Title: Firearms Retailer Code of Conduct Act of 2020
Policy area: Crime and Law Enforcement

Summary:
Firearms Retailer Code of Conduct Act of 2020
This bill establishes requirements for federal firearms licensees (e.g., gun dealers) and their employees regarding certain business practices, training, and certification. It also prohibits licensees from transferring firearms to certain individuals, including straw purchasers, gun traffickers, intoxicated individuals, or individuals at risk of harming themselves or others.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7977 Introduced in House (IH)]

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116th CONGRESS
  2d Session
                                H. R. 7977

 To require federally licensed firearms manufacturers, importers, and 
 dealers and their employees to undergo annual training to be eligible 
to sell a firearm, to require a notice to be posted at retail firearms 
 locations that describes the signs of unlawful firearms purchases, to 
    require such licensees to maintain a minimum level of business 
              liability insurance, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             August 7, 2020

 Ms. Mucarsel-Powell (for herself, Ms. Kelly of Illinois, Mr. Deutch, 
Mr. Cicilline, Mr. Langevin, Mr. Swalwell of California, and Mr. Crow) 
 introduced the following bill; which was referred to the Committee on 
                             the Judiciary

_______________________________________________________________________

                                 A BILL


 
 To require federally licensed firearms manufacturers, importers, and 
 dealers and their employees to undergo annual training to be eligible 
to sell a firearm, to require a notice to be posted at retail firearms 
 locations that describes the signs of unlawful firearms purchases, to 
    require such licensees to maintain a minimum level of business 
              liability insurance, 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 ``Firearms Retailer Code of Conduct 
Act of 2020''.

SEC. 2. CODE OF CONDUCT FOR FIREARMS MANUFACTURERS, IMPORTERS, AND 
              DEALERS.

