[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5092 Introduced in House (IH)]







109th CONGRESS
  2d Session
                                H. R. 5092

 To modernize and reform the Bureau of Alcohol, Tobacco, Firearms, and 
                              Explosives.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 5, 2006

   Mr. Coble (for himself and Mr. Scott of Virginia) introduced the 
  following bill; which was referred to the Committee on the Judiciary

_______________________________________________________________________

                                 A BILL


 
 To modernize and 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 ``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, or has failed to have 
secure gun sotrage 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, backorders 
from a manufacturer, or any other similar reason beyond the control of 
the licensee), the Attorney General may--
            ``(i) if the violation is not of a serious nature--
                    ``(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) 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) 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.
    ``(C) For purposes of subparagraph (A), 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;
            ``(ii) obstructs or could have obstructed a bona fide civil 
        or criminal investigation or prosecution; or
            ``(iii) prevents or could have prevented a licensee from 
        complying with subsection (g)(7).
    ``(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 of the violation; or
            ``(ii) if the licensee involved intentionally obstructed 
        discovery of the violation, the date of discovery of the 
        violation.
    ``(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 of--
            ``(i) the determination, and the grounds on which the 
        determination was made;
            ``(ii) the nature of the penalty; and
            ``(iii) how, and by when, the licensee may 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.
    ``(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 a copy of each document which 
will be introduced as evidence at the hearing, and 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.
    ``(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 Amendment.--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.''.

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)(1) 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 921(a) of title 18, United States Code, is amended by 
adding at the end the following:
    ``(36) The term `willfully' means intentionally, purposely, and 
with the intent to act in violation of a known legal duty.''.

SEC. 5. ESTABLISHMENT OF FORMAL INVESTIGATIVE GUIDELINES.

    The Attorney General shall establish guidelines for how the Bureau 
of Alcohol, Tobacco, Firearms, and Explosives is to conduct 
investigations of possible violations of chapter 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 about the 
conduct of a named individual with respect to a firearm or ammunition 
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. CLARIFICATION OF RESPONSIBILITIES.

    Section 1111(b) of the Homeland Security Act of 2002 (6 U.S.C. 
531(b)) is amended--
            (1) by adding ``and'' at the end of paragraph (1);
            (2) by striking ``; and'' at the end of paragraph (2) and 
        inserting a period; and
            (3) by striking paragraph (3).

SEC. 9. 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.''.

SEC. 10. 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 person licensed 
under this chapter has transferred to another person an entire firearms 
business subject to license under this chapter and, before the 
transfer, the transferor was 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;
            ``(2) shall not presume that the transferee is committing 
        the violation; and
            ``(3) if the Attorney General finds that the transferee is 
        committing the violation--
                    ``(A) shall notify the transferee of the violation;
                    ``(B) shall afford the transferee a reasonable 
                amount of time after receipt of the notice to cure the 
                violation; and
                    ``(C) shall not impose a sanction on the transferee 
                with respect to the violation, unless the transferee 
                has not cured the violation with the reasonable amount 
                of time referred to in subparagraph (B).''.

SEC. 11. 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. 12. 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.
                                 <all>