BILL NUMBER: AB 32	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MARCH 4, 2013

INTRODUCED BY   Assembly Member John A. Pérez

                        DECEMBER 3, 2012

   An act to amend Sections 12209, 17053.57, and 23657 of the Revenue
and Taxation Code, relating to taxation, to take effect immediately,
tax levy.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 32, as amended, John A. Pérez. Insurance taxes: income taxes:
credits: community development financial institution investments.
   Existing laws governing the taxation of insurers, the Personal
Income Tax Law, and the Corporation Tax Law, authorize, until January
1, 2017, a credit in an amount equal to 20% of a qualified
investment, as defined, made into a community development financial
institution, as defined, but not to exceed, in the aggregate amount
under all those laws, $10,000,000 per year.  Existing law
provides that a credit shall not be allowed under those laws unless
the California Organized Investment Network certifies that the
investment made by the taxpayer is a qualified investment, as
defined. 
   The bill would increase the $10,000,000 limitation on the
aggregate amount of qualified investments to  $20,000,000
  $50,000,000  .  This bill would prohibit the
total amount of investments certified by the California Organized
Investment Network in any calendar year to any one community
development financial institution from exceeding 30% of the annual
aggregate amount of qualified investments, except as specified. This
bill would require that each year 10% of the annual aggregate amount
of qualified investments be reserved for investment amounts of less
than or equal to $200,000, as specified. This bill would also allow
the California Organized Investment Network to certify investments
for the credit until January 1, 2017.  
   Existing law authorizes the California Organized Investment
Network, in allocating qualified investment credits, when certain
conditions are met, to prioritize applications for those credits, as
specified.  
   This bill would revise those conditions. 
   This bill would take effect immediately as a tax levy.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


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

  SECTION 1.  Section 12209 of the Revenue and Taxation Code is
amended to read:
   12209.  (a) For each year beginning on or after January 1, 1999,
and before January 1, 2017, there shall be allowed as a credit
against the amount of tax, as defined in Section 28 of Article XIII
of the California Constitution, an amount equal to 20 percent of the
amount of each qualified investment made by a taxpayer during the
taxable year into a community development financial institution that
is certified by the Department of Insurance, California Organized
Investment Network, or any successor thereof.
   (b) For purposes of determining any tax that may be imposed under
Section 685 of the Insurance Code on a taxpayer not organized under
the laws of this state, the amount of the credit allowed by
subdivision (a) shall be treated as a tax paid under Section 12201 or
Section 28 of Article XIII of the California Constitution.
   (c) (1) Notwithstanding any other provision of this part, a credit
shall not be allowed under this section unless the California
Organized Investment Network, or its successor within the Department
of Insurance, certifies that the investment described in subdivision
(a) qualifies for the credit under this section and certifies the
total amount of the credit allocated to the taxpayer pursuant to this
section.
   (2) A credit shall not be allowed by this section unless the
applicant and the taxpayer provide satisfactory substantiation to,
and in the form and manner requested by, the Department of Insurance,
California Organized Investment Network, or any successor thereof,
that the investment is a qualified investment as defined in paragraph
(1) of subdivision (h).
   (3)  (A)    The aggregate amount of qualified
investments made by all taxpayers pursuant to this section, Section
17053.57, and Section 23657 shall not exceed  twenty million
dollars ($20,000,000)   fifty million dollars
($50,000,000)  for each calendar year. However, if the aggregate
amount of qualified investments made in any calendar year is less
than  twenty million dollars ($20,000,000)  
fifty million d   ollars ($50,000,000)  , the
difference may be carried over to the next year, and any succeeding
year during which this section remains in effect, and added to the
aggregate amount authorized for those years. 
   (B) The total amount of qualified investments certified by the
California Organized Investment Network in any calendar year to any
one community development financial institution together with its
affiliates, as defined in Section 1215 of the Insurance Code, shall
not exceed 30 percent of the annual aggregate amount of qualified
investments certified by the California Organized Investment Network.
If after October 1, the California Organized Investment Network has
determined that the availability of tax credits exceed their demand,
then a community development financial institution that has been
allocated 30 percent of the annual aggregate amount of qualified
investments shall become eligible to apply to be certified for any
remaining tax credits in that calendar year.  
