I 

109TH CONGRESS 

2D SESSION H. R. 5092 

To modernize and reform the Bureau of Alcohol, Tobacco, Firearms, and 

Explosives. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 5, 2006 

Mr. COBLE (for himself and Mr. SCOTT of Virginia) introduced the following 

bill; which was referred to the Committee on the Judiciary 

A BILL 

To modernize and reform the Bureau of Alcohol, Tobacco, 

Firearms, and Explosives. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Bureau of Alcohol, 

5 Tobacco, Firearms, and Explosives (BATFE) Moderniza6 tion and Reform Act of 2006’’. 


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1 SEC. 2. GRADUATED PENALTIES FOR CIVIL VIOLATIONS BY 

2 FEDERAL FIREARMS LICENSEES. 

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

4 States Code, is amended by striking subsections (e) and 

5 (f) and inserting the following: 

6 ‘‘(e)(1)(A) If the Attorney General determines that 

7 a licensee under this section has willfully violated any pro8 vision of this chapter or any regulation prescribed under 

9 this chapter, or has failed to have secure gun sotrage or 

10 safety devices available at any place in which firearms are 

11 sold under the license to persons who are not licensees 

12 (except because of theft, casualty loss, consumer sales, 

13 backorders from a manufacturer, or any other similar rea14 son beyond the control of the licensee), the Attorney Gen15 eral may— 

16 ‘‘(i) if the violation is not of a serious nature— 

17 ‘‘(I) impose on the licensee a civil money 

18 penalty of not more than $1,000 for each such 

19 violation, except that the total amount of pen20 alties imposed on a licensee under this sub21 clause for violations arising from a single in22 spection or examination shall not exceed 

23 $5,000; or 

24 ‘‘(II) suspend the license for not more than 

25 30 days, and specify the circumstances under 

26 which the suspension is to be terminated, if, in 


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1 the period for which the license is in effect, 

2 there have been at least 2 prior occasions on 

3 which the licensee has been determined to have 

4 violated this chapter; or 

5 ‘‘(ii) if the violation is of a serious nature— 

6 ‘‘(I) impose on the licensee a civil money 

7 penalty of not more than $2,500 for each such 

8 violation, except that the total amount of pen9 alties imposed on a licensee under this sub10 clause for a violations arising from a single in11 spection or examination shall not exceed 

12 $15,000; 

13 ‘‘(II) suspend the license for not more than 

14 90 days, and specify the circumstances under 

15 which the suspension is to be terminated; 

16 ‘‘(III) revoke the license; or 

17 ‘‘(IV) take the actions described in sub18 clauses (I) and (II), or subclauses (I) and (III). 

19 ‘‘(B)(i) In determining the amount of a civil money 

20 penalty to impose under subparagraph (A) on a licensee, 

21 the nature and severity of the violation involved, the size 

22 of the firearms business operated by the licensee, and the 

23 prior record of the licensee shall be considered. 

24 ‘‘(ii) For purposes of subparagraph (A), violation of 

25 a provision of this chapter with respect to 2 or more fireVerDate Aug 31 2005 08:45 Apr 07, 2006 Jkt 049200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H5092.IH H5092

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1 arms during a single transaction shall be considered a sin2 gle violation of the provision. 

3 ‘‘(C) For purposes of subparagraph (A), a violation 

4 of this chapter shall be considered to be of a serious nature 

5 if the violation— 

6 ‘‘(i) results in or could have resulted in the 

7 transfer of a firearm or ammunition to a person pro8 hibited from possessing or receiving the firearm or 

9 ammunition under this chapter; 

10 ‘‘(ii) obstructs or could have obstructed a bona 

11 fide civil or criminal investigation or prosecution; or 

12 ‘‘(iii) prevents or could have prevented a li13 censee from complying with subsection (g)(7). 

14 ‘‘(D) The Attorney General may not commence an 

15 enforcement action under subparagraph (A) with respect 

16 to a violation after the 5-year period that begins with— 

17 ‘‘(i) the date of the violation; or 

18 ‘‘(ii) if the licensee involved intentionally ob19 structed discovery of the violation, the date of dis20 covery of the violation. 

21 ‘‘(2)(A) Not less than 30 days before the effective 

22 date of any penalty imposed on a licensee by reason of 

23 a determination made under paragraph (1), the Attorney 

24 General shall send the licensee a written notice of— 


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1 ‘‘(i) the determination, and the grounds on 

2 which the determination was made; 

3 ‘‘(ii) the nature of the penalty; and 

4 ‘‘(iii) how, and by when, the licensee may re5 quest a hearing to review the determination. 

6 ‘‘(B) A hearing to review a determination made under 

7 paragraph (1) with respect to a licensee shall not be held 

8 unless the licensee requests such a hearing within 30 days 

9 after receiving the notice of the determination sent pursu10 ant to subparagraph (A). 

11 ‘‘(C) On timely receipt from the licensee of a request 

12 for such a review, the Attorney General shall stay the im13 position under paragraph (1) of any penalty involved, 

14 pending resolution of the review. 

