[Federal Register Volume 63, Number 210 (Friday, October 30, 1998)]
[Rules and Regulations]
[Pages 58303-58312]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-29109]


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DEPARTMENT OF JUSTICE

28 CFR Part 25

[AG Order No. 2186-98]
RIN 1105-AA51


National Instant Criminal Background Check System Regulation

AGENCY: Federal Bureau of Investigation, Department of Justice.

ACTION: Final rule.

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SUMMARY: The United States Department of Justice (DOJ) is publishing a 
final rule implementing the National Instant Criminal Background Check 
System (NICS) pursuant to the Brady Handgun Violence Prevention Act 
(``Brady Act''), to provide notice of the establishment of the NICS, to 
establish policies and procedures for ensuring the privacy and security 
of this system, and to implement a NICS appeals policy for persons 
denied acquisition of a firearm based on information in the NICS that 
they believe to be erroneous or incomplete.

EFFECTIVE DATE: November 30, 1998.

FOR FURTHER INFORMATION CONTACT: Emmet A. Rathbun, Unit Chief, Federal 
Bureau of Investigation, Module C-3, 1000 Custer Hollow Road, 
Clarksburg, West Virginia 26306-0147, telephone number (304) 625-2000.

SUPPLEMENTARY INFORMATION: This rule finalizes two notices of proposed 
rulemaking: the National Instant Criminal Background Check System 
Regulation published in the Federal Register on June 4, 1998 (63 FR 
30430), and the National Instant Criminal Background Check System User 
Fee Regulation, published in the Federal Register on August 17, 1998 
(63 FR 43893). The FBI accepted comments on the proposed rules from 
interested parties until September 16, 1998, and approximately 2,000 
comments were received.
    In publishing this final rule, the Department also is giving 
notice, pursuant to section 103(d) of the Brady Act, Public Law 103-
159, 107 Stat. 1536, to Federal Firearm Licensees (FFLs) and the chief 
law enforcement officer of each state that the NICS is established as 
of October 31, 1998. With limited exceptions, FFLs are required by the 
Brady Act to begin contacting the system beginning on November 30, 
1998, thirty days after the establishment of the system, before they 
may transfer a firearm to a non-licensee. FFLs shall contact the NICS 
by contacting either the FBI NICS Operations Center or a state point of 
contact (POC) for the NICS, as specified by the Bureau of Alcohol, 
Tobacco, and Firearms (ATF), United States Department of the Treasury. 
The ATF will notify each FFL of the method by which FFLs must contact 
the NICS in their state.

Significant Comments or Changes

The NICS User Fee

    The largest number of comments pertained to the FBI's proposed user 
fee to be charged FFLs that contact the FBI NICS Operations Center 
directly for a NICS background check. All of those who commented on the 
proposed user fee opposed the fee. This issue was the subject of 
Congressional action since the time of the initial publication of the 
proposed NICS rule. The Omnibus Appropriations Act for fiscal year 1999 
provided additional monies to the FBI to fund the operation of the NICS 
and prohibited the FBI from charging a fee for NICS checks. 
Accordingly, the FBI will not be charging the user fee set forth in the 
proposed NICS user fee regulation. This does not preclude state or 
local agencies acting as POCs for the NICS from charging such fees as 
may be appropriate under state or local law.

The NICS Audit Log

    A significant number of comments were received opposing the 
retention by the NICS of a temporary log of background check 
transactions that allow a firearm transfer to proceed. Most of these 
comments expressed an opinion that such a log would constitute a 
national firearms registry, the establishment of which is prohibited by 
the Brady Act.
    The FBI will not establish a federal firearms registry. The FBI is 
expressly barred from doing so by section 103(i) of the Brady Act. In 
order to meet her responsibility to maintain the integrity of 
Department systems, however, the Attorney General must establish an 
adequate system of oversight and review. Consequently, the FBI has 
proposed to retain records of approved transactions in an audit log for 
a limited period of time solely for the purpose of satisfying the 
statutory requirement of ensuring the privacy and security of the NICS 
and the proper operation of the system. Although the Brady Act mandates 
the destruction of all personally identified information in the NICS 
associated with approved firearms transactions (other than the 
identifying number and the date the number was assigned), the statute 
does not specify a period of time within which records of approvals 
must be destroyed. The Department attempted to balance various 
interests involved and comply with both statutory requirements by 
retaining such records in the NICS Audit Log for a limited, but 
sufficient, period of time to conduct audits of the NICS.
    The NICS Audit Log will contain information relating to each NICS 
background check requested by FFLs and will allow the FBI to audit use 
of the system by FFLs and POCs. By auditing the system, the FBI can 
identify instances in which the NICS is used for unauthorized purposes, 
such as running checks of people other than actual gun transferees, and 
protect against the invasions of privacy that would result from such 
misuse. Audits can also determine whether potential handgun purchasers 
or FFLs have stolen the identity of innocent and unsuspecting 
individuals or otherwise submitted false identification information, in 
order to thwart the name check system. The Audit Log will also allow 
the FBI to perform quality control checks on the

[[Page 58304]]

system's operation by reviewing the accuracy of the responses given by 
the NICS record examiners to gun dealers.
    Under the proposed rule, personally identified information in the 
NICS Audit Log associated with allowed transfers would be destroyed 
after eighteen months. Because of the numerous comments objecting to 
this retention period as too long, the Department reexamined the time 
period needed to perform audits of the NICS. In light of the statutory 
requirement that records for allowed transfers be destroyed, and the 
countervailing statutory requirement to provide for system privacy and 
security, the Department determined that the general retention period 
for records of allowed transfers in the NICS Audit Log should be the 
minimum reasonable period for performing audits on the system, but in 
no event more than six months. Section 25.9(b) in the final rule was 
revised to reflect this and to provide that such information may be 
retained for a longer period if necessary to pursue identified cases of 
misuse of the system. The Department further determined that the FBI 
shall work toward reducing the retention period to the shortest 
practicable period of time less than six months that will allow basic 
security audits of the NICS. By February 28, 1999, the Department will 
issue a notice of a proposed revision of the regulation setting forth a 
further reduced period of retention that will be observed by the 
system.
    Various comments expressed concern that the Audit Log would allow 
POCs and law enforcement agencies access to records of approved 
transfers. This is not a well-founded concern because only the FBI will 
be able to access information in the transaction log. Section 
25.9(b)(1) of the final rule was revised to provide explicitly that 
such information is available only to the FBI, and only for the 
purposes of conducting audits of the use and performance of the NICS or 
pursing cases of misuse of the system.
    There were also suggestions in the comments that more specific 
language be added to the final rule setting forth requirements for the 
FBI to ensure that transaction logs of the separate National Crime 
Information Center (NCIC) record system also be destroyed to the extent 
they reflect allowed firearm transfers. The NCIC information system is 
separate from the NICS. Nonetheless, the FBI has taken steps to 
preclude transaction logging of personally identified information in 
either NCIC or the Interstate Identification Index (III) that would 
pertain to allowed firearm transactions. Thus, the only logging of this 
information by the FBI is in the NICS Audit Log. Similar steps will be 
taken to prevent such logging in the future FBI information systems 
NCIC 2000 and the Integrated Automated Fingerprint Identification 
System (IAFIS) as soon as practicable, but in no event more than one 
year after those systems come on-line in July 1999. For NICS disaster 
recovery, a tape of each weekly, full system backup will be maintained 
in an off-site location for up to six months. Full system backup tapes 
will also be stored locally to recycle the off-site storage. The FBI 
keeps no systematic paper copies of transactions.
    Finally, comments were received from state and local law 
enforcement agencies that will serve as POCs seeking clarification that 
none of the information about NICS checks in state record systems that 
they maintain pursuant to state law will be subject to the record 
destruction requirement. The proposed rule provided: (1) that POC 
records of inquiry and response messages relating to the initiation and 
result of a NICS check that allows a transfer must be destroyed; and 
(2) that POC records of NICS checks that the POC processes that are 
part of a state record system created and maintained in accordance with 
state law are not subject to the Brady Act record destruction 
requirement. Sections 25.9(d)(1) and (2) of the final rule were revised 
to make it clear that the referenced state records of allowed transfers 
would not be subject to the Brady Act record destruction requirement if 
they are part of a record system created and maintained pursuant to 
independent state law regarding firearms transfers. The reason for this 
clarification is to avoid interfering with state regulation of 
firearms. If a state is performing a gun eligibility check under state 
law, and state law requires or allows the retention of the records of 
those checks, the state's retention of records of the concurrent 
performance of a NICS check would not add any more information about 
gun ownership than the state already retains under its own law.

