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AB-3199 Firearms: transfers.(2017-2018)

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Date Published: 04/05/2018 09:00 PM
AB3199:v97#DOCUMENT

Amended  IN  Assembly  April 05, 2018
Amended  IN  Assembly  March 20, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 3199


Introduced by Assembly Member Holden

February 16, 2018


An act to amend Section 320.5 of Sections 16520, 16585, 16730, 26384, 26405, 26805, 26890, and 27905 of, to add Section 26851 to, to repeal Sections 26955 and 27655 of, and to repeal and add Section 27900 of, the Penal Code, relating to charitable raffles. firearm transfers.


LEGISLATIVE COUNSEL'S DIGEST


AB 3199, as amended, Holden. Charitable raffles: firearms. Firearms: transfers.
Existing law requires the transfer of a firearm to be conducted through a licensed dealer. Existing law also requires a licensed dealer processing the transfer of a firearm to conduct a background check of the recipient, to hold the firearm for a designated waiting period before releasing the firearm, and to require the recipient to possess a safety certificate and demonstrate safe handling of the firearm. A violation of these provisions is a misdemeanor.
Existing law exempts certain firearms transactions that occur as part of a charitable auction, as specified, from these requirements.
This bill would repeal these exemptions for charitable auctions and would instead authorize a charitable organization, as specified, to conduct no more than 3 auctions, raffles, or similar events per year in which firearms, other than handguns, may be auctioned, raffled, or otherwise sold, and would require those firearms to be transferred to a licensed dealer to process the transfer pursuant to all legal requirements, including a background check and waiting period.
The bill would also revise existing provisions referencing charitable auctions and similar events to additionally include charitable raffles, as specified.
By increasing the scope of an existing crime, this bill would impose a state-mandated local program.
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 any lottery, as defined, including a raffle, except as specified. A violation of this prohibition is a misdemeanor.

The California Constitution authorizes the Legislature to permit private, nonprofit organizations to conduct raffles as a funding mechanism to support beneficial and charitable works if, among other conditions, at least 90% of the gross receipts from the raffle go directly to beneficial or charitable purposes in California.

Existing statutory law authorizes raffles conducted by eligible organizations for beneficial or charitable purposes, if they are conducted in accordance with certain requirements.

This bill would prohibit an authorized raffle from having a firearm, as defined, as a prize. A violation of this prohibition would render such a raffle nonexempt and therefore violate the prohibition on lotteries, the violation of which is a misdemeanor.

By narrowing the exemption to prohibited lotteries and expanding the scope of an existing crime, this bill would impose a state-mandated local program.

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.

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

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


SECTION 1.

 Section 16520 of the Penal Code is amended to read:

16520.
 (a) As used in this part, “firearm” means a device, designed to be used as a weapon, from which is expelled through a barrel, a projectile by the force of an explosion or other form of combustion.
(b) As used in the following provisions, “firearm” includes the frame or receiver of the weapon:
(1) Section 16550.
(2) Section 16730.
(3) Section 16960.
(4) Section 16990.
(5) Section 17070.
(6) Section 17310.
(7) Sections 26500 to 26588, inclusive.
(8) Sections 26600 to 27140, inclusive.
(9) Sections 27400 to 28000, inclusive.
(10) Section 28100.
(11) Sections 28400 to 28415, inclusive.
(12) Sections 29010 to 29150, inclusive.
(13) Section 29180.
(14) Sections 29610 to 29750, inclusive.
(15) Sections 29800 to 29905, inclusive.
(16) Sections 30150 to 30165, inclusive.
(17) Section 31615.
(18) Sections 31705 to 31830, inclusive.
(19) Sections 34355 to 34370, inclusive.
(20) Sections 8100, 8101, and 8103 of the Welfare and Institutions Code.
(c) As used in the following provisions, “firearm” also includes a rocket, rocket propelled projectile launcher, or similar device containing an explosive or incendiary material, whether or not the device is designed for emergency or distress signaling purposes:
(1) Section 16750.
(2) Subdivision (b) of Section 16840.
(3) Section 25400.
(4) Sections 25850 to 26025, inclusive.
(5) Subdivisions (a), (b), and (c) of Section 26030.
(6) Sections 26035 to 26055, inclusive.
(d) As used in the following provisions, “firearm” does not include an unloaded antique firearm:
(1) Subdivisions (a) and (c) of Section 16730.
(2) Section 16550.
(3) Section 16960.
(4) Section 17310.
(5) Chapter 6 (commencing with Section 26350) of Division 5 of Title 4.
(6) Chapter 7 (commencing with Section 26400) of Division 5 of Title 4.
(7) Sections 26500 to 26588, inclusive.
(8) Sections 26700 to 26915, inclusive.
(9) Section 27510.
(10) Section 27530.
(11) Section 27540.
(12) Section 27545.
(13) Sections 27555 to 27585, inclusive.
(14) Sections 29010 to 29150, inclusive.
(15) Section 25135.
(16) Section 29180.
(e) As used in Sections 34005 and 34010, “firearm” does not include a destructive device.
(f) As used in Sections 17280 and 24680, “firearm” has the same meaning as in Section 922 of Title 18 of the United States Code.
(g) As used in Sections 29010 to 29150, inclusive, “firearm” includes the unfinished frame or receiver of a weapon that can be readily converted to the functional condition of a finished frame or receiver.