15 ‘‘(3)(A) Within 90 days after timely receipt from a 

16 licensee of a request to review a determination made under 

17 paragraph (1) (or at such later time as is agreed to by 

18 the Attorney General and the licensee), an administrative 

19 law judge shall hold a hearing, at a location convenient 

20 to the licensee, to review the determination. 

21 ‘‘(B) Not less than 30 days before the hearing, the 

22 Attorney General shall deliver to the licensee a copy of 

23 each document which will be introduced as evidence at the 

24 hearing, and copies of all documents on which the deter25 mination is based. 


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1 ‘‘(C) Within 90 days after the hearing, the adminis2 trative law judge shall issue a written decision setting 

3 forth findings of fact and conclusions of law, and a deci4 sion as to whether to affirm, modify, or reverse the deter5 mination. 

6 ‘‘(D) On request of the licensee, the Attorney General 

7 shall stay the effective date of any penalty, suspension, 

8 or revocation until there has been a final, nonreviewable 

9 judgment with respect to the determination involved. 

10 ‘‘(E) The action of an administrative law judge under 

11 this subsection shall be considered final agency action for 

12 all purposes, and may be reviewed only as provided in sub13 section (f). 

14 ‘‘(4) This subsection shall not be interpreted to affect 

15 the authority of the Attorney General under section 

16 922(t)(5). 

17 ‘‘(f)(1) Within 60 days after a party receives a notice 

18 issued under subsection (d)(3) of a decision to deny a li19 cense, or a notice issued under subsection (e)(3)(C) of a 

20 determination to impose a civil money penalty or to sus21 pend or revoke a license, the party may file a petition with 

22 the United States district court for the district in which 

23 the party resides or has a principal place of business for 

24 a de novo review of the decision or determination. 


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1 ‘‘(2) In a proceeding conducted under this paragraph, 

2 the court shall, on application of a party, consider any evi3 dence submitted by the parties to the proceeding whether 

4 or not the evidence was considered at the hearing held 

5 under subsection (d)(3) or (e)(3). 

6 ‘‘(3) If the court decides that the decision or deter7 mination was not authorized, the court shall order the At8 torney General to take such action as may be necessary 

9 to comply with the judgment of the court. 

10 ‘‘(4) If criminal proceedings are instituted against a 

11 licensee alleging any violation of this chapter or of a regu12 lation prescribed under this chapter, and the licensee is 

13 acquitted of the charges, or the proceedings are termi14 nated, other than upon motion of the Government before 

15 trial on the charges, the Attorney General shall be abso16 lutely barred from denying a license under this chapter, 

17 suspending or revoking a license granted under this chap18 ter, or imposing a civil money penalty under subsection 

19 (e), if the action would be based in whole or in part on 

20 the facts which form the basis of the criminal charges. 

21 ‘‘(5) The Attorney General may not institute a pro22 ceeding to suspend or revoke a license granted under this 

23 chapter, or to impose a civil money penalty under sub24 section (e), more than 1 year after the filing of the indict25 ment or information.’’. 


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1 (b) CONFORMING AMENDMENT.—Section 923(d) of 

2 such title is amended by adding at the end the following: 

3 ‘‘(3) If the Attorney General denies an application 

4 for a license, an administrative law judge of the Depart5 ment of Justice shall, on request by the aggrieved party, 

6 promptly hold a hearing to review the denial, at a location 

7 convenient to the aggrieved party. If, after the hearing, 

8 the administrative law judge decides not to reverse the de9 nial, the administrative law judge shall give notice of the 

10 final denial decision to the aggrieved party.’’. 

11 SEC. 3. CONSIDERATION OF FEDERAL FIREARMS LICENSE 

12 APPLICATIONS. 

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

14 States Code, as amended by section 2(b) of this Act, is 

15 amended by redesignating paragraphs (2) and (3) as para16 graphs (3) and (4) and inserting after paragraph (1) the 

17 following: 

18 ‘‘(2) The Attorney General shall make a preliminary 

19 determination as to whether to approve or deny an appli20 cation submitted under subsection (a) or (b). If the pre21 liminary determination is to deny the application, the At22 torney General shall notify the applicant in writing of the 

23 preliminary determination and the reasons for the prelimi24 nary determination, and shall afford the applicant an op25 portunity to supplement the application with additional inVerDate Aug 31 2005 08:45 Apr 07, 2006 Jkt 049200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H5092.IH H5092

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1 formation and to request a hearing on the application. If 

2 the applicant, in a timely manner, requests such a hearing, 

3 the Attorney General shall hold the hearing at a location 

4 convenient to the applicant, and shall notify the applicant 

5 in writing of the time and place of the hearing.’’. 

6 (b) CONFORMING AMENDMENT.—Section 923(f)(1) 

7 of such title, as amended by section 2(a) of this Act, is 

8 amended by striking ‘‘(d)(3)’’ each place it appears and 

9 inserting ‘‘(d)(4)’’. 

