Legislation sponsored by the American Insurance Association (AIA) moved one step closer to becoming law when the California State Assembly voted Thursday to approve a measure continuing the 20-percent premium tax credit for insurers that invest in certified community and economic development projects.
Assembly Bill 874, authored by Assembly Member Jerome Horton (D-Inglewood), will continue the insurer tax incentive program managed by the California Organized Investment Network (COIN) until Jan. 1, 2005, and will expand the program to include organizations that develop low-income housing.
“This legislation is a win-win situation for insurance companies seeking solid investments and economic development organizations rebuilding communities,” said Mark Webb, AIA vice president, state affairs. “AB 874 is supported by a broad coalition of business and nonprofit organizations that are working to create new jobs and opportunities throughout California.”
Legislation sponsored by Senator Ed Vincent created the tax credit program in 1999. Assembly Member Horton’s bill will continue the important work of this program. Under direction from the California Department of Insurance, the COIN program researches, evaluates and certifies Community Development Financial Institutions (CDFIs). Once approved, CDFIs are eligible to receive deposits and investments from insurers. The insurers are then provided a premium tax credit equal to 20 percent of their investment. There are 29 CDFIs working in communities throughout California.
“This bill provides a positive incentive for the insurance industry to direct investments into developing communities,” said James Shelby, President of the Greater Sacramento Urban League. “This legislation will generate partnerships between insurance industry investors, community-based organizations and local governments that will foster significant economic growth in communities around the state.”
AB 874 is supported by organizations such as the Inglewood Neighborhood Housing Services, Leaders for Community Development, California Association of Urban League Executives (CAULE), FAME Renaissance Corporation and New Faze Development. The California State Assembly approved AB 874 on a vote of 74 to 0. The bill will now move over for consideration by the California State Senate.
Was this article valuable?
Here are more articles you may enjoy.