http://frwebgate5.access.gpo.gov/cgi-bin/waisgate.cgi?WAISdocID=6630316495+0+0+0&WAISaction=retrieve
[Federal Register: August 28, 2000 (Volume 65, Number 167)]
[Proposed Rules]
[Page 52054-52056]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28au00-20]
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DEPARTMENT OF THE TREASURY
Bureau of Alcohol, Tobacco and Firearms
27 CFR Part 178
[Notice No. 902]
RIN 1512-AC08
Commerce in Firearms and Ammunition--Annual Inventory of Firearms
(99R-502P)
AGENCY: Bureau of Alcohol, Tobacco and Firearms (ATF), Treasury.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Bureau of Alcohol, Tobacco and Firearms (ATF) is proposing
to amend the regulations to require Federally licensed importers,
manufacturers, and dealers of firearms to take at least one physical
inventory each year. The proposed regulations also specify the
circumstances under which these licensees must conduct a special
physical inventory. In addition, the proposed regulations clarify that
when a firearm is stolen or lost in transit between licensees, for
reporting purposes it is considered stolen or lost from the
transferor's/sender's inventory.
DATES: Written comments must be received on or before November 27,
2000.
ADDRESSES: Send written comments to: Chief, Regulations Division;
Bureau of Alcohol, Tobacco and Firearms; P.O. Box 50221; Washington, DC
20091-0221; ATTN: Notice No. 902. Written comments must be signed.
Submit e-mail comments to: nprm@atfhq.atf.treas.gov. E-mail comments
must contain your name, mailing address, and e-mail address. They must
also reference this notice number and be legible when printed on not
more than three pages 8\1/2\" × 11" in size. We will treat e-mail
as originals and we will not acknowledge receipt of e-mail. See the
Public Participation section of this notice for alternative means of
providing written comments.
FOR FURTHER INFORMATION CONTACT: James P. Ficaretta, Regulations
Division, Bureau of Alcohol, Tobacco and Firearms, 650 Massachusetts
Avenue, NW., Washington, DC 20226 (202-927-8230).
SUPPLEMENTARY INFORMATION:
Background
Section 923(g)(6) of the Gun Control Act of 1968 (GCA) requires
licensed manufacturers, licensed importers, licensed dealers, and
licensed collectors to report any theft or loss of firearms from the
licensee's inventory or collection to ATF and the appropriate local
authorities within 48 hours after the theft or loss is discovered.
The regulation that implements section 923(g)(6) is contained in 27
CFR 178.39a. This section provides that each Federal firearms licensee
(FFL) must report the theft or loss of a firearm from the licensee's
inventory (including any firearm which has been transferred from the
licensee's inventory to a personal collection and held as a personal
firearm for at least 1 year), or from the collection of a licensed
collector within 48 hours after the theft or loss is discovered.
Licensees must report such thefts or losses by telephoning 1-800-800-
3855 (nationwide toll free number) and by preparing ATF Form 3310.11,
Federal Firearms Licensee Theft/Loss Report, in accordance with the
instructions on the form. The original of the report must be forwarded
to the office specified on the form, and Copy 1 must be retained by the
licensee as part of the licensee's permanent records. The licensee must
also report the theft or loss of a firearm to the appropriate local
authorities.
Section 178.129(c) requires licensees to retain each copy of Form
3310.11 for a period of not less than 5 years after the date the theft
or loss was reported to ATF.
Proposed Regulations
27 CFR 178.130
In 1998 and 1999, licensees filed theft/loss reports on over 5,000
incidents, involving over 27,000 lost or stolen firearms. Inventory
discrepancies, recordkeeping errors, and employee theft (problems which
often only become apparent when a physical inventory is conducted)
accounted for almost 40 percent of the reported incidents and over
11,000 missing firearms.
Accordingly, ATF is proposing that all Federally licensed
importers, manufacturers, and dealers in firearms be required to
conduct at least one annual physical inventory of their firearms
inventory and reconcile that inventory with the records of receipt and
disposition required under part 178. In addition, ATF is proposing that
these licensees be required to conduct special firearms inventories
under the following conditions: at the time of commencing business
(already a requirement for licensed dealers under 178.125(e)), at the
time of changing the location of their business premises, at the time
of discontinuing business, and at any other time the Director of
Industry Operations may require in writing. These special inventory
requirements are necessary to account for changes in business
operations that often affect inventories.
