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Introduced Bills Seek to “Keep Gun Dealers Honest”

Written by Orchid


August 12, 2021


White text atop red background with street sight reading Truth and Lies pointing in opposite directions

Are you being honest as an FFL? Based on recent rhetoric from the Biden-Harris administration and new bills introduced in Congress, some don’t seem to think so.

For the third time since 2018, Rep. Jim Langevin (R.I.) and Sen. Edward J. Markey (Mass.) have introduced bills to ensure greater accountability by licensed firearms dealers. Titled the “Keeping Gun Dealers Honest Act of 2021,” US HR4271/S2320 list several provisions to provide the ATF with additional resources, increase regulatory oversight and raise penalties for FFL violations and offenses.

We broke down relevant sections of the bill and its potential impact on FFLs.

Bill Breakdown

Sec. 2: Increasing number of allowed FFL compliance inspections
Under the Gun Control Act (GCA), the ATF is permitted to inspect FFLs annually. However, with more than 130,000 active FFLs and limited resources, inspections are generally conducted every few years. The provision would allow ATF industry operations investigators (IOIs) to perform up to three compliance inspections of an FFL every year.

Sec. 3: Increasing penalties on FFLs
Currently, 18 U.S.C., § 924(a)(3) states any FFL who knowingly makes any false statement or representation in any regulated records, knowingly makes a false entry in a regulated record, fails to make an appropriate entry in regulated records, or fails to properly maintain any records required by regulation could face imprisonment up to one year. The provision would increase maximum imprisonment to five years.

Sec. 4: Serious recordkeeping offenses that aid gun trafficking
Adding to § 924(a)(3), the provision would permit imprisonment up to 10 years, or levying of fines, if any of the offenses under Section 3 are in relation to an offense under § 922(a)(2), a false statement or false identification by a transferee in connection with a purchase of a firearm from an FFL, or § 922(d), transfer of a firearm to a prohibited person.

Sec. 5:  Suspension of FFLs and civil penalties for GCA violations
Subsections (e) and (f) of § 923 would be amended under the provision to allow the ATF to suspend or revoke an FFL, or issue a civil penalty of up to $10,000, if the FFL violates any regulation of the GCA, fails to have secure gun storage or safety devices available on premises where firearms are sold, or transfers “armor piercing ammunition.” The provision also revises procedures for FFLs to defend themselves against adverse ATF action, including license denial, suspension or revocation.

Sec. 6: Termination of FFL upon felony conviction
Per § 925(b), any FFL indicted for a crime punishable by imprisonment for a term exceeding one year may continue operations until any conviction following the indictment becomes final. The provision would amend this section to allow for immediate revocation of a firearms license in the event of felony conviction.

Sec. 7: Authority to hire additional personnel
Outside of its headquarters in Washington, D.C., the ATF has 25 field divisions responsible for all 50 states. Of more than 5,800 full-time employees, 760 serve as IOIs, according to recent figures. The provision would allow the ATF to hire at least 80 additional employees for purposes of carrying out the provisions of the Act.

Sec. 8: Authority to require FFL to conduct a physical inventory and provide inventory record if dealer unlawfully transferred a firearm or 10 or more crime guns are traced to the dealer
The provision would amend § 923(g)(1) to allow the ATF to require an FFL to conduct and provide a detailed record of physical firearm inventory if the licensee has been convicted of transferring a firearm unlawfully or 10 or more firearms used in a federal, state or local crime have been traced back to the FFL.

Sec. 9: Issuance of licenses
Regulating licensing, § 923 would be amended to expand ATF discretion in the issuance of firearms licenses. Under the provision, the ATF may deny an application for an FFL if it determines “issuing the license would pose a danger to public safety,” “the applicant is not likely to comply with the law,” or “the applicant is not suitable to be issued a license.”

Sec. 10: Liability Standards
The provision would remove instances of “willfully” from § 923 to remove potentially subjective interpretations of FFL actions to violate federal law.

Sec. 11: Regulatory Flexibility
The provision would remove “only” from § 926(a) to allow for broader authority of issuing regulations.

Impact & Transparency

Unlike in 2018 and 2019, this is the first time the Act has been introduced with complete Democratic control of Congress and the presidency. However, some provisions of the bills may still go too far for some, particularly Sections 5, 8 and 9.

Section 5 could see FFLs receive large financial fines for perceivably small violations, such as failing to post their license, whereas Section 8 could unfairly penalize high-volume manufacturers and importers for receiving more firearm traces. Meanwhile, Section 9 grants more authority to the ATF in reviewing firearms licenses but fails to provide specifics of what would determine an FFL as a danger to public safety, unlikely to comply with the law or not suitable for a license.

This lack of transparency can also be seen in the separate, but coordinated, press releases from Langevin and Markey regarding their respective bills. Echoing the administration’s intolerance of “rogue gun dealers” and their role in contributing to gun crime, their statements parrot a statistic commonly used to scrutinize such FFLs.

“While the majority of gun dealers follow the law, a small number of delinquent gun dealers perpetuate the epidemic of gun violence,” said Langevin. “In fact, five percent of gun dealers supply about 90 percent of all guns used in crimes.”

Originating from an ATF report published in 2000, “Commerce in Firearms in the United States,” the agency actually stated as much themselves, and provided data from 1998 to back it up. In the report, the ATF shared retail gun dealers with two or more traces – 5.6% of FFLs – accounted for 88.2% of traces. Considering there were more than 75,000 active Type 01 FFLs and 73,000 retail gun dealer traces processed that year, roughly 4,000 FFLs were responsible for 64,000 traces.

Today, active Type 01 firearms licenses number less than 53,000, but total firearm traces processed in 2020 totaled over 490,000. However, it remains unknown how many of those were connected to retailers as the 2003 Tiahrt Amendment prevents the ATF from disclosing Firearms Tracing System information publicly. As such, relying on data from 22 years ago to create modern-day policies fails to paint an accurate picture of FFL compliance and the current gun crime climate.

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