(1)The California Constitution authorizes the Legislature to exempt from taxation, in whole or in part, property that is used exclusively for religious, hospital, or charitable purposes, and is owned or held in trust by a nonprofit entity. Pursuant to that authority, existing law provides for a welfare exemption under which property used exclusively for an exempt purpose and owned and operated by specified entities, including foundations, limited liability companies, or corporations meeting certain statutory requirements, is exempt from taxation. Chapter 2 of the Statutes of 2026 (AB 1485) provides that, for purposes of the exemption for property used exclusively for the preservation of specified natural resources or open-space lands, for the property tax lien dates for the 202627 fiscal year to the 203132 fiscal year, inclusive, property may be owned and operated by a federally recognized Indian tribe or a wholly owned subsidiary of a federally recognized Indian tribe meeting certain requirements.

This bill would expand the above-described authorization, for purposes of the exemption for property used exclusively for the preservation of specified natural resources or open-space lands, to include property owned and operated by a nonprofit corporation chartered by a federally recognized tribe pursuant to tribal law or a specified provision of federal law, or a wholly owned tribal entity, as defined.

(2)Existing law authorizes counties and cities and counties to impose a documentary transfer tax at a specified rate upon deeds, instruments, or other writings by which specified property is transferred. AB 1485 exempts from that tax, until January 1, 2031, the transfer of any deed, instrument, or other writing that makes effective a tribal land return transaction. AB 1485 defines a tribal land return transaction to mean a land return acquisition that transfers ownership of land to a federally recognized tribe or a wholly owned subsidiary of a federally recognized Indian tribe in fee simple and that includes specified restrictive covenants.

This bill would, for these purposes, expand the definition of tribal land return transaction to include a land return acquisition that transfers ownership of land to a nonprofit corporation chartered by a federally recognized tribe pursuant to tribal law or a specified provision of federal law, or a wholly owned tribal entity, as defined.

(3)Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.

This bill would include additional information required for any bill authorizing a new tax expenditure.

(4)The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

(5)This bill would take effect immediately as a tax levy.

(1)The California Constitution authorizes the Legislature to exempt from taxation, in whole or in part, property that is used exclusively for religious, hospital, or charitable purposes, and is owned or held in trust by a nonprofit entity. Pursuant to that authority, existing law provides for a welfare exemption under which property used exclusively for an exempt purpose and owned and operated by specified entities, including foundations, limited liability companies, or corporations meeting certain statutory requirements, is exempt from taxation. Chapter 2 of the Statutes of 2026 (AB 1485) provides that, for purposes of the exemption for property used exclusively for the preservation of specified natural resources or open-space lands, for the property tax lien dates for the 202627 fiscal year to the 203132 fiscal year, inclusive, property may be owned and operated by a federally recognized Indian tribe or a wholly owned subsidiary of a federally recognized Indian tribe meeting certain requirements.

This bill would expand the above-described authorization, for purposes of the exemption for property used exclusively for the preservation of specified natural resources or open-space lands, to include property owned and operated by a nonprofit corporation chartered by a federally recognized tribe pursuant to tribal law or a specified provision of federal law, or a wholly owned tribal entity, as defined.

(2)Existing law authorizes counties and cities and counties to impose a documentary transfer tax at a specified rate upon deeds, instruments, or other writings by which specified property is transferred. AB 1485 exempts from that tax, until January 1, 2031, the transfer of any deed, instrument, or other writing that makes effective a tribal land return transaction. AB 1485 defines a tribal land return transaction to mean a land return acquisition that transfers ownership of land to a federally recognized tribe or a wholly owned subsidiary of a federally recognized Indian tribe in fee simple and that includes specified restrictive covenants.

This bill would, for these purposes, expand the definition of tribal land return transaction to include a land return acquisition that transfers ownership of land to a nonprofit corporation chartered by a federally recognized tribe pursuant to tribal law or a specified provision of federal law, or a wholly owned tribal entity, as defined.

(3)Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.

This bill would include additional information required for any bill authorizing a new tax expenditure.

(4)The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

(5)This bill would take effect immediately as a tax levy.

(1)The California Constitution authorizes the Legislature to exempt from taxation, in whole or in part, property that is used exclusively for religious, hospital, or charitable purposes, and is owned or held in trust by a nonprofit entity. Pursuant to that authority, existing law provides for a welfare exemption under which property used exclusively for an exempt purpose and owned and operated by specified entities, including foundations, limited liability companies, or corporations meeting certain statutory requirements, is exempt from taxation. Chapter 2 of the Statutes of 2026 (AB 1485) provides that, for purposes of the exemption for property used exclusively for the preservation of specified natural resources or open-space lands, for the property tax lien dates for the 202627 fiscal year to the 203132 fiscal year, inclusive, property may be owned and operated by a federally recognized Indian tribe or a wholly owned subsidiary of a federally recognized Indian tribe meeting certain requirements.

This bill would expand the above-described authorization, for purposes of the exemption for property used exclusively for the preservation of specified natural resources or open-space lands, to include property owned and operated by a nonprofit corporation chartered by a federally recognized tribe pursuant to tribal law. law or a specified provision of federal law, or a wholly owned tribal entity, as defined.

(2)Existing law authorizes counties and cities and counties to impose a documentary transfer tax at a specified rate upon deeds, instruments, or other writings by which specified property is transferred. AB 1485 exempts from that tax, until January 1, 2031, the transfer of any deed, instrument, or other writing that makes effective a tribal land return transaction. AB 1485 defines a tribal land return transaction to mean a land return acquisition that transfers ownership of land to a federally recognized tribe or a wholly owned subsidiary of a federally recognized Indian tribe in fee simple and that includes specified restrictive covenants.

This bill would, for these purposes, expand the definition of tribal land return transaction to include a land return acquisition that transfers ownership of land to a nonprofit corporation chartered under by a federally recognized tribe pursuant to tribal law. law or a specified provision of federal law, or a wholly owned tribal entity, as defined.

(3)Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.

This bill would include additional information required for any bill authorizing a new tax expenditure.

(4)The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

(5)This bill would take effect immediately as a tax levy.

(1)The California Constitution authorizes the Legislature to exempt from taxation, in whole or in part, property that is used exclusively for religious, hospital, or charitable purposes, and is owned or held in trust by a nonprofit entity. Pursuant to that authority, existing law provides for a welfare exemption under which property used exclusively for an exempt purpose and owned and operated by specified entities, including foundations, limited liability companies, or corporations meeting certain statutory requirements, is exempt from taxation. Chapter 2 of the Statutes of 2026 (AB 1485) provides that, for purposes of the exemption for property used exclusively for the preservation of specified natural resources or open-space lands, for the property tax lien dates for the 202627 fiscal year to the 203132 fiscal year, inclusive, property may be owned and operated by a federally recognized Indian tribe or a wholly owned subsidiary of a federally recognized Indian tribe meeting certain requirements.

This bill would expand the above-described authorization, for purposes of the exemption for property used exclusively for the preservation of specified natural resources or open-space lands, to include property owned and operated by a nonprofit corporation chartered pursuant to tribal law.

(2)Existing law authorizes counties and cities and counties to impose a documentary transfer tax at a specified rate upon deeds, instruments, or other writings by which specified property is transferred. AB 1485 exempts from that tax, until January 1, 2031, the transfer of any deed, instrument, or other writing that makes effective a tribal land return transaction. AB 1485 defines a tribal land return transaction to mean a land return acquisition that transfers ownership of land to a federally recognized tribe or a wholly owned subsidiary of a federally recognized Indian tribe in fee simple and that includes specified restrictive covenants.

