Tag Archives: rulemaking

Trump Signs Bill Reversing Obama Rule to Report Certain Social Security Recipients to NICS

Late last year, I blogged that the Social Security Administration published a final rule relating to the NICS Improvement Act of 2007.

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The final rule provided that:

An individual will have been “adjudicated as a mental defective” if during SSA’s claim development and adjudication process, or when SSA takes certain post-entitlement or post-eligibility actions, SSA will identify any individual who:

  1. Has filed a claim based on disability;
  2. Has been determined to be disabled based on a finding that the individual’s impairment(s) meets or medically equals the requirements of one of the Mental Disorders Listing of Impairments (section 12.00 of appendix 1 to subpart P of part 404 of this chapter) under the rules in part 404, subpart P, of this chapter, or under the rules in part 416, subpart I, of this chapter;
  3. Has a primary diagnosis code in our records based on a mental impairment;

    Primary diagnosis code
     means the code we use to identify an individual’s primary medical diagnosis in our records. The primary diagnosis refers to the basic condition that renders an individual disabled under the rules in part 404, subpart P, of this chapter, or under the rules in part 416, subpart I, of this chapter.
  4. Has attained age 18, but has not attained full retirement age; and
  5. Requires that his or her benefit payments be made through a representative payee because we have determined, under the rules in part 404, subpart U, of this chapter, or the rules in part 416, subpart F, of this chapter, that he or she is mentally incapable of managing benefit payments.

While the rule would not have affected anyone until December of this year, it will now no longer affect anyone.

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On February 28, 2017, President Trump quietly signed a bill that was passed in both chambers of Congress which reversed the implementation of this rule. As a result, the Social Security Administration’s regulation is now no longer a threat to about 75,000 Americans.

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Of course, those who oppose individuals owning firearms, are attempting to sway public opinion by using a narrative that President Trump signed a bill which reversed Obama’s rule to ban gun purchases by the mentally ill. Given that many individuals did not know or understand what the rule actually did, it is not surprising this narrative is being utilized to delegitimize what is a good decision for Americans.

 

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Social Security Administration Publishes Final Rule Relating to NICS Improvement Amendments Act of 2007

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It has been well reported that the Social Security Administration (“SSA”) had been passing along information of individuals that it deemed unable to handle their financial affairs to NICS for the purposes of preventing them from purchasing a firearm due to being “adjudicated as a mental defective.”

In May of this year, the SSA published a Notice of Proposed Rulemaking. It received over 91,000 comments relating to the proposed rule. Of those, 86,860 were identical letters submitted by various individuals of a single advocacy group, opposing the proposed rule.

On December 19, 2016, the SSA published a Final Rule on the Federal Register pertaining to its regulations. While the regulations take effect on January 18, 2017 compliance is not required until December 19, 2017.

Public Comments

There were a number of comments on various issues, which I will recap a few points quickly below before moving on to explain the final rule and its impact.

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Second Amendment and Equal Protection

A number of individuals commented that “these rules would violate the affected individuals’ rights under the Second Amendment to the Constitution, and would also violate their equal protection rights under the Constitution. Most of these comments were provided in largely identical letters, and they asserted that our rules would take firearms away from elderly recipients of Social Security retirement benefits.”

SSA responds stating that “[t]he criteria we will use under these rules do not focus on one age group, such as the elderly or recipients of Social Security retirement benefits, nor do they categorize and treat individuals who are similarly situated differently.” Further, “[w]e do not intend under these rules to report to the NICS any individual for whom we appoint a representative payee based solely on the individual’s application for and receipt of Social Security retirement benefits.”

With regard to the Second Amendment claim, the SSA cites to District of Columbia v. Heller, 554 U.S. 570 (2008) for the proposition that “[l]ike most rights, the right secured by the Second Amendment is not unlimited,” and that “nothing in [the Court’s] opinion should be taken to cast doubt on longstanding prohibitions on the possession of firearms by felons and the mentally ill.” Heller at 626.

Unfortunately, the Heller decision gives no guidance as to what constitutes mentally ill. Is an individual who was diagnosed with OCD “mentally ill”? Where does one draw the line exactly?

Due Process

Individuals commented that the due process rights of the beneficiaries would be violated because the beneficiaries would not be able to appeal the decision prior to the inclusion of their information being reported to NICS, raised concerns about adequate notice being given to the beneficiary who might be reported and argued the costs of pursuing relief should an individual be reported to NICS would be onerous.

SSA responded stating that “[a]ffected individuals will have the opportunity to apply for relief from the Federal firearms prohibitions imposed by 18 U.S.C. 922(g)(4) at any time after our adjudication has become final…we will provide individuals with advance notice at the commencement of the adjudication that we may report their information to NICS if we find they meet the criteria for reporting when the adjudication is final.”