SEC. 2.

 Section 16585 of the Penal Code is amended to read:

16585.
 (a) Except as stated in subdivision (d), the following provisions are continuations of provisions that were included in former Section 12078, as that section read when it was repealed by the Deadly Weapons Recodification Act of 2010:
(1) Subdivision (b) of Section 16170, as it pertains to former Section 12078, as that section read when it was repealed by the Deadly Weapons Recodification Act of 2010.
(2) Section 16720.
(3) Subdivision (a) of Section 16730, as it pertains to former Section 12078, as that section read when it was repealed by the Deadly Weapons Recodification Act of 2010.
(4) Subdivision (b) of Section 16730. 16730, as that section read on January 1, 2018.
(5) Section 16990.
(6) Sections 26600 to 26615, inclusive.
(7) Sections 26950 to 27140, inclusive.
(8) Sections 27400 to 27415, inclusive.
(9) Subdivision (b) of Section 27505, as it pertains to former Section 12078, as that section read when it was repealed by the Deadly Weapons Recodification Act of 2010.
(10) Sections 27600 to 28000, inclusive.
(11) Sections 28400 to 28415, inclusive.
(12) Sections 30150 to 30165, inclusive.
(13) Sections 31705 to 31830, inclusive.
(14) Sections 34355 to 34370, inclusive.
(b) Except as stated in subdivision (d), the provisions listed in subdivision (a) may be referred to as “former Section 12078 provisions.”
(c) Except as stated in subdivision (d), the following provisions are continuations of provisions that were included in subdivision (a) of former Section 12078, as that subdivision read when it was repealed by the Deadly Weapons Recodification Act of 2010:
(1) Sections 26600 to 26615, inclusive.
(2) Section 26950.
(3) Sections 27050 to 27065, inclusive.
(4) Sections 27400 to 27415, inclusive.
(5) Sections 27600 to 27615, inclusive.
(6) Section 27650.
(7) Sections 27850 to 27860, inclusive.
(8) Sections 28400 to 28415, inclusive.
(9) Sections 30150 to 30165, inclusive.
(10) Sections 31705 to 31735, inclusive.
(11) Sections 34355 to 34370, inclusive.
(d) Subdivisions (a) and (c) do not include any provision that was first codified in one of the specified numerical ranges after the effective date of the Deadly Weapons Recodification Act of 2010.

SEC. 3.

 Section 16730 of the Penal Code is amended to read:

16730.
 (a) As used in Section 31815 and in Division 6 (commencing with Section 26500) of Title 4, “infrequent” means:
(1) For handguns, less than six transactions per calendar year.
(2) For firearms other than handguns, occasional and without regularity.

(b)As used in Section 27900, the term “infrequent” shall not be construed to prohibit different local chapters of the same nonprofit corporation from conducting auctions or similar events, provided the individual local chapter conducts the auctions or similar events infrequently. It is the intent of the Legislature that different local chapters, representing different localities, be entitled to invoke the exemption created by Section 27900, notwithstanding the frequency with which other chapters of the same nonprofit corporation may conduct auctions or similar events.

(c)

(b) As used in this section, “transaction” means a single sale, lease, or transfer of any number of handguns.

