Firearms Retailer Code of Conduct Act of 2020

I 116TH CONGRESS 2D SESSION H. R. 7977 To require federally licensed firearms manufacturers, importers, and dealers and their employees to undergo annual training to be eligible to sell a firearm, to require a notice to be posted at retail firearms locations that describes the signs of unlawful firearms purchases, to require such licensees to maintain a minimum level of business liability insurance, and for other purposes. IN THE HOUSE OF REPRESENTATIVES AUGUST 7, 2020 Ms. MUCARSEL-POWELL (for herself, Ms. KELLY of Illinois, Mr. DEUTCH, Mr. CICILLINE, Mr. LANGEVIN, Mr. SWALWELL of California, and Mr. CROW) introduced the following bill; which was referred to the Committee on the Judiciary A BILL To require federally licensed firearms manufacturers, import- ers, and dealers and their employees to undergo annual training to be eligible to sell a firearm, to require a notice to be posted at retail firearms locations that de- scribes the signs of unlawful firearms purchases, to re- quire such licensees to maintain a minimum level of business liability insurance, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 VerDate Sep 11 2014 23:55 Aug 28, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H7977.IH H7977 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 7977 IH SECTION 1. SHORT TITLE. 1 This Act may be cited as the ‘‘Firearms Retailer 2 Code of Conduct Act of 2020’’. 3 SEC. 2. CODE OF CONDUCT FOR FIREARMS MANUFACTUR- 4 ERS, IMPORTERS, AND DEALERS. 5 (a) IN GENERAL.—Section 923 of title 18, United 6 States Code, is amended by adding at the end the fol- 7 lowing: 8 ‘‘(m)(1)(A) The Attorney General shall annually 9 make available to each licensed importer, licensed manu- 10 facturer, and licensed dealer, and each employee of such 11 a licensee who is authorized to engage in the transfer of 12 firearms or ammunition in the course of the firearms busi- 13 ness to unlicensed persons, a training course in the con- 14 duct of firearm transfers. 15 ‘‘(B) The training course shall describe Federal law 16 governing firearms transfers, and cover, at a minimum, 17 the following matters: 18 ‘‘(i) How to recognize and identify straw pur- 19 chasers and fraudulent activity. 20 ‘‘(ii) The indicators that a person is attempting 21 to purchase a firearm illegally. 22 ‘‘(iii) How to recognize and identify indicators 23 that an individual intends to use a firearm for un- 24 lawful purposes. 25 VerDate Sep 11 2014 23:55 Aug 28, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H7977.IH H7977 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 7977 IH ‘‘(iv) How to recognize and identify indicators 1 that an individual intends to use a firearm for self- 2 harm. 3 ‘‘(v) How to prevent theft or burglary of fire- 4 arms and ammunition. 5 ‘‘(vi) How to respond in the circumstances de- 6 scribed in clauses (i) through (v), and the applicable 7 reporting requirements. 8 ‘‘(vii) Other reasonable business practices that 9 the Attorney General determines will deter gun traf- 10 ficking, or deter the provision of a firearm to those 11 who indicate an intent to use a firearm for unlawful 12 purposes or for self-harm. 13 ‘‘(C) The training course shall include an examina- 14 tion with not less than 20 questions derived from the 15 course materials and intended to confirm that a course 16 participant has learned the information covered by the 17 course. To receive certification of completion of the course, 18 a participant must answer at least 70 percent of the exam- 19 ination questions correctly. 20 ‘‘(D) Not less frequently than annually, the Attorney 21 General shall review the training course materials, and re- 22 vise them as necessary. 23 ‘‘(E) On successful completion of the training course 24 by a participant— 25 VerDate Sep 11 2014 23:55 Aug 28, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H7977.IH H7977 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 7977 IH ‘‘(i) the participant shall attest to his or her 1 participation in the course; 2 ‘‘(ii) the participant shall attest to his or her 3 receipt of the course materials; 4 ‘‘(iii) if the participant is not a licensed manu- 5 facture, licensed importer, or licensed dealer, the 6 participant has submitted to the national instant 7 criminal background check system established under 8 section 103 of the Brady Handgun Violence Preven- 9 tion Act sufficient information to enable the system 10 to determine whether the participant is prohibited by 11 subsection (g) or (n) of section 922 or State law 12 from receiving a firearm; and 13 ‘‘(iv) if the system has determined that the par- 14 ticipant is not so prohibited, the Attorney General 15 shall immediately issue to the participant, through 16 United States mail or electronic means, a certificate 17 which indicates successful completion of the training 18 course and includes a unique certification number, 19 both of which shall expire 2 years after issuance un- 20 less renewed. 