SSA goes on to state that they “will provide oral and written notice to the beneficiary at the commencement of the adjudication, which we define as after we have determined that he or she meets the medical requirements for disability based on a finding that his or her impairment(s) meets or medically equals the requirements of the mental disorders listings, but before we find that he or she requires a representative payee.”

Notice is extremely important and a lot of times never given to individuals. SSA incorporating both oral and written notice to an individual is pleasantly surprising, given a the litany of issues I see where an individual is never told that a finding may result in their Second Amendment rights being taken from them.

Lastly, regarding the cost of pursuing relief, SSA dismissed the concerns by stating they will not impose a fee in connection with a request for relief and that it believes the cost to obtain the evidence it would require for such a request for relief as “reasonable”.

Part of the criteria of the new rule is that the individual appealing the decision will provide the SSA medical evidence in the form of a statement of the individual’s current mental health status as well as their mental health during the preceding five years from the applicant’s primary mental health provider. Such evaluations are typically performed by a psychologist and cost anywhere between $1,500 to $2,000 on average.

Final Rule

In order for an individual to be reported to NICS, they have to meet the five (5) criteria spelled out in Section 421.110.

Adjudicated as a mental defective, in accordance with 18 U.S.C. 922(g)(4), as amended, means a determination by a court, board, commission, or other lawful authority that a person, as a result of marked subnormal intelligence, or mental illness, incompetency, condition, or disease: Is a danger to himself or others; or lacks the mental capacity to contract or manage his own affairs.

An individual will have been “adjudicated as a mental defective” if during SSA’s claim development and adjudication process, or when SSA takes certain post-entitlement or post-eligibility actions, SSA will identify any individual who:

  1. Has filed a claim based on disability;
  2. Has been determined to be disabled based on a finding that the individual’s impairment(s) meets or medically equals the requirements of one of the Mental Disorders Listing of Impairments (section 12.00 of appendix 1 to subpart P of part 404 of this chapter) under the rules in part 404, subpart P, of this chapter, or under the rules in part 416, subpart I, of this chapter;
  3. Has a primary diagnosis code in our records based on a mental impairment;

    Primary diagnosis code means the code we use to identify an individual’s primary medical diagnosis in our records. The primary diagnosis refers to the basic condition that renders an individual disabled under the rules in part 404, subpart P, of this chapter, or under the rules in part 416, subpart I, of this chapter.

  4. Has attained age 18, but has not attained full retirement age; and
  5. Requires that his or her benefit payments be made through a representative payee because we have determined, under the rules in part 404, subpart U, of this chapter, or the rules in part 416, subpart F, of this chapter, that he or she is mentally incapable of managing benefit payments.

These criteria will be applied to capability findings that are made in connection with initial claims on or after December 19, 2017 and capability findings that are made in connection with continuing disability reviews (including age-18 disability redeterminations under § 416.987) on or after December 19, 2017. The latter provision will only apply in instances with respect to capability findings in which SSA appoints a representative payee for an individual in connection with a continuing disability review.

If the individual does not meet all five of the aforementioned requirements, then they will not be reported to NICS.

The regulations provide that if SSA determines the person is “mental defective” they will provide both oral and written notice to the affected individual that:

(a) A finding that he or she meets the criteria in § 421.110(b)(1) through (5), when final, will prohibit the individual from purchasing, possessing, receiving, shipping, or transporting firearms and ammunition, pursuant to 18 U.S.C. 922(d)(4) and (g)(4);

(b) Any person who knowingly violates the prohibitions in 18 U.S.C. 922(d)(4) or (g)(4) may be imprisoned for up to 10 years or fined up to $250,000, or both, pursuant to 18 U.S.C. 924(a)(2); and

(c) Relief from the Federal firearms prohibitions imposed by 18 U.S.C. 922(d)(4) and (g)(4) by virtue of our adjudication is available under the NIAA.

If an individual is reported, they may request relief from SSA as to the determination. Per Section 421.150 an application for relief must be in writing and include the information required by § 421.151. It may also include any other supporting data that the SSA or the applicant deems appropriate. When an individual requests relief under this section, SSA will also obtain a criminal history report on the individual before deciding whether to grant the request for relief.

Section 421.151 requires the applicant provide:

  1. A current statement from the applicant’s primary mental health provider assessing the applicant’s current mental health status and mental health status for the 5 years preceding the date of the request for relief; and

    The statement must specifically address:
    (i) Whether the applicant has ever been a danger to himself or herself or others; and
    (ii) Whether the applicant would pose a danger to himself or herself or others if we granted the applicant’s request for relief and the applicant purchased and possessed a firearm or ammunition.

  2. Written statements and any other evidence regarding the applicant’s reputation.

    The statements must specifically:
    (i) Identify the person supplying the information;
    (ii) Provide the person’s current address and telephone number;
    (iii) Describe the person’s relationship with and frequency of contact with the applicant;
    (iv) Indicate whether the applicant has a reputation for violence in the community; and
    (v) Indicate whether the applicant would pose a danger to himself or herself or others if we granted the applicant’s request for relief and the applicant purchased and possessed a firearm or ammunition.

