The 2026 Retirement and Personal Savings Protection Act

Sec. 1. Title.

This Act shall be known and may be cited as the Retirement and Personal Savings Protection Act of 2026.

Sec. 2. Findings and Declarations.

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Sec. 2 · Findings

Seven legislative findings setting up the measure’s rationale: Californians already pay among the nation’s highest taxes amid an affordability crisis, politicians and special interests want to tax retirement holdings and personal savings, and retroactive taxes undermine financial planning.

Findings are not operative law but frame intent and support the liberal-construction clause (Sec. 8). Finding (c) — with its two subparts — warns that defined-benefit pensions and 401(k)/IRA balances could be taxed on their value before any benefit is collected; findings (d)–(g) supply the stated justifications for the two operative bans the measure enacts: taxing the “mere ownership or control” of personal property (Art. VIII § 1) and retroactive taxation (Art. VIII § 2).

(a)

California families are paying more for everything and we already pay some of the highest taxes in the country. A recent analysis by a non-partisan research institute concluded that California ranks 3rd worst in the nation in subjecting its population to taxes, when considering individual income taxes, sales taxes, property taxes, and other forms of taxation. California is behind only New Jersey and the District of Columbia in this regard. California also has the highest state sales tax in the nation, the highest top income tax rate, and the highest tax on gasoline, among other indicators.

(b)

Every day, Californians are also facing an affordability crisis. Costs for housing, food, electricity, health care, home and auto insurance, and many other life necessities continue to escalate. Californians are struggling economically just to make ends meet on a daily basis. Saving for retirement or a rainy day is even harder. Given the state’s extraordinarily high cost of living, a recent analysis suggests that Californians would need $2.3 million saved up if they want to retire comfortably for 20 years. This is an impossible sum for many Californians.

(c)

To make matters worse, politicians and special interest groups want to start taxing retirement holdings, individually-owned assets, and other forms of personal savings-even though the “California Dream” is getting further out of reach for many of us and many Californians struggle to save enough money to retire. Here is just some of what could be at risk:

(1): Teachers, police officers, firefighters, and other dedicated workers earn defined-benefit pension benefits. They could be taxed on the future value of their pension benefits and forced to pay the government before they ever collect a dime in pension pay.
(2): Californians who contribute to 401 (k) retirement plans and individual retirement accounts (IRAs), and invest in stocks, bonds, mutual funds, and other investments could be taxed on the value of their retirement nest eggs. This could cost workers some of their hard-earning savings, causing them to put off retirement and leaving them more economically vulnerable later in life.

(d)

California already imposes income taxes, capital gains taxes, real property taxes, personal property taxes, corporation taxes, sales and use taxes, real property transaction taxes and many other taxes on its residents. In addition, once Californians begin to access their retirement holdings, sell their individually-owned assets, or realize the growth in other personal savings, they are already subject to the state’s income, capital gains, and property taxes. But politicians and special interests should be prohibited from taxing the mere ownership or control of personal property such as retirement holdings, individually-owned assets, and other forms of personal savings that Californians work hard to save.

(e)

Retroactive taxes can have the same devastating effects on Californians’ retirement planning and personal savings. Fundamental principles of fairness in a democratic society require that individuals, families, and businesses be able to understand and rely upon the tax laws that govern their financial planning so they can make decisions with advance notice of what the rules are.

(f)

The ability of Californians to organize and achieve their financial and retirement goals depends on having advance notice of the tax obligations that apply to them. Retroactive changes to tax laws are fundamentally unfair and undermine confidence in government, disrupt retirement and financial planning, and prevent residents and businesses from preparing for the future.

(g)

Sacramento politicians and special interests have wasted billions of our tax dollars on inefficient and ineffective programs. But they keep coming back for more of our money with more tax proposals. They don’t need to tax our retirement holdings or tax us retroactively based on past conduct, activities, or status-they need to deliver better results with what taxpayers have already given them to spend.

Sec. 3. Statement of Purpose.

In enacting this Act, the purpose and intent of the People of the State of California is to protect Californians’ ability to save for their futures by prohibiting the imposition of new taxes on our personal property, including the ownership or control of retirement holdings, individually-owned assets, and other forms of personal savings as well as requiring all new taxes to only apply prospectively.

