SB387/HB425 Becomes Law, HB1021 Veto Overridden
Earlier this week, MSI sent a letter to Governor Larry Hogan urging his veto of SB387/HB425, the bills that criminalize the possession of unserialized firearms, and HB1021, a bill that puts onerous and expensive burdens upon all State-licensed firearms dealers. On Friday (04/08), the Governor issued a statement saying that he will let the so-called "ghost gun" bills become law without his signature. He calls the legislation "a positive step," but said the General Assembly needs to do more to address violent crime.
HB 1021: We are pleased to report that Governor Hogan did veto HB1021. You can read his letter on that bill HERE. Of course, that veto did not matter much, as the General Assembly promptly overrode the veto today (4/9). HB1021 takes effect on October 1, 2022. The Bill gives a dealer two options for securing firearms. The first requires that the dealer install video surveillance in and outside the building, a full-time monitored burglary alarm system, and at least one specified security system (such as bollards) designed to prevent unauthorized entry into the building. Or the dealer may comply by, in non-business hours, locking all firearms stored in the building into a safe, a vault, or a room or building that meets all the other security requirements specified in the first option. The first violation of these requirements is punishable by a $1,000 civil fine. A "knowingly or willful" second violation is punishable by a suspension of the dealer's license. A third such violation is punishable by a revocation of the license.
We expect that many small dealers will be unable to afford compliance with this Bill and thus will go out of business or move to neighboring states. Once again, the General Assembly burdens the innocent in a vain effort to control criminals. It has never worked and it will not work here either. Nothing in the Bill will prevent a determined thief from robbing a dealership. Compliance with the Bill will drive up the dealer's costs and thus drive up the price of firearms in Maryland. Those price increases will likely make Maryland dealers non-competitive with out-of-state dealers. Competitive forces will, over time, force many Maryland dealers to close. The Bill thus hurts the dealers and the consumer.
SB387/HB425: We regard Governor's failure to veto SB387/HB425 as unfortunate and misguided. In our view, that legislation will do nothing to address violent crime while criminalizing thousands of law-abiding Marylanders who merely wish to be left alone. The home manufacture of firearms for personal use by otherwise non-prohibited persons has been going on since before the Founding and has always been lawful throughout the United States. Existing federal and state laws are more than sufficient to address bad actors who illegally manufacture, sell or possess firearms of any type. Those laws merely need to be fully enforced. Yet Maryland would rather criminalize the innocent than devote resources to the enforcement of existing laws. We expect these Bills to be enforced in an haphazard, arbitrary, and discriminatory manner.
The Details: SB387/HB425 become effective in two parts. Starting on June 1, 2022, no firearm and no "unfinished frames and receivers" may be sold, purchased, or transferred in Maryland unless they have a serial number imprinted in accordance with federal law by a federally licensed manufacturer or importer. An "unfinished frame or receiver" is defined by the bills to mean "a forged, cast, printed, extruded or machine body or similar article that has reached a stage in manufacture where it may readily be completed, assembled, or converted to be used as the frame or receiver of a functional firearm."
The term "readily be completed, assembled, or converted" will be defined by forthcoming ATF regulations. As proposed, those ATF rules use a nebulous, multi-part test for that purpose. The only thing we can be sure of is that the Bills no longer purport to regulate a "zero percent" receiver, as such coverage was amended out of the Bills. The Bills expressly incorporate these ATF rules and thus will cover whatever the ATF rules define as an article that can be "readily" completed, assembled, or converted into a functional firearm. The White House may announce the issuance of these ATF regulations as soon as Monday (04/11). Under the bills, a sale, purchase, or transfer of such an unserialized firearm or unserialized unfinished frame or receiver on or after June 1, 2022, is punishable by up to five years imprisonment and a $10,000 fine, per firearm.
Starting on March 1, 2023, the bill will also ban the mere possession of every unserialized firearm or unfinished frame or receiver (as defined above). Firearms manufactured prior to October 22, 1968, and antiques are exempted. To retain possession, an owner must make use of one of two alternatives. Under the first alternative, the firearm and/or "unfinished frame or receiver" must be serialized in accordance with federal law by a federally licensed manufacturer, importer, or other federal licensee authorized by federal law to imprint serial numbers. Under this alternative, the firearm must be marked in accordance with the procedure and marking protocol established by the new ATF rules that may come out on Monday.
Alternatively, the "firearm" or unfinished frame or receiver may be serialized by such an FFL with a number that includes the zip code and initials of the owner, plus another unique number. Under both alternatives, the owner must also register the "firearm" with the Maryland State Police. A failure to comply with these requirements applicable to possession is punishable by up to 2 years imprisonment and a fine of up to $10,000, per firearm. Neither the ATF rules nor these bills actually require an FFL to participate. A willing FFL is free to charge a fee in any amount. You can read more on what the bill does in a prior write-up by MSI HERE. Conviction of this possession offense does not result in a lifetime firearms disqualification under federal or state law.
Compliance: We think it highly likely that few, if any, FFLs will actually participate in these imprinting schemes. Under current federal law, only a federally licensed manufacturer or importer may serialize a firearm in a manner compliant with federal law. Most dealers in Maryland are neither. Under the ATF rules, as proposed, the ATF will also permit a gunsmith to imprint serial numbers. The ATF rules will not require an FFL to accept possession of any unserialized firearm, but if the FFL does so, the ATF rules, as proposed, would require imprinting within 7 days, that the FFL to include the firearm in his A&D books, and imprint a serial number that includes part of the FFL's license number. Federal rules for imprinting serial numbers are highly specific and demanding, effectively requiring expensive engraving machinery and skill. All these serial number requirements create legal risks for the FFL, as any failure to follow the ATF rules would risk the loss of the FFL's federal license.
The few FFLs willing to bear these risks are likely to charge a significant fee (who can blame them?). Given that there are untold thousands of owners and tens of thousands of unserialized firearms and "unfinished frames or receivers" in Maryland, we doubt that most existing owners will be able to obtain serialization services from a qualified FFL by March 1, 2023. That will be particularly true for owners of all-polymer frames, as federal rules effectively require a metal surface for engraving.
Thus, in order to comply, those owners who are unable to obtain serialization will be required to destroy these firearms (or unfinished receivers), sell them to an FFL, move them out of the State, or surrender them to a State law enforcement agency. And because the final ATF rules will likely require every FFL who accepts an unserialized firearm or receiver to follow the ATF rules for imprinting, no FFL will ever be willing to follow the alternative, "zip code" alternative marking scheme established by SB387/HB425. In short, the marking systems mandated by these bills for continued possession are largely illusory. Once again, the law-abiding are being criminalized by irrational Maryland gun-control policies based more on hysteria and gun hatred than on rational thought.
The end of session, Sine Die, is this Monday at midnight. None of the other gun-related bills on which MSI has taken a position have moved. But nothing is over until the clock strikes 12. Stay tuned for further developments.