BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
1011 (Jones)
Hearing Date: 8/2/2010 Amended: 7/15/2010
Consultant: Katie Johnson Policy Vote: BFI 8-2
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BILL SUMMARY: AB 1011 would require the California Department of
Insurance (CDI) to specifically collect data from insurers and
to share it on its website related to the aggregate amount of
insurer investments in green investments as part of their
community development and community development infrastructure
investments. The bill would also establish the Green Insurance
Tax Credit.
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Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
Green incentive $5 million annually
commencingGeneral
tax credit upon approval of regulations
Addition of green incentives unknown cost pressure onGeneral
to CDFI law existing $10 million tax credit
CDI review and certification $445 $345
$345Special*
of tax credit eligibility and
green investments data
collection and reporting
*Insurance Fund
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STAFF COMMENTS: This bill meets the criteria for referral to the
Suspense File.
This bill would make findings and declarations regarding the
detrimental effects of climate change on California's insurance
industry and would state that by investing in energy efficiency
improvements, renewable energy, incentives for reduced driving,
and the building of "green buildings," and the conservation of
natural resources, the insurance industry could help reduce
greenhouse gas emission.
This bill would define "green investments" with respect to
existing law that requires all insurers in California to make
community development and community development infrastructure
investments. "Green investments" would mean investments that
emphasize renewable energy projects, economic development, and
affordable housing, as well as investments in projects such as
the reuse and reinvention of city centers, community space, and
transportation corridors that offer energy efficiency
improvements and renewable energy generation. The California
Department of Insurance (CDI), as part of its biennial data
call, would be required to collect community development
investment data related to green investments and to post the
information on its departmental website.
Page 2
AB 1011 (Jones)
This bill would make green investments eligible for the existing
California Community Development Financial Institution (CDFI)
$10 million tax credit. The addition of another use for this tax
credit would put cost pressure on it. The CDFI tax credit
expires January 1, 2012.
This bill would also establish a "Green Insurance Tax Credit"
related to green investment each taxable year commencing on or
after January 1, 2011. Insurers making green investments and
desiring to utilize the tax credit would apply to CDI, as
specified, to be certified as eligible for the tax credit. The
tax credit would be limited to $5 million annually, but if that
amount is not accessed in a given year, the excess authority
could be carried over to subsequent years. Staff recommends that
the tax credit provisions sunset January 1, 2015, to allow for
Legislative review of the program.
Existing law, the California Organized Investment Network (COIN)
law, which sunsets on January 1, 2011, requires all California
admitted insurers to provide information biennially to CDI on
all community development investments and community development
infrastructure investments they make in the state. This bill
would instead sunset the provisions on January 1, 2015. Any
expenses to CDI to provide guidance to insurers and to collect
policy statements and to make them available to the public would
be minor and absorbable.
In order to develop applications, promulgate regulations,
biennially provide information on its website regarding the
aggregate amount of green investments made by insurers, and
certify insurer eligibility for the tax credit, CDI would need
staffing and IT contract resources of $445,000 in FY 2010-2011
and ongoing resources of $345,000 annually, commencing with FY
2011-2012. At the request of CDI and the California Organized
Investment Network (COIN), the State Board of Equalization (BOE)
would be required to advise and assist in the administration of
this bill.