NICS Checks on Pawnshop Redemptions and Gunsmith Transactions

    A significant number of comments on this rule pertained to 
conducting background checks on firearms redeemed from pawnshops and 
firearms that were the subject of repair or modification by a gunsmith. 
Although the Brady Act requires the Attorney General to establish a 
national instant criminal background check system, it is the Secretary 
of Treasury through the ATF who defines what constitutes a firearms 
transfer, how long a background check is valid, which firearm permits 
constitute a substitute or alternative to a background check, and the 
recordkeeping requirements for FFLs. The ATF has issued proposed 
regulations dealing with these issues. (63 FR 8379). Questions and 
comments about these matters should be directed to the ATF.
    A number of comments from the pawnbrokers' industry addressed the 
circumstances that will develop when a person redeems a firearm from 
pawn but the firearm cannot be transferred back to the individual 
because of a disqualifying record found by the NICS check. The U.S. 
Department of Treasury Fiscal Year 1999 appropriations legislation 
includes a provision to allow pawnbrokers the option of requesting a 
NICS background check at the time a person offers the firearm for pawn. 
An additional check would still be necessary at the time of redemption. 
NICS will be made available to pawnbrokers for this purpose. No change 
in the rule is necessary to address this.

Use of State Points of Contact

    Some comments questioned the legality of using state POCs to 
process NICS checks in light of the Supreme Court's decision in Printz 
v. United States, 117 S. Ct. 2365 (1997), which held that Congress 
could not compel the states to perform Brady checks. In response to 
these comments we note that the states that will act as POCs for the 
NICS are not being required to do so by Federal law or regulation, but 
will do so voluntarily pursuant to their own state authority. The final 
rule's definition of a POC acknowledges that a state or local agency 
serving that function will be doing so by express or implied authority 
pursuant to state statute or executive order.
    Some commenters objected to the use of state or local law 
enforcement agencies as NICS POCs even if such agencies do so 
voluntarily. The FBI considers the use of POCs (serving as 
intermediaries between FFLs and the system) to be an appropriate means 
to implement the Brady Act. Fostering state and local participation in 
the NICS is entirely consistent with both our federal form of 
government and with practices under the Brady Act's interim provision. 
Moreover, state and local authorities are likely to have readier access 
to more detailed information than a single centralized processor, such 
as the FBI, thus resulting in fewer system misses of disqualified 
persons and enhancing system responsiveness

[[Page 58305]]

for non-disqualified persons. The final rule therefore retains the POC 
provisions of the proposed rule.

