Existing law requires the Department of Justice to conduct inspections of certain firearm dealers every 3 years in order to ensure compliance with specified requirements. Existing law requires inspections to include a sampling of between 25% and 50% of dealer records of each type. Existing law authorizes the department to assess a fee, up to $115, in order to cover various costs, including the costs of inspections.

This bill would instead require the departments sampling of dealer records to include at least 25% of each record type. The bill would also authorize the department to periodically increase the inspection fee, as specified.

The bill would require the department to annually inspect the 10 firearm dealer locations, as specified, with the highest percentage of total sales that were recovered by law enforcement and found to be illegally possessed, used in a crime, or suspected to have been used in a crime. The bill would require the department to conduct the inspections within 12 months of the release of its annual report unless the dealer location has been inspected within 6 months prior to the release of the report.

Existing law directs law enforcement agencies to submit the description of a firearm that has been reported stolen, lost, found, recovered, or under observation directly to an automated Department of Justice system. Existing law requires these law enforcement agencies to report to the department any information in their possession necessary to identify and trace the history of a recovered firearm that is illegally possessed, has been used in a crime, or is suspected of having been used in a crime. Existing law requires the department to analyze this data and to submit an annual report to the Legislature summarizing this analysis, as specified.

The bill would also require firearm dealers, commencing January 1, 2028, to maintain inventory records, as specified, at their place of business in a manner prescribed by the department. The bill would additionally require firearm dealers to produce an affidavit, under penalty of perjury, certifying the accuracy of all records, upon request. By expanding the crime of perjury, this bill would impose a state-mandated local program.

Existing law requires the department to keep a centralized list of all persons who meet the specified requirements of a dealer, licensee, or person licensed, except as specified. Existing law requires the department to remove various persons from this list, including those whose federal firearms license has expired or has been revoked.

The bill would additionally authorize the department to remove a person from the centralized list who has willfully failed to comply with specified licensing requirements or who, among other things, failed to remedy violations discovered as a result of an inspection within 90 days of the inspection. The bill would make a violation of these provisions punishable by a civil fine not to exceed $1,000 fine and render a person ineligible for placement on the centralized list for 2 years from the date of removal from the list.

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.

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

Existing law requires the Department of Justice to conduct inspections of certain firearm dealers every 3 years in order to ensure compliance with specified requirements. Existing law requires inspections to include a sampling of between 25% and 50% of dealer records of each type. Existing law authorizes the department to assess a fee, up to $115, in order to cover various costs, including the costs of inspections.

This bill would instead require the departments sampling of dealer records to include at least 25% of each record type. The bill would also authorize the department to periodically increase the inspection fee, as specified.

The bill would require the department to annually inspect the 10 firearm dealer locations, as specified, with the highest percentage of total sales that were recovered by law enforcement and found to be illegally possessed, used in a crime, or suspected to have been used in a crime. The bill would require the department to conduct the inspections within 12 months of the release of its annual report unless the dealer location has been inspected within 6 months prior to the release of the report.

Existing law directs law enforcement agencies to submit the description of a firearm that has been reported stolen, lost, found, recovered, or under observation directly to an automated Department of Justice system. Existing law requires these law enforcement agencies to report to the department any information in their possession necessary to identify and trace the history of a recovered firearm that is illegally possessed, has been used in a crime, or is suspected of having been used in a crime. Existing law requires the department to analyze this data and to submit an annual report to the Legislature summarizing this analysis, as specified.

The bill would also require firearm dealers, commencing January 1, 2028, to maintain inventory records, as specified, at their place of business in a manner prescribed by the department. The bill would additionally require firearm dealers to produce an affidavit, under penalty of perjury, certifying the accuracy of all records, upon request. By expanding the crime of perjury, this bill would impose a state-mandated local program.

Existing law requires the department to keep a centralized list of all persons who meet the specified requirements of a dealer, licensee, or person licensed, except as specified. Existing law requires the department to remove various persons from this list, including those whose federal firearms license has expired or has been revoked.

The bill would additionally authorize the department to remove a person from the centralized list who has willfully failed to comply with specified licensing requirements or who, among other things, failed to allow the department to conduct an inspection or failed to maintain accurate business hours with the department. remedy violations discovered as a result of an inspection within 90 days of the inspection. The bill would make a violation of these provisions punishable by a civil fine not to exceed $1,000 and render a person ineligible for placement on the centralized list for 2 years from the date of removal from the list.

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.

