`[Federal Register Volume 89, Number 239 (Thursday, December 12, 2024)]
[Proposed Rules]
[Pages 100424-100439]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-28711]


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

DEPARTMENT OF JUSTICE

28 CFR Part 25

[Docket No. FBI-159; AG Order No. 6099-2024]
RIN 1110-AA35


Bipartisan Safer Communities Act of 2022--Criteria for National 
Instant Criminal Background Check System (``NICS'') Background Checks 
of Firearm Handlers

AGENCY: Federal Bureau of Investigation, Department of Justice.

ACTION: Notice of proposed rulemaking.

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

SUMMARY: The United States Department of Justice (``Department'') 
proposes several amendments to regulations pertaining to the National 
Instant Criminal Background Check System (``NICS'' or ``system'') of 
the Federal Bureau of Investigation (``FBI''). The proposed amendments 
implement parts of the Bipartisan Safer Communities Act (``BSCA''), 
which, in relevant part, require the Attorney General to promulgate 
regulations authorizing certain Federal Firearm Licensees (``FFLs'' or 
``licensees'') to use NICS for purposes of voluntarily conducting 
employment background checks relating to certain current or prospective 
employees. As this Notice of Proposed Rulemaking (``NPRM'') describes 
in more detail, the Department proposes allowing FFLs to use NICS for 
employment background checks of their ``firearm handlers'' and other 
``eligible employees.''

DATES: Written comments must be postmarked, and electronic comments 
must be submitted, on or before January 13, 2025. Commenters should be 
aware the electronic Federal Docket Management System will not accept 
comments after 11:59 p.m. Eastern Time on the last day of the comment 
period.

ADDRESSES: You may submit comments, identified by RIN 1110-AA35 or 
Docket No. FBI-159, by either of the following methods:
    [ssquf] Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
    [ssquf] Mail: Charles Klebe, Assistant General Counsel, Federal 
Bureau of Investigation, Office of the General Counsel, Module C-3, 
1000 Custer Hollow Road, Clarksburg, West Virginia 26306-0110; ATTN: 
Docket No. FBI-159.
    Instructions: All submissions received must include the agency name 
and RIN (1110-AA35) or docket number (FBI-159) for this NPRM. In 
general, all properly completed comments received will be posted 
without change to the Federal eRulemaking portal, https://www.regulations.gov, including any personal information provided. For 
detailed instructions on submitting comments and additional information 
on the rulemaking process, see the ``Public Participation'' heading of 
the SUPPLEMENTARY INFORMATION section of this document.

FOR FURTHER INFORMATION CONTACT: Jill A. Montgomery, NICS Business and 
Liaison Unit Chief, Federal Bureau of Investigation, Criminal Justice 
Information Services Division, NICS Section. Telephone: (304) 625-0606 
(this is not a toll-free number).

SUPPLEMENTARY INFORMATION:

I. Public Participation

A. Comments Sought

    The Department welcomes public comments from any interested person 
on any aspect of the changes proposed in this rule. In particular, and 
as discussed in more detail in the parts of this preamble that describe 
specific changes, the Department seeks comments from the public on the 
proposed amendments to NICS regulations to allow FFLs, as required by 
Congress under BSCA, Public Law 117-159, 136 Stat. 1313 (2022), to use 
NICS for purposes of conducting voluntary employment background checks 
of the FFLs' current and prospective employees. The Department seeks 
comments regarding that use in

[[Page 100425]]

general as well as regarding the proposed revisions related to the 
processes surrounding that use of NICS. The Department will carefully 
consider all properly submitted public comments in drafting any final 
rules.
    All comments must reference RIN 1110-AA35 or this document's docket 
number, FBI-159, and be legible. Please do not submit, under this 
proposed rule, any comments pertaining to a different rule that may be 
discussed in limited detail below. Public comments concerning those 
proposed rules should be submitted as directed within those rules.
    Please note that all comments received are considered part of the 
public record and may be made available for public inspection online at 
https://www.regulations.gov. Information made available for public 
inspection may include personal identifying information (such as name, 
address, etc.) submitted by the commenter.

B. Confidentiality

    In general, the Department will make all comments, whether 
submitted electronically or on paper, available for public viewing on 
the internet through the Federal eRulemaking Portal. If you do not want 
your name or other personal identification information posted on the 
internet as part of your comment, you must include the phrase 
``PERSONAL IDENTIFYING INFORMATION'' in the first paragraph of your 
comment. You must also locate all the personal identifying information 
that you do not want posted online in the first paragraph of your 
comment and identify what information you want the Department to 
redact. Personal identifying information identified and located as set 
forth above will be placed in the Department's public docket file but 
not posted online.
    If you wish to submit confidential business information as part of 
your comment but do not wish it to be posted online, you must include 
the phrase ``CONFIDENTIAL BUSINESS INFORMATION'' in the first paragraph 
of your comment. You must also prominently identify confidential 
business information to be redacted within the comment. If a comment 
has so much confidential business information that it cannot be 
effectively redacted, the Department may choose not to post that 
comment (or to post only part of the comment) on https://www.regulations.gov. Confidential business information identified and 
located as set forth above will not be placed in the public docket 
file, nor will it be posted online.

C. Submitting Comments

    Submit comments in either of the following ways (but do not submit 
the same comment multiple times or by more than one method). Hand-
delivered comments will not be accepted.
     Federal eRulemaking Portal: The Department recommends that 
you submit your comments via the Federal eRulemaking portal at https://www.regulations.gov and follow the instructions. Please keep the 
comment tracking number that is provided after you have successfully 
uploaded your comment.
     Mail: Send written comments to the address listed in the 
ADDRESSES section of this document.

II. Background and Purpose

A. National Instant Criminal Background Check System

1. NICS Procedures
    The Brady Handgun Violence Prevention Act of 1993 (``Brady Act''), 
Public Law 103-159, 107 Stat. 1536, required the Attorney General to 
establish NICS, a system that certain FFLs must contact before selling 
or otherwise transferring a firearm. Brady Act sec. 103. NICS provides, 
when possible, immediate information on whether receipt of a firearm by 
an unlicensed person would violate 18 U.S.C. 922(g) or (n), or State, 
local, or Tribal law. See 18 U.S.C. 922(t). The FBI manages and 
operates NICS by delegation of the Attorney General pursuant to 28 CFR 
25.3. The NICS Section of the FBI's Criminal Justice Information 
Services Division processed the first NICS background check on November 
30, 1998.\1\
---------------------------------------------------------------------------

    \1\ See National Instant Criminal Background Check System 
Regulation, 63 FR 58303, 58303 (Oct. 30, 1998).
---------------------------------------------------------------------------

    The Brady Act provides that persons federally licensed by the 
Bureau of Alcohol, Tobacco, Firearms, and Explosives (``ATF'') as 
manufacturers, dealers, and importers under 18 U.S.C. 923 are required 
to initiate a NICS background check before transferring firearms to 
unlicensed persons. See 18 U.S.C. 922(t)(1); see also 921(a)(9)-(11). 
Persons licensed under 18 U.S.C. 923 as ``collectors,'' see 18 U.S.C. 
923(b),\2\ are not required to submit NICS transactions under 18 U.S.C. 
922(t) because licensed collectors are not defined as ``licensees'' 
under the Brady Act. See 34 U.S.C. 40901(j)(1).
---------------------------------------------------------------------------

    \2\ See also 27 CFR 478.11 (defining ``[c]ollector'' as ``[a]ny 
person who acquires, holds, or disposes of firearms as curios or 
relics,'' and ``[l]icensed collector'' as ``[a] collector of curios 
and relics only [who is] licensed under the provisions of this 
part'').
---------------------------------------------------------------------------

    An FFL initiates a NICS background check by contacting the FBI NICS 
Section \3\ or a State or local law enforcement agency known as a point 
of contact (``POC'')--i.e., certain State or local law enforcement 
agencies with express or implied authority to perform NICS inquiries 
and respond to FFLs with the results. See 28 CFR 25.2, 25.6(a), (d).\4\ 
As of December 31, 2021, the NICS Section supported NICS background 
checks for 50,588 dealer and pawnbroker licensees conducting business 
in 31 States, 5 U.S. Territories, and the District of Columbia.\5\ The 
NICS Section processed 11,106,931 firearm transactions from January 1, 
2021, through December 31, 2021.\6\ In addition, the NICS Section 
processed 138,518 explosive permit background checks for this same 
timeframe.\7\
---------------------------------------------------------------------------

