I 
119TH CONGRESS 
2D SESSION 
H. R. 7135 
To improve the licensing requirements for the retail sale of firearms, and 
for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 16, 2026 
Mr. FROST introduced the following bill; which was referred to the Committee 
on the Judiciary 
A BILL 
To improve the licensing requirements for the retail sale 
of firearms, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Prevent Illegal Gun 
Resales Act’’. 
SEC. 2. INCREASED LICENSING FEES. 
Section 923 of title 18, United States Code, is 
amended— 
(1) in subsection (a)— 
(A) in paragraph (1)— 
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(i) in subparagraph (A), by striking 
‘‘$1,000’’ and inserting ‘‘$2,000’’; 
(ii) in subparagraph (B), by striking 
‘‘$50’’ and inserting ‘‘$2,000’’; and 
(iii) in subparagraph (C), by striking 
‘‘$10’’ and inserting ‘‘$1,000’’; 
(B) in paragraph (2)— 
(i) in subparagraph (A), by striking 
‘‘$1,000’’ and inserting ‘‘$2,000’’; and 
(ii) in subparagraph (B), by striking 
‘‘$50’’ and inserting ‘‘$2,000’’; and 
(C) in paragraph (3)— 
(i) in subparagraph (A), by striking 
‘‘$1,000’’ and inserting ‘‘$2,000’’; and 
(ii) in subparagraph (B)— 
(I) by striking ‘‘$200’’ and in-
serting ‘‘$400’’; and 
(II) by striking ‘‘$90’’ and in-
serting ‘‘$180’’; and 
(2) in subsection (b), by striking ‘‘$10’’ and in-
serting ‘‘$20’’. 
SEC. 3. ANTI-TRAFFICKING PROCEDURES. 
(a) DEALER’S LICENSE APPLICATION REQUIRED TO 
SPECIFY BUSINESS PRACTICES TO PREVENT DIVERSIONS 
FROM LAWFUL COMMERCE.—Section 923(d)(1)(G) of 
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title 18, United States Code, is amended to read as fol-
lows: 
‘‘(G) in the case of an application to be licensed 
as a dealer— 
‘‘(i) the applicant certifies that secure gun 
storage or safety devices will be available at any 
place in which firearms are sold under the li-
cense to persons who are not licensees (subject 
to the exception that in any case in which a se-
cure gun storage or safety device is temporarily 
unavailable because of theft, casualty loss, con-
sumer sales, backorders from a manufacturer, 
or any other similar reason beyond the control 
of the licensee, the dealer shall not be consid-
ered to be in violation of the requirement under 
this subparagraph to make available such a de-
vice); 
‘‘(ii) the applicant submits with the appli-
cation a specification of the firearms business 
practices, policies, and procedures of the appli-
cant; and 
‘‘(iii) the Attorney General determines that 
the specification describes policies, practices, 
and procedures comply with regulations pre-
scribed under section 926(d).’’. 
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(b) REGULATIONS TO REQUIRE LICENSED DEALERS 
TO IMPLEMENT BUSINESS PRACTICES, POLICIES, AND 
PROCEDURES TO PREVENT BUSINESS INVENTORY FIRE-
ARMS, AMMUNITION, AND ACCESSORIES FROM BEING DI-
VERTED FROM LAWFUL COMMERCE, AND PREVENT BUSI-
NESS INVENTORY FIREARMS FROM BEING TRANSFERRED 
TO A STRAW PURCHASER.—Section 926 of such title is 
amended by adding at the end the following: 
‘‘(d) The Attorney General shall prescribe regulations 
requiring licensed dealers to implement business practices, 
policies, and procedures sufficient to prevent firearms, am-
munition, and accessories in the business inventory of a 
licensed dealer from being diverted from lawful commerce, 
and to prevent business inventory firearms of a licensed 
dealer from being transferred to a straw purchaser, and 
shall do so in consultation with government entities with 
expertise similar to that of the White House Office of Gun 
Prevention.’’. 
