Rep. David Dank will open his much-anticipated study of state tax credits with a look at the fact that some credits can be used to soften the effect of guaranty-fund assessments on insurance companies.

The Task Force for the Study of State Tax Credits and Economic Incentives, which Dank co-chairs along with Sen. Mike Mazzei, R-Tulsa, takes off at 10 a.m. Friday, with a meeting scheduled to take up most of the day.

“I just think we need to make a determination on the three points that the attorney general said constituted a rightful incentive, and whether or not those credits actually should be paid by the community as a whole, which is all the taxpayers, or whether it should be paid by the people in the industry and the policyholders based on their needs and what they purchase in terms of property and casualty, health and others,” Dank said. “I mean, who should be paying those assessments?”

Dank’s reference to the attorney general related to an opinion issued last year in which then-Attorney General Drew Edmondson said tax credits are constitutionally infirm if they do not meet three criteria: Promotion of a public purpose, adequate consideration and having adequate controls and safeguards in place.

Dank, R-Oklahoma City, said he intends to scrutinize all tax credits.

Friday’s meeting will focus on tax credits for assessments related to the Property and Casualty Insurance Guaranty Association and the Life and Health Insurance Guaranty Association.

Insurers pay assessments into the two guaranty funds, which pay claims of insurance companies that become insolvent or otherwise are unable to meet their obligations.

State law was changed in 2002 to provide that insurers who pay the assessments would receive tax credits that they could use against insurance premium taxes, to make up for what they pay in assessments.

Dank explains that an insurance company assessed for $1 million could receive that amount in tax credits, using $100,000 against premiums for 10 years.In other words, the company is made whole while taxpayers foot the bill, a situation of which Dank has been critical.

Dank has also targeted the fact that millions of dollars in transferable tax credits end up benefiting insurance companies, which purchase them at reduced rates from the companies that initially qualify for them.

Information Dank previously provided to 23^rd and Lincoln indicates that $57.9 million in tax credits was taken against premium taxes in 2008, $54.1 million in 2007 and $38.9 million in 2006.

“The reason that they’re marketed with the insurance premium tax is because the insurance companies pay 2.25 percent tax on all the premiums they write,” he said. “That’s a tremendous amount of obligation to the state. Naturally they’re going to go to the people where they have the highest obligation to the state. That’s the best place to market them.”

Dank said he will ask task force members what they hope to accomplish during the study, to develop a consensus.

“The governor has said on several different occasions that she thinks they (tax credits) should create jobs,” Dank said.

He concurs.

“That’s my number-one deal,” Dank said. “I’m a huge supporter of the Quality Jobs incentive, because I like the controls that are placed on it.”

The lawmaker said he likes the fact that the Quality Jobs program has certain performance requirements that must be met.

“I think that all tax credits should be performance based,” Dank said. “In other words, I don’t think people ought to be given a blank check just to be able to go out and do what they want to do and we have no idea what they’re doing, why they’re doing it, no transparency, no accountability.”

The task force will also look into the tax credit for qualified historic rehabilitation expenditures.

In March, Dank asked Oklahoma Attorney General Scott Pruitt to file a lawsuit challenging the constitutionality of certain tax credits, with an eye toward recapturing revenue from any credits declared unconstitutional. He said he has not heard from Pruitt about his request.

In addition to a half-dozen lawmakers, other members of the task force include State Treasurer Ken Miller, State Auditor and Inspector Gary Jones, Secretary of State Glenn Coffee and State Finance Director Preston Doerflinger.