[Federal Register: March 20, 2003 (Volume 68, Number 54)]
[Rules and Regulations]
[Page 13767-13793]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr20mr03-18]
[[Page 13767]]
-----------------------------------------------------------------------
Part II
Department of Justice
-----------------------------------------------------------------------
Bureau of Alcohol, Tobacco, Firearms and Explosives
-----------------------------------------------------------------------
27 CFR Part 555
Implementation of the Safe Explosives Act, Title XI, Subtitle C of
Public Law 107-296; Interim Final Rule
[[Page 13768]]
-----------------------------------------------------------------------
DEPARTMENT OF JUSTICE
Bureau of Alcohol, Tobacco, Firearms and Explosives
27 CFR Part 555
[ATF No. 1; Docket No. 2002R-341P]
RIN 1140-AA00
Implementation of the Safe Explosives Act, Title XI, Subtitle C
of Public Law 107-296
AGENCY: Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF),
Department of Justice.
ACTION: Interim final rule with request for comments.
-----------------------------------------------------------------------
SUMMARY: The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF)
is amending the regulations to implement the provisions of the Safe
Explosives Act, Title XI, Subtitle C of Pub. L. 107-296, the Homeland
Security Act of 2002 (enacted November 25, 2002). This interim rule
implements the law which: requires that all persons receiving
explosives on and after May 24, 2003, obtain a Federal license or
permit, and creates a new type of permit, the ``limited permit;''
requires applicants for licenses and permits to provide as part of
their application the names and appropriate identifying information
regarding employees authorized to possess explosive materials as well
as fingerprints and photographs of ``responsible persons;'' extends the
time for ATF to act on an application for a license or permit from 45
days to 90 days; authorizes warrantless inspections of places of
storage maintained by applicants for limited permits and holders of
limited permits; provides that only licensees and holders of user
permits must post their licenses and permits and make them available
for inspection; requires that ATF conduct background checks on
responsible persons and employees authorized to possess explosive
materials; specifies additional categories of persons who may not
lawfully receive or possess explosive materials, i.e., aliens (other
than permanent resident aliens and other excepted aliens), persons
dishonorably discharged from the military, and persons who have
renounced their U.S. citizenship; broadens the interstate commerce
element of the prohibited persons section of the law to specify that a
violation is committed if possession of explosive materials affects
interstate or foreign commerce; provides ATF the authority to require
licensed manufacturers and licensed importers and persons who
manufacture or import explosive materials or ammonium nitrate to
provide samples, information on chemical composition, and other
information relevant to the identification of the product; broadens the
scope of a criminal violation of the law to include any institution or
organization receiving Federal financial assistance within the
categories of property covered by the violation; expands ATF's
authority to grant relief from disabilities to all categories of
prohibited persons; and adds a new theft-reporting violation, providing
felony penalties for a licensee or permittee who fails to report thefts
of explosives within 24 hours of discovery. This interim rule also
incorporates the provisions of ATF Ruling 76-10, which will become
obsolete as of May 24, 2003.
The interim rule will remain in effect until superseded by final
regulations.
DATES: Effective date: This interim rule is effective March 20, 2003.
Comment date: Comments must be submitted on or before June 18,
2003.
ADDRESSES: Send written comments to: James P. Ficaretta, Program
Manager; Room 5150; Bureau of Alcohol, Tobacco, Firearms and
Explosives; PO Box 50221; Washington, DC 20091-0221; Attn: ATF No. 1.
Written comments must be signed, and may be of any length.
E-mail comments may be submitted to: nprm@atf.gov. E-mail comments
must contain your name, mailing address, and e-mail address. They must
also reference this document number, as noted above, and be legible
when printed on 8\1/2\'' x 11'' paper. ATF will tr0eat e-mail as
originals and ATF will not acknowledge receipt of e-mail. See the
Public Participation section at the end of the SUPPLEMENTARY
INFORMATION section for requirements for submitting written comments by
facsimile.
FOR FURTHER INFORMATION CONTACT: James P. Ficaretta; Firearms,
Explosives and Arson; Bureau of Alcohol, Tobacco, Firearms and
Explosives; U.S. Department of Justice; 650 Massachusetts Avenue, NW.,
Washington, DC 20226, telephone (202) 927-8203.
SUPPLEMENTARY INFORMATION:
Background
Public Law 107-296 (116 Stat. 2135), the Homeland Security Act of
2002, was enacted on November 25, 2002. In general, the provisions of
the Homeland Security Act became effective 60 days after the date of
enactment, January 24, 2003. Under Title XI, Subtitle B of the Homeland
Security Act, the law enforcement responsibilities of the Bureau of
Alcohol, Tobacco and Firearms, including its authority over explosives,
were transferred to the new Bureau of Alcohol, Tobacco, Firearms and
Explosives of the Department of Justice.
Section 1512(a) of the Homeland Security Act provides in pertinent
part that the completed administrative actions of an agency shall not
be affected by either the enactment of the Act or the transfer of the
agency to the Department of Homeland Security. In the regulations in
Title 28, CFR, the Attorney General has delegated to the new Bureau of
Alcohol, Tobacco, Firearms and Explosives (which will also be known as
``ATF'') the statutory authorities that were transferred to the
Attorney General by the Homeland Security Act, including authority over
Chapter 40 of Title 18, United States Code. That regulation also
provided that the regulations previously issued by ATF in 27 CFR part
55, will continue in effect as if adopted by the Attorney General until
recodified, superseded, repealed or amended.
In a separate document published in the Federal Register on January
24, 2003 (68 FR 3744), the regulations in 27 CFR part 55 were
transferred from Chapter 1 to Chapter 2 of Title 27, and were
redesignated as part 555.
Title XI, Subtitle C of Public Law 107-296, the Safe Explosives Act
(hereafter, ``the Act''), amended the Federal explosives laws in 18
U.S.C. Chapter 40. As stated in House Report No. 107-658, 107th
Congress, 2d Session, September 17, 2002, accompanying H.R. 4864, the
``Anti-terrorism Explosives Act of 2002'' (the House version of the
Act), the primary purpose of the Act is to provide tighter security for
explosive materials and increased security measures for purchasers and
possessors of explosives by requiring all persons who wish to obtain
explosives, even for limited use, to obtain a Federal license or
permit. The House Report notes that since September 11, 2001, the
United States has been on high alert due to concern about possible
terrorist threats and, accordingly, has increased security throughout
our society. The report notes that additional precautions will help to
prevent threats posed by explosive materials, and the legislation seeks
to address such precautions. The report mentions incidents of concern
such as the 1993 World Trade Center bombing, the 1995 Oklahoma City
bombing, the 2002 attempt to detonate a bomb in a suspect's shoe on an
aircraft, and the Federal Bureau of Investigation's (FBI's) uncovering
of a terrorist plot to detonate
[[Page 13769]]
a ``dirty bomb.'' The report notes that the Attorney General has stated
that suicide bombings and car bombings could be the next line of attack
by terrorists in the United States.
As noted by Senator Kohl during consideration of the Act in the
Senate:
Most Americans would be stunned to learn that in some States it
is easier to get enough explosives to take down a house than it is
to buy a gun, get a driver's license, or even obtain a fishing
license. Currently, it is too easy for would be terrorists and
criminals to obtain explosive materials. Although permits are
required for interstate purchases of explosives, there are no
current uniform national limitations on the purchase of explosives
within a single State by a resident of that State.* * * We must take
all possible steps to keep deadly explosives out of the hands of
dangerous individuals seeking to threaten our livelihood and
security. The Safe Explosives Act is critical legislation, supported
by the administration. It is designed solely to [sic] the interest
of public safety. It will significantly enhance our efforts to limit
the proliferation of explosives to would be terrorists and
criminals. It will close a loophole that could potentially cause
mass destruction of property and life.
148 Cong. Rec. S 11374, 11391-11394, Vol. 148, No. 150 (November 19,
2002)
Effective Dates for the Provisions of the Safe Explosives Act
A. Provisions Effective January 24, 2003
The following provisions of the Act became effective January 24,
2003:
[sbull] Adding three new categories of persons who may not lawfully
receive or possess explosive materials;
[sbull] Broadening the interstate commerce element of the
prohibited persons section of the law to specify that a violation is
committed if possession of explosive materials affects interstate or
foreign commerce;
[sbull] Providing ATF the authority to require licensed
manufacturers and licensed importers and persons who manufacture or
import explosive materials or ammonium nitrate to provide samples,
information on chemical composition, and other information relevant to
the identification of the product;
[sbull] Broadening the scope of a criminal violation of the law to
include any institution or organization receiving Federal financial
assistance within the categories of property covered by the violation;
[sbull] Expanding ATF's authority to grant relief from disabilities
to all categories of prohibited persons; and
[sbull] Adding a new theft-reporting violation, providing felony
penalties for a licensee or permittee who fails to report thefts of
explosives within 24 hours of discovery.
B. Provisions Effective May 24, 2003
The following provisions of the Act become effective May 24, 2003:
[sbull] The requirement that all persons receiving explosives
obtain a Federal license or permit, and the creation of a new type of
permit, the ``limited permit;''
[sbull] The requirement that applicants for licenses and permits
provide as part of their application the names and appropriate
identifying information regarding employees authorized to possess
explosive materials as well as fingerprints and photographs of
``responsible persons;''
[sbull] The extension of the time for ATF to act on an application
for a license or permit from 45 days to 90 days;
[sbull] The authorization for warrantless inspections of places of
storage for applicants for limited permits and holders of limited
permits;
[sbull] The provision that only licensees and holders of user
permits must post their licenses and permits and make them available
for inspection; and
[sbull] The requirement that ATF conduct background checks on
responsible persons and employees authorized to possess explosive
materials.
Changes to Explosives Laws and Regulations
The new statutory provisions and the regulatory changes
necessitated by the law are as follows:
I. Limited Permit
The Act amended the Federal explosives laws in 18 U.S.C. Chapter 40
to require that all persons receiving explosives on and after the
effective date (May 24, 2003) obtain a Federal permit. Existing law
provides for a ``user permit'' that is necessary only if the holder
transports, ships, or receives explosive materials in interstate or
foreign commerce. The Act creates an additional type of permit, the
``limited permit,'' that will authorize the holder to receive explosive
materials only within his State of residence on no more than 6 separate
occasions during the one-year period of the permit. The interim
regulations specify that the term ``6 separate occasions'' means six
deliveries of explosive materials. Each delivery must relate to a
single purchase transaction and be documented on only one ATF Form
5400.4, Limited Permittee Transaction Report; be referenced on a single
commercial invoice or purchase order; and be delivered in one shipment
to the purchaser.
ATF Ruling 76-10 (1976-ATF C.B. 105) holds that a single Form
5400.4 may be used for a series of deliveries of explosive materials
made over a 30-day period. Since that ruling is inconsistent with the
definition of ``6 separate occasions'' set forth in this rule, it will
become obsolete as of May 24, 2003.
Section 845, title 18 U.S.C., and implementing regulations at
section 555.141, provide that the law and regulations, except for
certain specified criminal violations, do not apply to activities and
products specified therein. Among the exemptions listed are black
powder (50 pounds for sporting and other limited purposes); small arms
ammunition and components; Government agencies; and consumer fireworks.
These exemptions are not changed by the Act or this interim rule.
The Act also provides that the maximum fee to be charged for the
limited permit is $50 for a one-year period, and the renewal fee may
not exceed one-half the original fee.
Regulations that implement these provisions of the Act are in
Sec. Sec. 555.26, 555.27, 555.43, 555.45, 555.102, 555.103, 555.105,
555.106, 555.125, and 555.126.
A. Section 555.26 (Prohibited Shipment, Transportation, Receipt,
Possession, or Distribution of Explosive Materials)
Section 555.26 has been amended to describe activities that are not
authorized by a limited permit. Specifically, the section prescribes,
in accordance with the provisions of the Act, that holders of limited
permits may not transport, ship, cause to be transported or receive
explosive materials in interstate or foreign commerce. Holders of
limited permits may receive explosives only from distributors located
in the permit-holder's State of residence and such receipt of explosive
materials may occur no more than six times during the one-year duration
of the limited permit. Persons seeking to acquire explosive materials
more frequently or seeking to acquire or transport explosive materials
in interstate commerce must obtain a Federal explosives license or user
permit.
This section has also been amended to reflect the newly expanded
categories of persons prohibited from shipping, transporting,
receiving, and possessing explosive materials. Newly added ``prohibited
categories'' include illegal and nonimmigrant aliens, persons who have
been discharged from the armed forces under dishonorable conditions,
and persons who have renounced their United States citizenship. Section
555.106 has been amended to reflect these new categories as well, in
the
[[Page 13770]]
context of persons to whom distribution of explosive materials is
prohibited.
B. Section 555.27 (Out-of-State Disposition of Explosive Materials)
Effective May 24, 2003, the provisions of section 555.27 will no
longer apply because this section contemplates that distributions of
explosives can be made to persons not holding a Federal explosives
license or permit. The Federal explosives law, as amended by the Act,
now provides that all persons acquiring explosives must have, at
minimum, a limited permit.
C. Section 555.43 (Permit Fees)
Section 555.43 has been amended to describe the fee structure for
the issuance of limited permits, including renewals of limited permits.
The Act provides that the fee for a limited permit may not exceed $50.
The fee for renewal of a limited permit is capped by statute at one-
half the amount of the original fee. This section sets the fee for a
limited permit significantly lower than the statutory maximum,
providing that the fee for an original limited permit will be $25 and
providing also that the fee for each subsequent renewal of a limited
permit will be $12. ATF believes this fee is affordable for most
infrequent users but serves to offset some of the costs associated with
processing an application. The fee for the limited permit is not
intended as a ``user fee,'' because it does not compensate ATF for the
full cost of processing the application, conducting an inspection of
storage facilities, and conducting background checks for the applicant,
responsible persons, and employees.
D. Section 555.45 (Original License or Permit)
Section 555.45 explains that license and permit applications
postmarked on or after the effective date of this interim rule, must be
submitted along with ATF Form 5400.28 (Responsible Person
Questionnaire) or, where applicable, multiple Forms 5400.28. On this
form, applicants and others who will direct the policies of the
applicant with respect to explosive materials will be required to
answer whether they fall within any of the categories of persons
prohibited from possessing explosive materials. Form 5400.28 includes
questions concerning the newly added categories of prohibited persons.
It is important that ATF obtain this information for all licenses and
permits issued after the effective date to ensure that no persons with
authority to direct the explosives operations of a licensee or
permittee are prohibited by law from possessing explosive materials.
For licenses and permits to be issued on and after May 24, 2003,
ATF Forms 5400.13 and 5400.16 will mandate that all responsible persons
be identified. The statutory requirement to include fingerprints and
photographs of each responsible person will also become effective.
On and after May 24, 2003, ATF Form 5400.28 will be re-titled as
the Employee Possessor Questionnaire. Each person who will be
possessing explosive materials in the course of his employment will be
required to complete this form. Each person completing the form will be
required to provide appropriate identifying information, including name
of employer and residential address and will be required to declare
whether he falls within any of the categories of persons prohibited
from possessing explosive materials. This information will be used to
conduct a background check to ensure that employees are not within the
categories of persons Congress has determined should not possess
explosive materials. Responsible persons will not complete a Form
5400.28 because their identifying information will be submitted on the
license or permit application form.
An applicant for a license or permit that will be issued on and
after May 24, 2003, must submit an application that includes the
appropriate identifying information for responsible persons as well as
their fingerprints and photographs. Fingerprints must be submitted on
FBI Form FD-258 in accordance with the instructions on the form and
must be submitted by the applicant with the application. Also, where
applicable, Form 5400.28, Employee Possessor Questionnaire must be
submitted with the application for each employee who will be possessing
explosive materials in the course of his employment.
E. Section 555.102 (Authorized Operations by Permittees)
Section 555.102 has been amended to reflect that, effective May 24,
2003, persons not holding a Federal explosives license or permit will
be prohibited from acquiring explosive materials. Accordingly, this
section has been changed to provide that permittees disposing of
surplus stocks of explosive materials may dispose of those stocks only
to licensees or other permittees.
F. Section 555.103 (Transactions Among Licensees/Permittees and
Transactions Among Licensees and Holders of User Permits)
Section 555.103 has been amended to clarify the procedures to be
followed where distributions of explosives are made by licensees to
other licensees and holders of user permits. These procedures have been
clarified to conform to the newly applicable procedures set forth in
section 555.105 for transactions in which limited permittees are
acquiring explosive materials. In this regard, section 555.103, like
section 555.105, has been amended to comport with Congress' intention,
as expressed in the House Report No. 107-658, 107th Congress, 2d
Session, September 17, 2002, to ``provid[e] tighter security for
explosive materials and increased security measures for purchasers and
possessors of explosives.''
In general, the procedures outlined in this section are similar to
practices currently authorized (and/or required) under part 555.
Included among these are a requirement that the distributor verify the
licensed status of the licensee or permittee who wishes to purchase
explosive materials and a requirement that, prior to or at the time of
distribution, the distributee provide the distributor with a list of
persons authorized to accept delivery of explosive materials and with a
statement identifying the intended use for the explosive materials.
Distributors will be required to verify that any person seeking to
accept delivery of explosive materials on behalf of a distributee is,
in fact, on the list of persons authorized to accept delivery and to
verify the identity of such person by examining an identification
document. The term ``identification document'' is defined in section
555.11.
Current regulations require that purchasers provide the distributor
with a certified list of persons authorized to order explosive
materials. Because most orders are placed via phone or fax, rather than
over-the-counter, ATF believes this requirement is not particularly
helpful in ensuring distribution of explosives to authorized persons.
Accordingly, sections 555.103 and 555.105 have been revised to
eliminate this requirement and to replace it with the requirement to
provide a certified list of persons authorized to accept delivery of
explosives. ATF believes this system is consistent with Congress'
intention that there should be stringent security in the system
established for transfers of explosive materials. The system set forth
in sections 555.103 and 555.105 is designed to ensure that licensees
and permittees deliver explosives only to persons affiliated with a
purchaser holding a license or permit and to require verification of
those persons' identities prior to relinquishing
[[Page 13771]]
possession of the explosive materials. Once all licenses and permits
have been renewed under the licensing criteria of the Act, any person
accepting delivery of explosives would have had a background check
conducted in accordance with section 555.33, as an employee authorized
to possess explosive materials. Thus, the regulatory system established
in sections 555.103 and 555.105 will reduce the likelihood of the
delivery of explosive materials to prohibited persons who are employed
by members of the explosives industry. ATF believes these controls are
essential in ensuring that persons who are likely to use explosives for
criminal or terrorist purposes are denied access through legitimate
industry channels.