This bill would, for these purposes, expand the definition of tribal land return transaction to include a land return acquisition that transfers ownership of land to a nonprofit corporation chartered under tribal law.

(3)Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.

This bill would include additional information required for any bill authorizing a new tax expenditure.

(4)The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

(5)This bill would take effect immediately as a tax levy.

Existing property tax law defines state-assessed property as all property required to be assessed by the State Board of Equalization under a specified provision of the California Constitution and that is subject to local taxation.

This bill would make nonsubstantive changes to that definition.

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 2167

Author:(Macedo)

As Amended Ver:June 11, 2026

Majority vote. Tax Levy

SUMMARY

Expands the type of entities eligible for the welfare exemption for tribal conservation activities and the exemption from the Documentary Transfer Tax Act (DTTA) for tribal land return transactions to include certain nonprofit corporations.

Senate Amendments

1. Clarify that a qualifying nonprofit corporation be chartered by a federal recognized Indian tribe pursuant to tribal law or Section 17 of the federal Indian Reorganization Act.
2. Provide that a "wholly owned tribal entity" be eligible, and define that term as an entity wholly owned by one or more Indian tribal governments as that term is defined in federal law, that is organized or incorporated under the laws of the tribe or tribes that own the entity, or organized or incorporated under the laws of one or more of the tribes that own the entity and authorized by all of the other owning tribes.

COMMENTS

1. Tribal exemptions: Last year, the Legislature passed AB 1485 (Macedo), Chapter 2, Statutes of 2026. AB 1485 authorized the existing tribal exemptions under the welfare exemption for conservation activities and the DTTA. When AB 1485 passed the Assembly, that bill only included as eligible entities those currently in existing law. AB 1485 was subsequently amended in the Senate to include, and then remove, corporations chartered pursuant to tribal law as eligible entities. The sponsors of this bill claim that the deletion was inadvertent.
2. Need for this bill: Committee staff questioned the sponsors of this bill regarding the deficiency in existing law. In response, the sponsors noted that they had not considered the existing construction, despite sponsoring said construction in AB 1485. Committee staff is unclear as to the extent to which other tribes would benefit from this bill. Committee staff notes, however, that qualifying non-profit corporations, funds, foundations, and limited liability companies are qualifying entities under the welfare exemption for conservation activities, generally.

According to the Author

The author has submitted the following statement in support of this bill:

California has taken an important step toward supporting tribal land return transactions and the preservation of natural resources and open-space lands under current law. AB 2167 is a narrow follow-up measure to ensure that framework works as intended.

Some tribes hold land through corporations chartered under tribal law. Those entities are legitimate arms of tribal self-governance, but current statutory language does not clearly state them in the relevant tax provisions. As a result, similarly situated tribal land return transactions may be treated differently based solely on how a tribe structures its ownership.

AB 2167 provides a simple fix by expressly including corporations chartered under tribal law in the applicable welfare exemption and documentary transfer tax provisions. This bill promotes parity, respects tribal governance structures, and preserves the intent of existing law.

Arguments in Support

The Wilton Rancheria, writing in support of this bill, states, in part:

California's property-tax and documentary-transfer-tax statutes should likewise reflect how tribal governments actually organize and govern land-restoration efforts. By expressly including tribally chartered corporations, AB 2167 would align state law with tribal governance realities, reduce unnecessary uncertainty, and preserve the purpose of prior legislation supporting land return, open-space preservation, and natural-resource conservation.

Arguments in Opposition

None on file

FISCAL COMMENTS

The Senate Appropriations Committee has estimated the following fiscal impact:

1. This bill would likely reduce local property tax revenues relative to current law. Although the [State] Board of Equalization (BOE) estimates no revenue impact, the actual fiscal effect is unknown because it is unclear how many nonprofit corporations chartered under tribal law currently own, or may in the future acquire, property that would become eligible for the exemption.

Reductions in local property tax revenues, in turn, can increase General Fund Proposition 98 spending by up to roughly 50 percent (the exact amount depends on the specific amount of the annual Proposition 98 guarantee, which in turns depends upon a variety of economic, demographic and budgetary factors).

1. [The] BOE would incur minor and absorbable costs as a result of the bill.
2. By imposing specified duties on local officials, this bill creates a state-mandated local program. To the extent the Commission on State Mandates determines that the provisions of this bill create a new program or impose a higher level of service on local agencies, local agencies could claim reimbursement of those costs. The magnitude is unknown, but likely minor.

VOTES:

ASM REVENUE AND TAXATION: 7-0-0

YES: Gipson, Sanchez, Carrillo, DeMaio, McKinnor, Quirk-Silva, Michelle Rodriguez

ASM APPROPRIATIONS: 15-0-0

YES: Wicks, Hoover, Aguiar-Curry, Calderon, Caloza, Dixon, Fong, Mark González, Krell, Pacheco, Pellerin, Sharp-Collins, Solache, Ta, Tangipa

ASSEMBLY FLOOR: 71-0-9

YES: Addis, Aguiar-Curry, Ahrens, Alanis, Alvarez, Ávila Farías, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Caloza, Carrillo, Castillo, Connolly, Davies, DeMaio, Dixon, Elhawary, Ellis, Flora, Fong, Gabriel, Gallagher, Gipson, Jeff Gonzalez, Mark González, Hadwick, Haney, Harabedian, Hart, Irwin, Jackson, Johnson, Kalra, Krell, Lowenthal, Macedo, McKinnor, Muratsuchi, Nguyen, Ortega, Pacheco, Papan, Patel, Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ransom, Michelle Rodriguez, Rogers, Blanca Rubio, Sanchez, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Ta, Tangipa, Valencia, Wallis, Ward, Wicks, Zbur, Rivas

ABS, ABST OR NV: Arambula, Chen, Garcia, Hoover, Lackey, Lee, Ramos, Celeste Rodriguez, Wilson

UPDATED

VERSION: June 11, 2026

CONSULTANT: Harrison Bowlby / REV. & TAX. / (916) 319-2098 FN: 0003727

 THIRD READING  

Bill No: AB 2167

Author: Macedo (R)

Amended: 6/11/26 in Senate

Vote: 21

SENATE REVENUE AND TAXATION COMMITTEE: 4-0, 6/24/26

AYES: McNerney, Ashby, Becker, Grayson

NO VOTE RECORDED: Alvarado-Gil

SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/13/26

AYES: Cervantes, Seyarto, Cabaldon, Dahle, Grayson, Richardson, Wahab

ASSEMBLY FLOOR: 71-0, 5/21/26 - See last page for vote

SUBJECT: Property tax: documentary transfer tax: exemptions: nonprofit corporations chartered under tribal or federal law

SOURCE: Mooretown Rancheria

DIGEST:

This bill clarifies that nonprofit tribal corporations and wholly owned tribal entities are eligible for the welfare exemption from property tax and exemption from Documentary Transfer Tax for tribal land return transactions.

