AB2270 - Low-income housing tax credit: farmworker housing.

Amended IN Senate August 21, 2026 Amended IN Senate June 18, 2026 Amended IN Assembly April 30, 2026 CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION Assembly Bill No. 2270 Introduced by Assembly Member Arambula (Coauthors: Assembly Members Calderon and Garcia) (Coauthors: Senators Arreguín, Ochoa Bogh, and Reyes) February 19, 2026 An act to amend Section 50205 of the Health and Safety Code, and to amend Sections 12206, 17058, and 23610.5 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. LEGISLATIVE COUNSEL'S DIGEST AB 2270, as amended, Arambula. Low-income housing tax credit: farmworker housing. Existing law establishes a low-income housing tax credit program for which the California Tax Credit Allocation Committee (CTCAC) provides procedures and requirements for the allocation, in modified conformity with federal law, of state insurance, personal income, and corporation tax credit amounts to qualified low-income housing projects that have been allocated, or qualify for, a federal low-income housing tax credit, and farmworker housing. Existing law limits the total annual amount of the state low-income housing credit for which a federal low-income housing credit is required to the sum of $70,000,000, as increased by any percentage increase in the Consumer Price Index for the preceding calendar year, any unused credit for the preceding calendar years, and the amount of housing credit ceiling returned in the calendar year. Existing law governing the taxation of insurers, the Personal Income Tax Law, and the Corporation Tax Law provided an allocation of $500,000,000 for the 2020 calendar year and, for calendar years beginning in 2021, also provides for an additional amount that may be allocated, up to $500,000,000, to specified low-income housing projects that are new buildings that are federally subsidized, as specified. Existing law provides that this additional amount is only available for allocation pursuant to an authorization in the annual Budget Act. Existing law requires specified regulatory action by CTCAC aimed at increasing production and containing costs, including a scoring system that maximizes the efficient use of public subsidy and benefit created through the low-income housing tax credit program, as specified. This bill would require CTCAC to consider amending the regulatory scoring system to establish a housing type for farmworker housing projects, as specified in the existing CTCAC regulation. The bill would also require the CTCAC to consider using the same point allocations provided for rural set-aside projects in assigning points to farmworker housing based on the proximity of amenities to an eligible farmworker housing project. Existing federal immigration law authorizes employment of nonimmigrant agricultural workers, known as H-2A workers, if specified requirements are met, including that the employer furnish housing, as provided. Existing law generally prohibits providing state funding to an employer or its agent who employs an H-2A worker for the purposes of funding housing and requires an employer that receives state funding for that purpose to reimburse the state by that amount, as specified. Existing law defines “state funding” for this purpose to exclude the allocation of federal or state low-income housing tax credits. This bill, for taxable years beginning on or after January 1, 2027, would include the allocation of state low-income housing tax credits within the definition of “state funding” and would prohibit providing low-income housing tax credits for projects to provide farmworker housing used to comply with the above-described H2-A housing requirement. This bill would incorporate additional changes to Sections 12206, 17058, and 23610.5 of the Revenue and Taxation Code proposed by Senate Bill 1072 to be operative only if this bill and Senate Bill 1072 are enacted and this bill is enacted last. 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. Digest Key Vote: 2/3 Appropriation: NO Fiscal Committee: YES Local Program: NO Bill Text The people of the State of California do enact as follows: SECTION 1. Section 50205 of the Health and Safety Code is amended to read: 50205. (a) As used in this section: (1) “Employer” means a person or entity who has petitioned, or will petition, to import an H-2A worker pursuant to Section 1188 of Title 8 of the United States Code to work on the employer’s agricultural land. (2) “H-2A worker” means a nonimmigrant person excluded from the term “immigrant,” for purposes of the federal Immigration and Nationality Act (8 U.S.C. Sec. 1101), pursuant to Section 1101(a)(15)(H)(ii)(a) of Title 8 of the United States Code employed to work for an employer. (3) “State funding” means any provision of moneys or other financial assistance provided by the state or a state agency, including, but not limited to, grants, loans, and