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109th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     109-672

======================================================================



 
     BUREAU OF ALCOHOL, TOBACCO, FIREARMS, AND EXPLOSIVES (BATFE) 
                  MODERNIZATION AND REFORM ACT OF 2006

                                _______
                                

 September 21, 2006.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

 Mr. Sensenbrenner, from the Committee on the Judiciary, submitted the 
                               following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 5092]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on the Judiciary, to whom was referred the bill 
(H.R. 5092) to modernize and reform the Bureau of Alcohol, 
Tobacco, Firearms, and Explosives, having considered the same, 
report favorably thereon with an amendment and recommend that 
the bill as amended do pass.

  The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Bureau of Alcohol, Tobacco, Firearms, 
and Explosives (BATFE) Modernization and Reform Act of 2006''.

SEC. 2. GRADUATED PENALTIES FOR CIVIL VIOLATIONS BY FEDERAL FIREARMS 
                    LICENSEES.

  (a) In General.--Section 923 of title 18, United States Code, is 
amended by striking subsections (e) and (f) and inserting the 
following:
  ``(e)(1)(A) If the Attorney General determines that a licensee under 
this section has willfully violated any provision of this chapter or 
any regulation prescribed under this chapter, the Attorney General 
may--
          ``(i) if the violation is of a minor nature, or if the 
        violation is that the licensee has failed to have secure gun 
        storage or safety devices available at any place in which 
        firearms are sold under the license to persons who are not 
        licensees (except because of theft, casualty loss, consumer 
        sales, back orders from a manufacturer, or any other similar 
        reason beyond the control of the licensee)--
                  ``(I) impose on the licensee a civil money penalty of 
                not more than $1,000 for each such violation, except 
                that the total amount of penalties imposed on a 
                licensee under this subclause for violations arising 
                from a single inspection or examination shall not 
                exceed $5,000; or
                  ``(II) suspend the license for not more than 30 days, 
                and specify the circumstances under which the 
                suspension is to be terminated, if, in the period for 
                which the license is in effect, there have been at 
                least 2 prior occasions on which the licensee has been 
                determined to have violated this chapter; or
          ``(ii) if the violation is of a serious nature--
                  ``(I) impose on the licensee a civil money penalty of 
                not more than $2,500 for each such violation, except 
                that the total amount of penalties imposed on a 
                licensee under this subclause for a violations arising 
                from a single inspection or examination shall not 
                exceed $15,000;
                  ``(II) suspend the license for not more than 90 days, 
                and specify the circumstances under which the 
                suspension is to be terminated;
                  ``(III) revoke the license; or
                  ``(IV) take the actions described in subclauses (I) 
                and (II), or subclauses (I) and (III).
  ``(B)(i)(I) In determining the amount of a civil money penalty to 
impose under subparagraph (A) on a licensee, the nature and severity of 
the violation involved, the size of the firearms business operated by 
the licensee, and the prior record of the licensee shall be considered.
  ``(II) On request of the licensee, the Attorney General may consider 
the ability of the licensee to pay a civil money penalty, and may allow 
the licensee to submit documents and information to establish the 
ability of the licensee to pay. The Attorney General shall not make 
part of any public record any document or information so submitted, and 
shall return to the licensee any such document or information.
  ``(III) The total amount of penalties imposed on a licensee under 
subparagraph (A) with respect to violations of a minor nature and of a 
serious nature arising from a single inspection or examination shall 
not exceed $15,000.
  ``(ii) For purposes of subparagraph (A), violation of a provision of 
this chapter with respect to 2 or more firearms during a single 
transaction shall be considered a single violation of the provision.
  ``(iii) The Attorney General may defer, or suspend, in whole or in 
part, the imposition of a civil money penalty on a licensee whose 
license is suspended under this paragraph.
  ``(C) For purposes of subparagraph (A):
          ``(i) A violation of this chapter shall be considered to be 
        of a serious nature if the violation--
                  ``(I) results in or could have resulted in the 
                transfer of a firearm or ammunition to a person 
                prohibited from possessing or receiving the firearm or 
                ammunition under this chapter or under State or local 
                law;
                  ``(II) obstructs or could have obstructed  a  bona 
                fide criminal investigation or prosecution, or an 
                inspection or examination under this chapter; or
                  ``(III) prevents or could have prevented a licensee 
                from complying with subsection (a)(7), (a)(8), (b)(1), 
                (b)(3), (b)(4), (j), (k), (o), or (p) of section 922, 
                subsection (g)(7) of this section, or subsection (b) or 
                (h) of section 924.
          ``(ii) A violation of this chapter shall be considered to be 
        of a minor nature if the violation is not of a serious nature.
  ``(D) The Attorney General may not commence an enforcement action 
under subparagraph (A) with respect to a violation, after the 5-year 
period that begins with--
          ``(i) the date the violation occurred; or
          ``(ii) if the licensee intentionally obstructed discovery of 
        the violation, the date the violation is discovered.
  ``(2)(A) Not less than 30 days before the effective date of any 
penalty imposed on a licensee by reason of a determination made under 
paragraph (1), the Attorney General shall send the licensee a written 
notice--
          ``(i) of the determination, and the grounds on which the 
        determination was made;
          ``(ii) of the nature of the penalty; and
          ``(iii) that the licensee may, within 30 days after receipt 
        of the notice, request a hearing to review the determination.
  ``(B) A hearing to review a determination made under paragraph (1) 
with respect to a licensee shall not be held unless the licensee 
requests such a hearing within 30 days after receiving the notice of 
the determination sent pursuant to subparagraph (A).
  ``(C) On timely receipt from the licensee of a request for such a 
review, the Attorney General shall stay the imposition under paragraph 
(1) of any penalty involved, pending resolution of the review, unless, 
in the case of a suspension or revocation of a licensee, the Attorney 
General establishes, at a hearing before an administrative law judge, 
by clear and convincing evidence, that--
          ``(i) the licensee or the principal owner of the business 
        subject to the license has been indicted and charged with a 
        criminal violation of this chapter; and
          ``(ii) the continued operation by the licensee of the 
        business poses an immediate and grave threat to public safety.
  ``(3)(A) Within 90 days after timely receipt from a licensee of a 
request to review a determination made under paragraph (1) (or at such 
later time as is agreed to by the Attorney General and the licensee), 
an administrative law judge shall hold a hearing, at a location 
convenient to the licensee, to review the determination.
  ``(B) Not less than 30 days before the hearing, the Attorney General 
shall deliver to the licensee--
          ``(i) a document identifying each person whom the Attorney 
        General intends to call as a witness during the hearing;
          ``(ii) a copy of each document which will be introduced as 
        evidence at the hearing; and
          ``(iii) copies of all documents on which the determination is 
        based.
  ``(C) Within 90 days after the hearing, the administrative law judge 
shall issue a written decision setting forth findings of fact and 
conclusions of law, and a decision as to whether to affirm, modify, or 
reverse the determination.
  ``(D) On request of the licensee, the Attorney General shall stay the 
effective date of any penalty, suspension, or revocation until there 
has been a final, nonreviewable judgment with respect to the 
determination involved, unless, in the case of a suspension or 
revocation of a licensee, the Attorney General establishes, at a 
hearing before an administrative law judge, by clear and convincing 
evidence, that--
          ``(i) the licensee or the principal owner of the business 
        subject to the license has been indicted and charged with a 
        criminal violation of this chapter; and
          ``(ii) the continued operation by the licensee of the 
        business poses an immediate and grave threat to public safety.
  ``(E) The action of an administrative law judge under this subsection 
shall be considered final agency action for all purposes, and may be 
reviewed only as provided in subsection (f).
  ``(4) This subsection shall not be interpreted to affect the 
authority of the Attorney General under section 922(t)(5).
  ``(f)(1) Within 60 days after a party receives a notice issued under 
subsection (d)(3) of a decision to deny a license, or a notice issued 
under subsection (e)(3)(C) of a determination to impose a civil money 
penalty or to suspend or revoke a license, the party may file a 
petition with the United States district court for the district in 
which the party resides or has a principal place of business for a de 
novo review of the decision or determination.
  ``(2) In a proceeding conducted under this paragraph, the court 
shall, on application of a party, consider any evidence submitted by 
the parties to the proceeding whether or not the evidence was 
considered at the hearing held under subsection (d)(3) or (e)(3).
  ``(3) If the court decides that the decision or determination was not 
authorized, the court shall order the Attorney General to take such 
action as may be necessary to comply with the judgment of the court.
  ``(4) If criminal proceedings are instituted against a licensee 
alleging any violation of this chapter or of a regulation prescribed 
under this chapter, and the licensee is acquitted of the charges, or 
the proceedings are terminated, other than upon motion of the 
Government before trial on the charges, the Attorney General shall be 
absolutely barred from denying a license under this chapter, suspending 
or revoking a license granted under this chapter, or imposing a civil 
money penalty under subsection (e), if the action would be based in 
whole or in part on the facts which form the basis of the criminal 
charges.
  ``(5) The Attorney General may not institute a proceeding to suspend 
or revoke a license granted under this chapter, or to impose a civil 
money penalty under subsection (e), more than 1 year after the filing 
of the indictment or information.''.
  (b) Conforming Amendments.--
          (1) Procedure applicable to denial of application for 
        license.--Section 923(d) of such title is amended by adding at 
        the end the following:
  ``(3) If the Attorney General denies an application for a license, an 
administrative law judge of the Department of Justice shall, on request 
by the aggrieved party, promptly hold a hearing to review the denial, 
at a location convenient to the aggrieved party. If, after the hearing, 
the administrative law judge decides not to reverse the denial, the 
administrative law judge shall give notice of the final denial decision 
to the aggrieved party.''.
          (2) Elimination of redundant penalty.--Section 924 of such 
        title is amended by striking subsection (p).

SEC. 3. CONSIDERATION OF FEDERAL FIREARMS LICENSE APPLICATIONS.

  (a) In General.--Section 923(d) of title 18, United States Code, as 
amended by section 2(b) of this Act, is amended by redesignating 
paragraphs (2) and (3) as paragraphs (3) and (4) and inserting after 
paragraph (1) the following:
  ``(2) The Attorney General shall make a preliminary determination as 
to whether to approve or deny an application submitted under subsection 
(a) or (b). If the preliminary determination is to deny the 
application, the Attorney General shall notify the applicant in writing 
of the preliminary determination and the reasons for the preliminary 
determination, and shall afford the applicant an opportunity to 
supplement the application with additional information and to request a 
hearing on the application. If the applicant, in a timely manner, 
requests such a hearing, the Attorney General shall hold the hearing at 
a location convenient to the applicant, and shall notify the applicant 
in writing of the time and place of the hearing.''.
  (b) Conforming Amendment.--Section 923(f) of such title, as amended 
by section 2(a) of this Act, is amended by striking ``(d)(3)'' each 
place it appears and inserting ``(d)(4)''.

SEC. 4. DEFINITION OF WILLFULLY.

  Section 923(e) of title 18, United States Code, as amended by section 
2(a) of this Act, is amended by adding at the end the following:
  ``(5) For purposes of this subsection, the term `willfully' means, 
with respect to conduct of a person, that the person knew of a legal 
duty, and engaged in the conduct knowingly and in intentional disregard 
of the duty.''.

SEC. 5. ESTABLISHMENT OF FORMAL INSPECTION, EXAMINATION, AND 
                    INVESTIGATIVE GUIDELINES.

  The Attorney General shall establish guidelines for how the Bureau of 
Alcohol, Tobacco, Firearms, and Explosives is to conduct inspections, 
examinations, or investigations of possible violations of chapters 40 
and 44 of title 18, United States Code.

SEC. 6. REVIEW BY THE INSPECTOR GENERAL OF THE DEPARTMENT OF JUSTICE OF 
                    THE GUN SHOW ENFORCEMENT PROGRAM; REPORT.

  (a) Review.--The Inspector General of the Department of Justice shall 
conduct a review of the operations of the Bureau of Alcohol, Tobacco, 
Firearms, and Explosives, for the purpose of assessing the manner in 
which the Bureau conducts the gun show enforcement program and blanket 
residency checks of prospective and actual firearms purchasers.
  (b) Report.--Not later than 1 year after the date of the enactment of 
this Act, the Inspector General of the Department of Justice shall 
submit to the Committee on the Judiciary of the House of 
Representatives and the Committee on the Judiciary of the Senate a 
written report that contains the findings of the review required by 
subsection (a), and includes such recommendations as may be 
appropriate.

SEC. 7. LIMITATIONS ON USE OF FIREARMS PURCHASER INFORMATION.

  Section 923(g)(1)(D) of title 18, United States Code, is amended in 
the last sentence by inserting ``, except that information identifying 
a person who has purchased or received firearms or ammunition and who 
is not prohibited from doing so may not be so made available or so 
provided unless the agency involved has certified that the agency will 
not disclose the information to any entity other than a court, federal, 
State or local law enforcement agency, or prosecutor'' before the 
period.

SEC. 8. LIQUIDATION OF INVENTORY IN FEDERAL FIREARMS LICENSE 
                    EXPIRATION, SURRENDER, OR REVOCATION CASES.

  Section 923 of title 18, United States Code, is amended by adding at 
the end the following:
  ``(m) A person whose license issued under this chapter is expired, 
surrendered, or revoked shall be afforded 60 days from the effective 
date of the expiration, surrender, or revocation to liquidate the 
firearms inventory of the person, which time may be extended upon a 
showing of reasonable cause. During such 60-day period (including any 
extension of the period), the license involved shall continue to be 
considered valid.''.

SEC. 9. OPPORTUNITY TO CURE VIOLATIONS AFTER ACQUISITION OF FIREARMS 
                    BUSINESS.

  Section 923 of title 18, United States Code, is further amended by 
adding at the end the following:
  ``(n) If the Attorney General is made aware that a business licensed 
under this chapter has transferred to a surviving spouse or child of 
the licensee, to an executor, administrator, or other legal 
representative of a deceased licensee; or to a receiver or trustee in 
bankruptcy, or an assignee for benefit of creditors, and, before the 
transfer, or on the first inspection or examination by the Attorney 
General of the records of the licensee after the transfer, the licensee 
is found to be operating the business in violation of this chapter, the 
Attorney General--
          ``(1) shall notify the transferee of the violation by the 
        transferor; and
          ``(2) shall not presume that the transferee is committing the 
        violation.''.

SEC. 10. STANDARDS FOR CRIMINAL VIOLATIONS OF RECORDKEEPING 
                    REQUIREMENTS.

  Section 922(m) of title 18, United States Code, is amended--
          (1) by striking ``any false entry'' and inserting ``a 
        materially false entry'';
          (2) by striking ``appropriate entry'' and inserting ``a 
        materially significant entry''; and
          (3) by striking ``properly maintain'' and inserting ``retain 
        custody of''.

SEC. 11. EFFECTIVE DATE.

  This Act and the amendments made by this Act shall take effect at the 
end of the 180-day period that begins with the date of the enactment of 
this Act.

                          Purpose and Summary

    H.R. 5092 reforms and modernizes the Bureau of Alcohol, 
Tobacco, Firearms and Explosives' (``BATFE'') enforcement 
authority. In the 109th Congress, the Subcommittee on Crime, 
Terrorism and Homeland Security conducted extensive oversight 
hearings on BATFE's management and enforcement activities. Such 
oversight has been long overdue given BATFE's mixed enforcement 
record. In response to specific concerns identified during the 
oversight hearings, Subcommittee Chairman Coble and Ranking 
Member Scott crafted a comprehensive reform measure which 
includes: (1) authorization of graduated penalties and civil 
penalties (e.g. fines and suspensions); (2) creation of 
independent administrative law judges to hear enforcement 
cases; (3) a clarification on the definition of the requisite 
state of mind for civil violations; (4) the establishment of 
investigative guidelines; (5) request that the Department of 
Justice Inspector General investigate BATFE's gun show 
enforcement practices; and (6) clarification of several 
enforcement regulations.

                Background and Need for the Legislation

    H.R. 5092 was introduced on April 5, 2006, by Subcommittee 
Chairman Coble and Ranking Member Scott as a bipartisan attempt 
to address issues raised during the BATFE oversight hearings. 
Earlier this year, the Subcommittee on Crime, Terrorism and 
Homeland Security conducted three oversight hearings regarding 
the BATFE's investigation and enforcement activities. This 
legislation addresses concerns raised at those hearings. The 
Subcommittee, by voice vote, reported the bill favorably to the 
full Committee on May 3, 2006.
    The oversight hearings held by the Subcommittee raised 
serious concerns relating to the BATFE's: allocation of 
resources; BATFE's licensing procedure and enforcement of 
regulations against licensees; criminal investigation 
techniques, including questionable stops, searches and seizures 
of firearm purchasers and Federal firearm licensees (``FFL''); 
and the lack of consistent law enforcement policies and 
procedures among the BATFE's field offices and central 
management.
    The Subcommittee's oversight hearings revealed the need 
for: (1) a graduated penalty system in title 18 U.S.C. 
Sec. 923, which includes civil penalties, based on the degree 
of risk of harm that the FFL's violation poses to others; (2) 
establishing a system of neutral administrative law judges to 
review the licensing decisions of the BATFE; (3) establishing 
investigative guidelines similar to those of the Federal Bureau 
of Investigation and Drug Enforcement Agency; and (4) other 
modifications to Federal law to ensure that American citizens 
receive due process of law.

                            CIVIL PENALTIES

    Section 2 of H.R. 5092 establishes a graduated penalty 
system under 18 U.S.C. Sec. 923, which includes civil 
penalties, based on the degree of risk of harm that the FFL's 
violation poses to others. For too many years BATFE has labored 
under a restrictive enforcement scheme which forces BATFE to 
either revoke a license or do nothing at all. This bill 
provides the BATFE with graduated sanctions so that FFLs will 
face a full range of possible sanctions, including civil 
penalties, suspensions and the ultimate penalty--revocation of 
their licenses. Any sanction is based on whether the violation 
is ``serious,'' those that pose a risk to the public, or are 
``minor violations,'' those that do not pose a risk of harm to 
the public. No longer will BATFE have to cajole licensees to 
comply or threaten them with heavy-handed revocation 
proceedings; instead, the BATFE will be able to seek a penalty 
that reflects the infraction. The bill also sets reasonable 
penalty caps: $5,000 for minor violations, and $15,000 for 
serious violations. Further, repeat offenders who commit minor 
violations can eventually have their license revoked. Serious 
violations will also result in revocation.

             FIVE YEAR STATUTE OF LIMITATIONS ON VIOLATIONS

    Section 2 of the bill sets out a five year statute of 
limitations for enforcement of violations, but extends that 
period if a licensee obstructs discovery of the violation. If 
the licensee has not violated the law for five years, there is 
no need to subject the licensee to enforcement action. The 
Federal criminal code imposes a five year statute of 
limitations for criminal offenses and the tax code imposes a 
three year statute of limitation for felonies and six years set 
for serious felonies, all from the date of occurrence of the 
violation.

                 REQUIREMENT OF DE NOVO JUDICIAL REVIEW

    Section 3 clarifies congressional intent with respect to de 
novo judicial review. As there has been some uncertainty among 
the courts in reenacting this provision, the Committee approves 
the interpretation in Willingham Sports, Inc. v. Bureau of 
Alcohol, Tobacco, Firearms and Explosives, 348 F.Supp.2d 1299, 
1306, n.12 (S.D. Ala. 2004) (``no deference must be accorded to 
the administrative proceedings . . . To the extent that the 
BATFE argues that the Federal court must uphold the agency 
decision as long as there is substantial evidence to support 
it, the Court cannot agree, as such a formulation would 
contravene the `de novo' statutory language'').

                      NEED TO DEFINE ``WILLFULLY''

    The Committee discovered examples of the BATFE, revoking 
FFL licenses based on minuscule clerical errors. This 
demonstrates the need to require the BATFE to prove that the 
licensee knowingly and intentionally violated the Gun Control 
Act.
    In Article II Gun Shop, Inc. v. Gonzales, 441 F.3d 492 (7th 
Cir. 2006), (Gun World is the trade name for the FFL at issue 
in this case), the Court of Appeals upheld the revocation of 
Gun World's license by the BATFE based on clerical errors 
contained in 12 out of the 880 BATFE 4473 Forms. Whenever a 
firearm is sold, a dealer is required by law to fill out a 
``Form 4473.'' Gun World's 4473 documents were maintained as 
follows:

    On six forms, Gun World omitted the type of identification 
used by the buyer (although the type of identification was 
known from another document); on two forms, Gun World's 
salesperson omitted his signature and the date of the transfer 
(although the information was on another document); on two 
forms the buyer did not state whether he had ever been 
adjudicated mentally defective or been committed to a mental 
institution (although in both instances he was not, and that 
was known to Gun World); on one form, Gun World omitted the 
initial NICS response (although the form also indicated an 
approval number); and on one form, the firearm manufacturer was 
not expressly stated (although it was known by the serial 
number and model).

    Gun World prepared approximately 880 ``Forms 4473'', and 
only 12 of those documents contained alleged errors or 
omissions. Thus, there were omissions on 1.4 percent of Gun 
World's Forms.
    In the period from January, 1999 through February, 2000, 
Form 4473 contained 39 blocks for recording 58 items of 
information (legal alien purchasers, are required to provide an 
additional four items of information). Thus, for approximately 
880 Form 4473s, there were approximately 34,320 blocks to be 
completed or approximately 51,240 items of information to be 
provided.
    On the 12 Forms on which BATFE found omissions, Gun World 
failed to complete, or to ensure that the purchaser completed, 
16 blocks; i.e., to provide 19 items of 
information.Accordingly, there were omissions on a minuscule .05 
percent (5/100 percent) of the blocks or .04 percent (4/100 percent) of 
the items of information on Gun World's Form 4473s. The experience of 
Gun World demonstrates why Congress needs to establish a ``willfully'' 
standard for civil actions against FFLs.
    Section 4 establishes a definition of the term 
``willfully'' for purposes of 18 U.S.C. Sec. 923(e). The 
purpose of the definition is to clarify and codify Congress' 
intent when it enacted the Firearms Owners Protection Act of 
1986 (``FOPA''), i.e., to ensure that licenses are not revoked 
for inadvertent or unintentional errors, but only for knowing, 
intentional actions by a licensee. It's entirely reasonable to 
require the government to prove bad intent (knowledge of the 
law, and the intent to violate it) before putting a dealer out 
of business or under this legislation imposing stiff fines or a 
license suspension. However, a dealer cannot evade its 
responsibilities by intentionally ignoring the law, or simply 
stating that he or she was unaware of the requirements of the 
law. The doctrine of ``willful blindness'' would still apply 
under this new definition of ``willful.'' A FFL's signing of a 
certification that he or she has read and is familiar with the 
rules applicable to his or her license issuance, is prima facie 
evidence that he or she knows and understands his or her 
licensee duties.
    The Committee recognizes that, despite the best efforts of 
a law-abiding business person, errors will occur and the 
Committee believes that mere human error should not deprive a 
licensee of his or her livelihood.\1\ This definition is 
intended to reverse court decisions that have interpreted 
``willfully'' (as enacted by the FOPA) not to require proof 
that the licensee knew of his legal duty and intentionally 
disregarded that duty: see e.g., Appalachian Resources Dev. 
Corp. v. McCabe, 387 F.3d 461 (6th Cir. 2004); Stein's Inc. v. 
Blumenthal, 649 F.2d 463 (7th Cir. 1980); Article II Gun Shop, 
Inc. v. Gonzales, 441 F.3d 492 (7th Cir. 2006); Lewin v. 
Blumenthal, 590 F.2d 268 (8th Cir. 1979); Perri v. Dep't of 
Treasury, 637 F.2d 1332 (9th Cir. 1981); Cucchiara v. Secretary 
of the Treasury, 652 F.2d 28 (9th Cir. 1981); and Willingham 
Sports, Inc. v. BATFE, 415 F.3d 1274 (11th Cir. 2005).
---------------------------------------------------------------------------
    \1\As Kennedy, J. has noted:

    We all tend toward myopia when looking for our own erros. Every 
lawyer and every judge can recite examples of documents that they 
wrote, checked, and doublechecked, but that still contained glaring 
errors.
    Groh v. Ramirez, 540 U.S. 551, 568 (2004) (Kennedy, J., disenting).
---------------------------------------------------------------------------
    The Subcommittee received testimony that the BATFE treats 
virtually all errors in dealers records, no matter how few or 
how minor, as willful violations. Any error may result in 
license revocation. For example, a witness cited the fact that 
a licensee received a revocation notice for a ``Y'' or an ``N'' 
instead of writing out ``Yes'' or ``No'' on a firearms 
transaction form. Another revocation notice cited the failure 
of a firearms purchaser to identify the county of residence, 
although the purchaser listed the city of residence. The 
Committee also received testimony that BATFE cited violations 
from 10 or 20 years earlier as supporting a revocation notice.
    These acts do not constitute the ``willful'' standard 
Congress adopted in the FOPA. The Senate Judiciary Committee 
Report stated, the purpose of adding ``willfully'' to the 
license revocation procedure ``is to ensure that licenses are 
not revoked for inadvertent errors or technical mistakes.''\2\ 
But BATFE continues to refute this interpretation. In fact, in 
one case, BATFE argued to the court that Congress' addition of 
the word ``willfully'' to the license revocation statute was 
``without practical significance.''
---------------------------------------------------------------------------
    \2\S. Rep. No. 98-583 at 88.
---------------------------------------------------------------------------

                   GUN SHOW INSPECTOR GENERAL REPORT

    The Subcommittee on Crime's oversight hearings reviewed the 
BATFE's activities related to Richmond, Virginia gun show 
operations. The testimony showed that between May of 2004 and 
August of 2005, BATFE conducted a series of eight gun show 
enforcement operations in the Richmond area. BATFE's 
enforcement activity had such a chilling effect on lawful 
purchases by legitimate customers exercising their Second 
amendment rights, that many potential purchasers simply walked 
away from the transaction as a result of the wait time.
    During these gun shows, BATFE admitted to stopping and 
interviewing approximately 206 individuals as a result of their 
attendance or purchase of a firearm at the gun show. 
Additionally, 50 individuals had their firearms seized by BATFE 
and were provided with a letter indicating that these 
individuals may have knowingly made a false statement to a 
firearms dealer, a crime punishable by imprisonment for up to 
five years. These 50 individuals were ordered to appear at the 
local BATFE office to discuss their transactions and were 
warned that failure to appear could result in a warrant for 
arrest.
    BATFE's allocation of resources; its gun enforcement 
program in Richmond and other cities has raised serious 
questions that the Inspector General needs to review. Section 6 
of H.R. 5092 contains a provision requiring the Inspector 
General to conduct an oversight report on BATFE's operations. 
The Inspector General's report will help us to examine other 
critical issues and ensure that BATFE remains focused on its 
mission.