SEC. 4.

 Section 26384 of the Penal Code is amended to read:

26384.
 Paragraph (1) of subdivision (a) of Section 26350 does not apply to, or affect, the open carrying of an unloaded handgun if all of the following conditions are satisfied:
(a) The open carrying occurs at an auction auction, raffle, or similar event of a nonprofit public benefit or mutual benefit corporation, at which firearms are auctioned or otherwise sold to fund the activities of that corporation or the local chapters of that corporation.
(b) The unloaded handgun is to be auctioned or otherwise sold for that nonprofit public benefit or mutual benefit corporation.
(c) The unloaded handgun is to be delivered by a person licensed pursuant to, and operating in accordance with, Sections 26700 to 26915, inclusive.

SEC. 5.

 Section 26405 of the Penal Code is amended to read:

26405.
 Section 26400 does not apply to, or affect, the carrying of an unloaded firearm that is not a handgun in any of the following circumstances:
(a) By a person when carried within a place of business, a place of residence, or on private real property, if that person, by virtue of subdivision (a) of Section 25605, may carry a firearm within that place of business, place of residence, or on that private real property owned or lawfully occupied by that person.
(b) By a person when carried within a place of business, a place of residence, or on private real property, if done with the permission of a person who, by virtue of subdivision (a) of Section 25605, may carry a firearm within that place of business, place of residence, or on that private real property owned or lawfully occupied by that person.
(c) When the firearm is either in a locked container or encased and it is being transported directly between places where a person is not prohibited from possessing that firearm and the course of travel shall include only those deviations between authorized locations as are reasonably necessary under the circumstances.
(d) If the person possessing the firearm reasonably believes that he or she is in grave danger because of circumstances forming the basis of a current restraining order issued by a court against another person or persons who has or have been found to pose a threat to his or her life or safety. This subdivision may not apply when the circumstances involve a mutual restraining order issued pursuant to Division 10 (commencing with Section 6200) of the Family Code absent a factual finding of a specific threat to the person’s life or safety. Upon a trial for violating Section 26400, the trier of fact shall determine whether the defendant was acting out of a reasonable belief that he or she was in grave danger.
(e) By a peace officer or an honorably retired peace officer if that officer may carry a concealed firearm pursuant to Article 2 (commencing with Section 25450) of Chapter 2, or a loaded firearm pursuant to Article 3 (commencing with Section 25900) of Chapter 3.
(f) By a person to the extent that person may openly carry a loaded firearm that is not a handgun pursuant to Article 4 (commencing with Section 26000) of Chapter 3.
(g) As merchandise by a person who is engaged in the business of manufacturing, importing, wholesaling, repairing, or dealing in firearms and who is licensed to engage in that business, or the authorized representative or authorized agent of that person, while engaged in the lawful course of the business.
(h) By a duly authorized military or civil organization, or the members thereof, while parading or while rehearsing or practicing parading, when at the meeting place of the organization.
(i) By a member of a club or organization organized for the purpose of practicing shooting at targets upon established target ranges, whether public or private, while the members are using firearms that are not handguns upon the target ranges or incident to the use of a firearm that is not a handgun at that target range.
(j) By a licensed hunter while engaged in hunting or while transporting that firearm when going to or returning from that hunting expedition.
(k) Incident to transportation of a handgun by a person operating a licensed common carrier, or by an authorized agent or employee thereof, when transported in conformance with applicable federal law.
(l) By a member of an organization chartered by the Congress of the United States or a nonprofit mutual or public benefit corporation organized and recognized as a nonprofit tax-exempt organization by the Internal Revenue Service while on official parade duty or ceremonial occasions of that organization or while rehearsing or practicing for official parade duty or ceremonial occasions.
(m) Within a gun show conducted pursuant to Article 1 (commencing with Section 27200) and Article 2 (commencing with Section 27300) of Chapter 3 of Division 6.
(n) Within a school zone, as defined in Section 626.9, if that carrying is not prohibited by Section 626.9.
(o) When in accordance with the provisions of Section 171b.
(p) By a person while engaged in the act of making or attempting to make a lawful arrest.
(q) By a person engaged in firearms-related activities, while on the premises of a fixed place of business that is licensed to conduct and conducts, as a regular course of its business, activities related to the sale, making, repair, transfer, pawn, or the use of firearms, or related to firearms training.
