Rep. David Dank, R-Oklahoma City, gave an indication Wednesday morning of one issue he intends to address in drafting legislation on tax credits—caps, or rather the lack of same.

“There are literally no caps at all on the cumulative amounts that can be taken or used annually on all but two of these credits,” Dank told a task force he co-chairs. “That’s like handing the keys to the car and a credit card to a 16-year-old boy and saying ‘Have fun, son!’ You know he’s thinking that the sky is the limit.”

Much like the boy’s family, Dank said, the state is ultimately going to have to balance its budget.

“That’s what we are all about here,” he said, “shining light on these issues and finding solutions that are fair to everyone, beginning with the individual taxpayers who ultimately foot the bill.”

The panel was meeting in the House Chamber to hear presentations on the capital investment/new jobs tax credit and incentives offered under the Quality Jobs Act.

“That’s also why we have to get a handle on these tax credits that have no caps and no controls,” Dank said. “They’re a lot like poker chips. They aren’t worth anything until they are redeemed, and the state really has no way to project how many will be cashed in at any given time. That seems like a shaky and reckless way to maintain a budget.”

Dawn Cash, a member of the Oklahoma Tax Commission, presented the following numbers on use of the investment/new jobs credit:

2007: 1,070 returns, $124.8 million in credits claimed, $37.7 million used.

2008: 894 returns, $49.5 million claimed, $9 million used.

2009: 869 returns, $137.7 million claimed, $16.9 million used.

Established in 1980, the investment/new jobs credit applies to manufacturers and aircraft maintenance businesses. Qualifying businesses can apply for a credit based either on investment of at least $50,000 in depreciable property or the addition of a full-time employee. The credit amounts to the greater of 1 percent of the cost of the investment or $500 per employee, whichever is greater. If the business is located in an enterprise zone or if the investment exceeds $40 million over three years, the credits doubles to the greater of 2 percent or $1,000 per employee.

The lack of a cap on the amount of credits that can be offered is not all that troubles Dank about the investment/new jobs credit.

“I hate the lack of transparency and control,” he said. “They’re clouded in secrecy and I don’t think they should be. We have no controls over that or where the money’s spent or how it’s being spent, who approves it. All they have to do is show a capital investment, an equity investment, and they can qualify for the credits. I just think that’s a disgrace for the state.”

Dank expressed consternation after being informed that state law was changed from limiting the carry-forward aspect of the credits to 20 years to removing the time period completely.

“Whatever possessed our legislature to do that, from 20 years to perpetuity, I don’t know,” he said.

Dank said he understands that the Kiowa power plant has more than $20 million in remaining tax credits

“I don’t know how long they’ve had those credits,” he said. “But now, as long as there’s a Kiowa power plant over there in Kiowa, Oklahoma, they can use that credit. So, supposedly, they may not ever pay any state taxes, as far as income or corporate taxes, and that’s not right. I mean, there’s got to be an endgame to this.”