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The ABCs for the National Firearms Act (the NFA)

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The ABCs for the National Firearms Act (the NFA)

The National Firearms Act of 1934 (the NFA) was one of the first pieces of federal gun legislation passed in this country and yet remains a source of confusion among attorneys and non-attorneys alike. This presentation will cover what types of firearms are regulated by the NFA, what firearms are outside its scope, the registration and transfer processes, and the penalties for violating the NFA. We will also discuss proposed legislation and regulations that impact the NFA, as well as challenges to the NFA that can be expected in light of the NYSRPA v. Bruen U.S. Supreme Court decision in June 2022. This course will be of interest to attorneys who practice firearms law, those in the firearms industry who work with firearms, and all those who simply want to gain a greater understanding of firearms regulation today.

Presenters

Sarah Gervase
Assistant General Counsel
National Rifle Association

Transcript

- Hello, and welcome to the ABCs of the NFA, the National Firearms Act of 1934. As some of you may know, the National Firearms Act of 1934 was one of the first federal gun control laws that was passed in this country. And it remains important today. This class will be a good introduction if you're an attorney new to firearms law, or simply if you're anyone who wants to get a better understanding of gun laws in this country today, and to understand better, some of what is being debated on the state and federal level. My name is Sarah Gervase. I've been Assistant General Counsel at the National Rifle Association for over 16 years now. And I hope you enjoy the program. To start off, under federal law, there are generally two classifications of firearms. The first category are those firearms that are regulated by the Gun Control Act of 1968, commonly known as Title 1 firearms. The second category are those firearms that are regulated by both the Gun Control Act of 1968 and the National Firearms Act of 1934. Those firearms are known interchangeably as Title II or class three or NFA Firearms. Keep in mind that all firearms in the United States are regulated under both federal and state law. And in some cases, local law as well. Let's look at that first category, the Title 1 firearms. These are by far the most commonly purchased and transferred guns in the United States. They are the most common. These are your garden variety types of semiautomatic handguns, revolvers, pump, and semiautomatic shotguns, semiautomatic rifles, like the AR-15. These guns make up well over 95% of the firearm stock in this country. The vast majority of gun owners in this country own only Title 1 firearms. And they may never even have the opportunity to hold or to shoot a Title II NFA firearm that we're gonna talk about . Now, under federal law, the buyer of a Title I generic everyday type of firearm who purchases that gun from a federal firearm's licensee, otherwise known as an FFL must undergo a criminal background check, and for Title I firearms, those checks generally go through the FBI, through the FBI mixed program. That's true as well in states that have what are known as universal background checks that cover even private sales between two unlicensed individuals, where there's no federal firearms licensee involved. Those background checks generally go through the FBI. Although there are some different systems out there. Title II, those NFA firearms, that second category is very different. These NFA firearms require approval of the ATF before they can be transferred or made. They require registration of those firearms with ATF. In most cases, a tax must be paid before those guns are transferred or manufactured. They require notification to the Chief Law Enforcement Officer where the buyer, the transferee resides. They can be possessed generally only by the registered owner. And they are lawful to possess under federal law, remember the National Firearms Act is a federal law, but some states either further regulate them or prohibit them under their own state laws. Keep that in mind. Before we get into the NFA specifically, I wanna talk generally about who is prohibited from owning firearms. There are different classifications of people who are prohibited from owning both Title I and Title II NFA firearms. I'm gonna go through the federal statute here fairly quickly, but it's important to know before we start talking transfers. The first category is here under section one, and this covers those who've been convicted in a court of a crime punishable by more than a year in jail. Now there are some states that punish misdemeanors with potential of more than a year in jail, but generally these are felonies. This is the felon prohibition section. Two, those who are fugitives from justice. We don't see that very often, but it is there. The third category, those who are unlawful users of, or addicted to any controlled substance, that does include marijuana. As many of you know, the marijuana has been legalized in many states on different levels, but it remains a schedule, one drug under the Controlled Substances Act. So right now that is a conflict between federal and state law that has not been resolved, but it is an