BILL ANALYSIS Ó
AB 2728
Page 1
ASSEMBLY THIRD READING
AB
2728 (Atkins)
As Amended April 25, 2016
Majority vote
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Revenue & |9-0 |Ridley-Thomas, | |
|Taxation | |Brough, Dababneh, | |
| | |Gipson, Mullin, | |
| | |O'Donnell, Patterson, | |
| | |Quirk, Wagner | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Insurance |13-0 |Daly, Melendez, | |
| | |Travis Allen, | |
| | |Bigelow, Calderon, | |
| | |Chu, Cooley, Cooper, | |
| | |Dababneh, Dahle, | |
| | |Frazier, Gatto, | |
| | |Rodriguez | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Appropriations |20-0 |Gonzalez, Bigelow, | |
| | |Bloom, Bonilla, | |
| | |Bonta, Calderon, | |
| | |Chang, Daly, Eggman, | |
AB 2728
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| | |Gallagher, Eduardo | |
| | |Garcia, Roger | |
| | |Hernández, Holden, | |
| | |Jones, Obernolte, | |
| | |Quirk, Santiago, | |
| | |Wagner, Weber, Wood | |
| | | | |
| | | | |
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SUMMARY: Extends the sunset dates for the California Organized
Investment Network (COIN) Advisory Board and COIN-certified tax
credits. Specifically, this bill:
1)Extends the sunset date on the COIN Advisory Board to January
1, 2022.
2)Adds definitions for qualified COIN investments in Native
American and rural communities.
3)Makes technical and clarifying changes to definitions of
COIN-qualified investments.
4)States the Legislature's intent that the sunset date of
January 1, 2020 on a mandate that insurers submit community
development investment data to the Department of Insurance
(DOI) will be extended upon the DOI complying with an existing
requirement to provide COIN-related information on its
Internet Web site.
5)Extends the sunset date on the Community Development Financial
Institution (CDFI) tax credit program until January 1, 2022.
AB 2728
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EXISTING LAW:
1)Establishes a COIN Advisory Board to consult with and advise
the DOI with respect to issues associated with the COIN
program.
2)Sunsets the Advisory Board on January 1, 2020.
3)Requires any admitted insurer that writes at least $100
million in California premium to file, by July 1, 2016, data
with DOI detailing its investment activity for the past 3
years with respect to community development investments.
4)Requires the DOI, by December 31, 2016, to provide information
on its Internet Web site:
a) Concerning the community development investments made by
insurers, specifically noting information concerning
investments that are innovative, responsive to community
needs, not routinely made by insurers, and that have a high
impact on low and moderate income communities, and
b) On the actions taken by the COIN program to analyze
insurer data for purposes of identifying potential insurer
investment opportunities, and on COIN's outreach and
marketing efforts, and
c) Identifying the amount of California public debt
purchased by insurers, the amount of identified California
investments by insurers, and the amount of green
investments by insurers.
AB 2728
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5)Provides that the data call and information posting provisions
will sunset on January 1, 2020.
FISCAL EFFECT: Annual ongoing general fund revenue loss in the
range of $3.8 million from the extension of the Community
Development Financial Institutions (CDFI) tax credit.
COMMENTS:
1)Purpose. The author argues that the CDFI tax credit program
administered by the DOI's COIN program provides a valuable
economic incentive for insurers to invest in California low
and moderate income communities. COIN directly administers
the tax credit program, and is tasked with encouraging
insurers to make other qualified investments in California's
low and moderate income communities. The bill extends the
sunset date on the tax credit component of the COIN program,
and it is the author's intent to, upon reviewing the
information provided by the DOI after July 1, 2016, to extend
the sunset on the remainder of the COIN program's activities
as well as the insurer data call provisions.
2)Background. The COIN program has existed within the DOI for
20 years, in one form or another. Originally created
administratively, the purposes of COIN have been clarified,
and its operations formalized, in statute. Encouraging
community development investments was the primary goal of the
program. However, over time its role expanded to
administering the tax credit program, and managing the data
insurers have been required to file concerning their efforts
at making socially desirable community development investments
with some portion of the premium dollars collected from
California policyholders.
AB 2728
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3)Recent legislation. The current sunset dates for the COIN
program were established by AB 624 (Pérez), Chapter 436,
Statutes 2011, (tax credit), and AB 2128 (Gordon), Chapter
384, Statutes 2014, (data call). Stakeholders engaged in
substantial discussions prior to enactment of AB 2128, and
many stakeholders maintain that extending the sunset date on
future data call mandates ought to wait until after the DOI
completes its analysis and information posting
responsibilities, currently required to be completed by
December 31 of this year. For this reason, the author opted
to refrain from including sunset extensions on that portion of
the COIN program, instead adding language declaring the
Legislature's intent to extend that sunset date upon the DOI
fulfilling its responsibilities.
Analysis Prepared by:
Mark Rakich / INS. / (916) 319-2086 FN: 0003212