Be it enacted by the Legislature of the State of Arizona:

Section 1. Title 13, Arizona Revised Statutes, is amended by adding chapter 31.1, to read:

CHAPTER 31.1

FIREARM REGULATION

START_STATUTE13-3151. Definitions

In this chapter, unless the context otherwise requires:

1. "ATF" means the Bureau of Alcohol, Tobacco, Firearms and Explosives within the United States Department of Justice.

2. "Branch location" means any location physically separate from the principal place of business of a parent company that has a state permit to sell firearms and that is also engaged in the business of selling firearms.

3. "Dealer" means a person who holds a valid state permit issued pursuant to this chapter.

4. "Department" means the Department of Public Safety.

5. "Drug trafficking crime" has the same meaning prescribed in 18 United states Code section 924(c)(2) AND includes a felony punishable under the law of this state for which the conduct constituting the offense would constitute a felony punishable under the Controlled Substances Act (21 United states Code section 801), the Controlled Substances Import and Export Act (21 United states Code section 951) or chapter 705 of title 46 of the United States Code.

6. "Engage in the business of dealing in firearms" means to sell or offer to sell five or more firearms within a twelve-month period.

7. Federal crime of terrorism" has the same meaning prescribed in 18 United states Code section 2332b(g)(5).

8. "Federal firearms license" means a license to import, manufacture or deal in firearms issued pursuant to 18 United states Code section 923.

9. "Felony" includes any offense under federal law punishable by imprisonment for a term of one year or more.

10. "Firearm" has the same meaning prescribed in section 13-3101.

11. "Gun industry member" means a person, firm, corporation, company, partnership, society, joint stock company or any other entity or association engaged in the sale, manufacturing, distribution, importing or marketing of firearms, ammunition, ammunition magazines or firearms accessories and includes a parent company that owns, in whole or in part, more than one branch location that operates as a dealer in this state.

12. "Manufacturer" means a person who possesses a federal firearms license to engage in the business of manufacturing firearms or ammunition for sale or distribution.

13. "Parent company" means a business that sells firearms through branch locations and that has a state permit to sell firearms.

14. "Pistol converter" means any device or instrument that, when installed in or attached to the slide of a semi-automatic pistol, interferes with the trigger mechanism and enables the pistol to discharge a number of shots or bullets rapidly or automatically with one continuous pull of the trigger.

15. "Proposed transferee" means an unlicensed person to whom a proposed transferor intends to sell or transfer a firearm.

16. "Proposed transferor" means an unlicensed person who intends to sell or transfer a firearm to another unlicensed person.

17. "Qualified product" means a firearm, including any antique firearm, ammunition and a component part of a firearm or ammunition.

18. "Reasonable controls and procedures" includes:

(a) Instituting screening, security, inventory and other business practices to prevent theft of qualified products as well as sale of qualified products to straw purchasers, traffickers, persons prohibited from possessing firearms under state or federal law or persons at risk of injuring themselves or others.

(b) Preventing deceptive acts and practices and false advertising and otherwise ensuring compliance with the provisions of title 44, chapter 10, articles 5 and 7.

19. "recovered firearm" means any firearm seized, taken into custody or under investigation by law enforcement that was unlawfully possessed, used for any unlawful purpose, recovered from the scene of a crime, reasonably believed to have been used or associated with the commission of a crime or abandoned, lost or discarded.

20. "State permit" means the state firearms dealer permit required pursuant to this chapter.

21. "Transfer" means to assign, pledge, lease, loan, give away or otherwise dispose of.

22. "Unlicensed person" means a person who does not hold a valid state permit. END_STATUTE

START_STATUTE13-3152. Permit required; firearm dealer permit cash fund; rules; violation; classification

A. a dealer must possess a state permit issued by the department in order to engage in the business of dealing in firearms in this state. A person shall obtain a state permit for each location in which the person is engaged in the business of dealing firearms in this state. A dealer shall carry a general liability insurance policy providing at least $1,000,000 of coverage per incident. A state permit issued pursuant to this section is not transferrable.

B. the firearm dealer permit cash fund is established consisting of legislative appropriations and fees deposited pursuant to this section. The department shall administer the fund. Monies in the fund are continuously appropriated to the department and shall be used to cover the costs of issuing permits, conducting inspections, preparing reports and other requirements of this chapter.

C. The department shall charge a fee of $250 for each state permit issued pursuant to this section. The department may annually adjust the fee based on the department's costs for administering this section. The department shall deposit the fees collected pursuant to this subsection in the firearm dealer permit cash fund established by subsection B of this section.

D. A person applying for a state permit pursuant to this section must complete an application as provided by department rule and pay the application fee established by the department. the department shall require an applicant to submit to fingerprinting and a background check. The applicant shall pay the costs associated with the fingerprinting and background check.

E. The department shall issue a state permit to an applicant that meets all of the following:

1. Is at least twenty-one years of age.

2. Has been granted and holds a valid federal firearms license.

3. Possesses every permit or license required by the local governing body where the person is dealing firearms.

4. Is not prohibited from possessing or purchasing a firearm under state or federal law.

5. Has not had a license or permit to sell, lease, transfer, purchase or possess a firearm or ammunition from the federal government, any state, or a subdivision of any state, revoked or denied before submitting an application, except that if a period of ten years has elapsed from the date of the revocation or denial, the department may waive this requirement for good cause.

6. Has not been convicted of a violation of any federal law or the law of any state concerning the possession, purchase, sale, transport or carrying of firearms, unless a period of ten years has elapsed from the date of the conviction.

7. Based on an investigation conducted by the department or a local law enforcement agency in coordination with the department, has not exhibited or engaged in behavior that, in the department's determination, indicates that, if issued a state permit, the applicant is likely to pose a danger to the public health, safety or welfare.

F. A person who has applied for a federal firearms license may apply for a state permit prior to being issued a federal firearms license. The department may not issue a state permit to the person until the person holds a valid federal firearms license.

G. The department shall act on a state permit application made pursuant to this section not later than ninety days after the date the application is received, except that:

1. For good cause, the department may extend the deadline to act for an additional ninety days.

2. If a person applies for a state permit while the person's application for a federal firearms license is pending, the department may extend the deadline to act until fourteen days after the person notifies the department that the person has been issued and holds a valid federal firearms license.