write-downs of land costs, but does not include any allocation of federal low-income housing tax credits pursuant to Chapter 3.6 (commencing with Section 50199.4) of this part. For taxable years beginning on or after January 1, 2027, “state funding” includes any allocation of state low-income housing tax credits pursuant to Section 12206, 17058, or 23610.5 of the Revenue and Taxation Code. (b) (1) Notwithstanding any other law and subject to paragraph (2), state funding shall not be provided to an employer or its agent who employs at least one H-2A worker for the purposes of funding predevelopment of, developing, or operating any housing. (2) Any employer or other recipient of state funding who utilizes state funding for the purposes described in paragraph (1) shall reimburse the state or state agency that provided the funding in an amount equal to the amount of that state funding expended for those purposes. (3) This subdivision shall not apply to any contract or other enforceable agreement pursuant to which the state or a state agency provides state funding that was entered into prior to January 1, 2020. (4) The department shall not be responsible for inspecting units that are not subsidized by funding received by the department. (5) A person or entity who receives state funding on and after January 1, 2020, and expends any of those funds for the purpose of funding predevelopment of, developing, or operating any housing shall submit a declaration to the entity administering the funding which declares the following: (A) (i) The person or entity is not an agricultural employer, as defined in Section 1140.4 of the Labor Code, or its agent, or a farm labor contractor, as defined in Section 1682 of the Labor Code, or its agent, who employs at least one H-2A worker, as defined in Section 50205. (ii) The person or entity will not rent, sell, or sublease housing funded pursuant to this chapter to an agricultural employer, as defined in Section 1140.4 of the Labor Code, or its agent, or a farm labor contractor, as defined in Section 1682 of the Labor Code, or its agent, who employs at least one H-2A worker, as defined in Section 50205, until the expiration of the regulatory agreement or affordability covenant, as applicable. (B) The declaration described in subparagraph (A) may be met through the inclusion in a regulatory agreement, contract, or affordability covenant, as applicable, with the entity administering the funding program that is signed by the person or entity receiving funds. (c) The changes made by the act adding this subdivision shall apply only to tax credits allocated for taxable years beginning on or after January 1, 2027. SEC. 2. Section 12206 of the Revenue and Taxation Code is amended to read: 12206. (a) (1) There shall be allowed as a credit against the “tax,” described by Section 12201, a state low-income housing tax credit in an amount equal to the amount determined in subdivision (c), computed in accordance with Section 42 of the Internal Revenue Code, relating to low-income housing credit, except as otherwise provided in this section. (2) “Taxpayer,” for purposes of this section, means the sole owner in the case of a “C” corporation, the partners in the case of a partnership, and the shareholders in the case of an “S” corporation. (3) “Housing sponsor,” for purposes of this section, means the sole owner in the case of a “C” corporation, the partnership in the case of a partnership, and the “S” corporation in the case of an “S” corporation. (b) (1) The amount of the credit allocated to any housing sponsor shall be authorized by the California Tax Credit Allocation Committee, or any successor thereof, based on a project’s need for the credit for economic feasibility in accordance with the requirements of this section. (A) Except for projects to provide farmworker housing, as defined in subdivision (h) of Section 50199.7 of the Health and Safety Code, that are allocated credits solely under the set-aside described in subdivision (c) of Section 50199.20 of the Health and Safety Code, the low-income housing project shall be located in California and shall meet either of the following requirements: (i) The project’s housing sponsor has been allocated by the California Tax Credit Allocation Committee a credit for federal income tax purposes under Section 42 of the Internal Revenue Code, relating to low-income housing credit. (ii) It qualifies for a credit under Section 42(h)(4)(B) of the Internal Revenue Code, relating to special rule where 50 percent or more of building is financed with tax-exempt bonds subject to volume cap. (B) The California Tax Credit Allocation Committee shall not require fees for the credit under this section in addition to those fees required for applications for the tax credit pursuant to Section 42 of the Internal Revenue Code, relating to low-income housing credit. The committee may require a