                        LIQUIDATION OF INVENTORY

    Section 8 of the bill allows a licensee whose license was 
terminated or revoked 60 days to liquidate his or her 
inventory--dispose, sell or otherwise legally transfer 
inventory to purchasers. This provision simply allows a dealer 
to close down the business in an orderly manner. The licensee 
must still comply with all applicable law and regulations, 
including the normal background check and record-keeping 
requirements. If the licensee does not, he or she is subject to 
graduated sanctions as set out in section 2 of the bill.

                                hearings

    The Committee on the Judiciary held no hearings 
specifically on H.R. 5092. However, prior to H.R. 5092 being 
introduced, the Subcommittee on Crime, Terrorism and Homeland 
Security conducted three oversight hearings regarding BATFE's 
actions.
    The first hearing was held on February 15, 2006, and the 
following witnesses appeared: Annette Gelles, Owner, Showmaster 
Gun Shows; James Lalime, Gun Salesman; John White, Owner, The 
Gunsmith; and Suzanne McComas, Licensed Field Investigator in 
the State of New York. The second hearing was held on February 
28, 2006, and received testimony from three witnesses: Michael 
R. Bouchard, Assistant Director (Field Operations), Bureau of 
Alcohol, Tobacco, Firearms and Explosives; Lt. Col. D.A. 
Middleton, Deputy Chief of Police, Henrico County Police 
Department; and Major David McCoy, City of Richmond Police 
Department. The final hearing took place on March 28, 2006, at 
which the following witnesses testified: Audrey Stucko, Deputy 
Assistant Director for Enforcement Programs & Services, Bureau 
of Alcohol, Tobacco, Firearms, and Explosives; Richard 
Gardiner, Attorney at Law in Virginia; Lt. Michael Lara, 
Officer, City of Tucson Police Department: and M. Kristen Rand, 
Legislative Director, Violence Policy Center.
    H.R. 5092 addresses concerns that were raised at each of 
those hearings.

                        Committee Consideration

    On May 3, 2006, the Subcommittee on Crime, Terrorism, and 
Homeland Security met in open session and ordered favorably 
reported the bill H.R. 5092, by voice vote, a quorum being 
present. On September 7, 2006, the Committee met in open 
session and ordered the bill H.R. 5092 favorably reported by 
voice vote, a quorum being present.

                         Vote of the Committee

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the Committee notes that there 
were the following roll call votes occurred during the 
committee's consideration of H.R. 5092.
    Date: 9-7-06
    Rollcall No. 2
    Subject: Roll to record presence of Members to consider 
amendments to H.R. 5092--there were 14 Members present.

------------------------------------------------------------------------
                                      Ayes         Nays        Present
------------------------------------------------------------------------
Mr. Hyde........................  ...........  ...........  ............
Mr. Coble.......................  ...........  ...........            X
Mr. Smith.......................  ...........  ...........            X
Mr. Gallegly....................  ...........  ...........  ............
Mr. Goodlatte...................  ...........  ...........  ............
Mr. Chabot......................  ...........  ...........  ............
Mr. Lungren.....................  ...........  ...........  ............
Mr. Jenkins.....................  ...........  ...........            X
Mr. Cannon......................  ...........  ...........            X
Mr. Bachus......................  ...........  ...........  ............
Mr. Inglis......................  ...........  ...........            X
Mr. Hostettler..................  ...........  ...........  ............
Mr. Green.......................  ...........  ...........  ............
Mr. Keller......................  ...........  ...........            X
Mr. Issa........................  ...........  ...........  ............
Mr. Flake.......................  ...........  ...........  ............
Mr. Pence.......................  ...........  ...........  ............
Mr. Forbes......................  ...........  ...........  ............
Mr. King........................  ...........  ...........            X
Mr. Feeney......................  ...........  ...........            X
Mr. Franks......................  ...........  ...........  ............
Mr. Gohmert.....................  ...........  ...........  ............
Mr. Conyers.....................  ...........  ...........            X
Mr. Berman......................  ...........  ...........  ............
Mr. Boucher.....................  ...........  ...........            X
Mr. Nadler......................  ...........  ...........  ............
Mr. Scott.......................  ...........  ...........            X
Mr. Watt........................  ...........  ...........  ............
Ms. Lofgren.....................  ...........  ...........  ............
Ms. Jackson Lee.................  ...........  ...........  ............
Ms. Waters......................  ...........  ...........  ............
Mr. Meehan......................  ...........  ...........  ............
Mr. Delahunt....................  ...........  ...........  ............
Mr. Wexler......................  ...........  ...........  ............
Mr. Weiner......................  ...........  ...........            X
Mr. Schiff......................  ...........  ...........  ............
Ms. Sanchez.....................  ...........  ...........  ............
Mr. Van Hollen..................  ...........  ...........  ............
Mrs. Wasserman Schultz..........  ...........  ...........            X
Mr. Sensenbrenner, Chairman.....  ...........  ...........            X
                                 ---------------------------------------
    Total.......................  ...........  ...........           14
------------------------------------------------------------------------

    Rollcall No. 3
    Subject: Weiner amendment (#313) to the Coble amendment in 
the nature of a substitute to H.R. 5092, to strike lanaguage 
that provides a Federal firearm licensee 60 days to liquidate 
its inventory after going out of business, was not agreed to by 
a rollcall vote of 4 ayes to 18 nays.

------------------------------------------------------------------------
                                    Ayes          Nays         Present
------------------------------------------------------------------------
Mr. Hyde......................  ............  ............  ............
Mr. Coble.....................  ............            X   ............
Mr. Smith.....................  ............            X   ............
Mr. Gallegley.................  ............  ............  ............
Mr. Goodlatte.................  ............  ............  ............
Mr. Chabot....................  ............            X   ............
Mr. Lungren...................  ............            X   ............
Mr. Jenkins...................  ............            X   ............
Mr. Cannon....................  ............            X   ............
Mr. Bachus....................  ............            X   ............
Mr. Inglis....................  ............            X   ............
Mr. Hostlettler...............  ............            X   ............
Mr. Green.....................  ............  ............  ............
Mr. Keller....................  ............            X   ............
Mr. Issa......................  ............  ............  ............
Mr. Flake.....................  ............  ............  ............
Mr. Pence.....................  ............  ............  ............
Mr. Forbes....................  ............            X   ............
Mr. King......................  ............            X   ............
Mr. Feeney....................  ............            X   ............
Mr. Franks....................  ............            X   ............
Mr. Gohmert...................  ............            X   ............
Mr. Conyers...................            X   ............  ............
Mr. Berman....................  ............  ............  ............
Mr. Boucher...................  ............            X   ............
Mr. Nadler....................  ............  ............  ............
Mr. Scott.....................  ............            X   ............
Mr. Watt......................  ............  ............  ............
Ms. Lofgren...................  ............  ............  ............
Ms. Jackson Lee...............  ............  ............  ............
Ms. Waters....................  ............  ............  ............
Mr. Meehan....................  ............  ............  ............
Mr. Delahunt..................  ............  ............  ............
Mr. Wexler....................  ............  ............  ............
Mr. Weiner....................            X   ............  ............
Mr. Schiff....................            X   ............  ............
Ms. Sanchez...................  ............  ............  ............
Mr. Van Hollen................  ............  ............  ............
Mrs. Wasserman Schultz........            X   ............  ............
Mr. Sensenbrenner, Chairman...  ............            X   ............
                               -----------------------------------------
    Total.....................            4            18   ............
------------------------------------------------------------------------

    Date: 9-7-06
    Rollcall No. 4
    Subject: Weiner amendment (#314) to the Coble amendment in 
the nature of a substitute to H.R. 5092, to strike language 
regarding the Attorney General's pursuing civil sanctions 
against a licensee which has also been a defendant in a 
criminal action, was not agreed to by a roll call vote of 9 
ayes to 16 nays.

------------------------------------------------------------------------
                                    Ayes          Nays         Present
------------------------------------------------------------------------
Mr. Hyde......................  ............  ............  ............
Mr. Coble.....................  ............            X   ............
Mr. Smith.....................  ............            X   ............
Mr. Gallegly..................  ............  ............  ............
Mr. Goodlatte.................  ............  ............  ............
Mr. Chabot....................  ............            X   ............
Mr. Lungren...................  ............            X   ............
Mr. Jenkins...................  ............            X   ............
Mr. Cannon....................  ............            X   ............
Mr. Bachus....................  ............            X   ............
Mr. Inglis....................  ............            X   ............
Mr. Hostettler................  ............  ............  ............
Mr. Green.....................  ............  ............  ............
Mr. Keller....................  ............            X   ............
Mr. Issa......................  ............  ............  ............
Mr. Flake.....................  ............  ............  ............
Mr. Pence.....................  ............  ............  ............
Mr. Forbes....................  ............            X   ............
Mr. King......................  ............            X   ............
Mr. Feeney....................  ............            X   ............
Mr. Franks....................  ............            X   ............
Mr. Gohmert...................  ............            X   ............
Mr. Conyers...................            X   ............  ............
Mr. Berman....................  ............  ............  ............
Mr. Boucher...................  ............            X   ............
Mr. Nadler....................  ............  ............  ............
Mr. Scott.....................            X   ............  ............
Mr. Watt......................  ............  ............  ............
Ms. Lofgren...................  ............  ............  ............
Ms. Jackson Lee...............  ............  ............  ............
Ms. Waters....................            X   ............  ............
Mr. Meehan....................            X   ............  ............
Mr. Delahunt..................  ............  ............  ............
Mr. Wexler....................            X   ............  ............
Mr. Weiner....................            X   ............  ............
Mr. Schiff....................            X   ............  ............
Ms. Sanchez...................  ............  ............  ............
Mr. Van Hollen................            X   ............  ............
Mrs. Wasserman Schultz........            X   ............  ............
Mr. Sensenbrenner, Chairman...  ............            X   ............
                               -----------------------------------------
    Total.....................            9            16   ............
------------------------------------------------------------------------

    Date: 9-7-06
    Rollcall No. 5
    Subject: Weiner amendment (#317) to the Coble amendment in 
the nature of a substitute to H.R. 5092, to amend the maximum 
amount of fines a Federal firearm licensee would be subject to 
if it violated section 923 of title 18, U.S.C., which was not 
agreed to by a roll call vote of 8 ayes to 20 nays.

------------------------------------------------------------------------
                                    Ayes          Nays         Present
------------------------------------------------------------------------
Mr. Hyde......................  ............  ............  ............
Mr. Coble.....................  ............            X   ............
Mr. Smith.....................  ............            X   ............
Mr. Gallegly..................  ............  ............  ............
Mr. Goodlatte.................  ............  ............  ............
Mr. Chabot....................  ............            X   ............
Mr. Lungren...................  ............            X   ............
Mr. Jenkins...................  ............            X   ............
Mr. Cannon....................  ............            X   ............
Mr. Bachus....................  ............            X   ............
Mr. Inglis....................  ............            X   ............
Mr. Hostettler................  ............            X   ............
Mr. Green.....................  ............            X   ............
Mr. Keller....................  ............            X   ............
Mr. Issa......................  ............            X   ............
Mr. Flake.....................  ............            X   ............
Mr. Pence.....................  ............  ............  ............
Mr. Forbes....................  ............            X   ............
Mr. King......................  ............            X   ............
Mr. Feeney....................  ............            X   ............
Mr. Franks....................  ............            X   ............
Mr. Gohmert...................  ............            X   ............
Mr. Conyers...................            X   ............  ............
Mr. Berman....................  ............  ............  ............
Mr. Boucher...................  ............            X   ............
Mr. Nadler....................  ............  ............  ............
Mr. Scott.....................  ............            X   ............
Mr. Watt......................  ............  ............  ............
Ms. Lofgren...................  ............  ............  ............
Ms. Jackson Lee...............            X   ............  ............
Ms. Waters....................            X   ............  ............
Mr. Meehan....................  ............  ............  ............
Mr. Delahunt..................  ............  ............  ............
Mr. Wexler....................            X   ............  ............
Mr. Weiner....................            X   ............  ............
Mr. Schiff....................            X   ............  ............
Ms. Sanchez...................  ............  ............  ............
Mr. Van Hollen................            X   ............  ............
Mrs. Wasserman Schultz........            X   ............  ............
Mr. Sensenbrenner, Chairman...  ............            X   ............
                               -----------------------------------------
    Total.....................            8            20   ............
------------------------------------------------------------------------

    Date: 9-7-06
    Rollcall No. 6
    Subject: Jackson Lee amendment to the Coble amendment in 
the nature of a substitute to H.R. 5092, to strike the 
definition of ``willfully'', which was not agreed to by a roll 
call vote of 9 ayes to 17 nays.

------------------------------------------------------------------------
                                    Ayes          Nays         Present
------------------------------------------------------------------------
Mr. Hyde......................  ............  ............  ............
Mr. Coble.....................  ............            X   ............
Mr. Smith.....................  ............            X   ............
Mr. Gallegly..................  ............  ............  ............
Mr. Goodlatte.................  ............  ............  ............
Mr. Chabot....................  ............            X   ............
Mr. Lungren...................  ............            X   ............
Mr. Jenkins...................  ............            X   ............
Mr. Cannon....................  ............            X   ............
Mr. Bachus....................  ............  ............  ............
Mr. Inglis....................  ............            X   ............
Mr. Hostettler................  ............            X   ............
Mr. Green.....................  ............  ............  ............
Mr. Keller....................  ............  ............  ............
Mr. Issa......................  ............            X   ............
Mr. Flake.....................  ............            X   ............
Mr. Pence.....................  ............  ............  ............
Mr. Forbes....................  ............            X   ............
Mr. King......................  ............            X   ............
Mr. Feeney....................  ............            X   ............
Mr. Franks....................  ............            X   ............
Mr. Gohmert...................  ............            X   ............
Mr. Conyers...................            X   ............  ............
Mr. Berman....................  ............  ............  ............
Mr. Boucher...................  ............            X   ............
Mr. Nadler....................  ............  ............  ............
Mr. Scott.....................            X   ............  ............
Mr. Watt......................  ............  ............  ............
Mr. Lofgren...................  ............  ............  ............
Ms. Jackson Lee...............            X   ............  ............
Ms. Waters....................            X   ............  ............
Mr. Meehan....................  ............  ............  ............
Mr. Delahunt..................  ............  ............  ............
Mr. Wexler....................            X   ............  ............
Mr. Weiner....................            X   ............  ............
Mr. Schiff....................            X   ............  ............
Ms. Sanchez...................  ............  ............  ............
Mr. Van Hollen................            X   ............  ............
Mrs. Wasserman Schultz........            X   ............  ............
Mr. Sensenbrenner, Chairman...  ............            X   ............
                               -----------------------------------------
    Total.....................            9            17   ............
------------------------------------------------------------------------

    Date: 9-7-06
    Rollcall No. 7
    Subject: Weiner amendment in the nature of a substitute to 
H.R. 5092, to amend the Attorney General's ability to sanction 
licensed dealers that violate Section 923 of title 18, U.S.C., 
which was not agreed to by a roll call vote of 10 ayes to 16 
nays.

------------------------------------------------------------------------
                                    Ayes          Nays         Present
------------------------------------------------------------------------
Mr. Hyde......................  ............  ............  ............
Mr. Coble.....................  ............            X   ............
Mr. Smith.....................  ............            X   ............
Mr. Gallegly..................  ............  ............  ............
Mr. Goodlatte.................  ............  ............  ............
Mr. Chabot....................  ............            X   ............
Mr. Lungren...................  ............            X   ............
Mr. Jenkins...................  ............            X   ............
Mr. Cannon....................  ............            X   ............
Mr. Bachus....................  ............  ............  ............
Mr. Inglis....................  ............            X   ............
Mr. Hostettler................  ............            X   ............
Mr. Green.....................  ............  ............  ............
Mr. Keller....................  ............  ............  ............
Mr. Issa......................  ............            X   ............
Mr. Flake.....................  ............            X   ............
Mr. Pence.....................  ............  ............  ............
Mr. Forbes....................            X   ............  ............
Mr. King......................  ............  ............  ............
Mr. Feeney....................  ............            X   ............
Mr. Franks....................  ............            X   ............
Mr. Gohmert...................  ............            X   ............
Mr. Conyers...................            X   ............  ............
Mr. Berman....................  ............  ............  ............
Mr. Boucher...................  ............            X   ............
Mr. Nadler....................  ............  ............  ............
Mr. Scott.....................            X   ............  ............
Mr. Watt......................  ............  ............  ............
Ms. Lofgren...................  ............  ............  ............
Ms. Jackson Lee...............            X   ............  ............
Ms. Waters....................            X   ............  ............
Mr. Meehan....................            X   ............  ............
Mr. Delahunt..................  ............  ............  ............
Mr. Wexler....................            X   ............  ............
Mr. Weiner....................            X   ............  ............
Mr. Schiff....................            X   ............  ............
Ms. Sanchez...................  ............  ............  ............
Mr. Van Hollen................            X   ............  ............
Mrs. Wasserman Schultz........            X   ............  ............
Mr. Sensenbrenner, Chairman...  ............            X   ............
                               -----------------------------------------
    Total.....................           10            16   ............
------------------------------------------------------------------------

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII of the Rules 
of the House of Representatives, the Committee reports that the 
findings and recommendations of the Committee, based on 
oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

               New Budget Authority and Tax Expenditures

    Clause 3(c)(2) of rule XIII of the Rules of the House of 
representatives is inapplicable because this legislation does 
not provide new budgetary authority or increased tax 
expenditures.

               Congressional Budget Office Cost Estimate

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, the Committee sets forth, with 
respect to the bill, H.R. 5092, the following estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 
1974.

H.R. 5092--Bureau of Alcohol, Tobacco, Firearms, and Explosives (BATFE) 
        Modernization and Reform Act of 2006

    Summary: H.R. 5092 would authorize the Bureau of Alcohol, 
Tobacco, Firearms, and Explosives (BATFE) to impose civil fines 
for violations of firearms laws. It also would change the 
procedures BATFE uses to approve applications for firearms 
licenses and how the agency prosecutes license violations. 
Finally, the bill would require administrative law judges to 
review certain BATFE actions.
    CBO estimates that implementing H.R. 5092 would cost about 
$50 million over the 2007-2011 period, assuming appropriation 
of the necessary amounts. Enacting the bill could affect 
revenues, but CBO estimates that any such effects would not be 
significant. H.R. 5092 contains no intergovernmental or 
private-sector mandates as defined in the Unfunded Mandates 
Reform Act (UMRA) and would impose no costs on state, local, or 
tribal governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 5092 is shown in the following table. 
The costs of this legislation fall within budget function 750 
(administration of justice).

----------------------------------------------------------------------------------------------------------------
                                                                    By fiscal year, in millions of dollars--
                                                               -------------------------------------------------
                                                                  2007      2008      2009      2010      2011
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Estimated Authorization Level.................................         7        10        11        12        12
Estimated Outlays.............................................         7        10        11        12        12
----------------------------------------------------------------------------------------------------------------

Basis of estimate

    CBO estimates that implementing H.R. 5092 would cost about 
$50 million over the 2007-2011 period. For this estimate, CBO 
assumes that the necessary amounts will be appropriated near 
the start of each fiscal year and that spending will follow 
historical patterns for similar activities. In addition, CBO 
estimates that enacting the bill would have an insignificant 
effect on revenues.
            Spending Subject to Appropriation
    H.R. 5092 would require administrative law judges to review 
BATFE actions that are disputed by firearms licensees and 
applicants, including suspensions and revocations of licenses, 
denials of applications, and fines. BATFE has 23 field 
divisions in the United States and the agency expects it would 
need to hire 20 judges to review actions in these divisions. 
Based on information from BATFE, CBO expects that annual costs 
for each administrative law judge would total about $325,000, 
including salaries, benefits, and support expenses. Thus, we 
estimate that costs relating to administrative law judges would 
total $6.5 million a year when fully implemented in 2008.
    BATFE also expects that it would need to hire one attorney 
for each field division, mostly to prepare for hearings before 
administrative law judges. Based on a cost of about $160,000 
per attorney, including salaries, benefits, and support 
expenses, CBO estimates that it would cost nearly $4 million 
annually for the additional attorneys when fully implemented in 
2008. In addition, we expect that BATFE would spend about $2 
million in 2007 for enhanced computer systems, mostly to record 
the new civil fines and implement the new administrative 
procedures that would be established by H.R. 5092.
            Revenues
    BATFE currently lacks the authority to impose civil fines 
on violators of firearms laws. Under the provisions of H.R. 
5092, such violators could be subject to civil fines, so the 
federal government might collect additional fines if the 
legislation is enacted. Civil fines are recorded as revenues 
and deposited in the Treasury. CBO expects that any additional 
revenues would not be significant because the bill would limit 
the amount of penalties that could be imposed on violators.
    Intergovernmental and private-sector impact: H.R. 5092 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments.
    Estimate prepared by: Federal costs: Mark Grabowicz; Impact 
on state, local, and tribal governments: Melissa Merrell; 
Impact on the private sector: Amy Petz.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds the authority for 
this legislation in article I, section 8, of the Constitution.

               Section-by-Section Analysis and Discussion

    The following discussion describes the bill as reported by 
the Committee.

Sec. 1. Short title

    This section cites the short title of the bill as the 
``Bureau of Alcohol, Tobacco, Firearms, and Explosives (BATFE) 
Modernization and Reform Act of 2006.''

Sec. 2. Graduated penalties for civil violations by federal firearms 
        licensees

    This section provides ATF with the ability to impose 
graduated civil penalties against persons who violate any 
statute or regulation in ATF's jurisdiction. The penalties are 
graduated based on whether the violation is a ``serious'' or 
``non-serious'' violation. A ``serious'' violation is defined 
as one that; (1) results in, or could have resulted in, the 
transfer of a firearm or ammunition to a person prohibited from 
possessing or receiving the firearm or ammunition under chapter 
44; (2) obstructs or could have obstructed a bona fide civil or 
criminal investigation; or (3) prevents or could have prevented 
a licensee from complying with subsection (g)(7). A ``non-
serious'' violation is one that is not covered by the 
definition for ``serious'' violation.
    For a serious violation, ATF may impose a civil penalty of 
not more than $2,500 for each violation, up to a maximum of 
$15,000, suspend the license for up to 90 days, or revoke the 
license. For a ``non-serious'' violation, ATF may impose a 
civil penalty of not more than $1,000 for each violation, up to 
a maximum of $5,000, and may suspend a license for not more 
than 30 days if the licensee has at least 2 prior violations 
(serious or non-serious). The violation-specific limitation is 
designed to operate as a cap. ATF would have discretion to set 
a graduated scale of penalties up to that maximum ($1,000 and 
$2,500 per non-serious and serious violation, respectively) to 
reflect the nature and severity of the violation, the size of 
the firearms business operated by the licensee, and the prior 
record of the licensee.
    The section also bars ATF from initiating a civil 
enforcement action after five years from the date of the 
violation, except if the licensee intentionally obstructed 
discovery of the violation. This section also reforms existing 
law on due process hearings to permit a licensee subject to an 
enforcement order to seek a hearing before an Administrative 
Law Judge (ALJ) and sets deadlines for the completion of such a 
hearing. by streamlining the hearing process and requiring an 
independent Administrative Law Judge to conduct such a hearing, 
the intent is to expedite resolution of enforcement matters and 
to ensure a fair and consistent review of potential violations. 
Any enforcement order would be stayed pending review. The ALJ's 
determination would be subject to court review as provided in 
existing law and would retain the de novo standard for district 
court and appellate review.

Sec. 3. Consideration of federal firearms license applications

    This section provides procedures for preliminary 
consideration of license applications, and affords applicants 
with an opportunity to supplement the application with 
additional information and with the ability to request a 
hearing before an ALJ.

Sec. 4. Definition of willfully

    This section clarifies the definition of ``willfully'' when 
establishing the intent for a violation. The intent standard, 
as applied to licensees, would reflect the fact that licensees 
are provided with extensive education and notice of all legal 
and regulatory obligations. Thus, a violation of a known legal 
obligation would require ATF to establish that the licensee was 
aware of the obligation and intentionally or purposely violated 
such an obligation.

Sec. 5. Establishment of formal inspection, examination, and 
        investigative guidelines

    This section requires that ATF establish formal 
investigative guidelines similar to those already applicable to 
the Drug Enforcement Administration and the Federal Bureau of 
Investigation.

Sec. 6. Review by the Inspector General of the Department of Justice of 
        the Gun Show Enforcement Program; Report

    This section requires the Inspector General to conduct a 
review of ATF's operation in order to assess the manner in 
which ATF conducts its gun show enforcement program and blanket 
residency checks of prospective and actual firearms purchasers. 
Within one year of enactment, the IG is required to submit to 
the House and Senate Judiciary Committees a report as to its 
findings in its review.

Sec. 7. Limitations on use of firearms purchaser information

    This section amends 18 U.S.C. section 923(g)(1)(D) to 
ensure that AFT only shares information about individuals 
gathered in its enforcement programs with other law enforcement 
agencies when such agency certifies that the agency will not 
disclose such information to any nongovernmental entity. The 
intent in this provision is to endure that sharing of 
information among law enforcement agencies does not result in 
disclosures of private information to non-governmental entities 
which are not involved in law enforcement efforts. Such a 
prohibition would not extend to private contractors who work 
for law enforcement agencies (e.g. intelligence support or 
other law enforcement activities)

Sec. 8. Liquidation of inventory in federal firearms license 
        expiration, surrender or revocation cases

    This section amends section 923 of title 18 to ensure that 
a person has 60 days to liquidate the firearms inventory of a 
business, which shall be extended for reasonable cause.

Sec. 10. Opportunity to cure violations after acquisition of firearms 
        business

    This section amends section 923 of title 18 to provide a 
purchaser of a firearms business with an opportunity to cure 
any violations and limits ATF's ability to impose penalties for 
violations that may have existed prior to a transferee assuming 
control of the business.

Sec. 11. Standards or criminal violations of record-keeping 
        requirements

    This section amends section 922(m) of title 18 to require 
that any criminal violation of the record-keeping requirements 
involve ``materially'' false entries, and ``materially'' 
significant entry. The punishment for such a violation is a one 
year misdemeanor.

