235 
‘‘(m)(1) Each licensed dealer shall annually certify to 
the Attorney General that each premises from which the 
licensed dealer conducts business subject to license under 
this chapter is in compliance with the regulations pre-
scribed under section 926(d), and include with the certifi-
cation the results of a reconciliation of the firearms inven-
tory of the licensed dealer with the firearms inventory at 
the time of the most recent prior certification (if any) 
under this paragraph, including a report of any missing 
firearms. 
‘‘(2) With respect to a violation of paragraph (1), the 
Attorney General may, after notice and opportunity for 
a hearing— 
‘‘(A) suspend, until the violation is corrected, 
the license issued to the licensee under this chapter 
that was used to conduct the firearms transfer; and 
‘‘(B) impose a civil money penalty of not more 
than $5,000 on a licensed dealer who fails to comply 
with paragraph (1).’’. 
(2) TRANSITION RULE.—The amendment made 
by paragraph (1) of this subsection shall not apply 
to a person who, on the date of enactment of this 
Act, is a licensed dealer (as defined in section 
921(a)(11) of title 18, United States Code), until 
the end of the 1-year period that begins with the 
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236 
date person complies with subsection (b)(2) of this 
section. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall take effect 1 year after the date of enact-
ment of this Act. 
SEC. 702. INSPECTIONS. 
(a) ELIMINATION OF LIMIT ON ANNUAL INSPEC-
TIONS OF LICENSEES.—Section 923(g)(1)(B)(ii) of title 
18, United States Code, is amended— 
(1) by striking the em dash and all that follows 
through ‘‘(II)’’; and 
(2) by striking ‘‘licensee.’’ and inserting ‘‘li-
censee’’. 
(b) MANDATED ANNUAL INSPECTIONS
OF HIGH 
RISK LICENSED DEALERS, TRIENNIAL INSPECTIONS OF 
OTHER LICENSED DEALERS.—Section 923(g)(1) of title 
18, United States Code, is amended by adding at the end 
the following: 
‘‘(E)(i) The Attorney General shall, without 
such reasonable cause or warrant— 
‘‘(I) annually inspect or examine the inven-
tory, records, and business premises of each li-
censed dealer whom the Attorney General deter-
mines is a high-risk dealer (based on the con-
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237 
siderations used to do so as of the date of the 
enactment of this sentence); and 
‘‘(II) triennially inspect or examine the in-
ventory, records, and business premises of any 
other licensed dealer that the Attorney General 
determines is not a high-risk dealer. 
‘‘(ii) Not later than 180 days after the date of 
an inspection under this subparagraph reveals a vio-
lation of this section or any regulation prescribed 
under this chapter, the Attorney General shall con-
duct an inspection to determine whether such viola-
tion has been cured.’’. 
(c) AUTHORITY TO HIRE ADDITIONAL INDUSTRY 
OPERATION INVESTIGATORS FOR ATF.— 
(1) IN GENERAL.—The Attorney General may 
hire 650 industry operation investigators for the Bu-
reau of Alcohol, Tobacco, Firearms and Explosives, 
in addition to any personnel needed to carry out this 
title and the amendments made by this title. 
(2) AUTHORIZATION
OF
APPROPRIATIONS.— 
There are authorized to be appropriated to the At-
torney General such sums as are necessary to carry 
out paragraph (1). 
SEC. 703. EMPLOYEE BACKGROUND CHECKS. 
(a) REQUIREMENTS.— 
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(1) BACKGROUND
CHECK
REQUIRED
BEFORE 
FIREARM POSSESSION BY DEALER EMPLOYEE.—Sec-
tion 923(g) of title 18, United States Code, as 
amended by section 709 of this Act, is amended by 
adding at the end the following: 
‘‘(10) A licensed dealer may not allow an employee 
of the licensed dealer to possess a firearm at a premises 
from which the licensed dealer conducts business subject 
to license under this chapter unless— 
‘‘(A) the licensed dealer has contacted the na-
tional instant criminal background check system es-
tablished under section 103 of the Brady Handgun 
Violence Prevention Act for information about 
whether it would be unlawful for the individual to 
receive a firearm; and 
‘‘(B) the system has notified the licensee that 
the information available to the system does not 
demonstrate that the receipt of a firearm by the in-
dividual would violate subsection (g) or (n) of sec-
tion 922 or State law.’’. 
(2) BACKGROUND CHECKS REQUIRED BEFORE 
ISSUANCE OR RENEWAL OF DEALER LICENSE.—Sec-
tion 923(c) of title 18, United States Code, is 
amended by inserting after the 1st sentence the fol-
lowing: ‘‘Notwithstanding the preceding sentence, 
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the Attorney General may not issue or renew a li-
cense to deal in firearms unless the Attorney Gen-
eral has contacted the national instant criminal 
background check system established under section 
103 of the Brady Handgun Violence Prevention Act 
for information about whether it would be unlawful 
for any employee of the applicant for the license or 
renewal, identified by the applicant as having the re-
sponsibility to receive a firearm, for information 
about whether it would be unlawful for the employee 
to receive a firearm, and the system has notified the 
Attorney General that the information available to 
the system does not demonstrate that the receipt of 
a firearm by the employee would violate subsection 
(g) or (n) of section 922 or the law of the State in 
which the business premises of the applicant subject 
to the license is located.’’. 
(3) EFFECTIVE DATE.—The amendments made 
by this subsection shall take effect on the date that 
is 1 year after the date of enactment of this Act. 