ANALYSIS:

Existing law:

1. Vests Congress with the authority to engage in relations with Indian tribes, sovereign nations that existed long before the founding of the Republic (United States Constitution, Article One, Section Eight).
2. Provides that all property is taxable unless explicitly exempted by the Constitution or federal law (California Constitution, Article XIII, Section One.)
3. Limits the maximum amount of any ad valorem tax on real property at 1% of full cash value, plus any locally-authorized bonded indebtedness, and caps a property’s annual inflationary increase in taxable value to 2%. Provides that assessors reappraise property whenever it is purchased, newly constructed, or when ownership changes (California Constitution, Article XIIIA, as added by Proposition 13, 1978).
4. Sets, generally, a property’s value as its sales price when purchased or, when there is no sales price, at its fair market value when ownership changes.
5. Allows the Legislature to exempt property used exclusively for charitable purposes, so long as it is owned by non-profit corporations or other entities organized and operated for charitable purposes, such as universities, hospitals, and libraries, commonly known as the “welfare exemption” (California Constitution, Article XIII, Section Four).
6. Applies the welfare exemption to property used exclusively for the preservation of native plants and animals, biotic communities, geological or geographical formations of scientific or educational interest, or open-space lands used solely for recreation and for the enjoyment of scenic beauty. The land must be open to the public subject to reasonable restrictions, and the exemption cannot apply to property that is reserved for future development. In 2022, the Legislature extended the exemption until the 2027 lien date (SB 825, Committee on Governance & Finance, Chapter 433, Statutes of 2022).
7. Enacts the Documentary Transfer Tax Act, which allows counties to levy a tax upon the recording of documents that transfer interests in real property. All 58 counties impose a documentary transfer tax (DTT), which is levied at a rate of 55 cents per $500 (or 0.11%) of the value of the real property or interest being transferred.
8. Under the Act, permits a city within a county that has adopted a DTT to impose a DTT at one-half of the county rate, where the amount of tax paid to a city is a credit against the amount of the tax owed to a county. More than 450 cities levy a DTT pursuant to the Act, including some charter cities, which can apply the tax at rates that exceed the Act’s limits on the DTT.
9. Directs county recorders to administer documentary transfer taxes, and prohibits a recorder from recording a document subject to the DTT unless the tax is paid at the time of recording.
10. Exempts tribal land return transactions, as defined, from the documentary tax, and enacts a property tax exemption parallel to the current exemption for open space lands for properties owned and operated by a federally recognized Indian tribe, or its wholly owned subsidiary (AB 1485, Macedo, Chapter 2, Statutes of 2026).
11. Defines “tribal land return transactions” as a land return acquisition that transfers ownership of land to a federally recognized Indian tribe, or a wholly owned subsidiary of a federally recognized Indian tribe in fee simple, and that includes restrictive covenants that prohibit that tribe from engaging in commercial activities on the land, instead restricting its uses to cultural, educational, recreational, or conservation purposes.

This bill:

1. Adds the following entities as eligible property owners to apply AB 1485’s documentary transfer tax and property tax exemptions:
   1. Nonprofit corporations chartered by a federally recognized tribe pursuant to tribal law,
   2. Nonprofit corporations chartered under Section 17 of the Indian Reorganization Act, and
   3. Wholly owned tribal entities.
2. Defines “wholly owned tribal entity,” as an entity wholly owned by one or more Indian tribal governments, as that term is defined in Section 7701(a)(40) Title 26 of the United States Code, that is organized or incorporated under the law of the tribe or tribes that own the entity and authorized by all of the other owning tribes.
3. Deletes references to “subsidiary.”
4. Makes a conforming change to AB 1485’s legislative findings and declarations to comply with Section 41 of the Revenue & Taxation Code.

Background

Tribal corporations. The Indian Reorganization Act of 1934 has long provided a framework for tribes to create corporations that facilitate economic development while safeguarding their sovereignty and assets. Tribal nations often create separate corporations or subsidiaries for specific purposes, including owning land not held in trust by the federal government. Tribes state that forming corporations under their own law is an exercise of their inherent sovereign authority to generate governmental revenue, self-govern the use of that revenue according to their own laws, and self-determine the use of that revenue for their citizenry. Tribes add that incorporating corporations under Tribal law enables Tribes to create entities that meet their emerging revenue opportunities, establish guidelines for the operation of these entities that are culturally appropriate and protect Tribal assets, and dissolve them when they are no longer needed.

Last December, the Internal Revenue Service issued new regulations that included a new rule providing that entities wholly owned by Tribes and organized, incorporated, or authorized under the laws of the Tribes that own them generally are not recognized as separate entities for federal tax purposes. The regulations also apply to entities wholly owned by one or more Indian Tribal governments, and to entities other than corporations, such as Limited Liability Companies.

AB 1485 allowed wholly-owned subsidiaries of tribes to qualify for the measure’s welfare exemption from property tax as well as its DTT exemption. However, tribes can differ in the types of entities they create, and the term “wholly owned subsidiary” may be interpreted differently from tribe to tribe. Additionally, it’s unclear whether a non-profit land trust created by several tribes would qualify as a “wholly owned subsidiary” of a tribe.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

According to the Senate Appropriations Committee:

• This bill would likely reduce local property tax revenues relative to current law. Although the Board of Equalization (BOE) estimates no revenue impact, the actual fiscal effect is unknown because it is unclear how many nonprofit corporations chartered under tribal law currently own, or may in the future acquire, property that would become eligible for the exemption.
• Reductions in local property tax revenues, in turn, can increase General Fund Proposition 98 spending by up to roughly 50 percent (the exact amount depends on the specific amount of the annual Proposition 98 guarantee, which in turns depends upon a variety of economic, demographic and budgetary factors).
• BOE would incur minor and absorbable costs as a result of the bill.
• By imposing specified duties on local officials, this bill creates a state-mandated local program. To the extent the Commission on State Mandates determines that the provisions of this bill create a new program or impose a higher level of service on local agencies, local agencies could claim reimbursement of those costs. The magnitude is unknown, but likely minor.

SUPPORT: (Verified 8/13/26)

Mooretown Rancheria (source)
California Baptist Capitol Ministry
California Nations Indian Gaming Association
Elk Valley Rancheria
Habematolel Pomo of Upper Lake
Rincon Band of Luiseño Indians
Santa Ynez Band of Chumash Indians
Soboba Band of Luiseño Indians
Tolowa Dee-ni’ Nation
Wilton Rancheria
Yurok Tribe

OPPOSITION: (Verified 8/13/26)

None received

ARGUMENTS IN SUPPORT: According to the author, “California has taken an important step toward supporting tribal land return transactions and the preservation of natural resources and open-space lands under current law. AB 2167 is a narrow follow-up measure to ensure that framework works as intended. Some tribes hold land through corporations chartered under tribal law. Those entities are legitimate arms of tribal self-governance, but current statutory language does not clearly state them in the relevant tax provisions. As a result, similarly situated tribal land return transactions may be treated differently based solely on how a tribe structures its ownership. AB 2167 provides a simple fix by expressly including corporations chartered under tribal law in the applicable welfare exemption and documentary transfer tax provisions. This bill promotes parity, respects tribal governance structures, and preserves the intent of existing law.”

