January 16, 2026
Mr. Frost introduced the following bill; which was referred to the Committee on the Judiciary
To improve the licensing requirements for the retail sale of firearms, and for other purposes.
Section 1. Short title
This Act may be cited as the Prevent Illegal Gun Resales Act
.
Sec. 2. Increased licensing fees
Section 923 of title 18, United States Code, is amended—
(1)
in subsection (a)—
(A)
in paragraph (1)—
(i)
in subparagraph (A), by striking $1,000
and inserting $2,000
;
(ii)
in subparagraph (B), by striking $50
and inserting $2,000
; and
(iii)
in subparagraph (C), by striking $10
and inserting $1,000
;
(B)
in paragraph (2)—
(i)
in subparagraph (A), by striking $1,000
and inserting $2,000
; and
(ii)
in subparagraph (B), by striking $50
and inserting $2,000
; and
(C)
in paragraph (3)—
(i)
in subparagraph (A), by striking $1,000
and inserting $2,000
; and
(ii)
in subparagraph (B)—
(I)
by striking $200
and inserting $400
; and
(II)
by striking $90
and inserting $180
; and
(2)
in subsection (b), by striking $10
and inserting $20
.
Sec. 3. Anti-trafficking procedures
(a) Dealer’s license application required To specify business practices To prevent diversions from lawful commerce
Section 923(d)(1)(G) of title 18, United States Code, is amended to read as follows:
(G)
in the case of an application to be licensed as a dealer—
(i)
the applicant certifies that secure gun storage or safety devices will be available at any place in which firearms are sold under the license to persons who are not licensees (subject to the exception that in any case in which a secure gun storage or safety device is temporarily unavailable because of theft, casualty loss, consumer sales, backorders from a manufacturer, or any other similar reason beyond the control of the licensee, the dealer shall not be considered to be in violation of the requirement under this subparagraph to make available such a device);
(ii)
the applicant submits with the application a specification of the firearms business practices, policies, and procedures of the applicant; and
(iii)
the Attorney General determines that the specification describes policies, practices, and procedures comply with regulations prescribed under section 926(d).
(b) Regulations To require licensed dealers To implement business practices, policies, and procedures To prevent business inventory firearms, ammunition, and accessories from being diverted from lawful commerce, and prevent business inventory firearms from being transferred to a straw purchaser
Section 926 of such title is amended by adding at the end the following:
(d)
The Attorney General shall prescribe regulations requiring licensed dealers to implement business practices, policies, and procedures sufficient to prevent firearms, ammunition, and accessories in the business inventory of a licensed dealer from being diverted from lawful commerce, and to prevent business inventory firearms of a licensed dealer from being transferred to a straw purchaser, and shall do so in consultation with government entities with expertise similar to that of the White House Office of Gun Prevention.
(c) Penalties for failure To implement business practices, policies, and procedures specified in approved dealer’s license application
Section 924 of such title is amended by adding at the end the following:
(q)
The Attorney General may impose a civil money penalty of not more than $5,000 on, and may suspend the license issued under section 923 to, any person who is a licensed dealer who fails to comply with any practice, policy, or procedure specified in the application approved under section 923 of the person to become a licensed dealer.
Sec. 4. Preventing firearm trafficking
(a) Duties of firearm licensees
Section 923(g) of title 18, United States Code, is amended—
(1)
in paragraph (1)(B)—
(A)
by striking or
at the end of clause (ii); and
(B)
by redesignating clause (iii) as clause (iv) and inserting after clause (ii) the following:
(iii)
for ensuring compliance with the regulations prescribed under section 926(d); or;
(2)
in paragraph (3)(B)—
(A)
by inserting a firearm involved in a crime or
after thereof regarding
;
(B)
by striking , and shall destroy each such form and any record of the contents thereof no more than 20 days from the date such form is received
and inserting and shall retain each such form and any record of the contents of the form for 180 days after the date the form is received
; and
(C)
by striking the 2nd sentence; and
(3)
by striking paragraph (7) and inserting the following:
(7)
(A)
Each licensee shall respond immediately to, and in no event later than 24 hours after the receipt of, a request by the Attorney General for information contained in the records required to be kept by this chapter as may be required for determining the disposition of 1 or more firearms in the course of a bona fide criminal investigation. The requested information shall be provided orally or in writing, as the Attorney General may require. The Attorney General shall implement a system whereby the licensee can positively identify and establish that an individual requesting information via telephone is employed by and authorized by the agency to request the information.
