Firearms Retailer Code of Conduct Act of 2020

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. Short title This Act may be cited as the Firearms Retailer Code of Conduct Act of 2020 2. Code of conduct for firearms manufacturers, importers, and dealers (a) In general Section 923 of title 18, United States Code, is amended by adding at the end the following: (m) (1) (A) The Attorney General shall annually make available to each licensed importer, licensed manufacturer, and licensed dealer, and each employee of such a licensee who is authorized to engage in the transfer of firearms or ammunition in the course of the firearms business to unlicensed persons, a training course in the conduct of firearm transfers. (B) The training course shall describe Federal law governing firearms transfers, and cover, at a minimum, the following matters: (i) How to recognize and identify straw purchasers and fraudulent activity. (ii) The indicators that a person is attempting to purchase a firearm illegally. (iii) How to recognize and identify indicators that an individual intends to use a firearm for unlawful purposes. (iv) How to recognize and identify indicators that an individual intends to use a firearm for self-harm. (v) How to prevent theft or burglary of firearms and ammunition. (vi) How to respond in the circumstances described in clauses (i) through (v), and the applicable reporting requirements. (vii) Other reasonable business practices that the Attorney General determines will deter gun trafficking, or deter the provision of a firearm to those who indicate an intent to use a firearm for unlawful purposes or for self-harm. (C) The training course shall include an examination with not less than 20 questions derived from the course materials and intended to confirm that a course participant has learned the information covered by the course. To receive certification of completion of the course, a participant must answer at least 70 percent of the examination questions correctly. (D) Not less frequently than annually, the Attorney General shall review the training course materials, and revise them as necessary. (E) On successful completion of the training course by a participant— (i) the participant shall attest to his or her participation in the course; (ii) the participant shall attest to his or her receipt of the course materials; (iii) if the participant is not a licensed manufacture, licensed importer, or licensed dealer, the participant has submitted to the national instant criminal background check system established under section 103 of the Brady Handgun Violence Prevention Act sufficient information to enable the system to determine whether the participant is prohibited by subsection (g) or (n) of section 922 or State law from receiving a firearm; and (iv) if the system has determined that the participant is not so prohibited, the Attorney General shall immediately issue to the participant, through United States mail or electronic means, a certificate which indicates successful completion of the training course and includes a unique certification number, both of which shall expire 2 years after issuance unless renewed. (F) The Attorney General shall— (i) create and maintain a database which identifies each individual to whom such a certificate is issued, the date the certificate is issued, the date the certificate expires, and the unique certification number on the certificate; (ii) make readily available to persons licensed under this chapter and Federal, State, and local law enforcement authorities, on request, the certification status of current or potential employees; (iii) on a monthly basis, provide to the Bureau of Alcohol, Tobacco, Firearms and Explosives a complete list of the certificates issued under subparagraph (E) that have expired or been renewed since the most recent prior provision of information, if any, to the system under this clause. (G) Each licensee referred to in subparagraph (A) shall keep— (i) a copy of any certificate issued to the licensee under subparagraph (E); and (ii) a copy of any such certificate issued to any employee of the licensee, throughout the duration of employment. (H) Beginning 545 days after the date of the enactment of this subsection, it shall be unlawful for such a licensee or an employee of such a licensee to transfer a firearm or ammunition, unless the licensee or employee, as the case may be, has been issued a certificate under this paragraph which has not expired. (2) In the course of firearms business with a person who is not such a licensee, such a licensee— (A) shall not transfer a firearm to an individual if the licensee or an employee of the licensee knows or has reasonable cause to know that the individual is a straw purchaser or a gun trafficker; (B) shall not transfer a firearm or ammunition to an individual if the licensee or an employee of the licensee knows or has reasonable cause to know that the individual is intoxicated; (C) shall not transfer a firearm or ammunition to an individual if the licensee or an employee of the licensee knows or has reasonable cause to know that the individual will attempt to harm the individual or others with the firearm or ammunition; (D) shall not transfer a firearm to an individual not paying in United States currency, unless the identity of the individual matches the name on the payment method used by the individual; and (E) immediately notify the Bureau of Alcohol, Tobacco, Firearms and Explosives and local law enforcement authorities if the licensee or an employee of the licensee knows or has reasonable cause to know that the individual has engaged or attempted to engage in a straw purchase or gun trafficking. (3) (A) The Attorney General shall make available to each licensee referred to in paragraph (1)(A) written protocols which— (i) outline the indicators of straw purchasing and gun trafficking, including the presence of a prospective firearm transferee who— (I) is accompanied by 1 or more individuals; (II) is communicating with other