Amended in Senate April 2, 2013

Senate Bill No. 385

Introduced by Senator Block

February 20, 2013

begin delete An act to add Section 6812.5 to the Revenue and Taxation Code, relating to bulk sales. end delete begin insert An act to amend Section 28235 of, and to add Article 6.1 (commencing with Section 27970) to Chapter 4 of Division 6 of Title 4 of Part 6 of, the Penal Code, relating to firearms. end insert

LEGISLATIVE COUNSEL’S DIGEST

SB 385, as amended, Block. begin delete Bulk sales: sales and use taxes: collection of taxes: successor’s liability: notifications: disclosures. end delete begin insert Firearms: Private Patrol Operators: registration and assignment. end insert

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Existing law generally regulates the ownership and transfer of firearms, but does not authorize business entities to own or register firearms.

end insert begin insert

This bill would establish procedures allowing Private Patrol Operators to own firearms and to assign those firearms to employees of the Private Patrol Operator (PPO) who are licensed security guards. The bill would state findings and declarations of the Legislature, and expresses the intent of the Legislature in connection with these procedures. The bill would direct the Department of Justice to modify and create forms, and charge reasonable fees for the filing and processing of those forms for these purposes and for enforcement of these provisions, including to allow the PPO to be listed as the purchaser and legal owner of a firearm, for a security guard who is assigned that firearm to be listed as the registered owner, as specified, and for a firearm custodian to be designated by the PPO. The bill would provide that an assignment for these purposes would not constitute a loan, sale, or transfer of a firearm. The bill would require the security guard receiving a firearm by assignment from a PPO to undergo a background check and to possess a handgun safety certificate, as specified. The bill would require security guards, upon request by the PPO, for any reason, or upon separation of employment or revocation of the security guard’s firearm qualification card, to immediately return the firearm to the PPO.

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The bill would make other conforming changes.

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Existing law, the Uniform Commercial Code-Bulk Sales, is a comprehensive body of law regulating bulk sales, which are defined to include a sale not in the ordinary course of the seller’s business of more than 1⁄2 the seller’s inventory and equipment, as specified, and which imposes specified obligations on an escrow agent for that sale.

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The Sales and Use Tax Law, employment tax laws, and personal property laws impose liabilities for unpaid taxes upon the purchaser of a business under specified circumstances. Under the Sales and Use Tax Law, if any person liable for any amount under that law sells out the business or stock of goods or quits the business, the successors or assigns are required to withhold sufficient of the purchase price to cover such amount until the former owner either produces a receipt from the State Board of Equalization showing that it has been paid or produces a certificate from the board stating that no amount is due. Under that law, if the purchaser of a business or stock of goods fails to withhold from the purchase price as required, the purchaser becomes personally liable for the payment of the amount required to have been withheld to the extent of the purchase price, valued in money.

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This bill would require an escrow agent to make specified notifications in writing to a potential purchaser of a business regarding a purchaser’s liabilities under the Sales and Use Tax Law. This bill would also require specified sellers of a business to provide under penalty of perjury a successor liability disclosure statement, as may be prescribed by the State Board of Equalization, to all potential purchasers or their authorized agents. By expanding the crime of perjury, this bill would impose a state-mandated local program.

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The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

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This bill would provide that no reimbursement is required by this act for a specified reason.

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Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program:  begin delete yes end delete begin insert no end insert .

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

end insert

begin insert Article 6.1 (commencing with Section 27970) is
added to Chapter 4 of Division 6 of Title 4 of Part 6 of the end insert begin insert Penal
Code end insert begin insert , to read: end insert

begin insert

 

Article begin insert 6.1. end insert   Ownership, Registration, and Assignment of
Firearms by Private Patrol Operators

 

begin insert 27970. end insert   

(a) (1) The Legislature finds and declares that current
practices and statutes authorize the purchase, registration, and
ownership of firearms by individuals, but not by business entities.

(2) It is the intent of the Legislature in enacting this chapter to
allow business ownership and registration of firearms in the case
of Private Patrol Operators. It is further the intent of the
Legislature to establish procedures whereby a Private Patrol
Operator may assign firearms it owns to its employees who are
licensed to carry firearms and that the assignment of a firearm by
a Private Patrol Operator to that employee shall not constitute a
loan, sale, or transfer of a firearm.

(b) For purposes of this article, the following definitions shall
apply:

(1) “Department” means the Department of Justice.

(2) “Private Patrol Operator” or “PPO” means a Private
Patrol Operator licensed pursuant to Chapter 11.5 (commencing
with Section 7580) of Division 3 of the Business and Professions
Code.

begin insert 27972. end insert   

(a) A PPO may be the legal owner of a firearm.

(b) (1) The department shall modify the Dealers’ Record of
Sale (DROS) form to allow a PPO to be listed as the purchaser
and legal owner of a firearm. The form shall also identify the status
of the PPO as a sole proprietorship, partnership, or corporate
entity, and include any tax identification number or other
identifying number that may be required by the department.

(2) The department shall modify the DROS form to allow a
security guard who receives a firearm from a PPO for purposes
of his or her employment with that PPO to be listed as the
registered owner of the firearm.