ASSEMBLY FLOOR: 71-0, 5/21/26

AYES: Addis, Aguiar-Curry, Ahrens, Alanis, Alvarez, Ávila Farías, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Caloza, Carrillo, Castillo, Connolly, Davies, DeMaio, Dixon, Elhawary, Ellis, Flora, Fong, Gabriel, Gallagher, Gipson, Jeff Gonzalez, Mark González, Hadwick, Haney, Harabedian, Hart, Irwin, Jackson, Johnson, Kalra, Krell, Lowenthal, Macedo, McKinnor, Muratsuchi, Nguyen, Ortega, Pacheco, Papan, Patel, Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ransom, Michelle Rodriguez, Rogers, Blanca Rubio, Sanchez, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Ta, Tangipa, Valencia, Wallis, Ward, Wicks, Zbur, Rivas

NO VOTE RECORDED: Arambula, Chen, Garcia, Hoover, Lackey, Lee, Ramos, Celeste Rodriguez, Wilson

Prepared by: Colin Grinnell / REV. & TAX. / (916) 651-4117

8/14/26 16:20:10

**** END ****

SENATE COMMITTEE ON

Senator Sabrina Cervantes, Chair

2025 - 2026 Regular Session

AB 2167 (Macedo) - Property tax: documentary transfer tax: exemptions: nonprofit corporations chartered under tribal or federal law

Bill Summary:

AB 2167 would clarify that nonprofit tribal corporations and wholly owned tribal entities are eligible for the welfare exemption from property tax and exemption from the Documentary Transfer Tax enacted by AB 1485 (Macedo, 2026).

Fiscal Impact:

• This bill would likely reduce local property tax revenues relative to current law. Although the Board of Equalization (BOE) estimates no revenue impact, the actual fiscal effect is unknown because it is unclear how many nonprofit corporations chartered under tribal law currently own, or may in the future acquire, property that would become eligible for the exemption.

Reductions in local property tax revenues, in turn, can increase General Fund Proposition 98 spending by up to roughly 50 percent (the exact amount depends on the specific amount of the annual Proposition 98 guarantee, which in turns depends upon a variety of economic, demographic and budgetary factors).

• BOE would incur minor and absorbable costs as a result of the bill.
• By imposing specified duties on local officials, this bill creates a state-mandated local program. To the extent the Commission on State Mandates determines that the provisions of this bill create a new program or impose a higher level of service on local agencies, local agencies could claim reimbursement of those costs. The magnitude is unknown, but likely minor.

Background:

Existing law authorizes the property tax welfare exemption for property used exclusively for specified preservation, conservation, scientific, educational, or open-space purposes that is open to the public and owned and operated by qualifying nonprofit organizations. Counties and cities also may impose a documentary transfer tax (DTT) on transfers of real property. Last year, AB 1485 (Macedo, 2025) established parallel property tax and DTT exemptions for qualifying tribal land return transactions involving federally recognized California tribes. The measure applies to land acquired for cultural, educational, recreational, or conservation purposes and extends eligibility to wholly owned tribal subsidiaries. According to the author, this bill would clarify and expand the types of tribal entities eligible for those exemptions by including nonprofit corporations chartered under tribal law, consistent with the diverse organizational structures used by tribes to own and manage land.

Proposed Law:

This bill, among other things, would add the following entities into AB 1485: (1) nonprofit corporations chartered by a federally recognized tribe pursuant to tribal law, (2) nonprofit corporations chartered under Section 17 of the Indian Reorganization Act, and (3) wholly owned tribal entities, as defined.

Related Legislation:

AB 1668 (Pellerin) would extend the welfare exemption for open space lands owned by non-profit charitable organizations for five years. The measure is currently pending in this Committee.

Staff Comments:

Existing law authorizes the property tax welfare exemption for property used exclusively for specified preservation or open-space purposes that is open to the general public and owned and operated by a scientific or charitable fund with a primary interest to preserve such natural areas. AB 1485 allowed similar property owned by a Native American tribe to qualify for the welfare exemption until the property tax lien date for 2031-32. This bill additionally would apply the exemption to a property owned by a non-profit corporation chartered pursuant to tribal law.

-- END --

SENATE COMMITTEE ON REVENUE AND TAXATION

Senator Jerry McNerney, Chair

2025 - 2026 Regular

Property tax: documentary transfer tax: exemptions: nonprofit corporations chartered under tribal or federal law

Clarifies that nonprofit tribal corporations and wholly owned tribal entities are eligible for the welfare exemption from property tax and exemption from Documentary Transfer Tax enacted by AB 1485 (Macedo, 2026).

Background

Property Taxation. Section One of Article XIII of the California Constitution provides that all property is taxable unless explicitly exempted by the Constitution or federal law. The Constitution limits the maximum amount of any ad valorem tax on real property at 1% of full cash value, plus any locally-authorized bonded indebtedness, and caps a property’s annual inflationary increase in taxable value to 2%. Assessors reappraise property whenever it is purchased, newly constructed, or when ownership changes. The Constitution and statute define those terms.

Section Four of Article XIII allows the Legislature to exempt property used exclusively for charitable purposes, so long as it is owned by non-profit corporations or other entities organized and operated for charitable purposes, such as universities, hospitals, and libraries. Commonly known as the “welfare exemption,” it has a similar policy rationale to tax-exempt status for charitable groups: revenues paid in tax to the government divert needed resources away from the organizations’ good works.

Current law also exempts property that is used exclusively for the preservation of native plants and animals, biotic communities, geological or geographical formations of scientific or educational interest, or open-space lands used solely for recreation and for the enjoyment of scenic beauty. The land must be open to the public subject to reasonable restrictions, and the exemption cannot apply to property that is reserved for future development. In 2022, the Legislature extended the exemption until the 2027 lien date (SB 825, Committee on Governance & Finance).

Documentary Transfer Taxes. The Documentary Transfer Tax Act allows counties to levy a tax upon the recording of documents that transfer interests in real property. All 58 counties impose a documentary transfer tax (DTT), which is levied at a rate of 55 cents per $500 (or 0.11%) of the value of the real property or interest being transferred. The Act allows a city within a county that has adopted a DTT to impose a DTT at one-half of the county rate. The amount of tax paid to a city is a credit against the amount of the tax owed to a county. More than 450 cities levy a DTT pursuant to the Act. Under the “municipal affairs” doctrine established by Article XI, Section 5 of the California Constitution, some charter cities tax the transfer of ownership of real estate at rates that exceed the statutory limit on the DTT. County recorders administer documentary transfer taxes. State law prohibits a recorder from recording a document subject to the DTT unless the tax is paid at the time of recording.

Tribal Land Return Transactions. The United States Constitution vests Congress with the authority to engage in relations with Indian tribes, sovereign nations that existed long before the founding of the Republic. This sovereignty was first affirmed in 1832 by the United States Supreme Court in Worcester v. Georgia, 31 U.S. 515, which stated that “the Indian nations had always been considered as distinct, independent political communities retaining their original natural rights as undisputed possessors of the soil, from time immemorial.” As a result, state laws generally do not apply to Native Americans on their respective lands, except where expressly allowed by federal law.

California is home to 110 federally recognized tribes and more than 60 aboriginal tribes that are not federally recognized. However, the State’s history with tribes is a tumultuous and violent one, filled with dispossessions of tribal lands, violations of human rights, and unlawful termination of federal recognition as tribal sovereigns. Further, the Homestead Act, the Dawes Act, and the Rancheria Act, among other actions by federal, state, and local governments, resulted in vast land takings from California tribes.

In recent years, California has enacted policies that encourage the return of tribal land to California Tribes and support co-management of ancestral lands by California Tribal Nations. In 2020, Governor Newsom signed Executive Order N-82-20, which directed certain agencies to partner with various entities, including California tribes, to combat the biodiversity and climate crises. Subsequently, the Legislature enacted SB 101 (Committee on Budget & Fiscal Review, 2023), which directed the California Natural Resources Agency (CNRA) to develop a Tribal Nature-Based Solutions program, and appropriated $41 million to state agencies to support the return of ancestral lands to tribal ownership and stewardship, as well as habitat restoration projects, coast and ocean protection, wildfire resiliency and cultural fire, among other purposes. As a result, the CNRA has announced nearly $108 million available to fund 33 projects and support the return of approximately 39,000 acres of land to California Native American tribes. Among them, the Program helped the Hoopa Valley Tribe fund the recent reacquisition of more than 10,000 acres, the tribe’s largest acquisition since its reservation was established in 1864.

