All Roll Calls
Yes: 211 • No: 20
CaliforniaAB 22702025-2026 Regular SessionHouseWALLET
Low-income housing tax credit: farmworker housing.
Sponsored By: Joaquin Arambula (Democratic)
Signed by Governor
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Bill Overview
Analyzed Economic Effects
22 provisions identified: 13 benefits, 1 costs, 8 mixed.
Higher tax credits for older housing repairs
Qualifying major housing repairs earn credit rates of 30% in each of the first three years and 5% in year four. Buildings must be at least 15 years old and complete major repairs tied to the credit award. One eligibility route requires existing income limits averaging no more than 45% of area median income. That route also requires a tax-credit agreement lasting at least 55 years, with average targeted incomes no higher than 45%. Alternatively, buildings can have specified federal farm-housing financing; either route requires low appraised value to leave other available credits insufficient for repairs.
Housing investors get building-based credit rates
Credits use the building's qualified tax basis: specified new buildings get 9% yearly for three years, then 3%. Specified subsidized new or at-risk buildings get 4% yearly for three years, then 1%. Eligible rehabilitation buildings at least 15 years old get 30% yearly for three years, then 5%. That rehabilitation rate requires qualifying income or federal financing, low appraised value that limits credits, and substantial rehabilitation; it cannot combine with the specified alternative allocation. Since January 1, 2018, qualifying federally subsidized farmworker housing gets 20% yearly for three years, then 15%.
Investors can save unused housing credits
Taxpayers can carry forward California housing tax credits that exceed their tax bill. They can use the unused amount against taxes in later years until it runs out. The law sets no maximum carryforward period and provides no separate refund for the excess credit.
Housing investors can sell tax credits
Projects with preliminary reservations on or after January 1, 2016, qualify for sales of all or part of their credits. Taxpayers must elect before final allocation; the election becomes irrevocable then, and already-claimed credits cannot be sold. Unrelated buyers must pay at least 80% of the credit's face value and can use it as the seller could. Sellers must report the sale within 10 days and remain solely responsible for credit obligations. The committee sends annual sale information to the Franchise Tax Board.
Low-income renters gain housing enforcement rights
The law replaces federal credit-recapture rules with recorded housing agreements that last at least 30 years and name enforcement agencies. Current, former, and prospective occupants who meet the building’s income limit can enforce these agreements in state court. Sponsors must provide required notices and pledge rent payments as security. After an unresolved violation and a reasonable time to fix it, an enforcement agency can collect that rent.
Renters gain enforceable long-term housing protections
Credit-funded buildings must follow housing program rules for 30 consecutive tax years, starting with the first credit year. Recorded agreements replace specified federal credit-recapture rules and last at least that long. Tenants and eligible future, current, or former occupants can enforce the agreements in state court. Sponsors must report federal noncompliance findings and pledge project rents as security; agreements can be placed behind qualifying lenders' liens. Unfixed defaults can lead to rent collection, agency operation, court-ordered compliance, or a court-appointed manager.
Rural housing gets reserved tax credits
At least 20% of the covered annual housing tax credits must be reserved for rural areas. On or after October 31, unused rural credits can go to other eligible projects only if no eligible rural applications are pending on October 31. The reserve supports rural housing projects, not direct payments to residents.
Tax credits support subsidized farmworker housing
Beginning January 1, 2018, qualifying federally subsidized farmworker housing receives a four-year state housing-credit rate schedule. The rate is 20% in each of the first three years and 15% in the fourth year. These rates apply to the building’s qualified basis—the property cost amount used to calculate its credit. The building must meet both the low-income housing rules and the law’s farmworker housing definition.
Housing investors can claim credits sooner
For tax years beginning on or after January 1, 2023, investors can claim credits before the committee's final certification. The building must be in service, and its federal credit period must have begun. The sponsor must file a CPA-certified taxpayer certification and give the taxpayer a copy. Claims cannot exceed the taxpayer's share of the smaller preliminary-reservation calculation or taxpayer-certified amount. If the committee later certifies a different amount, taxpayers must amend earlier returns.
Housing investors follow four-year credit schedules
The state housing credit runs for four tax years, rather than the federal credit's 10-year period. The federal first-year special rule and specified credit-acceleration election do not apply. A qualifying increase in a building's tax basis after the first year can receive its own four-year credit period. That additional credit cannot exceed the sponsor's allocation.