fee if the application for the credit under this section is submitted in a calendar year after the year the application is submitted for the federal tax credit. (C) (i) For a project that receives a preliminary reservation of the state low-income housing tax credit, allowed pursuant to subdivision (a), on or after January 1, 2009, the credit shall be allocated to the partners of a partnership owning the project in accordance with the partnership agreement, regardless of how the federal low-income housing tax credit with respect to the project is allocated to the partners, or whether the allocation of the credit under the terms of the agreement has substantial economic effect, within the meaning of Section 704(b) of the Internal Revenue Code, relating to determination of distributive share. (ii) This subparagraph shall not apply to a project that receives a preliminary reservation of state low-income housing tax credits under the set-aside described in subdivision (c) of Section 50199.20 of the Health and Safety Code unless the project also receives a preliminary reservation of federal low-income housing tax credits. (2) (A) The California Tax Credit Allocation Committee shall certify to the housing sponsor the amount of tax credit under this section allocated to the housing sponsor for each credit period. (B) In the case of a partnership or an “S” corporation, the housing sponsor shall provide a copy of the California Tax Credit Allocation Committee certification to the taxpayer. (C) (i) A taxpayer shall be eligible to claim the credit commencing in the taxable year the building is placed in service and the federal credit period commences, notwithstanding that the certification pursuant to subparagraph (A) has not been issued by the California Tax Credit Allocation Committee, provided that the housing sponsor has filed a taxpayer certification with the California Tax Credit Allocation Committee and delivered a copy to the taxpayer. The amount of credit claimed by the taxpayer shall not exceed the pro rata share with respect to the amount of credit that the taxpayer purchased or is allocated per the partnership agreement, as applicable, of the lesser of either of the following: (I) The applicable percentages for each of the four credit years, as specified in subdivision (c), multiplied by the qualified basis of the building set forth in the preliminary reservation. (II) The amount of credit the project is eligible for as stated in the taxpayer certification. (ii) The California Tax Credit Allocation Committee may, but is not required to, review the taxpayer certification and other information provided by the housing sponsor to confirm both of the following: (I) The calculations set forth in the taxpayer certification. (II) The amount of credits allocated to the project is consistent with applicable California Tax Credit Allocation Committee rules and regulations for the purposes of making the certification required pursuant to subparagraph (A). (iii) If the California Tax Credit Allocation Committee issues a certification pursuant to subparagraph (A) that is inconsistent with the taxpayer certification upon which a credit has been claimed, the taxpayer shall amend any previously filed tax returns to reflect the credit amount certified by the California Tax Credit Allocation Committee pursuant to subparagraph (A). (iv) For purposes of this subparagraph, “taxpayer certification” means a certified statement from the certified public accountant of the housing sponsor. The taxpayer certification shall contain the amount of the credit the project is eligible for, the taxable year the building is placed in service, and the taxable year in which the federal credit period for the building has commenced. (v) The taxpayer shall, upon request, provide a copy of the taxpayer certification pursuant to clause (iv) or the California Tax Credit Allocation Committee’s certification pursuant to subparagraph (A), as applicable, to the Department of Insurance. (vi) In the case of a failure to provide a copy of the taxpayer certification pursuant to clause (iv) or the California Tax Credit Allocation Committee’s certification pursuant to subparagraph (A), if the Department of Insurance so requires, no credit under this section shall be allowed for that taxable year until a copy of that certification is provided. (vii) The changes made to this subparagraph by the act adding this clause shall apply for taxable years beginning on or after January 1, 2023. (D) All elections made by the taxpayer pursuant to Section 42 of the Internal Revenue Code, relating to low-income housing credit, shall apply to this section. (E) (i) Except as described in clause (ii) or (iii), for buildings located in designated difficult development areas (DDAs) or qualified census tracts (QCTs), as defined in Section 42(d)(5)(B) o [Text truncated for display. Full text available on Congress.gov.]