Firearm Industry Crime and Trafficking Accountability Act
Bill: H.R.8740 | Sponsor: Rep. Maloney, Carolyn B. (D-NY)
Policy area: Crime and Law Enforcement

Summary:
Firearm Industry Crime and Trafficking Accountability Act
This bill outlines certain requirements (and establishes related penalties for failure to comply with these requirements) for manufacturers or importers of firearms. For example, the bill generally requires each manufacturer or importer to create a monitoring database to retain essential facts about the criminal diversion or potential misuse of their firearms.

To establish reasonable controls on firearms manufacturers and 
                   importers, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Firearm Industry Crime and 
Trafficking Accountability Act''.

SEC. 2. FINDINGS.

    The Congress finds as follows:
            (1) The firearm industry has engaged in dangerous business 
        practices, flooding American communities with weapons of war 
        like AR-15s and other semiautomatic weapons. Despite these 
        practices, the firearm industry is not required to monitor its 
        distribution to ensure that its products are not used for 
        unlawful purposes.
            (2) A study conducted by the Bureau of Alcohol, Tobacco, 
        Firearms, and Explosives (ATF) found that 5 percent of licensed 
        dealers sell about 90 percent of guns used in crimes (also 
        known as ``crime guns''). Firearm manufacturers, through trace 
        data provided by the ATF, often know exactly which dealers and 
        distributors disproportionately sell these crime guns.
            (3) Despite these indicators of diversion, firearm 
        manufacturers have failed to adequately curtail their 
        distribution practices and sought to evade any responsibility 
        for preventing the widespread misuse of their products--
        rejecting ATF resources and failing to effect change at the top 
        of the distribution pyramid.
            (4) Firearm manufacturers also sell dangerous firearms to 
        distributors and retailers who, according to ATF data, can fail 
        to comply with Federal firearms law. The trace analysis of 
        2,000 firearms dealers cited by the ATF found that half of the 
        dealers sold firearms to customers without conducting the 
        background checks required by Federal law. Firearms dealers 
        often flouted Federal laws and regulations, sold weapons to 
        convicted felons and domestic abusers, lied to investigators, 
        and falsified records.

SEC. 3. REQUIREMENT TO CREATE REASONABLE CONTROLS AND MONITORING 
              SYSTEM.

    Each manufacturer or importer of firearms in or affecting 
interstate commerce shall implement reasonable controls to prevent, and 
create and maintain a monitoring database to retain essential facts 
concerning, the criminal diversion or potential misuse of their 
products.

SEC. 4. PROHIBITED ACTIVITIES.

    It shall be unlawful for any manufacturer or importer of firearms 
in or affecting interstate commerce to--
            (1) supply a firearm to a distributor or retailer of the 
        firearm, knowing or having reasonable cause to believe that the 
        distributor or retailer has failed to implement reasonable 
        controls or engaged in distribution, sales, or other practices 
        likely to result in a high risk of criminal diversion or 
        misuse;
            (2) fail to investigate or inquire as to the distribution 
        practices of such a distributor or retailer, knowing or having 
        reasonable cause to believe that the distributor or retailer 
        has failed to implement reasonable controls or engaged in 
        distribution, sales, or other practices likely to result in a 
        high risk of criminal diversion or misuse; or
            (3) supply a quantity of firearms to a State or 
        distribution area, knowing or having reasonable cause to 
        believe that the quantity exceeds the lawful demand for 
        firearms in the State or distribution area.

SEC. 5. REQUIRED ACTIVITIES.

