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Federal Firearms Licensing [3]
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FOIA Number: 2009-1305-F
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This is not a textual record. This is used as an
administrative marker by the William J. Clinton
Presidential Library Staff.
Collection/Record Group:
Clinton Presidential Records
Subgroup/Office of Origin:
Domestic Policy Council
Series/Staff Member:
Jose Cerda
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OA/ID Number:
5874
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Folder Title:
Federal Firearms Licensing [3]
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98
2
10
1
JOINT STATEMENT
We recognize that there is a serious problem of crime. especially violent crime, in this
nation. This problem is driven in part by the size, scope and availability of the illegal firearms
market, which supplies criminals and juveniles with deadly weapons.
We strongly support the right of law-abiding American adults to bear arms, and our
intention is not to undermine either their constitutional rights. or the legitimate commerce in
firearms.
However, within the firearms industry are elements who divert the flow of firearms from
the legitimate trade into the more lucrative firearms black market.
In addition to the tragedies and sorrows suffered by the victims of violent crime, we
recognize the perils faced by state, local and federal law enforcement as they target gun
traffickers and violent criminals.
We, further recognize that gun licensees, who through willful, negligent or irresponsible
actions contribute to the illicit gun market, undermine those businesses which carefully adhere
to the letter of the law.
At present, the Bureau of Alcohol, Tobacco and Firearms (ATF) has regulatory authority
over the firearms industry, but its ability to ensure compliance with firearms laws is hampered
by insufficient resources and inadequate statutory authority. The regulatory system with its
present constraints is harmful to legitimate firearms businesses, to law enforcement and to the
public.
We strongly support new legislation to reform the Federal Firearms Licensing (FFL)
system, including the following initiatives:
*
ensuring that the firearms regulatory system pay for itself, increasing the license
fee commensurate with the cost of the program;
requiring that FFLs be in compliance with state and local laws and ordinances;
requiring reports of losses or thefts from FFL firearms inventories;
removing the prohibition on more than one compliance visit per FFL per year;
increasing the penalty for willful falsification of records; and
extending ATF's period for a decision on firearms license applications from 45
to 90 days.
We further support any initiatives in the crime bill that would improve ATF's ability to
enforce firearms violations, particularly addressing the illicit firearms market.
had Bihn
Putz
Neil Behan
John Pitta
Major City Chiefs
Federal Law Enforcement
Officers Association
Bill Bridgewater
Jack
National Alliance of Stocking
Collectors Arms Dealers
Gun Dealers
Association
Palment Scally
Don Cahill
Robert Scully
Fraternal Order of Police
National Association of Police
Organizations
On Marth
Daniel Rosenblatt
International Association of
Chiefs of Police
Angeles Times
THE PRESIDENT HAS SEEN
12/1
ty
Taming the Gun Monster:
The Federal Role
A
bandwagon can roll forward,
that these so-called "kitchen table"
backward or off the road. Which
dealers make up fully four-fifths of
the this and
way for the anti-gun movement
those holding FFLs.
in Congress? Congress now has more
This situation is clearly both an
than 40 gun-control bills before it.
absurdity and an abomination. Sens.
J
Some of them are not worth much more
Daniel Patrick Moynihan (D-N.Y.) and
than the paper they're printed on. But a
Paul Simon (D-III.) have introduced
few of them represent a clear advance:
legislation to target renegade dealers
They are earnest, thoughtful attempts
and toughen licensing procedures.
to stop the killing and restrict the
Their proposals are so obviously sensi-
poisonous circulation of guns.
ble, it is hard to see why anyone could
In Part 2 of this series, we weighed
be against them. They would mandate
the strengths and weaknesses of many
that prospective deal-
generic approaches to gun control such
ers comply with all
as waiting periods, bans on types of
state and local fire-
guns and stiffer penalties for gun crime.
arms laws before they
Here we'll look at some specific propos-
receive their federal
als now before Congress-which ones
firearms licenses. The
will help reduce gun violence and
proposals would also
which will do little more than try the
raise license fees, in-
patience of fearful Americans.
crease dealer report-
But let us be clear: With one excep-
ing requirements, re-
tion, the many bills now pending before
quire more inspec-
Congress will not meaningfully end the
tions by the federal Bureau of Alcohol,
killing because none will reduce an
Tobacco and Firearms and extend the
arsenal of more than 200 million fire-
time period allowed the ATF to issue a
arms or do much to slow the unrelent-
license. What's also needed is for Presi-
ing production and sale of new guns.
dent Clinton to authorize many more
That's why The Times supports a
ATF inspectors. Nationally, the ATF
near-total ban on the manufacture, sale
has only 1,947 agents and even fewer
and possession of handguns and assault
compliance inspectors.
weapons, leaving those guns solely in
the hands of law-enforcement officials.
WHAT ABOUT BANNING
Individuals would be permitted to own
ASSAULT WEAPONS?
sporting weapons only if they had
California was the first state to ban
submitted to a background check and
the production, sale and possession of
passed a safety course. Other special,
specified models of military-style rifles,
closely monitored exceptions could be
pistols and shotguns that had no legiti-
made, such as for gun collectors. But
mate sporting purpose. But California
short of that monumental achieve-
was also the first state to discover that
ment-a near-total ban on handguns
gun manufacturers could easily evade
and automatic weapons-would any of
the model-by-model ban by ever-so-
the congressional bills actually help?
slightly modifying old firearms or in-
troducing new ones.