issue. Four, four is a big category. Four includes those people who've been adjudicated as mental defectives or those who have been committed to mental institutions. That term adjudicated and that term committed means certain things. That means that there was some due process, commitment, procedure involved. So it does not include people who may check themselves into a facility. They're going through a difficult time, but they're there voluntarily because they want help. It also doesn't include people who everyone knows may be off, but who have not been adjudicated or who have not been committed. Five, those are the illegal aliens or individuals who are not in this country permanently. Six, those who've been discharged from the armed forces under dishonorable conditions. Note here that that must be a dishonorable discharge, not one of the lesser discharges that exists under the middle military court system. It must be dishonorable. Seven, those who have renounced their US citizenship. Don't see that very often, but eight and nine are big ones. And these are the domestic violence prohibitions. Section eight covers those who have restraining orders against them for domestic violence. Section nine includes those who've been convicted of a crime of domestic violence. All those people, whatever category they are prohibited under federal law from owning or possessing firearms of any type, Title I and Title II NFA firearms. It is also a federal felony to transfer a firearm, to loan, to give, to sell a firearm to anyone if the transfer knows or has reasonable cause to believe that the recipient of that firearm is prohibited. So it's a federal felony for the individual to receive it. It is also a federal felony to sell an individual who's prohibited that firearm. Keep in mind too, that that was the federal prohibition statute. States two have their own laws on the books on who cannot possess firearms. State laws generally track that federal statute, but states can have additional prohibitions as well. The biggest example of that, I think are the red flag laws. Those are state level laws that allow for the temporary seizure of otherwise lawfully owned firearms from those who may pose a risk to themselves or to others. As of today, 19 states and DC have these red flag laws on the books, but those are state level laws that you should know as well. There are age restrictions, of course. Under federal law, a person must be at least 21 in order to purchase a gun, Title I or Title II from an FFL, from a licensed dealer. It's 18 years or older to purchase from a non licensee. Keep in mind that here two states may have more restrictive laws. Some states have say, you must be 21 or older to purchase possess handguns or modern sporting rifles, otherwise incorrectly called assault rifles. But know that that's what they're talking about when you hear these terms and when you hear age discussed in the news. So let's start off with the National Firearms Act of 1934. As I said earlier, you'll hear these guns referred to as NFA firearms, class three firearms, Title II firearms, they're used interchangeably, but they all refer to the same things. A National Firearms Act was passed in 1934. And it was a response to some of the prohibition era violence that was going on at the time. Think the gangsters like Al Capone, James Dillinger, the Saint Valentine's Day Massacre in Chicago using Tommy guns. That's what Congress had in mind when it passed the National Firearms Act of 1934. Keep in mind too, that because this was 1934 before courts really expanded our understanding if you will, of the commerce clause in the constitution. So Congress chose to base its authority for the National Firearms Act on its ability to tax. That's why the National Firearms Act is a tax statute. Since 1934, when the NFA was passed. These Title II NFA firearms have been far more strictly regulated than the gun variety Title I firearms that exist in the United States, NFA firearms require approval of the ATF before they're transferred or made, registration and attacks in some cases, we'll talk about that more specifically. And again, keep in mind, we're gonna talk only that federal law, but states to have their own laws or can have their own laws regarding these types of firearms. Keep in mind that the NFA was passed in 1934. It is an older statute. So there is significant case law, ATF rulings, and a breadth of other information that if you practice in this field, you should review, but you can find that information online or by contacting me after the class if you like. Keep in mind too, when we start talking about what's covered under the NFA, every year, ATF comes out with its annual statistical update. As of today, the most recent report comes from last year, 2021. But what this report does is it breaks down by state. How many of these NFA firearms are lawfully registered to residents of that state, that are lawfully registered. No one knows how many illegally possessed NFA firearms are out there, but this is a very, very good report to look at if you're interested. Texas, as you can imagine, has the most NFA firearms. So let's start talking about what types of firearms are regulated under the NFA. And the answer of course is gonna be in the internal revenue code because the NFA is a tax statute. I included here the overall general definition