    \3\ The NICS Section was known as the ``NICS Operation Center'' 
until July 24, 2002. However, 28 CFR part 25 has not since been 
updated to reflect that change. The Department's initial NICS 
regulations included definitions for ``NICS Operations Center'' and 
``NICS Operations Center's regular business hours.'' See 63 FR 
58308. In 2001, ``NICS Operations Center'' was inadvertently deleted 
from the Federal Register publication. See FindLaw.com, Code of 
Federal Regulations Title 28. Judicial Administration Sec.  28.25.2 
Definitions, https://codes.findlaw.com/cfr/title-28-judicial-administration/cfr-sect-28-25-2/ (last visited Nov. 5, 2024) 
(observing that the ``official CFR appears to have inadvertently 
deleted [the] definition'' of NICS Operations Center). The relevant 
intent of those 2001 revisions was only to delete the definition for 
and references to ``NICS Operations Center regular business hours.'' 
See National Instant Criminal Background Check System Regulation, 69 
FR 43892, 43896, 43900 (July 23, 2004). The Department has proposed 
revisions here and within RIN 1110-AA36, FBI-158, to update 
references to the ``NICS Operation Center'' to the ``NICS Section.'' 
See proposed revisions in 28 CFR 25.2, 25.6, and 25.10.
    \4\ 28 CFR 25.2 defines ``POC (Point of Contact)'' as ``[a] 
state or local law enforcement agency serving as an intermediary 
between an FFL and the federal databases checked by the NICS.'' That 
provision further states that 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, and respond to FFLs with the results of a NICS 
background check. In addition, a POC must be an agency with express 
or implied authority to perform POC duties pursuant to State 
statute, regulation, or executive order. POCs perform NICS inquiries 
on either all or only a subset of the NICS background checks that 
FFLs submit in the POC's State. See NICS Participation Map, https://www.fbi.gov/how-we-can-help-you/more-fbi-services-and-information/nics/about-nics#NICS-Participation%20Map (last visited Nov. 5, 
2024).
    \5\ FBI, National Instant Criminal Background Check System 
Operational Report 2020-2021 7 (Apr. 2022), https://www.fbi.gov/file-repository/nics-2020-2021-operations-report.pdf/view.
    \6\ Id. at 12-13.
    \7\ Id. at 13.
---------------------------------------------------------------------------

    Relevant databases for background checks are the NICS Index (now 
called

[[Page 100426]]

the ``NICS Indices''),\8\ the National Crime Information Center 
(``NCIC''), and the Interstate Identification Index (``III''). See 28 
CFR 25.2, 25.4, 25.6. The NICS Indices is a database of information 
provided by Federal, State, local, and Tribal agencies about persons 
who are prohibited from receiving firearms under Federal or State law. 
See 28 CFR 25.2. NCIC is searched for other criminal justice data, such 
as active warrants and protection orders, which would also demonstrate 
that a person is prohibited from receiving firearms.\9\ III is part of 
the FBI's Next Generation Identification system and is used to search 
for criminal justice records such as arrests, charges, or case 
dispositions demonstrating the subject of the NICS transaction is 
prohibited from receiving firearms.\10\ See also 28 CFR 25.6(c), (f).
---------------------------------------------------------------------------

    \8\ The NICS Index has become known by most NICS users as the 
``NICS Indices.'' The Department has proposed revisions here and in 
RIN 1110-AA36, FBI-158, to update references to the ``NICS Index'' 
to the ``NICS Indices.'' See proposed revisions in 28 CFR 25.2, 
25.4-25.6, 25.8, and 25.9.
    \9\ See FBI, 2022 NICS Operations Report 7 (2022), https://www.fbi.gov/file-repository/nics-2022-operations-report.pdf/view.
    \10\ See id.
---------------------------------------------------------------------------

    After initiating a background check for the prospective transfer of 
firearms, FFLs receive one of three responses from NICS: ``Proceed,'' 
``Delayed,'' or ``Denied.'' \11\ As currently defined, a ``Proceed'' 
response means the background check revealed no disqualifying (e.g., 
matching) records. 28 CFR 25.6(c)(1)(iv)(A). A ``Denied'' response 
means that receipt of a firearm by the prospective transferee would 
violate applicable law described in 18 U.S.C. 922(t). 28 CFR 
25.6(c)(1)(iv)(C). For those transactions in which a search of NICS 
cannot provide a definitive response of either ``Proceed'' or 
``Denied'' because additional research of a possible disqualification 
is required, the FFL receives a response of ``Delayed.'' 28 CFR 
25.6(c)(1)(iv)(B). FFLs do not review the record sources searched 
during a background check by NICS, nor does a response from NICS 
provide the FFL with any of the underlying information reviewed during 
the background check. 28 CFR 25.6(c)(2). Beyond one of the previously 
noted responses, the only other information an FFL receives as part of 
a NICS background check is the NICS transaction number (``NTN'') and, 
for ``Delayed'' transactions,\12\ a prospective transfer date, which is 
the day after ``3 business days . . . have elapsed since the licensee 
contacted'' NICS. 18 U.S.C. 922(t)(1)(B)(ii); see also 28 CFR 
25.6(c)(1).
---------------------------------------------------------------------------

    \11\ Through RIN 1110-AA36, FBI-158, the Department has proposed 
a new status (``No Known Prohibitors: A state or local agency has 
not responded or cannot respond'') and discusses new processes 
applicable when FFLs submit NICS background checks for prospective 
firearm transfers to persons under 21 years of age (``under-21 
transactions''). However, because the provisions discussed in that 
rulemaking do not apply to FHCs, this rule has generally omitted 
discussion of proposed regulatory updates related to under-21 
transactions.
    \12\ See 28 CFR 25.2 (defining ``Delayed'' and ``NTN (NICS 
Transaction Number)''); see also 28 CFR 25.6(c)(1)(iv)(B).
---------------------------------------------------------------------------

    Under one of several BSCA provisions, ``the Attorney General shall 
promulgate regulations allowing licensees to use [NICS] for purposes of 
voluntarily conducting an employment background check relating to a 
current or prospective employee.'' 34 U.S.C. 40901(b)(2). Again, per 34 
U.S.C. 40901(j)(1), ``licensee[s]'' include licensed importers, 
licensed manufacturers, and licensed dealers as those terms are defined 
under 18 U.S.C. 921(a)(9)-(11), respectively. An unlicensed person for 
purposes of 18 U.S.C. 922(t) is someone ``not licensed under'' chapter 
44 of title 18. 18 U.S.C. 922(t)(1); see also 18 U.S.C. 923 (providing 
for licensing).\13\
---------------------------------------------------------------------------

    \13\ Licensed collectors are also considered unlicensed persons 
during firearm transactions that involve firearms other than curios 
and relics. See 18 U.S.C. 921(a)(13); see also ATF, Does a 
Collector's License Afford Any Privileges to the Licensee with 
Respect to Acquiring or Disposing of Firearms Other than Curios or 
Relics in Interstate or Foreign Commerce? (last reviewed May 26, 
2020), https://www.atf.gov/firearms/qa/does-collector%E2%80%99s-license-afford-any-privileges-licensee-respect-acquiring-or-disposing.
---------------------------------------------------------------------------

    Persons who fall within any of the prohibitions noted under 18 
U.S.C. 922(g) or (n) are generally prohibited by Federal law from 
shipping, transporting, possessing, or receiving firearms and 
ammunition.\14\ The Brady Act also prohibits the transfer of firearms 
to persons prohibited from receiving firearms under sections 922(d), 
(g), or (n), as appropriate, or State, local, or Tribal law. See 18 
U.S.C. 922(t).\15\
---------------------------------------------------------------------------

    \14\ Federal law prohibits receipt of a firearm by a person 
under a qualifying indictment but does not prohibit mere possession 
of the firearm by the indicted individual. See 18 U.S.C. 922(n) 
(making it unlawful for any person who is under indictment for a 
crime punishable by imprisonment for a term exceeding 1 year to ship 
or transport in interstate or foreign commerce any firearm or 
ammunition or receive any firearm or ammunition which has been 
shipped or transported in interstate or foreign commerce). However, 
a State ``possession'' prohibition may also apply. See, e.g., Haw. 
Rev. Stat. 134-7.
    \15\ Section II.E of this preamble contains a brief discussion 
of RIN 1110-AA36, FBI-158, another NPRM the Department has 
published. That rulemaking includes discussion regarding, among 
other topics, further disqualifying categories that Congress added 
to 18 U.S.C. 922(t) in 2022.
---------------------------------------------------------------------------

