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[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7042 Introduced in House (IH)]

<DOC>

118th CONGRESS
  2d Session
                                H. R. 7042

  To reform the Bureau of Alcohol, Tobacco, Firearms, and Explosives.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                            January 18, 2024

    Mr. Mann (for himself, Mr. Davidson, Mr. Ezell, Mr. Ellzey, Mr. 
Grothman, Mr. Moran, Mr. Rouzer, Mr. Tiffany, Mr. Walberg, Mr. Jackson 
   of Texas, Mr. McCormick, Mr. Alford, Mr. Duncan, Mr. LaMalfa, Mr. 
   Clyde, Mrs. Miller of Illinois, and Mr. Burchett) introduced the 
  following bill; which was referred to the Committee on the Judiciary

_______________________________________________________________________

                                 A BILL

 
  To reform the Bureau of Alcohol, Tobacco, Firearms, and Explosives.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Reining in Federal Licensing 
Enforcement Act of 2024'' or the ``RIFLE Act of 2024''.

SEC. 2. GRADUATED PENALTIES FOR CIVIL VIOLATIONS BY FEDERAL FIREARMS 
              LICENSEES.

    Section 923 of title 18, United States Code, is amended by striking 
subsections (e) and (f) and inserting the following:
    ``(e)(1)(A) If the Attorney General determines that a licensee 
under this section has violated this chapter--
                    ``(i) in the case of a violation that is not 
                willful, the Attorney General shall notify the licensee 
                of the violation and work with the licensee to rectify 
                the violation within a commercially reasonable time 
                frame; or
                    ``(ii) in the case of a willful violation, if the 
                Attorney General, after working with the licensee to 
                rectify the violation within a commercially reasonable 
                time frame, finds that a lesser action (such as a 
                warning, warning letter, or warning conference) is not 
                likely to lead to future compliance, and the Attorney 
                General seeks revocation of the license in an 
                administrative action, the Attorney General may--
                            ``(I) if the licensee has no history of 
                        noncompliance with this chapter, suspend the 
                        license for not more than 30 days or such 
                        lesser period as would apply on compliance with 
                        such conditions as are specified by the 
                        Attorney General; or
                            ``(II) in any other case, revoke the 
                        license.
    ``(B) In applying subparagraph (A), the Attorney General shall 
presume that the violation is not willful, absent clear and convincing 
evidence to the contrary.
    ``(C) For purposes of subparagraph (A):
            ``(i) A violation of this chapter with respect to 2 or more 
        firearms during a single transaction shall be considered a 
        single violation.
            ``(ii) A violation of this chapter with respect to any 
        category of record keeping requirements, even if involving 
        multiple instances, shall be considered a single violation.
    ``(D) The Attorney General may not commence an enforcement action 
under subparagraph (A) with respect to a violation, after the 3-year 
period that begins with--
            ``(i) the date the violation occurred; or
            ``(ii) if the licensee intentionally obstructed discovery 
        of the violation, the date the violation is discovered.
    ``(E) The Attorney General may not commence an enforcement action 
under subparagraph (A) with respect to a violation without first 
notifying the licensee of the reasons for the contemplated action and 
affording the licensee an opportunity to demonstrate or achieve 
compliance with this chapter and to submit facts, arguments, or 
proposals of adjustment.
    ``(2)(A)(i) Not less than 60 days before the effective date of any 
penalty imposed on a licensee by reason of a determination made under 
paragraph (1), the Attorney General shall send the licensee a written 
notice by certified return receipt mail--
                    ``(I) of the determination, and the grounds on 
                which the determination was made;
                    ``(II) that sets forth the facts on which the 
                Attorney General relied as a basis for the 
                determination, including the facts pertaining to any 
                determination of willfulness;
                    ``(III) of the nature of the penalty; and
                    ``(IV) that the licensee may, within 60 days after 
                receipt of the notice, request in writing a hearing to 
                review the determination.
    ``(ii) Within 5 calendar days after serving the written notice on 
the licensee, the Attorney General, shall give written notice to the 
licensee of the date the written notice was so served and provide the 
licensee with proof of the service.
    ``(B) A hearing to review a determination made under paragraph (1) 
with respect to a licensee shall not be held unless the licensee or an 
agent of the licensee requests such a hearing within 60 days after 
receiving the written notice required by subparagraph (A), and if held, 
shall be open to the public
    ``(C) On timely receipt from the licensee of a request for such a 
review, the Attorney General shall stay the imposition of any penalty 
under paragraph (1), pending resolution of the hearing, unless, in the 
case of a license revocation, the Attorney General establishes, at a 
hearing before an administrative law judge, by clear and convincing 
evidence, that the licensee committed the violation willfully and that 
the continued operation by the licensee of the business involved poses 
an immediate and grave threat to public safety.
    ``(3)(A) Within not fewer than 60 days after timely receipt from a 
licensee or an agent of the licensee of a written request for a hearing 
to review a determination made under paragraph (1) (or at such later 
time as is agreed to by the Attorney General and the licensee), an 
administrative law judge shall hold an evidentiary hearing, at a 
location convenient to the licensee, to review the determination, 
