To amend title 18, United States Code, to require persons to obtain a State license before receiving a handgun or handgun ammunition.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Handgun Licensing Act of 2001''.

SEC. 2. STATE LICENSE REQUIRED TO RECEIVE A HANDGUN OR HANDGUN 
              AMMUNITION.

    (a) In General.--Section 922 of title 18, United States Code, is 
amended by adding at the end the following:
    ``(z)(1) It shall be unlawful for any person to sell, deliver, or 
otherwise transfer a handgun or handgun ammunition to an individual who 
is not licensed under section 923 unless--
            ``(A) the transferor (or a licensed dealer, if State law so 
        directs or allows)--
                    ``(i) has examined a valid handgun license issued 
                to the individual by the State in which the transaction 
                takes place, and an additional valid identification 
                document (as defined in section 1028) containing a 
                photograph of the individual; and
                    ``(ii) has contacted the chief law enforcement 
                officer of the State, and been informed by the officer 
                that the handgun license has not been revoked; and
            ``(B)(i) 3 business days (meaning a day on which State 
        offices are open) have elapsed from the date on which the 
        transferor (or licensed dealer) received the information 
        described in subparagraph (A)(ii); or
            ``(ii) the individual has presented to the transferor (or 
        licensed dealer) a written document, issued not less than 10 
        days earlier by the chief law enforcement officer of the State 
        in which the individual resides, stating that the transferee 
        requires access to a handgun because of a threat to the life of 
        the transferee or any member of the household of the 
        transferee.
    ``(2)(A) It shall be unlawful for an individual who is not licensed 
under section 923 to receive a handgun or handgun ammunition in a State 
unless the individual possesses a valid handgun license issued to the 
individual by the State.
    ``(B) Beginning 2 years after the date of the enactment of this 
subsection, it shall be unlawful for an individual who is not licensed 
under section 923 to possess a handgun or handgun ammunition in a State 
unless the individual possesses a valid handgun license issued to the 
individual by the State.
    ``(3)(A) For purposes of this subsection, the term `handgun 
license' means a license issued under a State law that--
            ``(i) provides for the issuance and revocation of licenses 
        permitting persons to receive handguns and handgun ammunition, 
        and for the reporting of losses and thefts of handguns and 
handgun ammunition; and
            ``(ii) at a minimum, meets the requirements of this 
        paragraph.
    ``(B) The State law referred to in subparagraph (A) shall provide 
that a handgun license shall--
            ``(i) be issued by the chief law enforcement officer of the 
        State;
            ``(ii) contain the licensee's name, address, date of birth, 
        and physical description, a unique license number, and a 
        photograph of the licensee; and
            ``(iii) remain valid for not more than 2 years, unless 
        revoked.
    ``(C) The State law referred to in subparagraph (A) shall provide 
that, before a handgun license is issued to an applicant, the chief law 
enforcement officer of the State determine that the applicant--
            ``(i) has attained 21 years of age;
            ``(ii) is a resident of the State, by examining, in 
        addition to a valid identification document (as defined in 
        section 1028), a utility bill or lease agreement;
            ``(iii) is not prohibited from possessing or receiving a 
        handgun under Federal, State, or local law, based upon name- 
        and fingerprint-based research in all available Federal, State, 
        and local recordkeeping systems, including the national instant 
        criminal background check system established under section 103 
        of the Brady Handgun Violence Prevention Act; and
            ``(iv) has been issued a handgun safety certificate by the 
        State.
    ``(D) The State law referred to in subparagraph (A) shall provide 
that, if the chief law enforcement officer of the State determines that 
an individual is ineligible to receive a handgun license, the officer 
shall provide the reasons for the determination to the individual, in 
writing, within 20 business days after making the determination.
    ``(E)(i) The State law referred to in subparagraph (A) shall 
provide that a handgun license issued by the State shall be revoked if 
the chief law enforcement officer of the State determines that the 
licensee no longer meets the requirements of subparagraph (C).
    ``(ii) The State law shall provide that, within 10 days after a 
person receives notice from the State that the handgun license issued 
to the person has been revoked, the person shall return the license to 
the chief law enforcement officer of the State in which the licensee 
resides.
    ``(F) The State law referred to in subparagraph (A) shall provide 
that, within 24 hours after a handgun licensee discovers the theft of 
any firearm from, or the loss of any firearm by the licensee, the 
licensee shall report the theft or loss to--
            ``(i) the Secretary;
            ``(ii) the chief law enforcement officer of the State; and
            ``(iii) appropriate local authorities,
and shall provide that any failure to make such a report shall be 
punishable by a civil penalty as provided by State law, with a maximum 
penalty of at least $1,000.
    ``(4)(A) For purposes of paragraph (3)(C)(iv), the term `handgun 
safety certificate' means a certificate issued under a State law that--
            ``(i) provides for the issuance of certificates attesting 
        to the completion of a course of instruction and examination in 
        handgun safety, consistent with this paragraph; and
            ``(ii) at a minimum, meets the requirements of this 
        paragraph.
    ``(B) The State law referred to in subparagraph (A) shall provide 
that the chief law enforcement officer of a State shall issue the 
handgun safety certificate.
    ``(C) The State law referred to in subparagraph (A) shall provide 
that a handgun safety certificate shall not be issued to an applicant 
unless the chief law enforcement officer of the State determines that 
the applicant--
            ``(i) has completed a course, taught by law enforcement 
        officers and designed by the chief law enforcement officer, of 
        not less than 2 hours of instruction in handgun safety; and
            ``(ii) has passed an examination, designed by the chief law 
        enforcement officer, testing the applicant's knowledge of 
        handgun safety.
    ``(5) For purposes of this subsection, the term `chief law 
enforcement officer' means, with respect to a State, the chief, or 
equivalent officer, of the State police force, or the designee of that 
officer.''.
    (b) Definition of Handgun Ammunition.--Section 921(a) of such title 
is amended by adding at the end the following:
    ``(35) The term `handgun ammunition' means--
            ``(A) a centerfire cartridge or cartridge case less than 
        1.3 inches in length; or
            ``(B) a primer, bullet, or propellant powder designed 
        specifically for use in a handgun.''.
    (c) Penalty.--Section 924(a)(1)(B) of such title is amended by 
inserting ``, or (z)'' before ``of section 922''.
    (d) Technical Correction.--Section 922(t)(1)(B)(ii) of such title 
is amended by inserting ``or State law'' after ``section''.
    (e) Funding.--
            (1) Grants for establishing systems of licensing and 
        registration.--Subject to the availability of appropriations, 
        the Attorney General shall make a grant to each State (as 
        defined in section 921(a)(2) of title 18, United States Code), 
        to cover the initial startup costs associated with establishing 
        a system of licensing pursuant to section 922(z) of title 18, 
        United States Code.
            (2) Authorization of appropriations.--For grants under 
        paragraph (1), there is authorized to be appropriated a total 
        of $200,000,000 for fiscal year 2002 and all fiscal years 
        thereafter.
    (f) Effective Date.--The amendments made by this section shall take 
effect 180 days after the date of the enactment of this Act.

