BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Kevin de León, Chair SB 293 (DeSaulnier) - Firearms: owner-authorized handguns. Amended: As Introduced Policy Vote: Public Safety 5-2 Urgency: No Mandate: Yes Hearing Date: April 29, 2013 Consultant: Jolie Onodera This bill meets the criteria for referral to the Suspense File. Bill Summary: SB 293 would enact a system of "owner-authorized handguns", as follows: Defines an "owner-authorized handgun" as a handgun that has a permanent programmable feature as part of its original manufacture that renders the handgun incapable of being fired except when activated by the lawful owner or other users authorized by the lawful owner, and that cannot be readily deactivated. Requires the Attorney General (AG), beginning July 1, 2014, and every July 1 thereafter through 2019, to submit a written report to the Governor and Legislature summarizing the current availability of owner-authorized handguns until such handguns are available for retail sale. Amends handgun safety requirements for both revolvers and pistols, as specified, beginning 18 months after the release of the report by the AG stating owner-authorized handguns are available for retail sale. This provision would not apply to the sale, loan, or transfer of handguns manufactured in or imported into this state prior to that date. Establishes minimum performance standards for "owner-authorized handguns," as specified. Provides that, beginning 18 months following the release of the AG report that owner-authorized handguns are available for retail sale, any person who intentionally disables or circumvents the technology of an owner-authorized handgun is guilty of a misdemeanor, punishable by up to six months in county jail, a fine of up to $1,000, or both. Fiscal Impact: Annual costs to DOJ to develop and submit the written reports of $50,000 to $90,000 (Special Fund*) through 2019, or until owner-authorized handguns are available for retail SB 293 (DeSaulnier) Page 1 sale. One-time costs to the DOJ to revise and adopt regulations of about $250,000 (Special Fund*) once owner-authorized handguns are available for sale. Costs to develop testing protocols of $150,000 to $400,000 (Special Fund*) to the extent consultants are secured to evaluate the effectiveness, accuracy, and durability of the owner-authorized handguns prior to adopting regulations. Potentially significant future cost pressure to the extent the DOJ participates in testing and evaluation of prospective technology. It is assumed, however, that testing will principally be conducted and funded by manufacturers (Private Funds). Potential future non-reimbursable local enforcement costs offset to a degree by fine revenue to the extent owner-authorized handguns become available for retail sale. Potential future increased local incarceration costs for misdemeanor convictions to the extent owner-authorized handguns become available for retail sale. Unknown net impact on future state sales tax revenues as the cost of owner-authorized handguns would need to be considered against the impact on the number of owner-authorized handguns sold. *Firearm Safety and Enforcement Special Fund Background: The development of owner-authorized handguns or "smart guns" is currently under way both nationally and abroad. Researchers are seeking to develop features to prevent unauthorized or accidental use by any person other than the owner through various means such as biometric recognition technology, which is used to verify a person's identity in order to prevent unauthorized access. Legislative efforts promoting owner-authorized handguns have been pursued over the past 15 years in several states, and in 2002, New Jersey became the first state to enact "smart gun" legislation that would eventually require new handguns to contain a mechanism that would allow only their owners to fire them. The bill's enactment was hailed by supporters as an important step in the campaign to reduce handgun violence. Proposed Law: This bill provides that commencing 18 months following the release of a report by the AG to the Legislature SB 293 (DeSaulnier) Page 2 and Governor reporting that owner-authorized handguns are available for retail sale, as specified, a handgun that is not an owner-authorized handgun will be deemed "unsafe." This requirement will not apply to the sale, loan, or transfer of a handgun manufactured in or imported into this state prior to that date. Related Legislation: SB 697 (DeSaulnier) 2009 was substantially similar to this measure. This bill was referred to but not heard in the Senate Committee on Public Safety. AB 2235 (DeSaulnier) 2008 was substantially similar to this measure. This bill was held on the Suspense File of this committee. Staff Comments: The costs for the DOJ to report annually to the Governor and Legislature on the availability for retail sale of owner-authorized handguns would require additional workload to collect and prepare the reports. Annual costs of $50,000 to $90,000 (Special Fund) are estimated until it has been reported that owner-authorized handguns are available for retail sale. Once these handguns are available for retail sale, the AG must adopt regulations to implement the provisions of this bill. Costs of approximately $250,000 (Special Fund) are estimated to develop and adopt these regulations. The DOJ would be required to evaluate the effectiveness, accuracy, and durability of the owner-authorized handguns before adopting regulations. The costs could range from $150,000 to $400,000 (Special Fund) for contracts with outside consultants, depending on the amount of time needed once the technology is available. The costs associated with this measure are to be paid from the Firearm Safety and Enforcement Special Fund. The 2013-14 Governor's Budget reflects a year-end fund balance of $12.2 million in the account for FY 2013-14. To the extent owner-authorized handguns are eventually available for retail sale, the net impact on future state sales tax revenues is unknown, as the potentially higher cost of owner-authorized handguns over existing handguns would need to be considered against the number of owner-authorized handguns sold in relation to existing sales. The degree to which sales SB 293 (DeSaulnier) Page 3 would be impacted would be dependent on numerous factors including the available supply, cost, and consumer choice. In addition to the potential impact on the purchases made by existing handgun owners, the extent to which additional consumers would purchase owner-authorized handguns who otherwise would not have purchased firearms in the absence of the new technology is unknown. To the extent the retail sale of owner-authorized handguns reduces the future incidence of unintentional/accidental and intentional acts of gun violence, cost savings could be substantial. A study by the Pacific Institute for Research and Evaluation (PIRE) reported over 105,000 incidences of firearm injury and death in 2010 nationally, with an estimated governmental cost of $187,000 to $582,000 per firearm fatality in medical and mental health care, emergency services, and administrative and criminal justice costs. The estimated societal cost per firearm injury or fatality, including lost work productivity and quality of life was reported as nearly $430,000 to $5 million, respectively.