The San Diego Tribune has more details.  The highlights I am interested in follow:

“Most of the guns used in crime – 80 percent – are handguns,” said Randy Rossi, director of the firearms division at the state Department of Justice. “We want to see how well this works and give it a sunset. If it doesn’t work, abandon it. But there is no reason in the world to believe it won’t work.”

The plan would require putting serial numbers on all handgun ammunition possessed in public, sold or imported into the state. To accommodate law-abiding sport shooters and those who reload their own cartridges, anyone on their way to or from a shooting range or hunting trip would be exempt. It’s unclear how this provision would work, with supporters acknowledging that details on many aspects of the system need to be worked out.

This would require it be legal to have unmarked ammo in your home.  I love the part about “details… need to be worked out.“  Sort of like, “And then angels flew out of my ass and saved the day.“  These people live in a fantasy world.  They don’t seem to understand that security is like a chain and when the weakest link breaks you have complete failure.

The microstamping system under study was developed by a Washington state company, Ravensforge. The company engraves shell casings and bullets with a matching serial number. All of the cartridges in a box packaged for retail sale would have the same serial number, which could be scanned and linked to a purchaser’s driver license number, Rossi said.

This would help the serial number management problem some.  Instead of a billion numbers it would probably be 50 million or so.

The state’s more than 1,600 licensed firearms dealers already have the electronic equipment to record the information – scanning the code on the ammunition box and electronically swiping the driver license – in the same way they collect required personal information for gun transactions.

Rossi initially was skeptical that a bullet’s number would be legible after it was fired.

A test of 200 rounds fired from close range into walls, car doors, bulletproof vests, rubber matting and a gel designed to simulate a human target convinced him the technology is sound.

Of 181 slugs recovered – including soft lead bullets that largely flattened out – the tiny code could be read on 180 of them with a simple electronic magnifying scope.

“We tried to prove this doesn’t work,” he said. “To have it work virtually every time, I was very surprised.”

Lockyer seized on the system as an alternative to ballistics fingerprinting, which relies on unique, microscopic imperfections in shell casings and slugs. The attorney general angered gun-control advocates last year when his office concluded that ballistics imaging required a massive database and would prove ineffective unless launched as part of national system.

By tracking ammunition, which Rossi said has a relatively short shelf life, the state could develop a much broader database than an alternative that applies only to new handguns.

Hmmm… in practice ammo may not sit on the shelf for very long but if stored in a cool dry place it can easily last for 50 to 100 years.  I suspect Rossi was just making things up as he went along on this particular point.

The attorney general’s aides concede the microstamping proposal faces daunting political and financial obstacles. Manufacturers, gun-control and gun-rights activists – none of whom were involved in the initial study – are raising questions.

Gary Mehalik of the National Shooting Sports Foundation, a trade association for manufacturers of ammunition and firearms, said the caliber of guns used in any test could have been a critical factor in the results.

The state tested 9 millimeter, .38, .40 and .45 caliber handguns. No .22 caliber weapons were used and microstamping has not yet been applied to .22 caliber ammunition, the most common used by sport shooters.

Rossi and Paul Curry, a lobbyist for Ravensforge, said the serial numbers could be applied for a penny or less per cartridge. But Mehalik predicted it would be expensive to add a manufacturing process that matches casings and bullets, and then packages them in a box with the same code number.

“We’d have to analyze the costs, but I can tell you that it would create a logistical nightmare inside the current production systems,” Mehalik said.

It’s been a while (35+ years) but I have receive a tour through an ammo manufacturing plant but from what I remember Mehalik is right on with this point.

A leading gun-rights group dismissed the proposal as an ill-conceived, high-tech version of gun registration.

“The technology is certainly there, but all of the technology can be defeated by anyone who wants to defeat it,” said Sam Paredes of the 30,000-member Gun Owners of California.

Many gun owners make their own ammunition and reuse lead and shell casings, Paredes said.

“Gang members in South Central or East Los Angeles, they’re going to know this ammunition is tainted,” Paredes said. “So they’re going to pay somebody a little bit of money to load some ammunition for them and they’re clean.”

But they won’t be legal if caught with unmarked ammo in public, Rossi said.

And almost for certain they won’t be legal if they are caught with a gun in public either.  Carrying a loaded gun in public is already illegal in CA except for the politically connected and certain celebrities.  And if they have a felony conviction they are illegally in possession as well.  So how would this help?  It’s just one more way to demonize and increase the expense for people exercising their inalienable rights.  In that regard it will probably succeed.