Assemblyman Matt Haney is taking direct aim at the private immigration detention business in California, rolling out AB 1633 yesterday to slap a 50 percent tax on profits from companies that run immigration detention centers. The San Francisco Democrat argues the steep levy would blunt the financial incentives that fuel detention expansion while pumping new money into immigration-related services. He is pitching the bill as a Bay Area-rooted response to stepped-up federal enforcement and to the ripple effects when local residents are detained and sent to facilities across the state.
What the bill would do
Per the bill text, AB 1633 would create a Private Detention Facility Tax Law that, starting Jan. 1, 2027, imposes an annual tax equal to 50 percent of a private operator's gross receipts from detention contracts. Those revenues would be routed into a new Due Process for All Fund. According to LegiScan, the California Department of Tax and Fee Administration would administer the tax, and the measure, as a tax levy, would need a two-thirds vote in the Legislature. The draft language makes clear the levy applies regardless of whether the contracting agency is federal, state, or local, and it directs that the fund be used, upon appropriation, for immigration-related services.
Supporters and critics
Advocates are lining up behind the basic idea of taxing away the profit motive. Shiu-Ming Cheer of the California Immigrant Policy Center told Mercury News that the tax could help protect immigrants and their families, and Alex Mensing of the California Collaborative for Immigrant Justice called it a creative use of tools to discourage profit from immigration detention. Haney and his backers argue the private detention market in California is big enough that slicing into profits could both deter new facilities and generate a meaningful stream of money for legal and social support services.
Haney's rationale
Haney is explicitly tying the bill to broader federal enforcement plans. "ICE plans to grow its deportation force exponentially," he told Mercury News, and he says AB 1633 is meant to strip out the financial incentive for companies to expand that capacity. Representing San Francisco's 17th Assembly District, Haney argues the tax would make operating detention facilities in California less attractive while giving state lawmakers a dedicated pot of money to help communities that feel the impact of detention most directly.
Backstory: Dublin and detention scandals
To sell the bill, Haney is drawing on a well-documented track record of detention abuses and oversight failures. The federal Bureau of Prisons permanently shut down the Federal Correctional Institution in Dublin after investigations and prosecutions exposed years of staff misconduct and deteriorating conditions. AP News chronicled the probe and the closure, which pushed questions about oversight and private profit into the spotlight. Supporters of AB 1633 say a profit tax is one way for California to curb private gain in a system that has seen repeated allegations of abuse.
Industry scale and why supporters want change
Backers of the bill point to the sheer footprint of private contractors in the immigration detention system as the reason for action. Private corporations operate a large share of ICE facilities, and detention contracts generate significant revenue for a small number of major firms. A 2024 report from the ACLU, Physicians for Human Rights, and American Oversight describes systemic problems across ICE detention and the large sums flowing through the detention business. The report, published by the ACLU, is central to the case made by policymakers who argue California should test new tools to limit profit from detention.
What's next
AB 1633 was introduced yesterday and has been read for printing; from here, it heads into Assembly committee hearings, where its fiscal structure, legal footing, and political viability will get picked apart. LegiScan notes that, as a tax levy, it would take effect immediately if it clears the two-thirds threshold in both houses.
