ASSEMBLYMAN TRI TA INTRODUCES LEGISLATION TO EXEMPT CHEMICAL LEAK COMPENSATION FROM STATE INCOME TAXES

The chemical leak, which began on May 21, 2026, at an aerospace  manufacturing facility in Garden Grove, led to the evacuation of more than  50,000 residents and prompted both a gubernatorial state of emergency  declaration and a presidential emergency declaration.

ORANGE COUNTY— Assemblyman Tri Ta (R-Westminster) announced legislation that would exempt settlement payments, including any compensation received by victims of the 2026 Garden Grove chemical leak from California income taxes.

The legislation would allow residents and businesses affected by the chemical emergency to retain the full value of compensation received for losses connected to the incident.

Substantive amendments to AB 760 excludes qualifying compensation payments from California personal income taxes and corporate income taxes for taxable years beginning on or after January 1, 2026, and before January 1, 2031. The bill would apply to residents, property owners, and businesses that receive compensation payments connected to the chemical leak.

“When families are compensated for expenses caused by an evacuation, that money should stay with the people who were affected,” Assemblyman Ta said. “The goal of this bill is simple: make sure disaster victims can keep every dollar intended to help them move forward.  The state should not be taking a share of those funds through income taxes.”

Senator Tony Strickland (R-Huntington Beach) joined the legislation as a principal co-author.

“I believe in solving problems, not creating new burdens. At a time when families are struggling with an affordability crisis, this legislation is the right approach, and I’m proud to be a principal co-author. Throughout and after the hazmat incident, I heard directly from residents and business owners about the financial strain they faced as they worked to recover. That’s why I signed on to this measure to ensure that financial payouts provided to victims are not taxed. This is about delivering real relief,” said Senator Tony Strickland (R-Huntington Beach), principal coauthor of AB 760.

WHAT THEY ARE SAYING

“The families affected by the chemical incident have already borne enough of the cost. Evacuees should not face state income taxes on compensation intended to help them recover from an emergency that uprooted their lives. Assemblyman Tri Ta’s bill takes a commonsense approach by ensuring relief payments remain with the people who need them.”

— Garden Grove Mayor Stephanie Klopfenstein

“The chemical incident disrupted daily life for countless Stanton residents and created uncertainty for families and local businesses alike. As our community continues to recover, it is important that those affected are given every opportunity to rebuild their lives without additional obstacles. Assemblyman Tri Ta’s legislation recognizes that compensation paid to victims is intended to address real losses and hardships. This measure helps ensure that relief serves its intended purpose and supports the long-term recovery of our community.”

— Stanton Mayor Dave Shawver

“The chemical emergency forced thousands of families in Westminster’s District 1 from their homes and upended daily life throughout our neighborhoods. Any compensation received by evacuees is meant to help them recover—not create another tax burden. I appreciate Assemblyman Tri Ta for introducing this legislation to ensure residents can keep every dollar of the relief they receive. Government should not tax disaster assistance meant to help families rebuild.”

— Westminster Councilwoman Amy Phan West