[Federal Register Volume 63, Number 33 (Thursday, February 19, 1998)]
[Proposed Rules]
[Pages 8379-8386]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-4215]


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DEPARTMENT OF THE TREASURY

Bureau of Alcohol, Tobacco and Firearms

27 CFR Parts 178 and 179

[Notice No. 857]
RIN: 1512-AB67


Implementation of Public Law 103-159, Relating to the Permanent 
Provisions of the Brady Handgun Violence Prevention Act (93F-057P)

AGENCY: Bureau of Alcohol, Tobacco and Firearms (ATF), Department of 
the Treasury.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Bureau of Alcohol, Tobacco and Firearms (ATF) is proposing 
to amend the regulations to implement the provisions of Public Law 103-
159, relating to the permanent provisions of the Brady Handgun Violence 
Prevention Act. These proposed regulations implement the law by 
requiring, with some exceptions, a licensed firearms importer, 
manufacturer, or dealer to contact the

[[Page 8380]]

national instant criminal background check system (NICS) before 
transferring any firearm to an unlicensed individual. NICS will advise 
the licensee whether the system contains any information that the 
prospective purchaser is prohibited by law from possessing or receiving 
a firearm.

DATES: Written comments must be received on or before May 20, 1998.

ADDRESSES: Send written comments to: Chief, Regulations Division; 
Bureau of Alcohol, Tobacco and Firearms; P.O. Box 50221; Washington, DC 
20091-0221; ATTN: Notice No. 857.

FOR FURTHER INFORMATION CONTACT: James P. Ficaretta, Regulations 
Division, Bureau of Alcohol, Tobacco and Firearms, 650 Massachusetts 
Avenue, NW., Washington, DC 20226 (202-927-8230).

SUPPLEMENTARY INFORMATION:

Background

    On November 30, 1993, Public Law 103-159 (107 Stat. 1536) was 
enacted, amending the Gun Control Act of 1968 (GCA), as amended (18 
U.S.C. Chapter 44). Title I of Pub. L. 103-159, the Brady Handgun 
Violence Prevention Act (the ``Brady law''), imposed as an interim 
measure a waiting period of 5 days before a licensed importer, 
manufacturer, or dealer may sell, deliver, or transfer a handgun to an 
unlicensed individual. The waiting period applies only in States 
without an acceptable alternate system of conducting background checks 
on handgun purchasers. The interim provisions of the Brady law, 18 
U.S.C. 922(s), became effective on February 28, 1994, and cease to 
apply on November 30, 1998.

Permanent Provisions of the Brady Law

    The permanent provisions of the Brady law provide for the 
establishment of a national instant criminal background check system 
(``NICS'') that a firearms licensee must contact before transferring 
any firearm to unlicensed individuals. The law requires that the 
permanent system be established not later than November 30, 1998. While 
the interim provisions apply only to handguns, the permanent provisions 
of the Brady law will apply to all firearms. Furthermore, while there 
is no five-day waiting period under the permanent provisions, the 
system may take up to three business days to notify the licensee 
whether receipt of a firearm by the prospective purchaser would be in 
violation of law.

National Instant Criminal Background Check System

    The Brady law requires that the Attorney General establish a 
permanent national instant criminal background check system that any 
licensee may contact, by telephone or by other electronic means in 
addition to the telephone, for information on whether receipt of a 
firearm by a prospective transferee would violate Federal or State law. 
The law requires that the permanent system be established not later 
than November 30, 1998.
    Upon establishment of the system, the Attorney General is required 
to notify each firearms licensee and the chief law enforcement officer 
of each State of the existence and purpose of NICS and the means to be 
used to contact NICS. Beginning on the date that is 30 days after the 
Attorney General notifies firearms licensees that NICS is established, 
the permanent provisions of Brady, 18 U.S.C. 922(t), become effective.

Statutory Requirements

    Section 922(t) generally makes it unlawful for any licensed 
firearms importer, manufacturer, or dealer to sell, deliver, or 
transfer a firearm to an unlicensed individual (transferee), unless--
    1. Before the completion of the transfer, the licensee contacts the 
national instant background check system;
    2. The system provides the licensee with a unique identification 
number signifying that transfer of the firearm would not be in 
violation of law OR 3 business days (meaning a day on which State 
offices are open) have elapsed from the date the licensee contacted the 
system and the system has not notified the licensee that receipt of the 
firearm by the transferee would be in violation of law; and
    3. The licensee verifies the identity of the transferee by 
examining a valid identification document containing a photograph of 
the transferee.

Penalties for Noncompliance

    Section 922(t) provides that a firearms licensee who transfers a 
firearm and knowingly fails to comply with the requirements of the law, 
in a case where compliance would have revealed that the transfer was 
unlawful, may be subject to license suspension or revocation and fined 
not more than $5,000.