individuals by telephone or other means; (III) is buying multiple firearms; (IV) has been the subject of a crime gun trace; (V) has purchased a firearm in the preceding 30 days; or (VI) otherwise indicates that a firearm is being obtained for another person; (ii) instruct employees to attempt to ascertain whether a prospective firearm transferee is lawfully purchasing a firearm, including by asking questions of the prospective firearm transferee (including whether he or she intends to transfer the firearm to another person); and (iii) inform employees about how to report a suspected fraudulent firearm purchase to the Bureau of Alcohol, Tobacco, Firearms and Explosives. (B) Beginning 545 days after the date of the enactment of this subsection, each such licensee shall— (i) obtain the written protocols described in subparagraph (A); and (ii) during all business hours, display the written protocols at each point of sale in the firearms business of the licensee, in a manner that is clearly visible to all employees of the business. (4) Each licensee referred to in paragraph (1)(A) of this subsection shall maintain general business and liability insurance as described in subsection (d)(1)(F)(iv) during each day of a calendar month, unless the licensee has certified to the Attorney General, on the 1st day of that month, that the licensee— (A) did not transfer more than 20 firearms in the 12-month period that precedes the date of the certification; and (B) expects to transfer not more than 20 firearms in the 12-month period that begins with that date. . (b) Deadline for development of firearm transfer training course Within 180 days after the date of the enactment of this Act, the Attorney General shall develop the training course provided for in section 923(m)(1) of title 18, United States Code. (c) Deadline for development of written business protocols for firearms sales Within 180 days after the date of the enactment of this Act, the Attorney General shall develop the written protocols provided for in section 923(m)(3) of title 18, United States Code. (d) Business liability insurance certification required in application for firearms license Section 923(d)(1)(F) of title 18, United States Code, is amended— (1) by striking and (2) by adding at the end the following: (iv) the applicant has applied for, and will not conduct the business before the applicant has received, a general business and liability insurance policy from an insurance company licensed to do business in the State in which the licensed premises is located, which provides coverage for damages for the negligent or unlawful transfer of a firearm in an amount of at least $1,000,000, unless the applicant certifies in the application that the applicant expects to transfer to persons not licensed under this chapter not more than 20 firearms per year; and . (e) Validation of licensee and employee certifications Section 922(t)(1) of such title is amended— (1) by striking and (2) by striking the period at the end of subparagraph (C) and inserting ; and (3) by adding at the end the following: (D) a unique certification number has been issued to the transferor under section 923(m)(1)(E)(iv) and has not expired, and the transferor has validated that number with the system. . 3. Definitions Section 921(a) of title 18, United States Code, is amended by adding at the end the following: (36) The term ‘straw purchase’ means the purchase of a firearm by an individual who conceals, or intends to conceal, that the purchase is being made on behalf of a third party who is identified or not yet identified. The term shall not include a bona fide gift to a person who is not prohibited by law from possessing or receiving a firearm. For purposes of the preceding sentence, a gift to a person is not a bona fide gift if the person has offered or given the purchaser a service or thing of value to acquire the firearm for the person. (37) The term ‘straw purchaser’ means a person engaged in a straw purchase. (38) The term ‘gun trafficking’ means the knowing acquisition, transfer, or attempted acquisition or transfer of a firearm for purposes of unlawful commerce by a licensed or unlicensed person. . 4. Penalties Section 924 of title 18, United States Code, is amended by adding at the end the following: (q) (1) With respect to each violation of subparagraph (A), (B), or (C) of section 923(m)(2), a person shall be fined under this title, imprisoned not more than 18 months, or both. (2) With respect to each violation of section 923(m)(2)(D), a person shall be fined not more than $2,500, imprisoned not more than 1 year, or both. (3) With respect to each violation of paragraph (1)(G) or (3)(B) of section 923(m), a licenced importer, licensed manufacturer or licensed dealer shall be fined not more than $500. (4) (A) With respect to each violation of paragraph (1)(H) or (2)(E) of section 923(m), the Attorney General shall, after notice and opportunity for hearing— (i) suspend for not more than 6 months, or revoke, the license under which the firearms transfer involved was conducted; or (ii) subject the licensee to a civil penalty of not more than $2,500. (B) With respect to each violation of section 923(m)(4) the Attorney General shall, after notice and opportunity for hearing— (i) suspend for not more than 6 months, or revoke, the license under which the firearms transfer involved was conducted; or (ii) subject the licensee to a civil penalty of not more than $10,000. . 5. Effective date The amendments made by this Act shall take effect 90 days after the date of the enactment of this Act.

Summary: Firearms Retailer Code of Conduct Act of 2020 This bill establishes requirements for federal firearms licensees (e.g., gun dealers) and their employees regarding certain business practices, training, and certification. It also prohibits licensees from transferring firearms to certain individuals, including straw purchasers, gun traffickers, intoxicated individuals, or individuals at risk of harming themselves or others.