[Federal Register Volume 84, Number 227 (Monday, November 25, 2019)]
[Rules and Regulations]
[Pages 64740-64754]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-24570]
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DEPARTMENT OF JUSTICE
Bureau of Alcohol, Tobacco, Firearms, and Explosives
27 CFR Parts 478, 555, and 771
[Docket No. ATF 33F; AG Order No. 4577-2019]
RIN 1140-AA40
Rules of Practice in Explosives License and Permit Proceedings
(2007R-5P); Revisions Reflecting Changes Consistent With the Homeland
Security Act of 2002
AGENCY: Bureau of Alcohol, Tobacco, Firearms, and Explosives,
Department of Justice.
[[Page 64741]]
ACTION: Final rule.
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SUMMARY: The Department of Justice is amending the regulations of the
Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) concerning
procedures and practices in connection with denials of initial
applications, denials of renewals, and revocations of explosives
licenses or permits. These regulations are being codified in a new part
entitled, ``Rules and Practice in License and Permit Proceedings.''
These regulations are based upon the regulations that ATF relied upon
prior to its transfer from the Department of the Treasury to the
Department of Justice. This final rule makes minor revisions to
regulations governing administrative proceedings related to the denial,
suspension, or revocation of a license, and the imposition of a civil
fine under Federal firearms law to reference regulations under ATF
authority. These revisions remove all references to statutes,
regulations, positions, and other terms that are applicable only to the
Department of the Treasury. These revisions reflect ATF's position as a
regulatory and enforcement agency under the Department of Justice and
are consistent with the regulations governing administrative hearing
processes for explosives licenses and permits.
DATES: This rule is effective December 26, 2019.
FOR FURTHER INFORMATION CONTACT: Denise Brown, Enforcement Programs and
Services, Office of Regulatory Affairs, Bureau of Alcohol, Tobacco,
Firearms, and Explosives, U.S. Department of Justice, 99 New York
Avenue NE, Washington, DC 20226; telephone: (202) 648-7070.
SUPPLEMENTARY INFORMATION:
I. Background
The Attorney General has delegated to the Director of ATF
responsibility for administering and enforcing title I of the Gun
Control Act of 1968 (GCA), Public Law 90-618, as amended, 18 U.S.C.
chapter 44, relating to commerce in firearms and ammunition; and title
XI, Regulation of Explosives, of the Organized Crime Control Act of
1970 (OCCA), Public Law 91-452, as amended, 18 U.S.C. chapter 40. See
18 U.S.C. 926(a); 18 U.S.C. 843; 28 CFR 0.130. Under the GCA, ATF has
the authority to license applicants, renew licenses, and revoke Federal
firearms licenses. 18 U.S.C. 923. The OCCA, as amended by the Safe
Explosives Act, title XI, subtitle C of Public Law 107-296, the
Homeland Security Act of 2002 (enacted November 25, 2002), authorizes
ATF to provide licenses and permits to qualified applicants for the
acquisition, distribution, storage, or use of explosive materials and
to renew or revoke such licenses and permits. 18 U.S.C. 843.
A. Rules of Practice in Permit Proceedings (27 CFR Part 71)
On November 25, 2002, President George W. Bush signed the Homeland
Security Act of 2002, Public Law 107-296 (the Act), which divided the
regulatory functions of the Bureau of Alcohol, Tobacco, and Firearms
into two separate agencies. The Act renamed the Bureau of Alcohol,
Tobacco, and Firearms as the Bureau of Alcohol, Tobacco, Firearms, and
Explosives and transferred law enforcement and certain regulatory
functions to the Department of Justice. The Act also retained in the
Department of the Treasury (Treasury) certain functions of the former
Bureau of Alcohol, Tobacco, and Firearms. The functions retained by
Treasury became the responsibility of a new Alcohol and Tobacco Tax and
Trade Bureau (TTB). As a result of the Act, TTB has all regulatory
authority under 27 CFR part 71 and ATF therefore cannot promulgate new
regulations under that part, although ATF has continued to follow the
procedures set forth in part 71 to administer hearings related to the
application and revocation of Federal explosives licenses and permits.
See 28 CFR 0.133(a)(2).
B. License Proceedings (27 CFR Part 478)
Regulations that implement the provisions of the GCA are set forth
in 27 CFR part 478. Subpart E of part 478 relates to proceedings
involving Federal firearms licensees, including the denial, suspension,
or revocation of licenses and the imposition of civil fines.
Specifically, 27 CFR 478.76 provides that, at a hearing for the
disapproval of applications for firearms licenses, for the denial,
suspension, or revocation of a firearms license, or for imposition of a
civil fine under Federal firearms law, an applicant or licensee may be
represented by an attorney, a certified public accountant, or any other
person recognized to practice before ATF as provided in 31 CFR part 8,
if the representative complies with the applicable practice
requirements of 26 CFR 601.521 through 601.527.
C. License and Permit Proceedings (27 CFR Part 555)
The regulations that implement OCCA procedural and substantive
requirements are found in 27 CFR part 555. Subpart E of part 555
relates to proceedings involving Federal explosives licensees and
permittees, including the denial of an initial application, denial of a
renewal, and revocation of a license or permit. Specifically, 27 CFR
555.78 provides that, at a hearing for the disapproval of applications
for explosives licenses, and for the denial of renewal or revocation of
such licenses or permits under Federal explosives law, an applicant,
licensee, or permittee may be represented by an attorney, a certified
public accountant, or any other person recognized to practice before
ATF as provided in 31 CFR part 8, if the representative complies with
the applicable practice requirements of 26 CFR 601.521 through 601.527.
II. Notice of Proposed Rulemaking
On October 7, 2014, the Department of Justice published a notice of
proposed rulemaking with a request for comments entitled, ``Rules of
Practice in Explosives License and Permit Proceedings (2007R-5P);
Revisions Reflecting Changes Consistent with the Homeland Security Act
of 2002.'' 79 FR 60391-60405. The proposed rule sought to revise ATF
regulations to add a new part that implements 18 U.S.C. 843 and 847
relating to the procedures and practice for the denials of initial
applications, denials of renewal, and revocations of explosives
licenses or permits by ATF under Federal explosives law. Additionally,
the proposed rule sought to make minor revisions to regulations
governing administrative proceedings related to the denial, suspension,
or revocation of a license, and the imposition of a civil fine under
Federal firearms law to reference regulations under ATF authority.
These changes clarify ATF's role in explosives license proceedings and
remove references to any regulations outside the scope of ATF's
authority.
Comments on the notice of proposed rulemaking were to be submitted
to ATF on or before January 5, 2015.
III. Comment Analysis and Department Response
Comments Received
In response to the notice of proposed rulemaking, ATF received two
comments. One commenter is an explosive and fertilizer trade
association; and the other is a university student. Both commenters
support ATF's proposal to transfer and consolidate regulations
governing explosives license applications and renewals or revocation of
licenses and
[[Page 64742]]
permits, improving the enforcement of ATF's regulations.
One of the commenters, the Institute of Makers of Explosives (IME),
notes that the creation of a new part 771 addresses jurisdictional and
authority issues within ATF. IME agrees that ATF should maintain
jurisdiction for all explosives programs and since the regulatory
authority over part 71 resides with another agency, ATF should
promulgate new regulations affecting the procedures for hearings that
it is responsible for conducting. IME further states: ``If promulgated,
the new Part will bring all administrative and enforcement
responsibilities connected with the explosives licensing and permitting
program under the jurisdiction of ATF and will allow the Bureau,
itself, to affect any necessary changes to the procedural rules
governing its due process proceedings.'' Further, IME agrees with ATF's
clarification of 27 CFR 555.78 that will allow for self-representation
in licensing and permit hearings conducted by ATF.
The second commenter, a student, generally supports the rule
because the proscribed regulation changes will not hurt the economy but
rather ``help[s] the economy, productivity, competition, jobs, the
environment, public health or safety, State, local, or tribal
government and communities.'' The same commenter further notes that the
rule gives every person the right to due process if their application
has been denied for a firearm.
Department Response
The Department agrees that by promulgating regulations in a new
part, 27 CFR part 771, ATF will be able to better govern and administer
explosives license and permit proceedings that come under its
jurisdiction.
IV. Final Rule
This final rule implements the amendments to the regulations in 27
CFR 478.76, 555.73, 555.75, 555.78, 555.79, 555.82, and adds new part
771, as specified in the notice of proposed rulemaking published on
October 7, 2014 (79 FR 60391-60405). Additionally, this final rule
includes some minor technical amendments. First, in 27 CFR 771.5, the
definition of ``Application'' is amended to include renewal
applications and the definition of ``Person'' is amended to include
``company.'' Second, Sec. 771.59, which governs an initial application
for a license or permit, is amended to eliminate the statement that a
request for hearing should include a statement of the reasons for a
hearing; this change makes this provision consistent with the
requirements for an existing Federal explosive licensee requesting a
hearing in Sec. 771.60. Third, Sec. Sec. 771.59 and 771.60 are
amended to add that the licensee or permittee will receive notice of
the assignment of an administrative law judge (ALJ) by the Director of
Industry Operations (DIO), if the ALJ has not already provided such
notice; this clarifies that the ALJ will often provide this
notification but the DIO must provide this notice if not already
provided by the ALJ. Fourth, a reference to Sec. 771.59 is added in
Sec. 771.64, which concerns part of the process following a request
for a hearing, to reflect the fact that requests for a hearing can be
made as a result of denial of an initial application in addition to the
revocation or denial of a renewal application. Fifth, Sec. 771.82 is
amended to include a statement that the Federal Rules of Evidence are
not binding on these proceedings, and to include a reference to expert
testimony and the relevant Federal Rule of Evidence in Sec. 771.82(a).
