AB 159: Personal Income Tax Law: Corporation Tax Law: exemptions: wildfire.
- Session Year: 2025-2026
- House: Assembly
- Latest Version Date: 2025-09-08
Current Status:
In Progress
(2025-09-13: Ordered to inactive file at the request of Senator Grayson.)
Introduced
In Committee
Awaiting First Chamber Vote
Passed First Chamber
In Committee
Awaiting Second Chamber Vote
Passed Second Chamber
Enacted
What does this bill do?
This bill narrows a California income tax exclusion so it only applies to settlement payments received by taxpayers for losses tied to a qualified wildfire disaster — a wildfire for which the Governor or the President declared an emergency or major disaster. It also requires settlement payers and recipients to provide documentation to the Franchise Tax Board on request and adds a $10,000 General Fund appropriation for the Board to administer those settlements.
The summary is provided by generative AI which can make mistakes. For original language, please view the details in the table below.
Existing law establishes, in the Government Operations Agency, the Franchise Tax Board consisting of the Controller, the Director of Finance, and the Chairperson of the State Board of Equalization. Existing law prescribes various powers and duties to the Franchise Tax Board, including, among other things, the administration of state personal income taxes and corporation franchise and income taxes.
The Personal Income Tax Law, in conformity with federal income tax laws, defines gross income as income from whatever source derived, except as specifically excluded, and provides various exclusions from income, including, for taxable years beginning on or after January 1, 2021, and before January 1, 2030, an exclusion from income for any qualified taxpayer, as defined, for amounts received in settlement in connection with a wildfire in the state, as provided.
This bill would amend the definitions provided in that exclusion from tax and would limit the exclusion to qualified amounts made in connection with a qualified wildfire disaster, as defined.
This bill would also appropriate $10,000 from the General Fund to the Franchise Tax Board to administer qualified wildfire disaster settlements, as specified.
This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIIIA of the California Constitution, and thus would require for passage the approval of 2/3 of the membership of each house of the Legislature.
This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.
This bill would express the intent of the Legislature to enact statutory changes relating to the Budget Act of 2025.This bill would express the intent of the Legislature to enact statutory changes relating to the Budget Act of 2025.
(a)For taxable years beginning on or after January 1, 2021, and before January 1, 2030, gross income shall not include any qualified amount received by a qualified taxpayer in the taxable year.
(b)For purposes of this section, the following definitions shall apply:
(1)Qualified amount means any amount received from a settlement entity by a qualified taxpayer in connection with a qualified wildfire disaster in California.
(2)Qualified taxpayer means any of the following:
(A)Any taxpayer who owns real property located in an area damaged by a qualified wildfire disaster who paid or incurred expenses, and received qualified amounts from a settlement entity, arising out of or pursuant to the wildfire. qualified wildfire disaster.
(B)Any taxpayer who resides within an area damaged by a qualified wildfire disaster who paid or incurred expenses, and received qualified amounts from a settlement entity, arising out of or pursuant to the wildfire. qualified wildfire disaster.
(C)Any taxpayer who has a place of business within an area damaged by a qualified wildfire disaster who paid or incurred expenses, and received qualified amounts from a settlement entity, arising out of or pursuant to the wildfire. qualified wildfire disaster.
(3)Qualified wildfire disaster means any disaster arising from a wildfire for which either the Governor has declared a state of emergency or the President of the United States has declared an emergency or major disaster as defined under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. Sec. 5121 et seq.).
(3)(4)Settlement entity means the entity, approved by an entity making a class action settlement administrator, making the settlement payment payment of a qualified amount to a qualified taxpayer.
(c)The settlement entity shall provide, upon request by the Franchise Tax Board or qualified taxpayer, documentation of the settlement payments in the form and manner requested by the Franchise Tax Board or the qualified taxpayer.
(d)The qualified taxpayer shall provide, upon request, all necessary information in the form and manner prescribed by the Franchise Tax Board.
(e)This section shall remain in effect only until December 1, 2030, and as of that date is repealed.
SEC. 2.Section 24309.2 of the Revenue and Taxation Code is amended to read:24309.2.(a)For taxable years beginning on or after January 1, 2021, and before January 1, 2030, gross income shall not include any qualified amount received by a qualified taxpayer in the taxable year.
(b)For purposes of this section the following definitions apply:
(1)Qualified amount means any amount received from a settlement entity by a qualified taxpayer in connection with a qualified wildfire disaster in California.