WHAT ABOUT TIGHTER
California's Sen. Dianne Feinstein
GUN LICENSING?
has learned from that. Her federal bill,
More than a quarter-million Ameri-
approved by the Senate last week as an
cans hold federal firearms licenses-or
amendment to the pending crime bill,
FFLs-allowing them to ship and re-
would forbid the manufacture and
ceive large quantities of guns and
transfer of 19 specific models of assault
ammunition. But both the rules under
weapons, plus any models that have
which these licenses are granted and
high-volume detachable ammunition
the system to monitor those who hold
magazines with 10 or more bullets and
them are shamefully inadequate. Too
other generic features.
many dealers-including some with
The Feinstein approach hardly
criminal records-peddle guns out of
crowds legitimate hunters: About 650
their homes and private offices often in
sporting guns are protected. At this
direct violation of federal, state and
point that's sensible, but her bill would
local firearms law. The feds estimate
do nothing to reduce the existing stock
90
LOS Angeles Times
of 1 million assault weapons in private
The Brady bill is worthy, even though
hands. Even so, The Times supports the
its impact would be limited solely to
Feinstein effort as a step forward.
new handgun sales.
BETTER YET, THEN, WHY NOT
WHY NOT TAX AMMUNITION?
JUST BAN HANDGUNS, PERIOD?
Gun violence now costs the nation
Perhaps the boldest and most far-
about $16 billion a year and if Sen.
reaching gun measure now on Capitol
Moynihan has his way, the firearms
Hill is that by by Sen. John H. Chafee
industry and its customers will appro-
(R-R.I.) to ban the manufacture, sale
priately bear a heavier burden for the
and possession of all handguns. The
grievous harm their weapons cause.
Chafee bill would establish a six-month
Moynihan's proposal, now tacked on
period during which citizens could turn
to the President's
in their handguns to federal, state or
health-care reform
local law enforcement agencies for
bill, calls for a 40%
monetary reimbursement. After that
federal tax increase
time, violators could face criminal pen-
AMERICA'S
on several types of
alties of up to $5,000 and/or five years
GUN EPIDEMIC
bullets and a license
in jail. The bill would exempt law
What Is the Best
fee of $10,000 on
enforcement and the military and cer-
Medicine?
manufacturers and
tain kinds of collectors, hunting guns,
importers of handgun
Fifth in a series
gun clubs, security guards and gun
ammunition. These
dealers.
new fees would raise
an estimated $200 million annually.
Chafee's proposal may sound radical.
Granted, this is just walking-around
It's not. It's sensible. The bill, stuck in
money compared with the annual bill
committee, focuses on handguns, often
from gun violence. And as long as there
the street gun of choice. Chafee says it's
are so many guns in circulation, a black
time to "turn off the spigot" flooding
market in ammo would meet the de-
our neighborhoods and schools with
mand. Still, Moynihan's proposal push-
these weapons. He's absolutely right.
es America in the right direction.
But if the Chafee measure would do
AND WHY NOT WORK TO KEEP
much to stem gun violence and the
GUNS AWAY FROM KIDS?
Brady bill and others we have men-
The Congress, as part of the crime
tioned would do less, there are some
bill, has approved a provision by Sen.
proposals floating around Congress that
Herbert Kohl (D-Wis.) banning hand-
are not wholly on target. For instance.
gun possession by anyone under age 18.
limiting individuals to the purchase or
The one beauty of this measure is that
transfer of one handgun per month is
it gives police the additional legal tool
obviously only a small piece of the
they need to disarm kids. But without
puzzle. And imposing on firearms
funds for vigorous enforcement or a
manufacturers liability for injuries
meaningful decline in the gun supply,
caused by the handguns or assault
we fear that angry young people bent
weapons they make is stretching prod-
on violence will be undeterred by this
uct liability laws too far.
measure. Still, it too is worth trying.
Two things must happen if gun
control is to work. First, a strong public
BUT CAN THE NOW-FAMOUS
consensus must emerge for bold and
WAITING PERIOD HELP?
sweeping action. That is beginning to
Criminals and individuals who are
happen. Second, Congress will have to
emotionally unstable simply should not
shed its interest-group shackles, roll up
be able to leave a gun store armed. That
its sleeves and get serious. Our future is
self-evident premise alone makes the
on the line: Either we act decisively or
Brady bill-imposing a five-day wait-
we can expect to watch the slaughter in
ing period to permit background checks
our homes, streets, malls, schools and
on handgun buyers-eminently sensi-
churches proceed apace.
ble. Last week, after six long years, the
House finally passed the Brady bill, but
NEXT: The best and the worst of
it now looks to be stuck in the Senate.
state and local gun proposals.
TALKING POINTS: GUN DEALERS LICENSING FEE AMENDMENT
THE PROBLEM
Since 1980, the number of firearm dealers in this country has increased
by 113,000 to a total of 287,000. That means there is 1 firearm dealer for every
1,000 Americans, or 1 dealer for approximately every 290 firearm owners
(Bureau of Alcohol, Tobacco, and Firearms, or ATF). The Violence Policy
Center puts this into perspective when they note that there are more gun
dealers in our country than there are gas stations.
The number of license applications is exploding. In FY 92, ATF's
licensing center received an average of 2,900 applications each month. In
December 1992, the number jumped to 5,200 applications. From January
through April 1993, the center received an average of 6,000 applications each
month. According to ATF, the escalating number of applications is primarily
the result of minimal licensing standards and fees.
ATF spokesman Jack Killorin noted: "There is no question that illegal
activity by [dealers] is a threat to the community. The volume of licenses has
outstripped [ATF's] ability to keep up" (Washington Post, December 12, 1992).
While the number of dealers has increased by 65 percent since 1980, the
number of investigators assigned to inspect these dealers has decreased by 13
percent.
In 1991, ATF issued 270 licenses a day, for a total of 91,000 new and
renewed licenses that year. Only 37 of the 34,000 requests for new licenses
that year were denied. Only 15 of the 57,237 requests for renewal licenses that
year were denied.
Generally, fewer than 10 percent of dealer applicants undergo an actual
inspection in the form of a personal interview or an on-site visit. Once
licensed, a typical dealer is audited by federal inspectors only once every
twenty years.
ATF relies primarily on a computer search to inspect applicants.
