Income taxes: gross income exclusions: state of emergency: natural disaster settlements.

Senator Choi's tax relief measure would exclude from gross income certain settlement payments received by California residents and businesses to replace property damaged or destroyed during declared emergencies. The exclusion would apply to settlement amounts paid between 2025 and 2030 by entities approved through class action administrators.

The bill establishes three categories of eligible recipients: property owners, residents, and business owners located in areas affected by disasters or accidents that prompted state or local emergency declarations. To qualify, taxpayers must have incurred expenses related to the emergency event and received settlement funds specifically for property replacement. Settlement entities would be required to provide payment documentation to both recipients and state tax authorities upon request.

According to the bill's findings, this tax treatment aims to provide financial relief to individuals who face losses and expenses during disasters. The provisions would automatically expire on December 1, 2030, unless extended through subsequent legislation.