Tax break review bill gets watered down in Senate

ANNAPOLIS — Legislation that originally sought the review of 31 state tax breaks was substantially weakened on Thursday when the Senate gave preliminary approval to a bill that reduced by almost 75 percent the number of credits slated for review.

SB 739, sponsored by Sen. Richard S. Madaleno, D-Montgomery, and HB 764, sponsored by Del. Bill Frick, D-Montgomery, were filed together in an attempt to establish a legislative review process for 31 of the Maryland‘s 341 available tax breaks.

The bills would create a two-member committee, appointed by the House Speaker and Senate President, to review the state’s giveaways. In June, that committee would consult with the Department of Budget and Management, the Department of Legislative Services, the state comptroller and a representative from each agency’s office to determine how best to review the tax breaks.

The state does not keep reliable records of how well its tax breaks work.

But the Senate bill was amended in the Budget and Taxation Committee to mandate the review of just eight tax breaks between June 2014 and June 2017. The bill could be given final approval in the Senate on Friday.

The House bill, meanwhile, easily passed in that chamber with the review of 31 tax breaks still intact.

Both bills were amended to remove a clause that would have forced the termination of tax credits that were not reestablished by the legislative review committee. Instead, breaks would be continued unless recommended for termination.

Frick and Madaleno were not immediately available for comment.

SB 739, in its current form, would allow for the review of enterprise zones and economic development credits by July 2014.

The House plan would mandate review of credits for enterprise zones, taxes paid to another state, installment sales, earned income, job creation, sustainable communities, neighborhood and community assistance contributions and film production by July 2014.

Raquel Guillory, a spokeswoman for Gov. Martin O’Malley, said the governor thought it was important to know if tax breaks work, but would not comment on a preference between the House and Senate plan.