except that, if the licensee moves for leave to take the deposition of 
any witness identified by the Attorney General or any officer or 
employee of the Department of Justice who was involved in the 
inspection or examination, or any prior inspection or examination on 
which the Attorney General relies, the administrative law judge shall 
grant the motion and adjust the hearing date accordingly.
    ``(B) Not less than 30 days before the hearing, the Attorney 
General shall deliver to the licensee--
            ``(i) a document identifying each person whom the Attorney 
        General intends to call as a witness during the hearing and a 
        summary of the proposed sworn testimony of the witness;
            ``(ii) a copy of each document, in unredacted form, that 
        will be introduced by the Attorney General as evidence at the 
        hearing;
            ``(iii) copies of all documents on which the determination 
        is based;
            ``(iv) a complete copy of the file of the licensee 
        maintained by the Attorney General; and
            ``(v) a sworn statement from the Attorney General as to 
        whether or not there is a pending criminal investigation by the 
        Attorney General of the licensee, which statement shall be 
        supplemented or amended by the Attorney General if a criminal 
        investigation is initiated before the conclusion of the 
        hearing.
    ``(C)(i) Within 120 days after the hearing, the administrative law 
judge shall issue a written decision setting forth findings of fact and 
conclusions of law, and a decision as to whether to affirm, modify, or 
reverse the determination.
    ``(ii) The findings of fact and conclusions of law and decision of 
the administrative law judge shall be--
            ``(I) de novo and not predicated on a presumption that the 
        determination of the Attorney General was correct; and
            ``(II) based on a clear and convincing standard of proof, 
        which shall be borne by the Attorney General.
    ``(iii) The administrative law judge shall not make a determination 
to revoke a license unless the administrative law judge finds, by clear 
and convincing evidence, that--
            ``(I) the Attorney General notified the licensee in writing 
        of all reasons for the contemplated action of the Attorney 
        General;
            ``(II) the Attorney General afforded the licensee a 
        commercially reasonable opportunity to demonstrate or achieve 
        compliance with this chapter; and
            ``(III) the licensee has not complied, and is unlikely to 
        be able to achieve compliance, with this chapter.
    ``(iv) The Attorney General shall provide to the licensee a 
complete copy of the hearing transcript, including exhibits, within 60 
days after the date of the hearing.
    ``(D) On request of the licensee, the Attorney General shall stay 
the effective date of any penalty, suspension, or revocation until 
there is a final, unreviewable judgment with respect to the 
determination of the administrative law judge, unless, in the case of a 
license revocation, the Attorney General establishes, at a hearing 
before an administrative law judge, by clear and convincing evidence, 
that the licensee committed the violation willfully and that the 
continued operation by the licensee of the business involved poses an 
immediate and grave threat to public safety.
    ``(E) An action of an administrative law judge under this 
subsection shall be considered final agency action for all purposes, 
and may be reviewed only as provided in subsection (f).
    ``(4) This subsection shall not be interpreted to affect the 
authority of the Attorney General under section 922(t)(5), except that 
the provisions of section 922(t)(5) regarding notice and opportunity 
for a hearing shall be subject to the procedural and evidentiary 
requirements provided in this subsection.
    ``(f)(1) Within 60 days after a party receives a notice issued 
under subsection (d) of a decision to deny a license, or a notice 
issued under subsection (e)(3)(C) of a determination to suspend or 
revoke a license, the party may file a petition with the United States 
district court for the district in which the party resides or has a 
principal place of business for a de novo trial of the determination.
    ``(2) In a proceeding conducted under this subsection, the court 
shall, on application of a party, consider any evidence submitted by 
the parties to the proceeding whether or not the evidence was 
considered at the hearing held under subsection (d) or (e)(3).
    ``(3)(A) If the court decides that the determination was not 
authorized by law, the court shall order the Attorney General to take 
such action as may be necessary to comply with the judgment of the 
court.
    ``(B) The court shall not make a determination to revoke a license 
unless the court finds, by clear and convincing evidence, that--
            ``(i) the Attorney General notified the licensee in writing 
        of all reasons for the contemplated action of the Attorney 
        General;
            ``(ii) the Attorney General afforded the licensee a 
        commercially reasonable opportunity to demonstrate or achieve 
        compliance with this chapter; and
            ``(iii) the licensee has not complied, and is unlikely to 
        be able to comply, with this chapter.
    ``(4) If criminal proceedings are instituted against an applicant 
for a license under this chapter or a licensee alleging a violation of 
this chapter, and the applicant or licensee, as the case may be, is 
acquitted of the charges, or the proceedings are terminated, other than 
on motion of the Government before trial on the charges, the Attorney 
General shall be absolutely barred from denying a license under this 
chapter, or suspending or revoking a license granted under this 
chapter, if the action would be based in whole or in part on the facts 
which form the basis of the criminal charges.
    ``(5) The Attorney General may not institute a proceeding to 
suspend or revoke a license granted under this chapter, more than 1 
year after the filing of the indictment or information.
    ``(6) The Attorney General may not institute a proceeding to 
suspend or revoke a license granted under this chapter, based on a 
violation that is finally determined to have occurred with respect to a 
different license.''.