Any theft or loss of a firearm disclosed during the annual
inventory or during a special inventory must be reported within 48
hours after its discovery in accordance with the statutory requirements
of 18 U.S.C. 923(g)(6). Without the inventory requirements, licensees
could not effectively fulfill these reporting requirements.
The annual inventory requirement is considered to be an ordinary
and customary business practice.
27 CFR 178.39a
Current regulations do not specify if firearms are considered the
inventory of the sending or receiving Federal firearms licensee while
in transit
[[Page 52055]]
between licensees on a common carrier. Therefore, current regulations
do not specify whether the sending or receiving licensee is responsible
for reporting the theft or loss of a firearm while it is in transit
between licensees on a common carrier. The lack of clarity over which
FFL is responsible for reporting the theft or loss may result in
neither party reporting the theft or loss. In Fiscal Year 1999, there
were 1,271 crime guns traces in which the FFL claimed that it never
received the firearm shipped to it and the firearm had not been
reported to ATF as lost or stolen. Thus, a significant number of
firearms lost or stolen in transit are not being reported to ATF and
the appropriate local authorities. In addition, common carriers are not
required under Federal law to report the theft or loss of firearms
shipped in commerce. These omissions prevent ATF and local law
enforcement from investigating the specific theft or loss which is not
reported and hinders ATF's tracing capabilities.
To eliminate this problem, ATF proposes that a firearm stolen or
lost in transit between licensees be considered stolen or lost from the
transferor's/ sender's inventory. Accordingly, the transferor/sender of
the missing firearm must report the theft or loss of the firearm within
48 hours after the theft or loss is discovered by the transferor/sender
to ATF and to the appropriate local authorities.
In addition, in order to enable the transferor/sender of the
firearm to have the knowledge necessary to fulfill these reporting
responsibilities, the transferor/sender must have, or establish,
commercial business practices which let him or her learn whether the
transferee/buyer of the firearm ultimately received the firearm. The
transferor/sender can fulfill this verification requirement by
contacting the transferee/buyer by telephone, facsimile, or e-mail and
asking whether he or she had received the firearm. The transferor/
sender also could, by contract, require the transferee/buyer to always
confirm receipt of firearms.
We determined it is more logical to put the reporting burden on the
transferor/sender, rather than the transferee/buyer, because the
transferor/ sender is more likely to know the circumstances of when and
how the firearm was shipped. Accordingly, it will be less burdensome
for the transferor/sender to assure that he/she has the knowledge
necessary to fulfill the reporting requirement than it would be for the
transferee/buyer.
If a firearm is lost or stolen in transit, the notation in the
acquisition and disposition book of the transferor/sender that the
firearm was disposed of to a particular transferee/buyer is inaccurate.
Therefore, a transferor/sender must verify that the transferee/buyer
received the shipped firearm in order to fulfill his/her statutory
responsibility to maintain accurate records. 18 U.S.C. 922(m),
923(g)(1)(A), and 923(g)(2).
ATF recognizes that the proposed regulation is not consistent with
the Uniform Commercial Code's (UCC's) treatment of the transfer of
title for risk of loss purposes. In the absence of State law governing
the transfer of a firearm between the seller and the buyer, the UCC
allows the seller and buyer to establish when the title of the firearm
would pass from the seller to the buyer. However, ATF determined that
adopting the UCC rule in the context of reporting firearms lost or
stolen in transit from a common carrier would be problematic, both for
FFLs to apply and for ATF to enforce. Rather than being able to follow
the flat rule that the transferor/sender FFL always is responsible for
reporting lost or stolen firearms, an FFL would have to look at each
contract it had with another FFL to determine whether he/she had the
reporting responsibility in a particular circumstance. The transferor/
sending FFL may have the reporting responsibility under some contracts,
and not have it under other contracts. Because of shifting
responsibilities, it would be more likely that some lost or stolen
firearms would slip through the cracks and go unreported.
