[Federal Register Volume 66, Number 130 (Friday, July 6, 2001)]
[Proposed Rules]
[Pages 35567-35572]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-16766]


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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 66, No. 130 / Friday, July 6, 2001 / Proposed 
Rules  

[[Page 35567]]



DEPARTMENT OF JUSTICE

28 CFR Part 25

[FBI 108P; AG Order No. 2466-2001]
RIN 1110-AA07


National Instant Criminal Background Check System

AGENCY: Federal Bureau of Investigation, Department of Justice.

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: The Department promulgated regulations to govern the National 
Instant Criminal Background Check System (NICS) in 1998 when the NICS 
became operational. Earlier this year, the Department published 
amendments to those regulations, which will take effect on July 3, 
2001. In this notice, the Department is publishing, for public comment 
and further consideration, five proposals to make additional changes in 
the NICS regulations. The proposed changes balance the legitimate 
privacy interests of law-abiding firearms purchasers and the 
Department's obligation to enforce the Brady Act and the Gun Control 
Act to prevent prohibited persons from purchasing firearms.

DATES: Written comments must be submitted on or before September 4, 
2001.

ADDRESSES: All comments concerning this proposed rule should be sent 
to: Mr. Timothy Munson, Section Chief, Federal Bureau of Investigation, 
Module A-3, 1000 Custer Hollow Road, Clarksburg, West Virginia 26306-
0147.

FOR FURTHER INFORMATION CONTACT: Fanny Haslebacher, Attorney-Advisor, 
Federal Bureau of Investigation, Module A-3, 1000 Custer Hollow Road, 
Clarksburg, WV 26306-0147, (304) 625-2000.

SUPPLEMENTARY INFORMATION:

I. Background

    On January 22, 2001, the Department published a Final Rule to make 
two changes to 28 CFR 25.9(b):
     To reduce from six months to 90 days the maximum retention 
period for information relating to allowed firearm transfers in the 
system's chronological log of background check transactions (``NICS 
Audit Log''); and
     To permit the FBI to extract and provide information from 
the NICS Audit Log to the Bureau of Alcohol, Tobacco and Firearms 
(``ATF'') for use in ATF's inspections of Federal Firearms Licencee 
(``FFL'') records.
    These revisions originally were scheduled to take effect on March 
5, 2001. 66 FR 6470. On March 1, 2001, the Department postponed the 
effective date of the NICS rule from March 5 to May 4, 2001. 66 FR 
12854 (March 1, 2001). On May 4, 2001, the Department further postponed 
the effective date for another 60 days to July 3, 2001. 66 FR 22898.
    These postponements were prompted by the Department's need to 
conduct a review of the rule and record in light of the Department's 
original commitment that it would ``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.'' 63 FR 58304 
(1998). The Department made findings of good cause for forgoing notice 
and comment and for making these postponements effective immediately, 
in satisfaction of the legal requirements for rulemaking under the 
Administrative Procedure Act, 5 U.S.C. 553(b)(B), (d)(3), and on the 
assumption that section 553 might otherwise have been applicable. See 
66 FR at 22898, 12855.
    Based on the review occasioned by the 120-day postponement, the 
Department is taking two related steps at this time. First, the January 
22, 2001, Final Rule will take effect on July 3, 2001, without further 
delay. Second, the Department is publishing this new Notice of Proposed 
Rulemaking (``NPRM'') to propose further changes in the NICS 
regulations, as discussed in Part II below.
    The January 22, 2001, Final Rule amended 28 CFR 25.9(b)(1) to 
provide that, in the case of allowed transfers, all information in the 
NICS relating to the transfer--except for the date of the request and 
the NICS Transaction Number (``NTN'') assigned to that request--will be 
destroyed within 90 days. The FBI will implement this regulatory 
requirement as soon as it takes effect on July 3, 2001.
    Section 25.9(b)(2) authorizes only the FBI to access directly 
information in the NICS Audit Log pertaining to allowed transfers, and 
permits such access only for the purpose of conducting audits of the 
use and performance of the NICS. The January 22, 2001, Final Rule, 
however, permits the FBI to extract information from the NICS Audit Log 
and provide it to ATF in connection with ATF's inspections of FFL 
records:

    Permissible uses include extracting and providing information 
from the NICS Audit Log to ATF in connection with ATF's inspections 
of FFL records, provided that ATF destroys the information about 
allowed transfers within the retention period for such information 
set forth in paragraph (b)(1) of this section and maintains a 
written record certifying the destruction.

