§ 17138.8

(a) For taxable years beginning on or after January 1, 2024, and before January 1, 2031, gross income shall not include any amount received by a qualified taxpayer as a California qualified wildfire loss mitigation payment.

(b) For purposes of this section, the following definitions apply:

(1) “California qualified wildfire loss mitigation payment” means any grant, rebate, direct assistance, or other financial assistance for wildfire mitigation, home hardening, structure hardening, vegetation management, defensible space, fuel modification activities, or community wildfire resilience received through either of the following:

(A) The California Wildfire Mitigation Financial Assistance Program under Article 16.5 (commencing with Section 8654.2) of Chapter 7 of Division 1 of Title 2 of the Government Code.

(B) A wildfire mitigation grant program under Section 91510 of the Public Resources Code.

(2) “Qualified taxpayer” means a taxpayer that owns the structure for which a California qualified wildfire loss mitigation payment was received.

(3) “Wildfire loss mitigation” means an activity that reduces wildfire risks to a residential structure or its contents, or both.

(c) (1) For the purpose of complying with Section 41, as it relates to the tax exclusion provided by this section and Section 24308.10, the Legislature finds and declares the following:

(A) The specific goal, purpose, and objective of the tax exclusion is to provide relief to qualifying property owners in high fire areas who participate in either of the following:

(i) The California Wildfire Mitigation Financial Assistance Program pursuant to Section 8654.2 of the Government Code.

(ii) A wildfire mitigation grant program pursuant to paragraph (4) of subdivision (a) of Section 91510 of the Public Resources Code.

(B) The performance indicators for the Legislature to use in determining if the exclusion achieves the stated goal, purpose, and objective shall be the number of qualified taxpayers that may be eligible to exclude qualified amounts from gross income, and the aggregate amount of funds distributed from the California Wildfire Mitigation Financial Assistance Program pursuant to Section 8654.2 of the Government Code and a wildfire mitigation grant program pursuant to paragraph (4) of subdivision (a) of Section 91510 of the Public Resources Code.

(2) (A) No later than December 1, 2029, the joint powers authority created pursuant to Section 8654.4 of the Government Code shall submit a report to the Legislature, in compliance with Section 9795 of the Government Code, detailing, to the extent data is available, the aggregate amount of funds distributed from the California Wildfire Mitigation Financial Assistance Program, and the number of individuals who accepted funds from the program who may be eligible to exclude the income pursuant to this section and Section 24308.10.

(B) Notwithstanding Section 19542, the Franchise Tax Board may provide data related to amounts excluded from gross income pursuant to this section and Section 24308.10, requested by the joint powers authority, to the extent that data is available. Taxpayer information received by the joint powers authority pursuant to this section is subject to Section 19542.

(3) No later than December 1, 2031, the Office of Emergency Services shall submit a report to the Legislature, in compliance with Section 9795 of the Government Code, detailing, to the extent data is available, the aggregate amount of funds distributed from a wildfire mitigation grant program pursuant to paragraph (4) of subdivision (a) of Section 91510 of the Public Resources Code and the number of individuals or entities who accepted funds from the program who may be eligible to exclude the income pursuant to this section and Section 24308.10.

(d) This section shall remain in effect only until December 1, 2031, and as of that date is repealed.

(Amended by Stats. 2026, Ch. 261, Sec. 1. (SB 195) Effective September 18, 2026. Repealed as of December 1, 2031, by its own provisions)