Californians should not have to pay state taxes on settlement funds from the massive 2021 Huntington Beach oil spill, Senator Janet Nguyen (R-Huntington Beach) wrote in a bill she introduced today.
Senate Bill 1102 states that compensation payments residents and businesses received after the disaster would be excluded from their gross income for state tax purposes. The bill is modeled after similar legislation that excluded utility company payouts to wildfire victims.
“Victims of this horrible spill were reimbursed for damages by a check that arrived in the mail. Imagine how happy you would be to receive this money, only to find a 1099 form also included,” said Senator Janet Nguyen. “It’s unconscionable that the state would try to make money off the hardship of these victims.”
The spill occurred during Huntington Beach’s international Pacific Air Show, causing the event to be canceled on its final day. Two cargo ships dragging anchors ruptured a pipeline running along the ocean floor, spewing up to 144,000 gallons of crude oil along the Orange County coastline.
Besides tourism, the spill impacted property owners and the fishing industry and killed countless wildlife. Owners and operators of the pipeline and container ships paid a total of $95 million in damages.
Bills were passed in 2022 and 2023 making payouts from the Thomas and Zogg fires exempt from state taxes. Last week, Senator Scott Wilk (R-Santa Clarita) introduced SB 1004, which would exclude any wildfire compensation from state taxes. It has an effective date of Jan. 1, 2020.
Senator Janet Nguyen said she learned of the state price gouging from a constituent who wrote to her on social media.
“This just shows that everyone has a voice in my district – please contact me if you see something amiss and I’ll try to fix it,” Senator Janet Nguyen said.