Other Comments

    Other comments addressed matters that were established by the Brady 
Act and are not subject to change by regulation, or addressed matters 
over which the Attorney General has no authority under the Brady Act. 
Accordingly, no changes were made to this final rule for comments such 
as the following: long guns should be exempted from background checks; 
a government-issued photo identification should not be required for 
transferee identification; disqualifying information should be included 
on a person's drivers license to make a NICS check unnecessary; there 
should be no immunity from liability for persons or agencies providing 
information to the NICS; the Attorney General should not be permitted 
to obtain information relevant to NICS determinations from other 
federal agencies; and FFLs should be able to transfer a firearm sooner 
than the expiration of three business days in the absence of a NICS 
response.
    Some comments also objected to the use of a NICS ``Delayed'' 
response, arguing that the Brady Act only provides for approval and 
denial responses. We note that the ``Delayed'' response is merely a way 
of communicating to the FFL that the system requires additional time to 
research and evaluate whether the prospective transferee is 
disqualified from receiving a firearm. The definition of the 
``Delayed'' response in the final rule was revised to reflect this and 
the fact that a ``Delayed'' response indicates that it would be 
unlawful to transfer the firearm pending receipt of a follow-up 
``Proceed'' response from the NICS or the expiration of three business 
days, whichever occurs first. The law does not prohibit the system from 
making such a response.
    Some comments objected to solicitation and retention of a 
prospective transferee's Social Security number (SSN). As noted in the 
proposed rule, a prospective transferee is free not to provide his or 
her SSN and will not be denied NICS processing for failure to do so. 
However, voluntarily providing his or her SSN can benefit a prospective 
transferee by helping NICS differentiate the prospective transferee 
from other persons with similar names who may have disqualifying 
records. Moreover, the SSNs of non-disqualified transferees will be 
destroyed with the rest of the transferees' identifying data at the end 
of 180 days. The final rule therefore retains this provision of the 
proposed rule.
    At least one comment asked about the system's handling of persons 
who have been granted relief from disabilities and the safeguards to 
ensure this relief is recognized by the NICS. Initially, the NICS will 
not contain records on persons granted relief from firearm disabilities 
by the ATF. A procedure will be implemented, however, so that the NICS 
Operations Center can verify the status of such individuals when they 
wish to obtain a firearm. The ATF has agreed to notify the FBI if and 
when it grants relief from disabilities in the future by providing the 
individuals' names and FBI identification numbers for inclusion in its 
records. This matter will also be the subject of discussion with state 
law enforcement agencies that include or should include information in 
their record systems about relief granted to persons under state 
statute.
    A small number of comments suggested that the FBI establish its 
regular business hours beginning at 8:00 a.m. in the earlier time zones 
and/or requiring POCs to offer hours of 9:00 a.m. to 10:00 p.m. The 
final rule retains the FBI business hours of 9:00 a.m. to 2:00 a.m. It 
is understood that some places of business are open during hours during 
which the NICS Operations Center is unavailable. However, the FBI is 
servicing retail stores in seven different time zones and has attempted 
to define its business hours to cover the peak sales times in each 
zone. Additionally, in the near future, the FBI will make electronic 
access available to FFLs. This access will essentially allow FFLs to 
conduct background checks 24 hours a day except during minimal periods 
of system maintenance. Guidelines for POCs have been distributed 
suggesting minimum business hours of 10:00 a.m. to 9:00 p.m., although 
these hours are not mandatory.
    A number of law enforcement officials noted that the proposed rule 
would not allow a law enforcement officer to check the NICS for the 
status of a person in possession of a firearm to help investigate 
whether the person is unlawfully in possession. The proposed rule also 
would not allow checks for general law enforcement purposes. The final 
rule remains unchanged in this regard largely due to privacy-related 
concerns expressed by the federal agencies supplying records to the 
NICS Index. Taking into account that the Brady Act expressly requires 
agencies to provide records to the NICS for Brady Act purposes, the 
agencies were concerned that use for other purposes would conflict with 
privacy statutes that restrict the use of such information. The FBI 
notes that law enforcement has access to the vast majority of records 
available to the NICS through the National Crime Information Center 
(NCIC) or the Interstate Identification Index (III).
    A number of state officials who will be acting as POCs in their 
states commented that they verify the identity of the FFLs by means 
other than the FFL number assigned by the ATF. They further commented 
that they may provide a state number rather than a NICS system 
transaction number to the FFLs for approved sales. They may not provide 
a number for a denied sale. Section 25.6(d), (g), and (i) were changed 
to accommodate the state systems.
    Several comments expressed the desire for the FBI to have both 
telephone and electronic dial-up access fully available for background 
checks when the NICS becomes available November 30, 1998. The FBI also 
would like to have electronic access fully deployed as soon as possible 
since the electronic access improves service and reduces the number of 
people needed to operate the system. Since the Brady Act requires 
telephone access at a minimum, the NICS system developers have focused 
resources to make sure that the basic system would be operational on 
schedule. It now appears that electronic dial-up access will become 
available to FFLs sometime after November 30, 1998. Therefore, section 
25.6(b) was changed accordingly. This section was changed further to 
make it clear that there may be periods within a 24-hour day when NICS 
would be unavailable due to scheduled or unscheduled downtime. As soon 
as the NICS is proven to have fully successful operating capability 
using telephone access, all available resources will be directed toward 
the additional electronic access. The development time for this 
capability should be relatively short because prototypes are already 
complete.
    Some comments suggested that the FBI provide a toll-free telephone 
number to individuals who are denied the transfer of a firearm and wish 
to appeal this denial, and that the FBI establish in the final rule a 
time frame within which the FBI and POCs would have to respond to an 
appeal. The FBI will provide a toll-free number for this purpose. In 
most cases, however, a written appeal will be required to get the 
appeal process started. No time frame for answering appeals was 
included in this rule since the Brady Act specifically provides that 
the NICS will respond within five business days

[[Page 58306]]

to individuals requesting the reasons for being found ineligible to 
receive a firearm, and that the system immediately consider an 
individual's submission to correct, clarify, or supplement records in 
the NICS.
    In response to comments about FFL access to the NICS, section 
25.6(b) was modified to clarify that the FBI intends to provide FFLs a 
toll-free number for both telephone and electronic dial-up access.

Technical Changes

    The term ``password'' used in the proposed rule has been changed to 
``code word'' in the final rule. The term ``password'' has a specific 
meaning and implications when used in the context of computer security. 
The ``code word'' selected by the FFL when enrolling with the FBI to 
gain access to the NICS does not comply with all the security measures 
normally associated with a ``password.'' Therefore, to avoid creating a 
false impression, the term ``password'' has been replaced by ``code 
word.''
    In the final rule, words such as ``purchase'' and ``purchaser'' 
were changed to words such as ``obtain'' and ``transferee'' to clarify 
that NICS checks apply to transfers and are not limited to firearm 
sales.
    The definition of the term ``Proceed'' was modified in the final 
rule to clarify that it means that information available to the system 
at the time of the response did not demonstrate that transfer of the 
firearm would violate Federal or state law and that, notwithstanding a 
``Proceed'' response from the NICS, an FFL may not lawfully transfer a 
firearm if he or she knows or has reasonable cause to believe that the 
prospective transferee is prohibited from receiving or possessing 
firearms, or is otherwise prohibited from transferring the firearm 
under applicable Federal or state law.
    The proposed rule provided that a denial by the NICS of a firearm 
transfer would be based upon one or more matching records that provide 
reason to believe that receipt of a firearm by a prospective transferee 
would violate 18 U.S.C. 922 or state law. The final rule changes the 
terminology relating to NICS denials to ``information demonstrating'' 
rather than ``reason to believe'' in order to conform the language of 
the regulation more closely to the language relating to denials in the 
Brady Act.
    Section 25.6(a) in the final rule was modified to indicate that the 
ATF will advise FFLs whether they are required to contact the FBI or a 
POC to initiate a NICS check and how they are to do so. Section 25.6(j) 
was modified to clarify the allowable non-Brady Act uses of the NICS 
Index to include responding to inquiries by criminal justice agencies 
in connection with licenses or permits to carry a concealed firearm or 
to import, manufacture, deal in, or purchase explosives, and inquiries 
by the ATF in connection with enforcement of the Gun Control Act (18 
U.S.C. Chapter 44), or the National Firearms Act (26 U.S.C. Chapter 
53). Section 25.8(b) was modified to indicate that the states will not 
be required to give the FBI a list of the Originating Agency 
Identifiers (ORIs) for POCs within the state. Section 25.8(i) was 
modified to correctly identify the documents where security 
requirements are outlined. Section 25.9(a) was modified to clarify that 
in cases of firearms disabilities that are not permanent, e.g., 
disqualifying restraining orders, the NICS will automatically purge the 
pertinent record when it is no longer disqualifying. Section 25.10(a) 
was modified to allow states to accept denial appeals in other than 
written form.

