[Federal Register Volume 74, Number 9 (Wednesday, January 14, 2009)]
[Rules and Regulations]
[Pages 1875-1878]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-527]


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DEPARTMENT OF JUSTICE

Bureau of Alcohol, Tobacco, Firearms, and Explosives

27 CFR Part 478

[Docket No. ATF 27P; AG Order No. 3030-2009]


Decision-Making Authority Regarding the Denial, Suspension, or 
Revocation of a Federal Firearms License, or Imposition of a Civil Fine 
(2008R-10P)

AGENCY: Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), 
Department of Justice.

ACTION: Interim final rule with request for comments.

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SUMMARY: The Department of Justice is amending the regulations of the 
Bureau of Alcohol, Tobacco, Firearms, and Explosives (``ATF'') to 
delegate to the Director of ATF the authority to serve as the deciding 
official regarding the denial, suspension, or revocation of federal 
firearms licenses, or the imposition of a civil fine. The Director will 
have the flexibility to delegate to another ATF official the authority 
to decide a revocation or denial matter, or may exercise that authority 
himself. Such flexibility will allow ATF to more efficiently decide 
denial, suspension, and revocation hearings and also whether to impose 
a civil fine, because the Director can redelegate to Headquarters 
officials, field officials, or some combination thereof, authority to 
take action as the final agency decision maker. This will give the 
agency the ability to ensure consistency in decision making and to 
address any case backlogs that may occur.
    The interim rule will remain in effect until superseded by final 
regulations.

DATES: Effective Date: This interim rule is effective January 14, 2009.
    Comment date: Written comments must be postmarked and electronic 
comments must be submitted on or before April 14, 2009. Commenters 
should be aware that the electronic Federal Docket Management System 
will not accept comments after Midnight Eastern Time on the last day of 
the comment period.

ADDRESSES: Send comments to any of the following addresses--
    <bullet> James P. Ficaretta, Program Manager, Room 6N-602, Bureau 
of Alcohol, Tobacco, Firearms, and Explosives, P.O. Box 50221, 
Washington, DC 20091-0221; ATTN: ATF 27P. Written comments must include 
your mailing address and be signed, and may be of any length.
    <bullet> 202-648-9741 (facsimile).
    <bullet> http://www.regulations.gov. Federal e-rulemaking portal; 
follow the instructions for submitting comments.
    You may also view an electronic version of this rule at the http://www.regulations.gov site.
    See the Public Participation section at the end of the 
SUPPLEMENTARY INFORMATION section for instructions and requirements for 
submitting comments, and for information on how to request a public 
hearing.

FOR FURTHER INFORMATION CONTACT: James P. Ficaretta, Enforcement 
Programs and Services, Bureau of Alcohol, Tobacco, Firearms, and 
Explosives, U.S. Department of Justice, 99 New York Avenue, NE., 
Washington, DC 20226; telephone: (202) 648-7094.

SUPPLEMENTARY INFORMATION:

I. Background

    The Attorney General is responsible for enforcing the provisions of 
the Gun Control Act of 1968 (``the Act''), 18 U.S.C. Chapter 44. He has 
delegated that responsibility to the Director of ATF, subject to the 
direction of the Attorney General and the Deputy Attorney General. 28 
CFR 0.130(a). ATF has promulgated regulations that implement the 
provisions of the Act in 27 CFR Part 478.
    The regulations in Subpart E of Part 478, Sec. Sec.  478.71-78, 
relate to proceedings involving federal firearms licenses, including 
the denial, suspension, and revocation of a license, and the imposition 
of a civil fine. Section 478.71 provides that whenever the Director of 
Industry Operations (``DIO'') has reason to believe that an applicant 
is not qualified to receive a license under the provisions of Sec.  
478.47, he may issue a notice of denial, on ATF Form 4498, to the 
applicant. The notice will set forth the matters of fact and law relied 
upon in determining that the application should be denied, and will 
afford the applicant 15 days from the date of receipt of the notice in 
which to request a hearing to review the denial. If no request for a 
hearing is filed within such time, the application will be disapproved 
and a copy, so marked, will be returned to the applicant.
    Under Sec.  478.72, an applicant who has been denied an original or 
renewal license can file a request with the DIO for a hearing to review 
the denial of the application. On conclusion of the hearing and after 
consideration of all relevant facts and circumstances presented by the 
applicant or his representative, the DIO renders a decision confirming 
or reversing the denial of the application. If the decision is that the 
denial should stand, a

