BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Carole Migden, Chair
357 (Dunn)
Hearing Date: 5/26/05 Amended: 5/18/05
Consultant: Nora Lynn Policy Vote: Public Safety 4-2
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BILL SUMMARY:
SB 357 requires handgun ammunition sold, manufactured,
transferred and possessed in public in California after July 1,
2007, to be marked with a unique identifier (serialization) as
prescribed by the Department of Justice (DOJ). SB 357 requires
all handgun manufacturers and vendors in California to register
with DOJ and authorizes the department to collect fees both on
ammunition sales and licensed vendors to fund SB 357's
implementation and infrastructure costs.
After July 1, 2007, SB 357 makes it an alternate
felony-misdemeanor ("wobbler") to manufacture, sell, import,
give or lend any nonserialized handgun ammunition; to destroy
the serialization required by this bill; or for vendors to
willfully fail to comply with or falsify SB 357's record keeping
requirements.
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Fiscal Impact (in thousands)
Major Provisions 2005-06 2006-07 2007-08 Fund
Increased ammunition costs Estimated $300 per year Various
beginning in 2007-08
DOJ: implementation $1,041 $2,015**
Special*
Fee revenues <$1,039>
Special*
"Wobbler" penalties Likely in excess of $150 General
beginning in 2007-08
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* Serialized Handgun Ammunition Fund, created in the bill, and
$2 million from the Wal-Mart Settlement Trust Fund (see staff
comments)
** Ongoing costs are estimated at $1.015 million annually
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STAFF COMMENTS: SUSPENSE FILE
The California Highway Patrol, Department of Corrections and
local law enforcement agencies purchase an estimated 60 million
rounds of handgun ammunition each year. SB 357's half-cent fee
on each round sold will increase law enforcement ammunition
costs by an estimated $300,000 annually. Ammunition costs to
state and local agencies could increase as well if manufacturers
raise their prices to offset increased manufacturing costs
associated with serialization requirements.
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SB 357 (Dunn)
DOJ estimates first-year staff and overtime costs for its
firearms, criminal justice investigative services and
administrative services divisions of $1,041,000 and second-year
costs of $2,015,000 for a total of 11.5 positions.
DOJ intends to use $2 million from a January 2005 settlement in
People v. Wal-Mart to offset start-up and system development
costs. This settlement was reached after investigations of the
chain that began in 2003 showed that 118 Wal-Mart stores in
California were selling shotguns and rifles. The Attorney
General brought an unfair business practices action against
Wal-Mart and the suit was eventually settled for $10 million. Of
those funds, $5 million went to the General Fund; the additional
$5 million was divided among DOJ's Firearms Division, for the
costs of future monitoring and audits of Wal-Mart ($1.2
million); $800,000 to the Firearms Division for the costs of
investigating and prosecuting the original case; and $3 million
to the Firearms Division for (a) a public service campaign to
educate consumers regarding firearm safety and (b) a system to
validate the age of ammunition purchasers. Section 12315 (d) of
the bill requires vendors to capture drivers' license
information from purchasers and transmit that data to DOJ; DOJ
believes this requirement is consistent with use of the
settlement funds.
Based on estimated ammunition sales to state and local law
enforcement agencies, security guards, new handgun purchasers
(assuming one box of 50 rounds with each purchase), fees from
ammunition sales are projected at $790,000 per year. With 1,596
registered firearms vendors in the state, vendors' fee revenues
are estimated at $250,000 annually.
It is unknown how many people will be prosecuted for felony
violations of SB 357; if as few as five individuals in one year
are sent in state prison, however, incarceration costs would
exceed $150,000.