G. Sections 555.105, 555.106, and 555.126 (Distribution of Explosive
Materials and Records)
Sections 555.105, 555.106, and 555.126 have been amended to conform
to the Act's mandate that all persons who wish to acquire explosives,
whether in interstate or intrastate commerce, must obtain a Federal
explosives license or permit. As noted above, the Act created a new
type of permit, the ``limited permit'' that can be used by persons who
wish to obtain explosives only within their states of residence on no
more than six occasions per year. Previously, ``intrastate'' purchasers
of explosives could acquire explosives without a Federal license or
permit. Intrastate purchasers prior to receiving explosive materials
completed ATF Form 5400.4, Explosives Transaction Record. The form
required the purchaser to certify that he was not a felon, fugitive, or
other prohibited person. This system of transactions relied on the
``honor system'' since background checks were not conducted on
purchasers. Effective May 24, 2003, ATF Form 5400.4 will be revised and
re-titled as the Limited Permittee Transaction Report. This form will
be completed by limited permittees when purchasing explosive materials
from licensees or permittees.
The amended provisions of sections 555.105 and 555.126 outline
procedures for explosives transactions involving holders of limited
permits. These procedures have been amended to comport with Congress'
intention, as expressed in the House Report No. 107-658, 107th
Congress, 2d Session, September 17, 2002, to ``provid[e] tighter
security for explosive materials and increased security measures for
purchasers and possessors of explosives.''
The amended provisions require that, prior to (or at the time of)
taking distribution of explosive materials, a limited permittee must
have submitted to the distributor a list of persons authorized to
accept delivery of explosive materials on the limited permittee's
behalf. Additionally, prior to a delivery of explosive materials, the
limited permittee must complete the appropriate section on Form 5400.4
and affix to the form one of his six original Intrastate Purchase of
Explosives Coupons (IPECs), ATF Form 5400.30. Form 5400.4 (with the
appropriate section completed and with IPEC affixed) must be provided
by the limited permittee to the distributor prior to (or at the time
of) distribution, and the distributor must, after verifying the
identification of the purchaser and executing the appropriate section
on the form, remit one copy of the form to ATF and retain the other
copy in his permanent records as required by section 555.121.
The information concerning acquisition of explosive materials by a
particular limited permittee will be used to ensure that the permittee
does not exceed the 6 transactions authorized by his permit and that
the permittee has storage magazines suitable for the type and quantity
of explosive materials acquired. If a Form 5400.4 indicates, for
example, that a particular limited permittee acquired 1,000 pounds of
explosive materials, but the application inspection indicated that the
limited permittee maintained only a single indoor storage magazine
(capable of lawfully storing only 50 pounds of explosives), the report
would be referred to an ATF field office for investigation. This is
another important safeguard to prevent theft, loss, or diversion of
explosives into criminal channels due to unsafe or insecure storage.
Form 5400.4 requires that the limited permittee provide information
regarding the use to which he intends to put the explosive materials.
Identifying information concerning the limited permittee and, if
applicable, the person who will be accepting delivery of the explosive
materials is also required. The form prescribes that the distributor
examine an identification document provided by the person accepting
delivery of explosive materials and that he note the type and number of
the identification document. The distributor must also report the
quantity, manufacturer, and description of the explosive materials to
be distributed. The form also provides an option for the distributor to
document information concerning marks of identification and size of the
explosives to be distributed. This information is helpful in tracing
explosives at the request of law enforcement officials who have
recovered stolen explosives or explosives that have been used in an
actual or attempted criminal or terrorist bombing. ATF is soliciting
comment as to whether this optional information should be mandatory.
Included among the provisions of sections 555.103 and 555.106 is a
requirement that the distributor verify the status of the licensee or
permittee who wishes to purchase explosive materials and a requirement
that, prior to or at the time of distribution, the distributee provide
the distributor with a list of persons authorized to accept delivery of
explosive materials and a statement identifying the intended use for
the explosive materials. Distributors will be required to verify that
any person seeking to accept delivery of explosive materials on behalf
of a distributee is, in fact, on the list of persons authorized to
accept delivery and to verify the identity of such person by examining
an identification document.
Sections 555.103 and 555.105 also revise procedures for use of ATF
Form 5400.8 (Explosives Delivery Record). In all cases, the distributor
will be required to verify the identity of the person taking possession
of explosive materials by examining an identification document and
noting the type and number of the document on Form 5400.8. This
procedure will remain in effect until May 24, 2003. On and after this
date, the procedure for executing Form 5400.8 will require that all
common or contract carriers taking possession of explosive materials
for delivery to a licensee or permittee must complete this form prior
to taking possession of explosive materials whether they are hired by
the distributor or by the distributee. Employees of purchasers will no
longer complete ATF Form 5400.8.
ATF believes it is essential that Form 5400.8 be executed in all
instances when licensees and permittees transfer possession of
explosive materials to a truck driver who is not an employee of the
distributor. Truck drivers employed by the distributor would be
employees authorized to possess explosives and would have had a
background check conducted in accordance with section 555.33. Execution
of the delivery record by employees of common or contract carriers who
transport explosive materials and verification of their identification
will help ensure that explosives are not placed in the hands of
prohibited persons for possible diversion to criminal or terrorist use.
[[Page 13772]]
ATF believes the most efficient manner of conducting transactions
with limited permittees would be a system whereby a distributor
verifies the limited permittee's status and the number of authorized
transactions remaining by conducting an online query of a database
maintained by ATF. For distributors who do not have access to a
computer, such queries would be conducted via a toll-free number
connected to ATF's Firearms and Explosives Licensing Center. Such a
system would virtually eliminate fraud since there would be no
presentation of permits or Intrastate Purchase of Explosives Coupons.
Such a system would also reduce the burden on buyers and sellers of
explosives. ATF has established a similar system to be used voluntarily
by Federal firearms licensees (FFLs) to verify the validity of a
license held by another licensee. This system, the FFL eZ Check system,
is accessed via ATF's website or by calling the Firearms and Explosives
Licensing Center. The eZ Check system is popular with Federal firearms
licensees and is an efficient method of verifying license status. ATF
believes a similar system would be useful for verifying permit status
of licensees and permittees as required under part 555. ATF seeks
comment on the feasibility and utility of establishing such a system
and whether such a system should be used in conjunction with the
procedures required by sections 555.103 and 555.105.
H. Section 555.125 (Records Maintained by Permittees)
Section 555.125 has been revised to set forth recordkeeping
requirements for limited permittees. Because ATF has no statutory right
to inspect such records, absent consent or a warrant, the requirements
imposed are only those necessary to ensure the permittee's ability to
detect a theft or loss of explosives and to respond to requests from
ATF to trace explosives. Specifically, limited permittees will be
required to take a physical inventory of explosives on an annual basis.
Limited permittees will also be required to keep permanent acquisition
and disposition records of explosive materials that include date of
acquisition; name of manufacturer; manufacturer's marks of
identification; quantity; description; and name, address and license
number of the person from whom received. Significantly, this section
provides that a commercial record may be used as the permanent record,
if it includes all the foregoing information. It should be noted that
no recordkeeping entries are required for explosive materials that are
used by a limited permittee in its business or operations. However,
limited permittees disposing of surplus stocks to other licensees or
permittees would be required to make a permanent record of such
dispositions. Because permittees are not authorized to engage in an
explosives business, such disposition records would not be a commercial
record. Accordingly, such record would take the form of a permanent
written record, such as a notebook. Finally, section 555.127, which is
not amended by this interim rule, will also apply to limited
permittees. This section will require limited permittees to keep a
daily summary of magazine transactions for each magazine used to store
explosive materials. This summary requires recording, not later than
the close of the next business day, the total quantity of explosives
received in and removed from each magazine during a 24-hour period and
the total explosives remaining on hand at the end of the day. This
requirement has applied to all licensees and permittees since 1971. It
enables licensees and permittees to readily detect discrepancies
between physical inventory and record inventory so that thefts and
losses can be promptly reported.
I. Elimination of the ``User-Limited'' Permit
ATF is also soliciting comment on removal of the user-limited
permit from part 555. This permit authorizes the holder to ship,
transport, and receive explosive materials in interstate or foreign
commerce, but is valid for only a single purchase transaction. ATF
issues very few of these permits each year, generally to organizations
that wish to obtain fireworks for annual Fourth of July displays. Most
organizations have, in recent years, arranged for the distributor of
the fireworks to arrive at the event and put on the fireworks display.
This eliminates the need for the organization to obtain a permit and
ensures that persons trained to handle explosive materials maintain
custody and control of the explosives throughout the event. Those few
organizations that wish to obtain explosives interstate for the Fourth
of July or other purposes, may obtain a user permit. ATF believes that
retention of the user-limited permit is unnecessary and proposes
elimination of this permit from part 555.
II. Licensing Information and Criteria
The Act amended Chapter 40 to require applicants for licenses and
permits to provide with the application the names and appropriate
identifying information regarding employees authorized to possess
explosive materials as well as fingerprints and photographs of
``responsible persons.'' The requirement to submit fingerprints and
photographs ensures that a thorough background check can be completed.
The term ``responsible person'' is defined in the law as an individual
who has the power to direct the management and policies of the
applicant pertaining to explosive materials. This would generally
include sole proprietors, partners, site managers, corporate officers
and directors, and majority shareholders.
This provision does not require corporate applicants for licenses
or permits to list every corporate officer or director as a
``responsible person'' on its application. Those officials having no
power to direct the management and policies of the applicant with
respect to explosive materials are not ``responsible persons'' and may
not be listed on the application. For example, in a large corporation
that uses explosive materials in one of its many business activities,
there will likely be many corporate officials having no responsibility
or authority in connection with the company's explosives business.
These officials should not be listed as ``responsible persons'' on the
application, and need not submit fingerprints and photographs to ATF.
The requirement that applicants provide names of, and appropriate
identifying information for, all employees authorized to possess
explosive materials allows ATF to verify, by conducting a background
check, that these individuals are not prohibited from receiving or
possessing explosive materials. As noted in the legislative history of
the Act, ``[i]t is too easy for would-be terrorists and criminals to
obtain access to explosive materials by obtaining jobs with explosives
licensees or permittees.'' House Report No. 107-658, 107th Congress, 2d
Session, September 17, 2002. Applicants for licenses and permits are
not required to list every employee of the business. Rather, they must
list only those employees expected to possess explosive materials as
part of their duties. As directed by Congress (See House Report 107-
658, id.), ATF is guided by case law interpreting ``possession'' under
the Gun Control Act of 1968 (GCA), 18 U.S.C. Chapter 44. Possession
under the GCA may be either actual or constructive. Actual possession
exists when a person is in immediate possession or control of explosive
materials, and includes instances where a person knowingly has direct
physical control over the
[[Page 13773]]
explosive materials at a given time. Thus, employees who handle
explosive materials in the course of their employment would clearly be
in possession of those materials. This would include employees who
handle explosive materials as part of the production process; employees
who handle explosive materials in order to ship, transport, or sell
them; and employees, such as blasters, who actually use explosive
materials.
Where direct physical control over explosive materials is absent,
an employee has constructive possession where he knowingly has the
power and intention to exercise dominion and control over the explosive
materials, either directly or indirectly through others. For example,
an employee at a construction site who keeps keys for magazines in
which explosive materials are stored or who directs the use of
explosive materials by other employees would be in constructive
possession of the explosive materials. Likewise, an employee
transporting explosive materials from a licensee to a purchaser has
constructive possession of the explosive materials, even though the
employee may not have direct contact with the explosives.
The criteria for issuing licenses have been revised to provide that
a license will not be issued to an applicant if any of the employees
authorized to possess explosive materials is described in any paragraph
of section 842(i) of the statute. This section lists ``prohibited
persons'' who may not lawfully receive or possess explosive materials
including felons, unlawful drug users, and fugitives.
A new provision has been added to require that applicants for
limited permits provide a certification with the application stating
that the applicant will not receive explosive materials on more than 6
separate occasions during the 12-month period of the permit. This
provision is effective May 24, 2003.
Regulations that implement these provisions of the Act are in
Sec. Sec. 555.11, 555.34, 555.49, 555.54, and 555.57.
III. Time Period for Acting on Applications
Current law gives ATF 45 days to act on an application for a
license or permit. The Act extended that period to 90 days. This
provision is effective on May 24, 2003. Regulations that implement this
provision of the Act are in Sec. 555.49.
IV. Inspection Authority
The Act also amended the licensing criteria to provide that ATF
must verify ``by inspection'' that applicants for user permits and
licenses have places of storage for explosive materials that meet the
standards of safety and security set forth in the regulations. This
will require an on-site inspection of all new applicants for user
permits and licenses issued on and after May 24, 2003, in order to
verify compliance with the storage requirements specified in the
regulations. The inspection requirement will also apply to renewals for
user permits and licenses after the effective date.
The Act does not require an on-site inspection of storage
facilities for applicants for limited permits. Instead, it provides
that ATF may verify by inspection or by such other means as the
Attorney General determines appropriate that the applicant for the
limited permit has suitable storage. The Act allows ATF the option to
verify storage by means other than an on-site inspection for the first
or second renewal of a limited permit, and requires an on-site
inspection for the third renewal if an inspection has not been
conducted within the previous 3 years. Other means of verification
include written certifications, telephone interviews, site plans,
magazine description worksheets, and other appropriate means. The above
provisions of the Act are effective on May 24, 2003.
Regulations that implement these provisions of the Act are in
Sec. Sec. 555.24, 555.34, 555.49, 555.54, 555.57, 555.121, 555.125,
and 555.126.
V. Posting of Permits
The Act amended section 843(g) of the Federal explosives laws, 18
U.S.C. 843(g), to provide that only licensees and holders of user
permits must post their licenses and permits and make them available
for inspection. Thus, holders of limited permits are exempted from this
requirement. This provision is effective on May 24, 2003.
Regulations that implement this provision of the Act are in Sec.
555.101.
VI. Background Checks and Letters of Clearance
A. Voluntary Checks Not Associated With a License or Permit Application
Effective May 24, 2003, the Act requires ATF to conduct background
checks on responsible persons and employees authorized to possess
explosive materials upon request by a licensee or permittee. In
addition, the law requires ATF to determine whether any of the
responsible persons or employees are prohibited persons under 18 U.S.C.
842(i), and to notify the employer of the determination. Also, the Act
requires ATF to issue a letter of clearance to the responsible person
or employee, if the results of the background check do not indicate
that the person is prohibited from possessing explosive materials. If
the results of the background check indicate that the person may be
prohibited from possessing explosive materials, ATF must notify the
employer of the determination and issue a letter to the employee or
responsible person advising of the determination, providing information
concerning how the disability may be relieved, and explaining how the
determination may be appealed.
Regulations that implement these provisions of the Act are in
Sec. Sec. 555.33. Section 555.33 provides that, if ATF receives from a
licensee or permittee the names and appropriate identifying information
of responsible persons and employees who will be authorized by an
employer to possess explosive materials in the course of employment
with an employer, ATF will conduct a background check to determine
whether the responsible person or employee is one of the persons
prohibited from possessing explosive materials. If ATF determines that
the responsible person or the employee does not fall within a
prohibited category, ATF will notify the employer in writing or
electronically of the determination and issue, to the responsible
person or employee, a letter of clearance that confirms the
determination. As noted in House Report 107-658, ATF will not violate
the privacy rights of an employee by disclosing to an employer the
reason for the determination that an employee is a prohibited person.
The employer will be notified only whether the employee is cleared or
may be a prohibited person. Only an employee who ATF has determined is
prohibited will receive information regarding the basis for the
prohibition.
If ATF determines that the responsible person or employee is
prohibited from possessing explosive materials, ATF will notify the
employer in writing or electronically of the determination and issue to
the responsible person or the employee, as the case may be, a document
that: confirms the determination; explains the grounds for the
determination; provides information on how the disability may be
relieved; and explains how the determination may be appealed. The
employer must then take immediate steps to remove the responsible
person from his position directing the management and policies of the
business or operations as they relate to explosive materials or, as the
[[Page 13774]]
case may be, to remove the employee from a position requiring the
possession of explosive materials. Also, if the employer has listed the
employee as a person authorized to accept delivery of explosive
materials, the employer must remove the employee from such list and
immediately, and in no event later than the second business day after
such change, notify distributors of such change.
Section 555.33 also provides for an appeal process for a
responsible person or employee to challenge an adverse determination.
Such appeals must be submitted to the Director in writing within 45
days of issuance of the determination. In the case of employees and
responsible persons who have not submitted fingerprint cards,
fingerprints must be submitted in accordance with the instructions in
the letter of denial. In the case of both responsible persons and
employees, it may be necessary to submit additional information or
documents in support of an appeal, such as certified court records.
Responsible persons and employees, where appropriate, are encouraged to
contact the agency that originated the record containing the
information causing the adverse determination. If the records are
corrected as a result of contact with an originating agency, ATF will
take steps to correct the record with the agency responsible for the
record system.
B. Background Checks Conducted in Connection With Applications for
License or Permit (Including Renewals)
The background checks conducted under section 555.33 will also be
done in conjunction with the issuance of a license or permit under 18
U.S.C. 843.
There is no requirement that persons holding a license or permit
prior to May 24, 2003, submit names of responsible persons and
employees for background checks. Such licensees and permittees need not
provide this information until their license or permit is renewed on or
after May 24, 2003. Moreover, ATF has no authority, prior to May 24,
2003, to conduct background checks that are not associated with a
license or permit application, including a renewal application.
C. Reporting Changes in Responsible Persons and Employees Authorized To
Possess Explosive Materials
All persons who have been issued licenses or permits, including
renewals, on and after May 24, 2003, must report any change in
responsible persons or employees authorized to possess explosive
materials. ATF will then conduct a background check on any new
responsible persons or employees in accordance with section 555.33. The
report of such changes will ensure that all persons having access to or
possession of explosive materials are not prohibited persons likely to
misuse explosives for criminal or terrorist purposes. Regulations that
implement these provisions of the Act are in Sec. Sec. 555.33 and
555.57.