This grant of permissive authority will also take effect on July 3, 
2001. It does not, however, mandate any particular action. Rather, the 
provision states that ``extracting and providing'' information to ATF 
is among the ``(p)ermissible uses'' of the information in the NICS 
Audit Log.
    Because the Department today proposes new changes to the 
maintenance and use of the NICS Audit Log, the FBI will not exercise 
this discretionary authority to ``extract and provide'' NICS Audit Log 
information to ATF except as specifically authorized by the Attorney 
General. Such restraint will maintain the status quo while the public 
provides comments on today's proposals and the Department considers 
those comments. This approach in no way alters or limits the FBI's 
legal authority under the NICS regulations as amended; it is instead a 
prudent and permissible exercise of discretion, during the pendency of 
this rulemaking, to preserve the current practices relating to the use 
of information in the NICS Audit Log.

II. New NPRM on the National Instant Criminal Background Check 
System

    In this new rulemaking, the Department is publishing, for public 
comment and further consideration, several proposed changes in the NICS 
regulations. The proposed changes balance the legitimate privacy 
interests of law-abiding firearms purchasers and the Department's 
obligation to enforce the Brady Act and the Gun Control Act to prevent 
prohibited persons from

[[Page 35568]]

purchasing firearms. The Department welcomes comments from all 
interested persons regarding both the legal and practical effects of 
these proposals.

1. Proposal #1: Prompt Destruction of Records of Allowed Transactions 
(Sec. 25.9(b)(1), (2) and (3))

    The first proposal would amend Sec. 25.9(b)(1) to provide for a 
general rule requiring prompt destruction of information in the NICS 
Audit Log pertaining to allowed transfers, coupled with specific 
authority to retain information in two respects in order to ensure the 
security and integrity of the system. This proposal also revises and 
reorganizes the existing provisions of Sec. 25.9(b) for greater 
clarity.
    The basis for this change lies in three provisions of the Brady 
Act. Section 103(h) requires the Attorney General to ``prescribe 
regulations to ensure the privacy and security of the information of 
the system.'' Section 103(i) prohibits the establishment of a 
registration system with respect to firearms, and section 102(b) 
requires the FBI to ``destroy all records of the system with respect to 
the call (other than the identifying number and the date the number was 
assigned) and all records of the system relating to the person or the 
transfer,'' when the receipt of a firearm would not violate state or 
federal law.
    This proposal would require the destruction of all information in 
the Audit Log relating to the lawful purchaser or the transfer (other 
than the NTN, and date of inquiry) on all allowed transactions prior to 
the start of the next business day following the date on which the 
``proceed'' message was received by the initiator of the NICS check. 
Under this proposal, the FBI would retain only that information on 
allowed transfers specified in 18 U.S.C. 922(t)(2)(C)--namely, the NTN 
and the date the NTN was assigned. In addition, as discussed more fully 
below, this proposal would authorize the FBI to retain the ORI 
(Originating Agency Identifier), as defined in 28 CFR 25.2, and/or the 
FFL identifier issued by the Bureau of Alcohol, Tobacco and Firearms, 
when requested to do so, in writing, by ATF for inspection purposes.
    This proposal makes no change in the existing provisions of the 
NICS rules pertaining to the retention of records of transactions where 
the transfer was denied because the putative purchaser is prohibited by 
state or federal law from purchasing a firearm.
    This proposal balances the privacy interests of law-abiding 
citizens and the law enforcement interests of the Department in 
ensuring that the Brady Act and Gun Control Act are enforced to prevent 
prohibited persons from purchasing firearms. The FBI and ATF need to 
enforce the law to prevent misuse of the NICS system by FFLs and POCs 
(as defined in 28 CFR 25.2). There is no change in the provision 
authorizing the FBI to retain and use information pertaining to allowed 
transfers as long as needed to pursue cases of identified misuse of the 
system. By retaining only that information specified by statute, this 
proposal reduces the impact on the privacy rights of individual 
purchasers while still meeting the law enforcement requirements of the 
Department and ensuring the security of the NICS system as a whole.
    By keeping all records until the start of the next business day, 
the NICS Operations Center would be able to compile statistics on the 
operation of the system, such as the number of calls per state per day, 
the percentage of checks run on long guns versus handguns, and other 
statistical information that does not include personally identifiable 
information on lawful purchasers. The NICS operates every day of the 
year except Thanksgiving and Christmas Day. By destroying personally 
identifiable information on allowed transfers before the start of the 
next business day, the NICS Operations Center would have the hours 
between the close of one business day and the start of the next 
business day to run internal audits, amass statistical data, accomplish 
destruction of the necessary records, and carry out other system 
maintenance with minimal disturbance to the system. The Department 
welcomes comments as to whether this proposal will accommodate the 
needs of the NICS Operations Center regarding statistical compilations 
and internal operating procedures.
    In addition, the Department seeks comments as to the ability of the 
NICS system to ensure the privacy and security of the information of 
the system in the absence of retaining all records of allowed 
transactions, specifically, the costs and increased efficiency 
available by conducting the quality control and system performance 
evaluations using control data and real time performance reviews.

