New California DOJ Regulations Tighten Oversight on Firearms Dealers

What the California DOJ Is Doing

On June 6, 2025, the California Department of Justice (DOJ) proposed amendments to Title 11, Division 5, Chapter 2 of the California Code of Regulations to strengthen oversight of firearms dealers, as outlined in documents like the “Text of Proposed Regulations” and “Notice of Proposed Rulemaking.” These regulations establish a comprehensive framework for inspecting dealers, issuing citations, imposing civil fines, and managing the Centralized List of licensed dealers. Key components include:

• Inspections and Citations: The DOJ will conduct on-site inspections at dealers’ business premises or gun shows to ensure compliance with state firearms laws under Penal Code section 16575. Violations are categorized into four levels (Form BOF 1050), with fines ranging from $100 to $3,000 based on severity.
• Fines and Corrective Actions: Level 1 and 2 violations (e.g., unposted fees, signage issues) are exempt from fines if corrected within 30 days. Level 3 and 4 violations (e.g., straw purchases, assault weapon sales) may incur up to $3,000 and risk license forfeiture, especially if committed with gross negligence or uncorrected after notification.
• Appeals Process: Dealers can appeal fines within 30 days using Form BOF 1112, with hearings conducted under the Administrative Procedure Act (Government Code section 11500 et seq.).
• Centralized List Management: Dealers pay a $20 annual placement fee and a $95 inspection fee per location (waived in jurisdictions with local inspection programs). Failure to renew licenses or comply with corrective actions may lead to removal from the Centralized List.

Why the DOJ Claims to Be Acting

The DOJ asserts that these regulations are mandated by Penal Code section 26800, effective January 1, 2024, which authorizes fines up to $1,000 for general state law violations and $3,000 for serious breaches risking license forfeiture. According to the “Initial Statement of Reasons,” the DOJ aims to address the lack of fining authority prior to July 1, 2022, which allowed uncorrected violations to persist, posing public safety risks. The regulations’ objectives are to:

• Enhance Public Safety: Ensure firearms are sold and transferred legally to prevent misuse and protect communities.
• Promote Compliance: Use fines and corrective actions to encourage adherence to state laws without immediately revoking licenses.
• Improve Regulatory Efficiency: Establish clear procedures for inspections, fines, appeals, and list management to streamline enforcement.

The DOJ emphasizes that well-regulated dealers are critical to California’s stringent gun safety framework, protecting the health and welfare of residents.

Impact on Firearms Dealers

The regulations will affect California’s 1,299 firearms dealers, 83% of which are small businesses, as noted in the “Economic and Fiscal Impact Statement” (STD 399). Key impacts include:

• Financial Burden: Fines ($100–$3,000) and fees ($20 placement, $95 inspection) could strain small dealers, particularly for Level 3 and 4 violations. Unpaid fines are added to annual fees, increasing costs.
• Operational Changes: Dealers must maintain compliant records (e.g., Dealer Record of Sale, ATF Form 4473), security systems (e.g., digital surveillance), and licenses to avoid citations, requiring investments in staff training and infrastructure.
• Risk of License Forfeiture: Egregious violations, such as selling to prohibited persons or falsifying records, may lead to removal from the Centralized List, threatening business viability.
• Administrative Load: Compliance with inspections, corrective actions, and appeals requires significant time and resources. The DOJ estimates needing one Associate Governmental Program Analyst ($139,000 annually) to manage this workload.
• Potential Closures: While the DOJ considers closures unlikely due to historically low egregious violations, fines up to $3,000 could lead to layoffs or closures for small dealers with limited margins, especially if multiple violations occur.

The “Economic Impact Assessment” suggests minimal statewide economic impact, as fines are avoidable through compliance, and most dealers already adhere to state laws. However, small businesses face disproportionate challenges due to resource constraints.

Compliance with California OAG Rule Structuring

The Office of Administrative Law (OAL) oversees rulemaking under the Administrative Procedure Act (Government Code section 11340 et seq.). The DOJ’s rulemaking complies with OAL requirements:

• Notice and Comment: The “Notice of Proposed Rulemaking” was published on June 6, 2025, with a 45-day comment period ending July 22, 2025, meeting Government Code section 11346.4.
• Initial Statement of Reasons: The “Initial Statement of Reasons” details the problem, benefits, and necessity of each regulation, satisfying Government Code section 11346.2(b).
• Economic Impact Assessment: The STD 399 form assesses impacts, concluding minimal statewide effects, as required by Government Code section 11346.3.
• Forms Incorporation: Forms BOF 1050 and BOF 1112 are incorporated by reference, with clear descriptions and availability, per Government Code section 11347.5.
• Alternatives Considered: The DOJ evaluated lesser fines and performance standards (e.g., DROS Entry System upgrades), meeting Government Code section 11346.5(a)(13).
• Public Access: Documents are available at https://oag.ca.gov/firearms/regs, ensuring transparency.

Dealers may argue that section 4017’s violation classification process lacks clarity for unlisted violations, potentially inviting OAL scrutiny.