The applicant may obtain written statements from anyone who knows the applicant, including but not limited to clergy, law enforcement officials, employers, friends, and family members, as long as the person providing the statement has known the applicant for a sufficient period, has had recent and frequent contact with the beneficiary, and can attest to the beneficiary’s good reputation. At least one statement must be from an individual who is not related to the applicant by blood or marriage.

The burden is on the applicant to show that he/she is not likely to act in a manner dangerous to public safety and that granting relief from the prohibitions imposed by 18 U.S.C. 922(d)(4) and (g)(4) will not be contrary to the public interest. Assuming those criteria are met, the SSA may grant relief. Unfortunately, the regulation does not state that they shall grant relief.

SSA’s regulations provide that a decision maker who was not involved in making the finding that the applicant’s benefit payments be made through a representative payee will review the evidence and act on the request for relief. If the request is denied, the applicant will have 60 days to file a petition for review in a Federal District Court. If the application for relief is approved, SSA will provide the applicant with written notice as to the reason for their decision, inform them that they are no longer prohibited under 18 U.S.C. 922(g)(4) from purchasing, possessing, receiving, shipping, or transporting firearms or ammunition based on the prohibition that we granted the applicant relief from, and inform the Attorney General of the decision in order to remove the applicant from the NICS database.

SSA has 365 days to act upon an application pursuant to NICS Improvement Amendments Act.

 

Did you find this blog helpful or informative? Be sure to share it with your friends by clicking the buttons below. Don’t forget to like Firearms Industry Consulting Group and Prince Law Offices, P.C. on Facebook by using the “Like” button to the right

ak4nra_logo-01smallIf you are an NRA Life, Endowment, Patron or Benefactor member or an annual member of the past 5 consecutive years I ask that you please consider me in the upcoming election for the Board of Directors in February of 2017. Ballots will be mailed in the February issue of the NRA magazine to which you are subscribed. For more information, please visit www.adamkraut.com.

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New Regulations for Explosives/Pyrotechnics Industries (Part 2)

 

09/19/2016

OSHA is currently accepting comments for proposed rulemaking. The proposal is for new Process Safety Management rules for the Explosives and Pyrotechnics Industries and comments will be accepted until September 23rd!

You might ask, “What is ‘Process Safety Management’?”  That is a great question answered in Part 1 of this post click HERE to check it out!

The proposed regulations are expansive and, along with those items mentioned in Part 1, require that employers develop PHAs, SOPs, and Mechanical Integrity Plans.  So welcome to Part 2 let’s get started.

Process Hazard Analyses (PHAs)

Among the proposed regulations is the requirement that all employers perform PHAs.  OSHA defines PHAs as – “A systematic effort designed to identify and analyze hazards associated with the processing or handling of highly hazardous materials; and a method to provide information which will help workers and employers in making decisions that will improve safety.”

At its heart PHAs ares nothing more than identifying processes and identifying what hazards are present. OSHA states that PHAs “attempt[] to determine: the failure points, methods of operations, and other factors that potentially lead to accidents.”

Beyond that, OSHA’s best guidance on the subject was developed by The New Jersey Work Environment Council (WEC) under grant of OSHA. That document is 31 pages long and can be downloaded HERE.  Most businesses have (at a minimum) dozens of processes.  If you fail to identify a hazard within a process, that is a violation.  If you fail to identify a process and the hazards it contains – violation. If you fail to document everything in accordance with those 31 pages of ‘guidance’ – violation.

Seven Steps to PHA Success

Here is a hypothetical – Fictional Enterprises makes Pyrotechnics. The manufacturing is complicated involving over 75 operations.  – Each of these involves one process for purposes of a PHA. Operation 34 states – Technician will mix 3mL of Chemical X with 25cc of Explosive. Technician must then place the mixture in Centrifuge, spinning mixture for exactly 5 minutes at exactly 120 rpm. Fictional Enterprises wants to perform a PHA on Operation 34.

Step 1 – assembling the right team. OSHA stipulates that to perform a PHA your team, “should include engineers, operators, supervisors and other workers who have knowledge of the standards, codes, specifications…which apply to the process….” You assemble Mr. Engineer, Mrs. Supervisor, Ms. Technician, and Homer the technician who performs Operation 34. Your team proceeds to…

Step 2 – develop checklists of applicable regulations and safety standards. Your team examines Operation 34, finding 3 fire safety codes, 5 electrical ordinances, 9 chemical safety standards, and 122 other regulations which may be applicable to Operation 34. Developing the checklist was performed efficiently and only required 42 man hours to complete. The team moves to…

Step 3 – examine those regulations and determine the steps needed to ensure compliance with (or alternatively the non-applicability of) the standards.  All of this must be documented and included in your PHA. Your team continues their efficiency requiring 115 man hours to finish. The team now begins…

Step 4 – performing “What If” evaluations. OSHA defines this as having, “a relatively loose structure” and “only [being] as effective as the quality of questions asked and the answers given.” Even with that precision guidance your team spends 100 man hours in brainstorming the possible “what ifs.” The team now moves to…

Step 5 – Hazard and Operability Study (HazOp). OSHA defines this as “a structured, systematic review that identifies equipment that is being used in a way that it was not designed to be, and which might create hazards or operational problems.”  OSHA notes that this may require an additional “multi-skilled team.” This team must be familiar with, “piping and instrument diagrams” and have a competent understanding of “certain limitations and deviations in flow, temperatures, and pressures…” for your equipment.

