An excerpt of the following article was posted in opposition to ATF’s Proposed Rule 41P.
(Originally published 9/2/2013)
Seems I am always working on Labor Day.
This year, it’s reviewing the latest nonsense to arise by Executive Order in the Obama Nation. Last week, ATF published new proposed regulations concerning the transfer of National Firearms Act (“NFA”) items to gun trusts and other entities.
New regulations have been anticipated for some time, but we were led to believe ATF would remove the requirement for certification of individual applications by the applicant’s Chief Law Enforcement Officer (“CLEO signoff”), which gun trusts are currently used to avoid, especially in jurisdictions where the CLEO flat out refuses to certify any such applications. Although such a revision would surely reduce the number of gun trusts cranked out by mills, gun trust attorneys were not overly concerned because the gun trust remains the best way to hold guns of all types, especially NFA items, for prevention of accidental felonies and for other reasons.
Instead of removing the CLEO signoff requirement as anticipated, ATF instead proposes expanding it to include gun trusts and other entities. Currently, fingerprints and photos, plus a CLEO certification that the CLEO has no information that possession by the transferee would violate law or that the firearm would be used for other than lawful purposes, are required only of individual applicants. Under the proposed reg, the CLEO will no longer have to certify absence of information that the firearm would be used for other than lawful purposes, but the CLEO will still need to certify it is satisfied that the fingerprints and photos are the applicant’s, and that the CLEO has no information that possession by the transferee would violate law. Futhermore, in addition to individual applicants, CLEO certification will be necessary for each “responsible person” of a gun trust or other entity acquiring NFA items.
“Responsible person” under proposed §479.11 is defined very broadly, and much more broadly for trusts than for other entities:
(a) In the case of a trust, any individual, including any grantor, trustee, or beneficiary, who possesses, directly or indirectly, the power or authority under any trust instrument or other document, or under state law, to receive, possess, ship, transport, deliver, transfer, or otherwise dispose of a firearm for, or on behalf of, the trust;
(b) In the case of a partnership, any individual, including any partner or manager, who possesses, directly or indirectly, the power or authority under any contract, agreement, article, certificate, bylaw, or instrument, or under state law, to direct the management and policies of the partnership to receive, possess, ship, transport, deliver, transfer, or otherwise dispose of a firearm for, or on behalf of, the partnership;
(c) In the case of an association, any individual, including any member, officer, director, board member, owner, or manager, who possesses, directly or indirectly, the power or authority under any contract, agreement, article, certificate, bylaw, or instrument, or under state law, to direct the management and policies of the association to receive, possess, ship, transport, deliver, transfer, or otherwise dispose of a firearm for, or on behalf of, the association;
(d) In the case of a company (including a Limited Liability Company (LLC)), any individual, including any member, officer, director, board member, owner, shareholder, or manager, who possesses, directly or indirectly, the power or authority under any contract, agreement, article, certificate, bylaw, or instrument, or under state law, to direct the management and policies of the company to receive, possess, ship, transport, deliver, transfer, or otherwise dispose of a firearm for, or on behalf of, the company;
(e) In the case of a corporation, any individual, including any officer, director, board member, owner, shareholder, or manager, who possesses, directly or indirectly, the power or authority under any contract, agreement, article, certificate, bylaw, or instrument, or under state law, to direct the management and policies of the corporation to receive, possess, ship, transport, deliver, transfer, or otherwise dispose of a firearm for, or on behalf of, the corporation.
As you can see, there is quite a difference in how the proposed regs treat trusts versus other entities. In addition to the grantors that set up the trust, successor trustees, distribution trustees, special trustees, lifetime beneficiaries, death beneficiaries, remote contingent beneficiaries, trust protectors, those who may hold a power of appointment, or frankly anyone that can fog a mirror, if possession includes constructive possession–all of these may be “responsible persons” based on having “direct or indirect” right of possession. With the other entity types the scope of “responsible person” stops at the manager level, with those having authority to direct the management and policies of the entity relating to the firearm. [Also, note that while the proposed reg exempts probate transfers, it does not clarify whether postmortem trust transfers are exempt.]
