Kurt Uebersax, as the owner of New Market film production services company KJU Productions, spends much of his time doing commercials and other such projects to pay the bills.
But sometimes he gets the call to work on a larger project, such as being executive producer of “Elf-Man,” a 2012 holiday film starring Jason “Wee Man” Acuña that was shot in Frederick County.
The state has offered movie companies more tax incentives to film in Maryland in recent years, and legislation that passed the state House of Delegates this week would more than triple the amount of tax credits Maryland offers to film companies, to $25 million next fiscal year.
The bill, filed by Sen. Edward J. Kasemeyer (D-Dist. 12) of Columbia on behalf of the state business department, passed the Senate last week, so it awaits Gov. Martin O’Malley’s consideration.
“More production incentives help everyone at many levels,” Uebersax said. “The large Hollywood productions tend to get the credits to film here, and that trickles down to companies like mine. ... It keeps me working in Maryland, instead of having to go to other states.”
Patrick Burn, a Montgomery County location manager who is working on the political thriller “House of Cards,” said the increased tax credits are of major importance to the local industry. “Cards,” which stars Kevin Spacey in Netflix’s first original dramatic program, is in its second season of filming in Maryland.
“It could mean another full movie production for the state,” Burn said.
The state only offered $1 million in film credits in fiscal 2011 before boosting it to $7.5 million for 2012 and 2013. Officials say that boost has helped the state land other major projects besides “Cards.”
Those include HBO’s “Veep,” starring former Seinfeld actress Julia Louis-Dreyfus, “Game Change,” another HBO production starring Julianne Moore, Ed Harris and Woody Harrelson, and independent films “Better Living Through Chemistry,” “Ping Pong Summer” and “Jamesy Boy.”
State officials estimate the economic effect to Maryland in the form of spending with local businesses on props, materials, hotels, fuel, food and more at $117 million in fiscal 2012, about double of 2011.
Some legislators were not enamored by the program, saying during debate on the House floor Tuesday it mostly benefits out-of-state Hollywood companies.
“Once the film production is finished, they leave the state, and there is no lasting benefit whatsoever from this tax credit,” Del. Mark Fisher (R-Dist. 27B) of Prince Frederick said.
Legislators who supported the bill said many Maryland small businesses, including lighting, design, limousine and catering businesses, benefited.
Other tax-credit legislation is winding through the chambers.
The Senate approved one last week that would allow more biotechnology companies to qualify for that tax-credit program. The House passed it several weeks ago. Those chambers are working out a technical difference that Del. Brian Feldman (D-Dist. 15) of Potomac, who authored the House version of the bill, was confident would be resolved.
The legislation would change the business age requirement to 10 years from the date the company first received a tax-credit investment. The present law only allows companies that have been in business period for less than a decade.
“That fits in better with the lifecycle of a biotechnology company,” said Brian Levine, vice president of government relations for the Rockville-based Tech Council of Maryland.
Feldman said originally legislators wanted to help primarily early-stage biotechs gain capital. But making the change better addresses the nature of such companies, he said.
“A lot of biotech companies take five to 10 years to get to the point where they can attract investors,” Feldman said. The change also will help older biotechs who were formed before the program started in 2006 to participate, he said.
The bill also would allow a refundable credit for investors of small businesses that have net assets valued at less than $5 million.
“That will help smaller companies that might not have shown a profit to qualify and raise some capital,” said Mathew J. Palmer, senior vice president of government affairs for the Maryland Chamber of Commerce.
In addition, Gov. Martin O’Malley’s fiscal 2014 budget proposal calls for raising the amount of biotech tax credits next fiscal year to $10 million, from $8 million. That budgetary matter is being debated in a conference committee.
“I am optimistic that the amount will be raised to $10 million,” Feldman said.
Another bill, which would increase the value of research and development tax credits that the state can approve to $8 million from $6 million, passed the House and was being considered by the Senate Budget and Taxation Committee.
The Tech Council wanted to see those credits raised to $18 million, Levine said, and hopes to see a higher ceiling.
Finally, other legislation would allow $3 million in credits for investors in cybersecurity companies. The bill passed the House and is also under consideration by the Senate Budget and Taxation Committee.