Federal Firearm Licensee Act

To modernize the business of selling firearms. 1. Short title This Act may be cited as the Federal Firearm Licensee Act 2. Findings The Congress finds the following: (1) A growing body of evidence demonstrates that gun dealers’ sales practices affect the probability of guns getting to criminals and that policies designed to hold gun sellers accountable can curtail the diversion of guns to criminals. (2) Federal laws governing firearm dealers have not been updated in over 30 years, contain safeguards that protect dealers who engage in illegal practices from adverse enforcement action, frustrate law enforcement efforts to curb gun trafficking and violence and are, thus, inadequate to meet the realities of the twenty-first century. (3) The Tiahrt Amendments, for one, severely limit the authority of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) to disclose crime gun trace data to the public, prevent the collection of valuable information, and the establishment of effective policies to prevent illegal guns from being used in crimes and impede enforcement of the gun laws by requiring most background check records to be destroyed within 24 hours, and by barring the Government from requiring annual inventory audits by owners of gun shops. Repealing the Tiahrt Amendments would support law enforcement efforts and give the public vital information needed to craft the most effective policies against illegal guns. (4) Additionally, Federal law imposes no requirements that dealers physically secure their highly valuable and lethal inventory. The number of gun thefts from licensed gun dealers has increased more than the number from any other source. Between 2013 and 2017, the number of firearms stolen in gun-dealer burglaries more than doubled and the number of firearms stolen in gun-dealer robberies tripled. 3. Definitions Section 921(a) of title 18, United States Code, is amended by adding at the end the following: (38) The term facilitator (39) The term occasional (40) The term personal collection (41) The term business inventory firearm (42) (A) The term frame (B) The term receiver (C) For purposes of this paragraph, the terms variant variants thereof . 4. Repeal of temporary Brady provision Section 922 of title 18, United States Code, is amended by striking subsection (s). 5. Physical security of dealer premises (a) Security plan submission requirement (1) In general Section 923(d)(1)(G) of title 18, United States Code, is amended by striking the period at the end and inserting , and the applicant submits with the application a security plan that describes how the applicant will secure, in accordance with the regulations issued under section 926(d), the premises from which the applicant will conduct business under the license (including in the event of a natural disaster or other emergency), and the applicant certifies that, if issued such a license, the applicant will comply with the plan; and (2) Written approval required before license renewal Section 923(d)(1) of such title is amended— (A) in subparagraph (F)(iii), by striking and (B) by adding at the end the following: (H) in the case of an application to renew a license to deal in firearms— (i) the license is not suspended; (ii) the applicant has not had a license issued under this chapter revoked; and (iii) the Attorney General has inspected the premises and provided written approval of the security plan submitted by the applicant under subparagraph (G). . (3) Applicability A person who, on the date of the enactment of this Act, is a licensed dealer (as defined in section 921(a)(11) of title 18, United States Code) and whose license to deal in firearms, issued under chapter 44 of such title, will not expire before the end of the 1-year period that begins with the date regulations are prescribed under section 926(d) of such title, shall submit to the Attorney General a plan of the type described in section 923(d)(1)(G) of such title not later than the end of that period. Any plan so submitted shall be considered to be submitted pursuant to such section 923(d)(1)(G). (b) Annual security plan compliance certification requirement (1) In general Section 923 of such title is amended by adding at the end the following: (m) (1) Each licensed manufacturer, licensed importer, and licensed dealer shall annually certify to the Attorney General that each premises from which the licensee conducts business subject to license under this chapter is in compliance with the regulations prescribed under section 926(d), and include with the certification the results of a reconciliation of the resale firearms then in the business inventory of the licensee against the resale firearms in the business inventory of the licensee at the time of the most recent prior certification (if any) under this paragraph, and all dispositions and acquisitions of resale firearms in the year covered by the certification, identifying and reporting any missing firearm. (2) The Attorney General shall impose a civil money penalty of not more than $5,000 on, and may suspend the license issued under this section to, a licensee who fails to comply with paragraph (1). . (2) Applicability The amendment made by paragraph (1) of this subsection shall not apply to a person who, on the date of the enactment of this Act, is a licensee referred to in section 923(m) of title 18, United States Code, until the end of the 1-year period that begins with the date the person complies with subsection (a)(2) of this section. (c) Regulations (1) In general Section 926 of such title is amended by adding at the end the following: (d) The Attorney