Assembly BillPassed first houseRevenue and Taxation
AB 1675: Corporation Tax Law: tax expenditures: No Tax Breaks for ICE Contractors Act of 2026.
What AB 1675 does, verified June 26, 2026
The bill aims to deny certain tax breaks to companies that contract with the United States Department of Homeland Security. This change will take effect for taxable years starting January 1, 2027, and will remain in place until January 1, 2032. The revenue generated from this change will be allocated to the California Immigrant Resilience Fund, which will provide immigration-related services such as removal defense. The fund will be managed by the Franchise Tax Board and will be subject to legislative appropriation. This change will require a two-thirds majority approval from both houses of the legislature to pass.
Bill journey
✓IntroducedComplete
✓In CommitteeComplete
✓First Chamber FloorComplete
4Second ChamberCurrent
5GovernorPending
6ChapteredPending
Last action: In committee: Set, first hearing. Hearing canceled at the request of author. (2026-06-24)Alert me
Author and sponsors
Full contact details, staff, and committees with Connect, $16/moUnlockRecent actions19 total · showing 5
| Jun. 24, 2026 | In committee: Set, first hearing. Hearing canceled at the request of author. |
| Jun. 16, 2026 | From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on REV. & TAX. |
| Jun. 10, 2026 | Referred to Com. on REV. & TAX. |
| May. 28, 2026 | In Senate. Read first time. To Com. on RLS. for assignment. |
| May. 27, 2026 | Read third time. Passed. Ordered to the Senate. (Ayes 54. Noes 20.) |
Latest bill textAmended version, June 16, 2026 · 1,130 words
| Amended IN Senate June 16, 2026 |
| Amended IN Assembly April 29, 2026 |
| Amended IN Assembly March 23, 2026 |
CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION
Assembly Bill
No. 1675
| Introduced by Assembly Members Lee, Bonta, Carrillo, and Ortega (Principal coauthors: Assembly Members Schultz, Solache, and Ward) (Principal coauthor: Senator Pérez) (Coauthors: Assembly Members Addis, Ahrens, Connolly, Elhawary, Garcia, Mark González, Haney, Harabedian, Jackson, Kalra, McKinnor, Ramos, and Rogers) |
February 02, 2026 |
An act to add and repeal Chapter 16 (commencing with Section 25000) of Part 11 of Division 2 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.
LEGISLATIVE COUNSEL'S DIGEST
AB 1675, as amended, Lee. Corporation Tax Law: tax expenditures: No Tax Breaks for ICE Contractors Act of 2026.
Existing law, the Corporation Tax Law, imposes taxes based upon gross income, and defines “gross income” as all income from whatever source derived, unless specifically excluded. Existing law allows various credits against the taxes imposed by that law. The Corporation Tax Law conforms to federal law in its treatment of certain exclusions and credits. Existing law provides for certain programs for free legal services for indigent persons.
This bill would, for taxable years beginning on or after January 1, 2027, and before January 1, 2032, enact the No Tax Breaks for ICE Contractors Act of 2026, which would deny all tax credits otherwise available under the Corporation Tax Law to any taxpayer that contracts with United States Department of Homeland Security, except as provided. The bill would establish the California Immigrant Resilience Fund in the State Treasury. The bill would require the Franchise Tax Board, in consultation with the Department of Finance, to estimate the amount of additional revenue resulting from the provisions of the bill, notify the Controller of that amount, and require the Controller to transfer that amount to the fund. The bill would make moneys in the fund available to provide immigration-related services, including removal defense, as provided, upon appropriation by the Legislature.
This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIII A of the California Constitution, and thus would require for passage the approval of 2/3 of the membership of each house of the Legislature.
This bill would take effect immediately as a tax levy.
The people of the State of California do enact as follows:
SECTION 1.
Chapter 16 (commencing with Section 25000) is added to Part 11 of Division 2 of the Revenue and Taxation Code, to read:CHAPTER 16. Corporations Contracting with the United States Department of Homeland Security and Its Agencies
25000.
This chapter shall be known, and may be cited, as the No Tax Breaks for ICE Contractors Act of 2026.25001.
For the purposes of this chapter, the following definitions apply:(a) “Contracting corporation” means any taxpayer that contracts with the Department of Homeland Security, either directly or through subcontracts, to provide goods or services. services through the federal government procurement or contracting process that does not include goods or services acquired through a platform or mechanism available to the general public.
(b) “Department of Homeland Security” refers to the United States Department of Homeland Security when the Department of Homeland Security is contracting on behalf of either the United States Customs and Border Protection or the United States Immigration and Customs Enforcement, and the following agencies that are an operational or support component of the department:
(1) United States Customs and Border Protection.
(2) United States Immigration and Customs Enforcement.
(3)Management Directorate.
(c) “Nonprofit housing sponsor” has the same meaning as defined in Section 50091 of the Health and Safety Code.
(d) “Nonprofit sponsored venture” means either a limited partnership in which a nonprofit housing sponsor or an entity wholly owned by a nonprofit housing sponsor is designated as the managing general partner, or a limited liability company in which a nonprofit housing sponsor or an entity wholly owned by a nonprofit housing sponsor is designated as the managing member.
25002.
For taxable years beginning on or after January 1, 2027, and before January 1, 2032, a contracting corporation shall not be eligible to claim any credit provided under this part for the taxable(a) A tax credit received by any direct or indirect partner or member of a nonprofit sponsored venture to which the claiming party has made a direct or indirect loan or capital contribution.
(b) Any tax credit allowed pursuant to Section 12206, 17058, or 23610.5 directly or indirectly purchased from a nonprofit housing sponsor.
25003.
(a) (1) No later than June 1, 2027, the Franchise Tax Board, in consultation with the Department of Finance, shall estimate the amount of revenue that would have resulted if the modifications made with respect to the eligibility for tax credits by this chapter had applied to taxable years beginning on or after January 1, 2026, and before January 1, 2027, and notify the Controller of that amount.(2) No later than June 1, 2028, and annually thereafter, the Franchise Tax Board, in consultation with the Department of Finance, shall estimate the amount of additional revenue resulting from the modifications made with respect to the calculation of taxable income by this chapter for the taxable years beginning on or after January 1 of the calendar year immediately preceding the year in which the estimate is made and before January 1 of the calendar year in which the estimate is made and notify the Controller of that amount.
(b) (1) The California Immigrant Resilience Fund is hereby established in the State Treasury.
(2) Upon receiving the notifications from the Franchise Tax Board pursuant to subdivision (a), the Controller shall transfer an amount equal to the amount estimated by the Franchise Tax Board in those notifications from the General Fund to the California Immigrant Resilience Fund to be made available, upon appropriation by the Legislature, for grants or contracts, and state operations, under the authority of Chapter 5.6 (commencing with Section 13300) of Part 3 of Division 9 of the Welfare and Institutions Code, with organizations qualified pursuant to that chapter, to provide immigration-related services, including removal defense.
(c) The Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) shall not apply to any standard, criterion, procedure, determination, rule, notice, guideline, or any other guidance established or issued by the board pursuant to this section.
25004.
This chapter shall remain operative only until December 1, 2032, and as of that date is repealed.SEC. 2.
This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.Text of AB 1675 as amended, from the official record. Connect Plus keeps every version and highlights what changed.Compare versions