2. Proposal #2: Individual FFL Audit Logs (Sec. 25.9(b)(4))

    Under 18 U.S.C. 922(t), FFLs are required, prior to transferring a 
firearm to an unlicenced individual, to examine a valid identification 
document of the potential purchaser, contact the NICS system, receive 
and record from the NICS a unique NTN, and either receive an indication 
that the transaction may proceed or wait until three business days have 
passed without receiving a determination from the NICS system that the 
transfer is denied. In addition, 18 U.S.C. 923(g)(1) outlines the FFL 
record keeping requirements and the authority for ATF to review records 
of the FFL. Specifically, subsection 923(g)(1)(B)(ii)(I) provides for 
ATF inspection or examination, not more than once in any 12-month 
period, of the inventory and records of a licensed dealer to ensure 
compliance with the record keeping requirements of the Gun Control Act 
and the Brady Act.
    In order to ensure that ATF and the FBI have sufficient information 
to enforce the requirements of federal firearms laws, this proposal 
would allow the FBI to extract information from the NICS system to 
create, upon prior written request from ATF in connection with its 
inspections of FFL records, Individual FFL Audit Logs that contain not 
more than 30 days worth of allowed transactions from an identified FFL. 
Such Individual FFL Audit Logs would contain, with respect to allowed 
transfers, the NTN and the date of inquiry. All information on denied 
transactions or unresolved transactions will also be included in the 
Individual FFL Audit Log.
    The proposal seeks to meet the law enforcement needs of ATF and the 
FBI by providing to ATF, prior to an inspection of an identified FFL, 
information necessary to ensure that the licensee is complying with the 
Brady Act's requirements to conduct a NICS check prior to transferring 
a firearm to an unlicenced person. By receiving an Individual Audit Log 
before inspecting an FFL, ATF will also have the tools necessary to 
determine if an FFL has run a NICS check on an individual who is not a 
potential firearm purchaser, which would be a misuse of the NICS system 
and therefore a violation of the Brady Act.

    Example: Before June 1, ATF notifies the NICS Operations Center 
that it intends to audit Joe's Gun Shop on or after July 1. On June 
1, the NICS Operations Center begins compilation of an Individual 
Audit Log for Joe's Gun Shop that contains the following information 
on those NICS checks originating at Joe's during the month of June: 
The NTN and date of inquiry for allowed transactions, and all 
information on transactions determined to be denied or unresolved. 
On July 1, the NICS Operations Center transfers this information to 
ATF. The ATF agent inspector, now equipped with a list of the last 
30 days worth of transactions, visits Joe's Gun Shop to ensure that 
for every transaction on the Audit Log, there is a corresponding 
Form 4473, and that for every Form 4473,

[[Page 35569]]

there is a corresponding Audit Log record, indicating that a 
potential purchase is linked to each check and that each potential 
purchase received the NICS check required by federal law. If the 
inspector determines that the number of NICS transactions on the 
Audit Log does not correspond with the number of Form 4473s in Joe's 
Shop, further investigation is warranted.

    Under this proposal, pursuant to the requirements of the Brady Act 
section 102(b) (destruction of all records of allowed transactions 
other than the NTN and date of inquiry) and section 103(i)(prohibition 
against establishing any registration system for firearms), ATF would 
be required to destroy all information on allowed transfers within a 
set period of time (90 days) after the date of creation of the 
Individual FFL Audit Log. The NICS would also be required to delete the 
ORI and/or FFL identifier from its system within 90 days of the date of 
the transaction.
    As stated above, the provision authorizing the FBI and ATF to 
retain and use information pertaining to allowed transfers as long as 
needed to pursue cases of identified misuse of the system is 
maintained. By retaining only that information specified by statute, 
this proposal reduces the impact on the privacy rights of individual 
purchasers while still meeting the law enforcement requirements of both 
the Department and ATF.

