The Bill,
page by page.

A short letter from proponent of record Suzanne Jimenez to Attorney General Rob Bonta, dated November 24, 2025 and received November 26, 2025. It transmits Amendment 1 under Elections Code §9002(b) and asks the AG to prepare a circulating title and summary.

• Proponent of record: Suzanne Jimenez.
• Counsel of record: George M. Yin, Kaufman Legal Group, 445 S. Figueroa Street, Suite 2400, Los Angeles, CA 90071.
• Cites Elections Code §9002(b): the amendments are reasonably germane to the theme of the original measure.

One sentence. The Act is officially named the 2026 Billionaire Tax Act. The informal nickname CABTA is not in the bill.

• Verbatim: “This Act shall be known, and may be cited as, the 2026 Billionaire Tax Act.”

Twenty-six lettered paragraphs (a through z) laying out the political and economic case. Half the section concerns the Medi-Cal funding crisis, the rest concerns billionaire wealth growth and effective tax rates.

• (b) Nearly 15 million Californians on Medi-Cal, including more than half of the state’s children.
• (c) Medi-Cal projected to lose up to $19 billion in annual federal funding; ~$190 billion over 10 years.
• (d) State cuts to Medi-Cal estimated at $7B in 2027–28, rising to $8.6B per year from 2028–29.
• (r) “California has around 200 billionaires who collectively possess an astonishing $2 trillion in wealth.”
• (s) Billionaires pay 24% of income in all-level taxes; average California taxpayer pays 30%. Cites NBER Working Paper 34170 (Akcan Balkir, Saez, Yagan, Zucman, 2025).
• (t) Notes existing California wealth taxes: Vehicle License Fee at 0.65% of vehicle value; property tax at ~1% of assessed value.
• (w) California billionaire wealth: $300B (2011) → $700B (2019) → over $2T (2025).
• (z) “In light of the emergency funding situation … the People have provided for expedited judicial review of this Act.”

Five short paragraphs declaring the Act’s aims. Health care, K-14 education, food assistance. Closing what the Act calls the unfairness of billionaire wealth not being taxed by the State.

• (a) Protect access to health care, support K-14 public education, by raising revenue from a one-time tax on billionaire wealth.
• (c) Confront the “fundamental unfairness that arises because a large percentage of billionaire wealth is never taxed by the State due to billionaires’ unique ability to control the timing, location, and amount of income tax that they pay.”
• (d) Narrowly applicable, one-time, administratively feasible.
• (e) Treat similarly situated taxpayers and assets similarly, except where sound tax policy requires otherwise.

The constitutional core. Eight subdivisions create the tax authority, define the Reserve Fund, and immunize the Act from various existing constitutional limits.

• 37(a): Authorizes a one-time tax on the accumulated wealth of California-resident billionaires.
• 37(c): Authorizes taxation of all forms of personal property and wealth, tangible or intangible. Includes “shares of capital stock, bonds or other evidences of indebtedness, and any legal or equitable interest therein.”
• 37(d): Creates the 2026 Billionaire Tax Reserve Fund. 90% Health Account, 10% Education and Food Assistance Account.
• 37(e): Notwithstanding any other provision, the Act’s revenues are NOT General Fund revenues, NOT moneys/proceeds under §8 of Article XIIIB, and NOT “personal income taxes paid on net capital gains” under §20 of Article XVI. Crucially: “The taxes levied by this Act are not ‘ad valorem taxes on real property’ for purposes of Section 1 of Article XIIIA.” Article XIIIA inconsistencies are superseded by this Section.
• 37(f): Reserve Fund appropriations are NOT counted for entity appropriations limits.
• 37(g): Special-fund protections; cannot be borrowed or transferred to the General Fund.
• 37(h): Authorizes facial challenge via validation action under Code of Civil Procedure Chapter 6 of Part 27, RTC §50314, without requiring payment of the contested tax.

The Reserve Fund operating manual. How money is allocated, what it can fund, the spending caps, and the annual reporting requirements.