   (C) Each year, 10 percent of the annual aggregate amount of
qualified investments shall be reserved for investment amounts of
less than or equal to two hundred thousand dollars ($200,000). If
after October 1, there remains an unallocated portion of the amount
reserved for investments of less than or equal to two hundred
thousand dollars ($200,000), then qualified investments in excess of
two hundred thousand dollars ($200,000) may be eligible for that
remaining unallocated portion. 
   (4) If the California Organized Investment Network determines that
total qualified investments will exceed the aggregate amount of
qualified investments made by all taxpayers specified in paragraph
(3), priority shall be granted to those applications that meet
 any or all   one or both  of the
following:
   (A) Directly benefit low-income persons. 
   (B) Prioritize rental housing, mortgages for community-based
residential programs, and self-help housing ahead of single-family
owned housing.  
   (C) 
    (B)  Represent investments from insurance companies
subject to tax under Section 12201 of this code or under Section 28
of Article XIII of the California Constitution. 
   (5) If the application would support housing, priority shall be
given to applications that support affordable rental housing, housing
for veterans, mortgages for community-based residential programs,
and self-help housing ahead of single-family owned housing. 
   (d) The community development financial institution shall do all
of the following:
   (1) Apply to the Department of Insurance, California Organized
Investment Network, or its successor, for certification of its status
as a community development financial institution.
   (2) Apply to the Department of Insurance, California Organized
Investment Network, or its successor, on behalf of the taxpayer for
certification of the amount of the investment and the credit amount
allocated to the taxpayer, obtain the certification, and retain a
copy of the certification.
   (3) Obtain the taxpayer's California company identification number
for tax administration purposes and provide this information to the
Department of Insurance, California Organized Investment Network, or
its successor, with the application required in paragraph (2).
   (4) Provide an annual listing to the State Board of Equalization,
in the form and manner agreed upon by the State Board of Equalization
and the Department of Insurance, California Organized Investment
Network, or its successor, of the names and taxpayer's California
company identification numbers of any taxpayer who makes any
withdrawal or partial withdrawal of a qualified investment before the
expiration of 60 months from the date of the qualified investment.
   (5) Submit reports to the department, California Organized
Investment Network, or any successor thereof, as required pursuant to
subdivision (a) of Section 12939.1 of the Insurance Code.
   (e) The California Organized Investment Network may certify
investments for the credit allowed by this section on or before
January 1,  2015   2017  , but not after
that date.
   (f) The Insurance Commissioner may develop instructions,
procedures, and standards for applications, and for administering the
criteria for the evaluation of applications under this section. The
Insurance Commissioner may, from time to time, issue regulations to
implement the provisions of this section.
   (g) The Department of Insurance, California Organized Investment
Network, or any successor thereof, shall do all of the following:
   (1) Accept and evaluate applications for certification from
financial institutions and issue certificates that the applicant is a
community development financial institution qualified to receive
qualified investments. To receive a certificate, an applicant shall
satisfy the Department of Insurance, California Organized Investment
Network, or any successor thereof, that it meets the specific
requirements to be a community development financial institution for
this state program as defined in paragraph (2) of subdivision (h).
The certificate may be issued for a specified period of time, and may
include reasonable conditions to effectuate the intent of this
section. The Insurance Commissioner may suspend or revoke a
certification, after affording the institution notice and the
opportunity to be heard, if the commissioner finds that an
institution no longer meets the requirement for certification.
   (2) Accept and evaluate applications for certification from any
community development financial institution on behalf of the taxpayer
and issue certificates to taxpayers in an aggregate amount that
shall not exceed the limit specified in subdivision (c). The
certificate shall include the amount eligible to be made as an
investment that qualifies for the credit and the total amount of the
credit to which the taxpayer is entitled for the year. Applications
for tax credits shall be accepted and evaluated throughout the year.
   (3) Provide an annual listing to the State Board of Equalization,
in the form or manner agreed upon by the State Board of Equalization
and the Department of Insurance, California Organized Investment
Network, or its successor, of the taxpayers who were issued
certificates, their respective National Association of Insurance
Commissioners company number and employer's tax identification
number, the amount of the qualified investment made by each taxpayer,
and the total amount of qualified investments.
