Gov. Signs AB 2640; More Fiscal Flexibility for Counties, and Latest Actions from the Commission on State Mandates
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Governor Signs AB 2640; More Fiscal Flexibility for Counties
On September 18, Governor Newsom signed AB 2640 (Hadwick), which provides sensible fiscal relief and the fiscal flexibility necessary for efficient, modern governance by local agencies. This measure authorizes local government agencies, upon receiving a written notification of claim adjustments from the State Controller, to elect to offset any reduced reimbursement from other unpaid reimbursement claims (i.e., reducing the backlog of unpaid pending claims owed to counites that have accumulated over decades rather than withholding funds from future reimbursement claim payments). Read more about this measure in CSAC’s request for signature letter.
The state mandate reimbursement process, and administrative issues therein generally, have long burdened local governments and CSAC continues to support efforts to reform the current process.
Department of Finance Issues Comment Letter re: Housing (25-TC-05).
About the program: AB 130 (Chapter 22, Statutes of 2025) was a state budget trailer bill that, among other things, requires cities and counties to perform an annual inspection of every homeless shelter in their jurisdiction and requires an annual report of complaints received. View the test claim for reimbursement here.
- What is a budget trailer bill? Trailer bills accompany the main budget act by enacting any corresponding changes to state law. While the budget bill includes expenditure authority and sparse provisional language regarding the use of funds, the trailer bills include implementation language for specific appropriations. These bills are called “trailer” bills because they are not subject to the June 15 deadline and therefore trail after the main budget act is passed.
New this week: The Department of Finance submitted a comment letter to the Commission on State Mandates regarding the test claim Housing (25-TC-05), and recommend that the Commission deny the test claim in its entirety. The Department argues that these new requirements are not reimbursable from the state as local agencies have fee authority to compensate for the costs to comply.
Next steps: Interested parties (including any county) can file rebuttal comments to the Department’s letter on or before October 16. The Commission tentatively plans to hear this matter during their hearing on February 12, 2027.
Initial Reimbursement Claims Process: Opportunities for Reimbursement: Don’t leave money on the table!
Five opportunities to submit claims for reimbursement for newly approved state-mandated programs for retroactive periods:
- For costs incurred Jan. 1 2024 – June 30, 2025:
- Child Physical Abuse and Neglect Exams – reimbursement claims due by Jan. 12
- Stops: Notification by Peace Officers – reimbursement claims due by Jan. 12
- Internet Websites and Email Addresses – reimbursement claims due by Sept. 16*
- → Late claims may be submitted; subject to a 10% penalty
- For costs incurred July 1, 2023 – June 30, 2025:
- Criminal Procedure: Discrimination – reimbursement claims due by Sept. 16*
- Ballot DISCLOSE Act – reimbursement claims due by July 8*
- → Late claims may be submitted; subject to a 10% penalty
How do counties get money from the state? Submit initial claims for retroactive reimbursement via the State Controller’s Office Data Exchange Portal
- Local Reimbursements – Claim Submission Instructions (SCO)
- Data Exchange Portal Registration Instructions (SCO)
- Mandated Cost Manual for Local Agencies (SCO)
- See “Filing a Claim” section, pages 1-22
- Time-Study Guidelines (SCO)
- Frequently Asked Questions Related to State-Mandated Cost Programs (SCO)
A complete list of all matters pending before the Commission and recent actions is available on the pending caseload webpage. To receive updates directly from the Commission, contact Commission staff directly at csminfo@csm.ca.gov. To receive updates from the SCO, sign up for their email lists here.
Questions about the Commission on State Mandates or the state mandate reimbursement process in general? Contact Jessica Sankus, Principal Fiscal and Policy Analyst, at jsankus@counties.org.