California State Sen. Scott Wilk (R-Santa Clarita) has announced his bill to make wildfire settlement payments tax-free cleared its first hurdle in the Assembly, passing out of the Committee on Revenue and Taxation.

“In the last two weeks, my district and the entire state have witnessed an explosion of wildfires. Combined with dry conditions and record-breaking heat, the threats these wildfires pose to our communities are more concerning than ever,” said Wilk. “While I hope that no family will need this bill, history has proven that we must have every tool available to help victims rebuild their lives in the wake of a worst-case scenario.”

Senate Bill 1004 (SB 1004) would make settlement payments made in connection with any California wildfire from January 1, 2024, to January 1, 2029, tax-exempt. The legislature has already done this for numerous wildfire settlements.

In 2022, Senate Bill 1246 and Assembly Bill 1249 were signed into law, making settlements related to the Thomas Fire, the Woolsey Fire, the Butte Fire, the North Bay Fires, and the Camp Fire tax-exempt. Similarly, Senate Bill 370 and Senate Bill 542, which proposed the same for the Kincade and Zogg Fires, passed the Senate unanimously in 2023.

In September 2020, the Bobcat Fire, which burned over 115,000 acres and destroyed homes in the Juniper Hills community, was determined to have been caused by a tree coming into contact with power lines. No settlements have been paid out yet for this fire, making them eligible to be tax-free if SB 1004 is signed into law.

“If you received a settlement because you lost your home through no fault of your own, you deserve every cent. This bill removes one more worry for all victims,” said Wilk.

SB 1004 now moves to the Assembly Appropriations Committee.