BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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                                    THIRD READING


          Bill No:  AB 2220
          Author:   Daly (D)
          Amended:  8/19/14 in Senate
          Vote:     21

           
           SENATE BUSINESS, PROF. & ECON. DEV. COMM.  :  8-0, 6/16/14
          AYES:  Lieu, Wyland, Berryhill, Block, Corbett, Galgiani, Hill,  
            Torres
          NO VOTE RECORDED:  Hernandez
           
          SENATE APPROPRIATIONS COMMITTEE  :  5-0, 8/14/14
          AYES:  De León, Hill, Lara, Padilla, Steinberg
          NO VOTE RECORDED:  Walters, Gaines
           
          ASSEMBLY FLOOR  :  75-0, 5/19/14 - See last page for vote


           SUBJECT  :    Private security services:  private patrol operators

           SOURCE  :     California Association of Licensed Security  
                       Agencies, Guards and Associates


           DIGEST  :    This bill authorizes, effective July 1, 2016, a  
          licensed Private Patrol Operator (PPO), as defined, to be the  
          registered owner of a firearm, and establishes procedures for a  
          PPO to assign its firearms to its employees who are licensed to  
          carry firearms; and requires, as a condition of licensure, a PPO  
          to have on file with the Bureau of Security and Investigative  
          Services (BSIS) a liability insurance policy, as specified.

           ANALYSIS :    
                                                                CONTINUED





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          Existing law:

           1. Licenses and regulates PPOs and their employees through  
             BSIS.  

           2. Requires a PPO to carry a $500,000 insurance policy only if  
             it employs armed guards.  

           3. Exempts a peace officer, as defined in the Penal Code, which  
             has successfully completed a course of study in the use of  
             firearms, from the additional training required for  
             licensees.  

           4. Requires a licensee to retake a firearms training course  
             when renewing a firearms qualification card.  There is no  
             exemption for peace officers.  

           5. Regulates the ownership and transfer of firearms, but does  
             not authorize business entities to own or register firearms.

          This bill authorizes, effective July 1, 2016, a licensed PPO to  
          be the registered owner of a firearm, if the PPO is registered  
          with the Department of Justice (DOJ); and establishes procedures  
          for PPOs to assign its firearms to its employees who are  
          licensed to carry firearms.  Specifically, this bill:

           1. Defines PPO as a private patrol operator licensed pursuant  
             to Business and Professions Code (BPC) Section 7580 et seq.  
             whose license is not suspended, revoked, delinquent, or  
             cancelled; and defines "security guard" as a security guard  
             registered pursuant to BPC Section 7580 et seq. whose  
             registration is not suspended, revoked, delinquent, or  
             cancelled.

           2. Requires DOJ to modify the Dealers' Record of Sale (DROS)  
             form to record the PPO as the purchaser and registered owner  
             of the firearm.

           3. Requires DOJ to modify the DROS form to require the PPO to  
             designate a "firearms custodian" for the firearm owned by the  
             PPO.  The firearms custodian shall possess a valid firearm  
             qualification permit issued by BSIS.  Requires the PPO to  
             notify DOJ if the firearms custodian is no longer employed by  







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             the PPO within seven days and notify DOJ, within 20 days of  
             the original notice, of the designated replacement firearms  
             custodian.

           4. Requires DOJ to prescribe a Certificate of Assignment (COA).  
              The COA may include fields that are in the DROS form and  
             will be used to identify the PPO employee assigned to a  
             PPO-owned firearm.

           5. Requires security guards who receive a firearm pursuant to a  
             COA to possess a valid firearm qualification permit issued by  
             BSIS.  Requires PPO firearms acquired prior to July 1, 2016,  
             to be registered, as specified.

           6. Authorizes DOJ to charge reasonable fees for the  
             implementation of this program to the PPOs and deposit those  
             fees in the DROS account.

           7. Requires the PPO to complete a COA indicating the firearm is  
             no longer assigned to the employee and that the firearm is in  
             the PPO's possession, upon the termination of employment that  
             requires the security guard to be armed and the transfer of  
             the firearm from the security guard back to the PPO.

           8. Authorizes fees collected and deposited into the DROS  
             account to be used for expenditure by DOJ, upon appropriation  
             by the Legislature, for the purposes of this bill.

           9. Requires that if the PPO loses its license or goes out of  
             business, the PPO must, within 30 days and unless otherwise  
             prohibited by law, lawfully sell or transfer all PPO-owned  
             firearms.

           10.Requires a PPO to notify DOJ of the sale or transfer of a  
             PPO-owned firearm within five business days, as specified.

           11.Requires that a security guard shall, within 48 hours of the  
             PPO's request, for any reason, or within 48 hours of  
             separation of employment or revocation of the firearm  
             qualification card, return the firearm to the PPO. 

           12.Includes codified legislative findings and declarations.

           13.Revises the coverage amount PPOs are required to maintain as  







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             a condition of licensure that provides minimum limits of  
             insurance of $1 million for any one loss or occurrence  due  
             to bodily injury, including death, or property damage, or  
             both.

           14.Requires PPOs to keep a copy of the insurance policy on file  
             with the BSIS as a condition of licensure.

           15.Provides that a duly appointed peace officer authorized to  
             carry a firearm in the course of their duties and who has  
             completed requalification training for another agency is  
             exempt from the requirements of requalifying on the range and  
             passing the written examination for the purposes of renewing  
             a firearms qualification card, as specified.

           16.Authorizes BSIS to assess an administrative fine of up to  
             $1,000 against a PPO or a security guard for violations of  
             the bill's provisions and deposit it in the Private Security  
             Services Fund.