These changes are necessary to clarify what is admissible in a hearing
and to clarify that both opinion and expert testimony shall be admitted
in a hearing when the ALJ is satisfied that the witness is properly
qualified pursuant to Federal Rules of Evidence 701 or 702. Sixth,
Sec. 771.95, which governs the responsibilities of an ALJ, is amended
to eliminate the sentence that ALJs shall be under the administrative
control of the Director. This sentence addresses the responsibilities
of the Director and not the responsibilities of the ALJs. Therefore,
the sentence is unnecessary as to the responsibilities of the ALJ and
confusing as to application. Seventh, Sec. 771.97(k), which authorizes
the ALJ to take any action authorized by an ATF rule and consistent
with the Administrative Procedure Act, is amended to add a cross-
reference to ATF's authority concerning licenses and permits, 18 U.S.C.
843, and the provision of the Administrative Procedure Act setting out
authority for individuals presiding over agency hearings, 5 U.S.C.
556(c). Eighth, the final rule amends 27 CFR 771.99 to state that
disorderly or contemptuous language or conduct by an attorney (either
for a licensee or permittee or for the Government), may be reported to
the Department of Justice, Office of Professional Responsibility,
consistent with 28 CFR 0.39a(a)(9). Finally, other changes eliminate
superfluous language or correct stylistic errors.
V. Statutory and Executive Order Review
A. Executive Order 12866, 13563, and 13771
This final rule has been drafted and reviewed in accordance with
Executive Order 12866, ``Regulatory Planning and Review,'' section
1(b), The Principles of Regulation; Executive Order 13563, ``Improving
Regulation and Regulatory Review,'' section 1(b), General Principles of
Regulation, and section 6, Retrospective Analyses of Existing Rules;
and Executive Order 13771, ``Reducing Regulation and Controlling
Regulatory Costs.''
Both Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. This rule consolidates and clarifies regulations governing
explosives license application renewal or revocation of licenses and
permits. This rule would not add any costs to industry because this
rule puts into regulation current industry and agency practices;
therefore, the explosives industry would not need to incur any hourly
or capital burdens in order to comply with this final rule. The
Department has assessed the costs and benefits of this regulation and
believes that the regulatory approach selected imposes no new
regulatory costs and maximizes net benefits.
This final rule will not have an annual effect on the economy of
$100 million or more, nor will it adversely affect in a material way
the economy, a sector of the economy, productivity, competition, jobs,
the environment, public health or safety, or State, local, or tribal
government or communities. Similarly, it does not create a serious
inconsistency or otherwise interfere with an action taken or planned by
another agency, materially alter the budgetary impact of entitlements,
grants, user fees, or loan programs or the rights and obligations of
recipients thereof, or raise novel legal or policy issues arising out
of legal mandates, the President's priorities, or the principles set
forth in Executive Order 12866. The Department has determined that this
final rule is not a ``significant regulatory action'' as defined in
Executive Order 12866, section 3(f). Accordingly, this
[[Page 64743]]
final rule has not been reviewed by the Office of Management and Budget
(OMB).
Because this rule is not significant under Executive Order 12866,
this action is not subject to Executive Order 13771, ``Reducing
Regulations and Controlling Regulatory Costs.''
Section 6 of Executive Order 13563 directs agencies to develop a
plan to review existing significant rules that may be ``outmoded,
ineffective, insufficient, or excessively burdensome,'' and to make
appropriate changes where warranted. The Department selected and
reviewed this rule under the criteria set forth in its Plan for
Retrospective Analysis of Existing Rules, and determined that this rule
merely transfers and consolidates regulations governing explosives
license application renewal or revocation of licenses and permits,
improving the enforcement of ATF regulations.
B. Executive Order 13132
This final rule will not have substantial direct effects on the
States, on the relationship between the Federal Government and the
States, or on the distribution of power and responsibilities among the
various levels of government. Therefore, in accordance with section 6
of Executive Order 13132, ``Federalism,'' the Attorney General has
determined that this final rule does not have sufficient federalism
implications to warrant the preparation of a federalism summary impact
statement.
C. Executive Order 12988
This final rule meets the applicable standards set forth in
sections 3(a) and 3(b)(2) of Executive Order 12988, ``Civil Justice
Reform.''
D. Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 605(b)) exempts an agency
from the requirement to conduct a regulatory flexibility analysis of
any rule subject to notice and comment rulemaking requirements if the
agency certifies that the rule will not have a significant economic
impact on a substantial number of small entities. Small entities
include small businesses, small not-for-profit enterprises, and small
governmental jurisdictions. The Attorney General has reviewed this
final rule and, by approving it, certifies that it will not have a
significant economic impact on a substantial number of small entities.
This final rule codifies the ATF regulations governing the
procedure and practice for denying applications, denying renewals, and
revoking explosives licenses or permits under Federal explosives law in
a new part 771 under ATF's regulatory authority. Additionally, this
final rule updates the regulations governing the denial, suspension, or
revocation of a firearms license, and imposition of a civil fine under
Federal firearms law to only reference regulations under ATF authority.
This rule also amends the regulations to require an applicant or
licensee in a proceeding concerning the denial, suspension, or
revocation of a firearms license, or the imposition of a civil fine
under Federal firearms law, to file a duly executed power of attorney
designating his representative, and waivers, if applicable, under the
Privacy Act of 1974. See 5 U.S.C. 552(a), and 26 U.S.C. 6103(c)
(confidentiality and disclosure of returns and return information).
This is required in the current regulations by reference to 31 CFR part
8 and 26 CFR 601.521 through 601.527. The changes in this final rule
are purely administrative and do not add any new requirements that
would have any impact on the economy.
E. Small Business Regulatory Enforcement Fairness Act of 1996
This final rule is not a major rule as defined by section 251 of
the Small Business Regulatory Enforcement Fairness Act of 1996. See 5
U.S.C. 804. This final rule will not result in an annual effect on the
economy of $100 million or more; a major increase in costs or prices;
or significant adverse effects on competition, employment, investment,
productivity, innovation, or on the ability of United States-based
enterprises to compete with foreign-based enterprises in domestic and
export markets.
F. Unfunded Mandates Reform Act of 1995
This final rule will not result in the expenditure by State, local,
and tribal governments, in the aggregate, or by the private sector, of
$100 million or more in any one year, and it will not significantly or
uniquely affect small governments. Therefore, no actions were deemed
necessary under the provisions of the Unfunded Mandates Reform Act of
1995.
G. Paperwork Reduction Act
This final rule does not impose any new reporting or recordkeeping
requirements under the Paperwork Reduction Act of 1995.
Drafting Information
The author of this document is Denise Brown; Enforcement Programs
and Services; Office of Regulatory Affairs, Bureau of Alcohol, Tobacco,
Firearms, and Explosives.
List of Subjects
27 CFR Part 478
Administrative practice and procedure, Arms and munitions, Customs
duties and inspection, Exports, Imports, Intergovernmental relations,
Law enforcement officers, Military personnel, Penalties, Reporting and
recordkeeping requirements, Research, Seizures and forfeitures,
Transportation.
27 CFR Part 555
Administrative practice and procedure, Customs duties and
inspection, Explosives, Hazardous substances, Imports, Penalties,
Reporting and recordkeeping requirements, Safety, Security measures,
Seizures and forfeitures, Transportation, Warehouses.
27 CFR Part 771
Administrative practice and procedure, Explosives.
Authority and Issuance
Accordingly, for reasons discussed in the preamble, 27 CFR chapter
II is amended as follows:
PART 478--COMMERCE IN FIREARMS AND AMMUNITION
0
1. The authority citation for 27 part 478 continues to read as follows:
Authority: 5 U.S.C. 552(a); 18 U.S.C. 921-931; 44 U.S.C.
3504(h).
0
2. Revise Sec. 478.76 to read as follows:
Sec. 478.76 Representation at a hearing.
Applicants or licensees may represent themselves or be represented
by an attorney, a certified public accountant, or any other person,
specifically designated in a duly executed power of attorney that shall
be filed in the proceeding by the applicant or licensee. The applicant
or licensee shall file waivers, if applicable, under the Privacy Act of
1974 and 26 U.S.C. 6103(c) (confidentiality and disclosure of returns
and return information). The Director of Industry Operations may be
represented in proceedings under Sec. Sec. 478.72 and 478.74 by an
attorney in the Office of Chief Counsel who is authorized to execute
and file motions, briefs, and other papers in the proceeding, on behalf
of the Director of Industry Operations, in the attorney's own name as
``Attorney for the Government.''
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PART 555--COMMERCE IN EXPLOSIVES
0
3. The authority citation for 27 CFR part 555 continues to read as
follows:
Authority: 18 U.S.C. 847.
Sec. 555.73 [Amended]
0
4. Amend Sec. 555.73 by removing ``part 71'' and adding in its place
``part 771''.
Sec. 555.75 [Amended]
0
5. Amend Sec. 555.75 by removing ``part 71'' and adding in its place
``part 771''.
0
6. Revise Sec. 555.78 to read as follows:
Sec. 555.78 Representation at a hearing.
