Special Notice / Hearing: None__
Vote Required: Majority
To: Honorable Board of Supervisors
From: Michael P. Callagy, County Executive
Connie Juarez-Diroll, Chief Legislative Officer
Subject: Quarterly Legislative Presentation and Acceptance of the March 2026 Informational Report on the 2026 State and Federal Legislative Sessions
RECOMMENDATION:
title
Accept the presentation of the March 2026 quarterly informational report on the 2026 state and federal legislative sessions.
body
BACKGROUND:
The 2026-2027 state and federal legislative sessions resumed on January 5, 2026, and January 3, 2026, respectively.
On January 1, 2026, nearly 800 new laws went into effect in California. Shortly after, California legislators returned to Sacramento to kick off the second year of the Legislature’s two-year session. The deadline for members of the California State Legislature to introduce new bills was February 20, 2026. While many newly introduced bills this year include substantive language, many, nearly 600, are currently “spot bills” or placeholders. Spot bills, essentially, give bill authors more time to work on bill details and are amended before or during policy committee hearings, as committees cannot vote on legislation for at least 30 days after a bill’s introduction. The Assembly and Senate spot bill deadlines are March 16, 2026, and March 25, 2026. Additionally, all other bills introduced in the first year of the two-year session that failed to meet legislative deadlines are now dead and cannot be acted upon by either house. As we continue to sort through the wide range of legislative proposals, the Legislature’s collective focus does not differ substantially from 2025, including policy areas that address quality of life and the cost of living for Californians, like affordable housing, childcare, access to healthcare, and energy costs. Policy committees will convene until April 24, 2026, the deadline for a bill’s referral to fiscal committees. At the same time, Assembly and Senate Budget Committees are meeting to review policy proposals outlined in the Governor’s January spending plan.
The Continuing Resolution (CR) for the Department of Homeland Security (DHS) ended on February 13, 2026, leading to a partial government shutdown with no near end in sight. Congressional Democrats and Republicans are struggling to come to terms to advance the DHS funding bill. Other recent federal actions garnered national attention, and the President has yet to release his proposed budget proposal for FY2027. It is expected that the budget will be released sometime in March.
DISCUSSION:
State Update
On January 9, Governor Newsom released his last state budget proposal for FY 2026-27. For further details about budget impacts on select County programs and services, please reference materials from the February 10, 2026 <https://sanmateocounty.legistar.com/LegislationDetail.aspx?ID=7869851&GUID=F43857F7-4D0B-4899-9AA6-C28106E07242>, board meeting.
While budget discussions ramp up, our state associations, like the California State Association of Counties (CSAC), remain committed to strengthening collaborative partnerships between the state and local governments to meet County needs. Particularly, this budget cycle, CSAC’s advocacy efforts will focus on the following areas:
County Health and Human Services H.R. 1 Impacts
Ø The enactment of H.R. 1 fundamentally shifted significant fiscal responsibility for safety net programs from the federal government to states and counties. While the Governor’s budget proposal includes funding to address the state’s increased costs from H.R. 1 impacts, counties are deeply concerned that there is no funding to help counties respond to the massive new fiscal burden that has been placed upon them.
Homeless Housing, Assistance and Prevention (HHAP) Program
Ø Although counties appreciate last year’s $500 million commitment for the HHAP program in 2026-27, counties continue to call for full funding of $1,000,000,000 for Round 7. Through prior investments for the HHAP program and the demonstrated work of local government and partners, California has made significant strides in reducing homelessness. The only way to sustain this progress is to fully fund the HHAP program and distribute Round 7 funding by the enacted September 1, 2026, goal date, especially after a year in which no HHAP funding was provided.
In-Home Supportive Services (IHSS)
Ø Counties oppose the Governor’s budget proposal to remove the state’s share of costs for IHSS hours per case growth, which would be a significant cost shift to counties. IHSS costs are already outpacing Realignment revenues, the fund source intended to cover them. Any cost shift would undermine the existing fiscal structure of the county IHSS maintenance of effort (MOE) established in 2019 (Chapter 27, Statutes of 2019). Further, increased IHSS costs for counties would take away funding from other mandated critical health and human services programs such as Child Welfare and Mental Health at a time when counties are strained by the increased safety net program costs as a result of the implementation of H.R. 1.