10 SEC. 4. DEFINITION OF WILLFULLY. 

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

12 amended by adding at the end the following: 

13 ‘‘(36) The term ‘willfully’ means intentionally, pur14 posely, and with the intent to act in violation of a known 

15 legal duty.’’. 

16 SEC. 5. ESTABLISHMENT OF FORMAL INVESTIGATIVE 

17 GUIDELINES. 

18 The Attorney General shall establish guidelines for 

19 how the Bureau of Alcohol, Tobacco, Firearms, and Ex20 plosives is to conduct investigations of possible violations 

21 of chapter 44 of title 18, United States Code. 


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1 SEC. 6. REVIEW BY THE INSPECTOR GENERAL OF THE DE2 PARTMENT OF JUSTICE OF THE GUN SHOW 

3 ENFORCEMENT PROGRAM; REPORT. 

4 (a) REVIEW.—The Inspector General of the Depart5 ment of Justice shall conduct a review of the operations 

6 of the Bureau of Alcohol, Tobacco, Firearms, and Explo7 sives, for the purpose of assessing the manner in which 

8 the Bureau conducts the gun show enforcement program 

9 and blanket residency checks of prospective and actual 

10 firearms purchasers. 

11 (b) REPORT.—Not later than 1 year after the date 

12 of the enactment of this Act, the Inspector General of the 

13 Department of Justice shall submit to the Committee on 

14 the Judiciary of the House of Representatives and the 

15 Committee on the Judiciary of the Senate a written report 

16 that contains the findings of the review required by sub17 section (a), and includes such recommendations as may 

18 be appropriate. 

19 SEC. 7. LIMITATIONS ON USE OF FIREARMS PURCHASER 

20 INFORMATION. 

21 Section 923(g)(1)(D) of title 18, United States Code, 

22 is amended in the last sentence by inserting ‘‘, except that 

23 information about the conduct of a named individual with 

24 respect to a firearm or ammunition may not be so made 

25 available or so provided unless the agency involved has cer26 tified that the agency will not disclose the information to 


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1 any entity other than a court, Federal, State, or local law 

2 enforcement agency, or prosecutor’’ before the period. 

3 SEC. 8. CLARIFICATION OF RESPONSIBILITIES. 

4 Section 1111(b) of the Homeland Security Act of 

5 2002 (6 U.S.C. 531(b)) is amended— 

6 (1) by adding ‘‘and’’ at the end of paragraph 

7 (1); 

8 (2) by striking ‘‘; and’’ at the end of paragraph 

9 (2) and inserting a period; and 

10 (3) by striking paragraph (3). 

11 SEC. 9. LIQUIDATION OF INVENTORY IN FEDERAL FIRE12 ARMS LICENSE EXPIRATION, SURRENDER, OR 

13 REVOCATION CASES. 

14 Section 923 of title 18, United States Code, is 

15 amended by adding at the end the following: 

16 ‘‘(m) A person whose license issued under this chap17 ter is expired, surrendered, or revoked shall be afforded 

18 60 days from the effective date of the expiration, sur19 render, or revocation to liquidate the firearms inventory 

20 of the person, which time may be extended upon a showing 

21 of reasonable cause.’’. 

22 SEC. 10. OPPORTUNITY TO CURE VIOLATIONS AFTER AC23 QUISITION OF FIREARMS BUSINESS. 

24 Section 923 of title 18, United States Code, is further 

25 amended by adding at the end the following: 


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1 ‘‘(n) If the Attorney General is made aware that a 

2 person licensed under this chapter has transferred to an3 other person an entire firearms business subject to license 

4 under this chapter and, before the transfer, the transferor 

5 was found to be operating the business in violation of this 

6 chapter, the Attorney General— 

7 ‘‘(1) shall notify the transferee of the violation 

8 by the transferor; 

9 ‘‘(2) shall not presume that the transferee is 

10 committing the violation; and 

11 ‘‘(3) if the Attorney General finds that the 

12 transferee is committing the violation— 

13 ‘‘(A) shall notify the transferee of the vio14 lation; 

15 ‘‘(B) shall afford the transferee a reason16 able amount of time after receipt of the notice 

17 to cure the violation; and 

18 ‘‘(C) shall not impose a sanction on the 

19 transferee with respect to the violation, unless 

20 the transferee has not cured the violation with 

21 the reasonable amount of time referred to in 

22 subparagraph (B).’’. 


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1 SEC. 11. STANDARDS FOR CRIMINAL VIOLATIONS OF REC2 ORDKEEPING REQUIREMENTS. 

3 Section 922(m) of title 18, United States Code, is 

4 amended— 

5 (1) by striking ‘‘any false entry’’ and inserting 

6 ‘‘a materially false entry’’; 

7 (2) by striking ‘‘appropriate entry’’ and insert8 ing ‘‘a materially significant entry’’; and 

9 (3) by striking ‘‘properly maintain’’ and insert10 ing ‘‘retain custody of’’. 

11 SEC. 12. EFFECTIVE DATE. 

12 This Act and the amendments made by this Act shall 

13 take effect at the end of the 180-day period that begins 

14 with the date of the enactment of this Act. 

Æ 


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