BILL ANALYSIS Ó AB 232 Page 1 Date of Hearing: April 16, 2013 Counsel: Shaun Naidu ASSEMBLY COMMITTEE ON PUBLIC SAFETY Tom Ammiano, Chair AB 232 (Ting) - As Amended: April 2, 2013 SUMMARY : Provides for state personal income tax credits, as specified, in exchange for specified firearms given to law enforcement in a gun buyback program and for corporate state tax credits, as specified, for monetary contributions to a gun buyback program administered by local law enforcement. Specifically, this bill : 1)Allows, for each taxable year starting on or after January 1, 2014, a person to receive the following credit against his or her personal income "net tax," as defined, not to exceed $5,000 per taxable year, for surrendering without consideration or selling to local law enforcement in a gun buyback program the following types of firearm: a) A credit of $500 for each handgun, shotgun, or rifle in working condition; and b) A credit of $1,000 for each assault weapon in working condition. 2)Allows, for each taxable year starting on or after January 1, 2014, an entity to receive a credit against its corporate "tax," as defined, not to exceed $10,000 per taxable year, of an amount equal to the monetary contribution by the taxpayer to a gun buyback program administered by local law enforcement. 3)Allows, in the case where a credit allowed by the above provisions exceeds the "net tax" or "tax," the excess to be carried over to reduce the "net tax" or "tax" in the succeeding two years, until the credit has been exhausted. 4)Prevents the taxpayer from taking any other credit or deduction that he, she, or it may otherwise be able to claim with respect to surrendering a firearm listed above without AB 232 Page 2 consideration or with respect to monetary contributions made to a gun buyback program administered by local law enforcement. 5)Permits the Franchise Tax Board to promulgate rules and regulations to implement the provisions above. EXISTING LAW : 1)Establishes various pilot projects and programs for purposes of crime prevention. (Penal Code Part 4, Title 1.) 2)Exempts from the waiting period and background checks, firearms transfers where neither party is a licensed dealer, and sales, deliveries, or transfers of firearms to authorized representatives of governmental agencies where the entity is buying or receiving weapons from private individuals. Any weapons acquired pursuant to this provision shall be disposed of pursuant to the applicable Penal Code sections. (Penal Code Section 27850.) 3)Requires that firearms and specified weapons used in the commission of a crime, or found in the possession of proscribed classes of individuals, are defined as "nuisances" and are subject to confiscation by law enforcement agencies. These weapons are retained by the confiscating agency and may be sold at public auction to licensed dealers on an annual basis, between July 1 and 10, if they are determined to have a sporting, recreational, or collectible value. The law, however, provides numerous exceptions for alternative distribution. If a weapon is stolen, it is to be returned to its rightful owner once used as evidence. A weapon is to be retained if needed for further criminal proceedings. Any firearm not determined to be sellable for legitimate purposes, or not retained or distributed as specified, is destroyed. (Penal Code Sections 18000 et seq.) 4)Provides that firearms may be sold to the military, retained by the agency for its use or turned over to the DOJ for criminal justice purposes, or donated to the California National Guard Military Museum. (Penal Code Section 34005(b).) FISCAL EFFECT : Unknown AB 232 Page 3 COMMENTS : 1)Author's Statement : According to the author, "Gun buyback programs have removed a wide variety of guns from circulation, including handguns, assault weapons and even rocket launchers. Whatever the type of weapon, studies indicate that it is safer to not have a gun in the home than to have a gun. Consider the following facts: a gun in the home increases the risk of unintentional firearm-related death among children; people who keep a gun in the home are almost twice as likely to be murdered with a gun and almost 17 times more likely to take their own lives using a firearm; and, it is more likely that a gun used in the home will be used against a family member than to protect a family member. As a state, we can act to remove more guns from circulation by incentivizing more gun buyback programs and more gun buyback participants. By taking this action, we are lowering the chances of a misplaced, unwanted weapon causing damage, injury or tragically, death." 