An applicant, licensee, or permittee may represent himself, or be
represented by an attorney, a certified public accountant, or any other
person, specifically designated in a duly executed power of attorney
that shall be filed in the proceeding by the applicant, licensee, or
permittee. The applicant, licensee, or permittee shall file waivers, if
applicable, under the Privacy Act of 1974 and 26 U.S.C. 6103(c)
(confidentiality and disclosure of returns and return information). The
Director of Industry Operations may be represented in proceedings under
Sec. Sec. 555.73 and 555.75 by an attorney in the Office of Chief
Counsel who is authorized to execute and file motions, briefs and other
papers in the proceeding, on behalf of the Director of Industry
Operations, in the attorney's own name as ``Attorney for the
Government.''
Sec. 555.79 [Amended]
0
7. Amend Sec. 555.79 by removing ``(a)'', ``(b)'', and ``(c)'' and
removing ``part 71'' and adding in its place ``part 771''.
0
8. Revise Sec. 555.82 to read as follows:
Sec. 555.82 Rules of practice in license and permit proceedings.
Regulations governing the procedure and practice for disapproval of
applications for explosives licenses and permits and for the denial of
renewal or revocation of such licenses and permits under the Act are
contained in part 771 of this chapter.
0
9. Add subchapter E, consisting of part 771, to read as follows:
SUBCHAPTER E--EXPLOSIVE LICENSE AND PERMIT PROCEEDINGS
PART 771--RULES OF PRACTICE IN EXPLOSIVE LICENSE AND PERMIT
PROCEEDINGS
Subpart A--Scope and Construction of Regulations
Sec.
771.1 Scope of part.
771.2 Liberal construction.
771.3 Forms prescribed.
Subpart B--Definitions
771.5 Meaning of terms.
Subpart C--General
771.25 Communications and pleadings.
771.26 Service on applicant, licensee, or permittee.
771.27 Service on the Director of Industry Operations or Director.
Time
771.28 Computation.
771.29 Continuances and extensions.
Representation at Hearings
771.30 Personal representation.
771.31 Attorneys and other representatives.
Subpart D--Compliance and Settlement
771.35 Opportunity for compliance.
771.36 Settlement.
771.37 Notice of contemplated action.
771.38 Licensee's or permittee's failure to meet requirements within
reasonable time.
771.39 Authority of Director of Industry Operations to proceed with
revocation or denial action.
Subpart E--Revocation or Denial
771.40 Denial of initial application.
771.41 Denial of renewal application or revocation of license or
permit.
771.42 Grounds for revocation of licenses or permits.
771.43 Grounds for denial of applications for licenses or permits.
Subpart F--Hearing Procedure
Notices
771.55 Content.
771.56 Forms.
771.57 Execution and disposition.
771.58 Designated place of hearing.
Request for Hearing
771.59 Initial application proceedings.
771.60 Revocation or denial of renewal proceedings.
771.61 Notice of hearing.
Non-Request for Hearing
771.62 Initial application.
771.63 Revocation or denial of renewal.
Responses to Notices
771.64 Answers.
771.65 Responses admitting facts.
771.66 Initial conferences.
Failure to Appear
771.67 Initial applications.
771.68 Revocation or denial of renewal.
Waiver of Hearing
771.69 Withdrawal of request for hearing.
771.70 Adjudication based upon written submissions.
Surrender of License or Permit
771.71 Before citation.
771.72 After citation.
Motions
771.73 General.
771.74 Prior to hearing.
771.75 At hearing.
Hearing
771.76 General.
771.77 Initial applications.
771.78 Revocation or denial of renewal.
Burden of Proof
771.79 Initial applications.
771.80 Revocation or denial of renewal.
General
771.81 Stipulations at hearing.
771.82 Evidence.
771.83 Closing of hearings; arguments, briefs, and proposed
findings.
771.84 Reopening of the hearing.
Record of Testimony
771.85 Stenographic record.
771.86 Oath of reporter.
Subpart G--Administrative Law Judges
771.95 Responsibilities of administrative law judges.
771.96 Disqualification.
771.97 Powers.
771.98 Separation of functions.
771.99 Conduct of hearing.
771.100 Unavailability of administrative law judge.
Subpart H--Decisions
771.105 Administrative law judge's findings and recommended
decision.
771.106 Certification and transmittal of record and decision.
Action by Director of Industry Operations
771.107 Initial application proceedings.
771.108 Director of Industry Operations' decision.
771.109 Revocation or denial of renewal proceedings.
771.110 Revocation or denial of renewal.
771.111 Proceedings involving violations not within the division of
issuance of license or permit.
Subpart I--Review
771.120 Appeal on petition to the Director.
771.121 Review by Director.
771.122 Denial of renewal or revocation.
771.123 Court review.
Subpart J--Miscellaneous
771.124 Depositions.
771.125 Witnesses and fees.
771.126 Discovery.
771.127 Privileges.
Record
771.135 What constitutes record.
771.136 Availability.
Authority: 18 U.S.C. 843, 847.
Subpart A--Scope and Construction of Regulations
Sec. 771.1 Scope of part.
Regulations in this part govern procedures and practices for
disapproving applications for licenses and permits and denying renewal
of or revocation of such licenses or permits under 18 U.S.C. chapter
40.
[[Page 64745]]
Sec. 771.2 Liberal construction.
Regulations in this part shall be liberally construed to secure
just, expeditious, and efficient determination of the issues presented.
The Rules of Civil Procedure for the U.S. District Courts (28 U.S.C.
appendix) are not controlling, but may act as a guide in any situation
not provided for or controlled by this part and shall be liberally
construed or relaxed when necessary.
Sec. 771.3 Forms prescribed.
(a) The Director is authorized to prescribe all forms required by
this part. All of the information called for in each form shall be
furnished as indicated by the headings on the form and the instructions
on or pertaining to the form. In addition, information called for in
each form shall be furnished as required by this part.
(b) Requests for forms should be made to the ATF Distribution
Center or through the ATF website at http://www.atf.gov.
Subpart B--Definitions
Sec. 771.5 Meaning of terms.
When used in this part and in forms prescribed under this part,
where not otherwise distinctly expressed or manifestly incompatible
with the intent thereof, terms shall have the meaning provided in this
subpart. Words in the plural form shall include the singular, and vice
versa, and words importing the masculine gender shall include the
feminine.
Administrative law judge. The person appointed pursuant to 5 U.S.C.
3105, designated to preside over any administrative proceedings under
this part.
Applicant. Any person who has filed an application for a license or
permit under 18 U.S.C. chapter 40.
Application. Any application for a license or permit, including
renewal applications, under 18 U.S.C. chapter 40.
ATF. The Bureau of Alcohol, Tobacco, Firearms, and Explosives,
Department of Justice.
Attorney for the Government. An attorney in the ATF Office of Chief
Counsel authorized to represent the Director of Industry Operations in
the proceeding.
CFR. The Code of Federal Regulations.
Contemplated notice. Includes any notice contemplating the
revocation or denial of renewal of a license or permit.
Director. The Director, Bureau of Alcohol, Tobacco, Firearms, and
Explosives, Department of Justice.
Director of Industry Operations. The principal ATF official in a
Field Operations division responsible for administering regulations in
this part.
Ex parte communication. An oral or written communication not on the
public record with respect to which reasonable prior notice to all
parties is not given, but not including requests for status reports.
Initial decision. The decision of the Director of Industry
Operations in a proceeding concerning the revocation of, denial of
renewal of, or denial of application for a license or permit. This
decision becomes the agency's final decision in the absence of an
appeal.
Final decision. The definitive decision of ATF, e.g., the agency's
decision in the absence of an appeal or the Director's decision
following an appeal to the Director.
License. Subject to applicable law, entitles the licensee to
transport, ship, and receive explosive materials in interstate or
foreign commerce, and to engage in the business specified by the
license, at the location described on the license.
Licensee. Any importer, manufacturer, or dealer licensed under the
provisions of 18 U.S.C. chapter 40 and 27 CFR part 555.
Limited permit. A permit issued to a person authorizing him to
receive for his use explosive materials from a licensee or permittee in
his State of residence on no more than six occasions during the 12-
month period in which the permit is valid. A limited permit does not
authorize the receipt or transportation of explosive materials in
interstate or foreign commerce.
Other term. Any other term defined in the Federal explosives laws
(18 U.S.C. chapter 40), the regulations promulgated thereunder (27 CFR
part 555), or the Administrative Procedure Act (5 U.S.C. 551 et seq.),
where used in this part, shall have the meaning assigned to it therein.
Permittee. Any user of explosives for a lawful purpose who has
obtained either a user permit or a limited permit under 18 U.S.C.
chapter 40 and 27 CFR part 555.
Person. Any individual, corporation, company, association, firm,
partnership, society, or joint stock company.
Recommended decision. The advisory decision of the administrative
law judge in any proceeding regarding the revocation of, denial of
renewal of, or denial of application for a license or permit. ATF must
act on a recommended decision with its own initial or final decision.
User-limited permit. A user permit valid only for a single purchase
transaction. Recipients of a user-limited permit must obtain a new
permit for any subsequent purchase transaction.
User permit. A permit issued to a person authorizing him to--
(1) Acquire for his own use explosive materials from a licensee in
a State other than the State in which he resides or from a foreign
country; and
(2) Transport explosive materials in interstate or foreign
commerce.
Willfulness. The plain indifference to, or purposeful disregard of,
a known legal duty. Willfulness may be demonstrated by, but does not
require, repeat violations involving a known legal duty.
