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[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7042 Introduced in House (IH)]
<DOC>
118th CONGRESS
2d Session
H. R. 7042
To reform the Bureau of Alcohol, Tobacco, Firearms, and Explosives.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 18, 2024
Mr. Mann (for himself, Mr. Davidson, Mr. Ezell, Mr. Ellzey, Mr.
Grothman, Mr. Moran, Mr. Rouzer, Mr. Tiffany, Mr. Walberg, Mr. Jackson
of Texas, Mr. McCormick, Mr. Alford, Mr. Duncan, Mr. LaMalfa, Mr.
Clyde, Mrs. Miller of Illinois, and Mr. Burchett) introduced the
following bill; which was referred to the Committee on the Judiciary
_______________________________________________________________________
A BILL
To reform the Bureau of Alcohol, Tobacco, Firearms, and Explosives.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Reining in Federal Licensing
Enforcement Act of 2024'' or the ``RIFLE Act of 2024''.
SEC. 2. GRADUATED PENALTIES FOR CIVIL VIOLATIONS BY FEDERAL FIREARMS
LICENSEES.
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 violated this chapter--
``(i) in the case of a violation that is not
willful, the Attorney General shall notify the licensee
of the violation and work with the licensee to rectify
the violation within a commercially reasonable time
frame; or
``(ii) in the case of a willful violation, if the
Attorney General, after working with the licensee to
rectify the violation within a commercially reasonable
time frame, finds that a lesser action (such as a
warning, warning letter, or warning conference) is not
likely to lead to future compliance, and the Attorney
General seeks revocation of the license in an
administrative action, the Attorney General may--
``(I) if the licensee has no history of
noncompliance with this chapter, suspend the
license for not more than 30 days or such
lesser period as would apply on compliance with
such conditions as are specified by the
Attorney General; or
``(II) in any other case, revoke the
license.
``(B) In applying subparagraph (A), the Attorney General shall
presume that the violation is not willful, absent clear and convincing
evidence to the contrary.
``(C) For purposes of subparagraph (A):
``(i) A violation of this chapter with respect to 2 or more
firearms during a single transaction shall be considered a
single violation.
``(ii) A violation of this chapter with respect to any
category of record keeping requirements, even if involving
multiple instances, shall be considered a single violation.
``(D) The Attorney General may not commence an enforcement action
under subparagraph (A) with respect to a violation, after the 3-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.
``(E) The Attorney General may not commence an enforcement action
under subparagraph (A) with respect to a violation without first
notifying the licensee of the reasons for the contemplated action and
affording the licensee an opportunity to demonstrate or achieve
compliance with this chapter and to submit facts, arguments, or
proposals of adjustment.
``(2)(A)(i) Not less than 60 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 by certified return receipt mail--
``(I) of the determination, and the grounds on
which the determination was made;
``(II) that sets forth the facts on which the
Attorney General relied as a basis for the
determination, including the facts pertaining to any
determination of willfulness;
``(III) of the nature of the penalty; and
``(IV) that the licensee may, within 60 days after
receipt of the notice, request in writing a hearing to
review the determination.
``(ii) Within 5 calendar days after serving the written notice on
the licensee, the Attorney General, shall give written notice to the
licensee of the date the written notice was so served and provide the
licensee with proof of the service.
``(B) A hearing to review a determination made under paragraph (1)
with respect to a licensee shall not be held unless the licensee or an
agent of the licensee requests such a hearing within 60 days after
receiving the written notice required by subparagraph (A), and if held,
shall be open to the public
``(C) On timely receipt from the licensee of a request for such a
review, the Attorney General shall stay the imposition of any penalty
under paragraph (1), pending resolution of the hearing, unless, in the
case of a license revocation, the Attorney General establishes, at a
hearing before an administrative law judge, by clear and convincing
evidence, that the licensee committed the violation willfully and that
the continued operation by the licensee of the business involved poses
an immediate and grave threat to public safety.
``(3)(A) Within not fewer than 60 days after timely receipt from a
licensee or an agent of the licensee of a written request for a hearing
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 an evidentiary hearing, at a
location convenient to the licensee, to review the determination,
except that, if the licensee moves for leave to take the deposition of
any witness identified by the Attorney General or any officer or
employee of the Department of Justice who was involved in the
inspection or examination, or any prior inspection or examination on
which the Attorney General relies, the administrative law judge shall
grant the motion and adjust the hearing date accordingly.