Your team enlists the help of Supplier Engineer, Equipment Designer, and Senior Chemist. The team is efficient and prepared documentation for your PHA in only one week.  The Team moves to…

Step 6 – Failure Mode and Effect Analysis (FMEA). OSHA defines this process as a “systematic study of the consequences of failure (breakdown) of certain operational hardware….” This is the only guidance provided and results in your team spending an additional week attempting to figure out the FMEA.  The team moves to…

Step 7 – Fault-Tree Analysis. OSHA describes this as, “draw[ing] a picture (model) that shows what undesirable outcomes might result from a specific initiating event….” Or you make a flow chart of Operation 34, INCLUDING flow routes for if things go wrong.  So instead of just having “Homer runs centrifuge for 5 minutes” you should also include what happens if Homer gets distracted by a certain round raspberry confection and lets the centrifuge spin for 19 minutes.

The team is fortunate to have Homer with them and subsequently maps out all the possible faults in only 97 man hours.  Bringing your total time in completing the PHA for Operation 34 to over 800 man hours.

What’s wrong with this picture?

 The first thing you probably noticed was just how many man hours it takes to complete the PHA for one operation. Good thing your company only has 74 more that need to be evaluated…

The next thing that creates a problem is the FMEA.  OSHA provides very little guidance on FMEAs. This could mean they want you to use RAGAGEP but this is never stated. Given that OSHA is explicit in the other sections where they want RAGAGEP it might mean they have some specific standard in mind.  However, if it exists, it is not provided.

Worse still would be if RAGAGEP is to be used –With Aerospace you must often perform FMEAs before you are certified to conduct business.  The American Society for Quality (ASQ) has an excellent write up on their preferred methods for performing FMEAs.  This method is one I am familiar with and find to be successful.  Their write up can be found HERE.  Interestingly, you will note that the ASQ methodology for FMEAs is very similar in description to what OSHA requires for the entire PHA.

This should be of significant concern to business owners because it muddies what OSHA wants.  If they want you to refer to RAGAGEP the ASQ standard is undoubtedly one of the most thorough in the business.  However, if you follow the ASQ methodology you will essentially have a PHA within a PHA. Alternatively, if OSHA wants you to use a specific standard – they do not provide it. In short the FMEA requirement’s lack of clarity puts employers in a catch 22.

Some readers may note that the PHA steps listed above are exactly what is already available in the above referenced guidance document.  This is true and the next problem – the proposed regulations merely create an additional standard which can be cited as requiring employers to be compliant.  So what was before a violation of one PHA requirement can now be a violation of two.

My final gripe before we continue is that OSHA expressly states their reason for promulgating these new regulations are several incidents which could have been prevented had PHAs or other measures been taken.  These new requirements do not assist employers in being better able to conduct PHAs. Neither do they require employers who were previously unregulated to conform.

To the contrary, these new regulations will only serve to confuse businesses by telling them to comply with multiple but un-specified RAGAGEP standards. Confusing and redundant standards do not promote worker safety. They create a culture where employers who are unable to understand what OSHA wants merely give up. OSHA’s response continues to be “just fine them again” rather than actually finding ways to create safety standards that are clear, concise, and focused on the functional application of safe work practices.

In addition to the PHAs employers are also going to be re-required to create Standard Operating Procedures (SOPs) and create Mechanical Integrity Plans.

SOPs, in brief (I promise).

Again, OSHA is only reiterating already promulgated rules on operating procedures. The only new provision is a couple of vague examples encouraging those in the explosive and pyrotechnics industries to look to RAGAGEP for particulars of their industry.  It is also worth noting that as required by several other standards this standard would once again require employees be trained in the procedures and that employers document this training. However, the general requirements for procedures remain the same:

  1. Procedures must be written.
  2. must be clear
  3. must be available to all operators.
  4. must specify steps for
    1. normal operation.
    2. upset conditions
    3. temporary operations
    4. start-up
    5. emergency shutdown
  5. must include Basic Safety Information
  6. must be certified annually for current-ness an adequacy.
    1. Recommended that they be reviewed before each use to verify the current version is in use.

Mechanical Integrity Plans (MIPs)

OSHA’s requirements for Mechanical Integrity Plans are essentially PHAs used to evaluate equipment rather than processes.  So instead of focusing on what an operator is doing you focus on how our example Centrifuge works, in great detail.

