The Senate Committee on Finance and Revenue opened a public hearing April 14 on Senate Bill 1205, a proposal to expand an existing personal income tax subtraction so that judgments or settlements from wildfires that occur in 2026 and 2027 would be exempt from Oregon income tax.

The bill would extend the current eligibility window, which the Legislative Revenue Office staff told the committee applies to wildfires that occurred from 2018 through 2025 and permits amounts received from settlements or judgments at any time after 2018 to be subtracted from taxable income. "What the change in 1205 is it adds years 2026 and 2027 for when these fires could occur and then settlements going forward," the LRO staff said during the hearing.

Senator David Brock Smith, who represents Senate District 1 in southwest Oregon, described continued unmet settlement payments and urged the extension. "We have, a situation where some settlements have been paid, timber companies, and others, but we have not. There's still smaller settlements in regards to, some homeowners and landowners that we need to extend this for," he said. He framed the measure as relief for people "who have lost everything" in wildfires.

Staff clarified the statute’s design: the existing subtraction uses the date the wildfire occurred (and the governor's declaration of emergency) to determine eligibility, not the date when a settlement is paid. Committee members asked whether a suit filed in 2026 for a 2023 fire would be affected; staff answered that the framework leaves the receipt window open so amounts could be received after the fire date.

No formal action or vote was taken during the hearing; the committee closed the public hearing and indicated it would discuss the bill at a later time.

Background and next steps: committee testimony referenced prior session legislation that enacted the current subtraction; staff identified that prior enactment in committee discussion. The committee did not take a vote on SB 1205 on April 14 and left the record open for further consideration.