Topics for Firearms Dealers to Comment On

Firearms dealers have until July 22, 2025, at 5:00 p.m. to submit written comments to A. Mendoza ([email protected], PO Box 160487, Sacramento, CA 95816, or fax to 916-731-3354). Comments should be specific, evidence-based, reference regulation sections, and include practical suggestions to influence the rulemaking process. Below is a comprehensive list of topics for dealers to consider, addressing operational, financial, and fairness concerns while acknowledging public safety goals:

• Proportionality of Fine Amounts for Small Businesses (Section 4016)
  • Issue: Fines range from $100 (Level 1, e.g., unposted fees) to $3,000 (Level 3 and 4 violations with gross negligence, e.g., straw purchases). Small dealers, with limited margins, may face financial strain, especially from multiple or severe violations, potentially leading to layoffs or closures.
  • Comment Suggestions:
    • Assess whether fines are proportionate, citing typical dealer revenues (e.g., $100,000–$500,000 annually for small dealers).
    • Propose tiered fines based on business size or revenue (e.g., $50 for Level 1 for dealers with <10 employees).
    • Suggest a cap on total fines per inspection (e.g., $5,000) to prevent financial ruin.
    • Request exemptions for first-time, minor violations (e.g., signage errors) to prioritize education over punishment.
    • Provide data on how fines could impact staffing, inventory, or community services (e.g., safety training programs).
• Clarity and Consistency in Violation Classification (Section 4017)
  • Issue: Violations are classified into Levels 1–4 per Form BOF 1050. Unlisted violations are classified using discretionary factors (e.g., public harm, dealer history), risking inconsistent or subjective enforcement.
  • Comment Suggestions:
    • Request an expanded Form BOF 1050 with more violation examples to reduce discretion.
    • Propose a public guide or checklist detailing violation levels to aid compliance.
    • Suggest an independent review board for classifying unlisted violations to ensure fairness.
    • Recommend mandatory DOJ training on common violations to prevent errors.
    • Identify ambiguous violations (e.g., incomplete records) that may be misclassified, proposing clearer criteria.
• Feasibility of Compliance Deadlines for Corrective Actions (Sections 4016, 4018)
  • Issue: Dealers must correct violations within 30 days to avoid fines for Level 1 and 2 violations or higher fines for Level 3 and 4. Extensions are available for “good cause” (e.g., equipment delays), but 30 days may be insufficient for complex fixes (e.g., surveillance systems), and the extension process may be cumbersome.
  • Comment Suggestions:
    • Evaluate whether 30 days is feasible for corrections like installing digital surveillance ($5,000–$10,000, 6–8 week lead time).
    • Propose longer deadlines (e.g., 60 days) for capital-intensive fixes, with cost and timeline examples.
    • Suggest a streamlined extension process (e.g., online form, automatic approval for documented delays).
    • Request detailed guidance on “good cause” criteria to reduce uncertainty.
    • Share past compliance challenges to justify more flexible timelines.
• Inspection Timing and Operational Disruptions (Section 4014)
  • Issue: Inspections typically occur during business hours but can happen anytime for immediate public safety concerns (e.g., illegal activity tips). Off-hours inspections could disrupt small dealers with limited staff, and the lack of clear limits may lead to overuse.
  • Comment Suggestions:
    • Request strict criteria for off-hours inspections (e.g., documented evidence of imminent harm).
    • Propose a 24-hour notice for non-emergency inspections to allow preparation.
    • Suggest scheduling flexibility for small dealers during peak periods (e.g., holidays).
    • Argue for limits on inspection frequency (e.g., once annually for compliant dealers).
    • Provide examples of disruptions (e.g., lost sales, staff overtime) from unexpected inspections.
• Simplification of the Appeals Process (Section 4020)
  • Issue: Appeals must be filed within 30 days using Form BOF 1112, with extensions for Level 1 and 2 corrections. The process, governed by the Administrative Procedure Act, may be complex and costly for small dealers lacking legal resources.
  • Comment Suggestions:
    • Suggest extending the appeal window to 45 or 60 days for all violations.
    • Request DOJ resources (e.g., appeal guide, helpline) to assist small dealers.
    • Argue for informal resolution options (e.g., mediation) to avoid costly hearings.
    • Highlight legal fees or time constraints small dealers face in appeals.
• Fairness of Fee Structure and Waivers (Section 4012)
  • Issue: Dealers pay a $20 annual placement fee and $95 inspection fee per location, waived in local inspection jurisdictions. Unpaid fines are added to placement fees, increasing costs. Fees may burden compliant or small dealers.
  • Comment Suggestions:
    • Argue whether the $95 inspection fee is fair for compliant dealers, proposing waivers for no-violation records.
    • Request a clear, updated list of local inspection jurisdictions to ensure waivers.
    • Share financial data on fee impacts (e.g., 5% of monthly revenue for small dealers).

Call to Action

Firearms dealers are urged to act now to influence these regulations before the comment period closes on July 22, 2025, at 5:00 p.m. Your input is critical to ensuring the regulations are fair, practical, and balanced for small businesses while supporting public safety. Submit written comments to A. Mendoza at the California Department of Justice via email ([email protected]), mail (PO Box 160487, Sacramento, CA 95816), or fax (916-731-3354). Be specific, reference regulation sections, and include evidence or examples to strengthen your case.

If you need assistance drafting a response letter or ensuring compliance with these new requirements, contact The Davis Law Firm at www.calgunlawyers.com or call 866-545-4867. Their experienced team can help craft effective comments or guide you through compliance to protect your business.