2. Current Access to NICS for Purposes Other Than Firearm Transfers
    Federal statutes authorize access to NICS for certain entities for 
reasons other than a prospective firearm transfer under 18 U.S.C. 
922(t). See, e.g., 42 U.S.C. 2201a (authorizing use of NICS for 
background checks related to security personnel of Nuclear Regulatory 
Commission licensees and certificate holders). NICS regulations also 
permit access to NICS ``for purposes unrelated to NICS background 
checks pursuant to 18 U.S.C. 922(t)'' in three limited circumstances. 
28 CFR 25.6(j). First, NICS may be used to provide information to 
Federal, State, local, or Tribal criminal justice agencies in 
connection with the issuance of firearm- or explosives-related 
licenses. 25 CFR 25.6(j)(1). Second, NICS may be used in responding to 
an inquiry from 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). 25 CFR 
25.6(j)(2). Third, Federal, State, local, and Tribal criminal justice 
agencies may use NICS to dispose of firearms in their possession. 25 
CFR 25.6(j)(3).
    Since their issuance, the Department's NICS regulations have 
expressly prohibited FFLs from initiating NICS background checks for 
any purpose other than the prospective transfer of firearms as required 
by the Brady Act. See 28 CFR 25.6(a). With the enactment of BSCA, 
however, the Department must issue new regulations that allow FFLs to 
use NICS for another specified purpose: determining whether certain 
current or prospective employees are prohibited from possessing 
firearms.\16\ This NPRM proposes amendments to the Department's NICS 
regulations to allow licensees to voluntarily initiate NICS background 
checks for this new purpose.
---------------------------------------------------------------------------

    \16\ In addition to BSCA, Congress in 2022 passed the 
Consolidated Appropriations Act, 2022, Public Law 117-103, 136 Stat. 
49, which amended 18 U.S.C. 922(t) to reference firearm prohibitions 
imposed by ``local'' and ``Tribal'' governments. See 136 Stat. at 
919, 921. Those provisions are accounted for where relevant in this 
rule's preamble and the proposed regulatory revisions.
---------------------------------------------------------------------------

B. Using NICS for Voluntary Employment Background Checks

    Section 12004(h)(1)(B) of BSCA amended the Brady Act by requiring 
the Attorney General to promulgate rules allowing licensees to use NICS 
for purposes of voluntarily conducting an employment background check 
relating to a current or prospective employee (``employee''). 34 U.S.C. 
40901(b)(2)(A).

[[Page 100427]]

    The Department interprets ``voluntarily'' in this context to mean 
that licensees are not required to use NICS to conduct background 
checks of employees; rather, licensees have discretion to submit 
requests for NICS background checks. Licensees may not request a NICS 
background check without first providing written notice to and 
obtaining written consent of the affected employee. See 34 U.S.C. 
40901(b)(2)(B). This consent requirement is discussed in Section II.E 
of this preamble.
    Consistent with BSCA, the Department is proposing amendments to 
NICS regulations to generally allow licensees to initiate background 
checks of certain employees. See 34 U.S.C. 40901(b)(2)(A). This rule 
proposes to clarify that FFLs may voluntarily initiate NICS background 
checks of persons who are or would be ``eligible employees'' as further 
defined in proposed amendments to 28 CFR 25.2.

C. Firearm Handler Background Checks

1. Synopsis of Proposed Rule
    This rule proposes allowing licensees to use NICS as part of 
employment background checks of certain employees. Although other 
categories of employees are discussed further in this preamble, the 
core group of employees covered by this proposed rule consists of 
``firearm handlers.'' Accordingly, the Department will generally refer 
to these NICS background checks as ``firearm handler background 
checks'' or ``FHCs.'' This rule proposes to define a ``firearm 
handler'' to include, with exceptions discussed in Section II.C.3.a of 
this preamble, a person who has or may have an opportunity to access 
firearms or ammunition because of the person's duties as an employee of 
an FFL, regardless of whether the employee's duties include or may 
include the actual or constructive transfer or handling of firearms or 
ammunition. This rule also proposes that licensed manufacturers may 
submit FHCs for persons who do not have access to firearms or 
ammunition, but whose employment duties allow or may allow them access 
to the materials or tools used in firearms or ammunition manufacturing. 
Further, this rule proposes that FHCs would not be available for any 
employee who does not or will not have employment duties that would 
allow the employee access to firearms or ammunition or any materials or 
tools necessary to manufacture firearms or ammunition. This rule's 
proposed approach satisfies the text of section 12004 of BSCA, fulfills 
Congress's purpose in enacting section 12004 of BSCA, and addresses 
important policy and operational interests of the FBI and FFL 
employees.
    Next, the Department notes that FHC results indicating that an FFL 
is prohibited from transferring a firearm to an employee should not be 
construed to prohibit the licensee from employing that individual in a 
position that does not require the handling of or having access to a 
firearm or ammunition or the materials or tools used in firearms or 
ammunition manufacturing. Current responses to FFLs when they submit a 
request for a NICS background check for a firearm transfer are limited 
to ``Proceed,'' ``Delayed,'' or ``Denied,'' which could cause confusion 
if they were also used in response to FHCs. Licensees may mistake a 
``Proceed'' or ``Denied'' response during an FHC as a determination 
that the licensee must either hire or reject the subject of the FHC. 
Consequently, this NPRM proposes to amend 28 CFR 25.2 to reflect new 
responses to be used during FHCs: ``Pass,'' ``Pending,'' and ``Did Not 
Pass.'' \17\ These terms and their definitions are discussed more fully 
in Section II.C.3.b of this preamble.
---------------------------------------------------------------------------

    \17\ This rule also proposes a technical amendment to 28 CFR 
25.9(b)(1)(i) to reflect that ``Denied'' firearm transfer records in 
the NICS Audit Log are retained for 110 years under approved records 
schedules filed with the National Archives and Records 
Administration. See Request for Records Disposition Authority, 
National Instant Criminal Background Check System, Schedule Number 
NI-065-10-005 at 4 (Nov. 18, 2009), https://www.archives.gov/files/records-mgmt/rcs/schedules/departments/department-of-justice/rg-0065/n1-065-10-005_sf115.pdf (superseding, in part, Request for 
Records Disposition Authority, National Instant Criminal Background 
Check System, Schedule Number NI-065-07-003 at 4 (Oct. 13, 2006), 
https://www.archives.gov/files/records-mgmt/rcs/schedules/departments/department-of-justice/rg-0065/n1-065-07-003_sf115.pdf). 
Because there is no statute of limitations for appealing a 
``Denied'' transaction, the FBI may sometimes need to access very 
old records of these transactions; retaining such records for 110 
years ensures that the records are retained for a period that 
exceeds the relevant person's expected life span. See Off. of Just. 
Programs, Comparison of Criminal History Information Systems in the 
United States and Other Countries 105 (Apr. 2, 2020), https://www.ojp.gov/pdffiles1/bjs/grants/253816.pdf.
---------------------------------------------------------------------------

    Section 40901(b)(2)(B) of title 34, as added by BSCA, also requires 
a licensee to provide the employee written notice ``that the licensee 
intends to conduct the [NICS] background check'' and to obtain the 
employee's written consent to the NICS background check.\18\ Finally, 
Congress mandated through amendments to section 40901(b)(2)(D) that, 
when the ``employment background check'' for an individual ``indicates 
that the individual is prohibited from possessing a firearm or 
ammunition'' under 18 U.S.C. 922(g) or (n), the individual may appeal 
the result ``in the same manner and to the same extent as if the 
individual had been the subject of a background check relating to the 
transfer of a firearm.'' \19\ The appeal of FHC results is discussed in 
Section II.C.4 of this preamble.
---------------------------------------------------------------------------

    \18\ This rule proposes no specific method for licensees to 
document having obtained their eligible employees' informed consent 
in writing. However, ATF's proposed FHC form will include a notice 
that the information on the form may be used by the FFL to conduct a 
background check to determine whether the employee is prohibited 
from possessing or receiving firearms by Federal, State, local, or 
Tribal law, and that the employee's signature on the FHC form 
constitutes consent for the FFL to conduct the voluntary background 
check.
    \19\ BSCA also exempted this new use of NICS from provisions of 
the Fair Credit Reporting Act, 15 U.S.C. 1681 et seq. See 34 U.S.C. 
40901(b)(2)(C).
---------------------------------------------------------------------------

2. Purpose and Authority
    This rule proposes to amend 28 CFR 25.1 to add FHCs as an 
additional authorized use of NICS in the subpart of the Department's 
regulations governing NICS background checks. It would add BSCA as a 
source of authority for the subpart.
3. Definitions
    The proposed rule would amend 28 CFR 25.2 to add several 
definitions relevant to FHCs.
a. Eligible Employee and Firearm Handler
    Section 103 of the Brady Act established NICS to enable licensed 
manufacturers, dealers, and importers to receive information about 
whether the transfer of a firearm to a non-licensee would violate 
section 922 or State law. See 34 U.S.C. 40901(b)(1). Section 12004(h) 
of BSCA amended section 40901(b) to require the Attorney General to 
promulgate rules to allow ``licensees'' to use NICS ``for purposes of 
voluntarily conducting an employment background check relating to a 
current or prospective employee.'' 34 U.S.C. 40901(b)(2)(A). Neither 
the text nor the legislative history provides further guidance as to 
the meaning of ``current or prospective employee.''
    If the language were read to cover any employee of any licensee, as 
well as any potential future employee, the number of people who could 
be subject to an FHC, as well as the burden on NICS, would be much 
greater than what Congress likely intended. Thus, the NPRM proposes to 
limit the employees for whom an FFL may seek a background check to 
certain ``eligible employees.''
i. Statutory Context and Congressional Purpose
    Section 12004 of BSCA, entitled the ``Stop Illegal Trafficking in 
Firearms Act,'' is focused on combating the straw