(B)
Each licensee shall, in the absence of unique and special circumstances and approved in writing by the Attorney General, maintain records of all such crime gun trace requests for firearms disposed of by the licensee within the preceding 3 years, with copies of the transaction records for the firearms in the possession of the licensee, if any, to review before the transfer of any firearm.
(C)
Each licensee shall review all records of crime gun trace requests before transferring any firearm, and report sales or other dispositions whenever the licensee sells or otherwise disposes of any firearm to an unlicensed person to whom a crime gun has been traced. The report shall be prepared on a form specified by the Attorney General and forwarded to the office specified thereon and to the department of State police or State law enforcement agency of the State or local law enforcement agency of the local jurisdiction in which the sale or other disposition took place, not later than the close of business on the day that the licensee determines that the sale or other disposition occurs.
(D)
(i)
Each licensed dealer shall update the practices, policies, and procedures referred to in section 923(d)(1)(G)(ii) of the licensee, whenever—
(I)
the licensee reports to the Attorney General 5 or more lost or stolen firearms in any period of 12 consecutive months; or
(II)
5 or more firearms that were used in a crime under Federal, State, or local law within 3 years after the last known retail sale of the firearm are traced to the licensee within any such 12-month period.
(ii)
Each licensed dealer shall maintain physical records of costs incurred to implement and update the business practices, policies, and procedures, including the installation of audio and video surveillance of firearms transactions, and the implementation of an electronic record keeping system, or of physical security to prevent loss or theft of firearm inventory, and shall make the records available for inspection on the premises covered by the license until the licensee ceases to engage in the business of selling firearms.
(b) Duties of the Attorney General
The Attorney General shall—
(1)
develop, draft, and distribute to persons licensed under chapter 44 of title 18, United States Code, materials setting forth best business practices, policies, and procedures to prevent the diversion of firearms inventory from lawful commerce, and from time to time revise the materials as appropriate; and
(2)
during the 3 fiscal years that first begin after the date of the enactment of this Act, prioritize for compliance inspections those firearms dealers that have not been inspected within the then preceding fiscal year with a high number of crime gun traces relative to other firearms dealers.
Sec. 5. Mens rea requirement for violations of rules applicable to only licensees
Section 924(a)(1)(D) of title 18, United States Code, is amended by striking willfully
and inserting knowingly
.
Sec. 6. Firearms trafficking offense
(a) In general
Section 933 of title 18, United States Code, is amended to read as follows:
933. Trafficking in firearms
(a) Prohibitions
(1) In general
It shall be unlawful for any person to—
(A)
ship, transport, transfer, cause to be transported, or otherwise dispose of 2 or more firearms to another person in or affecting interstate or foreign commerce, if the person knows or has reasonable cause to believe that the use, carrying, or possession of a firearm by such other person would constitute a felony (as defined in section 932(a));
(B)
receive from another person 2 or more firearms in or affecting interstate or foreign commerce, if the person knows or has reasonable cause to believe that the receipt would constitute a felony; or
(C)
attempt or conspire to commit conduct described in paragraph (1) or (2).
(2) Licensees
It shall be unlawful for any licensee to ship, transport, transfer, cause to be transported, or otherwise dispose of any firearm to another licensee if the licensee knows or has reasonable cause to believe that—
(A)
in the preceding year, 5 or more firearms that were used in a crime under Federal, State, or local law within 3 years after the last known retail sale of the firearms have been traced to such other licensee;
(B)
in the preceding year, to the knowledge of the licensee, such other licensee has since failed to implement or update business practices to prevent firearm trafficking or straw purchasing;
(C)
such other licensee lacks adequate security to prevent loss or theft of firearms or ammunition from the inventory of such other licensee; or
(D)
in the most recent inspection of such other licensee under this chapter, the Attorney General has found 3 or more violations relating to failures to timely or accurately record information in firearm acquisition and disposition records.