(r) By an authorized participant in, or an authorized employee or agent of a supplier of firearms for, a motion picture, television, or video production or entertainment event, when the participant lawfully uses that firearm as part of that production or event, as part of rehearsing or practicing for participation in that production or event, or while the participant or authorized employee or agent is at that production or event, or rehearsal or practice for that production or event.
(s) Incident to obtaining an identification number or mark assigned for that firearm from the Department of Justice pursuant to Section 23910.
(t) At an established public target range while the person is using that firearm upon that target range.
(u) By a person when that person is summoned by a peace officer to assist in making arrests or preserving the peace, while the person is actually engaged in assisting that officer.
(v) Incident to any of the following:
(1) Complying with Section 27560 or 27565, as it pertains to that firearm.
(2) Section 28000, as it pertains to that firearm.
(3) Section 27850 or 31725, as it pertains to that firearm.
(4) Complying with Section 27870 or 27875, as it pertains to that firearm.
(5) Complying with Section 27915, 27920, or 27925, as it pertains to that firearm.
(w) Incident to, and in the course and scope of, training of, or by an individual to become a sworn peace officer as part of a course of study approved by the Commission on Peace Officer Standards and Training.
(x) Incident to, and in the course and scope of, training of, or by an individual to become licensed pursuant to Chapter 4 (commencing with Section 26150) as part of a course of study necessary or authorized by the person authorized to issue the license pursuant to that chapter.
(y) Incident to and at the request of a sheriff, chief, or other head of a municipal police department.
(z) If all of the following conditions are satisfied:
(1) The open carrying occurs at an auction auction, raffle, or similar event of a nonprofit public benefit or mutual benefit corporation at which firearms are auctioned auctioned, raffled, or otherwise sold to fund the activities of that corporation or the local chapters of that corporation.
(2) The unloaded firearm that is not a handgun is to be auctioned auctioned, raffled, or otherwise sold for that nonprofit public benefit or mutual benefit corporation.
(3) The unloaded firearm that is not a handgun is to be delivered by a person licensed pursuant to, and operating in accordance with, Sections 26700 to 26915, inclusive.
(aa) Pursuant to paragraph (3) of subdivision (b) of Section 171c.
(ab) Pursuant to Section 171d.
(ac) Pursuant to subparagraph (F) of paragraph (1) of subdivision (c) of Section 171.7.
(ad) On publicly owned land, if the possession and use of an unloaded firearm that is not a handgun is specifically permitted by the managing agency of the land and the person carrying that firearm is in lawful possession of that firearm.
(ae) By any of the following:
(1) The carrying of an unloaded firearm that is not a handgun that is regulated pursuant to Chapter 1 (commencing with Section 18710) of Division 5 of Title 2 by a person who holds a permit issued pursuant to Article 3 (commencing with Section 18900) of that chapter, if the carrying of that firearm is conducted in accordance with the terms and conditions of the permit.
(2) The carrying of an unloaded firearm that is not a handgun that is regulated pursuant to Chapter 2 (commencing with Section 30500) of Division 10 by a person who holds a permit issued pursuant to Section 31005, if the carrying of that firearm is conducted in accordance with the terms and conditions of the permit.
(3) The carrying of an unloaded firearm that is not a handgun that is regulated pursuant to Chapter 6 (commencing with Section 32610) of Division 10 by a person who holds a permit issued pursuant to Section 32650, if the carrying of that firearm is conducted in accordance with the terms and conditions of the permit.
(4) The carrying of an unloaded firearm that is not a handgun that is regulated pursuant to Article 2 (commencing with Section 33300) of Chapter 8 of Division 10 by a person who holds a permit issued pursuant to Section 33300, if the carrying of that firearm is conducted in accordance with the terms and conditions of the permit.
(af) By a licensed hunter while actually engaged in training a dog for the purpose of using the dog in hunting that is not prohibited by law, or while transporting the firearm while going to or returning from that training.
(ag) Pursuant to the provisions of subdivision (d) of Section 171.5.
(ah) By a person who is engaged in the business of manufacturing ammunition and who is licensed to engage in that business, or the authorized representative or authorized agent of that person, while the firearm is being used in the lawful course and scope of the licensee’s activities as a person licensed pursuant to Chapter 44 (commencing with Section 921) of Title 18 of the United States Code and regulations issued pursuant thereto.
(ai) On the navigable waters of this state that are held in public trust, if the possession and use of an unloaded firearm that is not a handgun is not prohibited by the managing agency thereof and the person carrying the firearm is in lawful possession of the firearm.

