The Wire · CalGunHub

LAO Projects DROS Account Insolvency in 2026-27, Flags Firearms Fee Structure

Published February 11, 2026 · Updated October 12, 2026

The Legislative Analyst's Office says the special account funding the Bureau of Firearms will go insolvent absent action.

Written by the CalGunHub desk from public reporting

Who this affects: The report is advisory to the Legislature and does not itself change any fee. It affects how California funds background check processing and Bureau of Firearms operations, and it notes current purchaser fees total $37.19 per transaction. LAO recommendations would need legislative action to take effect, with a proposed DOJ fee-funding framework due January 10, 2027. This is general information, not legal advice.

California's Legislative Analyst's Office projected in a February 11, 2026 budget report that the Dealers' Record of Sale Special Account, the primary special fund supporting the Bureau of Firearms, will be insolvent in fiscal year 2026-27 unless the Legislature acts.

According to the LAO report, "The 2026-27 Budget: Department of Justice," a firearm purchaser currently pays $37.19 in state fees per transaction: a $31.19 DROS fee, $5 to the Firearms Safety and Enforcement Special Fund, and $1 to the Firearm Safety Account. AB 1669 (2019) raised the DROS fee from $19 to $31.19.

The Governor's 2026-27 budget proposes shifting $8 million annually, through 2028-29, of Bureau of Firearms costs from the DROS account to the General Fund. It also includes $11.2 million in one-time General Fund money for the FITSM project, which would replace 17 firearms and ammunition databases, plus $1.2 million in General Fund support for implementing SB 704's barrel checks.

The LAO recommends approving the FITSM proposal, modifying the $8 million shift to a single year or structuring it as a loan, funding SB 704 startup costs through a loan repaid by the $5-per-check dealer fee (checks begin July 2027), and directing DOJ to deliver a fee-funding framework by January 10, 2027. The report also cites the Bruen footnote addressing "exorbitant fees" as a legal consideration when setting firearm regulatory fees.

Update: On June 12, 2026, DOJ noticed a separate fee rulemaking, Firearm Ownership Reporting Fees, in the Notice Register.

The case adds to a series of state enforcement efforts targeting unserialized firearms, following the AB 1621 (2022) framework and the newer AB 1263 statutes cited in the complaint.

Informational only, not legal advice. Facts are attributed to the sources listed above.