VII. Prohibited Persons
A. Definitions
The Act amended 18 U.S.C. 842(d) and 842(i) to provide additional
categories of persons who may not lawfully transport, ship, receive or
possess explosive materials. Prior to amendment, persons under
indictment for or convicted of a felony, fugitives from justice,
unlawful users of or persons addicted to controlled substances, and
persons adjudicated as a mental defective or committed to a mental
institution were prohibited from transporting, shipping, receiving or
possessing explosive materials. The Act added aliens (other than
permanent resident aliens and certain other excepted aliens), persons
dishonorably discharged from the military, and persons who have
renounced their U.S. citizenship to the list of prohibited persons.
These provisions of the law became effective on January 24, 2003.
Definitions for the categories of prohibited persons are set forth
in section 555.11 and are consistent with the definitions for the
categories of persons prohibited from receiving or possessing firearms
contained in 27 CFR 478.11. (For background information concerning
these definitions see T.D. ATF-391, June 27, 1997; 62 FR 34634.) The
definitions in this part and part 478 of this chapter are also
consistent with judicial decisions interpreting the statutory
categories of prohibited persons. The new definitions in section 555.11
include the three new categories added to the law by the Act as well as
definitions for categories that have been in the statute since 1970.
These include ``committed to a mental institution,'' ``adjudicated as a
mental defective,'' and ``unlawful user of or addicted to any
controlled substance.'' It was necessary to define all these terms so
that persons applying for explosives licenses or permits on or after
the effective date of this interim rule, will know whether responsible
persons (such as partners, corporate officers, and directors) are
prohibited and therefore cannot be associated with the applicant. It is
also necessary to define these terms so that persons who are subject to
explosives disabilities are put on notice that they may not lawfully
transport, ship, receive or possess explosives. These persons need to
know the criteria ATF will use in determining who is subject to such
disabilities so that they may apply for relief from disabilities
pursuant to 18 U.S.C. 845(b) if they desire.
Finally, it is also necessary to clearly define the categories of
prohibited persons so that a thorough background check can be conducted
on applicants for licenses and permits, responsible persons, and
persons applying for relief from disabilities. A clear understanding of
which persons fall within the different statutory categories is
necessary to determine whether a particular person is a prohibited
person under the law. Background checks will also be conducted on
employees authorized to possess explosive materials by an employer
applying for, or renewing, a license or permit that will be issued on
and after May 24, 2003. Because it generally takes 90 days to process
such applications, it is anticipated that many applications for the new
limited permit will be submitted in February and March of 2003. Thus,
background checks on employees may begin in February 2003,
necessitating clear definitions for the guidance of those persons
conducting the background checks. Clear definitions will also assist
employees and responsible persons who appear to fall within a category
of prohibited persons in preparing an appeal to a prohibited person
determination they believe is erroneous or to file an application for
relief from disabilities if they desire.
An amendment has been made to section 555.45(a) requiring
submission of ATF Form 5400.28, Responsible Person Questionnaire, for
all applications for a license or permit postmarked on or after the
effective date of this interim rule. The purpose of the questionnaire
is to obtain a certification from each responsible person stating that
he or she is not prohibited from receiving or possessing explosive
materials under the new prohibited persons provisions of the law, i.e.,
non-excepted aliens, persons dishonorably discharged from the military,
and renunciates.
As stated previously in relation to licensing criteria, in
determining whether a particular person is in possession of explosives,
ATF is guided by case law under the Gun Control Act of 1968 (GCA), 18
U.S.C. Chapter 44. Possession may be actual or constructive, but in all
instances no violation of section 842(i) is committed unless the person
``knowingly'' possesses the explosives.
[[Page 13775]]
Regulations that implement the prohibited persons provisions of the
Act are in Sec. Sec. 555.11, 555.26, 555.106, and 555.142.
B. Department of Transportation Exemption
Current law, 18 U.S.C. 845(a)(1), provides an exemption from the
Federal explosives laws (except for specified plastic explosives and
bombing and arson offenses) for ``any aspect of the transportation of
explosive materials via railroad, water, highway, or air which are
regulated by the United States Department of Transportation and
agencies thereof, and which pertain to safety.'' The Act did not amend
this provision of the law. This provision exempts persons from
application of the Federal explosives laws when (1) the Department of
Transportation (DOT) has actually regulated a relevant aspect of the
transportation of explosive materials or explicitly determined that
regulation is not necessary; and (2) those regulations cover the
particular aspect of the safe transportation of explosives that
prompted Congress to enact the criminal statute from which exemption is
sought. For purposes of this exemption, the term ``safety'' includes
security concerns.
DOT has recently issued an interim final rule, effective February
3, 2003, that addresses security issues regarding transportation of
explosives by aliens via commercial motor vehicles and railroads from
Canada into the United States. 68 FR 6083 (February 6, 2003). In the
new regulation, DOT has exercised its authority to make security
determinations, and generally provides that Canadian truck and rail
operators may transport explosives to the United States only after they
have been the subject of security checks to ensure that the operators
do not pose a security risk.
The DOT interim rule did not establish new requirements regarding
the transportation of explosives by air or by water, but the
supplementary information to that rule discussed the existing rules and
procedures enforced by the Federal Aviation Administration (FAA) and
the Transportation Security Administration (TSA), and by the United
States Coast Guard, regulating aliens transporting explosives in
commerce into the United States by air or by water, respectively.
DOT is currently assessing the need for new or revised regulations
concerning security aspects of the commercial transportation of
explosives and certain other hazardous materials by air, rail, highway,
and vessel carriers. As part of this assessment, DOT is examining the
extent to which security concerns related to prohibited persons who
handle explosives incident to and in connection with the commercial
transportation of explosives are already addressed under existing
regulations. Where such concerns are not currently addressed in the
existing DOT regulatory scheme, DOT has the authority to issue new or
revised regulations in the future addressing the security risks posed
by the commercial transportation of explosives by any of the categories
of prohibited persons. For example, DOT has stated that it plans to
issue regulations in the near future to implement the provisions of
section 1012 of the USA Patriot Act, Pub. L. No. 107-56, 115 Stat. 272
(2001). This statute requires, in pertinent part, that the Department
of Justice conduct background checks on drivers of commercial motor
vehicles applying to States for a hazardous materials endorsement and
report the results of the background check to DOT, which will then
determine whether the driver poses a security risk.
When DOT has exercised its authority to assess the security risks
related to persons who handle explosives incident to and in connection
with the transportation of explosives in commerce, and has an existing
regulation or has implemented a new or revised regulation addressing
this aspect of the transportation of explosives by a particular mode,
whether by truck, railroad, air, or water, ATF's authority to enforce
the Federal explosives laws against such persons during the commercial
transportation of explosives is preempted under 18 U.S.C. 845(a)(1), to
the extent that the regulation and security assessment address the
prohibited categories set forth in 18 U.S.C. 842(i). For example, if
DOT conducts a security assessment and adopts regulations to permit
certain felons to obtain a commercial driver's license with a hazardous
materials endorsement, then ATF would have no authority to enforce 18
U.S.C. 842(i)(1) against such felons while they are shipping,
transporting, receiving, or possessing explosives incident to and in
connection with the commercial transportation of explosives.
It is important to note that DOT's regulatory authority covers
commercial transportation only. Thus, the preemption of the explosives
laws occurs only during the commercial transportation of the explosives
(and applies only to the shipping, possessing and receiving incident to
and in connection with commercial transportation). A prohibited person
who ships, transports, receives, or possesses explosives not incident
to and in connection with commercial transportation will violate 18
U.S.C. 842(i) irrespective of DOT's regulation.
ATF has amended 27 CFR 555.141(a)(1) to include language clarifying
the DOT exception of 18 U.S.C. 845(a)(1).
ATF has recently been advised that the trucking industry may employ
persons who are subject to Federal explosives disabilities. It is ATF's
longstanding position that a driver transporting explosive materials in
a truck or other vehicle has possession of such materials. Thus, if the
driver falls within any of the categories of prohibited persons, the
driver may not knowingly ship or transport any explosive in interstate
or foreign commerce or receive or possess any explosive which has been
shipped or transported in interstate or foreign commerce, unless the
person is addressed by a current DOT security assessment regulation as
discussed above, or one of the other statutory exemptions applies. See
18 U.S.C. 845(a).
It is not ATF's intention to place unnecessary obstacles in the
path of legitimate commerce in explosive materials. However, Congress
has made it clear that the persons specified in section 842(i) may not
lawfully possess explosives unless their activities fall within one of
the statutory exceptions in 18 U.S.C. 845(a) or they apply for and
receive relief from disabilities under 18 U.S.C. 845(b). ATF encourages
any individual who is a prohibited person, who has a need to possess or
transport explosives for purposes of his employment, and who is not
within the scope of any DOT security assessment regulation, to apply
for relief under 18 U.S.C. 845(b) as soon as possible. ATF will process
relief applications as quickly as possible when a person's employment
is contingent upon lawful possession of explosives.
VIII. Interstate Commerce Element of 18 U.S.C. 842(i)
The Act also amended section 842(i) to broaden the interstate
commerce element of the statute. Prior to amendment, section 842(i)
made it unlawful for prohibited persons to ship or transport any
explosive in interstate or foreign commerce or to receive or possess
any explosive which has been shipped or transported in interstate or
foreign commerce. The amendment adds ``or affecting'' before
``interstate'' each place the term appears in section 842(i). This
provision became effective on January 24, 2003.
Regulations that implement this provision of the Act are in Sec.
555.26.
[[Page 13776]]
IX. Samples of Explosive Materials and Ammonium Nitrate
The Act added a new section 843(i) to Chapter 40 providing ATF the
authority to require licensed manufacturers and licensed importers and
persons who manufacture or import explosive materials or ammonium
nitrate to provide samples, information on chemical composition, and
other information relevant to the identification of the product. The
Act requires ATF to authorize, by regulation, reimbursement of the fair
market value of the samples furnished as well as reasonable cost of
shipment.
This provision became effective on January 24, 2003. Regulations
that implement this provision of the Act are in Sec. 555.110.
X. Amendment of 18 U.S.C. 844(f)
The Act amended section 844(f)(1) of Chapter 40 to broaden the
scope of the statute. Prior to amendment, this section made it unlawful
to damage or destroy by means of fire or explosive any building,
vehicle, or other personal or real property owned, possessed by, or
leased to a Federal agency. The amendment broadens the statute by
including any institution or organization receiving Federal financial
assistance within the categories of property covered by the
prohibition. This amendment restores language inadvertently deleted
from the statute by the Antiterrorism and Effective Death Penalty Act
of 1996. This provision became effective on January 24, 2003.
XI. Relief From Disabilities
The Act amended section 845(b) of Chapter 40 to expand ATF's
authority to grant relief from disabilities to all categories of
prohibited persons. Prior to enactment of the Act, the statute provided
authority for ATF to grant relief only to persons under indictment for
or convicted of a felony. ATF had no statutory authority to grant
relief to persons falling within the remaining prohibited categories.
Although all persons may now apply for relief, the statute did not
expand the existing language allowing licensees or permittees who apply
for relief due to an indictment or conviction for a felony to continue
their operations until the application for relief is acted upon. Thus,
because the law does not provide a similar benefit for other
disabilities, licensees and permittees subject to other disabilities
will not be allowed to continue operations during the pendency of a
relief application. This provision became effective on January 24,
2003.
Regulations that implement this provision of the law are in Sec.
555.142. The regulation requires an application for relief to be filed
on ATF Form 5400.29, Application for Restoration of Explosives
Privileges. The regulation also specifies categories of persons to whom
the Director will generally not grant relief. Such categories of
persons include persons who have not been discharged from parole or
probation for at least 2 years, fugitives, non-excepted aliens,
unlawful drug users, persons committed to a mental institution or
adjudicated as a mental defective, and persons prohibited by the law of
the State in which the applicant resides from receiving or possessing
explosive materials. However, the Director will consider such
applications and may grant relief in extraordinary circumstances where
the granting of such relief is consistent with the public interest. The
Director may also grant relief to non-excepted aliens who have been
lawfully admitted to the United States or to persons who have not been
discharged from parole or probation for a period of at least 2 years if
he determines that the applicant has a compelling need to possess
explosives, such as for purposes of employment. Thus, ATF will
entertain relief applications from such persons who need to possess
explosives for purposes of their employment with an explosives licensee
or permittee or other employment where possession of explosives is
required as part of the employee's duties. The regulation is intended
to convey ATF's general policy that it is not in the public interest to
grant relief to prohibited persons so they may lawfully possess
explosives in the United States. This approach is consistent with the
history and purposes of the Act, which indicate Congress' intention to
prevent access to explosives by those categories of persons deemed most
likely to misuse them in criminal or terrorist incidents.
ATF has been advised that there may be a significant number of non-
excepted aliens who are employed by the explosives industry in the
United States or who transport explosives via common carrier. To date,
it appears that the majority of such aliens are Canadian citizens. As
stated above, non-excepted aliens who have a need to possess explosives
for purposes of employment fall within the ``compelling need''
provisions of the regulations and will have their applications for
relief processed expeditiously. ATF has been working with the Canadian
government to streamline the procedures for processing relief
applications submitted by Canadian citizens, particularly with respect
to criminal background checks conducted in connection with such
investigations. Again, it is not ATF's intention to impose unnecessary
obstacles to commerce in explosives. ATF anticipates granting relief to
many Canadian citizens who have no criminal records and whose records
and reputations indicate that their possession of explosives in the
United States poses no threat to public safety. Likewise, citizens of
other countries who have a need to possess explosives for purposes of
employment can expect ATF to act as quickly as possible on properly
completed applications for relief from disabilities.
XII. Theft Reporting
The Act added a new section 844(p) to Chapter 40, providing for
felony penalties for a licensee or permittee who fails to report thefts
of explosives within 24 hours of discovery. Existing law, section
842(k), makes it unlawful for any person having knowledge of the theft
or loss of explosive materials to fail to report such theft or loss
within 24 hours of discovery to ATF and local authorities. The penalty
for violation of section 842(k) is a fine of not more than $100,000,
imprisonment for not more than one year, or both. By contrast, the
penalty for licensees or permittees who violate section 844(p) is a
fine of not more than $250,000, imprisonment for not more than five
years, or both. This provision became effective on January 24, 2003.
Regulations that implement this provision of the Act are in Sec.
555.165.
How This Document Complies With the Federal Administrative Requirements
for Rulemaking
A. Executive Order 12866
This rule has been drafted and reviewed in accordance with
Executive Order 12866, ``Regulatory Planning and Review'' section 1(b),
Principles of Regulation. The Department of Justice, Bureau of Alcohol,
Tobacco, Firearms and Explosives has determined that this rule is a
``significant regulatory action'' under Executive Order 12866, section
3(f), Regulatory Planning and Review, and accordingly this rule has
been reviewed by the Office of Management and Budget. However, this
rule will not have an annual effect on the economy of $100 million, nor
will it adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health, or safety, or State, local or tribal governments or
communities. Accordingly, this rule is not an
[[Page 13777]]
``economically significant'' rulemaking as defined by Executive Order
12866. Following is an assessment of the costs and benefits of this
regulation.
1. Estimated Costs
i. Cost of obtaining a ``limited permit'' for infrequent users of
explosive materials. By statute, the fee for obtaining a ``limited
permit'' is capped at $50 for an original permit and at one-half the
origination fee for timely renewals. This rule sets the fee for
obtaining an original limited permit significantly lower than the
statutory allowance. The fee is set at $25 for an original limited
permit and at $12 for each renewal. ATF estimates that the requirement
to obtain a limited permit will impact approximately 20,000 persons.
Each applicant for a limited permit must submit an application that
includes information on each responsible person and employee possessor
and which includes photographs and fingerprints for each responsible
person. ATF estimates that applicants for a limited permit will
generally have three to five responsible persons per applicant. ATF
estimates that the average cost of taking and submitting photographs
will be approximately $1.50 per photograph. Although some law
enforcement agencies assess fees for taking fingerprints, others
perform this service without charge. ATF is advised that, where a fee
is assessed, the fee generally ranges from five to ten dollars per set
of fingerprints. In connection with background checks conducted as part
of the application process, employee possessors will have to submit
fingerprints if the employee appeals an adverse determination or
challenges the accuracy of the record upon which the adverse
determination is based. ATF estimates that each applicant for a limited
permit will have three to five employee possessors and that name-based
checks of such employees will result in adverse determinations for less
than one percent. ATF estimates that the time required to complete the
application for a limited permit is 1 hour and 30 minutes. In addition,
ATF estimates that the time required for each employee possessor to
complete Form 5400.28 (Employee Possessor Questionnaire) is 20 minutes
per employee. Finally, each applicant for a limited permit will spend 1
to 2 hours complying with an ATF inspection of their storage
facilities. Therefore, ATF estimates that the initial economic impact
of this rule is as follows:
Application fee--20,000 applicants x $25 = $500,000.
Photographs for responsible persons-- 100,000 x $1.50 = $150,000.
Fingerprints for responsible persons-- 100,000 x $10 = $1,000,000.
Fingerprints for employees--1,000 x $10 = $10,000.
Time to complete application--20,000 x 1.5 hours x $13 (mean hourly
wage for clerical worker) = $390,000.
Time to complete Form 5400.28-- 100,000 x .33 (hours) x $14 (mean
hourly wage for blue collar worker) = $462,000.
Time spent on ATF inspection--20,000 x 2 (hours) x $17 (mean hourly
wage for supervisory blue collar workers) = $680,000.