[[Page 100428]]

purchasing and trafficking of firearms. Among other things, section 
12004 added 18 U.S.C. 932 and 933, which criminalize straw purchasing 
and firearms trafficking, respectively, with punishments up to 25 and 
15 years of imprisonment, respectively, as well as forfeiture pursuant 
to 18 U.S.C. 934. See BSCA sec. 12004(a)(1). Section 12004 also amended 
18 U.S.C. 922(d), which prohibits selling or otherwise disposing of 
firearms or ammunition to listed categories of persons, to include in 
the prohibition those individuals who intend to sell or dispose of the 
firearm or ammunition in furtherance of a felony, a Federal crime of 
terrorism, or a drug trafficking offense or to a person in any of the 
other prohibited categories. 18 U.S.C. 922(d)(10) and (11). These 
measures demonstrate that, through BSCA, Congress sought to ensure that 
individuals prohibited from receiving firearms would not be able to 
obtain them.
    Section 12004 also advances this congressional purpose by allowing 
a new use of NICS. As already explained, section 12004(h) requires the 
Attorney General to promulgate regulations that allow ``licensees'' to 
access NICS ``for purposes of voluntarily conducting an employment 
background check relating to a current or prospective employee.'' This 
provision recognizes that FFLs may inadvertently employ prohibited 
persons, who would then have access to firearms through their 
employment duties and who may be able to use their positions to engage 
in illegal trafficking of firearms or to otherwise illegally possess or 
use firearms. The expanded authorization to use NICS to conduct 
background checks of certain prospective and current employees is an 
additional tool for FFLs to help prevent illegal firearms trafficking 
and ensure prohibited persons do not obtain firearms.
    FFLs collectively submit millions of NICS background checks related 
to firearm transfers each year.\20\ Moreover, FFLs employ thousands of 
individuals who, through their employment, have access to firearms and 
the ability to enable straw purchasing and illegal firearm trafficking. 
The Department believes that, by amending 34 U.S.C. 40901(b) through 
section 12004(h) of BSCA, Congress sought to provide a powerful new 
tool to reduce illegal firearm trafficking by giving FFLs the ability 
to use NICS to identify prohibited persons among their employees. This 
purpose informs the proper understanding of the term ``employee.'' 
Because Congress focused on preventing prohibited persons working for 
FFLs from obtaining firearms, the term ``employee'' in BSCA can be 
naturally understood to refer to the subset of individuals working for 
FFLs who, as a result of their employment, would be able to access 
firearms or related materials or tools. Reading the term ``employee'' 
to cover individuals without any opportunity to access firearms or 
related materials or tools would not advance the purpose of BSCA 
because employment of those individuals at FFLs does not create the 
same risk of prohibited persons obtaining firearms. Cf. Robinson v. 
Shell Oil Co., 519 U.S. 337, 340-46 (1997) (determining the meaning of 
the term ``employee'' under a different provision of law by considering 
statute itself, the context in which the word ``employee'' appeared, 
and the ``primary purpose'' of the law at issue).
---------------------------------------------------------------------------

    \20\ See FBI, NICS Firearm Background Checks: Month and Year by 
State and Type (Oct. 2024), https://www.fbi.gov/file-repository/nics_firearms_checks_-_month_year_by_state_type-last-5-years.pdf/view.
---------------------------------------------------------------------------

ii. Policy and Operational Considerations: Impact on Employees
    In addition to the statutory language, context, and congressional 
intent, the overall population of employees and several other factors 
relevant to employees or licensees impact the appropriate 
interpretation of the term ``current or prospective employee.'' The 
Department has concluded that important policy and operational factors 
support the Department's interpretation of the term ``employee.'' As 
discussed in this section, permitting licensees to use NICS for 
employment background checks in overly broad circumstances could have 
negative impacts on both NICS and individuals whose employment duties 
with licensees are or may be wholly unrelated to firearms or 
ammunition. Therefore, it is important to ensure that regulations 
adopted under section 12004(h) have a scope that is both consistent 
with the statute and that accounts for the regulations' potential 
impact on NICS and employees.
    As noted previously, section 12004 of BSCA focuses on preventing 
the illegal trafficking, use, and possession of firearms. One component 
of that focus is a requirement that the Attorney General promulgate 
regulations allowing the use of NICS for employment background checks 
of current or prospective employees of licensees. See 34 U.S.C. 
40901(b)(2)(A). However, not all employees of licensees will have the 
ability or authority to access, handle, or transfer firearms or 
ammunition--or, for licensed manufacturers, related materials or 
tools--during their employment.
    ATF reports that, as of May 10, 2024, there are an estimated 
130,000 total licensees and, of that total, the FBI anticipates this 
rule would apply to approximately 80,000 licensees throughout the 
United States.\21\ This includes eight types of licenses for dealers, 
pawnbrokers,\22\ manufacturers, and importers.\23\ Internal FBI subject 
matter experts estimate that some large retail chains (colloquially 
known as ``big box'' stores) also hold approximately 3,500 dealer 
licenses across their locations throughout the United States. Many 
large manufacturers, importers, or dealers have employees with duties 
wholly unrelated to accessing, handling, or transferring firearms or 
ammunition or related materials or tools. Examples may include certain 
store administrators (accountants, purchasing managers, secretaries, 
etc.), truck drivers, shipping and receiving clerks, pharmacists, deli 
counter workers, bakery workers, cooks, butchers, clothing 
salespersons, electronic salespersons, and cashiers. Allowing FFLs to 
use NICS for background checks of those employees who do not and will 
not have access to, handle, or transfer firearms or ammunition could 
impose burdens on those persons by preventing them from obtaining or 
maintaining any employment \24\ with that licensee.\25\
---------------------------------------------------------------------------

    \21\ See ATF, Report of Active Firearms Licenses--License Type 
by State Statistics (May 10, 2024), https://www.atf.gov/firearms/docs/undefined/0524-ffl-list-completepdf/download. This is the sum 
of subtracting Collectors of Curio and Relic licensees 
(approximately 50,000) from the estimated total licensees (130,000).
    \22\ Pawnbrokers are defined as dealers, but they have their own 
license, Type 2. See ATF, Complete Federal Firearms Listings, 
https://www.atf.gov/firearms/listing-federal-firearms-licensees/complete (last visited Nov. 5, 2024).
    \23\ See id.
    \24\ See, e.g., Just. Pol'y Ctr, Criminal Background Checks and 
Access to Jobs 1-5 (2017), https://www.urban.org/sites/default/files/publication/91456/2001377-criminal-background-checks-and-access-to-jobs_2.pdf (discussing the obstacles to employment that 
criminal background checks can create); Nat'l Emp. L. Project, 65 
MILLION ``NEED NOT APPLY'': The Case for Reforming Criminal 
Background Checks for Employment 1-2 (2011), https://www.nelp.org/app/uploads/2015/03/65_Million_Need_Not_Apply.pdf (similar).
    \25\ This NPRM is not intended to discourage licensees, in 
accordance with applicable laws, from conducting other background 
checks relating to any employees.
---------------------------------------------------------------------------

    For example, FBI subject matter experts estimate large, big box 
dealers of firearms currently employ nearly 1.7 million individuals in 
the United States.\26\ The FBI estimates that, of those

[[Page 100429]]

nearly 1.7 million current employees, approximately 793,000 are 
employed within retail stores that also hold dealer licenses. These 
numbers do not include individuals who would annually be considered for 
prospective employment at those licensed locations. These numbers, for 
just some of the nation's retail chains with multiple locations 
considered as licensees, may increase or decrease based on company 
policy, particularly with respect to individuals who may have access to 
firearms or ammunition. But regardless of this uncertainty, the fact 
remains that FFLs, including big box retailers, employ and may consider 
for employment a vast number of people each year. Allowing FFLs to use 
NICS for background checks of all these employees (including employees 
who do not have access to firearms or ammunition) could have negative 
practical consequences for the affected individuals' employment with 
FFLs. These potential deleterious practical effects underscore the 
importance of interpreting the term ``employee'' in the specific 
context in which it appears in BSCA. And these operational concerns 
apply similarly to use of NICS for background checks of employees of 
licensed manufacturers who have or would have no access to the tools or 
materials necessary to manufacture firearms or ammunition.
---------------------------------------------------------------------------