Applicable Administrative Procedures and Executive Orders

Regulatory Flexibility Analysis

    The Attorney General, in accordance with the Regulatory Flexibility 
Act (5 U.S.C. 605(b)), has reviewed this final regulation and by 
approving it certifies that this regulation will not have a significant 
economic impact on a substantial number of small entities. A Brady Act 
Task Group, composed of experienced state and local law enforcement 
officials, provided input on the design of the NICS. When developing 
the guidelines for the NICS, both the Task Group and the FBI took into 
account the fact that many FFLs are small businesses. A small firearm 
retailer is defined as having under $5.0 million in annual gross 
receipts as defined by 13 CFR 121.201. Firearm retailers are included 
in the Standard Industrial Class (SIC) Code 5941. The FBI has further 
considered that this rule will apply to pawn redemptions, and that many 
pawnbrokers are small entities. The obligation of FFLs to contact the 
NICS before transferring a firearm, and the applicability of NICS 
checks to pawn redemptions, are imposed by the Brady Act and detailed 
in the proposed ATF regulations implementing the permanent provisions 
of the Brady Act (63 FR 8379). In designing the NICS, the FBI has 
sought to avoid burdens on small entities beyond those requirements 
needed to conduct the statutorily prescribed background checks 
effectively and to ensure the privacy and security of the information 
in the NICS. The FBI is not aware of any relevant Federal rules that 
duplicate, overlap, or conflict with this rule.
    The FBI has sent a notice, including a letter describing NICS and a 
NICS brochure, to each FFL in the states and territories that are 
currently expected to be serviced directly by the FBI. The FBI has also 
met with FFLs at regional firearm seminars conducted by ATF to inform 
FFLs about NICS plans and to solicit comments needed to finalize these 
plans. These efforts were made by the FBI also to satisfy the 
``outreach'' provisions of 5 U.S.C. 609.

Executive Order 12866

    The Department of Justice has completed its examination of this 
final rule in light of Executive Order 12866, section 1(b), Principles 
of Regulation. The Department of Justice has determined that this final 
rule is a ``significant regulatory action'' under section 3(f) of 
Executive Order 12866, Regulatory Planning and Review, and thus it has 
been reviewed by the Office of Management and Budget (OMB).

Executive Order 12612

    This final rule will not have a substantial direct effect on the 
states, on the relationship between the national government and the 
states, or on the distribution of power and responsibilities among the 
various levels of government. Therefore, in accordance with Executive 
Order 12612, it is determined that this rule does not have sufficient 
federalism implications to warrant the preparation of a Federal 
Assessment.

Unfunded Mandates Reform Act of 1995

    This final rule will not result in the expenditure by state, local, 
and tribal governments, in the aggregate, or by the private sector, of 
$100,000,000 or more in any one year, and it will not significantly or 
uniquely affect small governments. Therefore, no actions were deemed 
necessary under the provisions of the Unfunded Mandates Reform Act of 
1995.

Small Business Regulatory Enforcement Fairness Act of 1996

    This final rule is not a major rule as defined by the Small 
Business Regulatory Enforcement Fairness Act of 1996. 5 U.S.C. 804. 
This rule will not result in an annual effect on the economy of 
$100,000,000 or more, a major increase in costs or prices, or have 
significant adverse effects on competition, employment, investment, 
productivity, innovation, or on the

[[Page 58307]]

ability of United States-based companies to compete with foreign-based 
companies in domestic and export markets.

Paperwork Reduction Act of 1995

    The collection of information contained in this final rule has been 
submitted to OMB for review in accordance with the Paperwork Reduction 
Act of 1995 (44 U.S.C. 3507(d)). Public comment was solicited in the 
notice of proposed rulemaking that preceded this final rule (63 FR 
30430). In addition, three data collection activities deemed necessary 
for the implementation of the NICS were the subject of separate 
publications.
    On May 31, 1998, the FBI submitted a Paperwork Reduction Act 
request for emergency OMB review and clearance of a proposed data 
collection entitled the NICS Firearm Dealers Survey. On June 1, 1998, 
the FBI published a Federal Register notice (63 FR 29755) announcing 
its intention to collect this information. On June 21, 1998, the OMB 
granted approval for the data collection effort, and issued OMB control 
number 1110-0025 for inclusion on the data collection instrument. This 
control number allows the FBI to collect survey data for 180 days from 
the date of issue. The FBI published a second notice in the Federal 
Register (63 FR 44925) on August 21, 1998, requesting OMB approval to 
collect this data for a period of up to three years.
    On July 16, 1998, the FBI submitted a Paperwork Reduction Act 
request for emergency OMB review and clearance of a proposed data 
collection entitled the NICS Federal Firearms Licensee (FFL) Enrollment 
Form. On July 23, 1998, the FBI published a Federal Register notice (63 
FR 39594) announcing its intention to collect this information. On 
August 3, 1998, OMB granted approval for the data collection effort, 
and issued OMB control number 1110-0026 for inclusion on the data 
collection instrument. This control number allows the FBI to collect 
enrollment information for 180 days from the date of issue. The FBI 
will publish a second notice in the Federal Register requesting OMB 
approval to collect this data for a period of up to three years.
    On July 27, 1998, the FBI submitted a Paperwork Reduction Act 
request for emergency OMB review and clearance of a proposed data 
collection entitled the FFL Execution of Acknowledgment of Obligations 
and Responsibilities Under the NICS. On August 3, 1998, the FBI 
published a Federal Register notice (63 FR 41296) announcing its 
intention to collect this information. On August 3, 1998, the OMB 
granted approval for the data collection effort, and issued OMB control 
number 1110-0027 for inclusion on the data collection instrument. This 
control number allows the FBI to collect this information for 180 days 
from the date of issue. The FBI will publish a second notice in the 
Federal Register requesting OMB approval to collect this data for a 
period of up to three years.

List of Subjects in 28 CFR Part 25

    Administrative practice and procedure, Business and industry, 
Computer technology, Courts, Firearms, Law enforcement officers, 
Penalties, Privacy, Reporting and recordkeeping requirements, Security 
measures, Telecommunications.
    Accordingly, chapter I of title 28 of the Code of Federal 
Regulations is amended by adding part 25 to read as follows:

PART 25--DEPARTMENT OF JUSTICE INFORMATION SYSTEMS

Subpart A--The National Instant Criminal Background Check System

Sec.
25.1  Purpose and authority.
25.2  Definitions.
25.3  System information.
25.4  Record source categories.
25.5  Validation and data integrity of records in the system.
25.6  Accessing records in the system.
25.7  Querying records in the system.
25.8  System safeguards.
25.9  Retention and destruction of records in the system.
25.10  Correction of erroneous system information.
25.11  Prohibited activities and penalties.

    Authority: Pub. L. 103-159, 107 Stat. 1536.

Subpart A--The National Instant Criminal Background Check System


Sec. 25.1  Purpose and authority.

    The purpose of this subpart is to establish policies and procedures 
implementing the Brady Handgun Violence Prevention Act (Brady Act), 
Public Law 103-159, 107 Stat. 1536. The Brady Act requires the Attorney 
General to establish a National Instant Criminal Background Check 
System (NICS) to be contacted by any licensed importer, licensed 
manufacturer, or licensed dealer of firearms for information as to 
whether the transfer of a firearm to any person who is not licensed 
under 18 U.S.C. 923 would be in violation of Federal or state law. The 
regulations in this subpart are issued pursuant to section 103(h) of 
the Brady Act, 107 Stat. 1542 (18 U.S.C. 922 note), and include 
requirements to ensure the privacy and security of the NICS and appeals 
procedures for persons who have been denied the right to obtain a 
firearm as a result of a NICS background check performed by the Federal 
Bureau of Investigation (FBI) or a state or local law enforcement 
agency.