General shall prescribe such regulations as are necessary to ensure that any premises at which a licensee referred to in section 923(m) conducts business is secure from theft, which shall include requiring— (1) compliance with the security plan submitted by the licensee pursuant to section 923(d)(1)(G); (2) the use of locked metal cabinets and fireproof safes; (3) security systems, video monitoring, and antitheft alarms; (4) security gates, strong locks, and site hardening; (5) concrete bollards and other access controls, if necessary; and (6) the use of any other security-enhancing features appropriate for the licensee’s specific circumstances. . (2) Applicability The regulations prescribed under section 926(d)(1) of such title shall not apply to a person who, on the date of the enactment of this Act, is a licensee referred to in section 923(m) of such title, until the earlier of— (A) the date the person complies with subsection (b)(2) of this section; or (B) the end of the 1-year period that begins with the date regulations are prescribed under section 926(d) of such title. 6. Business inventory firearms (a) Requirement To transfer firearm in personal collection to business inventory before disposition Section 923(c) of title 18, United States Code, is amended— (1) by striking the 2nd sentence and inserting the following: Nothing in this chapter shall be construed to prohibit a licensed manufacturer, licensed importer, or licensed dealer from maintaining a personal collection of firearms. (2) by striking the 3rd sentence; and (3) by adding at the end the following: Any firearm disposed of by a licensee shall be from the business inventory of the licensee. (b) Licensee firearms inventory Section 923(g) of such title is amended by adding at the end the following: (8) Each licensee shall conduct a quarterly physical check of the firearms inventory of the business of the licensee licensed under this chapter and report any lost, stolen, or unaccounted for firearm to the Attorney General and appropriate local authorities in accordance with regulations which shall be prescribed by the Attorney General and shall require, at a minimum, the recording of the date of receipt of the firearm, the name, address, and license number, if applicable, of the person from whom the firearm was received, the name of the manufacturer and, if applicable, importer of the firearm, the model, serial number, type, and caliber or gauge of the firearm, and the date of the sale or other disposition of the firearm. This chapter shall not be interpreted to prohibit the Attorney General from, at any time, requiring the regular or one-time submission of the inventory records of a licensee to ensure that the licensee is in compliance with this chapter. . (c) Repeal of limitations on imposition of requirement that firearms dealers conduct physical check of firearms inventory (1) The 5th proviso under the heading Bureau of Alcohol, Tobacco, Firearms and Explosives—Salaries and Expenses 18 U.S.C. 923 Public Law 113–6 and any fiscal year thereafter (2) The matter under the heading Bureau of Alcohol, Tobacco, Firearms and Explosives—Salaries and Expenses 18 U.S.C. 923 Public Law 112–55 (3) The matter under the heading Bureau of Alcohol, Tobacco, Firearms and Explosives—Salaries and Expenses 18 U.S.C. 923 Public Law 111–117 or any other Act (4) The matter under the heading Bureau of Alcohol, Tobacco, Firearms and Explosives—Salaries and Expenses 18 U.S.C. 923 Public Law 111–8 or any other Act (5) The matter under the heading Bureau of Alcohol, Tobacco, Firearms and Explosives—Salaries and Expenses 18 U.S.C. 923 Public Law 110–161 or any other Act (6) The matter under the heading Bureau of Alcohol, Tobacco, Firearms and Explosives—Salaries and Expenses 18 U.S.C. 923 Public Law 109–108 or any other Act (7) The matter under the heading Bureau of Alcohol, Tobacco, Firearms and Explosives—Salaries and Expenses 18 U.S.C. 923 Public Law 108–447 or any other Act (8) The matter under the heading Bureau of Alcohol, Tobacco, Firearms and Explosives—Salaries and Expenses 18 U.S.C. 923 Public Law 108–199 or any other Act 7. Electronic records (a) Records retention and submission Section 923(g) of title 18, United States Code, is amended— (1) in paragraph (1)(A)— (A) in the 1st sentence, by inserting , except that, notwithstanding any other provision of law, as of the effective date of the Federal Firearm Licensee Act, records prepared by licensees under this chapter of the sale or other disposition of firearms, including each firearms transaction record, and the corresponding record of receipt of such firearms, shall be retained at the business premises readily accessible for inspection under this chapter until the business is discontinued (B) by striking the 2nd sentence; (2) in paragraph (5)(A), by inserting or electronically as may be submit on a form (3) in paragraph (7), by inserting , electronically, orally (b) Records databases Section 923(g) of such title is further amended by adding at the end the following: (9) (A) Within 3 years after the date of enactment of this paragraph, the National Tracing Center of the Bureau of Alcohol, Tobacco, Firearms and Explosives shall establish and maintain electronic, searchable databases of all records regarding the importation, production, shipment, receipt, sale, or other disposition of firearms required to be submitted by licensees to the Attorney General under this chapter. (B) Each licensee under this chapter may provide the National Tracing Center with electronic access, consistent with the requirements of this paragraph, to all records within the possession of