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

Existing law prohibits certain actions relating to the sale, possession, storage, and carrying of firearms. Existing law authorizes a court to issue a temporary gun violence restraining order prohibiting a person from possessing a firearm or ammunition if there is reasonable cause to believe that a person poses a significant danger of harm to themselves or to another person by having a firearm.

This bill would state the intent of the Legislature to enact legislation relating to gun violence prevention.

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anna Caballero, Chair

2025 - 2026 Regular Session

SB 15 (Blakespear) - Firearms

Bill Summary:

SB 15 requires the Department of Justice (DOJ) to annually inspect the 10 firearm dealer locations with the highest percentage of total sales that were recovered by law enforcement, as specified; requires firearm dealers to maintain inventory records, as specified; grants DOJ de-licensure authority for dealers who fail to comply with inspection-related requirements; and, modifies DOJ’s fee authority with regard to dealers.

Fiscal Impact:

Unknown, potentially significant ongoing costs (General Fund) to the DOJ to implement the requirements of this bill. (See staff comments)

Background:

Federal law requires firearms dealers to obtain a license (FFL) through the Bureau of Alcohol, Tobacco, Firearms and Explosives. To obtain a state firearms dealer license in California, in addition to obtaining a federal FFL, other requirements include obtaining any required local licenses, a certificate of eligibility issued by the DOJ verifying that a background check has taken place, and being recorded on the DOJ’s centralized list of firearms dealers. In California, only individuals that have obtained a valid license through the DOJ may lawfully sell, lease or transfer firearms within the state, subject to limited exceptions.

The DOJ is required to maintain a centralized list of all active, licensed firearm dealers, and is authorized to remove dealers from that list for a number of specified reasons, including for having their FFL revoked, failing to provide certification of a working video surveillance system, or violating any of a number of dealer requirements.

Existing law requires the DOJ to conduct inspections of licensed firearms dealers at least once every three years to ensure compliance with any and all existing requirements to which they are subject. Moreover, dealer inspections must include an audit of dealer records that includes a sampling of at least 25% but no more than 50% of each record type.

DOJ is authorized to collect fees from both firearm dealers and purchasers to recover costs associated with the implementation and management of California’s firearms laws. With regard to dealers, the DOJ may collect fees for the issuance ($71) and renewal ($22) of certificates of eligibility, for the maintenance of the centralized list ($20), and to cover the costs of conducting inspections ($90). Existing law provides that the total amount that may be charged to a dealer recover costs related to maintaining the centralized list and conducting inspections is $115. Existing law also authorizes DOJ to charge certain FFLs an additional fee for being in a specialized category of licensees, such as an annual fee of $115 for FFLs that qualify for an exemption from specified dealer requirements, and an annual fee not to exceed $250 for licensed firearm manufacturers that produce fewer than 500 firearms in a calendar year. These fees provide cost recovery for the management of centralized lists exclusive to these specialized classes of licensee.

Proposed Law:

• Authorizes the DOJ to remove from the centralized list of firearms licensees a person who fails to comply with the prerequisite conditions for obtaining a firearms dealer license or with provisions related to dealer inspections.
• Authorizes the DOJ to remove from the centralized list of firearms licensees a person who fails to remedy violations discovered as a result of an inspection within 90 days of the inspection, as required by the bill.
• Provides that a person removed from the centralized list pursuant to its provisions shall be subject to a civil fine not exceeding $1,000 and shall be ineligible to be placed on the centralized list for a period of two years from the date of removal.
• Prohibits a person who has been removed from the centralized list from owning, operating, or being employed by a firearms dealer or ammunition vendor for a period of 2 years.
• Provides that each year, the DOJ shall conduct an inspection of the 10 firearm dealer locations with the highest percentage of total sales that were recovered by law enforcement and found to be illegally possessed, used in a crime, or suspected to have been used in a crime, as provided, though a dealer shall only be inspected if it is reported to be the source of no fewer than 20 firearms that were illegally possessed, used in a crime, or suspected to have been used in a crime.
• Provides that the inspections above shall occur within 12 months after the release of a report required under existing law relating to crime guns, and specifies that the DOJ may forgo an inspection of a location described above if the location has been inspected within 6 months prior to the release of the report.
• Provides that a dealer found to have committed a violation of specified firearm dealer requirements shall remedy the violation within 90 days of the inspection and submit proof of that remedy to the DOJ.
• Provides that, commencing January 1, 2028, every dealer shall maintain inventory records at the dealer’s place of business in a form and for a period as required by DOJ, and that inventory records shall include, but not be limited to, the following:
  • The manufacturer, model, caliber or gauge, and serial number of all firearms that are acquired or disposed of not later than one business day after their acquisition or disposition; and,
  • All firearms acquired, but not yet disposed of, shall be accounted for through an inventory check prepared once each month.
• Provides that inventory records, including a written affidavit certifying the accuracy of all inventory records, under penalty of perjury, shall be made available to the DOJ during inspections and upon the department’s request, and that the affidavit shall be completed in a manner prescribed by the department.
• Strikes the provision of existing law capping the annual fee that may be charged to licensees to cover the costs of maintaining the centralized list and conducting inspections at $115, and authorizes the DOJ to impose a fee adjustment of no more than 15 percent over the previous year, provided that the fee does not exceed the amount necessary to cover specified costs.
• Strikes the provision of existing law capping the annual fee that may be charged to cover costs of maintaining the centralized list of exempted FFLs, conducting inspections, and maintaining the firearm shipment verification number system at $115, and authorizes the DOJ to impose a fee adjustment of no more than 15 percent over the previous year, provided that the fee does not exceed the amount necessary to cover specified costs.
• Strikes the provision of existing law authorizing the DOJ to increase the fee above at a rate not to exceed the increase in the California Consumer Price Index.
• Strikes the provision of existing law capping the fee that may be charged to licensed manufacturers who produce fewer than 500 firearms per year at $250 or the actual costs of specified tasks related to firearm manufacturers, whichever is less, and instead authorizes the DOJ to charge those manufacturers a fee not to exceed the actual costs of inspections and maintaining a centralized list of firearm manufacturers and other related tasks.

Related Legislation:

SB 1038 (Blakespear), 2024, would have, among other things, required the DOJ to inspect the 25 firearm dealer locations that are the source of the highest gross number of crime guns in the previous year. SB 1038 was held under submission in this Committee.

Staff Comments:

DOJ has indicated to staff that numerous bills this session may result in no significant impact to the DOJ, should an aggregate of these bills chapter, the DOJ would submit a workload BCP for additional resources to process the increase to the DOJ workload. The Governor’s 2025-26 Budget proposes augmentations to support workload within the DOJ including the Bureau of Firearms Workload. To address ongoing workload within the Bureau, the Budget provides $3.2 million ($2.7 million General Fund and $519,000 Fingerprint Fees Account) and 26.0 positions in 2025-26 and ongoing to help the Bureau process an increased number of concealed carry weapon permit applications as a result of the New York State Rifle & Pistol Association v. Bruen U.S. Supreme Court decision. Additionally, the Budget proposes $2.2 million General Fund and 14.0 positions in 2025-26 and $1.9 million in 2026-27 and ongoing for the Firearms Clearance Section within the Bureau to process an increased number of Dealers Record of Sale transactions on specified timelines. The Budget also proposes $2.4 million ($2.3 million General Fund and $100,000 Special Fund) and 7.0 positions in 2025-26 and $1.2 million General Fund ongoing for DOJ to address workload from recently chaptered legislation related to the storage, sale, transfer, and relinquishment of firearms.

-- END --

SENATE COMMITTEE ON PUBLIC SAFETY

Senator Jesse Arreguín, Chair

2025 - 2026 Regular

Bill No: SB 15 Hearing Date: March 25, 2025

Subject: Firearms

HISTORY

Source: Giffords Law Center to Prevent Gun Violence

Prior Legislation: SB 965 (Min), Ch. 546, Stats. of 2024

SB 1038 (Blakespear), held in Senate Appropriations, 2024

AB 725 (Lowenthal), Ch. 239, Stats. of 2023

AB 1420 (Berman), Ch. 45, Stats. of 2023

AB 228 (Rodriguez), Ch. 138, Stats. of 2022

AB 1191 (McCarty), Ch. 683, Stats. of 2021

SB 894 (Jackson), vetoed by the Governor, 2016

SB 299 (DeSaulnier), vetoed by the Governor, 2016

SB 1366 (DeSaulnier), vetoed by the Governor, 2016

AB 809 (Feuer), Ch. 745, Stats. of 2011

Support: Brady Campaign; Everytown for Gun Safety Action Fund

Opposition: California Rifle and Pistol Association, INC.; Gun Owners of California

PURPOSE

The purpose of this bill is to require Department of Justice (DOJ) to annually inspect the 10 firearm dealer locations with the highest percentage of total sales that were recovered by law enforcement, as specified; to require firearm dealers, commencing January 1, 2028 to maintain inventory records, as specified; to grant DOJ de-licensure authority for dealers who fail to comply with inspection-related requirements; and to modify DOJ’s fee authority with regard to dealers.