Accordingly, this interim rule will result in approximately a
$3,192,000 cost to the explosives industry's nonlicensed/nonpermitted
population.
ii. No additional cost to limited permittees associated with
storage of explosive materials. Existing law and regulations require
that all persons storing explosive materials do so in accordance with
27 CFR part 555, subpart K. Accordingly, persons who have been
acquiring explosive materials, even on an infrequent basis, should
already have proper explosives storage facilities. However, because the
Safe Explosives Act brings previously nonlicensed/nonpermitted
infrequent users of explosive materials under ATF's oversight and
mandates that ATF verify the storage facilities of all licensees and
permittees, certain persons may need to obtain an appropriate
explosives storage magazine. Because infrequent users of explosive
materials will not likely be storing large quantities of explosive
materials, ATF believes that such users will acquire indoor explosives
storage magazines. Quantity restrictions for indoor storage of
explosive materials are limited to 50 pounds. The cost of indoor
explosives storage magazines that meet the regulatory requirements of
part 555, subpart K is approximately $300. However, because the
requirement to properly store explosive materials is a pre-existing
requirement for all persons, whether a licensee or permittee or a
nonlicensed/nonpermitted person, this cost does not result from the Act
and this rule.
iii. Similar process for explosives transactions under existing
regulations and new regulations. ATF regulations already require that
nonlicensee/nonpermittee purchasers complete a transaction record
requiring, among other things, that purchasers provide their names,
addresses, appropriate identifying information, and a certification
that they are not prohibited from receiving explosive materials. The
distributor is required to verify the identity of the purchaser, and
indicate on the transaction record the quantity and type of explosive
materials distributed to the purchaser. This record is completed each
time a seller distributes explosive materials to a nonlicensee/
nonpermittee.
This rule will require the same basic information before a
purchaser may be issued a ``limited permit'' and the six Intrastate
Purchase of Explosives Coupons (IPECs). This rule continues the
requirement that a distributor complete a form prior to distribution of
explosive materials. However, much of the information required by the
form is listed on the IPEC that will be affixed to the transaction
record. This change will not result in significant costs.
iv. Additional cost of compliance for licensees and holders of user
permits. There are approximately 8,600 persons holding explosives
licenses and user permits as of the date of this interim rule. Upon the
first renewal of such licenses and permits on and after May 24, 2003,
the holders must comply with the new photograph and fingerprint
requirements of the Act. Each renewal application must also include a
completed Form 5400.28 for each employee possessor. Assuming three to
five responsible persons per licensee/permittee and three to five
employee possessors for same, the additional estimated cost of
compliance would be as follows:
Time to complete Form 5400.28--8,600 x 5 x $14 (mean hourly wage for
blue collar worker) = $602,000.
Photographs for responsible persons--8,600 x 5 x $1.50 = $64,500.
Fingerprints for responsible persons--8,600 x 5 x $10 = $430,000.
Fingerprints for employees--430 x $10 = $4,300.
Accordingly, this interim rule will result in a cost to persons
currently holding a license or permit of approximately $1,100,800.
2. Benefits
The Act and this rule provide important benefits in public security
and safety. The Act mandates ATF to perform background checks of
persons and business entities to ensure that responsible persons and
employee possessors of explosive materials are not prohibited from
shipping, transporting, receiving, or possessing explosive materials.
This mandate enables ATF to determine whether a person is subject to an
explosives disability before such person may obtain explosive
materials. Thus, the Act as implemented by this
[[Page 13778]]
rule provides preventative tools to increase public safety and
security. Moreover, the required background checks may help to ensure
that would-be terrorists are not permitted to obtain explosive
materials for illicit use.
Prior to enactment, ATF did not have the authority to verify that
persons, except licensees and permittees, properly stored explosive
materials. The Act requires that all persons who wish to acquire
explosive materials obtain, at minimum, a ``limited permit,'' and that
ATF verify the storage facilities of all licensees and permittees. This
mandate authorizes ATF to verify that explosive materials are securely
stored and that storage of explosive materials does not pose a threat
to public safety.
3. Assessment
The public security and safety benefits of this rule outweigh its
costs. As stated above, the costs are minimal, affect a small sector of
the economy, and in some cases represent pre-existing requirements
(e.g., storage).
B. Executive Order 13132
This regulation will not have substantial direct effects on the
States, on the relationship between the National Government and the
States, or on the distribution of power and responsibilities among the
various levels of government. Therefore, in accordance with section 6
of Executive Order 13132, ATF has determined that this regulation does
not have sufficient federalism implications to warrant the preparation
of a federalism summary impact statement.
C. Executive Order 12988: Civil Justice Reform
This regulation meets the applicable standards set forth in
sections 3(a) and 3(b)(2) of Executive Order 12988.
D. Administrative Procedure Act (APA)
Immediate implementation of this rule as an interim rule with
provision for post-promulgation public comments is based upon the
exceptions found at 5 U.S.C. 553(b)(A), (b)(B), and (d). The Safe
Explosives Act was enacted in response to the terrorist attacks of
September 11, 2001. Its provisions close numerous gaps in Federal law
to prevent the threat of the use of explosives in future acts of
terrorism. Issuance of a notice of proposed rulemaking followed by a
comment period, consideration of the comments, and publication of a
final rule would delay implementation of these important security and
safety provisions. In addition, the effective date for certain
provisions of the Safe Explosives Act was January 24, 2003, only 60
days after enactment, with the remaining provisions effective on May
24, 2003. The explosives industry needs immediate guidance to comply
with the statute. For example, industry members will need to determine
whether any of their employees are prohibited from possessing
explosives under the new prohibited person categories added to 18
U.S.C. 842(i). In addition, the explosives industry, responsible
persons, employees who possess explosives in the course of their
employment, and members of the general public need immediate guidance
on the procedures for applying for relief from explosives disabilities
under 18 U.S.C. 845(b). It is also necessary to provide immediate
guidance concerning the limited permittee provisions of the law to give
persons who may require such a permit time to learn the new
requirements of the law, determine whether they should obtain a limited
permit or a user permit, and file an application to avoid conduct which
will be unlawful after the applicable effective date.
The portion of this interim rule that reflects agency organization,
procedure and practice is exempt under section 553(b)(A) of the APA.
With respect to the portion of this interim rule that makes technical
amendments, there is good cause for a finding that notice and public
procedure is unnecessary and contrary to the public interest pursuant
to section 553(b)(B) of the APA. With respect to the remainder of this
interim rule, there is good cause for a finding that notice and public
procedure is impracticable and contrary to the public interest,
pursuant to section 553(b)(B) of the APA. The due and timely execution
of the agency's responsibilities in implementing the Safe Explosives
Act would be unavoidably impeded by a time-consuming notice and comment
period. For the reasons stated above, there is also good cause for a
finding that this interim rule is exempt from the effective date
limitations under section 553(d).
E. Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 605(b)) requires an agency
to conduct a regulatory flexibility analysis of any rule subject to
notice and comment rulemaking requirements unless the agency certifies
that the rule will not have a significant economic impact on a
substantial number of small entities. Small entities include small
businesses, small not-for-profit enterprises, and small governmental
jurisdictions. The Director, Bureau of Alcohol, Tobacco, Firearms and
Explosives, has reviewed this regulation and, by approving it,
certifies that this rule will not have a significant economic impact on
a substantial number of small entities. This rule will affect persons
who hold a Federal explosives license as a manufacturer or importer of,
or dealer in, explosive materials. It will also affect persons who hold
Federal user permits that authorize them to obtain explosives in
interstate or foreign commerce. Users include farmers, construction
companies, mining companies, logging companies, and hobbyists, such as
fireworks and sport rocketry enthusiasts. The rule will also affect
infrequent or occasional users who obtain explosive materials within
their State of residence. The foregoing would include farmers,
construction companies, mining companies, logging companies, and
hobbyists, such as fireworks and sport rocketry enthusiasts. The rule
will also affect ``responsible persons'' affiliated with Federal
explosives licensees and permittees, as well as employees authorized by
a licensee or permittee to possess explosive materials in the course of
their employment. Finally, the rule will affect individuals subject to
Federal explosives disabilities under 18 U.S.C. 842(i).
Although a number of the persons affected by the rule may be small
businesses, many of these businesses already hold Federal explosives
licenses and permits and, therefore, the economic impact upon these
businesses will not be significant. Moreover, the requirement for
businesses to comply with the requirements of the rule is a statutory
mandate that ATF must implement. The rule will improve ATF's service to
the explosives industry and the general public by setting forth clear
procedures for obtaining a license or permit under the new provisions
of the law, by setting forth definitive criteria for conducting
background checks, and by providing a thorough description of the
relief from disabilities provisions of 18 U.S.C. 845(b). The
obligations placed on limited permittees under the provisions of the
interim rule are only those necessary to ensure that such persons are
not prohibited from possessing explosives and to limit their access to
explosives in accordance with the restrictions in the law. The rule has
been drafted to impose as few obstacles as possible to the acquisition
of explosive materials by these infrequent, intrastate users.
F. Small Business Regulatory Enforcement Fairness Act of 1996
This rule is not a major rule as defined by section 804 of the
Small
[[Page 13779]]
Business Regulatory Enforcement Fairness Act of 1996. This rule will
not result in an annual effect on the economy of $100 million or more;
a major increase in costs or prices; or significant adverse effects on
competition, employment, investment, innovation, or on the ability of
United States-based companies to compete with foreign-based companies
in domestic and export markets.
G. Unfunded Mandates Reform Act of 1995
This rule will not result in the expenditure by State, local, and
tribal governments, in the aggregate, or by the private sector of $100
million or more in any one year, and it will not significantly or
uniquely affect small governments. Therefore, no actions were deemed
necessary under the provisions of the Unfunded Mandates Reform Act of
1995.
H. Paperwork Reduction Act
This regulation is being issued without prior notice and public
procedure pursuant to the Administrative Procedure Act (5 U.S.C. 553).
For this reason, the collections of information contained in this
regulation have been reviewed under the requirements of the Paperwork
Reduction Act (44 U.S.C. 3507(j)) and, pending receipt and evaluation
of public comments, approved by the Office of Management and Budget
(OMB) under the following control numbers: 1140-0030, 1140-0073, 1140-
0074, 1140-0075, 1140-0076, 1140-0077, 1140-0078, 1140-0079, 1140-0080,
1140-0081, 1140-0082, and 1140-0083. An agency may not conduct or
sponsor, and a person is not required to respond to, a collection of
information unless it displays a valid control number assigned by the
Office of Management and Budget.
The collections of information in this regulation are in 27 CFR
555.33, 555.34, 555.41, 555.45, 555.49, 555.54, 555.57, 555.103,
555.105, 555.110, 555.125, 555.126, and 555.142.
This information is required to ensure compliance with the
provisions of the Safe Explosives Act, Title XI, Subtitle C of Public
Law 107-296. The collections of information are mandatory. The likely
respondents are individuals and businesses.
As indicated, the collections of information contained in this
interim rule have been submitted to the Office of Management and Budget
for review in accordance with the Paperwork Reduction Act of 1995 (44
U.S.C. 3507(d)). Comments on the collections of information should be
sent to the Office of Management and Budget, Attention: Desk Officer
for the Department of Justice, Bureau of Alcohol, Tobacco, Firearms and
Explosives, Office of Information and Regulatory Affairs, Washington,
DC, 20503, with copies to the Chief, Document Services Branch, Room
3110, Bureau of Alcohol, Tobacco, Firearms and Explosives, 650
Massachusetts Avenue, NW., Washington, DC 20226. Comments are
specifically requested concerning:
[sbull] Whether the collections of information are necessary for
the proper performance of the function of the Bureau of Alcohol,
Tobacco, Firearms and Explosives, including whether the information
will have practical utility;
[sbull] The accuracy of the estimated burden associated with the
collections of information (see below);
[sbull] How the quality, utility, and clarity of the information to
be collected may be enhanced; and
[sbull] How the burden of complying with the collections of
information may be minimized, including through the application of
automated collection techniques or other forms of information
technology.
With respect to Sec. 555.33:
Estimated total annual reporting and/or recordkeeping burden: 1,000
hours.
Estimated average annual burden hours per respondent and/or
recordkeeper: 2 hours.
Estimated number of respondents and/or recordkeepers: 500.
Estimated annual frequency of responses: 1.
With respect to Sec. 555.34:
Estimated total annual reporting and/or recordkeeping burden: 264
hours.
Estimated average annual burden hours per respondent and/or
recordkeeper: .33 hours (20 minutes).
Estimated number of respondents and/or recordkeepers: 800.
Estimated annual frequency of responses: 1.
With respect to Sec. Sec. 555.41 and 555.45:
Estimated total annual reporting and/or recordkeeping burden: 2,000
hours.
Estimated average annual burden hours per respondent and/or
recordkeeper: 30 seconds.
Estimated number of respondents and/or recordkeepers: 40,000.
Estimated annual frequency of responses: 6.
With respect to Sec. 555.49:
Estimated total annual reporting and/or recordkeeping burden: 416
hours.
Estimated average annual burden hours per respondent and/or
recordkeeper: 30 seconds.
Estimated number of respondents and/or recordkeepers: 50,000.
Estimated annual frequency of responses: 1.
With respect to Sec. 555.54:
Estimated total annual reporting and/or recordkeeping burden: 170
hours.
Estimated average annual burden hours per respondent and/or
recordkeeper: .17 hours (10 minutes).
Estimated number of respondents and/or recordkeepers: 1,000.
Estimated annual frequency of responses: 1.
With respect to Sec. 555.57:
Estimated total annual reporting and/or recordkeeping burden:
100,000 hours.
Estimated average annual burden hours per respondent and/or
recordkeeper: 1 hour.
Estimated number of respondents and/or recordkeepers: 50,000.
Estimated annual frequency of responses: 2.
With respect to Sec. 555.103:
Estimated total annual reporting and/or recordkeeping burden:
25,000 hours.
Estimated average annual burden hours per respondent and/or
recordkeeper: .5 hours (30 minutes).
Estimated number of respondents and/or recordkeepers: 50,000.
Estimated annual frequency of responses: 1.
With respect to Sec. 555.105:
Estimated total annual reporting and/or recordkeeping burden:
25,000 hours.
Estimated average annual burden hours per respondent and/or
recordkeeper: .5 hours (30 minutes).
Estimated number of respondents and/or recordkeepers: 50,000.
Estimated annual frequency of responses: 1.
With respect to Sec. 555.110:
Estimated total annual reporting and/or recordkeeping burden: 1,175
hours.
Estimated average annual burden hours per respondent and/or
recordkeeper: .5 hours (30 minutes).
Estimated number of respondents and/or recordkeepers: 2,350.
Estimated annual frequency of responses: 1.
With respect to Sec. 555.126:
Estimated total annual reporting and/or recordkeeping burden:
12,000 hours.
Estimated average annual burden hours per respondent and/or
recordkeeper: .08 hours (5 minutes).
Estimated number of respondents and/or recordkeepers: 5,000.
Estimated annual frequency of responses: 300.
With respect to Sec. 555.142:
Estimated total annual reporting and/or recordkeeping burden: 1
hour.
Estimated average annual burden hours per respondent and/or
recordkeeper: .02 hours (1 minute).
Estimated number of respondents and/or recordkeepers: 50.
[[Page 13780]]
Estimated annual frequency of responses: 1.
Public Participation
ATF is requesting comments on the interim regulations from all
interested persons. ATF is also specifically requesting comments on the
clarity of this interim rule and how it may be made easier to
understand.
Comments received on or before the closing date will be carefully
considered. Comments received after that date will be given the same
consideration if it is practical to do so, but assurance of
consideration cannot be given except as to comments received on or
before the closing date.
ATF will not recognize any material in comments as confidential.
Comments may be disclosed to the public. Any material that the
commenter considers to be confidential or inappropriate for disclosure
to the public should not be included in the comment. The name of the
person submitting a comment is not exempt from disclosure.
You may submit written comments by facsimile transmission to (202)
927-8525. Facsimile comments must:
[sbull] Be legible;
[sbull] Reference this document number;
[sbull] Be 8\1/2\'' x 11'' in size;
[sbull] Contain a legible written signature; and
[sbull] Be not more than five pages long.
ATF will not acknowledge receipt of facsimile transmissions. ATF
will treat facsimile transmissions as originals.
Any interested person who desires an opportunity to comment orally
at a public hearing should submit his or her request, in writing, to
the Director within the 90-day comment period. The Director, however,
reserves the right to determine, in light of all circumstances, whether
a public hearing is necessary.
Disclosure
Copies of this interim rule and the comments received will be
available for public inspection by appointment during normal business
hours at: ATF Reference Library, Room 6480, 650 Massachusetts Avenue,
NW., Washington, DC 20226, telephone (202) 927-7890.
Regulation Identification Number
A regulation identification number (RIN) is assigned to each
regulatory action listed in the Unified Agenda of Federal Regulations.
The Regulatory Information Service Center publishes the Unified Agenda
in the Federal Register in April and October of each year. The RIN
contained in the heading of this document can be used to cross-
reference this action with the Unified Agenda.
Drafting Information
The author of this document is James P. Ficaretta; Firearms,
Explosives and Arson; Bureau of Alcohol, Tobacco, Firearms and
Explosives.
List of Subjects in 27 CFR Part 555
Administrative practice and procedure, Authority delegations,
Customs duties and inspection, Explosives, Hazardous materials,
Imports, Penalties, Reporting and recordkeeping requirements, Safety,
Security measures, Seizures and forfeitures, Transportation, and
Warehouses.
Authority and Issuance
For the reasons discussed in the preamble, 27 CFR Part 555, is
amended as follows:
PART 555--COMMERCE IN EXPLOSIVES
Paragraph 1. The authority citation for 27 CFR Part 555 continues
to read as follows:
Authority: 18 U.S.C. 847.
Par. 2. Section 555.1 is amended by revising paragraphs (a) and
(b)(3) to read as follows:
Sec. 555.1 Scope of regulations.
(a) In general. The regulations contained in this part relate to
commerce in explosives and implement Title XI, Regulation of Explosives
(18 U.S.C. Chapter 40; 84 Stat. 952), of the Organized Crime Control
Act of 1970 (84 Stat. 922), Pub. L. 103-322 (108 Stat. 1796), Pub. L.
104-132 (110 Stat. 1214), and Pub. L. 107-296 (116 Stat. 2135).
(b) * * *
(3) The issuance of permits;
* * * * *
Par. 3. Section 555.11 is amended by revising the definitions for
``ATF officer,'' ``Bureau,'' ``Director,'' and ``Permittee'' and by
adding new definitions for the terms ``Adjudicated as a mental
defective,'' ``Alien,'' ``Appropriate identifying information,''
``ATF,'' ``Committed to a mental institution,'' ``Common or contract
carrier,'' ``Controlled substance,'' ``Discharged under dishonorable
conditions,'' ``Identification document,'' ``Limited permit,'' ``Mental
institution,'' ``Renounced U.S. citizenship,'' ``Responsible person,''
and ``Unlawful user of or addicted to any controlled substance'' to
read as follows:
Sec. 555.11 Meaning of terms.