   (4) Include information specified pursuant to subdivision (b) of
Section 12939.1 of the Insurance Code in the report required by
Section 12922 of the Insurance Code.
   (h) For purposes of this section:
   (1) "Qualified investment" means an investment that is a deposit
or loan that does not earn interest, or an equity investment, or an
equity-like debt instrument that conforms to the specifications for
these instruments as prescribed by the United States Department of
the Treasury, Community Development Financial Institutions Fund, or
its successor, or, in the absence of that prescription, as defined by
the Insurance Commissioner. The investment must be equal to or
greater than fifty thousand dollars ($50,000) and made for a minimum
duration of 60 months. During that 60-month period, the community
development financial institution shall have full use and control of
the proceeds of the entire amount of the investment as well as any
earnings on the investment for its community development purposes.
The entire amount of the investment shall be received by the
community development financial institution before the application
for the tax credit is submitted. The community development financial
institution shall use the proceeds of the investment for a purpose
that is consistent with its community development mission and for the
benefit of economically disadvantaged communities and low-income
people in California.
   (2) "Community development financial institution" means a private
financial institution located in this state that is certified by the
Department of Insurance, California Organized Investment Network, or
its successor, that, consistent with the legislative findings,
declarations, and intent set forth in Section 12939 of the Insurance
Code, has community development as its primary mission, and that
lends in urban, rural, or reservation-based communities in this
state. A community development financial institution may include a
community development bank, a community development loan fund, a
community development credit union, a microenterprise fund, a
community development corporation-based lender, or a community
development venture fund.
   (i) (1) If a qualified investment is withdrawn before the end of
the 60th month and not reinvested in another community development
financial institution within 60 days, there shall be added to the
"tax," as defined in Section 28 of Article XIII of the California
Constitution, for the year in which the withdrawal occurs, the entire
amount of any credit previously allowed under this section.
   (2) If a qualified investment is reduced before the end of the
60th month, but not below fifty thousand dollars ($50,000), there
shall be added to the "tax," as defined in Section 28 of Article XIII
of the California Constitution, for the taxable year in which the
reduction occurs, an amount equal to 20 percent of the total
reduction for the year.
   (j) In the case where the credit allowed by this section exceeds
the "tax," the excess may be carried over to reduce the "tax" for the
next four years, or until the credit has been exhausted, whichever
occurs first.
   (k) The State Board of Equalization shall, as requested by the
Department of Insurance, California Organized Investment Network, or
its successor, advise and assist in the administration of this
section.
   (l) This section shall remain in effect only until December 1,
2017, and as of that date is repealed.
  SEC. 2.  Section 17053.57 of the Revenue and Taxation Code is
amended to read:
   17053.57.  (a) For each taxable year beginning on or after January
1, 1997, and before January 1, 2017, there shall be allowed as a
credit against the amount of "net tax," as defined in Section 17039,
an amount equal to 20 percent of the amount of each qualified
investment made by a taxpayer during the taxable year into a
community development financial institution that is certified by the
Department of Insurance, California Organized Investment Network, or
any successor thereof.
   (b) (1) Notwithstanding any other provision of this part, a credit
shall not be allowed under this section unless the California
Organized Investment Network, or its successor within the Department
of Insurance, certifies that the investment described in subdivision
(a) qualifies for the credit under this section and certifies the
total amount of the credit allocated to the taxpayer pursuant to this
section.
   (2) A credit shall not be allowed by this section unless the
applicant and the taxpayer provide satisfactory substantiation to,
and in the form and manner requested by, the Department of Insurance,
California Organized Investment Network, or any successor thereof,
that the investment is a qualified investment, as defined in
paragraph (1) of subdivision (g).
   (3)  (A)    The aggregate amount of qualified
investments made by all taxpayers pursuant to this section, Section
12209, and Section 23657 shall not exceed  twenty million
dollars ($20,000,000)   fifty million dollars
($50,000,000)  for each calendar year. However, if the aggregate
amount of qualified investments made in any calendar year is less
than  twenty million dollars ($20,000,000)  
fifty million dollars ($50,000,000)  , the difference may be
carried over to the next year, and any succeeding year during which
this section remains in effect, and added to the aggregate amount
authorized for those years. 
