State Flood Mitigation Revolving Fund Act of 2019

This bill, the Clean Hands Firearm Procurement Act, mandates the Attorney General to publicly list federally licensed firearms dealers with a high number of short time-to-crime firearm traces. Specifically, a 'covered firearms dealer' is defined as one with at least 25 traced firearms with a time-to-crime of not more than 3 years in at least 2 of the preceding 3 calendar years. Federal agencies are prohibited from contracting with these listed dealers for the current and two preceding calendar years. This legislation takes effect 180 days after enactment, with the first list published 120 days after enactment. The money trail for this legislation involves federal procurement contracts for firearms and ammunition. The Department of Defense and Department of Homeland Security are major purchasers of firearms and related equipment. This bill restricts which licensed dealers can bid on and receive these contracts. While the bill does not appropriate new funds, it reallocates existing procurement spending away from dealers identified on the list. The waiver authority for national security reasons exists but requires Attorney General approval and Congressional notification. Historically, legislation impacting firearms sales or procurement has led to volatility in publicly traded firearms manufacturers. For example, following the Sandy Hook Elementary School shooting in December 2012, discussions around stricter gun control measures led to a significant sell-off in firearms stocks. $RGR dropped approximately 15% and $SWBI (then Smith & Wesson Holding Corp.) fell around 20% in the weeks following the event, as investors anticipated reduced sales or increased regulatory burdens. Conversely, periods of perceived threats to gun ownership, such as during presidential election cycles with candidates advocating for stricter gun control, have historically driven surges in sales and stock prices for these companies, as consumers stock up. This bill, however, targets specific dealers rather than broad consumer sales, focusing on the supply chain to federal agencies. Specific companies that stand to lose are publicly traded firearms manufacturers that also operate as federally licensed dealers and have a significant portion of their revenue from federal contracts, or whose products are sold through dealers that would be designated as 'covered firearms dealers.' While direct federal contracts are often with manufacturers, the bill's language targets 'licensed dealers.' Companies like Sturm, Ruger & Company ($RGR) and Smith & Wesson Brands ($SWBI) could see reduced federal procurement opportunities if their distribution channels or direct sales operations fall under the 'covered firearms dealer' definition. Vista Outdoor, through its ammunition and shooting accessories brands, could also be indirectly affected if federal agencies shift procurement away from dealers carrying their products. The impact is bearish for these companies as it shrinks their potential federal market share. Conversely, dealers not on the list stand to gain market share in federal contracts. The first list of covered firearms dealers will be published 120 days after enactment, and the contract prohibition takes effect 180 days after enactment. Key takeaways are: 1) Federal agencies will be prohibited from contracting with certain firearms dealers. 2) The Attorney General will publish an annual list of 'covered firearms dealers.' 3) The Department of Defense and Homeland Security have limited waiver authority for national security. 4) The bill takes effect 180 days after enactment.