[Congressional Record Volume 145, Number 95 (Wednesday, June 30, 1999)]
[Senate]
[Pages S7934-S7937]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SCHUMER:
  S. 1306. A bill to amend chapter 44 of title 18, United States Code, 
relating to the regulation of firearms dealers, and for other purposes; 
to the Committee on the Judiciary.


              Targeted Gun dealer enforcement Act of 1999

  Mr. SCHUMER Mr. President, today I am introducing the ``Targeted Gun 
Dealer Enforcement Act of 1999.'' This legislation would enable law 
enforcement to crack down on certain gun dealers and ``straw 
purchasers'' responsible for funneling firearms into the hands of those 
who use guns in crime.
  A licensed gun dealer in West Milwaukee, Wisconsin was the retail 
source of 1,195 guns linked to crime between 1996 and 1998 Similarly, 
1,176 crime guns recovered by law enforcement authorities over those 
three years were traced to a single gun dealer in Riverdale, Illinois 
In fact, 137 gun stores account for more than 13,000 crime guns seized 
in 1998 Year after year, many of these 137 dealers emerge as major 
sources of crime guns, even though most are not located in high-crime 
areas.
  The path a gun takes to a crime scene is often a path of rapid 
diversion from first retail sale at federally licensed gun dealers to 
an illegal market supplying juveniles and felons According to a 
February 1999 ATF crime gun trace analysis report, ``New guns in 
juvenile or criminal hands signal direct

[[Page S7935]]

diversion, by illegal firearms trafficking--for instance through straw 
purchases or off the book sales by corrupt FFLs.''
  An extremely small percentage of gun dealers are disproportionately 
responsible for this problem of rapid diversion of guns from first 
retail sale to crime scenes Indeed, almost half of the guns recovered 
in crime and traced through ATF in 1998 are traceable to a mere 1.1 
percent of the nation's licensed gun dealers Yet law enforcement's 
ability to prevent certain gun dealers and straw purchasers from 
supplying young people and felons with new guns for use in crime is 
constrained by current federal firearms law--which limits the records 
and sanctions to which law enforcement has ready access.
  My legislation would give law enforcement the tools it needs to crack 
down on certain gun dealers and ``straw purchasers'' responsible for 
funneling firearms into the hands of those who use guns in crime The 
bill would, among other things, impose strict new reporting 
requirements and automatic sanctions for illegal activity upon the 0.4 
percent of licensed gun dealers responsible for 25 or more crime gun 
traces in given year; authorize ATF to suspend the licenses of and 
impose civil monetary penalties upon licensed gun dealers who willfully 
violate federal firearms law; clearly outlaw and increase penalties for 
``straw purchasing''; and enable law enforcement more readily to trace 
the purchase-and-sale histories of firearms used in crime.
  Mr. President, I ask unanimous consent that a copy of the legislation 
be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1306

       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 ``Targeted Gun Dealer 
     Enforcement Act of 1999''.

     SEC. 2. REGULATION OF LICENSED DEALERS.

