SUPPLEMENTARY INFORMATION:

I. Background

The Attorney General is responsible for enforcing the Gun Control Act of 1968 (“GCA”), as amended. This responsibility includes the authority to promulgate regulations necessary to ( printed page 24409) enforce the provisions of the GCA. ^[1] See18 U.S.C. 926(a). Congress and the Attorney General have delegated the responsibility for administering and enforcing the GCA to the Director of ATF (“Director”), subject to the direction of the Attorney General and the Deputy Attorney General. See28 U.S.C. 599A(b)(1), (c)(1); 28 CFR 0.130(a)(1)-(2); Treas. Order No. 221(2)(a), (d), 37 FR 11696-97 (June 10, 1972).^[2] Accordingly, the Department and ATF have promulgated regulations to implement the GCA in 27 CFR part 478.

Under 18 U.S.C. 923(a), persons cannot engage in the business of importing, manufacturing, or dealing in firearms, or importing or manufacturing ammunition, unless they have first filed an application with and received a license to do so from the Attorney General. Further, 18 U.S.C. 923(d) provides that an application submitted under section 923(a) shall be approved if, among other things, “the applicant has in a State . . . premises from which he conducts business subject to license under this chapter or from which he intends to conduct such business within a reasonable period of time.” Additionally, the law requires that each applicant pay a fee for obtaining a license and that a separate fee be paid for each place in which the applicant is to do business. See18 U.S.C. 923(a). As early as 1968, when the GCA was enacted and initial rules were promulgated, the term “business premises” has been defined to implement the provisions of the GCA. Pursuant to 27 CFR 478.11, a “business premises” is defined as “[t]he property on which the manufacturing or importing of firearms or ammunition or the dealing in firearms is or will be conducted. A private dwelling, no part of which is open to the public, shall not be recognized as coming within the meaning of the term.” ³ Id. In addition, 27 CFR 478.50 sets forth a number of exceptions to the general rule that a separate license must be obtained for each location at which a firearms or ammunition business or activity requiring a license is conducted. The term “business premises” is used throughout the GCA. However, Congress did not define “business premises.” Although the Department promulgated a definition of “business premises” in 27 CFR 478.11, as described above, ATF has become aware of situations in which a federal firearms licensee (“FFL”) owns or leases properties adjoining ( i.e., touching) each other or properties that are adjacent ( i.e., lying near or close) to each other and adjoin a common parking lot, sidewalk, or road. Currently, in those situations, FFLs have been required to apply for separate licenses for each property or otherwise seek a variance.

II. Proposed Rule

Because these situations can arise, ATF is proposing to amend 27 CFR 478.11 and 27 CFR 478.50 to clarify that “business premises” includes properties that adjoin ( i.e., touch) each other or properties that are adjacent ( i.e., lying near or close) to each other and adjoin the same parking lot, sidewalk, or road. The proposed amendments to these sections would allow FFLs to apply for and maintain one license for their business if they own or lease more than one property or location that (i) adjoin ( i.e., touch) each other; or (ii) are adjacent ( i.e., lying near or close) to each other and adjoin the same parking lot, sidewalk, or road.

As explained above, this rule will provide greater clarification as to circumstances that qualify as “business premises” under the GCA. For purposes of this proposed rule, ATF is relying on the plain meaning of the terms “adjoin” and “adjacent” as defined in Black's Law Dictionary (12th ed. 2024). There, the term “adjoin” is defined as “touching; sharing a common boundary.” ^[4] Thus, if an FFL owns or leases two properties and their boundary lines touch each other at any point, such properties would adjoin each other for purposes of this proposed rule and would constitute a single “business premises.”

Moreover, “adjacent” is defined in Black's Law Dictionary as “lying near or close to, but not necessarily touching.” ^[5] Thus, if properties are non-contiguous ( i.e., the property lines do not touch each other) but are “near or close to” each other and adjoin the same parking lot, sidewalk, or road, these properties would also qualify as a single “business premises.” As an example, if an FFL owns or leases two locations that are directly across the street from each other — in other words, the properties would be adjoining but for a bisecting road — ATF's proposed rule would treat those two locations as adjacent and as a single “business premise.” Another example is where an FFL owns or leases more than one location in a shopping outlet where the stores are separated by other business entities, but they both share the same parking lot; in this example, ATF's proposed amendments would treat the multiple locations as adjacent and as a single “business premise.”