H. A state permit issued pursuant to this section is valid for one year. The department may not accept a renewal application submitted after the expiration of the dealer's state permit. Ninety days before the expiration of a state permit, the department shall notify the dealer of the permit expiration date. A dealer may apply for renewal of a state permit at any time during the ninety day period before the expiration of the state permit. A dealer that submits a timely and sufficient renewal application may continue to engage in the business of dealing in firearms pursuant to state law until the department has acted on the renewal application. The department shall act on a renewal application submitted pursuant to this subsection not later than ninety days after the date the application is received. The department shall conduct a background check on the dealer before renewing a state permit and shall renew the state permit if the dealer continues to meet the requirements for a state permit pursuant to this section. The department shall charge a $200 renewal fee for each permit and shall deposit the monies in the firearm dealer permit cash fund.

I. At least once each year, the department shall:

1. request a list of firearm dealers licensed under 18 United states Code section 923 with business premises in this state from the ATF and shall verify that all firearm dealers on the list provided by the ATF are in compliance with the state permit requirements of this section.

2. notify the ATF of all dealers licensed under 18 United states Code section 923 with business premises in this state who are not in compliance with the state permit requirements of this section.

J. If the department revokes a state permit issued to a dealer pursuant to this section, the dealer MAY not attempt to obtain a state permit held under a different business name, or to re-open as a dealer under another business name using the same permit or as the same person or entity doing business under a different business name.

k. The department shall adopt rules necessary to implement this section, including establishing the process for applying for and obtaining a state permit, fingerprinting and conducting background checks. The rules shall require that the background check process include a check of the National Instant Criminal Background Check System and all relevant state databases. The department MAY not adopt rules that alter the eligibility criteria for obtaining a state permit, but the department may require any information it deems necessary to verify the eligibility of an applicant.

l. A person who violates this section is guilty of a Class 1 misdemeanor for a first offense and a class 6 felony for a second or subsequent offense. END_STATUTE

START_STATUTE13-3153. Employee background checks; rules

A. A dealer MAY not employ a person who, in the course of the person’s duties, handles firearms, processes the sale or transfer of firearms or otherwise has access to firearms, if any of the following apply:

1. the person Is under twenty-one years of age.

2. the person Is prohibited from possessing or purchasing a firearm under state or federal law.

3. the person Has had a license or permit to sell, lease, transfer, purchase or possess a firearm or ammunition from the federal government, any state, or a political subdivision of any state, revoked or denied, except that if at least ten years have elapsed from the date of the revocation or denial, the department may waive the requirement in this paragraph for good cause.

4. the person Has been convicted of a violation of any federal law or the law of any state concerning the possession, purchase, sale, transport or carrying of firearms, unless at least ten years have elapsed from the date of the conviction.

5. Based on an investigation conducted by the department or a local law enforcement agency in coordination with the department, the person has exhibited or engaged in behavior that, in the department's determination, indicates that, if employed by a dealer, the applicant is likely to pose a danger to the public health, safety or welfare.

B. To determine whether the dealer may employ a person consistent with this section, the dealer shall require a prospective employee to submit to fingerprinting and a background check. The person, or the dealer on the person’s behalf, shall pay the costs associated with the fingerprinting and background check. A dealer shall only accept the results of a background check completed within seven days before the employee's first day of work. An employee shall submit to a background check at least once each calendar year.

C. The department shall adopt rules necessary to implement this section, including establishing the process for fingerprinting and conducting background checks. The rules shall require that the background check process include a check of the National Instant Criminal Background Check System, if the system is made available by the Federal Bureau of Investigation, and all relevant state databases, and shall also require the department to send a notice to the dealer following each background check conducted pursuant to this section indicating whether the prospective employee or current employee is qualified for employment. The department may not adopt rules that alter the eligibility criteria for employment, but the department may collect any information it deems necessary to verify the eligibility of a prospective employee or current employee.

D. A dealer shall maintain a copy of each notice delivered to the dealer pursuant to this section for the duration of the person's employment and shall make each notice available to the department during an on-site inspection of the dealer's place of business. Each year, A dealer shall provide certification to the department, in the form prescribed by the department, that all applicable employees have completed the background check requirement pursuant to this section. END_STATUTE

START_STATUTE13-3154. Training; dealers; employees

A. The department shall develop training courses for dealers and employees of dealers. The training must include an examination with at least fifty questions derived from the course material and intended to confirm that a course participant understands the information covered in the course. The department shall give a participant who answers at least eighty percent of the examination questions correctly a printable certificate of completion that is valid for one year after the date of completion. The department shall offer the training course in-person at least quarterly and shall offer the training course in an online format. The training must include instruction regarding the following:

1. Federal and state laws governing the sale and transfer of firearms and ammunition.

2. Recognizing and identifying straw purchasers and fraudulent activity, including:

(a) Identifying indicators of straw purchasing and trafficking, including a prospective firearm purchaser who is accompanied by one or more individuals, is communicating with other individuals by telephone or other means about the purchase, has been the subject of a trace with a short time between the date of sale or transfer and the date the firearm was used in a crime, displays minimal knowledge of the firearm they are attempting to purchase, making statements that are not consistent with the type of firearm being purchased, appears to have a list or pictures of the firearms, utilizes large amounts of cash as payment, utilizes a credit card in someone else’s name, shows little interest in acquiring ammunition suitable for the firearm or otherwise indicates that a firearm is being obtained for another person.

(b) Strategies for identifying multiple sales that may be indicators of straw purchasing or trafficking.

(d) Determining when to decline a sale.

3. Indicators that a person is otherwise attempting to purchase a firearm illegally.

4. Recognizing and identifying indicators that an individual intends to use a firearm for unlawful purposes.

5. Recognizing and identifying indicators that an individual intends to use a firearm for self-harm.

6. Preventing theft or burglary of firearms and ammunition.

7. Responding to circumstances described in paragraphs 1 through 6 of this subsection.

8. Recordkeeping and reporting requirements required by this chapter.

9. Effectively teaching consumers rules of firearm safety, including the safe handling and storage of firearms.

10. Any other reasonable business practices that the department determines will deter straw purchasing, firearm trafficking or the unlawful use of firearms.

B. A dealer shall complete the training course developed by the department pursuant to this section in-person within ninety days after the date the state permit is first issued and in-person or online each year thereafter.