[[Page 1876]]

certified copy of the DIO's findings and conclusions are furnished to 
the applicant with a final notice of denial, ATF Form 4501. In 
addition, a copy of the application, marked ``Disapproved,'' is 
furnished to the applicant. If the decision is that the license applied 
for should be issued, the applicant will be so notified, in writing, 
and the license will be issued.
    Section 478.73 provides that whenever the DIO has reason to believe 
that a firearms licensee has willfully violated any provision of the 
Act or part 478, a notice of revocation of the license (ATF Form 4500), 
may be issued. In addition, a notice of revocation, suspension, or 
imposition of a civil fine may be issued on Form 4500 whenever the DIO 
has reason to believe that a licensee has knowingly transferred a 
firearm to an unlicensed person and knowingly failed to comply with the 
requirements of section 922(t)(1), relating to a NICS (National Instant 
Criminal Background Check System) background check.
    As specified in Sec.  478.74, a licensee who received a notice of 
suspension or revocation of a license, or imposition of a civil fine, 
may file a request for a hearing with the DIO. On conclusion of the 
hearing and after consideration of all the relevant presentations made 
by the licensee or the licensee's representative, the DIO renders a 
decision and prepares a brief summary of the findings and conclusions 
on which the decision was based. If the decision is that the license 
should be revoked or, in actions under section 922(t)(5), that the 
license should be revoked or suspended, and/or that a civil fine should 
be imposed, a certified copy of the summary is furnished to the 
licensee with the final notice of revocation, suspension, or imposition 
of a civil fine on ATF Form 4501. If the decision is that the license 
should not be revoked, or in actions under section 922(t)(5), that the 
license should not be revoked or suspended, and a civil fine should not 
be imposed, the licensee will be notified in writing.
    Under Sec.  478.76, an applicant or licensee may be represented by 
an attorney, certified public accountant, or other person recognized to 
practice before ATF, provided certain requirements are met. The DIO may 
be represented in proceedings by an attorney in the office of the 
Assistant Chief Counsel or Division Counsel who is authorized to 
execute and file motions, briefs and other papers in the proceeding, on 
behalf of the DIO, in his own name as ``Attorney for the Government.''
    Section 478.78 provides that if a licensee is dissatisfied with a 
post-hearing decision revoking or suspending the license or denying the 
application or imposing a civil fine, as the case may be, he may file a 
petition for judicial review of such action. In such case, when the DIO 
finds that justice so requires, he may postpone the effective date of 
suspension or revocation of a license or authorize continued operations 
under the expired license, as applicable, pending judicial review.

II. Interim Rule

    As indicated above, at present ATF's regulations name the DIO as 
the deciding official in matters dealing with the denial of an original 
or renewal firearms license, the suspension or revocation of a license, 
and the imposition of a civil fine. This interim rule amends the 
regulations to redesignate the Director as the deciding official. ATF 
believes that delegating the final authority with respect to those 
matters to the Director is necessary and proper. ATF further believes 
that the Director should be able to redelegate this authority to the 
DIO or any other agency official through issuance of a delegation 
order, not through regulation. This is consistent with other 
regulations in part 478. For example, Sec.  478.144 provides that the 
Director is the deciding authority with respect to applications for 
relief from firearms disabilities. Pursuant to ATF Order 1120.4 (69 FR 
55462, September 14, 2004), the authority to make determinations on 
applications for relief from federal firearms disabilities was 
delegated to the Assistant Director (Enforcement Programs and 
Services).
    ATF believes that it is appropriate for the Director to have more 
flexibility to change the delegation of authority to decide a hearing 
regarding denial, suspension, or revocation of a federal firearms 
license, and a hearing regarding imposition of a civil fine, or to 
exercise that authority himself. Such flexibility will allow ATF to 
more efficiently decide revocation and denial hearings, because the 
Director can designate Headquarters officials, field officials, or some 
combination thereof, as the final agency decision maker. That 
flexibility will give the agency the ability to ensure consistency in 
decision making and to address any case backlogs that may occur.

How This Document Complies With the Federal Administrative Requirements 
for Rulemaking

A. Executive Order 12866

    The Attorney General has determined that this rule is not a 
``significant regulatory action'' under Executive Order 12866, section 
3(f), Regulatory Planning and Review. This rule will not have an annual 
effect on the economy of $100 million, nor will it adversely affect in 
a material way the economy, a sector of the economy, productivity, 
competition, jobs, the environment, public health, or safety, or State, 
local or tribal governments or communities.
    This is a rule of agency organization, procedure, and practice. It 
merely redesignates the Director as the deciding official with respect 
to the denial, suspension, or revocation of a federal firearms license 
and the imposition of a civil fine.

B. Executive Order 13132

    This regulation will not have substantial direct effects on the 
States, on the relationship between the federal Government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government. Therefore, in accordance with section 6 
of Executive Order 13132, the Attorney General has determined that this 
regulation will not have sufficient federalism implications to warrant 
the preparation of a federalism summary impact statement.

