April 11, 2024 – As Renzulli Law Firm previously reported, in August 2023, the Department of Justice (“DOJ”) issued a notice and request for comments relating to proposed amendments to the Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”) regulations for the purpose of implementing the provisions of the Bipartisan Safer Communities Act (“BSCA”), which became effective June 25, 2022. These amendments primarily change various definitions that affect both individuals and licensed dealers. Attorney General Garland issued the final version of the rule on April 8, 2024, and it was submitted to the Federal Register today. The rule goes into effect 30 days after the date of publication in the Federal Register.
The final version of the rule broadens the definition of when a person is considered to be “engaged in the business” as a dealer in firearms. A person will be presumed to be engaged in the business of dealing in firearms when that person: (1) “[r]esells or offers for resale firearms, and also represents to potential buyers or otherwise demonstrates a willingness and ability to purchase and resell additional firearms (i.e., to be a source of additional firearms for resale)”; (2) “[r]epetitively purchases for the purpose of resale, or repetitively resells or offers for resale, firearms — (i) [t]hrough straw or sham businesses, or individual straw purchasers or sellers; or (ii) [t]hat cannot lawfully be purchased, received, or possessed under Federal, State, local, or Tribal law”; (3) “[r]epetitively sells or offers for resale firearms “(i) [w]ithin 30 days after the person purchased the firearms; or (ii) [w]ithin one year after the person purchased the firearms if they are — (A) [n]ew, or like new in their original packaging; or (B) [t]he same make and model, or variants thereof; (4) “[a]s a former licensee (or responsible person acting on behalf of the former licensee), resells or offers for resale to a person . . . firearms that were in the business inventory”; and (5) “[a]s a former licensee (or responsible person acting on behalf of the former licensee), resells or offers for resale firearms that were transferred to the licensee’s personal collection.”
The new rule provides several additional definitions. The new rule formally defines the term “responsible person” as it relates to a federal firearms license (“FFL”), as “[a]ny individual possessing, directly or indirectly, the power to direct or cause the direction of the management and policies of a sole proprietorship, corporation, company, partnership, or association, insofar as they pertain to firearms.” The new rule also defines the term “personal collection,” which aids in clarifying when a person is not “engaged in the business” because they make only occasional sales to enhance a personal collection (which includes for “study, comparison, exhibition . . . or for a hobby”). The new rules further address the lawful ways in which former FFL holders (or a responsible person(s) on an FFL) may liquidate business inventory upon revocation or other termination of their FFL, which is directly related to the Biden Administration’s ongoing revocation of FFLs pursuant to its zero tolerance policy.
Finally, the rule clarifies that a licensee transferring a firearm to another licensee must do so by following the verification and recordkeeping procedures in 27 C.F.R. § 478.94, rather than by using a Firearms Transaction Record, ATF Form 4473. The rule is likely to be challenged in court as exceeding the scope of authority granted to the ATF pursuant to the BSCA.
Renzulli Law Firm, LLP will continue to monitor the implementation of this rule and other firearm related statutes around the country. If you have any questions concerning the final rule, please contact John F. Renzulli or Christopher Renzulli.