3. Proposal #3: New Definition of ``Unresolved'' Transaction 
(Sec. 25.2)

    This proposal would provide a new definition in Sec. 25.2 
pertaining to unresolved transactions, for two reasons.
    First, in those states in which the NICS performs background checks 
for FFLs, if the NICS examiner cannot determine within three business 
days whether the proposed firearm transfer would violate state or 
Federal law, the transaction is designated informally as a ``default 
proceed.'' Under the Brady Act, the FFL is not prohibited from 
transferring the firearm if the NICS has not responded with a denial 
notification within three business days. (18 U.S.C. 922(t)(1)(B)(ii)). 
Despite the fact that three business days have elapsed, it is the 
practice of NICS examiners to continue research on such transactions 
for 21 days to determine whether the transaction is an actual 
``proceed'' (allowed) or ``denied''. Under Proposal #1 above, it is 
possible the system may be required to purge information concerning 
``default proceeds'' after three business days. The Department does not 
intend this result. The NICS system should retain information on 
transactions that have not been definitively resolved after three 
business days.
    This proposal would create a new internal classification system for 
transactions that are ``unresolved,'' meaning the NICS examiner could 
not verify that a ``hit'' in the database is or is not a disqualifier 
under state or federal law. This classification will allow the NICS 
system to maintain such unresolved transactions until either (1) a 
final determination on the transaction is reached resulting in the 
transaction being changed to a ``proceed'' (prompt destruction) or a 
``denied'' (permanent retention) status, or (2) the expiration of the 
retention period for unresolved transactions. The Department proposes a 
retention period of no more than 90 days, consistent with the retention 
period under the final rule that takes effect on July 3, 2001. 
Statistics compiled by the FBI show that as a result of initially 
unresolved transactions that were later determined to be denied, over 
5,400 firearms retrievals have been referred within 30 days of the 
default proceed, and that more than 9,700 have been determined to be 
denials by retention of such records for up to 90 days.
    In cases of ``unresolved'' transactions, the NICS examiner would 
continue to respond to an FFL in the same manner as is current practice 
for ``default proceeds''. This change does not affect the manner or 
form in which response information is relayed by the NICS examiner to 
the FFL.
    Second, in the POC (Point of Contact) states, a state agency is 
responsible for performing background checks for potential gun 
purchasers, including contacting the NICS system as part of that 
background check. When a state agency contacts the NICS as part of a 
POC-initiated background check, the NICS system presently records that 
transaction as an ``implied proceed'' unless and until the state 
transmits to the NICS system the ultimate determination for that 
transaction: either ``proceed'' or ``denied''. Once again, under a 
prompt destruction alternative, these transactions records could be 
removed from the NICS system before a final determination is made.
    In order to have the most accurate record of denials in the system, 
this proposal would classify all state POC transactions as 
``unresolved'' until the POC transmits the final determination to NICS. 
In cases of ``proceed'' or allowed transfers, the NICS system would be 
required to destroy such records within the time frame discussed in 
Proposal #1, above. Again, records of unresolved transactions would be 
deleted from the system within 90 days.
    The new category of ``unresolved'' would not affect an FFL's 
ability to transfer or not transfer a firearm after three business 
days, but would allow the NICS system to keep accurate records of the 
precise status of NICS transactions.

4. Proposal #4: Require POC States To Transmit State Determinations to 
the NICS System (Sec. 25.6(h))

    Under current Sec. 25.6(h), POC states are encouraged, but not 
required, to transmit to the NICS system determinations that a 
background check indicates a firearm transfer is denied. Unfortunately, 
most POC states currently do not transmit this information to the NICS 
system. This means that a potential purchaser could be prohibited under 
state or federal law (based upon information available to a state from 
records available to that state only), yet the NICS system would not 
have access to that determination. If the prohibited purchaser then 
traveled to another state and again attempted to purchase a firearm, 
the NICS system would be unable to stop the prohibited purchase.
    This proposal would condition participation as a POC state on 
transmission of state determination information to the NICS system as 
soon as it is available, so that the NICS system will have accurate 
records of all prohibited persons. Because state laws vary on how 
quickly the background check must be completed, the proposed rule does 
not specify a particular length of time for transmittal, but instead 
requires the transmittal ``upon communication of the determination to 
the FFL or the expiration of any applicable state waiting period''. 
Until the NICS system receives the determination information, it will 
identify the transaction as unresolved.
    Determination information from POC states would still be subject to 
the rules governing record retention. The NICS system may not retain 
information on allowed transfers that originate in a POC state for a 
longer period of time than it may keep information about a NICS-
originated allowed transaction.