(c) PENALTIES FOR FAILURE TO IMPLEMENT BUSI-
NESS PRACTICES, POLICIES, AND PROCEDURES SPECI-
FIED IN APPROVED DEALER’S LICENSE APPLICATION.— 
Section 924 of such title is amended by adding at the end 
the following: 
‘‘(q) The Attorney General may impose a civil money 
penalty of not more than $5,000 on, and may suspend 
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the license issued under section 923 to, any person who 
is a licensed dealer who fails to comply with any practice, 
policy, or procedure specified in the application approved 
under section 923 of the person to become a licensed deal-
er.’’. 
SEC. 4. PREVENTING FIREARM TRAFFICKING. 
(a) DUTIES
OF
FIREARM
LICENSEES.—Section 
923(g) of title 18, United States Code, is amended— 
(1) in paragraph (1)(B)— 
(A) by striking ‘‘or’’ at the end of clause 
(ii); and 
(B) by redesignating clause (iii) as clause 
(iv) and inserting after clause (ii) the following: 
‘‘(iii) for ensuring compliance with the regula-
tions prescribed under section 926(d); or’’; 
(2) in paragraph (3)(B)— 
(A) by inserting ‘‘a firearm involved in a 
crime or’’ after ‘‘thereof regarding’’; 
(B) by striking ‘‘, and shall destroy each 
such form and any record of the contents there-
of no more than 20 days from the date such 
form is received’’ and inserting ‘‘and shall re-
tain each such form and any record of the con-
tents of the form for 180 days after the date 
the form is received’’; and 
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(C) by striking the 2nd sentence; and 
(3) by striking paragraph (7) and inserting the 
following: 
‘‘(7)(A) Each licensee shall respond immediately to, 
and in no event later than 24 hours after the receipt of, 
a request by the Attorney General for information con-
tained in the records required to be kept by this chapter 
as may be required for determining the disposition of 1 
or more firearms in the course of a bona fide criminal 
investigation. The requested information shall be provided 
orally or in writing, as the Attorney General may require. 
The Attorney General shall implement a system whereby 
the licensee can positively identify and establish that an 
individual requesting information via telephone is em-
ployed by and authorized by the agency to request the in-
formation. 
‘‘(B) Each licensee shall, in the absence of unique 
and special circumstances and approved in writing by the 
Attorney General, maintain records of all such crime gun 
trace requests for firearms disposed of by the licensee 
within the preceding 3 years, with copies of the trans-
action records for the firearms in the possession of the 
licensee, if any, to review before the transfer of any fire-
arm. 
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‘‘(C) Each licensee shall review all records of crime 
gun trace requests before transferring any firearm, and 
report sales or other dispositions whenever the licensee 
sells or otherwise disposes of any firearm to an unlicensed 
person to whom a crime gun has been traced. The report 
shall be prepared on a form specified by the Attorney Gen-
eral and forwarded to the office specified thereon and to 
the department of State police or State law enforcement 
agency of the State or local law enforcement agency of 
the local jurisdiction in which the sale or other disposition 
took place, not later than the close of business on the day 
that the licensee determines that the sale or other disposi-
tion occurs. 
‘‘(D)(i) Each licensed dealer shall update the prac-
tices, policies, and procedures referred to in section 
923(d)(1)(G)(ii) of the licensee, whenever— 
‘‘(I) the licensee reports to the Attorney Gen-
eral 5 or more lost or stolen firearms in any period 
of 12 consecutive months; or 
‘‘(II) 5 or more firearms that were used in a 
crime under Federal, State, or local law within 3 
years after the last known retail sale of the firearm 
are traced to the licensee within any such 12-month 
period. 
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‘‘(ii) Each licensed dealer shall maintain physical 
records of costs incurred to implement and update the 
business practices, policies, and procedures, including the 
installation of audio and video surveillance of firearms 
transactions, and the implementation of an electronic 
record keeping system, or of physical security to prevent 
loss or theft of firearm inventory, and shall make the 
records available for inspection on the premises covered 
by the license until the licensee ceases to engage in the 
business of selling firearms.’’. 
(b) DUTIES OF THE ATTORNEY GENERAL.—The At-
torney General shall— 
(1) develop, draft, and distribute to persons li-
censed under chapter 44 of title 18, United States 
Code, materials setting forth best business practices, 
policies, and procedures to prevent the diversion of 
firearms inventory from lawful commerce, and from 
time to time revise the materials as appropriate; and 
(2) during the 3 fiscal years that first begin 
after the date of the enactment of this Act, prioritize 
for compliance inspections those firearms dealers 
that have not been inspected within the then pre-
ceding fiscal year with a high number of crime gun 
traces relative to other firearms dealers. 