Subpart C--General
Sec. 771.25 Communications and pleadings.
(a) All communications to the Government regarding the procedures
set forth in this part and all pleadings, such as answers, motions,
requests, or other papers or documents required or permitted to be
filed under this part, relating to a proceeding pending before an
administrative law judge, shall be addressed to the administrative law
judge at his post of duty and the Attorney for the Government.
Communications concerning proceedings not pending before an
administrative law judge should be addressed to the Director of
Industry Operations or Director, as the case may be.
(b) Except to the extent required for the disposition of ex parte
matters as authorized by law, no ex parte communications shall be made
to or from the administrative law judge concerning the merits of the
adjudication. If the administrative law judge receives or makes an ex
parte communication not authorized by law, the administrative law judge
shall place on the record of the proceeding:
(1) All such written communications;
(2) Memoranda stating the substance of all such oral
communications; and
(3) All written responses and memoranda stating the substance of
all oral responses to paragraphs (b)(1) and (2) of this section.
Sec. 771.26 Service on applicant, licensee, or permittee.
All orders, notices, motions, and other formal documents required
to be served under the regulations in this part may be served by
mailing a signed, original copy thereof to the designated
representative of the applicant, licensee, or permittee by certified
mail, with request for return receipt card, at the representative's
business address, by personal service, or as otherwise agreed
[[Page 64746]]
to by the parties. If the applicant, licensee, or permittee has not yet
designated a representative, all orders, notices, motions, and other
formal documents required to be served under the regulations in this
part may be served by mailing a signed, original copy thereof to the
applicant, licensee, or permittee at the address stated on his
application, license, or permit, or at his last known address, or by
delivery of such original copy to the applicant, licensee, or permittee
personally, or in the case of a corporation, partnership, or other
unincorporated association, by delivering the same to an officer, or
manager, or general agent thereof, or to its attorney of record. Such
personal service may be made by any employee of the Department of
Justice designated by the Attorney General or by any employee of ATF. A
certificate of mailing and the return receipt card, or certificate of
service signed by the person making such service, shall be filed as a
part of the record.
Sec. 771.27 Service on the Director of Industry Operations or
Director.
Pleadings, motions, notices, and other formal documents may be
served by certified mail, by personal service, or as otherwise agreed
to by the parties, on the Director of Industry Operations (or upon the
Attorney for the Government on behalf of the Director of Industry
Operations), or on the Director, if the proceeding is before him for
review on appeal.
Time
Sec. 771.28 Computation.
In computing any period of time prescribed or allowed by this part,
the day of the act, event, or default after which the designated period
of time is to run is not to be included. The last day of the period to
be computed is to be included, unless it is a Saturday, Sunday, or
Federal holiday, in which event the period runs until the next day that
is not a Saturday, Sunday, or Federal holiday. Pleadings, requests, or
other papers or documents required or permitted to be filed under this
part must be received for filing at the appropriate office within the
time limits, if any, for such filing.
Sec. 771.29 Continuances and extensions.
For good cause shown, the administrative law judge, Director, or
Director of Industry Operations, as the case may be, may grant
continuances and, as to all matters pending before him, extend any time
limit prescribed by the regulations in this part (except where the time
limit is statutory).
Representation at Hearings
Sec. 771.30 Personal representation.
Any individual or member of a partnership may appear for himself,
or for such partnership, and a corporation or association may be
represented by a bona fide officer of such corporation or association,
upon showing of adequate authorization.
Sec. 771.31 Attorneys and other representatives.
An applicant, licensee, or permittee may represent himself, or be
represented by an attorney, a certified public accountant, or any other
person, specifically designated in a duly executed power of attorney
that shall be filed in the proceeding by the applicant, licensee, or
permittee. The applicant, licensee, or permittee shall file waivers, if
applicable, under the Privacy Act of 1974 and 26 U.S.C. 6103(c)
(confidentiality and disclosure of returns and return information). The
Director of Industry Operations may be represented in proceedings by an
attorney in the Office of Chief Counsel who is authorized to execute
and file motions, briefs, and other papers in the proceeding on behalf
of the Director of Industry Operations, in the attorney's own name as
``Attorney for the Government.''
Subpart D--Compliance and Settlement
Sec. 771.35 Opportunity for compliance.
No license or permit shall be revoked or denied renewal unless,
prior to the institution of proceedings, facts or conduct warranting
such action shall have been called to the attention of the licensee or
permittee by the Director of Industry Operations in writing in a
contemplated notice, and the licensee or permittee shall have been
accorded an opportunity to demonstrate or achieve compliance with all
lawful requirements as set forth in section 9(b) of the Administrative
Procedure Act. In cases in which the Director of Industry Operations
alleges in his contemplated notice, with supporting reasons, willful
violations or that the public interest requires otherwise, this section
does not apply and the issuance of a contemplated notice is
unnecessary.
Sec. 771.36 Settlement.
Any proposals of settlement should be made to the Director of
Industry Operations, but may be made through the Attorney for the
Government. Where necessary, the date of the hearing may be postponed
pending consideration of such proposals when they are made in good
faith and not for the purpose of delay. If proposals of settlement are
submitted, and they are considered unsatisfactory, the Director of
Industry Operations may reject the proposals and may, either directly
or through the Attorney for the Government, inform the licensee or
permittee of any conditions on which the alleged violations may be
settled. If the proposals of settlement are considered satisfactory to
the Director of Industry Operations, the licensee or permittee shall be
notified thereof and the proceeding shall be dismissed.
Sec. 771.37 Notice of contemplated action.
Where the Director of Industry Operations has not ascertained
whether the licensee or permittee has willfully violated the Federal
explosives laws and where he believes the matter has the potential to
be settled informally, i.e., without formal administrative proceedings,
he shall, in accordance with section 5(b) of the Administrative
Procedure Act, prior to the issuance of a notice of revocation or
denial of renewal, give the licensee or permittee a contemplated notice
of such action and an opportunity to show why the license or permit
should not be revoked or denied renewal. The notice should inform the
licensee or permittee of the charges on which the notice would be
based, if issued, and afford him a period of 15 days from the date of
the notice, or such longer period as the Director of Industry
Operations deems necessary, in which to submit proposals of settlement
to the Director of Industry Operations. Where informal settlement is
not reached promptly because of inaction by the applicant, licensee, or
permittee or proposals are made for the purpose of delay, a notice
shall be issued in accordance with Sec. 771.42 or Sec. 771.43, as
appropriate. The issuance of a notice of contemplated action does not
entitle the recipient to a hearing before an administrative law judge.
Sec. 771.38 Licensee's or permittee's failure to meet requirements
within reasonable time.
If the licensee or permittee fails to meet the requirements of
applicable laws and regulations in this part within such reasonable
time as may be specified by the Director of Industry Operations,
proceedings for revocation or denial of renewal of the license or
permit shall be initiated.
Sec. 771.39 Authority of Director of Industry Operations to proceed
with revocation or denial action.
Where the evidence is conclusive and the nature of the violation is
such as to preclude any settlement, the violation is of a continuing
character that necessitates immediate action to protect
[[Page 64747]]
the public interest, or the Director of Industry Operations believes
that any informal settlement of the alleged violation will not ensure
future compliance with applicable laws and regulations in this part, or
in any similar case where the circumstances are such as to clearly
preclude informal settlement, and the Director of Industry Operations
so finds and states the reasons therefor in the notice, the Director of
Industry Operations may proceed with the revocation or denial of
renewal.
Subpart E--Revocation or Denial
Sec. 771.40 Denial of initial application.
Whenever the Director of Industry Operations has reason to believe
that an applicant for an original license or permit is not eligible to
receive a license or permit under the provisions of Sec. 555.49 of
this chapter, the Director of Industry Operations shall issue a notice
of denial on ATF Form 5400.11 (Notice of Denial of Application for
License or Permit) (F 5400.11). The notice will set forth the matters
of fact and law relied upon in determining that the application should
be denied and will afford the applicant 15 days from the date of
receipt of the notice in which to request a hearing to review the
denial. If no request for a hearing is filed within that time, a copy
of the application, marked ``Disapproved,'' will be returned to the
applicant.
Sec. 771.41 Denial of renewal application or revocation of license
or permit.
If, following the opportunity for compliance under Sec. 555.71 of
this chapter, or without opportunity for compliance under Sec. 555.71
of this chapter as circumstances warrant, the Director of Industry
Operations finds that the licensee or permittee is not likely to comply
with applicable laws or regulations in this part or is otherwise not
eligible to continue operations authorized under his license or permit,
the Director of Industry Operations shall issue a notice of denial of
the renewal application or revocation of the license or permit, ATF F
5400.11 (Notice of Denial of Application for License or Permit) or ATF
Form 5400.10 (Notice of Revocation of License or Permit) (F 5400.10),
as appropriate. The notice will set forth the matters of fact
constituting the violations specified, dates, places, and the sections
of law and regulations violated. In the case of the revocation of a
license or permit, the notice will specify the date on which the action
is effective, which date will be on or after the date the notice is
served on the licensee or permittee. The notice will also advise the
licensee or permittee that he may, within 15 days after receipt of the
notice, request a hearing and, if applicable, a stay of the effective
date of the revocation of his license or permit.
Sec. 771.42 Grounds for revocation of licenses or permits.