When a tribe conveys land to the United States Government to be held in trust, it is exempt from property tax as federally-owned property. However, this process can often take several years to obtain federal government approval. When a tribe purchases land in fee, the only other property tax exemption available specifically to tribes is the tribal low-income housing tax exemption that applies to rental housing owned and operated by a federally recognized Indian tribe, or its tribally designated housing entity. As a result, most property purchased by tribes becomes taxable in the same way as property owned by anyone else.

In March 2024, the Berkeley City Council unanimously approved an ordinance that authorized purchasing the West Berkeley Shellmound and Village Site with funds raised by Sogorea Te’ Land Trust. The land is among the most culturally significant sites for the Lisjan people, so the land return acquisition was imperative to the Tribe’s ability to protect its culture. However, the purchase price was more than $25 million, which results in $250,000 in annual property tax payments at the 1% rate, unless an exemption applies. The tribal land trust also paid documentary transfer taxes.

AB 1485. Earlier this year, the Legislature enacted AB 1485 (Macedo), which exempted tribal land return transactions, as defined, from the documentary tax, and enacts a property tax exemption parallel to the current exemption for open space lands for properties owned and operated by a federally recognized Indian tribe, or its wholly owned subsidiary. The bill exempted “tribal land return transactions” from the documentary tax, defined as a land return acquisition that transfers ownership of land to a federally recognized Indian tribe, or a wholly owned subsidiary of a federally recognized Indian tribe in fee simple, and that includes restrictive covenants that prohibit that tribe from engaging in commercial activities on the land, instead restricting its uses to cultural, educational, recreational, or conservation purposes.

Tribal corporations. The Indian Reorganization Act of 1934 has long provided a framework for tribes to create corporations that facilitate economic development while safeguarding their sovereignty and assets. Tribal nations often create separate corporations or subsidiaries for specific purposes, including owning land not held in trust by the federal government. Tribes state that forming corporations under their own law is an exercise of their inherent sovereign authority to generate governmental revenue, self-govern the use of that revenue according to their own laws, and self-determine the use of that revenue for their citizenry. Tribes add that incorporating corporations under Tribal law enables Tribes to create entities that meet their emerging revenue opportunities, establish guidelines for the operation of these entities that are culturally appropriate and protect Tribal assets, and dissolve them when they are no longer needed.

Last December, the Internal Revenue Service issued new regulations that included a new rule providing that entities wholly owned by Tribes and organized, incorporated, or authorized under the laws of the Tribes that own them generally are not recognized as separate entities for federal tax purposes.^[1] The regulations also apply to entities wholly owned by one or more Indian Tribal governments, and to entities other than corporations, such as Limited Liability Companies.

AB 1485 allowed wholly-owned subsidiaries of tribes to qualify for the measure’s welfare exemption from property tax as well as its DTT exemption. However, tribes can differ in the types of entities they create, and the term “wholly owned subsidiary” may be interpreted differently from tribe to tribe. Additionally, it’s unclear whether a non-profit land trust created by several tribes would qualify as a “wholly owned subsidiary” of a tribe. The Mooretown Rancheria wants to amend AB 1485 to expand the types of tribal entities that can qualify for its exemptions.

Proposed Law

Assembly Bill 2167 adds the following entities into AB 1485:

• Nonprofit corporations chartered by a federally recognized tribe pursuant to tribal law,
• Nonprofit corporations chartered under Section 17 of the Indian Reorganization Act, and
• Wholly owned tribal entities.

The measure defines “wholly owned tribal entity,” an entity wholly owned by one or more Indian tribal governments, as that term is defined in Section 7701(a)(40) Title 26 of the United States Code, that is organized or incorporated under the law of the tribe or tribes that own the entity and authorized by all of the other owning tribes. The bill also deletes references to “subsidiary,” and makes a conforming change to AB 1485’s legislative findings and declarations to comply with Section 41 of the Revenue & Taxation Code.

State Revenue Impact

No estimate.

Comments

1. Purpose of the bill. “California has taken an important step toward supporting tribal land return transactions and the preservation of natural resources and open-space lands under current law. AB 2167 is a narrow follow-up measure to ensure that framework works as intended. Some tribes hold land through corporations chartered under tribal law. Those entities are legitimate arms of tribal self-governance, but current statutory language does not clearly state them in the relevant tax provisions. As a result, similarly situated tribal land return transactions may be treated differently based solely on how a tribe structures its ownership. AB 2167 provides a simple fix by expressly including corporations chartered under tribal law in the applicable welfare exemption and documentary transfer tax provisions. This bill promotes parity, respects tribal governance structures, and preserves the intent of existing law.”

2. Constitutional requirements still apply. To qualify for a welfare exemption from property tax, a property’s owner must be either religious, hospital, scientific, or charitable. While the Constitution references property owned by “corporations,” it also includes “other entities,” which can include tribes and tribal corporations so long as it meets the Constitutional requirement. While tribes are legally organized in a myriad of ways in California, a tribe or the corporations it creates (or creates with other tribes) must meet the same constitutional requirements as any other corporation or organization seeking a welfare exemption, at least as long as the property is not conveyed to the United States Government to be held in trust. To qualify for a property tax exemption, tribes and subsidiaries must follow the same steps as any other organization, specifically to obtain Organizational Clearance Certificates from BOE and have a claim approved by the assessor. Additionally, the exemption applies almost all of the same statutory requirements that currently apply to owners of open space property when seeking a welfare exemption.

3. Recent history. While pending on the Senate Floor, the author amended AB 1485 on August 29^th to add “a corporation chartered pursuant to tribal law,” as a property owner potentially eligible for the bill’s DTT and property tax exemptions, among other changes. The author then amended the measure on September 5^th to delete that addition, among other changes. The Senate approved the bill unanimously on September 11, 2025, but the Assembly did not concur in Senate Amendments until January 29, 2026, after the IRS had published its new rule regarding tribal entities.

4. Related legislation. At its June 10^th, 2026, hearing the Committee approved AB 1668 (Pellerin), which extends the welfare exemption for open space lands owned by non-profit charitable organizations for five years. The measure is currently pending in the Senate Appropriations Committee.

Assembly Actions

Assembly Revenue & Taxation Committee: 7-0
Assembly Appropriations Committee: 15-0
Assembly Floor: 71-0

Support and Opposition

(6/18/26)

Support: Mooretown Rancheria (Sponsor)

California Baptist Capitol Ministry
California Nations Indian Gaming Association
Habematolel Pomo of Upper Lake
Rincon Band of Luiseño Indians
Santa Ynez Band of Chumash Indians
Soboba Band of Luiseño Indians
Yurok Tribe

Opposition: None received.

-- END --

1. Entities Wholly Owned by Tribal Governments, 12/16/25, 26 CFR Parts 1 and 301: https://www.federalregister.gov/documents/2025/12/16/2025-22874/entities-wholly-owned-by-indian-tribal-governments ↑

ASSEMBLY THIRD READING

ATR Bill Id:AB 2167

Author:(Macedo)

As Amended Ver:April 29, 2026

Majority vote

SUMMARY

Adds a non-profit corporation chartered pursuant to tribal law to the existing list of entities eligible for the welfare exemption for tribal conservation activities, and the exemption from the Documentary Transfer Tax Act (DTTA) for tribal land return transactions.