Sec. 12. Effective date

    This section provides that the effective date of the Act is 
to be 180 days after enactment.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

                      TITLE 18, UNITED STATES CODE



           *       *       *       *       *       *       *
PART I--CRIMES

           *       *       *       *       *       *       *


CHAPTER 44--FIREARMS

           *       *       *       *       *       *       *


Sec. 922. Unlawful acts

  (a) * * *

           *       *       *       *       *       *       *

  (m) It shall be unlawful for any licensed importer, licensed 
manufacturer, licensed dealer, or licensed collector knowingly 
to make [any false entry] a materially false entry in, to fail 
to make [appropriate entry] a materially significant entry in, 
or to fail to [properly maintain] retain custody of, any record 
which he is required to keep pursuant to section 923 of this 
chapter or regulations promulgated thereunder.

           *       *       *       *       *       *       *


Sec. 923. Licensing

  (a) * * *

           *       *       *       *       *       *       *

  (d)(1) * * *
  (2) The Attorney General shall make a preliminary 
determination as to whether to approve or deny an application 
submitted under subsection (a) or (b). If the preliminary 
determination is to deny the application, the Attorney General 
shall notify the applicant in writing of the preliminary 
determination and the reasons for the preliminary 
determination, and shall afford the applicant an opportunity to 
supplement the application with additional information and to 
request a hearing on the application. If the applicant, in a 
timely manner, requests such a hearing, the Attorney General 
shall hold the hearing at a location convenient to the 
applicant, and shall notify the applicant in writing of the 
time and place of the hearing.
  [(2)] (3) The Attorney General must approve or deny an 
application for a license within the 60-day period beginning on 
the date it is received. If the Attorney General fails to act 
within such period, the applicant may file an action under 
section 1361 of title 28 to compel the Attorney General to act. 
If the Attorney General approves an applicant's application, 
such applicant shall be issued a license upon the payment of 
the prescribed fee.
          (4) If the Attorney General denies an application for 
        a license, an administrative law judge of the 
        Department of Justice shall, on request by the 
        aggrieved party, promptly hold a hearing to review the 
        denial, at a location convenient to the aggrieved 
        party. If, after the hearing, the administrative law 
        judge decides not to reverse the denial, the 
        administrative law judge shall give notice of the final 
        denial decision to the aggrieved party.
  [(e) The Attorney General may, after notice and opportunity 
for hearing, revoke any license issued under this section if 
the holder of such license has willfully violated any provision 
of this chapter or any rule or regulation prescribed by the 
Attorney General under this chapter or fails to have secure gun 
storage or safety devices available at any place in which 
firearms are sold under the license to persons who are not 
licensees (except 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 to make available such a device). 
The Attorney General may, after notice and opportunity for 
hearing, revoke the license of a dealer who willfully transfers 
armor piercing ammunition. The Secretary's action under this 
subsection may be reviewed only as provided in subsection (f) 
of this section.
  [(f)(1) Any person whose application for a license is denied 
and any holder of a license which is revoked shall receive a 
written notice from the Attorney General stating specifically 
the grounds upon which the application was denied or upon which 
the license was revoked. Any notice of a revocation of a 
license shall be given to the holder of such license before the 
effective date of the revocation.
  [(2) If the Attorney General denies an application for, or 
revokes, a license, he shall, upon request by the aggrieved 
party, promptly hold a hearing to review his denial or 
revocation. In the case of a revocation of a license, the 
Attorney General shall upon the request of the holder of the 
license stay the effective date of the revocation. A hearing 
held under this paragraph shall be held at a location 
convenient to the aggrieved party.
  [(3) If after a hearing held under paragraph (2) the Attorney 
General decides not to reverse his decision to deny an 
application or revoke a license, the Attorney General shall 
give notice of his decision to the aggrieved party. The 
aggrieved party may at any time within sixty days after the 
date notice was given under this paragraph file a petition with 
the United States district court for the district in which he 
resides or has his principal place of business for a de novo 
judicial review of such denial or revocation. In a proceeding 
conducted under this subsection, the court may consider any 
evidence submitted by the parties to the proceeding whether or 
not such evidence was considered at the hearing held under 
paragraph (2). If the court decides that the Attorney General 
was not authorized to deny the application or to revoke the 
license, the court shall order the Attorney General to take 
such action as may be necessary to comply with the judgment of 
the court.
  [(4) If criminal proceedings are instituted against a 
licensee alleging any violation of this chapter or of rules or 
regulations prescribed under this chapter, and the licensee is 
acquitted of such charges, or such proceedings are terminated, 
other than upon motion of the Government before trial upon such 
charges, the Attorney General shall be absolutely barred from 
denying or revoking any license granted under this chapter 
where such denial or revocation is based in whole or in part on 
the facts which form the basis of such criminal charges. No 
proceedings for the revocation of a license shall be instituted 
by the Attorney General more than one year after the filing of 
the indictment or information.]
  (e)(1)(A) If the Attorney General determines that a licensee 
under this section has willfully violated any provision of this 
chapter or any regulation prescribed under this chapter, the 
Attorney General may--
          (i) if the violation is of a minor nature, or if the 
        violation is that the licensee has failed to have 
        secure gun storage or safety devices available at any 
        place in which firearms are sold under the license to 
        persons who are not licensees (except because of theft, 
        casualty loss, consumer sales, back orders from a 
        manufacturer, or any other similar reason beyond the 
        control of the licensee)--
                  (I) impose on the licensee a civil money 
                penalty of not more than $1,000 for each such 
                violation, except that the total amount of 
                penalties imposed on a licensee under this 
                subclause for violations arising from a single 
                inspection or examination shall not exceed 
                $5,000; or
                  (II) suspend the license for not more than 30 
                days, and specify the circumstances under which 
                the suspension is to be terminated, if, in the 
                period for which the license is in effect, 
                there have been at least 2 prior occasions on 
                which the licensee has been determined to have 
                violated this chapter; or
          (ii) if the violation is of a serious nature--
                  (I) impose on the licensee a civil money 
                penalty of not more than $2,500 for each such 
                violation, except that the total amount of 
                penalties imposed on a licensee under this 
                subclause for a violations arising from a 
                single inspection or examination shall not 
                exceed $15,000;
                  (II) suspend the license for not more than 90 
                days, and specify the circumstances under which 
                the suspension is to be terminated;
                  (III) revoke the license; or
                  (IV) take the actions described in subclauses 
                (I) and (II), or subclauses (I) and (III).
  (B)(i)(I) In determining the amount of a civil money penalty 
to impose under subparagraph (A) on a licensee, the nature and 
severity of the violation involved, the size of the firearms 
business operated by the licensee, and the prior record of the 
licensee shall be considered.
  (II) On request of the licensee, the Attorney General may 
consider the ability of the licensee to pay a civil money 
penalty, and may allow the licensee to submit documents and 
information to establish the ability of the licensee to pay. 
The Attorney General shall not make part of any public record 
any document or information so submitted, and shall return to 
the licensee any such document or information.
  (III) The total amount of penalties imposed on a licensee 
under subparagraph (A) with respect to violations of a minor 
nature and of a serious nature arising from a single inspection 
or examination shall not exceed $15,000.
  (ii) For purposes of subparagraph (A), violation of a 
provision of this chapter with respect to 2 or more firearms 
during a single transaction shall be considered a single 
violation of the provision.
  (iii) The Attorney General may defer, or suspend, in whole or 
in part, the imposition of a civil money penalty on a licensee 
whose license is suspended under this paragraph.
  (C) For purposes of subparagraph (A):
          (i) A violation of this chapter shall be considered 
        to be of a serious nature if the violation--
                  (I) results in or could have resulted in the 
                transfer of a firearm or ammunition to a person 
                prohibited from possessing or receiving the 
                firearm or ammunition under this chapter or 
                under State or local law;
                  (II) obstructs or could have obstructed a 
                bona fide criminal investigation or 
                prosecution, or an inspection or examination 
                under this chapter; or
                  (III) prevents or could have prevented a 
                licensee from complying with subsection (a)(7), 
                (a)(8), (b)(1), (b)(3), (b)(4), (j), (k), (o), 
                or (p) of section 922, subsection (g)(7) of 
                this section, or subsection (b) or (h) of 
                section 924.
          (ii) A violation of this chapter shall be considered 
        to be of a minor nature if the violation is not of a 
        serious nature.
  (D) The Attorney General may not commence an enforcement 
action under subparagraph (A) with respect to a violation, 
after the 5-year period that begins with--
          (i) the date the violation occurred; or
          (ii) if the licensee intentionally obstructed 
        discovery of the violation, the date the violation is 
        discovered.
  (2)(A) Not less than 30 days before the effective date of any 
penalty imposed on a licensee by reason of a determination made 
under paragraph (1), the Attorney General shall send the 
licensee a written notice--
          (i) of the determination, and the grounds on which 
        the determination was made;
          (ii) of the nature of the penalty; and
          (iii) that the licensee may, within 30 days after 
        receipt of the notice, request a hearing to review the 
        determination.
  (B) A hearing to review a determination made under paragraph 
(1) with respect to a licensee shall not be held unless the 
licensee requests such a hearing within 30 days after receiving 
the notice of the determination sent pursuant to subparagraph 
(A).
  (C) On timely receipt from the licensee of a request for such 
a review, the Attorney General shall stay the imposition under 
paragraph (1) of any penalty involved, pending resolution of 
the review, unless, in the case of a suspension or revocation 
of a licensee, the Attorney General establishes, at a hearing 
before an administrative law judge, by clear and convincing 
evidence, that--
                  (i) the licensee or the principal owner of 
                the business subject to the license has been 
                indicted and charged with a criminal violation 
                of this chapter; and
                  (ii) the continued operation by the licensee 
                of the business poses an immediate and grave 
                threat to public safety.
  (3)(A) Within 90 days after timely receipt from a licensee of 
a request to review a determination made under paragraph (1) 
(or at such later time as is agreed to by the Attorney General 
and the licensee), an administrative law judge shall hold a 
hearing, at a location convenient to the licensee, to review 
the determination.
  (B) Not less than 30 days before the hearing, the Attorney 
General shall deliver to the licensee--
                  (i) a document identifying each person whom 
                the Attorney General intends to call as a 
                witness during the hearing;
                  (ii) a copy of each document which will be 
                introduced as evidence at the hearing; and
                  (iii) copies of all documents on which the 
                determination is based.
  (C) Within 90 days after the hearing, the administrative law 
judge shall issue a written decision setting forth findings of 
fact and conclusions of law, and a decision as to whether to 
affirm, modify, or reverse the determination.
  (D) On request of the licensee, the Attorney General shall 
stay the effective date of any penalty, suspension, or 
revocation until there has been a final, nonreviewable judgment 
with respect to the determination involved, unless, in the case 
of a suspension or revocation of a licensee, the Attorney 
General establishes, at a hearing before an administrative law 
judge, by clear and convincing evidence, that--
          (i) the licensee or the principal owner of the 
        business subject to the license has been indicted and 
        charged with a criminal violation of this chapter; and
          (ii) the continued operation by the licensee of the 
        business poses an immediate and grave threat to public 
        safety.
  (E) The action of an administrative law judge under this 
subsection shall be considered final agency action for all 
purposes, and may be reviewed only as provided in subsection 
(f).
  (4) This subsection shall not be interpreted to affect the 
authority of the Attorney General under section 922(t)(5).
  (5) For purposes of this subsection, the term ``willfully'' 
means, with respect to conduct of a person, that the person 
knew of a legal duty, and engaged in the conduct knowingly and 
in intentional disregard of the duty.
  (f)(1) Within 60 days after a party receives a notice issued 
under subsection (d)(4) of a decision to deny a license, or a 
notice issued under subsection (e)(3)(C) of a determination to 
impose a civil money penalty or to suspend or revoke a license, 
the party may file a petition with the United States district 
court for the district in which the party resides or has a 
principal place of business for a de novo review of the 
decision or determination.
  (2) In a proceeding conducted under this paragraph, the court 
shall, on application of a party, consider any evidence 
submitted by the parties to the proceeding whether or not the 
evidence was considered at the hearing held under subsection 
(d)(4) or (e)(3).
  (3) If the court decides that the decision or determination 
was not authorized, the court shall order the Attorney General 
to take such action as may be necessary to comply with the 
judgment of the court.
  (4) If criminal proceedings are instituted against a licensee 
alleging any violation of this chapter or of a regulation 
prescribed under this chapter, and the licensee is acquitted of 
the charges, or the proceedings are terminated, other than upon 
motion of the Government before trial on the charges, the 
Attorney General shall be absolutely barred from denying a 
license under this chapter, suspending or revoking a license 
granted under this chapter, or imposing a civil money penalty 
under subsection (e), if the action would be based in whole or 
in part on the facts which form the basis of the criminal 
charges.
  (5) The Attorney General may not institute a proceeding to 
suspend or revoke a license granted under this chapter, or to 
impose a civil money penalty under subsection (e), more than 1 
year after the filing of the indictment or information.
  (g)(1)(A) * * *

           *       *       *       *       *       *       *

  (D) At the election of a licensed collector, the annual 
inspection of records and inventory permitted under this 
paragraph shall be performed at the office of the Attorney 
General designated for such inspections which is located in 
closest proximity to the premises where the inventory and 
records of such licensed collector are maintained. The 
inspection and examination authorized by this paragraph shall 
not be construed as authorizing the Attorney General to seize 
any records or other documents other than those records or 
documents constituting material evidence of a violation of law. 
If the Attorney General seizes such records or documents, 
copies shall be provided the licensee within a reasonable time. 
The Attorney General may make available to any Federal, State, 
or local law enforcement agency any information which he may 
obtain by reason of this chapter with respect to the 
identification of persons prohibited from purchasing or 
receiving firearms or ammunition who have purchased or received 
firearms or ammunition, together with a description of such 
firearms or ammunition, and he may provide information to the 
extent such information may be contained in the records 
required to be maintained by this chapter, when so requested by 
any Federal, State, or local law enforcement agency, except 
that information identifying a person who has purchased or 
received firearms or ammunition and who is not prohibited from 
doing so may not be so made available or so provided unless the 
agency involved has certified that the agency will not disclose 
the information to any entity other than a court, federal, 
State or local law enforcement agency, or prosecutor.

           *       *       *       *       *       *       *

  (m) A person whose license issued under this chapter is 
expired, surrendered, or revoked shall be afforded 60 days from 
the effective date of the expiration, surrender, or revocation 
to liquidate the firearms inventory of the person, which time 
may be extended upon a showing of reasonable cause. During such 
60-day period (including any extension of the period), the 
license involved shall continue to be considered valid.
  (n) If the Attorney General is made aware that a business 
licensed under this chapter has transferred to a surviving 
spouse or child of the licensee, to an executor, administrator, 
or other legal representative of a deceased licensee; or to a 
receiver or trustee in bankruptcy, or an assignee for benefit 
of creditors, and, before the transfer, or on the first 
inspection or examination by the Attorney General of the 
records of the licensee after the transfer, the licensee is 
found to be operating the business in violation of this 
chapter, the Attorney General--
          (1) shall notify the transferee of the violation by 
        the transferor; and
          (2) shall not presume that the transferee is 
        committing the violation.

Sec. 924. Penalties

  (a) * * *

           *       *       *       *       *       *       *

  [(p) Penalties Relating To Secure Gun Storage or Safety 
Device.--
          [(1) In general.--
                  [(A) Suspension or revocation of license; 
                civil penalties.--With respect to each 
                violation of section 922(z)(1) by a licensed 
                manufacturer, licensed importer, or licensed 
                dealer, the Secretary may, after notice and 
                opportunity for hearing--
                          [(i) suspend for not more than 6 
                        months, or revoke, the license issued 
                        to the licensee under this chapter that 
                        was used to conduct the firearms 
                        transfer; or
                          [(ii) subject the licensee to a civil 
                        penalty in an amount equal to not more 
                        than $2,500.
                  [(B) Review.--An action of the Secretary 
                under this paragraph may be reviewed only as 
                provided under section 923(f).
          [(2) Administrative remedies.--The suspension or 
        revocation of a license or the imposition of a civil 
        penalty under paragraph (1) shall not preclude any 
        administrative remedy that is otherwise available to 
        the Secretary.]

           *       *       *       *       *       *       *


                           Markup Transcript



                            BUSINESS MEETING

                      THURSDAY, SEPTEMBER 7, 2006

                  House of Representatives,
                                Committee on the Judiciary,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:07 a.m., in 
Room 2141, Rayburn House Office Building, the Honorable F. 
James Sensenbrenner, Jr. (Chairman of the Committee) presiding.
    [Intervening business.]
    Chairman Sensenbrenner. The next item on the agenda is the 
adoption of H.R. 5092, the ``Bureau of Alcohol, Tobacco, 
Firearms and Explosives Modernization Reform Act.''
    [The bill, H.R. 5092, follows:]
      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


    Chairman Sensenbrenner. The chair recognizes the gentleman 
from North Carolina, Mr. Coble, the chair of the Subcommittee 
on Crime, Terrorism, and Homeland Security, for a motion.
    Mr. Coble. Mr. Chairman, the Subcommittee on Crime, 
Terrorism, and Homeland Security reports favorably the bill, 
H.R. 5092, and moves its favorable recommendation to the full 
House.
    Chairman Sensenbrenner. Without objection, H.R. 5092 will 
be considered as read and open for amendment at any point.
    The chair recognizes the gentleman from North Carolina to 
strike the last word.
    Mr. Coble. I thank the Chairman.
    Mr. Chairman, the Subcommittee on Crime, Terrorism, and 
Homeland Security reports favorably the bill, H.R. 5092, the 
``Bureau of Alcohol, Tobacco, Firearms and Explosives (BATFE) 
Modernization and Reform Act of 2006,'' which was introduced by 
the gentleman from Virginia, Representative Scott, and me.
    The Subcommittee on Crime, Terrorism, and Homeland Security 
conducted a series of three oversight hearings regarding the 
BATFE's investigation and enforcement activities. These 
hearings raised concerns over the BATFE's allocation of 
resources, investigation techniques, and lack of consistent law 
enforcement policies and procedures among the BATFE's field 
offices and central management.
    The hearings, furthermore, revealed the need for, one, a 
graduated penalty system in Title 18, U.S. Code Section 923, 
including civil penalties, based on the degree of risk or harm 
that the dealer's violation posed to others; two, establish a 
system of neutral administrative law judges to review the 
license and the decisions of BATFE; three, establish 
investigative guidelines similar to those of the Federal Bureau 
of Investigation and the Drug Enforcement Agency; and, finally, 
other modifications to the Federal laws to ensure that American 
citizens receive due process of the law.
    H.R. 5092 is a bipartisan attempt to address issues raised 
during the BATFE oversight hearings.
    The bill authorizes civil penalties, including fines and 
suspensions, for dealers who violate the Gun Control Act, 
creates independent administrative law judges to hear 
enforcement cases, defines serious and non-serious violations, 
clarifies the requisite intent for civil violations, 
establishes BATFE investigative guidelines, requires the DOJ 
inspector general to investigate the BATFE gun show enforcement 
program, and limits the BATFE's authority and clarifies several 
enforcement regulations.
    On May 3, 2006, the Subcommittee favorably reported the 
bill, without amendment, and I hope my colleagues in the full 
Committee will support this important bill.
    I would yield back.
    Chairman Sensenbrenner. For what purpose does the gentleman 
from Virginia, Mr. Scott, seek recognition?
    Mr. Scott. Yes, Mr. Chairman.
    Chairman Sensenbrenner. The gentleman is recognized for 5 
minutes.
    Mr. Scott. Thank you, Mr. Chairman.
    Mr. Chairman, thank you for holding this markup on H.R. 
5092, the ``Bureau of Alcohol, Tobacco, Firearms and Explosives 
Modernization and Reform Act.'' I am pleased to join Chairman 
Coble in presenting the substitute for markup by this 
Committee.
    And I want to express my appreciation for the bipartisan 
and open process under which Chairman Coble and the chief 
counsel, Michael Volkov, and my counsel, Bobby Vassar, 
conducted consideration and development of the bill.
    I understand from my counsel that they have met with other 
Judiciary Committee Members and staff, ATF and the Department 
of Justice staff, handgun safety group representatives and with 
representatives of offices of mayors of New York and Boston, as 
well as with the National Rifle Association and other gun 
rights advocates, and they have exchanged information and ideas 
with all on a bipartisan basis.
    There have been well over a dozen redrafts of the original 
substitute before us. And while no participant got all he or 
she wanted in the bill, all of the interests and concerns were 
considered and the bill represents a reflection of the impact 
of many of those considerations.
    Mr. Chairman, I joined Chairman Coble in developing the 
bill based on his representation to me that it would focus on 
improving due process and effectiveness of the ATF enforcement 
of Federal gun laws and regulations.
    Currently, there are complaints, on the one hand, that the 
enforcement system treats firearm licensees unfairly by 
focusing too much on minor technical violations, with the 
threat of revocation on each one. And if a violation citation 
is challenged, the system perpetuates a further appearance of 
unfairness by using ATF employees, responsible to their 
supervisors, to decide challenges ultimately subject to the 
discretion of the director of ATF.
    On the other hand, there are complaints that ATF is unable 
to effectively impact licensees because its only effective 
sanction is revocation and licensees know that they will not be 
revoked for anything other than the most serious violations, so 
they can be fairly loose with lesser violations.
    Most of these violations receive only warnings or 
conferences with ATF officials. And where a dealer's license is 
revoked for what is perceived to be a relatively minor 
violation, even if it is the ATF's only way of showing that it 
is willing to revoke for such violations, it generates 
perceptions of unfairness and breeds disrespect for the 
regulatory process.
    Moreover, with the limited resources to cover the large 
number of licensees, there are complaints that most violators 
only get a slap on the wrist or nothing at all, because ATF is 
unable to conduct a sufficient number of inspections.
    So bad dealers often are able to operate with relative 
impunity, endangering the public and giving the ATF and 
industry a bad name.
    H.R. 5092 seeks to address these problems with a system of 
intermediate sanctions, applied on a graduated basis, for 
violations the ATF designates as minor through its regulations 
and in addition to current sanctions, such as warnings and 
required conferences, the bill makes available to the ATF fines 
up to a $1,000 each, with a cumulative total of $5,000 per 
inspection process.
    In addition to such fines, after two minor violations, 
suspensions of up to 30 days are available.
    For violations designated as serious by the ATF, by ATF 
regulations in compliance with this act, fines up to $2,500 per 
violation may be applied, up to a cumulative amount of up to 
$15,000 per inspection process. In addition to such fines, 
suspensions of up to 90 days or revocation are available.
    To address the issues of due process in the context of 
substantially heightened penalties for most violations, the 
bill revamps the hearing process by requiring that hearings be 
conducted by detached administrative law judges, with penalties 
stayed during appeals, unless the attorney general establishes 
that such a stay would pose an immediate and gave danger to the 
public.
    The bill redefines the term ``willfully'' to raise the 
burden of proof for a violation in an effort to limit the 
findings of guilt to knowing and intentional violations.
    All of this is subject to the regulatory process, as well, 
which should serve to further clarify what reflects knowing and 
intentional acts or omissions.
    In one area in the bill, we have agreed to revamp, in this 
section, the section allowing for the liquidation of inventory 
after revocation. In order to hold a business accountable to 
Federal requirements during this period, the business will have 
to be in at least provisional or, in other regulatory context, 
legal and we have agreed to address this as the bill moves 
forward.
    The bill is a total revamp of the licensing and regulatory 
system and I believe it will better ensure fairness, as well as 
accountability and, ultimately, better assure public safety.
    Chairman Sensenbrenner. The time of the gentleman has 
expired.
    Mr. Scott. Mr. Chairman, if I could just have 30 more 
seconds.
    Chairman Sensenbrenner. Without objection.
    Mr. Scott. Accordingly, while I am open to proposals for 
further improvement, I believe the bill is worthy of our 
support in its current form.
    Thank you, Mr. Chairman. I yield back.
    Chairman Sensenbrenner. Without objection, all Members' 
opening statements will appear in the record at this time.
    [The opening statement of Ms. Jackson Lee follows:]
       Prepared Statement of the Honorable Sheila Jackson Lee, a 
    Representative in Congress from the State of Texas, and Member, 
                       Committee on the Judiciary
    Mr. Chairman, I move to strike the last word.
    Thank you, Mr. Chairman and members of the Committee. I appreciate 
this opportunity to explain my concerns with the bill, H.R. 5092. My 
primary concern with the bill is that it hampers the ability of the 
Bureau of Alcohol, Tobacco, Firearms, and Explosives (BATF) to put 
corrupt gun dealers out of business, and thus help reduce the carnage 
taking place in many of the nation's major urban centers, by striking 
Sec. 4 of the bill.
    H.R. 5092 was introduced by Chairman Coble and the Ranking Member, 
Mr. Scott as a bipartisan attempt to address enforcement issues raised 
during ATF oversight hearings conducted by the Subcommittee. 
Specifically, those hearings focused on ATF's Richmond gun show 
enforcement program and generally on ATF's licensing and revocation 
authority over federal Firearms Licensees.
    The bill addresses a number of issues relating to ATF's enforcement 
authority, including authorization of civil penalties (e.g. fines and 
suspensions); creation of independent Administrative law Judges to hear 
enforcement cases; definition of serious and non-serious violations; 
DOJ Inspector General investigation of ATF gun show enforcement 
program; limitation on ATF authorities; clarification of several 
enforcement regulations; and, most significantly, modification of the 
requisite intent for violations.
    The bill provides in Sec. 4, entitled ``Definition of Willfully,'' 
that ``willfully'' is defined as:

        ``intentionally, purposely, and with the intent to act in 
        violation of a known legal duty.''