OSHA decided to also include an explicit RAGAGEP provision. So in addition to the extreme scrutiny that must be given within the PHA styled process, they also require “employers [to] identify the subset of RAGAGEP most appropriate for their process equipment, document in the MIP which protocols are to be followed, and ensure that inspection and testing is performed accordingly.”  So stated in English, OSHA’s new standard is requiring employers to (1) figure out which standards apply to them; (2) write up how they decided this and how they are complying; and (3) ensure they are complying in the appropriate manner to the standards which the employer had to find themselves.

OSHA states, “employers are completely unfamiliar with [] RAGAGEP references, consultation with a professional [] is advised.” This can be roughly translated as OSHA saying, “Good luck complying!”

Closing Remarks (and the people rejoice)

This whole section of proposed regulation is a farce.  It is an attempt by OSHA to satisfy an executive order by promulgating a new rule that says nothing more than “do our existing rules” and “find what rules apply and then follow them.”  I cannot reiterate enough that this does not promote worker safety.  No sane person wants their employees to be endangered.  However, no employer can commit to thousands of man hours just to guess at whether they are being compliant with an OSHA Standard.

If your business is in the explosives or pyrotechnics industry I implore you to consider submitting an official comment to OSHA.  OSHA is accepting comments through THIS FRIDAY, September the 23rd.  Click HERE to submit a comment or download the proposed regulations. Comments made to these proposed rules really can affect OSHA’s actions!

Whether you are in the Explosives industry and would like to submit an official comment or you just want to make sure your business is compliant with existing OSHA requirements Prince Law Offices is happy to be of assistance.  Just call 888-313-0416 to schedule an appointment.


Jonathan Moore  served as Manager of Corrective Actions and Director of Corporate Compliance for an Aerospace Manufacturing Company. He  now serves as Prince Law Offices in-house OSHA Consultant while attending law school at the Pennsylvania State University School of Law.

 

 

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Extremely Interesting Developments Relating to ATF’s Re-Opening of the Comment Period for the ATF 4473

As our readers are likely aware, I previously blogged that ATF had re-opened the comment period for the ATF 4473 form. After digging a little deeper, I determined that OMB issued a PRA Primer Memo of April 7, 2010 directing that an agency, after providing the initial 60 day notice period required by 44 U.S.C. 3506(c)(2)(A), summarize the public comments received and any response by the agency, then submit that information to OIRA and thereafter provide an additional 30 day comment period so the public has an opportunity to respond to comments submitted.

Accordingly, on August 5, 2016, I submitted a correspondence to OIRA and ATF citing to the PRA Primer Memo and explaining that in relation OMB Number 1140-0020 “ATF has failed to provide either (1) the actual comments submitted or (2) any summary of the public comments received (as well as any response by the agency); therefore, depriving the public of any opportunity to know what comments were submitted and depriving the public of an opportunity to respond to those comments and thereby eviscerating the purpose of the 30 day comment period.”

Although I received no response from OIRA or ATF, today, Attorney Adam Kraut, who drafted our Comment in Opposition, initially received an email from the ATF Firearms Industry Program Branch (FIPB) in relation to his June 1, 2016 email inquiring as to why ATF was not posting or providing access to the comments submitted regarding the proposed changes to the ATF 4473. FIPB stated that “Comments received from this information collection will soon be available on the www.reginfo.gov website.”

Shortly thereafter, Attorney Kraut received a second email from FIPB with a response to Firearms Industry Consulting Group‘s Comment in Opposition. You can download a copy of ATF’s response to our Comment here. Additionally, I recently learned that ATF also emailed a response to our friends at Cannabis Industry Law Group in relation to their Comment in Opposition to the ATF 4473 and ATF provided this response.

It appears that OIRA was not exactly happy with ATF’s failure to comply with OMB’s requirements and directed ATF to correct its errors. It will be interesting to see if the 30 day comment period is extended to provide all interested parties with the requisite 30 days to respond, after ATF provides access to all comments received and its responses thereto.

If you are in the Firearms Industry and desire to file comments in relation to ATF, DDTC or any other federal agency’s rulemaking, contact us today to discuss how we can assist.

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News from the Round Table Discussions at the NSSF Import/Export Conference

It’s that time of year again, the NSSF Import/Export Conference which is held in Washington, D.C. While the conference is designed to help educate companies about the import/export regulations and laws they might encounter while in the business, the conference does provide for round table discussions with ATF, DDTC and other Firearm Industry officials. Some of the officials from ATF that I had the opportunity to sit around the table with were Ted Clutter (Section Chief of the NFA Branch), Earl Griffith (Head of the Firearms and Ammunition Technology Division [FATD]), Max Kingery (Second in Command at FATD) and Edward Courtney (Head of the Firearms Industry Programs Branch).

ATF

General ATF

Marvin Richardson, the Deputy Assistant Director of Enforcement Programs and Services, announced during the ATF Panel Discussion that there would be a new NFA Division (discussed further below).

