Bill > AB159

This bill amends California's tax code to refine and clarify the tax exemption for wildfire settlement payments by introducing a more specific definition of a "qualified wildfire disaster." Under the bill, a qualified wildfire disaster is now defined as a wildfire event for which either the Governor of California or the President of the United States has officially declared an emergency, using the criteria outlined in the Robert T. Stafford Disaster Relief and Emergency Assistance Act. The bill modifies existing tax law for both personal and corporate income taxes to specify that only settlements related to these officially declared wildfire disasters will be exempt from taxation. Additionally, the bill updates the definition of a "settlement entity" and expands the types of taxpayers who can qualify for the exemption, including property owners, residents, and business owners in areas affected by a qualified wildfire disaster. The bill also appropriates $10,000 from the General Fund to the Franchise Tax Board to help administer these wildfire disaster settlement exemptions. The tax exemption provisions will remain in effect until December 1, 2030, and the bill requires a two-thirds majority vote in the legislature for passage due to its potential impact on taxpayer obligations. The bill is part of the proposed Budget Act of 2025 and is intended to take effect immediately.

Budget and Finance

Budget (Assembly)

https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=202520260AB159