If, however, the FFL's “adjacent” properties are not sufficiently close to each other, those locations would not qualify as a single “business premise.” For example, if an FFL owns or leases two locations on a major highway, and the locations are located miles apart from each other, the locations would not qualify as a single “business premise” because they would not be “lying near or close to” each other. These are general scenarios and each situation would need to be evaluated based on its circumstances.

These proposed parameters align with Supreme Court interpretations of “adjoin” and “adjacent.” See, e.g., United States v. St. Anthony R. Co., 192 U.S. 524 (1904). In St. Anthony R. Co., the Court evaluated whether lands were “adjacent” for purposes of a federal statute granting railroads the right to cut timber from “public lands adjacent” to a railroad right of way. Id. at 526 n.†, 530. In discussing relevant case law, the Court held that the word “adjacent” had been used “in connection with the words `contiguous' and `adjoining,' so as to give an impression that it is almost, though not entirely, synonymous with those words.” Id. at 533. The Court agreed that “adjacent” need not be ( printed page 24410) “adjoining or actually contiguous, but it must be, as said, near or close at hand.” Id.

More recently, in Sackett v. Environmental Protection Agency, 598 U.S. 651, 676 (2023), the Court recognized that “[d]ictionaries tell us that the term `adjacent' may mean either `contiguous' or `near.' ” Although statutory context required a narrow reading of “adjacent” as used in the Clean Water Act for it to be “compatible with the rest of the law,” the Court acknowledged that the term could have broader definitional scope. See id. at 676-78 (internal quotation and citation omitted); see also id. at 711 (Kagan, J., concurring) (“[i]n ordinary language, one thing is adjacent to another not only when it is touching, but also when it is nearby.”); id. at 716 (Kavanaugh, J., concurring) (“ `adjacent' and `adjoining' have distinct meanings.”). Again, ATF's proposed change here aligns with the Supreme Court's general understanding of “adjoin” and “adjacent.”

The proposed change is also consistent with other GCA amendments and ATF guidance concerning “business premises.” The Firearms Owners' Protection Act of 1986 (“FOPA”), Public Law 99-308 (1986), amended the GCA to allow FFLs to conduct business temporarily at a location other than the location specified on the license if such temporary location is the location for a gun show or event sponsored by any national, state, or local organization, or any affiliate of any such organization devoted to the collection, competitive use, or other sporting use of firearms in the community, and such location is in the state which is specified on the license. ATF's proposed regulatory amendment does not change the fact that the location must be licensed but merely clarifies that an FFL does not need multiple licenses for multiple locations if the locations (i) adjoin each other; or (ii) are adjacent to each other and adjoin the same parking lot, sidewalk, or road.

The proposed change is also consistent with guidance ATF issued on April 10, 2020, in which ATF clarified that under the GCA, an FFL could, in qualifying circumstances, carry out certain activities on any part of the business premises, including the exterior of the brick-and-mortar structure, provided that the activity otherwise complied with applicable laws and regulations.^[6] The specific requested activities in that guidance were (i) verifying customer identity and permitting the completion of paperwork, including for purposes of the National Instant Criminal Background Check System; (ii) accepting payment; and (iii) delivering firearms to customers. For these requested activities, ATF indicated that FFLs could do so (i) through a drive-up or walk-up window or doorway where the customer is on the licensee's property on the exterior of the brick-and-mortar structure at the address listed on the license; and (ii) from a temporary table or booth located in a parking lot or other exterior location on the licensee's property at the address listed on the license, but any such activities must occur in a location where the licensee has the authority to permit ATF's entry for inspection purposes.^[7] FFLs were not permitted to carry out the requested activities from nearby spaces that were not located on the licensee's property. Again, this proposed rule does not change the fact that properties must be licensed; it merely clarifies the limited situations in which one license is sufficient.

ATF's proposed rule also aligns with certain variances that the agency has provided to FFLs. For example, variances have been given to allow one license to cover an additional location if it was adjoining with the FFL's other licensed locations. This has been true even in circumstances where the addresses are separated by a public road. In these variance scenarios, ATF concluded that allowing one license to cover an adjacent property owned by the FFL would not hinder the administration of the GCA; nor does it impede ATF's ability to trace firearms or interfere with ATF's Industry Operations Investigators' ability to conduct inspections to ensure regulatory compliance with the GCA. ATF submits that this is also true for properties that are adjacent to each other and adjoin the same parking lot, sidewalk, or road. Further, it reduces burden on the industry and saves the costs of having to maintain two separate licenses.