SEC. 3. CONSIDERATION OF FEDERAL FIREARMS LICENSE APPLICATIONS.

    Section 923(d) of title 18, United States Code, is amended by 
striking paragraph (2) and inserting the following:
    ``(2) The Attorney General shall make a preliminary determination 
as to whether to approve or deny an application submitted under 
subsection (a) or (b). If the preliminary determination is to deny the 
application, the Attorney General shall notify the applicant in writing 
of the preliminary determination and the reasons for the preliminary 
determination, and shall afford the applicant an opportunity to 
supplement the application with additional information and to request a 
hearing on the application. If the applicant, in a timely manner, 
requests such a hearing, the Attorney General shall hold the hearing at 
a location convenient to the applicant, and shall notify the applicant 
in writing of the time and place of the hearing.
    ``(3) The Attorney General may not deny an application for a 
license based on--
            ``(A) any prior violation of this chapter by the applicant, 
        if more than 5 years have elapsed since the date a license 
        previously issued to the applicant under this chapter was 
        terminated, unless the Attorney General finds that the 
        applicant is a person described in section 922(g);
            ``(B) the applicant having been employed by, or a 
        responsible party for, a licensee whose license under this 
        chapter was revoked, unless there is clear and convincing 
        evidence that the applicant willfully violated this chapter in 
        that capacity; or
            ``(C) the applicant being a spouse, former spouse, or child 
        of a licensee whose license under this chapter was revoked, 
        unless there is clear and convincing evidence that the 
        applicant willfully violated this chapter as a responsible 
        party under the license.
    ``(4) The procedures provided for in subsection (e) shall apply 
with respect to any applicant for a license under this chapter and any 
application for such a license.''.

SEC. 4. DEFINITION OF ``WILLFULLY''; CERTAIN EVIDENCE INADMISSIBLE TO 
              PROVE WILLFULNESS.

    Section 923(e) of title 18, United States Code, as amended by 
section 2(a) of this Act, is amended by adding at the end the 
following:
    ``(5) For purposes of this subsection, the term `willfully' means, 
with respect to conduct of an individual who holds a license or is 
designated in the records of the Attorney General as a responsible 
party under a specific license, that the person--
            ``(A) had actual knowledge of a clearly established legal 
        duty;
            ``(B) understood the obligation imposed by the legal duty; 
        and
            ``(C) engaged in the conduct knowingly and in deliberate 
        disregard of the legal duty.
    ``(6) Evidence that a person has received a document or other 
communication containing information about a requirement imposed by or 
under this chapter and evidence that the person has signed an 
acknowledgment that the person understands the legal obligations of the 
person under this chapter shall not be admissible as part of the 
determination of the Attorney General, in an administrative law hearing 
or in a court of law, to prove actual knowledge and shall not be 
admissible as evidence to establish a willful violation of this 
chapter.
    ``(7) Evidence that a person has substantial experience as a 
licensee, or has in other instances successfully complied with this 
chapter, shall not be admissible as part of the determination of the 
Attorney General, in an administrative law hearing or in a court of 
law, to prove actual knowledge and shall not be admissible as evidence 
to established a willful violation of this chapter.
    ``(8) In determining under this subsection whether conduct of a 
licensee was willful, the entire historical administrative record of 
the licensee shall be considered.''.

SEC. 5. RECONSIDERATION OF APPLICATIONS FROM FORMER LICENSEES WHOSE 
              LICENSES WERE REVOKED, IN LIGHT OF NEW RULES PERTAINING 
              TO WILLFULLNESS.

    The Attorney General shall reconsider each application for a 
license under chapter 44 of title 18, United States Code, that is 
submitted by an individual whose license under such chapter was revoked 
or whose application for a license was denied before the date of the 
enactment of this Act, and that was disposed of on or before such date 
of enactment, and, in doing so, the Attorney General shall apply the 
amendments made by section 4 of this Act.

