ATF Transparency Act Mandates 3-Day Firearm Application Decisions, Adds Appeal Rights for Denials

The ATF Transparency Act proposes significant changes to how certain federal firearm applications are processed, aiming for both speed and transparency. It introduces strict deadlines for the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) to act on applications and establishes new procedures for individuals whose applications are denied.

Putting Transfers on a Timer: The 3-Day Rule

A core component of this bill is the introduction of a strict timeline for processing specific firearm applications under the National Firearms Act (NFA), which covers items like suppressors, short-barreled rifles, and machine guns. According to Section 3, if the Secretary (acting through the ATF) fails to approve or deny an application to transfer or an application to make and register such a firearm within 3 business days, the application is considered automatically approved. Denials, the bill states, can only be based on the application not meeting legal requirements, not simply because processing took too long.

What happens if an automatic approval turns out to be incorrect? Section 3(a) includes a "safe harbor" provision. If a transfer approved automatically is later found to violate the law (e.g., the applicant was actually prohibited), neither the person transferring the firearm nor the recipient will be held liable for certain violations, provided the firearm is returned within 14 days of being notified about the erroneous approval. This shifts the dynamic significantly from the current system, where processing times can often extend for months.

Denied? Now You Get Answers (and Maybe Legal Fees)

For individuals whose applications are denied, the Act mandates more transparency and recourse. Section 2 amends the Internal Revenue Code (where NFA regulations reside) to require the ATF, when denying an application based on information suggesting a violation of law (often flagged by the National Instant Criminal Background Check System, or NICS), to provide the applicant with specific information. This includes the relevant NICS transaction number.

Crucially, the bill grants applicants the right to formally appeal the denial, mirroring existing federal regulations (specifically referencing 28 CFR § 25.10). Applicants can also submit information to help correct the record and prevent future wrongful denials or delays, similar to the existing NICS Voluntary Appeal File program. Perhaps most notably, if an applicant successfully appeals a denial, Section 2 mandates that the government reimburse them for reasonable and necessary attorney fees.

Shining a Light on NICS

Beyond individual applications, the Act seeks to improve oversight of the NICS system itself, particularly concerning delays and agency coordination. Section 4 requires the Comptroller General and the Department of Justice Inspector General to report to Congress within 180 days on the number of NICS inquiries for firearm transfers that remained unresolved after 90 days between 2010 and 2024. This report must also include recommendations for the ATF to minimize these delays.

Additionally, the DOJ Inspector General must report on the percentage of NICS checks handled by the FBI on behalf of the ATF between 2014 and 2024. To improve coordination, the Directors of the ATF and FBI are required to enter into a memorandum of understanding within 180 days regarding how NICS inquiries related to these firearm transfers are administered and processed. These measures aim to provide a clearer picture of NICS operations and potential bottlenecks, forcing the agencies involved to formally agree on their respective roles and responsibilities.