Timely processing of applications

(a) Transfer of firearms Section 5812 of the Internal Revenue Code of 1986, as amended by section 2, is amended by adding at the end the following new subsection: (d) Processing of applications (1) In general Notwithstanding subsection (a), if an application described in such subsection with respect to the transfer and registration of a firearm has been filed with the Secretary and the Secretary fails to make a determination regarding whether to approve or deny such application prior to the date which is 3 business days after the date on which such application was originally filed by the transferor, the transfer and registration of such firearm to the transferee shall be deemed to have been approved by the Secretary for purposes of this section and such transfer may be made. The Secretary shall only deny an application described in subsection (a) on the grounds that the applicable requirements under such subsection have not been satisfied, and may not deny an application solely on the grounds that a determination regarding whether to approve or deny such application could not be completed by the Secretary during the period described in the preceding sentence. (2) Safe harbor (A) In general In the case of an application described in subsection (a) which, following the expiration of the 3-day period under paragraph (1), has been deemed to have been approved by the Secretary for purposes of this section and for which the transfer of the firearm has been made, if the Secretary subsequently determines that the applicable requirements under such subsection have not been satisfied and that such application should have been denied, the Secretary shall provide actual notice of such determination to the transferor and transferee of such firearm. (B) Criminal liability In the case of a determination described in subparagraph (A) that an application for transfer and registration of a firearm should have been denied— (i) the transferor may not be held liable for any violation of subsection (d) of section 922 of title 18, United States Code, and (ii) the transferee may not be held liable for any violation of subsection (g) or (n) of section 922 of title 18, United States Code, provided that the transferee returns the firearm to the Secretary within the 14-day period subsequent to the date on which the transferee received notice from the Secretary regarding such determination.. (b) Making of firearms Section 5822 of the Internal Revenue Code of 1986 is amended by adding at the end the following: Notwithstanding the preceding sentences, if a person files an application to make and register a firearm with the Secretary and the Secretary fails to make a determination regarding whether to approve or deny such application prior to the date which is 3 business days after the date on which such application was originally filed by such person, such application shall be deemed to have been approved by the Secretary for purposes of this section and such firearm may be made by such person. The Secretary shall only deny an application to make and register a firearm on the grounds that the applicable requirements under this section have not been satisfied, and may not deny an application solely on the grounds that a determination regarding whether to approve or deny such application could not be completed by the Secretary during the period described in the preceding sentence.. (c) Effective date The amendments made by this section shall apply to applications which are filed or pending on or after the date of enactment of this Act.