Housing awards favor deeply affordable homes
Sponsors must show housing need, viable finances, site control, zoning compliance, and a qualified project team. At least 50% of estimated project financing must have enforceable construction or long-term financing commitments. Outside specified set-asides, awards favor the lowest-income tenants, affordable rents, and the longest service commitments. Application date can break an equal-rating tie but cannot otherwise decide priority. From 2021 onward, added-credit scoring considers unit numbers and sizes, nearby services, jobs, transit, deep affordability, and total state subsidy.
More affordable housing credits with eligibility limits
California adds $500 million in housing tax credits for 2020 and allows up to $500 million yearly starting in 2021. This supplements a base pool of $70 million in 2001, adjusted yearly for inflation. Starting in 2021, the added pool requires budget funding and allocation rules from both state housing-credit and debt-limit committees. Eligible projects include specified federally subsidized new buildings and nonresidential buildings converted to housing within five years before applying. Sponsors receiving the specified nonfederally subsidized allocation generally cannot use the added pool, but remain eligible for the base pool.
More tax credits for affordable housing
The law adds $500 million in housing credits for 2020 and up to $500 million yearly afterward. From 2021 onward, the annual budget sets the amount, and state agencies must align their allocation rules. Eligible projects include specified federally subsidized new buildings and nonresidential buildings converted to housing within the previous five years. Separate rehabilitation costs and sponsors receiving specified nonfederal allocations are generally excluded from this added pool. Up to $200 million can support California Housing Finance Agency mixed-income projects; each project's full four-year award counts against its allocation year's limit.
Credits support preserving at-risk affordable housing
Existing housing can meet acquisition-credit conditions when affordability limits end within five years before or after its application. The window also covers eligibility to prepay a federally insured mortgage or end a rent-subsidy contract. Buyers must sign an agreement to follow federal housing-credit rules and applicable California requirements. Properties must meet federal rehabilitation spending rules, with the stated statutory exception.
Farmworker housing scores get required review
The state housing credit committee must consider better scoring rules for farmworker projects seeking added credits from 2021 onward. Options include maximum housing-needs points and five initial points for site amenities beyond required thresholds. The committee must also consider a separate farmworker housing type and the amenity-proximity points used for rural projects. The law requires review, not adoption of these changes or a guaranteed credit award.
Farmworker projects gain housing credit exceptions
Qualifying farmworker housing receives exceptions to the usual project-location and federal-credit requirements. California projects funded solely through the farmworker set-aside can qualify without a federal housing credit allocation. Projects must meet the law's definition of farmworker housing. These exceptions expand financing access for project sponsors, rather than giving farmworkers a personal tax credit.
More financing options for targeted housing
Qualifying buildings in designated high-cost areas or census tracts can receive state credits when federal credits use 100% of qualified basis. Buildings reserved so 50% of occupants are special-needs households can receive specified credits capped at 30% of eligible basis. The committee can also allow state credits alongside federal high-cost-area credits in the stated cases. Exchanges replacing those federal credits are capped at 30% of eligible basis and require an equal federal-credit reduction.
Reserved credits for farmworker housing projects
The law provides $500,000 yearly in credits for qualifying farmworker housing, plus unused or returned older credits until exhausted. From 2024 through 2034, it also reserves the smaller of 5% of the added credit pool or $25 million yearly. Unused reserved credits move to later funding rounds that year, then return to the added pool after the final round. Starting in 2035, the Legislature sets the reserve after considering the state's farmworker housing strategy. These credits finance housing projects, not payments to farmworker households.
Housing businesses can share tax credits
For state reservations on or after January 1, 2009, partnership agreements can set partners' shares of housing credits. Federal credit shares and federal economic-effect tests do not control; specified set-aside projects also need a federal credit reservation. Corporations can assign credits to affiliates meeting the 100% ownership and voting-common-stock standard. Corporate assignment choices are final for that tax year. Later-year changes must appear on both the assigning and receiving corporations' returns.
Employer worker housing faces credit limits
State housing credits cannot fund farmworker housing used to meet employers' federal housing duty for H-2A temporary agricultural workers. Beginning with tax years on or after January 1, 2027, credits also count as state funding under the employer-housing restriction. That restriction covers employers or agents employing at least one H-2A worker and housing planning, development, or operation. Covered recipients must submit the required declaration and reimburse the state for prohibited use. The law does not create a new housing payment duty for workers.
Farmworker housing credits reserved with limits
The law reserves $500,000 yearly for qualifying farmworker housing, excluding projects used to meet federal H-2A worker housing requirements. For 2024–2034, it also reserves the smaller of 5% of the added credit pool or $25 million yearly. That added pool requires yearly budget funding and adopted program rules. Unused reserved credits move to later rounds that year; leftovers after the final round return to the main pool. Starting in 2035, the Legislature sets the reserve after considering the state housing department’s farmworker housing strategy or latest update.