SEC. 3. REQUIREMENT OF BUSINESS LIABILITY INSURANCE.

    Section 923(d)(1) of title 18, United States Code, is amended--
            (1) by striking the period at the end of subparagraph (F) 
        and inserting a semicolon;
            (2) by striking the period at the end of subparagraph (G) 
        and inserting ``; and''; and
            (3) by adding at the end the following new subparagraph:
                    ``(H) the applicant certifies that the business is 
                covered by an insurance policy which provides personal 
                injury protection, to a limit of $100,000, to any 
                person who, while engaged in lawful activity, suffers 
                bodily injury or death through the use of a handgun 
                obtained as a result of the negligence of the 
                applicant.''.

Summary: Handgun Licensing Act of 2001 - Amends the Brady Handgun Violence Prevention Act to prohibit the transfer of a handgun or handgun ammunition to an individual not licensed to engage in the business of importing, manufacturing, or dealing in firearms or ammunition, unless: (1) the transferor has examined a valid handgun license issued to the individual by the State in which the transaction takes place and an additional valid photograph identification document and has contacted and has been informed by the chief law enforcement officer of the State that the handgun license has not been revoked. And (2) three business days have elapsed from the date on which the transferor received such information, or the individual has presented to the transferor a written document, issued not less than ten days earlier by the appropriate officer, stating that the transferee requires access to a handgun because of a threat to the life of the transferee or any member of the transferee's household. Prohibits an unlicenced individual from receiving a handgun or handgun ammunition without possessing a valid handgun license issued to the individual by the State in which the transaction takes place. Sets forth State law requirements, definitions of handgun license and handgun ammunition, and penalties for violations of this Act. Directs the Attorney General to make a grant to each State to cover the initial startup costs associated with establishing a licensing system. Requires an applicant for a license to certify that the business is covered by an insurance policy which provides personal injury protection, to a limit of $100,000, to any person who, while engaged in lawful activity, suffers bodily injury or death through the use of a handgun obtained as a result of the applicant's negligence.