A bill to protect firearms owners' constitutional rights, civil liberties, and rights to privacy.

(Reported to Senate from the Committee on the Judiciary with amendment, S. Rept. 98-583)

Title I: Amendments to Title 18, United States Code (18 U.S.C. 921-928) - Amends the Gun Control Act of 1968 to redefine: (1) "manufacturer" to mean any person engaged in the "business of manufacturing" (instead of "manufacture" of) firearms or ammunition; and (2) "dealer" to exclude dealers in ammunition.

Adds a new definition "engaged in the business" with respect to manufacturers, dealers, and importers. Defines as a manufacturer, dealer, or importer of firearms a person who manufacturers or deals in a regular course of trade or business with the principal objective of livelihood and profit. Defines "with the principal objective of livelihood and profit" to mean that the intent underlying the sale or disposition of firearms is predominantly one of obtaining livelihood and pecuniary gain. Excludes as dealers persons making occasional sales or repairs of firearms.

Eliminates certain activities involving ammunition from the coverage of the current prohibitions.

Permits the interstate sale of handguns with a barrel length of three inches or more where the sale complies with the law of the licensee's State and the State of the purchaser's residence.

Presumes the licensee to have actual knowledge of the published laws of the States.

Revises the current prohibition against certain classes of persons transporting a firearm or ammunition in interstate commerce to extend such prohibition to possession or receipt in commerce or affecting commerce of any firearm or ammunition. Includes as additional categories illegal aliens, dishonorably discharged members of the Armed Forces, and U.S. citizens who renounce their citizenship.

Excludes ammunition dealers from the current licensing requirements. Declares that a licensed dealer's personal collection of firearms shall not be subject to recordkeeping requirements, under specific circumstances.

Permits the Secretary of the Treasury to revoke a license only where the holder "willfully" violates a provision of the Act. Bars the Secretary from denying or revoking a license on the basis of violations which are alleged in criminal proceedings instituted against a licensee, where such individual is not convicted of such charges. Allows the government to voluntarily dismiss criminal charges prior to trial and still proceed with revocation.

Imposes as a condition for the inspection or examination of records, documents, firearms, or ammunition that the Secretary has reasonable cause to believe that a violation has occurred and that evidence may be found on the premises. Requires a warrant to be issued for such search. Provides exceptions to such warrant requirement.

Requires licensed collectors to maintain records of the receipt, sale, or other disposition of firearms.

Requires records maintained by a licensee who has discontinued business to be delivered to the Administrator of General Services and the Secretary of the Treasury and to be disposed of after 20 years.

Sets forth information-gathering procedures for tracing firearms and prohibits criminal charges based solely on information provided under those procedures.

Permits licensed importers, manufacturers, and dealers to conduct business at temporary locations other than the one specified on a license (for example, gun shows).

Establishes either a "knowing" or a "willful" (scienter) requirement with respect to general violations of the Act.

Imposes additional penalties for the use of a firearm during the commission of a Federal crime of violence and for carrying a firearm in furtherance of a Federal crime of violence. Increases the penalties for the criminal misuse of firearms by making such penalties mandatory and at higher fine levels or longer prison terms than current law requires.

Extends to first offenders the requirement, currently applicable only to second offenders, that the court not suspend any sentence or grant probation. Prohibits the granting of parole to first and subsequent offenders. Declares that no person shall be subject to the additional, mandatory penalties if use of the firearm or destructive device was a nonfelonious attempt to protect persons or property.

Amends the forfeiture provision to subject to seizure any firearm or ammunition "involved in or used" in a knowing violation of the Gun Control Act (instead of "involved in or used or intended to be used"). Directs the court to award attorney fees to the prevailing party (other than the United States) in a proceeding for the return of seized firearms or ammunition. Requires the court to award such fees in any other action upon a finding that the action was without foundation or was initiated in bad faith. Limits seizure to firearms individually identified as involved in the violation.

Revises the current procedure allowing persons who have been convicted of a crime to apply to the Secretary for relief from the firearms prohibitions. Permits any person prohibited from possessing, shipping, transporting, or receiving firearms or ammunition to apply for relief. Requires, instead of permits, the Secretary to grant release, unless the applicant will be likely to act in a manner dangerous to public safety. Permits any person who is denied relief to seek de novo judicial review in Federal court. Imposes on the applicant the burden of proof.

Makes the authority of the Secretary to permit importation of certain types of firearms and ammunition nondiscretionary. Extends the types of sporting firearms which may be imported.

Amends the rulemaking authority of the Secretary to provide that no regulation may require the transfer of records required under this Act to a facility owned, managed, or controlled by the United States or any State or the establishment of any system of registration of firearms, firearms owners, or firearms transactions. Requires a 90-day public comment period for proposed regulations (no period is currently specified).

Prohibits the Secretary from prescribing regulations which require purchasers of black powder to complete affidavits or forms attesting to their exemption from certain provisions of the Federal criminal code.

Declares any law or regulation promulgated by any State prohibiting the transfer of an unloaded and not readily accessible firearm or ammunition null and void.

Imposes an additional mandatory sentence on any person who uses or carries a firearm loaded with armor-piercing ammunition during a commission of a crime of violence.

Title II: Amendments to Title VII of the Omnibus Crime Control and Safe Streets Act of 1968 - Repeals title VII of the Omnibus Crime Control and Safe Streets Act (relating to the receipt, possession, or transportation of firearms by felons, veterans dishonorably discharged, mental incompetents, illegal aliens, and persons renouncing their United States citizenship).