Medi-Cal Mobile Crisis Services
Ø Counties are also concerned about the Governor’s budget proposal to make Medi-Cal Mobile Crisis Services an optional county benefit. This will shift tens of millions per year in costs from the state to the counties and undercut recent progress by the state and counties to bolster the community behavioral health system.
Proposition 36
Ø Despite the fact that the 2025 Budget Act appropriated $50,000,000 General Fund one-time to county behavioral health departments for Proposition 36 implementation, this funding is only for one of multiple county departments impacted by the measure, and still has not been allocated to counties to meet the demand for substance use disorder and mental health treatment. The Governor’s budget proposal does not include any new funding to address county costs to implement Proposition 36 in 2026-27 or thereafter. Counties request adequate, sustained funding for implementation of Proposition 36 to meet the expectations of voters who overwhelmingly approved the initiative in 2024, including associated costs for increased caseloads impacting probation, behavioral health, indigent defense providers, district attorneys, and sheriff’s offices.
On February 19, 2026, Governor Newsom signed legislation (AB/SB 117) that authorizes the California State Transportation Agency (CalSTA) to loan $590,000,000 to the Metropolitan Transportation Commission (MTC). MTC will use the loan proceeds to provide short-term operating loans to four Bay Area transit operators, including BART, Muni, Caltrain, and AC Transit. This loan will help provide stability for transit services while the region works toward long-term budget solutions - one of which is a November 2026 ballot measure.
Regarding loan structure and accountability, MTC will:
• Repay the loan in quarterly installments to CalSTA over a period of 12 years, with interest only payments during the first two years;
• Secure repayment of any loan issued by CalSTA by pledging the State Transit Assistance Program revenues received by transit entities;
• Work with CalSTA to ensure there are no impacts on existing capital projects; and
• In coordination with CalSTA, prioritize the use of existing sources of funds allocated by the state to the region so that projects are not materially impacted with regard to scope, schedule, and eligibility for non-state funding.
The loan carries an interest rate that reflects the interest rate of the state’s Surplus Money Investment Fund to ensure the general fund will not lose out on interest income. The California Transportation Commission is also required to monitor and report to CalSTA on the unallocated and unexpended balances of the region’s project awards for the Transit and Intercity Rail Capital Program (TIRCP).
Lastly, as of February 20, 2026, a total of 1,798 bills were introduced in both houses combined this year. Notable flagged bills include:
Environment & Sustainability
• AB 762 (Irwin-D) would prohibit, beginning January 1, 2027, a person from importing or manufacturing for sale in this state a new or refurbished disposable, battery-embedded vapor inhalation device, and beginning January 1, 2028, a person from selling, distributing, or offering for sale a new or refurbished disposable, battery-embedded vapor inhalation device in this state.
• SB 811 (Caballero-D) would establish a comprehensive scheme for the regulation of metal shredding facilities that would be administered by the Department of Toxic Substances Control pursuant to authority separate from laws governing the control of hazardous waste.
Health
• AB 1900 (Kalra-D) would create the California Guaranteed Health Care for All program, or CalCare, to provide comprehensive universal single-payer health care coverage and a health care cost control system for the benefit of all residents of the state.
Child Support Services
• AB 1643 (Nguyen-D) would require that all child support payments be directed to the State Disbursement Unit and would authorize the court to direct the local child support agency to appear on behalf of the minor children to enforce the order.
Housing
• SB 1016 (Blakespear-D) would state the intent of the Legislature to enact legislation to submit to the voters an act authorizing the issuance of general obligation bonds for the development of transitional housing.
Elections
• SB 884 (Umberg-D) would propose several changes for elections in 2026 through 2028, except for the June 2026 statewide primary.
