Newsom Vetoed Bill on Unclaimed Lien Sale Funds
Governor Gavin Newsom blocked legislation that would have transferred unclaimed vehicle lien proceeds to the state.
Updated on Oct. 8, 2026 in Auto Parts
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California Governor Gavin Newsom vetoed SB 1029, a proposal that sought to shift the oversight of unclaimed vehicle lien-sale proceeds from the Department of Motor Vehicles to the state Controller. The existing system will remain in place, leaving the DMV responsible for the funds.
Why it matters
Newsom vetoed the legislation due to concerns regarding the administrative costs to the Motor Vehicle Account and the lack of clarity on how to verify ownership and adjudicate claims. The move ensures the status quo continues for thousands of vehicle owners whose property was sold via liens.
Between 2016 and 2024, the DMV collected over $8 million in excess proceeds from nearly 5,300 vehicles. State law currently grants former owners three years to claim these surplus funds after a lien sale before they remain with the agency.
The players
Gavin Newsom
He is the current Governor of California who has oversight over state legislative vetoes.
Department of Motor Vehicles
This is the California state agency responsible for vehicle registration, licensing, and processing lien-sale proceeds.
The details
The vetoed bill, SB 1029, would have required changes to how unclaimed money is handled after the mandatory three-year waiting period. While the DMV now provides an online lookup tool for surplus proceeds, California law does not mandate that the agency notify former owners directly about money owed to them.
Timeline
From 2016 to 2024, the DMV collected $8 million in vehicle proceeds.
The SB 1029 proposal was initially reported in April 2026.
Governor Gavin Newsom vetoed the legislation in October 2026.
Roadmap
The veto of SB 1029 maintains the current administrative framework for vehicle lien sales in California. This decision preserves the DMV’s existing role in managing surplus funds rather than shifting oversight to the state Controller’s office.
Former vehicle owners must continue using the DMV’s online lookup tool to check for unclaimed proceeds, as there is no legal requirement for the agency to provide direct notification. Owners are limited to a three-year window following a lien sale to claim these excess funds.
The takeaway
Drivers should proactively monitor the status of any vehicle sold at a lien auction through official DMV channels. Because the state is not required to notify individuals of surplus money, the burden of discovery remains entirely on the vehicle owner.
Further reading
Learn more about regulations and industry standards on our California Auto Parts section.
Source note: This article includes information reported by Carscoops.
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