S. 884 — ATF Transparency Act

This section establishes an administrative relief process under IRC §5812(c) for denials of applications to transfer and register National Firearms Act (NFA) firearms (i.e., machine guns, short-barreled rifles or shotguns, suppressors, and destructive devices). For denials based on violations of 18 U.S.C. §922(d) (unlawful transfers), §922(g) or (n) (prohibited persons), or state/local/tribal law, the Secretary must (1) provide the relevant NICS transaction number; (2) permit appeals similar to the NICS process in 28 CFR §25.10; and (3) allow submission of information to prevent future erroneous denials via a program similar to the Voluntary Appeal File (28 CFR §25.10(g)). The Secretary must reimburse reasonable attorney fees for successful appeals. Applies to applications filed or pending on or after enactment.

This section establishes a three-business-day processing requirement for National Firearms Act (NFA) applications to transfer (under IRC §5812) or make (under IRC §5822) a firearm (i.e., machine gun, suppressor, short-barreled rifle or shotgun, destructive device, or any other weapon), under which the application is deemed approved if the Secretary of the Treasury (through ATF) fails to approve or deny it within that period, allowing the transfer or making to proceed. (As background, the NFA requires prior approval and registration of such firearms, a process that currently lacks a statutory deadline and often takes months.) The section further provides that denials may occur only if statutory requirements are unsatisfied (not due to processing delays) and includes a safe harbor from criminal liability under 18 U.S.C. §922(d), (g), or (n) for transfers later found noncompliant if the transferee returns the firearm within 14 days of notice. The amendments apply to applications filed or pending on or after the date of enactment.

This section requires, not later than 180 days after the date of enactment of this Act— (1) a report to Congress from the Comptroller General of the United States, in conjunction with the Department of Justice Inspector General, detailing the number of National Instant Criminal Background Check System (NICS) inquiries received during calendar years 2010 through 2024 for firearm transfers that remained unresolved after the 90-day period specified in 28 CFR 25.9(b)(1), along with recommendations for administrative actions by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) to minimize such unresolved inquiries; (2) a report to Congress from the Department of Justice Inspector General on the percentage of NICS inquiries during calendar years 2014 through 2024 for firearm transfers that were administered by the Federal Bureau of Investigation (FBI) on behalf of ATF; and (3) a memorandum of understanding between the ATF Director and FBI Director regarding the administration and processing of NICS inquiries for firearm transfers. The section defines "firearm" as in 26 U.S.C. 5845(a) and "NICS" as the national instant criminal background check system established under 34 U.S.C. 40901. (As background, NICS enables federal firearms licensees to conduct instant checks on prospective transferees to determine if receipt of a firearm would violate federal or state law.)