Government Administration
• AB 1729 (Lee-D) would require the Department of General Services to establish a telework dashboard that displays the cost-effectiveness and efficiency benefits of state telework programs, including documenting annual savings to the state of reduced office space and operating costs.
Telecommunications
• AB 2443 (McKinnor-D) would require the California Public Utilities Commission (CPUC) to develop a reasonable process for a carrier of last resort to be relieved, on or before January 1, 2029, of that status in areas where customers have other options for voice service.
Energy
• AB 2463 (Petrie-Norris-D) would require the CPUC, on or before April 1, 2027, to open a rulemaking to conduct a systemwide review of the methodologies used to determine the cost of capital and authorized return on equity for each electrical corporation and gas corporation.
• AB 2493 (Petrie-Norris-D) would require the CPUC to require each electrical corporation to retain an independent third-party auditor to review certain transmission- and interconnection-related submissions made by the electrical corporation, the electrical corporation’s progress on completing network upgrades following approval in a generator interconnection agreement or transmission plan approved by the Independent System Operator, and the electrical corporation’s compliance with any remedial actions ordered by the commission.
In addition, members of the San Mateo County delegation have introduced the following bills that may be of notable interest to the County:
• AB 1838 (Berman-D) would require a contractor, as a condition of submitting a bid to a local agency, as specified, to fully disclose any history of wage-and-hour violations and provide supporting documentation, as described.
• SB 875 (Wiener-D) would reform the process at the CPUC by making it easier for cities to show that it is in the public interest to convert to a municipal utility to provide more affordable and reliable energy to residents and would establish enforceable timelines to prevent Pacific Gas and Electric Company from causing long delays at the CPUC in the future.
• AB 2595 (Papan-D) the San Mateo Electric Bicycle Safety Pilot Program, would, until January 1, 2031, authorize a local authority within the County of San Mateo, or the County of San Mateo in unincorporated areas, to adopt an ordinance or resolution that would prohibit a person under 12 years of age from operating a class 1 or 2 electric bicycle.
• AB 1734 (Stefani-D) the Count Hunger Act, would require the department to establish a 2-year pilot program, in collaboration with the University of California at Los Angeles (UCLA), to ensure that certain sets of questions linked to food insecurity are funded and covered within the California Health Interview Survey (CHIS).
• SB 949 (Becker-D) would designate the Santa Cruz Mountains, as defined, as a landscape of statewide significance that requires special protection by the Natural Resources Agency and its boards, departments, and conservancies, as provided.
The attached 2026 Legislative Activity Report lists the bills tracked to date. This includes 2-year bills from last session, and newly introduced bills from the current session. The Intergovernmental and Public Affairs (IGPA) unit continues to review bills introduced by the February 20 bill introduction deadline; therefore this list will continue to grow. As bills progress through the legislative process, the IGPA unit will update your Board regularly. Future legislative updates will include additional measures of note and actions taken by the County.
Federal Update
HUD Moves to Block Families with Mixed Immigration Status from Housing Assistance
Last week, the Department of Housing and Urban Development (HUD) released a proposed rule to prevent families with mixed immigration status from receiving certain federal housing assistance. Under current HUD regulations, mixed-status families -which include some members whose citizenship or immigration status makes them eligible to receive federal housing assistance as well as some members who are ineligible - can receive assistance on a pro-rated basis, calculated based on the percentage of eligible family members. This proposed rule seeks to end prorated assistance for these households, removing the option for ineligible family members to live with eligible family members. Along with other imposed requirements, HUD estimates that around 24,000 households could lose the rental assistance under the proposed rule unless they stop living with ineligible family members. Should the County like to weigh in on this issue, the proposed rule has a 60-day public comment period, with comments due by April 21, 2026.