Whenever the Director of Industry Operations has reason to believe
that any holder of a license or permit has willfully violated any
provision of 18 U.S.C. chapter 40 or 27 CFR part 555 or has become
ineligible to continue operations authorized under the license or
permit, the Director of Industry Operations shall issue a notice for
the revocation of such license or permit, as the case may be.
Sec. 771.43 Grounds for denial of applications for licenses or
permits.
If, upon examination of any application (including a renewal
application) for a license or permit, the Director of Industry
Operations has reason to believe that the applicant is not entitled to
such license or permit, the Director of Industry Operations shall issue
a denial of the application. An applicant is not eligible for a license
or permit if he fails to meet the requirements of 18 U.S.C. 843(b) and
Sec. 555.49 of this chapter.
Subpart F--Hearing Procedure
Notices
Sec. 771.55 Content.
(a) Notices for the revocation or denial of renewal of a license or
permit shall be promptly issued by the Director of Industry Operations
and shall set forth:
(1) The sections of law and regulations relied upon for authority
and jurisdiction;
(2) The specific grounds upon which the revocation or denial is
based, i.e., the matters of fact constituting the violations specified,
dates, places, and sections of law and regulations violated;
(3) In the case of a revocation, the date on which the action is
effective; and
(4) That the licensee or permittee has 15 days from receipt of the
notice within which to request a hearing before an administrative law
judge.
(b) Notices for the denial of an initial application for a license
or permit shall set forth:
(1) The sections of law and regulations relied upon for authority
and jurisdiction;
(2) The specific grounds upon which the denial is based, i.e., the
matters of fact and law relied upon for the disapproval of the
application; and
(3) That the application will be disapproved unless a hearing is
requested within 15 days from receipt of the notice.
Sec. 771.56 Forms.
Notices shall be issued on the following forms:
(a) ATF Form 5400.9, ``Order After Denial or Revocation Hearing,''
for all revocations or denials of renewal of licenses or permits
pursuant to 18 U.S.C. chapter 40 after a hearing has been held and a
Recommended Decision has been issued by the administrative law judge;
(b) Form 5400.10, ``Notice of Revocation for License or Permit,''
for all revocations of licenses or permits pursuant to 18 U.S.C.
chapter 40, except as provided for in paragraph (a) of this section;
(c) Form 5400.11, ``Notice of Denial of Application for License or
Permit,'' for the denial of renewal or original applications for
licenses or permits pursuant to 18 U.S.C. chapter 40, except as
provided for in paragraph (a) of this section;
(d) Form 5400.12, ``Notice of Contemplated Denial or Revocation of
License or Permit,'' for the contemplated revocation or denial of
renewal application of licenses or permits pursuant to 18 U.S.C.
chapter 40; or
(e) Such other forms as the Director may prescribe.
Sec. 771.57 Execution and disposition.
A signed original of the applicable form shall be served on the
licensee or permittee. If a hearing is requested, a copy shall be sent
to the administrative law judge designated to conduct the hearing. Any
remaining copies shall be retained for the office of the Director of
Industry Operations.
Sec. 771.58 Designated place of hearing.
The designated place of hearing shall be determined by the
administrative law judge, taking into consideration the convenience and
necessity of the parties and their representatives.
Request for Hearing
Sec. 771.59 Initial application proceedings.
(a) If the applicant for an initial license or permit desires a
hearing, he shall file a request in writing with the Director of
Industry Operations within 15 days after receipt of notice of the
disapproval, in whole or in part, of the application.
(b) On receipt of the request, the Director of Industry Operations
shall forward a copy of the request, together with a copy of the
notice, to the Office of Chief Counsel for the assignment of an
administrative law judge.
[[Page 64748]]
(c) After the Office of Chief Counsel notifies the Director of
Industry Operations or the Attorney for the Government of the
assignment of an administrative law judge, the Director of Industry
Operations shall notify the licensee or permittee of the assignment, if
the administrative law judge has not already done so.
Sec. 771.60 Revocation or denial of renewal proceedings.
(a) If the licensee or permittee desires a hearing, he shall file a
request, in writing, with the Director of Industry Operations within 15
days after receipt of the notice or within such time as the Director of
Industry Operations may allow.
(b) Where a licensee or permittee requests a hearing, the Director
of Industry Operations shall forward a copy of the request, together
with a copy of the notice, to the Office of Chief Counsel for the
assignment of an administrative law judge.
(c) After the Office of Chief Counsel notifies the Director of
Industry Operations or the Attorney for the Government of the
assignment of an administrative law judge, the Director of Industry
Operations shall notify the licensee or permittee of the assignment, if
the administrative law judge has not already done so.
(d) In the case of a revocation, a licensee or permittee may
include a request for a stay of the effective date of revocation with
the request for a hearing.
(e) On receipt of a request for a stay of the effective date of a
revocation, the Director of Industry Operations shall timely advise the
licensee or permittee whether the stay is granted.
(1) If the stay is granted, the matter shall be referred to an
administrative law judge pursuant to paragraph (b) of this section.
(2) If the stay is denied, the licensee or permittee may request an
immediate hearing. In this event, the Director of Industry Operations
shall immediately refer the matter to the Office of Chief Counsel for
the assignment of an administrative law judge, who shall set a date and
place for hearing, which date shall be no later than 10 days from the
date the licensee or permittee requested the immediate hearing.
Sec. 771.61 Notice of hearing.
Once a request for a hearing has been referred to the
administrative law judge, the administrative law judge shall set a time
and place for a hearing and shall serve notice thereof upon the parties
at least 10 days in advance of the hearing date.
Non-Request for Hearing
Sec. 771.62 Initial application.
In the case of an initial application, if the applicant does not
request a hearing within 15 days, or within such additional time as the
Director of Industry Operations may in his discretion allow, the
Director of Industry Operations will return a copy of the application,
marked ``Disapproved,'' to the applicant, accompanied by a brief
statement including the findings upon which the denial is based.
Sec. 771.63 Revocation or denial of renewal.
In the case of a revocation or denial of renewal of an application,
if the licensee or permittee does not request a hearing within 15 days,
or within such additional time as the Director of Industry Operations
may in his discretion allow, the Director of Industry Operations shall
make the initial decision in the case pursuant to Sec. 771.78(b).
Responses to Notices
Sec. 771.64 Answers.
(a) Where the licensee or permittee requests a hearing in
accordance with Sec. Sec. 771.59 and 771.60, a written response to the
relevant notice may be filed with the administrative law judge and
served on the Director of Industry Operations within 15 days after the
licensee or permittee receives service of the designation of the
administrative law judge.
(b) Where no hearing is requested, the licensee or permittee may
file a written answer to the relevant notice with the Director of
Industry Operations within 15 days after service of the notice.
(c) An answer shall contain a concise statement of the facts that
constitute the grounds for defense. A hearing, if requested, may be
limited to the issues contained in the notice and the answer. The
administrative law judge or Director of Industry Operations, as the
case may be, may, as a matter of discretion, waive any requirement of
this section.
(d) Answers need not be filed in initial application proceedings.
Sec. 771.65 Responses admitting facts.
If the licensee or permittee desires to waive the hearing on the
allegations of fact set forth in the notice and does not contest the
facts, the answer may consist of a statement that the licensee or
permittee admits all material allegations of fact charged in the notice
to be true. The Director of Industry Operations shall base the decision
on the notice and such answer, although such an answer shall not affect
the licensee's or permittee's right to submit proposed findings of fact
and conclusions of law or right to appeal.
Sec. 771.66 Initial conferences.
(a) In any proceeding, the administrative law judge, upon his own
motion or upon the motion of one of the parties or their qualified
representatives, may in the administrative law judge's discretion
direct the parties or their qualified representatives to appear at a
specified time and place for a conference to consider:
(1) Simplification of the issues;
(2) The necessity of amendments to the pleadings;
(3) The possibility of obtaining stipulations, admissions of facts,
and documents;
(4) The possibility of both parties exchanging information or
scheduling discovery;
(5) A date on which both parties will simultaneously submit lists
of proposed hearing exhibits;
(6) Limiting the number of expert witnesses;
(7) Identifying and, if practicable, scheduling all witnesses to be
called; however, there is no requirement in these proceedings for the
parties to submit pre-hearing statements or statements of proposed
testimony by witnesses; and
(8) Such other matters as may aid in the disposition of the
proceeding.
(b) As soon as practicable after such conference, the
administrative law judge shall issue an order that recites the action
taken, the amendments allowed to the pleadings, and the agreements made
by the parties or their qualified representatives as to any of the
matters considered. The order shall also limit the issues for hearing
to those not disposed of by admission or agreement. Such order shall
control the subsequent course of the proceedings, unless modified for
good cause by a subsequent order. After discovery is complete, the
order may be amended or supplemented if necessary.
Failure To Appear
Sec. 771.67 Initial applications.
Where the applicant on an initial application for a license or
permit has requested a hearing and does not appear at the appointed
time and place, evidence has not been offered to refute or explain the
grounds upon which disapproval of the application is contemplated, and
no good cause has been shown for the failure to appear, the applicant
shall be considered to have waived the hearing. When such waiver
occurs, a default judgment against the applicant will be entered and
the
[[Page 64749]]
administrative law judge shall recommend disapproval of said
application.
Sec. 771.68 Revocation or denial of renewal.