Sec. 25.2  Definitions.

    Appeal means a formal procedure to challenge the denial of a 
firearm transfer.
    ARI means a unique Agency Record Identifier assigned by the agency 
submitting records for inclusion in the NICS Index.
    ATF means the Bureau of Alcohol, Tobacco, and Firearms of the 
Department of Treasury.
    Audit log means a chronological record of system (computer) 
activities that enables the reconstruction and examination of the 
sequence of events and/or changes in an event.
    Business day means a 24-hour day (beginning at 12:01 a.m.) on which 
state offices are open in the state in which the proposed firearm 
transaction is to take place.
    Control Terminal Agency means a state or territorial criminal 
justice agency recognized by the FBI as the agency responsible for 
providing state-or territory-wide service to criminal justice users of 
NCIC data.
    Data source means an agency that provided specific information to 
the NICS.
    Delayed means that more research is required prior to a NICS 
``Proceed'' or ``Denied'' response. A ``Delayed'' response to the FFL 
indicates that it would be unlawful to transfer the firearm until 
receipt of a follow-up ``Proceed'' response from the NICS or the 
expiration of three business days, whichever occurs first.
    Denied means denial of a firearm transfer based on a NICS response 
indicating one or more matching records were found providing 
information demonstrating that receipt of a firearm by a prospective 
transferee would violate 18 U.S.C. 922 or state law.
    Denying agency means a POC or the NICS Operations Center, whichever 
determines that information in the NICS indicates that the transfer of 
a firearm to a person would violate Federal or state law, based on a 
background check.
    Dial-up access means any routine access through commercial switched 
circuits on a continuous or temporary basis.
    Federal agency means any authority of the United States that is an 
``Agency'' under 44 U.S.C. 3502(1), other than those considered to be 
independent regulatory agencies, as defined in 44 U.S.C. 3502(10).
    FFL (federal firearms licensee) means a person licensed by the ATF 
as a

[[Page 58308]]

manufacturer, dealer, or importer of firearms.
    Firearm has the same meaning as in 18 U.S.C. 921(a)(3).
    Licensed dealer means any person defined in 27 CFR 178.11.
    Licensed importer has the same meaning as in 27 CFR 178.11.
    Licensed manufacturer has the same meaning as in 27 CFR 178.11.
    NCIC (National Crime Information Center) means the nationwide 
computerized information system of criminal justice data established by 
the FBI as a service to local, state, and Federal criminal justice 
agencies.
    NICS means the National Instant Criminal Background Check System, 
which an FFL must, with limited exceptions, contact for information on 
whether receipt of a firearm by a person who is not licensed under 18 
U.S.C. 923 would violate Federal or state law.
    NICS Index means the database, to be managed by the FBI, containing 
information provided by Federal and state agencies about persons 
prohibited under Federal law from receiving or possessing a firearm. 
The NICS Index is separate and apart from the NCIC and the Interstate 
Identification Index (III).
    NICS Operations Center means the unit of the FBI that receives 
telephone or electronic inquiries from FFLs to perform background 
checks, makes a determination based upon available information as to 
whether the receipt or transfer of a firearm would be in violation of 
Federal or state law, researches criminal history records, tracks and 
finalizes appeals, and conducts audits of system use.
    NICS Operations Center's regular business hours means the hours of 
9:00 a.m. to 2:00 a.m., Eastern Time, seven days a week.
    NICS Representative means a person who receives telephone inquiries 
to the NICS Operations Center from FFLs requesting background checks 
and provides a response as to whether the receipt or transfer of a 
firearm may proceed or is delayed.
    NRI (NICS Record Identifier) means the system-generated unique 
number associated with each record in the NICS Index.
    NTN (NICS Transaction Number) means the unique number that will be 
assigned to each valid background check inquiry received by the NICS. 
Its primary purpose will be to provide a means of associating inquiries 
to the NICS with the responses provided by the NICS to the FFLs.
    ORI (Originating Agency Identifier) means a nine-character 
identifier assigned by the FBI to an agency that has met the 
established qualifying criteria for ORI assignment to identify the 
agency in transactions on the NCIC System.
    Originating Agency means an agency that provides a record to a 
database checked by the NICS.
    POC (Point of Contact) means a state or local law enforcement 
agency serving as an intermediary between an FFL and the federal 
databases checked by the NICS. A POC will receive NICS background check 
requests from FFLs, check state or local record systems, perform NICS 
inquiries, determine whether matching records provide information 
demonstrating that an individual is disqualified from possessing a 
firearm under Federal or state law, and respond to FFLs with the 
results of a NICS background check. A POC will be an agency with 
express or implied authority to perform POC duties pursuant to state 
statute, regulation, or executive order.
    Proceed means a NICS response indicating that the information 
available to the system at the time of the response did not demonstrate 
that transfer of the firearm would violate federal or state law. A 
``Proceed'' response would not relieve an FFL from compliance with 
other provisions of Federal or state law that may be applicable to 
firearms transfers. For example, under 18 U.S.C. 922(d), an FFL may not 
lawfully transfer a firearm if he or she knows or has reasonable cause 
to believe that the prospective recipient is prohibited by law from 
receiving or possessing a firearm.
    Record means any item, collection, or grouping of information about 
an individual that is maintained by an agency, including but not 
limited to information that disqualifies the individual from receiving 
a firearm, and that contains his or her name or other personal 
identifiers.
    STN (State-Assigned Transaction Number) means a unique number that 
may be assigned by a POC to a valid background check inquiry.
    System means the National Instant Criminal Background Check System 
(NICS).


Sec. 25.3  System information.

    (a) There is established at the FBI a National Instant Criminal 
Background Check System.
    (b) The system will be based at the Federal Bureau of 
Investigation, 1000 Custer Hollow Road, Clarksburg, West Virginia 
26306-0147.
    (c) The system manager and address are: Director, Federal Bureau of 
Investigation, J. Edgar Hoover F.B.I. Building, 935 Pennsylvania 
Avenue, NW, Washington, D.C. 20535.


Sec. 25.4  Record source categories.

    It is anticipated that most records in the NICS Index will be 
obtained from Federal agencies. It is also anticipated that a limited 
number of authorized state and local law enforcement agencies will 
voluntarily contribute records to the NICS Index. Information in the 
NCIC and III systems that will be searched during a background check 
has been or will be contributed voluntarily by Federal, state, local, 
and international criminal justice agencies.


Sec. 25.5  Validation and data integrity of records in the system.

