Board of Equalization backs bill to bar welfare‑tax exemption for properties used as detention facilities

The California State Board of Equalization on June 24 voted unanimously to support SB 420, legislation that would prevent property that is operated as a detention facility by a for‑profit entity from qualifying for the state’s welfare (charitable) property tax exemption.

Mel Kulra, a legislative aide for Sen. Steve Padilla, told the board the measure would close a loophole that allowed at least one nonprofit owner of a private immigration detention facility to avoid paying property taxes. “A recent investigation revealed the [nonprofit] ... avoided paying at least $6 million in property taxes,” Kulra said, and added the bill was drafted with BOE staff input to ensure the language meets the bill’s intent.

Deputy Director David Young of the BOE’s Property Tax Department described how enforcement would work if the bill becomes law: the board conducts periodic recertifications of organizations that hold welfare exemptions, would review formation and use documents for affected properties, and could revoke an exemption if the law’s criteria are not met. “If revoked, they have a right to appeal within a certain amount of time,” Young said, adding that appeals would come before the board.

Imperial County Assessor Robert Minville, who called in during public comment, described his county’s review of the Imperial Valley Regional Detention Center. Minville said county staff inspected the facility and “found it to be clean and safe and well‑maintained,” though staff did not interview detainees. He noted the owner pays property taxes on excess land and some service assessments but that the exemption produced a substantial reduction in assessed value for the improvements. Minville said the California Assessors Association and Imperial County Board of Supervisors support SB 420 and welcomed statutory clarification.

Supporters told the board the goal is to prevent taxpayer subsidies of facilities whose operations or revenue are tied to private detention contracts. Opponents were not heard in the public record at the meeting, and BOE legal counsel reminded members that implementation questions would remain subject to the board’s existing review and appeals processes.

Member Tony Vasquez moved that the board support SB 420; Deputy Controller Emerron seconded the motion. The motion passed on a unanimous roll‑call vote: Chair Lieber — I; Vice Chair Gaines — I; Member Vasquez — I; Member Schaefer — I; Deputy Controller Emerron — I.

The board’s support position will be transmitted to the Legislature as the bill proceeds through committee and floor consideration.