Historic Vote: U.S. House Passes Fire Victims' Tax Relief Bill

NORTH BAY, CA — Legislation passed Tuesday by the U.S. House of Representatives would exempt victims of PG&E wildfires —including the Tubbs Fire of 2017 — and thousands of other qualified wildfire victims in California from owing federal income tax on their settlement money or attorney fees included in the settlement.

U.S. Rep. Mike Thompson, D-St. Helena, applauded the House's vote to pass the Federal Disaster Tax Relief Act of 2023— House Resolution 5863 — which includes Thompson's legislation about tax exemption for fire victims.

The Fire Victims Trust— FVT — was established in July 2020 as a result of the PG&E Bankruptcy settlement. The FVT evaluates, administers, processes and resolves eligible claims arising from the 2015 Butte Fire, 2017 North Bay Fires and the 2018 Camp Fire. As of this month, the trust has paid out, on behalf of PG&E, $12.31 billion to victims of these fires.

"Fire survivors have been through enough in the wake of losing their homes and livelihoods to wildfires—it’s wrong to tax them on the settlement money meant to help them rebuild their lives," Thompson said. "Today’s bipartisan vote to provide tax relief to fire survivors is an important step towards recovery for those who lost homes, businesses, and loved ones and sends a clear message to Senate Republicans: It’s time to work with us to pass much-needed relief for disaster victims."

RELATED:

• PG&E Reaches $13.5 Billion Settlement With Wildfire Victims
• Numerous Dead As Fires Devastate Sonoma, Napa Counties

Thompson introduced the original legislation in October 2023 to provide tax relief to PG&E fire victims and has worked to advance the legislation ever since.

The House's vote Tuesday on the relief act was expedited after Thompson and U.S. Rep. Greg Steube from Florida last week led a bipartisan group of 218 members of Congress to successfully advance a discharge petition forcing House Speaker Mike Johnson to do so, Thompson's office said in a statement. The petition's historic advancement marked only the third time a House discharge petition has succeeded in the 21st Century, Thompson's staff said.

The Federal Disaster Tax Relief Act relief act, it excludes from a taxpayer's gross income, for income tax purposes, any amount received by an individual taxpayer as compensation for expenses or losses incurred because of a qualified wildfire disaster — meaning it occurred after Dec. 31, 2014, and was declared a federal disaster as a result of a forest or range fire.

The legislation also excludes relief payments for losses resulting from the East Palestine, Ohio, train derailment on Feb. 3, 2023, and designates Hurricane Ian, among other federally declared disasters, as a qualified disaster to determine the tax treatment of certain disaster-related personal casualty losses.

Discharge Petition

The political maneuver can be used when a bill has been stalled awaiting in committee, awaiting review or comments, for at least 30 days. Use of the discharge petition must be approved by 218 members of Congress, making it a rare occurence. Once a bill is "discharged" — pulled — from committee, it is forced onto the House floor for a vote.

The most recent Congress saw saw 18 unsuccessful discharge petitions related to abortion, COVID-19, stock trading by members, and energy permitting, among other topics.

Next Steps

The bill still needs to be approved by a majority vote of the U.S. Senate. If it passes there, it would head to the desk of President Joe Biden's desk for his signature.

If signed into law, the tax exemption would be retroactive and would apply to wildfire relief payments received during the tax years falling after Dec. 31, 2019 and before Jan. 1, 2026.