Assembly BillVetoedGovernment
AB 2465: State government: benefits.
What AB 2465 does, verified October 2, 2026
This bill prohibits business entities that contract with the federal government for immigration enforcement purposes from receiving any state-provided benefit, subsidy, grant, loan, or tax credit. It establishes the California Immigrant Resilience Fund, requiring the controller to transfer each year from the general fund to the fund the amount of tax collected attributable to ineligible business entities. Moneys in the fund can be used for immigration-related services and programs. The bill takes effect immediately.
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Last action: Vetoed by Governor. (2026-09-30)Alert me
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| Sep. 30, 2026 | Vetoed by Governor. |
| Sep. 03, 2026 | Enrolled and presented to the Governor at 4 p.m. |
| Aug. 26, 2026 | Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 58. Noes 19. Page 6602.). |
| Aug. 26, 2026 | In Assembly. Concurrence in Senate amendments pending. |
| Aug. 25, 2026 | Read third time. Passed. Ordered to the Assembly. (Ayes 29. Noes 10.). |
Latest bill textEnrolled version, August 30, 2026 · 3,057 words
| Enrolled August 30, 2026 |
| Passed IN Senate August 25, 2026 |
| Passed IN Assembly August 26, 2026 |
| Amended IN Senate August 13, 2026 |
| Amended IN Senate July 08, 2026 |
| Amended IN Senate June 17, 2026 |
| Amended IN Assembly May 18, 2026 |
| Amended IN Assembly April 06, 2026 |
CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION
Assembly Bill
No. 2465
| Introduced by Assembly Members Ortega and Lee (Coauthors: Assembly Members Haney, Jackson, Ward, and Kalra) (Coauthors: Senators Caballero and Padilla) |
February 20, 2026 |
An act to add Chapter 17.6 (commencing with Section 7300) to Division 7 of Title 1 of the Government Code, and to add Sections 17137 and 23637 to the Revenue and Taxation Code, relating to state government.
LEGISLATIVE COUNSEL'S DIGEST
AB 2465, Ortega. State government: benefits.
Existing law generally provides various benefits, including grant programs and tax credits. Existing law, the California Values Act, generally prohibits California law enforcement agencies from using their moneys or personnel for immigration enforcement purposes, except as specified.
This bill would prohibit a business entity that is directly invested in, owns, operates, or manages a private detention facility, or that contracts with the federal government for immigration enforcement purposes, as specified, from receiving any state-provided grant or loan, as specified. The bill would also prohibit a disqualified taxpayer, as defined, from receiving any tax credits, except as provided. The bill would define “disqualified taxpayer” to mean a taxpayer that is directly invested in, owns, operates, or manages a private detention facility, or a taxpayer that contracts with a private detention facility or agency engaging in immigration enforcement, as specified. The bill would not apply these provisions to a provider of health care, as defined, that contracts with a private detention facility or agency engaging in immigration enforcement, as specified. The bill would establish the Due Process for All Fund and would require the Controller to transfer each year from the General Fund to the Due Process for All Fund the amount of tax collected that is attributable to business entities being made ineligible for tax credits by this bill. The bill would make moneys in the fund available upon appropriation by the Legislature for immigration-related services and programs.
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.
The people of the State of California do enact as follows:
SECTION 1.
Chapter 17.6 (commencing with Section 7300) is added to Division 7 of Title 1 of the Government Code, to read:CHAPTER 17.6. No Taxpayer Dollars for Family Separation
7300.
(a) Notwithstanding any other law, in any year in which a business entity is directly invested in, owns, operates, or manages a private detention facility or contracts with a private detention facility or agency engaging in immigration enforcement to provide covered services, that business entity shall be ineligible to receive any state-provided grant, loan, or tax credit as described in Section 17137 or 23637 of the Revenue and Taxation Code.(b) This section shall not apply to either of the following:
(1) Tax credits received by any direct or indirect partner or member of a nonprofit sponsored venture to which the taxpayer has made a direct or indirect loan or capital contribution.
(2) Any low-income housing tax credit allowed pursuant to Section 12206, 17058, or 23610.5 of the Revenue and Taxation Code that was originally issued to a nonprofit housing sponsor or nonprofit sponsored venture.