C. An employee of a dealer who, in the course of the employee's duties, handles firearms, processes the sale or transfer of firearms, or otherwise has access to firearms shall complete the training course developed by the department pursuant to this section in-person within ninety days after the employee's first day of work for the dealer unless the employee provides the department with information demonstrating good cause to be permitted to complete the training course online, in which case the department may permit the employee to conduct the training course online, and in-person or online each year thereafter.

D. A dealer shall permanently maintain the training records of each employee and shall make the records available to the department during an on-site inspection of the dealer's place of business or on request by the department. each year, A dealer shall provide certification to the department, in the form prescribed by the department, that the dealer and all applicable employees have completed the training required pursuant to this section. END_STATUTE

START_STATUTE13-3155. Physical security; secure storage

A dealer shall do all of the following:

1. Any time the dealer is not open for business, ensure that every firearm is stored unloaded and separate from ammunition, and is stored or secured in one of the following ways in a location where firearms are not readily visible from outside the business premises:

(a) Stored in a locked fireproof safe or vault in the dealer's premises.

(b) Secured with a hardened steel rod or cable through the trigger secured with a hardened steel lock that has a shackle with the lock and shackle protected or shielded from the use of a BOLT CUTTER and the rod or cable anchored in a manner that prevents removal of the firearm from the premises.

2. Except in the immediate presence of and under the direct supervision of the dealer or an employee of the dealer whose duties include firearm sales, any time the dealer is open for business, ensure that every firearm is unloaded, inaccessible to the public, and stored or secured in one of the following ways in a location where firearms are not readily visible from outside the business premises:

(a) Stored in a locked case so that a customer seeking access to the firearm must ask the dealer or an employee of the dealer for assistance.

(b) Stored in a locked fireproof safe or vault in the dealer's premises.

(c) Secured with a hardened steel rod or cable through the trigger secured with a hardened steel lock that has a shackle with the lock and shackle protected or shielded from the use of a BOLT CUTTER and the rod or cable anchored in a manner that prevents removal of the firearm from the premises.

3. Except in the immediate presence of and under the direct supervision of the dealer or an employee of the dealer whose duties include firearm sales, any time the dealer is open for business, ensure that all ammunition is stored separately from firearms and in a manner that the ammunition is inaccessible to the public and secured within a locked case so that a customer seeking access to the ammunition must ask the dealer or an employee of the dealer for assistance.

4. Ensure that bars, security screens, commercial grade metal doors, grates or other physical barriers approved by the department and designed to prevent unauthorized entry are installed on all exterior doors and windows of all buildings on the premises where firearms are stored.

5. Ensure the premises is equipped with physical barriers designed to prevent the use of motor vehicles to breach all buildings where firearms are stored.

6. Ensure the exterior of the premises is equipped with lighting that provides enough illumination to allow an individual to safely enter the premises, exit the premises and traverse to the individual’s vehicle. END_STATUTE

START_STATUTE13-3156. Video surveillance

A. A dealer shall ensure that its business premises are monitored by a digital video surveillance system that meets all of the following requirements:

1. The system shall clearly record color images and, for systems located inside the premises, audio of the area under surveillance.

2. Each camera shall be permanently mounted in a fixed location and Cameras shall be placed in locations that allow the camera to clearly record activity occurring in all areas of the business premises SPECIFIED in subsection B of this section and clearly identify each person present.

B. The areas recorded shall include all of the following:

1. Interior views of all entries and exits to the premises.

2. All areas where firearms or ammunition are displayed, stored, handled or carried.

3. All points of sale or transfer, sufficient to identify the parties involved in the transaction.

4. All parking lots adjacent to the premises.

C. The system shall continuously record twenty-four hours per day at a frame rate not less than fifteen frames per second. The media or device on which recordings are stored shall be secured in a manner to protect the recording from tampering, unauthorized access or use or theft. The system shall be equipped with a failure notification system that provides notification to the dealer of any interruption or failure of the system or storage device. Recorded images shall clearly and accurately display the date and time. The system shall produce retrievable and identifiable images and video recordings on media approved by the department that can be enlarged through projection or other means and can be made a permanent record for use in a criminal investigation. The system shall be capable of delineating on playback the activity and physical features of individuals or areas within the premises.

D. Recordings shall be maintained for a minimum of three years and shall be made available for inspection by federal, state or local law enforcement on request.

E. The dealer shall inspect the system not less than once each week to ensure it is functioning properly and images are being recorded and retained as required. If the system becomes inoperable, the dealer shall repair or replace the system not later than seven calendar days after the system becomes inoperable.

F. The video surveillance system is subject to inspection by the department at any time. each year, A dealer shall provide certification to the department, in a form prescribed by the department, that its video surveillance system is in proper working order.

G. The dealer shall post a sign in a conspicuous place at each entrance to the premises that states in block letters not less than one inch in height that contains the following language:

"THESE PREMISES ARE UNDER VIDEO AND AUDIO SURVEILLANCE. YOUR IMAGE AND CONVERSATIONS MAY BE RECORDED." END_STATUTE

START_STATUTE13-3157. Alarm monitoring system

A. A dealer shall ensure that its business premises are monitored by an alarm monitoring system or service that contains all of the following:

1. Monitoring by a remote central station that will notify the dealer and the local law enforcement agency of an unauthorized intrusion into the premises of the dealer where firearms are stored.

2. Coverage of critical areas of the premises, including all entrances, exits, exterior windows, roof hatches, skylights and areas where firearms are displayed, stored, handled, carried, sold or transferred.

3. Monitoring of the detection of entry, motion, sound, glass breakage and any failure in the alarm system.

4. The ability to remain operational during a power outage if all access doors are solely controlled by an electronic access panel so that locks are not released during a power outage.

B. The dealer shall test the system at least once each week to ensure it is functioning properly. If the system becomes inoperable, the dealer shall repair or replace the system not later than seven calendar days after the system becomes inoperable. The alarm system is subject to inspection by the department at any time.

c. each year, A dealer shall provide certification to the department, in a form prescribed by the department, that the dealer's alarm monitoring system is in proper working order. END_STATUTE

START_STATUTE13-3158. Secure storage device

A. Except as provided in subsection B, a dealer or a dealer's employee may not sell or transfer a firearm in this state unless the sale or transfer includes one of the following:

1. A commercially available trigger lock or other device designed to disable the firearm and prevent the discharge of the firearm.