Andy Graham Deputy Assist Director for Industry Operations reviewed some statistics from this past year.

Inspection statistics:

177 new importer applications

493 inspections occurred, 177 were related to importer applications, the rest were compliance inspections.

There was 1 application denial, 103 applications which were withdrawn for various reasons, 110 compliance inspections resulted in no further action, 36 compliance inspections that resulted in license surrenders,  and 15 special requests for inspections from licensing center.

There were 3 inspections that resulted in warning conferences and 14 inspections that resulted in a warning letter with a recall. There were also 8 inspections that resulted in a warning letter without a recall.

Last fiscal year, base of licensees dropped from ~141,000 to ~139,000.

Alphonso Hughes chief of the Firearms & Explosives Services Division reviewed changes to the structure of different divisions of ATF.

FFL Licensing Center has 20 examiners processing applications. FEL Licensing Center has 10 examiners working for it.

NFA Branch has 24 examiners staffing it. It’s down from 26. There are now 4 sections within the NFA Branch. That’s up from the previous 2. There are 7 vacant examiner positions that they are in the process of filling. Projections into 2017 for additional staff to help the NFA Branch.

Krissy Carlson, the chief of the Firearms and Explosives Industry Division, reviewed the new 4473 that is up for comment (again) on the Federal Register. For more on that see Chief Counsel Joshua Prince’s blog article. They are also introducing a newsletter that they’ve been working on since November! Krissy also mentioned new rulings based on petitions submitted to them.

Andrew Lange the Division Chief of the Officer of Regulatory Affairs spoke about the difference between regulations and rulings. There are a couple of rulemaking proceedings that are in the notice and comment phase. He specifically mentioned the ATF 29P notice and comment period closing today which I filed a comment in Opposition of the Advanced Notice of Proposed Rulemaking on behalf of Dead Air Silencers. You can find that comment here.

Lastly, Earl Griffith, the Chief of the Firearms and Ammunition Technology Division, spoke. There are some promotions within the division. They are on track to do over 1,000 marking variances this year. They are taking about 2-3 weeks to process.

 

nfa branch

NFA Branch

NFA Stats:

307,000 NFA Applications were processed. Last year there were 221,000. On track to receive about 400,000 forms for this year based on last years numbers. They are predicting 469,000 for this year because of ATF 41F (shout out to NFATCA).

Processing time is advertised as 6 months. In the last 5 weeks, they received 126,000 forms on top of the 90,000 they already have. 6 months now may be 8 or 9 months. Sorry guys. Just forget you ever submitted anything.

7,500 applications a week were received before 41F was announced. It doubled after the announcement of ATF 41F. It approached 35,000 in a single week closer to ATF 41F being implemented.

Alphonso said that the non-tax paid forms should be close to a 30 day processing time. He told his examiners to make that a priority.

They received several million dollar days in tax paid forms for the month of July. They cleared 11 million dollars in tax paid applications for the month of July.

They are looking to implement an electronic method for the submission of tax paid forms post 41F. Alphonso mentioned the possibility of electronic submission of the application and RP questionnaires with a matching barcode sheet to mail in the fingerprints.

NFA Branch is going to become a division with several branches within it to modernize the workflow. This is due to congressional oversight inquiries. They are looking for approval on paper in the first quarter of fiscal year 2017. Actual implementation in the 2nd or 3rd quarter. Alphonso will be the Chief of the NFA Division.

I also asked the NFA Branch a number of questions during the round table discussion. Before attending the conference I asked members of AR15.com, other industry related forums, and on Facebook questions they had that they wanted answered. I received a number of good questions which I decided I would ask.

Does ATF intend to bring back eForms for Form 1 and Form 4s?

Sounds like due to funding the eForms system will just be maintained where it is, until there is funding to replace it. In other words…

burea

Is the NFA Branch still accepting corrections to forms submitted that had “non fatal” errors?

Yes. They are.

Does the NFA Branch have any procedures in place for forms which were submitted with credit card information that was rejected for wrong numbers, when the right number was listed on the form, particularly in light ATF 41F going into effect?

Not currently. That is something I am going to follow up with ATF about. I was alerted that it would likely need to be run through the NFA Branch counsel before I received an answer.

Does ATF prioritize Form 3 transfers? Is there any plans to “auto approve” Form 3 transfers using the eForms system after verifying the information on the form?

As stated earlier, the NFA branch is again prioritizing Form 3s. They are trying to process them within 30 days (that’s the goal). There is no plan for “auto approval”.

What constitutes a “fatal error” on a form?

A few examples I was given were 1) wrong serial number, 2) no serial number, 3) wrong address.

Firearms and Ammunition Technology Division

If you have a sample you want a determination request on prior to SHOT Show 2017, you must submit it to FATD no later than the end of September.