ATF's proposed rule also aligns with the President's Executive Order 14206, Protecting Second Amendment Rights, issued on February 7, 2025. In that Executive Order, the President set forth that “[t]he Second Amendment is an indispensable safeguard of security and liberty.” E.O. 14206, sec. 1, 90 FR 9503 (Feb. 7, 2025). Further, “[b]ecause it is foundational to maintaining all other rights held by Americans, the right to keep and bear arms must not be infringed.” Id.

Finally, ATF notes that each FFL application will continue to be evaluated on the specific facts underlying each application. If an FFL application is denied on the grounds that an FFL's premises does not meet the amended definition of “business premises” under 27 CFR 478.11 or 27 CFR 478.50, ATF reminds the public that licensees can ask ATF for an alternate method or procedure (known as a variance request) to fulfill their regulatory obligations. This process is set forth in 27 CFR 478.22.

III. Statutory and Executive Order Review

A. Executive Orders 12866 and 13563

Executive Order 12866 (Regulatory Planning and Review) directs agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits.

Executive Order 13563 (Improving Regulation and Regulatory Review) emphasizes the importance of agencies quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting public flexibility.

This proposed rule would amend ATF regulations at 27 CFR 478.11 and 27 CFR 478.50 to clarify that the term “business premises” includes properties that (i) adjoin each other; or (ii) are adjacent to each other and adjoin the same parking lot, sidewalk, or road. This rulemaking would provide qualitative benefits to the industry by providing more flexibility in complying with statutes and existing regulatory standards.

The Office of Management and Budget (“OMB”) has determined that this rule would not be a “significant regulatory action” under Executive Order 12866. Therefore, it did not review this rule. ATF provides the following analysis to comply with Executive Order 12866 and 13563. Although an overall industry savings was not calculated, ATF estimates that a per-entity savings, which may range from $150 to $300, could occur from an FFL not having to apply and pay for more than one license.^[8] Furthermore, ATF estimates an hourly time-burden savings of 1 hour.

For illustrative purposes, ATF estimates that an FFL manager may be paid an hourly wage rate of $53.42 per ( printed page 24411) hour.^[9] To account for fringe benefits such as insurance, ATF calculated a load rate based on total hourly compensation (average $44.20 for 2024) ^[10] and divided the average total compensation by the average hourly wages and salaries (average $31.95 for 2024) ^[11] making a load rate of 1.42.^[12] Multiplying the estimated hourly wage rate for an FFL ($53.42) by the load rate of 1.42, ATF estimates that a loaded monetized hour that an FFL would save in monetized time per hour would be of $74.79. In total, an FFL may be able to save between $225 ^[13] to $375 ^[14] (rounded) per adjoining or adjacent location. However, ATF requests more information from the public regarding economic effects that this rulemaking may have on the public and the regulated industries.

B. Executive Order 14192

Executive Order 14192 (Unleashing Prosperity Through Deregulation) requires an agency, unless prohibited by law, to identify at least ten existing regulations to be repealed or revised when the agency publicly proposes for notice and comment or otherwise promulgates a new regulation that qualifies as an Executive Order 14192 regulatory action (defined in OMB Memorandum M-25-20 as a final significant regulatory action as defined in section 3(f) of Executive Order 12866 that imposes total costs greater than zero). In furtherance of this requirement, section 3(c) of Executive Order 14192 requires that any new incremental costs associated with such new regulations must, to the extent permitted by law, also be offset by eliminating existing costs associated with at least ten prior regulations. However, this proposed rule would not be an Executive Order 14192 regulatory action because it is not a significant regulatory action as defined by Executive Order 12866, and it would not impose total costs greater than zero. This rule would save FFLs from having to apply and pay for two licenses if the FFL's business premises is adjacent or adjoining to each other. Therefore, ATF expects this rule, if finalized as proposed, to qualify as an Executive Order 14192 deregulatory action (defined OMB Memorandum M-25-20 as a final action that imposes total costs less than zero).

