The Small Business Investor Alliance is throwing its support for behind a bill to reauthorize and amend the California Organized Investment Network program.
Assembly Bill 2728 will reauthorize COIN and ensure that insurance companies in California continue to provide capital to invest in California’s small businesses, and the group says its amendments will boost capital in program.
“SBIA’s proposed amendments will enhance the current COIN program by making it easier for California small businesses to receive insurance company investments through the Small Business Investment Company (SBIC) program, a U.S. Small Business Administration (SBA) program,” Jeri Harman, chairman elect of SBIA’s board of governors, said in a statement.
COIN pre-qualifies SBICs for California insurance companies under the COIN bulletin program.
The COIN program could make a significantly larger impact in California communities, attract more insurance company investments, and provide a higher return on investment for California taxpayers, if SBICs could more easily qualify for the COIN Community Development Financial Institution tax credit program, SBIA argues.
Currently, the requirements for the CDFI Tax Credit Program are too onerous to permit SBICs to become a COIN-certified CDFI, according to SBIA. The group’s proposed amendments would permit SBICs to qualify automatically as COIN-certified CDFI’s.
COIN is up for renewal this year, and AB 2728 would extend it to 2022. Under the program, investors earn a tax credit worth 20 percent of their investment, which can be applied to their state personal income tax, corporation tax or insurer premium tax.
Each year the California Department of Insurance allocates $10 million in tax credits to support $50 million in community development investments through the program. Many of the investments are in low income communities.