* * * * *
Adjudicated as a mental defective. (a) 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:
(1) Is a danger to himself or to others; or
(2) Lacks the mental capacity to contract or manage his own
affairs.
(b) The term will include--
(1) A finding of insanity by a court in a criminal case; and
(2) Those persons found incompetent to stand trial or found not
guilty by reason of lack of mental responsibility by any court or
pursuant to articles 50a and 76b of the Uniform Code of Military
Justice, 10 U.S.C. 850a, 876b.
Alien. Any person who is not a citizen or national of the United
States.
* * * * *
Appropriate identifying information. The term means, in relation to
an individual:
(a) The full name, date of birth, place of birth, sex, race, street
address, State of residence, telephone numbers (home and work), country
or countries of citizenship, and position at the employer's business or
operations of responsible persons and employees authorized to possess
explosive materials;
(b) The business name, address, and license or permit number with
which the responsible person or employee is affiliated;
(c) If an alien, INS-issued alien number or admission number; and
(d) Social security number, as optional information (this
information is not required but is helpful in avoiding
misidentification when a background check is conducted).
* * * * *
ATF. (a) Prior to January 24, 2003. The Bureau of Alcohol, Tobacco
and Firearms, Department of the Treasury, Washington, DC.
(b) On and after January 24, 2003. The Bureau of Alcohol, Tobacco,
Firearms and Explosives, Department of Justice, Washington, DC.
ATF officer. (a) Prior to January 24, 2003. An officer or employee
of the Bureau of Alcohol, Tobacco and Firearms (ATF) authorized to
perform any function relating to the administration or enforcement of
this part.
(b) On and after January 24, 2003. An officer or employee of the
Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) authorized to
perform any function relating to the administration or enforcement of
this part.
* * * * *
[[Page 13781]]
Bureau. (a) Prior to January 24, 2003. The Bureau of Alcohol,
Tobacco and Firearms, Department of the Treasury, Washington, DC.
(b) On and after January 24, 2003. The Bureau of Alcohol, Tobacco,
Firearms and Explosives, Department of Justice, Washington, DC.
* * * * *
Committed to a mental institution. A formal commitment of a person
to a mental institution by a court, board, commission, or other lawful
authority. The term includes a commitment to a mental institution
involuntarily. The term includes commitment for mental defectiveness or
mental illness. It also includes commitments for other reasons, such as
for drug use. The term does not include a person in a mental
institution for observation or a voluntary admission to a mental
institution.
Common or contract carrier. Any individual or organization engaged
in the business of transporting passengers or goods.
* * * * *
Controlled substance. A drug or other substance, or immediate
precursor, as defined in section 102 of the Controlled Substances Act,
21 U.S.C. 802. The term includes, but is not limited to, marijuana,
depressants, stimulants, and narcotic drugs. The term does not include
distilled spirits, wine, malt beverages, or tobacco, as those terms are
defined or used in Subtitle E of the Internal Revenue Code of 1986, as
amended.
* * * * *
Director. (a) Prior to January 24, 2003. The Director, Bureau of
Alcohol, Tobacco and Firearms, Department of the Treasury, Washington,
DC.
(b) On and after January 24, 2003. The Director, Bureau of Alcohol,
Tobacco, Firearms and Explosives, Department of Justice, Washington,
DC.
Discharged under dishonorable conditions. Separation from the U.S.
Armed Forces resulting from a dishonorable discharge or dismissal
adjudged by general court-martial. The term does not include any
separation from the Armed Forces resulting from any other discharge,
e.g., a bad conduct discharge.
* * * * *
Identification document. A document containing the name, residence
address, date of birth, and photograph of the holder and which was made
or issued by or under the authority of the United States Government, a
State, political subdivision of a State, a foreign government, a
political subdivision of a foreign government, an international
governmental or an international quasi-governmental organization which,
when completed with information concerning a particular individual, is
of a type intended or commonly accepted for the purpose of
identification of individuals.
* * * * *
Limited permit. A permit issued to a person authorizing him to
receive for his use explosive materials from a licensee or permittee in
his state of residence on no more than 6 occasions during the 12-month
period in which the permit is valid. A limited permit does not
authorize the receipt or transportation of explosive materials in
interstate or foreign commerce.
* * * * *
Mental institution. Includes mental health facilities, mental
hospitals, sanitariums, psychiatric facilities, and other facilities
that provide diagnoses by licensed professionals of mental retardation
or mental illness, including a psychiatric ward in a general hospital.
* * * * *
Permittee. Any user of explosives for a lawful purpose who has
obtained either a user permit or a limited permit under this part.
* * * * *
Renounced U.S. citizenship. (a) A person has renounced his U.S.
citizenship if the person, having been a citizen of the United States,
has renounced citizenship either--
(1) Before a diplomatic or consular officer of the United States in
a foreign state pursuant to 8 U.S.C. 1481(a)(5); or
(2) Before an officer designated by the Attorney General when the
United States is in a state of war pursuant to 8 U.S.C. 1481(a)(6).
(b) The term will not include any renunciation of citizenship that
has been reversed as a result of administrative or judicial appeal.
Responsible person. An individual who has the power to direct the
management and policies of the applicant pertaining to explosive
materials. Generally, the term includes partners, sole proprietors,
site managers, corporate officers and directors, and majority
shareholders.
* * * * *
Unlawful user of or addicted to any controlled substance. A person
who uses a controlled substance and has lost the power of self-control
with reference to the use of a controlled substance; and any person who
is a current user of a controlled substance in a manner other than as
prescribed by a licensed physician. Such use is not limited to the use
of drugs on a particular day, or within a matter of days or weeks
before possession of the explosive materials, but rather that the
unlawful use has occurred recently enough to indicate that the
individual is actively engaged in such conduct. A person may be an
unlawful current user of a controlled substance even though the
substance is not being used at the precise time the person seeks to
acquire explosive materials or receives or possesses explosive
materials. An inference of current use may be drawn from evidence of a
recent use or possession of a controlled substance or a pattern of use
or possession that reasonably covers the present time, e.g., a
conviction for use or possession of a controlled substance within the
past year; multiple arrests for such offenses within the past 5 years
if the most recent arrest occurred within the past year; or persons
found through a drug test to use a controlled substance unlawfully,
provided that the test was administered within the past year. For a
current or former member of the Armed Forces, an inference of current
use may be drawn from recent disciplinary or other administrative
action based on confirmed drug use, e.g., court-martial conviction,
nonjudicial punishment, or an administrative discharge based on drug
use or drug rehabilitation failure.
* * * * *
Par. 4. Section 555.24 is revised to read as follows:
Sec. 555.24 Right of entry and examination.
(a) Any ATF officer may enter during business hours the premises,
including places of storage, of any licensee or holder of a user permit
for the purpose of inspecting or examining any records or documents
required to be kept under this part, and any facilities in which
explosive materials are kept or stored.
(b) Any ATF officer may inspect the places of storage for explosive
materials of an applicant for a limited permit or, in the case of a
holder of a limited permit, at the time of renewal of such permit.
(c) The provisions of paragraph (b) of this section do not apply to
an applicant for the renewal of a limited permit if an ATF officer has,
within the preceding 3 years, verified by inspection that the
applicant's place of storage for explosive materials meets the
requirements of subpart K of this part.
Par. 5. Section 555.26 is revised to read as follows:
Sec. 555.26 Prohibited shipment, transportation, receipt, possession,
or distribution of explosive materials.
(a) General. No person, other than a licensee or permittee
knowingly may transport, ship, cause to be transported, or receive any
explosive materials:
[[Page 13782]]
Provided, That the provisions of this paragraph (a) do not apply to the
lawful purchase by a nonlicensee or nonpermittee of commercially
manufactured black powder in quantities not to exceed 50 pounds, if the
black powder is intended to be used solely for sporting, recreational,
or cultural purposes in antique firearms as defined in 18 U.S.C.
921(a)(16), or in antique devices as exempted from the term
``destructive device'' in 18 U.S.C. 921(a)(4).
(b) Holders of a limited permit. No person who is a holder of a
limited permit may--
(1) Transport, ship, cause to be transported, or receive in
interstate or foreign commerce any explosive materials;
(2) Receive explosive materials from a licensee or permittee, whose
premises are located outside the State of residence of the limited
permit holder; or
(3) Receive explosive materials on more than 6 separate occasions,
during the period of the permit, from one or more licensees or
permittees whose premises are located within the State of residence of
the limited permit holder. (See Sec. 555.105(b) for the definition of
``6 separate occasions.'')
(c) Possession by prohibited persons. No person may ship or
transport any explosive material in or affecting interstate or foreign
commerce or receive or possess any explosive materials which have been
shipped or transported in or affecting interstate or foreign commerce
who:
(1) Is under indictment or information for, or who has been
convicted in any court of, a crime punishable by imprisonment for a
term exceeding one year;
(2) Is a fugitive from justice;
(3) Is an unlawful user of or addicted to any controlled substance
(as defined in section 102 of the Controlled Substances Act (21 U.S.C.
802) and Sec. 555.11);
(4) Has been adjudicated as a mental defective or has been
committed to a mental institution;
(5) Is an alien, other than an alien who--
(i) Is lawfully admitted for permanent residence (as that term is
defined in section 101(a)(20) of the Immigration and Nationality Act (8
U.S.C. 1101)); or
(ii) Is in lawful nonimmigrant status, is a refugee admitted under
section 207 of the Immigration and Nationality Act (8 U.S.C. 1157), or
is in asylum status under section 208 of the Immigration and
Nationality Act (8 U.S.C. 1158), and--
(A) Is a foreign law enforcement officer of a friendly foreign
government, as determined by the Attorney General in consultation with
the Secretary of State, entering the United States on official law
enforcement business, and the shipping, transporting, possession, or
receipt of explosive materials is in furtherance of this official law
enforcement business;
(B) Is a person having the power to direct or cause the direction
of the management and policies of a corporation, partnership, or
association licensed pursuant to section 843(a) of the Act, and the
shipping, transporting, possession, or receipt of explosive materials
is in furtherance of such power;
(C) Is a member of a North Atlantic Treaty Organization (NATO) or
other friendly foreign military force, as determined by the Attorney
General in consultation with the Secretary of Defense, (whether or not
admitted in a nonimmigrant status) who is present in the United States
under military orders for training or other military purpose authorized
by the United States, and the shipping, transporting, possession, or
receipt of explosive materials is in furtherance of the military
purpose; or
(D) Is lawfully present in the United States in cooperation with
the Director of Central Intelligence, and the shipment, transportation,
receipt, or possession of the explosive materials is in furtherance of
such cooperation;
(6) Has been discharged from the armed forces under dishonorable
conditions; or
(7) Having been a citizen of the United States, has renounced
citizenship.
(d) Distribution to prohibited persons. No person may knowingly
distribute explosive materials to any individual who:
(1) Is under twenty-one years of age;
(2) Is under indictment or information for, or who has been
convicted in any court of, a crime punishable by imprisonment for a
term exceeding one year;
(3) Is a fugitive from justice;
(4) Is an unlawful user of or addicted to any controlled substance
(as defined in section 102 of the Controlled Substances Act (21 U.S.C.
802) and Sec. 555.11);
(5) Has been adjudicated as a mental defective or has been
committed to a mental institution;
(6) Is an alien, other than an alien who--
(i) Is lawfully admitted for permanent residence (as that term is
defined in section 101(a)(20) of the Immigration and Nationality Act (8
U.S.C. 1101)); or
(ii) Is in lawful nonimmigrant status, is a refugee admitted under
section 207 of the Immigration and Nationality Act (8 U.S.C. 1157), or
is in asylum status under section 208 of the Immigration and
Nationality Act (8 U.S.C. 1158), and--
(A) Is a foreign law enforcement officer of a friendly foreign
government, as determined by the Attorney General in consultation with
the Secretary of State, entering the United States on official law
enforcement business, and the shipping, transporting, possession, or
receipt of explosive materials is in furtherance of this official law
enforcement business;
(B) Is a person having the power to direct or cause the direction
of the management and policies of a corporation, partnership, or
association licensed pursuant to section 843(a) of the Act, and the
shipping, transporting, possession, or receipt of explosive materials
is in furtherance of such power;
(C) Is a member of a North Atlantic Treaty Organization (NATO) or
other friendly foreign military force, as determined by the Attorney
General in consultation with the Secretary of Defense, (whether or not
admitted in a nonimmigrant status) who is present in the United States
under military orders for training or other military purpose authorized
by the United States, and the shipping, transporting, possession, or
receipt of explosive materials is in furtherance of the military
purpose; or
(D) Is lawfully present in the United States in cooperation with
the Director of Central Intelligence, and the shipment, transportation,
receipt, or possession of the explosive materials is in furtherance of
such cooperation;
(7) Has been discharged from the armed forces under dishonorable
conditions; or
(8) Having been a citizen of the United States, has renounced
citizenship.
(e) See Sec. 555.180 for regulations concerning the prohibited
manufacture, importation, exportation, shipment, transportation,
receipt, transfer, or possession of plastic explosives that do not
contain a detection agent.
Par. 6. Section 555.27 is revised to read as follows:
Sec. 555.27 Out-of-State disposition of explosive materials.
(a) No nonlicensee or nonpermittee may distribute any explosive
materials to any other nonlicensee or nonpermittee who the distributor
knows or who has reasonable cause to believe does not reside in the
State in which the distributor resides.
[[Page 13783]]
(b) The provisions of this section do not apply on and after May
24, 2003.
Par. 7. Section 555.33 is added to subpart C to read as follows:
Sec. 555.33 Background checks and clearances (effective May 24,
2003).
(a) Background checks. (1) If the Director receives from a licensee
or permittee the names and appropriate identifying information of
responsible persons and employees who will be authorized by the
employer to possess explosive materials in the course of employment
with the employer, the Director will conduct a background check in
accordance with this section.
(2) The Director will determine whether the responsible person or
employee is one of the persons described in any paragraph of section
842(i) of the Act (see Sec. 555.26). In making such determination, the
Director may take into account a letter or document issued under
paragraph (a)(3) of this section.
(3)(i) If the Director determines that the responsible person or
the employee is not one of the persons described in any paragraph of
section 842(i) of the Act (see Sec. 555.26), the Director will notify
the employer in writing or electronically of the determination and
issue, to the responsible person or employee, as the case may be, a
letter of clearance which confirms the determination.
(ii) If the Director determines that the responsible person or
employee is one of the persons described in any paragraph of section
842(i) of the Act (see Sec. 555.26), ATF will notify the employer in
writing or electronically of the determination and issue to the
responsible person or the employee, as the case may be, a document that
confirms the determination; explains the grounds for the determination;
provides information on how the disability may be relieved; and
explains how the determination may be appealed. The employer will
retain the notification as part of his permanent records in accordance
with Sec. 555.121. The employer will take immediate steps to remove
the responsible person from his position directing the management or
policies of the business or operations as they relate to explosive
materials or, as the case may be, to remove the employee from a
position requiring the possession of explosive materials. Also, if the
employer has listed the employee as a person authorized to accept
delivery of explosive materials, as specified in Sec. 555.103 or Sec.
555.105, the employer must remove the employee from such list and
immediately, and in no event later than the second business day after
such change, notify distributors of such change.
(b) Appeals and correction of erroneous system information. (1) In
general. A responsible person or employee may challenge the adverse
determination set out in the letter of denial, in writing and within 45
days of issuance of the determination, by directing his or her
challenge to the basis for the adverse determination, or to the
accuracy of the record upon which the adverse determination is based,
to the Director. The appeal request must include appropriate
documentation or record(s) establishing the legal and/or factual basis
for the challenge. Any record or document of a court or other
government entity or official furnished in support of an appeal must be
certified by the court or other government entity or official as a true
copy. In the case of an employee, or responsible person who did not
submit fingerprints, such appeal must be accompanied by two properly
completed FBI Forms FD-258 (fingerprint card). The Director will advise
the individual in writing of his decision and the reasons for the
decision.
(2) Employees. The letter of denial, among other things, will
advise an employee who elects to challenge an adverse determination to
submit the fingerprint cards as described above. The employee also will
be advised of the agency name and address that originated the record
containing the information causing the adverse determination
(``originating agency''). At that time, and where appropriate, an
employee is encouraged to apply to the originating agency to challenge
the accuracy of the record(s) upon which the denial is based. The
originating agency may respond to the individual's application by
addressing the individual's specific reasons for the challenge, and by
indicating whether additional information or documents are required. If
the record is corrected as a result of the application to the
originating agency, the individual may so notify ATF which will, in
turn, verify the record correction with the originating agency and take
all necessary steps to contact the agency responsible for the record
system and correct the record. The employee may provide to ATF
additional and appropriate documentation or record(s) establishing the
legal and/or factual basis for the challenge to ATF's decision to
uphold the initial denial. If ATF does not receive such additional
documentation or record(s) within 45 days of the date of the decision
upholding the initial denial, ATF will close the appeal.
(3) Responsible persons. The letter of denial, among other things,
will advise a responsible person of the agency name and address which
originated the record containing the information causing the adverse
determination (``originating agency''). A responsible person who elects
to challenge the adverse determination, where appropriate, is
encouraged to apply to the originating agency to challenge the accuracy
of the record(s) upon which the denial is based. The originating agency
may respond to the individual's application by addressing the
individual's specific reasons for the challenge, and by indicating
whether additional information or documents are required. If the record
is corrected as a result of the application to the originating agency,
the individual may so notify ATF which will, in turn, verify the record
correction with the originating agency and take all necessary steps to
contact the agency responsible for the record system and correct the
record. A responsible person may provide additional documentation or
records as specified for employees in paragraph (b)(2) of this section.
(Approved by the Office of Management and Budget under control
number 1140-0081)
Par. 8. Section 555.34 is added to subpart C to read as follows:
Sec. 555.34 Replacement of stolen or lost ATF Form 5400.30
(Intrastate Purchase of Explosives Coupon (IPEC)).