the licensee that are required to be kept under this chapter. (C) The National Tracing Center— (i) shall have remote access to query, search, or otherwise access the electronic databases described in this paragraph; and (ii) with the permission of a State, or political subdivision of a State, may query, search, or otherwise access the databases of the firearms registration system or pawnbroker records system of the State or political subdivision. (D) The National Tracing Center may query, search, or otherwise access the electronic databases described in this paragraph only to obtain information related to any Federal, State, local, tribal, or foreign criminal investigation. (E) The databases established under this paragraph— (i) shall be electronically searchable by date of disposition, license number, and the information identified on each firearm or other firearm descriptor, including the manufacturer, importer, model, serial number, type, and caliber or gauge; (ii) shall not be electronically searchable by the personally identifiable information of any individual, without a warrant authorizing such a search; and (iii) shall include in search results the entire contents of the relevant records kept by the licensee. . (c) Video recordings of sales and transfers Section 923(g) of such title is further amended by adding to the end the following: (10) In accordance with regulations promulgated by the Attorney General, each licensed dealer operating a location at which firearms are sold to a person not licensed under this chapter shall— (A) maintain video surveillance of all areas within each premises where firearms in the business inventory of the licensee are sold or transferred; (B) retain records of the surveillance, including any sound recording obtained from the surveillance, for a period of not less than 90 days; and (C) post a sign in a conspicuous place and at each public entrance to the retail location, in block letters not less than 1 inch in height, stating that the premises are under video surveillance. . (d) Increased penalties for licensee violations relating to acquisition and disposition records Section 924(a)(3) of such title is amended— (1) in the matter following subparagraph (B), by striking one year 5 years (2) by adding at the end the following: 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, licensed collector, or licensed facilitator shall be fined under this title, imprisoned not more than 10 years, or both. (e) Elimination of limitation on centralizing records Section 926(a) of such title is amended in the matter following paragraph (3) by striking records required to be maintained under this chapter or any portion of the contents of such records, be recorded at or transferred to a facility owned, managed, or controlled by the United States or any State or any political subdivision thereof, nor that. (f) Electronic recordkeeping adoption and implementation Section 926 of such title is further amended by adding at the end the following: (e) The Attorney General— (1) shall facilitate and incentivize licensee conversion to, and adoption of, electronic recordkeeping solutions that enable electronic completion and submission to the Attorney General of all records required to be maintained under this chapter; (2) shall facilitate digital capture of dealer paper records, the integration and indexing of data onto a platform accessible by law enforcement authorities for purposes of investigating a violent crime or crime gun trace; (3) shall facilitate remote access to electronic records of licensed dealers by law enforcement authorities for purposes of investigating a violent crime or crime gun trace, and dealer access to only their own records; and (4) shall not remotely access or search electronic records of licensed dealers without a warrant authorizing such a search. . 8. Notification of default transfers Section 922(t)(1)(B)(ii) of title 18, United States Code, is amended by adding at the end, before the semicolon, the following: , if the licensee notifies the Attorney General that such firearm has been transferred to such person no later than the close of business on the day that the firearm is transferred 9. Multiple firearm sales records and reports (a) Expanding reporting requirement to certain long guns Section 923(g)(3)(A) of title 18, United States Code, is amended— (1) by striking pistols, or revolvers, or any combination of pistols and revolvers pistols, revolvers, semiautomatic rifles or shotguns, or rifles or shotguns capable of accepting a high capacity magazine, or any combination of such weapons (2) by inserting after the 1st sentence the following: In the preceding sentence, the term high capacity magazine (b) Requirement To retain instant criminal background check records for 90 Section 922(t)(2)(C) of such title is amended— (1) by striking destroy retain for 90 business days (2) by striking (other than the identifying number and the date the number was assigned) (3) by inserting solely for purposes related to discovering misuse or avoidance of the national instant criminal background check system or ensuring its proper operation (c) Attorney General reports of multiple sales by non-Licensees Section 923(g)(3) of such title is amended— (1) by inserting after subparagraph (A) the following: (B) The Attorney General shall prepare a report of multiple dispositions of firearms to persons not licensed under this chapter, which shall include the names and identifying information of transferees appearing in the records retained pursuant to section 922(t)(2)(C) on 2 or more occasions in any period of 5 consecutive business