If, on the date set for a hearing concerning the revocation or
denial of renewal of a license or permit, the licensee or permittee
does not appear, no evidence has been offered, and no good cause has
been shown for the failure to appear, the Attorney for the Government
will proceed ex parte and offer for the record sufficient evidence to
make a prima facie case. At such hearing, documents, statements, and
affidavits may be submitted in lieu of testimony of witnesses.
Waiver of Hearing
Sec. 771.69 Withdrawal of request for hearing.
At any time prior to the assignment of an administrative law judge,
the licensee or permittee may, by filing written notice with the
Director of Industry Operations, withdraw his request for a hearing. If
such a notice is filed after assignment to the administrative law judge
and prior to issuance of his recommended decision the Director of
Industry Operations shall move the administrative law judge to dismiss
the proceedings as moot. If such a notice is filed either after
issuance of a notice of denial or notice of revocation and before
assignment of the administrative law judge, or after issuance by the
administrative law judge of his recommended decision and prior to the
Director of Industry Operations' order disapproving the application or
denying the renewal of or revoking the license or permit, the Director
of Industry Operations shall, by order, dismiss the proceeding.
Sec. 771.70 Adjudication based upon written submissions.
The licensee or permittee may waive the hearing before the
administrative law judge and stipulate that the matter will be
adjudicated by the Director of Industry Operations based upon written
submissions. Written submissions may include stipulations of law or
facts, proposed findings of fact and conclusions of law, briefs, or any
other documentary material. The pleadings, together with the written
submissions of both the licensee or permittee and the attorney for the
Government, shall constitute the record on which the initial decision
shall be based. The election to contest the denial or revocation
without a hearing under this section does not affect the licensee's or
permittee's right to appeal to the Director pursuant to Sec. 555.79 of
this chapter or to the United States Court of Appeals for the circuit
in which the licensee or permittee resides or has his principle place
of business pursuant to Sec. 555.80 of this chapter.
Surrender of License or Permit
Sec. 771.71 Before citation.
If a licensee or permittee surrenders the license or permit before
the notice of revocation or denial of renewal, the Director of Industry
Operations may accept the surrender. But if the evidence, in the
opinion of the Director of Industry Operations, warrants issuance of a
notice for revocation or denial of renewal, the surrender shall be
refused and the Director of Industry Operations shall issue the notice.
Sec. 771.72 After citation.
If a licensee or permittee surrenders the license or permit after
notice, but prior to the referral to an administrative law judge and
prior to an initial decision, the Director of Industry Operations may
accept the surrender of the license or permit and dismiss the
proceeding as moot. If a licensee or permittee surrenders the license
or permit after notice and after the referral to the administrative law
judge, but prior to the issuance of a recommended decision, the
Director of Industry Operations may accept the surrender of the license
or permit and shall move the administrative law judge to dismiss the
proceedings as moot. In either case, if, in the opinion of the Director
of Industry Operations, the evidence is such as to warrant revocation
or denial of renewal, as the case may be, the surrender of the license
or permit shall be refused, and the proceeding shall continue.
Motions
Sec. 771.73 General.
All motions shall be made and addressed to the administrative law
judge before whom the proceeding is pending, and copies of all motion
papers shall be served upon the other party or parties. The
administrative law judge may dispose of any motion without oral
argument, but he may, if he so desires, set it down for hearing and
request argument. The administrative law judge may dispose of such
motion prior to the hearing on the merits or he may postpone the
disposition until the hearing on the merits. No appeal may be taken
from any ruling on a motion until the whole record is certified for
review. Examples of typical motions may be found in the Rules of Civil
Procedure referred to in Sec. 771.2.
Sec. 771.74 Prior to hearing.
All motions that should be made prior to the hearing, such as a
motion directed to the sufficiency of the pleadings or of preliminary
orders, shall be filed in writing with the Director of Industry
Operations or the administrative law judge if the matter has been
referred to him, and shall briefly state the order or relief applied
for and the grounds for such motion.
Sec. 771.75 At hearing.
Motions at the hearing may be made in writing to the administrative
law judge or stated orally on the record.
Hearing
Sec. 771.76 General.
If a hearing is requested, it shall be held at the time and place
stated in the notice of hearing unless otherwise ordered by the
administrative law judge.
Sec. 771.77 Initial applications.
(a) The administrative law judge who presides at the hearing on
initial applications shall recommend a decision to the Director of
Industry Operations. The administrative law judge shall certify the
complete record of the proceedings before him and shall immediately
forward the complete certified record to the Director of Industry
Operations. The administrative law judge shall also send one copy of
his recommended decision to the applicant or the applicant's
representative, one copy to the Attorney for the Government, and one
copy to the Director of Industry Operations, who shall make the initial
decision as provided in Sec. 771.107. The applicant may be directed by
the Director of Industry Operations to produce such records as may be
deemed necessary for examination. All hearings on applications shall be
open to the public subject to such restrictions and limitations as may
be consistent with orderly procedure.
(b) If no hearing is requested, the return of the application
marked ``Disapproved'' is the Director of Industry Operations' initial
decision.
Sec. 771.78 Revocation or denial of renewal.
(a) The administrative law judge who presides at the hearing in
proceedings for the revocation or denial of renewal of licenses or
permits shall make a recommended decision to the Director of Industry
Operations. The administrative law judge shall certify the complete
record of the proceedings before him and shall immediately forward the
complete certified record to the Director of Industry Operations. The
administrative law judge shall also send
[[Page 64750]]
one copy of his recommended decision to the licensee or permittee or
the licensee's or permittee's representative, one copy to the Attorney
for the Government, and one copy to the Director of Industry
Operations, who shall make the initial decision as provided in Sec.
771.109.
(b) If no hearing is requested, the Director of Industry Operations
shall make the initial decision.
Burden of Proof
Sec. 771.79 Initial applications.
In hearings on the initial denial of applications, the burden of
proof is on the Government to show by a preponderance of the evidence
that the Director of Industry Operations had reason to believe that the
applicant is not entitled to a permit or license.
Sec. 771.80 Revocation or denial of renewal.
In hearings on the revocation or denial of renewal of a license or
permit, the burden of proof is on the Government to show that the
Director of Industry Operations had reason to believe that the licensee
or permittee is not entitled to a permit or license, as may be the
case. The Government must meet this proof by a preponderance of the
evidence.
General
Sec. 771.81 Stipulations at hearing.
If there has been no initial conference under Sec. 771.66, the
administrative law judge may at the beginning of the hearing require
that the parties attempt to arrive at such stipulations as will
eliminate the necessity of taking evidence with respect to allegations
of fact about which there is no substantial dispute. The administrative
law judge should take similar action, where appropriate, throughout the
hearing and should call and conduct any conferences that he deems
advisable with a view to the simplification, clarification, and
disposition of any of the issues involved in the hearing.
Sec. 771.82 Evidence.
The Federal Rules of Evidence are not binding on these proceedings.
However, any relevant evidence that would be admissible under the rules
of evidence governing civil proceedings in matters not involving trial
by jury in the Courts of the United States shall be admissible. The
administrative law judge may relax such rules in any hearing when in
his judgment such relaxation would not impair the rights of either
party and would more speedily conclude the hearing or would better
serve the ends of justice. However, the administrative law judge shall
provide for the exclusion of irrelevant, immaterial, or unduly
repetitious evidence. Every party shall have the right to present his
case or defense by oral or documentary evidence, depositions, or duly
authenticated copies of records and documents; to submit rebuttal
evidence; and to conduct such reasonable cross-examination as may be
required for a full and true disclosure of the facts.
(a) Witnesses. The administrative law judge shall have the right in
his discretion to limit the number of witnesses whose testimony may be
merely cumulative and shall, as a matter of policy, not only exclude
irrelevant, immaterial, or unduly repetitious evidence but shall also
limit the cross-examination of witnesses to that required for a full
and true disclosure of the facts so as not to unnecessarily prolong the
hearing and unduly burden the record. Opinion or expert testimony shall
be admitted when the administrative law judge is satisfied that the
witness is properly qualified as defined by Federal Rules of Evidence
701 or 702.
(b) Documentary evidence. Material and relevant evidence shall not
be excluded because it is not the best evidence unless its authenticity
is challenged, in which case reasonable time shall be given to
establish its authenticity. When only portions of a document are to be
relied upon, the offering party shall prepare the pertinent excerpts,
adequately identified, and shall supply copies of such excerpts,
together with a statement indicating the purpose for which such
materials will be offered, to the administrative law judge and to the
other parties. Only the excerpts, so prepared and submitted, shall be
received in the record. However, the whole of the original document
should be made available for examination and for use by opposing
counsel for purposes of cross-examination. Compilations, charts,
summaries of data, and photocopies of documents may be admitted in
evidence if the proceedings will thereby be expedited, and if the
material upon which they are based is available for examination by the
parties. Objections to the evidence shall be in short form, stating the
grounds relied upon. The transcript shall not include argument or
debate on objections, except as ordered by the administrative law
judge, but shall include the rulings thereon. Where official notice is
taken of a material fact not appearing in the evidence in the record,
any party shall, on timely request, be afforded an opportunity to
controvert such fact.
(c) Hearsay. Probative, material, and reliable hearsay evidence is
admissible in proceedings under this subpart.
Sec. 771.83 Closing of hearings; arguments, briefs, and proposed
findings.