    (a) The FBI will be responsible for maintaining data integrity 
during all NICS operations that are managed and carried out by the FBI. 
This responsibility includes:
    (1) Ensuring the accurate adding, canceling, or modifying of NICS 
Index records supplied by Federal agencies;
    (2) Automatically rejecting any attempted entry of records into the 
NICS Index that contain detectable invalid data elements;
    (3) Automatic purging of records in the NICS Index after they are 
on file for a prescribed period of time; and
    (4) Quality control checks in the form of periodic internal audits 
by FBI personnel to verify that the information provided to the NICS 
Index remains valid and correct.
    (b) Each data source will be responsible for ensuring the accuracy 
and validity of the data it provides to the NICS Index and will 
immediately correct any record determined to be invalid or incorrect.


Sec. 25.6  Accessing records in the system.

    (a) FFLs may initiate a NICS background check only in connection 
with a proposed firearm transfer as required by the Brady Act. FFLs are 
strictly prohibited from initiating a NICS background check for any 
other purpose. The process of accessing the NICS for the purpose of 
conducting a NICS background check is initiated by an FFL's contacting 
the FBI NICS Operations Center (by telephone or electronic dial-up 
access) or a POC. FFLs in each state will be advised by the ATF whether 
they are required to initiate NICS background checks with the NICS 
Operations Center or a POC and how they are to do so.
    (b) Access to the NICS through the FBI NICS Operations Center. FFLs 
may contact the NICS Operations Center by use of a toll-free telephone 
number, only during its regular business hours. In addition to 
telephone access, toll-free electronic dial-up access to the NICS will 
be provided to FFLs after the

[[Page 58309]]

beginning of the NICS operation. FFLs with electronic dial-up access 
will be able to contact the NICS 24 hours each day, excluding scheduled 
and unscheduled downtime.
    (c)(1) The FBI NICS Operations Center, upon receiving an FFL 
telephone or electronic dial-up request for a background check, will:
    (i) Verify the FFL Number and code word;
    (ii) Assign a NICS Transaction Number (NTN) to a valid inquiry and 
provide the NTN to the FFL;
    (iii) Search the relevant databases (i.e., NICS Index, NCIC, III) 
for any matching records; and
    (iv) Provide the following NICS responses based upon the 
consolidated NICS search results to the FFL that requested the 
background check:
    (A) ``Proceed'' response, if no disqualifying information was found 
in the NICS Index, NCIC, or III.
    (B) ``Delayed'' response, if the NICS search finds a record that 
requires more research to determine whether the prospective transferee 
is disqualified from possessing a firearm by Federal or state law. A 
``Delayed'' response to the FFL indicates that the firearm transfer 
should not proceed pending receipt of a follow-up ``Proceed'' response 
from the NICS or the expiration of three business days (exclusive of 
the day on which the query is made), whichever occurs first. (Example: 
An FFL requests a NICS check on a prospective firearm transferee at 
9:00 a.m. on Friday and shortly thereafter receives a ``Delayed'' 
response from the NICS. If state offices in the state in which the FFL 
is located are closed on Saturday and Sunday and open the following 
Monday, Tuesday, and Wednesday, and the NICS has not yet responded with 
a ``Proceed'' or ``Denied'' response, the FFL may transfer the firearm 
at 12:01 a.m. Thursday.)
    (C) ``Denied'' response, when at least one matching record is found 
in either the NICS Index, NCIC, or III that provides information 
demonstrating that receipt of a firearm by the prospective transferee 
would violate 18 U.S.C. 922 or state law. The ``Denied'' response will 
be provided to the requesting FFL by the NICS Operations Center during 
its regular business hours.
    (2) None of the responses provided to the FFL under paragraph 
(c)(1) of this section will contain any of the underlying information 
in the records checked by the system.
    (d) Access to the NICS through POCs. In states where a POC is 
designated to process background checks for the NICS, FFLs will contact 
the POC to initiate a NICS background check. Both ATF and the POC will 
notify FFLs in the POC's state of the means by which FFLs can contact 
the POC. The NICS will provide POCs with electronic access to the 
system virtually 24 hours each day through the NCIC communication 
network. Upon receiving a request for a background check from an FFL, a 
POC will:
    (1) Verify the eligibility of the FFL either by verification of the 
FFL number or an alternative POC-verification system;
    (2) Enter a purpose code indicating that the query of the system is 
for the purpose of performing a NICS background check in connection 
with the transfer of a firearm; and (3) Transmit the request for a 
background check via the NCIC interface to the NICS.
    (e) Upon receiving a request for a NICS background check, POCs may 
also conduct a search of available files in state and local law 
enforcement and other relevant record systems, and may provide a unique 
State-Assigned Transaction Number (STN) to a valid inquiry for a 
background check.
    (f) When the NICS receives an inquiry from a POC, it will search 
the relevant databases (i.e., NICS Index, NCIC, III) for any matching 
record(s) and will provide an electronic response to the POC. This 
response will consolidate the search results of the relevant databases 
and will include the NTN. The following types of responses may be 
provided by the NICS to a state or local agency conducting a background 
check:
    (1) No record response, if the NICS determines, through a complete 
search, that no matching record exists.
    (2) Partial response, if the NICS has not completed the search of 
all of its records. This response will indicate the databases that have 
been searched (i.e., III, NCIC, and/or NICS Index) and the databases 
that have not been searched. It will also provide any potentially 
disqualifying information found in any of the databases searched. A 
follow-up response will be sent as soon as all the relevant databases 
have been searched. The follow-up response will provide the complete 
search results.
    (3) Single matching record response, if all records in the relevant 
databases have been searched and one matching record was found.
    (4) Multiple matching record response, if all records in the 
relevant databases have been searched and more than one matching record 
was found.
    (g) Generally, based on the response(s) provided by the NICS, and 
other information available in the state and local record systems, a 
POC will:
    (1) Confirm any matching records; and
    (2) Notify the FFL that the transfer may proceed, is delayed 
pending further record analysis, or is denied. ``Proceed'' 
notifications made within three business days will be accompanied by 
the NTN or STN traceable to the NTN. The POC may or may not provide a 
transaction number (NTN or STN) when notifying the FFL of a ``Denied'' 
response.
    (h) In cases where a transfer is denied by a POC, the POC should 
provide a denial notification to the NICS. This denial notification 
will include the name of the person who was denied a firearm and the 
NTN. The information provided in the denial notification will be 
maintained in the NICS Audit Log described in Sec. 25.9(b). This 
notification may be provided immediately by electronic message to the 
NICS (i.e., at the time the transfer is denied) or as soon thereafter 
as possible. If a denial notification is not provided by a POC, the 
NICS will assume that the transfer was allowed and will destroy its 
records regarding the transfer in accordance with the procedures 
detailed in Sec. 25.9.
    (i) Response recording. FFLs are required to record the system 
response, whether provided by the FBI NICS Operations Center or a POC, 
on the appropriate ATF form for audit and inspection purposes, under 27 
CFR part 178 recordkeeping requirements. The FBI NICS Operations Center 
response will always include an NTN and associated ``Proceed,'' 
``Delayed,'' or ``Denied'' determination. POC responses may vary as 
discussed in paragraph (g) of this section. In these instances, FFLs 
will record the POC response, including any transaction number and/or 
determination.
    (j) Access to the NICS Index for purposes unrelated to NICS 
background checks required by the Brady Act. Access to the NICS Index 
for purposes unrelated to NICS background checks pursuant to 18 U.S.C. 
922(t) shall be limited to uses for the purpose of:
    (1) Providing information to Federal, state, or local criminal 
justice agencies in connection with the issuance of a firearm-related 
or explosives-related permit or license, including permits or licenses 
to possess, acquire, or transfer a firearm, or to carry a concealed 
firearm, or to import, manufacture, deal in, or purchase explosives; or
    (2) Responding to an inquiry from the ATF in connection with a 
civil or criminal law enforcement activity relating to the Gun Control 
Act (18 U.S.C. Chapter 44) or the National Firearms Act (26 U.S.C. 
Chapter 53).