SEC. 6.

 Section 26581 is added to the Penal Code, to read:

26581.
 Section 26500 does not apply to the delivery, sale, or transfer of an unloaded firearm that is not a handgun to a dealer if the delivery, sale, or transfer satisfies all of the following conditions:
(a) The delivery, sale, or transfer is made by a nonprofit public benefit or mutual benefit corporation, including a local chapter of the same nonprofit corporation, organized pursuant to the Corporations Code.
(b) The sale or other transfer of ownership of that firearm is to occur as part of an auction, raffle, or similar event conducted by that nonprofit public benefit or mutual benefit corporation organized pursuant to the Corporations Code.
(c) If the delivery, sale, or transfer is made by a local chapter of that nonprofit corporation, that local chapter holds no more than three auctions, raffles, or similar events during a calendar year where firearms are to be sold or ownership is otherwise to be transferred.

SEC. 7.

 Section 26805 of the Penal Code is amended to read:

26805.
 (a) Except as provided in subdivisions (b) and (c), the business of a licensee shall be conducted only in the buildings designated in the license.
(b) (1) A person licensed pursuant to Sections 26700 and 26705 may take possession of firearms and commence preparation of registers for the sale, delivery, or transfer of firearms at any gun show or event, as defined in Section 478.100 of Title 27 of the Code of Federal Regulations, or its successor, if the gun show or event is not conducted from any motorized or towed vehicle. A person conducting business pursuant to this subdivision shall be entitled to conduct business as authorized herein at any gun show or event in the state, without regard to the jurisdiction within this state that issued the license pursuant to Sections 26700 and 26705, provided the person complies with all applicable laws, including, but not limited to, the waiting period specified in subdivision (a) of Section 26815, and all applicable local laws, regulations, and fees, if any.
(2) A person conducting business pursuant to this subdivision shall publicly display the person’s license issued pursuant to Sections 26700 and 26705, or a facsimile thereof, at any gun show or event, as specified in this subdivision.
(c) (1) A person licensed pursuant to Sections 26700 and 26705 may engage in the sale and transfer of firearms other than handguns, at events specified in Sections 26955, 27655, 27900, 27900 and 27905, subject to the prohibitions and restrictions contained in those sections.
(2) A person licensed pursuant to Sections 26700 and 26705 may also accept delivery of firearms other than handguns, outside the building designated in the license, provided the firearm is being donated for the purpose of sale or transfer at an auction auction, raffle, or similar event specified in Section 27900.
(d) The firearm may be delivered to the purchaser, transferee, or person being loaned the firearm at one of the following places:
(1) The building designated in the license.
(2) The places specified in subdivision (b) or (c).
(3) The place of residence of, the fixed place of business of, or on private property owned or lawfully possessed by, the purchaser, transferee, or person being loaned the firearm.

SEC. 8.

 Section 26890 of the Penal Code is amended to read:

26890.
 (a) Except as provided in subdivisions (b) and (c) of Section 26805, any time when the licensee is not open for business, all inventory firearms shall be stored in the licensed location. All firearms shall be secured using one of the following methods as to each particular firearm:
(1) Store the firearm in a secure facility that is a part of, or that constitutes, the licensee’s business premises.
(2) Secure the firearm with a hardened steel rod or cable of at least one-eighth inch in diameter through the trigger guard of the firearm. The steel rod or cable shall be secured with a hardened steel lock that has a shackle. The lock and shackle shall be protected or shielded from the use of a boltcutter and the rod or cable shall be anchored in a manner that prevents the removal of the firearm from the premises.
(3) Store the firearm in a locked fireproof safe or vault in the licensee’s business premises.
(b) The licensing authority in an unincorporated area of a county or within a city may impose security requirements that are more strict or are at a higher standard than those specified in subdivision (a).
(c) Upon written request from a licensee, the licensing authority may grant an exemption from compliance with the requirements of subdivision (a) if the licensee is unable to comply with those requirements because of local ordinances, covenants, lease conditions, or similar circumstances not under the control of the licensee.
(d) Subdivision (a) or (b) shall not apply to a licensee organized as a nonprofit public benefit corporation pursuant to Part 2 (commencing with Section 5110) of Division 2 of Title 1 of the Corporations Code, or as a mutual benefit corporation pursuant to Part 3 (commencing with Section 7110) of Division 2 of Title 1 of the Corporations Code, if both of the following conditions are satisfied:
(1) The nonprofit public benefit or mutual benefit corporation obtained the dealer’s license solely and exclusively to assist that corporation or local chapters of that corporation in conducting auctions auctions, raffles, or similar events at which firearms are auctioned or raffled off to fund the activities of that corporation or the local chapters of the corporation.
(2) The firearms are not handguns.

