[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7834 Introduced in House (IH)]
<DOC>
118th CONGRESS
2d Session
H. R. 7834
To improve the licensing requirements for the retail sale of firearms,
and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 29, 2024
Mr. Frost (for himself, Mr. Neguse, Mrs. Ramirez, and Ms. Kelly of
Illinois) introduced the following bill; which was referred to the
Committee on the Judiciary
_______________________________________________________________________
A BILL
To improve the licensing requirements for the retail sale of 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 ``Prevent Illegal Gun Resales Act''.
SEC. 2. INCREASED LICENSING FEES.
Section 923 of title 18, United States Code, is amended--
(1) in subsection (a)--
(A) in paragraph (1)--
(i) in subparagraph (A), by striking
``$1,000'' and inserting ``$2,000'';
(ii) in subparagraph (B), by striking
``$50'' and inserting ``$2,000''; and
(iii) in subparagraph (C), by striking
``$10'' and inserting ``$1,000'';
(B) in paragraph (2)--
(i) in subparagraph (A), by striking
``$1,000'' and inserting ``$2,000''; and
(ii) in subparagraph (B), by striking
``$50'' and inserting ``$2,000''; and
(C) in paragraph (3)--
(i) in subparagraph (A), by striking
``$1,000'' and inserting ``$2,000''; and
(ii) in subparagraph (B)--
(I) by striking ``$200'' and
inserting ``$400''; and
(II) by striking ``$90'' and
inserting ``$180''; and
(2) in subsection (b), by striking ``$10'' and inserting
``$20''.
SEC. 3. ANTI-TRAFFICKING PROCEDURES.
(a) Dealer's License Application Required To Specify Business
Practices To Prevent Diversions From Lawful Commerce.--Section
923(d)(1)(G) of title 18, United States Code, is amended to read as
follows:
``(G) in the case of an application to be licensed
as a dealer--
``(i) the applicant certifies that secure
gun storage or safety devices will be available
at any place in which firearms are sold under
the license to persons who are not licensees
(subject to the exception that in any case in
which a secure gun storage or safety device is
temporarily unavailable because of theft,
casualty loss, consumer sales, backorders from
a manufacturer, or any other similar reason
beyond the control of the licensee, the dealer
shall not be considered to be in violation of
the requirement under this subparagraph to make
available such a device);
``(ii) the applicant submits with the
application a specification of the firearms
business practices, policies, and procedures of
the applicant; and
``(iii) the Attorney General determines
that the specification describes policies,
practices, and procedures comply with
regulations prescribed under section 926(d).''.
(b) Regulations To Require Licensed Dealers To Implement Business
Practices, Policies, and Procedures To Prevent Business Inventory
Firearms, Ammunition, and Accessories From Being Diverted From Lawful
Commerce, and Prevent Business Inventory Firearms From Being
Transferred to a Straw Purchaser.--Section 926 of such title is amended
by adding at the end the following:
``(d) The Attorney General shall prescribe regulations requiring
licensed dealers to implement business practices, policies, and
procedures sufficient to prevent firearms, ammunition, and accessories
in the business inventory of a licensed dealer from being diverted from
lawful commerce, and to prevent business inventory firearms of a
licensed dealer from being transferred to a straw purchaser, and shall
do so in consultation with government entities with expertise similar
to that of the White House Office of Gun Prevention.''.
(c) Penalties for Failure To Implement Business Practices,
Policies, and Procedures Specified in Approved Dealer's License
Application.--Section 924 of such title is amended by adding at the end
the following:
``(q) The Attorney General may impose a civil money penalty of not
more than $5,000 on, and may suspend the license issued under section
923 to, any person who is a licensed dealer who fails to comply with
any practice, policy, or procedure specified in the application
approved under section 923 of the person to become a licensed
dealer.''.
SEC. 4. PREVENTING FIREARM TRAFFICKING.
(a) Duties of Firearm Licensees.--Section 923(g) of title 18,
United States Code, is amended--
(1) in paragraph (1)(B)--
(A) by striking ``or'' at the end of clause (ii);
and
(B) by redesignating clause (iii) as clause (iv)
and inserting after clause (ii) the following:
``(iii) for ensuring compliance with the
regulations prescribed under section 926(d);
or'';
(2) in paragraph (3)(B)--
(A) by inserting ``a firearm involved in a crime
or'' after ``thereof regarding'';
(B) by striking ``, and shall destroy each such
form and any record of the contents thereof no more
than 20 days after the date such form is received'' and
inserting ``and shall retain each such form and any
record of the contents of the form for 180 days after
the date the form is received''; and
(C) by striking the 2nd sentence; and
(3) by striking paragraph (7) and inserting the following:
``(7)(A) Each licensee shall respond immediately to, and in no
event later than 24 hours after the receipt of, a request by the
Attorney General for information contained in the records required to
be kept by this chapter as may be required for determining the
disposition of 1 or more firearms in the course of a bona fide criminal
investigation. The requested information shall be provided orally or in
writing, as the Attorney General may require. The Attorney General
shall implement a system whereby the licensee can positively identify
and establish that an individual requesting information via telephone
is employed by and authorized by the agency to request the information.
