Senate supports higher level of film tax credits -- Gazette.Net


This story was updated at 6 p.m. on March 20, 2014.

As Netflix’s political thriller “House of Cards” threatens to pack up its sets for another state, Maryland’s Senate this week agreed to more than double a tax-credit pool for film and television production in fiscal 2015.

The bill, which raises the credit pot from $7.5 million to $18.5 million, advanced to the House Ways and Means Committee, which is still considering legislation that would only increase the credits to $11 million.

The “House of Cards” series, starring Kevin Spacey, filmed its first two seasons in Maryland. It’s looking at moving third-season filming to another state if it doesn’t get more credits, an executive with the show’s production company wrote in a recent letter to state officials.

Producers had planned to start filming the third season this spring, but pushed that back to June “to ensure there has been a positive outcome of the legislation,” wrote Charlie Goldstein, senior vice president for television production with Media Rights Capital of Beverly Hills, Calif.

“In the meantime, I wanted you to be aware that we are required to look at other states in which to film on the off chance that the legislation does not pass, or does not cover the amount of tax credits for which we would qualify,” Goldstein wrote. “In the event sufficient incentives do not become available, we will have to break down our stage, sets and offices and set up in another state.”

Spacey, who plays scheming politician Frank Underwood on the show, is scheduled to rub elbows Friday night with real Maryland politicians at an Annapolis wine bar to promote the show and the income tax credit it receives.

Investors in “House of Cards” have received, or are expected to obtain, $30.9 million in tax credits between fiscal years 2012 and 2016, according to a state legislative analysis. That leads some to question why the production company is threatening to move if it doesn’t get more credits.

“This just keeps getting bigger and bigger,” Del. Eric G. Luedtke (D-Dist. 14) of Burtonsville said in a recent committee hearing on the legislation. “Is this a permanent state in which every year we will be asked to spend more for the film industry?”

In a hearing last week before the Senate Budget and Taxation Committee, senators had fewer such comments as they approved the higher credit amount.

Film and television production carried an estimated economic impact of $197.2 million in fiscal 2013, up from $123.5 million in fiscal 2012, according to figures from the Maryland Film Office.

Other states offer more in incentives, officials say.

Ten years ago, five states offered tax credits or rebates for film and TV production; now, more than 40 such states do, said Lawrence F. Twele, CEO of the Howard County Economic Development Authority.

“We find ourselves in an increasingly competitive market,” he said.

A construction coordinator working on “House of Cards” told the committee he is reviewing whether it makes sense to move to Pittsburgh, Chicago and Toronto to work on the third season if the production moves to one of those cities.

For fiscal 2014, lawmakers increased the total allocation for film tax credits to $25 million.

“Veep,” an HBO television comedy series starring Julia Louis-Dreyfus, which also is shot in Maryland, is set to receive $22.8 million in credits through fiscal 2016, according to the state analysis.

Senate also passes higher funding for research credits

The Maryland Senate also passed on Monday legislation that would increase the amount of tax credits for research and development activities from $8 million to $10 million annually. The House Ways and Means Committee scheduled a hearing on the bill for March 25.

Legislation to create a statewide investment fund for young cybersecurity companies has passed both the House and Senate, but in different versions, which the chambers eventually will have to reconcile.

The Senate Finance Committee scheduled a hearing on the bill for March 25.

The legislation, part of an agenda proposed jointly by Senate President Thomas V. Mike Miller Jr. (D-Dist. 27) of Chesapeake Beach and House Speaker Michael E. Busch (D-Dist. 30) of Annapolis, would provide up to $2 million annually for grants to the cybersecurity companies.