2. A commercially available gun case or storage container that can be secured to prevent unauthorized access to the firearm.

B. Subsection A of this section does not apply to:

1. The sale or transfer of an antique firearm, as defined in 18 United states code section 921.

2. The sale or transfer of a curio or relic, as defined in 27 Code of federal regulations section 478.11.

3. The sale or transfer of a firearm to a law enforcement agency purchasing firearms for use by officers in the actual performance of their law enforcement duties. END_STATUTE

START_STATUTE13-3159. Warning signs; display

A. At the entrance to a dealer's business premises where firearms sales or transfers are conducted in this state and in each area where the sales or transfers occur, the dealer shall conspicuously display the warning signs required by this section. The signs shall be DISPLAYED in a manner that the signs can be easily viewed by persons to whom firearms are sold or transferred and may not be removed, obscured or rendered illegible.

B. Each informational sign shall be at least eight and one-half inches high by eleven inches wide and feature black text against a white background and letters that are at least one-half inch high. The signs may not contain other statements or markings other than the following text, in English and Spanish:

1. WARNING: Access to a firearm in the home significantly increases the risk of suicide, death during domestic violence disputes and the unintentional death of children, household members or others. If you or a loved one is experiencing distress or depression, call the 988 Suicide and Crisis hotline or text "HOME" to 741741.

2. WARNING: Firearms should be stored unloaded and locked in a location separate from ammunition and inaccessible to children and other unauthorized persons. Under Arizona law (A.R.S. section 13-3111(F)), gun owners who fail to securely store firearms may be liable for damages if a minor gains access and unlawfully uses a firearm.

C. The Department of Health Services, in consultation with the department of public safety, shall develop detailed printed information to be made available to dealers at no cost to the dealers, in English and Spanish, regarding the risks of access to firearms, the importance of secure firearm storage, the importance of the reporting of lost or stolen firearms, a summary of the major provisions of Chapter 31 of this title, relating to firearms, including the duties of the sellers and purchasers and possessors of firearms, and suicide prevention resources. Dealers shall distribute this printed information to each person to whom a firearm is sold or transferred.END_STATUTE

START_STATUTE13-3160. Sales; transfers; prohibitions; requirements; violation; classification

A. A dealer or a dealer’s employee may not sell or transfer a firearm to a purchaser or transferee until both:

1. The dealer or employee has obtained approval for the sale or transfer from NICS after NICS has completed all background checks required by state or federal law and the purchaser or transferee is determined to not be prohibited from purchasing or possessing a firearm under state or federal law.

2. At least Seven days have elapsed from the date the dealer or employee requested the background check.

B. Subsection A of this section does not apply to:

1. The sale or transfer of an antique firearm, as defined in 18 United states code section 921.

2. The sale or transfer of a curio or relic, as defined in 27 Code of federal regulations section 478.11.

3. The sale or transfer of a firearm to a law enforcement agency purchasing firearms for use by officers in the actual performance of their law enforcement duties.

C. A dealer or dealer's employee may not sell or transfer a firearm if either:

1. The sale would occur outside of the dealer's posted business hours, except that a dealer may sell or transfer a firearm at a gun show outside of the dealer's posted business hours.

2. The dealer or employee knows or reasonably should know that the person seeking to purchase or receive the firearm is any of the following:

(a) Under the influence of intoxicating liquor or of a controlled substance.

(b) A threat to the safety of the person or another person.

(c) Seeking to purchase or receive a firearm for, on behalf of, or at the request or demand of any other person who is prohibited under state or federal law from purchasing or possessing a firearm.

(d) Prohibited by state or federal law from purchasing or possessing a firearm.

D. A person may not purchase or receive, and a dealer or a dealer's employee may not knowingly sell or transfer to any person, more than one firearm within any thirty-day period. This subsection does not apply to:

1. A law enforcement officer or agency purchasing firearms for use by officers in the actual performance of their law enforcement duties.

2. A collector of firearms as curios or relics as defined in 18 United States Code section 921 who has in his possession a valid Collector of Curios and Relics License issued by the ATF.

3. Sales or transfers of firearms among dealers, registered wholesale dealers and registered manufacturers.

4. Any transaction where the person has purchased or received a firearm from a dealer and has returned that firearm to the dealer in exchange for another firearm within thirty days of the original transaction, provided the dealer reports the exchange transaction to the department.

E. The department shall develop a process, using the records sent to the department pursuant to section 13-3163, to identify any individuals who have purchased or received more than one firearm from one or more dealers in this state in violation of this section. The department shall implement the process at least quarterly.

F. A dealer or a dealer's employee who facilitates the transfer or delivery of a firearm purchased on the internet shall require the person to whom the firearm is being transferred or delivered to present a valid government-issued photographic identification to the dealer or employee and to present sufficient evidence that confirms the firearm purchased and the identity of the person who purchased the firearm. Before the transfer or delivery of any firearm, the dealer or employee shall verify that the identity of the person to whom the firearm is being transferred or delivered matches the identity of the person who purchased the firearm. The dealer or employee shall require the person to whom the firearm is transferred or delivered to attest in writing, in a form prescribed by the department, that the person is the bona fide purchaser of the firearm. The dealer shall permanently retain the attestation and make the attestation available to the department for inspection.

G. Whenever a dealer or a dealer's employee denies the sale or transfer of a firearm based on suspected straw purchasing or trafficking or for any other reason in the discretion of the dealer or employee, the dealer or employee shall create, permanently retain and make available to the department for inspection an electronic record containing the name of the individual who attempted to purchase or receive the firearm and the reason for the denial. The dealer or employee shall notify the department and local law enforcement of the denial and the reason for the denial within twenty-four hours. The notification shall be in the form prescribed by the department. The department shall conduct an investigation into any sale or transfer denied on the basis of suspected straw purchasing or trafficking.

H. If a dealer compensates any employee who processes the sale or transfer of firearms on a commission basis for the sale or transfer of one or more firearms, the dealer shall create, permanently retain and make available to the department for inspection a record of each sale or transfer made by the employee for which a commission was paid, including the make, model, caliber or gauge, manufacturer’s name, and serial number of each firearm sold or transferred and the Federal transaction record for the firearm.

