North Bay Congressman: Fire Victims Should Not Be Taxed On PG&E Trust Payouts

NORTH BAY, CA — U.S. Rep. Mike Thompson (D-St. Helena) co-introduced legislation Wednesday that would ensure fire survivors are not taxed on payments received from the PG&E Fire Victims Trust.

The court-ordered trust of over $13 billion was established for survivors of devastating Northern California wildfires including the 2015 Butte Fire, the 2017 North Bay Fires and the 2018 Camp Fire.

As of March 15, PG&E had paid out $3.04 billion in preliminary and pro-rata payments and awarded another $7.04 billion in determination notices.

"I have heard from constituents across our community who are deeply, deeply concerned that they will face a tax burden upon receiving a payout from PG&E," Thompson said in a news release. "This trust was set up to help people get back on their feet and recover after a destructive fire. They should not have to pay taxes on these payouts. I am proud to introduce this bill alongside Rep. [Doug] LaMalfa to help our constituents receive the money they are owed, and will continue working to ensure survivors have the resources they need to recover from these tragedies."

The Butte Fire, North Bay Fires and Camp Fire burned 400,000 acres, destroying 10s of thousands of homes and other structures. The North Bay fires of 2017 alone claimed 44 lives, burned more than 200,000 acres and destroyed 5,300 homes in Napa, Sonoma, Lake, Mendocino and Solano counties. In the aftermath of each fire, thousands of people sought refuge in their vehicles, emergency tent communities or FEMA camps.

In addition to ensuring survivors would not be taxed on trust payments, the new law includes a provision exempting attorneys' fees from taxation to ensure that recipients of PG&E funds do not pay taxes on lawyers they did not hire.

"Fire victims have lost homes, belongings, and for some, even their loved ones," said LaMalfa (R-Richvale), who co-introduced the bipartisan legislation. "We should not ask survivors to pay federal taxes on compensation that they will use to rebuild their lives. And we certainly should not be asking them to pay taxes on funds that are going to their lawyers — this would be double taxing the settlement dollars. I have heard firsthand the concerns survivors have faced when navigating the ambiguous tax code. This bill has been a long time coming, and I look forward to continuing this effort with Rep. Thompson so survivors can finally get a financial reprieve."