    My concern with this provision of the bill is that it defines 
``willfully'' to impose a much higher standard of proof upon law 
enforcement officials than currently. There does not appear to be any 
compelling reason for increasing the government's evidentiary burden at 
this time. The definition of willfullness is well-settled in the law 
and means that defendant knew his conduct was unlawful; not that he 
knew of the specific statute he is accused of violating or had the 
specific intent to violate that precise provision.
    Mr. Chairman, changing the evidentiary standards governing elements 
of penal offenses should be done sparingly and with the utmost care. 
This is particularly true where, as here, we do not have the benefit of 
the considered views of thoughtful criminal law scholars, experienced 
prosecutors and police officers with front-line experience, or the 
Department of Justice.
    The redefinition of ``willfully'' contained in the bill illustrates 
my concern. As I noted, the bill defines willfully as ``intentionally, 
purposely, and with the intent to act in violation of a known legal 
duty.'' This definition, however, has been repeatedly rejected by the 
federal courts. Bryan v. U.S., 524 U.S. 184 (1998); U.S. v. Andrade, 
135 F.3d 104 (1st Cir. 1998); U.S. v. Allah, 130 F.3d 33 (2d Cir. 
1997); U.S. v. Collins, 957 F.2d 72 (2d. 1992)
    In the Bryan case, the defendant was convicted of willfully dealing 
in firearms without a federal license. Specifically, the defendant did 
not have a federal firearms license; he used ``so-called ``straw 
purchasers'' in Ohio to acquired pistols he could not have bought 
himself; that he knew the straw purchasers made false statements when 
purchasing the guns; that defendant assured the straw purchasers that 
he would file off the serial numbers; and that defendant resold the 
guns on Brooklyn street corners known for drug dealing. Despite this 
conduct, defendant claimed that he could not be convicted under the 
federal firearms laws unless the government proved he knew of the 
federal licensing requirement. The Supreme Court rejected this claim, 
stating:

        ``the willfulness requirement . . . does not carve out an 
        exception to the traditional rule that ignorance of the law is 
        no excuse; knowledge that the conduct is unlawful is all that 
        is required.'' 524 U.S. at 193.

    Similarly, in another case, U.S. v. Collins, the Second Circuit 
rejected the argument that willfully requires proof that defendant had 
specific knowledge of the federal firearms license requirements, 
stating:

        [T]he element of willfulness not contained in Sec. 922(a)(1) 
        was meant to be read broadly to require only that the 
        government prove that defendant's conduct was knowing and 
        purposeful and that the defendant intended to commit an act 
        which the law forbids.'' 957 F.2d at 76.

    According to the court, the government was not required to prove 
more than just the defendant's general knowledge that he or she is 
violating the law.'' Id. at 75.
    Other courts have reached similar conclusions and I list them in my 
statement. The point, Mr. Chairman, is that the federal firearms 
license statute is and has been an important tool for law enforcement 
to crack down on the illegal trafficking in firearms and the wanton 
violence this conduct exacerbates. I do not believe that a compelling 
case has been made on this record to take this tool away from law 
enforcement. Therefore, I would urge my colleagues to vote against the 
bill.
    Thank you. I yield the balance of my time.

    Chairman Sensenbrenner. Are there any amendments?
    The chair recognizes the gentleman from North Carolina, Mr. 
Coble, for purposes of offering an amendment in the nature of a 
substitute.
    Mr. Coble. And I so offer that, Mr. Chairman.
    Chairman Sensenbrenner. The clerk will report the 
amendment.
    The Clerk. ``Amendment in the nature of a substitute to 
H.R. 5092----
    [The amendment offered by Mr. Coble and Mr. Scott follows:]
      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


    Mr. Coble. I ask unanimous consent, Mr. Chairman, that the 
amendment be considered as read.
    Chairman Sensenbrenner. Without objection, so ordered.
    And the gentleman is recognized for 5 minutes.
    Mr. Coble. Well, I failed to do that. Mr. Scott, I failed 
to express my appreciation to you earlier, and Mr. Vassar, as 
well, and to Mr. Volkov, on our side. This was a bipartisan 
effort that was thoroughly and deliberately examined. As I 
said, there were three hearings conducted.
    Very briefly, let me tell you what appears in the amendment 
in the nature of a substitute.
    It modifies section 2 regarding graduated penalties by 
expanding the list of possible violations that are serious, 
changes existing law to allow governments to force licensees to 
cease operations pending review of the administrative law judge 
(ALJ) decision to revoke a license or suspend operations, 
criminal indictment and where continued operation poses grave 
risk to community safety.
    It authorizes the ALJ to consider the size of the business 
when setting a civil penalty, clarifies that gun storage or 
safety device requirements are minor violations, as under 
existing law.
    Section 4 revises the definition of ``willful'' to ensure 
that enforcement actions are directed against knowing and 
intentional violations by a licensee and do not include good 
faith mistakes or ministerial or administrative mistakes.
    Section 5 expands investigative guidelines to address non-
firearms inspections and examinations.
    Section 8 clarifies the 60-day limit within which a 
licensee may continue to sell firearms.
    Section E deletes former section 8, which would have 
restricted the ATF authorities to prevent ATF from enforcement 
of other criminal and civil laws beyond the Tobacco, Alcohol, 
Firearms and Explosives venue.
    And that, pretty clearly, I think, Mr. Chairman, explains 
the amendment in the nature of a substitute.
    And I yield back.
    Chairman Sensenbrenner. Before continuing, the chair will 
interrupt the proceedings to announce the presence in the room 
of a number of members of the parliament of the Islamic 
Republic of Afghanistan. And I will introduce them one by one 
and apologize in advance if I am mispronouncing anybody's name.
    Dr. Mohammad Salih Saljoqi, Mr. Noorolhaq Olomi, Mr. Zalmay 
Mujadidi, Dr. Kabir Ranjbar, Mr. Bidar Zazai, Mr. Mohammad 
Shaker Kargar, Mr. Ahmad Ali Jebraili, and Mr. Din Mohammad 
Azimi.
    This includes the second secretary of the parliament and 
the chairs of the armed services, internal security, government 
relations, and budget committee, the deputy chair of the 
international relations committee, a member of the government 
affairs committee, and the secretary of the religious affairs 
and education committee.
    [Applause.]
    There are three staff Members who are accompanying them, a 
program escort from the House Democracy Assistance Commission, 
which is an arm of the U.S. House of Representatives, and three 
interpreters.
    We welcome you here, and we hope that you find that the way 
American democracy works is open and transparent. We debate 
vigorously. And we wish you well as you are establishing your 
democracy in your country.
    Thank you.
    Mr. Conyers. Mr. Chairman?
    Chairman Sensenbrenner. The gentleman from Michigan?
    Mr. Conyers. I rise in opposition of the substitute 
amendment.
    Chairman Sensenbrenner. The gentleman is recognized for 5 
minutes.
    Mr. Conyers. I am opposed to the amendment for the same 
reasons that I am opposed to the text of the underlying bill, 
namely, because the amendment, as introduced, would largely 
eliminate BATFE's current revocation powers, replace them with 
minimal fines and temporary license suspensions.
    And, additionally, this substitute fails to improve upon 
the bill's current definition of serious versus minor offenses. 
And, finally, the amendment fails to address the problem that 
would require the bureau to automatically stay or postpone the 
imposition of a fine or a suspension or revocation, pending 
completion of an administrative hearing, no matter how 
egregious the violation.
    Now, what we have before us is one of the most amazing 
pieces of work that this Committee has brought forward yet. We 
all but eliminate the bureau's current authority to revoke the 
Federal firearms licenses of corrupt dealers and would make it 
virtually impossible for the bureau to shut down rogue gun 
dealers who repeatedly violate the law.
    It creates two serious new classifications of Federal gun 
laws, the serious ones and the non-serious ones. And the 
definitions are so vague that it would make enforcement, it 
seems to me, extremely rare and would require the bureau to 
automatically stay or postpone the imposition of a fine, 
suspension or revocation, pending completion of an 
administrative hearing, no matter how serious the violation.
    The problem that this raises, for me, is that dangerous 
firearms in the hands of violent criminals and, may I also add, 
terrorists continue to be one of the most pressing concerns 
facing our nation.
    In the last year that it was recorded, 3,012 children and 
teens were killed by gunfire in the United States, which comes 
to about a child every 3 hours, eight children every day, 50 
more every week.
    In addition, American children are often at greater risk 
for firearm related injuries and fatalities. Firearms were 
reportedly used to kill 19 children in Great Britain, 57 in 
Germany, 109 in France, 153 in Canada, but 5,285 in the United 
States.
    And so this substitute only compounds the problem that is 
found in the original measure. I hope that we can see some kind 
of a concern here about the incredible amount of deaths that 
are taking place because of inadequate enforcement and I think 
we are moving in the wrong direction.
    I ask unanimous consent to have The Washington Post Sunday, 
July 23rd, article by Amit Paley included in my comments.
    And I return the balance of my time.
    Chairman Sensenbrenner. Without objection, the extraneous 
material will be included.
    [The article follows:]
    
    
    Chairman Sensenbrenner. Are there any second-degree 
amendments to the amendment in the nature of a substitute 
offered by the gentleman from North Carolina?
    Mr. Weiner. Mr. Chairman?
    Chairman Sensenbrenner. For what purpose does the gentleman 
from New York seek recognition?
    Mr. Weiner. First, I would like to strike the last word on 
the amendment being offered by Mr. Coble.
    Chairman Sensenbrenner. The gentleman is recognized for 5 
minutes.
    Mr. Weiner. Mr. Chairman, it is puzzling to me what the 
problem is that the Coble substitute or the base bill seeks to 
resolve. It is certainly not that there have been an enormous 
number of gun dealers that have had their license revoked.
    According to the ATF, the last numbers we have in 2003, 
they only sought to revoke 54 licenses in the entire country, 
which represented about 2 percent of those that they inspected.
    The ATF says that even the president system that is being 
reformed, theoretically, because there is widespread and very 
subjective enforcement going on by the ATF, ATF says that the 
present system already makes it very, very difficult for them 
to actually repeal anyone's license.
    They say that the inspector general said that if they 
proceeded on the present pace to do all of their revocations 
they would like to do, it would take them 19 years to do them.
    There are gun shops that are presently under the process to 
be suspended that have been on appeal for years. You know, 
there is one in San Laredo, California, where an ATF audit 
found that 7,477 firearms had gone missing. Now, when I say 
``gone missing,'' I mean that the paperwork that is required 
under the law that we could say you don't want to keep anymore, 
maybe that is the way we should go, had been lost.
    That is under a process for suspension that has been going 
on since 2004 and still the gun dealer continues to operate.
    Now, I should point out that under the Coble substitute and 
the base bill, that would be considered, in the words of the 
bill, a minor offense, 7,400 missing or off-the-book 
transactions would be redefined in this legislation as a minor 
offense.
    Which brings me to the second rationale for the bill, which 
is that we have one bucket that we put all infractions in and 
we should give the ATF more flexibility to actually be able to 
decide what is the wheat and what is the chaff. And I think 
that that is fair, but the way that the Coble bill does it is 
by saying that everything is essentially a minor infraction.
    Well, I would ask you if failure to do a background check 
should be considered minor. Is failure to do 50 background 
checks minor, failure to do a 100, failure to do any?
    They all would be, under the Coble substitute, considered a 
minor infraction. In fact, it is very interesting, in the Coble 
substitute, you might be saying, ``Well, what does he consider 
serious under the bill?''
    If a dealer colludes with a gun trafficker. But if he says, 
``I am not going to collude with anyone. I am just not going to 
do any paperwork. I am not going to do any paperwork. Let 
anyone who comes in here who wants--I am not going to do a 
single one. I am not going to intentionally sell or collude 
with someone, but I am not going to do any paperwork.''
    Thousands and thousands and thousands of lost guns, which, 
by the way, is how we track down terrorists, how we track down 
criminals. Those would be considered minor infractions.
    So it is not that the ATF is doing a lot of these 
proceedings. They are doing very few. I gave you the 
statistics. What this is really about is gutting the way the 
ATF, as Mr. Conyers said, the ATF does its job.
    Now, if you really wanted to clarify or modernize or 
reform, would you put in language that repeals the penalties 
enacted in 2005 for failure to provide gun safety locks with 
your handgun? No. You are not trying to reform the ATF. You are 
trying to gut handgun laws.
    And you might disagree that we should provide safety locks, 
that is fine, we can have that debate again, but let's call it 
what it is. If you really are trying to reform the process, 
then you would give the ATF some guidelines about penalties 
that you think are more fair rather than saying wholesale 
numbers of violations would be wiped off the books and be 
something that the ATF can't pursue.
    No one would ever accuse the ATF and the Bush 
administration of being a ferocious tiger of enforcement.
    You can look at some of the dealers that have been allowed 
to proceed. You can look at the positions they have taken on 
issues we are going to take up later, where they even stop 
cities and States from trying to protect their citizens.
    But, certainly, the ATF activities so far have not 
demonstrated that they need this type of reform. If anything, 
they need to be bolstered. But if we are going to have this 
debate, let's have it in the context of a little more honesty 
here.
    This is not about reforming the ATF. This is about gutting 
the gun laws.
    And with that, I yield back the balance of my time.
    Chairman Sensenbrenner. The bell has now rung, and, without 
objection, the Committee will recess until 15 minutes after the 
conclusion of the vote on the rule on the horse slaughter bill.
    Members will please return promptly. We will be going from 
the time we come back until about 1:30 or the completion of at 
least this bill and the next bill. So we will be here until we 
get this bill and the next bill out, whether it is 1:30 or 
later.
    The Committee stands recessed.
    [Recess.]
    Chairman Sensenbrenner. The Committee will be in order.
    When the Committee recessed for the vote, pending was an 
amendment in the nature of a substitute offered by the 
gentleman from North Carolina, Mr. Coble.
    Are there any second-degree amendments to the Coble 
substitute amendment?
    For what purpose does the gentleman from Tennessee seek 
recognition?
    Mr. Jenkins. Thank you, Mr. Chairman. To strike the last 
word.
    Chairman Sensenbrenner. The gentleman is recognized for 5 
minutes.
    Mr. Jenkins. And I yield to the gentleman from North 
Carolina.
    Mr. Coble. I thank the gentleman from Tennessee for 
yielding.
    Mr. Chairman, I won't take 5 minutes, but I just want to 
respond to some of the problems that have been voiced.
    As you all know, reasonable men and women can differ on 
various issues, as we do often times in this Committee, and 
there is nothing wrong with that. In fact, it is healthy.
    But, Mr. Weiner, I hope I understood you correctly. If I 
didn't, I will apologize. But I think you indicated that a 
dealer who could not account for a gun would result in a minor 
violation. This is incorrect. That would be a serious 
violation.
    Furthermore, you indicated, as I best recall, that if a 
dealer did not conduct a background check, that, too, would be 
classified as a minor violation. In truth, it would be a 
serious violation.
    And most importantly, ATF will define, in the regulation, 
serious vs. non-serious violations.
    And, finally, regarding the gun safety locks and storage, 
the distinguished gentleman from Virginia, Mr. Scott, and I 
agreed at the last markup to fix this issue and retain existing 
penalties.
    So, Mr. Chairman and colleagues, I think a lot that has 
been said today is subject to interpretation. It is my belief 
that the ATF has not been emasculated in any way by this bill 
and to corroborate that, no one from the ATF has complained to 
me about the bill. So apparently they don't feel that they have 
been emasculated as a result thereof.
    And as an aside, Mr. Chairman, this, in and of itself, does 
not make a bill good, but now we have a 137 cosponsors, 
Democrats and Republicans. So that indicates feel for the 
Congress at-large.
    And I thank the gentleman from Tennessee for yielding to 
me.
    Chairman Sensenbrenner. Does the gentleman yield back?
    Mr. Jenkins. Yes.
    Chairman Sensenbrenner. Are there any amendments in the 
second degree to the amendment in the nature of a substitute by 
the gentleman from North Carolina?
    Mr. Weiner. Mr. Chairman?
    Chairman Sensenbrenner. For what purpose does the gentleman 
from New York, Mr. Weiner, seek recognition?
    Mr. Weiner. Mr. Chairman, I would make a point of order.
    Is there a quorum present to consider amendments at this 
point?
    Chairman Sensenbrenner. The clerk will call the roll.
    The Clerk. Mr. Hyde?
    [No response.]
    Mr. Coble?
    Mr. Coble. Present.
    The Clerk. Mr. Coble, present.
    Mr. Smith?
    Mr. Smith. Present.
    The Clerk. Mr. Smith, present.
    Mr. Gallegly?
    [No response.]
    Mr. Goodlatte?
    [No response.]
    Mr. Chabot?
    [No response.]
    Mr. Lundgren?
    [No response.]
    Mr. Jenkins?
    Mr. Jenkins. Present.
    The Clerk. Mr. Jenkins, present.
    Mr. Cannon?
    [No response.]
    Mr. Bachus?
    [No response.]
    Mr. Inglis?
    Mr. Inglis. Present.
    The Clerk. Mr. Inglis, present.
    Mr. Hostettler?
    [No response.]
    Mr. Green?
    [No response.]
    Mr. Keller?
    Mr. Keller. Present.
    The Clerk. Mr. Keller, present.
    Mr. Issa?
    [No response.]
    Mr. Flake?
    [No response.]
    Mr. Pence?
    [No response.]
    Mr. Forbes?
    [No response.]
    Mr. King?
    [No response.]
    Mr. Feeney?
    Mr. Feeney. Present.
    The Clerk. Mr. Feeney, present.
    Mr. Franks?
    [No response.]
    Mr. Gohmert?
    [No response.]
    Mr. Conyers?
    Mr. Conyers. Present.
    The Clerk. Mr. Conyers, present.
    Mr. Berman?
    [No response.]
    Mr. Boucher?
    Mr. Boucher. Present.
    The Clerk. Mr. Boucher, present.
    Mr. Nadler?
    [No response.]
    Mr. Scott?
    Mr. Scott. Present.
    The Clerk. Mr. Scott, present.
    Mr. Watt?
    [No response.]
    Ms. Lofgren?
    [No response.]
    Ms. Jackson Lee?
    [No response.]
    Ms. Waters?
    [No response.]
    Mr. Meehan?
    [No response.]
    Mr. Delahunt?
    [No response.]
    Mr. Wexler?
    [No response.]
    Mr. Weiner?
    Mr. Weiner. Present.
    The Clerk. Mr. Weiner, present.
    Mr. Schiff?
    [No response.]
    Ms. Sanchez?
    [No response.]
    Mr. Van Hollen?
    [No response.]
    Mrs. Wasserman Schultz?
    Ms. Wasserman Schultz. Present.
    The Clerk. Mrs. Wasserman Schultz, present.
    Mr. Chairman?
    Chairman Sensenbrenner. Present.
    The Clerk. Mr. Chairman, present.
    Chairman Sensenbrenner. Are there Members in the chamber 
who wish to record their presence?
    The gentleman from Iowa, Mr. King?
    Mr. King. Present.
    The Clerk. Mr. King, present.
    Chairman Sensenbrenner. The gentleman from Utah, Mr. 
Cannon?
    Mr. Cannon. Present.
    The Clerk. Mr. Cannon, present.
    Chairman Sensenbrenner. Further Members in the chamber who 
wish to record their presence?
    The clerk will report.
    The Clerk. Mr. Chairman, there are 14 Members present.
    Chairman Sensenbrenner. A reporting quorum is present--
excuse me, a working quorum is present.
    For what purpose does the gentleman from New York, Mr. 
Weiner, seek recognition?
    Mr. Weiner. Mr. Chairman, just a point of clarification. So 
that means that a sufficient number aren't here to vote on an 
amendment, but just to discuss the amendments?
    Chairman Sensenbrenner. No, a sufficient number are here to 
discuss and vote on amendments, but not to report the bill.
    Mr. Weiner. Mr. Chairman, I have an amendment at the desk.
    Chairman Sensenbrenner. The clerk will report the 
amendment.
    Mr. Weiner. Weiner 313.
    Chairman Sensenbrenner. The clerk will report the 
amendment.
    The Clerk. ``Amendment to the amendment in the nature of a 
substitute to H.R. 5092, offered by Mr. Weiner of New York. 
Strike section 8''----
    [The amendment offered by Mr. Weiner follows:]
      
      

  


    Chairman Sensenbrenner. The gentleman is recognized for 5 
minutes.
    Mr. Weiner. Mr. Chairman, in my remarks about the Coble 
substitute, I listed some of the things that lay bare the 
notion that this is not an effort to reform the ATF, this is an 
effort to gut their authority.
    There are a few examples that make that more clear than 
section 8. When the ATF goes in and takes action against a 
dealer and says, ``We are going to take away your license to 
operate,'' it says that you have got to say that they have a 
period of time where they can dispense of their firearms in 
their stock.
    But, obviously, you still have to do the necessary 
disclosures and the necessary recordkeeping.
    What this section 8 does, if you read it carefully, is it 
says that for 60 days after a license is revoked, 60 days after 
you have fallen into that 1 percent category, you have gone 
through these years of appeals and you have been whittled down 
to--you are one of the very worst actors, by almost any 
definition, you are one of the very worst actors, you have 
lost--your license has been taken away, what section 8 of the 
Coble substitute says is you can continue selling guns for 60 
days thereafter, even if there is a risk to the public that the 
ATF has determined by continuing to do that.
    And this amendment would simply strike that. It would allow 
the ATF to do what the ATF should be doing, which is deciding 
who should be able to sell guns and who should not. And 
particularly in this case, to have a 60-day fire sale of 
weapons essentially being dumped by someone who we have already 
concluded, by definition of the gentleman from North Carolina, 
the gentleman from here in New York, all of us agree that once 
you have gone through this process, however we are going to 
define it, once you have gone through this process and had your 
license revoked, it means you are a bad guy.
    I believe you are a bad guy presently, you are a bad player 
presently. Under the Coble bill, it would be changed. So you 
still have a process that you go through that would be much 
more lenient, much, much more lenient.
    But even by his definition, you are the worst of the worst 
player. You are someone that sells guns to terrorists. You are 
someone that has repeatedly willfully showed, under any 
definition, that you are not going to comply.
    What this amendment does is allow the ATF to end that fire 
sale, to not include this 60-day period where guns can be 
dumped onto the marketplace.
    Think about what would happen. You have already lost 
whatever enforcement mechanism you have against that dealer. 
What incentive is there on him then not to just, to anyone who 
pulls up in a U-Haul, to sell off his wares, because then what 
are they going to do to me?
    You have already taken away my license. You have already 
taken away my shop. I am already such a scurrilous player that 
I have lost my right to sell.
    At the very least, once that Damocles sword falls, we 
should make sure that we don't have the 60-day period.
    My amendment would strike section 8, and I urge a ``yes'' 
vote.
    Chairman Sensenbrenner. The gentleman from North Carolina, 
Mr. Coble.
    Mr. Coble. I rise in opposition to the Weiner amendment.
    Chairman Sensenbrenner. The gentleman is recognized for 5 
minutes.
    Mr. Coble. During that 60-day period to which the gentleman 
from New York referred, the licensee must comply with 
appropriate rules and regulations during that time.
    So indictments can be forthcoming. Further violations can 
be forthcoming, if that were the case.
    So I see no need for the amendment and oppose it.
    Mr. Scott. Would the gentleman yield?
    Mr. Coble. Yes, sir.
    Mr. Scott. Will the gentleman agree that we could make this 
a little clearer? Because it says, on line 15, ``The license 
involved shall continue to be considered valid,'' to make it 
clear that you have to be in compliance with rules and 
regulations?
    And I think there is a provision elsewhere in the law that 
allows the attorney general to eliminate the stay for safety 
reasons.
    Would the gentleman agree that we could look at this, in 
case the amendment is defeated?
    Mr. Coble. I would have no problem with that, Mr. Scott.
    Mr. Weiner. Would the gentleman further yield?
    Mr. Coble. I will.
    Mr. Weiner. I would just ask, Mr. Coble, we are talking 
about gun shops that have already run so far afoul to the law 
that they have had their license repealed. They have gone 
through the appeals.
    Under your bill, it is now a much more lenient process. 
They have still been targeted. They have still lost their 
license. This is a player who is already shown utter disregard 
for the rules of the road.
    Why do you think they are suddenly, in their last 60 days, 
when they have no chance of being a gun dealer ever again, why 
would they suddenly comply? I am curious. What would motivate 
them to suddenly see the light and say, ``Okay, with this last 
60 days of stock, I am going to start following the letter of 
the law,'' because it is written on line 15 of some obscure 
bill that they don't care about or else they wouldn't be a 
criminal.
    Mr. Coble. If I shared the concern that my friend from New 
York shares, I would probably agree with you. But they are 
still in the target. The ATF is not sleeping during this 60-day 
period.
    And, furthermore, it affords the licensee a chance to at 
least salvage some money from his inventory before----
    Mr. Weiner. But, Mr. Chairman, why is that an objective we 
want for such a bad player? Why are we trying to protect his 
interests here?
    He has already been shown to be such a heinous player, he 
is in the 1 percent that lost the license. Why are we showing 
concern for salvaging anything?
    Mr. Coble. Well, we are, obviously, in disagreement on this 
one and I stand by what I said earlier.
    Chairman Sensenbrenner. The question is on the Weiner 
amendment.
    Those in favor will say ``aye.''
    Those opposed, ``no.''
    The noes appear to have it. The noes have it. The amendment 
is not agreed to.
    Are there further amendments?
    Mr. Weiner. Mr. Chairman, I would like to request a 
recorded vote.
    Chairman Sensenbrenner. A recorded vote is requested.
    Those in favor of the Weiner amendment in the second degree 
to the amendment in the nature of a substitute offered by the 
gentleman from North Carolina, Mr. Coble, will, as your names 
are called, answer ``aye,'' those opposed, ``no.''
    And the clerk will call the roll.
    The Clerk. Mr. Hyde?
    [No response.]
    Mr. Coble?
    Mr. Coble. No.
    The Clerk. Mr. Coble, no.
    Mr. Smith?
    Mr. Smith. No.
    The Clerk. Mr. Smith, no.
    Mr. Gallegly?
    [No response.]
    Mr. Goodlatte?
    [No response.]
    Mr. Chabot?
    Mr. Chabot. No.
    The Clerk. Mr. Chabot, no.
    Mr. Lundgren?
    [No response.]
    Mr. Jenkins?
    Mr. Jenkins. No.
    The Clerk. Mr. Jenkins, no.
    Mr. Cannon?
    Mr. Cannon. No.
    The Clerk. Mr. Cannon, no.
    Mr. Bachus?
    [No response.]
    Mr. Inglis?
    Mr. Inglis. No.
    The Clerk. Mr. Inglis, no.
    Mr. Hostettler?
    Mr. Hostettler. No.
    The Clerk. Mr. Hostettler, no.
    Mr. Green?
    [No response.]
    Mr. Keller?
    Mr. Keller. No.
    The Clerk. Mr. Keller, no.
    Mr. Issa?
    [No response.]
    Mr. Flake?
    [No response.]
    Mr. Pence?
    [No response.]
    Mr. Forbes?
    Mr. Forbes. No.
    The Clerk. Mr. Forbes, no.
    Mr. King?
    Mr. King. No.
    The Clerk. Mr. King, no.
    Mr. Feeney?
    Mr. Feeney. No.
    The Clerk. Mr. Feeney, no.
    Mr. Franks?
    Mr. Franks. No.
    The Clerk. Mr. Franks, no.
    Mr. Gohmert?
    Mr. Gohmert. No.
    The Clerk. Mr. Gohmert, no.
    Mr. Conyers?
    [No response.]
    Mr. Berman?
    [No response.]
    Mr. Boucher?
    Mr. Boucher. No.
    The Clerk. Mr. Boucher, no.
    Mr. Nadler?
    [No response.]
    Mr. Scott?
    Mr. Scott. No.
    The Clerk. Mr. Scott, no.
    Mr. Watt?
    [No response.]
    Ms. Lofgren?
    [No response.]
    Ms. Jackson Lee?
    [No response.]
    Ms. Waters?
    [No response.]
    Mr. Meehan?
    [No response.]
    Mr. Delahunt?
    [No response.]
    Mr. Wexler?
    [No response.]
    Mr. Weiner?
    Mr. Weiner. Aye.
    The Clerk. Mr. Weiner, aye.
    Mr. Schiff?
    Mr. Schiff. Aye.
    The Clerk. Mr. Schiff, aye.
    Ms. Sanchez?
    [No response.]
    Mr. Van Hollen?
    [No response.]
    Mrs. Wasserman Schultz?
    Ms. Wasserman Schultz. Aye.
    The Clerk. Mrs. Wasserman Schultz, aye.
    Mr. Chairman?
    Chairman Sensenbrenner. No.
    The Clerk. Mr. Chairman, no.
    Chairman Sensenbrenner. Are there Members in the chamber 
who wish to cast or change their vote?
    The gentleman from Alabama, Mr. Bachus?
    Mr. Bachus. No.
    The Clerk. Mr. Bachus, no.
    Chairman Sensenbrenner. The gentleman from California, Mr. 
Lungren?
    Mr. Lungren. No.
    The Clerk. Mr. Lungren, no.
    Chairman Sensenbrenner. The gentleman from Michigan, Mr. 
Conyers?
    Mr. Conyers. Aye.
    The Clerk. Mr. Conyers, aye.
    Chairman Sensenbrenner. Are there further Members who wish 
to cast or change their vote?
    If not, the clerk will report.
    The Clerk. Mr. Chairman, there are four ``ayes'' and 18 
``nays.''
    Chairman Sensenbrenner. The amendment is not agreed to.
    Are there further amendments in the second degree to the 
Coble amendment in the nature of a substitute?
    Mr. Weiner. Mr. Chairman?
    Chairman Sensenbrenner. For what purpose does the gentleman 
from New York seek recognition?
    Mr. Weiner. I have an amendment at the desk, Weiner 314.
    Chairman Sensenbrenner. The clerk will report the 
amendment.
    The Clerk. ``Amendment to the amendment in the nature of a 
substitute to H.R. 5092, offered by Mr. Weiner of New York. 
Page 9, strike lines 3 through 13. Page 9, line 12, strike `5' 
and insert `4'.''
    [The amendment offered by Mr. Weiner follows:]
      
