Summary of Proposed Rules

The Department of State Police proposed a new Part which will impact any small business engaging in the sale of firearms:

The DEPARTMENT OF STATE POLICE proposed a new Part titled Firearm Dealer License Certification Act (20 IAC 1232; 43 Ill Reg 9084) implementing Public Act 100-1178, which requires all Illinois holders of a Federal Firearms License (FFL) to additionally receive certification from the State to sell, lease or otherwise transfer firearms. The new Part sets forth the conditions and process for obtaining State certification of an FFL as follows.

Applications
Every FFL licensee shall file with DSP a copy of its FFL, along with a sworn affidavit indicating that the license is currently valid and belongs to the licensee. This State certification must be renewed every 3 years when the FFL is renewed. DSP may, in lieu of requiring an affidavit, verify the validity of an FFL via any authentication system or website approved by the federal Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Applicants for certification must also submit an affidavit listing the name and Firearm Owner’s Identification Card (FOID) number of each owner, employee, or other agent who sells or transfers firearms for the licensee and attesting that each of these persons is at least 21 years old, holds a currently valid FOID card and (if a certification is being renewed) has completed the training required by the Firearm Dealer License Certification Act.

Fees
For FFL licensees without a retail location, the application fee is $300 for initial certification and $100 for a renewal certification. For licensees with retail locations, the application fee is $1,500 for initial certification and $500 for renewal.    Total fees for certification of multiple licenses (e.g., retail stores at different locations) to a single applicant cannot exceed $40,000. Initial certification fees for new applicants shall be prorated based on the number of months remaining on the applicant’s current FFL. An overpayment will be credited toward the cost of the licensee’s next renewal or may be refunded to the licensee upon written request.

Inspections
All certified licensees (CLs) must allow inspection of their place of business by DSP and other law enforcement agencies during all hours of operation when firearms are sold, leased or transferred. All records, documents and firearms shall be made accessible upon request of DSP or the LE agency. No more than one unannounced inspection may be conducted per year without good cause. A CL that is not open to the public, does not keep regular business hours or operates by appointment only shall advise DSP in writing of its hours of operation.

Security
No later than 1/2/20, CLs that maintain an inventory of firearms for sale or transfer must be connected to an alarm system or service that notifies local law enforcement of any unauthorized intrusion. This system must include features such as duress/holdup silent alarms and backup electrical power. By 1/2/21, all CLs operating retail locations must have a 24/7 closed circuit video surveillance system in place. The system must monitor all entrances and exits, parking areas, alleys adjacent to the building, and any inside areas (including areas not open to customers) where firearms are stored, displayed, handled, sold or transferred. Cameras must operate in a manner that permits facial recognition of anyone entering or leaving the retail location and that records license plates of vehicles in the parking area. Video recording systems shall be digital, include date and time stamps, and be able to alert the CL of any failure in the system. Security videos must be kept for at least 90 days (longer if needed to investigate a loss/theft of inventory or other incident) and must be backed up offsite via a server or cloud storage.

Records
CLs operating retail locations on or after 1/2/20 must use electronic based recordkeeping for all acquisition and disposition records currently required by federal law. Retail sales and purchases must be recorded within 24 hours after the transaction. Shipments from manufacturers or wholesalers must be recorded within 24 hours after unpacking or 5 business days after shipping, whichever is earlier. Inventory, acquisition and disposition records must be made available to DSP or local law enforcement upon request.

Storage
CLs with retail locations must develop and submit to DSP (using a form and method provided on the Department’s website) their written and detailed plans for safe storage of firearms and ammunition during retail hours, after closing, and in the event of a disaster. Storage procedures must include: keeping all inventoried firearms in a safe, vault, secured room or locked display and in a location accessible only to specifically authorized personnel; insuring that all keys, lock combinations, passwords or other security measures are accessible only to specifically authorized personnel; keeping ammunition stored separately from the firearms inventory and out of the reach of customers; and taking a complete firearms inventory, conducted by at least two persons, at least once per quarter. Any loss, theft or diversion of inventoried firearms from a retail location must be reported to ATF and local law enforcement within 48 hours and a copy of the notification must also be submitted to DSP.

Signage
Each location where a CL conducts business must post two signs (templates are provided in the rule and at DSP’s website). One sign must notify patrons that the premises are under video surveillance and that their images may be recorded. The other sign must advise patrons that the following actions are unlawful: storing or leaving unsecured firearms where children can access them, selling or transferring firearms to someone else without receiving approval from DSP, and failing to report the loss or theft of a firearm to local law enforcement within 72 hours.

Training
Every CL and employees who sell or transfer firearms must complete DSP-approved training prior to certification and annually thereafter. Newly hired employees must complete this training before selling or transferring any firearms or ammunition. The CL must submit an affidavit to DSP verifying that the licensee and any applicable employees have completed this training.

Penalties and Appeals
Disciplinary actions for violations of the Act or this Part may include a reprimand, refusal to renew or restore a certification, or suspension or revocation of license certification. A fine may also be imposed based on the seriousness and frequency of the violation. Fines range from a maximum of $200 for a first-time petty violation up to $10,000 per offense for repeated major violations. Procedures by which DSP will notify CLs of violations and for CLs to request hearings or appeals are included in the Part.

Bottom Line:  The proposed regulation implements the Firearm Dealers License Certification Act [430 ILCS 68] by establishing an application process for individuals and entities subject to regulation under the Act, describing enforcement mechanisms by law-enforcement agencies, and identifying licensee obligations relating to security and storage plans, record-keeping requirements and training mandates.  Additionally, the proposed regulations set forth eth fee schedule for license applicants and disciplinary fines and sanctions for violations of the Act.  Finally, the proposed regulations create administrative processes for investigating alleged violations of the Act and establish an appeal process for licensees and applicants to formally challenge determinations of the Department.

This rule is open for public comment until 10/7/19.  Questions/requests for copies/ comments through 10/7/19 may be directed to Mr. Matthew R. Rentschler, Chief Legal Counsel, Illinois State Police, 801 South 7th Street, Suite 1000-S, Springfield, IL 62703, or call (217) 782-7658. You may also click here to submit comments to the Department of Commerce Office of Regulatory Flexibility.