Sec. 4. Article VIII is added to the California Constitution, to read:

Art. VIII.

§ 1. Prohibition on Taxing Retirement Holdings, Individually-Owned Assets, and Other Forms of Personal Savings.

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Art. VIII § 1 · core ban on taxing ownership of assets

The operative heart of the measure: no state law or constitutional provision enacted on or after Jan. 1, 2026 may impose a tax on the mere ownership or control of retirement holdings, individually-owned assets, and other forms of personal savings, whether held directly or indirectly. It targets taxes on owning property — not taxes on income, sales, or transactions.

Structural observation: the companion 2026 Billionaire Tax Act on the same ballot is a tax measured by the value of a billionaire’s owned “net worth” (publicly-traded stock, private business interests, and the like), with status fixed by a Jan. 1, 2026 tax-obligation date and value measured on a Dec. 31, 2026 valuation date. A tax keyed to the ownership and value of personal property and assets is precisely what § 1 is written to forbid for any law enacted on or after Jan. 1, 2026, so the two measures are in direct structural tension. The “whether held directly or indirectly” language reaches assets held through entities or nominees. Income, capital-gains, sales, and transaction taxes that apply when an asset is accessed, sold, or its growth realized are not barred — finding (d) (bill-sec-2-d) says those remain in force; § 1 reaches only the tax on ownership or control itself.

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Art. VIII § 1 · No tax on owning personal savings

Bars any state law or constitutional provision enacted on or after Jan. 1, 2026 from taxing the ownership or control of retirement holdings, individually-owned assets, and other forms of personal savings, whether held directly or indirectly.

Subdivision (b) grandfathers any tax that was in effect, imposed, and first collected on or before Dec. 31, 2025; subdivision (c) preserves the existing taxation of real property under other constitutional provisions. Read with the sweeping § 3 definition, the ban reaches a tax on the mere ownership or value of personal property — tangible or intangible — but, per the findings, not the income, capital-gains, sales, or property taxes that already apply when assets are accessed, sold, or their growth realized.

(a): No state law and no provision of this Constitution enacted on or after January 1, 2026 may enact, create, impose, or authorize collection of a tax on the ownership or control of retirement holdings, individually-owned assets, and other forms of personal savings, whether held directly or indirectly.
(b): Nothing in this section shall alter or limit the imposition or collection of any tax that was in effect, imposed, and first collected on or before December 31, 2025.
(c): Nothing in this section shall alter or affect the taxation of real property as provided in other provisions of this Constitution.

§ 2. Prohibition on Retroactive Taxes.

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Art. VIII § 2 · No retroactive taxes

Bars any state law or constitutional provision enacted on or after Jan. 1, 2026 from imposing a tax that operates retroactively — one creating liability based on conduct, activities, or status occurring before the law’s effective date — and expressly extends to a tax keyed to a taxpayer’s residency status on an earlier date.

Subdivision (b) preserves taxes in effect and first collected on or before Dec. 31, 2025. Subdivision (c) is a narrow carve-out: a statute the Legislature passes on or after Jan. 1, 2026 may look back no more than 365 days, but only if either the Governor declares a disaster/attack emergency or a fiscal emergency under Art. IV § 10(f) and the statute expressly limits the revenue to responding to that emergency. The residency-status clause in (a)(2) targets a tax that fixes a taxpayer’s status as of a date before the tax takes effect.

(a)

(1): No state law and no provision of this Constitution enacted on or after January 1, 2026 may enact, create, impose, or authorize collection of a tax that operates retroactively to result in tax liability based on conduct, activities, or a status that occurred or was present prior to the effective date of the state law or constitutional provision.
(2): This subdivision also applies to a tax that is imposed on a taxpayer based upon their residency status on a date prior to the effective date of the tax.

(b)

Nothing in subdivision (a) shall alter or limit the imposition or collection of any tax that was in effect, imposed, and first collected on or before December 31, 2025.