Before closing a hearing, the administrative law judge shall
inquire of each party whether the party has any further evidence to
offer, which inquiry and the response thereto shall be shown in the
record. The administrative law judge may hear arguments of counsel and
the administrative law judge may limit the time of such arguments at
his discretion. The administrative law judge may, in his discretion,
allow briefs to be filed on behalf of either party but shall closely
limit the time within which the briefs for both parties shall be filed,
so as to avoid unreasonable delay. The administrative law judge shall
also ascertain whether the parties desire to submit proposed findings
and conclusions, together with supporting reasons, and, if so, a period
of not more than 15 days (unless extended by the administrative law
judge)--after the close of the hearing or receipt of a copy of the
record, if one is requested--will be allowed for such purpose.
Sec. 771.84 Reopening of the hearing.
The Director, the Director of Industry Operations, or the
administrative law judge, as the case may be, may, as to all matters
pending before him, in his discretion reopen a hearing--
(a) In case of default under Sec. 771.67 or Sec. 771.68 where the
applicant, licensee, or permittee failed to request a hearing or to
appear after one was set, upon petition setting forth reasonable
grounds for such failure; and
(b) Where any party desires leave to adduce additional evidence
upon petition summarizing such evidence, establishing its materiality,
and stating reasonable grounds why such party with due diligence was
unable to produce such evidence at the hearing.
Record of Testimony
Sec. 771.85 Stenographic record.
A stenographic record shall be made of the testimony and
proceedings, including stipulations, admissions of fact, and arguments
of counsel in all proceedings. A transcript of the evidence and
proceedings at the hearing shall be made in all cases.
Sec. 771.86 Oath of reporter.
The reporter making the stenographic record shall subscribe an oath
before the administrative law judge, to be filed in the record of the
case, that he will truly and correctly report the oral testimony and
proceedings at such hearing and
[[Page 64751]]
accurately transcribe the same to the best of his ability.
Subpart G--Administrative Law Judges
Sec. 771.95 Responsibilities of administrative law judges.
In hearings under this subpart, administrative law judges must
apply all governing agency rulings and governing agency precedent. They
shall be responsible for the conduct of hearings and shall render their
decisions as soon as is reasonably possible after the hearing is
closed. Administrative law judges shall also be responsible for the
preparation, certification, and forwarding of the complete record of
proceedings and the administrative work relating thereto and, by
arrangement with Directors of Industry Operations and representatives
of the Office of Chief Counsel shall have access to facilities and
temporary use of personnel at such times and places as are needed in
the prompt dispatch of official business.
Sec. 771.96 Disqualification.
An administrative law judge shall, at any time, withdraw from any
proceeding if he deems himself disqualified. Upon the filing in good
faith by the applicant, licensee, permittee, or Attorney for the
Government of a timely and sufficient affidavit of facts showing
personal bias or otherwise warranting the disqualification of any
administrative law judge, if the administrative law judge fails to
disqualify himself, the Director shall upon appeal, as provided in
Sec. 771.120, determine the matter as a part of the record and
decision in the proceeding. If the Director decides the administrative
law judge should have deemed himself disqualified, the Director will
remand the record for hearing de novo before another administrative law
judge. If the Director should decide against the disqualification of
the administrative law judge, the proceeding will be reviewed on its
merits by the original administrative law judge. The burden is upon the
party seeking disqualification to set forth evidence sufficient to
overcome the presumption of the administrative law judge's honesty and
integrity.
Sec. 771.97 Powers.
Administrative law judges shall have authority to:
(a) Administer oaths and affirmations;
(b) Issue subpoenas as authorized by law;
(c) Rule upon offers of proof and receive relevant evidence;
(d) Take or cause depositions to be taken whenever the ends of
justice would be served thereby;
(e) Regulate the course of the hearing;
(f) Hold conferences for the settlement or simplification of the
issues by consent of the parties;
(g) Require the attendance at such conferences of at least one
representative of each party who has the authority to negotiate
concerning resolution of issues in controversy;
(h) Dispose of procedural requests or similar matters;
(i) Render recommended decisions in proceedings on applications for
licenses and permits and on revocation or denial of renewal of licenses
or permits;
(j) Call, examine, and cross-examine witnesses, including hostile
or adverse witnesses, when the administrative law judge deems such
action to be necessary to a just disposition of the case, and introduce
into the record documentary or other evidence; and
(k) Take any other action authorized by rule of the Bureau of
Alcohol, Tobacco, Firearms, and Explosives consistent with the
Administrative Procedure Act. See 5 U.S.C. 556(c) and 18 U.S.C. 843.
Sec. 771.98 Separation of functions.
Administrative law judges shall perform no functions inconsistent
with their duties and responsibilities. The Director may assign
administrative law judges duties not inconsistent with the performance
of their functions as administrative law judges. Except to the extent
required for the disposition of ex parte matters as required by law, no
administrative law judge shall consult any person or party as to any
fact in issue unless there has been notice and opportunity for all
parties to participate. The functions of the administrative law judge
shall be entirely separated from the general investigative functions of
the agency. No officer, employee, or agent engaged in the performance
of investigative or prosecuting functions in any proceeding shall, in
that proceeding or a factually related proceeding, participate or
advise in the administrative law judge's or Director's decision, or in
the agency review on appeal, except as a witness or counsel in the
proceedings. The administrative law judge may not informally obtain
advice or opinions from the parties or their counsel, or from any
officer or employee of the ATF, as to the facts or the weight or
interpretation to be given to the evidence. The administrative law
judge may, however, informally obtain advice on matters of law or
procedure in a proceeding from officers or employees who were not
engaged in the performance of investigative or prosecuting functions in
that proceeding or a factually related proceeding. The administrative
law judge may, at any time, consult with and obtain instructions from
the Director on questions of law and policy. Furthermore, it is not a
violation of the separation of functions for the administrative law
judge to participate in the questioning of witnesses, where the
questioning is for clarification or to move the proceedings along, and
where the questioning is not so extensive as to place the
administrative law judge in the position of a prosecuting officer.
Sec. 771.99 Conduct of hearing.
The administrative law judge is charged with the duty of conducting
a fair and impartial hearing and of maintaining order in form and
manner consistent with the dignity of a court proceeding. In the event
that counsel or any person or witness in any proceeding shall refuse to
obey the orders of the administrative law judge, or be guilty of
disorderly or contemptuous language or conduct in connection with any
hearing, the administrative law judge may, for good cause stated in the
record, suspend the hearing, and, in the case of disorderly or
contemptuous language or conduct by an attorney, report the matter to
the Department of Justice, Office of Professional Responsibility. See
28 CFR 0.39a(a)(9). The refusal of a witness to answer any question
that has been ruled to be proper shall be considered by the
administrative law judge in determining the weight to be given all the
testimony of that witness.
Sec. 771.100 Unavailability of administrative law judge.
In the event that the administrative law judge designated to
conduct a hearing becomes unavailable before the filing of his findings
and recommended decision, the Director may assign the case to another
administrative law judge for the continuance of the proceeding, in
accordance with the regulations in this part in the same manner as if
he had been designated administrative law judge at the commencement of
the proceeding.
Subpart H--Decisions
Sec. 771.105 Administrative law judge's findings and recommended
decision.
Within a reasonable time after the conclusion of the hearing, and
as expeditiously as possible, the administrative law judge shall render
his recommended decision. All decisions shall become a part of the
record and, if proposed findings and conclusions have been filed, shall
show
[[Page 64752]]
the administrative law judge's ruling upon each of such proposed
findings and conclusions. Decisions shall consist of:
(a) A brief statement of the issues of fact involved in the
proceeding;
(b) The administrative law judge's findings and conclusions, as
well as the reasons or basis therefor with record references, upon all
the material issues of fact, law, or discretion presented on the record
(including, when appropriate, comment as to the credibility and
demeanor of the witnesses); and
(c) The administrative law judge's recommended determination as to
the revocation or denial at issue.
Sec. 771.106 Certification and transmittal of record and decision.
After reaching his decision, the administrative law judge shall
certify the complete record of the proceeding before him and shall
immediately forward the complete certified record together with one
copy of the administrative law judge's recommended decision to the
Director of Industry Operations for initial decision, one copy of the
recommended decision to the applicant or the applicant's
representative, and one copy of the recommended decision to the
Attorney for the Government.
Action by Director of Industry Operations
Sec. 771.107 Initial application proceedings.
(a) Accepting the recommended decision. If the Director of Industry
Operations, after consideration of the record of the hearing and of any
proposed findings, conclusions, or exceptions filed with him by the
applicant, accepts the recommended decision of the administrative law
judge, the Director of Industry Operations shall by order approve or
disapprove of the application in accordance with the recommended
decision. If the Director of Industry Operations approves the
application, he shall briefly state for the record his reasons
therefor. However, if the Director of Industry Operations disapproves
of the applications, he shall serve a copy of the administrative law
judge's recommended decision on the applicant, informing the applicant
of the Director of Industry Operations' contemplated action and
affording the applicant not more than 10 days in which to submit
proposed findings and conclusions or exceptions to the recommended
decision with reasons in support thereof.
(b) Rejecting the recommended decision. If, after such
consideration referenced in paragraph (a) of this section, the Director
of Industry Operations rejects the recommended decision of the
administrative law judge, in whole or in part, the Director of Industry
Operations shall by order make such findings and conclusions as in his
opinion are warranted by the law and facts in the record. Any decision
of the Director of Industry Operations ordering the disapproval of an
application for a permit shall state the findings and conclusions upon
which it is based, including his ruling upon each proposed finding,
conclusion, and exception to the administrative law judge's recommended
decision, together with a statement of the administrative law judge's
findings, conclusions, and reasons or basis therefor, upon all material
issues of fact, law, or discretion presented on the record. A signed
original of the decision of the Director of Industry Operations shall
be served upon the applicant and the original copy containing a
certificate of service shall be placed in the official record of the
proceeding.