When any Form 5400.30 is stolen, lost, or destroyed, the person
losing possession will, upon discovery of the theft, loss, or
destruction, immediately, but in all cases before 24 hours have elapsed
since discovery, report the matter to the Director by telephoning 1-
888-ATF-BOMB (nationwide toll free number). The report will explain in
detail the circumstances of the theft, loss, or destruction and will
include all known facts that may serve to identify the document. Upon
receipt of the report, the Director will make such investigation as
appears appropriate and may issue a duplicate document upon such
conditions as the circumstances warrant.
(Approved by the Office of Management and Budget under control
number 1140-0077)
Par. 9. Section 555.41 is revised to read as follows:
Sec. 555.41 General.
(a) Licenses and permits issued prior to May 24, 2003. (1) Each
person intending to engage in business as an importer or manufacturer
of, or a dealer
[[Page 13784]]
in, explosive materials, including black powder, must, before
commencing business, obtain the license required by this subpart for
the business to be operated. Each person who intends to acquire for use
explosive materials from a licensee in a State other than the State in
which he resides, or from a foreign country, or who intends to
transport explosive materials in interstate or foreign commerce, must
obtain a permit under this subpart; except that it is not necessary to
obtain a permit if the user intends to lawfully purchase:
(i) Explosive materials from a licensee in a State contiguous to
the user's State of residence and the user's State of residence has
enacted legislation, currently in force, specifically authorizing a
resident of that State to purchase explosive materials in a contiguous
State; or
(ii) Commercially manufactured black powder in quantities not to
exceed 50 pounds, intended to be used solely for sporting,
recreational, or cultural purposes in antique firearms or in antique
devices.
(2) Each person intending to engage in business as an explosive
materials importer, manufacturer, or dealer must file an application,
with the required fee (see Sec. 555.42), with ATF in accordance with
the instructions on the form (see Sec. 555.45). A license will,
subject to law, entitle the licensee to transport, ship, and receive
explosive materials in interstate or foreign commerce, and to engage in
the business specified by the license, at the location described on the
license. A separate license must be obtained for each business premises
at which the applicant is to manufacture, import, or distribute
explosive materials except under the following circumstances:
(i) A separate license will not be required for storage facilities
operated by the licensee as an integral part of one business premises
or to cover a location used by the licensee solely for maintaining the
records required by this part.
(ii) A separate license will not be required of a licensed
manufacturer with respect to his on-site manufacturing.
(iii) It will not be necessary for a licensed importer or a
licensed manufacturer (for purposes of sale or distribution) to also
obtain a dealer's license in order to engage in business on his
licensed premises as a dealer in explosive materials.
(iv) A separate license will not be required of licensed
manufacturers with respect to their on-site manufacture of theatrical
flash powder.
(3) Except as provided in paragraph (a)(1) of this section, each
person intending to acquire explosive materials from a licensee in a
State other than a State in which he resides, or from a foreign
country, or who intends to transport explosive materials in interstate
or foreign commerce, must file an application, with the required fee
(see Sec. 555.43), with ATF in accordance with the instructions on the
form (see Sec. 555.45). A permit will, subject to law, entitle the
permittee to acquire, transport, ship, and receive in interstate or
foreign commerce explosive materials of the class authorized by this
permit. Only one permit is required under this part.
(b) Licenses and permits issued on and after May 24, 2003. (1) In
general. (i) Each person intending to engage in business as an importer
or manufacturer of, or a dealer in, explosive materials, including
black powder, must, before commencing business, obtain the license
required by this subpart for the business to be operated.
(ii) Each person who intends to acquire for use explosive materials
within the State in which he resides on no more than 6 separate
occasions during the 12-month period in which the permit is valid must
obtain a limited permit under this subpart. (See Sec. 555.105(b) for
definition of ``6 separate occasions.'')
(iii) Each person who intends to acquire for use explosive
materials from a licensee or permittee in a State other than the State
in which he resides, or from a foreign country, or who intends to
transport explosive materials in interstate or foreign commerce, or who
intends to acquire for use explosive materials within the State in
which he resides on more than 6 separate occasions during a 12-month
period, must obtain a user permit under this subpart.
(iv) It is not necessary to obtain a permit if the user intends
only to lawfully purchase commercially manufactured black powder in
quantities not to exceed 50 pounds, intended to be used solely for
sporting, recreational, or cultural purposes in antique firearms or in
antique devices.
(2) Importers, manufacturers, and dealers. Each person intending to
engage in business as an explosive materials importer, manufacturer, or
dealer must file an application, with the required fee (see Sec.
555.42), with ATF in accordance with the instructions on the form (see
Sec. 555.45). A license will, subject to law, entitle the licensee to
transport, ship, and receive explosive materials in interstate or
foreign commerce, and to engage in the business specified by the
license, at the location described on the license. A separate license
must be obtained for each business premises at which the applicant is
to manufacture, import, or distribute explosive materials except under
the following circumstances:
(i) A separate license will not be required for storage facilities
operated by the licensee as an integral part of one business premises
or to cover a location used by the licensee solely for maintaining the
records required by this part.
(ii) A separate license will not be required of a licensed
manufacturer with respect to his on-site manufacturing.
(iii) It will not be necessary for a licensed importer or a
licensed manufacturer (for purposes of sale or distribution) to also
obtain a dealer's license in order to engage in business on his
licensed premises as a dealer in explosive materials. No licensee will
be required to obtain a user permit to lawfully transport, ship, or
receive explosive materials in interstate or foreign commerce.
(iv) A separate license will not be required of licensed
manufacturers with respect to their on-site manufacture of theatrical
flash powder.
(3) Users of explosive materials. (i) A limited permit will,
subject to law, entitle the holder of such permit to receive for his
use explosive materials from a licensee or permittee in his state of
residence on no more than 6 separate occasions during the 12-month
period in which the permit is valid. A limited permit does not
authorize the receipt or transportation of explosive materials in
interstate or foreign commerce. Holders of limited permits who need to
receive explosive materials on more than 6 separate occasions during a
12-month period must obtain a user permit in accordance with this
subpart.
(ii) Each person intending to acquire explosive materials from a
licensee in a State other than a State in which he resides, or from a
foreign country, or who intends to transport explosive materials in
interstate or foreign commerce, must file an application for a user
permit, with the required fee (see Sec. 555.43), with ATF in
accordance with the instructions on the form (see Sec. 555.45). A user
permit will, subject to law, entitle the permittee to transport, ship,
and receive in interstate or foreign commerce explosive materials of
the class authorized by this permit. Only one user permit per person is
required under this part, irrespective of the number of locations
relating to explosive materials operated by the holder of the user
permit.
[[Page 13785]]
(Approved by the Office of Management and Budget under control number
1140-0083)
Par. 10. Section 555.43 is revised to read as follows:
Sec. 555.43 Permit fees.
(a) Each applicant must pay a fee for obtaining a permit as
follows:
(1) User--$100 for a three-year period.
(2) User-limited (nonrenewable)--$75.
(3) Limited--$25 for a one-year period.
(b)(1) Each applicant for renewal of a user permit must pay a fee
of $50 for a three-year period.
(2) Each applicant for renewal of a limited permit must pay a fee
of $12 for a one-year period.
Par. 11. Section 555.45 is amended by adding a heading to paragraph
(a) and two new sentences at the end of that paragraph; by adding a
heading to paragraph (b) and two new sentences at the end of that
paragraph; by adding a new paragraph (c); and by adding a parenthetical
text at the end of the section to read as follows:
Sec. 555.45 Original license or permit.
(a) Licenses issued prior to May 24, 2003. * * * The Chief,
Firearms and Explosives Licensing Center, will not approve an
application postmarked on or after March 20, 2003, unless it is
submitted with a Responsible Person Questionnaire, ATF Form 5400.28.
Form 5400.28 must be completed in accordance with the instructions on
the form.
(b) Permits issued prior to May 24, 2003. * * * The Chief, Firearms
and Explosives Licensing Center, will not approve an application
postmarked on or after March 20, 2003, unless it is submitted with a
Responsible Person Questionnaire, ATF Form 5400.28. Form 5400.28 must
be completed in accordance with the instructions on the form.
(c) Licenses and permits issued on and after May 24, 2003. (1)
License. Any person who intends to engage in the business as an
importer of, manufacturer of, or dealer in explosive materials, or who
has not timely submitted an application for renewal of a previous
license issued under this part, must file an application for License,
Explosives, ATF F 5400.13, with ATF in accordance with the instructions
on the form. ATF Form 5400.13 may be obtained by contacting any ATF
office. The application must:
(i) Be executed under the penalties of perjury and the penalties
imposed by 18 U.S.C. 844(a);
(ii) Include appropriate identifying information concerning each
responsible person;
(iii) Include a photograph and fingerprints for each responsible
person;
(iv) Include the names of and appropriate identifying information
regarding all employees who will be authorized by the applicant to
possess explosive materials by submitting ATF F 5400.28 for each
employee; and
(v) Include the appropriate fee in the form of money order or check
made payable to the Bureau of Alcohol, Tobacco, Firearms and
Explosives.
(2) User permit and limited permit. Except as provided in Sec.
555.41(b)(1)(iv), any person who intends to acquire explosive materials
in the State in which that person resides or acquire explosive
materials from a licensee or holder of a user permit in a State other
than the State in which that person resides, or from a foreign country,
or who intends to transport explosive materials in interstate or
foreign commerce, or who has not timely submitted an application for
renewal of a previous permit issued under this part, must file an
application for Permit, Explosives, ATF F 5400.16 or Permit, User
Limited Display Fireworks, ATF F 5400.21 with ATF in accordance with
the instructions on the form. ATF Form 5400.16 and ATF Form 5400.21 may
be obtained by contacting any ATF office. The application must:
(i) Be executed under the penalties of perjury and the penalties
imposed by 18 U.S.C. 844(a);
(ii) Include a photograph, fingerprints, and appropriate
identifying information for each responsible person;
(iii) Include the names of and appropriate identifying information
regarding all employees who will be authorized by the applicant to
possess explosive materials by submitting ATF F 5400.28 for each
employee; and
(iv) Include the appropriate fee in the form of money order or
check made payable to the Bureau of Alcohol, Tobacco, Firearms and
Explosives.
(3) The Chief, Firearms and Explosives Licensing Center, will
conduct background checks on responsible persons and employees
authorized by the applicant to possess explosive materials in
accordance with Sec. 555.33. If it is determined that any responsible
person or employee is described in any paragraph of section 842(i) of
the Act, the applicant must submit an amended application indicating
removal or reassignment of that person before the license or permit
will be issued.
(Approved by the Office of Management and Budget under control
number 1140-0083)
Par. 12. Section 555.49 is revised to read as follows:
Sec. 555.49 Issuance of license or permit.
(a) Issuance of license or permit prior to May 24, 2003. (1) The
Chief, Firearms and Explosives Licensing Center, will issue a license
or permit if--
(i) A properly executed application for the license or permit is
received; and
(ii) Through further inquiry or investigation, or otherwise, it is
found that the applicant is entitled to the license or permit.
(2) The Chief, Firearms and Explosives Licensing Center, will
approve a properly executed application for a license or permit, if:
(i) The applicant is 21 years of age or over;
(ii) The applicant (including, in the case of a corporation,
partnership, or association, any individual possessing, directly or
indirectly, the power to direct or cause the direction of the
management and policies of the corporation, partnership, or
association) is not a person to whom distribution of explosive
materials is prohibited under the Act;
(iii) The applicant has not willfully violated any provisions of
the Act or this part;
(iv) The applicant has not knowingly withheld information or has
not made any false or fictitious statement intended or likely to
deceive, in connection with his application;
(v) The applicant has in a State, premises from which he conducts
business or operations subject to license or permit under the Act or
from which he intends to conduct business or operations;
(vi) The applicant has storage for the class (as described in Sec.
555.202) of explosive materials described on the application, unless he
establishes to the satisfaction of the Chief, Firearms and Explosives
Licensing Center, that the business or operations to be conducted will
not require the storage of explosive materials;
(vii) The applicant has certified in writing that he is familiar
with and understands all published State laws and local ordinances
relating to explosive materials for the location in which he intends to
do business; and
(viii) The applicant for a license has submitted the certificate
required by section 21 of the Federal Water Pollution Control Act, as
amended (33 U.S.C. 1341).
(3) The Chief, Firearms and Explosives Licensing Center, will
approve or the regional director (compliance) will deny any application
for a license or permit within the 45-day
[[Page 13786]]
period beginning on the date a properly executed application was
received. However, when an applicant for license or permit renewal is a
person who is, under the provisions of Sec. 555.83 or Sec. 555.142,
conducting business or operations under a previously issued license or
permit, action regarding the application will be held in abeyance
pending the completion of the proceedings against the applicant's
existing license or permit, or renewal application, or final action by
the Director on an application for relief submitted under Sec.
555.142, as the case may be.
(4) The license or permit and one copy will be forwarded to the
applicant, except that in the case of a user-limited permit, the
original only will be issued.
(5) Each license or permit will bear a serial number and this
number may be assigned to the licensee or permittee to whom issued for
as long as he maintains continuity of renewal in the same region.
(b) Issuance of license or permit on and after May 24, 2003. (1)
The Chief, Firearms and Explosives Licensing Center, will issue a
license or permit if:
(i) A properly executed application for the license or permit is
received; and
(ii) Through further inquiry or investigation, or otherwise, it is
found that the applicant is entitled to the license or permit.
(2) The Chief, Firearms and Explosives Licensing Center, will
approve a properly executed application for a license or permit, if:
(i) The applicant (or, if the applicant is a corporation,
partnership, or association, each responsible person with respect to
the applicant) is not a person described in any paragraph of section
842(i) of the Act;
(ii) The applicant has not willfully violated any provisions of the
Act or this part;
(iii) The applicant has not knowingly withheld information or has
not made any false or fictitious statement intended or likely to
deceive, in connection with his application;
(iv) The applicant has in a State, premises from which he conducts
business or operations subject to license or permit under the Act or
from which he intends to conduct business or operations;
(v) The applicant has storage for the class (as described in Sec.
555.202) of explosive materials described on the application;
(vi) The applicant has certified in writing that he is familiar
with and understands all published State laws and local ordinances
relating to explosive materials for the location in which he intends to
do business;
(vii) The applicant for a license has submitted the certificate
required by section 21 of the Federal Water Pollution Control Act, as
amended (33 U.S.C. 1341);
(viii) None of the employees of the applicant who will be
authorized by the applicant to possess explosive materials is a person
described in any paragraph of section 842(i) of the Act; and
(ix) In the case of an applicant for a limited permit, the
applicant has certified in writing that the applicant will not receive
explosive materials on more than 6 separate occasions during the 12-
month period for which the limited permit is valid.
(3) The Chief, Firearms and Explosives Licensing Center, will
approve or the regional director (compliance) will deny any application
for a license or permit within the 90-day period beginning on the date
a properly executed application was received. However, when an
applicant for license or permit renewal is a person who is, under the
provisions of Sec. 555.83 or Sec. 555.142, conducting business or
operations under a previously issued license or permit, action
regarding the application will be held in abeyance pending the
completion of the proceedings against the applicant's existing license
or permit, or renewal application, or final action by the Director on
an application for relief submitted under Sec. 555.142, as the case
may be.
(4) The license or permit and one copy will be forwarded to the
applicant, except that in the case of a user-limited permit, the
original only will be issued.
(5) Each license or permit will bear a serial number and this
number may be assigned to the licensee or permittee to whom issued for
as long as he maintains continuity of renewal in the same region.
(Approved by the Office of Management and Budget under control
number 1140-0082)
Par. 13. Section 555.51 is revised to read as follows:
Sec. 555.51 Duration of license or permit.
(a) Prior to May 24, 2003. An original license or permit is issued
for a period of three years. A renewal license or permit is issued for
a period of three years. However, a user-limited permit is valid only
for a single purchase transaction.
(b) On and after May 24, 2003. (1) An original license or user
permit is issued for a period of three years. A renewal license or user
permit is also issued for a period of three years. However, a user-
limited permit is valid only for a single purchase transaction.
(2) A limited permit is issued for a period of one year. A renewal
limited permit is also issued for a period of one year.
Par. 14. Section 555.54 is amended by designating the introductory
text as paragraph (a); by redesignating paragraphs (a) and (b) as
paragraphs (a)(1) and (a)(2), respectively; by adding a new paragraph
(b); and by adding a parenthetical text at the end of the section to
read as follows:
Sec. 555.54 Change of address.
* * * * *
(b) Licensees and permittees whose mailing address will change must
notify the Chief, Firearms and Explosives Licensing Center, at least 10
days before the change.
(Paragraph (b) approved by the Office of Management and Budget under
control number 1140-0080)
Par. 15. Section 555.57 is amended by revising the section heading;
by redesignating the existing paragraph as paragraph (a); by adding new
paragraphs (b), (c), and (d); and by adding a parenthetical text at the
end of the section to read as follows:
Sec. 555.57 Change of control, change in responsible persons, and
change of employees.
* * * * *
(b) For all licenses or permits issued on and after May 24, 2003,
each person holding the license or permit must report to the Chief,
Firearms and Explosives Licensing Center, any change in responsible
persons or employees authorized to possess explosive materials. Such
report must be submitted within 30 days of the change and must include
appropriate identifying information for each responsible person.
Reports relating to newly hired employees authorized to possess
explosive materials must be submitted on ATF F 5400.28 for each
employee.
(c) Upon receipt of a report, the Chief, Firearms and Explosives
Licensing Center, will conduct a background check, if appropriate, in
accordance with Sec. 555.33.
(d) The reports required by paragraph (b) of this section must be
retained as part of a licensee's or permittee's permanent records for
the period specified in Sec. 555.121.
(Approved by the Office of Management and Budget under control
number 1140-0074)
Par. 16. Section 555.101 is amended by adding the word ``user''
before the
[[Page 13787]]
word ``permit'' in the section heading and wherever else it appears.
Par. 17. Section 555.102 is amended by revising paragraph (b) to
read as follows:
Sec. 555.102 Authorized operations by permittees.
* * * * *
(b) Distributions of surplus stocks. (1) Distributions of surplus
stocks prior to May 24, 2003. Permittees are not authorized to engage
in the business of sale or distribution of explosive materials.
However, permittees may dispose of surplus stocks of explosive
materials to other licensees or permittees in accordance with Sec.