C. Executive Order 14294

Executive Order 14294 (Fighting Overcriminalization in Federal Regulations) requires agencies promulgating regulations with criminal regulatory offenses potentially subject to criminal enforcement to explicitly describe the conduct subject to criminal enforcement, the authorizing statutes, and the mens rea standard applicable to each element of those offenses. This proposed rule would not create a criminal regulatory offense and is thus exempt from Executive Order 14294 requirements.

D. Executive Order 13132

This proposed rule would not have substantial direct effects on the states, the relationship between the federal government and the states, or the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with section 6 of Executive Order 13132 (Federalism), the Director has determined that this proposed rule would not impose substantial direct compliance costs on state and local governments, preempt state law, or meaningfully implicate federalism. It thus does not warrant preparing a federalism summary impact statement.

E. Executive Order 12988

This proposed rule meets the applicable standards set forth in sections 3(a) and 3(b)(2) of Executive Order 12988 (Civil Justice Reform).

F. Regulatory Flexibility Act

Under the Regulatory Flexibility Act (“RFA”), 5 U.S.C. 601-612, agencies are required to conduct a regulatory flexibility analysis of any proposed rule subject to notice-and-comment rulemaking requirements unless the agency head certifies, including a statement of the factual basis, that the proposed rule would not have a significant economic impact on a substantial number of small entities. Small entities include certain small businesses, small not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.

The Director certifies, after consideration, that this proposed rule would not have a significant economic impact on a substantial number of small entities. As discussed above, while an overall industry savings was not calculated, ATF estimates that a per-entity savings, which may range from $150 to $300, may occur from not having to apply and pay for more than one license. Furthermore, ATF estimates an hourly time-burden savings of 1 hour or a loaded monetized hour of $74.79.^[15] In total, an FFL may be able to save $225 to $375 (rounded) per adjoining or adjacent location. This proposed rule is deregulatory and would not impose any additional costs.

G. Unfunded Mandates Reform Act of 1995

This proposed rule does not include a federal mandate that might result in the expenditure by state, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year, and it will not significantly or uniquely affect small governments. Therefore, the ATF has determined that no actions are necessary under the provisions of the Unfunded Mandates Reform Act of 1995.

H. Paperwork Reduction Act of 1995

Under the Paperwork Reduction Act of 1995 (“PRA”), 44 U.S.C. 3501-3521, agencies are required to submit to OMB, for review and approval, any information collection requirements a rule creates or any impacts it has on existing information collections. An information collection includes any reporting, record-keeping, monitoring, posting, labeling, or other similar actions an agency requires of the public. See5 CFR 1320.3(c). This proposed rule would impact two existing information collections under the PRA: OMB control number 1140-0018: Application for Federal Firearms License, which includes ATF Form 5310.12 (“Form 7”); OMB control number 1140-0019: Federal Firearms Licensee Renewal Application-Part II, which includes ATF Form 5310.11 (“Form 8”). This proposed rule would likely reduce the number of respondents applying for a firearms license on a Form 7 and the number of respondents renewing their license Form 8. This would occur because this proposed rule would allow licensees to maintain one license instead of two to cover business premises that either adjoin each other or are adjacent to each other and adjoin the ( printed page 24412) same parking lot, sidewalk or road. As a result of this change, the number of respondents would likely decrease if this proposed rule becomes final. The proposed rule would not otherwise change these information collections. ATF will provide more details about the information collections in any final rule.

I. Congressional Review Act

This proposed rule would not be a major rule as defined by the Congressional Review Act, 5 U.S.C. 804.

IV. Public Participation

A. Comments Sought

ATF requests comments on the proposed rule from all interested persons. ATF specifically requests comments on the clarity of this proposed rule and how it may be made easier to understand. In addition, ATF requests comments on the costs or benefits of the proposed rule and on the appropriate methodology and data for calculating those costs and benefits.

