Cal. Rev. & Tax. Code § 17138.3

(a) For each taxable year beginning on or after July 1, 2015, gross income does not include an amount received as a loan forgiveness, grant, credit, rebate, voucher, or other financial incentive issued by the California Residential Mitigation Program or the California Earthquake Authority to assist a residential property owner or occupant with expenses paid, or obligations incurred, for earthquake loss mitigation.
(b) For the purposes of this section, “earthquake loss mitigation” means an activity that reduces seismic risks to a residential structure or its contents, or both. For purposes of structural seismic risk mitigation, a residential structure is either of the following:
1. (1) A structure described in subdivision (a) of Section 10087 of the Insurance Code.
2. (2) A residential building of not fewer than 2, but not more than 10, dwelling units.