NFA Modernization Act of 2021
Bill: H.R.2427 | Sponsor: Rep. Raskin, Jamie (D-MD)
Policy area: Taxation

Summary:
NFA Modernization Act of 2021
This bill increases from $200 to $300 the excise tax on the transfer of certain firearms. It also establishes a Firearms Trust Fund and transfers to such fund the revenues from the increased excise tax.
The bill requires equal 50% expenditures from the fund for gun violence prevention initiatives of the Bureau of Alcohol, Firearms, and Explosives and the Office of Justice Programs of the Department of Justice.

To amend the Internal Revenue Code of 1986 to increase the transfer tax 
              on certain firearms, 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 ``NFA Modernization Act of 2021''.

SEC. 2. INCREASE IN TRANSFER TAX ON CERTAIN FIREARMS.

    (a) In General.--Section 5811(a) of the Internal Revenue Code of 
1986 is amended by striking ``$200'' and inserting ``$300''.
    (b) Inflation Adjustment.--Section 5811 of Internal Revenue Code of 
1986 is amended by adding at the end the following new subsection:
    ``(d) Inflation Adjustment.--In the case of a transfer in a 
calendar after 2022, the $300 amount in subsection (a) shall be 
increased by an amount equal to--
            ``(1) such dollar amount, multiplied by
            ``(2) the cost-of-living adjustment determined under 
        section 1(f)(3) for the calendar year, by substituting 
        `calendar year 2021' for `calendar year 2016' in subparagraph 
        (A)(ii) thereof.''.
    (c) Effective Date.--The amendments made by this Act shall apply 
with respect to transfers after December 31, 2021.

SEC. 3. TRUST FUND.

    (a) Establishment.--Subchapter A of chapter 98 of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
section:

``SEC. 9512. GUN VIOLENCE PREVENTION TRUST FUND.

    ``(a) Creation of Trust Fund.--There is established in the Treasury 
of the United States a trust fund to be known as the `Firearms Trust 
Fund' (referred to in this section as the `Trust Fund'), consisting of 
such amounts as may be appropriated or credited to such fund as 
provided in this section or section 9602(b).
    ``(b) Transfers to Trust Fund.--There are hereby appropriated to 
the Trust Fund each year an amount equal to the increase in net 
revenues received in the Treasury attributable to the amendments made 
by the NFA Modernization Act of 2021.
    ``(c) Expenditures.--Amounts in the Trust Fund shall be available 
to the Attorney General, as provided in appropriation Acts, only as 
follows:
            ``(1) Fifty percent for the purpose of funding gun violence 
        prevention initiatives of the Bureau of Alcohol, Tobacco, 
        Firearms, and Explosives.
            ``(2) Fifty percent for the purpose of funding gun violence 
        prevention initiatives of the Office of Justice Programs.''.
    (b) Clerical Amendment.--The table of sections for subchapter A of 
chapter 98 of such Code is amended by adding at the end the following 
new item:

``Sec. 9512. Gun violence prevention trust fund.''.
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