Latest news with #SantaAnaWinds
Forbes
22-07-2025
- Business
- Forbes
Wildfire Recovery Tax Treatment Even With New Tax Exclusion Is Tricky
LOS ANGELES, CALIFORNIA - JANUARY 8: A firefighter battles the Palisades Fire while it burns homes ... More at Pacific Coast Highway amid a powerful windstorm on January 8, 2025 in Los Angeles, California. The fast-moving wildfire has grown to more than 2900-acres and is threatening homes in the coastal neighborhood amid intense Santa Ana Winds and dry conditions in Southern California. (Photo by) It was huge news in December 2024 when Congress passed a tax law to many wildfire settlements tax free. The law expires at the end of 2025, and there's no sign of it being amended to cover 2026 and later recoveries. That's a worry for recent fires such as the LA fires of 2025. Litigation usually takes years to resolve. Yet fire victims usually have tax issues long before any lawsuit recovery. They include whether and how to claim a casualty loss on their taxes, and how various categories of insurance proceeds are taxed. Which Fires, Does Yours Qualify? The new federal law is a great benefit but among other limitations, it applies only for payments through the end of 2025. But what about California state taxes? As for California taxes, state law added temporary provisions to the California Revenue & Taxation Code that exclude from California income tax amounts received in connection with certain specific California wildfires (the Butte Fire (if the recovery is received from the Fire Victim Trust), the North Bay Fires (if the recovery is received from the Fire Victim Trust), the Thomas Fire, the Woolsey Fire, the Kincade Fire, and the Zogg Fire). Other fires were not covered, until now. California's 2025 budget legislation expanded the California income tax exclusions that apply to certain wildfire recoveries received between January 1, 2021 and January 1, 2030. However, the new exclusion does have requirements that not all wildfire recoveries may satisfy. As noted, in the past, California passed state-level tax exclusions for recoveries related to specific wildfires. That often made the specific wildfire that affected your home or property controlling over whether you qualified to treat your wildfire recovery as tax free. Then, on September 29, 2024, Governor Newsom vetoed two bills that would have granted state-level income tax exclusions to new wildfires. In his letter to the Legislature, Governor Newsom explained that he vetoed the bills, not because he disagreed with the idea that the recoveries should be tax-free for California tax purposes, but because he believed that a wildfire exclusion should be addressed more systematically as part of the annual budgeting process, not on a wildfire-by-wildfire basis where it would be more difficult to incorporate the exclusions into California's budget balancing efforts. That helps to explain why the new California wildfire exclusion was included in the recently enacted S.B. 132, which was one of the bills recently passed as part of a larger budget deal between the Governor and the state legislature. S.B. 132 adds a new section to the California tax code, Section 17138.7. The new exclusion applies to all wildfire recoveries received by a California taxpayer between January 1, 2021, and January 1, 2030, regardless of the specific wildfire involved. However, there is one very notable requirement for the new exclusion. Under the new exclusion, the recovery must be received from a 'settlement entity.' The new law defines the term 'settlement entity' to mean an entity 'approved by a class action settlement administrator.' This definition seems likely to have been intended to include the PG&E Fire Victim Trust. However, what about money you get from your insurance company? It seems unlikely that that kind of payment could be shoehorned into this defined term. The same for recoveries received in direct settlement with Southern California Edison or PG&E outside of a class action. For taxpayers whose recoveries do not qualify for the new exclusion, the existing wildfire-by-wildfire exclusions remain in the California tax code, for at least a little while longer. Those exclusions are still alternative bases to claim a California tax exclusion for amounts received through 2026 or 2027, depending on the specific wildfire involved. Does the new exclusion seem unduly narrow or formalistic, particularly for an exclusion that was presented as intending to expand the scope of wildfires that qualify for exclusion from California income tax? Yes, many fire victims are likely to think so. Of course, this is still a new law. It is possible that there may be guidance from the Franchise Tax Board about the application and requirements for claiming this exclusion. Regarding federal taxes, tax issues can hinge on federal disaster declarations, and even determining which disaster declarations count can be nuanced.
