The Overview

If your county is losing vehicle license fee revenue, a state law signed in September says the Legislature intends to work with affected counties and cities on solutions, with any fix operative beginning in the 2027–28 fiscal year. California's State Government bill, AB 184 became law when Gov. Gavin Newsom (D) signed it Sept. 18. The San Mateo Daily Journal reported that the funding shortfall is connected to the state's property-tax-based replacement system, while ABC7 News reported that San Mateo County is seeking to recover $100 million from the state, with potential effects on schools, agencies and public services. ​

What the Law Does

The Vehicle License Fee Law requires that each city, county, and city and county receive additional property tax revenues through a vehicle license fee adjustment amount from a Vehicle License Fee Property Tax Compensation Fund in each county treasury. The law states the Legislature's intent to work with Alpine County, Mono County, and San Mateo County, their cities, and any other affected jurisdictions to develop mutually agreeable legislative and fiscal solutions to the revenue shortfall, with any fix intended to take effect starting in the 2027–28 fiscal year and apply statewide.

The law also closes the Victims of Corporate Fraud Compensation Fund to new applications and directs the Secretary of State to wind it down, reduces authorized bond debt under several older bond acts, extends authority to sell or exchange Camp Coombs state property to Napa County through June 30, 2028, and revises internal control and risk management reporting requirements for state agencies.

Legislative Status

The Committee on Budget sponsored the bill. The Assembly passed it 53-17 on March 20, 2025. The Senate Budget and Fiscal Review Committee approved the amended bill 13-5 on Aug. 31, 2026. The full Senate passed it 30-10 the same day, and the Assembly concurred in Senate amendments 61-15.

San Mateo County leaders said in a Sept. 3 release that AB 184's language followed a sustained campaign for a solution but that work was not finished, according to reporting last month by San Mateo County.

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