I 

116TH CONGRESS 

2D SESSION H. R. 7977 

To require federally licensed firearms manufacturers, importers, and dealers 

and their employees to undergo annual training to be eligible to sell 

a firearm, to require a notice to be posted at retail firearms locations 

that describes the signs of unlawful firearms purchases, to require such 

licensees to maintain a minimum level of business liability insurance, 

and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

AUGUST 7, 2020 

Ms. MUCARSEL-POWELL (for herself, Ms. KELLY of Illinois, Mr. DEUTCH, Mr. 

CICILLINE, Mr. LANGEVIN, Mr. SWALWELL of California, and Mr. CROW) 

introduced the following bill; which was referred to the Committee on the 

Judiciary 

A BILL 

To require federally licensed firearms manufacturers, importers, and dealers and their employees to undergo annual 

training to be eligible to sell a firearm, to require a 

notice to be posted at retail firearms locations that describes the signs of unlawful firearms purchases, to require such licensees to maintain a minimum level of 

business liability insurance, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Firearms Retailer 

3 Code of Conduct Act of 2020’’. 

4 SEC. 2. CODE OF CONDUCT FOR FIREARMS MANUFACTUR5 ERS, IMPORTERS, AND DEALERS. 

6 (a) IN GENERAL.—Section 923 of title 18, United 

7 States Code, is amended by adding at the end the fol8 lowing: 

9 ‘‘(m)(1)(A) The Attorney General shall annually 

10 make available to each licensed importer, licensed manu11 facturer, and licensed dealer, and each employee of such 

12 a licensee who is authorized to engage in the transfer of 

13 firearms or ammunition in the course of the firearms busi14 ness to unlicensed persons, a training course in the con15 duct of firearm transfers. 

16 ‘‘(B) The training course shall describe Federal law 

17 governing firearms transfers, and cover, at a minimum, 

18 the following matters: 

19 ‘‘(i) How to recognize and identify straw pur20 chasers and fraudulent activity. 

21 ‘‘(ii) The indicators that a person is attempting 

22 to purchase a firearm illegally. 

23 ‘‘(iii) How to recognize and identify indicators 

24 that an individual intends to use a firearm for un25 lawful purposes. 


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1 ‘‘(iv) How to recognize and identify indicators 

2 that an individual intends to use a firearm for self3 harm. 

4 ‘‘(v) How to prevent theft or burglary of fire5 arms and ammunition. 

6 ‘‘(vi) How to respond in the circumstances de7 scribed in clauses (i) through (v), and the applicable 

8 reporting requirements. 

9 ‘‘(vii) Other reasonable business practices that 

10 the Attorney General determines will deter gun traf11 ficking, or deter the provision of a firearm to those 

12 who indicate an intent to use a firearm for unlawful 

13 purposes or for self-harm. 

14 ‘‘(C) The training course shall include an examina15 tion with not less than 20 questions derived from the 

16 course materials and intended to confirm that a course 

17 participant has learned the information covered by the 

18 course. To receive certification of completion of the course, 

19 a participant must answer at least 70 percent of the exam20 ination questions correctly. 

21 ‘‘(D) Not less frequently than annually, the Attorney 

22 General shall review the training course materials, and re23 vise them as necessary. 

24 ‘‘(E) On successful completion of the training course 

25 by a participant— 


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1 ‘‘(i) the participant shall attest to his or her 

2 participation in the course; 

3 ‘‘(ii) the participant shall attest to his or her 

4 receipt of the course materials; 

5 ‘‘(iii) if the participant is not a licensed manu6 facture, licensed importer, or licensed dealer, the 

7 participant has submitted to the national instant 

8 criminal background check system established under 

9 section 103 of the Brady Handgun Violence Preven10 tion Act sufficient information to enable the system 

11 to determine whether the participant is prohibited by 

12 subsection (g) or (n) of section 922 or State law 

13 from receiving a firearm; and 

14 ‘‘(iv) if the system has determined that the par15 ticipant is not so prohibited, the Attorney General 

16 shall immediately issue to the participant, through 

17 United States mail or electronic means, a certificate 

18 which indicates successful completion of the training 

19 course and includes a unique certification number, 

20 both of which shall expire 2 years after issuance un21 less renewed. 

22 ‘‘(F) The Attorney General shall— 

23 ‘‘(i) create and maintain a database which iden24 tifies each individual to whom such a certificate is 

25 issued, the date the certificate is issued, the date the 


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1 certificate expires, and the unique certification num2 ber on the certificate; 

3 ‘‘(ii) make readily available to persons licensed 

4 under this chapter and Federal, State, and local law 

5 enforcement authorities, on request, the certification 

6 status of current or potential employees; 

7 ‘‘(iii) on a monthly basis, provide to the Bureau 

8 of Alcohol, Tobacco, Firearms and Explosives a com9 plete list of the certificates issued under subpara10 graph (E) that have expired or been renewed since 

11 the most recent prior provision of information, if 

12 any, to the system under this clause. 