Furthermore, it would be more difficult for ATF to ensure the
reporting requirements were being fulfilled under the UCC rule. ATF
would have to ask FFLs about their contracts with other FFLs.
Therefore, ATF opted to propose the clear-cut rule of imposing the
reporting requirements on the sending FFL, even though this requires
the sending FFL to take additional steps to be informed of the theft or
loss.
How This Document Complies With the Federal Administrative
Requirements for Rulemaking
A. Executive Order 12866
We have determined that this proposed regulation is not a
significant regulatory action as defined by Executive Order 12866.
Therefore, a Regulatory Assessment is not required.
B. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) generally requires an agency
to conduct a regulatory flexibility analysis of any rule subject to
notice and comment rulemaking requirements unless the agency certifies
that the rule will not have a significant economic impact on a
substantial number of small entities. Small entities include small
businesses, small not-for-profit enterprises, and small governmental
jurisdictions. We hereby certify that this proposed regulation, if
adopted, will not have a significant economic impact on a substantial
number of small entities because the revenue effects of this rulemaking
on small businesses flow directly from the underlying statute.
Likewise, any secondary or incidental effects, and any reporting,
recordkeeping, or other compliance burdens flow directly from the
statute. Accordingly, a regulatory flexibility analysis is not
required.
C. Paperwork Reduction Act
The collections of information contained in this notice of proposed
rulemaking have been submitted to the Office of Management and Budget
for review in accordance with the Paperwork Reduction Act of 1995 (44
U.S.C. 3507(d)). Comments on the collections of information should be
sent to the Office of Management and Budget, Attention: Desk Officer
for the Bureau of Alcohol, Tobacco and Firearms, Office of Information
and Regulatory Affairs, Washington, DC 20503, with copies to the Chief,
Document Services Branch, Room 3110, Bureau of Alcohol, Tobacco and
Firearms, at the address previously specified. Comments are
specifically requested concerning:
Whether the proposed collections of information are necessary for
the proper performance of the functions of the Bureau of Alcohol,
Tobacco and Firearms, including whether the information will have
practical utility;
The accuracy of the estimated burden associated with the proposed
collections of information (see below);
How the quality, utility, and clarity of the information to be
collected may be enhanced; and
How the burden of complying with the proposed collections of
information may be minimized, including through the application of
automated collection techniques or other forms of information
technology.
The collections of information in this proposed regulation are in
27 CFR sections 178.39a and 178.130. This information is required to
fulfill the statutory requirements of reporting the theft or loss of
firearms to ATF. The collections of information are mandatory. The
likely respondents are businesses. Since the annual inventory
requirement under section 178.130 is considered to be an ordinary and
[[Page 52056]]
customary business practice, we are stating that there is no additional
reporting and/or recordkeeping burden. The following burden hours are
for the additional reporting requirements of section 178.39a.
Estimated total annual reporting and/or recordkeeping burden:
15,483 hours (estimated total hours for follow-up verification
requirements of section 178.39a).
Estimated average burden hours per respondent and/or recordkeeper:
.1 hours (estimated one-tenth of an hour per follow-up verification).
Estimated number of respondents and/or recordkeepers: 100,293
(total population of Federal firearms licensees excluding ammunition
manufacturers).
Estimated annual frequency of responses: 929,000 (estimated number
of firearm shipments per year).
An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless it displays a valid
control number assigned by the Office of Management and Budget.
Public Participation
We are requesting comments on the proposed regulations from all
interested persons. In addition, we are soliciting comment on whether
the inventory requirements should be applied to licensed collectors. We
are also specifically requesting comments on the clarity of this
proposed rule and how it may be made easier to understand.
You may submit comments by facsimile transmission to (202) 927-
8602. Facsimile comments must:
<bullet> Be legible;
<bullet> Reference this notice number;
<bullet> Be 8\1/2\" x 11" in size;
<bullet> Contain a legible written signature; and
<bullet> Be not more than three pages long.
We will not acknowledge receipt of facsimile transmissions. We will
treat facsimile transmissions as originals.
Comments received on or before the closing date will be carefully
considered. Comments received after that date will be given the same
consideration if it is practical to do so, but assurance of
consideration cannot be given except as to comments received on or
before the closing date.
