BILL ANALYSIS                                                                                                                                                                                                    




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                           1011 (Jones)
          
          Hearing Date:  8/12/2010        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
                                                                  
          Addition of green incentives    unknown cost pressure onGeneral
          to CDFI law              existing tax credit

          *Insurance Fund
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          STAFF COMMENTS: SUSPENSE FILE. AS PROPOSED TO BE AMENDED.
          
          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. 

          This bill would make green investments eligible for the existing  
          California Community Development Financial Institution (CDFI) $2  
          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 
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          AB 1011 (Jones)

          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 $1 million  
          annually, but if that amount is not accessed in a given year,  
          the excess authority could be carried over to subsequent years. 

          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. 











          The proposed author's amendments would eliminate provisions  
          related to the Green Insurance Tax Credit.