However, since the ATF database does not include arrests and dispositions
from many states, errors can be made. Moreover, the license application
contains no stringent identification requirements, not even fingerprint checks.
Applicants often get friends to file license applications for them; two years ago,
ATF officials approved applications for two dogs (Washington Post, May 8,
1991).
Only about one-quarter of all federally licensed dealers are actually
storefront businesses (ATF). Out of the remaining three-quarters of all dealers
who operate out of their homes, ATF estimates that a majority of these
"kitchen-table" dealers acquire a license in order to buy guns in bulk at lowered
prices and to skirt state and local laws such as waiting periods and other
restrictions.
THE AMENDMENT
The amendment will raise the annual license fee for firearm dealers to
$375. Currently, the federal firearms statutes impose an annual fee of $10 on
federal licensees. This figure has remained unchanged since the enactment of
the 1968 Gun Control Act. It is more expensive to join the NRA than it is to
get a federal firearms license.
ATF estimates that an increase in license fees to $375 would reduce the
total number of firearm dealers from the current 287,000 to somewhere
between 40,000 and 70,000. The proposed user fee would enable ATF to do
thorough computer checks, as well as to conduct on-site visits and background
checks for every applicant. It would also enable ATF to investigate every
dealer at least once a year.
The proposed fee increase will ensure that firearms licensees and
customers, not taxpayers, bear the full burden of the program's costs. The
current $10 fee does not even cover the costs of processing paperwork and
issuing a license. Moreover, since federal law imposes various regulatory
requirements on licensees, American taxpayers currently pay for the rising costs
of background investigations and periodic inspections.
The proposed fee increase will discourage individuals from obtaining a
dealer's license for illegal purposes. The current system encourages people to
file applications even if they have no intent to actually engage in a firearms
business. Licensees often acquire firearms at wholesale prices for their
personal use; in a recent sampling of gun dealers, 73 percent had conducted
fewer than 10 transactions in the preceding year. Licensees also obtain licenses
to circumvent state and local laws that impose restrictions on firearm
acquisition; restrictions such as waiting periods and the Virginia one-gun-per-
month rule do not generally apply to transactions between dealers.
Investigation of firearms licensees is highly effective. In February of this
year, the ATF implemented an initiative to contact every firearms license
applicant. Approximately 19 percent of new license applicants who were
directly contacted by field inspectors withdrew or abandoned their applications.
Over a period of three months, increased efforts by ATF's licensing center
resulted in 3,620 new and renewal applications being withdrawn, abandoned,
or voluntarily discontinued. Unfortunately, without the additional revenues
sought by the amendment, this program must be cancelled.
This amendment is supported by the Fraternal Order of Police and the
International Brotherhood of Police Officers. It is also supported by the
National Alliance of Gun Stocking Dealers (which represents store-front
dealers) as well as the ATF.
DANGERS OF LICENSED GUN DEALERS
Josh Lee, a federally licensed dealer in Orange County, California,
supplied guns to the Fourth Reich Skinheads, who were plotting to kill
Rodney King and blow up the First African Methodist Episcopal Church in
Los Angeles. ATF spokesman Jack Killorin opined: "If
you want to put
down on your application 'American Nazi Gun Shop,' we have no ability
under the law to shut you down." [Los Angeles Times]
During a six-month period in 1990, Gustavo Salazar, a federally licensed
gun dealer in Los Angeles, purchased more than 1,500 guns which he sold
to gang members and other individuals. An ATF check on 1,165 of these
handguns showed that only four had been registered under California law.
[Violence Policy Center]
22-year old gun dealer Sam Miller, a convicted drug dealer and felon,
sold guns, including at least ten high-powered semiautomatic pistols, to
teen-age members of Boston's Inner-city gangs. Yet Miller's convictions
were not forwarded to the FBI's National Crime Information Center; thus
nothing on the computer suggested that he was a felon. [Boston Globe]
More than a dozen federally licensed dealers in Detroit have been
charged with providing more than 2,000 firearms to criminals in the city.
[Violence Policy Center]
Carroll Landis Brown, a federally licensed dealer in Baltimore, sold more
than 300 handguns, fewer than half of which were properly recorded, and
at least 14 of which have turned up at Baltimore crime scenes. Brown took
out classified ads in the Baltimore Sun, advertising the semiautomatic
pistols. [Washington Post]
Federal firearms licensee David Taylor, a Bronx man with a long record
of misdemeanors and an indictment for murder at the age of 16, ordered
more than 500 guns from Ohio, which he sold to New York City drug
dealers. [New York Times]
James Boyd, a gun dealer and Los Angeles County sheriff's reserve
deputy, falsified firearms forms and sold handguns to a citizen of the
Philippines who smuggled the weapons out of the country in microwave
ovens. Boyd worked with Willie Harris, a convicted felon, who allegedly
sold weapons to Los Angeles gang members. [Los Angeles Times]
From February to June in 1990, Detroit "kitchen table" dealer McClinton
Thomas ordered hundreds of handguns, and sold them off the books,
including 90 guns to a "big-time dope dealer." [Violence Policy Center]
A firearms dealer in Texas falsified his records to conceal the diversion
of over 2,000 firearms to a Mexican national who is a major firearms
trafficker. [ATF testimony]
A firearms dealer in North Carolina provided between 6,000 and 10,000
handguns to the black market after altering the serial numbers of the
handguns. Several of the firearms have been recovered from convicted
felons, drug dealers, and a firearms trafficker in New York City involved with
Pakistan Nationals. [ATF testimony]
Two Miami gun dealers sold machine guns to operatives of the Medellin
cocaine cartel, and an Ohio dealer shipped weapons to the Irish
Republican Army. [Washington Post]
TORAL
DEPARTMENT OF THE TREASURY
AND FIREA TEACH ARMS
BUREAU OF ALCOHOL, TOBACCO AND FIREARMS
WASHINGTON, D.C. 20226
DIRECTOR
JUL 26 1993
Honorable Paul Simon
Chairman
Subcommittee on the Constitution
Committee on the Judiciary
United States Senate
Washington, DC 20510
Dear Senator Simon:
This is in response to your inquiry of July 23, 1993, in which
you asked for our evaluation of how many current Federal firearms
licensees are actively engaged in the business of buying and
selling firearms, for which a Federal firearms license is
required.