555.103, and to nonlicensees or to nonpermittees in accordance with
Sec. 555.105(a)(4).
(2) Distributions of surplus stocks on and after May 24, 2003.
Permittees are not authorized to engage in the business of sale or
distribution of explosive materials. However, permittees may dispose of
surplus stocks of explosive materials to other licensees or permittees
in accordance with Sec. 555.103 and Sec. 555.105.
Par. 18. Section 555.103 is revised to read as follows:
Sec. 555.103 Transactions among licensees/permittees and transactions
among licensees and holders of user permits.
(a) Transactions among licensees/permittees prior to May 24, 2003.
(1) General. (i) A licensed importer, licensed manufacturer or licensed
dealer selling or otherwise distributing explosive materials (or a
permittee disposing of surplus stock to a licensee or another
permittee) who has the certified information required by this section
may sell or distribute explosive materials to a licensee or permittee
for not more than 45 days following the expiration date of the
distributee's license or permit, unless the distributor knows or has
reason to believe that the distributee's authority to continue business
or operations under this part has been terminated.
(ii) A licensed importer, licensed manufacturer or licensed dealer
selling or otherwise distributing explosive materials (or a permittee
disposing of surplus stock to another licensee or permittee) must
verify the license or permit status of the distributee prior to the
release of explosive materials ordered, as required by this section.
(iii) Licensees or permittees desiring to return explosive
materials to a licensed manufacturer may do so without obtaining a
certified copy of the manufacturer's license.
(iv) Where possession of explosive materials is transferred at the
distributor's premises, the distributor must in all instances verify
the identity of the person accepting possession on behalf of the
distributee before relinquishing possession. Before the delivery at the
distributor's premises of explosive materials to an employee of a
licensee or permittee, or to an employee of a common or contract
carrier transporting explosive materials to a licensee or permittee,
the distributor delivering explosive materials must obtain an executed
ATF F 5400.8, Explosives Delivery Record, from the employee before
releasing the explosive materials. The ATF F 5400.8 must contain all of
the information required on the form and required by this part.
Example 1. An ATF F 5400.8 is required when:
a. An employee of the purchaser takes possession at the
distributor's premises.
b. An employee of a common or contract carrier hired by the
purchaser takes possession at the distributor's premises.
Example 2. An ATF F 5400.8 is not required when:
a. An employee of the distributor takes possession of the
explosives for the purpose of transport to the purchaser.
b. An employee of a common or contract carrier hired by the
distributor takes possession of the explosives for the purpose of
transport to the purchaser.
(2) License/permit verification of individuals. (i) The distributee
must furnish a certified copy (or, in the case of a user-limited, the
original) of the license or permit. The certified copy need be
furnished only once during the current term of the license or permit.
Also, a licensee need not furnish certified copies of licenses to other
licensed locations operated by such licensee.
(ii) The distributor may obtain any additional verification as the
distributor deems necessary.
(3) License/permit verification of business organizations. (i) A
business organization may (in lieu of furnishing a certified copy of a
license) furnish the distributor a certified list which contains the
name, address, license number and date of license expiration of each
licensed location. The certified list need be furnished only once
during the current term of the license or permit. Also, a business
organization need not furnish a certified list to other licensed
locations operated by such business organization.
(ii) A business organization must, prior to ordering explosive
materials, furnish the licensee or permittee a current certified list
of the representatives or agents authorized to order explosive
materials on behalf of the business organization showing the name,
address, and date and place of birth of each representative or agent. A
licensee or permittee may not distribute explosive materials to a
business organization on the order of a person who does not appear on
the certified list of representatives or agents and, if the person does
appear on the certified list, the licensee or permittee must verify the
identity of such person.
(4) Licensee/permittee certified statement. (i) A licensee or
permittee ordering explosive materials from another licensee or
permittee must furnish a current, certified statement of the intended
use of the explosive materials, e.g., resale, mining, quarrying,
agriculture, construction, sport rocketry, road building, oil well
drilling, seismographic research, to the distributor.
(ii) For individuals, the certified statement of intended use must
specify the name, address, date and place of birth, and social security
number of the distributee.
(iii) For business organizations, the certified statement of
intended use must specify the taxpayer identification number, the
identity and the principal and local places of business.
(iv) The licensee or permittee purchasing explosive materials must
revise the furnished copy of the certified statement only when the
information is no longer current.
(5) User-limited permit transactions. A user-limited permit issued
under the provisions of this part is valid for only a single purchase
transaction and is not renewable (see Sec. 555.51). Accordingly, at
the time a user-limited permittee orders explosive materials, the
licensed distributor must write on the front of the user-limited permit
the transaction date, his signature, and the distributor's license
number prior to returning the permit to the user-limited permittee.
(b) Transactions among licensees/permittees on and after May 24,
2003. (1) General. (i) A licensed importer, licensed manufacturer or
licensed dealer selling or otherwise distributing explosive materials
(or a holder of a user permit disposing of surplus stock to a licensee;
a holder of a user permit; or a holder of a limited permit who is
within the same State as the distributor) who has the certified
information required by this section may sell or distribute explosive
materials to a licensee or permittee for not more than 45 days
following the expiration date of the distributee's license or permit,
unless the distributor knows or has reason to believe that the
distributee's authority to
[[Page 13788]]
continue business or operations under this part has been terminated.
(ii) A licensed importer, licensed manufacturer or licensed dealer
selling or otherwise distributing explosive materials (or a holder of a
user permit disposing of surplus stock to another licensee or
permittee) must verify the license or permit status of the distributee
prior to the release of explosive materials ordered, as required by
this section.
(iii) Licensees or permittees desiring to return explosive
materials to a licensed manufacturer may do so without obtaining a
certified copy of the manufacturer's license.
(2) Verification of license/user permit. (i) Prior to or with the
first order of explosive materials, the distributee must provide the
distributor a certified copy (or, in the case of a user-limited, the
original) of the distributee's license or user permit. However,
licensees or holders of user permits that are business organizations
may (in lieu of a certified copy of a license or user permit) provide
the distributor with a certified list that contains the name, address,
license or user permit number, and date of the license or user permit
expiration of each location.
(ii) The distributee must also provide the distributor with a
current list of the names of persons authorized to accept delivery of
explosive materials on behalf of the distributee. The distributee
ordering explosive materials must keep the list current and provide
updated lists to licensees and holders of user permits on a timely
basis. A distributor may not transfer possession of explosive materials
to any person whose name does not appear on the current list of names
of persons authorized to accept delivery of explosive materials on
behalf of the distributee. In all instances, the distributor must
verify the identity of the person accepting possession of explosive
materials on behalf of the distributee by examining an identification
document (as defined in Sec. 555.11) before relinquishing possession.
(iii) A licensee or holder of a user permit ordering explosive
materials from another licensee or permittee must provide to the
distributor a current, certified statement of the intended use of the
explosive materials, e.g., resale, mining, quarrying, agriculture,
construction, sport rocketry, road building, oil well drilling,
seismographic research, etc.
(A) For individuals, the certified statement of intended use must
specify the name, address, date and place of birth, and social security
number of the distributee.
(B) For business organizations, the certified statement of intended
use must specify the taxpayer identification number, the identity and
the principal and local places of business.
(C) The licensee or holder of a user permit purchasing explosive
materials must revise the furnished copy of the certified statement
only when the information is no longer current.
(3) Delivery of explosive materials by a common or contract
carrier. When a common or contract carrier will transport explosive
materials from a distributor to a distributee who is a licensee or
holder of a user permit, the distributor must obtain an executed ATF F
5400.8, Explosives Delivery Record, from the common or contract carrier
before relinquishing possession of the explosive materials.
(i) The common or contract carrier must complete Section A of Form
5400.8.
(ii) The distributor must verify the identity of the person
accepting possession for the common or contract carrier by examining an
identification document (as defined in Sec. 555.11) and noting in
Section B of Form 5400.8 the type of document presented. The
distributor must complete all other information required on Form
5400.8.
(iii) The distributor must maintain Form 5400.8 in his permanent
records in accordance with Sec. 555.121.
(4) User-limited permit transactions. A user-limited permit issued
under the provisions of this part is valid for only a single purchase
transaction and is not renewable (see Sec. 555.51). Accordingly, at
the time a user-limited permittee orders explosive materials, the
licensed distributor must write on the front of the user-limited permit
the transaction date, his signature, and the distributor's license
number prior to returning the permit to the user-limited permittee.
(Approved by the Office of Management and Budget under control number
1140-0079)
Par. 19. Section 555.105 is revised to read as follows:
Sec. 555.105 Distributions to nonlicensees, nonpermittees, and
limited permittees.
(a) Distributions to nonlicensees and nonpermittees prior to May
24, 2003. (1) This section will apply in any case where distribution of
explosive materials to the distributee is not otherwise prohibited by
the Act or this part.
(2) Except as provided in paragraph (a)(3) of this section, a
licensed importer, licensed manufacturer, or licensed dealer may
distribute explosive materials to a nonlicensee or nonpermittee if the
nonlicensee or nonpermittee is a resident of the same State in which
the licensee's business premises are located, and the nonlicensee or
nonpermittee furnishes to the licensee the explosives transaction
record, ATF F 5400.4, required by Sec. 555.126. Disposition of ATF F
5400.4 will be made in accordance with Sec. 555.126.
(3) A licensed importer, licensed manufacturer, or licensed dealer
may sell or distribute explosive materials to a resident of a State
contiguous to the State in which the licensee's place of business is
located if the purchaser's State of residence has enacted legislation,
currently in force, specifically authorizing a resident of that State
to purchase explosive materials in a contiguous State and the purchaser
and the licensee have, prior to the distribution of the explosive
materials, complied with all the requirements of paragraphs (a)(2),
(a)(5), and (a)(6) of this section applicable to intrastate
transactions occurring on the licensee's business premises.
(4) A permittee may dispose of surplus stocks of explosive
materials to a nonlicensee or nonpermittee if the nonlicensee or
nonpermittee is a resident of the same State in which the permittee's
business premises or operations are located, or is a resident of a
State contiguous to the State in which the permittee's place of
business or operations are located, and if the requirements of
paragraphs (a)(2), (a)(3), (a)(5), and (a)(6) of this section are fully
met.
(5) A licensed importer, licensed manufacturer, or licensed dealer
selling or otherwise distributing explosive materials to a business
entity must verify the identity of the representative or agent of the
business entity who is authorized to order explosive materials on
behalf of the business entity. Each business entity ordering explosive
materials must furnish the distributing licensee prior to or with the
first order of explosive materials a current certified list of the
names of representatives or agents authorized to order explosive
materials on behalf of the business entity. The business entity
ordering explosive materials is responsible for keeping the certified
list current. A licensee may not distribute explosive materials to a
business entity on the order of a person whose name does not appear on
the certified list.
(6) Where the possession of explosive materials is transferred at
the distributor's premises, the distributor must in all instances
verify the identity of the person accepting possession on behalf of the
distributee before
[[Page 13789]]
relinquishing possession. Before the delivery at the distributor's
premises of explosive materials to an employee of a nonlicensee or
nonpermittee, or to an employee of a common or contract carrier
transporting explosive materials to a nonlicensee or nonpermittee, the
distributor delivering explosive materials must obtain an executed ATF
F 5400.8 from the employee before releasing the explosive materials.
The ATF F 5400.8 must contain all of the information required on the
form and by this part. (See examples in Sec. 555.103(a)).
(7) A licensee or permittee disposing of surplus stock may sell or
distribute commercially manufactured black powder in quantities of 50
pounds or less to a nonlicensee or nonpermittee if the black powder is
intended to be used solely for sporting, recreational, or cultural
purposes in antique firearms as defined in 18 U.S.C. 921(a)(16), or in
antique devices as exempted from the term ``destructive device'' in 18
U.S.C. 921(a)(4).
(b) Distributions to holders of limited permits on and after May
24, 2003. (1) This section will apply in any case where distribution of
explosive materials to the distributee is not otherwise prohibited by
the Act or this part.
(2) A licensed importer, licensed manufacturer or a licensed dealer
may distribute explosive materials to a holder of a limited permit if
such permittee is a resident of the same State in which the licensee's
business premises are located, the holder of the limited permit
presents in person or by mail ATF Form 5400.4, Limited Permittee
Transaction Report (LPTR), and the licensee completes Form 5400.4 in
accordance with Sec. 555.126(b). In no event will a licensee
distribute explosive materials to a holder of a limited permit unless
the holder presents a Form 5400.4 with an original unaltered and
unexpired Intrastate Purchase of Explosives Coupon (IPEC), ATF Form
5400.30, affixed. The coupon must bear the name, address, permit
number, and the coupon number of the limited permittee seeking
distribution of the explosives.
(3) A holder of a limited permit is authorized to receive explosive
materials from a licensee or permittee whose premises are located in
the same State of residence in which the premises of the holder of the
limited permit are located on no more than 6 separate occasions during
the one-year period of the permit. For purposes of this section, the
term ``6 separate occasions'' means six deliveries of explosive
materials. Each delivery must--
(i) Relate to a single purchase transaction made on one ATF F
5400.4;
(ii) Be referenced on one commercial invoice or purchase order; and
(iii) Be delivered to the holder of the limited permit in one
shipment delivered at the same time.
(4) A holder of a user permit may dispose of surplus stocks of
explosive materials to a licensee or holder of a user permit, or a
holder of a limited permit who is a resident of the same State in which
the premises of the holder of the user permit are located. A holder of
a limited permit may dispose of surplus stocks of explosive materials
to another holder of a limited permit who is a resident of the same
State in which the premises of the distributor are located, if the
transaction complies with the requirements of paragraph (b)(2) of this
section and Sec. 555.126(b). A holder of a limited permit may also
dispose of surplus stocks of explosive materials to a licensee or
holder of a user permit if the disposition occurs in the State of
residence of the holder of the limited permit. (See Sec. 555.103.)
(5) Each holder of a limited permit ordering explosive materials
must furnish the distributing licensee prior to or with the first order
of the explosive materials a current list of the names of employees
authorized to accept delivery of explosive materials on behalf of the
limited permittee. The distributee ordering explosive materials must
keep the list current and provide updated lists to licensees and
holders of user permits on a timely basis. A licensed importer,
licensed manufacturer, licensed dealer, or permittee, selling or
otherwise distributing explosive materials to a holder of a limited
permit must, prior to delivering the explosive materials, obtain from
the limited permittee a current list of persons who are authorized to
accept deliveries of explosive materials on behalf of the limited
permittee. A licensee or permittee may not deliver explosive materials
to a person whose name does not appear on the list.
(6)(i) Delivery at the distributor's premises. Where possession of
explosive materials is transferred directly to the distributee at the
distributor's premises, the distributor must obtain an executed Form
5400.4 in accordance with Sec. 555.126(b) and must in all instances
verify the identity of the person accepting possession on behalf of the
distributee by examining an identification document (as defined in
Sec. 555.11) before relinquishing possession.
(ii) Delivery by distributor. Where possession of explosive
materials is transferred by the distributor to the distributee away
from the distributor's premises, the distributor must obtain an
executed Form 5400.4 in accordance with Sec. 555.126(b) and must in
all instances verify the identity of the person accepting possession on
behalf of the distributee by examining an identification document (as
defined in Sec. 555.11) before relinquishing possession.
(iii) Delivery by common or contract carrier hired by the
distributor. Where a common or contract carrier hired by the
distributor will transport explosive materials from the distributor to
a holder of a limited permit, the limited permittee will, prior to
delivery of the explosive materials, complete the appropriate section
on Form 5400.4, affix to the Form 5400.4 one of the six IPECs he has
been issued, and provide the form to the distributor in person or by
mail. Before the delivery at the distributor's premises of explosive
materials to the common or contract carrier who will transport
explosive materials to a limited permittee, the distributor must obtain
an executed ATF Form 5400.8, Explosives Delivery Record, from the
common or contract carrier before releasing the explosive materials.
Form 5400.8 must contain all of the information required on the form
and by this part. At the time of delivery the common or contract
carrier, as agent for the distributor, must verify the identity of the
person accepting delivery on behalf of the distributee, note the type
and number of the identification document and provide this information
to the distributor. The distributor will enter this information in the
appropriate section on Form 5400.4. Form 5400.8 must be attached to the
distributor's copy of the Form 5400.4 and retained in his permanent
records in accordance with Sec. 555.121.
(iv) Delivery by common or contract carrier hired by the
distributee. Where a common or contract carrier hired by the
distributee will transport explosive materials from the distributor to
the holder of a limited permit, the holder of the limited permit will,
prior to delivery of the explosive materials, complete the appropriate
section on Form 5400.4, affix to the Form 5400.4 one of the six IPECs
he has been issued, and provide the form to the distributor in person
or by mail. Before the delivery at the distributor's premises to the
common or contract carrier who will transport explosive materials to
the holder of a limited permit, the distributor must obtain an executed
ATF Form 5400.8, Explosives Delivery Record, from the common or
contract carrier before releasing the explosive materials. Form 5400.8
must contain all of the
[[Page 13790]]
information required on the form and by this part. Form 5400.8 must be
attached to the distributor's copy of the Form 5400.4 and retained in
his permanent records in accordance with Sec. 555.121.
(7) A licensee or permittee disposing of surplus stock may sell or
distribute commercially manufactured black powder in quantities of 50
pounds or less to a holder of a limited permit, nonlicensee, or
nonpermittee if the black powder is intended to be used solely for
sporting, recreational, or cultural purposes in antique firearms as
defined in 18 U.S.C. 921(a)(16), or in antique devices as exempted from
the term ``destructive device'' in 18 U.S.C. 921(a)(4).
(Approved by the Office of Management and Budget under control
number 1140-0075)
Par. 20. Section 555.106 is amended by:
a. Revising paragraph (a);
b. Removing the word ``or'' at the end of paragraph (c)(3);
c. Removing the period at the end of paragraph (c)(4) and adding in
its place a semicolon;
d. Adding new paragraphs (c)(5), (c)(6), and (c)(7); and by
removing ``Sec. 555.105(g)'' in paragraph (d) and adding in its place
``Sec. 555.105(a)(7) or (b)(7)'' to read as follows:
Sec. 555.106 Certain prohibited distributions.
(a) A licensee or permittee may not distribute explosive materials
to any person except--
(1) A licensee;
(2) A holder of a user permit; or
(3) A holder of a limited permit who is a resident of the State
where distribution is made and in which the premises of the transferor
are located.