13 ‘‘(G) Each licensee referred to in subparagraph (A) 

14 shall keep— 

15 ‘‘(i) a copy of any certificate issued to the li16 censee under subparagraph (E); and 

17 ‘‘(ii) a copy of any such certificate issued to any 

18 employee of the licensee, throughout the duration of 

19 employment. 

20 ‘‘(H) Beginning 545 days after the date of the enact21 ment of this subsection, it shall be unlawful for such a 

22 licensee or an employee of such a licensee to transfer a 

23 firearm or ammunition, unless the licensee or employee, 

24 as the case may be, has been issued a certificate under 

25 this paragraph which has not expired. 


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1 ‘‘(2) In the course of firearms business with a person 

2 who is not such a licensee, such a licensee— 

3 ‘‘(A) shall not transfer a firearm to an indi4 vidual if the licensee or an employee of the licensee 

5 knows or has reasonable cause to know that the in6 dividual is a straw purchaser or a gun trafficker; 

7 ‘‘(B) shall not transfer a firearm or ammuni8 tion to an individual if the licensee or an employee 

9 of the licensee knows or has reasonable cause to 

10 know that the individual is intoxicated; 

11 ‘‘(C) shall not transfer a firearm or ammunition 

12 to an individual if the licensee or an employee of the 

13 licensee knows or has reasonable cause to know that 

14 the individual will attempt to harm the individual or 

15 others with the firearm or ammunition; 

16 ‘‘(D) shall not transfer a firearm to an indi17 vidual not paying in United States currency, unless 

18 the identity of the individual matches the name on 

19 the payment method used by the individual; and 

20 ‘‘(E) immediately notify the Bureau of Alcohol, 

21 Tobacco, Firearms and Explosives and local law en22 forcement authorities if the licensee or an employee 

23 of the licensee knows or has reasonable cause to 

24 know that the individual has engaged or attempted 

25 to engage in a straw purchase or gun trafficking. 


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1 ‘‘(3)(A) The Attorney General shall make available 

2 to each licensee referred to in paragraph (1)(A) written 

3 protocols which— 

4 ‘‘(i) outline the indicators of straw purchasing 

5 and gun trafficking, including the presence of a pro6 spective firearm transferee who— 

7 ‘‘(I) is accompanied by 1 or more individ8 uals; 

9 ‘‘(II) is communicating with other individ10 uals by telephone or other means; 

11 ‘‘(III) is buying multiple firearms; 

12 ‘‘(IV) has been the subject of a crime gun 

13 trace; 

14 ‘‘(V) has purchased a firearm in the pre15 ceding 30 days; or 

16 ‘‘(VI) otherwise indicates that a firearm is 

17 being obtained for another person; 

18 ‘‘(ii) instruct employees to attempt to ascertain 

19 whether a prospective firearm transferee is lawfully 

20 purchasing a firearm, including by asking questions 

21 of the prospective firearm transferee (including 

22 whether he or she intends to transfer the firearm to 

23 another person); and 


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1 ‘‘(iii) inform employees about how to report a 

2 suspected fraudulent firearm purchase to the Bu3 reau of Alcohol, Tobacco, Firearms and Explosives. 

4 ‘‘(B) Beginning 545 days after the date of the enact5 ment of this subsection, each such licensee shall— 

6 ‘‘(i) obtain the written protocols described in 

7 subparagraph (A); and 

8 ‘‘(ii) during all business hours, display the writ9 ten protocols at each point of sale in the firearms 

10 business of the licensee, in a manner that is clearly 

11 visible to all employees of the business. 

12 ‘‘(4) Each licensee referred to in paragraph (1)(A) 

13 of this subsection shall maintain general business and li14 ability insurance as described in subsection (d)(1)(F)(iv) 

15 during each day of a calendar month, unless the licensee 

16 has certified to the Attorney General, on the 1st day of 

17 that month, that the licensee— 

18 ‘‘(A) did not transfer more than 20 firearms in 

19 the 12-month period that precedes the date of the 

20 certification; and 

21 ‘‘(B) expects to transfer not more than 20 fire22 arms in the 12-month period that begins with that 

23 date.’’. 

24 (b) DEADLINE FOR DEVELOPMENT OF FIREARM

25 TRANSFER TRAINING COURSE.—Within 180 days after 


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1 the date of the enactment of this Act, the Attorney Gen2 eral shall develop the training course provided for in sec3 tion 923(m)(1) of title 18, United States Code. 

