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Committee hears AB 429 to exempt past wildfire settlements from state income tax
Summary
AB 429 would exempt certain past wildfire-related settlement payments from California gross income for losses in 2020'2026; author and witnesses said the change would ease recovery for victims; the bill was referred to the committee's suspense file.
Assemblymember Megan Hatwick presented AB 429, which would exclude specified past wildfire-related settlement payments from gross income for tax purposes for losses occurring from 2020 through 2026.
Hatwick told the committee that some wildfire victims have been surprised to learn settlement payments could be taxable and that prior attempts to secure retroactive relief were vetoed with direction to the budget process. "This bill seeks to address the issue directly by exempting past wildfire related settlements from gross income, providing much needed relief to victims," Hatwick said.
Doug Stoy, a Dixie Fire survivor from Greenville, described losing his home and receiving settlements that were insufficient to rebuild everything he had lost. He told the committee taxing settlement proceeds would be "grossly unfair." Supporters included the California Forestry Association, rural county representatives, Associated California Loggers and several county boards of supervisors.
Hatwick said she has submitted a formal budget request in addition to the bill because many constituents continue to struggle and cited the long-term disruption in communities such as Greenville.
Formal action: the committee referred AB 429 to the suspense file for further fiscal consideration.
No registered opposition spoke during the hearing. Committee members asked clarifying questions about whether specific fires and settlements (for example the Park Fire) would generate taxable payments; the author noted eligibility can depend on declarations and settlement circumstances and said she would work with staff. The bill will be considered on the committee's suspense calendar.