    \26\ Examples of large, big box firearm dealers include Academy, 
Bass Pro Shops, Big 5 Sporting Goods, Cabela's, Sportsman's 
Warehouse, and Walmart. At the end of Fiscal Year 2024, Walmart 
alone employed approximately 1.6 million associates in the United 
States. See Walmart, How Many People Work at Walmart?, https://corporate.walmart.com/askwalmart/how-many-people-work-at-walmart 
(last visited Nov. 5, 2024).
---------------------------------------------------------------------------

iii. Policy and Operational Considerations: Impact on the NICS Section
    In addition to the negative practical impacts on employment, an 
improperly broad understanding of the term ``employee'' could 
negatively impact FBI's operation of NICS. The NICS Section may require 
additional support staff to process the additional FHC workload. 
Additional staffing may also be required at the NICS Contracted Call 
Center to address additional incoming calls for FHCs. The NICS Section 
and POCs have already experienced a recent, significant increase in 
record research (e.g., contacting State and local criminal justice and 
mental health facilities) because of the implementation of BSCA, which, 
as mentioned in Section II.E of this preamble, required enhanced 
background checks of juvenile justice and mental health records of all 
prospective transferees under 21 years of age. Congress allotted 
funding for additional staff to the NICS Section because of the 
workload increase anticipated with the passage of BSCA; however, much 
of that additional staff is still being hired. Training additional 
staff to process FHCs will also require adequate time. Hence, an overly 
broad application of FHCs could impose significant additional burdens 
on limited FBI resources.
    Based upon initial feedback from POCs, FBI subject matter experts 
anticipate that the majority of POCs will not perform FHCs due to 
either a lack of resources or a lack of authority to conduct background 
checks other than for transfers of firearms.\27\ Therefore, the 
Department anticipates that the majority of those FHCs submitted by 
licensees even in States in which POCs conduct some or all background 
checks for prospective firearm transfers will be processed by the FBI. 
Although the Department is unable to estimate the volume of requests 
for FHCs that will be received, any increase in volume would impact the 
NICS Section. The most likely impacts are a need for the NICS Section 
to hire more staff to receive and process the increased number of 
transactions this new use of NICS will likely cause, as well as an 
increase in overtime worked by NICS Section staff. The FBI will also 
need to devote additional staff resources to researching potentially 
prohibiting records linked to ``Pending'' FHCs and to processing the 
anticipated increase in appeals that will result from this new use of 
NICS.
---------------------------------------------------------------------------

    \27\ For some POCs, the enabling State law may authorize the POC 
only to conduct NICS background checks for the prospective transfer 
of firearms.
---------------------------------------------------------------------------

    The big box companies mentioned above are estimated to have 
approximately 1.7 million current employees in the United States, and 
the FBI estimates that 793,000 of these individuals are employed at 
company locations licensed under 18 U.S.C. 923. Conducting FHCs for 
such a large number of individuals would have significant consequences 
for the FBI's NICS Section. If, however, NICS access is expanded under 
this rule only for those individuals whose prospective employment 
duties have at least some connection to firearms or ammunition, then 
the operational impact on the FBI would be greatly reduced.\28\ 
Moreover, limiting background checks specifically to those employees 
with at least some potential to illegally traffic or aid in straw 
purchases of firearms or ammunition, which are two specific activities 
that BSCA attempts to suppress, is consistent with both the statutory 
text and congressional intent of section 12004 of BSCA.
---------------------------------------------------------------------------

    \28\ See Section II.C.3.a.v of this preamble for further 
discussion regarding the application of this rule to employees of 
licensed manufacturers.
---------------------------------------------------------------------------

iv. Policy and Operational Considerations: Economic Incentives
    There could be an economic incentive for a licensee to utilize NICS 
for employment checks--particularly if NICS regulations allowed FHCs to 
be conducted on all employees regardless of their current or 
anticipated handling, transferring, manufacturing, or accessing of 
firearms or ammunition or related materials or tools. The Department 
cannot charge a fee for an FHC under BSCA, see 34 U.S.C. 
40901(b)(2)(A),\29\ and the FBI understands that many licensees 
currently use a private background check service that does charge a 
fee. The incentive for licensees to rely on the free FHC for general 
employee background checks in lieu of a paid service could 
substantially increase the NICS transaction volume if the NICS Section 
permits licensees to submit FHCs for all employees regardless of 
whether the employees have or may have access to or otherwise handle, 
manufacture, or transfer firearms or ammunition or related materials or 
tools. The inclusion of a no-fee provision in BSCA and the fact that 
many employers currently use private background check services that 
charge a fee supports the Department's proposal to limit the scope of 
FHCs.
---------------------------------------------------------------------------

    \29\ BSCA does not prohibit POCs from charging a fee for 
performing FHCs. But, as noted earlier, many POCs may not perform 
FHCs because of a lack of resources or authority; the FBI would thus 
be responsible for such checks, and the economic incentive to rely 
on the free background checks performed by the FBI would still 
arise.
---------------------------------------------------------------------------

v. Proposed Definition of ``Eligible Employee''
    Given section 12004's focus on preventing the illegal trafficking 
of firearms; given the number of persons who could be considered 
current or prospective employees of an FFL regardless of whether they 
will ever have access to firearms or ammunition or, for licensed 
manufacturers, related materials or tools; and given the operational 
considerations discussed above, the proposed rule would permit FFLs to 
use NICS for employment background checks only where the job in 
question has at least some connection to firearms or ammunition. This 
NPRM thus proposes to limit use of FHC background checks to ``eligible 
employees.'' This term, as proposed, would not encompass every single 
employee of an FFL; instead, it would appropriately encompass those 
employees who have or are likely to have access to firearms or 
ammunition or, for licensed manufacturers, the materials or tools to 
make them.

[[Page 100430]]

    The ``eligible employee'' definition, if finalized, would include 
``firearm handler[s].'' A ``firearm handler,'' in turn, would be 
defined as ``a person whose current or prospective employment duties 
for an FFL include or will include the opportunity to access firearms 
or ammunition, regardless of whether the person's employment duties 
include or will include the actual or constructive transfer or handling 
in any way of firearms or ammunition.'' The term also includes 
``persons whose employment duties allow them entry to any device, room, 
or facility where firearms or ammunition of the licensee are stored.'' 
The FBI estimates that only 57,000 of the roughly 793,000 individuals 
employed within retail stores that also hold dealer licenses at this 
time would be considered ``firearm handlers'' under the definition 
proposed in this rule.
    If finalized, the ``eligible employee'' definition would also 
include certain other employees of licensed manufacturers. Employees of 
licensed manufacturers may, for example, never have access to or 
otherwise handle a weapon that meets the Federal definitions of 
``firearm'' or ``ammunition'' under 18 U.S.C. 921 and 27 CFR 478.11. 
Employees of licensed manufacturers may have access to or handle only 
the raw, unfinished materials or the tools or other equipment used to 
manufacture firearms or ammunition. However, access to the materials 
and tools used during the manufacturing of firearms or ammunition can 
also facilitate illegal firearms trafficking. Based on the Department's 
experience, when those materials or tools fall into the hands of 
prohibited persons, they can be used to illegally manufacture firearms 
or ammunition. Consequently, this rule proposes that licensed 
manufacturers may submit FHCs for persons whose employment duties 
include or will include access to any forging, casting, printing, 
extrusion, unmachined body, or similar article that has not yet reached 
a stage of manufacture where it is clearly identifiable as an 
unfinished component part of a firearm or ammunition (e.g., unformed 
block of metal, liquid polymer, or other raw material); or any tool or 
other equipment used to manufacture a firearm or ammunition or 
otherwise finish a component part of a firearm or ammunition.
    The Department also intends to exclude from the definition of 
``eligible employee'' ``responsible persons''--i.e., those individuals 
of an FFL with the power to direct the management, policies, and 
practices of the business or activity as it pertains to firearms. See 
proposed Sec.  25.2 (excluding ``responsible person[s]'' from the 
proposed definition of ``Eligible Employee''). ATF already requires 
responsible persons to submit fingerprints, a photograph, and specific 
forms so that a background check can be conducted as part of the 
prospective FFL's licensing requirements.\30\ See 27 CFR 478.44. As 
part of ATF's background check for a potential responsible person, NICS 
already responds if available information demonstrates that the 
individual is prohibited from receiving or being transferred a firearm 
as described in 18 U.S.C. 922(t), and conducting a separate FHC for 
responsible persons would accordingly be duplicative.\31\
---------------------------------------------------------------------------

    \30\ See ATF, Application for Federal Firearms License (Oct. 
2020), https://www.atf.gov/file/61506/download (``ATF 
Application'').
    \31\ ATF requires renewed background checks of responsible 
persons every 3 years. See ATF Application, supra.
---------------------------------------------------------------------------