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SEC. 5. MENS REA REQUIREMENT FOR VIOLATIONS OF 
RULES APPLICABLE TO ONLY LICENSEES. 
Section 924(a)(1)(D) of title 18, United States Code, 
is amended by striking ‘‘willfully’’ and inserting ‘‘know-
ingly’’. 
SEC. 6. FIREARMS TRAFFICKING OFFENSE. 
(a) IN GENERAL.—Section 933 of title 18, United 
States Code, is amended to read as follows: 
‘‘§ 933. Trafficking in firearms 
‘‘(a) PROHIBITIONS.— 
‘‘(1) IN GENERAL.—It shall be unlawful for any 
person to— 
‘‘(A) ship, transport, transfer, cause to be 
transported, or otherwise dispose of 2 or more 
firearms to another person in or affecting inter-
state or foreign commerce, if the person knows 
or has reasonable cause to believe that the use, 
carrying, or possession of a firearm by such 
other person would constitute a felony (as de-
fined in section 932(a)); 
‘‘(B) receive from another person 2 or 
more firearms in or affecting interstate or for-
eign commerce, if the person knows or has rea-
sonable cause to believe that the receipt would 
constitute a felony; or 
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‘‘(C) attempt or conspire to commit con-
duct described in paragraph (1) or (2). 
‘‘(2) LICENSEES.—It shall be unlawful for any 
licensee to ship, transport, transfer, cause to be 
transported, or otherwise dispose of any firearm to 
another licensee if the licensee knows or has reason-
able cause to believe that— 
‘‘(A) in the preceding year, 5 or more fire-
arms that were used in a crime under Federal, 
State, or local law within 3 years after the last 
known retail sale of the firearms have been 
traced to such other licensee; 
‘‘(B) in the preceding year, to the knowl-
edge of the licensee, such other licensee has 
since failed to implement or update business 
practices to prevent firearm trafficking or straw 
purchasing; 
‘‘(C) such other licensee lacks adequate se-
curity to prevent loss or theft of firearms or 
ammunition from the inventory of such other li-
censee; or 
‘‘(D) in the most recent inspection of such 
other licensee under this chapter, the Attorney 
General has found 3 or more violations relating 
to failures to timely or accurately record infor-
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mation in firearm acquisition and disposition 
records. 
‘‘(b) AFFIRMATIVE DEFENSES.—It shall be an af-
firmative defense to a charge of violating— 
‘‘(1) subsection (a)(1) of this section, that the 
licensee took all reasonable steps, including the im-
plementation of and updates to business practices 
pursuant to subsection 923(g)(7)(D), to prevent the 
diversion of inventory firearms from lawful com-
merce; and 
‘‘(2) subsection (a)(2) of this section, that the 
licensee took all reasonable steps to comply with 
subsection (a)(2) and failed to discover facts that 
would render disposition of firearms to a licensee 
unlawful under subsection (a)(2) only as the direct 
result of a violation of Federal law by the licensee. 
‘‘(c) PENALTIES.— 
‘‘(1) IN
GENERAL.—Any person who violates 
subsection (a)(1) shall be fined under this title, im-
prisoned for not more than 15 years, or both. 
‘‘(2) LICENSEES.— 
‘‘(A) CIVIL PENALTIES.—Any licensee who 
violates subsection (a)(2) shall, after notice and 
opportunity for a hearing, disgorge all profits 
from the transfer of the firearms that are the 
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subject of the violation, and the court may im-
pose on the licensee a civil money penalty equal 
to the greater of— 
‘‘(i) $10,000 for each firearm in-
volved, or $50,000 with respect to any 
such firearm that was subsequently used in 
a crime under Federal, State, or local law; 
or 
‘‘(ii) the total amount expended by the 
Attorney General in the preceding 3 fiscal 
years to trace firearms used in a crime 
under Federal, State, or local law, multi-
plied by the percentage of the firearms 
traced to the licensee that were recovered 
during that period. 
