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