of the type of firearms that are covered by the NFA. We're gonna go through each of those in more detail, but there is the general statue. So basically there are eight different categories of firearms that are covered by the NFA. The first category, these are short barreled shotguns or SPSS as you'll see that term. These are semiautomatic shotguns that are shorter. They either have barrel or barrels that are less than 18 inches in length, or the overall length of the shotgun is less than 26 inches. So these are shotguns, but the thought was that these are more easily concealable. Look at this picture, this is a sawed-off double barrel shotgun. You can see it is overall less than 26 inches and it has the shorter barrels. That is a short-barreled shotgun. Short-barreled rifles or SBR, same idea, the only difference is that the barrels or barrels is less than 16 inches versus 18 inches for shotguns and overall length of less than 26 inches. Same idea, except we're talking rifles here instead of shotguns. And there is an M-92 short-barreled rifle. The next category is any other weapon. This is a somewhat difficult to explain. And I think rather than reading through the definition with which you can do, I think it might be best to just go into some examples. First off, this is a very odd category of firearms. These pieces are rare. They're unique, collectors love them. And the only reason it's there in the first place is there was a quirk in the drafting history of the NFA, like most federal bills, it went through many revisions, things were cut out, added and things got lost, hence we have this category, any other weapon. It includes things that I consider James Bond type guns. These are umbrella guns, knife guns, cigarette lighter guns, pen guns, guns that look like a pen, but they actually fire a round, those types of guns. They also include firearms that most people would look at and would think are classic, just Title I firearms. They don't look from the outside like anything special. And those are things I give you examples. The H and R handgun, the smooth bore shot revolver. So with some of these firearms, you have to really know firearms wells to even be able to recognize them. Here is a picture of a cane gun made by Remington. They made about 1800 of these, but yes, that functions as both a cane, and it can also fire rounds. If you wanna see more examples of any other weapons and they are fun to look at, you can go to ATFs website and they have a guide for you to look at. This is a marble arms game, getter gun. This is one of those firearms that I said, doesn't look like anything particularly special, it looks odd with the stock and the very long barrel, but that is an NFA firearm and is highly highly regulated. But again, most people would not look at that and say, wow, that is something that will need to be registered with the ATF and special paperwork done for them. That's an example. Now let's move to machine guns. Machine guns are the quintessential National Firearms Act gun. And it was these machine guns that Congress was thinking of mostly when Congress passed this law in 1934, there are a couple things I wanna note up front. If you don't know what a machine gun is or what a semiautomatic gun is, I'll explain it to you right now. With semiautomatic firearms, a semiautomatic firearm requires the trigger to be depressed and released for every round fired. So if I wanna fire two shots with a semiautomatic gun, I must depress the trigger, release the trigger, and depress pull that trigger again, okay? So that semiautomatic firearm can fire only as quickly as my trigger finger can pull and release that trigger, machine guns function differently. With machine guns, if I pull that trigger back outta machine gun, it will continue to fire until the magazine is empty or until there's a jam, or until I release that trigger. As a result, machine guns have a much, much more rapid rate of fire than do semiautomatic firearms, machine guns in many cases are capable of firing thousands of rounds per minute, not so with semiautomatics. So now you understand the difference between a semiautomatic and a fully automatic machine gun, but let's look at the definition of machine gun because it's interesting. A machine gun includes not only the entire gun, okay? A weapon that automatically shoots more than one shot without manual reloading by a single function of the trigger. That's the definition of a machine gun as a whole. What's important here is that the definition of a machine gun also includes the frame or receiver alone of such a firearm or any part designed and intended a solely and exclusively, or a combination of parts designed and intended to convert a semiautomatic firearm into a fully automatic machine gun. So clearly, fully complete operational machine guns are covered, but also a component or a combination of components that could be used to create a machine gun there. That is a beautiful US auto ordinance model, 1928 Thompson sub-machine gun used by gangsters, popularized by gangsters, but also used by US forces in World War II. But that you can see it has a stick magazine, not the more classic rounded drama magazine, but same firearm. Keep in mind, I know it scares many, many people that machine guns may be lawfully owned in this country under federal law and under the laws of most