Section 1. Title.
This Act shall be known and may be cited as the Retirement and Personal Savings
Protection Act of 2026.
Section 2. Findings and Declarations.
(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 3rc1 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 definedbenefit 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
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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 asset~, 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.
(t) 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.
Section 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, individuallyPage 2 of6
owned assets, and other forms of personal savings as well as requiring all new taxes to only
apply prospectively.
Section 4. Article VIII is added to the California Constitution, to read:
ARTICLE VIII
SECTION 1. Prohibition on Taxing Retirement Holdings, Individually-Owned
Assets, and Other Forms of Personal Savings.
(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 ofreal property as provided in
other provisions of this Constitution.
SEC. 2. Prohibition on Retroactive Taxes.
(a)(l) 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:
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(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.
SEC. 3. Defmitions.
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.
SEC. 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.
Section 5. Conflicting Measures.
( 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
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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.
Section 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.
Section 7. Effective Date.
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.
Section 8. Liberal Construction.
This Act shall be liberally construed to give effect to its intent and purposes.
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Section 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.