Personal Income Tax Law: Corporation Tax Law: exemptions: wildfire.

Plain English Breakdown

The bill summary does not provide specific details on how the $10,000 appropriation will be used by the Franchise Tax Board.

Wildfire Disaster Tax Exclusion

AB-159 amends tax laws to limit wildfire disaster settlement exclusions and appropriates funds for the Franchise Tax Board.

What This Bill Does

• Changes the definition of income exclusion related to wildfire settlements to only include qualified amounts from a qualified wildfire disaster.
• Limits the exclusion period to taxable years starting on or after January 1, 2021, and before January 1, 2030.
• Appropriates $10,000 from the General Fund for the Franchise Tax Board to manage wildfire disaster settlements.

Who It Names or Affects

• Taxpayers who received settlement amounts related to wildfires.
• The Franchise Tax Board responsible for administering state personal income and corporation taxes.

Terms To Know

Qualified Wildfire Disaster

A wildfire event that meets specific criteria set by the bill, allowing certain settlements to be excluded from taxable income.

Franchise Tax Board

The agency responsible for administering state personal income taxes and corporation franchise and income taxes in California.

Limits and Unknowns

• The bill does not specify the exact criteria for what qualifies as a 'qualified wildfire disaster'.
• It is unclear how the $10,000 appropriation will be used by the Franchise Tax Board.
• The bill's immediate effect may depend on executive action after it passes both legislative houses.

Official Summary Text

AB 159, as amended, Committee on Budget.
Budget Act of 2025.
Personal Income Tax Law: Corporation Tax Law: exemptions: wildfire.
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 XIII A 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.

Current Bill Text

Download Bill PDF