Fortunately, we recently completed a study specifically designed
to answer such questions. A statistically valid random sample of
400 licensed firearms dealers (Type 01) was selected.
Inspections commenced in fiscal 1992 and the last were completed
earlier this year. The rates of occurrence of specific findings
can be projected to the entire Type 01 licensed firearms dealer
population. Projection of findings results in a precision rate
of plus or minus 5 percent with a confidence level of 95 percent.
We are enclosing a full report of this study, entitled "Operation
Snapshot," for your information.
Use of commercial premises is one indication of actual engagement
in the business. However, we recognize that there are some very
active dealers who do work from their homes. On the other hand,
a firearms business may also be a very small or incidental part
of operations at a commercial premises. In the sample, 26
percent of the dealers operated from commercial premises rather
than from a residence. Therefore, we can be 95 percent certain
that between 21 and 31 percent of all dealers have commercial
premises. Based on 244,000 Type 01 dealers, we can estimate that
approximately 50,000 to 70,000 operate from commercial premises.
Further, only 19 percent of dealers acquired more than 10
firearms in the year preceding the inspection. Dispositions of
more than 10 firearms were recorded for only 20 percent of
dealers. Inventory of more than 10 firearms was found for only
16 percent of the sample. The lower range projection for all of
these measures is 40,000 dealers.
-2-
Honorable Paul Simon
We expect that some of those using commercial premises and having
annual activity levels of more than 10 firearms will probably
abandon their licenses at the level of fees that have been
discussed. However, we also expect most of the Type 02 licensees
(pawnbrokers), of which there are over 10,000, to remain
licensed. Similarly, the more than 2,000 manufacturers and
importers would remain licensed. Using these numbers plus the
more active dealers as determined from Operation Snapshot we
conclude that at least 40,000 licensees requiring regular
inspection will remain even after increased annual fees of $250
or more are imposed.
Finally, you are correct in your recollection that I testified in
favor of increased fees for Federal firearms licensees on
June 17, 1993, before the House Subcommittee on Crime and
Criminal Justice, Committee on the the Judiciary.
We trust this information is responsive to your request. If we
may be of further assistance, please let us know.
Sincerely yours,
Fleve Higgins
Director
BUREAU OF ALCOHOL, TOBACCO AND FIREARMS
Synopsis of Testimony
Stephen E. Higgins, Director
June 17, 1993
A major problem facing society today is the ease with
which criminals, and others, including children,
acquire firearms. This testimony focuses on three
areas -- the licensing of firearms dealers, our efforts
in stemming illegal activities by certain firearms
dealers, and firearms tracing activities.
The number of firearms dealer applications has
increased from an average of 2,800 per month in FY 92,
to 6,000 per month from January through April, 1993.
The large number of licensees (over 280,000) is
primarily due to the minimal licensing standards and
fees in the current law. The annual fee for a dealer's
license is only $10.
The current licensing system encourages persons to file
applications who have no intent of actually engaging in
a firearms business. According to our Operation
Snapshot results, a vast majority of the dealers (73%)
buy or sell less than 10 guns a year. Unless an
applicant is statutorily prohibited, we must issue a
license. Although most licensees do not contribute to
our crime problem, the sheer volume of dealers is
obstructive in determining the focus of our compliance
program.
In a measure to address the growing number of
applications, ATF is now (since February 1993)
contacting every applicant for a license. As a result
of this enhanced program, numerous individuals have
withdrawn or abandoned their applications.
Whether criminals buy guns directly, through straw
purchases, or from traffickers who buy the guns for
resale, virtually all guns ending up in the hands of
criminals flow through licensed dealers. Since the
beginning of FY 92, 187 firearms dealers have been
subject to criminal prosecution.
Information from ATF's Tracing Center is used by ATF
special agents and other law enforcement officers to
identify the ownership sequence of guns used in crimes.
ATF also uses tracing information to target firearms
dealers who are frequent sources of guns used in
crimes, and to identify patterns of gun traffickers.
07/26/93
14:14
*614 221 0815
FOP
002
o
GRAND LODGE
FRATERNAL ORDER OF POLICE
NATIONAL PRESIDENT
520 SOUTH HIGH STREET
COLUMBUS. OHIO 43215.5605
(614) 221-0180
DEWEY R. STOKES
NATIONAL PRESIDENT
July 26, 1993
Honorable Paul Simon
United States Senate
Washington, DC 20510
Dear Senator Simon:
According to information WC have received from the Bureau of Alcohol, Tobacco and Firearms
(ATF), there are currently in excess of 280,000 licensed firearms dealers in the United States.
The primary reason for this excessive number of persons licensed to deal in firearms is the low
fee currently contained in the Gun Control Act.
As you are aware, the current fee for a Federal Firearms License (FFL) is a mere $10 annually.
$375 to $500.
My organization encourages and supports the imposition of an annual user fee in the range of
At the current rate, the American taxpayer is subsidizing the issuance of firearms licenses to an
abundance of individuals who are, at best, minimally engaged in activities requiring a license.
A recent study conducted by ATF showed that 74% of the licensed dealers are operating from
their residences. Only 13% of the dealers bought or sold more than 50 firearms in a year. The
cost of processing an application and issuing a license for dealers who engage in these minimal
activities far exceeds the current $10 fee.
