Calif. congressman reintroduces Fire Victim Trust income tax bill
"Fire survivors ... should not be taxed on the settlements from the PG&E Fire Victims Trust," Rep. Mike Thompson said
By Gerardo Zavala
The Daily Democrat
WOODLAND, Calif. — Congressman Mike Thompson helped reintroduce a bill from the last Congress — H.R. 7305 — to exempt thousands of fire victims receiving compensation from the Fire Victim Trust from having to pay federal income tax on settlement money or attorney fees.
"Fire survivors have been through living hell in the wake of losing their homes and livelihoods to wildfires and should not be taxed on the settlements from the PG&E Fire Victims Trust," Thompson argued. "This bipartisan bill is a top priority and I will continue to work... to enact this bill into law to bring much-needed relief to fire survivors."
The Fire Victim Trust reviews claims, issues determination notices daily and disburses payments twice monthly to fire victims for economic and non-economic damages caused by the 2015 Butte, 2017 North Bay and 2018 Camp fires, according to the trust's website.
This includes "destruction or damage to real estate and personal property, additional living expenses, lost wages, business losses, emotional distress, personal injury or death and related medical expenses."
Cathy Yanni, a trustee for the Fire Victim Trust, supports the passage of the bill arguing that the measure would amend the internal revenue code "to establish a deduction for attorneys' fees and to exclude from gross income any awards received as a result of damage from fires federally declared as disasters after 2015."
"The collective goal is to get H.R. 7305 out of committee and push for its passage as quickly as possible," Yanni stressed. "Every dollar counts to fire survivors as they rebuild their lives, and the passage of H.R. 7305 would make a meaningful difference to their recovery.
According to Congress' website, the bill would exclude "from the gross income of a taxpayer, for income tax purposes, amounts paid to compensate victims for losses or damages in connection with a qualifying wildfire disaster."
Thompson voiced his disappointment last month in Congress' exclusion of the bipartisan legislation — which was part of several exclusions Democrats had to make to push the $1.7 trillion government funding plan through the finish line only weeks prior to Republicans taking over the House of Representatives.
"It is a sad day when a bipartisan bill that helps people and has broad support in both chambers of Congress can't get through the Senate," Thompson said in a Dec. 19 statement. "This is terrible for fire survivors throughout California. There are several tax bills that must be considered next year and I will continue to push that relief for fire survivors be included."
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According to a December Congressional Research Service report, "more wildfires occur in the East, but the wildfires in the West are larger and burn more acreage."
"In 2021, just over 23,000 wildfires burned approximately 6.2 million acres in the West, compared with the over 35,000 fires that burned just under 1 million acres in the East," the report stressed.
Additionally, the report noted that 6,000 structures were burned in 2021 wildfires, the majority of which were located in California.
Locally, Woodland Fire Chief Eric Zane argued that Woodland has little to worry about regarding wildfires due to it being surrounded by irrigated farmland.
The fire department is instead concerned with natural vegetation risk associated with vacant lots that are not weed abated.
"The city of Woodland has an aggressive ordinance which gives the Fire Department authority to cut down weeds and vegetation on lots not maintained by property owners," Zane explained. "Our ordinance also allows the city to add the cost to administer and perform the abatement to the owner's property tax bill."
However, that does not mean the city is safe from the effects caused by wildfires in its surrounding regions. Zane noted the fire department is capable of supporting up to six personnel assisting in wildfire response at any given time.
"The most common way we assist is by sending a wildland fire engine with four personnel with a minimum commitment time of 14 days," he stated. "The fire department may also support single-role positions that support fire operations or logistics within the command structure at a wildfire."
Zane listed several incidents the fire department has responded to in recent years, including the LNU Lightning Complex, Caldor, Camp, Dixie, McFarland, Delta, Thomas and Carr fires. He added that all of its responses are 100% reimbursable through the California Fire Assistance Agreement.
"Unfortunately there is no silver bullet against the risk of wildfires in our state or throughout the western United States," he highlighted. "A strong emphasis in prevention, fire resistive building, construction requirements, hardening of utility infrastructure, early fire detection and adequate response capabilities are all required to limit wildfires' devastating impacts."
Zane said that as fire chief, his position is apolitical and had no comments to provide on Congressman Thompson's statement or a position on the exclusion of funding that would provide aid to California fire survivors.
Congressman Doug LaMalfa, D- Yuba, argued that this bill is essential to pass so that every Fire Victim Trust beneficiary has "this massive tax headache alleviated."
"It should have been done last year," LaMalfa stated. "Fire victims need this tax relief to help rebuild their lives, they should not have to go through another tax season with this uncertainty about their settlement."
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