Title: Default Proceed Sale Transparency Act
Policy area: Crime and Law Enforcement

Summary:
Default Proceed Sale Transparency Act
This bill establishes new requirements in the case of a firearm transfer by a licensed dealer, manufacturer, or importer to an unlicensed person prior to the completion of a background check. Current law permits such transactions—default proceed transactions—if a submitted background check remains incomplete after three business days.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8929 Introduced in House (IH)]

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116th CONGRESS
  2d Session
                                H. R. 8929

 To improve the procedures of the national instant criminal background 
  check system in the case of firearm transfers by federally licensed 
firearms importers, manufacturers, and dealers before the completion of 
   the related criminal background check, and to provide for annual 
                 reports on default firearm transfers.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            December 9, 2020

 Mr. Schneider (for himself, Mr. Quigley, Mr. Panetta, and Mr. Deutch) 
 introduced the following bill; which was referred to the Committee on 
                             the Judiciary

_______________________________________________________________________

                                 A BILL


 
 To improve the procedures of the national instant criminal background 
  check system in the case of firearm transfers by federally licensed 
firearms importers, manufacturers, and dealers before the completion of 
   the related criminal background check, and to provide for annual 
                 reports on default firearm transfers.

    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 ``Default Proceed Sale Transparency 
Act''.

SEC. 2. IMPROVEMENT OF NICS PROCEDURES IN THE CASE OF DEFAULT FIREARM 
              TRANSFERS.

    (a) Requirement That Federally Licensed Firearm Importers, 
Manufacturers, and Dealers Report Default Firearm Transfers.--
            (1) In general.--Section 922(t) of title 18, United States 
        Code, is amended by adding at the end the following:
    ``(7) A licensed importer, licensed manufacturer, or licensed 
dealer who transfers a firearm in compliance with paragraph (1), but 
before the national instant criminal background check system provides 
the licensee with a unique identification number, shall report the 
transfer to the Federal Bureau of Investigation within 24 hours. If a 
State or local law enforcement authority is conducting the related 
background check, the Federal Bureau of Investigation shall transmit 
the report to that authority.''.
            (2) Creation of online portal and telephone hotline.--
        Within 180 days after the date of the enactment of this Act, 
        the Attorney General shall create an online portal and 
        telephone hotline, that are to be used exclusively for the 
        purpose of reporting sufficient information to allow the 
        Federal Bureau of Investigation to prioritize background checks 
        in accordance with section 40901(j) of title 34, United States 
        Code.
    (b) Prioritization of NICS Background Checks Relating to Default 
Firearm Transfers.--Section 103 of the Brady Handgun Violence 
Prevention Act (34 U.S.C. 40901) is amended by redesignating 
subsections (j) and (k) as subsections (k) and (l) and inserting after 
subsection (i) the following:
    ``(j) Prioritization of Background Checks Related to Default 
Firearm Transfers.--In the case of a transfer referred to in section 
922(t)(7) of title 18, United States Code, the system established under 
this section shall give priority to completing the background check 
relating to the transfer.''.
    (c) Prohibition on Destruction of Records Relating to Firearm 
Transfer Before Completion of Background Check.--Section 103 of the 
Brady Handgun Violence Prevention Act (34 U.S.C. 40901), as amended by 
subsection (b)(1) of this section, is amended by redesignating 
subsections (k) and (l) as subsections (l) and (m) and inserting after 
subsection (j) the following:
    ``(k) Prohibition on Destruction of Records Relating to Firearm 
Transfer Before Completion of Related Background Check.--The system 
established under this section may not destroy any records of the 
system relating to a proposed or completed firearm transfer, before 
completion of the criminal background check with respect to the 
prospective or actual transferee.''.

SEC. 3. ANNUAL REPORTS ON DEFAULT FIREARM TRANSFERS.

    (a) In General.--Within 300 days after the date of the enactment of 
this Act and annually thereafter, the Director of the Federal Bureau of 
Investigation shall make accessible to the public a written report on--
            (1) the number of firearms transferred as described in 
        section 922(t)(7) of title 18, United States Code, during the 
        period covered by the report, disaggregated by State;
            (2) the number of the firearms described in paragraph (1) 
        of this subsection with respect to which the national instant 
        criminal background check system established under section 103 
        of the Brady Handgun Violence Prevention Act completed the 
        background check;
            (3) of the number described by paragraph (2) of this 
        subsection--
                    (A) the number with respect to which the system 
                provided the unique identification number under section 
                922(t)(1)(B)(i) of such title; and
                    (B) the number with respect to which information 
                available to the system demonstrated that receipt of a 
                firearm by the transferee would violate subsection (g) 
                or (n) of section 922 of such title or State law; and
                    (C) in each case described by subparagraph (B) of 
                this paragraph, the reason for indicating that the 
                receipt would be a violation referred to in such 
                subparagraph (B), including any specific prohibiting 
                criteria that would bar the transferee from receipt of 
                a firearm;
            (4) of the number described by paragraph (3)(B) of this 
        subsection, the number of firearms that were retrieved from the 
        transferee, and the number of firearms that were not retrieved 
        from the transferee, with each number broken down by the field 
        division of the Bureau of Alcohol, Tobacco, Firearms, and 
        Explosives and the State involved;
            (5) in the case of the first report under this section, the 
        number of requests for criminal background checks received by 
        the system in the preceding 5 years the records of which were 
        purged from the system without resolution; and
            (6) the number of licensed importers, licensed 
        manufacturers, or licensed dealers who transferred firearms as 
        described in section 922(t)(7) of such title during the period 
        covered by the report, disaggregated by the State of sale.
    (b) In General.--Within 300 days after the date of the enactment of 
this Act and annually thereafter, the Director of the Bureau of 
Alcohol, Tobacco, Firearms, and Explosives shall make accessible to the 
public a written report on--
            (1) the average time between receipt and recovery of a 
        firearm transferred as described in section 922(t)(7) of title 
        18, United States Code, during the period covered by the 
        report, where receipt by the transferee violated subsection (g) 
        or (n) of section 922 of such title or State law;
            (2) the number of firearms transferred as described in such 
        section 922(t)(7) during the period covered by the report, that 
        were recovered as part of a criminal investigation, where 
        receipt by the transferee violated such subsection (g) or (n) 
        or State law, disaggregated by State; and
            (3) of the number described by paragraph (2) of this 
        subsection--
                    (A) the total number of firearms that were 
                recovered by law enforcement in States other than the 
                State the firearm was transferred by a licensed 
                importer, licensed manufacturer, or licensed dealer as 
                described in such section 922(t); and
                    (B) the information outlined in subparagraph (A) of 
                this paragraph, disaggregated by--
                            (i) the State where the firearm was 
                        recovered; and
                            (ii) the State where the firearm was 
                        transferred as described in such section 
                        922(t).
    (c) Rule of Interpretation.--A report under subsection (a) shall be 
considered an annual statistical report and statistical aggregate data 
for purposes of the sixth proviso under the heading ``Bureau of 
Alcohol, Tobacco, Firearms and Explosives--Salaries and Expenses'' in 
the Department of Justice Appropriations Act, 2012 (title II of 
division B of Public Law 112-55).
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