    (a) In General.--Section 923 of title 18, United States Code, is 
amended by adding at the end the following:
    ``(m)(1)(A) The Attorney General shall annually make available to 
each licensed importer, licensed manufacturer, and licensed dealer, and 
each employee of such a licensee who is authorized to engage in the 
transfer of firearms or ammunition in the course of the firearms 
business to unlicensed persons, a training course in the conduct of 
firearm transfers.
    ``(B) The training course shall describe Federal law governing 
firearms transfers, and cover, at a minimum, the following matters:
            ``(i) How to recognize and identify straw purchasers and 
        fraudulent activity.
            ``(ii) The indicators that a person is attempting to 
        purchase a firearm illegally.
            ``(iii) How to recognize and identify indicators that an 
        individual intends to use a firearm for unlawful purposes.
            ``(iv) How to recognize and identify indicators that an 
        individual intends to use a firearm for self-harm.
            ``(v) How to prevent theft or burglary of firearms and 
        ammunition.
            ``(vi) How to respond in the circumstances described in 
        clauses (i) through (v), and the applicable reporting 
        requirements.
            ``(vii) Other reasonable business practices that the 
        Attorney General determines will deter gun trafficking, or 
        deter the provision of a firearm to those who indicate an 
        intent to use a firearm for unlawful purposes or for self-harm.
    ``(C) The training course shall include an examination with not 
less than 20 questions derived from the course materials and intended 
to confirm that a course participant has learned the information 
covered by the course. To receive certification of completion of the 
course, a participant must answer at least 70 percent of the 
examination questions correctly.
    ``(D) Not less frequently than annually, the Attorney General shall 
review the training course materials, and revise them as necessary.
    ``(E) On successful completion of the training course by a 
participant--
            ``(i) the participant shall attest to his or her 
        participation in the course;
            ``(ii) the participant shall attest to his or her receipt 
        of the course materials;
            ``(iii) if the participant is not a licensed manufacture, 
        licensed importer, or licensed dealer, the participant has 
        submitted to the national instant criminal background check 
        system established under section 103 of the Brady Handgun 
        Violence Prevention Act sufficient information to enable the 
        system to determine whether the participant is prohibited by 
        subsection (g) or (n) of section 922 or State law from 
        receiving a firearm; and
            ``(iv) if the system has determined that the participant is 
        not so prohibited, the Attorney General shall immediately issue 
        to the participant, through United States mail or electronic 
        means, a certificate which indicates successful completion of 
        the training course and includes a unique certification number, 
        both of which shall expire 2 years after issuance unless 
        renewed.
    ``(F) The Attorney General shall--
            ``(i) create and maintain a database which identifies each 
        individual to whom such a certificate is issued, the date the 
        certificate is issued, the date the certificate expires, and 
        the unique certification number on the certificate;
            ``(ii) make readily available to persons licensed under 
        this chapter and Federal, State, and local law enforcement 
        authorities, on request, the certification status of current or 
        potential employees;
            ``(iii) on a monthly basis, provide to the Bureau of 
        Alcohol, Tobacco, Firearms and Explosives a complete list of 
        the certificates issued under subparagraph (E) that have 
        expired or been renewed since the most recent prior provision 
        of information, if any, to the system under this clause.
    ``(G) Each licensee referred to in subparagraph (A) shall keep--
            ``(i) a copy of any certificate issued to the licensee 
        under subparagraph (E); and
            ``(ii) a copy of any such certificate issued to any 
        employee of the licensee, throughout the duration of 
        employment.
    ``(H) Beginning 545 days after the date of the enactment of this 
subsection, it shall be unlawful for such a licensee or an employee of 
such a licensee to transfer a firearm or ammunition, unless the 
licensee or employee, as the case may be, has been issued a certificate 
under this paragraph which has not expired.
    ``(2) In the course of firearms business with a person who is not 
such a licensee, such a licensee--
            ``(A) shall not transfer a firearm to an individual if the 
        licensee or an employee of the licensee knows or has reasonable 
        cause to know that the individual is a straw purchaser or a gun 
        trafficker;
            ``(B) shall not transfer a firearm or ammunition to an 
        individual if the licensee or an employee of the licensee knows 
        or has reasonable cause to know that the individual is 
        intoxicated;
            ``(C) shall not transfer a firearm or ammunition to an 
        individual if the licensee or an employee of the licensee knows 
        or has reasonable cause to know that the individual will 
        attempt to harm the individual or others with the firearm or 
        ammunition;
            ``(D) shall not transfer a firearm to an individual not 
        paying in United States currency, unless the identity of the 
        individual matches the name on the payment method used by the 
        individual; and
            ``(E) immediately notify the Bureau of Alcohol, Tobacco, 
        Firearms and Explosives and local law enforcement authorities 
        if the licensee or an employee of the licensee knows or has 
        reasonable cause to know that the individual has engaged or 
        attempted to engage in a straw purchase or gun trafficking.
    ``(3)(A) The Attorney General shall make available to each licensee 
referred to in paragraph (1)(A) written protocols which--
            ``(i) outline the indicators of straw purchasing and gun 
        trafficking, including the presence of a prospective firearm 
        transferee who--
                    ``(I) is accompanied by 1 or more individuals;
                    ``(II) is communicating with other individuals by 
                telephone or other means;
                    ``(III) is buying multiple firearms;
                    ``(IV) has been the subject of a crime gun trace;
                    ``(V) has purchased a firearm in the preceding 30 
                days; or
                    ``(VI) otherwise indicates that a firearm is being 
                obtained for another person;
            ``(ii) instruct employees to attempt to ascertain whether a 
        prospective firearm transferee is lawfully purchasing a 
        firearm, including by asking questions of the prospective 
        firearm transferee (including whether he or she intends to 
        transfer the firearm to another person); and
            ``(iii) inform employees about how to report a suspected 
        fraudulent firearm purchase to the Bureau of Alcohol, Tobacco, 
        Firearms and Explosives.
    ``(B) Beginning 545 days after the date of the enactment of this 
subsection, each such licensee shall--
            ``(i) obtain the written protocols described in 
        subparagraph (A); and
            ``(ii) during all business hours, display the written 
        protocols at each point of sale in the firearms business of the 
        licensee, in a manner that is clearly visible to all employees 
        of the business.
    ``(4) Each licensee referred to in paragraph (1)(A) of this 
subsection shall maintain general business and liability insurance as 
described in subsection (d)(1)(F)(iv) during each day of a calendar 
month, unless the licensee has certified to the Attorney General, on 
the 1st day of that month, that the licensee--
            ``(A) did not transfer more than 20 firearms in the 12-
        month period that precedes the date of the certification; and
            ``(B) expects to transfer not more than 20 firearms in the 
        12-month period that begins with that date.''.
    (b) Deadline for Development of Firearm Transfer Training Course.--
Within 180 days after the date of the enactment of this Act, the 
Attorney General shall develop the training course provided for in 
section 923(m)(1) of title 18, United States Code.
    (c) Deadline for Development of Written Business Protocols for 
Firearms Sales.--Within 180 days after the date of the enactment of 
this Act, the Attorney General shall develop the written protocols 
provided for in section 923(m)(3) of title 18, United States Code.
    (d) Business Liability Insurance Certification Required in 
Application for Firearms License.--Section 923(d)(1)(F) of title 18, 
United States Code, is amended--
            (1) by striking ``and'' at the end of clause (ii)(II); and
            (2) by adding at the end the following:
                    ``(iv) the applicant has applied for, and will not 
                conduct the business before the applicant has received, 
                a general business and liability insurance policy from 
                an insurance company licensed to do business in the 
                State in which the licensed premises is located, which 
                provides coverage for damages for the negligent or 
                unlawful transfer of a firearm in an amount of at least 
                $1,000,000, unless the applicant certifies in the 
                application that the applicant expects to transfer to 
                persons not licensed under this chapter not more than 
                20 firearms per year; and''.
    (e) Validation of Licensee and Employee Certifications.--Section 
922(t)(1) of such title is amended--
            (1) by striking ``and'' at the end of subparagraph (B)(ii);
            (2) by striking the period at the end of subparagraph (C) 
        and inserting ``; and''; and
            (3) by adding at the end the following:
            ``(D) a unique certification number has been issued to the 
        transferor under section 923(m)(1)(E)(iv) and has not expired, 
        and the transferor has validated that number with the 
        system.''.

