AB 376 California Assembly · 2025-2026 Regular Session

Personal Income Tax Law: Corporation Tax Law: wildfires: exclusions.

Summary

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, 2023, and before January 1, 2028, provide an exclusion from gross income for a qualified taxpayer, as defined, for amounts received for costs and losses associated with wildfires, 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.

Issues: ✓ Budget & Taxes

Bill status failed 1 of 4 stages cleared

Introduction

Feb 2025

Committee Review

Floor Vote

Governor

Introduced Feb 3, 2025 Last action Feb 2, 2026

Maddy AI version diff · 2 comparisons

What changed between versions

04/21/25 - Amended Assembly → AB376 · 1 edit

MINOR

This diff reflects a republishing of AB 376 on the California legislature website with updated page layout and navigation elements. The substantive legislative content - including all tax exclusion provisions, definitions, dates, and reporting requirements - remains unchanged between the two versions.

TECHNICAL

The bill text was reformatted for a web-based presentation: line numbers were removed, website navigation menus (home, accessibility, FAQ, search, etc.) were added, and the digest key section was restructured. No policy language was altered.

02/03/25 - Introduced → 04/21/25 - Amended Assembly · 6 edits · Apr 21, 2025

MODERATE

The amended bill significantly expands scope by adding two new tax exclusions for settlement payments related to wildfire property damage, applying retroactively to taxable years beginning January 1, 2023. It extends the exclusion from personal income tax only to both personal income and corporation tax, broadens eligible taxpayers to include business owners with places of business in affected areas, and introduces a new 'settlement entity' documentation requirement. The original insurance proceeds exclusion (Section 17139.1) is retained alongside the new provisions.

Scope change

Scope expanded from a personal income tax exclusion limited to insurance proceeds for 2025-2029 to a broader package covering both personal income and corporation tax, including settlement payments (not just insurance), retroactive to 2023, with eligibility extended to business owners in affected areas.

SCOPE

Added Section 24309.4 to the Revenue and Taxation Code, extending the wildfire settlement exclusion to corporation tax in addition to personal income tax.

ELIGIBILITY

New Section 17139 excludes 'qualified amounts' received in settlement (not just insurance proceeds) to replace property damaged or destroyed by wildfire. Eligible taxpayers now include real property owners, residents, and business owners with a place of business in the affected area.

TIMELINE

The new settlement exclusion applies retroactively to taxable years beginning on or after January 1, 2023 (not just 2025), and sunsets on December 1, 2028 (earlier than the insurance proceeds provision which sunsets December 1, 2030).

DEFINITION

New definition of 'settlement entity' as an entity approved by a class action settlement administrator that makes settlement payments to qualified taxpayers.

ENFORCEMENT

Settlement entities are required to provide documentation of settlement payments to the Franchise Tax Board or qualified taxpayer upon request, in the form and manner requested.

TECHNICAL

Added a legislative finding and declaration that the exclusions serve the public purpose of preventing undue hardship and do not constitute a gift of public funds under Article XVI, Section 6 of the California Constitution.

Floor votes

How they voted

No floor votes recorded yet.

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Amendments

Feb 2, 2026

Lower · Passed

From committee: Filed with the Chief Clerk pursuant to Joint Rule 56.

lower

Apr 28, 2025

Lower · Passed

In committee: Held under submission.

lower

Apr 28, 2025

Committee

In committee: Set, second hearing. Referred to REV. & TAX. suspense file.

lower

Apr 22, 2025

Committee

Re-referred to Com. on REV. & TAX.

lower

Apr 21, 2025

Introduced

From committee chair, with author's amendments: Amend, and re-refer to Com. on REV. & TAX. Read second time and amended.

lower

Mar 17, 2025

Lower · Passed

In committee: Set, first hearing. Hearing canceled at the request of author.

lower

Feb 18, 2025

Committee

Referred to Com. on REV. & TAX.

lower

Feb 4, 2025

Lower · Passed

From printer. May be heard in committee March 6.

lower

1 primary · 0 co-sponsors