Owner cash limits support affordable rents
Owners must fund required reserves before taking covered project cash distributions. The covered return is capped at 8% of the smaller of paid-in owner equity or 20% of the building's adjusted basis at the first credit year's end. Separate rules cover market-unit cashflow, with operating costs assigned to low-income units by their share of floor space. Excess distributable cash must lower restricted rents or add rent-restricted units. Eligible unpaid returns from the first five compliance years can accumulate through year 15, but not later; limits apply across all partners or S corporation shareholders together.
Sponsors & Cosponsors
Sponsor
Joaquin Arambula
Democratic • House
Cosponsors
Jesse Arreguín
Democratic • Senate
Lisa Calderon
Democratic • House
Robert Garcia
Democratic • House
Rosilicie Ochoa Bogh
Republican • Senate
Eloise Gómez Reyes
Democratic • Senate
Roll Call Votes
House vote • 8/27/2026
AB 2270 Arambula Concurrence in Senate Amendments
Yes: 63 • No: 7
Senate vote • 8/26/2026
Assembly 3rd Reading AB2270 Arambula et al. By Arreguín
Yes: 34 • No: 3
Senate vote • 8/13/2026
Do pass
Yes: 6 • No: 1
Senate vote • 6/29/2026
Placed on suspense file
Yes: 7 • No: 0
Senate vote • 6/16/2026
Do pass as amended, but first amend, and re-refer to the Committee on [Appropriations]
Yes: 9 • No: 1
House vote • 5/27/2026
AB 2270 Arambula Assembly Third Reading
Yes: 64 • No: 6
House vote • 5/14/2026
Do pass.
Yes: 12 • No: 1
House vote • 4/29/2026
Do pass as amended and be re-referred to the Committee on [Appropriations]
Yes: 11 • No: 0
House vote • 4/13/2026
Do pass and be re-referred to the Committee on [Housing and Community Development]
Yes: 5 • No: 1
Actions Timeline
Chaptered by Secretary of State - Chapter 931, Statutes of 2026.
9/30/2026SenateApproved by the Governor.
9/30/2026legislatureEnrolled and presented to the Governor at 4 p.m.
9/4/2026legislatureSenate amendments concurred in. To Engrossing and Enrolling. (Ayes 63. Noes 7. Page 6690.).
8/27/2026HouseIn Assembly. Concurrence in Senate amendments pending.
8/27/2026HouseRead third time. Passed. Ordered to the Assembly. (Ayes 33. Noes 3.).
8/26/2026SenateRead second time. Ordered to third reading.
8/24/2026SenateRead third time and amended. Ordered to second reading.
8/21/2026SenateRead second time. Ordered to third reading.
8/13/2026SenateFrom committee: Do pass. (Ayes 6. Noes 1.) (August 13).
8/13/2026SenateIn committee: Referred to APPR. suspense file.
6/29/2026SenateRead second time and amended. Re-referred to Com. on APPR.
6/18/2026SenateFrom committee: Amend, and do pass as amended and re-refer to Com. on APPR. (Ayes 9. Noes 1.) (June 16).
6/17/2026SenateReferred to Com. on HOUSING.
6/10/2026SenateIn Senate. Read first time. To Com. on RLS. for assignment.
5/28/2026SenateRead third time. Passed. Ordered to the Senate. (Ayes 64. Noes 6. Page 5460.)
5/27/2026HouseRead second time. Ordered to third reading.
5/18/2026HouseFrom committee: Do pass. (Ayes 12. Noes 1.) (May 14).
5/14/2026HouseJoint Rule 62(a), file notice suspended. (Page 5030.)
5/14/2026HouseIn committee: Set, first hearing. Referred to APPR. suspense file.
5/13/2026HouseRe-referred to Com. on APPR.
5/4/2026HouseRead second time and amended.
4/30/2026HouseFrom committee: Amend, and do pass as amended and re-refer to Com. on APPR. (Ayes 11. Noes 0.) (April 29).
4/29/2026HouseFrom committee: Do pass and re-refer to Com. on H. & C.D. (Ayes 5. Noes 1.) (April 13). Re-referred to Com. on H. & C.D.
4/14/2026HouseReferred to Coms. on REV. & TAX. and H. & C.D.
3/9/2026House
Bill Text
Chaptered
9/30/2026
Enrolled
9/1/2026
Amended Senate
8/21/2026
Amended Senate
6/18/2026
Amended Assembly
4/30/2026
Introduced
2/19/2026
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