(b) Affirmative defenses
It shall be an affirmative defense to a charge of violating—
(1)
subsection (a)(1) of this section, that the licensee took all reasonable steps, including the implementation of and updates to business practices pursuant to subsection 923(g)(7)(D), to prevent the diversion of inventory firearms from lawful commerce; and
(2)
subsection (a)(2) of this section, that the licensee took all reasonable steps to comply with subsection (a)(2) and failed to discover facts that would render disposition of firearms to a licensee unlawful under subsection (a)(2) only as the direct result of a violation of Federal law by the licensee.
(c) Penalties
(1) In general
Any person who violates subsection (a)(1) shall be fined under this title, imprisoned for not more than 15 years, or both.
(2) Licensees
(A) Civil penalties
Any licensee who violates subsection (a)(2) shall, after notice and opportunity for a hearing, disgorge all profits from the transfer of the firearms that are the subject of the violation, and the court may impose on the licensee a civil money penalty equal to the greater of—
(i)
$10,000 for each firearm involved, or $50,000 with respect to any such firearm that was subsequently used in a crime under Federal, State, or local law; or
(ii)
the total amount expended by the Attorney General in the preceding 3 fiscal years to trace firearms used in a crime under Federal, State, or local law, multiplied by the percentage of the firearms traced to the licensee that were recovered during that period.
(B) License suspension or revocation
In addition to any penalty under subparagraph (A), the Attorney General may, after notice and opportunity for a hearing, suspend or revoke the license issued to the licensee under this chapter in the case of the first violation of this section and, in the case of any subsequent violation, shall immediately revoke the license.
(b) Directive to Sentencing Commission
(1) In general
Pursuant to its authority under section 994(p) of title 28, United States Code, the United States Sentencing Commission shall review and, if appropriate, amend the Federal sentencing guidelines and policy statements applicable to persons convicted of offenses under section 933 of title 18, United States Code (as added by subsection (a) of this section).
(2) Requirements
In carrying out this section, the Commission shall review the penalty structure that the guidelines provide based on the number of firearms involved in the offense and determine whether any changes to the penalty structure are appropriate in order to reflect the intent of the Congress that the penalties reflect the gravity of the offense, the number of trafficked firearms purchased by or from the defendant, the extent of the knowledge of the defendant about the overall scheme to traffic firearms, the amount of money or nonmonetary compensation provided to the defendant for the participation of the defendant, and the culpability of the defendant, including whether the defendant is a licensed manufacturer, importer, or dealer and, as mitigating factors, whether the defendant is a relative or current or former intimate partner of another individual involved in a conspiracy to traffic firearms, is a domestic violence survivor, or has been otherwise exploited by personal affection, fear of reprisal. or economic need to commit an offense under section 933 of title 18, United States Code.
(c) Directive to ATF
(1) Duty to investigate
The Director of the Bureau of Alcohol, Tobacco, Firearms and Explosives shall investigate the source of firearms trafficked in violation of section 923 or 933 of title 18, United States Code, and in particular, whether the source is engaged in the business of importing, manufacturing, or dealing in firearms in violation of section 922(a)(1) of such title, and refer prosecutions of the source to the Attorney General. The Director shall assess whether regulations, informal guidance, licensee resources regarding trafficking, and the conduct of a firearms transferee would indicate, to a reasonable person, that the transferee may be violating section 932 or 933 of such title, and revise and re-issue the materials developed under section 4(b) of this Act, accordingly.
(2) Gun trafficking awareness program
The Director shall establish a program, to be known as the Gun Trafficking Awareness Program
, in which licensees under chapter 44 of title 18, United States Code, who have transferred firearms to an individual who has violated section 932(b) of such title, but who lack the mens rea to have committed a violation of section 933 of such title, may be enrolled for purposes of preventing future such violations. The program shall include, at a minimum—
(A)
electronic or in-person training of such a licensee and all employees of the licensee who are responsible for handling firearms to identify signs of straw purchasing or gun trafficking;
(B)
the adoption by such a licensee of electronic record keeping and collation of records relevant to trafficking, including crime gun trace requests and multiple purchase reports;
(C)
a requirement that such a licensee who operates retail premises from which firearms are transferred maintain audio and video surveillance of all areas of the premises; and
(D)
inspections of such a licensee, as appropriate, and not more frequently than quarterly, for a period of 1 year, to ensure compliance with such chapter.