Existing law generally prohibits the sale, lease or transfer of firearms unless the person has been issued a license by the DOJ, and establishes various exceptions to this prohibition. (Pen. Code, §§26500 – 26625)

Existing law requires a firearms dealer or licensee to meet all the following requirements:

• Have a valid federal firearms license;
• Have any regulatory or business license, or licenses, required by local government;
• Have a valid seller’s permit issued by the California Department of Tax and Fee Administration;
• Have a certificate of eligibility issued by the DOJ, as specified;
• Have a license issued in a specified format; and,
• Be recorded in the DOJ’s centralized list of licensees. (Pen. Code, § 26700.)

Existing law requires DOJ to keep a centralized list of all persons licensed to sell, lease or transfer firearms at retail. (Pen. Code, §26715 subd. (a).)

Existing law specifies the circumstances under which the DOJ may, or in some cases, shall, remove licensees from the centralized list. (Pen. Code, §26715 subd. (b).)

Existing law specifies that information compiled from the centralized list of licensees shall be made available, upon request, only for specified purposes, and shall be limited to information necessary to corroborate an individual’s current license status, as specified. (Pen. Code, §26715 subd. (c), (d).)

Existing law provides that a license to sell firearms is subject to forfeiture for any violation of a number of specified prohibitions and requirements, with limited exceptions. (Pen. Code, §26800(a).)

Existing law requires the DOJ to conduct inspections of all firearms dealers at least once every three years, except as specified, to ensure compliance with certain specified statutes and any other applicable state law, and authorizes DOJ to assess an annual fee not to exceed $115 to cover the cost of maintaining the centralized list of licensees. (Pen. Code, §26720, subd. (a)(1).)

Existing law provides that inspections of dealers pursuant to the above shall include an audit of dealer records that includes a sampling of at least 25 percent but no more than 50 percent of each record type. (Pen. Code, §26720, subd. (a)(2).)

Existing law requires law enforcement agencies to enter into the DOJ Automated Firearms System (AFS) each firearm that has been reported stolen, lost, found, recovered, held for safekeeping, surrendered or relinquished, as specified. (Pen. Code, §§ 11108.2, 25260)

Existing law provides that law enforcement agencies subject to the above requirement shall, and other specified agencies may, report to the DOJ in a manner determined by the Attorney General in consultation with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) all available information necessary to identify and trace the history of all recovered firearms that are illegally possessed, have been used in a crime, or are suspected of having been used in a crime (hereinafter, “crime guns”), within 7 calendar days of obtaining the information (Pen. Code, § 11108.3, subd. (a).)

Existing law provides that information collected pursuant to the above provision shall be maintained by the DOJ for academic and policy purposes, as specified, and requires the DOJ, on an ongoing basis, to analyze the information collected for patterns and trends relating to crime guns, as specified, including the leading sources and origins of those firearms. (Pen. Code, § 11108.3, subds. (d), (e).)

Existing law requires the DOJ to prepare and submit a report to the Legislature summarizing the analysis above, and including specified information regarding the quantity of certain firearms recovered by law enforcement, disaggregated as specified. (Pen. Code, § 11108.3, subd. (f).)

Existing law provides that, on the date of receipt, a licensee shall report to the DOJ the acquisition by the licensee of any firearm, subject to the following exceptions:

• Specified transactions between dealers when the firearm is not intended as merchandise in the receiving dealers business.
• Acquisitions of firearms by a dealer from a wholesaler.
• Acquisitions by a dealer from a person licensed as a manufacturer or importer to engage in those activities pursuant to federal law.
• Acquisitions by a dealer from a person who resides outside the state who is licensed as a “federal firearms licensee” (FFL) pursuant to federal law.
• Acquisitions of a firearm by a dealer who is also licensed as a secondhand dealer under existing law, as specified. (Pen. Code, §26905.)

Existing law requires the DOJ to keep a centralized list of persons who identify themselves as being federally licensed firearm dealers, importers or manufacturers (FFLs), who licensed premises are within this state and who declare to the DOJ an exemption from state firearm dealer licensing laws. (Pen. Code, §28450.)

Existing law requires the DOJ to asses an annual fee of $115 to cover its costs of maintaining the centralized list of exempted FFLs, conducting licensee inspections, and for the cost of maintaining the firearm shipment verification number system described in existing law, as specified. (Pen. Code, §28460.)