4 (c) DEADLINE FOR DEVELOPMENT OF WRITTEN

5 BUSINESS PROTOCOLS FOR FIREARMS SALES.—Within 

6 180 days after the date of the enactment of this Act, the 

7 Attorney General shall develop the written protocols pro8 vided for in section 923(m)(3) of title 18, United States 

9 Code. 

10 (d) BUSINESS LIABILITY INSURANCE CERTIFICATION

11 REQUIRED IN APPLICATION FOR FIREARMS LICENSE.— 

12 Section 923(d)(1)(F) of title 18, United States Code, is 

13 amended— 

14 (1) by striking ‘‘and’’ at the end of clause 

15 (ii)(II); and 

16 (2) by adding at the end the following: 

17 ‘‘(iv) the applicant has applied for, and will 

18 not conduct the business before the applicant 

19 has received, a general business and liability in20 surance policy from an insurance company li21 censed to do business in the State in which the 

22 licensed premises is located, which provides cov23 erage for damages for the negligent or unlawful 

24 transfer of a firearm in an amount of at least 

25 $1,000,000, unless the applicant certifies in the 


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1 application that the applicant expects to trans2 fer to persons not licensed under this chapter 

3 not more than 20 firearms per year; and’’. 

4 (e) VALIDATION OF LICENSEE AND EMPLOYEE CER5 TIFICATIONS.—Section 922(t)(1) of such title is amend6 ed— 

7 (1) by striking ‘‘and’’ at the end of subpara8 graph (B)(ii); 

9 (2) by striking the period at the end of sub10 paragraph (C) and inserting ‘‘; and’’; and 

11 (3) by adding at the end the following: 

12 ‘‘(D) a unique certification number has been 

13 issued to the transferor under section 

14 923(m)(1)(E)(iv) and has not expired, and the 

15 transferor has validated that number with the sys16 tem.’’. 

17 SEC. 3. DEFINITIONS. 

18 Section 921(a) of title 18, United States Code, is 

19 amended by adding at the end the following: 

20 ‘‘(36) The term ‘straw purchase’ means the purchase 

21 of a firearm by an individual who conceals, or intends to 

22 conceal, that the purchase is being made on behalf of a 

23 third party who is identified or not yet identified. The 

24 term shall not include a bona fide gift to a person who 

25 is not prohibited by law from possessing or receiving a 


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1 firearm. For purposes of the preceding sentence, a gift to 

2 a person is not a bona fide gift if the person has offered 

3 or given the purchaser a service or thing of value to ac4 quire the firearm for the person. 

5 ‘‘(37) The term ‘straw purchaser’ means a person en6 gaged in a straw purchase. 

7 ‘‘(38) The term ‘gun trafficking’ means the knowing 

8 acquisition, transfer, or attempted acquisition or transfer 

9 of a firearm for purposes of unlawful commerce by a li10 censed or unlicensed person.’’. 

11 SEC. 4. PENALTIES. 

12 Section 924 of title 18, United States Code, is 

13 amended by adding at the end the following: 

14 ‘‘(q)(1) With respect to each violation of subpara15 graph (A), (B), or (C) of section 923(m)(2), a person shall 

16 be fined under this title, imprisoned not more than 18 

17 months, or both. 

18 ‘‘(2) With respect to each violation of section 

19 923(m)(2)(D), a person shall be fined not more than 

20 $2,500, imprisoned not more than 1 year, or both. 

21 ‘‘(3) With respect to each violation of paragraph 

22 (1)(G) or (3)(B) of section 923(m), a licenced importer, 

23 licensed manufacturer or licensed dealer shall be fined not 

24 more than $500. 


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1 ‘‘(4)(A) With respect to each violation of paragraph 

2 (1)(H) or (2)(E) of section 923(m), the Attorney General 

3 shall, after notice and opportunity for hearing— 

4 ‘‘(i) suspend for not more than 6 months, or re5 voke, the license under which the firearms transfer 

6 involved was conducted; or 

7 ‘‘(ii) subject the licensee to a civil penalty of not 

8 more than $2,500. 

9 ‘‘(B) With respect to each violation of section 

10 923(m)(4) the Attorney General shall, after notice and op11 portunity for hearing— 

12 ‘‘(i) suspend for not more than 6 months, or re13 voke, the license under which the firearms transfer 

14 involved was conducted; or 

15 ‘‘(ii) subject the licensee to a civil penalty of not 

16 more than $10,000.’’. 

17 SEC. 5. EFFECTIVE DATE. 

18 The amendments made by this Act shall take effect 

19 90 days after the date of the enactment of this Act. 

Æ 


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