(c)

Subdivision (a) shall not apply to a tax imposed by a statute passed by the Legislature on or after January 1, 2026 where both of the following apply:

(1)

The tax does not apply retroactively for more than 365 days prior to the date the statute takes effect.

(2)

At least one of the following conditions exists:

(A): The Governor declares an emergency as a result of a fire, flood, storm, civil disorder, earthquake, volcanic eruption, or actual or imminent attack by a foreign enemy, and the use of the revenues from the tax are expressly limited by the statute to responding to the emergency.
(B): The Governor declares a fiscal emergency pursuant to subdivision (f) of Section 10 of Article IV and the use of the revenues from the tax are expressly limited by the statute to responding to the fiscal emergency.

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Art. VIII § 2(c) · the only exceptions are narrow and Legislature-only

The sole escape from the retroactivity ban is a tax passed by the Legislature (not by initiative) that looks back no more than 365 days AND is tied to either a Governor-declared natural-disaster emergency or a fiscal emergency under Art. IV § 10(f), with revenues expressly limited to responding to that emergency.

Several limits stack: (1) only a “statute passed by the Legislature” qualifies — an initiative-enacted retroactive tax gets no emergency relief; (2) the look-back is capped at 365 days; (3) the emergency must be one of the enumerated kinds (fire, flood, storm, civil disorder, earthquake, volcanic eruption, or actual/imminent foreign attack) or a declared fiscal emergency; and (4) the statute must expressly confine use of the revenue to the emergency. Critically, § 2(c) carves out only the § 2(a) retroactivity ban — it creates no exception to the § 1 ban on taxing the ownership or control of assets.

§ 3. Definitions.

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Art. VIII § 3 · Definitions

Defines the two terms that drive the Article: “retirement holdings, individually-owned assets, and other forms of personal savings,” and “tax.”

The first definition is deliberately broad — pensions; 401(k), 403(b), and all other individual retirement accounts; mutual funds; and “all personal property, whether tangible or intangible,” expressly including financial assets, investment accounts, business interests, digital assets, intellectual property, and personal belongings, plus a catch-all for “other assets used to produce or collect income or savings for retirement or financial planning.” “Tax” adopts the definition in Cal. Const. art. XIII A § 3(b), so the prohibitions track that broad, post-Prop. 26 meaning of a state tax.

For purposes of this article, the following definitions shall apply:

(a): “Retirement holdings, individually-owned assets, and other forms of personal savings” means pensions; retirement accounts including but not limited to 401(k) accounts, 403(b) accounts, and all other individual retirement accounts; mutual funds; and all personal property, whether tangible or intangible, including but not limited to financial assets, investment accounts, business interests, digital assets, intellectual property, personal belongings, and other assets used to produce or collect income or savings for retirement or financial planning.
(b): “Tax” means a tax as defined in subdivision (b) of Section 3 of Article XIII A.

§ 4. Application of Article.

This article applies to all statewide initiative measures submitted to the electors on or after January 1, 2026, including measures that appear on the ballot at the same election at which the measure adding this article is approved by the electors.

Sec. 5. Conflicting Measures.

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Sec. 5 · voids a rival tax measure “in their entirety”

If this measure shares a ballot with another initiative that taxes the ownership/control of the same broadly-defined assets, or imposes a tax based on pre-effective-date conduct, activities, or status, the two are “deemed to be in conflict”; if this measure draws more affirmative votes, its provisions “prevail in their entirety” and ALL of the other measure’s provisions become “null and void.”

Structural observation: the conflict trigger is drafted to describe a wealth/net-worth or retroactive tax — precisely the companion 2026 Billionaire Tax Act — and it borrows § 3(a)’s broad asset definition (Sec. 5(a)(2)). California ordinarily resolves conflicting measures under Cal. Const. art. II § 10(b) provision-by-provision, applying the higher-vote measure only where provisions are truly irreconcilable; voiding the rival “in their entirety” is broader than that default and is itself a likely litigation point. Subdivision (b) is a revival clause: if a conflicting measure wins but is later held invalid, this measure becomes self-executing and is given full force and effect.