``(B) Each licensee shall, in the absence of unique and special
circumstances and approved in writing by the Attorney General, maintain
records of all such crime gun trace requests for firearms disposed of
by the licensee within the preceding 3 years, with copies of the
transaction records for the firearms in the possession of the licensee,
if any, to review before the transfer of any firearm.
``(C) Each licensee shall review all records of crime gun trace
requests before transferring any firearm, and report sales or other
dispositions whenever the licensee sells or otherwise disposes of any
firearm to an unlicensed person to whom a crime gun has been traced.
The report shall be prepared on a form specified by the Attorney
General and forwarded to the office specified thereon and to the
department of State police or State law enforcement agency of the State
or local law enforcement agency of the local jurisdiction in which the
sale or other disposition took place, not later than the close of
business on the day that the licensee determines that the sale or other
disposition occurs.
``(D)(i) Each licensed dealer shall update the practices, policies,
and procedures referred to in section 923(d)(1)(G)(ii) of the licensee,
whenever--
``(I) the licensee reports to the Attorney General 5 or
more lost or stolen firearms in any period of 12 consecutive
months; or
``(II) 5 or more firearms that were used in a crime under
Federal, State, or local law within 3 years after the last
known retail sale of the firearm are traced to the licensee
within any such 12-month period.
``(ii) Each licensed dealer shall maintain physical records of
costs incurred to implement and update the business practices,
policies, and procedures, including the installation of audio and video
surveillance of firearms transactions, and the implementation of an
electronic record keeping system, or of physical security to prevent
loss or theft of firearm inventory, and shall make the records
available for inspection on the premises covered by the license until
the licensee ceases to engage in the business of selling firearms.''.
(b) Duties of the Attorney General.--The Attorney General shall--
(1) develop, draft, and distribute to persons licensed
under chapter 44 of title 18, United States Code, materials
setting forth best business practices, policies, and procedures
to prevent the diversion of firearms inventory from lawful
commerce, and from time to time revise the materials as
appropriate; and
(2) during the 3 fiscal years that first begin after the
date of the enactment of this Act, prioritize for compliance
inspections those firearms dealers that have not been inspected
within the then preceding fiscal year with a high number of
crime gun traces relative to other firearms dealers.
SEC. 5. MENS REA REQUIREMENT FOR VIOLATIONS OF RULES APPLICABLE TO ONLY
LICENSEES.
Section 924(a)(1)(D) of title 18, United States Code, is amended by
striking ``willfully'' and inserting ``knowingly''.
SEC. 6. FIREARMS TRAFFICKING OFFENSE.
(a) In General.--Section 933 of title 18, United States Code, is
amended to read as follows:
``Sec. 933. Trafficking in firearms
``(a) Prohibitions.--
``(1) In general.--It shall be unlawful for any person to--
``(A) ship, transport, transfer, cause to be
transported, or otherwise dispose of 2 or more firearms
to another person in or affecting interstate or foreign
commerce, if the person knows or has reasonable cause
to believe that the use, carrying, or possession of a
firearm by such other person would constitute a felony
(as defined in section 932(a));
``(B) receive from another person 2 or more
firearms in or affecting interstate or foreign
commerce, if the person knows or has reasonable cause
to believe that the receipt would constitute a felony;
or
``(C) attempt or conspire to commit conduct
described in paragraph (1) or (2).
``(2) Licensees.--It shall be unlawful for any licensee to
ship, transport, transfer, cause to be transported, or
otherwise dispose of any firearm to another licensee if the
licensee knows or has reasonable cause to believe that--
``(A) in the preceding year, 5 or more firearms
that were used in a crime under Federal, State, or
local law within 3 years after the last known retail
sale of the firearms have been traced to such other
licensee;
``(B) in the preceding year, to the knowledge of
the licensee, such other licensee has since failed to
implement or update business practices to prevent
firearm trafficking or straw purchasing;
``(C) such other licensee lacks adequate security
to prevent loss or theft of firearms or ammunition from
the inventory of such other licensee; or
``(D) in the most recent inspection of such other
licensee under this chapter, the Attorney General has
found 3 or more violations relating to failures to
timely or accurately record information in firearm
acquisition and disposition records.