SEC. 3. DEFINITIONS.

    Section 921(a) of title 18, United States Code, is amended by 
adding at the end the following:
    ``(36) The term `straw purchase' means the purchase of a firearm by 
an individual who conceals, or intends to conceal, that the purchase is 
being made on behalf of a third party who is identified or not yet 
identified. The term shall not include a bona fide gift to a person who 
is not prohibited by law from possessing or receiving a firearm. For 
purposes of the preceding sentence, a gift to a person is not a bona 
fide gift if the person has offered or given the purchaser a service or 
thing of value to acquire the firearm for the person.
    ``(37) The term `straw purchaser' means a person engaged in a straw 
purchase.
    ``(38) The term `gun trafficking' means the knowing acquisition, 
transfer, or attempted acquisition or transfer of a firearm for 
purposes of unlawful commerce by a licensed or unlicensed person.''.

SEC. 4. PENALTIES.

    Section 924 of title 18, United States Code, is amended by adding 
at the end the following:
    ``(q)(1) With respect to each violation of subparagraph (A), (B), 
or (C) of section 923(m)(2), a person shall be fined under this title, 
imprisoned not more than 18 months, or both.
    ``(2) With respect to each violation of section 923(m)(2)(D), a 
person shall be fined not more than $2,500, imprisoned not more than 1 
year, or both.
    ``(3) With respect to each violation of paragraph (1)(G) or (3)(B) 
of section 923(m), a licenced importer, licensed manufacturer or 
licensed dealer shall be fined not more than $500.
    ``(4)(A) With respect to each violation of paragraph (1)(H) or 
(2)(E) of section 923(m), the Attorney General shall, after notice and 
opportunity for hearing--
            ``(i) suspend for not more than 6 months, or revoke, the 
        license under which the firearms transfer involved was 
        conducted; or
            ``(ii) subject the licensee to a civil penalty of not more 
        than $2,500.
    ``(B) With respect to each violation of section 923(m)(4) the 
Attorney General shall, after notice and opportunity for hearing--
            ``(i) suspend for not more than 6 months, or revoke, the 
        license under which the firearms transfer involved was 
        conducted; or
            ``(ii) subject the licensee to a civil penalty of not more 
        than $10,000.''.

SEC. 5. EFFECTIVE DATE.

    The amendments made by this Act shall take effect 90 days after the 
date of the enactment of this Act.
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