I. A person who violates this section is guilty of a Class 1 misdemeanor for a first offense and a class 6 felony for a second or subsequent offense.END_STATUTE

START_STATUTE13-3161. Straw purchases; prohibition; violation; classification

A. A person may not purchase or receive for or conspire to purchase or receive for, and a dealer or dealer’s employee may not knowingly sell or transfer to any person who:

1. Is prohibited from possessing or purchasing a firearm under state or federal law.

2. Intends to use, carry, possess or sell or otherwise dispose of the firearm in furtherance of a felony, a federal crime of terrorism or a drug trafficking crime. A person is presumed to intend to use, carry, possess or sell or otherwise dispose of the firearm in furtherance of a felony, a federal crime of terrorism or a drug trafficking crime if the firearm is used in the offense within six months of the purchase of the firearm, unless clear and convincing evidence demonstrates otherwise.

3. Intends to sell or otherwise dispose of the firearm to a person described in paragraph 1 or 2 of this subsection. A person is presumed to intend to sell or otherwise dispose of the firearm to a person described in paragraph 1 or 2 of this subsection if the firearm is found to be in the possession of a person described in paragraph 1 or 2 of this subsection within six months of the purchase of the firearm, unless clear and convincing evidence demonstrates otherwise.

B. a person who violates this section is guilty of Class 2 felony except that if the person reasonably believes that the firearm involved will be used to commit a felony, a federal crime of terrorism or a drug trafficking crime, the person is guilty of Class 1 felony.END_STATUTE

START_STATUTE13-3162. Dealer recordkeeping

A. A dealer shall create and permanently maintain an electronic record of purchases, sales, transfers, inventory and other records at the dealer's place of business in a form prescribed by the department. The records shall include at least the following:

1. the make, model, caliber or gauge, manufacturer's name and serial number of all firearms that are acquired or disposed of not later than one business day after their acquisition or disposition. Whenever a dealer purchases, acquires or accepts in trade a secondhand firearm, the dealer shall also record the date and the name of the person who sold or traded the firearm and the number of the identification documentation presented by the person who sold or traded the firearm. The records shall be backed up on an external server or over the internet at the close of each business day.

2. all firearms acquired but not yet disposed of, which shall be accounted for through an inventory check prepared once each month.

B. firearm disposition information, including the make, model, caliber or gauge, manufacturer's name and serial number of all firearms sold or transferred, dates of sale or transfer and identity of purchasers or transferees, shall be maintained and made available at any time to the department, local law enforcement agencies and to the manufacturer of the firearm or its designee. A dealer shall provide to the department ongoing access to the electronic records of this section in the form required by the department.

C. A dealer shall permanently retain all ATF Federal transaction records on the dealer's business premises in either:

1. a secure container designed to prevent loss by fire, theft or flood.

2. in the electronic form approved by the ATF.

D. A parent company that owns, in whole or in part, more than one branch location that operates as a dealer in this state shall:

1. implement a centralized electronic database for all branch locations located in this state to:

(a) Record all of the information required to be recorded pursuant to this section and section 13-3160, subsection G.

(b) Record all suspicious purchases or attempted purchases of firearms, ammunition, firearm precursor parts, firearm components or firearm accessories, including purchases or attempted purchases of any of these products in unusual quantities or with unusual frequency.

2. Ensure the centralized electronic database is accessible, searchable and trackable by all branch locations in this State.

3. Require that all branch locations in this State that operate as a firearms dealer maintain and update the electronic database and receive training on how to establish and implement the database.

4. Require that all branch locations in this State search the name of all prospective firearm purchasers in the centralized database to identify:

(a) any prospective purchaser who would be in violation of section 13-3160 if the purchase were completed.

(b) any suspicious purchasing patterns across multiple branch locations. END_STATUTE

START_STATUTE13-3163. Dealer reporting

A. Each time a dealer sells or transfers a firearm, the dealer shall fill out a transfer notification indicating that the firearm was sold or transferred to the purchaser or transferee, in a form prescribed by the department, which shall include:

1. the make, model, caliber or gauge, manufacturer's name and serial number of all firearms sold or transferred, together with the date of the transaction.

2. the dealer's signature in ink.

3. The purchaser's or transferee's signature in ink indicating the purchase or receipt of the firearm from the dealer.

B. If a dealer purchases, acquires or accepts in trade a secondhand firearm, the dealer shall fill out a transfer notification in a form prescribed by the department and that shall include:

1. the make, model, caliber or gauge, manufacturer's name and serial number of all firearms purchased, acquired or accepted in trade, together with the date of transaction.

2. the dealer's signature in ink.

3. The signature in ink of the person or individual who sold, transferred or traded the firearm.

C. The dealer shall permanently retain a copy of the transfer notifications required by this section, provide a copy of the notification to the purchaser or transferee and return one copy of the notification to the department not more than five days after the date the firearm is sold or transferred. The dealer shall return the copy to the department in person or by first-class mail or certified mail sent in the five day period to the proper address of the department, provided that the notification may be sent to the department electronically in the form prescribed by the department.

D. Not more than five days after receiving a transfer notification, the department shall electronically enter the information into a firearm entry database created and maintained by the department. The department shall forward this information to the local law enforcement agency having jurisdiction where the purchaser or individual resides. The purchaser or individual may obtain a copy of the information placed in the firearm entry database to verify the accuracy of the information. The department may charge a reasonable fee for the cost of providing the copy.

E. If a dealer discontinues its business and is succeeded by a new dealer in this state, the records required to be kept pursuant to this section shall appropriately reflect that fact and shall be delivered to the successor dealer. If discontinuance of the business is complete, the records shall be delivered within thirty days after the discontinuance to the department, which shall permanently retain the records. END_STATUTE

START_STATUTE13-3164. Tracing; ballistics

A. Each law enforcement agency in this state shall enroll in the ATF eTrace system, or its successor platform.

B. Each law enforcement agency in this state shall participate in the Collective Data Sharing feature within the eTrace system.

C. A law enforcement agency shall submit a trace request via the eTrace system for any recovered firearm within forty-eight hours of recovery and shall include in the request:

1. The full address of the location from which the firearm was recovered and a brief description of the circumstances under which the firearm came into the possession of the law enforcement agency, including the crime which was or may have been committed with the firearm.

2. Appropriate codes from the National Crime Information Center Code Manual.

3. The full name, date of birth, sex, last known address and any known gang affiliation of the person who last possessed the firearm prior to recovery.

