On Thursday, Rep. Jackie Speier, D-San Mateo/San Francisco, introduced a bill that would make tax-exempt any compensation given to San Bruno victims from PG&E.
The utility has pledged a $100 million relief fund for victims of the San Bruno blast, including “no-strings-attached” checks of up to $50,000.
The bill, the San Bruno Victims Compensation Fairness Act, also would make nontaxable any gains residents receive from insurance payments or other compensation for their destroyed property.
Tax questions were a hot topic at a recent town hall meeting Speier hosted for San Bruno residents. An Internal Revenue Service official told residents that the taxability of any payments would likely depend on how they were used.
“It’s a legitimate question and it’s an outrageous governmental intervention if the IRS is allowed to tax that,” Speier said.
IRS spokesman Jesse Weller declined to comment on the proposed legislation.