7300.1.
For purposes of this chapter, the following definitions apply:(a) “Agency engaging in immigration enforcement” means any out-of-state agency or federal agency that engages in arresting, detaining, transporting, or deporting individuals pursuant to federal immigration law.
(b) “Business entity” has the same definition as that term is defined in Section 82005.
(c) (1) “Covered services” means detention, transportation, custody, or deportation services and includes providing software, information technology, surveillance equipment and technology, data analytics, artificial intelligence, applications, trainings for officers engaging in immigration enforcement, weapons, and digital systems or platforms used and specifically contracted to support immigration enforcement.
(2) “Covered services” does not include any service provided by a provider of health care, as defined in subdivision (p) of Section 56.05 of the Civil Code, under a contract with a private detention facility or agency engaging in immigration enforcement for the purpose of providing health care services for injured or ill individuals detained by, or whose care is the financial responsibility of, an agency engaging in immigration enforcement.
(d) “Immigration enforcement” has the same definition as that term is defined in Section 7284.4.
(e) “Invests in” means an entity that owns at least 5 percent of a private detention facility or private detention facility operator.
(f) “Manages” and “operates” mean an entity that the owner contracts with to control the daily operations of a private detention facility or private detention facility operator.
(g) “Nonprofit housing sponsor” has the same meaning as that term is defined in Section 50091 of the Health and Safety Code.
(h) “Nonprofit sponsored venture” means a limited partnership or a limited liability company where a nonprofit housing sponsor or an entity wholly owned by a nonprofit housing sponsor is designated as the managing general partner of the partnership or managing member of the limited liability company.
(i) “Owns” means an entity that owns at least 5 percent of a private detention facility or private detention facility operator or that owns or leases the building or land on which a private detention facility operates.
(j) “Private detention facility” and “private detention facility operator” have the same meanings as those terms are defined in Section 7320.
7300.2.
Any state agency that administers a program to provide or that otherwise provides a grant or loan shall screen applicants or otherwise eligible recipients of that grant or loan, to determine whether they are an ineligible entity as described in Section 7300.7300.3.
(a) The Due Process for All Fund is hereby created in the State Treasury.(b) Upon receiving an estimate described in subdivision (f) of Section 17137 or 23637 of the Revenue and Taxation Code, the Controller shall transfer an amount equal to that estimate from the General Fund to the Due Process for All Fund.
(c) Moneys in the fund shall be available, upon appropriation by the Legislature, for purposes of immigration-related services and programs within the state.
(d) An appropriation of moneys from the fund shall not be used as justification for reducing, eliminating, or failing to increase other appropriations for immigration-related services and programs and shall not be used to supplant existing state funds for immigration-related services and programs.
SEC. 2.
Section 17137 is added to the Revenue and Taxation Code, to read:17137.
(a) (1) Notwithstanding any other law, for taxable years beginning on or after January 1, 2027, in which a taxpayer is a disqualified taxpayer, they shall be ineligible to claim any credit allowed, and shall be ineligible to claim any carryover for any credit previously allowed, under this part for that taxable year.(2) This section shall not apply to any of the following:
(A) Tax credits received by any direct or indirect partner or member of a nonprofit sponsored venture to which the taxpayer has made a direct or indirect loan or capital contribution.
(B) Any low-income housing tax credit allowed pursuant to Section 12206, 17058, or 23610.5 that was originally issued to a nonprofit housing sponsor or nonprofit sponsored venture.
(C) The credits provided under Section 19002.
(b) For purposes of this section, the following definitions apply:
(1) “Agency engaging in immigration enforcement” means any out-of-state agency or federal agency that engages in arresting, detaining, transporting, or deporting individuals pursuant to federal immigration law.
(2) (A) “Covered services” means detention, transportation, custody, or deportation services and includes providing software, information technology, surveillance equipment and technology, data analytics, artificial intelligence, applications, trainings for officers engaging in immigration enforcement, weapons, and digital systems or platforms used and specifically contracted to support immigration enforcement.