4. The make, model, caliber or gauge, manufacturer's name and serial number of the firearm.

5. Any other notable or identifying information about the firearm, including any accessories attached to the firearm.

6. Any information sent to the law enforcement agency pursuant to section 13-3163 with respect to the recovered firearm.

D. Each law enforcement agency in this state shall permanently retain electronic records of all eTrace reports received from the ATF.

E. The department shall compile all of this state's eTrace data through use of the Collective Data Sharing feature and:

1. on an ongoing basis, analyze the data for patterns and trends relating to recovered firearms.

2. create and update at least once every six months a public-facing interactive online dashboard that allows users to view the patterns and trends described in paragraph 1 of this subsection.

3. create and update at least each month a restricted-access gun trace analytics platform for law enforcement users to view statewide trace data, including known trafficking indicators that identify firearm traffickers, individuals who commit crimes with firearms, individuals who are prohibited from possessing firearms and the source of their crime guns.

F. Whenever a law enforcement agency recovers a firearm, the agency shall have the recovered firearm test-fired and entered into the National Integrated Ballistic Information Network system, or a successor platform offering similar functionality, within forty-eight hours of recovery.

G. Whenever a law enforcement agency obtains a fired cartridge casing believed to be related to the commission of a crime or the unlawful discharge of a firearm, the agency shall have that fired cartridge casing entered into the National Integrated Ballistic Information Network system, or a successor platform offering similar functionality, within forty-eight hours of recovery.

H. The department shall adopt rules necessary to implement this section, including establishing the process for law enforcement agencies to submit firearms and fired cartridge casings to the eTrace system and the National Integrated Ballistic Information Network system.

I. The department shall create and administer a training program for all law enforcement agencies in this state that optimizes usage of the eTrace system, the National Integrated Ballistic Information Network system, the NIBIN Enforcement Support System, the state-based analytics platform and includes information on how to apply data from those systems to the solving and prevention of firearm crimes. This training shall be offered in-person at least once per year and shall be made available online.

J. Whenever a state or local law enforcement agency recovers any firearm, the agency shall promptly enter the make, model, caliber and serial number of the recovered firearm into the national crime information center system to determine whether the firearm was reported stolen.

K. A dealer or a manufacturer located within this state shall promptly review and respond to any request from a law enforcement agency or officer, including trace requests and requests for documents and records, within twenty-four hours after learning of the request. Whenever a dealer or a manufacturer located within this state receives a trace request from a law enforcement agency or officer, the dealer or manufacturer shall notify the department and the local law enforcement agency of the request within twenty-four hours after responding to the request prescribed by this section, except that if a manufacturer is a participant in ATF Connect, the manufacturer shall request a variance from the ATF to receive a notification of each trace of the manufacturer's firearms. The notification shall be made on a form prescribed by the department, a copy shall be PERMANENTLY retained by the dealer and the notification shall include, at a minimum:

1. the name of the person or dealer, as applicable, to whom the firearm subject to the trace request was sold or transferred.

2. the make, model, caliber or gauge, manufacturer's name and serial number of the firearm subject to the trace request.

3. the date of sale or transfer.

4. a list of all sales or transfers made by or to the person or dealer to whom the dealer or manufacturer sold or transferred the firearm subject to the trace request.

L. A dealer or manufacturer located in this state shall promptly notify the department, local law enforcement and the ATF of any loss, theft or unlawful transfer of any firearm or ammunition within twenty-four hours after the dealer knows or should know of the loss, theft or unlawful transfer.

M. On or before march 31 of each year, The department shall provide each dealer and manufacturer located in this state a document containing the following information for January 1 to December 31 of the preceding calendar year:

1. the total number of crime gun trace requests involving the dealer or manufacturer, including the date of each request.

2. the time between the date of sale or transfer and the date the firearm was used in a crime for each crime gun trace request involving the dealer or manufacturer.

3. the average time between the date of sale or transfer and the date the firearm was used in a crime for all crime gun trace requests involving the dealer or manufacturer.

4. the total number and percentage of crime gun trace requests involving the dealer or manufacturer with a period of less than one year between the date of sale or transfer and the date the firearm was used in a crime.

5. the total number and percentage of crime gun trace requests involving the dealer or manufacturer with a period of less than three years between the date of sale or transfer and the date the firearm was used in a crime.

N. On or before march 31 of each year, The department shall determine for each dealer with a state permit, with respect to firearms sold or transferred by that dealer for January 1 to December 31 of the preceding calendar year:

1. the percentage of crime gun trace requests made to that dealer compared to the number of firearms sold by that dealer.

2. the percentage of crime gun trace requests made to that dealer with a period of less than three years between the date of sale or transfer and the date the firearm was used in a crime.

O. A dealer that is in the top ten percent of dealers in this state in terms both of the lowest percentage of crime gun trace requests made to that dealer over the preceding year compared to the number of firearms sold by that dealer over the preceding year and the lowest percentage of crime gun trace requests made to that dealer over the previous year involving a period of less than three years between the date of sale or transfer and the date the firearm was used in a crime or less shall receive a seventy-five percent discount on the dealer's next application renewal fee for the dealer's current location or locations.END_STATUTE

START_STATUTE13-3165. Annual report; dealer; manufacturer

A. On or before march 31 of each year, A dealer shall provide an annual report to the department, in a form prescribed by the department, containing the following information for January 1 to December 31 of the preceding calendar year:

1. the number of firearms, classified by make and model, sold or transferred.

2. the number of approved ATF TRANSFER forms completed.

3. the names of each employee of the dealer who processed the sale or transfer of firearms and who were paid a commission, and the amount of commission each employee received.

4. any other information the department requires.

B. On or before march 31 of each year, A manufacturer located in this state shall provide an annual report to the department, in a form prescribed by the department, containing the following information for January 1 to December 31 of the preceding calendar year:

1. The number of firearms, classified by make and model, sold or transferred.

2. any other information the department requires.END_STATUTE

START_STATUTE13-3166. Inspections

A. The department shall conduct an annual on-site inspection of each newly-permitted dealer in this state and at least twenty percent of total dealers in this state, including inspecting a dealer's place of business, to ensure that the dealer is in compliance with the requirements of this chapter to hold a state permit.

B. using the report prepared pursuant to section 13-3168, the department shall inspect the following dealers each year:

1. dealers who are in the top ten percent of dealers in this state with the largest percentage of traces in the preceding year in which the time between the date of the sale or transfer and the date the firearm was used in a crime was less than one year, with a minimum of five traces.