‘‘(B) LICENSE
SUSPENSION
OR
REVOCA-
TION.—In addition to any penalty under sub-
paragraph (A), the Attorney General may, after 
notice and opportunity for a hearing, suspend 
or revoke the license issued to the licensee 
under this chapter in the case of the first viola-
tion of this section and, in the case of any sub-
sequent violation, shall immediately revoke the 
license.’’. 
(b) DIRECTIVE TO SENTENCING COMMISSION.— 
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(1) IN
GENERAL.—Pursuant to its authority 
under section 994(p) of title 28, United States Code, 
the United States Sentencing Commission shall re-
view and, if appropriate, amend the Federal sen-
tencing guidelines and policy statements applicable 
to persons convicted of offenses under section 933 of 
title 18, United States Code (as added by subsection 
(a) of this section). 
(2) REQUIREMENTS.—In carrying out this sec-
tion, the Commission shall review the penalty struc-
ture that the guidelines provide based on the number 
of firearms involved in the offense and determine 
whether any changes to the penalty structure are ap-
propriate in order to reflect the intent of the Con-
gress that the penalties reflect the gravity of the of-
fense, the number of trafficked firearms purchased 
by or from the defendant, the extent of the knowl-
edge of the defendant about the overall scheme to 
traffic firearms, the amount of money or nonmone-
tary compensation provided to the defendant for the 
participation of the defendant, and the culpability of 
the defendant, including whether the defendant is a 
licensed manufacturer, importer, or dealer and, as 
mitigating factors, whether the defendant is a rel-
ative or current or former intimate partner of an-
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other individual involved in a conspiracy to traffic 
firearms, is a domestic violence survivor, or has been 
otherwise exploited by personal affection, fear of re-
prisal. or economic need to commit an offense under 
section 933 of title 18, United States Code. 
(c) DIRECTIVE TO ATF.— 
(1) DUTY TO INVESTIGATE.—The Director of 
the Bureau of Alcohol, Tobacco, Firearms and Ex-
plosives shall investigate the source of firearms traf-
ficked in violation of section 923 or 933 of title 18, 
United States Code, and in particular, whether the 
source is engaged in the business of importing, man-
ufacturing, or dealing in firearms in violation of sec-
tion 922(a)(1) of such title, and refer prosecutions 
of the source to the Attorney General. The Director 
shall assess whether regulations, informal guidance, 
licensee resources regarding trafficking, and the con-
duct of a firearms transferee would indicate, to a 
reasonable person, that the transferee may be vio-
lating section 932 or 933 of such title, and revise 
and re-issue the materials developed under section 
4(b) of this Act, accordingly. 
(2) 
GUN
TRAFFICKING
AWARENESS
PRO-
GRAM.—The Director shall establish a program, to 
be known as the ‘‘Gun Trafficking Awareness Pro-
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gram’’, in which licensees under chapter 44 of title 
18, United States Code, who have transferred fire-
arms to an individual who has violated section 
932(b) of such title, but who lack the mens rea to 
have committed a violation of section 933 of such 
title, may be enrolled for purposes of preventing fu-
ture such violations. The program shall include, at 
a minimum— 
(A) electronic or in-person training of such 
a licensee and all employees of the licensee who 
are responsible for handling firearms to identify 
signs of straw purchasing or gun trafficking; 
(B) the adoption by such a licensee of elec-
tronic record keeping and collation of records 
relevant to trafficking, including crime gun 
trace requests and multiple purchase reports; 
(C) a requirement that such a licensee who 
operates retail premises from which firearms 
are transferred maintain audio and video sur-
veillance of all areas of the premises; and 
(D) inspections of such a licensee, as ap-
propriate, and not more frequently than quar-
terly, for a period of 1 year, to ensure compli-
ance with such chapter. 
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(d) DIRECTIVE
TO
THE ATTORNEY GENERAL.— 
Within 2 years after the date of the enactment of this Act 
and annually thereafter, the Attorney General shall submit 
to the Committee on the Judiciary of the Senate and the 
Committee on the Judiciary of the House of Representa-
tives a report containing the following information: 
(1) For the preceding 12-month period— 
(A) the number of investigations initiated 
for violations of section 933 of title 18, United 
States Code; 
(B) the number of individuals, entities, 
and Federal firearm licensees charged crimi-
nally or civilly for the violations; 
(C) the number of individuals, entities, and 
Federal firearm licensees indicted for the viola-
tions; 
(D) the number of investigations referred 
to the Attorney General by the Bureau of Alco-
hol, Tobacco, Firearms and Explosives that did 
not result in criminal or civil charges; and 
(E) the number of licensees enrolled in, 
and the number of licenses determined to have 
successfully completed, the program established 
under subsection (c)(2). 