Major Provisions

1. Adds a non-profit corporation chartered pursuant to tribal law to the existing tribal land conservation property tax exemption, and to the tribal land return transaction exemption under the DTTA.
2. Provides that, for the purposes of complying with Revenue and Taxation Code Section 41, the goals, purposes, and objectives of this bill′s tax exemptions are to:
   1. Eliminate financial barriers that inhibit federally recognized tribes from reclaiming and preserving ancestral land and tribal traditional knowledge;
   2. Ensure equitable access to existing tax exemptions for land conservation;
   3. Facilitate the return of land to tribal stewardship for cultural, environmental, educational, and recreational purposes; and,
   4. Promote tribal self-determination and long-term environmental preservation by enabling tribes to hold and maintain land in its natural state without accruing additional transactional tax burdens.
3. Requires the State Board of Equalization (BOE) to report, by March 1, 2028, and every March 1 thereafter, the following information that the Legislature may use as performance indicators to determine whether this bill meets its stated goals, purposes, and objectives:
   1. The total number and total assessed value of tribal land return transactions that qualify for this bill′s exemption from the DTTA;
   2. The total dollar amount of taxes exempted under the DTTA pursuant to this bill;
   3. The total acreage of land reclaimed by federally recognized Indian tribes granted the tribal conservation property tax exemption; and,
   4. The rate of year-over-year growth in the number of qualifying land transfers and acreage.
4. Takes immediate effect as a tax levy.

COMMENTS

Tribal exemptions: Last year, the Legislature passed AB 1485 (Macedo), Chapter 2, Statutes of 2026. AB 1485 authorized the existing tribal exemptions under the welfare exemption for conservation activities and the DTTA. When AB 1485 passed the Assembly, that bill only included as eligible entities those currently in existing law. AB 1485 was subsequently amended in the Senate to include, and then remove, corporations chartered pursuant to tribal law as eligible entities. The sponsors of this bill claim that the deletion was inadvertent.

Need for this bill: Committee staff questioned the sponsors of this bill regarding the deficiency in existing law. In response, the sponsors noted that they had not considered the existing construction, despite sponsoring said construction in AB 1485. Committee staff is unclear as to the extent to which other tribes would benefit from this bill. Committee staff notes, however, that qualifying non-profit corporations, funds, foundations, and limited liability companies are qualifying entities under the welfare exemption for conservation activities, generally.

According to the Author

California has taken an important step toward supporting tribal land return transactions and the preservation of natural resources and open-space lands under current law. AB 2167 is a narrow follow-up measure to ensure that framework works as intended.

Some tribes hold land through corporations chartered under tribal law. Those entities are legitimate arms of tribal self-governance, but current statutory language does not clearly state them in the relevant tax provisions. As a result, similarly situated tribal land return transactions may be treated differently based solely on how a tribe structures its ownership.

AB 2167 provides a simple fix by expressly including corporations chartered under tribal law in the applicable welfare exemption and documentary transfer tax provisions. This bill promotes parity, respects tribal governance structures, and preserves the intent of existing law.

Arguments in Support

None on file

Arguments in Opposition

None on file

FISCAL COMMENTS

The Assembly Committee on Appropriations, in its analysis of this bill, estimates the following fiscal impact:

1. Property tax revenue loss of an unknown amount, potentially in excess of $300,000. Although the BOE estimates no revenue impact, it is unknown how many non-profit corporations chartered pursuant to tribal law currently or will own and operate such properties that would become exempt from property tax. Although property tax is a local government revenue source, reductions in property tax revenues increase Proposition 98 General Fund (GF) spending by up to roughly 50% (the exact amount depends on the operative test of the annual Proposition 98 guarantee).
2. Minor and absorbable costs to the BOE to update related guidance and data collection.
3. Likely minor and absorbable costs to county assessors to update welfare exemption administration and county tax recorders to update DTT[A] administration. If the Commission on State Mandates determines the provisions of this bill create a new program or impose a higher level of service for which the state must reimburse local costs, counties could claim reimbursement from the state.

The Legislative Analyst′s Office recently warned of GF structural deficits of around $35 billion per year in the 2027-28 fiscal year and ongoing.

VOTES

ASM REVENUE AND TAXATION: 7-0-0

YES: Gipson, Sanchez, Carrillo, DeMaio, McKinnor, Quirk-Silva, Michelle Rodriguez

ASM APPROPRIATIONS: 15-0-0

YES: Wicks, Hoover, Aguiar-Curry, Calderon, Caloza, Dixon, Fong, Mark González, Krell, Pacheco, Pellerin, Sharp-Collins, Solache, Ta, Tangipa

UPDATED

VERSION: April 29, 2026

CONSULTANT: Harrison Bowlby / REV. & TAX. / (916) 319-2098 FN: 0002770

Date of Hearing: May 13, 2026

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 2167

Author:(Macedo) – As Amended Ver:April 29, 2026

Urgency: No State Mandated Local Program: Yes Reimbursable: Yes

SUMMARY:

This bill adds a non-profit corporation chartered pursuant to tribal law to the list of entities eligible for certain property-related tax exemptions.

Those exemptions are the welfare exemption for property used exclusively for the preservation of certain natural resources or open-space lands and an exemption from the documentary transfer tax (DTT) for a tribal land return transaction.

This bill also declares the goals and related performance indicators for the expanded exemptions and specifies the application of related data collection requirements by the State Board of Equalization (BOE) pursuant to AB 1485 (Macedo), Chapter 2, Statutes of 2026.

FISCAL EFFECT:

1. Property tax revenue loss of an unknown amount, potentially in excess of $300,000. Although the BOE estimates no revenue impact, it is unknown how many non-profit corporations chartered pursuant to tribal law currently or will own and operate such properties that would become exempt from property tax. Although property tax is a local government revenue source, reductions in property tax revenues increase Proposition 98 General Fund (GF) spending by up to roughly 50% (the exact amount depends on the operative test of the annual Proposition 98 guarantee).
2. Minor and absorbable costs to the BOE to update related guidance and data collection.
3. Likely minor and absorbable costs to county assessors to update welfare exemption administration and county tax recorders to update DTT administration. If the Commission on State Mandates determines the provisions of this bill create a new program or impose a higher level of service for which the state must reimburse local costs, counties could claim reimbursement from the state.

The Legislative Analyst’s Office recently warned of GF structural deficits of around $35 billion per year in the 2027-28 fiscal year and ongoing.

COMMENTS:

1. Purpose. According to the author:

Some tribes hold land through corporations charted under tribal law. Those entities are legitimate arms of tribal self-governance, but current statutory language does not clearly state them in the relevant tax provisions. As a result, similarly situated tribal land return transactions may be treated differently based solely on how a tribe structures its ownership.

AB 2167 provides a simple fix by expressly including corporations chartered under tribal law in the applicable welfare exemption and [DTT] provisions. This bill promotes parity, respects tribal governance structures, and preserves the intent of existing law.

This bill is supported by individual tribes and the California Nations Indian Gaming Association.

1. Background. Return of Native American Ancestral Lands. On September 25, 2020, Governor Newsom issued a Statement of Administration Policy that stated:

[I]t is the policy of this administration to encourage every State agency, department, board and commission subject to my executive control to seek opportunities to support California tribes’ co-management of and access to natural lands that are within a California tribe’s ancestral land and under the ownership or control of the State of California, and to work cooperatively with California tribes that are interested in acquiring natural lands in excess of State needs.