       (a) Prohibition on Straw Purchases.--
       (1) In general.--Section 922(a)(6) of title 18, United 
     States Code, is amended by inserting ``, or with respect to 
     the identity of the person in fact purchasing or attempting 
     to purchase such firearm or ammunition,'' before ``under 
     the''.
       (2) Penalties.--Section 924(a)(3) of title 18, United 
     States Code, is amended by adding at the end the following: 
     ``Notwithstanding the preceding sentence, a violation in 
     relation to section 922(a)(6) or 922(d) by a licensed dealer, 
     licensed importer, licensed manufacturer, or licensed 
     collector shall be subject to the penalties under paragraph 
     (2) of this subsection.''.
       (b) Notification of State Law Regarding Carrying Concealed 
     Firearms.--Section 922 of title 18, United States Code, is 
     amended by inserting after subsection (y) the following:
       ``(z) Notification of State Requirements.--It shall be 
     unlawful for a licensed dealer to transfer a firearm to any 
     person, unless the dealer notifies that person whether 
     applicable State law requires persons to be licensed to carry 
     concealed firearms in the State, or prohibits the carrying of 
     concealed firearms in the State.''.
       (c) Revocation or Suspension of License; Civil Penalties.--
     Section 923 of title 18, United States Code, is amended by 
     striking subsections (e) and (f) and inserting the following:
       ``(e) Revocation or Suspension of License; Civil 
     Penalties.--
       ``(1) In general.--The Secretary may, after notice and 
     opportunity for hearing--
       ``(A) suspend or revoke any license issued under this 
     section, if the holder of such license--
       ``(i) willfully violates any provision of this chapter or 
     any rule or regulation prescribed by the Secretary under this 
     chapter; or
       ``(ii) 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 
     licensed dealer shall not be considered to be in violation of 
     the requirement to make available such a device);
       ``(B) suspend or revoke the license issued under this 
     section to a dealer who willfully transfers armor piercing 
     ammunition; and
       ``(C) assess and collect a civil penalty of not more than 
     $10,000 per violation against any holder of a license, if the 
     Secretary is authorized to suspend or revoke the license of 
     that holder under subparagraph (A) or (B).
       ``(2) Liability.--The Secretary may at any time compromise, 
     mitigate, or remit the liability with respect to any willful 
     violation of this subsection or any rule or regulation 
     prescribed by the Secretary under this subsection.
       ``(3) Review.--An action of the Secretary under this 
     subsection may be reviewed only as provided in subsection 
     (f).
       ``(4) Notification requirement.--Not less than once every 6 
     months, the Secretary shall notify each licensed manufacturer 
     and each licensed dealer of the name, address, and license 
     number of each dealer whose license was suspended or revoked 
     under this section during the preceding 6-month period.
       ``(f) Rights of Applicants and Licensees.--
       ``(1) In general.--If the Secretary denies an application 
     for, or revokes or suspends a license, or assesses a civil 
     penalty under this section, the Secretary shall provide 
     written notice of such denial, revocation, suspension, or 
     assessment to the affected party, stating specifically the 
     grounds upon which the application was denied, the license 
     was suspended or revoked, or the civil penalty was assessed. 
     Any notice of a revocation or suspension of a license under 
     this paragraph shall be given to the holder of such license 
     before the effective date of the revocation or suspension, as 
     applicable.
       ``(2) Appeal Process.--
       ``(A) Hearing.--If the Secretary denies an application for, 
     or revokes or suspends a license, or assesses a civil penalty 
     under this section, the Secretary shall, upon request of the 
     aggrieved party, promptly hold a hearing to review the 
     denial, revocation, suspension, or assessment. A hearing 
     under this subparagraph shall be held at a location 
     convenient to the aggrieved party.
       ``(B) Notice of decision; appeal.--If, after a hearing held 
     under subparagraph (A), the Secretary decides not to reverse 
     the decision of the Secretary to deny the application, revoke 
     or suspend the license, or assess the civil penalty, as 
     applicable--
       ``(i) the Secretary shall provide notice of the decision of 
     the Secretary to the aggrieved party;
       ``(ii) during the 60-day period beginning on the date on 
     which the aggrieved party receives a notice under clause (i), 
     the aggrieved party may file a petition with the district 
     court of the United States for the judicial district in which 
     the aggrieved party resides or has a principal place of 
     business for a de novo judicial review of such denial, 
     revocation, suspension, or assessment;
       ``(iii) in any judicial proceeding pursuant to a petition 
     under clause (ii)--

       ``(I) the court may consider any evidence submitted by the 
     parties to the proceeding, regardless of whether or not such 
     evidence was considered at the hearing held under 
     subparagraph (A); and
       ``(II) if the court decides that the Secretary was not 
     authorized to make such denial, revocation, suspension, or 
     assessment, the court shall order the Secretary to take such 
     actions as may be necessary to comply with the judgment of 
     the court.