There are approximately 220 ATF inspectors who conduct application and compliance
inspections on the 280,000 dealers. It is apparent that at the current staffing level, ATF cannot
inspect all firearms dealers to ensure their compliance with laws. Obviously, the volume of
dealers would decrease dramatically with an increase in the fee to $375-$500 annually, thereby
making the number of dealers more manageable to ATF.
In order to support ATF's firearms program in conducting application and compliance
inspections on firearms dealers, the $375-$500 annual user fees for FFLs should go directly to
ATF. This enhanced funding would enable ATF to hire additional inspectors to ensure that no
new or renewal FFLs are issued without contact made by ATF inspectors, which is essential to
ensure the legality and integrity of all firearms dealer operations.
NATIONAL HEADQUARTERS, 2100 GARDINER LANE, LOUISVILLE. KENTUCKY 40205
07/26/93
14:15
614 221 0815
FOP
003
Honorable Paul Simon
Page 2
July 26, 1993
ATF has initiated several firearms programs to target those firearms dealers that are either
illegally trafficking in firearms or the sources of firearms purchased by criminals. However,
neither ATF nor state or local law enforcement agencies have the resources to inspect and locate
all dealers operating outside the law. Recently, a firearms dealer operating from his residence
in Tinley Park, Illinois, was the subject of numerous complaints from his neighbors for firing
weapons in the area. When local police investigated the complaints, the dealer refused entry to
the police and threatened to kill them if they attempted entry. Although the dealer had an
extensive arrest record, there were no convictions that would prohibit issuance of an FFL.
Additionally, local ordinances did not prohibit operating a firearms business from a residence.
Although ATF is taking action in this matter, this instance serves as an example of a dealer who
may not have been inspected, except for the referral from local authorities that arose from
citizen complaints.
In summary, we strongly support an imposition of an annual user fee in the range of $375 to
$500 for issuance of Federal Firearms Licenses for the following reasons:
--
The U.S. taxpayer should not be subsidizing the cost of establishing and maintaining
firearms businesses.
I
A $375-$500 annual user feel would reduce the current number of licensees (280,000)
to an estimated 40,000 to 70,000.
By directing the funds resulting from the $375-$500 user fee to ATF, all new and
renewal FFL applicants would be inspected to ensure compliance with the law.
Since a $375-$500 user fee would virtually eliminate dealers operating from their
residences, it would support the efforts of local law enforcement and zoning officials in
enforcement of their laws.
The increased fee will not affect firearms dealers that engage in the business as a primary
source of income. In fact, these dealers would benefit from the reduced competition they are
experiencing from people who are mere hobbyists, but licensed as dealers.
If you wish to discuss this matter in more detail, please call me at (614) 221-0180.
Sincerely,
Deway R. Stokes
Dewey R. Stokes
National President
DRS:cch
JUL-26-1993 14:57 FROM NAGE/IBPO
TO
2029278863
P.02
INTERNATIONAL BROTHERHOOD OF POLICE OFFICERS
2011 Crystal Drive, Suite 206 Arlington, VA 22202
703/979-0290
Fax 703/979-0294
AFL/CIO
July 26, 1993
Honorable Paul Simon
United States Senate
Washington, DC 20510
Dear Senator 'Simon:
The International Brotherhood of Police Officers encourages
and supports the imposition of an annual user fee in the range of
$375 to $500 for issuance of Federal Firearm Licenses (FFL).
At the annual rate of only $10 that is currently imposed by
the Gun Control Act, the number of licensed dealers is
approximately 280,000. From a law enforcement perspective, this
volume of licensed dealers is not only excessive, but is
problematic in our effort to control crime. Additionally, with the
current inspector staffing level for the Bureau of Alcohol, Tobacco
and Firearms (ATF), their approximate 220 inspectors who conduct
inspections of dealers cannot ensure that all 280,000 dealers are
operating within the law.
According to a recent study conducted by the ATF, the vast
majority of firearms dealers operate from their residences in
quantities that indicate they have no intention of engaging in the
business for support or livelihood. These dealers are merely
operating as hobbyists.
There are several reasons for our support of an annual user
fee in the range of $375 to $500, including:
*
At the current $10 rate, the American taxpayer is
subsidizing the issuance of Federal Firearms Licenses. Obviously,
the cost of processing, issuing and maintaining firearms licenses
far exceeds the current rate.
*
ATF currently has approximately 220 inspectors
dedicated to the firearms program. A fee of $375 to $500 would
reduce the number of licensees to approximately 50,000. By
directing the funds generated from the $375 - $500 user fee to ATF,
all firearms dealers could be inspected.
JUL-26-1993 14:57 FROM NAGE/IBPO
TO
2029278863 P.03
Senator Paul Simon
July 26, 1993
Page Two
*
Local law enforcement and zoning officials would be
supported in their efforts to control the proliferation of dealers
that do not meet state and local licensing and zoning requirements.
Dealers currently operating from their residences would be greatly
reduced, if not eliminated.
*
A vast majority of firearms dealers who derive their
primary source of income from their firearms business are opposed
to the current $10 annual fee. A $375 to $500 user fee would
discourage the abundance of hobbyists who negatively affect the
operations and livelihoods of storefront-type dealers.
To summarize, we strongly encourage and support imposition of
an annual user fee in the range of $375 to $500 for Federal
Firearms Licensees, and the direction of the resultant funds to ATF
for additional staffing to ensure the integrity and legality of all
firearms dealers.
If you want to discuss this matter further, please feel free to
call me at (703) 979-0290.
Sincerely,
Kenneth T. Lyons
National President
AIL COLLO TOBACCO CO AND
Bureau of Alcohol, Tobacco and Firearms
NIRFAU OF
Office of Compliance Operations
Firearms and Explosives Division
Oper
Shupshot
INGONOL OF TOB OBACCO SHIPPING
July 12, 1993
OPERATION SNAPSHOT
BACKGROUND
Since passage of the Gun Control Act of 1968 (GCA) there has been
a steady increase in the population, of Federal firearms licensees
(FFL's) in the United States. In 1968 there were about 87,000
licensees. Today there are over 287,000. In 1968 we did not have
sufficient resources to inspect all licensees; nor do we today. Given
our current commitment of resources, we project that it would take
over ten years to inspect each and every licensee.
