Personal Income Tax Law: Corporation Tax Law: credits: cleanup costs.

Assembly Member Nguyen's tax credit proposal responds to increased unauthorized encampments on private property following recent Supreme Court decisions on camping ordinances. The legislation would allow commercial property owners and lessees to claim credits of up to $20,000 for expenses related to removing encampments, illegal dumping, and abandoned property between 2026 and 2031.

The bill defines eligible cleanup costs as those incurred within 60 days of discovery, including waste removal, property sanitization, temporary security measures, damage repairs, and installation of passive deterrents. Permanent improvements, ongoing maintenance, security systems, and employee compensation would not qualify. Taxpayers must document property conditions before cleanup and provide detailed contractor invoices to claim the credit.

To prevent duplicate claims, only the entity that directly paid for cleanup services may receive the credit. The Franchise Tax Board would implement the program through emergency regulations and report annually to the Legislature on credit usage starting in 2029. The bill requires taxpayers to certify under penalty of perjury that expenses meet all qualifications and resulted from unauthorized activities not caused by the claiming entity.