      

  


    Chairman Sensenbrenner. The gentleman is recognized for 5 
minutes.
    Mr. Weiner. Thank you, Mr. Chairman.
    The hits keep coming. This is something else that I didn't 
have an opportunity to address in the spare 5 minutes that I 
had to address the Coble substitute.
    The ATF proceedings against gun dealers are, by and large, 
administrative proceedings. There are times when they rise to a 
level of criminal offenses and there are also proceedings that 
way.
    Among the many things tucked into this reform legislation 
is language that says that if you have a gun dealer that is 
going through an administrative proceeding that we have already 
learned can be quite long and lengthy and prosecutors, also, at 
the same time, decide that this charge rises to the level of 
criminality, which, as you know, is a much higher standard, if 
these proceedings are going along at the same time and the 
prosecution fails to make the burden of proof and fails to 
convict the person on the criminal charge, the language in this 
bill, in section 3, I believe it is, section 3, says that when 
that acquittal comes down, it stops in its track any ATF 
proceedings on any related matter.
    So to tell you what that means, let's assume for a moment 
that the ATF is doing an investigation of a gun dealer for 
selling undocumented or willfully selling, under the new 
standard, if this were to become the law, the new standard, a 
prosecution is also going forward on the criminal side, not the 
administrative side.
    What the effect of this language would be in this section 
would be to really render the administrative side either 
completely moot, because the standard there is now going to be 
irrelevant, because you are going to have the higher criminal 
standard at all times.
    It is a way of sneaking a new higher standard in to, again, 
burden the ATF, making administrative changes.
    The other thing that it is going to do is the ATF is going 
to have to have conversations with prosecutors and say, ``Yes, 
this is pretty serious. Yes, we think this rises to 
criminality,'' which is nothing that Mr. Coble or any of the 
sponsors of this legislation, I assume, want to eliminate with 
this law.
    They don't want to not do criminal prosecutions. But the 
effect of doing criminal prosecutions under this language would 
be to say if you do a criminal prosecution and you fall shy of 
the standard necessary there, but you far exceed the standard 
for administrative sanctions, still the administrative 
proceedings die.
    Now, the question has to be why do this. What is the 
problem that the sponsors seek to stop? Is it that they are 
concerned about someone who is violating the law 
administratively, but can't be held to a criminal standard, 
that that proceeding should be squashed? The answer is, yes, 
that is what they want.
    Secondarily, they want there to be fewer criminal 
prosecutions. They don't want any criminal prosecutor to say, 
``Boy, oh, boy, not only do I have a burden of persuading the 
jury of the high criminal standard, but if I fail, I am also 
killing this administrative proceeding.
    There is no other place in the United States Code that we 
do this. We don't say, ``If you are not guilty''--now, later on 
in the afternoon, you are going to see this go one step 
further.
    You are going to say not only that, you can't even bring a 
civil action. We are going to go from the sublime to the 
ridiculous a little later in the afternoon.
    But in this section, this, once again, lays bare the idea 
that this is an attempt to reform the ATF. This is a way to 
stop the ATF from doing even the small number of enforcement 
actions that they do.
    And I refer the Committee back to the statistics I quoted 
earlier. The number of license revocations that were done in 
ATF in 2003 was 54 out of 1,800 inspections and the ATF said 
that if they just did the worst 1 percent, it would take them 
19 years to revoke them.
    So this isn't a matter that there are thousands and 
thousands of abuse put upon dealers out there. In fact, there 
are thousands and thousands of dealers who are following the 
rules of the road every single day. And if you don't, the ATF 
comes and does an enforcement action.
    Under this section that we seek to strike here today, if 
you are so bad that you are being challenged both on the 
criminal side and in the administrative side and the criminal 
side falls, this quashes an investigation that is going on by 
the ATF on the administrative side.
    It is a way to either chill criminal or eliminate 
administrative. Either way, this is a wolf in sheep's clothing, 
and I ask for a ``yes'' vote.
    Chairman Sensenbrenner. The question is on the amendment 
offered by the gentleman from New York, Mr. Weiner.
    Those in favor will say ``aye.''
    Opposed, ``no.''
    The noes appear to have it. The noes have it. The amendment 
is not agreed to.
    Are there further amendments?
    Mr. Weiner. Mr. Chairman, I would like a roll-call vote.
    Chairman Sensenbrenner. A rollcall will be ordered.
    The question is on the Weiner amendment in the second 
degree to an amendment in the nature of a substitute offered by 
the gentleman from North Carolina, Mr. Coble.
    Those in favor of the Weiner amendment to the Coble 
amendment will, as your names are called, answer ``aye,'' those 
opposed, ``no.''
    And the clerk will call the roll.
    The Clerk. Mr. Hyde?
    [No response.]
    Mr. Coble?
    Mr. Coble. No.
    The Clerk. Mr. Coble, no.
    Mr. Smith?
    Mr. Smith. No.
    The Clerk. Mr. Smith, no.
    Mr. Gallegly?
    [No response.]
    Mr. Goodlatte?
    [No response.]
    Mr. Chabot?
    Mr. Chabot. No.
    The Clerk. Mr. Chabot, no.
    Mr. Lungren?
    [No response.]
    Mr. Jenkins?
    Mr. Jenkins. No.
    The Clerk. Mr. Jenkins, no.
    Mr. Cannon?
    Mr. Cannon. No.
    The Clerk. Mr. Cannon, no.
    Mr. Bachus?
    Mr. Bachus. No.
    The Clerk. Mr. Bachus, no.
    Mr. Inglis?
    Mr. Inglis. No.
    The Clerk. Mr. Inglis, no.
    Mr. Hostettler?
    [No response.]
    Mr. Green?
    [No response.]
    Mr. Keller?
    Mr. Keller. No.
    The Clerk. Mr. Keller, no.
    Mr. Issa?
    [No response.]
    Mr. Flake?
    [No response.]
    Mr. Pence?
    [No response.]
    Mr. Forbes?
    Mr. Forbes. No.
    The Clerk. Mr. Forbes, no.
    Mr. King?
    Mr. King. No.
    The Clerk. Mr. King, no.
    Mr. Feeney?
    [No response.]
    Mr. Franks?
    Mr. Franks. No.
    The Clerk. Mr. Franks, no.
    Mr. Gohmert?
    Mr. Gohmert. No.
    The Clerk. Mr. Gohmert, no.
    Mr. Conyers?
    Mr. Conyers. Aye.
    The Clerk. Mr. Conyers, aye.
    Mr. Berman?
    [No response.]
    Mr. Boucher?
    Mr. Boucher. No.
    The Clerk. Mr. Boucher, no.
    Mr. Nadler?
    [No response.]
    Mr. Scott?
    Mr. Scott. Aye.
    The Clerk. Mr. Scott, aye.
    Mr. Watt?
    [No response.]
    Ms. Lofgren?
    [No response.]
    Ms. Jackson Lee?
    [No response.]
    Ms. Waters?
    Ms. Waters. Aye.
    The Clerk. Ms. Waters, aye.
    Mr. Meehan?
    [No response.]
    Mr. Delahunt?
    [No response.]
    Mr. Wexler?
    Mr. Wexler. Aye.
    The Clerk. Mr. Wexler, aye.
    Mr. Weiner?
    Mr. Weiner. Aye.
    The Clerk. Mr. Weiner, aye.
    Mr. Schiff?
    Mr. Schiff. Aye.
    The Clerk. Mr. Schiff, aye.
    Ms. Sanchez?
    [No response.]
    Mr. Van Hollen?
    Mr. Van Hollen. Aye.
    The Clerk. Mr. Van Hollen, aye.
    Mrs. Wasserman Schultz?
    Ms. Wasserman Schultz. Aye.
    The Clerk. Mrs. Wasserman Schultz, aye.
    Mr. Chairman?
    Chairman Sensenbrenner. No.
    The Clerk. Mr. Chairman, no.
    Chairman Sensenbrenner. Are there Members who wish to cast 
or change their vote?
    The gentleman from California, Mr. Lungren?
    Mr. Lungren. No.
    The Clerk. Mr. Lungren, no.
    Chairman Sensenbrenner. The gentleman from Florida, Mr. 
Feeney?
    Mr. Feeney. No.
    The Clerk. Mr. Feeney, no.
    Chairman Sensenbrenner. The gentleman from Massachusetts, 
Mr. Meehan?
    Mr. Meehan. Aye.
    The Clerk. Mr. Meehan, aye.
    Chairman Sensenbrenner. Are there further Members who wish 
to cast or change their vote?
    If not, the clerk will report.
    The Clerk. Mr. Chairman, there are nine ``ayes'' and 16 
``nays.''
    Chairman Sensenbrenner. And the amendment to the substitute 
amendment is not agreed to.
    Are there further amendments?
    If there are no further amendments, the question is on----
    Mr. Weiner. Mr. Chairman?
    Chairman Sensenbrenner. The gentleman from New York, Mr. 
Weiner.
    Mr. Weiner. Mr. Chairman, I have an amendment at the desk, 
Weiner 317.
    Chairman Sensenbrenner. The clerk will report the 
amendment.
    The Clerk. ``Amendment to the amendment in the nature of a 
substitute to H.R. 5092, offered by Mr. Weiner of New York. 
Page 2, beginning on line 5, strike `$1,000' and all that 
follows through `$5,000.' On line 10 and insert----
    [The amendment offered by Mr. Weiner follows:]
    
    
    Chairman Sensenbrenner. Without objection, the amendment is 
considered as read.
    The gentleman from New York is recognized for 5 minutes.
    Mr. Weiner. Mr. Chairman, we have had some discussion here 
about the disagreement about what the Coble substitute does 
vis-a-vis the distinction between serious and minor violations.
    And I think it is an important distinction that we need to 
clarify, because I think that Mr. Coble left the Committee with 
the wrong impression.
    As I said in my remarks, that what we have done here is 
allowed off-the-book transactions. And for those of you who are 
unfamiliar with the process, right now, when the gun 
manufacturer transfers the gun to the dealer, he inscribes the 
registration and has to keep track of the first person that 
purchases that gun.
    That is often used as a way we track guns from crime 
scenes, from terrorist scenes, to at least know where the gun 
traveled from. There are bookkeeping requirements.
    Now, I happen to think the bookkeeping requirements are not 
sufficient. Many Members on the other side, many of the people 
who support the gun lobby think there probably should be none. 
But there are some that we agree upon that should be kept.
    In this legislation, the Coble amendment says, on page 4, 
line 13, ``A violation shall be considered serious in nature if 
the violation,'' and then lays out some things, okay. And if it 
is not in those sections, they are not considered major 
violations.
    Therefore, they are considered minor violations, which is 
where I extrapolated my conclusion, and Mr. Coble can point to 
the section that disputes this, that if someone has a 
bookkeeping violation, 10 bookkeeping violations, 50 
bookkeeping violations, a 1,000 of them, you will be in a minor 
situation and the ATF will be restricted from having the 
greatest sanctions available, because they are going to say, 
essentially, a dozen or two dozen or five dozen minor 
violations does not, in the Coble substitute, a major violation 
make.
    Now, Mr. Coble said I misunderstood or I misspoke, but 
unless he can point to me a section where it says--now, you 
could say that the attorney general could commend an action or 
the ATF could theoretically come back and, I guess, do some 
rulemaking.
    I would be surprised if they would in the light of 
congressional action, defining what major and minor would be. 
But what this amendment does, at the very least, is it takes 
off the cap on fines.
    What we do is we take off the cap on fines, putting it for 
minor violations to make it the same as what it would be for 
major violations.
    So at the very least, what the ATF would be able to do, if 
my amendment were adopted, is it doesn't change the minor-major 
thing, but it does say that the fines would be higher. So if 
someone thinks they can get away, which they clearly can, it is 
a loophole the size of a truck, if they can get away with just 
having a whole bunch of minor violations, at the very least, 
the sanctions for them can rise if the ATF sees that that is 
appropriate.
    And I ask for a ``yes'' vote.
    Ms. Waters. Will the gentleman yield for a question?
    Mr. Weiner. I certainly will.
    Ms. Waters. Mr. Weiner, as you describe, what is major and 
what is minor, is there any consideration given to whether or 
not this is a handgun or an assault weapon? Could this be major 
weapons that could be involved with 1,000 minor violations?
    I can't tell from looking at this.
    Mr. Weiner. Well, frankly, the way the Coble amendment, the 
substitute reads, is that it is things like collusion. If you 
collude with a gun dealer, with someone who is trafficking in 
guns, that you can't do.
    But if you lost his paperwork for his order of a 1,000 
guns, that is not so bad. That falls into minor. And to make 
matters worse, the fines that you are eligible for under this 
bill, under the Coble amendment, would be limited at $1,000.
    Ms. Waters. But this could be to any kind of weapons that 
you could sell, if you lost the paperwork. This could be for 
handguns or assault weapons.
    Mr. Weiner. Any weapon, this covers any weapon under the 
enforcement domain of the ATF.
    Ms. Waters. So it could be assault weapons.
    Mr. Weiner. And, frankly, and we are going to talk about 
this later, you know, this doesn't make--if you have someone 
come up to you and say--and if you have reason to know that he 
is a Member of Al Qaida, for example, I believe that is right, 
if you have reason to know.
    But if you are not willfully, under the new definition, if 
you just do it over and over and over again, just because you 
just lose bookkeeping, you lose records over and over again, 
you are considered to have committed a series of minor 
violations which you could not lose your license for.
    Ms. Waters. Well, since you mentioned willful, if you don't 
mind, since you are taking a very close look at this, the 
standards that are changed by this legislation from should have 
known to willful, under should have known, that would have 
taken in if you were under an orange or red alert or something 
is going on, particularly as it relates to this war on 
terrorism.
    And if we change that standard and weaken that standard, 
you could have had an orange or a red alert or some description 
or a profile or what have you, but unless it is deemed to be 
willful, then we have weakened the standard substantially and 
this could be for an assault weapon.
    Mr. Weiner. I would say to the gentlelady from California, 
I am going to be offering a substitute later that changes it to 
``knowingly,'' which is pretty bad, too.
    But if you know the fact, but you--I mean, you here are 
setting up what essentially turns out to be the highest 
possible standard for the worst type of activity.
    Ms. Waters. And that includes for assault weapons that 
terrorists may use, is that right?
    Mr. Weiner. The gentlelady is correct.
    Ms. Waters. Well, what a war on terrorism we have.
    Chairman Sensenbrenner. The gentleman's time has expired.
    The question is on the Weiner amendment to the Coble 
amendment in the nature of a substitute.
    Those in favor will say ``aye.''
    Opposed, ``no.''
    The noes appear to have it. The noes have it. The amendment 
is not agreed to.
    Are there further amendments?
    Mr. Weiner. While I gather myself, could I request a roll-
call vote on that?
    Chairman Sensenbrenner. Of course.
    Mr. Weiner. Thank you.
    Chairman Sensenbrenner. The chair will put the question the 
same way he has done with the last two amendments. Those in 
favor will say ``aye,'' those opposed, ``no.''
    And the clerk will call the roll.
    The Clerk. Mr. Hyde?
    [No response.]
    Mr. Coble?
    Mr. Coble. No.
    The Clerk. Mr. Coble, no.
    Mr. Smith?
    Mr. Smith. No.
    The Clerk. Mr. Smith, no.
    Mr. Gallegly?
    [No response.]
    Mr. Goodlatte?
    [No response.]
    Mr. Chabot?
    Mr. Chabot. No.
    The Clerk. Mr. Chabot, no.
    Mr. Lungren?
    [No response.]
    Mr. Jenkins?
    Mr. Jenkins. No.
    The Clerk. Mr. Jenkins, no.
    Mr. Cannon?
    Mr. Cannon. No.
    The Clerk. Mr. Cannon, no.
    Mr. Bachus?
    Mr. Bachus. No.
    The Clerk. Mr. Bachus, no.
    Mr. Inglis?
    Mr. Inglis. No.
    The Clerk. Mr. Inglis, no.
    Mr. Hostettler?
    [No response.]
    Mr. Green?
    [No response.]
    Mr. Keller?
    Mr. Keller. No.
    The Clerk. Mr. Keller, no.
    Mr. Issa?
    Mr. Issa. No.
    The Clerk. Mr. Issa, no.
    Mr. Flake?
    [No response.]
    Mr. Pence?
    [No response.]
    Mr. Forbes?
    Mr. Forbes. No.
    The Clerk. Mr. Forbes, no.
    Mr. King?
    Mr. King. No.
    The Clerk. Mr. King, no.
    Mr. Feeney?
    [No response.]
    Mr. Franks?
    Mr. Franks. No.
    The Clerk. Mr. Franks, no.
    Mr. Gohmert?
    Mr. Gohmert. No.
    The Clerk. Mr. Gohmert, no.
    Mr. Conyers?
    Mr. Conyers. Aye.
    The Clerk. Mr. Conyers, aye.
    Mr. Berman?
    [No response.]
    Mr. Boucher?
    Mr. Boucher. No.
    The Clerk. Mr. Boucher, no.
    Mr. Nadler?
    [No response.]
    Mr. Scott?
    Mr. Scott. No.
    The Clerk. Mr. Scott, no.
    Mr. Watt?
    [No response.]
    Ms. Lofgren?
    [No response.]
    Ms. Jackson Lee?
    Ms. Jackson Lee. Pass.
    The Clerk. Ms. Jackson Lee, pass.
    Ms. Waters?
    Ms. Waters. Aye.
    The Clerk. Ms. Waters, aye.
    Mr. Meehan?
    [No response.]
    Mr. Delahunt?
    [No response.]
    Mr. Wexler?
    Mr. Wexler. Aye.
    The Clerk. Mr. Wexler, aye.
    Mr. Weiner?
    Mr. Weiner. Pass.
    The Clerk. Mr. Weiner, pass.
    Mr. Schiff?
    Mr. Schiff. Pass.
    The Clerk. Mr. Schiff, pass.
    Ms. Sanchez?
    [No response.]
    Mr. Van Hollen?
    Mr. Van Hollen. Aye.
    The Clerk. Mr. Van Hollen, aye.
    Mrs. Wasserman Schultz?
    [No response.]
    Mr. Chairman?
    Chairman Sensenbrenner. No.
    The Clerk. Mr. Chairman, no.
    Chairman Sensenbrenner. Are there further Members in the 
chamber who wish to cast or change their vote?
    The gentleman from California, Mr. Lungren?
    Mr. Lungren. No.
    The Clerk. Mr. Lungren, no.
    Chairman Sensenbrenner. Do I see the gentleman from 
Arizona, Mr. Flake, hiding in the door? The gentleman from 
Arizona?
    Mr. Flake. No.
    The Clerk. Mr. Flake, no.
    Chairman Sensenbrenner. The gentleman from Florida, Mr. 
Feeney?
    Mr. Feeney. No.
    The Clerk. Mr. Feeney, no.
    Chairman Sensenbrenner. The gentlewoman from Florida, Mrs. 
Wasserman Schultz?
    Ms. Wasserman Schultz. Aye.
    The Clerk. Mrs. Wasserman Schultz, aye.
    Chairman Sensenbrenner. The gentleman from California, Mr. 
Schiff?
    Mr. Schiff. Aye.
    The Clerk. Mr. Schiff, aye.
    Chairman Sensenbrenner. And, finally, the gentleman from 
New York, Mr. Weiner?
    Mr. Weiner. Aye.
    The Clerk. Mr. Weiner, aye.
    Ms. Jackson Lee. How am I recorded, please?
    Chairman Sensenbrenner. The gentleman from Indiana, Mr. 
Hostettler?
    Mr. Hostettler. No.
    The Clerk. Mr. Hostettler, no.
    Chairman Sensenbrenner. How is the gentlewoman from Texas 
recorded?
    The Clerk. Mr. Chairman, she is recorded as present.
    Ms. Jackson Lee. Aye.
    The Clerk. Ms. Jackson Lee, aye.
    Chairman Sensenbrenner. The clerk will report.
    The Clerk. Mr. Chairman, there are eight ``ayes'' and 20 
``nays.''
    Chairman Sensenbrenner. And the amendment is not agreed to.
    Are there further amendments?
    If there are no further amendments, the question is on 
agreeing to the amendment in----
    Mr. Weiner. Mr. Chairman? Mr. Chairman, I believe the 
gentlelady from Texas has an amendment.
    Chairman Sensenbrenner. The gentlelady from Texas has never 
been at a loss for words. If she has an amendment, she can 
offer it herself. [Laughter.]
    Ms. Jackson Lee. I have an amendment at the desk, Mr. 
Chairman.
    Chairman Sensenbrenner. For what purpose does the 
gentlelady from Texas seek recognition?
    Ms. Jackson Lee. I have an amendment at the desk.
    And I am so glad that you are reaffirming my right to the 
First Amendment. Thank you.
    Chairman Sensenbrenner. That has never been abridged.
    And the clerk will report the amendment.
    Ms. Jackson Lee. Thank you very much.
    The Clerk. ``Amendment to the amendment in the nature of a 
substitute to H.R. 5092, offered by Ms. Jackson Lee of Texas. 
Strike section 4 and redesignate succeeding sections 
accordingly.''
    [The amendment offered by Ms. Jackson Lee follows:]
    