    The proposed rule thus proposes excluding any ``responsible 
person'' from the definition of ``eligible employee.'' In turn, this 
NPRM defines ``Responsible Person'' as ``a sole proprietor or, in the 
case of a corporation, partnership, or association, any individual 
possessing, directly or indirectly, the power to direct or cause the 
direction of the management, policies, and practices of the 
corporation, partnership, or association, insofar as they pertain to 
any FFL.''
b. New NICS Status Responses for FHCs
    As noted in Section II.C.1 of this preamble, after receiving an 
FFL's request for a NICS background check for a prospective firearm 
transfer, NICS responses are currently limited to ``Proceed,'' 
``Delayed,'' or ``Denied.'' The Department believes using these same 
responses during FHCs could confuse FFLs. In particular, the Department 
notes that FHC responses should not be construed to prohibit a licensee 
from employing an individual in a position that does not require the 
handling of or access to a firearm or ammunition or, as applicable, 
related materials or tools. Licensees may mistake a ``Denied'' response 
during an FHC as a determination that the licensee must deny all 
employment to the subject of that FHC. Consequently, this rule proposes 
new responses to be used during FHCs: ``Pass,'' ``Pending,'' and ``Did 
Not Pass.'' As a general matter, a ``Pass'' response would convey that 
available information revealed no firearm prohibitions for the eligible 
employee; a ``Pending'' response would convey that further research is 
needed; and a ``Did Not Pass'' response would convey that available 
information revealed a firearms prohibition applicable to that eligible 
employee.
    A response from the system (or a POC) that the person ``Did Not 
Pass'' the FHC should not be construed to indicate that the FFL cannot 
employ the person. Rather, a ``Did Not Pass'' response indicates only 
that, based on information available to NICS, the person is not 
eligible to ship, transport, possess, or receive firearms. Thus, 
circumstances in which that person handles a firearm during the 
person's employment could lead to criminal liability for the person 
(and potentially the licensee) under applicable Federal, State, local 
or Tribal law. This response, whether ``Pass'' or ``Did Not Pass,'' 
will allow the licensee to make an informed decision of whether to hire 
the person.
4. Appeals
    When information available to NICS ``indicates [the employee] is 
prohibited from possessing a firearm or ammunition pursuant to'' 18 
U.S.C. 922(g) or (n), the FHC will result in a ``Did Not Pass'' 
response. In such circumstances, BSCA requires that the employee be 
permitted to appeal that response ``in the same manner and to the same 
extent as if the individual had been the subject of a background check 
relating to the transfer of a firearm.'' 34 U.S.C. 40901(b)(2)(D).
    Under the Brady Act and its implementing regulations, when NICS has 
determined that a prospective firearm transferee is ineligible to 
receive a firearm, the FBI provides the FFL with a ``Denied'' response. 
See 18 U.S.C. 922(t); 28 CFR 25.2 (defining ``Denied''); see also 28 
CFR 25.6(c)(1) and (g) (further describing responses to FFLs). A denied 
transferee can then request the reasons for a denial and challenge the 
denial if the denied transferee believes it was erroneous. See 34 
U.S.C. 40901(f) and (g); \32\ 28 CFR 25.10(a) through (c) (further 
describing administrative

[[Page 100431]]

appeals of denied firearm transfers). Federal law also allows any 
person denied a firearm due to erroneous information from a NICS 
background check to bring a limited civil action against the State or 
political subdivision responsible for providing the erroneous 
information, against the denying State or political subdivision, or 
against the United States. 18 U.S.C. 925A.\33\ These provisions, 
however, do not apply where NICS has only ``Delayed'' the prospective 
firearm transfer.\34\ See 28 CFR 25.2 (defining ``Delayed'').
---------------------------------------------------------------------------

    \32\ 34 U.S.C. 40901(f) allows individuals to request the 
reasons for a ``determination'' when NICS ``determines that [the] 
individual is ineligible to receive a firearm.'' Reasons are to be 
provided ``in writing, within 5 business days after the date of the 
request.'' Id. Similarly, 34 U.S.C. 40901(g) allows prospective 
transferees to request the reasons why NICS informed an FFL ``that 
receipt of a firearm by a prospective transferee would violate 
subsection (g) or (n)'' of 18 U.S.C. 922 or State law. That person 
may also ``submit to the Attorney General information to correct, 
clarify, or supplement records of the system with respect to the 
prospective transferee.'' Id. If such a request is made, the FBI 
(under authority delegated by the Attorney General) has 60 days to 
determine if that denial was erroneous. Id.; see also 28 CFR 25.3 
(establishing NICS within the FBI). If the denial is determined to 
have been erroneous, the FBI must correct any erroneous records. See 
34 U.S.C. 40901(g).
    \33\ Such actions may only seek an order directing that the 
erroneous information be corrected or that the transfer be approved, 
except that prevailing parties may also seek to recover costs, 
including a reasonable attorney's fee. 18 U.S.C. 925A.
    \34\ Actions under 18 U.S.C. 925A are limited to persons who 
were ``denied.'' Similarly, the FBI's website pertaining to 
administrative appeals provides, ``[i]f you believe you have been 
wrongfully denied a firearm, you can request a firearm-related 
challenge (appeal). You may only challenge a denied firearm 
transaction, not a delayed one.'' FBI, Firearm-Related Challenge 
(Appeal) and Voluntary Appeal File (VAF), https://www.fbi.gov/how-we-can-help-you/more-fbi-services-and-information/nics/national-instant-criminal-background-check-system-nics-appeals-vaf (last 
visited Nov. 5, 2024) (``Appeal and VAF web page'') (emphasis 
omitted). The website also notes how persons can submit a ``Summary 
Request'' to the FBI to obtain copies of their identification 
records.
---------------------------------------------------------------------------

    Because BSCA provides for appeals of FHCs ``in the same manner and 
to the same extent'' as appeals of firearm transfer background checks, 
the Department interprets the term ``appeal'' for FHCs to include the 
same administrative and civil action procedures as those for firearm 
transfer background checks. And because appeals for firearm transfer 
background checks are limited to appeals from ``Denied'' responses, the 
Department interprets the phrase ``in the same manner and to the same 
extent'' to limit FHC appeals to the question whether a ``Did Not 
Pass'' response provided by the FBI or the POC \35\ was correctly 
issued. Just as ``Delayed'' responses for prospective firearm transfers 
cannot be appealed, the FHC appeal processes will not be available to 
challenge ``Pending'' responses from the system. Consistent with this 
limitation, the NPRM proposes to amend 28 CFR 25.10 to make these 
procedures available to individuals whose FHC led to a ``Did Not Pass'' 
response. Finally, the FHC appeal process will also not be used to 
reconsider or overturn a licensee's decision to not hire (or not 
retain) an employee, regardless of the employment position sought or 
held.
---------------------------------------------------------------------------

    \35\ Further discussion of POCs is provided in Section II.A.1 of 
this preamble.
---------------------------------------------------------------------------

    When prospective firearm transfers are ``Delayed'' for further 
research, prospective transferees sometimes pursue improper 
administrative challenges or civil actions regarding those responses. 
Accordingly, the NPRM also proposes some provisions to reduce 
operational burdens on the FBI related to processing administrative 
appeals (or defending actions brought under 18 U.S.C. 925A) with 
respect to FHCs, including meritless appeals filed by persons who were 
not seeking a position that included access to firearms or ammunition 
but were nevertheless denied employment by a licensee.
    Similar to what sometimes occurs during NICS transactions involving 
the prospective transfer of a firearm, the Department anticipates 
improper attempts to appeal NICS-related decisions. First, some 
individuals might attempt to appeal while a decision is still 
``Pending;'' such an appeal is premature. Second, some individuals 
might attempt to appeal the decision of an FFL not to hire the 
individual. Appeals, however, are available only to challenge the 
response of NICS itself. Whether to hire or retain someone on account 
of any response NICS provides is a decision belonging to the FFL; it is 
not a result required by BSCA or this rule, and hence FFL employment 
decisions cannot be appealed.
    In situations involving these inappropriate appeals, the FBI will 
have to expend resources defending administrative challenges or civil 
actions that do not meet the criteria of 34 U.S.C. 40901(b)(2)(D). 
Thus, to further aid in reducing the time it takes NICS to respond to 
some FHCs, as well as to limit unnecessary and inappropriate appeals of 
``Pending'' responses, this NPRM proposes to clarify that eligible 
employees of FFLs may use the Voluntary Appeal File (``VAF'') as 
described in 28 CFR 25.10(g) for FHC purposes. Any individual may 
provide written consent to the FBI to maintain information about the 
individual in the VAF.\36\ Those individuals approved for the VAF are 
issued a Unique Personal Identification Number (``UPIN'') to use during 
future NICS transactions.\37\ When provided during future transactions, 
a valid UPIN is placed on the ATF Form 4473 and transmitted to NICS to 
query the VAF.\38\ NICS currently uses UPINs to compare records, if 
any, at the time the UPIN was issued with any current records. NICS 
conducts this comparison to prevent erroneous ``Denied'' or extended 
``Delayed'' responses during prospective firearm transfers. See 28 CFR 
25.10(g). Consistent with use of the VAF and UPINs with respect to 
firearm transfers, this NPRM proposes that the VAF and UPINs may be 
used by eligible employees of FFLs to prevent future erroneous ``Did 
Not Pass'' or extended ``Pending'' responses during FHCs.
---------------------------------------------------------------------------

