"(c) Any application submitted under subsections (a) and (b) of this section shall be disapproved and the license denied if the Secretary, after notice and opportunity for hearing, finds that—

"(1) The applicant is under 21 years of age, or

"(2) 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 prohibited from transporting, shipping, or receiving firearms or ammunition in interstate or foreign commerce under the provisions of subsection (d) or (e) of section 2 of this Act; or is, by reason of his business experience, financial standing, or trade connections, not likely to maintain operations in compliance with this Act, or

"(3) The applicant has willfully violated any of the provisions of this Act or the regulations issued thereunder, or

"(4) The applicant has willfully failed to disclose any material information required, or made any false statement as to any material fact, in connection with his application, or

"(5) The applicant does not have, or does not intend to have or to maintain, in a State or possession, business premises for the conduct of the business.

"(d) The provisions of section 2 (d) and (e) of this Act shall not apply in the case of a licensed importer, licensed manufacturer, or licensed dealer who is indicted for a crime punishable by imprisonment for a term exceeding one year. A licensed importer, licensed manufacturer, or licensed dealer may continue operations, pursuant to his existing license (provided that prior to the expiration of the term of the existing license timely application is made for a new license), during the term of such indictment and until any conviction pursuant to the indictment becomes final, whereupon he shall be fully subject to all provisions of this Act and operations pursuant to such license shall be discontinued (unless an application for relief has been filed under section 6).

"(e) No person shall import or bring any firearm into the United States or any possession thereof, except that the Secretary may authorize a firearm to be imported or brought in if the person importing or bringing in the firearm establishes to the satisfaction of the Secretary that the firearm

"(1) Is being imported or brought in for scientific or research purposes, or is for use in connection with competition or training pursuant to Chapter 401 of Title 10 of the United States Code; or

“(2) Is (A) an antique, or (B) an unserviceable firearm (not readily restorable to firing condition), imported or brought in as a curio or museum piece; or

"(3) Is of a type and quality generally recognized as particularly suitable for lawful sporting purposes and is not a surplus military weapon and that the importation or bringing in of the firearm would not be contrary to the public interest; or

"(4) Was previously taken out of the United States or a possession by the person who is bringing in the firearm.

"Provided, That the Secretary may permit the conditional importation of bringing in of a firearm for examination and testing in connection with the making of a determination as to whether the importation or bringing in of such firearm will be allowed under this subsection.

"(f) No licensed importer, licensed manufacturer, or licensed dealer shall sell or otherwise dispose of a destructive device, a machinegun (as defined in sec. 5848 of the Internal Revenue Code of 1954), a short-barreled shotgun, or a short-barreled rifle, to a nonlicensee unless he has in his possession a sworn statement executed by the principal law-enforcement officer of the locality wherein the purchaser or person to whom it is otherwise disposed of resides, attesting that there is no provision of law, regulation, or ordinance which would be violated by such person's receipt or possession thereof and that he is satisfied that it is intended by such person for lawful purposes. Such sworn statement shall be retained by the licensee as a part of the records required to be kept under subsection (g).

"(g) Each licensed importer, licensed manufacturer, and licensed dealer shall maintain such records of importation, production, shipment, receipt, and sale and other disposition, of firearms and ammunition at such place, for such period and in such form as the Secretary may by regulations prescribe. Such importers, manufacturers, and dealers shall make such records available for in

spection at all reasonable times, and shall submit to the Secretary such reports and information with respect to such records and the contents thereof as he shall by regulations prescribe. The Secretary or his delegate may enter during business hours the premises (including places of storage) of any firearms or ammunition importer, manufacturer, or dealer for the purpose of inspecting or examining any records or documents required to be kept by such importer or manufacturer or dealer under the provisions of this Act or regulations issued pursuant thereto, and any firearms or ammunition kept or stored by such importer, manufacturer, or dealer at such premises. Upon the request of any State or possession or political subdivision thereof, the Secretary of the Treasury may make available to such State, or possession, or any political subdivision thereof, any information which he may possess or which he may obtain by reason of the provisions of this Act with respect to the identification of persons within such State, or possession, or political subdivision thereof, who have purchased or received firearms or ammunition, together with a description of the firearms or ammunition so purchased or received.

(h) Licenses issued under the provisions of subsection (c) of this section shall be kept posted and kept available for inspection on the business premises covered by the license.

“(1) Licensed importers and licensed manufacturers shall identify (or cause to be identified), in such manner as the Secretary shall by regulations prescribe, each firearm imported or manufactured by such importer or manufacturer."

SEC. 4. Section 4 of the Federal Firearms Act is amended to read as follows: "SEC. 4. Exceptions to Applicability of the Act.

"The provisions of this Act shall not apply with respect to the transportation, shipment, receipt, or importation of any firearms or ammunition imported for, or sold or shipped to, or issued for the use of (1) the United States or any department, independent establishment, or agency thereof; or (2) any State, or possession, or any department, independent establishment, agency, or any political subdivision thereof."

