Carson homeowners get state tax break for Shell Oil payments

CARSON, Calif. (KABC) -- Carson homeowners receiving compensation money from Shell Oil will not have to pay state income taxes on those payments.

California Gov. Jerry Brown signed off on a bill authorizing the exemption. Nearly 300 Carson households receive compensation while the oil-soaked soil beneath their homes is removed.

More than 50 years ago, homes in the Carousel tract were built atop former oil reservoirs. Shell Oil started the cleanup of the 50-acre neighborhood in 2015.

In some cases, the contaminated area requires removing soil up to 10-feet-deep. Contaminated groundwater plumes are also being remediated.

Local officials hope the move by Brown will put pressure on the federal government and IRS to do the same for federal income taxes.

Shell has agreed to pay $90 million in damages to residents. The total cleanup cost is expected to be $200 million.

Carousel residents can expect the cleanup to last until at least 2023.