ATF 41F: There’s a Horse in Here Somewhere, but I Haven’t Found It!

Having read the relevant parts of the 41F document released Monday, December 4th, here are some of my thoughts.

First, the actual rule:

479.11 Meaning of terms.

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Person. A partnership, company, association, trust, corporation, including each responsible person associated with such an entity; an estate; or an individual.

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Responsible person. 1.) In the case of an unlicensed entity, including any trust, partnership, association, company (including any Limited Liability Company (LLC)), or corporation, any individual who possesses, directly or indirectly, the power or authority to direct the management and policies of the trust or entity to receive, possess, ship, transport, deliver, transfer, or otherwise dispose of a firearm for, or on behalf of, the trust or legal entity. 2.) In the case of a trust, those persons with the power or authority to direct the management and policies of the trust include any person who has the capability to exercise such power and possesses, directly or indirectly, the power or authority under any trust instrument, or under State law, to receive, possess, ship, transport, deliver, transfer, or otherwise dispose of a firearm for, or on behalf of, the trust. Examples of who may be considered a responsible person include settlors/grantors, trustees, partners, members, officers, directors, board members, or owners. An example of who may be excluded from this definition of responsible person is the beneficiary of a trust, if the beneficiary does not have the capability to exercise the powers or authorities enumerated in this section. (emphasis and numbers supplied, except in the section heading, here and below)

Okay, now, let’s see if I’ve got this straight:

Under § 479.11, “in the case of an unlicensed entity, including any trust, partnership, association [etc],” I am a “responsible person” if I “possess, directly or indirectly, the power or authority to direct the management and policies of the trust or entity to receive, possess, ship, transport, deliver, transfer, or otherwise dispose of a firearm for, or on behalf of, the trust or legal entity.”

Correct so far?

But what about the next sentence? There I learn that “in the case of a trust, those persons with the power or authority to direct the management and policies of the trust [meaning “those persons” referred to in the first sentence, I assume] include any person who has the capability to exercise such power [which power? well, it must be “the power or authority to direct the management and policies of the trust or entity to receive, possess, ship, transport, deliver, transfer, or otherwise dispose of a firearm for, or on behalf of, the trust or legal entity,” as explained in the first sentence] and possesses, directly or indirectly, the power or authority under any trust instrument, or under State law, to receive, possess, ship, [etc. etc.] for, or on behalf of, the trust.”

Do you see the problem? It seems to me that the second sentence in the definition of a “responsible person” essentially states the “receive, possess, ship, transport” language twice, the first time by implication, that is, by referring back to the first sentence via the words “such power.” It states the “receive, possess, ship” language explicitly the second time, but adds the critical word “and” before the word “possesses.”

Am I missing something here? If not, then my question is: Does the second sentence stand apart and alone from the first sentence, or does the second sentence refine and narrow the first sentence? In other words, with regard to trusts, is “responsible person” defined one way or two different ways in § 479.11?

In the alternative, maybe the words “such power” in the second sentence refer back only to the words “power or authority to direct the management and policies of the trust” a few words back in the same sentence. That reading makes more sense, but even so, I’m left wondering whether the rule has one or two definitions of “responsible person” for trusts.

On a separate note, someone today was touting the importance of the word “and” before the word “possesses” in the second sentence. There are really two important “ands” in the definition: the one before “possesses” and the one between “management and policies.” Thus, for example, if the trust instrument explicitly granted a co-trustee the power or authority to direct the management but withheld the power or authority to direct the policies of the trust, arguably, that co-trustee wouldn’t be a responsible person, would s/he?

And finally, what does the word “capability” mean in the context of “such power” and how important is the word “direct”? (Very important, I would argue.)

Oh, and one more: did anyone notice the plurals “powers or authorities” in the beneficiary example at the end of the definition of “responsible person”? It’s the only use of those plurals in the entire document.

Of course, all this may be beside the point, given how often and how poorly paraphrased the definition of “responsible person” is used throughout the 248 page document. Take a look at pages 4, 32, 105, 114, 118-119, 124-125, 137, 145-146, and 209-210. On one page, the paraphrase/explanation seems to clarify who qualifies as a “responsible person.” On the next, clarity takes a holiday.

For example, consider pages 118-119 of the commentary (emphasis all mine):

First the commentary tells us that “the definition of ‘responsible person’ in this final rule applies to those who possess the power or authority to direct the management and policies of an entity insofar as they pertain to firearms.” (Note that the bolded words do not appear in the actual rule. The concern seems to be with management and policies.)

Then the goal posts shift to “[in trusts] those possessing trust property—trustees—are also the individuals who possess power and authority to direct the management and policies of the trust insofar as they pertain to trust property, including firearms.” (Note here, the additional underlined words, also not part of the actual rule. Also note that we’re now talking about “possessing trust property” and “management and policies.”

Then the goal posts move again—it appears to me, at least—when the commentary “clarifies” that the rule doesn’t apply to “individuals who would not, or could not, possess the firearms.” (Note the absence of the “management and policies” element. Possession of firearms seems key.)

Finally, those damn goal posts move to another end zone, when the commentary informs us that “beneficiaries and other individuals may be considered “responsible persons [if they have the] capacity to control the management or disposition of a relevant firearm on behalf of a trust or legal entity.” (Note that the word dispose appears in the actual rule; however, the combination management or disposition appears just once in the entire document—and you’re reading it. By the way, among the various meanings of “dispose” or “dispose of,” at least one is apt to the rule: “to transfer to the control of another.”)

My concern is that the seemingly constant insertion of new or different words into the “responsible person” equation makes it very difficult if not impossible to determine the proper course of action.

To be fair, as I read and re-read the rule and commentary, things seem clearer. That said, as I read and re-read the picture sometimes becomes muddier. For the moment, all I can think is, What a confusing mess.

Don’t go too far away campers. More to come.

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