Historically, we have based our inspection targeting on some
assumptions that we have made about the entire FFL population. We
assumed that the vast majority of licensees were residential dealers,
but couldn't, with any degree of certainty, calculate how many there
were. We suspected that a large number of dealers obtained their
Federal firearms license but never engaged in the business
contemplated by that license. It seemed that a significant number of
dealers were found in violation of the GCA during our compliance
inspections, but again, we couldn't quantify the results.
In an effort to bring the Federal firearms licensee population into
perspective, Operation Snapshot was conceived. We needed to
know who the average licensee was; what kinds of activities and
how much of these activities he/she engaged in; and a whole host of
other questions which, when answered, would provide us basic
information relative to the firearms industry.
Given that our resources would not permit an inspection program that
targeted each and every licensee, we developed a program that
would provide us the information we needed based on a statistical
sampling of the entire firearms dealer population. This program,
when completed, would provide us information about Federal firearms
licensees within defined degrees of accuracy.
July 12, 1993
-2-
METHODOLOGY
In January of 1992 there were approximately 287,000 Federal
firearms licensees, including manufacturers, importers, dealers,
pawnbrokers, and collectors. Of that number, 244,042 licensees
were dealers authorized to deal in firearms other than destructive
devices. These dealers are commonly referred to as Type 01 dealers.
Using a software package designed for the task, ATF selected a
random sample of 400 Type 01 dealers. Each dealer in the sample
was inspected. ATF inspectors used a uniform workplan and
questionnaire to ensure the accuracy of the information being
gathered. In those instances where licensees had discontinued
business, their records were examined at the ATF's Out of Business
Records Center.
The rates of occurrence of specific findings, which are reflected in
terms of percentages, can be projected to the entire Type 01 dealer
population. The projections, based on a sample size of 400 dealers,
will result in a precision rate of plus or minus 5%, with a confidence
level of 95%. For example, Operation Snapshot inspections found
that 26% of the dealers have commercial premises from which to
conduct business. Therefore, we can project, with a 95% level of
confidence, the true percentage rate of dealers having commercial
premises will be between 21% and 31% of the total dealer
population.
CONCLUSION
As a result of the information gathered during the course of Operation
Snapshot, we can now conclude, with a high degree of probability,
certain characteristics about the Federal firearms licensee population
in the United States.
July 12, 1993
-3-
LOCATION AND BUSINESS CHARACTERISTICS
THE TYPICAL FEDERAL FIREARMS DEALER
- IS A SOLE OWNER
- IS A 45-YEAR OLD MALE
- HAS HELD A LICENSE FOR 7 YEARS AND 4 MONTHS
85% OF DEALERS HAVE OTHER SOURCES OF INCOME OR
EMPLOYMENT OTHER THAN A FIREARMS BUSINESS
56% OF DEALERS HAVE THEIR BUSINESS LOCATION IN OR
WITHIN 25 MILES OF A CITY HAVING A POPULATION OVER
100,000 PEOPLE
74% OF DEALERS CONDUCT THE FIREARMS BUSINESS IN
THEIR HOMES
18% OF DEALERS ARE LOCATED IN COMMERCIAL PREMISES
WHERE OTHER GOODS ARE SOLD TO THE PUBLIC (e.g.,
sporting, hardware and general merchandise)
8% OF DEALERS ARE LOCATED AT OTHER COMMERCIAL
PREMISES NOT ASSOCIATED WITH SALE OF GOODS TO THE
PUBLIC (e.g., medical, real estate, insurance office, auto repair,
beauty shop, etc.)
July 12, 1993
-4-
BUSINESS VOLUME AND ACTIVITY
DURING THE 12 MONTHS PRECEDING THE OPERATION SNAPSHOT
INSPECTIONS
7% OF DEALERS HAD MULTIPLE HANDGUN SALES (SALE OF
2 OR MORE HANDGUNS TO THE SAME PERSON DURING A
5-DAY PERIOD)
20% OF DEALERS DEALT IN HANDGUNS HAVING A RETAIL
VALUE OF LESS THAN $200
3% OF DEALERS HAD DISPOSED OF FIREARMS AT
GUNSHOWS
4% OF DEALERS DISPOSED OF FIREARMS ONLY TO
THEMSELVES
8% OF DEALERS DID GUNSMITHING
2% OF DEALERS HAD THEFTS
July 12, 1993
-5-
BUSINESS VOLUME AND ACTIVITY
FIREARMS ACQUISITIONS
DURING THE 12 MONTHS PRECEDING THE OPERATION SNAPSHOT
INSPECTIONS
45% OF DEALERS ACQUIRED NO FIREARMS
36% OF DEALERS ACQUIRED 1 TO 10 FIREARMS
13% OF DEALERS ACQUIRED 11 TO 50 FIREARMS
6% OF DEALERS ACQUIRED OVER 50 FIREARMS
July 12, 1993
-6-
BUSINESS VOLUME AND ACTIVITY
FIREARMS DISPOSITIONS
DURING THE 12 MONTHS PRECEDING THE OPERATION SNAPSHOT
INSPECTIONS
46% OF DEALERS DISPOSED OF NO FIREARMS
34% OF DEALERS DISPOSED OF 1 TO 10 FIREARMS
13% OF DEALERS DISPOSED OF 11 TO 50 FIREARMS
7% OF DEALERS DISPOSED OF OVER 50 FIREARMS
July 12, 1993
-7-
BUSINESS VOLUME AND ACTIVITY
FIREARMS INVENTORY
DURING THE 12 MONTHS PRECEDING THE OPERATION SNAPSHOT
INSPECTIONS
59% OF DEALERS MAINTAINED NO INVENTORY OF FIREARMS
25% OF DEALERS MAINTAINED AN INVENTORY OF 1 TO 10
FIREARMS
10% OF DEALERS MAINTAINED AN INVENTORY OF 11 TO 50
FIREARMS
6% OF DEALERS MAINTAINED AN INVENTORY OF OVER 50