``(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 and a
summary of the proposed sworn testimony of the witness;
``(ii) a copy of each document, in unredacted form, that
will be introduced by the Attorney General as evidence at the
hearing;
``(iii) copies of all documents on which the determination
is based;
``(iv) a complete copy of the file of the licensee
maintained by the Attorney General; and
``(v) a sworn statement from the Attorney General as to
whether or not there is a pending criminal investigation by the
Attorney General of the licensee, which statement shall be
supplemented or amended by the Attorney General if a criminal
investigation is initiated before the conclusion of the
hearing.
``(C)(i) Within 120 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.
``(ii) The findings of fact and conclusions of law and decision of
the administrative law judge shall be--
``(I) de novo and not predicated on a presumption that the
determination of the Attorney General was correct; and
``(II) based on a clear and convincing standard of proof,
which shall be borne by the Attorney General.
``(iii) The administrative law judge shall not make a determination
to revoke a license unless the administrative law judge finds, by clear
and convincing evidence, that--
``(I) the Attorney General notified the licensee in writing
of all reasons for the contemplated action of the Attorney
General;
``(II) the Attorney General afforded the licensee a
commercially reasonable opportunity to demonstrate or achieve
compliance with this chapter; and
``(III) the licensee has not complied, and is unlikely to
be able to achieve compliance, with this chapter.
``(iv) The Attorney General shall provide to the licensee a
complete copy of the hearing transcript, including exhibits, within 60
days after the date of the hearing.
``(D) On request of the licensee, the Attorney General shall stay
the effective date of any penalty, suspension, or revocation until
there is a final, unreviewable judgment with respect to the
determination of the administrative law judge, unless, in the case of a
license revocation, the Attorney General establishes, at a hearing
before an administrative law judge, by clear and convincing evidence,
that the licensee committed the violation willfully and that the
continued operation by the licensee of the business involved poses an
immediate and grave threat to public safety.
``(E) An 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), except that
the provisions of section 922(t)(5) regarding notice and opportunity
for a hearing shall be subject to the procedural and evidentiary
requirements provided in this subsection.
``(f)(1) Within 60 days after a party receives a notice issued
under subsection (d) of a decision to deny a license, or a notice
issued under subsection (e)(3)(C) of a determination 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 trial of the determination.
``(2) In a proceeding conducted under this subsection, 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) or (e)(3).
``(3)(A) If the court decides that the determination was not
authorized by law, the court shall order the Attorney General to take
such action as may be necessary to comply with the judgment of the
court.
``(B) The court shall not make a determination to revoke a license
unless the court finds, by clear and convincing evidence, that--
``(i) the Attorney General notified the licensee in writing
of all reasons for the contemplated action of the Attorney
General;
``(ii) the Attorney General afforded the licensee a
commercially reasonable opportunity to demonstrate or achieve
compliance with this chapter; and
``(iii) the licensee has not complied, and is unlikely to
be able to comply, with this chapter.
``(4) If criminal proceedings are instituted against an applicant
for a license under this chapter or a licensee alleging a violation of
this chapter, and the applicant or licensee, as the case may be, is
acquitted of the charges, or the proceedings are terminated, other than
on motion of the Government before trial on the charges, the Attorney
General shall be absolutely barred from denying a license under this
chapter, or suspending or revoking a license granted under this
chapter, 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, more than 1
year after the filing of the indictment or information.
``(6) The Attorney General may not institute a proceeding to
suspend or revoke a license granted under this chapter, based on a
violation that is finally determined to have occurred with respect to a
different license.''.
SEC. 3. CONSIDERATION OF FEDERAL FIREARMS LICENSE APPLICATIONS.
Section 923(d) of title 18, United States Code, is amended by
striking paragraph (2) and inserting 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.
``(3) The Attorney General may not deny an application for a
license based on--
``(A) any prior violation of this chapter by the applicant,
if more than 5 years have elapsed since the date a license
previously issued to the applicant under this chapter was
terminated, unless the Attorney General finds that the
applicant is a person described in section 922(g);
``(B) the applicant having been employed by, or a
responsible party for, a licensee whose license under this
chapter was revoked, unless there is clear and convincing
evidence that the applicant willfully violated this chapter in
that capacity; or
``(C) the applicant being a spouse, former spouse, or child
of a licensee whose license under this chapter was revoked,
unless there is clear and convincing evidence that the
applicant willfully violated this chapter as a responsible
party under the license.
``(4) The procedures provided for in subsection (e) shall apply
with respect to any applicant for a license under this chapter and any
application for such a license.''.
