BILL ANALYSIS Ó
AB 2728
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GOVERNOR'S VETO
AB
2728 (Atkins)
As Enrolled September 9, 2016
2/3 vote
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|ASSEMBLY: |80-0 |(May 31, 2016) |SENATE: |39-0 |(August 25, |
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|ASSEMBLY: |80-0 |(August 30, | | | |
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Original Committee Reference: INS.
SUMMARY: Extends the sunset date on the tax credit allowed for
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defined community development investments until 2018, and
declares Legislative intent that the authority of the Department
of Insurance (DOI) to issue a data call to insurers will be
extended.
The Senate amendments
1)Delete a sunset extension provision that would have extended
the statutory authorization for the California Organized
Investment Network (COIN) Advisory Board from 2017 to 2022.
2)Shorten the sunset extension for the tax credit from 2022 to
2018.
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 three
years with respect to community development investments.
4)Requires the DOI, by December 31, 2016, to provide information
on its Internet Web site:
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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.
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: The bill contains intent language that the authority
for DOI to continue to conduct data calls relating to community
development investments by insurers, which currently sunsets in
2017, should be extended. As noted above, a report relating to
the previous data call and efforts by COIN to further the
purposes of the program was due December 31, 2016. However, the
DOI fast tracked the most recent data call ahead of the
Legislatively-established time table, and issued the report last
month. Unfortunately, stakeholders were unable to come to
agreement on the role of future data calls, and the role of COIN
is becoming more proactive in identifying, developing and
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marketing appropriate community development investments by
insurers. As a result, the bill was pared back, and these
issues will be before the Legislature next year.
GOVERNOR'S VETO MESSAGE:
I am returning the following seven bills without my signature:
Assembly Bill 717
Assembly Bill 724
Assembly Bill 1561
Assembly Bill 2127
Assembly Bill 2728
Senate Bill 898
Senate Bill 907
Each of these bills creates a new tax break or expands an
existing tax break. In total, these bills would reduce revenues
by about $300 million through 2017-18.
As I said last year, tax breaks are the same as new spending --
they both cost the General Fund money. As such, they must be
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considered during budget deliberations so that all spending
proposals are weighed against each other at the same time. This
is even more important when the state's budget remains
precariously balanced.
Therefore, I cannot sign these measures.
Analysis Prepared by:
Mark Rakich / INS. / (916) 319-2086 FN:
0005051