• (b)(1) Health Account uses: Medi-Cal restoration, safety-net providers, mitigating facility closures, supporting providers serving vulnerable populations.
• (b)(2) Education and Food Assistance Account uses: K-14 restoration; programs such as CalFresh, CalFAP, CalFood, California’s Universal Meals Program.
• (c) Annual appropriation caps: up to $22.5 billion from the Health Account, up to $2.5 billion from the Education and Food Assistance Account.
• (d) Anti-supplant rule: cannot be used to justify reducing or failing to increase other appropriations.
• (e) FTB administrative loan authority up to $50 million for the first year.
• (f) Annual Department of Finance reporting (current balance, revenue projections, expenditures, certification of non-supplantation).
• (g) Once all Act revenues are collected and spent, the Legislature may abolish the Reserve Fund.
• (h) Defines what counts as “reductions in federal funding” (FMAP cuts, eligibility tightening, work requirements, HR 1 / Pub. L. 119-21, etc.).

The substantive heart of the Act. Six chapters covering imposition, valuation, deferral, appraisals, apportionment, and general administration.

The mechanics of who pays, when, and how.

• §50301(a): “An excise tax is imposed for tax year 2026 on the activity of sustaining excessive accumulations of wealth by applicable individuals with net worth of $1 billion ($1,000,000,000) or more, and on applicable trusts.” A married couple is one individual for this Section.
• §50301(b): Rate is 5 percent of net worth. Phase-in: between $1.0B and $1.1B, the rate reduces by 0.1 percentage points per $2M of net worth below $1.1B.
• §50301(c)(1): Pay-in-full option, due with the 2026 income tax return.
• §50301(c)(2): Five-year installment option, with a 7.5 percent annual nondeductible deferral charge on the remaining unpaid balance.
• §50301(d): Every California resident otherwise required to file a return must declare either (1) net worth at or below $1B as of the valuation date, OR (2) a full additional-tax declaration with appraisals or other evidence of fair market value.
• §50301(e): The Franchise Tax Board has full audit power under RTC §19504.

The valuation rule book. The most administratively dense part of the Act, covering debts, business interests, trusts, art, and out-of-state property.

• §50302(a): Recourse debts personally liable, fully counted.
• §50302(c): Debts of a sole proprietorship reduce net worth; debts of a partnership/LLC/business entity that are not personal do NOT reduce net worth.
• §50302(e): No deduction for debts to related persons, contingent liabilities (substantially uncertain within 5 years), or non-arm’s-length debt.
• §50302(f): Charitable pledges entered after October 15, 2025 do not reduce net worth unless legally enforceable by the recipient.
• §50303(c)(1): Publicly traded assets valued at market trading value on the valuation date.
• §50303(c)(3): Private business interests valued via book value plus a present-value multiplier of 7.5 times annual book profits, averaged over current and prior two tax years. Private equity entities cannot be valued below the sum of their constituents.
• §50303(c)(4): Real property held directly by an individual or via a revocable trust is excluded from net worth.
• §50303(c)(5): Tangible personal property excluded only if outside California for ≥270 days during 2026, with anti-abuse for property “relocated temporarily with a substantial purpose of avoiding tax.”
• §50303(c)(6): Trust attribution rules. 100% of property transferred to a trust in 2026 and 75% of property transferred in 2025 are treated as the transferor’s net worth (other than grantor or tax-exempt trusts).
• §50303(c)(7): Pensions exempt; Roth IRA exempt up to $10M aggregate.
• §50303(c)(9): $5M de minimis exclusion for art, collectibles, financial instruments, and personal property combined.
• §50303(c)(10): No asset can be valued below its insured value or below a recent funding-round / equity-sale valuation within two years.
• §50303(c)(11): Property transferred at below fair market value after October 15, 2025 attributed back to the transferor if the items together exceed $1M.

The liquidity safety valve. A taxpayer whose tax owed exceeds the value of their publicly traded assets can elect to attach private holdings to an ODA and defer payment, in exchange for a contractual lock-in.

• (a)(3) ODA holders agree to be subject to California personal jurisdiction for collection.
• (c) A taxpayer may maintain only one ODA. Assets attached must exceed the value of the taxpayer’s publicly traded assets.
• (d) Reporting requirements continue “even if and after the taxpayer is no longer a resident of California.” Failure is a contract breach plus tax-filing penalties. Death does not terminate the ODA — the estate must reconcile.
• (e) Accumulated unliquidated tax withholding percentage is 5 percent.
• (f)–(i) Material distribution transactions trigger pro-rata tax payments. Includes withdrawals of money or value, and transfers to related persons.
• (g) Ordinary maintenance/improvement transactions are NOT material distributions.
• (k) Selling all ODA-attached interests fully liquidates the ODA.

