Should California businesses get a tax credit for cleaning up after homeless?

Kate Wolffe, The Sacramento Bee on Apr 22, 2025

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SACRAMENTO, Calif. — Sacramento Assemblywoman Stephanie Nguyen, D-Elk Grove, highlighted a new bill this week that would give a tax credit to business owners who say they have to spend money cleaning up after people who camp out on or near their properties.

One of those business owners is Little Saigon’s Tina Nguyen, who joined the assemblywoman Monday for the bill’s announcement at her popular Vietnamese lunch spot, Pho Xe Lua, along Stockton Boulevard in South Sacramento.

For the past few years, a group of homeless people regularly camped out down the street from Pho Xe Lua, and during that time, Tina Nguyen said she had to clean up ash, syringes, and fecal matter from her property. She said she spent thousands replacing a fence that was damaged when people tried to get into her trash bins.

“My staff can only clean up so much,” she said. “Then we have to hire third parties to come in and handle the biowaste and other things like that.”

Both Tina Nguyen and Assemblywoman Nguyen spoke to reporters Monday at a news conference in support of the new bill, AB 1435. A committee analysis of the bill flagged that the law in its current state could allow for many things to be reimbursed, including security guards, and that it may duplicate tax benefits for businesses.

Despite those concerns, the bill moved forward in the Legislature Monday. The assemblywoman said she will continue to work with committee staff to modify the bill.

The impact of the Grants Pass SCOTUS decision

The bill was sponsored by the California Business Properties Association. President and CEO Matthew Hargrove said Monday the issue of unhoused people camping on private property has gotten worse since the implementation of the Grants Pass U.S. Supreme Court decision, which forbids camping on public property.

“What we are seeing is anecdotal evidence of shifts as the state cleans up areas near freeway underpasses, the unhoused individuals in the encampments need to go somewhere,” Hargrove said.

That somewhere is onto empty lots or spaces on business corridors like Stockton Boulevard.

Sacramento Mayor Kevin McCarty, who also attended the press conference at Pho Xe Lua, said that the city has opened 600 new shelter beds for people to go to as it clears encampments in accordance with Grants Pass.

But the problem persists.

“The reality is, businesses like this get left to pick up the pieces,” he said. “We want to step up as a community, as a state, to provide resources to help small businesses thrive.”

The security question

Tina Nguyen, the owner of Pho Xe Lua, said one solution businesses are turning to to help customers feel safe is hiring private security.

“We were thinking about it,” she said, “It’s very costly, so we didn’t do that.”

However, the bill currently includes in its definition of “qualified cleanup expenditures” as “security measures necessitated by the cleanup, such as temporary fencing, security gates, or surveillance.”

The bill analysis, written by Senior Revenue and Taxation Committee Consultant Harrison Bowlby, flags that the language is broad, and the credit amount is unlimited.

“This bill is unclear, and the Committee may wish to consider the scope of activities that this bill seeks to subsidize,” Bowlby wrote.

State Sen. Nguyen said the bill is really supposed to be about addressing the destruction of property, and accumulated trash.

“I don’t know if security is going to be the big, huge part of it,” she said.

The bill is now in the suspense file. The Assembly Appropriations Committee will analyze whether the estimated tax reduction of about $10 million next fiscal year and over $23 million thereafter is something the state can stomach.

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