states. But there's something that you should know. The Firearm Owner's Protection Act, FOPA of 1986, did a few things. As it relates to machine guns, what it did was it prohibited the mis possession of machine guns that were not lawfully registered as of May 19th, 1986. So if there is a machine gun that was not lawfully registered as of that date, it cannot be sold to non licensees like you or me. Now, the military law enforcement, they can get machine guns all day, every day, but not civilians, civilians can have only those machine guns that were registered as of that day in May, 1986. So what that did was it essentially froze the supply of machine guns in this country to about 150,000. So there are about 150,000 lawfully owned machine guns now in this country, these are highly collectible, but because that supply is frozen, machine guns are very expensive. Even the cheapest machine guns, the ones that typically jam, those are worth thousands of dollars, a mint Thompson sub-machine gun, over 100,000, some classic pieces from World War II, well over into the hundreds of thousands of dollars. And again, because these guns are capable of firing so quickly, they run through a lot of ammunition, a day at the range is also costly. So yes, you can own machine guns in this country in most states, but you're gonna need disposable income to do it. Now that is an autos sear, also called conversion kits. And that is an example of one of those pieces that meets the definition of a machine gun. That picture is of an AR-15 auto sear. It looks just like an odd piece of metal, that is a machine gun alone under federal law. If you included that piece of metal, if you inserted that into a semiautomatic AR-15 and did some work on it, then you would have a fully automatic machine gun. That's why they classify that part alone as a machine gun. Suppressors and silencers. This is the largest category of NFA firearms in the country. I wanna go through the definition fairly quickly. The terms firearms silencer, firearms muffler means any device for silencing, muffling, or diminishing the report of a portable firearm. Again, including a combination of parts designed or redesigned and intended for use in assembling or fabricating a firearm silencer. The first thing to know about suppressors or silencers, you will see the term silencers used. The term silencer is clearly used in the federal statute, and you'll see the term silencer used on the internet or in other laws. But the term silencer is really a misnomer because none of these devices truly silences a gun. They do decrease the report, the sound, the bang that a gun makes when it's fired, but they don't silence the firearm by any stretch of the imagination. Now with smaller caliber guns, they do a better job because those guns aren't as loud to begin with. But with the larger caliber guns, there's more gun powder, the bigger the bone, they are less capable of bringing down the sound so that you will still hear a suppressed gun being fired, but there is a picture of a heckler and catch, H and K 23. You can see the suppressor screwed on to the end of the barrel there. That is what a suppressor looks like. Suppressors are very, very popular and they become more and more popular over the last 10 years or so. There are a few reasons for that, one, because they do decrease the sounds. It's easier on the ears, going to the range for the day, it's less stress on the ears. If there are residences or businesses near a range, they are not bothered as much. Hunters like these because they allow for accurate follow up shots when hunting guns spook game less if those guns sound are decreased. More states have legalized possession and ownership of suppressors in the last decade. And as of today, 42 states allow them to be owned and possessed by non licensees. There are only a handful of states, Massachusetts, Rhode Island, New York, New Jersey, Delaware, Illinois, California, and Hawaii, where individuals cannot own them. And of course, those states are also the states that regulate all types of firearms more strictly. If you're interested in more information about suppressors, I recommend the website for the American Suppressor Association. It has good information about suppressors, the relevant laws and things that are changing. Now, that definition of suppressors and silencers is important. There are devices that look like suppressors that are for shell. They don't actually function as suppressors. Those are not classified as suppressors under federal law. Keep in mind too, that many other devices can sometimes decrease the sound that a gun makes. I'm sure you've seen old black and white movies where the assassin walks up and he's got a pillow or a phone book. I've seen people convert soda bottles, I've seen YouTube videos of that. Potatoes, people have tested potatoes as well. Those are not classified as suppressors under federal law. You do not have to run out and register the bag of potatoes you have in your pantry, okay? That must be some intent when manufacturing suppressors to make a suppressor. Destructive devices. When I teach this class live, I can see the eyebrows go up. People wonder what destructive devices is, are, and why people own these. This is a highly technical area of the law. Know that the first category includes things like explosives in sandy areas, that