California Affordable Childcare Act: Personal Income Tax and Corporation Tax.

The tax rate on income in excess of $10,000,000 was increased from 0.05 percent to 0.5 percent for both individual taxpayers (Section 17043.5) and corporations (Section 23151.5), a tenfold increase that will generate substantially more revenue for the childcare grant fund.

A sunset provision was added to both Section 17043.5 and Section 23151.5, limiting the tax to taxable years beginning on or after January 1, 2026, and before January 1, 2031. A new subdivision (c) in each section states the section shall remain operative only until December 1, 2031, and is repealed as of that date.

The bill's title description was updated to reflect that Sections 17043.5 and 23151.5 are being 'added and repealed' rather than simply added, acknowledging the built-in expiration.

Imposes a 0.05% tax on individual income exceeding $10,000,000 for taxable years beginning on or after January 1, 2026 (new Section 17043.5 of the Revenue and Taxation Code).

Imposes a parallel 0.05% tax on corporate income exceeding $10,000,000 for taxable years beginning on or after January 1, 2026 (new Section 23151.5 of the Revenue and Taxation Code).

Establishes the Affordable Childcare Reimbursement Fund in the State Treasury. All revenues from the new taxes, less Franchise Tax Board administration costs, are deposited into the fund and continuously appropriated to the State Treasurer (new Section 19602.6).

The new tax only applies to taxpayers who employ one or more employees (individually or through a partnership, LLC, or similar entity). Taxpayers are exempt if they provide childcare for employees during working hours or fully reimburse employees for necessary childcare services.

Beginning with fiscal year 2027-28, grants must be made available to childcare facilities licensed under the California Child Day Care Facilities Act. Grant funds may only be used to lower rates charged by licensees or to increase available spaces by hiring additional employees.

The bill changed from a non-operative statement of legislative intent to an operative measure that imposes taxes, creates a fund, and appropriates money. The title now references adding sections to the Revenue and Taxation Code and making an appropriation.

Voting requirement changed from majority to two-thirds of each house, because the bill imposes a tax requiring supermajority approval under Article XIIIA of the California Constitution. Appropriation and fiscal committee designations both changed from 'no' to 'yes.'

Added legislative findings citing statistics: 2.7 million children ages 5 and under in California, typical infant childcare cost of about $19,000 per year, average provider salary of $37,270, and an estimated $17 billion annual economic loss due to childcare challenges.