    
    Chairman Sensenbrenner. And the gentlewoman is recognized 
for 5 minutes.
    Ms. Jackson Lee. Thank you very much, Mr. Chairman.
    Just a few blocks from this august building, three of the 
nation's mayors are sitting on a panel discussing the increase 
of gun violence in their cities. Frankly, they are present at 
the Congressional Black Caucus legislative weekend to ask 
Congress to be more sensitive and responsive to the 
proliferating gun violence that we have in this nation.
    Just a few weeks ago, I had the opportunity to participate 
in one of the many immigration hearings. At that hearing, there 
was a discussion of the drug and gun violence in Nuevo Laredo. 
That is, of course, in Mexico.
    But one of the issues had to do with the spillover of that 
gun violence into Laredo, Texas. And so it is clear that there 
needs to be a further reinforcement of the responsible 
legislation necessary to ensure responsible use of guns and the 
protection of the innocent.
    My amendment maintains the ability of the Bureau of 
Alcohol, Tobacco, Firearms and Explosives to put corrupt gun 
dealers out of business and, thus, help reduce the carnage 
taking place in many of the nation's major urban centers, by 
striking section 4 of the bill.
    H.R. 5092 was introduced by Chairman Coble and the Ranking 
Member, Mr. Scott, as a bipartisan attempt to address 
enforcement issues raised during ATF oversight hearings 
conducted by the Subcommittee.
    I congratulate their effort. I appreciate their leadership. 
But those hearings focused on ATF's gun show enforcement 
program and generally on ATF's licensing and revocation 
authority over Federal firearms licensees.
    The bill addresses a number of issues relating to ATF 
enforcement authority, including authorization of civil 
penalties, creation of independent administrative law judges to 
hear enforcement cases, definitions of serious and non-serious 
violations, DOJ inspector general investigations, ATF gun show 
enforcement, and other support provisions.
    Most significantly, for purposes of my amendment, 
modification of the requisite intent for violation. The bill in 
section 4, entitled ``definition of willfully,'' that 
``willfully'' is defined as ``intentionally, purposefully, and 
with the intent to act in violation of a known legal duty.''
    My concern with this provision of the bill is that it 
defines ``willfully'' to impose a much higher standard of proof 
upon law enforcement officers than currently.
    We have got to give law enforcement officers the right 
tools to do the right things, but at the same time, we must 
provide them with the tools to protect the innocent.
    There does not appear to be any compelling reason for 
increasing the government's evidentiary burden is time. My 
amendment simply restores the restoration of the definition of 
``willfulness'' to its well settled meaning that defendant knew 
his conduct was unlawful; not that he knew the specific statute 
he is accused of violating or the specific intent to violate 
that precise provision.
    Mr. Chairman, that determination will be made beyond a 
reasonable doubt or in civil penalties. It will allow the 
individual, in a preponderance of evidence, to prove that they 
did not intend to break the law.
    That is fair enough, because guns kill. And some people say 
people kill with guns, but guns kill and there are people with 
criminal intent that will buy guns from gun shows and they will 
kill.
    Mr. Chairman, changing the evidentiary standards governing 
elements of penal offenses should be done sparingly and with 
the utmost care. This is particularly true whereas here we do 
not have the benefit of the considered views of thoughtful 
criminal law scholars, experienced prosecutors and police 
officers with front line experience, or the Department of 
Justice.
    Let's help our nation's major mayors and rural communities. 
The redefinition of ``willfully'' contained in the bill 
illustrates my concern. As I noted, the bill defines 
``willfully'' as intentionally, purposely and with the intent 
to act in violation of a known legal duty.
    This definition, however, has been repeatedly rejected by 
the Federal courts, Bryan v. U.S., 524-184, the U.S. v. Andre 
case, the U.S. v. Aleck, and the U.S. v. Collins.
    In the Bryan case, the defendant was convicted of willfully 
dealing in firearms without a Federal license. Specifically, 
the defendant did not have a Federal firearms license. He used 
so-called store purchasers in Ohio to acquire pistols he could 
not have bought himself; that he knew the store purchasers made 
false statements when purchasing the guns; that the defendant 
assured the store purchasers that he would file off the serial 
numbers; and, that the defendant resold the guns on Brooklyn 
street corners known for drug dealing.
    Despite this conduct, defendant claimed that he could not 
be convicted under the Federal firearm laws unless the 
government proved he knew of the Federal licensing requirement.
    The Supreme Court soundly rejected this claim, stating, 
``The willfulness requirement does not carve out an exception 
to the traditional rule that ignorance of the law is no 
excuse.''
    Knowledge that the conduct is unlawful is all that is 
required.
    Chairman Sensenbrenner. The time of the gentlewoman has 
expired.
    Ms. Jackson Lee. I ask my colleagues to support this 
amendment.
    Chairman Sensenbrenner. For what purpose does the gentleman 
from North Carolina, Mr. Coble, seek recognition?
    Mr. Coble. I will speak in opposition to the amendment.
    Chairman Sensenbrenner. The gentleman is recognized for 5 
minutes.
    Mr. Coble. And I won't take 5 minutes, Mr. Chairman.
    This provision, of course, is restricted only to civil 
matters, not criminal, and it is intended to distinguish 
between the licensee actions that are knowing and intentional 
versus good faith or administrative mistakes and recordkeeping.
    The Subcommittee heard testimony, Mr. Chairman and 
colleagues, on this issue that ATF treats virtually all errors 
in dealers' records, no matter how few or how minor, as willful 
violations. Any error could result in a license revocation. It 
just seems that this is not there.
    For the benefit of Members of the Committee, Mr. Chairman, 
I will be brief about this. But we had a witness that appeared 
before Mr. Scott and me who cited the fact that a licensee 
received a revocation notice who wrote the initials ``Y'' or 
``N'' in lieu of writing out the words ``yes'' or ``no'' on a 
firearms transaction form.
    This seems to violate common sense, to me. And in a number 
of transactions, a revocation notice cited the failure of the 
firearms purchaser to identify the county of residence, 
although the purchaser did clearly and notoriously list his 
city of residence.
    So for those reasons, Mr. Chairman, I oppose the amendment.
    Mr. Gohmert. Mr. Chairman?
    Chairman Sensenbrenner. For what purpose does the gentleman 
from Texas, Mr. Gohmert, seek recognition?
    Mr. Gohmert. Move to strike the last word.
    Chairman Sensenbrenner. The gentleman is recognized for 5 
minutes.
    Mr. Gohmert. The violence in D.C. is certainly something 
that we need to be very concerned about and I would humbly 
submit that one of the things that has concerned me is the fact 
that guns were prohibited in Washington, D.C.
    And there is something to the old bumper stickers that 
says, ``When guns are outlawed, only outlaws have guns.'' Back 
in Texas, after a disaster where a gunman came in to a 
cafeteria and began shooting people, it was realized we need to 
have guns in the hands of lawful, legal, law-abiding people.
    And so we passed a concealed carry and violent crime has 
been going down ever since. So I would submit that may be a 
good thing for us to take a look at.
    I do recall back in the early 1990's, under President 
Clinton, the secretary of state, a man from Texas, stood up in 
front of the country and said, ``What we need to do is raise 
the fees for gun dealers tenfold and that will bring an end to 
so much of this gun violence in America.''
    Well, it didn't, because I can tell you, in all my years as 
a judge, the guns that were constantly used in crimes were not 
bought from sporting good dealers. I didn't even have them from 
gun shows. I had them bought out of people's trunks, stolen out 
of other people's homes, things like that.
    And so that kind of thing ended up penalizing law-abiding 
gun dealers and it did nothing to actually address the real 
problem, the underlying problem, and that was the criminals 
that use them and tying the hands of law-abiding folks that 
could counter that.
    And I would just submit, in conclusion and before I yield 
back my time, that the bumper sticker is quite true that says, 
``Guns kill people the same way it is spoons that really make 
people fat.''
    I yield back.
    Mr. Weiner. Mr. Chairman?
    Chairman Sensenbrenner. The gentleman from New York, Mr. 
Weiner, for what purpose do you seek recognition?
    Mr. Weiner. Mr. Chairman, I would like to seek to respond 
to that erudite presentation.
    Chairman Sensenbrenner. For what purpose do you seek 
recognition?
    Mr. Weiner. Five minutes to strike the last word, please.
    Chairman Sensenbrenner. That is better. The gentleman is 
recognized for 5 minutes.
    Mr. Weiner. I don't know where to start, the spoons or the 
trunks.
    Mr. Gohmert. I think I resent erudite, I am not sure.
    Chairman Sensenbrenner. The time belongs to the gentleman 
from New York, all 5 minutes of it.
    Mr. Weiner. First, let me just clarify a couple of 
questions or fact. First of all, what the gentleman from North 
Carolina said about the knowingly standard is incorrect.
    Under the gentlelady's amendment, if you have an 
inadvertent error, that would not be a basis for sanction. The 
Bryan standard did not say if you put a ``Y'' or an ``N.'' The 
Bryan standard for willingly said, you know, if you show a 
pattern again and again and again and again of someone 
violating the law, that is enough to show willfulness.
    Now, I doubt, and who knows, I am surprised in this debate 
all the time, but I doubt that the gentleman from North 
Carolina or the gentleman from Texas think that Bryan was a 
good guy and think that there shouldn't have been sanctions 
brought against him.
    The question is, is the standard correct or not and I think 
the knowingly standard that the gentlelady from Texas is 
arguing for here is a good one. It says if you know what you 
are doing, even if you don't know the specific section, if you 
know what you are doing is wrong, that that should be enough to 
bring sanctions.
    But I can't let the example, as far off point as it was, by 
the gentleman from Texas, not be responded to. The guy who 
sells guns illegally in the back of the car is why we need good 
documentation and good trace data and why we need a strong ATF.
    You have got to understand it is the good gun dealer that 
is protected by these sections. The guy who is following the 
rules, documenting his actions, they are not the problem. I 
think the gentleman would agree.
    If somehow the gun is going from being legal when it is 
manufactured to becoming illegal, and what the ATF is asking 
for and what cities are asking for and what individuals are 
asking for is give somebody the tools, somebody the tools to be 
able to do that investigation and get the bad guys.
    We are not talking about 50 percent of the gun dealers. I 
mean, there is a statistic in my notes here somewhere about the 
relatively tiny percentage of gun dealers that are responsible 
by this trace data for all of the illegal handguns making their 
way that way.
    If you don't believe in having an ATF, all right, I can 
it--listen, it is a weird position to have, but that is the 
direction you are going in with the Coble substitute. You are 
taking away their ability to put the heaviest sanctions.
    You are slowing down a process that is already 
excruciatingly slow. You are saying if it results in criminal 
sanctions, you kind of have a weird double-jeopardy situation 
going on.
    You are saying that if you choose not to observe the child 
lock provision, that we are not going to sanctions you.
    You have got all of these things. You have got this new 
classification of minor, which says you can't lose your license 
at all, even if there are dozens and dozens and dozens and 
dozens of them.
    I agree with the gentleman from Texas. I don't know, the 
spoon thing had me a little confused, but I agree with the 
gentleman from Texas, we need to get criminals.
    How do we do it? Well, we have got the ATF to do it. Why 
gut the few investigations and the few prosecutions that they 
are doing? If you want to get the guy selling guns out of the 
back of his car, and I know 99.9 percent of gun dealers want to 
get him, too, how do you do it?
    With a strong, empowered ATF, with a standard that leads to 
real enforcement. If you say that knowingly violating the law 
is too strong a standard, you are right. It is too strong a 
standard for the criminal who is selling it out of the back of 
his car.
    But for the gun dealer who wants to be a good player, it is 
no challenge. He just knows he can't lose documents. He knows 
he has to write down the right thing.
    Who are we protecting? Who are we protecting, my 
colleagues, with the Coble substitute? Let's really talk about 
that.
    We are protecting essentially a tiny group of gun dealers 
who are doing bad things. Don't take it from me. Ask the ATF. 
They are doing 2 percent of their investigations lead to 
revocations, 2 percent. They are not getting the best 2, they 
are not getting--is Wal-Mart on this list, as much as I dislike 
them, is Target? No. They are getting the rogue guy.
    Isn't that who people who support gun rights want to get? 
Isn't that the people like me who think we need tougher 
restrictions?
    We have agreement. We created the ATF. Why not just say 
what you mean? Do away with the ATF. Why the death by a 
thousand nicks here?
    So the gentleman is right, that is who we want to get. Now, 
he didn't speak to the point of knowing and willful, but he is 
right about the overall point. As far as knowing and willful, 
knowing is a pretty tough standard. You have got to know that 
what you are doing is breaking the law every single time you do 
it, not simply having paperwork errors every once in a while. 
That person is not going to get stuck.
    And I yield what little time I have left to the gentlelady 
from Texas.
    Chairman Sensenbrenner. The time of the gentleman has 
expired.
    The question is on the Jackson Lee amendment.
    Mr. Conyers. Mr. Chairman, I rise in support of the 
amendment.
    Chairman Sensenbrenner. The gentleman is recognized for 5 
minutes.
    Mr. Conyers. I think this is a very revealing discussion, 
and I would like the gentlelady from Texas to make any closing 
comments that she might like. I yield to her at this time.
    Ms. Jackson Lee. I thank the distinguished Ranking Member.
    And I am moved by the gentleman's eloquent detailing of 
where we are going in this debate, both Mr. Conyers' very frank 
statement, but Mr. Weiner, who has made a very potent point.
    I would wish that we could make this a very factual debate 
and discussion and, frankly, track or efforts toward the NRA 
that really want absolutely no regulations and provisions 
whatsoever.
    The point that many of us are trying to make with these 
amendments is the point that the ATF has a duty. It is a civil 
duty, in some instances, and that is to make sure that the 
regulations of gun ownership, which are, if you will, 
consistent with the Second Amendment, which the Second 
Amendment is not a free-for-all.
    It is a constitutional right to be able to bear arms, but 
it is not a free-for-all. And so most likely you would not like 
to have a 2-year-old holding a gun. You would not like to have 
someone who is suffering from some failings of mental health 
have a gun. You wouldn't want to have a domestic abuser have a 
gun, as well.
    And this is what ultimately happens when you have a 
reckless, non-supervised and no law enforcement overseeing of 
the movement of guns in America. We know that there are massive 
gun dealers coming from countries outside of the United States, 
making multi, multi millions of dollars and making sure that 
their guns get in the hands of those who have no intent of 
doing anything but doing harm.
    You now, if you will, emasculate the ATF to the extent that 
they have to take out a little card and say, ``Is this 
willful?'' Now, what is the definition of willful?
    Their job on the street is to arrest the bad guys. That 
means the individual who had people go to Ohio and misuse his 
identification or not use his identification, buy guns and 
then, ultimately, the drug dealers on the streets of Houston, 
Chicago, Kansas City, New York are then able to get their guns 
without any reprimand whatsoever.
    This is, in essence, taking the law away from ATF and 
simply saying, ``Look pretty, wear a uniform, and just let us 
pay you.'' And I don't think that that was the intent.
    One abuse, one play should be fixed. Obviously, we should 
find a way for the ATF to be able to supervise legitimate gun 
shows and be able to be responsible with a responsible gun 
dealer.
    Raiding gun shows recklessly is not what I am advocating 
for, but to take an incident in one city and, if you will, 
blindfold the rest of us and cause me in Houston to have to 
suffer through the thousands of gun shows experience every 
year, with illegal folks standing outside the gun shows and 
then trunks open, I think is an outrage.
    For you to suggest to me that because we are taking the 
word ``willfully out,'' a 2-year-old gets a gun and shoots her 
4-year-old brother and that is okay, I think is an outrage.
    And so I would ask my colleagues to consider spoons and 
various other anecdotes that have been told and really look at 
the life or death question that we are talking about.
    And that life or death question has to do with removing 
section 4 that literally guts the responsibility of the ATF and 
their ability to respond to the need of the American people by 
ensuring that illegal gun dealers and those who are not 
attempting to follow the law and those who are attempting to 
really, if you will, have a cartel of guns on the streets and 
they don't care who they sell it to, they are not interested in 
making sure that the guns are sold safely and legally, this is 
what this amendment is attempting to do.
    I ask my colleagues to stand on behalf of the children, 
families, security and the Second Amendment and vote for my 
amendment.
    I yield back.
    Chairman Sensenbrenner. For what purpose does the gentleman 
from California seek recognition?
    Mr. Issa. To strike the last word.
    Chairman Sensenbrenner. The gentleman is recognized for 5 
minutes.
    Mr. Issa. I will take only 1.
    In listening to the gentlelady, I have served on this 
Committee for 6 years, I have never spoken on a gun bill 
before. But I would ask that all of us throughout the rest of 
today, on this bill and others, recognize that we may disagree 
on the fundamentals.
    Clearly, this Committee is divided along those who 
historically have supported the Second Amendment and those who 
seem to constantly want to limit it, strike it, limit its 
importation, limit its sale.
    Hopefully, we can recognize that we can agree to disagree 
and do it in a civil way, without using rhetoric that is 
extreme. We do disagree along recognizable lines on the 
interpretation of the Second Amendment and people's right to 
keep and bear arms.
    Mr. Chairman, one of my cousins, Richard Issa, is, in fact, 
an ATF agent and I would not be supporting this if I thought 
that it gutted Alcohol, Tobacco and Fire's ability to do its 
job. Just the opposite.
    I think that the firearm portion of Alcohol, Tobacco and 
Firearms will, in fact, be enhanced by us being reasonable in 
the message that we send to that agency and their enforcement.
    And with that, I yield back.
    Chairman Sensenbrenner. The question is on the Jackson Lee 
amendment.
    Those in favor will say ``aye.''
    Opposed, ``no.''
    Ms. Jackson Lee. rollcall, Mr. Chairman.
    Chairman Sensenbrenner. Okay, first of all, let me state 
that the noes have it.
    Ms. Jackson Lee. I would like a roll-call vote, please, Mr. 
Chairman.
    Chairman Sensenbrenner. A rollcall will be ordered.
    Those in favor of the Jackson Lee amendment in the second 
degree to the amendment in the nature of a substitute by Mr. 
Coble of North Carolina will, as your names are called, answer 
``aye,'' those opposed, ``no.''
    And the clerk will call the roll.
    The Clerk. Mr. Hyde?
    [No response.]
    Mr. Coble?
    Mr. Coble. No.
    The Clerk. Mr. Coble, no.
    Mr. Smith?
    Mr. Smith. No.
    The Clerk. Mr. Smith, no.
    Mr. Gallegly?
    [No response.]
    Mr. Goodlatte?
    [No response.]
    Mr. Chabot?
    Mr. Chabot. No.
    The Clerk. Mr. Chabot, no.
    Mr. Lungren?
    [No response.]
    Mr. Jenkins?
    Mr. Jenkins. No.
    The Clerk. Mr. Jenkins, no.
    Mr. Cannon?
    Mr. Cannon. No.
    The Clerk. Mr. Cannon, no.
    Mr. Bachus?
    [No response.]
    Mr. Inglis?
    Mr. Inglis. No.
    The Clerk. Mr. Inglis, no.
    Mr. Hostettler?
    Mr. Hostettler. No.
    The Clerk. Mr. Hostettler, no.
    Mr. Green?
    [No response.]
    Mr. Keller?
    [No response.]
    Mr. Issa?
    Mr. Issa. No.
    The Clerk. Mr. Issa, no.
    Mr. Flake?
    Mr. Flake. No.
    The Clerk. Mr. Flake, no.
    Mr. Pence?
    [No response.]
    Mr. Forbes?
    Mr. Forbes. No.
    The Clerk. Mr. Forbes, no.
    Mr. King?
    Mr. King. No.
    The Clerk. Mr. King, no.
    Mr. Feeney?
    Mr. Feeney. No.
    The Clerk. Mr. Feeney, no.
    Mr. Franks?
    Mr. Franks. No.
    The Clerk. Mr. Franks, no.
    Mr. Gohmert?
    Mr. Gohmert. No.
    The Clerk. Mr. Gohmert, no.
    Mr. Conyers?
    Mr. Conyers. Aye.
    The Clerk. Mr. Conyers, aye.
    Mr. Berman?
    [No response.]
    Mr. Boucher?
    Mr. Boucher. No.
    The Clerk. Mr. Boucher, no.
    Mr. Nadler?
    [No response.]
    Mr. Scott?
    Mr. Scott. Aye.
    The Clerk. Mr. Scott, aye.
    Mr. Watt?
    [No response.]
    Ms. Lofgren?
    [No response.]
    Ms. Jackson Lee?
    Ms. Jackson Lee. Aye.
    The Clerk. Ms. Jackson Lee, aye.
    Ms. Waters?
    Ms. Waters. Aye.
    The Clerk. Ms. Waters, aye.
    Mr. Meehan?
    [No response.]
    Mr. Delahunt?
    [No response.]
    Mr. Wexler?
    Mr. Wexler. Aye.
    The Clerk. Mr. Wexler, aye.
    Mr. Weiner?
    Mr. Weiner. Aye.
    The Clerk. Mr. Weiner, aye.
    Mr. Schiff?
    Mr. Schiff. Aye.
    The Clerk. Mr. Schiff, aye.
    Ms. Sanchez?
    [No response.]
    Mr. Van Hollen?
    Mr. Van Hollen. Aye.
    The Clerk. Mr. Van Hollen, aye.
    Mrs. Wasserman Schultz?
    Ms. Wasserman Schultz. Aye.
    The Clerk. Mrs. Wasserman Schultz, aye.
    Mr. Chairman?
    Chairman Sensenbrenner. No.
    The Clerk. Mr. Chairman, no.
    Chairman Sensenbrenner. Are there Members who wish to cast 
or change their votes?
    The gentleman from California, Mr. Lungren?
    Mr. Lungren. No.
    The Clerk. Mr. Lungren, no.
    Chairman Sensenbrenner. Are there further Members who wish 
to cast or change their vote?
    If not, the clerk will report.
    Mr. Weiner. Mr. Chairman? Mr. Chairman?
    Chairman Sensenbrenner. Who seeks recognition?
    Mr. Weiner. I have my final amendment, which is an 
amendment in the form of a substitute.
    Chairman Sensenbrenner. Well, the clerk has to report 
first. I know the gentleman is real eager to offer another 
amendment, but let's find out what happened to this amendment 
first.
    Will the clerk please report?
    The Clerk. Mr. Chairman, there are nine ``ayes'' and 17 
``nays.''
    Chairman Sensenbrenner. And the amendment is not agreed to.
    Now, for what purpose does the gentleman from New York seek 
recognition?
    Mr. Weiner. Mr. Chairman, would this be an appropriate time 
to offer an amendment?
    Chairman Sensenbrenner. Are you doing it in person or by 
proxy this time?
    Mr. Weiner. I would like to have an amendment at the desk. 
It is Weiner JDG-212.
    Chairman Sensenbrenner. The clerk will report that 
amendment.
    The Clerk. ``Amendment in the nature of a substitute to 
H.R. 5092, offered by Mr. Weiner. Strike all after the enacting 
clause and insert''----
    [The amendment offered by Mr. Weiner follows:]
      
      

  


      
      

  


      
      

  


      
      

  