kind of thing. Mining companies, construction companies, those are the types of organizations that own destructive devices. The second category includes canyons, mortars, rocket launchers, those kinds of things. Curios and relics. This is another interesting category that are a special interest to collectors. And you'll see why, these firearms must be at least 50 years old. They are considered NFA firearms. And so they must be registered with the ATF and they have to go through the transfer requirements. But these are highly collectible items. You can see they're an example of a World War II, not seatbelt bucket pistol. The front plate has what I believe is a Nazi insignia of some type. Once that front plate is flipped open, you can see the barrels as well as the trigger mechanisms, okay? Collectors love these types of things. These aren't used in crimes, of course, and they weren't back in 1934, but know that they are types of NFA firearms. It is the ATF that determines what is and what is not Curio and Relic. There is a list that ATF puts out and I included the link there, but you can go to the ATF website and see what ATF has already declared to be Curio and Relic. If you come across an item and you're not sure if it's a Curio in Relic, an ATF has not already looked at it. You can send that firearm or describe the firearm to ATF. And ATF will make that determination for you. Antique firearms, if you remember that general broad definition of what that included the eight categories of firearms that are included on the NFA, it does not include antiques. So they're not subject to any NFA controls. You do not need ATF approval before transfer, and they don't have to be registered, but generally, an antique firearm is any firearm manufactured in or before 1898, that does not use conventional ammunition that is readily available. That ammunition is not readily available through ordinary channels of commercial trade. Let's move on now to the National Firearms Act registry. As I mentioned before, the NFA requires that owners register their firearms with the ATF, obtain ATF approval before they even get those firearms and pay a tax, all NFA firearms that are not controlled by federal entities must be registered in what's called the National Firearm Registration and Transfer Record. That's called the NFRTR, and it is ATF that maintains that central registry. The registry includes the name and address of the person to whom the firearm is registered, the identification of the firearm, including the manufacturer, the caliber, the barrel, or overall length, if appropriate, and the date the firearm was registered. But this is all done by ATF and not the FBI. Unregistered firearms. If you come across an NFA firearm that has not been previously registered in that NFRTR that gun cannot be transferred, and it cannot be lawfully owned or possessed. The only options in such a case is to destroy the firearm, to donate that firearm to a qualified museum, or to donate that firearm to a law enforcement agency. It may be possible in some cases to remove that item from under the NFA, say, if it is a short-barreled shotgun, or short-barreled rifle, it may be possible to put longer barrels so that gun is no longer a short-barreled rifle, or short-barrelled shotgun. That makes sense. And this is where attorneys can come in and help. Note two that NFA firearms can generally be possessed only by the individual to whom that firearm is registered. Okay, anyone else? Family members, business associates, neighbors cannot have unaccompanied possession. They can't take it to the range. They can't take it home to look at it, not unless the registered owner is present. That's different from, with Title I firearms. Again, when you think NFA firearms, think much more highly and tightly regulated. Let's talk about making and transferring NFA firearms. Again, most transfers require a tax to be paid. And generally, there are some exceptions, but generally that tax is gonna be $200. That $200 was set by Congress in the 1930s, when they passed this law, $200 at the time was equivalent to about what a machine gun would cost. So it was about a 100% tax. In today's dollars, that $200 is about $4,200. So you can see that tax was intended to depress the demand for these types of firearms. And it probably did, but that $200 tax has never been increased even though $200 is not nearly as prohibitive now, as it was back in the 1930s. Transfers of NFA firearms also require notification to the Chief Law Enforcement Officer in the jurisdiction where the transfer resides, the Chief Law Enforcement Officer, usually the Chief of Police in the town or city could be the sheriff in the county, could be a few other individuals, but generally think chief of police or sheriff. And if you look at some of the forms that we're gonna talk about, you will see there are spaces where you include the name of the Chief Law Enforcement Officer, who is receiving that notification. These taxes are not annual taxes. They are one time taxes paid only when an application to make or to transfer an NFA firearm is made. We're gonna talk about form fours in more detail, and the tax there is $200. We are gonna talk about form fours and form fives. Those are two of the most common forms. Form fours are typically used. You'll see them in the states a lot, but form fours are