SEC. 5. Subsection (b) of section 5 of the Federal Firearms Act is amended to read as follows:

"(b) Any firearm or ammunition involved in, or used or intended to be used in, any violation of the provisions of this Act, or any rules or regulations promulgated thereunder, or any violation of the provisions of Title 18 U.S.C. sections 111, 1112, 372, 871, or 1114, shall be subject to seizure and forfeiture and all provisions of the Internal Revenue Code of 1954 relating to the seizure, forfeiture, and disposition of firearms, as defined in section 5848 (1) of said Code, shall, so far as applicable, extend to seizures and foreitures under the provisions of this Act."

SEC. 6. The Federal Firearms Act is amended by renumbering sections 6, 7, S. and 9 as sections 8, 9, 10, and 11, respectively, and inserting after section 5 the following new sections:

"SEC. 6. Relief of Convicted Persons Under Certain Conditions.

"A person who has been convicted of a crime punishable by imprisonment for a term exceeding one year (other than a crime involving the use of a firearm or other weapon or a violation of this Act or of the National Firearms Act) may make application to the Secretary for relief from the disabilities under the Act incurred by reason of such conviction, and the Secretary may grant such relief if it is established to his satisfaction that the circumstances regarding the conviction, and the applicant's record and reputation are such that the applicant will not be likely to conduct his operations in an unlawful manner, and that the granting of the relief would not be contrary to the public interest. A licensee conducting operations under the Act, who makes application for relief from the disabilities incurred under the Act by reason of such a conviction, shall not be barred by such conviction from further operations under his license pending final action on an application for relief filed pursuant to this section. "SEC. 7. Applicability of Other Laws.

"(a) Nothing in this Act shall be construed as modifying or affecting any provision of

"(1) The National Firearms Act (Chapter 53 of the Internal Revenue Code of 1954); or

"(2) Section 414 of the Mutual Security Act of 1954, as amended (section 1934 of Title 22 of the United States Code (relating to munitions control));

or

"(3) Section 1715 of Title 18 of the United States Code (relating to nonmailable firearms).

"(b) Nothing in this Act shall confer any right or privilege to conduct any business contrary to the law of any State, or be construed as relieving any person from compliance with the law of any State."

SEC. 7. The amendments made by this Act shall become effective on the date of the enactment of this Act; except that the amendments made by section 3 of this Act to section 3(a) of the Federal Firearms Act shall not apply to any importer, manufacturer, or dealer licensed under the Federal Firearms Act on the date of the enactment of this Act until the expiration of the license held by such importer, manufacturer, or dealer on such date.

The CHAIRMAN. We appreciate having you before the committee, Mr. Barr, and you are recognized.

STATEMENTS OF HON. JOSEPH W. BARR, UNDER SECRETARY OF THE TREASURY, AND HON. SHELDON S. COHEN, COMMISSIONER OF INTERNAL REVENUE; ACCOMPANIED BY ROBERT B. RITTER, DIRECTOR, ALCOHOL AND TOBACCO TAX LEGAL DIVISION; AND JOHN W. COGGINS, CHIEF, TECHNICAL BRANCH, ALCOHOL AND TOBACCO TAX LEGAL DIVISION, INTERNAL REVENUE SERVICE

Mr. BARR. I have with me at the table this morning Mr. John Coggins and Mr. Robert Ritter, of the Office of the Chief Counsel of the Internal Revenue Service.

Mr. Chairman, I welcome the opportunity to appear in support of the enactment of the administration's bills introduced by Mr. Murphy and Mr. Multer, which I deem to be of great importance to the welfare of this country and its citizens. Mr. Sheldon S. Cohen, the Commissioner of Internal Revenue, will be with me shortly. He will discuss in more detail aspects of the administration's proposals which I will cover in a general way.

The bill which would amend the Federal Firearms Act regulating interstate and foreign commerce in firearms is designed to implement the recommendations which the President set forth with respect to firearms control in his message to the Congress of March 8, 1965, relating to law enforcement and the administration of justice.

The President, in that message, described crime as "a malignant enemy in America's midst" of such extent and seriousness that the problem is now one "of great national concern." The President also stated and I quote from his message:

The time has come now to check that growth, to contain its spread, and to reduce its toll of lives and property.

As an integral part of the war against the spread of lawlessness, the President urged the enactment of more effective firearms control legislation, and cited as a significant factor in the rise of violent crime in the United States "the ease with which any person can acquire firearms."

The President recognized the necessity for State and local action, as well as Federal action, in this area and he urged

the Governors of our States and mayors and other local public officials to review their existing legislation in this critical field with a view to keeping lethal weapons out of the wrong hands.

However, the President also clearly recognized, in his message, that effective State and local regulation of firearms is not feasible unless we strengthen, at the Federal level, controls over the importation of

firearms and over the interstate shipment of firearms. The President advised that he was proposing draft legislation to accomplish these aims, and stated, and I quote:

I recommend this legislation to the Congress as a sensible use of Federal authority to assist local authorities in coping with an undeniable menace to law and order and to the lives of innocent people.

