To amend the Internal Revenue Code of 1986 to establish a deduction for attorney fees awarded with respect to certain wildfire damages and to exclude from gross income settlement funds received with respect to such damages.

“(22) Attorney fees and court costs relating to awards with respect to certain wildfires

“(A) In general—Any deduction allowable under this chapter for attorney fees and court costs paid by, or on behalf of, the taxpayer in connection with any award with respect to a qualifying wildfire disaster. The preceding sentence shall not apply to any deduction in excess of the amount includible in the taxpayer's gross income for the taxable year on account of a judgment or settlement (whether by suit or agreement and whether as lump sum or periodic payments) resulting from such claim.

“(B) Qualifying wildfire disaster—For purposes of subparagraph (A), the term “qualifying wildfire disaster” means any forest or range fire that—

“(i) is a federally declared disaster (as such term is defined in section 165(i)(5)(A)),

“(ii) occurs in a disaster area (as such term is defined in section 165(i)(5)(B)), and

“(iii) occurs in calendar year 2015 or later.”

“139J. Certain wildfire settlement proceeds

“(a) In general—Gross income shall not include amounts paid by a qualified settlement fund established to compensate victims for losses or damages in connection with a qualifying wildfire disaster (as defined in section 62(a)(22)(B)).

“(b) Qualified settlement fund—The term “qualified settlement fund” has the meaning given such term in Section 1.468B–1 of title 26, Code of Federal Regulations.”