Letter to The Honorable Steven M. Dettelbach, Director, Bureau of Alcohol, Tobacco, Firearms, and Explosives

Summary

This letter dated October 12, 2023, is addressed to the Honorable Steven M. Dettelbach, Director of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF). The House Committee on Small Business inquires about the proposed changes to the definition of “engaged in the business of selling firearms,” stating that the proposed rule would require nearly 25,000 new individuals or entities to register as Federally Licensed Firearm (FFL) Dealers. It says it appears the ATF may not have properly considered small entities as required by the Regulatory Flexibility Act (RFA). The letter requests information as soon as possible but no later than October 26, 2023, through numbered questions. The signature block names Chairman Roger Williams, Vice Chairman Blaine Luetkemeyer, and Members Pete Stauber and Aaron Bean.

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                                               October 12, 2023

The Honorable Steven M. Dettelbach
Director
Bureau of Alcohol, Tobacco, Firearms, and Explosives
99 New York Ave. NE
Washington, D.C. 20002

Dear Director Dettelbach:

        The House Committee on Small Business writes to inquire about the Bureau of Alcohol,
Tobacco, and Firearm, and Explosives’ (ATF) recent proposed changes to the definition of
“engaged in the business of selling firearms.” This proposed rule would require nearly 25,000
new individuals or entities to register as a Federally Licensed Firearm (FFL) Dealer, functionally
turning them into small businesses.1 This change creates an ambiguous standard that could cause
an individual to be labeled as being “engaged in the business of selling firearms,” requiring them
to register with and pay a fee to the ATF.2 Additionally, this rule obscures the difference between
individuals and potential businesses, complicating the landscape for people, businesses, and
entrepreneurs. It appears that the ATF may not have properly considered small entities during
this rulemaking process as required by the Regulatory Flexibility Act (RFA).

        It is difficult to determine whether this rulemaking is based on the Biden
Administration’s disdain for the Second Amendment or its contempt for American small
businesses, but it most certainly will not achieve its desired ends. This rule states that anyone
who sells a firearm with the “predominant purpose” of making a profit is “engaged in the
businesses of selling firearms,” and must register as a FFL dealer.3 Under the proposed standard
nearly 25,000 new “businesses” will essentially be created overnight, and few, if any, are
prepared to, nor intend to operate as a business.4 Additionally, the rule could require an
individual who sells just one firearm to register as a FFL dealer, depending on their
“predominant purpose.”5 This standard is ambiguous, and due to the nature of this rule, will
create confusion among individuals that the ATF now contends are firearms dealers.



1
  Definition of “Engaged in the Business” as a Dealer in Firearms, 88 FR 61993, 62017 (2023) (to be codified at 27
CFR 478).
2
  Id.
3
  Id.
4
  Id.
5
  Id. (See generally the ATF refusing to set a minimum threshold for number of weapons sold before becoming
“engaged in the business” of selling firearms).
The Honorable Steven M. Dettelbach
October 12, 2023
Page 2 of 3

       It is important for agencies to examine small businesses interests—which make up 99.9
percent of all businesses in the United States—when passing any new rule. The Committee is
unconvinced that the ATF’s explanation of how this rule impacts small business, which is less
than one page, is sufficient to explain this rule’s impact on the nearly 25,000 new small
businesses it creates. America’s small businesses deserve to have their voices heard and
considered. We therefore request the following information as soon as possible but no later than
October 26, 2023:

   1. For small businesses, the entirety of increased costs of this rule are owed to the ATF,
      such as the cost of creating an FFL license application and the application fees. Despite
      controlling all of the costs associated with this regulation, the ATF does not list a cost per
      business for this rule. What is the average additional cost a small business would incur as
      a result of this rule?

           a. Why did the ATF not include this figure in the published proposed rule?

   2. The RFA requires agencies to consider suitable alternatives which would be less costly
      for small business. In its RFA, the ATF indicates that it did not find a suitable alternative.
      What alternatives did the ATF consider?

           a. What would have been their impact on small entities?

           b. Why were these alternatives deemed insufficient?

           c. Why did the ATF not explain the alternatives in its original RFA analysis?

   3. If an individual sold, or sought to sell, a single firearm purely for monetary gain, would
      they now be considered as “engaged in the business of selling firearms?”

   4. The ATF anticipates that nearly 25,000 new individuals or entities must register as a
      firearm dealer. Of those entities, how many does the ATF anticipate will stop selling
      firearms?

   5. What impact will this rule have on existing FFL dealers, many of whom are small
      businesses?

   6. How did the ATF assess the costs of this rule on large entities, compared with the 25,000
      new small businesses it created?

   7. What impact does the ATF believe adding 25,000 new FFL dealers will have on the price
      of firearms?

   8. Why did the ATF not explain this rules’ impact on the 25,000 businesses it identified?
The Honorable Steven M. Dettelbach
October 12, 2023
Page 3 of 3

       To schedule the delivery of your response or ask any related follow-up questions, please
contact Committee on Small Business Majority Staff at (202) 225-5821. The Committee on
Small Business has broad authority to investigate “problems of all types of small business” under
House Rule X. Thank you in advance for your cooperation with this inquiry.

                                        In God we trust,




_________________________                           _________________________
Roger Williams                                      Blaine Luetkemeyer
Chairman                                            Vice Chairman
Committee on Small Business                         Committee on Small Business




________________________                            _________________________
Pete Stauber                                        Aaron Bean
Member                                              Member
Committee on Small Business                         Committee on Small Business




cc:    The Honorable Nydia M. Velasquez, Ranking Member
       Committee on Small Business


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