       ``(3) Stay pending appeal.--If the Secretary suspends or 
     revokes a license under this section, upon the request of the 
     holder of the license, the Secretary shall stay the effective 
     date of the revocation, suspension, or assessment.''.
       (d) Effect of Conviction.--Section 925(b) of title 18, 
     United States Code, is amended by striking ``until any 
     conviction pursuant to the indictment becomes final'' and 
     inserting ``until the date of any conviction pursuant to the 
     indictment''.
       (e) Regulation of High-Volume Crime Gun Dealers.--Section 
     923(g) of title 18, United States Code, is amended by adding 
     at the end the following:
       ``(8) High-volume crime gun dealers.--
       ``(A) Definition.--In this paragraph, the term `high-volume 
     crime gun dealer' means any licensed dealer with respect to 
     which a designation under subparagraph (B)(i) is in effect, 
     as provided in subparagraph (B)(ii).
       ``(B) Designation of high-volume crime gun dealers.--
       ``(i) In general.--The Secretary shall designate a licensed 
     dealer as a high-volume crime gun dealer--
       ``(I) as soon as practicable, if the Secretary determines 
     that the licensed dealer sold, delivered, or otherwise 
     transferred to 1 or more persons not licensed under this 
     chapter not less than 25 firearms that, during the preceding 
     calendar year, were used during the commission or attempted 
     commission of a criminal offense under Federal, State, or 
     local law, or were possessed in violation of Federal, State, 
     or local law; or
       ``(II) immediately upon the expiration date of a suspension 
     of the license of that dealer for a willful violation of this 
     chapter, if such violation involved 1 or more firearms that 
     were subsequently used during the commission or attempted 
     commission of a criminal offense under Federal, State, or 
     local law.
       ``(ii) Effective period of designation.--A designation 
     under clause (i) shall remain in effect during the period 
     beginning on the date on which the designation is made and 
     ending on the later of--
       ``(I) the expiration of the 18-month period beginning on 
     that date; or
       ``(II) the date on which the license issued to that dealer 
     under this section expires.
       ``(C) Notification requirement.--Upon the designation of a 
     licensed dealer as a high-volume crime gun dealer under 
     subparagraph (B), the Secretary shall notify the appropriate 
     United States attorney's office, the appropriate State and 
     local law enforcement agencies (including the district 
     attorney's

[[Page S7936]]