2)Local Gun Buyback Programs : A number of local jurisdictions in California and throughout the country conduct gun buyback programs. In exchange for firearms received, law enforcement agencies have given out cash, grocery and other retail gift cards, and other items. (See, e.g., The Associated Press, California: Gun-Buyback Program Moved Up, New York Times (Dec. 26, 2012.) By offering popular incentives to hand over weapons, local gun buyback programs have had a big draw that have resulted in some jurisdictions running out of funds due to the events' successful nature. (See Successful gun buyback runs out of money just hours in, KGO-TV (Jan. 15, 2013) North Bay News.) 3)Practical Considerations : As argued by the author, a goal of gun buyback programs is to get guns and other firearm off the streets. This bill, however, is silent on what local law enforcement agencies are to do with the firearms they receive through the program. As the personal income tax credit is offered in exchange for an operable firearm, without any directive otherwise, law enforcement may dispose of the weapons by selling them to licensed firearm dealers (see Penal Code Section 27850.) which would defeat the goal of removing guns out of circulation. Consequently, the author may wish to consider amending this bill to declare that firearms received by a local law enforcement agency through a gun buyback AB 232 Page 4 program are a nuisance and are required to be destroyed. Additionally, the Department of Justice (DOJ) maintains a list of persons prohibited from possessing a firearm, the Armed Prohibited Persons System (APPS). (Penal Code Sections 30000 et seq.) DOJ populates APPS with all handgun and assault weapon owners across the state and matches them up against criminal history records to determine who might fall into a prohibited status. An aspect worth considering is that when a person who is listed on APPS disposes of all of his or her firearm through a gun buyback program, will that person be removed from APPS, and thereby avoiding DOJ and/or local law enforcement agencies from expending resources pursuing that individual? Consequently, the author may wish to consider amending this bill to require the local law enforcement agency to notify DOJ of the serial numbers of registered firearms received through a gun buyback program so that DOJ can adjust APPS accordingly. 4)Argument in Support : According to California Attorneys for Criminal Justice , "Recent gun buyback programs held throughout the state reflect the need for this legislation. In locations up and down the state, ? these gun buyback programs have removed hundreds of dangerous weapons off the street. However, during most of these programs, the sponsors have run out of money to pay willing participants. Without sufficient incentives, citizens may choose to keep their guns instead of surrendering these dangerous items to the proper authorities. "This bill would provided [sic] a much needed financial alternative to properly incentivize these gun buyback programs. Rather than placing the burden on cash-strapped cities, counties, or organizations, the creation of up to a $1,000 tax incentive will maintain the incentives available for future participants." 5)Argument in Opposition : According to the California Association of Federal Firearms Licensees , "While gun buyback programs might offer good press, study after study has shown that they are bad policy and do very little to nothing to reduce gun violence. In fact, a 2004 study by the National Research Council noted, 'The theory underlying gun buyback programs is badly flawed.' The study pointed out the obvious - that that people most likely to commit crimes are also the people least likely to be [sic] turn in their weapons. It AB 232 Page 5 also showed that the highest-risk weapons for crimes are the least likely to be turned in at buybacks. "Additionally, AB 232 gives criminals the opportunity to gain a tax credit for getting rid of guns actually used in crimes - fun buybacks are 'no questions asked.'" 6)Prior Legislation : a) AB 2487 (Robert Pacheco), of the 1999-2000 Legislative Session, would have established a gun buyback program. AB 2487 was held on the Assembly Appropriations Committee suspense file. b) SB 1496 (Solis), of the 1999-2000 Legislative Session, would have established a gun buyback pilot program. SB 1496 was held on the Assembly Appropriations Committee suspense file. REGISTERED SUPPORT / OPPOSITION : Support California Attorneys for Criminal Justice California Chapters of the Brady Campaign to Prevent Gun Violence California Police Chiefs Association Coalition Against Gun Violence Law Center to Prevent Gun Violence Opposition California Association of Federal Firearms Licensees California Rifle and Pistol Association, Inc. California Right to Carry Gun Owners of California National Rifle Association of America Three private individuals Analysis Prepared by : Shaun Naidu / PUB. S. / (916) 319-3744 AB 232 Page 6