Office of Regulatory Affairs

For those who had questions regarding why comments reflected in the docket for regulatory changes were not all displayed, I learned a few things. First, if the comment contains just vulgarity, it will not be displayed. ATF will retain it and it will likely be subject to a FOIA request, but it won’t be displayed on regulations.gov. They also may be available for viewing in the reading room.

As for the timeline for comments submitted being displayed on regulations.gov, I was told that depending how much workload they had, it could be very quick or take a while.

Itar

DDTC

Unfortunately, the question that most people wanted answered “Do I have to register under ITAR?” is not one that was able to be asked to someone at DDTC who handles registration. However, the guidance that DDTC issued on July 22nd, available here, tells you whether you have to register under ITAR or not. Additionally, the guidance also tells an individual how to inquire with DDTC as to whether the need to register.

 

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The Elusive NFATCA Petition that Prompted the ATF to Enter into Rulemaking Regarding Silencer Engravings

As Chief Counsel Joshua Prince reported back in May, the organization responsible for ATF 41P/F, the National Firearms Trade and Collectors Association (“NFATCA”) had once again petitioned Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”) to enter into rulemaking, this time in relation to silencer engravings.

nfatca

The docket specified that copies of the petition would be available on www.regulations.gov and in the ATF Reading Room which is located in Washington, D.C. After having inspected the docket, there was no sign of the petition which was purportedly available for inspection.

After doing some digging, I was able to obtain a copy of the Petition that NFATCA had filed with ATF back in 2008. As noted in the docket, ATF had previously released guidance to the industry regarding the marking of silencers.

NFATCA in its petition stated “There has been an overwhelmingly negative response from the members of our trade to this particular guidance . . . there is strong policy agreement between ATF and our trade that only the silencer [outer] tube should be marked in accordance with the marking requirements of Parts 478 and 479 of Title 27 of the Code of Federal Regulations. . . . Allowing end caps to be the possible marking location for silencers does constitute a serious public safety issue in the areas of diversion, tracing, and evasion of other NFA rules.”

endcap

NFATCA went on to say “[w]e have also been further advised that the Bureau does not see how they would be able to take any adverse legal action against a person or entity that should decide to mark the end caps of a silencer without promulgating a change in the regulations.”

As a result, NFATCA requested that ATF “immediately draft and propose to the Attorney General an emergency regulation prohibiting marking a silencer in a location other than the tube, unless a variance is granted by the Director on a case by case basis for good cause”.

Also included with the Petition are the exhibits that NFATCA references in its Petition.

Of particular interest is that NFATCA, an organization which purports to represent the industry and individual collectors, actually asked for more regulations which would restrict the flexibility of the industry and requested that the regulations be adopted as “emergency” measures without going through the Administrative Procedures Act notice and comment period.

If you are interested in leaving a comment in opposition to the proposed regulatory change, head on over to www.regulations.gov and search for “ATF 29P” or click here. Comments are due on or before August 2, 2016.

 

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NFATCA Prompts ATF to Enter into Rulemaking…AGAIN – Now Regarding Silencer Engravings…

Not having learned from the debacle that is ATF 41P/F, the National Firearms Act Trade and Collector Association (“NFATCA”) has once again petitioned the Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”) to enter into rulemaking, this time in relation to silencer engravings.

In a proposed rule that will be published tomorrow, May 4, 2016, in the Federal Register as ATF-29P, the ATF, based on a petition received from the NFATCA, is seeking to restrict silencer marking to the tube of the silencer. You can download a pre-published copy of ATF29P, here.

So, how did ATF come to formulate ATF-29p and enter into rulemaking? A petition by the NFATCA, because it didn’t like ATF’s prior guidance, which provided for MORE marking locations for manufacturers and makers.

On April 17, 2008, ATF issued guidance to silencer manufacturers and makers regarding the engraving requirements and locations. Specifically, ATF stated:

The silencer must be marked in accordance with 27 C.F.R. §§ 478.92 and 479.102. The regulations require that the markings be conspicuous and legible, meaning that the markings may be placed on any external part, such as the outer tube or end cap. ATF strongly recommends that manufacturers place all required markings on the outer tube of the silencer, as this is the accepted industry standard. Moreover, this practice eliminates the need to remark in the event an end cap bearing the markings is damaged and requires replacement. (Emphasis added)

However, NFATCA wasn’t happy with this guidance and sought to have ATF restrict the marking location strictly to the silencer tube.

Specifically, ATF-29P declares:

ATF received a petition filed on behalf of the National Firearms Act Trade and Collectors Association (NFATCA). NFATCA is a trade group representing the firearms and import community. Some of its members primarily manufacture, transport, and possess silencers for lawful use.

According to the petitioner, the industry’s response to ATF’s guidance was not favorable: “There has been an overwhelmingly negative response from the members of our trade to this particular guidance. . . . there is strong policy agreement between ATF and our trade that only the silencer [outer] tube should be marked in accordance with the marking requirements of Parts 478 and 479 of Title 27 of the Code of Federal Regulations. . . . Allowing end caps to be the possible marking location for silencers does constitute a serious public safety issue in the areas of diversion, tracing, and evasion of other NFA rules.”

