EFFECTS OF THE ATTORNEY GENERAL’S FINAL RULE AMENDING THE REGULATIONS OF THE NATIONAL FIREARMS ACT
BY: SHAWN OWEN
On January 4th, 2016, Attorney General Loretta E. Lynch signed the Department of Justice’s Final Rule amending the regulations of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) regarding the making or transferring of a firearm under the National Firearms Act (NFA).
In 2014, the ATF processed 29,191 applications from individuals for the manufacture or transfer of an NFA regulated weapon, while it processed 115,829 from trusts and legal entities. The current regulations at 27 CFR 479.63 and 479.85, which require fingerprints, photographs, and a law enforcement certification for individual applicants to make or transfer NFA firearms, do not apply to trusts or legal entities. On September 9, 2013, the Department of Justice published in the Federal Register a notice of proposed rulemaking. The proposed rulemaking would amend current regulations to “conform the identification and background check requirements applicable to certain trusts and legal entities to those that apply to individuals.”
The Department of Justice’s Final Rule essentially expands the current “identification and background check requirements [to] apply equally to individuals, trusts and legal entities.” However, the Final Rule eliminates the requirement that the Chief Law Enforcement Officer (CLEO) approves and certifies each NFA application.
Currently, the ATF requires any individual, but not trusts or legal entities, to obtain CLEO approval and certification before the applicant is permitted to make or receive an NFA firearm. Essentially, an application does not just require a clean background check, but also the approval of a CLEO who may, but is not statutorily required to, approve the same. Many proponents of NFA Trusts argued understandably that NFA Trusts were essential in many areas of the country due to the fact that some CLEOs outright refused to approve any applications. The Department of Justice admittedly “reassessed the need for CLEO certification and is implementing a new approach that focuses on notifying CLEOS.”
Although gun rights activists may initially celebrate the elimination of the requirement that CLEOs approve and certify each individual NFA application, we need to understand this came at great costs. First, the net cost for CLEO involvement in NFA applications will increase. The “ATF estimates that the total cost of CLEO notification requirement will be approximately $5.8 million annually ($0.5 million for individuals; $5.3 million for trusts and legal entities). The current cost of CLEO certification for individuals is approximately $2.26 million annually. Consequently, the final rule’s estimated net cost increase is approximately $3.6 million annually.”
Second, we may no longer argue that NFA Trusts are essential due to the fact that CLEOs are not required to approve or certify any individual application. This comports with the Department of Justice’s expressed goal of essentially treating individuals, trusts and legal entities the same.
The only relevant restraint imposed by the Final Rule is that the identification and background check requirements currently applied only to individuals, will now apply equally to trusts and legal entities. To accomplish this, the Final rule “requires trusts and legal entities to complete and submit to ATF a new form (Form 5320.23), photographs, and fingerprint cards for each responsible person before the trust or legal entity is permitted to make or receive an NFA firearm.”
The Final Rule defines a “responsible person’ as follows:
“[A]ny individual who possesses, directly or indirectly, the power or authority to direct the management and policies of the trust or entity to receive, possess, ship, transport, deliver, transfer, or otherwise dispose of a firearm for, or on behalf of, the trust or legal entity. In the case of a trust, those persons with the power or authority to direct the management and policies of the trust include any person who has the capability to exercise such power and possesses, directly or indirectly, the power or authority under any trust instrument, or under State law, to receive, possess, ship, transport, or otherwise dispose of a firearm for, or on behalf of, the trust. Examples of who may be considered a responsible person include settlors/grantors, trustees, partners, members, officers, directors, board members, or owners. An example of who may be excluded from this definition of responsible person is the beneficiary of a trust, if the beneficiary does not have the capability to exercise the powers or authorities enumerated in this section.”
IS IT CONSTITUTIONAL?
Unfortunately, “the right to keep and bear arms has never been unlimited.” Nat’l Rifle Ass’n (NRA) v. ATF, 700 F.3d 185, 200 (5th Cir. 2012) (quoting District of Columbia v. Heller, 554 U.S. 570, at 626). The Supreme Court held explicitly in Heller that the Second Amendment protects an individual – not a collective – right to bear firearms; however, it did not extend to “dangerous and unusual weapons” not in “common use.” See Heller, 554 U.S. at 627; see also United States v. Miller, 307 U.S. 174, 178-79 (1939) (regarding short-barreled shotguns). Courts of Appeals have consistently found NFA weapons to be “dangerous and unusual.” See United States v. Henry, 688 F.3d 637, 640 (9th Cir. 2012); Heller v. District of Columbia (“Heller II”), 670 F.3d 1244, 1263 (D.C. Cir. 2011); United States v. Marzzarella, 614 F.3d 85, 94 (3d Cir. 2010); Hamblen v. United States, 591F.3d471, 473-74 (6th Cir. 2009); United States v. Tagg, 572 F.3d 1320, 1326 (11th Cir. 2009); United States v. Fincher, 538 F.3d 868, 874 (8th Cir. 2008).
Further, the Attorney General’s issuance of the Final Rule is likely lawful, given that the Attorney General is responsible for enforcing the provisions of the NFA.
Many gun rights activists already condemn this Final Rule as a death blow to gun rights. This is simply not true. While the Final Rule certainly neuters the utility of NFA Trusts, it does not restrict an individual right to make or transfer NFA firearms. In fact, it expands the individual’s rights under the NFA by eliminating entirely the requirement for CLEO approval.
Further, the current ATF regulations already require that FFLs run a background check on any person picking up a firearm on behalf of a trust or legal entity. Therefore, arguments that this Final Rule unduly expands background checks mistakenly ignores the fact that individual transferees of NFA Trust items already have to undergo a background check.
Moreover, the Final Rule’s amendments to the current regulations require simply that “responsible persons for trusts and legal entities will undergo a background check as a part of the application process. Therefore, a responsible person will not have to undergo a background check at the time of the transfer from the FFL.”
Those who take issue with this Final Rule should take note that “only Congress can bring a weapon under the purview of the NFA” and “only Congress can remove a class of weapons from the purview of the NFA.” Therefore, those of us who disagree with the NFA should take issue with our legislature – not the ATF, nor the Attorney General.
- See 27 CFR Part 479 [Docket No. ATF 41F; AG Order No. 3608-2016, p. 214]
- See 78 FR 55014 (ATF 41P).
- See 27 CFR Part 479 [Docket No. ATF 41F; AG Order No. 3608-2016, p. 4]
- See 27 CFR Part 479 [Docket No. ATF 41F; AG Order No. 3608-2016, p. 5]
- See 27 CFR Part 479 [Docket No. ATF 41F; AG Order No. 3608-2016, p. 6]
- See 27 CFR Part 479 [Docket No. ATF 41F; AG Order No. 3608-2016, p. 214] [Emphasis added]
- See 27 CFR Part 479 [Docket No. ATF 41F; AG Order No. 3608-2016, p. 238]
- Congress originally delegated the authority to promulgate NFA regulations to the Secretary of the Treasury; however, Congress re-delegated that authority to the Attorney General. See 26 U.S.C. 7801(a)(2); 28 U.S.C. 599A(c)(l); see also 26 U.S.C. Chapter 53.
- See 27 CFR Part 479 [Docket No. ATF 41F; AG Order No. 3608-2016, p. 44] [Emphasis added]
- See 27 CFR Part 479 [Docket No. ATF 41F; AG Order No. 3608-2016, p. 75]
- See 27 CFR Part 479 [Docket No. ATF 41F; AG Order No. 3608-2016, p. 77]