Proposed Regulations

    ATF is proposing regulations to implement the requirements placed 
on firearms licensees by section 922(t). The Department of Justice will 
be promulgating regulations establishing the methods of operation for 
NICS, including policies and procedures for ensuring the privacy and 
security of the system, and appeal procedures for individuals who are 
determined by NICS to be ineligible to purchase a firearm. Accordingly, 
these issues are not addressed in the ATF regulations.

Time of NICS Check

    The Brady law generally provides that a licensed importer, 
manufacturer or dealer may not transfer a firearm to an unlicensed 
individual unless, before the completion of the transfer, the licensee 
contacts NICS. It is clear that the law contemplates that the licensee 
should contact NICS immediately prior to the transfer of a firearm. ATF 
recognizes that there may be circumstances in which there is an 
unavoidable delay between the NICS check and the transfer of the 
firearm. For example, many States have waiting periods for the sale of 
certain types of firearms. Nonetheless, ATF believes that the 
regulations should impose a time frame beyond which a licensee can no 
longer rely upon a ``stale'' NICS check in transferring a firearm.
    In accordance with the above, ATF is proposing to amend 
Sec. 178.124(c) to require licensees to contact NICS after the 
transferee has executed the firearms transaction record, Form 4473. ATF 
is also proposing to amend Sec. 178.102(c) to provide that a licensee 
may not rely upon a NICS check that was conducted more than 30 calendar 
days prior to the transfer of the firearm. This will ensure that 
licensees are not relying upon ``stale'' NICS checks. Finally, the 
proposed regulations clarify that a separate NICS check must be 
conducted for each separate transaction. While an individual may 
purchase several firearms in one transaction, a licensee must initiate 
a separate NICS check for each separate transaction. Examples are 
provided in section 178.102(c) of the proposed regulations.
    Section 922(t)(2) provides that if NICS notifies the licensee that 
the information available to the system does not indicate that the 
prospective purchaser's receipt or possession of the firearm would 
violate the law, the system will assign a unique identification number 
to the transfer and provide the licensee with the number. The 
Department of Justice has advised ATF that NICS will also provide 
licensees with a unique identification number in the event that the 
transfer is denied or delayed by NICS. Accordingly, the proposed 
regulations require that licensees record any responses received from 
the system,

[[Page 8381]]

in addition to the unique identification number (if any) provided by 
the system, on the firearms transaction record (ATF Form 4473). The 
proposed regulations also require that licensees maintain a copy of 
each Form 4473 for which a NICS transaction number has been received, 
regardless of whether the transfer of the firearm was completed. This 
will enable ATF to determine compliance with the law by licensees and 
purchasers.

Exceptions to NICS

    The statute provides the following exceptions to the national 
instant background check system:
    1. The transferee presents to the licensee a permit which was 
issued not more than 5 years earlier by the State in which the transfer 
is to take place and which allows the transferee to possess or acquire 
a firearm, and the law of the State provides that such a permit is to 
be issued only after an authorized government official has verified 
that available information does not indicate that possession of a 
firearm by the transferee would be in violation of the law;
    2. Purchases of firearms which are subject to the National Firearms 
Act and which have been approved for transfer under 27 CFR Part 179 
(Machine Guns, Destructive Devices, and Certain Other Firearms); or
    3. Purchases of firearms for which the Secretary has certified that 
compliance with NICS is impracticable because the ratio of the number 
of law enforcement officers of the State in which the transfer is to 
occur to the number of square miles of land area of the State does not 
exceed 0.0025 (i.e., 25 officers per 10,000 square miles), the premises 
of the licensee are remote in relation to the chief law enforcement 
officer of the area, and there is an absence of telecommunications 
facilities in the geographical area in which the business premises are 
located.
    Proposed regulations which implement these provisions of the law 
are set forth in Secs. 178.102(d), 178.131, and 178.150.
    It should be noted that State ``instant check'' and ``point of sale 
check'' systems will not qualify as alternatives to the NICS check 
required by the permanent provisions of the Brady law. Therefore, NICS 
checks must be conducted on firearms purchasers in those States.
    With respect to purchases of firearms which are subject to the 
National Firearms Act, ATF is proposing to amend Sec. 179.86 to provide 
that in addition to any other records checks that may be conducted to 
determine whether the transfer, receipt, or possession of a firearm 
would place the transferee in violation of law, the Director must 
contact NICS.