C. Executive Order 12988

    This regulation meets the applicable standards set forth in 
sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice 
Reform.

D. Administrative Procedure Act (APA)

    Notice and comment rulemaking is not required for this interim 
final rule. Under the APA, ``rules of agency organization, procedure or 
practice,'' 5 U.S.C. 553(b)(3)(A), that do not ``affect[ ] individual 
rights and obligations,'' Morton v. Ruiz, 415 U.S. 199, 232 (1974), are 
exempt from the general notice and comment requirements of section 553. 
See JEM Broadcasting Co. v. FCC, 22 F.3d 320, 326 (D.C. Cir. 1994) 
(section 553(b)(3)(A) applies to ``agency actions that do not 
themselves alter the rights or interests of parties, although [they] 
may alter the manner in which the parties present themselves or their 
viewpoints to the agency''). The revisions to the regulations in 
Sec. Sec.  478.71-78 are purely matters of agency organization, 
procedure, and practice. The interim final rule will not affect 
substantive rights or interests of federal firearms licensees or 
applicants for federal firearms licensees. Nevertheless, ATF welcomes 
public comments on the interim final rule.
    Furthermore, there is good cause for finding that the interim final 
rule is exempt from the effective date

[[Page 1877]]

limitation of section 553(d). The interim final rule will grant the 
Director more flexibility to change the delegation of authority to 
decide a hearing regarding denial, suspension, or revocation of a 
federal firearms license, and a hearing regarding imposition of a civil 
fine, or to exercise that authority himself. Such flexibility will 
allow ATF to more efficiently decide revocation and denial hearings, 
because the Director can designate Headquarters officials, field 
officials, or some combination thereof, as the final agency decision 
maker. This will enable the Director to ensure consistency in decision 
making and to address any case backlogs that may occur.
    There is no reason to defer these benefits for thirty days. The 
interim final rule will not alter the rights or obligations of third 
parties, although it may alter the manner in which those parties 
present themselves or their viewpoints to the agency. No matter how the 
Director delegates his authority to revoke or deny federal firearms 
licenses pursuant to 18 U.S.C. 923(e), persons who apply for or hold 
federal firearms licenses will still have a right to due process during 
the agency administrative proceeding, including a right to a hearing 
(18 U.S.C. 923(f)(2)), a right to a written notice from the agency 
specifying the grounds for denial or revocation (18 U.S.C. 923(f)(3)), 
and a right to judicial review (18 U.S.C. 923(f)(3)). Therefore, there 
is good cause to make the interim final rule effective immediately.

E. Regulatory Flexibility Act

    The Regulatory Flexibility Act, 5 U.S.C. 601 et seq., requires an 
agency to conduct a regulatory flexibility analysis of any rule subject 
to notice and comment rulemaking requirements unless the agency 
certifies that the rule will not have a significant economic impact on 
a substantial number of small entities. See 5 U.S.C. 605(b). As noted 
above, this rule is not subject to notice and comment rulemaking 
requirements. Id. 553(b)(A). This is a rule of agency organization, 
procedure, and practice. It merely delegates to the Director the 
authority to make decisions with respect to the denial, suspension, 
imposition of a civil fine, or revocation of federal firearms licenses.

F. Small Business Regulatory Enforcement Fairness Act of 1996

    This rule is not a major rule as defined by section 251 of the 
Small Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 
804. This rule will not result in an annual effect on the economy of 
$100 million or more; a major increase in costs or prices; or 
significant adverse effects on competition, employment, investment, 
productivity, innovation, or on the ability of United States-based 
companies to compete with foreign-based companies in domestic and 
export markets.

G. Unfunded Mandates Reform Act of 1995

    This rule will not result in the expenditure by State, local, and 
tribal governments, in the aggregate, or by the private sector of $100 
million or more in any one year, and it will not significantly or 
uniquely affect small governments. Therefore, no actions were deemed 
necessary under the provisions of the Unfunded Mandates Reform Act of 
1995.

H. Paperwork Reduction Act

    This rule does not impose any new reporting or recordkeeping 
requirements under the Paperwork Reduction Act.

Public Participation

A. Comments Sought

    ATF is requesting comments on the interim final rule from all 
interested persons. ATF is also specifically requesting comments on the 
clarity of this interim final rule and how it may be made easier to 
understand.
    All comments must reference this document docket number (ATF 27P), 
be legible, and include your name and mailing address. ATF will treat 
all comments as originals and will not acknowledge receipt of comments.
    Comments received on or before the closing date will be carefully 
considered. Comments received after that date will be given the same 
consideration if it is practical to do so, but assurance of 
consideration cannot be given except as to comments received on or 
before the closing date.