Really? A public safety concern? On what basis? (Maybe they’ll also petition to have the lettering size increased from 1/16th to 1″ and the depth from .003 to .3 in case the officer doesn’t have his/her glasses with him/her). What does this remind you of? That’s right, NFATCA’s petition, which resulted in ATF-41P.

BUT, NFATCA didn’t stop there. No, it wanted to drive its point home so that ATF would take action:

In addition, the petitioner stated that “[w]e have also been further advised that the Bureau does not see how they would be able to take any adverse legal action against a person or entity that should decide to mark the end caps of a silencer without promulgating a change in the regulations.”

So, let’s analyze this sentence. The “we” refers to NFATCA, which has been “advised that the Bureau does not see how they [sic] would be able to take any adverse legal action.” So, NFATCA, which lauds itself as the representative of the NFA community is seeking to have ATF implement new regulations so that ATF can prosecute our community??? Yeah, that makes sense. What was I thinking? And, let’s not take too much time to consider how NFATCA came into this information regarding the Bureau’s inability to prosecute and NFATCA’s desire for the Bureau to prosecute where a manufacturer or maker complied with ATF’s guidance…

As we documented in our Comment in Opposition to ATF-41P and the accompanying Exhibits, pages 28-30 and Exhibit 25, the President of the NFATCA, John Brown, has a long history with the ATF:

Indeed, as Richard Vasquez — ATF’s Chief of the Firearms Training Branch and previous Assistant and Acting Chief of the Firearms Technology Branch — testified under oath only last year, Mr. Brown “interacted with ATF a lot,” was a friend since at least 2006, had personally transferred two firearms to him, had transferred firearms to other ATF employees, visited ATF “to meet and become personal with a lot of the offices” over a period of years, and provided him with information to pass along to ATF for ATF’s use in a forfeiture proceeding. See Exhibit 25(A), pp. 202, 208-09, 226-32, 251, 255-56. Mr. Brown apparently went so far as to forward e-mails he had received from a FFL involved in litigation with ATF to ATF for ATF’s use in the litigation against the FFL. Id., pp. 232, 270. Indeed, Mr. Brown was not surprised to be characterized as a “confidential source” for Acting Chief Vasquez and ATF. Exhibit 25(E), pp. 611-12. Despite having acquired three machineguns illegally manufactured by George D. Clark, Mr. Brown seems to be the only FFL in that situation that ATF never referred for prosecution. Exhibits 25(A), pp. 255-56, 278; 25(C), pp. 396-97. In fact, ATF knowingly left Mr. Brown in possession of that contraband for six weeks and then promptly destroyed that evidence before the completion of prosecutions of other individuals in possession of Mr. Clark’s machineguns. Exhibit 25(A), pp. 215-26, 278. In addition, during this same time period Mr. Brown, together with the attorney he reportedly hired to prepare the NFATCA petition upon which ATF now relies, hired two thirty-year veterans of ATF who simultaneously worked together with ATF to draft the National Firearms Act Handbook. See id., pp. 227-30 Ernie Lintner — a specialist in ATF’s NFA Branch and one-time Acting Chief of that Branch — testified that he and other ATF employees met Mr. Brown at his place of business to discuss those revisions. See Exhibit 25(B), pp. 282, 332-34. And another NFA Branch employee, Daniel Pickney, testified to additional meetings held at ATF’s Martinsburg, West Virginia, facility. See Exhibit 25(D), pp. 444-45, 459.

As particularly pertinent to this proceeding, Mr. Lintner testified that he and Gary Schaible — another former Acting Chief of the NFA Branch — met with Mr. Brown “about some suggested regulatory changes that we wanted to try and make.” See Exhibit 25(B), pp. 333-34. That is, ATF employees testified under oath that regulatory changes that ATF wanted to advance — quite likely the subject of this proceeding — were the subject of a meeting with Mr. Brown, confirming his statement about working “inside ATF”. Indeed, Mr. Brown testified that NFATCA “deals with ATF on a weekly basis” setting up “meetings with very high-level agenda.” See Exhibit 25(E), p. 650. As noted above, multiple FOIA requests have sought documents from such meetings, at least one dating back to January 2013. See supra note 4.

It appears clear based on the the information provided in ATF-29P and the testimony provided relating to John Brown, that NFATCA is operating as a proxy for ATF, so that ATF can implement further regulations on our community. There is simply no basis for a putative representative of the NFA community to repeatedly request further more restrictive regulations on lawful conduct.

Regardless, the Firearms Industry Consulting Group is prepared to represent silencer manufacturers, makers and other interested parties in this rulemaking. If you desire to file a comment in opposition to ATF-29P, contact us today to discuss your options. As there are only 90 days to file comments, time is of the essence.

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