   (B) The total amount of qualified investments certified by the
California Organized Investment Network in any calendar year to any
one community development financial institution together with its
affiliates, as defined in Section 1215 of the Insurance Code, shall
not exceed 30 percent of the annual aggregate amount of qualified
investments certified by the California Organized Investment Network.
If after October 1, the California Organized Investment Network has
determined that the availability of tax credits exceed their demand,
then a community development financial institution that has been
allocated 30 percent of the annual aggregate amount of qualified
investments shall become eligible to apply to be certified for any
remaining tax credits in that calendar year.  
   (C) Each year, 10 percent of the annual aggregate amount of
qualified investments shall be reserved for investment amounts of
less than or equal to two hundred thousand dollars ($200,000). If
after October 1, there remains an unallocated portion of the amount
reserved for investments of less than or equal to two hundred
thousand dollars ($200,000), then qualified investments in excess of
two hundred thousand dollars ($200,000) may be eligible for that
remaining unallocated portion. 
   (4) If the California Organized Investment Network determines that
total qualified investments will exceed the aggregate amount of
qualified investments made by all taxpayers specified in paragraph
(3), priority shall be granted to those applications that meet
 any or all   one or both  of the
following:
   (A) Directly benefit low-income persons. 
   (B) Prioritize rental housing, mortgages for community-based
residential programs, and self-help housing ahead of single-family
owned housing.  
   (C) 
    (B)  Represent investments from insurance companies
subject to tax under Section 12201 of this code or under Section 28
of Article XIII of the California Constitution. 
   (5) If the application would support housing, priority shall be
given to applications that support affordable rental housing, housing
for veterans, mortgages for community-based residential programs,
and self-help housing ahead of single-family owned housing. 
   (c) The community development financial institution shall do all
of the following:
   (1) Apply to the Department of Insurance, California Organized
Investment Network, or its successor, for certification of its status
as a community development financial institution.
   (2) Apply to the Department of Insurance, California Organized
Investment Network, or its successor, on behalf of the taxpayer, for
certification of the amount of the investment and the credit amount
allocated to the taxpayer, obtain the certification, and retain a
copy of the certification.
   (3) Obtain the taxpayer's identification number, or in the case of
a partnership, the taxpayer identification numbers of all the
partners for tax administration purposes and provide this information
to the Department of Insurance, California Organized Investment
Network, or its successor, with the application required in paragraph
(2).
   (4) Provide an annual listing to the Franchise Tax Board, in the
form and manner agreed upon by the Franchise Tax Board and the
Department of Insurance, California Organized Investment Network, or
its successor, of the names and taxpayer identification numbers of
any taxpayer who makes any withdrawal or partial withdrawal of a
qualified investment before the expiration of 60 months from the date
of the qualified investment.
   (5) Submit reports to the department, California Organized
Investment Network, or any successor thereof, as required pursuant to
subdivision (a) of Section 12939.1 of the Insurance Code.
   (d) The Insurance Commissioner may develop instructions,
procedures, and standards for applications, and for administering the
criteria for the evaluation of applications under this section. The
Insurance Commissioner may, from time to time, issue regulations to
implement the provisions of this section.
   (e) The California Organized Investment Network may certify
investments for the credit allowed by this section on or before
January 1,  2015   2017  , but not after
that date.
   (f) The Department of Insurance, California Organized Investment
Network, or any successor thereof, shall do all of the following:
   (1) Accept and evaluate applications for certification from
financial institutions and issue certificates that the applicant is a
community development financial institution qualified to receive
qualified investments. To receive a certificate, an applicant shall
satisfy the Department of Insurance, California Organized Investment
Network, or any successor thereof, that it meets the specific
requirements to be a community development financial institution for
this state program as defined in paragraph (2) of subdivision (g).
The certificate may be issued for a specified period of time, and may
include reasonable conditions to effectuate the intent of this
section. The Insurance Commissioner may suspend or revoke a
certification, after affording the institution notice and the
opportunity to be heard, if the commissioner finds that an
institution no longer meets the requirement for certification.