Existing law requires the DOJ to recover the full cost of administering a program granting licenses permitting the manufacture of firearms by collecting fees from applicants, but limits the fee for licensed manufacturers who produce fewer than 500 firearms in a calendar year to $250 per year or the actual costs of inspections and maintaining a centralized list of manufacturers and any other related duties, whichever is less. (Pen. Code, §29055, subds. (b), (c).)

This bill authorizes the DOJ to remove from the centralized list of firearms licensees a person who fails to comply with the prerequisite conditions for obtaining a firearms dealer license or with provisions related to dealer inspections.

This bill authorizes the DOJ to remove from the centralized list of firearms licensees a person who fails to remedy violations discovered as a result of an inspection within 90 days of the inspection, as required by the bill.

This bill provides that a person removed from the centralized list pursuant to its provisions shall be subject to a civil fine not exceeding $1,000 and shall be ineligible to be placed on the centralized list for a period of two years from the date of removal.

This bill prohibits a person who has been removed from the centralized list pursuant to its provisions from owning, operating or being employed by a firearms dealer or ammunition vendor for a period of 2 years.

This bill provides that each year, the DOJ shall conduct an inspection of the 10 firearm dealer locations with the highest percentage of total sales that were recovered by law enforcement and found to be illegally possessed, used in a crime, or suspected to have been used in a crime, as provided, though a dealer shall only be inspected if it is reported to be the source of no fewer than 20 firearms that were illegally possessed, used in a crime, or suspected to have been used in a crime.

This bill provides that the inspections above shall occur within 12 months after the release of a report required under existing law relating to crime guns, and specifies that the DOJ may forgo an inspection of a location described above if the location has been inspected within 6 months prior to the release of the report.

This bill strikes the provision in existing law capping the number of records of each type that may be audited at 50 percent.

This bill provides that a dealer found to have committed a violation of specified firearm dealer requirements shall remedy the violation within 90 days of the inspection and submit proof of that remedy to the DOJ.

This bill strikes the provision of existing law capping the annual fee that may be charged to licensees to cover the costs of maintaining the centralized list and conducting inspections at $115, and authorizes the DOJ to impose a fee adjustment of no more than 15 percent over the previous year, provided that the fee does not exceed the amount necessary to cover specified costs.

This bill provides that, commencing January 1, 2028, every dealer shall maintain inventory records at the dealer’s place of business in a form and for a period as required by DOJ, and that inventory records shall include, but not be limited to, the following:

• The manufacturer, model, caliber or gauge, and serial number of all firearms that are acquired or disposed of not later than one business day after their acquisition or disposition.
• All firearms acquired, but not yet disposed of, shall be accounted for through an inventory check prepared once each month.

This bill provides that inventory records, including a written affidavit certifying the accuracy of all inventory records, under penalty of perjury, shall be made available to the DOJ during inspections and upon the department’s request, and that the affidavit shall be completed in a manner prescribed by the department.

This bill strikes the provision of existing law capping the annual fee that may be charged to cover costs of maintaining the centralized list of exempted FFLs, conducting inspections, and maintaining the firearm shipment verification number system at $115, and authorizes the DOJ to impose a fee adjustment of no more than 15 percent over the previous year, provided that the fee does not exceed the amount necessary to cover specified costs.

This bill strikes the provision of existing law authorizing the DOJ to increase the fee above at a rate not to exceed the increase in the California Consumer Price Index.

This bill strikes the provision of existing law capping the fee that may be charged to licensed manufacturers who produce fewer than 500 firearms per year at $250 or the actual costs of specified tasks related to firearm manufacturers, whichever is less, and instead authorizes the DOJ to charge those manufacturers a fee not to exceed the actual costs of inspections and maintaining a centralized list of firearm manufacturers and other related tasks.

COMMENTS

1. Need for This Bill

According to the Author:

Today, there are more firearms than people and more dealers than all McDonalds, Burger King, Subway and Wendy’s restaurants combined in the United States. Considering the number of firearms circulating throughout the country, it is not surprising that many firearms are lost, stolen, or end up associated with a crime. We know California has tough gun safety laws, but the problem is ensuring that everyone is following them. Far too many guns make their way into the hands of criminals. SB 15 improves reporting and oversight to limit gun trafficking. From 2017 to 2021, over 1 million lost or stolen firearms were reported to authorities, according to the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Of those, nearly 35,000 firearms were stolen from licensed dealers and another 13,145 were stolen in interstate shipments, which are often used to transport firearms between manufacturers and dealers. Theft can happen when dealers are not closely monitoring their inventories, not following rules or acting in bad faith. SB 15 is designed to tighten scrutiny and rules to reduce thefts and other gun trafficking.