SEC. 4. DEFINITION OF ``WILLFULLY''; CERTAIN EVIDENCE INADMISSIBLE TO
PROVE WILLFULNESS.
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 an individual who holds a license or is
designated in the records of the Attorney General as a responsible
party under a specific license, that the person--
``(A) had actual knowledge of a clearly established legal
duty;
``(B) understood the obligation imposed by the legal duty;
and
``(C) engaged in the conduct knowingly and in deliberate
disregard of the legal duty.
``(6) Evidence that a person has received a document or other
communication containing information about a requirement imposed by or
under this chapter and evidence that the person has signed an
acknowledgment that the person understands the legal obligations of the
person under this chapter shall not be admissible as part of the
determination of the Attorney General, in an administrative law hearing
or in a court of law, to prove actual knowledge and shall not be
admissible as evidence to establish a willful violation of this
chapter.
``(7) Evidence that a person has substantial experience as a
licensee, or has in other instances successfully complied with this
chapter, shall not be admissible as part of the determination of the
Attorney General, in an administrative law hearing or in a court of
law, to prove actual knowledge and shall not be admissible as evidence
to established a willful violation of this chapter.
``(8) In determining under this subsection whether conduct of a
licensee was willful, the entire historical administrative record of
the licensee shall be considered.''.
SEC. 5. RECONSIDERATION OF APPLICATIONS FROM FORMER LICENSEES WHOSE
LICENSES WERE REVOKED, IN LIGHT OF NEW RULES PERTAINING
TO WILLFULLNESS.
The Attorney General shall reconsider each application for a
license under chapter 44 of title 18, United States Code, that is
submitted by an individual whose license under such chapter was revoked
or whose application for a license was denied before the date of the
enactment of this Act, and that was disposed of on or before such date
of enactment, and, in doing so, the Attorney General shall apply the
amendments made by section 4 of this Act.
SEC. 6. ESTABLISHMENT OF FORMAL INSPECTION, EXAMINATION, AND
INVESTIGATIVE STANDARDS.
(a) In General.--The Attorney General shall establish written
standards for how the Bureau of Alcohol, Tobacco, Firearms, and
Explosives is to--
(1) conduct inspections, examinations, or investigations of
a possible violation of chapter 40 or 44 of title 18, United
States Code; and
(2) make license application denial, license suspension,
license revocation or other adverse determinations regarding an
applicant or licensee.
(b) Inclusion of Mitigating Factors.--The standards shall include
mitigation factors that must be considered before the Attorney General
initiates any adverse action against an applicant or licensee.
(c) Availability.--The written standards shall be made available to
the public, and shall be provided by the Attorney General to applicants
and licensees at the time of any license application and on demand.
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)(1) Except as provided in paragraph (2), an entity whose
license issued under this chapter is expired, surrendered, or revoked
shall be afforded 90 days from the effective date of the expiration,
surrender, or revocation (not counting any period in which an appeal of
such a revocation is pending) to liquidate the firearms business
inventory of the entity, which time may be extended on a showing of
reasonable cause. During the 90-day period (including any extension of
the period), the license involved shall continue to be considered
valid, notwithstanding the expiration, surrender, or revocation, and
the Attorney General shall issue letters of authorization to the entity
on which licensees under this chapter and commercial third parties may
rely. At any time before the expiration of the disposition period, the
entity may transfer any remaining firearms from the firearms business
inventory of the entity to the entity or, if more than 1 person holds
an interest in the entity, to the interest holders, at which point the
firearms are deemed to be a personal collection of the entity or
interest holders, as the case may be.
``(2) Paragraph (1) shall not apply with respect to a person if a
United States district court for the judicial district in which the
person resides or in which the principal place of business of the
person subject to the license is located finds, by clear and convincing
evidence, that the continued operation by the person of the firearms
business involved poses an immediate and grave threat to public safety,
in which case the person may transfer all firearms from the firearms
business inventory of the person to the personal collection of the
person or to another licensee for consignment or other liquidation at
the direction of the person.''.
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 been transferred to a surviving spouse
or child of the licensee, to an executor, administrator, or other legal
representative of a deceased or incompetent licensee, to a receiver or
trustee in bankruptcy, to an assignee for benefit of creditors, or to
an entity holding a security interest in an item as collateral pursuant
to Article 9 of the Uniform Commercial Code (U.C.C. Sec. 9-
102(a)(73)), 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''.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on the Judiciary.
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