   (2) Accept and evaluate applications for certification from any
community development financial institution on behalf of the taxpayer
and issue certificates to taxpayers in an aggregate amount that
shall not exceed the limit specified in subdivision (b). The
certificate shall include the amount eligible to be made as an
investment that qualifies for the credit and the total amount of the
credit to which the taxpayer is entitled for the taxable year.
Applications for tax credits shall be accepted and evaluated
throughout the year.
   (3) Provide an annual listing to the Franchise Tax Board, in the
form or manner agreed upon by the Franchise Tax Board and the
Department of Insurance, California Organized Investment Network, or
its successor, of the taxpayers who were issued certificates, their
respective tax identification numbers, the amount of the qualified
investment made by each taxpayer, and the total amount of qualified
investments.
   (4) Include information specified pursuant to subdivision (b) of
Section 12939.1 of the Insurance Code in the report required by
Section 12922 of the Insurance Code.
   (g) For purposes of this section:
   (1) "Qualified investment" means an investment that is a deposit
or loan that does not earn interest, or an equity investment, or an
equity-like debt instrument that conforms to the specifications for
these instruments as prescribed by the United States Department of
the Treasury, Community Development Financial Institutions Fund, or
its successor, or, in the absence of that prescription, as defined by
the Insurance Commissioner. The investment must be equal to or
greater than fifty thousand dollars ($50,000) and made for a minimum
duration of 60 months. During that 60-month period, the community
development financial institution shall have full use and control of
the proceeds of the entire amount of the investment as well as any
earnings on the investment for its community development purposes.
The entire amount of the investment shall be received by the
community development financial institution before the application
for the tax credit is submitted. The community development financial
institution shall use the proceeds of the investment for a purpose
that is consistent with its community development mission and for the
benefit of economically disadvantaged communities and low-income
people in California.
   (2) "Community development financial institution" means a private
financial institution located in this state that is certified by the
Department of Insurance, California Organized Investment Network, or
its successor, that, consistent with the legislative findings,
declarations, and intent set forth in Section 12939 of the Insurance
Code, has community development as its primary mission, and that
lends in urban, rural, or reservation-based communities in this
state. A community development financial institution may include a
community development bank, a community development loan fund, a
community development credit union, a microenterprise fund, a
community development corporation-based lender, or a community
development venture fund.
   (h) (1) If a qualified investment is withdrawn before the end of
the 60th month and not reinvested in another community development
financial institution within 60 days, there shall be added to the
"net tax," as defined in Section 17039, for the taxable year in which
the withdrawal occurs, the entire amount of any credit previously
allowed under this section.
   (2) If a qualified investment is reduced before the end of the
60th month, but not below fifty thousand dollars ($50,000), there
shall be added to the "net tax," as defined in Section 17039, for the
taxable year in which the reduction occurs, an amount equal to 20
percent of the total reduction for the taxable year.
   (i) In the case where the credit allowed by this section exceeds
the "net tax," the excess may be carried over to reduce the "net tax"
for the next four taxable years, or until the credit has been
exhausted, whichever occurs first.
   (j) The Franchise Tax Board shall, as requested by the Department
of Insurance, California Organized Investment Network, or its
successor, advise and assist in the administration of this section.
   (k) This section shall remain in effect only until December 1,
2017, and as of that date is repealed.
  SEC. 3.  Section 23657 of the Revenue and Taxation Code is amended
to read:
   23657.  (a) For each taxable year beginning on or after January 1,
1997, and before January 1, 2017, there shall be allowed as a credit
against the amount of "tax," as defined in Section 23036, an amount
equal to 20 percent of the amount of each qualified investment made
by a taxpayer during the taxable year into a community development
financial institution that is certified by the Department of
Insurance, California Organized Investment Network, or any successor
thereof.
   (b) (1) Notwithstanding any other provision of this part, a credit
shall not be allowed under this section unless the California
Organized Investment Network, or its successor within the Department
of Insurance, certifies that the investment described in subdivision
(a) qualifies for the credit under this section and certifies the
total amount of the credit allocated to the taxpayer pursuant to this
section.
