LA-Backed Bill Would Make Cold Storage Companies Set Aside Emergency Funds

LOS ANGELES, CA — A bill prompted by the massive Boyle Heights cold-storage fire would require operators of similar facilities to set aside money for emergencies and could shield future settlement payments to victims from state income taxes.

AB 817, introduced by Assemblymember Mark Gonzalez, advanced Tuesday after the state Senate Revenue and Taxation Committee voted to send it to the Appropriations Committee.

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The legislation follows the June 17 fire at the Lineage Logistics cold-storage warehouse in Boyle Heights, where roughly 85 million pounds of frozen food were stored. The fire burned for eight days, and residents later complained of foul odors, pests and health problems as food decomposed inside the facility.

Under the proposed law, cities and counties could not approve building permits for cold-storage facilities unless the owner, operator or lessee establishes a contingency fund that could be tapped during a declared emergency.

The money could be used to help affected communities with needs including temporary housing, food assistance, health care, air-quality monitoring and pest control.

The bill would also provide state income tax relief for qualified residents, property owners and businesses that receive settlements tied to the 2026 Boyle Heights fire. The exclusion would apply to qualifying payments received during tax years beginning in 2027 through 2031.

Mayor Karen Bass' office testified in support of the bill in Sacramento this week, arguing that communities should not be left scrambling when a major facility disaster affects surrounding neighborhoods.

"We cannot change what happened in Boyle Heights, but we can change what happens next," Bass said in a statement. "AB 817 holds cold storage companies accountable if something goes wrong and ensures communities are protected."

Bass has also called for legal action against Lineage and Chill Build, including efforts to recover city costs and pursue penalties related to the fire.

Supporters of the bill include the city of Los Angeles, Los Angeles Unified School District, California Community Foundation, East Yard Communities for Environmental Justice and several health and housing advocacy groups.

The measure has drawn opposition from a long list of agricultural, food-production and business organizations, including the Global Cold Chain Alliance, California Grocers Association and California Manufacturers & Technology Association.