20250AB__009799INT INTRODUCED 2025-01-07 REVISED 2025-05-06 2025 AB INT Introduced by Assembly Member Lackey (Coauthor: Assembly Member Hadwick) (Coauthors: Senators Dahle and Valladares) LEAD_AUTHOR ASSEMBLY Lackey COAUTHOR ASSEMBLY Hadwick COAUTHOR SENATE Dahle COAUTHOR SENATE Valladares

An act to add and repeal Sections 17139.1 and 24309.9 of the Revenue and Taxation Code, relating to taxation, and declaring the urgency thereof, to take effect immediately. taxation, and declaring the urgency thereof, to take effect immediately Personal Income Tax Law: Corporation Tax Law: Bobcat Fire: exclusions. The Personal Income Tax Law and the Corporation Tax Law, in conformity with federal income tax law, generally define “gross income” as income from whatever source derived, except as specifically excluded, and provides various exclusions from gross income.

This bill, for taxable years beginning on or after January 1, 2024, and before January 1, 2029, would provide an exclusion from gross income for any qualified taxpayer, as defined, for amounts received in settlement for costs and losses associated with the Bobcat Fire in the County of Los Angeles, as provided. Existing law requires a bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives 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. This bill would make findings and declarations related to a gift of public funds. This bill would declare that it is to take effect immediately as an urgency statute. TWO_THIRDS NO YES NO YES YES NO NO NO NO NO The people of the State of California do enact as follows:

SECTION

Section 17139.1 is added to the Revenue and Taxation Code , to read: 17139.1. (

a) For taxable years beginning on or after January 1, 2024, and before January 1, 2029, gross income does not include any qualified amount received by a qualified taxpayer. (

b) For purposes of this section: (1) “Qualified amount” means any amount received in settlement by a qualified taxpayer from a settlement entity in connection with the Bobcat Fire. (2) “Qualified taxpayer” means any of the following: (

A) Any taxpayer that owned real property located in the County of Los Angeles during the Bobcat Fire who paid or incurred expenses and received amounts from a settlement arising out of the Bobcat Fire. (

B) Any taxpayer that resided within the County of Los Angeles during the Bobcat Fire who paid or incurred expenses and received amounts from a settlement arising out of the Bobcat Fire. (

C) Any taxpayer that had a place of business within the County of Los Angeles during the Bobcat Fire who paid or incurred expenses and received amounts from a settlement arising out of the Bobcat Fire. (3) “Settlement entity” means Southern California Edison or its subsidiary that is making the settlement payment to a qualified taxpayer. (

c) The settlement entity shall provide, upon request by the Franchise Tax Board, documentation of the settlement payments in the form and manner requested by the Franchise Tax Board. (d)

(1) For the purpose of complying with

Section in regards to the exclusion provided by this

section and

Section 24309.9, the Legislature finds and declares as follows: (

A) The specific goal, purpose, and objective of the tax exclusion is to provide essential relief to individuals who have suffered injury, loss, inconvenience, and expenses resulting from the devastating Bobcat Fire. (

B) The performance indicators for the Legislature to use in determining if the exclusion achieves the stated goal, purpose, and objective shall be the number of qualified taxpayers that excluded qualified amounts from gross income, and the aggregate amount of settlement payments arising out of the Bobcat Fire. (2) (

A) On December 1, 2029, the Franchise Tax Board shall deliver to the Legislature a written report that includes both of the following: (

i) To the extent feasible, the number of qualified taxpayers that excluded qualified amounts from gross income, as a result of the exclusion. (ii) The aggregate amount of those settlement payments arising out of the Bobcat Fire. (

B) The report required by this paragraph shall be delivered to the Legislature in compliance with

Section of the Government Code. (

C) The disclosure provisions of this subdivision shall be treated as an exception to

Section 19542. (

e) This

section shall remain in effect only until December 1, 2029, and as of that date is repealed.

SEC.

Section 24309.9 is added to the Revenue and Taxation Code , to read: 24309.9. (

a) For taxable years beginning on or after January 1, 2024, and before January 1, 2029, gross income does not include any qualified amount received by a qualified taxpayer. (

b) For purposes of this section: (1) “Qualified amount” means any amount received in settlement by a qualified taxpayer from a settlement entity in connection with the Bobcat Fire. (2) “Qualified taxpayer” means any of the following: (

A) Any taxpayer that owned real property located in the County of Los Angeles during the Bobcat Fire who paid or incurred expenses and received amounts from a settlement arising out of the Bobcat Fire. (

B) Any taxpayer that had a place of business within the County of Los Angeles during the Bobcat Fire who paid or incurred expenses and received amounts from a settlement arising out of the Bobcat Fire. (3) “Settlement entity” means Southern California Edison or its subsidiary that is making the settlement payment to a qualified taxpayer. (

c) The settlement entity shall provide, upon request by the Franchise Tax Board, documentation of the settlement payments in the form and manner requested by the Franchise Tax Board. (

d) This

section shall remain in effect only until December 1, 2029, and as of that date is repealed.

SEC. 3. The Legislature finds and declares that Sections 17139. and 24309.9 of the Revenue and Taxation Code, as added by this act, are necessary for the public purpose of preventing undue hardship to taxpayers who reside, or used to reside, in a part of California devastated by wildfire, and do not constitute a gift of public funds within the meaning of

Section of

Article XVI of the California Constitution.

SEC. 4. This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of

Article IV of the California Constitution and shall go into immediate effect. The facts constituting the necessity are: In order to provide essential relief to those persons who have suffered injury, loss, inconvenience, and expenses resulting from the devastating Bobcat Fire as soon as possible, it is necessary that this act take effect immediately. REVISIONS: Heading–Line 2.