SEC. 9.

 Section 26955 of the Penal Code is repealed.
26955.

(a)The waiting period described in Section 26815 does not apply to a dealer who delivers a firearm, other than a handgun, at an auction or similar event described in Section 27900, as authorized by subdivision (c) of Section 26805.

(b)Within two business days of completion of the application to purchase, the dealer shall forward by prepaid mail to the Department of Justice a report of the application as is indicated in Section 28160 or 28165, as applicable.

(c)If the electronic or telephonic transfer of applicant information is used, within two business days of completion of the application to purchase, the dealer delivering the firearm shall transmit to the Department of Justice an electronic or telephonic report of the application as is indicated in Section 28160 or 28165, as applicable.

SEC. 10.

 Section 27655 of the Penal Code is repealed.
27655.

(a)The waiting period described in Section 27540 does not apply to a dealer who delivers a firearm, other than a handgun, at an auction or similar event described in Section 27900, as authorized by subdivision (c) of Section 26805.

(b)Within two business days of completion of the application to purchase, the dealer shall forward by prepaid mail to the Department of Justice a report of the application as is indicated in Section 28160 or 28165, as applicable.

(c)If the electronic or telephonic transfer of applicant information is used, within two business days of completion of the application to purchase, the dealer delivering the firearm shall transmit to the Department of Justice an electronic or telephonic report of the application as is indicated in Section 28160 or 28165, as applicable.

SEC. 11.

 Section 27900 of the Penal Code is repealed.
27900.

(a)Section 27545 does not apply to the infrequent sale or transfer of a firearm other than a handgun at an auction or similar event conducted by a nonprofit mutual or public benefit corporation organized pursuant to the Corporations Code.

(b)As used in this section, “infrequent” has the meaning provided in Section 16730.

SEC. 12.

 Section 27900 is added to the Penal Code, to read:

27900.
 Section 27545 does not apply to the loan of a firearm other than a handgun at an auction, raffle, or similar event conducted by a nonprofit public benefit or mutual benefit corporation organized pursuant to the Corporations Code if all the following apply:
(a) The firearm at all times stays on the premises where the auction, raffle, or similar event occurs.
(b) That firearm is to be auctioned, raffled, or otherwise sold for the benefit of that nonprofit public benefit or mutual benefit corporation.
(c) That firearm when sold or otherwise transferred is to then be delivered to a person licensed pursuant to, and operating in accordance with, Sections 26700 to 26915, inclusive, for sale or other transfer to the person who purchased or otherwise is acquiring ownership of that firearm.

SEC. 13.

 Section 27905 of the Penal Code is amended to read:

27905.
 Section 27545 does not apply to the transfer of a firearm if all of the following requirements are satisfied:
(a) The firearm is not a handgun.
(b) The firearm is donated for an auction auction, raffle, or similar event described in Section 27900.
(c) The firearm is delivered to the nonprofit corporation immediately preceding, or contemporaneous with, the auction auction, raffle, or similar event.

SEC. 14.

 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.
SECTION 1.Section 320.5 of the Penal Code is amended to read:
320.5.

(a)Nothing in this chapter applies to any raffle conducted by an eligible organization as defined in subdivision (c) for the purpose of directly supporting beneficial or charitable purposes or financially supporting another private, nonprofit, eligible organization that performs beneficial or charitable purposes if the raffle is conducted in accordance with this section.