(2)Qualified taxpayer means any of the following:
(A)Any taxpayer that owns real property located in an area damaged by a qualified wildfire disaster that paid or incurred expenses, and received qualified amounts from a settlement entity, arising out of or pursuant to the wildfire. qualified wildfire disaster.
(B)Any taxpayer that has a place of business within an area damaged by a qualified wildfire disaster that paid or incurred expenses, and received qualified amounts from a settlement entity, arising out of or pursuant to the wildfire. qualified wildfire disaster.
(3)Qualified wildfire disaster means any disaster arising from a wildfire for which either the Governor has declared a state of emergency or the President of the United States has declared an emergency or major disaster as defined under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. Sec. 5121 et seq.).
(3)(4)Settlement entity means the entity, approved by an entity making a class action settlement administrator, making the settlement payment payment of a qualified amount to a qualified taxpayer.
(c)The settlement entity shall provide, upon request by the Franchise Tax Board or qualified taxpayer, documentation of the settlement payments in the form and manner requested by the Franchise Tax Board or the qualified taxpayer.
(d)The qualified taxpayer shall provide, upon request, all necessary information in the form and manner prescribed by the Franchise Tax Board.
(e)This section shall remain in effect only until December 1, 2030, and as of that date is repealed.
SEC. 3.The sum of ten thousand dollars ($10,000) is hereby appropriated from the General Fund to the Franchise Tax Board to administer qualified wildfire disaster settlements pursuant to Sections 17138.7 and 24309.2 of the Revenue and Taxation Code.
SEC. 4.This act is a bill providing for appropriations related to the Budget Bill within the meaning of subdivision (e) of Section 12 of Article IV of the California Constitution, has been identified as related to the budget in the Budget Bill, and shall take effect immediately.
SECTION 1.It is the intent of the Legislature to enact statutory changes relating to the Budget Act of 2025.It is the intent of the Legislature to enact statutory changes relating to the Budget Act of 2025.
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Date
|
Status
|
|---|---|
| Sep 13, 2025 | Ordered to inactive file at the request of Senator Grayson. |
| Sep 11, 2025 | Read second time. Ordered to third reading. |
| Sep 10, 2025 | From committee: Do pass. (Ayes 13. Noes 0.) (September 10). |
| Sep 8, 2025 | From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on B. & F. R. |
| Sep 8, 2025 | Senate Rule 29.3(b) suspended. (Ayes 28. Noes 8. Page 2568.) |
| Apr 2, 2025 | Referred to Com. on B. & F. R. |
| Mar 20, 2025 | In Senate. Read first time. To Com. on RLS. for assignment. |
| Mar 20, 2025 | Read third time. Passed. Ordered to the Senate. (Ayes 53. Noes 17. Page 742.) |
| Mar 18, 2025 | Read second time. Ordered to third reading. |
| Mar 17, 2025 | (Ayes 53. Noes 17. Page 643.) |
| Mar 17, 2025 | Ordered to second reading. |
| Mar 17, 2025 | Withdrawn from committee. |
| Feb 3, 2025 | Referred to Com. on BUDGET. |
| Jan 9, 2025 | From printer. May be heard in committee February 8. |
| Jan 8, 2025 | Read first time. To print. |
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Date
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Description
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Location
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Votes
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|---|---|---|---|---|
| Sep 10, 2025 | Do pass | Senate Standing Committee on Budget and Fiscal Review |
Passed |
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| Mar 20, 2025 | AB 159 Gabriel Assembly Third Reading | Assembly Floor |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
SENATE RULES COMMITTEE Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB 159 |
THIRD READING
Bill No: AB 159
Author: Committee on Budget
Amended: 9/8/25 in Senate
Vote: 27- Urgency
ASSEMBLY FLOOR: 53-17, 3/20/25 - See last page for vote
SUBJECT: Personal Income Tax Law: Corporation Tax Law: exemptions: wildfire
SOURCE: Author
DIGEST:
This bill is a revenue and taxation trailer bill for the 2025-26 Budget. This bill contains statutory changes necessary to facilitate implementation of the Budget Act of 2025.
ANALYSIS: This bill contains the following statutory changes necessary to implement the 2025 Budget Act, specifically, this bill:
- Clarifies that definitions for “qualified amount” and “qualified taxpayer” have a connection to a qualified wildfire disaster.
- Defines “qualified wildfire disaster” to mean any disaster arising from a wildfire for which either the Governor has declared a state of emergency or the President of the United States has declared an emergency or major disaster as defined under the Robert T. Stafford Disaster Relied and Emergency Assistance Act (42 U.S.C. Sec. 5121 et seq).