``(b) Affirmative Defenses.--It shall be an affirmative defense to
a charge of violating--
``(1) subsection (a)(1) of this section, that the licensee
took all reasonable steps, including the implementation of and
updates to business practices pursuant to subsection
923(g)(7)(D), to prevent the diversion of inventory firearms
from lawful commerce; and
``(2) subsection (a)(2) of this section, that the licensee
took all reasonable steps to comply with subsection (a)(2) and
failed to discover facts that would render disposition of
firearms to a licensee unlawful under subsection (a)(2) only as
the direct result of a violation of Federal law by the
licensee.
``(c) Penalties.--
``(1) In general.--Any person who violates subsection
(a)(1) shall be fined under this title, imprisoned for not more
than 15 years, or both.
``(2) Licensees.--
``(A) Civil penalties.--Any licensee who violates
subsection (a)(2) shall, after notice and opportunity
for a hearing, disgorge all profits from the transfer
of the firearms that are the subject of the violation,
and the court may impose on the licensee a civil money
penalty equal to the greater of--
``(i) $10,000 for each firearm involved, or
$50,000 with respect to any such firearm that
was subsequently used in a crime under Federal,
State, or local law; or
``(ii) the total amount expended by the
Attorney General in the preceding 3 fiscal
years to trace firearms used in a crime under
Federal, State, or local law, multiplied by the
percentage of the firearms traced to the
licensee that were recovered during that
period.
``(B) License suspension or revocation.--In
addition to any penalty under subparagraph (A), the
Attorney General may, after notice and opportunity for
a hearing, suspend or revoke the license issued to the
licensee under this chapter in the case of the first
violation of this section and, in the case of any
subsequent violation, shall immediately revoke the
license.''.
(b) Directive to Sentencing Commission.--
(1) In general.--Pursuant to its authority under section
994(p) of title 28, United States Code, the United States
Sentencing Commission shall review and, if appropriate, amend
the Federal sentencing guidelines and policy statements
applicable to persons convicted of offenses under section 933
of title 18, United States Code (as added by subsection (a) of
this section).
(2) Requirements.--In carrying out this section, the
Commission shall review the penalty structure that the
guidelines provide based on the number of firearms involved in
the offense and determine whether any changes to the penalty
structure are appropriate in order to reflect the intent of the
Congress that the penalties reflect the gravity of the offense,
the number of trafficked firearms purchased by or from the
defendant, the extent of the knowledge of the defendant about
the overall scheme to traffic firearms, the amount of money or
nonmonetary compensation provided to the defendant for the
participation of the defendant, and the culpability of the
defendant, including whether the defendant is a licensed
manufacturer, importer, or dealer and, as mitigating factors,
whether the defendant is a relative or current or former
intimate partner of another individual involved in a conspiracy
to traffic firearms, is a domestic violence survivor, or has
been otherwise exploited by personal affection, fear of
reprisal. or economic need to commit an offense under section
933 of title 18, United States Code.
(c) Directive to ATF.--
(1) Duty to investigate.--The Director of the Bureau of
Alcohol, Tobacco, Firearms and Explosives shall investigate the
source of firearms trafficked in violation of section 923 or
933 of title 18, United States Code, and in particular, whether
the source is engaged in the business of importing,
manufacturing, or dealing in firearms in violation of section
922(a)(1) of such title, and refer prosecutions of the source
to the Attorney General. The Director shall assess whether
regulations, informal guidance, licensee resources regarding
trafficking, and the conduct of a firearms transferee would
indicate, to a reasonable person, that the transferee may be
violating section 932 or 933 of such title, and revise and re-
issue the materials developed under section 4(b) of this Act,
accordingly.
(2) Gun trafficking awareness program.--The Director shall
establish a program, to be known as the ``Gun Trafficking
Awareness Program'', in which licensees under chapter 44 of
title 18, United States Code, who have transferred firearms to
an individual who has violated section 932(b) of such title,
but who lack the mens rea to have committed a violation of
section 933 of such title, may be enrolled for purposes of
preventing future such violations. The program shall include,
at a minimum--
(A) electronic or in-person training of such a
licensee and all employees of the licensee who are
responsible for handling firearms to identify signs of
straw purchasing or gun trafficking;
(B) the adoption by such a licensee of electronic
record keeping and collation of records relevant to
trafficking, including crime gun trace requests and
multiple purchase reports; and
(C) a requirement that such a licensee who operates
retail premises from which firearms are transferred
maintain audio and video surveillance of all areas of
the premises; and
(D) inspections of such a licensee, as appropriate,
and not more frequently than quarterly, for a period of
1 year, to ensure compliance with such chapter.