2. dealers who are in the top ten percent of dealers in this state with the largest percentage of traces in the preceding year in which the time between the date of the sale or transfer and the date the firearm was used in a crime was less than three years, with a minimum of five traces.

C. In addition to the inspections required in subsections A and B of this section, the department may conduct periodic unannounced inspections of a dealer and the dealer’s place of business during the dealer's regular business hours to ensure that the dealer is complying with the requirements of this chapter to hold a state permit. Before conducting an on-site inspection of a dealer, the department shall review crime gun trace requests involving that dealer and, on conducting an on-site inspection, provide the dealer with a copy of the most recent document described in section 13-3164 with respect to that dealer to discuss the document during the inspection process.

D. Whenever a dealer or manufacturer located in this state is inspected by the ATF, the dealer or manufacturer shall notify the department of the inspection not later than twenty-four hours after the inspection and shall send to the department a copy of any reports of violations or letters received from the ATF not later than twenty-four hours after receiving the reports or letters. The department shall permanently retain the reports and letters. END_STATUTE

START_STATUTE13-3167. Enforcement

A. if the department finds a dealer to be in violation of any provision of this chapter, any state or local law concerning the sale or transfer of firearms or any federal law or rule concerning the sale or transfer of firearms for which the penalty includes potential revocation of the person’s federal firearms license, the department may impose a civil PENALTY of not more than $10,000 for each violation and may:

1. issue a warning to the dealer that includes a description of the offense and the possible penalties for subsequent offenses.

2. suspend the dealer's state permit for a period of time determined by the department if the department determines, based on the violation and any past violations, that the dealer is likely to pose a danger to the public health, safety or welfare.

3. revoke the dealer's state permit if the department determines, based on the violation and any past violations, that the dealer is likely to pose a danger to the public health, safety or welfare.

B. Notwithstanding subsection A of this section:

1. the department shall suspend a state permit if the dealer is charged with an offense that would render the dealer ineligible for the state permit pursuant to section 13-3152.

2. the department shall revoke a state permit if the dealer:

(a) No longer qualifies for the issuance of a state permit pursuant to this chapter.

(b) Refuses to allow the department to conduct an on-site inspection pursuant to this chapter.

(d) Fails to conduct a background check required pursuant to federal or state law, or transfers a firearm before receiving the results of a background check as required by this chapter.

(e) Sells or transfers a firearm in violation of this chapter.

(f) Sells or transfers a firearm to a person who is prohibited from possessing or purchasing a firearm under federal or state law.

(g) Fails to respond to a trace request as required by this chapter.

(h) Provides a fraudulent or material misstatement in the completion of any record or notification required pursuant to federal law or this chapter.

C. A person whose state permit is revoked solely because the person no longer holds a valid federal firearms license may apply for a new state permit any time after the person obtains a valid federal firearms license.

D. If the department revokes a dealer's state permit, the department must notify THE ATF of the revocation and the reason for the revocation.

E. The denial, suspension or revocation of a state permit pursuant to this section is subject to THE PROVISIONS OF Title 41, Chapter 6.

F. A person who is a former dealer, including a person whose state permit was revoked or whose state permit renewal was denied, who wishes to dispose of inventory shall dispose of the inventory in a manner that does not constitute being engaged in the business of dealing in firearms. END_STATUTE

START_STATUTE13-3168. Annual report; department of public safety

A. On of before May 31 of each year, the department shall publish a report on the department's website containing, at a minimum, the following information:

1. the number of state permit applications received, granted and denied.

2. the number of state permits revoked and the basis for each revocation.

3. the amount of fees collected and deposited into the firearm dealer permit cash fund and the amount of FUND MONIES SPENT.

4. the total amount spent on permitting and inspection costs.

5. information about the race, gender and geographic location of persons who applied for a permit, including whether the application was granted or denied, and persons whose permits were revoked.

6. The department's staffing levels for conducting dealer inspections pursuant to this chapter, including both authorized positions and filled positions.

7. The number of dealer inspections conducted and, for each inspection, The name of the dealer, THE dealer's license number AND The business address of the dealer.

8. The number of hours spent to complete the inspection, A list of violations identified through the inspection, whether those violations were subsequently resolved and, if so, the date they were resolved, and any fines or penalties assessed.

9. The date of any reinspection, any violations identified during a reinspection and The dates of any prior inspections.

10. The number of background checks submitted by the dealer during the one-year period prior to the inspection and the outcome of the background checks

11. The total number of firearms used in crimes that were traced back to the dealer during the one-year period BEFORE the inspection and the percentage of total sales by the dealer in the same period of time that the traced firearms represent.

12. The number of firearms that the dealer reported or discovered lost or stolen during the one-year period prior to the inspection.

B. The report shall include a summary of the analysis completed by the department pursuant to section 13-3164, including:

1. The total number of firearms recovered in thIS state.

2. The number of firearms recovered, disaggregated by county and by city.

3. The number of firearms recovered, disaggregated by the firearms dealer where the most recent sale or transfer of the firearm occurred, INCLUDING the full name and address of the firearms dealer.

4. The number of firearms recovered, disaggregated by THE manufacturer.

5. The number of firearms recovered in this state, disaggregated by the state in which the firearm was last purchased or received from a dealer.

6. The number of firearms recovered in this state, disaggregated by whether the firearm was originally purchased or received by the perpetrator of the crime.

7. The total number of unserialized firearms recovered in thIS state.

8.The number of unserialized firearms recovered, disaggregated by county and by city.

9. The average time elapsed between the date of sale or transfer and the date the firearm was used in a crime with respect to all firearms recovered in thIS state.

10. The percentage of crime gun trace requests with a period of less than one year between the date of sale or transfer and the date the firearm was used in a crime.

11. The percentage of crime gun trace requests with a period of less than three years between the date of sale or transfer and the date the firearm was used in a crime.

12. For all dealers across thIS state, the average percentage of firearms traced to the dealer compared to the total number of firearm dispositions by the dealer, and the number of dealers that exceed the average.END_STATUTE

START_STATUTE13-3169. Manufacturer; shipping requirements

A. A manufacturer that ships or transports a firearm for sale or transfer into or within THIS STATE, BEFORE shipping or transporting any firearm to a dealer, SHALL receive and retain for at least five years the following information from that dealer for the preceding calendar year:

1. A copy of the annual trace summary prepared by the department and delivered to the dealer pursuant to this chapter.

2. A copy of the annual report required to be delivered by the dealer to the department pursuant to this chapter.

3. A copy of the results of any compliance inspections conducted or reports of violations or letters received from THE ATF.