* * * * *
(c) * * *
(5) Is an alien, other than an alien who--
(i) Is lawfully admitted for permanent residence (as that term is
defined in section 101(a)(20) of the Immigration and Nationality Act (8
U.S.C. 1101));
(ii) Is in lawful nonimmigrant status, is a refugee admitted under
section 207 of the Immigration and Nationality Act (8 U.S.C. 1157), or
is in asylum status under section 208 of the Immigration and
Nationality Act (8 U.S.C. 1158), and--
(A) Is a foreign law enforcement officer of a friendly foreign
government, as determined by the Attorney General in consultation with
the Secretary of State, entering the United States on official law
enforcement business, and the shipping, transporting, possession, or
receipt of explosive materials is in furtherance of this official law
enforcement business;
(B) Is a person having the power to direct or cause the direction
of the management and policies of a corporation, partnership, or
association licensed pursuant to section 843(a), and the shipping,
transporting, possession, or receipt of explosive materials is in
furtherance of such power;
(C) Is a member of a North Atlantic Treaty Organization (NATO) or
other friendly foreign military force, as determined by the Attorney
General in consultation with the Secretary of Defense, (whether or not
admitted in a nonimmigrant status) who is present in the United States
under military orders for training or other military purpose authorized
by the United States, and the shipping, transporting, possession, or
receipt of explosive materials is in furtherance of the military
purpose; or
(D) Is lawfully present in the United States in cooperation with
the Director of Central Intelligence, and the shipment, transportation,
receipt, or possession of the explosive materials is in furtherance of
such cooperation;
(6) Has been discharged from the armed forces under dishonorable
conditions; or
(7) Having been a citizen of the United States, has renounced
citizenship.
* * * * *
Par. 21. Section 555.108 is amended by removing the word
``permittee'' wherever it appears in paragraph (a) and adding in its
place the phrase ``holder of a user permit.''
Par. 22. Section 555.110 is added to subpart F to read as follows:
Sec. 555.110 Furnishing of samples (Effective on and after January
24, 2003).
(a) In general. Licensed manufacturers and licensed importers and
persons who manufacture or import explosive materials or ammonium
nitrate must, when required by letter issued by the Director, furnish--
(1) Samples of such explosive materials or ammonium nitrate;
(2) Information on chemical composition of those products; and
(3) Any other information that the Director determines is relevant
to the identification of the explosive materials or to identification
of the ammonium nitrate.
(b) Reimbursement. The Director will reimburse the fair market
value of samples furnished pursuant to paragraph (a) of this section,
as well as reasonable costs of shipment.
(Approved by the Office of Management and Budget under control number
1140-0073)
Par. 23. Section 555.121 is amended by removing the word
``subpart'' in paragraph (a)(2) and adding in its place the word
``part'' and by revising paragraph (b) to read as follows:
Sec. 555.121 General.
* * * * *
(b) ATF officers may enter the premises of any licensee or holder
of a user permit for the purpose of examining or inspecting any record
or document required by or obtained under this part (see Sec. 555.24).
Section 843(f) of the Act requires licensees and holders of user
permits to make all required records available for examination or
inspection at all reasonable times. Section 843(f) of the Act also
requires licensees and permittees (including holders of limited
permits) to submit all reports and information relating to all required
records and their contents, as the regulations in this part prescribe.
* * * * *
Par. 24. Section 555.125 is revised to read as follows:
Sec. 555.125 Records maintained by permittees.
(a) Records maintained by permittees prior to May 24, 2003. (1)
Each permittee must take true and accurate physical inventories that
will include all explosive materials on hand required to be accounted
for in the records kept under this part. The permittee must take a
special inventory--
(i) At the time of commencing business, which is the effective date
of the permit issued upon original qualification under this part;
(ii) At the time of changing the location of his premises to
another region;
(iii) At the time of discontinuing business; and
(iv) At any other time the regional director (compliance) may in
writing require. Each special inventory is to be prepared in duplicate,
the original of which is submitted to the regional director
(compliance) and the duplicate retained by the permittee. If a special
inventory required by paragraphs (a)(1)(i) through (iv) of this section
has not been taken during the calendar year, a permittee is required to
take at least one physical inventory. However, the record of the yearly
inventory, other than a special inventory required by paragraphs
(a)(1)(i) through (iv) of this section, will remain on file for
inspection instead of being sent to the regional director (compliance).
(See also Sec. 555.127.)
(2) Each permittee must, not later than the close of the next
business day following the date of acquisition of
[[Page 13791]]
explosive materials, enter the following information in a separate
record:
(i) Date of acquisition;
(ii) Name or brand name of manufacturer;
(iii) Manufacturer's marks of identification;
(iv) Quantity (applicable quantity units, such as pounds of
explosives, number of detonators, number of display fireworks, etc.);
(v) Description (dynamite (dyn), blasting agents (ba), detonators
(det), display fireworks (df), etc., and size (length and diameter or
diameter only of display fireworks)); and
(vi) Name, address, and license number of the persons from whom the
explosive materials are received.
(3) Each permittee must, not later than the close of the next
business day following the date of disposition of surplus explosive
materials to another permittee or a licensee, enter in a separate
record the information prescribed in Sec. 555.124(c).
(4) Each permittee must maintain separate records of disposition of
surplus stocks of explosive materials to nonlicensees or nonpermittees
as prescribed in Sec. 555.126.
(5) The regional director (compliance) may authorize alternate
records to be maintained by a permittee to record his acquisition of
explosive materials, when it is shown by the permittee that alternate
records will accurately and readily disclose the required information.
A permittee who proposes to use alternate records must submit a letter
application to the regional director (compliance) and must describe the
proposed alternate records and the need for them. Alternate records are
not to be employed by the permittee until approval is received from the
regional director (compliance).
(b) Records maintained by permittees on and after May 24, 2003. (1)
Each holder of a user permit must take true and accurate physical
inventories that will include all explosive materials on hand required
to be accounted for in the records kept under this part. The permittee
must take a special inventory--
(i) At the time of commencing business, which is the effective date
of the permit issued upon original qualification under this part;
(ii) At the time of changing the location of his premises;
(iii) At the time of discontinuing business; and
(iv) At any other time the regional director (compliance) may in
writing require. Each special inventory is to be prepared in duplicate,
the original of which is submitted to the regional director
(compliance) and the duplicate retained by the permittee. If a special
inventory required by paragraphs (b)(1)(i) through (iv) of this section
has not been taken during the calendar year, a permittee is required to
take at least one physical inventory. The record of the yearly
inventory, other than a special inventory required by paragraphs
(b)(1)(i) through (iv) of this section, will remain on file for
inspection instead of being sent to the regional director (compliance).
(See also Sec. 555.127.)
(2) Each holder of a limited permit must take true and accurate
physical inventories, at least annually, that will include all
explosive materials on hand required to be accounted for in the records
kept under this part.
(3) Each holder of a user permit or a limited permit must, not
later than the close of the next business day following the date of
acquisition of explosive materials, enter the following information in
a separate record:
(i) Date of acquisition;
(ii) Name or brand name of manufacturer;
(iii) Manufacturer's marks of identification;
(iv) Quantity (applicable quantity units, such as pounds of
explosives, number of detonators, number of display fireworks, etc.);
(v) Description (dynamite (dyn), blasting agents (ba), detonators
(det), display fireworks (df), etc., and size (length and diameter or
diameter only of display fireworks)); and
(vi) Name, address, and license number of the persons from whom the
explosive materials are received.
(4) Each holder of a user permit or a limited permit must, not
later than the close of the next business day following the date of
disposition of surplus explosive materials to another permittee or a
licensee, enter in a separate record the information prescribed in
Sec. 555.124(c).
(5) When a record book is used as a permittee's permanent record
the permittee may delay entry of the required information for a period
not to exceed seven days if the commercial record contains all of the
required information prescribed by paragraphs (b)(3) and (b)(4) of this
section. However, the commercial record may be used instead of a record
book as a permanent record provided that the record contains all of the
required information prescribed by paragraphs (b)(3) and (b)(4) of this
section.
(6) Each holder of a user permit or a limited permit must maintain
separate records of disposition of surplus stocks of explosive
materials to holders of a limited permit as prescribed in Sec.
555.126.
(7) The regional director (compliance) may authorize alternate
records to be maintained by a holder of a user permit or a limited
permit to record his acquisition of explosive materials, when it is
shown by the permittee that alternate records will accurately and
readily disclose the required information. A permittee who proposes to
use alternate records must submit a letter application to the regional
director (compliance) and must describe the proposed alternate records
and the need for them. Alternate records are not to be employed by the
permittee until approval is received from the regional director
(compliance).
(Approved by the Office of Management and Budget under control
number 1140-0030)
Par. 25. Section 555.126 is amended by:
a. Revising the section heading;
b. Adding a new heading to paragraph (a);
c. Redesignating paragraphs (a) through (f) as (a)(1) through
(a)(6);
d. Removing ``Sec. 555.105(c)'' in redesignated paragraph (a)(2)
and adding in its place ``Sec. 555.105(a)(3)'';
e. Removing ``paragraph (d)'' in redesignated paragraph (a)(3) and
adding in its place ``paragraph (a)(4)'';
f. Adding a new paragraph (b); and
g. Revising the parenthetical text at the end of the section to
read as follows:
Sec. 555.126 Explosives transaction record for distribution of
explosive materials prior to May 24, 2003 and Limited Permittee
Transaction Report for distribution of explosive materials on and after
May 24, 2003.
(a) Explosives transaction record for distribution of explosive
materials prior to May 24, 2003.
* * * * *
(b) Limited Permittee Transaction Report for distribution of
explosive materials on and after May 24, 2003. (1) A licensee or
permittee may not distribute explosive materials to any person who is
not a licensee or permittee. A licensee or permittee may not distribute
explosive materials to a limited permittee unless the distributor
records the transaction on ATF Form 5400.4, Limited Permittee
Transaction Report.
(2) Before distributing explosive materials to a limited permittee,
the licensee or permittee must obtain an executed Form 5400.4 from the
limited permittee with an original unaltered and unexpired Intrastate
Purchase of Explosives Coupon (IPEC) affixed. Except when delivery of
explosive materials is made by a common or
[[Page 13792]]
contract carrier who is an agent of the limited permittee, the
licensee, permittee, or an agent of the licensee or permittee, must
verify the identity of the of the holder of the limited permit by
examining an identification document (as defined in Sec. 555.11) and
noting on the Form 5400.4 the type of document presented. The licensee
or permittee must complete the appropriate section on Form 5400.4 to
indicate the type and quantity of explosive materials distributed, the
license or permit number of the seller, and the date of the
transaction. The licensee or permittee must sign and date the form and
include any other information required by the instructions on the form
and the regulations in this part.
(3) One copy of Form 5400.4 must be retained by the distributor as
part of his permanent records in accordance with paragraph (b)(4) of
this section and for the period specified in Sec. 555.121. The
distributor must mail the other copy of Form 5400.4 to the Bureau of
Alcohol, Tobacco, Firearms and Explosives in accordance with the
instructions on the form.
(4) Each Form 5400.4 must be retained in chronological order by
date of disposition, or in alphabetical order by name of limited
permittee. A licensee may not, however, use both methods in a single
recordkeeping system. Where there is a change in proprietorship by a
limited permittee, the forms may continue to be filed together after
such change.
(5) The requirements of this section are in addition to any other
recordkeeping requirement contained in this part.
(Approved by the Office of Management and Budget under control
number 1140-0078)
Par. 26. Section 555.128 is amended by adding the phrase ``or new
permittee'' after the phrase ``new licensee'' in the first sentence.
Par. 27. Section 555.141 is amended by adding two new sentences at
the end of paragraph (a)(1) to read as follows:
Sec. 555.141 Exemptions.
(a) * * *
(1) * * * For example, regulations issued by the Department of
Transportation addressing the security risk of aliens transporting
explosives by commercial motor or railroad carrier from Canada preclude
the enforcement of 18 U.S.C. 842(i)(5) against persons shipping,
transporting, receiving, or possessing explosives incident to and in
connection with the commercial transportation of explosives by truck or
rail from Canada into the United States. Questions concerning this
exception should be directed to ATF's Public Safety Branch in
Washington, DC.
* * * * *
Par. 28. Section 555.142 is amended by revising the section
heading; by revising paragraphs (a) through (d); by adding a new
paragraph (f); and by adding a parenthetical text at the end of the
section to read as follows:
Sec. 555.142 Relief from disabilities (effective January 24, 2003).
(a) Any person prohibited from shipping or transporting any
explosive in or affecting interstate or foreign commerce or from
receiving or possessing any explosive which has been shipped or
transported in or affecting interstate or foreign commerce may make
application for relief from disabilities under section 845(b) of the
Act .
(b) An application for relief from disabilities must be filed with
the Director by submitting ATF Form 5400.29, Application for
Restoration of Explosives Privileges, in accordance with the
instructions on the form. The application must be supported by
appropriate data, including the information specified in paragraph (f)
of this section. Upon receipt of an incomplete or improperly executed
application for relief, the applicant will be notified of the
deficiency in the application. If the application is not corrected and
returned within 30 days following the date of notification, the
application will be considered abandoned.
(c)(1) The Director may grant relief to an applicant if it is
established to the satisfaction of the Director that the circumstances
regarding the disability and the applicant's record and reputation are
such that the applicant will not be likely to act in a manner dangerous
to public safety and that the granting of such relief is not contrary
to the public interest.
(2) Except as provided in paragraph (c)(3) of this section, the
Director will not grant relief if the applicant--
(i) Has not been discharged from parole or probation for a period
of at least 2 years;
(ii) Is a fugitive from justice;
(iii) Is a prohibited alien;
(iv) Is an unlawful user of or addicted to any controlled
substance;
(v) Has been adjudicated a mental defective or committed to a
mental institution, unless the applicant was subsequently determined by
a court, board, commission, or other lawful authority to have been
restored to mental competency, to be no longer suffering from a mental
disorder, and to have had all rights restored; or
(vi) Is prohibited by the law of the State where the applicant
resides from receiving or possessing explosive materials.
(3)(i) The Director may grant relief to aliens who have been
lawfully admitted to the United States or to persons who have not been
discharged from parole or probation for a period of at least 2 years if
he determines that the applicant has a compelling need to possess
explosives, such as for purposes of employment.
(ii) The Director may grant relief to the persons identified in
paragraph (c)(2) of this section in extraordinary circumstances where
the granting of such relief is consistent with the public interest.
(d) A person who has been granted relief under this section is
relieved of all disabilities imposed by the Act for the disabilities
disclosed in the application. The granting of relief will not affect
any disabilities incurred subsequent to the date the application was
filed. Relief from disabilities granted to aliens will be effective
only so long as the alien retains his or her lawful immigration status.
* * * * *
(f)(1) Applications for relief from disabilities must include the
following information:
(i) In the case of a corporation, or of any person having the power
to direct or control the management of the corporation, information as
to the absence of culpability in the offense for which the corporation,
or any such person, was indicted, formally accused or convicted;
(ii) In the case of an applicant who is an individual, two properly
completed FBI Forms FD-258 (fingerprint card), and a written statement
from each of three references who are not related to the applicant by
blood or marriage and have known the applicant for at least 3 years,
recommending the granting of relief;
(iii) Written consent to examine and obtain copies of records and
to receive statements and information regarding the applicant's
background, including records, statements and other information
concerning employment, medical history, military service, immigration
status, and criminal record;
(iv) In the case of an applicant having been convicted of a crime
punishable by imprisonment for a term exceeding one year, a copy of the
indictment or information on which the applicant was convicted, the
judgment of conviction or record of any plea of nolo contendere or plea
of guilty or finding of guilt by the court;
[[Page 13793]]
(v) In the case of an applicant under indictment, a copy of the
indictment or information;
(vi) In the case of an applicant who has been adjudicated a mental
defective or committed to a mental institution, a copy of the order of
a court, board, commission, or other lawful authority that made the
adjudication or ordered the commitment, any petition that sought to
have the applicant so adjudicated or committed, any medical records
reflecting the reasons for commitment and diagnoses of the applicant,
and any court order or finding of a court, board, commission, or other
lawful authority showing the applicant's discharge from commitment,
restoration of mental competency and the restoration of rights;
(vii) In the case of an applicant who has been discharged from the
Armed Forces under dishonorable conditions, a copy of the applicant's
Certificate of Release or Discharge from Active Duty (Department of
Defense Form 214), Charge Sheet (Department of Defense Form 458), and
final court martial order;
(viii) In the case of an applicant who, having been a citizen of
the United States, has renounced his or her citizenship, a copy of the
formal renunciation of nationality before a diplomatic or consular
officer of the United States in a foreign state or before an officer
designated by the Attorney General when the United States was in a
state of war (see 8 U.S.C. 1481(a)(5) and (6)); and
(ix) In the case of an applicant who is an alien, documentation
that the applicant is an alien who has been lawfully admitted to the
United States; certification from the applicant including the
applicant's INS-issued alien number or admission number, country/
countries of citizenship, and immigration status, and certifying that
the applicant is legally authorized to work in the United States, or
other purposes for which possession of explosives is required;
certification from an appropriate law enforcement agency of the
applicant's country of citizenship stating that the applicant does not
have a criminal record; and, if applicable, certification from a
Federal explosives licensee or permittee or other employer stating that
the applicant is employed by the employer and must possess explosive
materials for purposes of employment. These certifications must be
submitted in English.
(2) Any record or document of a court or other government entity or
official required by paragraph (f)(1) of this section must be certified
by the court or other government entity or official as a true copy.
(Approved by the Office of Management and Budget under control number
1140-0076)
Par. 29. Section 555.165 is amended by designating the existing
paragraph as paragraph (a) and by adding new paragraph (b) to read as
follows:
Sec. 555.165 Failure to report theft or loss.
* * * * *
(b) On and after January 24, 2003, any licensee or permittee who
fails to report a theft of explosive materials in accordance with Sec.
555.30 will be fined under title 18 U.S.C., imprisoned not more than 5
years, or both.
Signed: March 14, 2003.
Bradley A. Buckles,
Director.
[FR Doc. 03-6573 Filed 3-19-03; 8:45 am]