BILL NUMBER: AB 1011	CHAPTERED
	BILL TEXT

	CHAPTER  418
	FILED WITH SECRETARY OF STATE  SEPTEMBER 28, 2010
	APPROVED BY GOVERNOR  SEPTEMBER 28, 2010
	PASSED THE SENATE  AUGUST 30, 2010
	PASSED THE ASSEMBLY  AUGUST 31, 2010
	AMENDED IN SENATE  AUGUST 24, 2010
	AMENDED IN SENATE  JULY 15, 2010
	AMENDED IN SENATE  SEPTEMBER 3, 2009
	AMENDED IN SENATE  JUNE 29, 2009
	AMENDED IN ASSEMBLY  JUNE 1, 2009
	AMENDED IN ASSEMBLY  APRIL 15, 2009

INTRODUCED BY   Assembly Member Jones

                        FEBRUARY 27, 2009

   An act to amend Sections 926.1, 926.2, and 12939 of the Insurance
Code, relating to insurer investment.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1011, Jones. Insurance: green investments.
   Existing law requires each admitted insurer to provide information
biennially to the Insurance Commissioner on all of its community
development investments and community development infrastructure
investments, as defined, in California. The commissioner and the
Department of Insurance are required to provide certain information
on these investments to the public, as specified. These provisions
are to remain in effect only until January 1, 2011, and are repealed
as of that date.
   This bill would make findings and declarations relating to
California's role in greenhouse gas reduction, and would include
green investments, as defined, as community development investments.
The bill would require the commissioner, on the department's Internet
Web site, to biennially identify those insurers that make
investments that qualify as green investments and the aggregate
amount of identified insurer investments in green investments. The
bill would extend the date for repealing those provisions to January
1, 2015.
   The bill would make changes to findings and declarations relating
to specialized financial institutions and tax incentives for their
capitalization.
   The bill would incorporate additional changes to Section 926.2 of
the Insurance Code, proposed by AB 41 of the 2009-10 Regular Session,
to be operative only if both bills are chaptered and become
effective on or before January 1, 2011, and this bill is chaptered
last.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  The Legislature finds and declares all of the
following:
   (a) Climate change will have detrimental effects on some of
California's largest industries, including the insurance industry. It
will also increase the strain on energy and natural resources
necessary to rebuild and restore property after losses.
   (b) National and international actions are necessary to fully
address the issue of climate change. However, actions taken in
California to reduce emissions of greenhouse gases will have
far-reaching effects by encouraging other states, the federal
government, and other countries to act.
   (c) By exercising a global leadership role, California and its
state-based businesses will also position California's economy,
technology centers, financial institutions, and businesses to benefit
from national and international efforts to reduce emissions of
greenhouse gases. More importantly, investing in and fostering the
development of innovative and pioneering technologies will assist
California businesses and communities in achieving reductions in the
emissions of greenhouse gases and will provide an opportunity for the
state, including the state's businesses, to take a global economic
and technological leadership role in reducing emissions of greenhouse
gases.
   (d) By increasing incentives for reduced driving, the building of
"green buildings," investments in energy efficiency improvements and
renewable energy projects, and the conservation of natural resources,
the insurance industry can help reduce greenhouse gas emissions.
   (e) By making investments that support community development
financial institutions in low- and moderate-income communities,
including needed financial services, economic development, and
housing, the insurance community can help those communities better
accommodate new growth in compact forms, so as to deemphasize
automobile dependency, integrate new growth into existing
communities, support a diversity of affordable housing near
employment centers, and create jobs.
   (f) Making this new capital available furthers important green
objectives by enabling communities to focus on the use and reuse of
existing urbanized lands supplied with infrastructure as the situs
for new growth, and by helping those communities grow through new
capital investment in the maintenance and rehabilitation of existing
infrastructure so that the reuse and reinvention of city centers and
existing transportation corridors and community spaces through
mixed-use development, affordable housing opportunities, safe,
reliable, and efficient multimodal transportation systems, and
transit-oriented development are encouraged.
  SEC. 2.  Section 926.1 of the Insurance Code is amended to read:
   926.1.  As used in this article, the following terms shall have
the following meanings:
   (a) "Area median income" (AMI) means either of the following:
   (1) The median family income for the Metropolitan Statistical Area
(MSA), if a person or geography is located in an MSA, or for the
metropolitan division, if a person or geography is located in an MSA
that has been subdivided into metropolitan divisions.
   (2) The statewide nonmetropolitan median family income, if a
person or geography is located outside an MSA.
   (b) "Community development investment" means an investment where
all or a portion of the investment has as its primary purpose
community development for, or that directly benefits, California low-
or moderate-income individuals, families, or communities. "Community
development investment" includes, but is not limited to, investments
in California in the following:
   (1) Affordable housing, including multifamily rental and ownership
housing, for low- or moderate-income individuals or families.
   (2) Community facilities or community services providers
(including providers of education, health, or social services)
directly benefiting low- or moderate-income individuals, families, or
communities.
