The secretary of state's office reported Friday that only 66 percent of the 1.37 million signatures submitted in the effort were projected to be valid.
Silicon Valley venture capitalist Tim Draper submitted the signatures in July as part of an effort he says would give better representation for California's 38.3 million residents.
He wants to split California into six states called Jefferson, North California, Silicon Valley, Central California, West California and South California.
Critics had noted that the plan would have separated the wealthiest and poorest Californians, potentially creating some of the poorest states in the nation.
—By The Associated Press