Permits

    The Brady law provides that a licensee is not required to initiate 
a NICS check where the purchaser presents a permit that allows the 
purchaser to ``possess or acquire a firearm.'' The proposed regulations 
clarify that this exception includes permits to carry concealed weapons 
as well as permits specifically authorizing the purchase of a firearm.
    For purposes of the permanent provisions of the Brady law, it is 
irrelevant whether the permit covers the type of firearm that is being 
purchased. For example, a licensee need not initiate a NICS check where 
an individual who wishes to purchase a rifle presents a handgun permit, 
as long as that permit meets all the requirements of the Brady law. The 
critical issue is not the type of firearm for which the permit was 
issued, but whether the State has conducted a background check on that 
individual to ensure that the individual is not prohibited from 
possessing a firearm. Of course, all such transactions must still 
comply with State law.

NICS Checks in Conjunction With the Issuance of Permits

    The law provides that the permit must have been issued not more 
than 5 years earlier by the State in which the transfer is to take 
place. Furthermore, the permit is a valid alternative under the Brady 
law only if the law of the State provides that such a permit is to be 
issued only after an authorized government official has verified that 
the information available to such official does not indicate that 
possession of a firearm by such other person would be in violation of 
law.
    In construing the language of the statute, it is ATF's position 
that as of November 30, 1998, ``the information available to'' State 
officials will include the NICS database. Accordingly, the proposed 
regulations provide that permits issued on or after November 30, 1998, 
will be valid alternatives under the permanent provisions of the Brady 
law only if the State officials conduct a NICS check on all permit 
applicants. It should be noted that the NICS database will provide a 
more extensive background check of the purchaser than other record 
systems containing only criminal records. NICS will include records 
from the Defense Department concerning dishonorable discharges, records 
from the State Department regarding individuals who have renounced 
United States citizenship, and other information not available in 
criminal records.

Permits Issued to Persons Prohibited Under Federal Law

    The proposed regulations provide that a permit would be a valid 
alternative only if the issuing State verifies that possession of a 
firearm by the permittee would not be in violation of Federal, State, 
or local law. There may be States that would issue a permit to 
individuals (such as persons who have renounced United States 
citizenship or persons convicted of a misdemeanor crime of domestic 
violence) even though these individuals are subject to Federal firearms 
disabilities. If a State does not disqualify all individuals prohibited 
under Federal law, the permits issued by that State would not be 
accepted as alternatives under the permanent provisions of the Brady 
law. Prior to the effective date of the permanent provisions of the 
Brady law, ATF will notify licensees in each State whether or not 
permits issued by that State will suffice as alternatives under the 
Brady law.

Pawn Transactions

    The permanent provisions of the Brady law apply to any transfer of 
a firearm by a licensed importer, manufacturer, or dealer to a 
nonlicensee. This includes the redemption of a pawned firearm. It 
should be noted that the Violent Crime Control and Law Enforcement Act 
of 1994, Public Law 103-322, amended Sec. 922(s) of the GCA to exempt 
transactions involving the return of a handgun to the person from whom 
it was received. Thus, the redemption of a pawned handgun by the person 
from whom it was received is not subject to the waiting period and 
background check requirements imposed by the interim provisions of the 
Brady law. However, no such exemption appears in Sec. 922(t). Thus, the 
proposed regulations would apply the permanent provisions of the Brady 
law to pawn transactions.

Firearms Transaction Record (Form 4473)

    In general, the regulations provide that prior to the transfer of a 
firearm to a prospective purchaser, the buyer must complete, sign, and 
date a firearms transaction record, Form 4473. The form requests 
certain information, including the transferee's name, sex, height, 
weight, race, residence address, date of birth, and place of birth. ATF 
is proposing to amend the regulations to solicit additional optional 
information about the purchaser, such as the

[[Page 8382]]

transferee's social security number and alien registration number (if 
applicable), to facilitate the transfer of a firearm.
    ATF believes this additional information will help minimize the 
misidentification of firearms purchasers as felons or other prohibited 
persons whose receipt and possession would violate the law. For 
example, by providing a social security number, the transferee might 
avoid confusion with a prohibited buyer who has the same name and date 
of birth as the transferee. This would clearly help expedite the 
transfer. ATF would note that ATF Form 5300.35, Statement of Intent to 
Obtain a Handgun (Brady form), currently requests the purchaser's 
social security number and alien registration number as optional 
information. Because the NICS check will be based upon information from 
the Form 4473, the proposed regulations would not require firearms 
purchasers to fill out a separate Brady form.

Executive Order 12866

    It has been determined that this proposed regulation is not a 
significant regulatory action as defined by Executive Order 12866. 
Therefore, a Regulatory Assessment is not required.

Regulatory Flexibility Act

    It is hereby certified that these proposed regulations will not 
have a significant economic impact on a substantial number of small 
entities. The revenue effects of this rulemaking on small businesses 
flow directly from the underlying statute. Likewise, any secondary or 
incidental effects, and any reporting, recordkeeping, or other 
compliance burdens flow directly from the statute. Accordingly, a 
regulatory flexibility analysis is not required.