FIREARMS
July 12, 1993
-8-
INSPECTION HISTORY AND RESULTS
9% OF DEALERS HAD PREVIOUSLY BEEN THE SUBJECT OF AN
APPLICATION INVESTIGATION BY ATF
10% OF DEALERS HAD PREVIOUSLY BEEN THE SUBJECT OF A
COMPLIANCE INSPECTION BY ATF
34% OF DEALERS WERE FOUND TO HAVE FEDERAL FIREARMS
VIOLATIONS
7% OF DEALERS WERE FOUND TO HAVE VIOLATIONS FOR
WHICH A FOLLOWUP INSPECTION WAS REQUIRED
4% OF DEALERS COULD NOT ACCOUNT FOR THE
DISPOSITION OF ONE OR MORE FIREARMS
12% OF DEALERS SURRENDERED THEIR LICENSE DURING THE
ATF INSPECTION
3% OF DEALERS WERE OUT OF BUSINESS BEFORE THE ATF
INSPECTION
July 12, 1993
-9-
STATE AND LOCAL LICENSING
35% OF DEALERS ARE REQUIRED TO HAVE A STATE OR
LOCAL FIREARMS LICENSE BUT ONLY 6 OF 10 COMPLY
65% OF DEALERS ARE NOT REQUIRED TO BE LICENSED FOR
FIREARMS UNDER STATE OR LOCAL LAWS
July 12, 1993
OPERATION SNAPSHOT
FIREARMS ACQUISITIONS 1 YEAR BEFORE INSPECTION
OVER 50 FIREARMS
11 TO 50 FIREARMS
6%
13%
NONE
45%
36%
1 TO 10 FIREARMS
(Dealers whose records or business could not be located are included in the NONE category.)
July 12, 1993
OPERATION SNAPSHOT
FIREARMS DISPOSITIONS 1 YEAR BEFORE INSPECTION
OVER 50 FIREARMS
11 TO 50 FIREARMS
7%
13%
NONE
46%
34%
1 TO 10 FIREARMS
(Dealers whose records or business could not be located are included in the NONE category.)
July 12, 1993
OPERATION SNAPS: OT
FIREARMS INVENTORY AT TIME OF INSPECTION
OVER 50 FIREARMS
11 TO 50 FIREARMS
6%
10%
NONE
59%
25%
1 TO 10 FIREARMS
July 12, 1993
ALCOROL TOBACCO
BUREAU OF ALCOHOL, TOBACCO AND FIREARMS
AND FIREARMS FIRE OF DRIVE ARMS *
OFFICE OF COMPLIANCE OPERATIONS
FIREARMS AND EXPLOSIVES DIVISION
OPERATION SNAPSHOT
Final Report
July 12, 1993
OPERATION SNAPSHOT
BACKGROUND
Since passage of the Gun Control Act of 1968 (GCA) there has been
a steady increase in the population of Federal firearms licensees
(FFL's) in the United States. In 1968 there were about 87,000
licensees. Today there are over 287,000. In 1968 we did not have
sufficient resources to inspect all licensees; nor do we today. Given
our current commitment of resources, we project that it would take
over ten years to inspect each and every licensee.
Historically, we have based our inspection targeting on some
assumptions that we have made about the entire FFL population. We
assumed that the vast majority of licensees were residential dealers,
but couldn't, with any degree of certainty, calculate how many there
were. We suspected that a large number of dealers obtained their
Federal firearms license but never engaged in the business
contemplated by that license. It seemed that a significant number of
dealers were found in violation of the GCA during our compliance
inspections, but again, we couldn't quantify the results.
In an effort to bring the Federal firearms licensee population into
perspective, Operation Snapshot was conceived. We needed to
know who the average licensee was; what kinds of activities and
how much of these activities he/she engaged in; and a whole host of
other questions which, when answered, would provide us basic
information relative to the firearms industry.
Given that our resources would not permit an inspection program that
targeted each and every licensee, we developed a program that
would provide us the information we needed based on a statistical
sampling of the entire firearms dealer population. This program,
when completed, would provide us information about Federal firearms
licensees within defined degrees of accuracy.
July 12, 1993
-2-
METHODOLOGY
In January of 1992 there were approximately 287,000 Federal
firearms licensees, including manufacturers, importers, dealers,
pawnbrokers, and collectors. Of that number, 244,042 licensees
were dealers authorized to deal in firearms other than destructive
devices. These dealers are commonly referred to as Type 01 dealers.
Using a software package designed for the task, ATF selected a
random sample of 400 Type 01 dealers. Each dealer in the sample
was inspected. ATF inspectors used a uniform workplan and
questionnaire to ensure the accuracy of the information being
gathered. In those instances where licensees had discontinued
business, their records were examined at the ATF's Out of Business
Records Center.
The rates of occurrence of specific findings, which are reflected in
terms of percentages, can be projected to the entire Type 01 dealer
population. The projections, based on a sample size of 400 dealers,
will result in a precision rate of plus or minus 5%, with a confidence
level of 95%. For example, Operation Snapshot inspections found
that 26% of the dealers have commercial premises from which to
conduct business. Therefore, we can project, with a 95% level of
confidence, the true percentage rate of dealers having commercial
premises will be between 21% and 31% of the total dealer
population.
CONCLUSION
As a result of the information gathered during the course of Operation
Snapshot, we can now conclude, with a high degree of probability,
certain characteristics about the Federal firearms licensee population
in the United States.
