said. Lawmakers said there were too many uncertainties under current law, referring to a threat to leave the state by the production company for the Netflix television series "House of Cards."

The measure now heads to the full House of Delegates. The House still needs to pass the measure and the Senate must concur to the House's changes before the end of the General Assembly's 90-day session on Monday.

The measure's passage would resolve an issue lawmakers have been for wrestling with for months after Beverly Hills, Calif.-based Media Rights Capital, which films "House of Cards" in Maryland, threatened to leave the state.

The "House of Cards" series is already on track to be granted $30 million in tax credits through fiscal 2016, according to the state. But an executive at the show's production company wrote legislative leaders in February to inform them the show would consider leaving Maryland if the money didn't keep flowing.

Charlie Goldstein, senior vice president of television production for Media Rights Capital, wrote legislative leaders in February to say that the show had pushed back its filming schedule for its third season to see if lawmakers would boost tax credits.

"In the event that sufficient incentives do not become available, that gives us time to break down our stage, sets and offices and set up in another state," Goldstein wrote to House Speaker Michael E. Busch, D-Annapolis.

In March, "House of Cards" star Kevin Spacey socialized with lawmakers at Red Red Wine Bar in Annapolis as they considered whether to hike the amount Maryland would hand out.

Del. Ron George, R-Arnold, was one of several votes Saturday by committee members against the measure to raise the funding for the credits.

"I saw a lot of people go gaga over a star," George said, referring to Spacey's visit.

George said he "regrettably" had to vote no for the measure because he felt increasing credits going to film production in the state was wrong during a time when he said many small businesses are struggling.

"Small businesses need some help too," George said.

Del. Jolene Ivey, D-Prince George's, raised concern about the possibility that "House of Cards" gets cancelled, inserting her personal opinion about the show's second season.

"House of Cards has, in my opinion, gone downhill," Ivey said. "What if the show gets cancelled?"

But a majority of delegates on the panel believed the film tax credits were a good investment and the increase in funds was warranted.

Del. Frank Turner, vice chair of the Ways and Means committee, described the old General Electric building in Columbia that has been used to film scenes from several seasons of the HBO series "Veep."

Prior to the show's arrival, the Howard County Democrat said the facility sat vacant for some time. He suggested film production activity could make up for lost manufacturing jobs in the state.

"Now we have trucks out there, parking lots that are full," Turner said. "I think it really kind of solves a problem."