The new market tax credit bill heads to Governor Jerry Brown's desk and would stimulate business growth in low-income areas.
According to an August 2014 report, $2.4 billion has been raised through the federal tax credit program that needs to be allocated.
States with their own NMTC Program are known to be more attractive to national investors, keeping California economically competitive.
"It's an incentive for businesses, it's a mechanism to put capital into very low-income areas that otherwise wouldn't have investments," Assemblymember Jose Medina said.
Medina says he is optimistic the governor will sign the legislation.