July 12, 1993
-3-
LOCATION AND BUSINESS CHARACTERISTICS
THE TYPICAL FEDERAL FIREARMS DEALER
- IS A SOLE OWNER
- IS A 45-YEAR OLD MALE
- HAS HELD A LICENSE FOR 7 YEARS AND 4 MONTHS
85% OF DEALERS HAVE OTHER SOURCES OF INCOME OR
EMPLOYMENT OTHER THAN A FIREARMS BUSINESS
56% OF DEALERS HAVE THEIR BUSINESS LOCATION IN OR
WITHIN 25 MILES OF A CITY HAVING A POPULATION OVER
100,000 PEOPLE
74% OF DEALERS CONDUCT THE FIREARMS BUSINESS IN
THEIR HOMES
18% OF DEALERS ARE LOCATED IN COMMERCIAL PREMISES
WHERE OTHER GOODS ARE SOLD TO THE PUBLIC (e.g.,
sporting, hardware and general merchandise)
8% OF DEALERS ARE LOCATED AT OTHER COMMERCIAL
PREMISES NOT ASSOCIATED WITH SALE OF GOODS TO THE
PUBLIC (e.g., medical, real estate, insurance office, auto repair,
beauty shop, etc.)
July 12, 1993
-4-
BUSINESS VOLUME AND ACTIVITY
DURING THE 12 MONTHS PRECEDING THE OPERATION SNAPSHOT
INSPECTIONS
7% OF DEALERS HAD MULTIPLE HANDGUN SALES (SALE OF
2 OR MORE HANDGUNS TO THE SAME PERSON DURING A
5-DAY PERIOD)
20% OF DEALERS DEALT IN HANDGUNS HAVING A RETAIL
VALUE OF LESS THAN $200
3% OF DEALERS HAD DISPOSED OF FIREARMS AT
GUNSHOWS
4% OF DEALERS DISPOSED OF FIREARMS ONLY TO
THEMSELVES
8% OF DEALERS DID GUNSMITHING
2% OF DEALERS HAD THEFTS
July 12, 1993
-5-
BUSINESS VOLUME AND ACTIVITY
FIREARMS ACQUISITIONS
DURING THE 12 MONTHS PRECEDING THE OPERATION SNAPSHOT
INSPECTIONS
45% OF DEALERS ACQUIRED NO FIREARMS
36% OF DEALERS ACQUIRED 1 TO 10 FIREARMS
13% OF DEALERS ACQUIRED 11 TO 50 FIREARMS
6% OF DEALERS ACQUIRED OVER 50 FIREARMS
July 12, 1993
-6-
BUSINESS VOLUME AND ACTIVITY
FIREARMS DISPOSITIONS
DURING THE 12 MONTHS PRECEDING THE OPERATION SNAPSHOT
INSPECTIONS
46% OF DEALERS DISPOSED OF NO FIREARMS
34% OF DEALERS DISPOSED OF 1 TO 10 FIREARMS
13% OF DEALERS DISPOSED OF 11 TO 50 FIREARMS
7% OF DEALERS DISPOSED OF OVER 50 FIREARMS
July 12, 1993
-7-
BUSINESS VOLUME AND ACTIVITY
FIREARMS INVENTORY
DURING THE 12 MONTHS PRECEDING THE OPERATION SNAPSHOT
INSPECTIONS
59% OF DEALERS MAINTAINED NO INVENTORY OF FIREARMS
25% OF DEALERS MAINTAINED AN INVENTORY OF 1 TO 10
FIREARMS
10% OF DEALERS MAINTAINED AN INVENTORY OF 11 TO 50
FIREARMS
6% OF DEALERS MAINTAINED AN INVENTORY OF OVER 50
FIREARMS
July 12, 1993
-8-
INSPECTION HISTORY AND RESULTS
9% OF DEALERS HAD PREVIOUSLY BEEN THE SUBJECT OF AN
APPLICATION INVESTIGATION BY ATF
10% OF DEALERS HAD PREVIOUSLY BEEN THE SUBJECT OF A
COMPLIANCE INSPECTION BY ATF
34% OF DEALERS WERE FOUND TO HAVE FEDERAL FIREARMS
VIOLATIONS
7% OF DEALERS WERE FOUND TO HAVE VIOLATIONS FOR
WHICH A FOLLOWUP INSPECTION WAS REQUIRED
4% OF DEALERS COULD NOT ACCOUNT FOR THE
DISPOSITION OF ONE OR MORE FIREARMS
12% OF DEALERS SURRENDERED THEIR LICENSE DURING THE
ATF INSPECTION
3% OF DEALERS WERE OUT OF BUSINESS BEFORE THE ATF
INSPECTION
July 12, 1993
-9-
STATE AND LOCAL LICENSING
35% OF DEALERS ARE REQUIRED TO HAVE A STATE OR
LOCAL FIREARMS LICENSE BUT ONLY 6 OF 10 COMPLY
65% OF DEALERS ARE NOT REQUIRED TO BE LICENSED FOR
FIREARMS UNDER STATE OR LOCAL LAWS
July 12, 1993
OPERATION SNAPSHOT
FIREARMS ACQUISITIONS
1 Year Before Inspection
Over 50 Firearms
6%
11 to 50 Firearms
None
36%
1 to 10 Firearms
NOTE: Dealers whose records or business could not be located
are included in the None category.
July 12, 1993
OPERATION SNAPSHOT
FIREARMS DISPOSITIONS
1 Year Before Inspection
Over 50 Firearms
THE
11 to 50 Firearms
None
34%
1 to 10 Firearms
NOTE: Dealers whose records or business could not be located
are included in the None category.
July 12, 1993
OPERATION SNAPSHOT
FIREARMS INVENTORY
At Time of Inspection
Over 50 Firearms
11 to 50 Firearms
None
25%
1 to 10 Firearms
July 12, 1993