Paperwork Reduction Act

    The collections of information contained in this notice of proposed 
rulemaking have been submitted to the Office of Management and Budget 
(OMB) for review in accordance with the Paperwork Reduction Act of 1995 
(44 U.S.C. 3507(d)). Comments on the collections of information should 
be sent to the Office of Management and Budget, Attention: Desk Officer 
for the Department of the Treasury/Bureau of Alcohol, Tobacco and 
Firearms (ATF), Office of Information and Regulatory Affairs, 
Washington, D.C., 20503, with copies to the Chief, Document Services 
Branch, Room 3450, Bureau of Alcohol, Tobacco and Firearms, 650 
Massachusetts Avenue, NW., Washington, DC 20226. Comments are 
specifically requested concerning:
    Whether the proposed collections of information are necessary for 
the proper performance of the functions of ATF, including whether the 
information will have practical utility;
    The accuracy of the estimated burden associated with the proposed 
collections of information (see below);
    How the quality, utility, and clarity of the information to be 
collected may be enhanced; and
    How the burden of complying with the proposed collections of 
information may be minimized, including through the application of 
automated collection techniques or other forms of information 
technology.
    The collections of information in this proposed regulation are in 
Secs. 178.102, 178.124(c), 178.125(e), 178.129(b), 178.131, and 
178.150. This information is required to implement the provisions of 
Public Law 103-159, relating to the permanent provisions of the Brady 
Handgun Violence Prevention Act. The collections of information are 
required to ensure compliance with the law. The likely respondents and/
or recordkeepers are individuals and businesses.
    Estimated number of respondents: 10,273,851.
    Estimated total annual reporting and/or recordkeeping burden: 
199,357 hours.
    Estimated average annual burden per respondent and/or recordkeeper: 
1.16 minutes.
    Section 178.102 requires, with some exceptions, licensees to 
contact NICS before transferring any firearm to an unlicensed 
individual. The estimated total annual reporting and/or recordkeeping 
burden associated with this requirement is 112,978 hours. Section 
178.124(c) requires licensees to record on Form 4473 the date the 
licensee contacts NICS and any identification number provided by NICS. 
The licensee must also verify the identity of the person acquiring the 
firearm by examining an identification document presented by the 
transferee. Form 4473 will include certain optional information about 
the purchaser, such as the person's social security number and alien 
registration number. The estimated total annual reporting and/or 
recordkeeping burden associated with this requirement is 53,549 hours. 
Section 178.125(e) requires licensees to include in their records of 
disposition the identification number provided by NICS. The estimated 
total annual reporting and/or recordkeeping burden associated with this 
requirement is 18,444 hours. Section 178.129(b) requires licensees to 
retain a completed Form 4473 for a period of not less than 5 years 
where the transfer of a firearm is not made. The estimated total annual 
recordkeeping burden associated with this requirement is 553 hours. 
Section 178.131 requires licensees to maintain certain records for 
firearms transactions not subject to a NICS check. The estimated annual 
recordkeeping burden associated with this requirement is 13,833 hours. 
Section 178.150 provides for an alternative to NICS in certain 
geographical locations. Licensees must submit a written application to 
the Director containing certain information. The same requirement 
currently applies to the waiting period provision of the Brady law for 
transfers of handguns. Since this requirement was established in 1994, 
no licensee has qualified for an exception from the provisions of Brady 
based on geographical location. As such, ATF does not believe that 
there is any reporting and/or recordkeeping burden associated with the 
requirements of Sec. 178.150 with regard to NICS.
    Certain collections of information contained in Sec. 178.129(b), 
previously approved under control numbers 1512-0520, 1512-0006, and 
1512-0524, are merely being redesignated as Sec. 178.129(c) in this 
notice of proposed rulemaking. Similarly, the collections of 
information in Sec. 178.129(c), (d), and (e), previously approved under 
control numbers 1512-0129 and 1512-0526, are being redesignated as 
Sec. 178.129(d), (e), and (f) in the proposed regulation.
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a valid 
control number assigned by the Office of Management and Budget.

Public Participation

    ATF requests comments on the proposed regulations from all 
interested persons. Comments received on or before the closing date 
will be carefully considered. Comments received after that date will be 
given the same consideration if it is practical to do so, but assurance 
of consideration cannot be given except as to comments received on or 
before the closing date.
    ATF will not recognize any material in comments as confidential. 
Comments may be disclosed to the public. Any material which the 
commenter considers to be confidential or inappropriate for disclosure 
to the public should not be included in the comment. The name of the 
person submitting a comment is not exempt from disclosure.
    Any interested person who desires an opportunity to comment orally 
at a public hearing should submit his or her request, in writing, to 
the Director within the 90-day comment period. The Director, however, 
reserves the right to

[[Page 8383]]

determine, in light of all circumstances, whether a public hearing is 
necessary.