All comments must reference this document's RIN 1140-AA69 and, if handwritten, must be legible. If submitting by mail, you must also include your complete first and last name and contact information. If submitting a comment through the federal e-rulemaking portal, as described in section IV.C of this preamble, you should carefully review and follow the website's instructions on submitting comments. Whether you submit comments online or by mail, ATF will post them online. If submitting online as an individual, any information you provide in the online fields for city, state, zip code, and phone will not be publicly viewable when ATF publishes the comment on https://www.regulations.gov. However, if you include such personally identifying information (“PII”) in the body of your online comment, it may be posted and viewable online. Similarly, if you submit a written comment with PII in the body of the comment, it may be posted and viewable online. Therefore, all commenters should review section IV.B of this preamble, “Confidentiality,” regarding how to submit PII if you do not want it published online. ATF may not consider, or respond to, comments that do not meet these requirements or comments containing excessive profanity. ATF will retain comments containing excessive profanity as part of this rulemaking's administrative record but will not publish such documents on https://www.regulations.gov. ATF will treat all comments as originals and will not acknowledge receipt of comments. In addition, if ATF cannot read your comment due to handwriting or technical difficulties and cannot contact you for clarification, ATF may not be able to consider your comment.

ATF will carefully consider all comments, as appropriate, received on or before the closing date.

B. Confidentiality

ATF will make all comments meeting the requirements of this section, whether submitted electronically or on paper, and except as provided below, available for public viewing on the internet through the federal e-rulemaking portal, and subject to the Freedom of Information Act (5 U.S.C. 552). Commenters who submit by mail and who do not want their name or other PII posted on the internet should submit their comments with a separate cover sheet containing their PII. The separate cover sheet should be marked with “CUI//PRVCY” at the top to identify it as protected PII under the Privacy Act. Both the cover sheet and comment must reference this RIN 1140-AA69. For comments submitted by mail, information contained on the cover sheet will not appear when posted on the internet, but any PII that appears within the body of a comment will not be redacted by ATF and may appear on the internet. Similarly, commenters who submit through the federal e-rulemaking portal and who do not want any of their PII posted on the internet should omit such PII from the body of their comment and any uploaded attachments. However, PII entered into the online fields designated for name, email, and other contact information will not be posted or viewable online.

A commenter may submit to ATF information identified as proprietary or confidential business information by mail. To request that ATF handle this information as controlled unclassified information (“CUI”), the commenter must place any portion of a comment that is proprietary or confidential business information under law or regulation on pages separate from the balance of the comment, with each page prominently marked “CUI//PROPIN” at the top of the page.

ATF will not make proprietary or confidential business information submitted in compliance with these instructions available when disclosing the comments that it received but will disclose that the commenter provided proprietary or confidential business information that ATF is holding in a separate file to which the public does not have access. If ATF receives a request to examine or copy this information, it will treat it as any other request under the Freedom of Information Act (5 U.S.C. 552). In addition, ATF will disclose such proprietary or confidential business information to the extent required by other legal processes.

C. Submitting Comments

Submit comments using either of the two methods described below (but do not submit the same comment multiple times or by more than one method). Hand-delivered comments will not be accepted.

• Federal E-Rulemaking Portal: ATF recommends that you submit your comments to ATF via the federal e-rulemaking portal at https://www.regulations.gov and follow the instructions. Comments will be posted within a few days of being submitted. However, if large volumes of comments are being processed simultaneously, your comment may not be viewable for up to several weeks. Please keep the comment tracking number that is provided after you have successfully uploaded your comment.
• Mail: Send written comments to the address listed in the ADDRESSES section of this document. Written comments must appear in minimum 12-point font size, include the commenter's first and last name and full mailing address, and may be of any length. See also section IV.B of this preamble, “Confidentiality.”

D. Request for Hearing

Any interested person who desires an opportunity to comment orally at a public hearing should submit his or her request, in writing, to the Director within the 90-day comment period. The Director, however, reserves the right to determine, in light of all circumstances, whether a public hearing is necessary.

Disclosure

Copies of this proposed rule and the comments received in response to it are available through the federal e-rulemaking portal, at https://www.regulations.gov (search for RIN 1140-AA69).

For the reasons discussed in the preamble, ATF proposes to amend 27 CFR part 478 as follows:

1. The authority citation for 27 CFR part 478 continues to read as follows:

Authority: 5 U.S.C. 552(a); 18 U.S.C. 847, 921-931; 44 U.S.C. 3504(h).

2. In § 478.11, revise the definition of “Business premises” to read as follows:

3. Amend § 478.50 by:

a. Revising paragraphs (c) and (d); and

b. Adding a new paragraph (e).

The revisions and addition read as follows:

91 FR 24408