days. The report shall be prepared on a form substantially similar to the form created pursuant to subparagraph (A) and include the names and addresses of the licensees who requested the background checks pursuant to subsection (t). The Attorney General shall forward the report to the office designated pursuant to subparagraph (A) and to the departments of State police or State law enforcement agencies of the State or local law enforcement agencies of the local jurisdictions in which the sales or other dispositions took place, not later than the close of business on the date of the most recent such sale or other disposition. ; and (2) by redesignating subparagraph (B) as subparagraph (C). (d) Records retention To investigate crime guns Section 923(g)(3)(C) of such title as redesignated by subsection (c)(2) of this section, is further amended— (1) by inserting a firearm involved in a crime or Except in the case of forms and contents thereof regarding (2) by striking , and shall destroy each such form and any record of the contents thereof no more than 20 days from the date such form is received and shall retain each such form and any record of the contents of the form for 180 days after the date the form is received (3) by striking the 2nd sentence. 10. Safety devices and warnings to purchasers Section 922(z) of title 18, United States Code, is amended— (1) by inserting and Warnings to Purchasers Secure Gun Storage or Safety Device (2) by striking handgun firearm (3) by adding at the end the following: (4) Warnings to purchasers All licensed dealers operating a physical retail location shall post conspicuously within the licensed premises all warnings required to be provided to firearms purchasers under applicable State and local law. The Attorney General shall develop materials regarding suicide prevention, securing firearms from loss, theft, or access by a minor or prohibited person, and straw purchasing, and provide the materials to licensed dealers who shall disseminate the materials on transfer of a firearm to a person not licensed under this chapter. . 11. Inspections (a) Mandated annual inspections of high risk licensed dealers, triennial inspections of other licensed dealers Section 923(g)(1)(B) of such title is amended by adding after and below the end the following flush sentence: Not less frequently than annually, the Attorney General shall inspect or examine the inventory, records, and business premises of each licensed dealer whom the Attorney General determines to be a high risk dealer (based on considerations that shall include dealers who have reported a lost or stolen firearm within the preceding 5 years, were issued a report of violation, received a warning letter, or been the subject of a warning conference, or, within the preceding year, to whom were traced multiple firearms used in a crime under Federal, State, or local law within 3 years after sale by the dealer) and may appoint a special master to ensure that such dealers comply with all applicable firearm sales laws. The special master may use in-store observation, monitor records, conduct random and repeated sales integrity tests, and design and offer instructional programs providing best practices sales training to all employees involved in firearms sales until the special master certifies that the dealer has complied with all applicable firearms sales laws for 3 consecutive years. Not less frequently than every 5 years, the Attorney General shall inspect or examine the inventory, records, and business premises of each other licensed dealer. Within 6 months after such an inspection reveals a violation of this section or any regulation prescribed under this chapter, and within 6 months after a security inspection conducted under paragraph (6)(B)(i) of this subsection, the Attorney General shall conduct an inspection to determine whether the violation identified in the preceding inspection has been cured. (b) Elimination of limit on inspection of licensee records Section 923(g)(1)(B)(ii) of such title is amended— (1) by striking — (II) (2) by striking with respect to records relating to a firearm involved in a criminal investigation that is traced to the licensee (c) Mandated security inspection of dealers reporting lost or stolen firearms Section 923(g)(6) of such title is amended— (1) by inserting (A) (6) (2) by adding at the end the following: (B) (i) After the Attorney General receives such a report from a licensed dealer of the theft of a firearm, the Attorney General shall conduct an independent inspection of the security of the premises at which the theft occurred, which shall include an inspection of the measures taken to implement the security plan submitted by the licensed dealer pursuant to subsection (d)(1)(G). (ii) On completion of the security inspection, the Attorney General shall provide the licensed dealer with— (I) a notice of any violation by the licensed dealer of any security requirements prescribed under section 926(d); and (II) recommendations for improving security of the premises involved. . (d) Elimination of limit on inspection of other premises Section 923(j) of such title is amended by striking the 6th sentence. 