(B) “Covered services” does not include any service provided by a provider of health care, as defined in subdivision (p) of Section 56.05 of the Civil Code, under a contract with a private detention facility or agency engaging in immigration enforcement for the purpose of providing health care services for injured or ill individuals detained by, or whose care is the financial responsibility of, an agency engaging in immigration enforcement.
(3) “Disqualified taxpayer” means a taxpayer that satisfies either of the following:
(A) Is directly invested in, owns, operates, or manages a private detention facility.
(B) (i) Is, or is related to, a publicly traded company that contracts with a private detention facility or agency engaging in immigration enforcement to provide covered services and that has a market capitalization of at least one hundred fifty billion dollars ($150,000,000,000) on any day after September 30, 2026. A taxpayer that satisfies this subparagraph is a disqualified taxpayer only for taxable years beginning with the first taxable year in which they satisfy this subparagraph.
(ii) For purposes of this subparagraph, a person is related to a publicly traded company if they are treated as related under Section 267, 318, or 707 of the Internal Revenue Code.
(4) “Immigration enforcement” has the same definition as that term is defined in Section 7284.4 of the Government Code.
(5) (A) “Invests in” means an entity that owns at least 5 percent of the ownership shares or interests of a private detention facility or private detention facility operator.
(B) “Invests in” does not include holdings in a custodial, fiduciary, or similar capacity where the business entity does not have discretionary authority to select the issuer or direct the investment, including passive index-tracking strategies.
(6) “Manages” and “operates” mean an entity that the owner contracts with to control the daily operations of a private detention facility or private detention facility operator.
(7) “Nonprofit housing sponsor” has the same meaning as that term is defined in Section 50091 of the Health and Safety Code.
(8) “Nonprofit sponsored venture” means a limited partnership or a limited liability company where a nonprofit housing sponsor or an entity wholly owned by a nonprofit housing sponsor is designated as the managing general partner of the partnership or managing member of the limited liability company.
(9) (A) “Owns” means an entity that owns at least 5 percent of the ownership shares or interests of a private detention facility or private detention facility operator or that owns or leases the building or land on which a private detention facility operates.
(B) “Owns” does not include ownership interests held solely on behalf of clients in a custodial, fiduciary, or similar capacity.
(10) “Private detention facility” and “private detention facility operator” have the same meanings as those terms are defined in Section 7320 of the Government Code.
(c) The Franchise Tax Board shall require a taxpayer to declare whether they are an entity ineligible to claim credits pursuant to subdivision (a) for that taxable year in a form and manner prescribed by the board.
(d) Notwithstanding the carryover period for a credit pursuant to any other provision of this part, the amount of any credit or credit carryforward allowable for any taxable year that is ineligible to be claimed in the taxable year pursuant to paragraph (1) of subdivision (a) may be carried over to reduce the “net tax” in the following taxable year if the taxpayer is no longer a disqualified taxpayer in that taxable year. Any credits not claimed within the allowed time shall be included in the estimate the Franchise Tax Board provides to the Controller in subdivision (f).
(e) 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.
(f) (1) On or before July 1, 2029, and on or before July 1 annually thereafter, the board shall estimate the amount of tax collected, attributable to taxpayers being made ineligible for tax credits by this section, for the taxable year that is two years prior and shall report that estimate to the Controller.
(2) The disclosure provisions of this subdivision shall be treated as an exception to Section 19542.
SEC. 3.
Section 23637 is added to the Revenue and Taxation Code, to read:23637.
(a) (1) Notwithstanding any other law, for taxable years beginning on or after January 1, 2027, in which a taxpayer is a disqualified taxpayer, they shall be ineligible to claim any carryover for any credit previously allowed, under this part for that taxable year.(2) This section shall not apply to any of the following:
(A) Tax credits received by any direct or indirect partner or member of a nonprofit sponsored venture to which the taxpayer has made a direct or indirect loan or capital contribution.
(B) Any low-income housing tax credit allowed pursuant to Section 12206, 17058, or 23610.5 that was originally issued to a nonprofit housing sponsor or a nonprofit sponsored venture.
(C) The credit allowed for estimated tax paid under Section 19023.
