H.R. 4106: Prevent Illegal Gun Sales Act

This bill, known as the Prevent Illegal Gun Sales Act, aims to strengthen regulations and oversight of licensed firearms dealers in the United States. Below are the key components of the legislation:

Increased Compliance Inspections

The bill proposes to increase the frequency of inspections that firearms dealers must undergo. Currently, inspections are limited to once a year; the legislation seeks to raise this limit to three times a year, allowing for more frequent checks on compliance with firearm laws.

Harsher Penalties for Violations

The legislation enhances the penalties imposed on licensed firearms dealers who violate regulations. Where the previous maximum penalty was one year in prison, the new amendment proposes a maximum of five years for certain offenses. This aims to hold dealers more accountable for their actions.

Recordkeeping Offenses and Serious Consequences

In cases where firearms dealers have serious recordkeeping violations that contribute to gun trafficking, the bill stipulates severe consequences. A dealer could face fines, imprisonment for up to ten years, or both if their conduct leads to significant violations.

Suspension of Licenses and Civil Penalties

The bill grants the Attorney General the authority to suspend or revoke a firearms dealer's license after a hearing if the dealer violates gun laws or fails to provide secure storage for firearms. Additionally, civil penalties of up to $10,000 per violation could be assessed against dealers for noncompliance.

Termination of Licenses for Felony Convictions

This legislation alters the conditions under which a firearms dealer's license may be terminated following a felony conviction. It allows for termination to occur immediately upon a conviction being rendered, rather than waiting for the conviction to become final.

Additional Staffing for Enforcement

The bill authorizes the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) to hire at least 80 additional personnel specifically for the purpose of conducting increased inspections as mandated by this legislation.

Inventory Requirements

Under this bill, if a dealer has unlawfully transferred firearms or if ten or more crime guns are traced back to them, the Attorney General may require the dealer to conduct a physical inventory and submit detailed records concerning their firearms inventory.

Amendments to Licensing Procedures

The legislation introduces amendments to the conditions under which firearms licenses can be issued. The Attorney General can deny a license application if it is determined that granting the license would endanger public safety or if the applicant is unlikely to comply with applicable laws.

Liability Standards Adjustments

Changes are made to liability standards, removing the requirement for 'willful' violations in specific sections. This could make it easier to hold dealers accountable for certain infractions.

Reporting to Congress

Lastly, the bill mandates that the Director of the ATF submit biennial reports to Congress regarding the implementation of this Act, including an evaluation of resources needed and recommendations for compliance improvements among firearms dealers.

Severability Clause

The bill includes a severability clause, ensuring that if any part of the Act is found to be invalid, the remaining parts will still remain in effect.

Relevant Companies

• Ruger (RGR) - As a firearms manufacturer, stricter regulations and inspections could increase compliance costs and impact operations.
• Ossur (OSS) - The company manufactures products that utilize firearms and may face changes in demand or regulation depending on the outcome of the bill.
• Axon Enterprise (AXON) - Depending on the enforcement mechanisms, changes in law enforcement practices may affect technology demand.