12. Authority with regards to license issuance and renewal (a) Denial authority 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 shall 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)— (A) in the first sentence, by inserting and renewals thereof this section (B) in the matter preceding subparagraph (A), by inserting , subject to subsection (c)(2), shall (C) in subparagraph (C), by striking not willfully violated no uncured violations (D) in subparagraph (F)— (i) in clause (ii)(II), by striking and (ii) by adding at the end the following: (iv) all employees employed in the business will be at least the minimum age at which individuals may possess a firearm in the locality in which the business will be conducted and are not prohibited from being transferred a firearm, or transporting, shipping, or receiving firearms or ammunition in interstate or foreign commerce by subsection (d), (g), or (n) of section 922 (as applicable) or by State, local, or Tribal law; . (b) Authority To revoke or suspend licenses Section 923 of such title is amended— (1) in subsection (e), by striking revoke revoke or suspend (2) in subsection (f)— (A) in paragraph (1)— (i) by striking all instances of revoked revoked or suspended (ii) by striking all instances of revocation revocation or suspension (B) in paragraph (2)— (i) by striking , or revokes revokes, or suspends (ii) by striking or revocation , revocation, or suspension (C) in paragraph (3)— (i) by striking or revoke or revoke or suspend (ii) by striking or revocation , revocation, or suspension (iii) by striking to revoke to revoke or suspend (c) Authority To promulgate rules Section 926(a) of such title is amended by striking only (d) Repeal of riders limiting use of funds To deny licenses due to lack of business activity (1) The matter under the heading Bureau of Alcohol, Tobacco, Firearms and Explosives—Salaries and Expenses 18 U.S.C. 923 Public Law 112–55 (2) The matter under the heading Bureau of Alcohol, Tobacco, Firearms and Explosives—Salaries and Expenses 18 U.S.C. 923 Public Law 113–6 13. Increased licensing fees (a) Fees for licensed importers, manufacturers, and dealers in firearms and importers and manufacturers of ammunition Section 923(a) of title 18, United States Code, is amended— (1) in paragraph (1)— (A) in subparagraph (A), by striking $1,000 $2,000 (B) in subparagraph (B), by striking $50 $100 (C) in subparagraph (C), by striking $10 $20 (2) in paragraph (2)— (A) in subparagraph (A), by striking $1,000 $2,000 (B) in subparagraph (B), by striking $50 $100 (3) in paragraph (3)— (A) in subparagraph (A), by striking $1,000 $2,000 (B) in subparagraph (B)— (i) by striking $200 $400 (ii) by striking $90 $180 (b) Fees for licensed collectors Section 923(b) of such title is amended by striking $10 $20 14. Elimination of obligatory stay of effective date of license revocation Section 923(f)(2) of title 18, United States Code, is amended in the 2nd sentence by striking shall upon the request of the holder of the license may, upon a showing by the holder of the license of good cause, 15. Elimination of relief for dealers indicted for a crime punishable by imprisonment for a term exceeding one year (a) In general Section 925 of title 18, United States Code, is amended by striking subsection (b) and redesignating subsections (c) through (f) as subsections (b) through (e), respectively. (b) Conforming amendments Section 922 of such title is amended— (1) in subsection (d), in the 2nd sentence, by striking licensed importer, licensed manufacturer, licensed dealer, or licensed collector who pursuant to subsection (b) of section 925 of this chapter is not precluded from dealing in firearms or ammunition, or to a (2) in subsection (l), by striking 925(d) of this chapter 925(c) (3) in subsection (r), by striking 925(d)(3) of this chapter 925(c)(3) 16. Elimination of relief while federal disability relief application pending Section 925(b) of title 18, United States Code, as so redesignated by section 15(a) of this Act, is further amended by striking the 4th sentence and inserting This subsection shall not be interpreted to prohibit the Attorney General from, on a showing by a licensee of good cause, permitting the licensee to continue operations while an application for relief from disabilities is pending. 17. Presumption of knowledge of State law in sale of long guns to residents of another State Section 922(b)(3) of title 18, United States Code, is amended by striking in the absence of evidence to the contrary, 18. Increased penalties for knowing transfer of firearm without conducting a background check Section 922(t)(5) of title 18, United States Code, is amended by inserting in the case of the 1st violation and, in the case of a subsequent violation, shall immediately suspend or revoke any license issued to the licensee under section 923 and impose on the licensee a civil fine equal to $20,000 19. Unlawful acts upon incurring Federal disability or notice of license suspension, revocation or denied renewal (a) Restrictions Section 922 of title 18, United States Code, is amended by adding at the end the following: (aa) (1) It shall be unlawful for a licensed importer, licensed manufacturer, licensed dealer, licensed collector, or licensed facilitator who incurs a disability imposed by Federal laws with respect to the acquisition, receipt, transfer, shipment, transportation, or possession of firearms or ammunition during the term of a license issued under this chapter or while an application to renew such a license is pending, or who has been notified by the Attorney General that a license issued to the licensee under this chapter has been suspended or revoked or that an application of the licensee to renew such a license has been denied, to— (A) transfer a business inventory firearm— (i) into the personal collection of the licensee; or (ii) to any person other than a licensee under this chapter or a Federal, State, or local law enforcement agency; or (B) receive a business inventory firearm. (2) Upon a showing by a licensee of good cause, the Attorney General may