     offices and the police or sheriff's departments), and each 
     State and local agency responsible for the issuance of 
     business licenses in the jurisdiction in which the high-
     volume crime gun dealer is located of such designation.
       ``(D) Reporting and recordkeeping requirements.--
     Notwithstanding any other provision of this paragraph--
       ``(i) not later than 10 days after the date on which a 
     handgun is sold, delivered, or otherwise transferred by a 
     high-volume crime gun dealer to a person not licensed under 
     this chapter, the high-volume crime gun dealer shall submit 
     to the Secretary and to the department of State police or 
     State law enforcement agency of the State or local 
     jurisdiction in which the sale, delivery, or transfer took 
     place, on a form prescribed by the Secretary, a report of the 
     sale, delivery, or transfer, which report shall include--
       ``(I) the manufacturer or importer of the handgun;
       ``(II) the model, type, caliber, gauge, and serial number 
     of the handgun; and
       ``(III) the name, address, date of birth, and height and 
     weight of the purchaser or transferee, as applicable;
       ``(ii) each high-volume crime gun dealer shall submit to 
     the Secretary, on a form prescribed by the Secretary, a 
     monthly report of each firearm received and each firearm 
     disposed of by the dealer during that month, which report 
     shall include only the name of the manufacturer or importer 
     and the model, type, caliber, gauge, serial number, date of 
     receipt, and date of disposition of each such firearm, except 
     that the initial report submitted by a dealer under this 
     clause shall include such information with respect to the 
     entire inventory of the high-volume crime gun dealer; and
       ``(iii) a high-volume crime gun dealer may not destroy any 
     record required to be maintained under paragraph (1)(A).
       ``(E) Inspection.--Notwithstanding paragraph (1), the 
     Secretary may inspect or examine the inventory and records of 
     a high-volume crime gun dealer at any time without a showing 
     of reasonable cause or a warrant for purposes of determining 
     compliance with the requirements of this chapter.
       ``(F) Recordkeeping by local police departments.--
     Notwithstanding paragraph (3)(B), a State or local law 
     enforcement agency that receives a report under subparagraph 
     (D)(i) may retain a copy of that record for not more than 5 
     years.
       ``(G) License renewal.--Notwithstanding subsection (d)(2), 
     the Secretary shall approve or deny an application for a 
     license submitted by a high-volume crime gun dealer before 
     the expiration of the 120-day period beginning on the date on 
     which the application is received.
       ``(H) Effect of failure to comply.--
       ``(i) In general.--Notwithstanding subsection (e), the 
     Secretary shall, after notice and an opportunity for a 
     hearing--
       ``(I) suspend for not less than 90 days any license issued 
     under this section to a high-volume crime gun dealer who 
     willfully violates any provision of this section (including 
     any requirement of this paragraph);
       ``(II) revoke any license issued under this section to a 
     high-volume crime gun dealer who willfully violates any 
     provision of this section (including any requirement of this 
     paragraph) and who has committed a prior willful violation of 
     any provision of this section (including any requirement of 
     this paragraph); and
       ``(III) revoke any license issued under this section to a 
     high-volume crime gun dealer who willfully violates any 
     provision of section 922 or 924.
       ``(ii) Stay pending appeal.--Notwithstanding subsection 
     (f)(3), the Secretary may not stay the effective date of a 
     suspension or revocation under this subparagraph pending an 
     appeal.''.

     SEC. 3. ENHANCED ABILITY TO TRACE FIREARMS.

       (a) Voluntary Submission of Dealer's Records.--Section 
     923(g)(4) of title 18, United States Code, is amended to read 
     as follows:
       ``(4) Voluntary submission of dealer's records.--
       ``(A) Business discontinued.--
       ``(i) Successor.--When a firearms or ammunition business is 
     discontinued and succeeded by a new licensee, the records 
     required to be kept by this chapter shall appropriately 
     reflect that fact and shall be delivered to the successor. 
     Upon receipt of those records, the successor licensee may 
     retain the records of the discontinued business or submit the 
     discontinued business records to the Secretary.
       ``(ii) No successor.--When a firearms or ammunition 
     business is discontinued without a successor, records 
     required to be kept by this chapter shall be delivered to the 
     Secretary within 30 days after the business is discontinued.
       ``(B) Old records.--A licensee maintaining a firearms 
     business may voluntarily submit the records required to be 
     kept by this chapter to the Secretary if such records are at 
     least 20 years old.
       ``(C) State or local requirements.--If State law or local 
     ordinance requires the delivery of records regulated by this 
     paragraph to another responsible authority, the Secretary may 
     arrange for the delivery of records to such other responsible 
     authority.''
       (b) Centralization and Maintenance of Records.--Section 
     923(g) of title 18, United States Code, is amended by adding 
     at the end the following:
       ``(9) Centralization and maintenance of records by 
     secretary.--Notwithstanding any other provision of law, the 
     Secretary--
       ``(A) may receive and centralize any information or records 
     submitted to the Secretary under this chapter and maintain 
     such information or records in whatever manner will enable 
     their most efficient use in law enforcement investigations; 
     and
       ``(B) shall retain a record of each firearms trace 
     conducted by the Secretary, unless the Secretary determines 
     that there is a valid law enforcement reason not to retain 
     the record.''.
       (c) Licensee Reports of Secondhand Firearms.--Section 
     923(g) of title 18, United States Code, is amended by adding 
     at the end the following:
       ``(10) Licensee reports of secondhand firearms.--A licensed 
     importer, licensed manufacturer, and licensed dealer shall 
     submit to the Secretary, on a form prescribed by the 
     Secretary, a monthly report of each firearm received from a 
     person not licensed under this chapter during that month, 
     which report shall not include any identifying information 
     relating to the transferor or any subsequent purchaser.''.