also used for transferee, between non licensees, that tax for form fours is generally gonna be $200. But for any other weapon, it'll be $5. Form fives, you will see in the states through either wills or gun trusts. All these forms are available on ATFs website and they're available in either print format or via eForms. If you have a choice, use the eForms because they are significantly faster, but eForms are not available right now for all the different types of forms. The tax payment, you have to include a check with the application. If ATF approves the application, they will attach a tax stamp and return the approved copy with notations made. Then that transfer can be made, but the transfer has to be done immediately. The ATF does not want a year to pass or six months to pass, because that then that transferee, who just passed the background check that ATF conducted could become a prohibited person in that time. So they don't want much time to elapse between when ATF approved the application and when the physical transfer actually takes place. So let's start talking about some of the more common ATF transfer forms that are used for NFA firearms. The first is ATF form one, and this is the application to make and to register a firearm. It's quite common for individuals to make short-barrelled rifles and short-barreled shotguns. The thing to note here is that an individual who plans to do that must wait for ATF approval before starting work on that gun. An applicant cannot proceed with making the firearm before receiving ATF approval. Another thing to note it is not possible now to make your own machine guns as we discuss, when we talked about the Firearm Owner's Protection Act, that would be unlawful. So no, you can make your own short-barreled shotgun, short-barreled rifles if you receive ATF approval, but machine guns are out. The second form I wanna talk about is ATF form four. And is this is the application for a tax paid transfer and register of a firearm. This is one of the more common forms that you will see. So it is used for transfers between non licensees. So if there is an individual at a gun range who has a machine gun and he wants to sell that machine gun to his body, those are both non licensees that can be done using a form four. Form four is also used in trust in estate if there are no natural errors or there are no named beneficiary. So if a will or a trust said, I want my machine gun collection to be sold and the proceeds distributed to such and such a charity, the estate will sell those firearms, but they will use form fours for the transfer. ATF form five is also very common. And you see this in trust in estates. These are used if there are no natural errors are known named ATF form five, and you see form five, typically used with trusts and estates. And in this case, these are transfers to natural errors and named beneficiaries. So if there is a provision in someone's will or trust that says, I leave my gun collection to my son, Jim Johnson, in that case, the transfers will be done using a form five, and those are tax exempt transfers. So no tax has to be paid on those transfers. The last form I wanna talk about is ATF form 20. And this is an application to transport an NFA firearm interstate. So if a resident of Virginia has a machine gun, and that individual wants to take that machine gun into West Virginia, see there's a weekend shoot. The individual must receive prior approval from ATF before bringing that firearm, that machine gun from Virginia to West Virginia. And that is the case for all types of NFA firearms, with the sole exception being suppressors. And here too, before any intrastate transport can take place, ATF must approve that form. So why would the ATF not approve an application to make or to transfer an NFA firearm? The first reason is state or local law does not allow that NFA firearm to be possessed. So if a resident of New York or California wants to buy a machine gun and they wanna keep that machine gun in New York or California, and they fill out the transfer forms, ATF will not approve that application because machine guns are not allowed. They are prohibited for civilian ownership in New York and California, and some other states. So ATF will know the laws of the state where the potential transfer resides, and they will look to see if owning that firearm in that state or locally would be a violation. If so, they will disapprove, they will not approve that application. The second reason ATF will not approve an application is if the transferee is a prohibited person, okay? So if an individual meets any one of those classifications under the federal statute that we talked about, or a state statute, that application will not be approved. Same thing with age, if a potential transfer or maker is under age, ATF will not approve that application. Paperwork and record keeping is so important with NFA firearms. Approved applications received back from the ATF with that stamp on it are in owner's proof of registration. This document should be properly cared for and stored with the NFA firearm. I like the idea of making photocopies of that paperwork. Photocopies of course, are not as good as originals, but they're better than having nothing in case the originals are lost. Don't assume that the ATF has perfect records. We know that ATF doesn't have perfect