House revenue committee releases bill to create Delaware entertainment production tax credit

Representative Harris introduced House Bill 364 on the floor of the House Revenue and Finance Committee on Wednesday, saying the measure would create a Delaware Entertainment Production Tax Credit to attract film, television, esports and video-game production to the state.

"House Bill 364 creates a Delaware Entertainment Production Tax Credit focused on attracting film, television, esports, and video game production activity into our state," Representative Harris said in her opening remarks, adding the program is designed to "encourage real Delaware spending, support Delaware workers and vendors, and help diversify Delaware's economy into growing creative, and digital industries."

The bill would cap credits at $10 million annually, require independent verification of qualifying Delaware spending, include public reporting and interagency oversight, and contain a sunset provision through 2031 so the General Assembly can evaluate the program before any extension, Harris said.

Supporters at the hearing emphasized potential local economic benefits. TJ Healy, chairman of the Delaware Film Commission, said previous productions brought hotel nights and local spending. "We spent $18,000,000; that was our budget, and every penny of it was spent here in Delaware," Healy said, citing local economic activity from past productions.

Industry groups also urged approval. Renata Colbert, director of state government affairs for the Motion Picture Association's Mid-Atlantic region, said the industry generates tourism and direct spending that benefit local businesses and urged the committee to adopt the bill as a first step toward a sustainable incentive program.

Private producers and arts advocates said the credit could grow local capacity. Christopher Walt, a Delaware-based producer, told the committee he would prefer to film projects in-state if the credit were available and described how smaller, targeted incentives can help bring production and subsequent vendor and workforce activity.

Several witnesses and public commenters urged additional measures to maximize local benefit, such as internship language and streamlined permitting. David Shepherd, vice chair of the Delmarva Picture and Television Development commission, urged including internships to build a local talent pipeline so students can gain professional production experience.

Fiscal concerns surfaced in public comment. Rick Geisenberger, a former Delaware secretary of finance participating remotely, said the bill would provide $50 million in transferable tax credits over five years and warned that independent studies of film tax credits in other states have shown modest to low fiscal returns. "For every dollar spent, state and local governments recoup a small fraction," Geisenberger said, and he urged requiring truly independent audits and net-fiscal-impact reports prepared with the state's finance office and inspector general.

Current Secretary of Finance Mark Smith responded that the bill is drafted as a cost-of-performance program that limits credits to expenditures performed in Delaware and that the credit is nonrefundable but transferable. "This bill doesn't allow expenditures performed outside the state to count," Smith said, arguing the design is intended to ensure activity and spending occur in Delaware.

After discussion and public comment, Vice Chair Carson moved to release the bill from committee; Representative Dee Short seconded. The committee conducted a roll-call vote and the motion carried. The chair instructed members to sign the bill cover sheet prior to leaving.

Action taken: the committee voted to release House Bill 364 for further consideration. The committee did not adopt amendments during the hearing; staff and sponsors said they would consider technical or clarifying edits (including recommendations submitted by stakeholders) before the bill returns for floor consideration.

What's next: With the committee vote to release, House Bill 364 will appear on the legislative website and is expected to be announced on the House floor during a future session. Staff and sponsors indicated they may refine reporting, audit and internship provisions as recommended by stakeholders before the bill reaches a floor vote.