    Each manufacturer or importer of firearms in or affecting 
interstate commerce shall--
            (1) report to the Director on any pattern, distribution, or 
        repeated instances of a distributor or retailer of a firearm 
        whom the firearm manufacturer or importer knows or has 
        reasonable cause to believe has failed to implement reasonable 
        controls or engaged in distribution, sales, or other practices 
        likely to result in a high risk of criminal diversion or 
        misuse;
            (2) report to the Director annually, in such form and 
        manner as the Director shall prescribe, all instances of 
        criminal diversion or misuse of a product distributed or sold 
        by the manufacturer or importer, as the case may be, of which 
        the manufacturer or importer, as the case may be, is aware, and 
        shall include in the report an itemization of the firearms 
        involved by category; and
            (3) keep for a period of 5 years all trace records, 
        relevant communications, and other relevant information 
        pertaining to the monitoring database of the manufacturer or 
        importer, as the case may be.

SEC. 6. EXEMPTIONS.

    (a) In General.--Sections 3 through 5 shall not apply to a 
manufacturer who manufactures fewer than 3,000 firearms per year.
    (b) Waiver Authority.--The Director may waive the applicability of 
such sections to a manufacturer who manufactures not more than 6,000 
firearms per year, on finding that the provision of such a waiver will 
not harm public safety, except that the Director may not provide such a 
waiver to a manufacturer who manufactures a semiautomatic firearm or 
any copy, duplicate, variant, or altered facsimile with the capability 
of a semiautomatic firearm.

SEC. 7. DEFINITIONS.

    In this Act:
            (1) ATF.--The term ``ATF'' means the Bureau of Alcohol, 
        Tobacco, Firearms, and Explosives.
            (2) Criminal diversion.--The term ``criminal diversion'' 
        means the unlawful sale or distribution of a firearm by, to, or 
        through a firearm trafficker, straw purchaser, or person 
        prohibited by law from possessing a firearm, and any transfer 
        or possession of a firearm in violation of law.
            (3) Director.--The term ``Director'' means the Director or 
        the Acting Director of ATF.
            (4) Essential facts.--The term ``essential facts'' means 
        crime gun trace data, information on distributor or retailer 
        compliance with ATF inspections, information on distributor or 
        retailer compliance with State inspections, where applicable, 
        information concerning distributor or retailer compliance with 
        applicable background check requirements with respect to 
        firearms sold by the manufacturer or importer, and such other 
        information as the Director may deem useful in preventing 
        criminal diversion or misuse of firearms.
            (5) Firearm.--The term ``firearm'' has the meaning given 
        the term in section 921(a)(3) of title 18, United States Code.
            (6) Importer.--The term ``importer'' has the meaning given 
        the term in section 921(a)(9) of title 18, United States Code.
            (7) Manufacturer.--The term ``manufacturer'' has the 
        meaning given the term in section 921(a)(10) of title 18, 
        United States Code.
            (8) Monitoring database.--The term ``monitoring database'' 
        means a system capable of incorporating and analyzing--
                    (A) information obtained from gun trace data, ATF 
                notifications, dealer inspections, and State and local 
                law enforcement notifications; and
                    (B) such other information as the Director may deem 
                important and useful.
            (9) Reasonable controls.--The term ``reasonable controls'' 
        means procedures or practices designed to prevent the unlawful 
        sale or distribution of a firearm, including by preventing such 
        a sale to a firearm trafficker, straw purchaser, person 
        prohibited by Federal or State law from possessing a firearm, 
        or person who the seller knows or has reasonable cause to 
        believe will use a firearm unlawfully or for self-harm.
            (10) Semiautomatic firearm.--The term ``semiautomatic 
        firearm'' means any repeating firearm which utilizes a portion 
        of the energy of a firing cartridge or shell to extract the 
        fired cartridge case or shell and chamber the next round, and 
        which requires a separate pull of the trigger to fire each 
        cartridge or shell.
            (11) Straw purchaser.--The term ``straw purchaser'' means a 
        person who, in connection with the acquisition or attempted 
        acquisition of a firearm, makes any false or fictitious oral or 
        written statement intended to conceal that the purchase is 
        being made on behalf of a third party, unless the acquisition 
        or attempted acquisition is for the purpose of making a bona 
        fide gift to a third party who is not prohibited by law from 
        possessing or receiving a firearm. For purposes of the 
        preceding sentence, a gift to a third party is not a bona fide 
        gift if the third party has offered or given the purchaser a 
        service or thing of value to acquire the firearm for the third 
        party.

