Income taxes: gross income exclusions: state of emergency: natural disaster settlements.
What changed between versions
Throughout both new code sections, the disaster definition was cleaned up from an awkwardly merged 'natural disaster that was declared a state of emergency by the Governor or accidental or human-caused event' to the consistent phrase 'disaster or accidental or human-caused event for which a state of emergency or local emergency was proclaimed.' This removes the requirement that the Governor specifically declare the emergency, allowing local emergencies to qualify as well.
In Section 24309.8 (the corporate tax provision), the place-of-business taxpayer category was expanded from covering only areas damaged by a 'natural disaster' to also covering areas damaged by an 'accidental or human-caused event,' making it consistent with the other two taxpayer categories in that section.
The documentation requirement in both sections was strengthened. The old language allowed the qualified taxpayer to optionally ('may') provide settlement documentation to the Franchise Tax Board. The new language requires ('shall') both the settlement entity and the qualified taxpayer to provide documentation upon request.
The Section 41 tax expenditure compliance findings (goals, performance indicators, data collection) were removed from within Section 17139.4 and consolidated into a standalone Section 3, which now also carries its own sunset provision (repealed December 1, 2030). This is a structural reorganization rather than a policy change.
The performance indicator (number of taxpayers excluding qualified amounts) and the five-year reporting requirement to the Legislature that were embedded in Section 17139.4 were removed from that section. The standalone Section 3 now simply states there is no available data to collect or report, effectively eliminating the periodic reporting obligation.