(d) Directive to the Attorney General
Within 2 years after the date of the enactment of this Act and annually thereafter, the Attorney General shall submit to the Committee on the Judiciary of the Senate and the Committee on the Judiciary of the House of Representatives a report containing the following information:
(1)
For the preceding 12-month period—
(A)
the number of investigations initiated for violations of section 933 of title 18, United States Code;
(B)
the number of individuals, entities, and Federal firearm licensees charged criminally or civilly for the violations;
(C)
the number of individuals, entities, and Federal firearm licensees indicted for the violations;
(D)
the number of investigations referred to the Attorney General by the Bureau of Alcohol, Tobacco, Firearms and Explosives that did not result in criminal or civil charges; and
(E)
the number of licensees enrolled in, and the number of licenses determined to have successfully completed, the program established under subsection (c)(2).
(2)
To the extent the information is available, the average length of the sentences of imprisonment and average and mean monetary fines imposed on persons convicted of violations of section 933 of title 18, United States Code, during the preceding 12-month period.
(3)
A narrative describing the trafficking schemes prosecuted in the preceding 12-month period, including the sources of firearms, the roles of various defendants in the scheme, the number of firearms trafficked, and a description of any trafficking practices or trends common among various firearm trafficking schemes.
Sec. 7. Enhanced regulation of high risk dealers
Chapter 44 of title 18, United States Code, is amended by adding at the end the following:
935. Regulation of high risk dealers
(a) In general
On a determination by the Attorney General that a licensed dealer is a high risk dealer, the Attorney General shall—
(1)
require the dealer to permanently alter the business practices of the dealer or make physical improvements to the firearms business premises of the dealer to reduce the diversion of firearms from the firearms inventory of the dealer, which requirements shall include requiring the dealer to—
(A)
adopt electronic acquisition and disposition record keeping;
(B)
provide the National Tracing Center with electronic access to all records required to be kept under this chapter that are possessed by the dealer;
(C)
make video and audio recordings of all firearms transactions, and maintain the recordings for 360 days; and
(D)
retain for more than 360 days, any video or audio recording of a firearm transaction that was the subject of a trace request; and
(2)
not less frequently than biennially, inspect or examine the inventory, records, and business premises of the dealer without reasonable cause or warrant.
(b) Cessation
On application of a high risk dealer, on a form prescribed by the Attorney General, and approval of the application by the Attorney General in writing, the inspections of the dealer under subsection (a)(2) shall cease—
(1)
on certification by the Attorney General that the dealer—
(A)
has permanently altered the business practices of the dealer or made the physical improvements required under subsection (a)(1); and
(B)
will maintain the practices and improvements until otherwise notified by the Attorney General; and
(2)
if, on 2 separate and consecutive occasions at least 6 months apart, the Attorney General has inspected and examined the books and records of the dealer and, during that period, the dealer has not been notified of any violations of Federal, State, or local law.
(c) Notice
The Attorney General shall inform high risk dealers in writing of their obligations under this section.
(d) Definition
The term high risk dealer means any dealer identified by the Attorney General as lacking sufficient policies, procedures, or controls to prevent the diversion from lawful commerce of firearms or ammunition in the firearms business inventory of the dealer or transferred by the dealer, and firearms possessed by the dealer that are to be destroyed, and, thus, necessitating enhanced regulation and enforcement including regular inspection and examination of the inventory, records, and premises of the firearms business of the dealer. The Attorney General shall so identify such a dealer if—
(1)
the Attorney General has issued to the dealer a report of violation or warning letter;
(2)
the dealer has been the subject of a warning conference with the Attorney General within the preceding 36 months; or
(3)
in the preceding 12 months, the dealer was the source of 2 or more firearms that were used in a crime under Federal, State, or local law within 36 months after the last known retail sale of the firearm.
Sec. 8. Effective date
Sections 2 through 6 shall take effect on the date that is 180 days after the date of the enactment of this Act.