The "Prevent Illegal Gun Resales Act" aims to curb illegal firearm trafficking by strengthening licensing requirements and imposing new obligations on federal firearms licensees. It significantly increases licensing fees for manufacturers, importers, and dealers, with initial dealer fees rising from $50 to $2,000 and renewal fees from $10 to $1,000. These changes are intended to ensure that only responsible businesses engage in firearm sales.

The bill mandates that dealer license applications include specifications of business practices designed to prevent the diversion of firearms from lawful commerce and transfers to straw purchasers. Dealers must also certify the availability of secure gun storage or safety devices. The Attorney General is directed to prescribe regulations for these practices, and non-compliance can result in civil penalties of up to $5,000 and license suspension.

Key provisions enhance licensee duties, including requiring immediate responses to crime gun trace requests and retaining trace records for 180 days, rather than destroying them. Licensees must review crime gun trace requests before transfers and report sales to unlicensed persons if a crime gun has been traced to them. Dealers are also required to update their anti-trafficking practices if they report five or more lost or stolen firearms or if five or more crime guns are traced to them within a 12-month period.

A new federal firearms trafficking offense is established, making it unlawful to transfer two or more firearms to someone known to be a felon or to another licensee with a history of trafficking indicators. Penalties for this offense include imprisonment for up to 15 years for individuals and substantial civil fines, profit disgorgement, and license revocation for licensees. The bill also directs the U.S. Sentencing Commission to review and amend sentencing guidelines for these new offenses.

Furthermore, the Attorney General is authorized to designate "high risk dealers" based on past violations or crime gun traces. These dealers will face enhanced regulation, including mandatory electronic record-keeping, electronic access for the National Tracing Center, and audio/video surveillance of transactions. They will also be subject to biennial inspections without a warrant, with a pathway to cease enhanced regulation upon demonstrated compliance.