           Background
           
          PPOs (private security companies) are licensed and regulated by  
          BSIS.  Possession and use of firearms by PPO employees (security  
          guards) is specifically regulated.  Under existing law,  
          companies are not authorized to be the legal owner of a firearm  
          (with the exception of assault weapons), and it has been  
          indicated that PPOs are utilizing the existing provisions of law  
          that allow for firearms to be infrequently loaned to a person  
          known to the owner, as a means of providing firearms to  
          employees. 

          Pursuant to Penal Code Section 27880, firearms may be loaned  
          between persons who are personally known to each other subject  
          to specified requirements including that the loan must be for a  
          lawful purpose, the loan must not exceed 30 days, the individual  
          being loaned the firearm must have a valid handgun safety  
          certificate (if the firearm is a handgun), and the loan is  
          infrequent, meaning less than six transactions per calendar year  
          for handguns.  To the extent PPOs are switching firearms every  
          30 days between firearm-certified employees is not only  
          administratively burdensome but also potentially not in the best  
          interests of public safety.








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           Comments
           
          According to the author's office, one of the purposes of this  
          bill is to protect clients and the public by requiring an  
          adequate amount of insurance.  According to the author's office,  
          this bill will also eliminate a discrepancy between the training  
          requirements for peace officers during initial applications and  
          renewals. 

          Lastly, this bill will also allow PPOs to own and issue firearms  
          to their employees, eliminating the need for the use of a loan  
          loophole.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  Yes

          According to the Senate Appropriations Committee:

           One-time costs to DOJ of about $1 million (Special Fund*) to  
            enhance the registration database and update forms to  
            accommodate the new fields for PPO designation, offset by an  
            undetermined level of fee revenue.

           Ongoing workload to the DOJ Bureau of Firearms of about  
            $500,000 (Special Fund*) for investigations, inspections, and  
            the processing of forms, offset by the authority to charge  
            fees. 

           Ongoing costs of less than $150,000 (Special Fund**) to DCA  
            for enforcement of the insurance requirements and the  
            registration process for assigning firearms. DCA  
            investigations would be initiated based on complaint  
            allegations of uninsured PPO operations, and ongoing workload  
            resulting from inspections for compliance by PPOs.  Costs will  
            be offset in minor part by citation revenue of less than  
            $10,000 annually.

           Likely minor non-reimbursable local enforcement costs offset  
            to a degree by fine revenue for misdemeanor violations by  
            security guards for failure to return an assigned firearm as  
            required under the provisions of this bill. 

          * DROS Special Account (the DROS Special Account is operating at  
            a structural deficit with a projected 2014-15 year-end balance  







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            of $1.3 million.)
          **Private Security Services Fund

           SUPPORT  :   (Verified  8/18/14)

           California Association of Licensed Security Agencies, Guards  
            and Associates (source)

           ARGUMENTS IN SUPPORT  :    In sponsoring the bill, the California  
          Association of Licensed Security Agencies, Guards and Associates  
          writes:

            We believe these changes continue the outstanding and  
            nationally recognized security guard industry in California by  
            adding greater public and consumer protection and assist our  
            state regulatory agency, the Bureau of Security &  
            investigative Services, in their effort to curb unlicensed  
            activity.

            AB 2220 will allow Private Patrol Operators to be the Legal  
            Owner of a firearm and assign that firearm to a qualified  
            employee.  To be armed, the employee will also be required to  
            possess a valid Guard Card, a Firearm Qualification Card, and  
            a Handgun Safety Certificate prior to being issued a  
            Certificate of Assignment for the firearm.  The employee will  
            then effectively be the weapon's Registered "Assigned" Owner.

            Under AB 2220, the assignment of a weapon from a registered  
            company to a designated employee would not constitute a loan,  
            sale or transfer of the weapon.  Companies will be required to  
            fill out a Dealers' Record of Sale (DROS) for the purchase and  
            initial registration of the weapon and, with the required  
            Department of Justice's (DOJ) modifications to the DROS, will  
            also include the information for the assigned employee.  These  
            changes to the DROS and additional processing on behalf of the  
            DOJ will be mitigated by imposing a reasonable fee for  
            enforcement. Private Patrol Operators will still be required  
            to have a firearms custodian.

            Under current law, having a company's weapon cache registered  
            to one designated weapon's custodian presents an array of  
            issues if and when that employee chooses to leave their  
            employment with the company.  This bill will mitigate these  
            issues and allow for a company to consistently keep their  







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            weapons cache registered under the company name, assigning the  
            firearm on a need-be basis to qualified employees.  The use of  
            a Legal Owner and Registered Owner format will also simplify  
            identification of who possesses a firearm, thereby enhancing  
            public safety.

           ASSEMBLY FLOOR  :  75-0, 5/19/14
          AYES:  Achadjian, Alejo, Allen, Ammiano, Bigelow, Bloom,  
            Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian  
            Calderon, Campos, Chau, Chávez, Chesbro, Conway, Cooley,  
            Dababneh, Dahle, Daly, Dickinson, Eggman, Fong, Fox, Frazier,  
            Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon, Gorell,  
            Gray, Grove, Hagman, Hall, Harkey, Roger Hernández, Holden,  
            Jones, Jones-Sawyer, Levine, Linder, Logue, Lowenthal,  
            Maienschein, Medina, Melendez, Mullin, Muratsuchi, Olsen, Pan,  
            Patterson, Perea, John A. Pérez, V. Manuel Pérez, Quirk,  
            Quirk-Silva, Rendon, Ridley-Thomas, Rodriguez, Salas, Skinner,  
            Stone, Ting, Wagner, Waldron, Weber, Wieckowski, Wilk,  
            Williams, Yamada, Atkins
          NO VOTE RECORDED:  Donnelly, Mansoor, Nazarian, Nestande,  
            Vacancy


          MW:k  8/18/14   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

                                   ****  END  ****