On April 26, 2024, Governor Newsom announced the state awarded more than $100 million in funding appropriated as part of the fiscal years 2022-23 and 2023-24 state budgets for 33 tribal land projects, including ancestral land return.

Welfare Exemption and DTT. Existing law authorizes the property tax welfare exemption for property used exclusively for specified preservation or open-space purposes that is open to the general public and owned and operated by a scientific or charitable fund with a primary interest to preserve such natural areas. AB 1485 allowed similar property owned by a Native American tribe to qualify for the welfare exemption until the property tax lien date for the 2031-32 fiscal year. This bill additionally applies the exemption to a property owned by a non-profit corporation chartered pursuant to tribal law.

Existing law authorizes a county board of supervisors to enact an ordinance to impose a tax on each document that transfers real property within the county. The DTT is a local government revenue source. Existing law also provides for a number of DTT exemptions, such as for documents to secure debt, transfer assets in bankruptcy, and transfer community property. AB 1485 exempts a tribal land return transaction to a Native American tribe from DTT until January 1, 2031. This bill additionally applies the exemption to a transaction to a non-profit corporation chartered pursuant to tribal law.

Analysis Prepared by: Irene Ho / APPR. / (916) 319-2081

Date of Hearing: April 27, 2026

ASSEMBLY COMMITTEE ON REVENUE AND TAXATION

Mike Gipson, Chair

ABPCA Bill Id:AB 2167 (

Author:Macedo) – As Amended Ver:March 2, 2026

SUSPENSE

Majority vote. Tax levy. Fiscal Committee.

SUBJECT: Property tax: documentary transfer tax: exemptions: corporations chartered under tribal law

SUMMARY: Adds a corporation chartered pursuant to tribal law to the list of entities eligible for the welfare exemption for tribal conservation activities, and the exemption from the Documentary Transfer Tax Act (DTTA) for tribal land return transactions. Specifically, this bill:

1. Adds a corporation chartered pursuant to tribal law to the existing tribal land conservation property tax exemption, and to the tribal land return transaction exemption under the DTTA.
2. Provides that, for the purposes of complying with Revenue and Taxation Code (R&TC) Section 41, the goals, purposes, and objectives of this bill's tax exemptions are to:
   1. Eliminate financial barriers that inhibit federally recognized tribes from reclaiming and preserving ancestral land and tribal traditional knowledge;
   2. Ensure equitable access to existing tax exemptions for land conservation;
   3. Facilitate the return of land to tribal stewardship for cultural, environmental, educational, and recreational purposes; and,
   4. Promote tribal self-determination and long-term environmental preservation by enabling tribes to hold and maintain land in its natural state without accruing additional transactional tax burdens.
3. Requires the State Board of Equalization (BOE) to report, by March 1, 2028, and every March 1 thereafter, the following information that the Legislature may use as performance indicators to determine whether this bill meets its stated goals, purposes, and objectives:
   1. The total number and total assessed value of tribal land return transactions that qualify for this bill's exemption from the DTTA;
   2. The total dollar amount of taxes exempted under the DTTA pursuant to this bill;
   3. The total acreage of land reclaimed by federally recognized Indian tribes granted the tribal conservation property tax exemption; and,
   4. The rate of year-over-year growth in the number of qualifying land transfers and acreage.
4. Takes immediate effect as a tax levy.

EXISTING FEDERAL LAW provides that land taken in trust for a Native American tribe or individual Native American shall be exempt from State and local taxation. (United States Code, Title 25, Section 5108.)

EXISTING STATE LAW:

1. Provides that all property is taxable unless otherwise provided by the California Constitution or the laws of the United States. (California Constitution, Article XIII, Section 1.)
2. Authorizes the Legislature to partially or fully exempt property used for certain purposes, including charitable purposes, owned by a nonprofit organization organized and operated for those certain purposes if no part of the organization's earnings inure to the benefit of any private shareholder or individual. (California Constitution, Article XIII, Section 4.) Properties with buildings under construction, land required for convenient use of the buildings, and equipment in the buildings qualify for the exemption. (California Constitution, Article XIII, Section 5.) Existing statute implements this authorization by requiring that eligible property is irrevocably dedicated, and used, for the exempt purpose, and that the property is used in an amount reasonably necessary to accomplish the exempt purpose. This exemption is commonly referred to as the "welfare exemption." (R&TC Section 214(a).)
3. Provides that property is eligible for the welfare exemption if that property:
   1. Is used exclusively for the preservation of native plants or animals, biotic communities, geological or geographical formations of scientific or educational interest, or open-space lands used solely for recreation and the enjoyment of scenic beauty;
   2. Is open to the general public, as restricted, and is owned and operated by a scientific or charitable fund, foundation, limited liability company, or corporation, the primary interest of which is to preserve those natural areas; and,
   3. Complies with existing law governing the welfare exemption. (R&TC Section 214.02)
4. Authorizes, under the welfare exemption for conservation activities, an exemption for a federally recognized Indian tribe, or its wholly owned subsidiary, if the property is reserved for the same purposes as listed above, and if the property is subject to a qualified conservation management plan, as defined. (R&TC Section 214.03.)
5. Authorizes, under the DTTA, the board of supervisors of any county or city and county to enact an ordinance imposing a $0.55 tax for each $500 of value of a property that is transferred through a deed, instrument, or other writing transferring real property within the county. Cities may also impose a tax under the DTTA at $0.275 for each $500 of value. The total value of the property transferred must exceed $100 to be subject to the tax. (R&TC Section 11911.)
6. Prohibits the imposition of the DTTA on a tribal land return transaction, as defined. (R&TC Section 11930.5)

FISCAL EFFECT: Unknown, but potentially in excess of this Committee's Suspense File threshold.

COMMENTS:

1. The author has provided the following statement in support of this bill:

California has taken an important step toward supporting tribal land return transactions and the preservation of natural resources and open-space lands under current law. AB 2167 is a narrow follow-up measure to ensure that framework works as intended.

Some tribes hold land through corporations chartered under tribal law. Those entities are legitimate arms of tribal self-governance, but current statutory language does not clearly state them in the relevant tax provisions. As a result, similarly situated tribal land return transactions may be treated differently based solely on how a tribe structures its ownership.

AB 2167 provides a simple fix by expressly including corporations chartered under tribal law in the applicable welfare exemption and documentary transfer tax provisions. This bill promotes parity, respects tribal governance structures, and preserves the intent of existing law.

1. The Habematolel Pomo of Upper Lake, writing in support of this bill, state, in part:

Previous legislation, AB 1485, took an important step toward supporting tribal land return efforts by extending specified welfare exemption and documentary transfer tax treatment to qualifying land held by federally recognized tribes and wholly owned tribal subsidiaries. But tribes do not always structure land ownership through these specific entities. In many cases, land is acquired or managed through a corporation chartered under tribal law.

1. Committee Staff Comments:
   1. Tribal exemptions: Last year, the Legislature passed AB 1485 (Macedo), Chapter 2, Statutes of 2026. AB 1485 authorized the existing tribal exemptions under the welfare exemption for conservation activities and the DTTA. When AB 1485 passed the Assembly, that bill only included as eligible entities those currently in existing law. AB 1485 was subsequently amended in the Senate to include, and then remove, corporations chartered pursuant to tribal law as eligible entities. The sponsors of this bill claim that the deletion was inadvertent.
   2. Need for this bill: Committee staff questioned the sponsors of this bill on the deficiency in existing law. In response, the sponsors noted that they had not considered the existing construction. Committee staff is unclear as to the extent to which other tribes would benefit from this bill. Committee staff notes, however, that qualifying non-profit corporations, funds, foundations, and limited liability companies are qualifying entities under the welfare exemption for conservation activities, generally. The Committee may wish to consider whether it is appropriate to limit this bill's expansion to a nonprofit corporation.

