Relating to an income tax subtraction allowed for plaintiffs in wildfire litigation; prescribing an effective date.

Summary

The bill lets plaintiffs who receive judgments or settlements from wildfire-related civil lawsuits subtract those amounts—and any unreimbursed legal fees—from their federal taxable income, provided the fire occurred under a state emergency, a governor’s emergency order, or a federally declared disaster. It applies to cases and tax years beginning after Jan 1 2018, includes a refund process for earlier years, and takes effect 91 days after the 2026 regular session ends.

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