(b) For purposes of this section, the following definitions apply:
(1) “Agency engaging in immigration enforcement” means any out-of-state agency or federal agency that engages in arresting, detaining, transporting, or deporting individuals pursuant to federal immigration law.
(2) (A) “Covered services” means detention, transportation, custody, or deportation services and includes providing software, information technology, surveillance equipment and technology, data analytics, artificial intelligence, applications, trainings for officers engaging in immigration enforcement, weapons, and digital systems or platforms used and specifically contracted to support immigration enforcement.
(B) “Covered services” does not include any service provided by a provider of health care, as defined in subdivision (p) of Section 56.05 of the Civil Code, under a contract with a private detention facility or agency engaging in immigration enforcement for the purpose of providing health care services for injured or ill individuals detained by, or whose care is the financial responsibility of, an agency engaging in immigration enforcement.
(3) “Disqualified taxpayer” means a taxpayer that satisfies either of the following:
(A) Is directly invested in, owns, operates, or manages a private detention facility.
(B) (i) Is, or is related to, a publicly traded company that contracts with a private detention facility or agency engaging in immigration enforcement to provide covered services and that has a market capitalization of at least one hundred fifty billion dollars ($150,000,000,000) on any day after September 30, 2026. A taxpayer that satisfies this subparagraph is a disqualified taxpayer only for taxable years beginning with the first taxable year in which they satisfy this subparagraph.
(ii) For purposes of this subparagraph, a person is related to a publicly traded company if they are treated as related under Section 267, 318, or 707 of the Internal Revenue Code.
(4) “Immigration enforcement” has the same meaning as that term is defined in Section 7284.4 of the Government Code.
(5) (A) “Invests in” means an entity that owns at least 5 percent of the ownership shares or interests of a private detention facility or private detention facility operator.
(B) “Invests in” does not include holdings in a custodial, fiduciary, or similar capacity where the business entity does not have discretionary authority to select the issuer or direct the investment, including passive index-tracking strategies.
(6) “Manages” and “operates” mean an entity that the owner contracts with to control the daily operations of a private detention facility or private detention facility operator.
(7) “Nonprofit housing sponsor” has the same meaning as that term is defined in Section 50091 of the Health and Safety Code.
(8) “Nonprofit sponsored venture” means a limited partnership or a limited liability company where a nonprofit housing sponsor or an entity wholly owned by a nonprofit housing sponsor is designated as the managing general partner of the partnership or managing member of the limited liability company.
(9) (A) “Owns” means an entity that owns at least 5 percent of the ownership shares or interests of a private detention facility or private detention facility operator or that owns or leases the building or land on which a private detention facility operates.
(B) “Owns” does not include ownership interests held solely on behalf of clients in a custodial, fiduciary, or similar capacity.
(10) “Private detention facility” and “private detention facility operator” have the same meanings as those terms are defined in Section 7320 of the Government Code.
(c) A taxpayer ineligible for a credit under this section in a taxable year shall not assign any credit to an eligible assignee pursuant to Section 23663.
(d) The Franchise Tax Board shall require a taxpayer to declare whether they are an entity ineligible for credits pursuant to subdivision (a) for that taxable year in a form and manner prescribed by the board.
(e) Notwithstanding the carryover period for a credit pursuant to any other provision of this part, the amount of any credit or credit carryforward allowable for any taxable year that is ineligible to be claimed in the taxable year pursuant to paragraph (1) of subdivision (a) may be carried over to reduce the “tax” in the following taxable year if the taxpayer is no longer a disqualified taxpayer in that taxable year. Any credits not claimed within the allowed time shall be included in the estimate the Franchise Tax Board provides to the Controller in subdivision (f).
(f) 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.
(g) (1) On or before July 1, 2029, and on or before July 1 annually thereafter, the board shall estimate the amount of tax collected, attributable to taxpayers being made ineligible for tax credits by this section, for the taxable year that is two years prior and shall report that estimate to the Controller.
(2) The disclosure provisions of this subdivision shall be treated as an exception to Section 19542.
Text of AB 2465 as enrolled, from the official record. Connect Plus keeps every version and highlights what changed.Compare versions