SACRAMENTO, Calif. — State Sen. Steve Padilla has amended Senate Bill 420 to close a loophole that allows nonprofit organizations affiliated with private immigration detention facilities to claim charitable tax status and avoid paying millions of dollars in property taxes.
The amendment, introduced Wednesday, seeks to address what supporters describe as a long-standing practice in which nonprofit organizations profit from their involvement with private detention facilities while benefiting from tax exemptions intended for charitable organizations.
Timothy Kelley, a founder and board member of the Brawley Community Foundation, said the nonprofit organization “was created to improve downtown Brawley by investing in old buildings, improving them and using the money to buy up other properties.” A recent KPBS investigation revealed that the nonprofit owned the Imperial Regional Detention Facility and managed to avoid $6 million in property taxes.
The Management and Training Corp. (MTC), a for-profit private prison contractor that operates the facility, as well as U.S. Immigration and Customs Enforcement, pay the Brawley Community Foundation approximately $40 million annually in “detention center fees.” The foundation’s facility is one of eight immigration detention centers operating in California, and its involvement with the detention center has spanned more than a decade.
The nonprofit organization argues that its ICE detention center benefits the community by providing jobs. Kristian Salgado, an organizer with the Imperial Valley-based immigrant rights group Imperial Liberation Collective, disputed the facility’s claim, stating, “I don’t see the detention center as a community benefit at all. I don’t think the jobs that come out of it really outweigh the harm that it creates.”
Over the years that MTC has operated the immigration detention center, the private prison contractor has faced allegations of failing to provide adequate medical care, violating detainees’ civil rights and using solitary confinement as a form of retaliation. According to a 2022 letter to the U.S. Department of Homeland Security’s Office for Civil Rights and Civil Liberties, five men described being held under “torturous conditions.” One individual said he was not permitted treatment for back pain that was later diagnosed as a major spinal condition. Two men from China and Honduras died in detention after experiencing health emergencies without receiving proper medical attention.
The Brawley Community Foundation was able to continue operating its ICE detention facility at relatively low cost while generating substantial revenue through a loophole involving a special state tax break known as the Welfare Exemption.
First adopted in the 1940s, the exemption was intended to provide property tax relief to nonprofit organizations engaged in charitable activities that benefit the public. Traditionally, charities, hospitals, community foundations and faith-based organizations have been eligible to apply for the exemption. “The idea behind any tax exempt organization is that the very existence of the organization is at least as valuable as any tax that would be paid into the public trust,” said Geoff Green, who leads the California Association of Nonprofits. “Since the services, the purposes of the organization themselves, are public-serving.”
Padilla’s amendment to Senate Bill 420 would close the loophole in California’s Revenue and Taxation Code by prohibiting organizations associated with immigration detention operations from qualifying for charitable property tax exemptions. The bill specifies that an organization is not eligible for the exemption if any portion of its operations is managed by a for-profit company and functions as a detention center.
SB 420 would ensure that organizations with ties to private immigration detention facilities cannot receive a tax break solely because they are organized as nonprofits. The measure also seeks to prevent taxpayers from subsidizing ICE detention operations through the Welfare Exemption.
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