21 ‘‘(F) The Attorney General shall— 22 ‘‘(i) create and maintain a database which iden- 23 tifies each individual to whom such a certificate is 24 issued, the date the certificate is issued, the date the 25 VerDate Sep 11 2014 23:55 Aug 28, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H7977.IH H7977 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 7977 IH certificate expires, and the unique certification num- 1 ber on the certificate; 2 ‘‘(ii) make readily available to persons licensed 3 under this chapter and Federal, State, and local law 4 enforcement authorities, on request, the certification 5 status of current or potential employees; 6 ‘‘(iii) on a monthly basis, provide to the Bureau 7 of Alcohol, Tobacco, Firearms and Explosives a com- 8 plete list of the certificates issued under subpara- 9 graph (E) that have expired or been renewed since 10 the most recent prior provision of information, if 11 any, to the system under this clause. 12 ‘‘(G) Each licensee referred to in subparagraph (A) 13 shall keep— 14 ‘‘(i) a copy of any certificate issued to the li- 15 censee under subparagraph (E); and 16 ‘‘(ii) a copy of any such certificate issued to any 17 employee of the licensee, throughout the duration of 18 employment. 19 ‘‘(H) Beginning 545 days after the date of the enact- 20 ment of this subsection, it shall be unlawful for such a 21 licensee or an employee of such a licensee to transfer a 22 firearm or ammunition, unless the licensee or employee, 23 as the case may be, has been issued a certificate under 24 this paragraph which has not expired. 25 VerDate Sep 11 2014 23:55 Aug 28, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H7977.IH H7977 pamtmann on DSKBC07HB2PROD with BILLS 6 •HR 7977 IH ‘‘(2) In the course of firearms business with a person 1 who is not such a licensee, such a licensee— 2 ‘‘(A) shall not transfer a firearm to an indi- 3 vidual if the licensee or an employee of the licensee 4 knows or has reasonable cause to know that the in- 5 dividual is a straw purchaser or a gun trafficker; 6 ‘‘(B) shall not transfer a firearm or ammuni- 7 tion to an individual if the licensee or an employee 8 of the licensee knows or has reasonable cause to 9 know that the individual is intoxicated; 10 ‘‘(C) shall not transfer a firearm or ammunition 11 to an individual if the licensee or an employee of the 12 licensee knows or has reasonable cause to know that 13 the individual will attempt to harm the individual or 14 others with the firearm or ammunition; 15 ‘‘(D) shall not transfer a firearm to an indi- 16 vidual not paying in United States currency, unless 17 the identity of the individual matches the name on 18 the payment method used by the individual; and 19 ‘‘(E) immediately notify the Bureau of Alcohol, 20 Tobacco, Firearms and Explosives and local law en- 21 forcement authorities if the licensee or an employee 22 of the licensee knows or has reasonable cause to 23 know that the individual has engaged or attempted 24 to engage in a straw purchase or gun trafficking. 25 VerDate Sep 11 2014 23:55 Aug 28, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H7977.IH H7977 pamtmann on DSKBC07HB2PROD with BILLS 7 •HR 7977 IH ‘‘(3)(A) The Attorney General shall make available 1 to each licensee referred to in paragraph (1)(A) written 2 protocols which— 3 ‘‘(i) outline the indicators of straw purchasing 4 and gun trafficking, including the presence of a pro- 5 spective firearm transferee who— 6 ‘‘(I) is accompanied by 1 or more individ- 7 uals; 8 ‘‘(II) is communicating with other individ- 9 uals by telephone or other means; 10 ‘‘(III) is buying multiple firearms; 11 ‘‘(IV) has been the subject of a crime gun 12 trace; 13 ‘‘(V) has purchased a firearm in the pre- 14 ceding 30 days; or 15 ‘‘(VI) otherwise indicates that a firearm is 16 being obtained for another person; 17 ‘‘(ii) instruct employees to attempt to ascertain 18 whether a prospective firearm transferee is lawfully 19 purchasing a firearm, including by asking questions 20 of the prospective firearm transferee (including 21 whether he or she intends to transfer the firearm to 22 another person); and 23 VerDate Sep 11 2014 23:55 Aug 28, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H7977.IH H7977 pamtmann on DSKBC07HB2PROD with BILLS 8 •HR 7977 IH ‘‘(iii) inform employees about how to report a 1 suspected fraudulent firearm purchase to the Bu- 2 reau of Alcohol, Tobacco, Firearms and Explosives. 3 ‘‘(B) Beginning 545 days after the date of the enact- 4 ment of this subsection, each such licensee shall— 5 ‘‘(i) obtain the written protocols described in 6 subparagraph (A); and 7 ‘‘(ii) during all business hours, display the writ- 8 ten protocols at each point of sale in the firearms 9 business of the licensee, in a manner that is clearly 10 visible to all employees of the business. 