   (2) A credit shall not be allowed by this section unless the
applicant and the taxpayer provide satisfactory substantiation to,
and in the form and manner requested by, the Department of Insurance,
California Organized Investment Network, or any successor thereof,
that the investment is a qualified investment, as defined in
paragraph (1) of subdivision (g).
   (3)  (A)    The aggregate amount of qualified
investments made by all taxpayers pursuant to this section, Section
12209, and Section 17053.57 shall not exceed  twenty million
dollars ($20,000,000)   fifty million dollars
($50,000,000)  for each calendar year. However, if the aggregate
amount of qualified investments made in any calendar year is less
than  twenty million dollars ($20,000,000)  
fifty million dollars ($50,000,000)  , the difference may be
carried over to the next year, and any succeeding year during which
this section remains in effect, and added to the aggregate amount
authorized for those years. 
   (B) The total amount of qualified investments certified by the
California Organized Investment Network in any calendar year to any
one community development financial institution together with its
affiliates, as defined in Section 1215 of the Insurance Code, shall
not exceed 30 percent of the annual aggregate amount of qualified
investments certified by the California Organized Investment Network.
If after October 1, the California Organized Investment Network has
determined that the availability of tax credits exceed their demand,
then a community development financial institution that has been
allocated 30                                              percent of
the annual aggregate amount of qualified investments shall become
eligible to apply to be certified for any remaining tax credits in
that calendar year.  
   (C) Each year, 10 percent of the annual aggregate amount of
qualified investments shall be reserved for investment amounts of
less than or equal to two hundred thousand dollars ($200,000). If
after October 1, there remains an unallocated portion of the amount
reserved for investments of less than or equal to two hundred
thousand dollars ($200,000), then qualified investments in excess of
two hundred thousand dollars ($200,000) may be eligible for that
remaining unallocated portion. 
   (4) If the California Organized Investment Network determines that
total qualified investments will exceed the aggregate amount of
qualified investments made by all taxpayers specified in paragraph
(3), priority shall be granted to those applications that meet
 any or all  one or both  of the following:

   (A) Directly benefit low-income persons. 
   (B) Prioritize rental housing, mortgages for community-based
residential programs, and self-help housing ahead of single-family
owned housing.  
   (C) 
    (B)  Represent investments from insurance companies
subject to tax under Section 12201 of this code or under Section 28
of Article XIII of the California Constitution. 
   (5) If the application would support housing, priority shall be
given to applications that support affordable rental housing, housing
for veterans, mortgages for community-based residential programs,
and self-help housing ahead of single-family owned housing. 
   (c) The community development financial institution shall do all
of the following:
   (1) Apply to the Department of Insurance, California Organized
Investment Network, or its successor, for certification of its status
as a community development financial institution.
   (2) Apply to the Department of Insurance, California Organized
Investment Network, or its successor, on behalf of the taxpayer, for
certification of the amount of the investment and the credit amount
allocated to the taxpayer, obtain the certification, and retain a
copy of the certification.
   (3) Obtain the taxpayer's identification number, or in the case of
an "S" corporation, the taxpayer identification numbers of all the
shareholders for tax administration purposes and provide this
information to the Department of Insurance, California Organized
Investment Network, or its successor, with the application required
in paragraph (2).
   (4) Provide an annual listing to the Franchise Tax Board, in the
form and manner agreed upon by the Franchise Tax Board and the
Department of Insurance, California Organized Investment Network, or
its successor, of the names and taxpayer identification numbers of
any taxpayer who makes any withdrawal or partial withdrawal of a
qualified investment before the expiration of 60 months from the date
of the qualified investment.
   (5) Submit reports to the department, California Organized
Investment Network, or any successor thereof, as required pursuant to
subdivision (a) of Section 12939.1 of the Insurance Code.
   (d) The California Organized Investment Network may certify
investments for the credit allowed by this section on or before
January 1,  2015   2017  , but not after
that date.
   (e) The Insurance Commissioner may develop instructions,
procedures, and standards for applications, and for administering the
criteria for the evaluation of applications under this section. The
Insurance Commissioner may, from time to time, issue regulations to
implement the provisions of this section.