     SEC. 4. GENERAL REGULATION OF FIREARMS TRANSFERS.

       (a) Transfers of Crime Guns.--Section 924(h) of title 18, 
     United States Code, is amended by inserting ``or having 
     reasonable cause to believe'' after ``knowing''.
       (b) Increased Penalties for Trafficking in Firearms With 
     Obliterated Serial Numbers.--Section 924(a) of title 18, 
     United States Code, is amended--
       (1) in paragraph (1)(B), by striking ``(k),''; and
       (2) in paragraph (2), by inserting ``(k),'' after ``(j),''.

     SEC. 5. AMENDMENT OF FEDERAL SENTENCING GUIDELINES.

       The United States Sentencing Commission shall amend the 
     Federal sentencing guidelines to reflect the amendments made 
     by this Act.

  Mr. DURBIN. Mr. President, I am happy to join my colleague Senator 
Schumer in introducing the ``Targeted Gun Dealer Enforcement Act of 
1999.'' This bill will give law enforcement the tools they need to 
prevent suspect gun dealers from supplying firearms to criminals and 
plaguing our communities with gun violence.
  Guns kill 34,000 Americans every year--thirteen children every day. 
They kill more teen-agers than any natural cause.
  This bill allows the Bureau of Alcohol Tobacco and Firearms (ATF) to 
closely monitor those gun dealers who they should be monitoring--the 
dealers who have had more than 25 crime guns traced to them in the last 
year.
  The facts in Illinois are particularly compelling on this issue. In 
Illinois, 26 gun dealers account for more crime guns than the remaining 
3,700 Illinois federally licensed gun dealers combined.
  These figures show that while most gun dealers are law abiding and 
responsible, some shops have become ``convenience stores'' for 
criminals. Twenty-six dealers were the source of more than 1,600 crime 
guns with each dealer responsible for selling at least 25 guns used in 
crimes in 1998.
  This bill will help law enforcement find out why these dealers are 
the source of guns later used to commit crimes. The bill will require 
high volume crime dealers to report handgun sales to ATF and local 
police. Law enforcement can then use these records to more effectively 
trace crime guns.
  The bill will also encourage gun dealers to sell guns more 
responsively. In the Youth Crime Gun Interdiction Initiative, ATF found 
that many guns used by youths to commit crimes are purchased from 
licensed dealers by individuals acting as ``straw'' purchasers. A 
``straw purchaser'' is a person who illegally purchases a firearm for 
another person, such as a juvenile or a felon.
  This bill seeks to address that problem by prohibiting the sale of a 
firearm when a seller has ``reason to know'' that such firearm will be 
used to commit a crime of violence or a drug crime. Current law 
requires actual knowledge on the part of the dealer that the buyer will 
use the firearm to commit a crime of violence. This change will make it 
easier for law enforcement to target dealers who they believe are 
turning a blind eye in supplying guns to buyers under questionable 
circumstances.
  In 1998, Chicago police officers conducted ``Operation Gunsmoke,'' an 
investigation to target gun-sellers just outside the city limits. Seven 
undercover officers purchased 171 guns from 12 suburban gun stores in a 
three month period. Not one dealer refused to sell the agents weapons 
even as the agents openly violated laws needed to purchase firearms. 
This investigation was key to the City of Chicago's

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groundbreaking lawsuit against the gun industry on the theory of public 
nuisance.
  We must act now to keep guns from getting into the hands of 
criminals. I applaud Senator Schumer's leadership on this issue and 
hope my colleagues will join us in this important effort to make our 
communities safer. The statistics show most gun dealers are 
responsible, but a few unscrupulous dealers are supplying criminals 
with guns that plague our communities.
                                 ______