Disclosure

    Copies of this notice and the written comments will be available 
for public inspection during normal business hours at: ATF Public 
Reading Room, Room 6480, 650 Massachusetts Avenue, NW., Washington, DC.
    Drafting Information: The author of this document is James P. 
Ficaretta, Regulations Division, Bureau of Alcohol, Tobacco and 
Firearms.

List of Subjects in 27 CFR Parts 178 and 179

    Administrative practice and procedure, Arms and munitions, 
Authority delegations, Customs duties and inspection, Exports, Imports, 
Military personnel, Penalties, Reporting and recordkeeping 
requirements, Research, Seizures and forfeitures, Transportation.

Authority and Issuance

    Accordingly, 27 CFR Parts 178 and 179 are amended as follows:

PART 178--COMMERCE IN FIREARMS AND AMMUNITION

    1. The authority citation for 27 CFR Part 178 continues to read as 
follows:

    Authority: 5 U.S.C. 552(a); 18 U.S.C. 847, 921-930; 44 U.S.C. 
3504(h).

    2. Section 178.11 is amended by adding a definition for ``NICS'' to 
read as follows:


Sec. 178.11  Meaning of terms.

* * * * *
    NICS. The National Instant Criminal Background Check System 
established by the Attorney General pursuant to 18 U.S.C. 922(t).
* * * * *
    3. Section 178.96 is amended by revising the first sentence in 
paragraph (b), and by revising paragraph (c) to read as follows:


Sec. 178.96  Out-of-State and mail order sales.

* * * * *
    (b) A licensed importer, licensed manufacturer, or licensed dealer 
may sell a firearm that is not subject to the provisions of 
Sec. 178.102(a) to a nonlicensee who does not appear in person at the 
licensee's business premises if the nonlicensee is a resident of the 
same State in which the licensee's business premises are located, and 
the nonlicensee furnishes to the licensee the firearms transaction 
record, Form 4473, required by Sec. 178.124. * * *
    (c)(1) A licensed importer, licensed manufacturer, or licensed 
dealer may sell or deliver a rifle or shotgun, and a licensed collector 
may sell or deliver a rifle or shotgun that is a curio or relic, to a 
nonlicensed resident of a State other than the State in which the 
licensee's place of business is located if--
    (i) The purchaser meets with the licensee in person at the 
licensee's premises to accomplish the transfer, sale, and delivery of 
the rifle or shotgun;
    (ii) The licensed importer, licensed manufacturer, or licensed 
dealer complies with the provisions of Sec. 178.102;
    (iii) The purchaser furnishes to the licensed importer, licensed 
manufacturer, or licensed dealer the firearms transaction record, Form 
4473, required by Sec. 178.124; and
    (iv) The sale, delivery, and receipt of the rifle or shotgun fully 
comply with the legal conditions of sale in both such States.
    (2) For purposes of paragraph (c) of this section, any licensed 
manufacturer, licensed importer, or licensed dealer is presumed, in the 
absence of evidence to the contrary, to have had actual knowledge of 
the State laws and published ordinances of both such States.
    4. Section 178.97 is revised to read as follows:


Sec. 178.97  Loan or rental of firearms.

    (a) A licensee may lend or rent a firearm to any person for 
temporary use off the premises of the licensee for lawful sporting 
purposes: Provided, That the delivery of the firearm to such person is 
not prohibited by Sec. 178.99(b) or Sec. 178.99(c), the licensee 
complies with the requirements of Sec. 178.102, and the licensee 
records such loan or rental in the records required to be kept by him 
under Subpart H of this part.
    (b) A club, association, or similar organization temporarily 
furnishing firearms (whether by loan, rental, or otherwise) to 
participants in a skeet, trap, target, or similar shooting activity for 
use at the time and place such activity is held does not, unattended by 
other circumstances, cause such club, association, or similar 
organization to be engaged in the business of a dealer in firearms or 
as engaging in firearms transactions. Therefore, the licensing and 
recordkeeping requirements contained in this part pertaining to 
firearms transactions would not apply to this temporary furnishing of 
firearms for use on premises on which such an activity is conducted.
    5. Section 178.102 is revised to read as follows:


Sec. 178.102  Sales or deliveries of firearms on and after November 30, 
1998.