(a)

(1): In the event that this initiative measure appears on the same statewide election ballot as another initiative measure that would establish, enact, create, impose, or authorize collection of a tax on the ownership or control of retirement holdings, individually-owned assets, and other forms of personal savings, or enact a tax that would result in tax liability based on conduct, activities, or a status that occurred or was present prior to the effective date of the initiative measure, then that other initiative measure shall be deemed to be in conflict with this measure. In the event that this initiative measure receives a greater number of affirmative votes, the provisions of this measure shall prevail in their entirety, and all the provisions of the other measure shall be null and void.
(2): For purposes of this section, “retirement holdings, individually-owned assets, and other forms of personal savings” shall have the same meaning as set forth in Section 4 of this Act (Cal. Const., art. VIII § 3).

(b)

If this initiative measure is approved by the voters but superseded in whole or in part by any other conflicting initiative measure approved by the voters at the same election, and such conflicting measure is later held invalid, this measure shall be self-executing and given full force and effect.

Sec. 6. Severability.

The provisions of this Act are severable. If any portion, section, subdivision, paragraph, clause, subclause, sentence, phrase, word, or application of this Act is for any reason held to be invalid by a decision of any court of competent jurisdiction, that decision shall not affect the validity of the remaining portions of this Act. The People of the State of California hereby declare that they would have adopted this Act and each and every portion, section, subdivision, paragraph, clause, subclause, sentence, phrase, word, and application not declared invalid or unconstitutional without regard to whether any part of this Act or application thereof would be subsequently declared invalid.

Sec. 7. Effective Date.

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Cal. Const. art. II § 10

Article II reserves the powers of initiative, referendum, and recall to the people; § 10(a) is the effective-date rule Sec. 7 invokes — a voter-approved initiative takes effect the fifth day after the Secretary of State files the statement of the vote, unless the measure provides otherwise.

Sec. 7 adds that this Act becomes operative the same day it takes effect (it sets no later operative date). Section 10(b) of the same article supplies California’s general conflicting-measures rule — where provisions of two measures approved at the same election conflict, the one receiving the highest affirmative vote prevails. That default works provision-by-provision, displacing only the conflicting provisions of the lower-vote measure; the Act’s own conflicting-measures clause (Sec. 5) reaches further, purporting to render a competing measure null and void “in their entirety” — a broader remedy than § 10(b)’s usual rule, and itself a likely point of litigation. Section 10(c) limits how the Legislature may later amend or repeal a voter-enacted initiative.

Open source ↗ leginfo.ca.gov

This Act shall take effect at the earliest possible date in accordance with Section 10 of Article II of the California Constitution. This Act shall become operative on the same day it takes effect.

Sec. 8. Liberal Construction.

This Act shall be liberally construed to give effect to its intent and purposes.

Sec. 9. Legal Defense.

The purpose of this section is to ensure that the people’s precious right of initiative cannot be improperly annulled by state politicians who refuse to defend the will of the voters. Therefore, if this Act is approved by the voters of the State of California and thereafter subjected to a legal challenge which attempts to limit the scope or application of this Act in any way, or alleges this Act violates any state or federal law in whole or in part, and both the Governor and Attorney General refuse to defend this Act to the fullest extent possible on behalf of the State of California, then the following actions shall be taken:

(a): Notwithstanding anything to the contrary contained in Chapter 6 (commencing with Section 12500) of Part 2 of Division 3 of Title 2 of the Government Code or any other law, the Attorney General shall appoint independent counsel to faithfully and vigorously defend this Act to the fullest extent possible on behalf of the State of California.
(b): Before appointing or thereafter substituting independent counsel, the Attorney General shall exercise due diligence in determining the qualifications of independent counsel and shall obtain written affirmation from independent counsel that independent counsel will faithfully and vigorously defend this Act to the fullest extent possible. The written affirmation shall be made publicly available immediately upon request.
(c): In order to support the defense of this Act in instances where the Governor and Attorney General fail to do so despite the will of the voters, a continuous appropriation is hereby made from the General Fund to the Controller, without regard to fiscal years, in an amount necessary to cover the costs of retaining independent counsel to faithfully and vigorously defend this Act on behalf of the State of California to the fullest extent possible.