DHS Shutdown Drags on as Negotiations Remain Stalled
The partial shutdown of the Department of Homeland Security (DHS) is now approaching the two-week mark and there is still no clear path to reopening the agency. Roughly 90 percent of DHS workers are considered essential and continue to work without pay. These staff include members of the Transportation Security Administration (TSA), the Coast Guard, and FEMA. Discussions between the White House and congressional leaders have continued, but recent proposal exchanges have failed to produce a breakthrough. Democrats remain focused on securing changes to federal enforcement operations, while Republicans say they are open to codifying certain recent administrative reforms but have rejected several of Democrats’ core demands. Senate Democrats remain unified, however the first round of missed paychecks for DHS employees can be a potential pressure point for some Republicans.
Tariff Supreme Court Decision
The Supreme Court recently struck down tariffs imposed by President Trump in a 6-3 decision stating that they exceeded the powers granted to the president under the International Emergency Economic Powers Act (IEEPA). The Court ruled that the administration could not use emergency authorities intended for foreign threats to impose broad, economy-wide import duties, effectively invalidating the tariff framework that had been put in place through executive action.
In response to that decision, the Trump Administration pivoted to a separate and rarely used authority (Section 122 of the Trade Act of 1974), which allows temporary global tariffs for up to 150 days. President Trump also announced plans to raise the new worldwide tariff rate from 10 percent to the maximum 15 percent allowed under that statute. Any tariffs beyond that 150-day window would require congressional approval, putting Capitol Hill back at the center of the debate. Senate Democrats have declared that they will not support extending the tariffs and have also introduced legislation directing the administration to refund up to $175,000,000,000 collected under IEEPA and requiring refunds to be processed within 180 days.
President Trump’s State of the Union Address
On February 24, President Trump delivered a wide-ranging address to a joint session of Congress, delivering what is now considered the longest State of the Union in modern history. The President described his first year back in office as one pointing to lower inflation, rising incomes, record stock market gains, expanded domestic energy production, and deregulation. A few other prominent topics in his address included:
Ø Trade and Tariffs. President Trump defended his tariff strategy as a key driver of domestic investment and manufacturing growth, arguing that tariff revenues have strengthened the U.S. negotiating position and could ultimately reduce reliance on income taxes.
Ø Foreign Policy. The President highlighted what he characterizes as successful diplomatic and military actions, including ceasefire efforts in Gaza, ongoing negotiations aimed at ending the Russia-Ukraine conflict, and a military operation targeting Iran’s nuclear program. President Trump also emphasized increased NATO defense spending commitments, a $1,000,000,000,000 U.S. defense budget, and expanded efforts to combat drug cartels, which he designated as foreign terrorist organizations.
Ø Immigration. President Trump called on Congress to end “sanctuary city” policies, impose penalties on officials who block removals, and enact new voter ID and proof-of-citizenship requirements. He also proposed the “Dalilah law” to bar states from granting commercial driver’s licenses to undocumented immigrants, specifically referencing California in that context.
Ø Health Care and Safety-Net Policies. The President promoted his proposed “Great Health Care Plan” as a cost-saving alternative to existing systems and stated that 2.4 million Americans have been lifted off “food stamps,” pointing to a decline in participation in the Supplemental Nutrition Assistance Program (SNAP/CalFresh).
Update on County Federal Budget Requests
At the end of April 2025, the IGPA Unit and Public Works Department, with assistance from Carpi and Clay, the County’s federal advocacy firm, submitted a $2,000,000million Community Funding Request for the Mirada Road Resiliency Project to Representative Sam Liccardo. The roadway has been subject to continual winter storm surges and coastal erosion. The proposed project aims to develop solutions for the 100-year storm event, strengthening the roadway and rock slope protection, and preventing wave overtopping.
In February of this year, the President signed the FY2026 Transportation, Housing, and Urban Development (THUD) appropriations bill which includes $850,000 in Community Project Funding for the “Mirada Road Resiliency Project” to San Mateo County. Timing for the distribution of this funding is still unknown.
Now we are shifting into the new earmark season; House Appropriations Chair Tom Cole (R-Okla.) announced that House lawmakers will be allowed to submit 20 requests for earmarks for FY2027, this is up from 15 last year. The IGPA Unit will work closely with the Board, County departments, and our federal lobbyists to identify and submit projects for consideration by the Mid-March deadlines.