BILL ANALYSIS �
AB 2128
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 2128 (Gordon)
As Amended August 4, 2014
Majority vote
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|ASSEMBLY: |55-22|(April 21, |SENATE: |25-11|(August 13, |
| | |2014) | | |2014) |
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Original Committee Reference: INS.
SUMMARY : Extends the sunset clauses on the community
development investment program within the Department of
Insurance (DOI), and adopts programmatic changes, as detailed in
the Senate amendments.
The Senate amendments :
1)Limit the insurers that will have to continue to file
community development investment data with the DOI to those
insurers that write more than $100 million annual premium in
California.
2)Provide that these insurers must file the data by July 1,
2016.
3)Requires DOI to post on its Internet Web site, in addition to
the data filed by insurers, data relating to the actions taken
by the California Organized Investment Network (COIN), the
unit of the DOI responsible for implementing the community
development investments program.
4)Extend the sunset date on the program to January 1, 2020.
5)Repeal the requirement that insurers that write more than $100
million annual premium in California file with the DOI, and
update every two years, the company's policy statement
concerning community development investments.
6)Deletes language that was initially designed to ensure
staggered terms for the membership of the California Organized
Investment Network Advisory Board.
EXISTING LAW :
AB 2128
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1)Establishes COIN within the DOI, with the purpose of
encouraging insurers to invest in community development
investments.
2)Declares that it is the policy of this state that:
a) Insurers should be supportive of community development
investments and should, where practical, consider making
these investments; and
b) COIN should pursue active measures to encourage insurers
to make community development investments.
3)Defines "community development investments" as investments
where all or part of the investment has as its primary purpose
community development for, or that directly benefits,
California low or moderate income individuals, families, or
communities.
4)Establishes an Advisory Board to recommend to the Insurance
Commissioner (IC) how the COIN program should operate, but
sunsets the Board on January 1, 2015.
5)Requires the Advisory Board to meet quarterly.
6)Provides that COIN shall allocate a program of tax credits to
institutions that make investments in Community Development
Financial Institutions, as defined. Currently, tax credits of
20% are allocable by COIN for investments up to $50 million.
7)Requires insurers to file data with the IC concerning the
community development investments the insurers make in
California, but sunsets this obligation on January 1, 2015.
8)Requires the IC, by May 31, 2014, to provide information on
the DOI Web site relating to insurers' community development
investments.
FISCAL EFFECT : According to the Senate Appropriations
Committee, administrative costs of approximately $87,500
(Special Fund).
COMMENTS :
AB 2128
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1)Purpose. This bill was introduced to ensure that key
provisions of the COIN program in the DOI do not sunset, and
to provide a vehicle for reforming the program upon review of
the report on insurers' community development issued by the IC
on May 31, 2014. The Senate amendments reflect stakeholder
agreement on appropriate COIN reforms.
2)Background. COIN was established by the DOI in 1996 as a
voluntary public/private partnership between the DOI,
insurers, state government, and community development
organizations. COIN's role was later formalized and codified,
and some of its functions, such as administering the tax
credit program, specified in statute. Its role has also been
expanded to include encouraging "green investments," among
other roles. In practice, COIN has struggled to find its
precise role; for example, whether it is an entity that should
actively seek out investment opportunities, or whether it is
an entity that merely certifies investment opportunities that
are presented to it so that insurers can easily identify
qualified community development investments.
Analysis Prepared by : Mark Rakich / INS. / (916) 319-2086
FN: 0004589