(b)For purposes of this section, “raffle” means a scheme for the distribution of prizes by chance among persons who have paid money for paper tickets that provide the opportunity to win these prizes, where all of the following are true:

(1)Each ticket is sold with a detachable coupon or stub, and both the ticket and its associated coupon or stub are marked with a unique and matching identifier.

(2)Winners of the prizes are determined by draw from among the coupons or stubs described in paragraph (1) that have been detached from all tickets sold for entry in the draw.

(3)The draw is conducted in California under the supervision of a natural person who is 18 years of age or older.

(4)(A)At least 90 percent of the gross receipts generated from the sale of raffle tickets for any given draw are used by the eligible organization conducting the raffle to benefit or provide support for beneficial or charitable purposes, or it may use those revenues to benefit another private, nonprofit organization, provided that an organization receiving these funds is itself an eligible organization as defined in subdivision (c). As used in this section, “beneficial purposes” excludes purposes that are intended to benefit officers, directors, or members, as defined by Section 5056 of the Corporations Code, of the eligible organization. In no event shall funds raised by raffles conducted pursuant to this section be used to fund any beneficial, charitable, or other purpose outside of California. This section does not preclude an eligible organization from using funds from sources other than the sale of raffle tickets to pay for the administration or other costs of conducting a raffle.

(B)An employee of an eligible organization who is a direct seller of raffle tickets shall not be treated as an employee for purposes of workers’ compensation under Section 3351 of the Labor Code if the following conditions are satisfied:

(i)Substantially all of the remuneration (whether or not paid in cash) for the performance of the service of selling raffle tickets is directly related to sales rather than to the number of hours worked.

(ii)The services performed by the person are performed pursuant to a written contract between the seller and the eligible organization and the contract provides that the person will not be treated as an employee with respect to the selling of raffle tickets for workers’ compensation purposes.

(C)For purposes of this section, employees selling raffle tickets shall be deemed to be direct sellers as described in Section 650 of the Unemployment Insurance Code as long as they meet the requirements of that section.

(c)For purposes of this section, “eligible organization” means a private, nonprofit organization that has been qualified to conduct business in California for at least one year prior to conducting a raffle and is exempt from taxation pursuant to Sections 23701a, 23701b, 23701d, 23701e, 23701f, 23701g, 23701k, 23701l, 23701t, or 23701w of the Revenue and Taxation Code.

(d)Any person who receives compensation in connection with the operation of the raffle shall be an employee of the eligible organization that is conducting the raffle, and in no event may compensation be paid from revenues required to be dedicated to beneficial or charitable purposes.

(e)A raffle otherwise permitted under this section shall not be conducted by means of, or otherwise utilize, any gaming machine, apparatus, or device, whether or not that machine, apparatus, or device meets the definition of slot machine contained in Section 330a, 330b, or 330.1.

(f)(1)A raffle otherwise permitted under this section shall not be conducted, nor shall tickets for a raffle be sold, within an operating satellite wagering facility or racetrack inclosure licensed pursuant to the Horse Racing Law (Chapter 4 (commencing with Section 19400) of Division 8 of the Business and Professions Code) or within a gambling establishment licensed pursuant to the Gambling Control Act (Chapter 5 (commencing with Section 19800) of Division 8 of the Business and Professions Code).

(2)A raffle may not be operated or conducted in any manner over the Internet, nor may raffle tickets be sold, traded, or redeemed over the Internet. For purposes of this paragraph, an eligible organization shall not be deemed to operate or conduct a raffle over the Internet, or sell raffle tickets over the Internet, if the eligible organization advertises its raffle on the Internet or permits others to do so. Information that may be conveyed on an Internet Web site pursuant to this paragraph includes, but is not limited to, all of the following:

(A)Lists, descriptions, photographs, or videos of the raffle prizes.

(B)Lists of the prize winners.

(C)The rules of the raffle.

(D)Frequently asked questions and their answers.

(E)Raffle entry forms, which may be downloaded from the Internet Web site for manual completion by raffle ticket purchasers, but shall not be submitted to the eligible organization through the Internet.

(F)Raffle contact information, including the eligible organization’s name, address, telephone number, facsimile number, or e-mail address.

(g)A raffle otherwise permitted under this section shall not have any firearm, as defined in Section 16520, except an antique firearm, as defined in subdivision (c) of Section 16170, as a prize.