4. Certification from the dealer that the dealer and each of its employees has complied with the training requirements of this chapter.

B. If a manufacturer identifies on its website a dealer located within this state as a preferred dealer of the manufacturer, the manufacturer shall comply with this section with respect to the dealer, regardless of whether the manufacturer ships or transports firearms directly to that dealer or through a third party. END_STATUTE

START_STATUTE13-3170. Controls; nuisance; liability

A. A gun industry member, by unlawful or unreasonable conduct under all the circumstances, MAY not recklessly create, maintain or contribute to a condition in this state that endangers the safety or health of the public through the sale, manufacturing, importing or marketing of a qualified product.

B. A gun industry member who manufactures, markets, imports or offers for wholesale or retail sale any qualified product in this state shall establish and use reasonable controls and procedures to prevent its qualified products from being possessed, used, marketed or sold unlawfully in this state.

C. A gun industry member who commits a violation of subsection A or B of this section that results in harm to the public creates a public nuisance. The existence of the public nuisance does not depend on whether the gun industry member acted for the purpose of causing harm to the public.

D. Any person, firm, corporation or association that has been damaged as a result of a gun industry member's acts or omissions in violation of this chapter is entitled to bring an action for recovery of damages or to enforce this section in the Superior Court or in federal district court.

E. If it appears to the Attorney General that a gun industry member has engaged in or engagES in conduct that violates this section, the Attorney General may commence an action to seek and obtain:

1. an injunction prohibiting the gun industry member from continuing that conduct or engaging in any acts in furtherance of the conduct.

2. an order providing for abatement of the nuisance at the expense of the gun industry member.

3. restitution, damages, reasonable attorney fees, filing fees and costs and any other appropriate relief.

F. The Attorney General is not required to demonstrate any special injury to proceed as authorized by this section.

G. When it appears to the Attorney General that a gun industry member has engaged in, engagES in or is about to engage in conduct that violates this chapter, or when the Attorney General believes it is in the public interest that an investigation should be made to determine whether a gun industry member has in fact engaged in, engagES in or is about to engage in conduct that violates this chapter, the Attorney General may:

1. require the gun industry member or any other person to file a statement or report in writing under oath or otherwise, as to all the facts and circumstances concerning conduct, and other data and information as the Attorney General deems necessary.

2. examine under oath any gun industry member or any other person concerning the act or omission.

3. examine any record, object, book, document, account or paper as the Attorney General deems necessary

4. pursuant to a court order, impound and retain in the Attorney General’s possession any record, book, document, account, object or paper that is produced in accordance with this section until the completion of all proceedings in connection with impounded items.

H. To the extent causation is applicable, the conduct of a gun industry member IS deemed to constitute a proximate cause of the public nuisance if the harm to the public was a reasonably foreseeable effect of the conduct, notwithstanding any intervening actions, including criminal actions by A third partY.

I. The Attorney General may establish a unit to exercise all functions, powers and duties of the Attorney General established by this chapter.

J. Nothing in this section denies, abrogates or impairs any statutory or common law right, remedy or prohibition otherwise available to any party, including the Attorney General.END_STATUTE

START_STATUTE13-3171. Unlicensed sale; backgroungd check

A. an unlicensed person MAY not sell or transfer a firearm to another unlicensed person unless:

1. the proposed transferor and the proposed transferee physically appear together with the firearm before a dealer and request that the dealer facilitate the sale or transfer.

2. the dealer agrees to facilitate the sale or transfer.

B. A person MAY not knowingly make a false statement or exhibit a false identification intended to deceive a dealer with respect to any fact material to the sale or transfer of a firearm pursuant to this chapter.

C. A dealer who agrees to facilitate a firearm sale or transfer pursuant to this section shall comply with all requirements of state and federal law and, unless otherwise expressly provided in this section, shall conduct the sale or transfer in the same manner as the dealer would if selling or transferring the firearm from his or her own inventory.

D. A prospective transferor may remove the firearm from the business premises while the background check is being conducted if, before the prospective transferor sells or transfers the firearm to the prospective transferee, the prospective transferor and prospective transferee return to the dealer who takes possession of the firearm to complete the sale or transfer. A dealer shall return the firearm to the proposed transferor and decline to continue facilitating the sale or transfer if the dealer determines that the proposed transferee is prohibited by federal or state law from purchasing or possessing the firearm.

E. A dealer may charge a reasonable fee to facilitate the sale or transfer of a firearm between a proposed transferor and a proposed transferee pursuant to this section.

F. An unlicensed person who sells or transfers a firearm to another unlicensed person in violation of this chapter is guilty of a Class 1 misdemeanor for a first offense and a class 6 felony for a second or subsequent offense.

G. A dealer who facilitates a firearm sale or transfer pursuant to this section IS immune from any civil or criminal liability for any actions taken or omissions made when facilitating the transfer in reliance on the provisions of this section. This subsection does not apply to reckless or intentional misconduct by a dealer.

H. This section DOES not apply to:

1. The sale or transfer of a firearm by or to a law enforcement agency.

2. The sale or transfer of a firearm by or to a law enforcement officer or member of the United states Armed Forces acting within the course of official duties.

3. The sale or transfer of a firearm between spouses, domestic partners, parents, children, siblings, grandparents, grandchildren, aunts, uncles, nieces and nephews.

4. A person who sells or transfers the firearm to another person in order to prevent imminent harm to any person, provided that this subdivision shall only apply while the risk of imminent harm exists.END_STATUTE

Sec. 2. Short title

This act may be cited as the "Illegal Firearms Trafficking and Crime Prevention Act of 2026".

Sec. 3. Requirements for enactment; two-thirds vote

Pursuant to article IX, section 22, Constitution of Arizona, this act is effective only on the affirmative vote of at least two-thirds of the members of each house of the legislature and is effective immediately on the signature of the governor or, if the governor vetoes this act, on the subsequent affirmative vote of at least three-fourths of the members of each house of the legislature. This act may be cited as the Illegal Firearms Trafficking and Crime Prevention Act of 2026.