(3) The department shall also modify the DROS form to require
the PPO to designate a “firearms custodian” for the PPO. The
firearms custodian shall possess a valid firearm qualification card
issued by the Department of Consumer Affairs.

(4) A security guard who receives a firearm pursuant to a
certificate of assignment is subject to a background check by the
department, pursuant to Section 28220. A security guard shall
possess a valid handguns safety certificate prior to receiving a
firearm pursuant to a Certificate of Assignment.

(c) The PPO shall, on a separate form, and in a manner
prescribed by the department, identify the person who is designated
by the PPO as the firearms custodian for the PPO. If a firearms
custodian ceases to be employed by the PPO, or otherwise becomes
ineligible to be the firearms custodian, the PPO shall inform the
department of that fact, in a manner prescribed by the department,
and the PPO shall have 30 days to designate a replacement
firearms custodian. No PPO may assign a firearm pursuant to this
article if there is no designated firearms custodian for the PPO.

(d) (1) The department shall prescribe a “Certificate of
Assignment” or “COA.” The COA shall contain the same fields
as the DROS form, and shall be used to identify the employee of
the PPO who has been assigned a firearm by the PPO pursuant
to this article.

(2) Upon the PPO assigning a firearm to an employee who is
a security guard licensed pursuant to Chapter 11.5 (commencing
with Section 7580) of Division 3 of the Business and Professions
Code, the licensed security guard shall complete the COA, and
the PPO shall file the COA with the department in a timely manner
as prescribed by the department.

begin insert 27974. end insert   

The department shall charge a fee not to exceed the
reasonable costs to the department for filing and processing a
form identifying the firearms custodian of the PPO, for filing and
processing a COA, and for costs incurred in enforcing the
provisions of this article, including, but not limited to, processing
forms required by this article, and entering information obtained
pursuant to this article into the department’s Automated Firearms
System and other databases as deemed necessary by the
department. The fees shall be deposited in the Dealers’ Record of
Sale Special Account.

begin insert 27976. end insert   

If the PPO ceases to do business, ceases to possess a
valid PPO license as determined by the Director of Consumer
Affairs, ceases as a business entity, or changes its type of business
formation, the PPO shall, within 30 days and unless otherwise
prohibited by law, complete new DROS forms for all PPO-owned
firearms and transfer those firearms to a new owner.

begin insert 27978. end insert   

Notwithstanding any other law, an assignment of a
firearm pursuant to this article is not a loan, sale, or transfer of
a firearm.

begin insert 27980. end insert   

A security guard shall, immediately upon the PPO’s
request, for any reason, or immediately upon separation of
employment or revocation of the firearm qualification card, return
the firearm to the PPO. This article does not limit the right of a
licensed security guard employee to use, possess, or otherwise
lawfully carry a firearm owned by that employee.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 28235 of the end insert begin insert Penal Code end insert begin insert is amended to read: end insert

28235.  

All money received by the department pursuant to this
article shall be deposited in the Dealers’ Record of Sale Special
Account of the General Fund, which is hereby created, to be
available, upon appropriation by the Legislature, for expenditure
by the department to offset the costs incurred pursuant to any of
the following:

(a) This article.

(b) Section 18910.

(c) Section 27555.

(d) Subdivisions (d) and (e) of Section 27560.

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(e) Article 6.1 (commencing with Section 27970) of Chapter 4.

end insert begin delete

(e)

end delete

begin insert (f) end insert  Article 6 (commencing with Section 28450).

begin delete

(f)

end delete

begin insert (g) end insert  Section 31110.

begin delete

(g)

end delete

begin insert (h) end insert  Section 31115.

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(h)

end delete

begin insert (i) end insert  Subdivision (a) of Section 32020.

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(i)

end delete

begin insert (j) end insert  Section 32670.

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(j)

end delete

begin insert (k) end insert  Section 33320.

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SECTION 1.  

Section 6812.5 is added to the Revenue and
Taxation Code, to read:

6812.5.  

(a) For a bulk sale handled through an escrow, the
escrow agent shall notify in writing a potential purchaser of a
business that is required to hold a permit under this part of the
following information:

(1) That if a person is liable for any amount under this part sells
his or her business or stock of goods, the purchaser must withhold
a sufficient amount of the purchase price to cover that amount,
until the seller produces a receipt from the board showing payment
or no amount due.

(2) That a tax clearance certificate is available from the board
that will identify amounts owed under this part by the seller of the
business.

(3) That the purchaser may be personally liable for the payment
of the amounts owed by the seller under this part to the extent of
the purchase price.

(b) If a person liable for any amount due under this part sells
out his or her business or stock of goods or quits the business, the
person shall provide under penalty of perjury a successor liability
disclosure statement, as may be prescribed by the board, to all
potential purchasers or their authorized agents to identify any
unpaid amounts due under this part.

(c) For purposes of this section, “bulk sale” has the same
meaning as defined in paragraph (3) of subdivision (a) of Section
6102 of the Commercial Code.

end delete

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SEC. 2.  

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.

end delete