issue a written waiver of paragraph (1) if the licensee authorizes the Attorney General to inspect the records and inventory of the licensee at any time to ensure that the licensee is in compliance with this chapter. . (b) Penalties Section 924(a) of such title is amended by adding at the end the following: (8) Whoever knowingly violates section 922(aa) shall be fined under this title, imprisoned not more than 1 year, or both. . (c) Notice requirement Section 923(f)(1) of such title is amended in the 1st sentence by inserting and setting forth the provisions of Federal law and regulation that prohibit a person not licensed under this chapter from engaging in the business of dealing in firearms and the restrictions set forth in section 922(aa) 20. Regulation of facilitators of firearm transfers (a) Licensing Section 923(a) of title 18, United States Code, is amended by adding at the end the following: (4) If the applicant is a facilitator of firearm sales, purchases or other transfers, a fee of $1,000 per year. . (b) Completed facilitated sales Section 923 of such title is further amended by adding at the end the following: (n) (1) Each licensed facilitator shall— (A) inform all prospective sellers using its commercial marketplace that any offer for firearm sales, purchases, or other transfers made using its commercial marketplace may be completed only with the assistance of a licensed importer, licensed manufacturer, or licensed dealer, who must take possession of the firearm directly from the transferor for the purpose of complying with section 922(t); (B) require all prospective firearm sellers to so complete all firearms sales, purchases, or other transfers; and (C) maintain records of any such sale, purchase, or other transfer which shall include the date of the offer, the name of the offeror, and the name and the licensee number of the licensee that will take possession of the firearm directly from the transferor, and the model, serial number, type, and caliber or gauge of the firearm involved. (2) A licensed facilitator may require, as a condition of using its commercial marketplace, that, before offering a firearm for sale, a prospective seller identify a licensed dealer that will take possession of the firearm and complete the sale. (3) On taking possession of a firearm sold, purchased, or otherwise transferred in such a commercial marketplace, a licensee shall comply with all requirements of this chapter as if the licensee were transferring the firearm from the inventory of the licensee to the unlicensed transferee. . (c) Liability Section 924(h) of such title is amended— (1) by inserting (1) Whoever (2) by adding at the end the following: (2) Whoever, having accepted an offer to transfer ownership of a firearm using a commercial marketplace of a licensed facilitator in order to complete a firearm transaction as described in paragraph (1) of this subsection, knowingly transfers the firearm to a person not licensed under this chapter without a licensed importer, licensed manufacturer, or licensed dealer first taking possession of the firearm for the purpose of complying with section 922(t), shall be fined under this title, imprisoned not more than 1 year, or both, except that if transfer to, or receipt of the firearm by the transferee violates subsection (d), (g), or (n) of section 922, or the firearm is used to commit a crime of violence (as defined in section (c)(3) of this section) or drug trafficking crime (as defined in subsection (c)(2) of this section), the transferor shall be fined under this title, imprisoned not more than 10 years, or both. . (d) Conforming amendments (1) Section 922 of such title is amended— (A) in subsection (a)(1)— (i) by striking or (ii) by adding or (iii) by adding at the end the following: (C) except a licensed facilitator, to engage in the business of hosting a commercial marketplace in which offers for firearms sales, purchases, or other transfers are allowed to be made; ; (B) in subsection (a)(6)— (i) by striking or licensed collector licensed collector, or licensed facilitator (ii) by striking or collector collector, or facilitator (C) in subsection (m), by striking or licensed collector licensed collector, or licensed facilitator (2) Section 923 of such title is amended— (A) in the 1st sentence of subsection (c), by inserting or facilitate firearm sales, purchases or other transfers during the period stated in the license (B) in subsection (g)(1)(A)— (i) in the first sentence, by striking and licensed dealer licensed dealer, and licensed facilitator (ii) in the last sentence, by inserting licensed facilitator, or any licensed importer (C) in subsection (j), by striking or licensed dealer licensed dealer, or licensed facilitator (3) Section 924(a)(3) of such title is amended by striking or licensed collector licensed collector, or licensed facilitator 21. Dealer and employee background checks (a) Requirements (1) Background checks required before issuance or renewal of dealers license Section 923(c) of title 18, United States Code, is amended by inserting after the 1st sentence the following: Notwithstanding the preceding sentence, the Attorney General may not issue or renew a license unless the Attorney General has contacted the national instant criminal background check system established under section 103 of the Brady Handgun Violence Prevention Act to determine whether it would be unlawful for the applicant or any employee of the applicant identified by the applicant on the application as trusted with the possession or receipt of any firearm, to be transferred or receive a firearm, and the system has notified the