1. Firearm Dealer Licensing and Inspection by the Department of Justice

Federal law requires firearms dealers to obtain a license (also known as a “federal firearms license,” or “FFL”) through the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). The ATF issues various types of FFLs depending on the primary activity engaged in by the licensee: there are separate licenses for firearms dealers, pawnbrokers, collectors, manufacturers, and importers. According to the ATF, as of December 2023, there were 1,761 FFLs issued for firearms dealers and pawnbrokers in California, and a total of 9,673 FFLs in the state.^[1] An FFL is necessary but not sufficient for obtaining a firearms dealer license in California. Additional requirements include any business license required by local government, a seller’s permit issued by the California Department of Tax and Fee Administration, a seller’s license issued by the local licensing authority of a local government (and any other license required by that jurisdiction), a certificate of eligibility (COE) issued by the DOJ (verifying that a background check has taken place), and being recorded on the DOJ’s centralized list of firearms dealers.^[2] In California, only individuals that have obtained a valid license through the DOJ may lawfully sell, lease or transfer firearms within the state, subject to limited exceptions.^[3]

Firearm dealers in California are subject to numerous state and federal laws that they must abide by in order to remain in operation. Such laws specify the manner in which firearm dealers must keep their records, deliver a firearm, secure and store their inventory, obtain security measures, and impose numerous other requirements. Firearm dealers who do not comply with such laws have been linked to a greater likelihood that firearms from their inventory will be recovered in a crime. A recent report from Brady United Against Gun Violence cites data from the ATF highlighting that when ATF inspected the 1% of gun dealers that supplied almost 60% of crime guns nationwide, it found that 75% of these dealers had violated federal law, including significant recordkeeping violations and participation in sales to potential gun traffickers and prohibited persons. In comparison, when ATF inspected a random sample of dealers, the number that were found to be noncompliant dropped to 37%.^[4] Additionally, a recent report published by the California DOJ reviewing crime gun^[5] data gathered by the department between 2010 and 2022 revealed that of the approximately 545,946 crime guns with identifiable serial numbers recovered by California law enforcement agencies during that period, 76,135 could be associated with 1,929 distinct California firearms licensees. The report also showed that in 2022, 82 dealers were associated with roughly half of all crime guns, and one specific dealer could be associated with 1,652 crime guns.^[6] This trend persisted in 2023, with 87 dealers associated with roughly half of all crime guns.^[7]

Existing law, effective January 1, 2024 and enacted by recent legislation^[8], requires the DOJ to conduct inspections of licensed firearms dealers at least once every three years to ensure compliance with any and all existing requirements to which they are subject. Moreover, dealer inspections must include an audit of dealer records that includes a sampling of at least 25% but no more than 50% of each record type. This bill requires the DOJ to conduct an inspection of the 10 firearm dealer locations with the highest percentage of total sales that ended up as crime guns, but only if the dealer is the source of no fewer than 20 crime guns. The bill also requires these inspections to occur within 12 months after the release of DOJ’s annual crime guns report mandated by AB 1191 (McCarty) Ch. 683, Stats. of 2021. However, the DOJ may forego an inspection of these high-volume crime gun dealers if they were inspected within 6 months prior to the release of the report. In addition, the bill requires that any dealer found to have committed a violation as a result of an inspection must remedy that violation within 90 days and submit proof of the remedy to the DOJ.

Under existing law, the DOJ is required to maintain a centralized list of all active, licensed firearm dealers, and is authorized to remove dealers from that list for a number of specified reasons, including for having their FFL revoked, failing to provide certification of a working video surveillance system, or violating any of a number of dealer requirements. This bill authorizes the DOJ to remove a dealer from the centralized list if the dealer willfully fails to comply with specified dealer requirements (namely, Penal Code §§ 26700 – 26725), which includes inspection requirements, or if the dealer fails to remedy violations discovered as a result of an inspection within the 90-day timeframe. If a dealer is removed from the centralized list pursuant to these provisions, the bill imposes a $1,000 civil fine and renders that dealer ineligible to be placed on the centralized list for a period of 2 years, and ineligible to own, operate or be employed by a firearms dealer or ammunition vendor for a period of 2 years. Effectively, this means that a dealer who violates a single dealer requirement specified above will have to shutter their business for two years and may not work in the firearm industry for that duration. The Committee may wish to consider whether the severity of this penalty is commensurate with the severity of the violation.