   (f) The Department of Insurance, California Organized Investment
Network, or any successor thereof, shall do all of the following:
   (1) Accept and evaluate applications for certification from
financial institutions and issue certificates that the applicant is a
community development financial institution qualified to receive
qualified investments. To receive a certificate, an applicant shall
satisfy the Department of Insurance, California Organized Investment
Network, or any successor thereof, that it meets the specific
requirements to be a community development financial institution for
this state program as defined in paragraph (2) of subdivision (g).
The certificate may be issued for a specified period of time, and may
include reasonable conditions to effectuate the intent of this
section. The Insurance Commissioner may suspend or revoke a
certification, after affording the institution notice and the
opportunity to be heard, if the commissioner finds that an
institution no longer meets the requirement for certification.
   (2) Accept and evaluate applications for certification from any
community development financial institution on behalf of the taxpayer
and issue certificates to taxpayers in an aggregate amount that
shall not exceed the limit specified in subdivision (b). The
certificate shall include the amount eligible to be made as an
investment that qualifies for the credit and the total amount of the
credit to which the taxpayer is entitled for the taxable year.
Applications for tax credits shall be accepted and evaluated
throughout the year.
   (3) Provide an annual listing to the Franchise Tax Board, in the
form or manner agreed upon by the Franchise Tax Board and the
Department of Insurance, California Organized Investment Network, or
its successor, of the taxpayers who were issued certificates, their
respective tax identification numbers, the amount of the qualified
investment made by each taxpayer, and the total amount of qualified
investments.
   (4) Include information specified pursuant to subdivision (b) of
Section 12939.1 of the Insurance Code in the report required by
Section 12922 of the Insurance Code.
   (g) For purposes of this section:
   (1) "Qualified investment" means an investment that is a deposit
or loan that does not earn interest, or an equity investment, or an
equity-like debt instrument that conforms to the specifications for
these instruments as prescribed by the United States Department of
the Treasury, Community Development Financial Institutions Fund, or
its successor, or, in the absence of that prescription, as defined by
the Insurance Commissioner. The investment must be equal to or
greater than fifty thousand dollars ($50,000) and made for a minimum
duration of 60 months. During that 60-month period, the community
development financial institution shall have full use and control of
the proceeds of the entire amount of the investment as well as any
earnings on the investment for its community development purposes.
The entire amount of the investment shall be received by the
community development financial institution before the application
for the tax credit is submitted. The community development financial
institution shall use the proceeds of the investment for a purpose
that is consistent with its community development mission and for the
benefit of economically disadvantaged communities and low-income
people in California.
   (2) "Community development financial institution" means a private
financial institution located in this state that is certified by the
Department of Insurance, California Organized Investment Network, or
its successor, that, consistent with the legislative findings,
declarations, and intent set forth in Section 12939 of the Insurance
Code, has community development as its primary mission, and that
lends in urban, rural, or reservation-based communities in this
state. A community development financial institution may include a
community development bank, a community development loan fund, a
community development credit union, a microenterprise fund, a
community development corporation-based lender, or a community
development venture fund.
   (h) (1) If a qualified investment is withdrawn before the end of
the 60th month and not reinvested in another community development
financial institution within 60 days, there shall be added to the
"tax," as defined in Section 23036, for the taxable year in which the
withdrawal occurs, the entire amount of any credit previously
allowed under this section.
   (2) If a qualified investment is reduced before the end of the
60th month, but not below fifty thousand dollars ($50,000), there
shall be added to the "tax," as defined in Section 23036, for the
taxable year in which the reduction occurs, an amount equal to 20
percent of the total reduction for the taxable year.
   (i) In the case where the credit allowed by this section exceeds
the "tax," the excess may be carried over to reduce the "tax" for the
next four taxable years, or until the credit has been exhausted,
whichever occurs first.
   (j) The Franchise Tax Board shall, as requested by the Department
of Insurance, California Organized Investment Network, or its
successor, advise and assist in the administration of this section.
   (k) This section shall remain in effect only until December 1,
2017, and as of that date is repealed.
  SEC. 4.  This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.