Attorney General that the information available to the system does not demonstrate that the transfer to or receipt of a firearm by the applicant or any such employee would violate subsection (d), (g), or (n) of section 922 (as applicable) or by State, local, or Tribal law where the business premises of the applicant subject to the license is located. (2) Background check required before firearm possession by dealer employee Section 923(g) of such title is further amended by adding at the end the following: (11) A licensed dealer shall not allow an employee to possess a firearm at a premises from which the licensed dealer conducts business subject to license under this chapter, unless— (A) the employee is at least the minimum age required by State and local law to possess or receive a firearm; (B) the licensed dealer has contacted the national instant criminal background check system established under section 103 of the Brady Handgun Violence Prevention Act to determine whether it would be unlawful for the individual to receive a firearm; and (C) the system has notified the licensee that the information available to the system does not demonstrate that the receipt of a firearm by the individual would violate subsection (d), (g), or (n) of section 922 (as applicable) or by State, local, or Tribal law. . (b) Authority of NICS system To respond to licensed dealer request for criminal background check of employee or applicant for employment Section 103(b)(2) of the Brady Handgun Violence Prevention Act ( 34 U.S.C. 40901(b)(2) (1) in the heading, by striking Voluntary Compulsory (2) in subparagraph (A), by striking voluntarily (c) Authority of NICS system To search national data exchange Section 103(e)(1) of the Brady Handgun Violence Prevention Act ( 34 U.S.C. 40901(e)(1) (L) Search of national data exchange database The system established under this section shall include a search of the database of the National Data Exchange when conducting a background check under this section. . 22. Liability standards (a) Liability in licensing Section 923 of title 18, United States Code, is amended— (1) in subsection (d)(1)(D), by striking willfully knowingly (2) in subsection (e), by striking willfully knowingly (b) Liability in penalties Section 924 of such title is amended— (1) in subsection (a)(1)(D), by striking willfully knowingly (2) in subsection (d)(1), by striking willful knowing 23. Civil enforcement (a) Fines for engaging in the business without a license Section 924(n), of title 18, United States Code, is amended— (1) by inserting (1) (n) (2) by adding at the end the following: (2) In the case of a person who the Attorney General has found to be engaged in conduct that constitutes a violation of section 922(a)(1)(A), the Attorney General shall transmit to the persona written notice specifying the violation, which shall include a copy of the provision of law violated, and impose a civil money penalty in an amount that is not less than $2,500 and not more than $20,000. . (b) Tiered penalties for repeated violations of regulations by licensed dealers Section 924 of such title is amended by adding at the end the following: (q) Penalties relating to violations of regulations by licensed dealers (1) In the case of a licensed dealer who the Attorney General has found to be in violation of a regulation prescribed under section 926, the Attorney General shall— (A) if the violation is not a result of gross negligence by the licensed dealer— (i) in the case of the 1st such violation by the licensed dealer, if not preceded by a violation to which subparagraph (B) applies, transmit to the licensed dealer a written notice specifying the violation, which shall include a copy of the provision of law or regulation violated and a plan for how to cure the violation; (ii) in the case of the 2nd such violation by the licensed dealer, if not preceded by a violation to which subparagraph (B) applies, impose a civil money penalty in an amount that is not less than $2,500 and not more than $20,000; (iii) in the case of the 3rd such violation by the licensed dealer, if not preceded by a violation to which subparagraph (B) applies, suspend the license to deal in firearms issued to the licensed dealer under this chapter until the violation ceases; (iv) in the case of the 4th such violation by the licensed dealer, whether or not preceded by a violation to which subparagraph (B) applies, revoke the license; or (v) in the case of any such violation by the licensed dealer, if preceded by a violation to which subparagraph (B) applies, apply the penalty authorized under this subsection that is 1 level greater in severity than the level of severity of the penalty most recently applied to the licensed dealer under this subsection; or (B) if the violation is a result of such gross negligence— (i) in the case of the 1st such violation by the licensed dealer, impose a civil money penalty in an amount that is not less than $2,500 and not more than $20,000; (ii) in the case of the 2nd such violation by the licensed dealer— (I) impose a civil money penalty in an amount equal to $20,000; (II) suspend the license to deal in firearms issued to the licensed dealer under this chapter until the violation ceases; or (III) revoke the license; or (iii) in the case of the 3rd or subsequent such violation by the licensed dealer, apply the penalty authorized under this subsection that is 2 levels greater in severity than the level of severity of the penalty most recently applied to the licensed dealer under this subsection. (2) In the case of any such violation, if the Attorney General finds that the nature of the violation indicates that the continued operation of a firearms business by the licensed dealer presents an imminent risk to public safety, the Attorney General shall, notwithstanding paragraph (1), immediately suspend the license to deal in firearms issued to the licensed dealer under this chapter and secure the firearms inventory of the licensed dealer, until the violation ceases. . 