Appraisers face direct liability. The Act ties appraiser standards to existing federal qualified-appraisal rules and adds civil penalties.

• (a) Appraisers must send a copy of any certified appraisal to the FTB along with taxpayer-identifying information.
• (b) Standards based on IRC §1.170A-17 qualified-appraisal and qualified-appraiser rules.
• (c) Appraiser penalties: up to 2% of understatement (substantial) or 4% of understatement (gross) of tax attributable to a substantial or gross overstatement or understatement of valuation in the certified appraisal.

Standard rule: 100% of net worth is apportioned to California, regardless of residency history. Alternative apportionment available with a high evidentiary bar. A constitutional safety valve floors most reductions at 25%.

• §50306(a): Standard apportionment is 100% to California for applicable individuals and trusts, with no reduction or multiplier based on residency history.
• §50306(b)(2): Alternative apportionment available if the standard method “does not fairly represent the extent to which the taxpayer’s excessive wealth was accumulated in, or substantially sustained by, California.”
• §50306(b)(3): Petitioner must prove by clear and convincing evidence that (A) wealth did NOT substantially accumulate in California AND (B) was NOT substantially sustained in California for at least 365 days during the 48-month period ending on the valuation date.
• §50306(b)(4): Constitutional alternative also available if the U.S. or California Constitution or federal law prohibits the standard method.
• §50306(b)(6): Minimum 25% apportionment floor, unless the Office of Tax Appeals or a court finds “grossly disproportionate” taxation.
• §50306(b)(8): If any residency-based provision is held invalid, residency falls back to RTC §§17014/17015.5 personal income tax rules.
• §50307(a): Credit for taxes paid to other jurisdictions on net wealth, pro rata by days resided elsewhere during 2026 (denominator is 365). No credit for taxes on directly-held real property.
• §50307(b): Additional credit to the extent required by the U.S. Constitution.

Definitions, administration, severability, penalties, and the schedule for expedited judicial review.

• §50308(a) Applicable individual: California resident under RTC §§17014/17015.5 as of the tax obligation date.
• §50308(n) Tax obligation date: January 1, 2026.
• §50308(o) Valuation date: December 31, 2026.
• §50308(c) Board: the Franchise Tax Board.
• §50309(b)(2): Until January 1, 2028, the Administrative Procedure Act rulemaking provisions do NOT apply to FTB regulations under this Part.
• §50309(b)(3): 10-year statute on deficiency assessments for the 2026 tax year.
• §50310: Legislature may amend the Act by 2/3 vote in each house, only if consistent with the Act’s purposes.
• §50311(a): Provisions are severable. (b): Courts shall preserve the tax with the most limited adjustment possible to cure defects.
• §50312(a): Substantial understatement = greater of $1M or 20% of tax shown. Gross understatement = greater of $10M or 40% of tax shown.
• §50312(c): Penalties are 20% (substantial) or 40% (gross) of the understatement.
• §50312(i): For 2026, 6-month extension to file granted; estimated payment penalties do NOT apply to April 2027 payments. October 2027 final payments DO carry penalties.
• §50312(j): The Board may hire outside experts and outside counsel, with funding beyond the §16355(e) administrative loan if needed.
• §50312(k): General anti-avoidance rule. Transactions lacking economic substance can be disregarded.
• §50312(m)(2): NO exemptions, exclusions, or deductions beyond those expressly authorized.
• §50314: Validation action procedure. 60-day filing window after voter approval. Sole venue: Sacramento County Superior Court. Direct appeal to the California Supreme Court without intermediate appellate review. Sacramento court target resolution: April 1, 2027. Cal Supreme target: November 1, 2027.

A single subdivision: no California state-tax deduction for any net-worth tax paid, including this Act.

• §17220(e): No deduction shall be allowed for any tax imposed by the State on net worth, including the 2026 Billionaire Tax Act, notwithstanding IRC §164(a)(2) regarding deductibility of taxes on personal property.

If a competing wealth-tax measure appears on the same ballot, this measure prevails if it gets more affirmative votes.

• Verbatim: any measure that levies a tax or affects tax rates on net worth (not income) of billionaires, or that provides for use of funds from a tax on billionaire net worth, shall be deemed in conflict.
• If this measure receives more affirmative votes, conflicting provisions of the other measures are null and void.