Amended  IN  Assembly  June 10, 2024
Amended  IN  Senate  March 28, 2023

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Senate Bill
No. 370

Introduced by Senator McGuire Gonzalez
(Coauthor: Senator Dodd)(Coauthors: Assembly Members Connolly and Wood)

February 09, 2023

An act to add and repeal Sections 17139.2 and 24309.6 of the Revenue and Taxation Code, relating to taxation, and declaring the urgency thereof, to take effect immediately. amend Section 10095.5 of the Insurance Code, relating to insurance.


LEGISLATIVE COUNSEL'S DIGEST


SB 370, as amended, McGuire Gonzalez. Personal Income Tax Law: Corporation Tax Law: wildfires: exclusions. California FAIR Plan Association.
The California FAIR Plan Association is a joint reinsurance association in which all insurers licensed to write basic property insurance participate in administering a program for the equitable apportionment of basic property insurance for persons who are unable to obtain that coverage through normal channels. Existing law requires the association to establish and maintain an internet website and a statewide toll-free telephone number through which a person may receive assistance in applying for basic property insurance. Existing law requires an agent or broker transacting basic property insurance to assist a person seeking the agent’s or broker’s help in obtaining basic property insurance coverage by, among other things, providing the person with the association’s internet website and toll-free telephone number.
This bill would require an agent or broker to also provide a person seeking their help in obtaining basic property insurance coverage with information regarding the department’s Home Insurance Finder in addition to the association’s internet website and toll-free telephone number.

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, 2020, provide an exclusion from gross income for any qualified taxpayer, as defined, for amounts received in settlements associated with the 2019 Kincade Fire in the County of Sonoma, as provided.

Existing law requires that any bill that would authorize certain tax expenditures contain, among other things, specific goals, purposes, and objectives that the tax expenditure or exemption 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: TWO_THIRDSMAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 Section 10095.5 of the Insurance Code is amended to read:

10095.5.
 (a) The association shall establish and maintain an Internet Web site internet website and a statewide toll-free telephone number through which a person may receive information and assistance in applying for insurance through the plan. The association shall cause the toll-free telephone number to be published in all general distribution telephone directories in the state and shall include the toll-free telephone number and Internet Web site internet website address on all communications with an applicant or insured.
(b) An insurance agent or broker transacting basic property insurance shall assist a person seeking his or her the agent’s or broker’s help in obtaining basic property insurance coverage by any one of the following methods:
(1) Making an application for insurance through the plan by submitting an application at the person’s request.
(2) Providing the person with the California FAIR Plan’s Internet Web site address and the toll-free telephone number. internet website, the toll-free telephone number, and information regarding the department’s Home Insurance Finder.
(3) Making an application for insurance, at the person’s request, and placing that person with or through an insurer that offers, or a surplus line broker that procures, basic property insurance coverage.

SECTION 1.

The Legislature finds and declares as follows:

(a)On October 23, 2019, the Kincade Fire ignited in the County of Sonoma. The Kincade Fire burned for nearly 14 days across 77,758 acres after it was first reported in The Geysers at 9:24 p.m. The fire destroyed over 370 structures.

(b)The Kincade Fire was fully contained on November 6, 2019.

(c)Since 2019, Pacific Gas and Electric Company has been involved in litigation with the victims of the Kincade Fire, and has entered into settlement agreements with many concerned.

SEC. 2.Section 17139.2 is added to the Revenue and Taxation Code, to read:
17139.2.

(a)For taxable years beginning on or after January 1, 2020, 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 2019 Kincade Fire.

(2)“Qualified taxpayer” means any of the following:

(A)Any taxpayer that owned real property located in the County of Sonoma during the 2019 Kincade Fire who paid and incurred expenses and received amounts from a settlement arising out of or pursuant to the 2019 Kincade Fire.

(B)Any taxpayer that resided within the County of Sonoma during the 2019 Kincade Fire who paid and incurred expenses and received amounts from a settlement arising out of or pursuant to the 2019 Kincade Fire.

(C)Any taxpayer that had a place of business within the County of Sonoma during the 2019 Kincade Fire who paid and incurred expenses and received amounts from a settlement arising out of or pursuant to the Kincade Fire.

(3)“Settlement entity” means Pacific Gas and Electric Company or its subsidiary that is 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 24309.6, the Legislature finds and declares that 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 2019 Kincade Fire.

(2)(A)On December 31, 2028, the Franchise Tax Board shall deliver to the Legislature a written report that includes both of the following:

(i)The number of qualified taxpayers that excluded qualified amounts from gross income, as those terms are used in this section and Section 24309.6, as a result of the exclusion.

(ii)The aggregate amount of those settlement payments arising out of the 2019 Kincade 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, 2028, and as of that date is repealed.

SEC. 3.Section 24309.6 is added to the Revenue and Taxation Code, to read:
24309.6.

(a)For taxable years beginning on or after January 1, 2020, 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 2019 Kincade Fire.

(2)“Qualified taxpayer” means either of the following:

(A)Any taxpayer that owned real property located in the County of Sonoma during the 2019 Kincade Fire who paid and incurred expenses and received amounts from a settlement arising out of or pursuant to the 2019 Kincade Fire.

(B)Any taxpayer that had a place of business within the County of Sonoma during the 2019 Kincade Fire who paid and incurred expenses and received amounts from a settlement arising out of or pursuant to the 2019 Kincade Fire.

(3)“Settlement entity” means Pacific Gas and Electric Company or its subsidiary that is 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, 2028, and as of that date is repealed.

SEC. 4.

The Legislature finds and declares that Sections 17139.2 and 24309.6 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 wildfires, and do not constitute a gift of public funds within the meaning of Section 6 of Article XVI of the California Constitution.

SEC. 5.

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 2019 Kincade Fire as soon as possible, it is necessary that this act take effect immediately.