5. Proposal #5: Voluntary Appeals File (Sec. 25.10(g))

    This proposal addresses those situations in which a lawful firearms 
purchaser might desire to have personal information retained in the 
NICS system to avoid confusion or delays in future purchases. Because 
the NICS system must destroy all identifying information on allowed 
transactions after not more than 90 days (or before the start of the 
next business day under Proposal #1

[[Page 35570]]

above), if a potential purchaser is delayed or denied a firearm and 
then successfully appeals the decision, the NICS system would not be 
able to retain a record of the appeal and supporting documents.
    This means that if a lawful purchaser has a similar name and date 
of birth as a convicted felon, he or she may be delayed, or denied a 
purchase, until the NICS system can determine that the lawful purchaser 
is not the felon. Often this is done through submission of 
fingerprints.
    However, under the existing retention rules, once that purchase is 
determined to be allowed, the NICS system cannot retain the information 
identifying the person as a lawful purchaser for more than 90 days and 
must destroy all identifying information relating to the person and the 
transfer--even if retention is requested by the lawful purchaser. Both 
the NICS Operations Center and individual purchasers have requested 
creation of a mechanism by which NICS can keep, upon request of the 
purchaser, such clarifying information in a separate computer file 
within the NICS system.
    This proposal would allow the creation of a Voluntary Appeals File 
for the purpose of allowing lawful purchasers to request that the NICS 
system retain such information to facilitate future NICS transactions. 
Under this proposal, potential firearms transferees experiencing 
erroneous delays or denials by the system will have the option to 
supply the FBI with information such as name, date of birth, social 
security number, any other identifying numbers, and any documents that 
may clarify their records or prove their identity. The NICS system 
would be required to destroy any records submitted to the Voluntary 
Appeals File upon written request from the individual. Of course, such 
information could be retained and used by the FBI as long as needed to 
pursue cases of identified misuse of the system.

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 proposed rule and by approving 
it certifies that this regulation will not have a significant economic 
impact on a substantial number of small entities. Although many FFLs 
are small businesses, they are not subject to any additional burdens 
under the plan adopted to audit their use of the NICS. In addition, the 
rule will not have any impact on an FFL's ability to contact the NICS, 
nor will it result in any delay in receiving responses from the NICS.

Executive Order 12866

    The Department of Justice has drafted this notice of proposed 
rulemaking in light of Executive Order 12866, section 1(b), Principles 
of Regulation. The Department of Justice has determined that this rule 
is a ``significant regulatory action'' under section 3(f) of Executive 
Order 12866, and accordingly it has been reviewed by the Office of 
Management and Budget (OMB).

Executive Order 13132

    This proposed 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 13132, it is determined that this rule does not have sufficient 
federalism implications to warrant the preparation of a Federalism 
Assessment.