San Francisco Chronicle
17-07-2025
- Science
- San Francisco Chronicle
Winds behind fierce California wildfires will change, study finds. Here's what it means
Santa Ana winds have driven some of California's most devastating wildfires, including the destructive Palisades and Eaton fires that scorched Los Angeles in January. A new study reports that these hot, dry winds will become less frequent in the future. But the more rare Santa Ana winds could bring increasing danger, researchers from Princeton University and the National Oceanic and Atmospheric Administration's Geophysical Fluid Dynamics Laboratory found. When the winds do arrive, they will be drier than they are today and could pose greater wildfire risk to coastal Southern California, according to the study. Southern California's Santa Ana winds are close cousins to the Bay Area's Diablo winds, which have also whipped up catastrophic blazes. The winds are a product of cold, dense air hundreds of miles away, in the Great Basin. Temperature and pressure differences drive air toward California's coast. The air compresses as it barrels down mountain slopes, making it heat up and become drier. The resulting hot, dry winds can spread flames and even propel embers forward, causing blazes to explode in size. The study used high-resolution computer models to simulate how Santa Ana winds will change in the future. The authors used an extreme emission climate scenario to probe the impacts of human-caused climate change. They found that, in the future, Santa Ana winds will become less frequent, echoing previous studies. The authors propose that because land warms faster than the ocean, in the future, the temperature gradient that produces offshore winds — driven by cold air inland — will become weaker. Consequently, Santa Ana winds will occur less frequently. High-resolution models, however, revealed that Santa Ana winds will be drier than they are today, exacerbating wildfire risk. These patterns didn't pop out when the scientists used lower-resolution models. This could be because Santa Ana winds, as well as Diabo winds, are greatly influenced by small features in the landscape. 'If you have a higher-resolution model that can depict the topography of the region, you will have a more reliable result, ' said Janin Guzman-Morales, a regional climate scientist at San Jose State University, who wasn't part of the new research. Guzman-Morales led a 2019 study that reported climate change suppressed Santa Ana Winds via changes to atmospheric pressure patterns. The new study makes the earlier findings more robust, Guzman-Morales said. Alex Hall, a professor of atmospheric and oceanic science at UCLA, agreed that the main contribution of the study is 'highlighting the need for high resolution to simulate the impact of climate change on the Santa Ana wind phenomenon.' Hall, who also wasn't part of the new research, co-authored a 2011 study that reported a reduced frequency of wintertime Santa Ana winds in the mid-21st century, due to human-caused climate. The new research relied on one global climate model, produced by the Geophysical Fluid Dynamics Laboratory. Hall said that it will be valuable to analyze additional models, to quantify uncertainty and identify the most likely magnitude of Santa Ana wind weakening. Another question is how future changes to seasonal precipitation will impact wildfire risk associated with Santa Ana winds, Hall said. While the Los Angeles wildfires in January were driven by offshore winds, a lack of rain in preceding months set the stage for blazes to take off. Climate change could have similar effects on Diablo winds, given their similarity to Santa Ana winds, Guzman-Morales said. But additional research needs to be done to confirm that. 'There is an absolute need for that research,' Guzman-Morales said.
Yahoo
30-01-2025
- General
- Yahoo
Exposed utility wires may have contributed to LA's Eaton Fire, law firm says
By Laila Kearney NEW YORK (Reuters) - A law firm representing victims of the Eaton Fire in Los Angeles has submitted photos with a legal filing on Wednesday that appear to show exposed wire at the base of a Southern California Edison tower that the firm alleges may have contributed to the deadly blaze. The Eaton Fire was among the biggest of multiple wildfires that erupted on Jan. 7 and spread quickly in powerful Santa Ana Winds across the Los Angeles area. The wildfires are potentially the most costly disaster in U.S. history. See for yourself — The Yodel is the go-to source for daily news, entertainment and feel-good stories. By signing up, you agree to our Terms and Privacy Policy. Photographs and video show sparks or flames near the utility's transmission equipment have already been submitted in court cases against SCE, but the new images may be the first to show burnt and exposed, or unburied, wire. During potential arcing at the transmission towers, the exposed wires leading up to the bottom of the infrastructure may have heated to the point of igniting nearby vegetation, said plaintiff's attorney Alexander Robertson. The arcing could have sent a shower of sparks and molten metal down to the ground, triggering a fire, the law firm said. "The exposed grounding wire is charred on the photos and likely acted like a wick on a candle to ignite the brush at the base of the tower," attorney Robertson said. "We don't yet know if this was the sole or contributing ignition source, but the physical evidence suggests it was at least a contributing cause," said Robertson. The fire's cause is still under investigation, including by official government agencies and Southern California Edison. An SCE spokesperson criticized law firms for sharing details, such as potential evidence, with the media "when they should be sharing the information with authorities." "Our investigation into all possible involvement of SCE's equipment continues," Southern California Edison spokesperson Kathleen Dunleavy said. Robertson and experts with his firm captured the images of SCE's equipment by hiking to SCE towers along the ridge of foothills near Altadena and deploying drones earlier this month. Earlier in the week, SCE said a preliminary review of its data for transmission lines that run through towers, including the one scrutinized by Robertson, showed no indication of faults on the lines until more than an hour after the reported start time of the blaze. Electrical faults can sometimes lead to arcing, which is essentially a spark that jumps between two conductors. The Robertson and Associates' images were captured near the ARCO station where surveillance footage showed two short arcs at the top of an SCE tower. That surveillance video was reported earlier in the week by the New York Times and other news outlets and has since been cited in legal filings. SCE said in a statement on Monday that it was reviewing the footage.
