CaliforniaCalifornia bill would restrict grants and tax credits for detention-linked firms
Businesses with specified detention facility ties would lose access to state grants, loans, and some tax credits, while related tax amounts could fund immigration services if lawmakers approve spending.
What it does
Businesses tied to private detention facilities or immigration enforcement would be barred from state grants and loans in years they meet the bill’s criteria. Health care services for injured or ill detained people are excluded.
Certain taxpayers tied to detention facilities or very large companies providing immigration enforcement services would lose access to specified tax credits while they meet the bill’s criteria. Some nonprofit housing and other listed credits are excepted.
The Controller would transfer estimated tax amounts tied to the credit limits into a new fund for immigration-related services, if lawmakers approve spending. The money could not replace existing state funding.
Argument forIf lawmakers approve spending, tax amounts tied to the credit limits could support immigration services without replacing existing state funding.
Argument againstBusinesses could lose state grants, loans, or tax credits because of their ownership or service contracts, including contracts for some technology and training.
More detail
State agencies would screen grant and loan applicants and deny aid to businesses that meet the bill’s criteria. This covers businesses invested at least 5 percent in, owning, operating, or managing a private detention facility, or contracting to provide covered services to such a facility or an agency engaged in immigration enforcement. The rule would apply in any year the business meets the criteria. Covered services include detention and immigration enforcement support, such as certain technology and training. Health care services for injured or ill detained people are excluded from covered services. The bill also excepts specified tax credits, but does not state that those exceptions restore grant or loan eligibility. The rule would apply in any year the business meets the criteria.
Certain taxpayers would be barred from claiming specified tax credits or credit carryovers. This covers taxpayers that invest in, own, operate, or manage a private detention facility, and qualifying taxpayers related to very large publicly traded companies that contract to provide covered services. The rule covers taxpayers tied to private detention facilities, and taxpayers related to a publicly traded company that contracts to provide covered services and reaches a market value of at least $150 billion on any day after September 30, 2026. Exceptions include specified nonprofit housing credits, credits received by partners or members of certain nonprofit housing ventures, and other listed credits. Health care services for injured or ill detained people are excluded from covered services. Unused credits may carry over to a later year if the taxpayer is no longer disqualified, subject to the bill’s rules. The tax limits would apply to taxable years beginning on or after January 1, 2027. The large-company rule would start with the first taxable year in which its criteria are met.
The Controller would transfer estimated tax amounts into a new fund for immigration-related services and programs. The Controller would transfer the estimated amount from the General Fund to the Due Process for All Fund. The transfer would equal the Franchise Tax Board’s estimate of taxes collected because taxpayers became ineligible for credits. Lawmakers would have to approve spending from the fund. The money could not replace existing state funding for immigration-related services and programs. The first estimate would be due by July 1, 2029, for taxes from two years earlier; estimates would be due by July 1 each year after that.
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Where it stands
- Introduced
- Passed Assembly
- Passed Senate
- To Governor
- Became Law
Looking ahead
No hearings or votes scheduled.
History
- 2026
- Sep 30Vetoed by Governor Gavin Newsom.Latest
- Sep 3Enrolled and presented to the Governor at 4 p.m.To Governor
- Aug 26Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 58. Noes 19. Page 6602.).Major
- Vote recorded AB 2465 Ortega Concurrence in Senate Amendments. Result: pass.Lower
- Aug 26In Assembly. Concurrence in Senate amendments pending.
- Aug 25Read third time. Passed. Ordered to the Assembly. (Ayes 29. Noes 10.).Passed Senate
- Vote recorded 3rd Reading AB2465 Ortega et al. By Durazo. Result: pass.Upper
- Aug 17Read second time. Ordered to third reading.Minor
- Aug 13Read second time and amended. Ordered returned to second reading.Major
- Vote recorded Do pass as amended. Result: pass.Upper
- Aug 13From committee: Amend, and do pass as amended. (Ayes 5. Noes 2.) (August 13).Major
- Aug 3In committee: Referred to APPR. suspense file.Minor
- Vote recorded Placed on suspense file. Result: pass.Upper
- Jul 8Read second time and amended. Re-referred to Com. on APPR.Major
- Jul 8From committee: Amend, and do pass as amended and re-refer to Com. on APPR. (Ayes 11. Noes 2.) (June 30).Major
- Jun 30
- Vote recorded Do pass as amended, but first amend, and re-refer to the Committee on [Appropriations]. Result: pass.Upper
- Jun 24From committee: Do pass and re-refer to Com. on JUD. (Ayes 4. Noes 0.) (June 24). Re-referred to Com. on JUD.Minor
- Vote recorded Do pass, but first be re-referred to the Committee on [Judiciary]. Result: pass.Upper
- Jun 17From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on REV. & TAX.Major
- Jun 10Referred to Coms. on REV. & TAX. and JUD.Minor
- May 28In Senate. Read first time. To Com. on RLS. for assignment.Minor
- Vote recorded AB 2465 Ortega Assembly Third Reading. Result: pass.Lower
- May 27Read third time. Passed. Ordered to the Senate. (Ayes 55. Noes 20. Page 5473.)Passed Assembly
- May 18Read third time and amended. Ordered to third reading. (Page 5143.)Major
- May 18Read second time. Ordered to third reading.Minor
- May 14From committee: Do pass. (Ayes 11. Noes 4.) (May 14).Minor
- Vote recorded Do pass. Result: pass.Lower
- May 6In committee: Set, first hearing. Referred to APPR. suspense file.Minor
- Apr 21From committee: Do pass and re-refer to Com. on APPR. (Ayes 5. Noes 2.) (April 20). Re-referred to Com. on APPR.Minor
- Apr 20In committee: Set, first hearing. Referred to REV. & TAX. suspense file.Minor
- Vote recorded Do pass and be re-referred to the Committee on [Appropriations]. Result: pass.Lower
- Apr 15From committee: Do pass and re-refer to Com. on REV. & TAX. (Ayes 9. Noes 3.) (April 14). Re-referred to Com. on REV. & TAX.Minor
- Apr 15Coauthors revised.
- Apr 14
- Vote recorded Do pass and be re-referred to the Committee on [Revenue and Taxation]. Result: pass.Lower
- Apr 9Measure version as amended on April 6 corrected.Major
- Apr 7Measure version as amended on April 6 corrected.Major
- Apr 7Re-referred to Com. on JUD.Minor
- Apr 6From committee chair, with author's amendments: Amend, and re-refer to Com. on JUD. Read second time and amended.Major
- Mar 23Referred to Com. on JUD.Minor
- Feb 21From printer. May be heard in committee March 23.
- Feb 20Read first time. To print.Introduced
ImmigrationTaxes & BudgetGovernment & Ethics