SEC. 8. PENALTIES.

    (a) Administrative Remedies.--With respect to each violation of 
section 3, 4, or 5, the Director shall, after notice and opportunity 
for hearing, subject the violator to a civil penalty, in an amount to 
be determined by the Director which shall be--
            (1) in the case of the 1st such violation by the violator, 
        not less than $150,000 and not more than 1 percent of the gross 
        annual revenue of the violator;
            (2) in the case of the 2nd such violation, not less than 
        $300,000 and not more than 2 percent of the gross annual 
        revenue of the violator; or
            (3) in the case of the 3rd or subsequent such violation, 
        not less than $1,000,000 and not more than 6 percent of the 
        gross annual revenue of the violator.
    (b) Judicial Remedies in the Case of Knowing Violations.--
            (1) In general.--In the case of a violation of section 4 or 
        5 that the Director determines was committed knowingly, the 
        Director shall also bring a civil action against the violator 
        in the United States District Court for the District of 
        Columbia. If the Director proves the violation by a 
        preponderance of the evidence, the court shall order the 
        Director to place the violator under an ATF monitoring system 
        to prevent criminal diversion of the products of the violator, 
        for not more than 5 years.
            (2) License suspension for violation while subject to atf 
        monitoring system.--If the Director determines that, while 
        subject to such a monitoring system, the violator has knowingly 
        violated section 4 or 5, the Director may bring a civil action 
        in the United States District Court for the District of 
        Columbia. If the Director proves the violation by a 
        preponderance of the evidence, the court shall order the 
        Director to suspend for 3 months any license issued to the 
        violator under chapter 44 of title 18, United States Code.

SEC. 9. ADMINISTRATIVE PROVISIONS.

    (a) Request for Records.--On request of the Director, a 
manufacturer or importer of firearms shall provide the Director with 
such records as the Director determines will assist the Director in 
ensuring compliance with this Act.
    (b) Availability of Trace Data.--The Director may make available to 
a manufacturer or importer of firearms any data requested by the 
manufacturer or importer, as the case may be, from the National Tracing 
Center or the Director of Industry Operations.
    (c) Provision of Information to Other Federal Law Enforcement 
Agencies, or State or Local Governments.--On request of a Federal law 
enforcement agency, the Director shall provide information obtained 
under this Act to the agency, and may provide the information to State 
and local law enforcement authorities.

SEC. 10. ANNUAL REPORT TO CONGRESS.

    The Director shall submit to the Congress, and make easily 
accessible to the public on the website of the ATF, annual reports 
summarizing the information reported pursuant to section 5(2), which 
shall include copies of the reports made pursuant to section 5(2) and 
supporting economic analyses.

SEC. 11. TRADE SECRETS AND CONFIDENTIAL INFORMATION.

    This Act shall not be interpreted to require the disclosure of 
information that is exempt from public disclosure under section 552 of 
title 5, United States Code (commonly known as the ``Freedom of 
Information Act'').

SEC. 12. REGULATIONS.

    Within 18 months after the date of the enactment of this Act, the 
Director shall promulgate final regulations necessary to implement the 
preceding provisions of this Act, including regulations necessary to 
ensure that manufacturers and importers of firearms comply with 
sections 3 through 5. In promulgating regulations to enforce section 
4(3), the Director shall take into account factors such as population, 
reports of lost and stolen firearms, types of firearms used in crimes, 
firearms traced to distributors and retailers in other States, and 
firearm traces.

SEC. 13. EFFECTIVE DATE.

    The preceding provisions of this Act shall take effect on the date 
final regulations are promulgated under section 11.

SEC. 14. REPEAL OF CERTAIN LIMITATIONS ON THE BUREAU OF ALCOHOL, 
              TOBACCO, FIREARMS AND EXPLOSIVES.