24. Removal of bar on civil proceedings if criminal proceedings terminated Section 923(f) of title 18, United States Code, is amended by striking paragraph (4). 25. Repeal of certain limitations (a) Limitations related to use of firearms trace data (1) The matter under the heading Bureau of Alcohol, Tobacco, Firearms and Explosives—Salaries and Expenses 18 U.S.C. 923 Public Law 112–55 (2) The 6th proviso under the heading Bureau of Alcohol, Tobacco, Firearms and Explosives—Salaries and Expenses 18 U.S.C. 923 Public Law 111–117 beginning in fiscal year 2010 and thereafter in fiscal year 2010 (3) The 6th proviso under the heading Bureau of Alcohol, Tobacco, Firearms and Explosives—Salaries and Expenses 18 U.S.C. 923 Public Law 111–8 beginning in fiscal year 2009 and thereafter in fiscal year 2009 (4) The 6th proviso under the heading Bureau of Alcohol, Tobacco, Firearms and Explosives—Salaries and Expenses 18 U.S.C. 923 Public Law 110–161 beginning in fiscal year 2008 and thereafter in fiscal year 2008 (5) The 6th proviso under the heading Bureau of Alcohol, Tobacco, Firearms and Explosives—Salaries and Expenses 18 U.S.C. 923 Public Law 109–108 with respect to any fiscal year (6) The 6th proviso under the heading in title I of division B of the Consolidated Appropriations Act, 2005 ( 18 U.S.C. 923 Public Law 108–447 with respect to any fiscal year (7) Section 644 of title VI of division J of the Consolidated Appropriations Resolution, 2003 ( 5 U.S.C. 552 Public Law 108–7 or any other Act with respect to any fiscal year (b) Limitations relating to consolidating and centralizing records The matter under the heading Bureau of Alcohol, Tobacco, Firearms and Explosives—Salaries and Expenses 18 U.S.C. 923 Public Law 112–55 or hereafter (c) Requirement To destroy instant criminal background check records within 24 Section 511 of the Consolidated and Further Continuing Appropriations Act, 2012 ( 18 U.S.C. 922 Public Law 112–55 (1) by striking for— (1) (2) by striking the semicolon and all that follows and inserting a period. 26. Authority to hire additional industry operation investigators for BATFE The Attorney General may hire 650 Industry Operation Investigators for the Bureau of Alcohol, Tobacco, Firearms and Explosives, to be distributed among the various field divisions to match the number and distribution of persons licensed under chapter 44 27. Report on implementation of this Act Within 2 years after the date of the enactment of this Act, the Attorney General shall submit to the Congress and publish publicly on the website of the Department of Justice a written report on the implementation of this Act and the amendments made by this Act, including any steps needed to complete the implementation, which shall identify any additional resources that are required to conduct regular inspections under chapter 44 28. Annual licensed dealer inspections report and analysis Within 2 years after the date of enactment of this Act, and annually thereafter, the Attorney General shall submit to the Congress and publish publicly on the website of the Department of Justice, a written report which states— (1) the number of inspections conducted of Type 01, 02, and 07 Federal firearm licensees (dealers, pawnbrokers, and manufacturers) in the preceding 24 months, by each field division of the Bureau of Alcohol, Tobacco, Firearms and Explosives (in this section referred to as the BATFE (2) the number of security inspections prompted by dealer reports of lost or stolen firearms, and the number of follow-up inspections conducted 6 months after an inspection revealing a violation; (3) the average time spent on high risk, non-high risk, security, and follow up inspections; and (4) an analysis of the most frequently cited violations and corrective actions or penalties imposed in each instance, including— (A) the number of licenses recommended to be suspended or revoked; (B) the number of licensees sent notices of suspension or revocation; (C) the number of hearings requested by licensees on receipt of notice of suspension or revocation; (D) the number of suspension or revocation hearings initiated in a prior 12-month period that remain ongoing during the 12-month period covered by the report; and (E) the decision ultimately rendered in each such matter by the Director of the BATFE. 29. Deadline for issuance of final regulations Within two years after the date of enactment of this Act, the Attorney General shall prescribe, in final form, all regulations required to carry out this Act and the amendments made by this Act.

Summary: Federal Firearm Licensee Act This bill makes various changes to the federal statutory framework governing the sale or disposition of firearms by federally licensed dealers, importers, and manufacturers (i.e., federal firearms licensees, or FFLs). Specifically, the bill establishes new requirements, including for FFLs to secure their business premises and conduct physical checks of their business inventories. It also expands the recordkeeping and reporting requirements with which FFLs must comply; broadens the authority of the Bureau of Alcohol, Tobacco, Firearms and Explosives to administer federal firearms laws and investigate violations; and increases penalties on FFLs for violations.