    \36\ For further information about the VAF and for the VAF 
application, see Appeal and VAF web page, supra.
    \37\ Id.
    \38\ See id.
---------------------------------------------------------------------------

    The parameters this rule proposes regarding FHCs, such as applying 
FHCs only to ``eligible employee[s]'' of licensees and resolving 
appeals only when NICS responds that the person ``Did Not Pass'' the 
person's FHC, will mitigate the appellate-related operational impacts 
highlighted previously. Such parameters will help prevent the FBI and 
courts from expending resources defending or overseeing voluminous 
appeals submitted by persons seeking to appeal an employment decision 
of an FFL or seeking to appeal even when NICS did not provide a ``Did 
Not Pass'' result for that FHC.
5. Frequency of FHCs
    The earlier-referenced statistics regarding big box stores show 
that, if licensees submit FHCs on the same employee daily, weekly, or 
even monthly (even if only submitting for eligible employees), then 
FHCs could add millions of NICS background checks to current yearly 
totals. That volume of submissions could negatively impact transactions 
involving prospective transfers of firearms. With millions of NICS 
background checks being conducted, NICS staff would have to work 
overtime or be moved from another position to assist in working on FHCs 
during busier times of the year.
    To address this concern, the proposed regulations would allow 
employers to ask for an FHC for a particular eligible employee only 
once every 12 months. This limit would not apply if the licensee 
believes it has received information demonstrating the employee has 
become subject to a potentially prohibiting event. For example, suppose 
that in June 2025 a licensee submits an initial FHC for an eligible 
employee who is expected to handle firearms, and the licensee then 
receives a ``Pass'' response from NICS. However, in February 2026, the 
licensee sees the employee's picture on a local news segment stating 
that a grand jury indicted the employee for several felony-level 
offenses. Because that felony indictment results in a firearm 
restriction under 18 U.S.C. 922(n), the licensee would be authorized 
under this rule to submit another FHC of the eligible employee so long 
as the FFL had previously provided written notice

[[Page 100432]]

to the employee that it intends to conduct the background check and had 
obtained written consent to conduct the background check from the 
employee. See 34 U.S.C. 40901(b)(2)(B). This rule does not provide for 
a licensee to initiate an FHC without the eligible employee's prior 
written consent and does not address what, if any, recourse might be 
available to an employee or licensee where the licensee has not 
obtained that consent.\39\
---------------------------------------------------------------------------

    \39\ This rule is not intended to address any and all 
employment-related matters that may arise and does not take a 
position on whether notice and consent are required to be obtained 
prior to each FHC or whether the employee can consent to subsequent 
FHCs when the employee consents to the initial FHC. This rule does 
not address whether, for example, an eligible employee can provide 
written consent once, with that consent then being used for future 
FHCs; or if the employee must provide written consent for each FHC. 
This rule also does not provide any guidance on whether it would be 
proper for a licensee to require an eligible employee to submit to 
an FHC as a (pre)condition of obtaining or maintaining employment 
with the licensee. System misuse is discussed at 28 CFR 25.11, where 
a non-exhaustive list of examples of system misuse is provided.
---------------------------------------------------------------------------

6. Conforming Amendments
    To account for the proposed revision of the regulations to permit 
use of NICS for FHCs, some definitions in the current regulations will 
need small changes. This NPRM proposes amendments to the definitions 
for ``Appeal,'' ``FFL,'' NICS,'' ``NICS Section,'' ``NICS 
Representative,'' and ``POC,'' consistent with the addition of FHCs to 
these regulations.
    In addition, the Department proposes to amend 28 CFR 25.1, 25.2, 
25.6, 25.8, 25.10, and 25.11 to establish procedures for FHCs that are 
separate from those concerning prospective firearm transfers. Proposed 
amendments to 28 CFR 25.6 provide the process for how an FFL or POC 
will submit a request for an FHC and the requirements of the 
submission. This amendment also describes the responses the NICS 
Section or POC can provide to licensees. Further, FBI proposes 
amendments to 28 CFR 25.8 that parallel existing safeguards for 
background checks for prospective firearm transfers. Lastly, when a 
person or entity purposefully provides false information to NICS in 
order to obtain a ``Proceed'' response, the person or entity is subject 
to a fine of up to $10,000.00 and to potential loss of access to NICS. 
See 28 CFR 25.11. This NPRM proposes that 28 CFR 25.11 be amended to 
also apply monetary or access penalties to those persons who purposely 
provide misinformation to NICS to obtain a ``Pass'' response for an 
FHC.

D. Severability

    BSCA addresses critical but distinct components of the NICS 
background check process. The Department believes that its proposals to 
allow FFLs to conduct FHCs are well-supported in law, reflect sound 
policy, and, once finalized, should be upheld against any legal 
challenge. However, if any portion of the proposed rule, once 
finalized, is declared invalid or unenforceable by a court, the 
Department intends that the proposals contained herein, once finalized, 
be viewed as independent, necessary, and severable from each other to 
the maximum extent possible. As described previously, BSCA mandated 
that the Attorney General ``promulgate regulations allowing licensees 
to use [NICS] for purposes of voluntarily conducting an employment 
background check relating to a current or prospective employee.'' 34 
U.S.C. 40901(b)(2)(A). Each of the policy and operational 
considerations described in Section II of this preamble is 
independently significant to the functioning of this rule. If a court 
were to invalidate one or more of the provisions of the final rule 
resulting from this NPRM, the Department intends that the remaining 
provisions of the rule be severed from any invalidated provision and 
that all remaining provisions stand.
    To obviate any doubt as to the Department's intent, even if a 
provision were deemed invalid (which, again, the Department does not 
believe is supported), the Department would still have proposed each of 
the other provisions in this NPRM. Cf. American Fuel & Petrochemical 
Manufacturers v. E.P.A., 3 F.4th 373, 384 (D.C. Cir. 2021) (severing 
one section of a rule that the court found invalid where the agency had 
stated that it intended that relevant section to be ``severable from'' 
another section that ``operate[d] independently''). Each proposed 
amendment in this rule stands on its own with no reliance on another 
proposed amendment. Each proposed amendment is necessary, for example, 
to notify the public, to provide for the implementation of FHCs, or to 
account for the potential application of existing regulations (such as 
appellate procedures and penalty provisions) to FHCs. Consequently, the 
Department is also proposing an amendment of 28 CFR 25.1 to include a 
general statement about the severability of the provisions within 28 
CFR, part 25, subpart A.

E. Related Issues

    As noted several times in Sections II.B and II.C of this preamble, 
BSCA requires licensees to provide an employee notice of the background 
check and obtain the employee's written consent prior to conducting the 
check. BSCA does not address particular requirements related to 
recordkeeping (e.g., form or retention period) or reporting to the 
Department with respect to FHCs. See 34 U.S.C. 40901(b)(2)(B)(i)-(ii). 
This rule also does not propose to impose a specific requirement on 
licensees to maintain records showing that the FFL provided notice of 
the FHC to the eligible employee or that the eligible employee provided 
written consent to conduct the FHC. ATF has drafted a new form that, 
when available, may be used by licensees for purposes of submitting 
FHCs. The Department anticipates that ATF will have acquired approval 
for the new form in time to facilitate FHCs conducted under the final 
rule resulting from this rulemaking. ATF's FHC Form (5300.47) currently 
proposes to include places to document NICS responses (``Pass,'' ``Did 
Not Pass,'' or ``Pending'') and a statement indicating that the 
eligible employee's signature on the form constitutes the required 
written consent. The information provided by a licensee about an 
eligible employee for the purpose of conducting an FHC will be the same 
information provided by a licensee to NICS about a transferee for 
purposes of a prospective firearm transfer through the current ATF Form 
4473. See 28 CFR 25.7.
    The purpose of this rule is solely to propose updates to relevant 
NICS regulations to provide for the new use of NICS for FHCs, as 
mandated by Congress. This rule is not meant or intended to address 
matters that may or may not be impacted by jurisdiction-specific 
employment laws.
    In addition to this proposed rule, the Department has issued two 
other rulemakings to address relevant provisions in the Consolidated 
Appropriations Act, 2022, Public Law 117-103, 136 Stat. 49 (2022), and 
other provisions of BSCA. See RIN 1110-AA36, FBI-158 (proposing 
regulations related to mandated NICS denial notifications, collection 
of additional residence address information for a prospective firearm 
transferee during some NICS transactions, expansion of the existing 
prohibiting categories to include firearm prohibitions Congress added 
to 18 U.S.C. 922(t) concerning restrictions imposed by applicable 
Tribal and local laws and 18 U.S.C. 922(d), and expanded background 
checks and additional delays during under-21 transactions); and RIN 
1110 AA34, FBI-157 (allowing FFLs to receive information from NCIC's 
Gun File to check whether a firearm offered

