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SB-542 Personal Income Tax Law: Corporation Tax Law: wildfires: exclusions.(2023-2024)

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Date Published: 08/30/2024 09:00 PM
SB542:v93#DOCUMENT

Enrolled  August 30, 2024
Passed  IN  Senate  August 28, 2024
Passed  IN  Assembly  August 26, 2024
Amended  IN  Assembly  July 03, 2024
Amended  IN  Assembly  February 05, 2024
Amended  IN  Assembly  July 12, 2023
Amended  IN  Senate  March 30, 2023
Amended  IN  Senate  March 20, 2023

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Senate Bill
No. 542

Introduced by Senator Dahle
(Coauthor: Assembly Member Megan Dahle)

February 15, 2023

An act to add and repeal Sections 17139.4 and 24309.8 of the Revenue and Taxation Code, relating to taxation, and declaring the urgency thereof, to take effect immediately.


LEGISLATIVE COUNSEL'S DIGEST


SB 542, Dahle. Personal Income Tax Law: Corporation Tax Law: wildfires: exclusions.
The Personal Income Tax Law and the Corporation Tax Law, in conformity with federal income tax law, generally defines “gross income” as income from whatever source derived, except as specifically excluded, and provides various exclusions from gross income.
This bill would, for taxable years beginning on or after January 1, 2022, and before January 1, 2027, provide an exclusion from gross income for any qualified taxpayer, as defined, for amounts received in settlement for costs and losses associated with the 2021 Dixie Fire in the Counties of Butte, Plumas, Lassen, Shasta, and Tehama, or the 2022 Mill Fire in the County of Siskiyou, 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.
The bill would make legislative findings and declarations regarding the public purpose served by this bill.
This bill would declare that it is to take effect immediately as an urgency statute.
Vote: 2/3   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 17139.4 is added to the Revenue and Taxation Code, to read:

17139.4.
 (a) For taxable years beginning on or after January 1, 2022, and before January 1, 2027, 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 2021 Dixie Fire or the 2022 Mill Fire.
(2) “Qualified taxpayer” means any of the following:
(A) In relation to the 2021 Dixie Fire, the following:
(i) Any taxpayer that owned real property located in the County of Butte, Plumas, Lassen, Shasta, or Tehama during the 2021 Dixie Fire who paid or incurred expenses and received amounts from a settlement arising out of or pursuant to the 2021 Dixie Fire.
(ii) Any taxpayer that resided within the County of Butte, Plumas, Lassen, Shasta, or Tehama during the 2021 Dixie Fire who paid or incurred expenses and received amounts from a settlement arising out of or pursuant to the 2021 Dixie Fire.
(iii) Any taxpayer that had a place of business within the County of Butte, Plumas, Lassen, Shasta, or Tehama during the 2021 Dixie Fire who paid or incurred expenses and received amounts from a settlement arising out of or pursuant to the 2021 Dixie Fire.
(B) In relation to the 2022 Mill Fire, the following:
(i) Any taxpayer that owned real property located in the County of Siskiyou during the 2022 Mill Fire who paid or incurred expenses and received amounts from a settlement arising out of or pursuant to the 2022 Mill Fire.
(ii) Any taxpayer that resided within the County of Siskiyou during the 2022 Mill Fire who paid or incurred expenses and received amounts from a settlement arising out of or pursuant to the 2022 Mill Fire.
(iii) Any taxpayer that had a place of business within the County of Siskiyou during the 2022 Mill Fire who paid or incurred expenses and received amounts from a settlement arising out of or pursuant to the 2022 Mill Fire.
(3) “Settlement entity” means the following:
(A) In relation to the 2021 Dixie Fire, Pacific Gas and Electric Company or its subsidiary making the settlement payment to a qualified taxpayer.
(B) In relation to the 2022 Mill Fire, Roseburg Forest Products or its subsidiary or agent 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 41 in regards to the exclusion provided by this section and Section 24309.8, 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 2021 Dixie Fire and 2022 Mill 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 2021 Dixie Fire or the 2022 Mill Fire.
(2) (A) On December 1, 2027, 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 2021 Dixie Fire or the 2022 Mill Fire.
(B) The report required by this paragraph shall be delivered to the Legislature in compliance with Section 9795 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, 2027, and as of that date is repealed.

SEC. 2.

 Section 24309.8 is added to the Revenue and Taxation Code, to read:

24309.8.
 (a) For taxable years beginning on or after January 1, 2022, and before January 1, 2027, 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 2021 Dixie Fire or the 2022 Mill Fire.
(2) “Qualified taxpayer” means either of the following:
(A) In relation to the 2021 Dixie Fire, the following:
(i) Any taxpayer that owned real property located in the County of Butte, Plumas, Lassen, Shasta, or Tehama during the 2021 Dixie Fire that paid or incurred expenses and received amounts from a settlement arising out of or pursuant to the 2021 Dixie Fire.
(ii) Any taxpayer that had a place of business within the County of Butte, Plumas, Lassen, Shasta, or Tehama during the 2021 Dixie Fire that paid or incurred expenses and received amounts from a settlement arising out of or pursuant to the 2021 Dixie Fire.
(B) In relation to the 2022 Mill Fire, the following:
(i) Any taxpayer that owned real property located in the County of Siskiyou during the 2022 Mill Fire who paid or incurred expenses and received amounts from a settlement arising out of or pursuant to the 2022 Mill Fire.
(ii) Any taxpayer that had a place of business within the County of Siskiyou during the 2022 Mill Fire who paid or incurred expenses and received amounts from a settlement arising out of or pursuant to the 2022 Mill Fire.
(3) “Settlement entity” means the following:
(A) In relation to the 2021 Dixie Fire, Pacific Gas and Electric Company or its subsidiary making the settlement payment to a qualified taxpayer.
(B) In relation to the 2022 Mill Fire, Roseburg Forest Products or its subsidiary or agent 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, 2027, and as of that date is repealed.

SEC. 3.

 The Legislature finds and declares that Sections 17139.4 and 24309.8 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 fire, and do not constitute a gift of public funds within the meaning of Section 6 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 2021 Dixie Fire and 2022 Mill Fire as soon as possible, it is necessary that this act take effect immediately.