    Chairman Sensenbrenner. Without objection, the amendment is 
considered as read. And the gentleman from New York will be 
recognized for 5 minutes.
    Mr. Weiner. I thank the Chairman. This is a substitute that 
seeks to address some of the concerns that have been raised and 
some we haven't gotten to yet.
    But I want to thank the gentleman from California, Mr. 
Issa, for striking a tone that I think is important here. If 
the gentleman perceives that there is a certain level of 
passion to this issue, it is because in cities like mine, these 
are not academic rule-making things.
    In cities like mine, they are not constitutional debates in 
the abstract about the correct interpretation of a Second 
Amendment that was written a couple of hundred years ago.
    This is about illegally sold guns that are coming to cities 
like mine and killing children and killing police officers and 
killing people just about every single day, that we are trying 
to stop.
    Now, I don't know how you do it except by having an 
empowered ATF, with an empowered ability to do everything we 
can to track guns from that moment they are legal to when they 
are used in that crime.
    And if you believe that we should approach this issue with 
perhaps a little less passion and heat, I am sorry. It is not 
going to happen, because people are burying their relatives, 
police officers, children are getting shot.
    We heard the testimony from the mayor of the city of New 
York, a Republican, talking about part of his job is having to 
go to funerals where people are being killed with illegal guns 
that start out somewhere, and we know where they are starting.
    The ATF knows where they are and what you are saying with 
this bill is don't punish them. And if you think that is 
hyperbole, let me tell you about some other cases.
    You know, the Bull's Eye Shooter Supply in Tacoma, 
Washington shot Bushmaster rifles to the D.C. snipers, even 
though both were on the prohibited list. Perhaps the most high 
profile case maybe in American history dealing with the gun, or 
at least in recent memory.
    And 238 guns in the inventory of that shop had disappeared 
over a 3-year period. The owner has had the revocation of his 
license on appeal since 2003. He is selling guns to this day.
    Now, if you believe that that is an okay state of affairs, 
then keep the existing law. If you believe that is still too 
liberal, too generous, pass the Coble amendment and keep him 
selling guns for years to come.
    Trader Sports in San Laredo, California, in 2003, an ATF 
audit found, as I said earlier, 7,477 firearms had no 
documentation. They essentially were missing. Now, are they in 
the back of some guy's truck that he is selling to criminals, 
that the gentleman from Texas articulated in his example? 
Maybe.
    He had his license revoked in 2004 and was selling guns 
after that audit for two additional years of appeals, until 
June 2006.
    If you think this is a steel-jaw trap of enforcement, these 
are two high profile cases.
    Perhaps the highest-profile case is one that returns to 
this exact bill. I am going to read you the description of a 
gun dealer who, under this Coble bill, would be considered a 
minor offender, under this bill.
    In 2001, an audit found improper paperwork on 419 of 903 
transactions examined and a 133 lost guns, this dealer. In 
2003, an audit found 422 of 1,524 guns that should have been in 
inventory were missing. That was a 2001 audit and then a 2003 
audit.
    Ranked 37th of 80,000 dealers in the number of guns linked 
to crime, 500 crime guns in 2004 came from this one dealer. The 
license was revoked, but under 5092, every single one of those 
things would be considered a minor offense. The name of this 
dealer is Sanford Abrams, and he is a board member of the 
National Rifle Association and the owner of the Valley Gun Shop 
outside of Baltimore.
    Now, if you think that record is a list of minor offenses 
and that we were too tough on that guy, remember, it started in 
2001, it wasn't until last year that it was revoked.
    If you think the process is too strong, if you think the 
process is too vigorous, if you think the process is too 
onerous, vote for the Coble bill. And maybe go even further and 
do what the Coble bill is on the way to doing, which is taking 
firearms enforcement out of the ATF.
    But if you think that some of these things can be done in a 
more reasonable way, having the burden of proof be knowingly 
rather than willful, saying the ATF can revoke the gun license 
who knowingly break the law, allow fines of up to $10,000 per 
violation, doesn't take this carve-out that allows them--that 
prevents enforcement on gun safety----
    Chairman Sensenbrenner. The time of the gentleman has 
expired.
    The question is----
    Ms. Waters. Mr. Chairman?
    Chairman Sensenbrenner. For what purpose does the 
gentlewoman from California seek recognition?
    Ms. Waters. I move to strike the last word. And I yield to 
the gentleman from New York.
    Chairman Sensenbrenner. The gentlewoman is recognized for 5 
minutes.
    Mr. Weiner. And I thank the gentlelady for yielding, as I 
continue to explain that this--one of the sections of the bill 
repeals the separate penalties for not having child safety 
locks on handguns. That is one of the things we are doing 
today.
    My substitute would also take away this terrible 
disincentive to bring criminal cases against the worst 
offenders by having this notion that if you fail in the 
criminal case, you lose the administrative bite at the apple.
    My colleagues, I agree with the gentleman from California, 
we do have some ideological differences here. I do believe that 
one of them has never been should we have an ATF that does its 
job.
    If you don't believe in this recordkeeping thing, just say 
it. If you believe that the 95 percent of the gun dealers who 
are not responsible for not keeping records and who do fine 
when the ATF comes and visits, they are more than helpful when 
government officials visit, then, frankly, we do have a 
difference that goes beyond philosophy.
    Ms. Waters. Would the gentleman yield for a moment?
    Mr. Weiner. I certainly will. It is your time.
    Ms. Waters. I am sorry. I missed what you said about the 
child safety locks.
    Mr. Weiner. If the gentlelady would yield me the time.
    Ms. Waters. I yield back.
    Mr. Weiner. There are separate penalties under the law that 
were enacted in 2005 for failure to provide for a child safety 
lock for handguns. This language in this bill, unwittingly, 
accordingly to the gentleman from Virginia, I am not so sure, 
listening to some of the debate here today, strikes those 
separate provisions.
    Now, we can re-argue the child safety lock debate, if that 
is what my colleagues want. But I say to the gentlelady from 
California this is really a surrogate debate for something 
else.
    This is not about whether we are going to get the bad guys, 
because that is what the ATF wants to do. They are only doing 
it in a relatively tiny percentage, as the statistics show.
    This is about an entirely different discussion, a whole new 
frontier beyond where the gentleman from California described 
debates up to now.
    What they are essentially doing with this modernization and 
reform act, and I say that with sarcasm, is they are taking 
away the ATF's last remaining arrows in their quiver.
    When you have someone like a gun show that ranks 37 among 
80,000 dealers and he can still be considered a minor offender 
under this bill, it is clear what they are doing.
    When you say that the ATF is working too hard, when the 
shopkeeper that sold the Bushmaster rifle to D.C. snipers, even 
though both were on the list that they are required to check of 
prohibited people. Imagine if, God willing, they would have 
said, ``You know what? We are not going to sell and we are 
going to call someone and say `Someone is coming around here 
trying to buy who is on the list,''' it prevents the ATF from 
shutting down people like this.
    That is who my colleagues are defending here. We shouldn't 
be. Your brother deserves to be honored by giving him the tools 
he needs to do his job. We dishonor him by saying, ``You know 
what? You are doing too much,'' saying 1 percent or 2 percent, 
saying that we should keep the guy who is the 37th ranked out 
of 80,000 should be considered a minor offender.
    Does that honor the work of people who are trying to 
enforce the law, let alone the memories of those that are lost 
to these guns?
    Look, I believe in doing away with the pretense here. Let's 
have a discussion whether you should have the ATF. It would be 
a tough vote for you guys. You know what? Prepare that 
amendment, Josh.
    Let's see if we should even have an ATF. Isn't that what 
this is about? Is this about doing the bidding, because you 
have a board member who found, in an audit in 2001, he lost 
guns, in 2003 he lost guns, has 500 guns linked to crime? Isn't 
that what this is about, doing the bidding of a special 
interest here in Washington, when that special interest is 
responsible for more guns being on the street that are killing 
the citizens of our country?
    Isn't that what this is about? This isn't about a broad 
philosophical debate anymore. This is about protecting the 
very, very, very worst.
    And let me conclude with this, 99 percent of the gun 
dealers probably are watching this on television and saying, 
``Boy, I am glad my dues for the NRA are paying off.'' But they 
are also saying, ``This doesn't affect me. I keep my records. I 
don't sell to rogue guys. By the way, I probably know who the 5 
percent are, but I am not doing it.''
    We are trying to protect them, as well. What this bill is 
doing is neutering the ATF and I hope you vote for the 
substitute, which gives them a flexibility, takes out some of 
the highest standard, takes out some of the clerical things 
that Mr. Scott says was a mistake, like the child safety lock 
thing, prevents a fire sale of guns 60 days after you have lost 
your license.
    And then the answer is, ``Oh, but they are going to want to 
follow the law.'' They lost their license. They are like the 
worst you can imagine. It takes that provision out.
    And I urge my colleagues, in a spirit of comity and also in 
a spirit of understanding that we all believe, I would hope 
that there is a need for a strong ATF.
    And I yield back the time to the gentlelady from 
California.
    Chairman Sensenbrenner. And the time of the gentlewoman 
from California has expired.
    Mr. Scott. Mr. Chairman?
    Chairman Sensenbrenner. For what purpose does the gentleman 
from Virginia seek recognition?
    Mr. Scott. Move to strike the last word.
    Chairman Sensenbrenner. And the gentleman is recognized for 
5 minutes.
    Mr. Scott. And if I can get the attention of the gentleman 
from North Carolina, Mr. Coble.
    The gentleman from New York has indicated concern about the 
child safety lock provision. It is my understanding that the 
language in the bill does, in fact, change the present law.
    Is it the intention of the sponsor of the bill to make sure 
that when the bill is presented to the floor, that we correct 
that oversight and reinstate the present law on child safety 
locks?
    Mr. Coble. If the gentlewoman would yield to me. If you 
will yield, Mr. Scott.
    Mr. Scott. I will yield.
    Mr. Coble. I said earlier that you and I had agreed to do 
that, and I made that clear previously.
    Mr. Scott. I yield to the gentleman from New York.
    Mr. Weiner. Would the two gentleman who helped craft this 
bill, if we are able to craft an amendment now to do that, 
would you vote in favor of it?
    Mr. Coble. Well, I don't know that it is necessary.
    Mr. Weiner. We are in the process of marking up 
legislation. It is generally where that kind of thing is done.
    Mr. Coble. We can look at it and work with you as we go 
along. I want to be sure it is done technically correct. But 
Mr. Scott and I, I think, are as good as our word.
    Mr. Weiner. I thank you.
    Mr. Scott. Reclaiming my time. I yield back.
    Mr. Coble. Mr. Chairman?
    Chairman Sensenbrenner. For what purpose does the gentleman 
from North Carolina seek recognition?
    Mr. Coble. To strike the last word.
    Chairman Sensenbrenner. The gentleman is recognized.
    Mr. Coble. And, Mr. Chairman and colleagues, I will not 
take the full 5 minutes, but I want to say this to you.
    I think I have implied it before, but the response to this 
bill, Mr. Scott's and my bill and a 137 cosponsors, the 
response from the ATF in opposition, the silence has been 
deafening.
    Now, that tells me that the ATF is not all that upset about 
this. Usually, the way matters are transacted on this Hill, if 
I embrace a piece of proposed legislation and X, Y and Z are 
opposed to it, oftentimes they will knock my door down, at 
least knock on the door and sometimes knock it down, expressing 
their opposition.
    I have not heard from the ATF in opposition.
    And, finally, as to Mr. Weiner's amendment, he retains ATF 
employees as administrative law judges. Mr. Scott and I 
designate neutral ALJs, which I think would afford more 
objectivity.
    Mr. Weiner does not distinguish between minor and serious 
violations, thereby still permitting revocations as a result of 
innocuous clerical errors.
    Finally, suspension after indictment is usually not 
practical, because generally civil proceedings are routinely 
stayed pending the disposition of criminal matters.
    So with that in mind, Mr. Chairman, I oppose the amendment.
    Chairman Sensenbrenner. Does the gentleman yield back?
    Mr. Coble. I yield back.
    Chairman Sensenbrenner. The gentleman from Maryland, for 
what purpose do you seek recognition? And the gentleman is 
recognized for 5 minutes.
    Mr. Van Hollen. I thank you, Mr. Chairman.
    Whenever we have this debate on gun safety bills, gun 
control bills, we often hear from the other side, ``We don't 
need any new legislation, we don't need any new gun safety 
laws. Let's just enforce the existing laws that are on the 
books.''
    And now we have a piece of legislation that seeks to undo 
the existing laws on the books, that seeks to undermine the ATF 
and seeks to make it much more difficult for them to go after 
the bad apples.
    Now, Mr. Weiner has made the point that a very small 
percentage of gun dealers are responsible for selling the great 
majority of guns that are used in crimes. In fact, 1 percent of 
licensed dealers account for over 60 percent of the guns used 
in crimes.
    And under existing law, forget the changes in Mr. Coble's 
bill, under existing law, the ATF has had a very difficult time 
going after them and now we have a piece of legislation to make 
it even more difficult to go after the bad apples.
    You have got to ask yourself the question why. Now, Mr. 
Coble raised the point that he hasn't heard from anyone in the 
existing ATF. Well, as I understand this Bush administration's 
position, I don't even know if they have a position, but I am 
not at all surprised to hear that somebody at the ATF isn't 
coming down and telling us what they think about this bill.
    Unfortunately, you have to retire from the ATF these days 
to be able to speak your mind and it is what you believe. And 
if you look at people who are retired from the ATF, you will 
see that they have come out against this bill.
    In fact, the bill is opposed by former ATF members, 
including former director Stephen Higgins and Rex Davis. And, 
Mr. Chairman, I would like to submit for the record a letter to 
the Congress, dated June 29, 2006, from a number of former 
officials at the ATF in opposition to this bill.
    Chairman Sensenbrenner. Without objection, the letter will 
be put in the record.
    [The letter follows:]
    
    
    Mr. Van Hollen. And I would just like to read the first 
paragraph, since Mr. Coble raised this issue. Again, it is 
signed by a number of former ATF officials.
    ``As former officials of the Bureau of Alcohol, Tobacco, 
Firearms and Explosives, we write to urge you to oppose H.R. 
5092. Far from modernizing ATF, this legislation would severely 
undermine the bureau and protect corrupt gun dealers and gun 
traffickers. If passed, this bill would make it extremely 
difficult for ATF to successfully prosecute gun traffickers and 
dealers who break the law or revoke dealers' licenses.''
    So these are the people that worked at ATF. These are the 
people who now are free to speak their minds from the ATF and 
they clearly see this as undermining our ability to go after 
the bad apples.
    I would also say that this legislation is opposed by the 
Major City Chiefs Association, the International Association of 
Chiefs of Police, and the International Brotherhood of Police 
Officers.
    Now, Mr. Weiner mentioned a couple of cases. He mentioned 
the case of the gun shop in Tacoma, Washington, that had a 
record of losing guns, of gross negligence, and he mentioned 
Sanford Adams, who is a dealer in Maryland.
    Both these cases have had a direct impact on my State of 
Maryland. Sanford Abrams is a gun dealer in the State. As you 
can see, he is one of the worst offenders. The ATF has said in 
court documents that he is one of the most reckless sellers of 
guns and they said, and I quote from the documents, ``a serial 
violator who has endangered the public.''
    And, yet, under existing law, they have not been successful 
yet in revoking his license. And now we want to say, ``Let's 
change the law and make it even harder.''
    Mr. Weiner went through some of the statistics with respect 
to Mr. Sanford's sales. The fact of the matter is, and he has 
not disputed the substance of these, he had more than 900 
violations of Federal gun laws, 900.
    In 2003, the audit found that several machines guns had 
been sold without proper records. A gun had been sold without 
proper background check and 422 guns, and get this, 28 percent 
of his inventory were missing, 28 percent of his inventory were 
missing.
    And under existing law, they haven't been able to revoke 
his license. We want to make it even harder.
    Now, with respect to the sales out of the gun shop in 
Washington State, the victims were here in the Washington area. 
I don't know how many people were here back in October 2002, 
but this whole area was essentially under siege.
    Many of my constituents were killed in those sniper 
shootings. Other people in Washington, D.C., and Virginia were 
killed. The owner of that gun shop in Washington State had a 
record of losing his inventory.
    And under this legislation, there would be absolutely no 
recourse in going after him, except for his violations, which 
would be considered petty, minor violations.
    I just want to close with this, Mr. Chairman. I don't 
understand why we were passing legislation----
    Chairman Sensenbrenner. The time of the gentleman has 
expired.
    Mr. Van Hollen.--those who are the worst wrongdoers.
    Thank you, Mr. Chairman.
    Chairman Sensenbrenner. The time of the gentleman has 
expired.
    The question is on the Weiner----
    Mr. Meehan. Mr. Chairman?
    Chairman Sensenbrenner. For what purpose does the gentleman 
from Massachusetts seek recognition?
    Mr. Meehan. Strike the last word.
    Chairman Sensenbrenner. The gentleman is recognized for 5 
minutes.
    Mr. Meehan. I would like to yield to the gentleman.
    Mr. Van Hollen. I thank my colleague, Mr. Meehan.
    I just want to go back to the fundamental question here, 
which is under existing law, the ATF has found it difficult to 
revoke the licenses of the worst abusers, a small percentage of 
gun dealers responsible for the great percentage of guns used 
in gun violence, under existing law.
    And now we have to ask ourselves the question why are we 
going to make it even more difficult for them to do it.
    Let's listen to the folks from the ATF, who now have the 
freedom to speak their mind, who aren't under the gag rule of 
this Administration, people who have served the ATF in 
Republican and Democratic administrations alike.
    Why don't we listen to the folks in law enforcement and why 
don't we look them in the eye and tell them why we are making 
it more difficult for them to go after the people most 
responsible for selling guns negligently and gross negligently 
that find their way into the hands of----
    Ms. Waters. Would the gentleman yield?
    Mr. Van Hollen. Yes, I would be happy to yield.
    Ms. Waters. I am sorry. Did you say that the guns that were 
sold to Lee Malvo and John Muhammad, the snipers that killed 
all of those people, were directly traceable to one of these 
bad dealers that has been identified by ATF as a problem?
    Were you alluding to them or talking about them?
    Mr. Van Hollen. I was, indeed, a gun shop in the State of 
Washington. And, in fact, the ATF has found a whole slew of 
violations with respect--in fact, the guns that were sold to 
Malvo and Muhammad were, in fact, sold illegally.
    They were ineligible to buy guns and it turned out, when 
the gun shop was asked about those particular guns, they had no 
record of the sales. They just had disappeared. They had no 
record of the sales.
    Ms. Waters. And this bill would make it even easier for 
this gun dealer to do that kind of thing?
    Mr. Van Hollen. It would make it even more difficult for 
the ATF to try and take away their license for the kind of 
violations that they engaged in, yes.
    Ms. Waters. Wow. Thank you. I yield back.
    Ms. Jackson Lee. Mr. Chairman?
    Chairman Sensenbrenner. For what purpose does the 
gentlewoman from Texas seek recognition?
    Ms. Jackson Lee. I move to strike the last word.
    Chairman Sensenbrenner. The gentlewoman is recognized for 5 
minutes.
    Ms. Jackson Lee. Mr. Chairman, I listened to my good friend 
just a few minutes ago from California that mentioned the story 
that--Mr. Issa is not here, but mentioned his relationship to 
an ATF officer and suggested that comments might have been 
strident.
    As I am reminded of the arguments that I gave in support of 
an amendment previously before this Committee, the arguments 
and debate was based upon constitutional premise or Federal 
court decision.
    I stand by the representation that guns kill, bullets kill. 
Different types of bullets create even more destructive 
violence than others. Gun dealers not only sell guns, but they 
sell bullets.
    Therefore, this is a life or death question. And listen to 
any of the major mayors of major cities and they will tell you 
how difficult it is to fight the war on drugs and other violent 
activities with the proliferation of guns on their streets.
    We rely upon local law enforcement, but, as well, we rely 
upon Federal authority. The ATF has been an effective tool in 
breaking the gun cartels and the misuse and illegal selling of 
guns across the country.
    I, too, agree with my colleague, Mr. Van Hollen, that we 
should listen to these former ATF officers, who have no axe to 
grind whatsoever, and they have indicated in a letter to this 
Committee that H.R. 5092 redefines most violations of Federal 
laws as not of a serious nature.
    It prohibits license revocations for such so-called non-
serious violations, no matter how egregious the violation. And 
it limits serious violations to rare events.
    That impedes the work of the ATF and it opens the doors to 
the example that I utilized of the 2-year-old, because of 
someone not responsible having a gun in their home and that 
person not responsible may be someone with a record who has 
been able to secure a gun through some misuse of the process of 
gun dealers, who then have the guns going from one hand to the 
next.
    That gun dealer or that gun purchaser, even into their 
home, puts the gun in an illegal place. It may be under a bed 
and a child finds it.
    This chain of violations does not end at the point of 
purchase. This chain of violations then becomes a chain, one 
illegal act to the next. A person who is not supposed to 
legally be able to secure a gun misusing it, someone loses 
their life or is severe injured, some law enforcement officer 
doing their job is shot by a gun illegally secured, because the 
ATF officer was not able to use a basic premise that the gun 
dealer knew the infractions that they were perpetrating were 
illegal and they were violating the law.
    According to these ATF officers, H.R. 5092 also grants ATF 
the ability to impose fines and temporary license suspension, 
also then places such severe impediments on ATF's ability to 
impose these sanctions and to make them nearly meaningless.
    So H.R. 5092 may be well meaning to fix one problem with 
one gun show in one city in one State, but, frankly, what it 
does is causes dutiful law enforcement officers, taking an oath 
of office, confined to doing their job right and who I believe, 
if infracting or not doing their job right, certainly should 
have their own internal reprimand.
    But what we are doing now is playing in a handicap that 
they cannot win. We are giving them the ninth inning, we are 
giving them two-and-a-half outs, and we have no one on base and 
we have someone coming that literally plays, if you will, 
kindergarten softball to come hit the ball.
    This is the wrong direction for us to take and the strident 
nature of any one discussion is because it is a life and death 
matter.
    I certainly hope my colleagues would consider this as H.R. 
5092 is continued to be debated.
    And I yield back.
    Chairman Sensenbrenner. The time of the gentlewoman has 
expired. The question is on the substitute amendment offered by 
the gentleman from New York, Mr. Weiner.
    Anybody else want to say anything about it?
    Okay, all those in favor of the Weiner substitute will say 
``aye.''
    Opposed, ``no.''
    The noes appear to have it, and the noes have it, and the 
Weiner substitute is not agreed to.
    Mr. Weiner. Mr. Chairman, may I request a recorded vote?
    Chairman Sensenbrenner. A record vote is requested.
    Those in favor of the Weiner substitute will, as your names 
are called, answer ``aye,'' those opposed, ``no.''
    And the clerk will call the roll.
    The Clerk. Mr. Hyde?
    [No response.]
    Mr. Coble?
    [No response.]
    Mr. Smith?
    Mr. Smith. No.
    The Clerk. Mr. Smith, no.
    Mr. Gallegly?
    [No response.]
    Mr. Goodlatte?
    [No response.]
    Mr. Chabot?
    Mr. Chabot. No.
    The Clerk. Mr. Chabot, no.
    Mr. Lungren?
    [No response.]
    Mr. Jenkins?
    Mr. Jenkins. No.
    The Clerk. Mr. Jenkins, no.
    Mr. Cannon?
    Mr. Cannon. No.
    The Clerk. Mr. Cannon, no.
    Mr. Bachus?
    [No response.]
    Mr. Inglis?
    Mr. Inglis. No.
    The Clerk. Mr. Inglis, no.
    Mr. Hostettler?
    Mr. Hostettler. No.
    The Clerk. Mr. Hostettler, no.
    Mr. Green?
    [No response.]
    Mr. Keller?
    [No response.]
    Mr. Issa?
    Mr. Issa. No.
    The Clerk. Mr. Issa, no.
    Mr. Flake?
    Mr. Flake. No.
    The Clerk. Mr. Flake, no.
    Mr. Pence?
    [No response.]
    Mr. Forbes?
    Mr. Forbes. No.
    The Clerk. Mr. Forbes, no.
    Mr. King?
    [No response.]
    Mr. Feeney?
    Mr. Feeney. No.
    The Clerk. Mr. Feeney, no.
    Mr. Franks?
    Mr. Franks. No.
    The Clerk. Mr. Franks, no.
    Mr. Gohmert?
    Mr. Gohmert. No.
    The Clerk. Mr. Gohmert, no.
    Mr. Conyers?
    Mr. Conyers. Aye.
    The Clerk. Mr. Conyers, aye.
    Mr. Berman?
    [No response.]
    Mr. Boucher?
    Mr. Boucher. No.
    The Clerk. Mr. Boucher, no.
    Mr. Nadler?
    [No response.]
    Mr. Scott?
    Mr. Scott. Aye.
    The Clerk. Mr. Scott, aye.
    Mr. Watt?
    [No response.]
    Ms. Lofgren?
    [No response.]
    Ms. Jackson Lee?
    Ms. Jackson Lee. Aye.
    The Clerk. Ms. Jackson Lee, aye.
    Ms. Waters?
    Ms. Waters. Aye.
    The Clerk. Ms. Waters, aye.
    Mr. Meehan?
    Mr. Meehan. Aye.
    The Clerk. Mr. Meehan, aye.
    Mr. Delahunt?
    [No response.]
    Mr. Wexler?
    Mr. Wexler. Aye.
    The Clerk. Mr. Wexler, aye.
    Mr. Weiner?
    Mr. Weiner. Aye.
    The Clerk. Mr. Weiner, aye.
    Mr. Schiff?
    Mr. Schiff. Aye.
    The Clerk. Mr. Schiff, aye.
    Ms. Sanchez?
    [No response.]
    Mr. Van Hollen?
    Mr. Van Hollen. Aye.
    The Clerk. Mr. Van Hollen, aye.
    Mrs. Wasserman Schultz?
    Ms. Wasserman Schultz. Aye.
    The Clerk. Mrs. Wasserman Schultz, aye.
    Mr. Chairman?
    Chairman Sensenbrenner. No.
    The Clerk. Mr. Chairman, no.
    Chairman Sensenbrenner. Are there further Members who wish 
to cast or change their vote?
    The gentleman from North Carolina, Mr. Coble?
    Mr. Coble. No.
    The Clerk. Mr. Coble, no.
    Chairman Sensenbrenner. The gentleman from California, Mr. 
Lungren.
    Mr. Lungren. No.
    The Clerk. Mr. Lungren, no.
    Chairman Sensenbrenner. Are there further Members who wish 
to cast or change their vote?
    If not, the clerk will report.
    The Clerk. Mr. Chairman, there are 10 ``ayes'' and 16 
``nays.''
    Chairman Sensenbrenner. And the amendment in the nature of 
a substitute is not agreed to.
    Are there further amendments?
    Mr. Weiner. Mr. Chairman, I have an amendment at the desk.
    Chairman Sensenbrenner. The clerk will report the 
amendment.
    Is there an amendment at the desk?
    Mr. Weiner. Actually, Mr. Chairman, I will hold on that.
    Chairman Sensenbrenner. Are there further amendments?
    If there are no further amendments, the question is on the 
amendment in the nature of a substitute offered by the 
gentleman from North Carolina, Mr. Coble.
    Those in favor will say ``aye.''
    Opposed, ``no.''
    The ayes appear to have it. The ayes have it. The amendment 
in the nature of a substitute is agreed to.
    A reporting quorum is present. The question is on the 
motion to report the bill H.R. 5092 favorably, as amended.
    All those in favor will say ``aye.''
    Opposed, ``no.''
    The ayes appear to have it. The ayes have it, and the bill 
is ordered reported favorably, as amended.
    Without objection, the bill will be reported favorably to 
the House in the form of a single amendment in the nature of a 
substitute, incorporating the amendments adopted here today.
    Without objection, the staff is directed to make any 
technical and conforming changes. And all Members will be given 
2 days, as provided by the House rules, in which to submit 
additional dissenting, supplemental or minority views.
    [Additional material submitted by Mr. Conyers follows:]
    
    
    [Intervening business.]
    [Whereupon, at 3:46 p.m., the Committee was adjourned.]

                            DISSENTING VIEWS

    We dissent from the passage of H.R. 5092, the ``BATFE 
Modernization and Reform Act of 2006,'' and the approach that 
it takes to deal with this very important issue.
    As currently drafted, H.R. 5092 threatens to substantially 
undermine BATFE's power to revoke the federal firearms licenses 
of corrupt gun dealers. If enacted, the legislation would make 
it virtually impossible for BATFE to shut down rogue gun 
dealers who repeatedly violate federal law. It would largely 
replace BATFE's revocation powers with minimal fines and 
temporary license suspensions that BATFE could impose only if 
it proved that a dealer deliberately intended to violate 
federal law, an extreme standard for a civil penalty that is 
more difficult to meet than the prevailing standard in most 
criminal cases. Moreover, even if BATFE is able to meet this 
extraordinary new burden of proof to impose minimal fines and 
temporary suspensions, these sanctions would generally be 
delayed for years while BATFE conducted new administrative 
review procedures different from those that apply to other 
regulated industries, and that strongly favor lawbreakers.
    The negative impact that these provisions will undoubtedly 
have on local municipalities and the efforts of various law 
enforcement officials has produced a widespread coalition of 
groups that have spoken out in opposition to this measure. 
Specific groups or individuals expressing concerns with the 
legislation include: The International Association of Chiefs of 
Police; Bill Lockyer, Attorney General of the State of 
California; Stephen Higgins, Former Director of the ATF; Rex 
Davis, Former Director of the ATF; Joseph J. Vince, Jr., Former 
Chief of ATF's Crime Gun Analysis Branch; William Vizzard, 
Former ATF Special Agent in Charge; Gerald Nunziato, Former ATF 
Special Agent in Charge; Julius Wachtel, Former ATF Resident 
Agent in Charge; Frank Wandell, Former ATF Special Agent & 
District Senior Operations Officer; Gerald C. Benedict, Former 
ATF Special Agent in Charge; Michael R. Bloomberg, Mayor of New 
York; Thomas M. Menino, Mayor of Boston; Gregory J. Nickels, 
Mayor of Seattle; Tom Barrett, Mayor of Milwaukee; the Brady 
Center to Prevent Gun Violence, and its affiliate, the Brady 
Campaign to Prevent Gun Violence; the Violence Policy Center; 
the Coalition to Stop Gun Violence; and Mayors Against Illegal 
Guns.
    It is for these reasons, and those that follow, that we 
respectfully dissent.

 I. H.R. 5092 Offers Greater Protections to Those Corrupt Gun Dealers 
                   That Routinely Violate Current Law

    Federal law currently places severe restraints on BATFE's 
ability to revoke licenses from gun dealers who violate federal 
law. Despite the fact that BATFE inspections often reveal 
scores of violations of law by gun dealers, the revocation of a 
dealer's federal firearms license is a rare event.
    In fiscal year 2003, for example, BATFE completed 1,812 
inspections that uncovered regulatory violations, with an 
average of over 80 violations per dealer. Despite this large 
number of dealers with multiple violations, BATFE issued only 
54 notices of license revocation that year. In part, this is 
due to the overly burdensome requirement that BATFE prove that 
a dealer ``willfully'' violated the law, requiring proof that 
the dealer not only broke the law but also knew that his or her 
conduct was unlawful. This requirement that a dealer actually 
know that he is breaking the law is extremely rare even in 
criminal cases, let alone administrative agency actions. 
Because of this standard, BATFE generally requires repeated 
violations of the law over many years before it attempts to 
revoke a license.
    The following examples show the severe limits on BATFE's 
current power to crack down on rogue gun dealers. As explained 
below, H.R. 5092 makes a bad situation worse by giving greater 
protection to gun dealers who violate the law.

