Kincade Fire: Legislation Would Eliminate Taxes On PG&E Settlements

SONOMA COUNTY, CA — California state Sen. Majority Leader Mike McGuire introduced legislation this week that would ensure survivors of the Kincade Fire will be exempt from paying state income taxes on settlement awards from Pacific Gas and Electric Company.

The October 2019 fire, which was traced to PG&E equipment, forced nearly 200,000 people to flee their homes in the largest evacuation in Sonoma County history. All told, 374 homes and other structures were destroyed.

"The Kincade Fire was massive and horribly destructive," McGuire said in a news release announcing the proposed legislation. "Hundreds of neighbors lost everything. PG&E victimized these survivors once, they shouldn’t have to suffer again. The guts of this bill are simple, but incredibly important: The legislation would eliminate all state taxes on Kincade Fire PG&E settlement funds putting millions back into the pockets of deserving survivors."

The investor-owned utility already reached a $125 million settlement with the state and paid $31 million to Sonoma County and the cities of Santa Rosa, Windsor, Cloverdale and Healdsburg for government damages incurred. Residents who lost their homes and livelihoods are still waiting.

PG&E has estimated liabilities as high as $800 million for personal damage claims which are wrapped up in a settlement case in front of the courts, according to McGuire. Senate Bill 370 would ensure that once payments are awarded in connection with the 2019 Kincade Fire, wildfire victims would be exempt from paying state personal income and corporation taxes on their settlement claim.

Existing law makes wildfire settlement payments subject to taxation here in California, the senator said.

"This can’t stand and we’re going to fight to get survivors every penny possible so they can rebuild their homes and lives," McGuire said.

The legislation is co-authored by Senator Bill Dodd and Assemblymembers Jim Wood and Damon Connolly.

"The Kincade Fire was a tragedy that affected many thousands of people — not just during the fire, but quite frankly, forever," Wood said. "Once victims finally receive their well-deserved financial settlements, we have to make sure the payments are not taxable so they can move forward with their lives."