   (3) Economic development that demonstrates benefits, including,
but not limited to, job creation, retention, or improvement, or
provision of needed capital, to low- or moderate-income, individuals,
families, or communities, including urban or rural communities, or
businesses or nonprofit community service organizations that serve
these communities.
   (4) Activities that revitalize or stabilize low- or
moderate-income communities.
   (5) Investments in or through California Organized Investment
Network (COIN)-certified community development financial institutions
(CDFIs) and investments made pursuant to the requirements of
federal, state, or local community development investment programs or
community development investment tax incentive programs, including
green investments, if these investments directly benefit low- or
moderate-income individuals, families, and communities and are
consistent with this article.
   (6) Community development infrastructure investments.
   (7) Investments in a commercial property or properties located in
low- or moderate-income geographical areas and are consistent with
this article.
   (c) "Community development infrastructure" means California public
debt (including all debt issued by the State of California or a
California state or local government agency) where all or a portion
of the debt has as its primary purpose community development for, or
that directly benefits, low- or moderate-income communities and is
consistent with subdivision (b).
   (d) "Geography" means a census tract delineated by the United
States Bureau of the Census in the most recent decennial census.
   (e) "Green investments" means investments that emphasize renewable
energy projects, economic development, and affordable housing
focused on infill sites so as to reduce the degree of automobile
dependency and promote the use and reuse of existing urbanized lands
supplied with infrastructure for the purpose of accommodating new
growth and jobs. "Green investments" also means investments that can
help communities grow through new capital investment in the
maintenance and rehabilitation of existing infrastructure so that the
reuse and reinvention of city centers and existing transportation
corridors and community space, including projects offering energy
efficiency improvements and renewable energy generation, including,
but not limited to, solar and wind power, mixed-use development,
affordable housing opportunities, multimodal transportation systems,
and transit-oriented development, can advance economic development,
jobs, and housing.
   (f) "Insurer" means an admitted insurer as defined in Section 24,
including the State Compensation Insurance Fund, or a domestic
fraternal benefit society as defined in Section 10990.
   (g) "Investment" means a lawful equity or debt investment, or
loan, or deposit obligation, or other investment or investment
transaction allowed by the Insurance Code.
   (h) "Low-income" means an individual income that is less than 50
percent of the AMI, or a median family income that is less than 50
percent of the AMI in the case of a geographical area.
   (i) "MSA" means a metropolitan statistical area as defined by the
Director of the Office of Management and Budget.
   (j) "Moderate-income" means an individual income that is at least
50 percent but less than 80 percent of the AMI, or a median family
income that is at least 50 percent but less than 80 percent of the
AMI in the case of a geographical area.
   (k) "Nonmetropolitan area" means any area that is not located in
an MSA.
  SEC. 3.  Section 926.2 of the Insurance Code is amended to read:
   926.2.  (a) Each insurer admitted in California shall provide
information biennially to the commissioner on all its community
development investments and community development infrastructure
investments in California. This information shall be provided as part
of the required filing pursuant to Section 900 or Section 11131, or
through a data call, or by other means as determined by the
commissioner. COIN shall provide insurers with information on why
investments, if any, were found not to be qualified by the
commissioner.
   (b) The commissioner shall biennially provide information on the
department's Internet Web site on the aggregate insurer community
development investments and community development infrastructure
investments. Insurers that make investments that are innovative,
responsive to community needs, not routinely provided by insurers,
qualify as green investments, or have a high degree of positive
impact on the economic welfare of low- or moderate-income
individuals, families, or communities in urban or rural California
shall be identified.
   (c) The department shall also biennially provide information on
the department's Internet Web site regarding the aggregate amount of
California public debt (including all debt issued by the State of
California or a California state or local government agency)
purchased by insurers as reported to the department in their National
Association of Insurance Commissioners (NAIC) annual statement
filing pursuant to Section 900 or Section 11131.
   (d) The department shall also biennially provide on its Internet
Web site the aggregate amount of identified California investments,
as reported to the NAIC in the annual statement filed pursuant to
Section 900 or Section 11131.
   (e) The department shall also biennially provide information on
its Internet Web site regarding the aggregate amount of identified
California insurer investments in green investments.
   (f) The first report under this article shall be filed with the
commissioner by May 31, 2007.
   (g) Insurers that did not comply with the voluntary community
investment data call issued by the commissioner in May 2005 shall
provide the information requested therein to the commissioner on or
before February 28, 2007.
   (h) This article shall remain in effect only until January 1,
2015, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2015, deletes or extends
that date.
  SEC. 3.5.  Section 926.2 of the Insurance Code is amended to read:
   926.2.  (a) (1) Each insurer admitted in California shall provide
information, by January 1, 2014, to the commissioner on all of its
community development investments and community development
infrastructure investments in California. This information shall be
provided as part of the required filing pursuant to Section 900 or
Section 11131, or through a data call, or by other means as
determined by the commissioner. COIN shall provide insurers with
information on why investments, if any, were found not to be
qualified by the commissioner.