[[Page 58310]]

Sec. 25.7  Querying records in the system.

    (a) The following search descriptors will be required in all 
queries of the system for purposes of a background check:
    (1) Name;
    (2) Sex;
    (3) Race;
    (4) Complete date of birth; and
    (5) State of residence.
    (b) A unique numeric identifier may also be provided to search for 
additional records based on exact matches by the numeric identifier. 
Examples of unique numeric identifiers for purposes of this system are: 
Social Security number (to comply with Privacy Act requirements, a 
Social Security number will not be required by the NICS to perform any 
background check) and miscellaneous identifying numbers (e.g., military 
number or number assigned by Federal, state, or local authorities to an 
individual's record). Additional identifiers that may be requested by 
the system after an initial query include height, weight, eye and hair 
color, and place of birth. At the option of the querying agency, these 
additional identifiers may also be included in the initial query of the 
system.


Sec. 25.8  System safeguards.

    (a) Information maintained in the NICS Index is stored 
electronically for use in an FBI computer environment. The NICS central 
computer will reside inside a locked room within a secure facility. 
Access to the facility will be restricted to authorized personnel who 
have identified themselves and their need for access to a system 
security officer.
    (b) Access to data stored in the NICS is restricted to duly 
authorized agencies. The security measures listed in paragraphs (c) 
through (f) of this section are the minimum to be adopted by all POCs 
and data sources having access to the NICS.
    (c) State or local law enforcement agency computer centers 
designated by a Control Terminal Agency as POCs shall be authorized 
NCIC users and shall observe all procedures set forth in the NCIC 
Security Policy of 1992 when processing NICS background checks. The 
responsibilities of the Control Terminal Agencies and the computer 
centers include the following:
    (1) The criminal justice agency computer site must have adequate 
physical security to protect against any unauthorized personnel gaining 
access to the computer equipment or to any of the stored data.
    (2) Since personnel at these computer centers can have access to 
data stored in the NICS, they must be screened thoroughly under the 
authority and supervision of a state Control Terminal Agency. This 
authority and supervision may be delegated to responsible criminal 
justice agency personnel in the case of a satellite computer center 
being serviced through a state Control Terminal Agency. This screening 
will also apply to non-criminal justice maintenance or technical 
personnel.
    (3) All visitors to these computer centers must be accompanied by 
staff personnel at all times.
    (4) POCs utilizing a state/NCIC terminal to access the NICS must 
have the proper computer instructions written and other built-in 
controls to prevent data from being accessible to any terminals other 
than authorized terminals.
    (5) Each state Control Terminal Agency shall build its data system 
around a central computer, through which each inquiry must pass for 
screening and verification.
    (d) Authorized state agency remote terminal devices operated by 
POCs and having access to the NICS must meet the following 
requirements:
    (1) POCs and data sources having terminals with access to the NICS 
must physically place these terminals in secure locations within the 
authorized agency;
    (2) The agencies having terminals with access to the NICS must 
screen terminal operators and must restrict access to the terminals to 
a minimum number of authorized employees; and
    (3) Copies of NICS data obtained from terminal devices must be 
afforded appropriate security to prevent any unauthorized access or 
use.
    (e) FFL remote terminal devices may be used to transmit queries to 
the NICS via electronic dial-up access. The following procedures will 
apply to such queries:
    (1) The NICS will incorporate a security authentication mechanism 
that performs FFL dial-up user authentication before network access 
takes place;
    (2) The proper use of dial-up circuits by FFLs will be included as 
part of the periodic audits by the FBI; and
    (3) All failed authentications will be logged by the NICS and 
provided to the NICS security administrator.
    (f) FFLs may use the telephone to transmit queries to the NICS, in 
accordance with the following procedures:
    (1) FFLs may contact the NICS Operations Center during its regular 
business hours by a telephone number provided by the FBI;
    (2) FFLs will provide the NICS Representative with their FFL Number 
and code word, the type of sale, and the name, sex, race, date of 
birth, and state of residence of the prospective buyer; and
    (3) The NICS will verify the FFL Number and code word before 
processing the request.
    (g) The following precautions will be taken to help ensure the 
security and privacy of NICS information when FFLs contact the NICS 
Operations Center:
    (1) Access will be restricted to the initiation of a NICS 
background check in connection with the proposed transfer of a firearm.
    (2) The NICS Representative will only provide a response of 
``Proceed'' or ``Delayed'' (with regard to the prospective firearms 
transfer), and will not provide the details of any record information 
about the transferee. In cases where potentially disqualifying 
information is found in response to an FFL query, the NICS 
Representative will provide a ``Delayed'' response to the FFL. Follow-
up ``Proceed'' or ``Denied'' responses will be provided by the NICS 
Operations Center during its regular business hours.
    (3) The FBI will periodically monitor telephone inquiries to ensure 
proper use of the system.
    (h) All transactions and messages sent and received through 
electronic access by POCs and FFLs will be automatically logged in the 
NICS Audit Log described in Sec. 25.9(b). Information in the NICS Audit 
Log will include initiation and termination messages, failed 
authentications, and matching records located by each search 
transaction.
    (i) The FBI will monitor and enforce compliance by NICS users with 
the applicable system security requirements outlined in the NICS POC 
Guidelines and the NICS FFL Manual (available from the NICS Operations 
Center, Federal Bureau of Investigation, 1000 Custer Hollow Road, 
Clarksburg, West Virginia 26306-0147).


Sec. 25.9  Retention and destruction of records in the system.