We will not recognize any material in comments as confidential.
Comments may be disclosed to the public. Any material which the
commenter considers to be confidential or inappropriate for disclosure
to the public should not be included in the comment. The name of the
person submitting a comment is not exempt from disclosure.
Any interested person who desires an opportunity to comment orally
at a public hearing should submit his or her request, in writing, to
the Director within the 90-day comment period. The Director, however,
reserves the right to determine, in light of all circumstances, whether
a public hearing is necessary.
Disclosure
Copies of this notice and the written comments will be available
for public inspection during normal business hours at: ATF Public
Reading Room, Room 6480, 650 Massachusetts Avenue, NW., Washington, DC.
Regulation Identification Number
A regulation identification number (RIN) is assigned to each
regulatory action listed in the Unified Agenda of Federal Regulations.
The Regulatory Information Service Center publishes the Unified Agenda
in the Federal Register in April and October of each year. The RIN
contained in the heading of this document can be used to cross-
reference this action with the Unified Agenda.
Drafting Information
The authors of this document are James P. Ficaretta, Regulations
Division, and William Bowers, Firearms Trafficking Branch, Bureau of
Alcohol, Tobacco and Firearms.
List of Subjects in Part 178
Administrative practice and procedure, Arms and ammunition,
Authority delegations, Customs duties and inspection, Exports, Imports,
Incorporation by reference, Military personnel, Penalties, Reporting
requirements, Research, Seizures and forfeitures, and Transportation.
Authority and Issuance
For the reasons discussed in the preamble, ATF amends 27 CFR Part
178 as follows:
PART 178--COMMERCE IN FIREARMS AND AMMUNITION
Paragraph 1. The authority citation for 27 CFR Part 178 continues
to read as follows:
Authority: 5 U.S.C. 552(a); 18 U.S.C. 847, 921-930; 44 U.S.C.
3504(h).
Par. 2. Section 178.39a is amended by adding three sentences after
the first sentence to read as follows:
Sec. 178.39a Reporting theft or loss of firearms.
* * * When a firearm is stolen or lost in transit between
licensees, it is considered stolen or lost from the transferor's/
sender's inventory. Therefore, the transferor/sender of the missing
firearm(s) must report the theft or loss of the firearm(s) within 48
hours after the theft or loss is discovered. The transferor/sender must
have, or establish, commercial business practices which enable him/her
to determine whether the transferee/buyer of the firearm(s) received
the firearm(s). * * *
Par. 3. Section 178.130 is added to subpart H to read as follows:
Sec. 178.130 Inventory.
(a)(1) Each licensed manufacturer, licensed importer, and licensed
dealer must take at least one true and accurate physical inventory each
year. The inventory must include all firearms on hand required to be
accounted for in the records kept under this part. Furthermore, the
licensee must conduct a special physical inventory:
(i) At the time of commencing business, which is the effective date
of the license issued upon original qualification under this part;
(ii) At the time of changing the location of the business premises;
(iii) At the time of discontinuing business; and
(iv) At any other time the Director of Industry Operations may in
writing require.
(2) The special physical inventories required by paragraphs
(a)(1)(i) through (iv) of this section count toward the annual physical
inventory requirement.
(b) Every physical inventory must be reconciled with the record of
receipt and disposition required under this part. Any theft or loss of
a firearm disclosed during inventory must be reported within 48 hours
after its discovery in accordance with the requirements of
Sec. 178.39a.
(c) Every licensed manufacturer, licensed importer, and licensed
dealer must maintain a record of any inventory required by this section
for a period of not less than 5 years after the inventory was
conducted. The record must include the following firearms information--
(1) Name of manufacturer and/or importer;
(2) Model;
(3) Serial number;
(4) Type; and
(5) Caliber or gauge.
Dated: June 20, 2000.
Bradley A. Buckles,
Director.
Approved: August 3, 2000.
John P. Simpson,
Deputy Assistant Secretary (Regulatory, Tariff and Trade Enforcement).
[FR Doc. 00-21903 Filed 8-25-00; 8:45 am]
BILLING CODE 4810-31-P