(b) AUTHORITY OF NICS SYSTEM TO RESPOND TO 
LICENSED DEALER REQUEST
FOR CRIMINAL BACK-
GROUND CHECK OF EMPLOYEE OR PROSPECTIVE EM-
PLOYEE.—Section 103(b) of the Brady Handgun Violence 
Prevention Act (34 U.S.C. 40901(b)) is amended by add-
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ing at the end the following: ‘‘The Attorney General shall 
ensure that the system responds to any request received 
by the system from a licensed dealer for information on 
whether receipt of a firearm by an employee or prospective 
employee of the licensed dealer would violate such section 
922 or State law.’’. 
SEC. 704. GUN STORE THEFTS. 
Section 923(g)(6) of title 18, United States Code, is 
amended— 
(1) by inserting ‘‘(A)’’ after ‘‘(6)’’; and 
(2) by adding at the end the following: 
‘‘(B)(i) Not later than 30 days after the date on 
which the Attorney General receives a report from a li-
censed dealer pursuant to subparagraph (A) of this para-
graph 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 may include 
an inspection of the measures taken to implement the se-
curity plan submitted by the licensed dealer pursuant to 
subsection (d)(1)(G). 
‘‘(ii) On completion of the security inspection, the At-
torney 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 
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241 
‘‘(II) recommendations for improving security 
of the premises involved. 
‘‘(iii) Not later than 180 days after the date on which 
the Attorney General conducts an investigation under this 
subparagraph that reveals a violation of any security re-
quirement prescribed under section 926(d), the Attorney 
General shall conduct another investigation to determine 
whether the violation has been cured.’’. 
SEC. 705. CIVIL ENFORCEMENT. 
Section 923 of title 18, United States Code, as 
amended by section 701(c)(1) of this Act, is amended by 
adding at the end the following: 
‘‘(n) In the case of a licensed dealer who the Attorney 
General has found to be in violation of a regulation pre-
scribed under this chapter, to not have implemented a cor-
rective action required by the Attorney General at the 
completion of a security inspection conducted under sub-
section (g)(6)(B)(i) of this section within 30 days after 
the date of the inspection, or to be in violation of sub-
section (g)(8) of this section— 
‘‘(1) 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 viola-
tion of the law or regulation by the li-
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censed dealer, if not preceded by a viola-
tion 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 viola-
tion 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 viola-
tion by the licensed dealer, if not preceded 
by a violation to which subparagraph (B) 
applies, suspend the license to deal in fire-
arms issued to the licensed dealer under 
this chapter until the violation ceases; 
‘‘(iv) in the case of the 4th such viola-
tion by the licensed dealer, whether or not 
preceded by a violation to which subpara-
graph (B) applies, revoke that license; or 
‘‘(v) in the case of any such violation 
by the licensed dealer, if preceded by a vio-
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lation to which subparagraph (B) applies, 
apply the penalty authorized under this 
subsection that is 1 level greater in sever-
ity 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 viola-
tion 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 viola-
tion by the licensed dealer— 
‘‘(I) impose a civil money penalty 
in an amount equal to $20,000; or 
‘‘(II) suspend the license to deal 
in firearms issued to the licensed deal-
er under this chapter until the viola-
tion ceases; or 
‘‘(III) revoke that license; or 
‘‘(iii) in the case of the 3rd or subse-
quent such violation by the licensed dealer, 
apply the penalty authorized under this 
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subsection that is 1 or 2 levels greater in 
severity than the level of severity of the 
penalty most recently applied to the li-
censed dealer under this subsection; and 
‘‘(2) in the case of any such violation, if the At-
torney 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, not-
withstanding paragraph (1), immediately suspend 
the license to deal in firearm issued to the licensed 
dealer under this chapter and secure the firearms in-
ventory of the licensed dealer, until the violation 
ceases.’’. 
SEC. 706. NO EFFECT ON STATE LAWS GOVERNING DEAL-
ING IN FIREARMS. 
Nothing in this title shall be interpreted to preclude 
a State from imposing or enforcing any requirement relat-
ing to dealing in firearms (as defined in section 921(a)(3) 
of title 18, United States Code). 
SEC. 707. LOST AND STOLEN REPORTING REQUIREMENT. 
(a) IN GENERAL.—Section 922 of title 18, United 
States Code, as amended by section 601 of this Act, is 
amended by adding at the end the following: 
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‘‘(ee) The owner of a firearm shall report the theft 
or loss of the firearm, not later than 48 hours after the 
owner becomes aware of the theft or loss, to the Attorney 
General and to the appropriate local authorities.’’. 
(b) CIVIL PENALTY.—Section 924 of title 18, United 
States Code, is amended by adding at the end the fol-
lowing: 
‘‘(q) Whoever violates section 922(ee) shall be fined 
not more than $1,000 in a civil proceeding.’’. 
SEC. 708. REPORT ON IMPLEMENTATION. 
Not later than 2 years after the date of enactment 
of this Act, the Attorney General shall submit to the Con-
gress a written report on the implementation of this Act 
and the amendments made by this title, including any re-
maining steps that are necessary to complete the imple-
mentation, which shall also identify any additional re-
sources that are required to conduct regular inspections 
and to ensure that this title and the amendments made 
by this title are enforced against noncompliant firearm 
dealers in a timely manner. 
SEC. 709. ENHANCED RECORD KEEPING REQUIREMENTS. 
Section 923(g) of title 18, United States Code, is 
amended by adding at the end the following: 
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