records. They do well, but there is some history of not having accurate records in that database. But if ATF ever requests that information, then the owner of that lawfully owned firearm must produce that paperwork. That's why it's so important to care for the paperwork and make copies so that at least you have something, but it is fairly common. It's actually very common for NFA registration documents to be lost or destroyed. I get several calls every year from executors or attorneys who are working with the states and there's an NFA firearm, and there's no paperwork with it. So I help, but keep in mind that registration documents are treated as talk tax documents. Remember the NFA is a tax statute. So ATF is limited in disclosing certain information and whoever's requesting information has to verify his or her identity. So if there's an executor or a personal administrator, they can write in to ATF requesting information, but they will also have to include letters of administration or some proof that they can lawfully request this information before ATF will respond. If in fact that NFA firearm has been lawfully registered, ATF will let that person know and can provide registration documents to replace whatever was lost. But if that NFA firearm was never lawfully registered, ATF will give advice on what that person has to do. Again, either dispose the weapon of that firearm, give it to a certain type of museum, or to a law enforcement agency. And again, this is an area where attorneys can help. Law stolen or destroyed documents should be immediately reported to the NFA branch of the ATF in writing as soon as possible. That doesn't always happen as we know. If the actual firearm is lost or stolen, that is an even bigger deal. And that should be reported immediately to the ATF in writing. Gun trusts, there are tens of thousands of gun trusts now in the United States, there may be over 100,000 I don't know. The reason for that, the reason why these became so popular up until the summer of 2016 is historical at this point, but it is interesting. And the reason for that is prior to July, 2016, the NFA required the approval of the Chief Law Enforcement Officer, where the potential transfer resided before any transfer could take place. So that CLEO, Chief Law Enforcement Officer could say no. If the CLEO said no, then there could be no transfer. And there were many CLEOs across the country who would simply say no. And they had a variety of reasons for doing so, but they would say no, and no transfers occurred. The answer to that for law abiding people who wanted to own these NFA firearms was to set up a gun trust or sometimes partnerships, corporations, other types of legal entities, but gun trusts, and these other legal entities were exempt from that CLEO certification. Again, they're not individuals for whom background checks can be run. These are trusts or corporate entities. So this was a way around if you will, that CLEO approval process. Now what changed in July of 2016 was that Chief Law Enforcement approval is no longer required, only notification is required, but they change the regulation so that all responsible persons under a gun trust or another type of legal entity must go through background checks. So that was a big change in the gun trust world. There are still some good reasons to have gun trust and you can look those up or talk with attorneys who draft these gun trusts, but just know that these gun trusts exist. And historically, the main reason to obtain a gun trust was because of that CLEO approval, which is no longer part of the law. Statutes of limitations, violations, and penalties. The National Firearms Act is a very strict statute with very strict penalties, but the statute of limitations for the NFA is three years. For the Gun Control Act of 1968, those prohibitions that we talked about at the start for violating one of those prohibitions, that is a five year statute of limitations, but for the National Firearms Act, it is three years. The penalties, there can be a fine of not more than 10,000 or imprisonment of not more than 10 years or both. Keep in mind though, that there was a general amendment that provides for fine of up to $250,000 for an individual, $500,000 for a corporation that violates the NFA. There can be additional tax penalties and interest under the internal revenue code. And typically firearms, that are found that are in violation of the NFA are subject to seizure and forfeiture. They cannot be resold at a public sale. They must be destroyed or sold to a government agency. 