    (a) Background check. Except as provided in paragraph (d) of this 
section, a licensed importer, licensed manufacturer, or licensed dealer 
shall not sell, deliver, or transfer a firearm to any other person who 
is not licensed under this part unless--
    (1) Before the completion of the transfer, the licensee has 
contacted NICS;
    (2)(i) NICS informs the licensee that it has no information that 
receipt of the firearm by the transferee would be in violation of 
Federal or State law and provides the licensee with a unique 
identification number; or
    (ii) Three business days (meaning days on which State offices are 
open) have elapsed from the date the licensee contacted NICS and NICS 
has not notified the licensee that receipt of the firearm by the 
transferee would be in violation of law; and
    (3) The licensee verifies the identity of the transferee by 
examining the identification document presented in accordance with the 
provisions of Sec. 178.124(c).
    (b) Unique identification number. In any transaction for which a 
licensee receives a unique identification number from NICS, such number 
shall be recorded on a firearms transaction record, Form 4473, which 
shall be retained in the records of the licensee in accordance with the 
provisions of Sec. 178.129. This applies regardless of whether the 
transaction is approved or denied by NICS, and regardless of whether 
the firearm is actually transferred.
    (c) Time limitation on NICS checks. A NICS check conducted in 
accordance with paragraph (a) of this section may be relied upon by the 
licensee only for use in a single transaction, and for a period not to 
exceed 30 calendar days. If the transaction is not completed within the 
30-day period, the licensee shall initiate a new NICS check prior to 
completion of the transfer.

    Example 1. A purchaser completes the Form 4473 on December 15, 
1998, and a NICS check is initiated by the licensee on that date. 
The licensee is informed by NICS that the information available to 
the system does not indicate that receipt of the firearm by the 
transferee would be in violation of law, and a unique identification 
number is provided. However, the State imposes a 7-day waiting 
period on all firearms transactions, and the purchaser does not 
return to pick up the firearm until January 22, 1999. The licensee 
must conduct another NICS check before transferring the firearm to 
the purchaser.
    Example 2. A purchaser completes the Form 4473 on January 25, 
1999, and arranges

[[Page 8384]]

for the purchase of a single firearm. A NICS check is initiated by 
the licensee on that date. The licensee is informed by NICS that the 
information available to the system does not indicate that receipt 
of the firearm by the transferee would be in violation of law, and a 
unique identification number is provided. The State imposes a 7-day 
waiting period on all firearms transactions, and the purchaser 
returns to pick up the firearm on February 15, 1999. Before the 
licensee completes Section B of the Form 4473, the purchaser decides 
to purchase an additional firearm. The transfer of these two 
firearms is considered a single transaction; accordingly, the 
licensee may add the second firearm to the Form 4473, and transfer 
that firearm without conducting another NICS check.
    Example 3. A purchaser completes a Form 4473 on February 15, 
1999. The licensee receives a unique identification number from NICS 
on that date, Section B of the Form 4473 is completed by the 
licensee, and the firearm is transferred. On February 20, 1999, the 
purchaser returns to the licensee's premises and wishes to purchase 
a second firearm. The purchase of the second firearm is a separate 
transaction; thus, a new NICS check must be initiated by the 
licensee.

    (d) Exceptions to NICS check. The provisions of paragraph (a) of 
this section shall not apply if--
    (1) The transferee has presented to the licensee a permit or 
license that--
    (i) Allows the transferee to possess, acquire, or carry a firearm;
    (ii) Was issued not more than 5 years earlier by the State in which 
the transfer is to take place; and
    (iii) The law of the State provides that such a permit or license 
is to be issued only after an authorized government official has 
verified that the information available to such official does not 
indicate that possession of a firearm by the transferee would be in 
violation of Federal, State, or local law: Provided, That on and after 
November 30, 1998, the information available to such official includes 
the NICS;
    (2) The firearm is subject to the provisions of the National 
Firearms Act and has been approved for transfer under 27 CFR Part 179; 
or
    (3) On application of the licensee, in accordance with the 
provisions of Sec. 178.150, the Director has certified that compliance 
with paragraph (a)(1) of this section is impracticable.
    (e) The document referred to in paragraph (d)(1) of this section 
(or a copy thereof) shall be retained or the required information from 
the document shall be recorded on the firearms transaction record in 
accordance with the provisions of Sec. 178.131.
    6. Section 178.124 is amended by revising paragraph (c), by 
removing ``paragraph (c)(1)(ii)'' in paragraphs (d) and (e) and adding 
in its place ``paragraph (c)(3)(iii)'', and by revising the first 
sentence in paragraph (f) to read as follows:


Sec. 178.124  Firearms transaction record.

