Keeping Gun Dealers Honest Act of 2021
This bill modifies the requirements and penalties applicable to an individual who engages in the business of dealing, importing, or manufacturing firearms (i.e., a federal firearms licensee, or FFL).
Among other things, the bill does the following:
To ensure greater accountability by licensed firearms dealers.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Keeping Gun Dealers Honest Act of 
2021''.

SEC. 2. INCREASING THE NUMBER OF ALLOWED COMPLIANCE INSPECTIONS OF 
              FIREARMS DEALERS.

    Section 923(g)(1)(B)(ii)(I) of title 18, United States Code, is 
amended by striking ``once'' and inserting ``3 times''.

SEC. 3. INCREASING PENALTIES ON FIREARMS LICENSEES.

    Section 924(a)(3) of title 18, United States Code, is amended in 
the matter following subparagraph (B) by striking ``one year'' and 
inserting ``5 years''.

SEC. 4. SERIOUS RECORDKEEPING OFFENSES THAT AID GUN TRAFFICKING.

    Section 924(a)(3) of title 18, United States Code, is amended by 
striking the period at the end and inserting ``. If the conduct 
described in subparagraph (A) or (B) is in relation to an offense under 
subsection (a)(6) or (d) of section 922, the licensed dealer, licensed 
importer, licensed manufacturer, or licensed collector shall be fined 
under this title, imprisoned for not more than 10 years, or both.''.

SEC. 5. SUSPENSION OF FIREARMS DEALER'S LICENSE AND CIVIL PENALTIES FOR 
              VIOLATIONS OF THE GUN CONTROL ACT.

    Section 923 of title 18, United States Code, is amended by striking 
subsections (e) and (f) and inserting the following:
    ``(e)(1)(A) The Attorney General may, after notice and opportunity 
for hearing, suspend or revoke any license issued under this section, 
or may subject the licensee to a civil penalty of not more than $10,000 
per violation, if the holder of the license--
            ``(i) has violated any provision of this chapter or any 
        rule or regulation prescribed by the Attorney General under 
        this chapter; or
            ``(ii) except as provided in subparagraph (B), fails to 
        have secure gun storage or safety devices available at any 
        place in which firearms are sold under the license to persons 
        who are not licensees.
    ``(B) Subparagraph (A)(ii) shall not apply in any case in which a 
secure gun storage or safety device is temporarily unavailable because 
of theft, casualty loss, consumer sales, backorders from a 
manufacturer, or any other similar reason beyond the control of the 
licensee.
    ``(2) The Attorney General may, after notice and opportunity for 
hearing, suspend or revoke the license of, or assess a civil penalty of 
not more than $10,000 on, a dealer who transfers armor piercing 
ammunition.
    ``(3) The Attorney General may at any time compromise, mitigate, or 
remit the liability with respect to any violation of this chapter or 
any rule or regulation prescribed by the Attorney General under this 
chapter.
    ``(4) The Attorney General's actions under this subsection may be 
reviewed only as provided in subsection (f).
    ``(f)(1) Any person whose application for a license is denied and 
any holder of a license which is suspended or revoked or who is 
assessed a civil penalty shall receive a written notice from the 
Attorney General stating specifically the grounds upon which the 
application was denied or upon which the license was suspended or 
revoked or the civil penalty assessed. Any notice of a suspension or 
revocation of a license shall be given to the holder of the license 
before the effective date of the suspension or revocation.
    ``(2) If the Attorney General denies an application for a license, 
or suspends or revokes a license, or assesses a civil penalty, the 
Attorney General shall, upon request by the aggrieved party, promptly 
hold a hearing to review the denial, suspension, revocation, or 
assessment. In the case of a suspension or revocation of a license, the 
Attorney General shall, on the request of the holder of the license, 
stay the effective date of the suspension or revocation. A hearing 
under this paragraph shall be held at a location convenient to the 
aggrieved party.
    ``(3)(A) If after a hearing held under paragraph (2) the Attorney 
General decides not to reverse the decision to deny an application or 
suspend or revoke a license or assess a civil penalty, the Attorney 
General shall give notice of the decision to the aggrieved party.
    ``(B) The aggrieved party may at any time within 60 days after the 
date notice is given under subparagraph (A) file a petition with the 
United States district court for the district in which the party 
resides or in which the party's principal place of business is located 
for a de novo judicial review of the denial, suspension, revocation, or 
assessment.
    ``(C) In a proceeding conducted under this paragraph, the court may 
consider any evidence submitted by the parties to the proceeding 
without regard to whether such evidence was considered at the hearing 
held under paragraph (2).
    ``(D) If the court decides that the Attorney General was not 
authorized to deny the application or to suspend or revoke the license 
or to assess the civil penalty, the court shall order the Attorney 
General to take such action as may be necessary to comply with the 
judgment of the court.''.