26-USC section 5861 lists all the violations of the NFA. You can read through those. I will go through the most common violations, starting with section B. To receive or possess a firearm, transferred to an individual in violation of the NFA, to transfer a firearm in violation of the NFA in section E. Section F, to make a firearm in violation of the NFA. So if an individual were to make an SPR or an SBS without getting ATF approval, that would be a violation there of subsection F. J, to transport deliver or receive any fire and interstate commerce that hasn't been registered with the ATF in that central registry. L, to make a false entry on an application return or record to essentially to lie on one of those forms that we talked about. Now let's finish up with the future of the National Firearms Act. We talked about the history, going back to the 1930s and the prohibition era. We talked about the law as it exists now, let's talk about the future and what has been going on and what we may possibly expect with the NFA. On the state level. As of today, most states permit the ownership of all types of NFA firearms, and several states have liberalized their laws in the last 10 years, have loosened their laws to make these items more available in their states. And there will likely be some additional loosening on the state level in the coming years. On the federal level, some bills have been introduced that would remove suppressors, SBRs, and short-barrelled shotguns from the NFA. Under those bills, those types of firearms would no longer be considered NFA firearms, subject to registration and ATF approval. They would be treated only as Title I firearms. So if an individual wanted to buy one of those after a law has been passed, they would have to go through a background check if they bought that gone from an FFL, but there would not be the additional NFA requirements. Okay, those bills have not passed, but they will be reintroduced in future years. There have been changes to federal regulations that implement the NFA. One of the changes you may have heard about was with bump stocks after that tragedy in Las Vegas. After Las Vegas, the ATF amended the regulations so that those bump stocks are now considered machine guns under federal law. And that new rule went into effect in March, 2019, but under the new rule, no registration of bump stocks is permitted, owners if they have these, must get rid of the bump stocks, give them to ATF or destroy them. There is ongoing litigation regarding this regulation, but today the bump stocks are banned on the federal level and on the state level as well in some states. And it is a federal felony to possess those. In other recent change, we've seen is with what are called stabilizing braces, stabilizing braces are just braces, or sometimes they look like regular stocks that are commonly attached to handguns and other types of guns in order to stabilize the shooter's platform. They're useful, particularly for disabled shooters who need that point of contact with the shoulder in order to fire those guns well. For almost a decade, ATF recognized these braces as having legitimate functions and said nothing about the NFA, but recently there's been a change. I won't go into the regulation in detail, it is highly technical, but know now under the role that has been introduced, current owners will need to remove those stabilizing braces, alter them, maybe attach it to another firearms that the firearm doesn't become an NFA firearm, destroy the firearm, turn it into ATF, all those things. But that new rule is expected to go into effect in December of 2022, here to that regulation is being challenged in the courts. We've talked about the history of the NFA, we've discussed what the NFA requires. Now let's talk about the future. If you're watching this class, you're interested in firearms law, and you heard about the decision in June of 2022 out of the US Supreme Court in the landmark case of New York State Rifle and Pistol Association versus Bruin, the Bruin decision did two things. The first thing it did was it invalidated, held unconstitutional. New York States may issue scheme of concealed Carrie permitting, but it also did something else. It set the standard that future courts will have to use when analyzing firearm laws in the future. And the burden will be on the government to justify that law by pointing to history or historical analogs that existed either at the time of the founding or at the time when the 14th amendment was ratified. So at the time of the founding or when the 14th amendment was ratified. If a law does not have a historical analog, or did not exist in history, then that law may be held unconstitutional. And under that framework, some people believe that the NFA or at least portions of it may be found unconstitutional. Now, the Bruin court did say that courts can account for technology, increased better technology over the years. Things that didn't exist at the founding or in the 1860s, but generally that will be the framework that courts must use. So that's why some people will believe that the NFA or portions of it could be found to be unconstitutional even after all this time. As of today, I believe that one case to overturn a criminal conviction has been brought, but there will be additional cases brought as well. And that will be something of interest, something to keep our eyes on, especially if you're very interested in firearms law. So in closing, I wish to refer you to a document that I submitted is just additional resources that you can consult if you want more information on the NFA. I also included on that form, my direct phone line and my email address, please don't hesitate to email or to call with any questions or comments that you have. I enjoy speaking with folks across the country, and I would like to talk with you as well and give you guidance or any additional information that you might need. With that, I thank you for your time and thank you so very much for joining us today. Please take care.
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1h 58s

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