The Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) recently dropped two new proposed rules. If adopted, one will affect gun owners but the other, despite some apparent misunderstandings, probably will not. Some of the information is vague, sometimes alarmingly so, but this will at least put these proposals on your radar so you can keep up with them if necessary. Per the Administrative Procedures Act (APA), ATF must announce these proposed rules in advance and provide a 90-day public comment period. That period is open as of this writing.
Proposed Rule 1: “Definition of ‘Engaged in the Business’ as a Dealer in Firearms”
The White House announced this proposed rule on August 31, 2023. Moving past the political speak, we learn that it stems from last year’s Bipartisan Safer Communities Act (BSCA). Its purpose is to administratively “move as close to universal background checks as possible within existing law.”
In other words, the administration can’t get the misleadingly named universal background checks through Congress, so they’re doing it by changing ATF rules. The administration has employed this dubious tactic several times in the last couple of years, resulting in robust legal challenges that seem on the verge of succeeding. The courts apparently do not approve of the Executive Branch usurping the Legislative Branch’s power. Whether this rule can be similarly challenged remains to be seen.
The proposed rule aims to impose wider background check coverage by redefining who needs a Federal Firearms License to sell a gun. I won’t go into the weeds here because these provisions are still being worked out by legal experts. But I’ll list them so you get the idea of whether they might apply to you.
Proposed FFL Requirements
According to the White House, and confirmed by the ATF, the following people will be required to have a license under the new rule. It supposedly closes three alleged “loopholes” in the background check system: the “gun show loophole,” “internet loophole,” and “fire sale loophole.” Anyone who knows anything about how guns are privately bought and sold knows these are made-up terms meant to frighten the ignorant, but I digress. Under the proposed rule, you will need a license if you:
- Offer for sale any number of firearms and also represent to potential buyers that you are willing and able to purchase and sell them additional firearms.
- Repetitively offer for sale firearms within 30 days after they were purchased.
- Repetitively offer for sale firearms that are like new in their original packaging.
- Repetitively offer for sale multiple firearms of the same make and model.
- As a formerly federally licensed firearms dealer, sell firearms that were in the business inventory and not transferred to a personal collection at least a year before the sale, addressing the so-called “fire sale loophole.”
The proposed rule would also declare someone as intending to “predominantly earn a profit” through private firearms sales if that individual engages in activities such as:
- Creating a website or making business cards to advertise or market a firearms business.
- Maintaining records to document and track profits and losses from firearms purchases or sales.
- Purchasing business insurance or renting space at a gun show.
The announcement goes on to say that “The proposed rule would make clear that there is no ‘gun show loophole’ or ‘internet loophole.’” Again, those of us with actual knowledge have been saying that for years. The announcement continues, “Dealers who engage in the business of selling guns are required to obtain a license and run background checks no matter where they engage in the business of buying and selling firearms. That includes at gun shows and over the internet.”
ATF’s Implementation
The ATF states that they intend to implement the rule’s requirements by adopting the Bipartisan Safer Communities Act’s “definition of ‘predominantly earn a profit,’ creating a standalone definition of ‘terrorism,’ and amending the definitions of ‘principal objective of livelihood and profit’ and ‘engaged in the business’ to ensure each conforms with the BSCA’s statutory changes and can be relied upon by the public.”
ATF proposes to define “engaged in the business” by:
- Clarifying the definition of “dealer” and defining the terms “purchase” and “sale” as they apply to dealers.
- Clarifying when a person would not be engaged in the business of dealing in firearms as an auctioneer, or when purchasing firearms for, and selling firearms from, a personal collection.
- Setting forth conduct that is presumed to constitute “engaging in the business” of dealing in firearms and presumed to demonstrate the intent to “predominantly earn a profit” from the sale or disposition of firearms, absent reliable evidence to the contrary.
- Clarifying that the intent to “predominantly earn a profit” does not require the person to have received pecuniary gain and that intent does not have to be shown when a person purchases or sells a firearm for criminal or terrorism purposes.
- Adding a single definition for the term “personal collection, personal collection of firearms, or personal firearms collection” and adding a definition for the term “responsible person.”
- Addressing how former licensees, and responsible persons acting on behalf of former licensees, may lawfully liquidate business inventory upon revocation or other termination of their license.
- Clarifying that licensees must follow the verification and recordkeeping procedures in 27 CFR 94 and Subpart H, rather than using an ATF Form 4473 when firearms are transferred to other licensees, including transfers by a licensed sole proprietor to that person’s personal collection.
In other words, if this rule is adopted, and it will be, private firearms sales will become much more complicated. Make sure you keep up with this. Once again, the comment period is open if you wish to contribute.
Proposed Rule 2: Annual Reporting of Explosive Materials Storage Facilities to the Local Fire Authority
This one seems vague until you read the context in which it’s presented. Some social media influencers are making a big deal of it, so we’re addressing it here. A 1998 rule required people and companies who handle and store explosives to report the storage details to the local fire department. That knowledge allows firefighters responding to a call at the property to avoid explosive storage areas while fighting a fire. Lack of such knowledge cost firefighters’ lives before the rule was implemented. This new proposal merely increases the frequency that this information is reported to once per year.
There has been some alarmism regarding this proposed rule, primarily from social media, which is usually the case. After speaking to a few people in the industry, it seems to me that this proposed rule is nothing more nor less than what it purports to be. But we felt we should address it because of the uproar.
This proposed rule does not affect reloaders. Smokeless powders are included in the proposed rule, but there are exemptions. One of those exemptions is small arms ammunition and the components thereof, so shooters who reload their own ammo don’t have to worry about reporting anything. If you possess black powder, it will affect you as the 1998 rule has for the last 25 years. If you’re unsure, you should perhaps call your local fire department and ask. Since the rule is for their safety, they should be able to help you.
Final Thoughts
The proposed rule regarding who and what constitutes someone “engaged in the business” is concerning. Most of us are aware that the Biden Administration has been closing down unprecedented numbers of FFLs over the smallest infraction under their new zero tolerance policy. Even minor clerical errors have resulted in license revocation. I can’t help but think this proposed rule is more of the same. That it’s meant to end private sales at gun shows and on the internet is clear. The administration does not believe that private sales should be legal at all but has been unable to influence Congress along those lines, hence this proposal.
The rule’s stated purpose is to get as close to universal background checks as possible. But we have discussed elsewhere how such checks are unenforceable without a national firearms registry, which is explicitly forbidden. After all, how can the government tell whether guns have traded hands without knowing who had them to begin with?
That has always been the criticism of universal background checks, though gun control advocates continue to cover their ears and shout “LALALALALALA” when presented with that simple fact. It’s almost like the registry is the goal. I believe they know universal background checks will do nothing to deter crime and plan to roll out the registry as the solution. With this administration, I wouldn’t bet against it since a registry has always been a crown jewel on the gun control wish list, second only to outright confiscation. But history shows that one inevitably leads to the other.
We will see how things go. I think the proposed rule’s adoption is a foregone conclusion, despite the public comment period. That’s how the other controversial rules have gone. But I’m heartened by the success enjoyed by legal challenges to those rules. It does seem that the administration is overstepping its bounds and encroaching on the legislature’s turf. I suspect lawsuits are already being prepared for when this rule is finalized. We’ll keep you up to date on how that goes.
These proposed rules may be read and commented upon at atf.gov.