   (2) Nothing in this subdivision shall preclude an insurer that is
a member of an insurance holding company system, as defined in
Article 4.7 (commencing with Section 1215) of Chapter 2, from
complying with paragraph (1) through a single filing on behalf of the
entire group of affiliated companies, provided that the data so
filed accurately reflects the investments made by each of the
affiliates, and accurately attributes, by National Association of
Insurance Commissioners (NAIC) number or other identifier required by
the commissioner, which of the investments were made by each
affiliated company.
   (3) Nothing in this subdivision shall preclude an insurer from
satisfying the requirements of paragraph (1) through a filing made by
a community development financial institution, provided all of the
following conditions are met:
   (A) The insurer has no less than a 10 percent ownership interest
in a COIN-certified community development financial institution.
   (B) The insurer makes community development investments and
community development infrastructure investments in and through the
community development financial institution.
   (C) The community development financial institution accurately
files the information required by paragraph (1) with the commissioner
on behalf of the insurer and accurately attributes, by NAIC number
or other identifier required by the commissioner, which investments,
including the dollar amounts of the investments, were made by each
insurer on whose behalf the community development financial
institution is reporting.
   (b) The commissioner shall, by May 31, 2014, provide information
on the department's Internet Web site on the aggregate insurer
community development investments and community development
infrastructure investments. Insurers that make investments that are
innovative, responsive to community needs, not routinely provided by
insurers, qualify as green investments, or have a high degree of
positive impact on the economic welfare of low- or moderate-income
individuals, families, or communities in urban or rural California
shall be identified.
   (c) The department shall also, by May 31, 2014, provide
information on the department's Internet Web site regarding the
aggregate amount of California public debt (including all debt issued
by the State of California or a California state or local government
agency) purchased by insurers as reported to the department in their
NAIC annual statement filing pursuant to Section 900 or Section
11131.
   (d) The department shall also, by May 31, 2014, provide on its
Internet Web site the aggregate amount of identified California
investments, as reported to the NAIC in the annual statement filed
pursuant to Section 900 or Section 11131.
   (e) The department shall also biennially provide information on
its Internet Web site regarding the aggregate amount of identified
California insurer investments in green investments.
   (f) This article shall remain in effect only until January 1,
2015, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2015, deletes or extends
that date.
  SEC. 4.  Section 12939 of the Insurance Code is amended to read:
   12939.  The Legislature finds and declares all of the following:
   (a) There are specialized financial institutions in California
that are specifically dedicated to, and whose core purpose is to,
provide financial products and services to people and communities
underserved by traditional financial markets and to support renewable
energy projects, energy efficiency improvements, economic
development, and affordable housing in these communities. These
community development financial institutions or CDFIs seek to bridge
the growing gap that exists between the financial products and
services, renewable energy generation, energy efficiency
improvements, economic development, and affordable housing available
to the economic mainstream and those offered to low-income people and
communities, as well as the nonprofit institutions that serve them.
In addition, they serve a critical role in addressing issues of
poverty and access to credit in economically disadvantaged
communities by providing services, including, but not limited to,
credit counseling to consumers, financial literacy training, home
ownership counseling, entrepreneurial education, and technical
assistance to small business owners.
   (b) These mission-driven financial institutions require additional
capital in order to expand their ability to provide financial
products and services, and to promote needed renewable energy
generation projects, energy efficiency improvements, economic
development, and affordable housing for low-income individuals and
communities, and the businesses and nonprofit agencies that serve
them. For example, some offer responsible alternatives to high-cost
check-cashing services and payday lenders that have moved into
low-income communities. Others help finance small businesses,
affordable housing, and community services and facilities that, in
turn, help stabilize low-income neighborhoods and alleviate poverty.
   (c) In carrying out their mission, funding community development
is given priority over providing high returns to investors.
   (d) It is the intent of the Legislature to provide an incentive in
the form of California tax credits to attract much needed additional
private capital investments that would not otherwise be available to
CDFIs without the benefit of such incentive. It is the expectation
of the Legislature that CDFIs will leverage these new investment
dollars for the direct benefit of economically disadvantaged
communities and low-income people in California.
  SEC. 5.  Nothing in Article 10.1 (commencing with Section 926.1) of
Chapter 1 of Part 2 of Division 1 of the Insurance Code shall limit
the authority of the Insurance Commissioner to ask for data
concerning community development investments and community
development infrastructure investments on a voluntary basis on or
after January 1, 2015, if that article is not extended beyond that
date.
  SEC. 6.  Section 3.5 of this bill incorporates amendments to
Section 926.2 of the Insurance Code proposed by both this bill and AB
41. It shall only become operative if (1) both bills are enacted and
become effective on or before January 1, 2011, (2) each bill amends
Section 926.2 of the Insurance Code, and (3) this bill is enacted
after AB 41, in which case Section 3 of this bill shall not become
operative.