REGISTERED SUPPORT / OPPOSITION:

Support

Habematolel Pomo of Upper Lake

Mooretown Rancheria

Opposition

None on file

Analysis Prepared by: Harrison Bowlby / REV. & TAX. / (916) 319-2098

Date of Hearing: April 13, 2026

ASSEMBLY COMMITTEE ON REVENUE AND TAXATION

Mike Gipson, Chair

ABPCA Bill Id:AB 2167 (

Author:Macedo) – As Amended Ver:March 2, 2026

Majority vote. Tax levy. Fiscal Committee.

SUBJECT: Property tax: documentary transfer tax: exemptions: corporations chartered under tribal law

SUMMARY: Adds a corporation chartered pursuant to tribal law to the list of entities eligible for the welfare exemption for tribal conservation activities, and the exemption from the Documentary Transfer Tax Act (DTTA) for tribal land return transactions. Specifically, this bill:

1. Adds a corporation chartered pursuant to tribal law to the existing tribal land conservation property tax exemption, and to the tribal land return transaction exemption under the DTTA.
2. Provides that, for the purposes of complying with Revenue and Taxation Code (R&TC) Section 41, the goals, purposes, and objectives of this bill's tax exemptions are to:
   1. Eliminate financial barriers that inhibit federally recognized tribes from reclaiming and preserving ancestral land and tribal traditional knowledge;
   2. Ensure equitable access to existing tax exemptions for land conservation;
   3. Facilitate the return of land to tribal stewardship for cultural, environmental, educational, and recreational purposes; and,
   4. Promote tribal self-determination and long-term environmental preservation by enabling tribes to hold and maintain land in its natural state without accruing additional transactional tax burdens.
3. Requires the State Board of Equalization (BOE) to report, by March 1, 2028, and every March 1 thereafter, the following information that the Legislature may use as performance indicators to determine whether this bill meets its stated goals, purposes, and objectives:
   1. The total number and total assessed value of tribal land return transactions that qualify for this bill's exemption from the DTTA;
   2. The total dollar amount of taxes exempted under the DTTA pursuant to this bill;
   3. The total acreage of land reclaimed by federally recognized Indian tribes granted the tribal conservation property tax exemption; and,
   4. The rate of year-over-year growth in the number of qualifying land transfers and acreage.
4. Takes immediate effect as a tax levy.

EXISTING FEDERAL LAW provides that land taken in trust for a Native American tribe or individual Native American shall be exempt from State and local taxation. (United States Code, Title 25, Section 5108.)

EXISTING STATE LAW:

1. Provides that all property is taxable unless otherwise provided by the California Constitution or the laws of the United States. (California Constitution, Article XIII, Section 1.)
2. Authorizes the Legislature to partially or fully exempt property used for certain purposes, including charitable purposes, owned by a nonprofit organization organized and operated for those certain purposes if no part of the organization's earnings inure to the benefit of any private shareholder or individual. (California Constitution, Article XIII, Section 4.) Properties with buildings under construction, land required for convenient use of the buildings, and equipment in the buildings qualify for the exemption. (California Constitution, Article XIII, Section 5.) Existing statute implements this authorization by requiring that eligible property is irrevocably dedicated, and used, for the exempt purpose, and that the property is used in an amount reasonably necessary to accomplish the exempt purpose. This exemption is commonly referred to as the "welfare exemption." (R&TC Section 214(a).)
3. Provides that property is eligible for the welfare exemption if that property:
   1. Is used exclusively for the preservation of native plants or animals, biotic communities, geological or geographical formations of scientific or educational interest, or open-space lands used solely for recreation and the enjoyment of scenic beauty;
   2. Is open to the general public, as restricted, and is owned and operated by a scientific or charitable fund, foundation, limited liability company, or corporation, the primary interest of which is to preserve those natural areas; and,
   3. Complies with existing law governing the welfare exemption. (R&TC Section 214.02)
4. Authorizes, under the welfare exemption for conservation activities, an exemption for a federally recognized Indian tribe, or its wholly owned subsidiary, if the property is reserved for the same purposes as listed above, and if the property is subject to a qualified conservation management plan, as defined. (R&TC Section 214.03.)
5. Authorizes, under the DTTA, the board of supervisors of any county or city and county to enact an ordinance imposing a $0.55 tax for each $500 of value of a property that is transferred through a deed, instrument, or other writing transferring real property within the county. Cities may also impose a tax under the DTTA at $0.275 for each $500 of value. The total value of the property transferred must exceed $100 to be subject to the tax. (R&TC Section 11911.)
6. Prohibits the imposition of the DTTA on a tribal land return transaction, as defined. (R&TC Section 11930.5)

FISCAL EFFECT: Unknown, but potentially in excess of this Committee's Suspense File threshold.

COMMENTS:

1. The author has provided the following statement in support of this bill:

California has taken an important step toward supporting tribal land return transactions and the preservation of natural resources and open-space lands under current law. AB 2167 is a narrow follow-up measure to ensure that framework works as intended.

Some tribes hold land through corporations chartered under tribal law. Those entities are legitimate arms of tribal self-governance, but current statutory language does not clearly state them in the relevant tax provisions. As a result, similarly situated tribal land return transactions may be treated differently based solely on how a tribe structures its ownership.

AB 2167 provides a simple fix by expressly including corporations chartered under tribal law in the applicable welfare exemption and documentary transfer tax provisions. This bill promotes parity, respects tribal governance structures, and preserves the intent of existing law.

1. The Habematolel Pomo of Upper Lake, writing in support of this bill, state, in part:

Previous legislation, AB 1485, took an important step toward supporting tribal land return efforts by extending specified welfare exemption and documentary transfer tax treatment to qualifying land held by federally recognized tribes and wholly owned tribal subsidiaries. But tribes do not always structure land ownership through these specific entities. In many cases, land is acquired or managed through a corporation chartered under tribal law.

1. Committee Staff Comments:
   1. Tribal exemptions: Last year, the Legislature passed AB 1485 (Macedo), Chapter 2, Statutes of 2026. AB 1485 authorized the existing tribal exemptions under the welfare exemption for conservation activities and the DTTA. When AB 1485 passed the Assembly, that bill only included as eligible entities those currently in existing law. AB 1485 was subsequently amended in the Senate to include, and then remove, corporations chartered pursuant to tribal law as eligible entities. The sponsors of this bill claim that the deletion was inadvertent.
   2. Need for this bill: Committee staff questioned the sponsors of this bill on the deficiency in existing law. In response, the sponsors noted that they had not considered the existing construction. Committee staff is unclear as to the extent to which other tribes would benefit from this bill. Committee staff notes, however, that qualifying non-profit corporations, funds, foundations, and limited liability companies are qualifying entities under the welfare exemption for conservation activities, generally. The Committee may wish to consider whether it is appropriate to limit this bill's expansion to a nonprofit corporation.

REGISTERED SUPPORT / OPPOSITION:

Support

Habematolel Pomo of Upper Lake

Opposition

None on file

Analysis Prepared by: Harrison Bowlby / REV. & TAX. / (916) 319-2098