SEC. 6. TERMINATION OF FIREARMS DEALER'S LICENSE UPON FELONY 
              CONVICTION.

    Section 925(b) of title 18, United States Code, is amended by 
striking ``until any conviction pursuant to the indictment becomes 
final'' and inserting ``until the date of any conviction pursuant to 
the indictment''.

SEC. 7. AUTHORITY TO HIRE ADDITIONAL PERSONNEL.

    The Director of the Bureau of Alcohol, Tobacco, Firearms and 
Explosives may hire at least 80 additional employees for the purpose of 
carrying out additional inspections as provided for in the amendments 
made by this Act.

SEC. 8. AUTHORITY TO REQUIRE LICENSED DEALER TO CONDUCT A PHYSICAL 
              INVENTORY AND PROVIDE INVENTORY RECORD IF DEALER HAS 
              UNLAWFULLY TRANSFERRED A FIREARM OR 10 OR MORE CRIME GUNS 
              ARE TRACED TO THE DEALER.

    (a) In General.--Section 923(g)(1) of title 18, United States Code, 
is amended by adding at the end the following:
    ``(E) The Attorney General may require a licensed importer, 
licensed manufacturer, or licensed dealer to conduct a physical 
inventory of the firearms in the business inventory of the licensee, 
and provide the Attorney General with a detailed record of the physical 
inventory if--
            ``(i) the licensee has been convicted of transferring a 
        firearm unlawfully; or
            ``(ii) the Attorney General finds that 10 or more firearms 
        used in a crime under Federal, State, or local law have been 
        traced back to the licensee.''.
    (b) Conforming Amendments.--
            (1) Section 923(j) of such title is amended in the 6th 
        sentence by inserting ``, except as required under subsection 
        (g)(1)(E)'' before the period.
            (2) The matter under the heading ``salaries and expenses'' 
        under the heading ``Bureau of Alcohol, Tobacco, Firearms and 
        Explosives'' under title II of division B of the Consolidated 
        and Further Continuing Appropriations Act, 2013 (Public Law 
        113-6; 127 Stat. 247) is amended in the 5th proviso by 
        inserting ``, except as required under subsection (g)(1)(E) of 
        such section 923'' before the colon.

SEC. 9. ISSUANCE OF LICENSES.

    Section 923 of title 18, United States Code, is amended--
            (1) in subsection (c)--
                    (A) by inserting ``(1)'' before ``Upon'';
                    (B) in the first sentence, by inserting ``, subject 
                to paragraph (2),'' after ``Attorney General shall''; 
                and
                    (C) by adding at the end the following:
    ``(2) The Attorney General may deny an application submitted under 
subsection (a) or (b) if the Attorney General determines--
            ``(A) issuing the license would pose a danger to public 
        safety; or
            ``(B) that the applicant--
                    ``(i) is not likely to comply with the law; or
                    ``(ii) is otherwise not suitable to be issued a 
                license.''; and
            (2) in subsection (d)(1), in the matter preceding 
        subparagraph (A), by inserting ``, subject to subsection 
        (c)(2),'' after ``shall''.

SEC. 10. LIABILITY STANDARDS.

    Section 923 of title 18, United States Code, is amended--
            (1) in subsection (c), in the third sentence, by striking 
        ``willfully''; and
            (2) in subsection (d), by striking ``willfully'' each place 
        it appears.

SEC. 11. REGULATORY FLEXIBILITY.

    Section 926(a) of title 18, United States Code, is amended, in the 
matter preceding paragraph (1) by striking ``only''.

SEC. 12. REPORT TO THE CONGRESS.

    The Director of the Bureau of Alcohol, Tobacco, Firearms and 
Explosives shall submit biennial reports to Congress on the 
implementation of this Act and the amendments made by this Act, which 
shall include--
            (1) a statement by the Director as to what additional 
        resources, if any, are necessary in order to implement this Act 
        and the amendments made by this Act; and
            (2) any recommendations of the Director for how better to 
        ensure that--
                    (A) firearms dealers are complying with all laws 
                and regulations that apply with respect to dealing in 
                firearms; and
                    (B) noncompliant firearms dealers are subject to 
                appropriate action in a timely manner.

SEC. 13. SEVERABILITY.

    If any provision of this Act or of an amendment made by this Act, 
or the application of such a provision to any person or circumstance, 
is held to be invalid, the remainder of this Act or of such an 
amendment, or the application of this Act or of such an amendment to 
other persons or circumstances, shall not be affected.
                                 <all>
Keeping Gun Dealers Honest Act of 2021
A bill to ensure greater accountability by licensed firearms dealers.
Keeping Gun Dealers Honest Act of 2021
Sen. Markey, Edward J.