1. Firearm Dealer Inventory Certification

Existing law requires the Department of Justice to maintain certain data regarding firearm dealers, owners and transfers between certain parties, such as firearms surrendered to or recovered by law enforcement, issuance of concealed carry permits, dealer records of sale (DROS), importation of firearms by new residents, and ownership of relics, curios and other now-prohibited weapons.^[9] With regard to dealers specifically, existing law requires the reporting of all firearm purchases, sales and transfers conducted via licensed dealer to the DOJ, and requires the dealer to make this transaction record available for inspection to any peace officer, authorized law enforcement employee, or DOJ employee.^[10] For each transaction, existing law requires dealers to collect and report to DOJ over 40 discrete pieces of data, including information regarding the seller, the purchaser/transferor/transferee and the firearm(s) being transferred.^[11] Additionally, under existing law, licensed dealers are required to report to the DOJ any firearm they acquire from a non-licensed private party intended to be merchandise in the dealer’s inventory. However, several transfers are exempt from this requirement, include acquisitions from wholesalers, licensed manufacturers or importers, and licensed FFLs from other states.^[12]

Whereas existing law only requires dealer reporting to DOJ in specific circumstances – primarily triggered by the acquisition, sale or transfer of a firearm – this bill requires firearm dealers in California, commencing January 1, 2028, to maintain comprehensive inventory records at their place of business which must be made available during inspections and upon request by DOJ. The records must include the manufacturer, model, caliber or gauge, and serial number of all firearms that are acquired or disposed of within a day of their acquisition or disposition. Additionally, the bill requires dealers to account for all firearms acquired, but not yet disposed of, on a monthly basis and prepare a corresponding “inventory check.” Finally, the inventory provisions of the bill require dealers to prepare a written affidavit certifying the accuracy of all inventory records, under penalty of perjury. Thus, in sum, the inventory records required by the bill include, but are not limited to, the following three documents:

• A running list of all firearms acquired or disposed of current to the previous business day, which includes the manufacturer, model, caliber or gauge, and serial number of the firearms.
• A monthly “inventory check” including all firearms acquired but not yet disposed of.
• A written affidavit certifying the accuracy of the above records.

1. Firearm Licensee Fees Collected by DOJ

Under existing law, the DOJ is authorized to collect fees from both firearm dealers and purchasers to recover costs associated with the implementation and management of California’s firearms laws. With regard to dealers, the DOJ may collect fees for the issuance ($71) and renewal ($22) of certificates of eligibility, for the maintenance of the centralized list ($20), and to cover the costs of conducting inspections ($90). Existing law provides that the total amount that may be charged to a dealer recover costs related to maintaining the centralized list and conducting inspections is $115 (hereinafter, “the list fee”). Existing law also authorizes DOJ to charge certain FFLs an additional fee for being in a specialized category of licensees, such as an annual fee of $115 for FFLs that qualify for an exemption from specified dealer requirements, and an annual fee not to exceed $250 for licensed firearm manufacturers that produce fewer than 500 firearms in a calendar year. These fees provide cost recovery for the management of centralized lists exclusive to these specialized classes of licensee.

This bill removes the specified dollar limits on the fees described above, striking language limiting the fees to $115 and $250, respectively. Regarding the list fee and the exempted FFL fee, the bill authorizes DOJ to impose a fee adjustment not to exceed 15% over the previous year but limits the adjustment to the amount necessary to cover costs related to the maintenance of the respective lists. Mirroring existing statutes that prescribe other firearm-related fees, this bill provides that fees imposed pursuant to its provisions must be reasonable.

1. Prior Legislation

Last year, the Author of this bill authored SB 1038, which contained similar but less prescriptive provisions relating to firearm dealer inspections of specified dealers linked to crime guns and slightly different provisions requiring certification of inventory by dealers. SB 1038 did not include changes to the DOJ authority regarding charging fees to dealers and removal of dealers from the centralized list. SB 1038 was held in Senate Appropriations.