(h)An individual, corporation, partnership, or other legal entity shall not hold a financial interest in the conduct of a raffle, except the eligible organization that is itself authorized to conduct that raffle, and any private, nonprofit, eligible organizations receiving financial support from that charitable organization pursuant to subdivisions (a) and (b).

(i)(1)An eligible organization shall not conduct a raffle authorized under this section, unless it registers annually with the Department of Justice. The department shall furnish a registration form via the Internet or upon request to eligible nonprofit organizations. The department shall, by regulation, collect only the information necessary to carry out the provisions of this section on this form. This information shall include, but is not limited to, the following:

(A)The name and address of the eligible organization.

(B)The federal tax identification number, the corporate number issued by the Secretary of State, the organization number issued by the Franchise Tax Board, or the California charitable trust identification number of the eligible organization.

(C)The name and title of a responsible fiduciary of the organization.

(2)The department may require an eligible organization to pay an annual registration fee of ten dollars ($10) to cover the actual costs of the department to administer and enforce this section. The department may, by regulation, adjust the annual registration fee as needed to ensure that revenues willfully offset, but do not exceed, the actual costs incurred by the department pursuant to this section. The fee shall be deposited by the department into the General Fund.

(3)The department shall receive General Fund moneys for the costs incurred pursuant to this section subject to an appropriation by the Legislature.

(4)The department shall adopt regulations necessary to effectuate this section, including emergency regulations, pursuant to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code).

(5)The department shall maintain an automated database of all registrants. Each local law enforcement agency shall notify the department of any arrests or investigation that may result in an administrative or criminal action against a registrant. The department may audit the records and other documents of a registrant to ensure compliance with this section.

(6)Once registered, an eligible organization must file annually thereafter with the department a report that includes the following:

(A)The aggregate gross receipts from the operation of raffles.

(B)The aggregate direct costs incurred by the eligible organization from the operation of raffles.

(C)The charitable or beneficial purposes for which proceeds of the raffles were used, or identify the eligible recipient organization to which proceeds were directed, and the amount of those proceeds.

(7)The department shall annually furnish to registrants a form to collect this information.

(8)The registration and reporting provisions of this section do not apply to any religious corporation sole or other religious corporation or organization that holds property for religious purposes, to a cemetery corporation regulated under Chapter 19 of Division 3 of the Business and Professions Code, or to any committee as defined in Section 82013 that is required to and does file any statement pursuant to the provisions of Article 2 (commencing with Section 84200) of Chapter 4 of Title 9, or to a charitable corporation organized and operated primarily as a religious organization, educational institution, hospital, or a health care service plan licensed pursuant to Section 1349 of the Health and Safety Code.

(j)The department may take legal action against a registrant if it determines that the registrant has violated this section or any regulation adopted pursuant to this section, or that the registrant has engaged in any conduct that is not in the best interests of the public’s health, safety, or general welfare. Any action taken pursuant to this subdivision does not prohibit the commencement of an administrative or criminal action by the Attorney General, a district attorney, city attorney, or county counsel.

(k)Each action and hearing conducted to deny, revoke, or suspend a registry, or other administrative action taken against a registrant shall be conducted pursuant to the Administrative Procedure Act (Chapters 4.5 (commencing with Section 11400) and 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code). The department may seek recovery of the costs incurred in investigating or prosecuting an action against a registrant or applicant in accordance with those procedures specified in Section 125.3 of the Business and Professions Code. A proceeding conducted under this subdivision is subject to judicial review pursuant to Section 1094.5 of the Code of Civil Procedure.

(l)The Department of Justice shall conduct a study and report to the Legislature by December 31, 2003, on the impact of this section on raffle practices in California. Specifically, the study shall include, but not be limited to, information on whether the number of raffles has increased, the amount of money raised through raffles and whether this amount has increased, whether there are consumer complaints, and whether there is increased fraud in the operation of raffles.

(m)A raffle shall be exempt from this section if it satisfies all of the following requirements:

(1)It involves a general and indiscriminate distribution of the tickets.

(2)The tickets are offered on the same terms and conditions as the tickets for which a donation is given.

(3)The scheme does not require any of the participants to pay for a chance to win.

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.