- Clarifies the definition of settlement entity to mean an entity making settlement payment of a qualified amount to a qualified taxpayer.
- Appropriates $10,000 from the General Fund to the Franchise Tax Board to administer tax exemptions related to the qualified wildfire disaster settlements.
FISCAL EFFECT: Appropriation: Yes Fiscal Com.: Yes Local: No
The provisions of this bill related to the Wildfire Settlements exclusion are estimated to reduce revenues by $28 million in 2024-25, by $15 million in 2025-26, by $11 million in 2026-27, by $4.4 million in 2027-28, and by $1.3 million in 2028-29. This bill makes no changes to these estimates included in SB 132 (Committee on Budget and Fiscal Review), Chapter 17, Statutes of 2025.
SUPPORT: (Verified 9/8/25)
None received
OPPOSITION: (Verified 9/8/25)
None received
ASSEMBLY FLOOR: 53-17, 3/20/25
AYES: Addis, Aguiar-Curry, Arambula, Ávila Farías, Bains, Bennett, Berman, Boerner, Bonta, Bryan, Caloza, Carrillo, Connolly, Elhawary, Fong, Gabriel, Garcia, Gipson, Mark González, Haney, Harabedian, Hart, Jackson, Kalra, Lee, Lowenthal, McKinnor, Muratsuchi, Nguyen, Ortega, Pacheco, Patel, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Celeste Rodriguez, Michelle Rodriguez, Rogers, Blanca Rubio, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Valencia, Ward, Wicks, Wilson, Zbur, Rivas
NOES: Alanis, Castillo, Chen, Davies, DeMaio, Dixon, Ellis, Flora, Gallagher, Jeff Gonzalez, Hadwick, Lackey, Macedo, Patterson, Sanchez, Ta, Tangipa
NO VOTE RECORDED: Ahrens, Alvarez, Bauer-Kahan, Calderon, Essayli, Hoover, Irwin, Krell, Papan, Wallis
Prepared by: Elisa Wynne / B. & F.R. / (916) 651-4103
9/12/25 9:14:10
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SENATE COMMITTEE ON BUDGET AND FISCAL REVIEW
Senator Scott Wiener, Chair
2025 - 2026 Regular
Bill No: AB 159 Hearing Date: September 10, 2025
Author: | Committee on Budget | ||
Version: | September 8, 2025 As amended | ||
Urgency: | No | Fiscal: | Yes |
Consultant: | Elisa Wynne | ||
Subject: Revenue and Taxation
Summary: This bill is a revenue and taxation trailer bill for the 2025-26 Budget. This bill contains statutory changes necessary to facilitate implementation of the Budget Act of 2025
.
Proposed Law:
This bill contains the following statutory changes necessary to implement the 2025 Budget Act, specifically, this bill:
- Clarifies that definitions for “qualified amount” and “qualified taxpayer” have a connection to a qualified wildfire disaster.
- Defines “qualified wildfire disaster” to mean any disaster arising from a wildfire for which either the Governor has declared a state of emergency or the President of the United States has declared an emergency or major disaster as defined under the Robert T. Stafford Disaster Relied and Emergency Assistance Act (42 U.S.C. Sec. 5121 et seq).
- Clarifies the definition of settlement entity to mean an entity making settlement payment of a qualified amount to a qualified taxpayer.
- Appropriates $10,000 from the General Fund to the Franchise Tax Board to administer tax exemptions related to the qualified wildfire disaster settlements.
Fiscal Effect:
- The provisions of this bill related to the Wildfire Settlements exclusion are estimated to reduce revenues by $28 million in 2024-25, by $15 million in 2025-26, by $11 million in 2026-27, by $4.4 million in 2027-28, and by $1.3 million in 2028-29. This bill makes no changes to these estimates included in SB 132 (Committee on Budget and Fiscal Review), Chapter 17, Statutes of 2025.
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ASSEMBLY THIRD READING
ATR Bill Id:AB 159
Author:(Gabriel)
As Introduced Ver:January 8, 2025
Majority vote. Budget Bill Appropriation Takes Effect Immediately
SUMMARY
This bill expresses the intent of the Legislature to enact statutory changes relating to the Budget Act of 2025.
Major Provisions
COMMENTS
According to the Author
Arguments in Support
Arguments in Opposition
FISCAL COMMENTS
VOTES
UPDATED
VERSION: January 8, 2025
CONSULTANT: Christian Griffith / BUDGET / (916) 319-2099 FN: 0000102
Bill Author
Bill Co-Author(s):