             BULL'S EYE SHOOTER SUPPLY, TACOMA, WASHINGTON

    In fall 2002, John Allen Muhammad and John Lee Malvo 
engaged in a series of deadly sniper shootings in the 
Washington, DC area using a Bushmaster XM-15 semi-automatic 
assault rifle. Muhammad and Malvo obtained the Bushmaster 
assault rifle from gun dealer Bull's Eye Shooter Supply, even 
though both snipers were prohibited from buying guns under 
federal law. Malvo, the seventeen-year-old sniper, told 
authorities that he simply walked out of the shop with the gun, 
a scenario suggesting a shameful absence of security measures 
to prevent theft. The shop had no record that the gun was sold 
or lost and had never reported it missing. BATFE audits showed 
that a total of 238 guns, including the snipers' assault rifle, 
had ``disappeared'' from Bull's Eye in just three years and 
over 50 of its guns had been traced to crimes between 1997 and 
2001.
    Based on Bull's Eye's failure to account for scores of 
guns, in 2003, BATFE moved to revoke the federal firearms 
license held by Bull's Eye's owner, Brian Borgelt. Borgelt 
responded by appealing the revocation, alleging that BATFE had 
not shown that Bull's Eye committed ``willful'' violations. 
Borgelt also transferred operations of the shop to a friend, 
while continuing to manage an upstairs shooting range. As of 
2006, the store remains open and Borgelt continues to appeal 
his license revocation in federal court. Under current law, 
BATFE has already faced substantial hurdles in attempting to 
revoke Borgelt's federal firearms license.

                 TRADER SPORTS, SAN LEANDRO, CALIFORNIA

    Trader Sports has sold at least 337 guns traced to crime, 
including guns involved in at least 27 homicides, 26 assaults, 
2 robberies, and 282 additional gun crimes. Trader Sports has 
also sold at least 3,091 handguns in ``multiple sales''--where 
more than one handgun is sold to a single buyer within five 
working days, a recognized indicator of possible gun 
trafficking. In 2003, BATFE inspected Trader Sports' records 
and found that an astonishing 7,477 firearmswere missing from 
the store with no record of sale. After months of searching for records 
of its lost firearms, Trader Sports still could not account for more 
then 2,000 of its guns.
    Based on repeated violations of federal law relating to 
these missing guns, BATFE moved to revoke the federal firearms 
license of Trader Sports' owner, Anthony Cucchiara, in 2004. 
However, Cucchiara has continued to operate up until this year 
by challenging BATFE's revocation attempt in court.

                    VALLEY GUN, BALTIMORE, MARYLAND

    Sanford M. Abrams is a National Rifle Association Board 
Member and has owned Valley Gun of Baltimore since 1996. Valley 
Gun sold 483 firearms traced to crimes from 2000 to 2003, 
ranking it in the top 40 of the highest crime gun dealers 
nationwide.
    Less than a year after Abrams began operating the store, 
BATFE conducted an inspection and found numerous violations of 
federal law, including 45 firearms that were listed in his 
inventory books but were ``missing'' from the store. BATFE re-
inspected his store in 1999, 2000, and 2001. Each time BATFE 
found more violations of federal law, and each time Abrams 
promised to reform his practices and correct his violations.
    In 2003, BATFE again inspected Valley Gun, this time 
finding massive violations of federal law, including 422 
firearms that were ``missing'' from his store with no record of 
sale. He also failed to record the disposition of nearly all of 
the guns that he repaired, recording only 19 out of 475 
firearms. Abrams had numerous other violations, including 
failing to properly fill out gun purchase forms and failing to 
complete gun disposition records. Based on these hundreds of 
violations of federal law, BATFE moved to revoke Abrams' 
license in 2004. Abrams appealed the revocation and his appeal 
was denied, however, federal law allowed him to continue 
operating despite the 2004 revocation determination. Abrams now 
faces revocation, although he has again appealed and asked that 
the revocation be delayed while he continues his appeals. Under 
current law, BATFE has already faced substantial hurdles in 
attempting to revoke Valley Gun's federal firearms license.

  II. H.R. 5092 Makes It Harder To Prosecute or Sanction Corrupt Gun 
           Dealers by Elevating Burden of Proof Requirements

    H.R. 5092 redefines the burden of proof for violations of 
federal gun laws to make it virtually impossible to prosecute, 
sanction or revoke the licenses of corrupt gun dealers and to 
prosecute all other gun law offenders, including gun 
traffickers and violent criminals. Current law already imposes 
a requirement that BATFE prove that violations of federal gun 
laws are ``willful,'' an incredibly high burden which has 
greatly hindered BATFE's ability to enforce gun laws and revoke 
gun dealer licenses. H.R. 5092 redefines the ``willful'' 
standard of proof for gun law violations to make it even more 
difficult to prove a violation of the law.
    Since enactment of the Firearm Owners' Protection Act in 
1986, the BATFE has relied upon a standard of willfulness 
before pursuing a possible violation of a federal gun law. The 
Supreme Court has held that ``willfully'' requires proof that a 
defendant ``acted with knowledge that his conduct was 
unlawful.'' Bryan v. U.S., 524 U.S. 184, 193 (1998). BATFE need 
not also show that the defendant acted with the intent to break 
the law. H.R. 5092 changes current law, to require proof that a 
dealer not only knew the specific law he or she was violating 
but also a showing of intentional disregard of that specific 
legal duty. This is a very dangerous provision that is contrary 
to Supreme Court precedent and would cripple BATFE's ability to 
enforce federal gun laws.
    H.R. 5092's requirement that BATFE prove a lawbreaker's 
mental state would present a nearly insurmountable burden. The 
courts have generally rejected this interpretation of the 
meaning of ``willful,'' explaining that the willful standard 
``does not require [a person] to set out purposely to violate 
the Act,'' because if this was required, any remedy for a 
willful violation ``would be a rare remedy indeed.'' Tijerina 
v. Walters, 821 F.2d 789, 799 (D.C. Cir. 1987). The requirement 
of intent to violate the law is exceedingly uncommon and is 
generally limited only to criminal prosecutions of complex and 
arcane tax laws. See Cheek v. U.S., 498 U.S. 192, 199 (1991). 
There is no reason to extend this unique burden of proof to 
protect felons who illegally acquire firearms or gun dealers 
who violate federal laws regulating firearms sales.
    The Supreme Court in Bryan noted that the Firearm Owners' 
Protection Act, which imposed the willfulness standard for gun 
law violations in 1986, ``was enacted to protect law-abiding 
citizens who might inadvertently violate the law.'' Id. at 195 
n.23. BATFE need not prove that a dealer had the ``intent to 
act in violation of a known legal duty,'' as H.R. 5092 would 
now mandate.

 III. H.R. 5092 Establishes Two New Classifications of Violations and 
 Unwisely Limits BATFE's Enforcement Options According to Each Type of 
                               Violation

    The bill creates new classifications of federal gun laws as 
serious and minor, and allows license revocation only for so-
called ``serious,'' willful violations. ``Serious'' violations, 
as defined by H.R. 5092, would be rare and exclude many 
violations that are in fact extremely serious and dangerous, 
such as when a gun dealer has numerous weapons ``lost'' from 
its inventory with no record of sale. Even so-called minor 
violations would be nearly impossible to prove, as these also 
would require a willful violation. For example, BATFE 
occasionally revokes the licenses of corrupt dealers who fail 
to maintain records for hundreds or thousands of firearms. It 
would be nearly impossible for BATFE to prove that the failure 
to maintain records was deliberate, purposeful and done with 
the specific intent to break the law, as would be required to 
prove both serious and so-called minor violations under H.R. 
5092.
    The bill defines a violation to be ``of a serious nature'' 
only if it is willful, which is newly defined to require 
specific intent to break the law, see H.R. 5092 Sec. 4, and the 
violation must also meet one of three definitions:
    (1) A dealer specifically intends to break the law and such 
a violation ``results in or could have resulted in the transfer 
of a firearm or ammunition to a person prohibited from 
possessing or receiving the firearm or ammunition under this 
chapter.'' Proposed 18 U.S.C. Sec. 923(e)(1)(C)(i). This would 
be extremely difficult for BATFE to prove, as most corrupt gun 
dealers do not keep records that prove that a firearm was 
intentionally transferred to a prohibited buyer. Instead, such 
dealers have been cited for ``losing'' records for hundreds or 
thousands of guns. Because it is the transfer of a firearm, and 
not the act of losing a record, that would cause a firearm to 
be transferred to a prohibited purchaser, corrupt dealers could 
evade sanction under this section by ``losing'' or failing to 
keep records proving such a violation.
    (2) A dealer specifically intends to break the law and the 
violation ``obstructs or could have obstructed a bona fide 
civil or criminal investigation or prosecution.'' Proposed 18 
U.S.C. Sec. 923(e)(1)(C)(ii). This standard would be very 
difficult to meet, because it would require proof of intent to 
violate the law in addition to proof that the willful violation 
could have obstructed an ongoing investigation. As described 
above, it would be incredibly difficult to prove that when a 
dealer violated the law it actually did so with a specific 
intent to break the law. In addition, while federal gun law 
violations are serious because they frequently result in scores 
of guns ``disappearing'' from gun dealer's shops, it is not the 
norm that law enforcement is able to link missing firearms to a 
specific investigation or prosecution, so a dealer's repeated, 
dangerous violations would nonetheless be treated as minor.
    (3) A dealer specifically intends to break the law and the 
violation ``prevents or could have prevented a licensee from 
complying with subsection (g)(7).'' Proposed 18 U.S.C. 
Sec. 923(e)(1)(C)(iii). This relates to the rare case where a 
violation would prevent a dealer from responding to an BATFE 
request within 24 hours. Subsection (g)(7) only requires a 
dealer to provide information actually contained in its 
records--it does not address the problem of a dealer failing to 
keep proper records.
    Under H.R. 5092, BATFE would likely not be able to prove 
that most violations of federal gun laws meet the new 
definition of ``willful'' misconduct, as required for both 
serious and so-called minor violations. Furthermore, most 
serious violations of federal law would not meet the stringent 
test for a ``serious'' violation under H.R. 5092.

A. THE INHERENT PROBLEMS ASSOCIATED WITH IMPOSING FINES UNDER THIS NEW 
                            TWO-TIER SYSTEM

    For so-called minor violations, H.R. 5095 proposes to 
establish fines of no more than $1,000 per violation, and fines 
of no more than $5,000 for all violations ``arising from a 
single inspection or examination.'' Proposed 18 U.S.C. 
Sec. 923(e)(1)(A)(i)(I). For ``serious'' violations, the fines 
are no more than $2,500 per violation and no more than $15,000 
for violations ``arising from a single inspection or 
examination.'' Proposed 18 U.S.C. Sec. 923(e)(1)(A)(ii)(I). 
Because all fines first require proof of a willful violation, 
BATFE could not impose any fines unless it showed a deliberate 
intent to violate the law, making it unlikely in most cases 
that BATFE could impose any fines at all.
    These fines for willful violations of federal gun laws are 
also extremely low. For example, the Consumer Product Safety 
Commission can impose fines on sellers of most unsafe consumer 
products of $8,000 per violation, up to $1,825,000 for a 
related series of violations. See 15 U.S.C. Sec. 2068; 69 Fed. 
Reg. 68884 (Nov. 2004). The Environmental Protection Agency can 
impose fines of between $2,500 and $25,000 per day for Clean 
Water Act violations that are merely negligent. Knowing 
violations are from $5,000 to $50,000 per day. See 33 U.S.C. 
Sec. 1318(c). Similarly, the Federal Communications Commission 
may impose fines for indecency of $32,500 for each violation or 
each day of a continuing violation, up to $325,000 for 
continuing violations, for broadcast stations, and $130,000 per 
violation, up to $1,325,000 for continuing violations, for 
common carriers. See 47 CFR Sec. 1.80(b)(1).
    Another problem with this fine structure is that it limits 
fines for violations arising from a single inspection or 
examination. For example, if BATFE conducted an audit and found 
1,000 missing firearms, the maximum fine could be only $5,000. 
These fines reward the worst offenders by capping fines no 
matter how many related violations have occurred. A gun dealer 
with six ``serious'' violations would have the same maximum 
fine as a gun dealer with 600 or even 6,000 ``serious'' related 
violations--only $15,000.
    Because of BATFE's extremely limited resources, it rarely 
conducts inspections. When it does finally conduct an 
inspection, it may find hundreds or thousands of violations. 
But, under H.R. 5092, all violations found in the same audit 
would be grouped together, with a maximum fine of only $15,000 
for all so-called serious violations uncovered at the audit. 
For example, BATFE recently revoked the license of Trader 
Sports, a notorious California gun dealer. At an inspection, 
BATFE found 7,477 firearms unaccounted for in inventory and 
dozens of other willful violations of federal law. If these 
thousands of violations were found in the same inspection, the 
maximum fine would be $15,000, or an average fine of only a few 
dollars per violation, so low as to be meaningless.
    Proposed section 18 U.S.C. Sec. 923 (e)(1)(b)(ii) also 
imposes a limit that the ``violation of a provision of this 
chapter with respect to 2 or more firearms during a single 
transaction shall be considered a single violation of the 
provision.'' If anything, multiple firearms being illegally 
sold are more serious, as this is a likely indicator of gun 
trafficking. This should result in a higher penalty, not a 
lower one.

B. THE PROBLEMS ASSOCIATED WITH PURSUING LICENSE SUSPENSION UNDER THIS 
                               NEW SYSTEM

    The bill allows license suspension of up to 30 days for so-
called minor willful violations and up to 90 days for 
``serious'' willful violations. H.R. 5092 Sec. 2. The bill's 
new definition of willful would require proof of a deliberate 
intent to violate the law, making it unlikely that BATFE could 
meet this difficult burden to suspend licenses in most cases. 
Moreover, suspensions could only be imposed for so-called minor 
violations if the gun dealer had violated federal gun laws on 
two prior occasions.
    Even if BATFE could overcome the hurdle of meeting the 
bill's new definition of willful violations, this suspension 
authority is extremely weak even compared to BATFE's current, 
limited power to suspend firearms licenses. In 2005, Congress 
gave BATFE the power to suspend firearms licenses for up to six 
months if a licensee sells a handgun without providing a secure 
gun storage or safety device. See 18 U.S.C. Sec. Sec. 922(z), 
924(p). Yet under H.R. 5092, even so-called serious violations 
could result in only a 90-day suspension. Congress should give 
BATFE the power to suspend licenses for up to 6 months for all 
violations of federal firearms laws.
    Moreover, because BATFE has extremely limited resources and 
rarely inspects gun dealers, it would take many years before 
BATFE could prove three separate occasions in which a dealer 
violates the law. If BATFE did finally find three separate 
periods of violations, it would then have to begin the license 
suspension process, which could take many additional years to 
complete. In essence, BATFE could spend half a decade or more 
attempting to temporarily suspend a license for up to 30 days, 
a monumental effort that would hardly be worth BATFE's limited 
resources.
    Instead of this extremely weak suspension authority, 
Congress should enact legislation that gives BATFE the power to 
temporarily suspend licenses for up to 6 months when a gun 
dealer has violated federal law. H.R. 5092 imposes severe 
limitations on license suspension that would require an 
extraordinarily heightened burden of proof to impose a 
suspension and allows for years of administrative review and 
litigation before a temporary suspension could be imposed.

          C. PURSUING LICENSE REVOCATION UNDER THE NEW SYSTEM

    As described above, H.R. 5092 would make it virtually 
impossible to revoke a gun dealer's license even in cases of 
repeated, egregious violations of federal gun laws. It would be 
nearly impossible for BATFE to prove that most violations of 
federal law, such as the violations of Bull's Eye Shooter 
Supply, Trader Sports, and Valley Gun in the examples above, 
were committed with the specific and purposeful intent to break 
the law.
    Moreover, most willful violations are defined under H.R. 
5092 as violations that are ``not of a serious nature.'' H.R. 
5092 allows revocation only for ``serious'' violations, so 
revocation would not be allowed in so-called minor cases. 
Bull's Eye Shooter Supply, Trader Sports, and Valley Gun 
``lost'' hundreds of firearms from their inventory and they 
repeatedly failed to keep proper records. After years of 
egregious violations, BATFE was able to show willful misconduct 
under current law because of these dealers' pattern of 
violations over many years. Yet, under H.R. 5092, their 
violations likely would not have resulted in any sanction, as 
BATFE could not have proved, under the new definition of 
``willful,'' that the dealers not only repeatedly violated the 
law but also specifically intended to break the law. Even if 
BATFE overcame this significant hurdle of proving intentional 
violations, in order to revoke these dealers' licenses BATFE 
would have to overcome yet another extraordinary burden of 
proving that these illegal acts met the narrow definition in 
H.R. 5092 for so-called serious violations.
    If BATFE were somehow able to show that these dealers 
intended to break the law, an outcome which courts recognize 
``would be a rare [one] indeed,'' Tijerina, 821 F.2d at 799, 
BATFE likely still could not have met the narrow definition of 
a ``serious'' willful violation required to revoke a license. 
Under H.R. 5092, a ``serious'' willful violation would require 
a specific intent to break the law and proof that the 
violation: (1) ``results in or could have resulted in the 
transfer of a firearm or ammunition to a person prohibited from 
possessing or receiving the firearm or ammunition,'' (2) 
``obstructs or could have obstructed a bona fide civil or 
criminal investigation or prosecution,'' or (3) ``prevents or 
could have prevented a licensee from complying with subsection 
(g)(7) [requiring dealer to provide its records to BATFE].'' 
H.R. 5092 Sec. 2. The dealers described above apparently 
``lost'' records for hundreds of firearms, although BATFE 
likely could not show that the dealers deliberately ``lost'' 
these records with the specific intent to break the law. BATFE 
also likely could not show that the failure to keep records 
could have caused a gun transfer to a prohibited buyer, as the 
act of transferring a gun, rather than ``losing'' a record, 
would result in the illegal transfer. Likewise, because it is 
unusual for law enforcement to link missing guns to a specific 
investigation or prosecution, a dealer's violation rarely would 
be a willful violation that also could have obstructed a 
specific investigation. Finally, 18 U.S.C. Sec. 923(g)(7) 
merely requires dealers to provide records in their possession, 
and so could not be used against dealers who had ``lost'' gun 
records.

IV. H.R. 5092 Proposes to Unduly Delay BATFE's Ability to Impose Civil 
  Penalties Regardless of the Seriousness of the Underlying Violation

    H.R. 5092 would also require BATFE automatically to stay 
(postpone) a fine, suspension or revocation pending completion 
of an administrative hearing, no matter how egregious the 
violation. Proposed section (e)(2)(C). This standard strongly 
favors the alleged violator. Instead, the burden should be on 
the alleged violator to prove a likelihood of success on its 
challenge, as is the standard for stays generally. See Cabo 
Distribution Co., Inc. v. Brady, 821 F.Supp. 582, 594-95 
(N.D.Cal. 1992) (in appeal of BATFE's revocation of liquor 
labelingauthority, a plaintiff seeking a stay must prove a 
``likelihood that plaintiff will prevail on the merits and the possible 
harm to the parties from granting or denying the injunctive relief''); 
see also Nelson v. Campbell, 541 U.S. 637, 649 (2004) (even in a case 
seeking to stay the death penalty, courts require proof that a 
defendant has a likelihood of success on the merits).
    The bill further requires BATFE automatically to stay a 
fine, suspension or revocation ``until there has been a final, 
nonreviewable judgment with respect to the determination 
involved.'' Proposed section (e)(3)(D). Again, this standard 
strongly favors the alleged violator, allowing him to continue 
operating, possibly for years, even if an administrative 
hearing determines that the violation warrants severe 
penalties. It encourages litigation, as prolonged litigation 
allows violators to continue operating and avoid all penalties.
    These provisions make license suspension and fines 
essentially meaningless, because such a temporary suspension or 
small fine would automatically be delayed for years if a 
licensee asked for a mandatory stay.

 V. H.R. 5092 Proposes to Allow Firearm Dealers to Continue Operating 
  (for a Maximum of 60 Days) Even After Their License Has Been Revoked

    Section 9 of the bill would allow FFLs who violate federal 
gun laws to operate and earn a profit by continuing to sell 
guns even after they have had their license revoked for willful 
violations of federal gun laws or to continue operating under 
an expired license, to liquidate their inventory. This makes a 
mockery of license revocation by essentially allowing FFLs to 
evade revocation and continue operating even though they 
committed federal crimes, and allows FFLs to temporarily avoid 
renewing licenses as required by federal law to continue 
selling guns. BATFE should have the discretion to allow or 
disallow a short additional time to liquidate inventory 
depending on the severity of the violations and likelihood of 
continuing violations.

  VI. H.R. 5092 Eliminates BATFE's Ability to Pursue Civil Penalties, 
               Subsequent to a Failed Criminal Proceeding

    The bill greatly discourages BATFE from prosecuting 
criminal gun dealers who violate federal gun laws. Proposed 
section (f)(4) requires that if BATFE brings criminal charges 
against an FFL and the FFL is acquitted, this voids civil fines 
and penalties. Since the burden of proof on criminal charges is 
greater than in civil cases, a criminal case should not void 
civil penalties that have been proven under a civil standard. 
The bill also prohibits BATFE from imposing fines, suspension 
or revocation more than one year after an indictment, even if 
the FFL is found guilty. Proposed section (f)(5). There is no 
reason why BATFE should be prohibited from imposing civil 
penalties on an FFL convicted of violating federal gun laws 
simply because resolution of the criminal case took more than 
one year.

VII. H.R. 5092 Unnecessarily Complicates the Current Inspection Process

    This section redefines Section 922(m) of title 18 to make 
it more difficult to sanction dealers who fail to keep proper 
records of their firearms and allows dealers to keep records in 
disarray, changing the requirement from ``properly 
maintain[ing]'' records to simply ``retain[ing] custody of'' 
records. If dealers are not required to properly maintain 
records, it makes it much more difficult for BATFE to determine 
if firearms are missing or if the dealer is failing to keep 
proper records of firearm transactions. This provision would 
allow dealers to attempt to hide missing firearms by 
maintaining records in disarray, but still in their 
``custody.'' For example, a dealer who had been in business for 
50 years could simply throw all of its files in a back room, 
maintaining ``custody'' of them but making it very difficult 
for BATFE to audit the dealer's records to discover violations.

        DESCRIPTION OF AMENDMENTS OFFERED BY DEMOCRATIC MEMBERS

1. Amendment Offered by Rep. Anthony Weiner (#1)

    Description of amendment: The Weiner amendment sought to 
strike section 8 from the scope of the underlying bill. As 
currently drafted, section 8 proposes to allow all firearms 
dealers to continue operating (for a maximum of 60 days) for 
purposes of liquidating inventories subsequent to a license 
revocation proceeding.
    The amendment was defeated by a vote of 4 to 18. Ayes: 
Representatives Conyers, Weiner, Schiff, and Wasserman Schultz. 
Nays: Representatives Coble, Smith, Chabot, Jenkins, Cannon, 
Inglis, Hostettler, Keller, Forbes, King, Feeney, Franks, 
Gohmert, Boucher, Scott, Sensenbrenner, Bachus, and Lungren.

2. Amendment Offered by Rep. Anthony Weiner (#2)

    Description of amendment: The Weiner amendment sought to 
amend the provisions of the underlying bill that currently (and 
automatically) void any and all ongoing civil proceedings 
against a particular dealer, if he or she is first acquitted on 
similar criminal proceedings.
    The amendment was defeated by a vote of 9 to 16. Ayes: 
Representatives Conyers, Scott, Waters, Wexler, Weiner, Schiff, 
Van Hollen, Wasserman Schultz, and Meehan. Nays: 
Representatives Coble, Smith, Chabot, Jenkins, Cannon, Bachus, 
Inglis, Keller, Forbes, King, Franks, Gohmert, Boucher, 
Sensenbrenner, Lungren, and Feeney.

3. Amendment Offered by Rep. Anthony Weiner (#3)

    Description of amendment: The Weiner amendment sought to 
eliminate the bill's current proposed system of fines, and 
replace it with a maximum fine of up to $10,000 for each gun 
law violation.
    The amendment was defeated by a vote of 8 to 20. Ayes: 
Representatives Conyers, Jackson Lee, Waters, Wexler, Van 
Hollen, Wasserman Schultz, Schiff, and Weiner. Nays: 
Representatives Coble, Smith, Chabot, Jenkins, Cannon, Bachus, 
Inglis, Keller, Issa, Forbes, King, Franks, Gohmert, Boucher, 
Scott, Sensenbrenner, Lungren, Flake, Feeney, and Hostettler.

4. Amendment Offered by Rep. Sheila Jackson Lee

    Description of amendment: The Jackson Lee amendment sought 
to eliminate section 4, in its entirety, from the scope of the 
underlying bill.
    The amendment was defeated by a vote of 9 to 17. Ayes: 
Representatives Conyers, Scott, Jackson Lee, Waters, Wexler, 
Weiner, Schiff, Van Hollen, and Wasserman Schultz. Nays: 
Representatives Coble, Smith, Chabot, Jenkins, Cannon, Inglis, 
Hostettler, Issa, Flake, Forbes, King, Feeney, Franks, Gohmert, 
Boucher, Sensenbrenner, and Lungren.

5. Amendment Offered by Rep. Anthony Weiner (#4)

    Description of amendment: Rep. Weiner offered a substitute 
amendment to the pending Coble amendment. The second degree 
substitute proposed to make several changes to the text of the 
underlying bill. For example, rather than capping fines at a 
maximum of $15,000, under the Weiner amendment the BATFE could 
impose fines of not more than $10,000 per violation for knowing 
violations of federal law, after notice and a hearing. 
Additionally, rather than allowing license suspension only for 
certain rare violations or only after years of violations, 
under the Weiner amendment the BATFE could suspend a license 
for up to 6 months if a gun dealer is indicted for knowingly 
violating federal law or knowingly violates federal law, after 
notice and a hearing.
    The amendment was defeated by a vote of 10 to 16. Ayes: 
Representatives Conyers, Scott, Jackson Lee, Waters, Meehan, 
Wexler, Weiner, Schiff, Van Hollen, and Wasserman Schultz. 
Nays: Representatives Smith, Chabot, Jenkins, Cannon, Inglis, 
Hostettler, Issa, Flake, Forbes, Feeney, Franks, Gohmert, 
Boucher, Sensenbrenner, Coble and Lungren.
                                   John Conyers, Jr.
                                   Maxine Waters.
                                   William D. Delahunt.
                                   Anthony D. Weiner.
                                   Linda T. Sanchez.
                                   Debbie Wasserman Schultz.
                                   Sheila Jackson Lee.
                                   Martin T. Meehan.
                                   Robert Wexler.
                                   Chris Van Hollen.