11 ‘‘(4) Each licensee referred to in paragraph (1)(A) 12 of this subsection shall maintain general business and li- 13 ability insurance as described in subsection (d)(1)(F)(iv) 14 during each day of a calendar month, unless the licensee 15 has certified to the Attorney General, on the 1st day of 16 that month, that the licensee— 17 ‘‘(A) did not transfer more than 20 firearms in 18 the 12-month period that precedes the date of the 19 certification; and 20 ‘‘(B) expects to transfer not more than 20 fire- 21 arms in the 12-month period that begins with that 22 date.’’. 23 (b) DEADLINE FOR DEVELOPMENT OF FIREARM 24 TRANSFER TRAINING COURSE.—Within 180 days after 25 VerDate Sep 11 2014 23:55 Aug 28, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H7977.IH H7977 pamtmann on DSKBC07HB2PROD with BILLS 9 •HR 7977 IH the date of the enactment of this Act, the Attorney Gen- 1 eral shall develop the training course provided for in sec- 2 tion 923(m)(1) of title 18, United States Code. 3 (c) DEADLINE FOR DEVELOPMENT OF WRITTEN 4 BUSINESS PROTOCOLS FOR FIREARMS SALES.—Within 5 180 days after the date of the enactment of this Act, the 6 Attorney General shall develop the written protocols pro- 7 vided for in section 923(m)(3) of title 18, United States 8 Code. 9 (d) BUSINESS LIABILITY INSURANCE CERTIFICATION 10 REQUIRED IN APPLICATION FOR FIREARMS LICENSE.— 11 Section 923(d)(1)(F) of title 18, United States Code, is 12 amended— 13 (1) by striking ‘‘and’’ at the end of clause 14 (ii)(II); and 15 (2) by adding at the end the following: 16 ‘‘(iv) the applicant has applied for, and will 17 not conduct the business before the applicant 18 has received, a general business and liability in- 19 surance policy from an insurance company li- 20 censed to do business in the State in which the 21 licensed premises is located, which provides cov- 22 erage for damages for the negligent or unlawful 23 transfer of a firearm in an amount of at least 24 $1,000,000, unless the applicant certifies in the 25 VerDate Sep 11 2014 23:55 Aug 28, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H7977.IH H7977 pamtmann on DSKBC07HB2PROD with BILLS 10 •HR 7977 IH application that the applicant expects to trans- 1 fer to persons not licensed under this chapter 2 not more than 20 firearms per year; and’’. 3 (e) VALIDATION OF LICENSEE AND EMPLOYEE CER- 4 TIFICATIONS.—Section 922(t)(1) of such title is amend- 5 ed— 6 (1) by striking ‘‘and’’ at the end of subpara- 7 graph (B)(ii); 8 (2) by striking the period at the end of sub- 9 paragraph (C) and inserting ‘‘; and’’; and 10 (3) by adding at the end the following: 11 ‘‘(D) a unique certification number has been 12 issued to the transferor under section 13 923(m)(1)(E)(iv) and has not expired, and the 14 transferor has validated that number with the sys- 15 tem.’’. 16 SEC. 3. DEFINITIONS. 17 Section 921(a) of title 18, United States Code, is 18 amended by adding at the end the following: 19 ‘‘(36) The term ‘straw purchase’ means the purchase 20 of a firearm by an individual who conceals, or intends to 21 conceal, that the purchase is being made on behalf of a 22 third party who is identified or not yet identified. The 23 term shall not include a bona fide gift to a person who 24 is not prohibited by law from possessing or receiving a 25 VerDate Sep 11 2014 23:55 Aug 28, 2020 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H7977.IH H7977 pamtmann on DSKBC07HB2PROD with BILLS 11 •HR 7977 IH firearm. For purposes of the preceding sentence, a gift to 1 a person is not a bona fide gift if the person has offered 2 or given the purchaser a service or thing of value to ac- 3 quire the firearm for the person. 4 ‘‘(37) The term ‘straw purchaser’ means a person en- 5 gaged in a straw purchase. 6 ‘‘(38) The term ‘gun trafficking’ means the knowing 7 acquisition, transfer, or attempted acquisition or transfer 8 of a firearm for purposes of unlawful commerce by a li- 9 censed or unlicensed person.’’. 10 SEC. 4. PENALTIES. 11 Section 924 of title 18, United States Code, is 12 amended by adding at the end the following: 13 ‘‘(q)(1) With respect to each violation of subpara- 14 graph (A), (B), or (C) of section 923(m)(2), a person shall 15 be fined under this title, imprisoned not more than 18 16 months, or both. 17 ‘‘(2) With respect to each violation of section 18 923(m)(2)(D), a person shall be fined not more than 19 $2,500, imprisoned not more than 1 year, or both. 20 ‘‘(3) With respect to each violation of paragraph 21 (1)(G) or (3)(B) of section 923(m), a licenced importer, 22 licensed manufacturer or licensed dealer shall be fined not 23 more than $500. 24 VerDate Sep 11 2014 23:55 Aug 28, 2020 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H7977.IH H7977 pamtmann on DSKBC07HB2P [Text truncated for display. Full text available on Congress.gov.]