Keeping Gun Dealers Honest Act of 2021

To ensure greater accountability by licensed firearms dealers. 1. Short title This Act may be cited as the Keeping Gun Dealers Honest Act of 2021 2. Increasing the number of allowed compliance inspections of firearms dealers Section 923(g)(1)(B)(ii)(I) of title 18, United States Code, is amended by striking once 3 times 3. Increasing penalties on firearms licensees Section 924(a)(3) of title 18, United States Code, is amended in the matter following subparagraph (B) by striking one year 5 years 4. Serious recordkeeping offenses that aid gun trafficking Section 924(a)(3) of title 18, United States Code, is amended by striking the period at the end and inserting . If the conduct described in subparagraph (A) or (B) is in relation to an offense under subsection (a)(6) or (d) of section 922, the licensed dealer, licensed importer, licensed manufacturer, or licensed collector shall be fined under this title, imprisoned for not more than 10 years, or both. 5. Suspension of firearms dealer’s license and civil penalties for violations of the Gun Control Act Section 923 of title 18, United States Code, is amended by striking subsections (e) and (f) and inserting the following: (e) (1) (A) The Attorney General may, after notice and opportunity for hearing, suspend or revoke any license issued under this section, or may subject the licensee to a civil penalty of not more than $10,000 per violation, if the holder of the license— (i) has violated any provision of this chapter or any rule or regulation prescribed by the Attorney General under this chapter; or (ii) except as provided in subparagraph (B), fails to have secure gun storage or safety devices available at any place in which firearms are sold under the license to persons who are not licensees. (B) Subparagraph (A)(ii) shall not apply in any case in which a secure gun storage or safety device is temporarily unavailable because of theft, casualty loss, consumer sales, backorders from a manufacturer, or any other similar reason beyond the control of the licensee. (2) The Attorney General may, after notice and opportunity for hearing, suspend or revoke the license of, or assess a civil penalty of not more than $10,000 on, a dealer who transfers armor piercing ammunition. (3) The Attorney General may at any time compromise, mitigate, or remit the liability with respect to any violation of this chapter or any rule or regulation prescribed by the Attorney General under this chapter. (4) The Attorney General’s actions under this subsection may be reviewed only as provided in subsection (f). (f) (1) Any person whose application for a license is denied and any holder of a license which is suspended or revoked or who is assessed a civil penalty shall receive a written notice from the Attorney General stating specifically the grounds upon which the application was denied or upon which the license was suspended or revoked or the civil penalty assessed. Any notice of a suspension or revocation of a license shall be given to the holder of the license before the effective date of the suspension or revocation. (2) If the Attorney General denies an application for a license, or suspends or revokes a license, or assesses a civil penalty, the Attorney General shall, upon request by the aggrieved party, promptly hold a hearing to review the denial, suspension, revocation, or assessment. In the case of a suspension or revocation of a license, the Attorney General shall, on the request of the holder of the license, stay the effective date of the suspension or revocation. A hearing under this paragraph shall be held at a location convenient to the aggrieved party. (3) (A) If after a hearing held under paragraph (2) the Attorney General decides not to reverse the decision to deny an application or suspend or revoke a license or assess a civil penalty, the Attorney General shall give notice of the decision to the aggrieved party. (B) The aggrieved party may at any time within 60 days after the date notice is given under subparagraph (A) file a petition with the United States district court for the district in which the party resides or in which the party’s principal place of business is located for a de novo judicial review of the denial, suspension, revocation, or assessment. (C) In a proceeding conducted under this paragraph, the court may consider any evidence submitted by the parties to the proceeding without regard to whether such evidence was considered at the hearing held under paragraph (2). (D) If the court decides that the Attorney General was not authorized to deny the application or to suspend or revoke the license or to assess the civil penalty, the court shall order the Attorney General to take such action as may be necessary to comply with the judgment of the court. . 6. Termination of firearms dealer’s license upon felony conviction Section 925(b) of title 18, United States Code, is amended by striking until any conviction pursuant to the indictment becomes final until the date of any conviction pursuant to the indictment 7. Authority to hire additional personnel The Director of the Bureau of Alcohol, Tobacco, Firearms and Explosives may hire at least 80 additional employees for the purpose of carrying out additional inspections as provided for in the amendments made by this Act. 8. Authority to require licensed dealer to conduct a physical inventory and provide inventory record if dealer has unlawfully transferred a firearm or 10 (a) In general Section 923(g)(1) of title 18, United States Code, is amended by adding at the end the following: (E) The Attorney General may require a licensed importer, licensed manufacturer, or licensed dealer to conduct a physical inventory of the firearms in the business inventory of the licensee, and provide the Attorney General with a detailed record of the physical inventory if— (i) the licensee has been convicted of transferring a firearm unlawfully; or (ii) the Attorney General finds that 10 or more firearms used in a crime under Federal, State, or local law have been traced back to the licensee. . (b) Conforming amendments (1) Section 923(j) of such title is amended in the 6th sentence by inserting , except as required under subsection (g)(1)(E) (2) The matter under the heading salaries and expenses Bureau of Alcohol, Tobacco, Firearms and Explosives Public Law 113–6 , except as required under subsection (g)(1)(E) of such section 923 9. Issuance of licenses Section 923 of title 18, United States Code, is amended— (1) in subsection (c)— (A) by inserting (1) Upon (B) in the first sentence, by inserting , subject to paragraph (2), Attorney General shall (C) by adding at the end the following: (2) The Attorney General may deny an application submitted under subsection (a) or (b) if the Attorney General determines— (A) issuing the license would pose a danger to public safety; or (B) that the applicant— (i) is not likely to comply with the law; or (ii) is otherwise not suitable to be issued a license. ; and (2) in subsection (d)(1), in the matter preceding subparagraph (A), by inserting , subject to subsection (c)(2), shall 10. Liability standards Section 923 of title 18, United States Code, is amended— (1) in subsection (c), in the third sentence, by striking willfully (2) in subsection (d), by striking willfully 11. Regulatory flexibility Section 926(a) of title 18, United States Code, is amended in the matter preceding paragraph (1) by striking only 12. Report to the Congress The Director of the Bureau of Alcohol, Tobacco, Firearms and Explosives shall submit biennial reports to Congress on the implementation of this Act and the amendments made by this Act, which shall include— (1) a statement by the Director as to what additional resources, if any, are necessary in order to implement this Act and the amendments made by this Act; and (2) any recommendations of the Director for how better to ensure that— (A) firearms dealers are complying with all laws and regulations that apply with respect to dealing in firearms; and (B) noncompliant firearms dealers are subject to appropriate action in a timely manner. 13. Severability If any provision of this Act or of an amendment made by this Act, or the application of such a provision to any person or circumstance, is held to be invalid, the remainder of this Act or of such an amendment, or the application of this Act or of such an amendment to other persons or circumstances, shall not be affected.

Summary: Keeping Gun Dealers Honest Act of 2021 This bill modifies the requirements and penalties applicable to an individual who engages in the business of dealing, importing, or manufacturing firearms (i.e., a federal firearms licensee, or FFL). Among other things, the bill does the following: increases the allowable number of annual compliance inspections; authorizes the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) to hire at least 80 additional personnel to conduct additional inspections; increases the maximum prison term for an FFL or licensed collector who knowingly makes a false statement or representation in required firearms records; allows the ATF to require an FFL to conduct physical inventories if the FFL unlawfully transfers a firearm or if 10 or more crime guns are traced back to the FFL; allows the ATF to deny an application for a federal firearms license if it would endanger public safety or if the applicant is unlikely to comply with the law; and modifies the liability standard for an FFL who fails to comply with laws or regulations.