* * * * *
    (c)(1) Prior to making an over-the-counter transfer of a firearm to 
a nonlicensee who is a resident of the State in which the licensee's 
business premises is located, the licensed importer, licensed 
manufacturer, or licensed dealer so transferring the firearm shall 
obtain a Form 4473 from the transferee showing the transferee's name, 
sex, residence address (including county or similar political 
subdivision), date and place of birth; height, weight and race of the 
transferee; whether the transferee is a citizen of the United States; 
the transferee's State of residence; and certification by the 
transferee that the transferee is not prohibited by the Act from 
transporting or shipping a firearm in interstate or foreign commerce or 
receiving a firearm which has been shipped or transported in interstate 
or foreign commerce or possessing a firearm in or affecting commerce.
    (2) In order to facilitate the transfer of a firearm and enable 
NICS to verify the identity of the person acquiring the firearm, ATF 
Form 4473 also requests certain optional information. This information 
includes the transferee's social security number and alien registration 
number (if applicable). Such information may help avoid the possibility 
of the transferee being misidentified as a felon or other prohibited 
person.
    (3) The licensee shall identify the firearm to be transferred by 
listing on the Form 4473 the name of the manufacturer, the name of the 
importer (if any), the type, model, caliber or gauge, and the serial 
number of the firearm. After the transferee has executed the Form 4473, 
but before transferring the firearm described on the Form 4473, the 
licensee:
    (i) Shall comply with the requirements of Sec. 178.102 and record 
on the form the date on which the licensee contacted the NICS, as well 
as any response provided by the system, including any identification 
number provided by the system;
    (ii) Shall verify the identity of the transferee by examining the 
identification document (as defined in Sec. 178.11) presented, and 
shall note on the Form 4473 the type of identification used;
    (iii) Shall, in the case of a transferee who is an alien legally in 
the United States, cause the transferee to present documentation 
establishing that the transferee is a resident of the State (as defined 
in Sec. 178.11) in which the licensee's business premises is located, 
and shall note on the form the documentation used. Examples of 
acceptable documentation include utility bills or a lease agreement 
which show that the transferee has resided in the State continuously 
for at least 90 days prior to the transfer of the firearm; and
    (iv) Shall sign and date the form if the licensee does not know or 
have reasonable cause to believe that the transferee is disqualified by 
law from receiving the firearm.
* * * * *
    (f) Form 4473 shall be submitted, in duplicate, to a licensed 
importer, licensed manufacturer, or licensed dealer by a transferee who 
is purchasing or otherwise acquiring a firearm by other than an over-
the-counter transaction, who is not subject to the provisions of 
Sec. 178.102(a), and who is a resident of the State in which the 
licensee's business premises are located. * * *
* * * * *
    7. Section 178.124a is amended by removing the period at the end of 
the introductory text of paragraph (e) and adding in its place a colon.
    8. Section 178.125(e) is amended by revising the text following the 
eighth sentence to read as follows:


Sec. 178.125  Record of receipt and disposition.

* * * * *
    (e) Firearms receipt and disposition by dealers. * * * The record 
shall show the date of the sale or other disposition of each firearm, 
the name and address of the person to whom the firearm is transferred, 
or the name and license number of the person to whom transferred if 
such person is a licensee, or the firearms transaction record, Form 
4473, serial number if the licensed dealer transferring the firearm 
serially numbers the Forms 4473 and files them numerically, and the 
identification number (if any) provided by the NICS. The format 
required for the record of receipt and disposition of firearms is as 
follows:

[[Page 8385]]



                                                                                               Firearms Acquisition and Disposition Record                                                                                              
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                             Description of firearm                                                               Receipt                                                   Disposition                                 
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                  Address or license                    
                                                                                                                                                                                                   No. if licensee,                     
                                                                                                                                       Name and address                                              or Form 4473     Identification No.
  Manufacturer and/or Importer           Model            Serial No.             Type          Caliber or gauge          Date             or name and            Date                Name            Serial No. if     provided by NICS 
                                                                                                                                          license No.                                              forms 4473 filed        (if any)     
                                                                                                                                                                                                      numerically                       
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                        
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

* * * * *
    9. Section 178.129 is amended by revising paragraph (b), by 
redesignating paragraphs (c), (d), and (e) as paragraphs (d), (e), and 
(f), by adding new paragraph (c), and by revising the parenthetical 
text at the end of the section to read as follows:


Sec. 178.129  Record retention.

