Extra Tax Break for 'House of Cards' Folds in Final Hour - Southern Maryland Headline News

Extra Tax Break for 'House of Cards' Folds in Final Hour

By Jeremy Bauer-Wolf, jeremy@marylandreporter.com

(April 8, 2014) It was a scene worthy of “House of Cards,” a drama of hardball, in-your-face politics on Capitol Hill.

Six lawmakers, three from each chamber of the Maryland General Assembly, standing in a ring in the House of Delegates lounge at a half hour before midnight, vehemently haggling over a single bill.

They had only 30 minutes before the close of the 2014 session, and they needed to find middle ground on legislation that would grant the popular Netflix drama an additional $3.5 million in tax dollars.

But in the end, the six members of conference committee on SB 1051, only ran out the clock. They ended their meeting, and a session-long negotiation, without compromise and walked away.

Up to $15 million already

house-of-cards-kevin-spacey“House of Cards,” could receive up to $15 million in tax credits from Maryland — an initial $7.5 allocated by Gov. Martin O’Malley and another $7.5 as agreed to by the budget conference committee, drawn from the Sunny Day fund and Special Fund for the Preservation of Cultural Arts.

If the bill had passed, “House of Cards” could have gained an additional $3.5 million for a total $18.5 million in tax credits, a number developed by the Senate.

During their late-night quarrel, members on the Senate side — James Ed DeGrange, Verna Jones-Rodwell and Roger Manno — asked the delegates to strike language from the bill that would have permitted the Department of Business and Economic Development to recover tax credits should the state discover a production company had migrated out-of-state, as the producers of “House of Cards” had threatened.

This amendment had been added by the House Ways and Means Committee.

The senators asserted the provision would have “a chilling effect” on other production companies seeking to film in Maryland.

“We wouldn’t be here if that language wasn’t on here,” DeGrange said to the other conferees.

Quibbling, snapping, stalling

The meeting eventually divolved into quibbling — Del. Frank Turner, one of the delegate conferees, snapped at DeGrange, because he was only addressing Ways and Means Chairwoman Sheila Hixson. House Majority Leader Kumar Barve was the third House conferee.

DeGrange in turn accused the delegates of stalling, trying to run out the clock.

Jones-Rodwell said not providing “House of Cards” with their requested funds would limit growth of jobs and the film industry.

“Is this just to see who has the biggest balls?,” she said.

Surrounded by a gaggle of reporters, the meeting ended just minutes before midnight, with a stand-off between DeGrange and Turner. Hixson needed to drag Turner by the arm away from DeGrange.

Threat to leave the state

The saga began early in session, when the “House of Cards” production team, Media Rights Capital, sent a letter to Gov. O’Malley and General Assembly leadership that indicated if the legislature did not pass an increased tax credit, then they would move out of state.

The Senate, wooed after a legislative reception with leading man Kevin Spacey, boosted the tax credit to $18.5 million through their bill, sponsored by Senate Budget and Taxation Chair Ed Kasemeyer, D-Howard, an early champion of the film tax credit.

The House, however, was not as smitten, and Del. Bill Frick introduced an amendment to the Budget Reconciliation and Financing Act that would have allowed the state to seize the “House of Cards” property under eminent domain — to send a message, Frick said.

Conferees on the budget conference committee eventually eliminated the amendment from BRFA, but House Ways and Means still enacted the clawback provision in a separate bill.

Speaker calls lack of compromise unfortunate

After Sine Die, House Speaker Michael Busch said it was unfortunate that the House and Senate couldn’t work through their differences.

“It’s the end of session,” Busch said. “People feel strongly. I know the Ways and Means Committee felt strongly about the position they had, and I know the Senate, their position. It really comes down to $15 million and $18 million.”

O’Malley said in a press conference prior to the conference committee dispute that the tax credit primarily served as a job creator, and that he hoped the House and Senate would resolve their differences.

O’Malley said he had only watched “House of Cards” once, on a long flight. He’s more of a “Veep” fan.

“Everybody always threatens to leave if they don’t get what they want, and you know, that’s what they say — but sometimes when they get what they want, they [still] go home,” he said.

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