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(2) To the extent the information is available, 
the average length of the sentences of imprisonment 
and average and mean monetary fines imposed on 
persons convicted of violations of section 933 of title 
18, United States Code, during the preceding 12- 
month period. 
(3) A narrative describing the trafficking 
schemes prosecuted in the preceding 12-month pe-
riod, including the sources of firearms, the roles of 
various defendants in the scheme, the number of 
firearms trafficked, and a description of any traf-
ficking practices or trends common among various 
firearm trafficking schemes. 
SEC. 7. ENHANCED REGULATION OF HIGH RISK DEALERS. 
Chapter 44 of title 18, United States Code, is amend-
ed by adding at the end the following: 
‘‘§ 935. Regulation of high risk dealers 
‘‘(a) IN GENERAL.—On a determination by the At-
torney General that a licensed dealer is a high risk dealer, 
the Attorney General shall— 
‘‘(1) require the dealer to permanently alter the 
business practices of the dealer or make physical im-
provements to the firearms business premises of the 
dealer to reduce the diversion of firearms from the 
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firearms inventory of the dealer, which requirements 
shall include requiring the dealer to— 
‘‘(A) adopt electronic acquisition and dis-
position record keeping; 
‘‘(B) provide the National Tracing Center 
with electronic access to all records required to 
be kept under this chapter that are possessed 
by the dealer; 
‘‘(C) make video and audio recordings of 
all firearms transactions, and maintain the re-
cordings for 360 days; and 
‘‘(D) retain for more than 360 days, any 
video or audio recording of a firearm trans-
action that was the subject of a trace request; 
and 
‘‘(2) not less frequently than biennially, inspect 
or examine the inventory, records, and business 
premises of the dealer without reasonable cause or 
warrant. 
‘‘(b) CESSATION.—On application of a high risk deal-
er, on a form prescribed by the Attorney General, and ap-
proval of the application by the Attorney General in writ-
ing, the inspections of the dealer under subsection (a)(2) 
shall cease— 
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‘‘(1) on certification by the Attorney General 
that the dealer— 
‘‘(A) has permanently altered the business 
practices of the dealer or made the physical im-
provements required under subsection (a)(1); 
and 
‘‘(B) will maintain the practices and im-
provements until otherwise notified by the At-
torney General; and 
‘‘(2) if, on 2 separate and consecutive occasions 
at least 6 months apart, the Attorney General has 
inspected and examined the books and records of the 
dealer and, during that period, the dealer has not 
been notified of any violations of Federal, State, or 
local law. 
‘‘(c) NOTICE.—The Attorney General shall inform 
high risk dealers in writing of their obligations under this 
section. 
‘‘(d) DEFINITION.—The term ‘high risk dealer’ 
means any dealer identified by the Attorney General as 
lacking sufficient policies, procedures, or controls to pre-
vent the diversion from lawful commerce of firearms or 
ammunition in the firearms business inventory of the deal-
er or transferred by the dealer, and firearms possessed 
by the dealer that are to be destroyed, and, thus, necessi-
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tating enhanced regulation and enforcement including reg-
ular inspection and examination of the inventory, records, 
and premises of the firearms business of the dealer. The 
Attorney General shall so identify such a dealer if— 
‘‘(1) the Attorney General has issued to the 
dealer a report of violation or warning letter; 
‘‘(2) the dealer has been the subject of a warn-
ing conference with the Attorney General within the 
preceding 36 months; or 
‘‘(3) in the preceding 12 months, the dealer was 
the source of 2 or more firearms that were used in 
a crime under Federal, State, or local law within 36 
months after the last known retail sale of the fire-
arm.’’. 
SEC. 8. EFFECTIVE DATE. 
Sections 2 through 6 shall take effect on the date 
that is 180 days after the date of the enactment of this 
Act. 
Æ 
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