AB 376: Personal Income Tax Law: Corporation Tax Law: wildfires: exclusions.
The bill provides an exclusion from personal income tax for qualified insurance proceeds received by taxpayers. Qualified insurance proceeds are amounts received under a homeowner's or renter's insurance policy for damages or expenses resulting from a fire in an area declared a state of emergency by the governor. This exclusion applies to taxable years beginning on or after January 1, 2025, and before January 1, 2030. The bill includes additional information requirements for new tax expenditures, and it takes effect immediately as a tax levy.
| Feb. 02, 2026 | From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. |
| Jan. 31, 2026 | Died pursuant to Art. IV, Sec. 10(c) of the Constitution. |
| Apr. 28, 2025 | In committee: Held under submission. |
| Apr. 28, 2025 | In committee: Set, second hearing. Referred to REV. & TAX. suspense file. |
| Apr. 22, 2025 | Re-referred to Com. on REV. & TAX. |
| Amended IN Assembly April 21, 2025 |
| Introduced by Assembly Member Tangipa |
February 03, 2025 |
LEGISLATIVE COUNSEL'S DIGEST
The Personal Income 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, for taxable years beginning on or after January 1, 2025, and before January 1, 2030, would provide an exclusion from gross income for any amount received by a qualified taxpayer, as defined, as qualified insurance proceeds. The bill would define qualified insurance proceeds for this purpose to mean any amount received under a homeowner’s insurance policy or a renter’s insurance policy for damages or expenses resulting from a fire occurring in an area that is proclaimed by the Governor to be in a state of emergency.
Existing law requires a bill authorizing a new tax expenditure to contain, among other things, specific goals 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 take effect immediately as a tax levy.
The people of the State of California do enact as follows:
SECTION 1.
Section 17139 is added to the Revenue and Taxation Code, to read:17139.
(a) For taxable years beginning on or after January 1, 2023, and before January 1, 2028, gross income does not include any qualified amount received by a qualified taxpayer.SEC. 2.
Section 24309.4 is added to the Revenue and Taxation Code, to read:24309.4.
(a) For taxable years beginning on or after January 1, 2023, and before January 1, 2028, gross income does not include any qualified amount received by a qualified taxpayer.SEC. 3.
The Legislature hereby finds and declares that the exclusions authorized by Sections 17139 and 24309.4 of the Revenue and Taxation Code, as added by this act, serve the public purpose of preventing undue hardship to taxpayers who reside, or used to reside, in parts of California devastated by recent wildfires, and do not constitute a gift of public funds within the meaning of Section 6 of Article XVI of the California Constitution.(a)For taxable years beginning on or after January 1, 2025, and before January 1, 2030, gross income shall not include any amount received by a qualified taxpayer as qualified insurance proceeds.
(b)For purposes of this section, the following definitions shall apply:
(1)“Qualified insurance proceeds” means any amount received by a qualified taxpayer under a homeowner’s insurance policy or a renter’s insurance policy for damages or expenses resulting from a fire occurring in any city or county in this state that is proclaimed by the Governor to be in a state of emergency.
(2)“Qualified taxpayer” means any taxpayer that resided in any city or county in this state impacted by fire at the time the Governor declares the area to be in a state of emergency who paid or incurred expenses and received insurance proceeds arising out of or pursuant to that fire.
(c)No deduction shall be allowed with respect to any amount that a qualified taxpayer excludes from income pursuant to this section.
(d)(1)For purposes of complying with Section 41, the Legislature finds and declares as follows:
(A)The specific goal of the exclusion provided by this section is to provide essential relief to individuals who have suffered injury, loss, inconvenience, and expenses resulting from wildfire.
(B)The performance indicators used by the Legislature to determine if the exclusion is achieving its stated goal are the number of taxpayers excluding insurance proceeds from income pursuant to this section, and the total dollar value of insurance proceeds excluded.
(2)(A)On or before January 1, 2030, the Franchise Tax Board shall submit a report to the Legislature, in compliance with Section 9795 of the Government Code, detailing, to the extent that data is available, the number of taxpayers excluding insurance proceeds from income pursuant to this section, and the total dollar value of insurance proceeds excluded.
(B)The disclosure requirements of this paragraph shall be treated as an exception to Section 19542.
(e)This section shall remain operative only until December 1, 2030, and as of that date is repealed.
This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.