    (a) Repeal of Certain Limitations on the Use of Database 
Information of the Bureau of Alcohol, Tobacco, Firearms and 
Explosives.--
            (1) The matter under the heading ``Bureau of Alcohol, 
        Tobacco, Firearms and Explosives--Salaries and Expenses'' in 
        title II of division B of the Consolidated and Further 
        Continuing Appropriations Act, 2012 (18 U.S.C. 923 note; Public 
        Law 112-55; 125 Stat. 609-610) is amended by striking the 6th 
        proviso.
            (2) The 6th proviso under the heading ``Bureau of Alcohol, 
        Tobacco, Firearms and Explosives--Salaries and Expenses'' in 
        title II of division B of the Consolidated Appropriations Act, 
        2010 (18 U.S.C. 923 note; Public Law 111-117; 123 Stat. 3128-
        3129) is amended by striking ``beginning in fiscal year 2010 
        and thereafter'' and inserting ``in fiscal year 2010''.
            (3) The 6th proviso under the heading ``Bureau of Alcohol, 
        Tobacco, Firearms and Explosives--Salaries and Expenses'' in 
        title II of division B of the Omnibus Appropriations Act, 2009 
        (18 U.S.C. 923 note; Public Law 111-8; 123 Stat. 574-576) is 
        amended by striking ``beginning in fiscal year 2009 and 
        thereafter'' and inserting ``in fiscal year 2009''.
            (4) The 6th proviso under the heading ``Bureau of Alcohol, 
        Tobacco, Firearms and Explosives--Salaries and Expenses'' in 
        title II of division B of the Consolidated Appropriations Act, 
        2008 (18 U.S.C. 923 note; Public Law 110-161; 121 Stat. 1903-
        1904) is amended by striking ``beginning in fiscal year 2008 
        and thereafter'' and inserting ``in fiscal year 2008''.
            (5) The 6th proviso under the heading ``Bureau of Alcohol, 
        Tobacco, Firearms and Explosives--Salaries and Expenses'' in 
        title I of the Science, State, Justice, Commerce, and Related 
        Agencies Appropriations Act, 2006 (18 U.S.C. 923 note; Public 
        Law 109-108; 119 Stat. 2295-2296) is amended by striking ``with 
        respect to any fiscal year''.
            (6) The 6th proviso under the heading ``Bureau of Alcohol, 
        Tobacco, Firearms and Explosives--Salaries and Expenses'' in 
        title I of division B of the Consolidated Appropriations Act, 
        2005 (18 U.S.C. 923 note; Public Law 108-447; 118 Stat. 2859-
        2860) is amended by striking ``with respect to any fiscal 
        year''.
    (b) Elimination of Prohibition on Processing of Freedom of 
Information Act Requests About Arson or Explosives Incidents or Firearm 
Traces.--Section 644 of division J of the Consolidated Appropriations 
Resolution, 2003 (5 U.S.C. 552 note; Public Law 108-7; 117 Stat. 473) 
is repealed.
    (c) Repeal of Limitations on Imposition of Requirement That 
Firearms Dealers Conduct Physical Check of Firearms Inventory.--The 5th 
proviso under the heading ``Bureau of Alcohol, Tobacco, Firearms and 
Explosives--Salaries and Expenses'' in title II of division B of the 
Consolidated and Further Continuing Appropriations Act, 2013 (18 U.S.C. 
923 note; Public Law 113-6; 127 Stat. 248) is amended by striking ``and 
any fiscal year thereafter''.
    (d) Elimination of Prohibition on Consolidation or Centralization 
in the Department of Justice of Firearms Acquisition and Disposition 
Records Maintained by Federal Firearms Licensees.--The matter under the 
heading ``Bureau of Alcohol, Tobacco, Firearms and Explosives--Salaries 
and Expenses'' in title II of division B of the Consolidated and 
Further Continuing Appropriations Act, 2012 (18 U.S.C. 923 note; Public 
Law 112-55; 125 Stat. 609) is amended by striking the 1st proviso.
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