2007 California Insurance Code Article 1.1. The California Community Development Financial Institution Tax Credit Program

CA Codes (ins:12939-12939.1)

12939.  The Legislature finds and declares all of the following:
   (a) There are specialized financial institutions in California
that are specifically dedicated to, and whose core purpose is to,
provide financial products and services to people and communities
underserved by traditional financial markets. These Community
Development Financial Institutions or CDFIs seek to bridge the
growing gap that exists between the financial products and services
available to the economic mainstream and those offered to low-income
people and communities, as well as the nonprofit institutions that
serve them. In addition, they serve a critical role in addressing
issues of poverty and access to credit in economically disadvantaged
communities by providing services, including, but not limited to,
credit counseling to consumers, financial literacy training,
homeownership counseling, entrepreneurial education, and technical
assistance to small business owners.
   (b) These mission-driven financial institutions require additional
capital in order to expand their ability to provide financial
products and services for low-income individuals and communities, and
the businesses and nonprofit agencies that serve them. For example,
some offer responsible alternatives to high-cost check-cashing
services and payday lenders that have moved into low-income
communities. Others help finance small businesses, affordable
housing, and community services and facilities that, in turn, help
stabilize low-income neighborhoods and alleviate poverty.
   (c) In carrying out their mission, funding community development
is given priority over providing high returns to investors.
   (d) It is the intent of the Legislature to provide an incentive in
the form of California tax credits to attract much needed additional
private capital investments that would not otherwise be available to
CDFIs without the benefit of such incentive. It is the expectation
of the Legislature that CDFIs will leverage these new investment
dollars for the direct benefit of economically disadvantaged
communities and low-income people in California.



12939.1.  (a) The department, California Organized Investment
Network (COIN), or any successor thereof, shall require the CDFIs
receiving tax credit investments pursuant to Sections 12209,
17053.57, and 23657 of the Revenue and Taxation Code to submit
reports to the department, COIN, or any successor thereof, on their
use of the program and may specify by notice to those CDFIs the form,
content, and manner of the reports.
   (b) Biennially the department, COIN, or any successor thereof,
shall include in the report required by Section 12922, information on
the CDFI tax credit program based on the reports submitted by the
CDFIs pursuant to subdivision (a).
   (c) On or before December 31, 2010, the Legislative Analyst shall
prepare an analysis, based upon data provided by the Franchise Tax
Board, the Department of Insurance, and COIN, to the Legislative
Analyst on or before September 30, 2010, of the tax credit
investments provided for in Sections 12209, 17053.57, and 23657 of
the Revenue and Taxation Code, including, but not limited to, the
credits' fiscal impact, what programs, projects, and other uses were
funded or carried out by the CDFIs that were supported in whole or in
part by the tax credit investments, and the resulting benefits to
economically disadvantaged communities and low income people in
California.