* * * * *
    (b) Firearms transaction record. Licensees shall retain each Form 
4473 and Form 4473(LV) for a period of not less than 20 years after the 
date of sale or disposition. Where a licensee has received a 
transaction number from NICS for a proposed firearms transaction, but 
the sale, delivery, or transfer of the firearm is not made, the 
licensee shall record the transaction number on the Form 4473, and 
retain the Form 4473 for a period of not less than 5 years after the 
date of the NICS inquiry. Forms 4473 shall be retained in the 
licensee's records as provided in Sec. 178.124(b): Provided, That Forms 
4473 with respect to which a sale, delivery or transfer did not take 
place shall be separately retained in alphabetical (by name of 
transferee) or chronological (by date of transferee's certification) 
order.
    (c) Statement of intent to obtain a handgun, reports of multiple 
sales or other disposition of pistols and revolvers, and reports of 
theft or loss of firearms. Licensees shall retain each Form 5300.35 
(Statement of Intent to Obtain a Handgun(s)) for a period of not less 
than 5 years after notice of the intent to obtain the handgun was 
forwarded to the chief law enforcement officer, as defined in 
Sec. 178.150(c). Licensees shall retain each copy of Form 3310.4 
(Report of Multiple Sale or Other Disposition of Pistols and Revolvers) 
for a period of not less than 5 years after the date of sale or other 
disposition. Licensees shall retain each copy of Form 3310.11 (Federal 
Firearms Licensee Theft/Loss Report) for a period of not less than 5 
years after the date the theft or loss was reported to ATF.
* * * * *
(Paragraph (c) approved by the Office of Management and Budget under 
control numbers 1512-0520, 1512-0006, and 1512-0524; Paragraph (f) 
approved by the Office of Management and Budget under control number 
1512-0526; all other recordkeeping approved by the Office of 
Management and Budget under control number 1512-0129)


Sec. 178.130   [Removed]

    10. Section 178.130 is removed.
    11. Section 178.131 is revised to read as follows:


Sec. 178.131  Firearms transactions not subject to a NICS check.

    (a)(1) A licensed importer, licensed manufacturer, or licensed 
dealer whose sale, delivery, or transfer of a firearm is made pursuant 
to the alternative provisions of Sec. 178.102(d) and is not subject to 
the NICS check prescribed by Sec. 178.102(a) shall maintain the records 
required by paragraph (a) of this section.
    (2) If the transfer is pursuant to a permit or license in 
accordance with Sec. 178.102(d)(1), the licensee shall either retain a 
copy of the purchaser's permit or license and attach it to the firearms 
transaction record, Form 4473, or record on the firearms transaction 
record, Form 4473, any identifying number, the date of issuance, and 
the expiration date (if provided) from the permit or license.
    (3) If the transfer is pursuant to a certification by ATF in 
accordance with Secs. 178.102(d)(3) and 178.150, the licensee shall 
maintain the certification as part of the records required to be kept 
under this subpart and for the period prescribed for the retention of 
Form 5300.35 in Sec. 178.129(c).
    (b) The requirements of this section shall be in addition to any 
other recordkeeping requirements contained in this part.
    12. Section 178.150 is revised to read as follows:


Sec. 178.150  Alternative to NICS in certain geographical locations.

    (a) The provisions of Sec. 178.102(d)(3) shall be applicable when 
the Director has certified that compliance with the provisions of 
Sec. 178.102(a)(1) is impracticable because:
    (1) The ratio of the number of law enforcement officers of the 
State in which the transfer is to occur to the number of square miles 
of land area of the State does not exceed 0.0025;
    (2) The business premises of the licensee at which the transfer is 
to occur are extremely remote in relation to the chief law enforcement 
officer; and
    (3) There is an absence of telecommunications facilities in the 
geographical area in which the business premises are located.
    (b) A licensee who desires to obtain a certification under this 
section shall submit a written request to the Director. Each request 
shall be executed under the penalties of perjury and contain 
information sufficient for the Director to make such certification. 
Such information shall include statistical data, official reports, or 
other statements of government agencies pertaining to the ratio of law 
enforcement officers to the number of square miles of land area of a 
State and statements of government agencies and private utility 
companies regarding the absence of telecommunications facilities in the 
geographical area in which the licensee's business premises are 
located.
    (c) For purposes of this section and Sec. 178.129(c), the ``chief 
law enforcement officer'' means the chief of police, the sheriff, or an 
equivalent officer or the designee of any such individual.

PART 179--MACHINE GUNS, DESTRUCTIVE DEVICES, AND CERTAIN OTHER 
FIREARMS

    13. The authority citation for 27 CFR Part 179 continues to read as 
follows:

    Authority: 26 U.S.C. 7805.

    14. Section 179.86 is amended by adding a sentence at the end of 
the section to read as follows:


Sec. 179.86  Action on application.

    * * * In addition to any other records checks that may be conducted 
to determine whether the transfer, receipt, or possession of a firearm 
would place the transferee in violation of law, the Director shall 
contact the National

[[Page 8386]]

Instant Criminal Background Check System.

    Signed: December 31, 1997.
John W. Magaw,
Director.

    Approved: January 16, 1998.
John P. Simpson,
Deputy Assistant Secretary, (Regulatory, Tariff and Trade Enforcement).
[FR Doc. 98-4215 Filed 2-18-98; 8:45 am]
BILLING CODE 4810-31-P