B. Confidentiality

    Comments, whether submitted electronically or in paper, will be 
made available for public viewing at ATF, and on the Internet as part 
of the President's eRulemaking initiative, and are subject to the 
Freedom of Information Act. Commenters who do not want their name or 
other personal identifying information posted on the Internet should 
submit their comment by mail or facsimile, along with a separate cover 
sheet that contains their personal identifying information. Both the 
cover sheet and comment must reference this docket number. Information 
contained in the cover sheet will not be posted on the Internet. Any 
personal identifying information that appears within the comment will 
be posted on the Internet and will not be redacted by ATF.
    Any material that the commenter considers to be inappropriate for 
disclosure to the public should not be included in the comment. Any 
person submitting a comment shall specifically designate that portion 
(if any) of his comments that contains material that is confidential 
under law (e.g., trade secrets, processes, etc.). Any portion of a 
comment that is confidential under law shall be set forth on pages 
separate from the balance of the comment and shall be prominently 
marked ``confidential'' at the top of each page. Confidential 
information will be included in the rulemaking record but will not be 
disclosed to the public. Any comments containing material that is not 
confidential under law may be disclosed to the public. In any event, 
the name of the person submitting a comment is not exempt from 
disclosure.

C. Submitting Comments

    Comments may be submitted in any of three ways:
    <bullet> Mail: Send written comments to the address listed in the 
ADDRESSES section of this document. Written comments must be signed and 
may be of any length.
    <bullet> Facsimile: You may submit comments by facsimile 
transmission to (202) 648-9741. Faxed comments must:
    (1) Be legible;
    (2) Be on 8\1/2\<gr-thn-eq> x 11<gr-thn-eq> paper;
    (3) Contain a legible, written signature; and
    (4) Be no more than five pages long. ATF will not accept faxed 
comments that exceed five pages.
    <bullet> Federal e-Rulemaking Portal: To submit comments to ATF via 
the Federal e-rulemaking portal, visit http://www.regulations.gov and 
follow the instructions for submitting comments.

D. Request for Hearing

    Any interested person who desires an opportunity to comment orally 
at a public hearing should submit his or her request, in writing, to 
the Director of ATF within the 90-day comment period. The Director, 
however, reserves the right to determine, in light of all 
circumstances, whether a public hearing is necessary.

Disclosure

    Copies of this interim rule and the comments received will be 
available for public inspection by appointment during normal business 
hours at: ATF Reading Room, Room 1E-063, 99 New York Avenue, NE., 
Washington, DC 20226; telephone: (202) 648-7080.

[[Page 1878]]

Drafting Information

    The author of this document is James P. Ficaretta; Enforcement 
Programs and Services; Bureau of Alcohol, Tobacco, Firearms, and 
Explosives.

List of Subjects in 27 CFR Part 478

    Administrative practice and procedure, Arms and ammunition, 
Authority delegations, Customs duties and inspection, Domestic 
violence, Exports, Imports, Law enforcement personnel, Military 
personnel, Penalties, Reporting requirements, Research, Seizures and 
forfeitures, and Transportation.

Authority and Issuance

0
Accordingly, for the reasons discussed in the preamble, 27 CFR part 478 
is amended as follows:

PART 478--COMMERCE IN FIREARMS AND AMMUNITION

0
1. The authority citation for 27 CFR part 478 continues to read as 
follows:

    Authority: 5 U.S.C. 552(a); 18 U.S.C. 847, 921-931; 44 U.S.C. 
3504(h).


Sec.  478.71  [Amended]

0
2. Section 478.71 is amended by removing ``of Industry Operations'' in 
the first sentence.


Sec.  478.72  [Amended]

0
3. Section 478.72 is amended by removing ``of Industry Operations'' in 
the fifth sentence and by removing ``Director of Industry Operations'' 
in the sixth sentence and adding in its place ``Director's''.


Sec.  478.73  [Amended]

0
4. Section 478.73 is amended by removing ``of Industry Operations'' 
wherever it appears.


Sec.  478.74  [Amended]

0
5. Section 478.74 is amended by removing ``of Industry Operations'' in 
the fourth sentence.


Sec.  478.76  [Amended]

0
6. Section 478.76 is amended by removing ``of Industry Operations'' 
wherever it appears.


Sec.  478.78  [Amended]

0
7. Section 478.78 is amended by removing ``of Industry Operations'' in 
the last sentence.

    Dated: January 7, 2009.
Michael B. Mukasey,
Attorney General.
[FR Doc. E9-527 Filed 1-13-09; 8:45 am]
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