(d) Directive to the Attorney General.--Within 2 years after the
date of the enactment of this Act and annually thereafter, the Attorney
General shall submit to the Committee on the Judiciary of the Senate
and the Committee on the Judiciary of the House of Representatives a
report containing the following information:
(1) For the preceding 12-month period--
(A) the number of investigations initiated for
violations of section 933 of title 18, United States
Code;
(B) the number of individuals, entities, and
Federal firearm licensees charged criminally or civilly
for the violations;
(C) the number of individuals, entities, and
Federal firearm licensees indicted for the violations;
(D) the number of investigations referred to the
Attorney General by the Bureau of Alcohol, Tobacco,
Firearms and Explosives that did not result in criminal
or civil charges; and
(E) the number of licensees enrolled in, and the
number of licenses determined to have successfully
completed, the program established under subsection
(c)(2).
(2) To the extent the information is available, the average
length of the sentences of imprisonment and average and mean
monetary fines imposed on persons convicted of violations of
section 933 of title 18, United States Code, during the
preceding 12-month period.
(3) A narrative describing the trafficking schemes
prosecuted in the preceding 12-month period, including the
sources of firearms, the roles of various defendants in the
scheme, the number of firearms trafficked, and a description of
any trafficking practices or trends common among various
firearm trafficking schemes.
SEC. 7. ENHANCED REGULATION OF HIGH RISK DEALERS.
Chapter 44 of title 18, United States Code, is amended by adding at
the end the following:
``Sec. 935. Regulation of high risk dealers
``(a) In General.--On a determination by the Attorney General that
a licensed dealer is a high risk dealer, the Attorney General shall--
``(1) require the dealer to permanently alter the business
practices of the dealer or make physical improvements to the
firearms business premises of the dealer to reduce the
diversion of firearms from the firearms inventory of the
dealer, which requirements shall include requiring the dealer
to--
``(A) adopt electronic acquisition and disposition
record keeping;
``(B) provide the National Tracing Center with
electronic access to all records required to be kept
under this chapter that are possessed by the dealer;
``(C) make video and audio recordings of all
firearms transactions, and maintain the recordings for
360 days; and
``(D) retain for more than 360 days, any video or
audio recording of a firearm transaction that was the
subject of a trace request; and
``(2) not less frequently than biennially, inspect or
examine the inventory, records, and business premises of the
dealer without reasonable cause or warrant.
``(b) Cessation.--On application of a high risk dealer, on a form
prescribed by the Attorney General, and approval of the application by
the Attorney General in writing, the inspections of the dealer under
subsection (a)(2) shall cease--
``(1) on certification by the Attorney General that the
dealer--
``(A) has permanently altered the business
practices of the dealer or made the physical
improvements required under subsection (a)(1); and
``(B) will maintain the practices and improvements
until otherwise notified by the Attorney General; and
``(2) if, on 2 separate and consecutive occasions at least
6 months apart, the Attorney General has inspected and examined
the books and records of the dealer and, during that period,
the dealer has not been notified of any violations of Federal,
State, or local law.
``(c) Notice.--The Attorney General shall inform high risk dealers
in writing of their obligations under this section.
``(d) Definition.--The term `high risk dealer' means any dealer
identified by the Attorney General as lacking sufficient policies,
procedures, or controls to prevent the diversion from lawful commerce
of firearms or ammunition in the firearms business inventory of the
dealer or transferred by the dealer, and firearms possessed by the
dealer that are to be destroyed, and, thus, necessitating enhanced
regulation and enforcement including regular inspection and examination
of the inventory, records, and premises of the firearms business of the
dealer. The Attorney General shall so identify such a dealer if--
``(1) the Attorney General has issued to the dealer a
report of violation or warning letter;
``(2) the dealer has been the subject of a warning
conference with the Attorney General within the preceding 36
months; or
``(3) in the preceding 12 months, the dealer was the source
of 2 or more firearms that were used in a crime under Federal,
State, or local law within 36 months after the last known
retail sale of the firearm.''.
SEC. 8. EFFECTIVE DATE.
Sections 2 through 6 shall take effect on the date that is 180 days
after the date of the enactment of this Act.
<all>