Unfunded Mandates Reform Act

    This proposed 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 proposed rule is not a major rule as defined by section 251 of 
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 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 notice of proposed 
rulemaking has been submitted to OMB for emergency review in accordance 
with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)). Comments 
on the collection of information should be sent to the Office of 
Management and Budget, Attention: Desk Officer of the Department of 
Justice, Office of Information and Regulatory Affairs, Washington, DC 
20503, with copies to Robert B. Briggs, Clearance Officer, United 
States Department of Justice, Information Management and Security 
Staff, Justice Management Division, Suite 1220, National Place 
Building, 1331 Pennsylvania Avenue NW., Washington, DC 20530. Comments 
are specifically requested concerning:
    (1) Whether the proposed collection of information is necessary for 
the proper performance of the functions of the Department of Justice 
and the FBI, including whether the information will have practical 
utility;
    (2) The accuracy of the estimated burden associated with the 
proposed collection of information (see below);
    (3) How the quality, utility, and clarity of the information to be 
collected may be enhanced; and
    (4) How the burden of complying with proposed collection of 
information may be minimized, including through the use of appropriate 
automated, electronic, mechanical, or other technological collection 
techniques or other forms of information technology.
    The proposed rule adds as a condition for a state to participate in 
the system as a POC the requirement that POCs transmit determination 
information to the NICS as soon as it is available to the state, 
including determinations that a firearm transfer may proceed, is 
denied, or the check is unresolved. Some POCs already provide such 
information to the NICS. This collection of information is for the 
purpose of enhancing the performance of the NICS, by giving the system 
the same information about determinations on the checks processed by 
POCs that the system has about determinations made on the checks 
processed by the FBI.
    The number of respondents that will be affected by this information 
collection will be 21, which is the number of states that act as POCs 
for the NICS (states that do NICS checks in connection with the 
issuance of firearm permits only are not considered POCs). The 
notifications will be made by electronic message to the NICS 
immediately upon the acknowledgment of the receipt of the determination 
by the FFL or the expiration of any applicable state waiting period. It 
is estimated that it will take 6 months for each POC state to make the 
programming changes necessary to provide this information to the NICS. 
It is estimated it will take one (1) minute for each POC state to send 
the information relating to each check to the NICS. Collectively, the 
POCs conduct approximately 4.4 million NICS checks

[[Page 35571]]

per year. Thus, it is estimated that the total public burden (in hours) 
associated with the collection from the estimated 21 respondents is 
73,333 hours in the first year.

List of Subjects in 28 CFR Part 25

    Administrative practice and procedure, Computer technology, Courts, 
Firearms, Law enforcement officers, Penalties, Privacy, Reporting and 
recordkeeping requirements, Security measures, Telecommunications.

    Accordingly, part 25 of title 28 of the Code of Federal Regulations 
is proposed to be amended as follows:

PART 25--DEPARTMENT OF JUSTICE INFORMATION SYSTEMS

    1. The authority citation for Part 25 continues to read as follows:

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

Subpart A--The National Instant Criminal Background Check System


Sec. 25.2  [Amended]  [Proposal #3]

    2. In Sec. 25.2, the following definition is added:
* * * * *
    Unresolved means that information available to the system required 
further inquiry that could not be resolved before the end of three 
business days and resulted in no determination by the system that the 
receipt of a firearm by the prospective transferee would not violate 
Federal or state law. In cases of ``unresolved'' responses, the NICS 
continues research to discover definitive information regarding the 
transferee and, if definitive information is obtained, communicates to 
the FFL the final determination that the check resulted in a proceed or 
a denied. An ``unresolved'' response does not prohibit an FFL from 
transferring a firearm after three business days have elapsed since the 
FFL provided to the system the identifying information about the 
prospective transferee.
* * * * *


Sec. 25.6  [Amended]  [Proposal #4]

    4. In Sec. 25.6, paragraph (h) is revised to read as follows:
* * * * *
    (h) POC Determination Notification. POCs shall provide notification 
to the NICS of their determinations that a firearm transfer may 
proceed, is denied, or that the check is unresolved. These 
notifications will include all information relating to the transaction, 
including the identifying information provided for the background 
check, the FFL number, the records that were returned by the check, the 
NTN, the date of the determination, and, in the case of denials, the 
category of denial. The information provided in the POC determination 
notification will be maintained in the NICS Audit Log described in 
Sec. 25.9(b). These notifications shall be provided by electronic 
message to the NICS immediately upon communication of the determination 
to the FFL or the expiration of any applicable state waiting period. 
Until the POC determination notification is received by the NICS, the 
NICS will assume that the check is unresolved.
* * * * *


Sec. 25.9  [Amended]  [Proposal #1]

