California Legislature Closes Loophole that Allowed Nonprofits to Claim ICE Detention Centers as Charities,…
SACRAMENTO – Today, the California Legislature approved Senate Bill 420, authored by Senator Steve Padilla (D-San Diego), which would ensure organizations tied to private immigration detention centers cannot claim charitable tax status solely because they are organized as nonprofits.
A recent KPBS investigation revealed that the Brawley Community Foundation, a nonprofit organization that owns an ICE detention facility in Imperial County, avoided paying at least $6 million in property taxes through California’s “Welfare Exemption.” The California Welfare Exemption serves as a property tax relief program for nonprofit organizations that conduct charitable activities and benefit the public. For years, nonprofits have been supported through this exemption for the valuable work they do in local communities. This exemption is meant for charitable nonprofits, but in this case provided a taxpayer subsidy to a for-profit corporation engaged in mass deportation.
Although the Brawley Community Foundation claims to support the community, much of the Foundations $40 million in revenue are connected to the Imperial Regional Detention Facility, which is operated for profit by a private prison contractor. Complaints filed against facility allege dire conditions, excessive use of solitary confinement, and inadequate medical care, all of which have led to two deaths in custody, after the detainees did not receive proper medical attention. Subsidizing these facilities with charitable tax exemptions at the expense of local schools and local services is a gross abuse of the tax code.
“Our laws should always reflect our values,” said Senator Padilla. “Californians should not be forced to subsidize private immigration detention centers through tax breaks intended for true charitable organizations. We have to close this loophole so our tax dollars go back into enriching the community, not private detention profiteers.”
SB 420 closes the loophole in California’s Revenue and Taxation Code by preventing organizations connected to immigration detention or deportation efforts from qualifying for charitable property tax exemptions in the future. Specifically, the bill clarifies that a property is not considered exempt when it is used exclusively for charitable, religious, hospital, or scientific purposes and any part of it operates as a detention center run by a for-profit company.
By doing so, SB 420 ensures that organizations tied to private immigration detention centers cannot claim charitable tax status solely because they are organized as nonprofits. Without reform, taxpayers may continue indirectly subsidizing ICE detention facilities through reduced property taxes. The bill protects taxpayers from indirectly subsidizing ICE detention operations and aligns California’s tax policies with the state’s broader opposition to private detention centers and harmful deportation practices.
Senate Bill 420 is supported by several community and nonprofit organizations.
"Though operating as legal businesses, for-profit detention centers are in no way public charities," said Geoff Green, CEO of the California Association of Nonprofits. "We are grateful to Senator Padilla for leading the effort to close this loophole in California's tax code, which has allowed these facilities to claim property tax exemptions and rob local communities of much-needed tax revenue."
SB 420 passed the Senate with bipartisan support 32 to 0 and passed the Assembly with bipartisan support 62-10. The bill now heads to Governor Newsom’s desk for his signature.
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Steve Padilla represents the 18th Senate District, which includes the communities of Chula Vista, the Coachella Valley, Imperial Beach, the Imperial Valley, National City, and San Diego. Prior to his election to the Senate in 2022, Senator Padilla was the first person of color ever elected to city office in Chula Vista, the first Latino Mayor, and the first openly LGBT person to serve or be elected to city office. Website of Senator Steve Padilla: https://sd18.senate.ca.gov/
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