Fire victims may get tax exemption

San Bruno residents who accepted cash from Pacific Gas and Electric after the Sept. 9 explosion and fire may be exempt from state taxes if a bill Assemblyman Jerry Hill plans to introduce Monday is successful.

In late October, residents attending a town hall meeting expressed concerns about being taxed on money given to cover displacement and rebuilding costs. Money from insurance companies wouldn't be taxable but funds coming from PG&E could be. Local legislators on hand that night took note of the concern. U.S. Rep. Jackie Speier, D-San Mateo, introduced a bill last month exempting payments from PG&E from federal taxes. On Monday, Hill, D-San Mateo, will introduce a bill for those affected in San Bruno to make sure California doesn't take money residents deserve.

Hill hadn't thought about the tax implications until the meeting when it became clear afflicted residents would be on the hook for money that should help them get back on their feet.

"It's not a fair way for people to deal with their loss," he said.

Many were evacuated from the Glenview neighborhood Sept. 9 during the initial explosion and fire. In total, 37 homes were destroyed, many more damaged and eight people were killed. A number of people whose homes had minor damage or were undamaged were displaced for a few days.

Within the days following the event, PG&E pledged $100 million to affected residents including initial payments ranging from $15,000 to $50,000 to cover immediate day-to-day expenses. It is this kind of money that could be taxed.

Hill's bill follows Speier's lead in that it specifically helps San Bruno residents.

Speier's bill, San Bruno Survivors Compensation Fairness Act of 2010, was introduced after the October meeting when it became apparent that residents could be taxed depending on how they spent the money.

"There needs to be a clear provision in the law for circumstances like this," she said at the time.

Bill Magoolaghan, whose family's house is yellow tagged, was happy about the proposed bills.

"It's a wonderful idea. It's funny; the money people were given was spent so quickly. To learn we needed to give a good chunk of that to taxes, we weren't planning for that," he said.

Kevin Ashley, whose family has since left the Glenview area, agreed.

"Any assistance the government could provide would be helpful. A lot of people are in difficult circumstances," he said.

Hill has scheduled a legislative forum Tuesday, Dec. 7 from 5 p.m. to 8 p.m. at San Bruno Senior Center, 1555 Crystal Springs Road. Joining Hill will be members of the Assembly Utilities and Commerce Committee, chaired by Assemblyman Steven Bradford, and the Assembly Committee on Public Safety, chaired by Assemblyman Tom Ammiano.