Sec. 771.108 Director of Industry Operations' decision.
When the Director of Industry Operations issues an initial decision
in accordance with Sec. 771.77 or Sec. 771.107 the decision shall
become a part of the record. The decision shall consist of:
(a) A brief statement of the issues involved in the proceedings;
(b) The Director of Industry Operations' findings and conclusions,
as well as the reasons therefor; and
(c) The Director of Industry Operations' determination on the
record.
Sec. 771.109 Revocation or denial of renewal proceedings.
(a) Accepting the recommended decision. After consideration of the
complete certified record of the hearing, if the Director of Industry
Operations agrees with the recommended decision of the administrative
law judge, the Director of Industry Operations shall enter an order
revoking or denying the renewal of the license or permit or dismissing
the proceedings in accordance with the administrative law judge's
recommended decision.
(b) Rejecting the recommended decision. After consideration of the
complete certified record of the hearing, if the Director of Industry
Operations disagrees with the recommended decision of the
administrative law judge, he may file a petition with the Director for
review of the recommended decision, as provided in Sec. 771.120. If
the Director of Industry Operations files such a petition, he shall
withhold issuance of the order pending the decision of the Director,
upon receipt of which he shall issue the order in accordance with the
Director's decision. A signed original of the order of the Director of
Industry Operations shall be served upon the licensee or permittee or
his representative and the original copy containing a certificate of
service shall be placed in the official record of the proceeding.
(c) Decisions pursuant to Sec. 771.78(b). In a case where the
initial decision is made by the Director of Industry Operations in
accordance with Sec. 771.78(b), the Director of Industry Operations
shall also issue an order revoking or denying the renewal of the
license or permit, or dismissing the proceedings in accordance with his
initial decision. A signed original of the decision and order of the
Director of Industry Operations shall be served upon the licensee or
permittee or his representative and the original copy placed in the
official record of the proceeding.
Sec. 771.110 Revocation or denial of renewal.
Pursuant to Sec. 771.109(a), when the Director of Industry
Operations issues an order revoking or denying the renewal of a license
or permit, he shall furnish a copy of the order and of the recommended
decision on which it is based to the Director. Should such order be
subsequently set aside on review by the courts, the Director of
Industry Operations will so advise the Director.
Sec. 771.111 Proceedings involving violations not within the division
of issuance of license or permit.
In the event violations occurred at a place not within the field
division where the licensee or permittee is located, the Director of
Industry Operations of the field division where the licensee or
permittee is located will take jurisdiction over any proceeding and
will take appropriate action in accordance with this subpart, including
issuing the relevant notice.
Subpart I--Review
Sec. 771.120 Appeal on petition to the Director.
(a) An appeal to the Director may be made by the applicant,
licensee, or permittee, or by the Director of Industry Operations
(DIO). For the applicant, licensee, or permittee, such appeal shall be
made by filing a petition for review on appeal with the Director within
15 days of the service of the adverse initial decision by the Director
of Industry Operations. For the Director of Industry Operations, such
appeal shall be taken
[[Page 64753]]
by filing a petition for review on appeal with the Director within 15
days of the issuance of the administrative law judge's decision
recommending against revocation or denial of renewal. The petitioning
applicant, licensee, or permittee must submit arguments showing that
the Director of Industry Operations' initial decision, and if
applicable the underlying administrative law judge's recommended
decision, was without reasonable warrant in fact or contrary to law and
regulations. The petitioning DIO must submit arguments showing the
administrative law judge's recommended decision was without reasonable
warrant in fact or contrary to law and regulations. Nothing in this
part shall limit the authority of the Director to review the
administrative law judge's decision exercising all the powers that he
would have in making the recommended decision.
(b) A copy of the petition shall be filed with the Director of
Industry Operations or served on the applicant, licensee, or permittee,
as the case may be. In the event of an appeal, the Director of Industry
Operations shall immediately certify and forward the complete original
record, by certified mail, to the Director, for his consideration and
review.
Sec. 771.121 Review by Director.
(a) Modification or reversal. On appeal, the Director shall afford
a reasonable opportunity for the submission of proposed findings,
conclusions, or exceptions with reasons in support thereof and an
opportunity for oral argument. The Director may alter or modify any
finding of the administrative law judge (or of the Director of Industry
Operations as the case may be) and may affirm, reverse, or modify the
recommended decision of the administrative law judge, or the initial
decision of the Director of Industry Operations, or may remand the case
for further hearing, but shall not consider evidence that is not a part
of the record.
(b) Affirmance. Except in the case of a remand, when, on appeal,
the Director affirms the initial decision of the Director of Industry
Operations or the recommended decision of the administrative law judge,
as the case may be, such decision shall be the agency's final decision.
(c) Recusal. Appeals and petitions for review shall not be decided
by the Director in any proceeding in which the Director has engaged in
an investigation or prosecution and in such event the Director shall so
state his disqualification in writing and refer the record to the
Deputy Director for appropriate action. The Deputy Director may
designate an Assistant Director or one of the Deputy Director's
principal aides to consider any proceeding instead of the Director. The
original copy of the decision on review shall be placed in the official
record of the proceeding, a signed duplicate original shall be served
upon the applicant, licensee, or permittee, and a copy shall be
transmitted to the Director of Industry Operations.
Sec. 771.122 Denial of renewal or revocation.
If the Director orders the denial of an application, a copy of the
application marked ``Disapproved'' will be returned to the applicant by
the Director of Industry Operations. If the Director orders a
revocation of a license of permit, any stay of revocation will be
withdrawn and the revocation will become effective upon the order of
the Director of Industry Operations. After the issuance of a denial of
a renewal application or a revocation, and pending the final
determination of a timely appeal, the licensee or permittee may
continue operations, if at all, pursuant to Sec. 555.83 of this
chapter.
Sec. 771.123 Court review.
(a) If an applicant, licensee, or permittee files an appeal in the
United States Court of Appeals for the circuit in which he resides or
has his principle place of business, within 60 days after the receipt
of the Director's decision, the Director, upon notification that an
appeal has been taken, shall prepare the record for submission to the
court in accordance with applicable court rules.
(b) If an applicant, licensee, or permittee does not seek review
with the Director, but instead seeks review within 60 days after the
receipt of the initial decision of the Director of Industry Operations
pursuant to Sec. 771.109, the Director of Industry Operations, upon
notification that an appeal has been taken, shall prepare the record
for submission to the court in accordance with applicable court rules.
The Director of Industry Operations shall notify the Director if such
an appeal is taken.
(c) The Director, or the Director of Industry Operations, as the
case may be, shall certify the correctness of the transcript of the
record, forward one copy to the attorney for the Government in the
review of the case, and file the original record of the proceedings
with the original certificate in the appropriate United States Court of
Appeals.
Subpart J--Miscellaneous
Sec. 771.124 Depositions.
The administrative law judge may take or order the taking of
depositions by either party to the proceeding at such time and place as
the administrative law judge may designate before a person having the
power to administer oaths, upon application therefor and notice to the
parties to the action. The testimony shall be reduced to writing by the
person taking the deposition, or a person under his direction, and the
deposition shall be subscribed by the deponent unless subscribing
thereof is waived in writing by the parties.
Sec. 771.125 Witnesses and fees.
Witnesses summoned before the administrative law judge may be paid
the same fees and mileage that are paid witnesses in the courts of the
United States, and witnesses whose depositions are taken and the
persons taking the same shall severally be entitled to the same fees as
are paid for like services in the courts of the United States. Witness
fees and mileage shall be paid by the party at whose instance the
witnesses appear and the person taking the deposition shall be paid by
the party at whose instance the deposition is taken.
Sec. 771.126 Discovery.
The discovery provisions of the Federal Rules of Civil Procedure
and the Federal Rules of Criminal Procedure are not controlling with
respect to agency proceedings under this part. However, fundamental
fairness requires a party be given the opportunity to know what
evidence is offered and a chance to rebut such evidence. Either party
may petition the administrative law judge for non-burdensome discovery
if the party can demonstrate that the interests of justice require
disclosure of these materials.
Sec. 771.127 Privileges.
The Administrative Procedure Act, 5 U.S.C. 559, provides that,
except as otherwise required by law, privileges relating to procedure
or evidence apply equally to agencies and persons. Therefore, an agency
may rely on judicially-approved privileges to resist production of its
files where appropriate.
Record
Sec. 771.135 What constitutes record.
The transcript of testimony, pleadings, exhibits, all papers and
requests filed in the proceeding, and all findings, decisions, and
orders, shall constitute the exclusive record. Where the decision rests
on official notice of
[[Page 64754]]
material fact not appearing in the record, the administrative law judge
shall so state in his findings and any party shall, on timely request,
be afforded an opportunity to show facts to the contrary.
Sec. 771.136 Availability.
A copy of the record shall be available for inspection or copying
by the parties to the proceedings during business hours at the office
of the administrative law judge or the Director of Industry Operations
or, pending administrative review, at the Office of the Director.
Dated: November 5, 2019.
William P. Barr,
Attorney General.
[FR Doc. 2019-24570 Filed 11-22-19; 8:45 am]
BILLING CODE 4410-FY-P