SEC. 6. ESTABLISHMENT OF FORMAL INSPECTION, EXAMINATION, AND 
              INVESTIGATIVE STANDARDS.

    (a) In General.--The Attorney General shall establish written 
standards for how the Bureau of Alcohol, Tobacco, Firearms, and 
Explosives is to--
            (1) conduct inspections, examinations, or investigations of 
        a possible violation of chapter 40 or 44 of title 18, United 
        States Code; and
            (2) make license application denial, license suspension, 
        license revocation or other adverse determinations regarding an 
        applicant or licensee.
    (b) Inclusion of Mitigating Factors.--The standards shall include 
mitigation factors that must be considered before the Attorney General 
initiates any adverse action against an applicant or licensee.
    (c) Availability.--The written standards shall be made available to 
the public, and shall be provided by the Attorney General to applicants 
and licensees at the time of any license application and on demand.

SEC. 7. LIMITATIONS ON USE OF FIREARMS PURCHASER INFORMATION.

    Section 923(g)(1)(D) of title 18, United States Code, is amended in 
the last sentence by inserting ``, except that information identifying 
a person who has purchased or received firearms or ammunition and who 
is not prohibited from doing so may not be so made available or so 
provided unless the agency involved has certified that the agency will 
not disclose the information to any entity other than a court, federal, 
State or local law enforcement agency, or prosecutor'' before the 
period.

SEC. 8. LIQUIDATION OF INVENTORY IN FEDERAL FIREARMS LICENSE 
              EXPIRATION, SURRENDER, OR REVOCATION CASES.

    Section 923 of title 18, United States Code, is amended by adding 
at the end the following:
    ``(m)(1) Except as provided in paragraph (2), an entity whose 
license issued under this chapter is expired, surrendered, or revoked 
shall be afforded 90 days from the effective date of the expiration, 
surrender, or revocation (not counting any period in which an appeal of 
such a revocation is pending) to liquidate the firearms business 
inventory of the entity, which time may be extended on a showing of 
reasonable cause. During the 90-day period (including any extension of 
the period), the license involved shall continue to be considered 
valid, notwithstanding the expiration, surrender, or revocation, and 
the Attorney General shall issue letters of authorization to the entity 
on which licensees under this chapter and commercial third parties may 
rely. At any time before the expiration of the disposition period, the 
entity may transfer any remaining firearms from the firearms business 
inventory of the entity to the entity or, if more than 1 person holds 
an interest in the entity, to the interest holders, at which point the 
firearms are deemed to be a personal collection of the entity or 
interest holders, as the case may be.
    ``(2) Paragraph (1) shall not apply with respect to a person if a 
United States district court for the judicial district in which the 
person resides or in which the principal place of business of the 
person subject to the license is located finds, by clear and convincing 
evidence, that the continued operation by the person of the firearms 
business involved poses an immediate and grave threat to public safety, 
in which case the person may transfer all firearms from the firearms 
business inventory of the person to the personal collection of the 
person or to another licensee for consignment or other liquidation at 
the direction of the person.''.

SEC. 9. OPPORTUNITY TO CURE VIOLATIONS AFTER ACQUISITION OF FIREARMS 
              BUSINESS.

    Section 923 of title 18, United States Code, is further amended by 
adding at the end the following:
    ``(n) If the Attorney General is made aware that a business 
licensed under this chapter has been transferred to a surviving spouse 
or child of the licensee, to an executor, administrator, or other legal 
representative of a deceased or incompetent licensee, to a receiver or 
trustee in bankruptcy, to an assignee for benefit of creditors, or to 
an entity holding a security interest in an item as collateral pursuant 
to Article 9 of the Uniform Commercial Code (U.C.C. Sec.  9-
102(a)(73)), and, before the transfer, or on the first inspection or 
examination by the Attorney General of the records of the licensee 
after the transfer, the licensee is found to be operating the business 
in violation of this chapter, the Attorney General--
            ``(1) shall notify the transferee of the violation by the 
        transferor; and
            ``(2) shall not presume that the transferee is committing 
        the violation.''.

SEC. 10. STANDARDS FOR CRIMINAL VIOLATIONS OF RECORDKEEPING 
              REQUIREMENTS.

    Section 922(m) of title 18, United States Code, is amended--
            (1) by striking ``any false entry'' and inserting ``a 
        materially false entry'';
            (2) by striking ``appropriate entry'' and inserting ``a 
        materially significant entry''; and
            (3) by striking ``properly maintain'' and inserting 
        ``retain custody of''.
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