    5. In Sec. 25.9, paragraph (b) is revised to read as follows:
* * * * *
    (b) The FBI will maintain an automated NICS Audit Log of all 
incoming and outgoing transactions that pass through the system.
    (1) Contents. The NICS Audit Log will record the following 
information: Type of transaction (inquiry or response), line number, 
time, date of inquiry, header, message key, ORI or FFL identifier, and 
inquiry/response data (including the name and other identifying 
information about the prospective transferee and the NTN).
    (i) The NICS Audit Log will contain all records of denied 
transfers, and unresolved transfers. NICS 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. NICS Audit Log 
records relating to NICS checks where an ``Unresolved'' response is 
indicated will be destroyed after not more than 90 days from the date 
of inquiry.
    (ii) Except as provided in Sec. 25.10(g), in cases of allowed 
transfers, all information in the NICS 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 prior to the beginning 
of the next NICS business day following the date on which an FFL 
receives communication of the determination that the transfer may 
proceed.
    (2) Use of information in the NICS Audit Log. The NICS 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 NICS Audit Log pertaining to allowed transfers may 
be accessed directly only 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 by the FBI as long as needed to 
pursue cases of identified misuse of the system, and as provided in 
Sec. 25.9(b)(4).
    (3) Limitation on use. The NICS, including the NICS Audit Log, will 
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, except with 
respect to persons prohibited from receiving a firearm by 18 U.S.C. 
922(g) or (n) or by state law. The NICS Audit Log will be monitored and 
reviewed on a regular basis to detect any possible misuse of the NICS 
data.
* * * * *


Sec. 25.9  [Amended]  [Proposal #2]

    6. Section 25.9 is amended by revising paragraph (b), to read as 
follows:
* * * * *
    (b) The FBI will maintain an automated NICS Audit Log of all 
incoming and outgoing transactions that pass through the system.
    (1) Contents. The NICS Audit Log will record the following 
information: Type of transaction (inquiry or response), line number, 
time, date of inquiry, header, message key, ORI or FFL identifier, and 
inquiry/response data (including the name and other identifying 
information about the prospective transferee and the NTN).
    (i) The NICS Audit Log will contain all records of denied 
transfers, and unresolved transfers. NICS 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. NICS Audit Log 
records relating to NICS checks where an ``Unresolved'' response is 
indicated will be destroyed after not more than 90 days from the date 
of inquiry.
    (ii) Except as provided in Sec. 25.10(g), in cases of allowed 
transfers, all information in the NICS 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 prior to the beginning 
of the next NICS business day following the date on which an FFL 
receives communication of the determination that the transfer may 
proceed.
    (2) Use of information in the NICS Audit Log. The NICS Audit Log 
will be

[[Page 35572]]

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 NICS Audit Log pertaining to allowed transfers may 
be accessed directly only 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 by the FBI as long as needed to 
pursue cases of identified misuse of the system, and as provided in 
Sec. 25.9(b)(4).
    (3) Limitation on use: The NICS, including the NICS Audit Log, will 
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, except with 
respect to persons prohibited from receiving a firearm by 18 U.S.C. 
922(g) or (n) or by state law. The NICS Audit Log will be monitored and 
reviewed on a regular basis to detect any possible misuse of the NICS 
data.
    (4) Creation and Use of Individual FFL Audit Logs: Upon written 
request from ATF containing the name and license number of the FFL, the 
proposed date of inspection of the named FFL by ATF, and the requested 
start date for record retention, the FBI may extract information from 
the NICS Audit Log and create an Individual FFL Audit Log for 
transactions originating at the named FFL for a limited period of time. 
An Individual FFL Audit Log shall contain all information on unresolved 
transactions and denied transactions, and, with respect to allowed 
transfers, only the NTN and date of inquiry. In no instance shall an 
Individual FFL Audit Log contain more than 30 days worth of allowed 
transfer records originating at the FFL. The ATF shall destroy all 
records of allowed transfers within 90 days of the date on which the 
Individual Audit Log was created. The ATF shall maintain a written 
record certifying the destruction. Such information, however, may be 
retained as long as needed to pursue cases of identified misuse of the 
system.
* * * * *


Sec. 25.10  [Amended]  [Proposal #5]

    6. In Sec. 25.10, a new paragraph (g) is added to read as follows:
* * * * *
    (g) An individual may provide written consent to the FBI to 
maintain information about himself or herself in a voluntary appeal 
file checked by the NICS for the purpose of preventing the future 
erroneous delay or denial of a firearm transfer. Such file shall only 
be used by the NICS for this purpose. The FBI shall remove all 
information in the voluntary appeal file upon receipt of a written 
request by the individual. However, the FBI shall not be prohibited 
from retaining such information contained in the Voluntary Audit Log as 
long as needed to pursue cases of identified misuse of the system.
* * * * *

    Dated: June 28, 2001.
John Ashcroft,
Attorney General.
[FR Doc. 01-16766 Filed 7-5-01; 8:45 am]
BILLING CODE 4410-02-P