Supplying fingerprints and photos and CLEO certification for all of these responsible persons, especially for trusts, will be an extreme burden, and a very uncertain task. In addition, ATF recognizes that responsible persons will change over time and anticipates a requirement for notice within 30 days of any such change. Will trustees be aware of such a requirement and practically able to comply?
ATF cites a case involving an illegal alien with a felony record who was allowed access to a NFA firearm acquired by a gun trust. Well, under the proposed regs couldn’t the same illegal obtain possession of the same weapon with a LLC (as an employee or whatever)? ditto, with a corporation or partnership or association? or from an individual via straw purchase?
What is to keep friends or business associates of criminals from simply updating a trust agreement, or LLC operating agreement, or partnership agreement, or issuing shares in a corporation, adding “responsible persons” without ever submitting revised documentation to, or otherwise notifying, the ATF?
We are used to “voluntary reporting” in our tax code, and since the NFA is actually part of the tax code, criminals and their associates should also be comfortable with this mode of “voluntary reporting,” right?
Are criminals really going to be attracted to NFA items, with all the paperwork and oversight? Wouldn’t criminals rather obtain non-NFA weapons, just as powerful, from a car trunk or the back of a Chevy Astro? Heck, they might as well just buy at the local gun store given the extremely small likelihood they will ever be prosecuted for lying on a gun application.
This is all about controlling gun owners, not about controlling criminals.
There is only so much the government can do to prevent a gun from ultimately falling into the hands of a criminal. With regard to trusts, tort liability on trustees for negligent entrustment is a much more effective control. In fact, the trust instrument itself can be an enormously educational tool in preventing such occurrences.
This expansion of NFA regulation will not deter criminals. What it will do is dramatically compromise the privacy and security of the armed American family, without which the Constitution would cease to exist. While gun trusts are generally private documents, if they are used to acquire NFA firearms a complete copy of the trust must be given to ATF as part of the application.
The militia ethic is not merely about maintaining a balance of power, but also of maintaining the character of a free people that understands responsible use of power. It is sacramental. The family is the only social institution we can depend on to pass on this firearm legacy, much more a legacy of training than of handing down museum pieces. The only practical and effective way for families to do this is with a modern dynasty trust complete with incentive provisions for training and for maintaining a family armory. You cannot rely on simply training your children. Word of mouth is diluted over time, like in the game of telephone. A friend of mine recently gained membership in the Sons of the American Revolution because he was able to trace his ancestry to a Patriot—but my friend hates guns! The Founders, great men and women, failed to pass on the legacy. We can do better.
“Wait a minute,” you say. “Duringer, we are talking about NFA items—machine guns, silencers, longitudinally-challenged long guns—less than 1 percent of all firearms out there!”
Yes, that’s true. The vast majority of guns do not fall under the NFA and in fact, most of the gun trusts I draft are for clients who do not own any NFA items at all. They’ve seen my video at http://www.guncounsel.com/ and realize a gun trust is the best way to hold guns of all types, and is not just for acquisition of NFA items (most of which we cannot have in California, anyway).
“Then why all the concern about the NFA rule change?”
Do you recall the Assault Weapons Ban of 2013 introduced earlier this year by Senator Feinstein? It went a long way toward placing ALL of our guns under the NFA. The attempt failed, but no doubt will be made again when more sheep are available to support it.
If we allow this rule change by executive order, ceding to the federal government family privacy with regard to handling of firearms (America’s “liberty teeth”)—and if we fail to stop the incremental attempt we KNOW is coming to place all weapons under the NFA—then it is GAME OVER. It will be a very simple task at that point to ban the next generation from widespread possession of firearms, and training in their use.
The proposed change in regulations is vague and unworkable, especially as applied to trusts. The change is designed not to deter criminals, but to control families, as shown by the disparate treatment of trusts. The trust is the only way for individuals to pass on the firearm legacy to their families, so this irrational, vague and overly broad regulation should be opposed on constitutional grounds, along with the entire National Firearms Act. The statists have shown their hand and we must quell this coup d’etat against the next generation.
UPDATE: The public comment period is now open for this proposed rule, until 12/9/13. You may comment online here: http://www.regulations.gov/#!documentDetail;D=ATF-2013-0001-0001