    (a) The NICS will retain NICS Index records that indicate that 
receipt of a firearm by the individuals to whom the records pertain 
would violate Federal or state law. The NICS will retain such records 
indefinitely, unless they are canceled by the originating agency. In 
cases where a firearms disability is not permanent, e.g., a 
disqualifying restraining order, the NICS will automatically purge the 
pertinent record when it is no longer disqualifying. Unless otherwise 
removed, records contained in the NCIC and III files that are accessed 
during a background check

[[Page 58311]]

will remain in those files in accordance with established policy.
    (b) The FBI will maintain an automated NICS Audit Log of all 
incoming and outgoing transactions that pass through the system.
    (1) The Audit Log will record the following information: type of 
transaction (inquiry or response), line number, time, date of inquiry, 
header, message key, ORI, and inquiry/response data (including the name 
and other identifying information about the prospective transferee and 
the NTN). In cases of allowed transfers, all information in the Audit 
Log related to the person or the transfer, other than the NTN assigned 
to the transfer and the date the number was assigned, will be destroyed 
after not more than six months after the transfer is allowed. Audit Log 
records relating to denials will be retained for 10 years, after which 
time they will be transferred to a Federal Records Center for storage. 
The NICS will not be used to establish any system for the registration 
of firearms, firearm owners, or firearm transactions or dispositions, 
except with respect to persons prohibited from receiving a firearm by 
18 U.S.C. 922 (g) or (n) or by state law.
    (2) The Audit Log will be used to analyze system performance, 
assist users in resolving operational problems, support the appeals 
process, or support audits of the use of the system. Searches may be 
conducted on the Audit Log by time frame, i.e., by day or month, or by 
a particular state or agency. Information in the Audit Log pertaining 
to allowed transfers may only be used by the FBI for the purpose of 
conducting audits of the use and performance of the NICS. Such 
information, however, may be retained and used as long as needed to 
pursue cases of identified misuse of the system. The NICS, including 
the NICS Audit Log, may not be used by any department, agency, officer, 
or employee of the United States to establish any system for the 
registration of firearms, firearm owners, or firearm transactions or 
dispositions. The Audit Log will be monitored and reviewed on a regular 
basis to detect any possible misuse of the NICS data.
    (c) The following records in the FBI-operated terminals of the NICS 
will be subject to the Brady Act's requirements for destruction:
    (1) All inquiry and response messages (regardless of media) 
relating to a background check that results in an allowed transfer; and
    (2) All information (regardless of media) contained in the NICS 
Audit Log relating to a background check that results in an allowed 
transfer.
    (d) The following records of state and local law enforcement units 
serving as POCs will be subject to the Brady Act's requirements for 
destruction:
    (1) All inquiry and response messages (regardless of media) 
relating to the initiation and result of a check of the NICS that 
allows a transfer that are not part of a record system created and 
maintained pursuant to independent state law regarding firearms 
transactions; and
    (2) All other records relating to the person or the transfer 
created as a result of a NICS check that are not part of a record 
system created and maintained pursuant to independent state law 
regarding firearms transactions.


Sec. 25.10  Correction of erroneous system information.

    (a) An individual may request the reason for the denial from the 
agency that conducted the check of the NICS (the ``denying agency,'' 
which will be either the FBI or the state or local law enforcement 
agency serving as a POC). The FFL will provide to the denied individual 
the name and address of the denying agency and the unique transaction 
number (NTN or STN) associated with the NICS background check. The 
request for the reason for the denial must be made in writing to the 
denying agency. (POCs at their discretion may waive the requirement for 
a written request.)
    (b) The denying agency will respond to the individual with the 
reasons for the denial within five business days of its receipt of the 
individual's request. The response should indicate whether additional 
information or documents are required to support an appeal, such as 
fingerprints in appeals involving questions of identity (i.e., a claim 
that the record in question does not pertain to the individual who was 
denied).
    (c) If the individual wishes to challenge the accuracy of the 
record upon which the denial is based, or if the individual wishes to 
assert that his or her rights to possess a firearm have been restored, 
he or she may make application first to the denying agency, i.e., 
either the FBI or the POC. If the denying agency is unable to resolve 
the appeal, the denying agency will so notify the individual and shall 
provide the name and address of the agency that originated the document 
containing the information upon which the denial was based. The 
individual may then apply for correction of the record directly to the 
agency from which it originated. If the record is corrected as a result 
of the appeal to the originating agency, the individual may so notify 
the denying agency, which will, in turn, verify the record correction 
with the originating agency (assuming the originating agency has not 
already notified the denying agency of the correction) and take all 
necessary steps to correct the record in the NICS.
    (d) As an alternative to the above procedure where a POC was the 
denying agency, the individual may elect to direct his or her challenge 
to the accuracy of the record, in writing, to the FBI, NICS Operations 
Center, Criminal Justice Information Services Division, 1000 Custer 
Hollow Road, Module C-3, Clarksburg, West Virginia 26306-0147. Upon 
receipt of the information, the FBI will investigate the matter by 
contacting the POC that denied the transaction or the data source. The 
FBI will request the POC or the data source to verify that the record 
in question pertains to the individual who was denied, or to verify or 
correct the challenged record. The FBI will consider the information it 
receives from the individual and the response it receives from the POC 
or the data source. If the record is corrected as a result of the 
challenge, the FBI shall so notify the individual, correct the 
erroneous information in the NICS, and give notice of the error to any 
Federal department or agency or any state that was the source of such 
erroneous records.
    (e) Upon receipt of notice of the correction of a contested record 
from the originating agency, the FBI or the agency that contributed the 
record shall correct the data in the NICS and the denying agency shall 
provide a written confirmation of the correction of the erroneous data 
to the individual for presentation to the FFL. If the appeal of a 
contested record is successful and thirty (30) days or less have 
transpired since the initial check, and there are no other 
disqualifying records upon which the denial was based, the NICS will 
communicate a ``Proceed'' response to the FFL. If the appeal is 
successful and more than thirty (30) days have transpired since the 
initial check, the FFL must recheck the NICS before allowing the sale 
to continue. In cases where multiple disqualifying records are the 
basis for the denial, the individual must pursue a correction for each 
record.
    (f) An individual may also contest the accuracy or validity of a 
disqualifying record by bringing an action against the state or 
political subdivision responsible for providing the contested 
information, or responsible for denying the transfer, or against the 
United States, as the case may be, for an order directing that the 
contested information be corrected or that the firearm transfer be 
approved.

[[Page 58312]]

Sec. 25.11  Prohibited activities and penalties.

    (a) State or local agencies, FFLs, or individuals violating this 
subpart A shall be subject to a fine not to exceed $10,000 and subject 
to cancellation of NICS inquiry privileges.
    (b) Misuse or unauthorized access includes, but is not limited to, 
the following:
    (1) State or local agencies', FFLs', or individuals' purposefully 
furnishing incorrect information to the system to obtain a ``Proceed'' 
response, thereby allowing a firearm transfer;
    (2) State or local agencies', FFLs', or individuals' purposefully 
using the system to perform a check for unauthorized purposes; and
    (3) Any unauthorized person's accessing the NICS.

    Dated: October 27, 1998.
Janet Reno,
Attorney General.
[FR Doc. 98-29109 Filed 10-29-98; 8:45 am]
BILLING CODE 4410-06-P