H.R. 6628, introduced by Mr. Murphy, and H.R. 6783, introduced by Mr. Multer, reflect the legislation amending the Federal Firearms Act, to which the President referred.

I should like now briefly to state my understanding of what the administration bill to amend the Federal Firearms Act would do and, in order to eliminate misconceptions, what it would not do.

Among other things, the bill would

(1) Prohibit the shipment of firearms in interstate commerce, except between federally licensed manufacturers, dealers, and importers; the purpose of this is to control the distribution of firearms interstate so that States may more effectively control the traffic intrastate.

(2) Prohibit sales of firearms by Federal licensees to persons under 21 years of age, except that sales of sporting rifles and shotguns could continue to be made to persons of 18 years of age;

(3) Prohibit a Federal licensee from selling a firearm other than a rifle or shotgun-to any person who is not a resident of the State where the licensee is doing business;

(4) Curb the flow into the United States of surplus military weapons and other firearms not suitable for sporting purposes;

(5) Bring under effective Federal control the importation and interstate shipment of large-caliber weapons such as bazookas and antitank guns, and other destructive devices; and

(6) Revise the licensing provisions of the Federal Firearms Act, including increases in license fees, so as to assure that licenses will be issued only to responsible persons actually engaging in business as importers, manufacturers, and dealers.

What the bill does is to institute Federal controls in areas where the Federal Government can and should operate, and where the State governments cannot, the areas of interstate and foreign commerce. Under our Federal constitutional system, the responsibility for maintaining public health and safety is left to the State governments under their police powers. Basically, it is the province of the State governments to determine the conditions under which their citizens may acquire and use firearms. I certainly hope that in those States where there is not now adequate regulation of the acquisition of firearms, steps will soon be taken to institute controls complementing the steps taken in this bill in order to deal effectively with this serious menace.

I am particularly anxious that the changes proposed in the bill with respect to the issuance of licenses to manufacture, import, and deal in firearms be adopted. Under existing law, anyone other than a felon can, upon the mere allegation that he is a dealer and payment of a fee of $1, demand and obtain a license. Some 50,000 or 60,000 people have done this, some of them merely to put themselves in a position to obtain personal guns at wholesale. The situation is wide open for the obtaining of licenses by irresponsible elements, thus facilitating the acquisition of these weapons by criminals and other undesirables. The bill before you, by increasing license fees and imposing standards for ob

taining licenses, will go a long way toward rectifying this situation. Mr. Cohen, whose organization is responsible for the administration of the Federal Firearms Act, will discuss this aspect in more detail. One misconception about the administration's bill to amend the Federal Firearms Act which has been widely publicized is that it will make it possible for the Treasury Department to exercise, through the regulatory authority expressed in the bill, such arbitrary power as to be virtually dictatorial, and so potentially restrictive as to permit the elimination of private ownership of guns at the whim of the Secretary. This misunderstanding has been fostered by certain national gun and wildlife conservation organizations whose representatives, in testifying at Senate hearings on a companion bill, have pointed with alarm to seven places in the bill where regulatory authority is granted to the Secretary of the Treasury.

You and I know that it is customary for the Congress to vest discretionary powers in a Government officer to implement legislation through the issuance of regulations. Such regulations are necessary to provide flexibility and to take care of problems which may be unforeseen by the lawmakers. This flexibility, within the guidelines of standards and policies laid down by the Congress, inures to the benefit of the citizen affected as well as to Government. Moreover, a grant of regulatory authority is not, and cannot in any sense be, a dictatorial fiat. Surely no rational, intelligent individual can seriously maintain that the Secretary of the Treasury would issue regulations under this proposed legislation so arbitrary or capricious or so complicated or impracticable or so burdensome that they would make impossible the private ownership of guns. There is nothing in the bill that would authorize this, and if any attempt were made to do so there is abundant opportunity for appeal to the courts, the top administrative machinery, or to the Congress.

Any allegation of this nature, which attempts to obscure the merits of the bill by raising imaginary fears of possible maladministration, ignores completely the Treasury Department's past administrative record as well as the statutory and constitutional limitations on executive authority. The Secretary of the Treasury has for 27 years exercised regulatory authority under the Federal Firearms Act in many of the seven areas pointed to by critics of the bill where details or procedures are to be prescribed by regulations. In fact, section 907 of the present law provides "the Secretary of the Treasury may prescribe such rules and regulations as he deems necessary to carry out the provisions of this chapter." The term "this chapter," incidentally, includes the entire Federal Firearms Act. During these years there has been no regulatory abuse which can be cited. I do not believe that there is a single provision of existing regulations (26 CFR, part 177) which can be said to be unreasonable or beyond the intent of Congress, and in the 27-year history of this act no regulation issued under it has been held invalid by the courts.

Irresponsible allegations to the contrary, the bill does not, and regulations under it cannot, seriously interfere with the acquisition, ownership, or use of firearms for sporting purposes, or any other legitimate use. Sportsmen will continue to be able to obtain rifles and shotguns from licensed dealers and manufacturers subject only to the requirements of their respective State laws. Indeed, they can travel to an