1. Argument in Support

According to Giffords, the bill’s sponsor:

According to the UC Davis study, the number of firearms recovered shortly after purchase–a significant indicator that a gun has been trafficked–has also grown significantly. In particular, the percent of handguns recovered in a violent crime within one year of purchase has tripled, and the median “time-to-crime” (time between the gun’s last purchase and its recovery) for handguns recovered in violent crime dropped from 15 years to 4 years. The reduction in time to crime has continued. Between 2021 and 2023, over half of the firearms recovered in crimes traced back to a dealer were recovered in less than three years. These statistics show that, despite the state’s overall strong gun laws, gun trafficking is still a significant problem that endangers California communities.

Moreover, SB 15 comes at a crucial time and is an important next step in ensuring California’s leadership in gun violence prevention efforts. Historically, oversight of firearms dealers has been mainly the purview of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF). Among other things, it’s in charge of licensing federal firearms dealers, tracing guns used in crimes, and analyzing intelligence in shooting investigations. Unfortunately, ATF inspections of dealers are exceedingly rare, only occurring once every seven years on average. Even when violations are found, the vast majority of dealers only receive warnings. Licenses were only revoked in 1.6 percent of cases between 2010 and 2019.

Recent steps by the Trump administration, including using ATF agents as immigration enforcement, the signing of an executive order to review crucial Biden-era gun violence prevention policies, and the closure of the White House Office of Gun Violence Prevention indicate improved oversight of the gun industry, especially dealers, is highly unlikely. In fact, we expect reduced oversight. Fortunately, California has protected itself. In recent years, California has stepped up to fill the void left by the ATF and ensure dealers are inspected every three years. […] SB 15 will further empower the California Department of Justice’s ability to ensure dealers are following the law and doing their part in ensuring firearms remain in lawful commerce.

1. Argument in Opposition

According to Gun Owners of California:

The creation of a “top 10 list” of California firearms dealers who have the highest percentage of “crime guns” traced back to their FFL will not impact the devastation caused by the criminal misuse of firearms. Rather it will unnecessarily add a “scarlet letter” to firearm retailers who have been operating fully under the law in California. GOC believes that it is morally wrong to hold firearm dealers accountable for actions that occur after the legal transfer of a firearm, and therefore completely out of their control.  Penalizing a business for someone else’s prospective crime is misdirected, especially given that safeguards currently exist to remove dealers from the approved list for instances of willful disregard of the law.

Finally, the provisions allowing the charging of "reasonable" annual fees to be charged is of great concern, given that the term "reasonable" is often highly subjective in nature. What’s more, since SB 15 also does not limit the fees to the costs of inspections and maintenance of the requirements imposed by this bill, it is no longer a fee, but falls under the legal definition of a “tax.” GOC does not believe California gun dealers are intentionally providing guns for use by criminals, and thus does not agree that this bill provides “greater scrutiny for gun dealers providing high numbers of firearms for criminal activity.” 

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1. “Complete Federal Firearms Listings.” Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Complete Federal Firearms Listings | Bureau of Alcohol, Tobacco, Firearms and Explosives (atf.gov) ↑

2. Penal Code §26700 ↑

3. Penal Code §26500; see Penal Code §§27850 et. seq. for exceptions related to private party transfer. ↑

4. Brady United Against Gun Violence. A California Case Study: Government Agencies Should Screen Firearms Vendors. <https://s3.amazonaws.com/brady-static/Procurement-CA-v5.pdf ↑

5. A “crime gun” is defined as a firearm that was recovered by a law enforcement agency after it was (1) used in a crime, (2) suspected to have been used in a crime, or (3) illegally possessed. AB 1191 (McCarty, Ch. 683, Stats. of 2021) required the DOJ to submit a report on crime guns in California to the Legislature on an annual basis. ↑

6. “Crime Guns in California: Mandated Reporting Statistics AB 1191 Legislative Report.” California Department of Justice. 30 June 2023. AB 1191 Crime Gun Report.pdf ↑

7. “Crime Guns in California: Mandated Reporting Statistics AB 1191 Legislative Report.” California Department of Justice. 1 July 2024. AB 1191 Crime Gun Report 2024 ↑

8. AB 1420 (Berman), Ch. 45, Stats. of 2023, AB 228 (Rodriguez), Ch. 138, Stats. of 2022 ↑

9. Penal Code §§ 11106, 11108.2, 11108.3, 28100 et. seq, 17000, 27560, 27565, 28000, 30900. ↑

10. Penal Code §26900. ↑

11. Penal Code §28160; For additional information on DOJ’s various firearms databases and how they interact, see the department’s 2023 Armed and Prohibited Persons Report, particularly p. 54. Armed and Prohibited Persons System Report 2023 ↑

12. Penal Code §26905. ↑