[[Page 100433]]

to the FFL has been reported as stolen).\40\ Please consult those 
rulemakings for further substantive information about the regulatory 
amendments the Department is proposing on to those subjects.
---------------------------------------------------------------------------

    \40\ The Department's interim final rule found at RIN 1110-AA34, 
FBI-157, was signed by the Attorney General on June 24, 2024, and 
published in the Federal Register on July 1, 2024. See Bipartisan 
Safer Communities Act--Access to Records of Stolen Firearms in the 
National Crime Information Center, 89 FR 54344.
---------------------------------------------------------------------------

III. Statutory and Executive Order Reviews

A. Executive Orders 12866 (Regulatory Planning and Review), 13563 
(Improving Regulation and Regulatory Review), and 14094 (Modernizing 
Regulatory Review)

    This proposed rule has been drafted and reviewed in accordance with 
Executive Order 12866, section 1(b), The Principles of Regulation; 
Executive Order 13563, section 1(b), General Principles of Regulation; 
and Executive Order 14094. Both Executive Orders 12866 and 13563 direct 
agencies to assess all costs and benefits of available regulatory 
alternatives and, if regulation is necessary, to select regulatory 
approaches that maximize net benefits (including potential economic, 
environmental, public health and safety effects, distributive impacts, 
and equity). Executive Order 13563 emphasizes the importance of using 
the best available methods to quantify both costs and benefits, and of 
reducing costs, harmonizing rules, and promoting flexibility. Executive 
Order 14094, among other things, amends section 3(f) of Executive Order 
12866.
    The Office of Management and Budget (``OMB'') has determined that 
this rule is a ``significant regulatory action'' under Executive Order 
12866, section 3(f), as amended, and accordingly this rule has been 
reviewed by OMB.
    The Department has, to the extent possible, assessed the costs and 
benefits of this proposed rule and believes that the proposed 
regulatory approach selected maximizes net benefits. This proposed rule 
will benefit public safety and interested populations. First, this 
proposed rule benefits interested populations by further clarifying for 
the public how NICS may be used for FHCs. Next, this proposed rule 
benefits licensees, as specifically authorized by Congress, by allowing 
NICS to be used to submit requests for FHCs with respect to consenting 
eligible employees. This use of NICS, although voluntary, will benefit 
licensees and promote public safety by identifying eligible employees 
of the licensee who are subject to firearm prohibitions as described in 
18 U.S.C. 922(t).
    The anticipated costs to the public of this rule are likely to be 
small. There is no charge for this use of NICS. Although licensees will 
incur costs in terms of time necessary to notate system responses 
(``Pass,'' ``Did Not Pass,'' or ``Pending'') or obtain an eligible 
employee's written consent, this rule does not propose mandating that 
licensees submit FHCs. There will be no costs for licensees to modify 
or upgrade their current means of accessing NICS. POCs may incur costs 
to conduct FHCs, including, for example, a minimal one-time cost to 
upgrade their existing systems, but POCs will incur these costs only if 
the POCs voluntarily choose to add FHC-related duties to their current 
duties as POCs. It is anticipated that FHCs could result in some costs 
to State, local, and Tribal government entities such as courts, 
prosecuting offices, and law enforcement agencies if those entities 
choose to respond to requests for records when contacted during further 
research of a ``Pending'' response. But those governmental agencies are 
not required by this rule to respond to the NICS Section. Hence, any 
costs incurred would be voluntary.
    The exact cost of the proposed regulations cannot be calculated. 
The full impact on the NICS Section due to the increase in NICS 
background checks resulting from the addition of FHCs cannot be 
projected due to uncertainty about the number of licensees that will 
choose to use NICS for this purpose. And the FBI cannot determine 
whether State, local, and Tribal governments will voluntarily choose to 
respond to record requests stemming from FHCs. Moreover, the FBI does 
not have historical information to use to estimate the number of 
eligible employees whose backgrounds would require the NICS Section or 
participating POCs to contact Federal, State, local or Tribal 
governmental entities, such as courts and law enforcement agencies, to 
request those agencies provide further information about (potentially) 
prohibiting records. In addition, the FBI can neither predict the 
frequency nor the volume of checks each licensee will initiate, and the 
FBI cannot determine the number of eligible employees who will provide 
written consent for an FHC. As a result, a quantitative impact analysis 
cannot be provided.

B. Executive Order 13132 (Federalism)

    This proposed rule may have effects on the States to the extent 
State entities respond to NICS inquiries during research of a 
``Pending'' transaction. Any such effects, however, will be only an 
indirect result of this rule because State entities may freely choose 
whether to respond to such NICS inquiries. In addition, such effects 
will not be substantial, nor will such effects concern the relationship 
between the Federal Government and the States, or the distribution of 
power and responsibilities among the various levels of government. 
Therefore, in accordance with section 6 of Executive Order 13132, the 
Attorney General has determined that the proposed rule does not have 
sufficient federalism implications to warrant the preparation of a 
federalism summary impact statement.

C. Executive Order 12988 (Civil Justice Reform)

    This rule meets the applicable standards set forth in sections 3(a) 
and 3(b)(2) of Executive Order 12988.

D. Regulatory Flexibility Act

    This proposed rule amends the Department's regulations to 
incorporate changes made by some provisions of BSCA. These changes are 
proposed to provide FFLs the ability to use NICS to voluntarily request 
background checks for eligible employees. The Regulatory Flexibility 
Act (``RFA''), 5 U.S.C. 601 et seq., generally requires that when an 
agency issues a proposed rule or a final rule pursuant to section 
553(b) of the Administrative Procedure Act or another law, the agency 
must prepare a regulatory flexibility analysis that meets the 
requirements of the RFA and publish such analysis in the Federal 
Register. See 5 U.S.C. 603, 604. An initial regulatory flexibility 
analysis is not required if the head of the agency certifies that the 
rule would not, if promulgated, have a significant economic impact on a 
substantial number of small entities. See 5 U.S.C. 605(b).
    ``[T]he term small entity shall have the same meaning as the terms 
`small business', `small organization' and `small governmental 
jurisdiction' defined in paragraphs (3), (4) and (5) of this 
section[.]'' 5 U.S.C. 601(6). The term ``small entities,'' therefore, 
comprises small businesses, not-for-profit organizations that are 
independently owned and operated and are not dominant in their fields, 
and governmental jurisdictions with populations of fewer than 50,000 
people. See 5 U.S.C. 601(3)-(6). The Department anticipates that a 
majority of the licensees that will request FHCs under this rule would 
be considered small entities for purposes of the RFA.
    The FBI anticipates that costs for FFLs that voluntarily undertake 
FHCs would

[[Page 100434]]

be insignificant, consisting only of the minimal time it would take for 
the FFL to collect the employee's consent and any information necessary 
to complete the ATF Form 5300.47, submit the FHC, and receive the 
response. Further, whether to take part in FHCs of any eligible 
employees is the voluntary choice of each FFL. See 34 U.S.C. 
40901(b)(2)(A). Therefore, the rule has no impact, economic or 
otherwise, on any licensee, including small entity licensees, unless 
the licensee voluntarily chooses to request FHCs through NICS. Again, 
neither the FBI, nor this rule, imposes any fee upon any licensee to 
conduct a NICS background check. See 34 U.S.C. 40901(b)(2)(A).
    As is the case with respect to further research during a 
``Delayed'' NICS background check for purposes of a prospective firearm 
transfer, when the NICS Section (or a POC) contacts a State, local, or 
Tribal governmental unit (such as a police department or municipal 
court) for further information when researching a ``Pending'' response 
for an FHC, that governmental unit will not necessarily be burdened. 
This is because this rule does not require the governmental unit to 
take any specific action upon being contacted by NICS. This remains 
true regardless of whether that governmental unit would be considered a 
small entity.
    An FFL will initiate an FHC and receive a response in the same 
manner the FFL uses to submit a NICS background check for the 
prospective transfer of a firearm. The FBI will not charge a fee for 
this service, and there are no mandatory maintenance or compliance 
costs imposed by this proposed rule. Because an FHC is a voluntary 
check; because there is no mandatory requirement that POCs process 
these checks, see proposed Sec.  25.2 (requiring that POCs process 
checks only for prospective firearm ``transfers,'' not FHCs); and 
because State, local, and Tribal agencies contacted for supplemental 
records are not required to respond to NICS contacts, the FBI certifies 
there will not be a significant economic impact on a substantial number 
of small entities. Accordingly, an initial regulatory flexibility 
analysis is not necessary for this rule.
    The FBI welcomes any public comments concerning potential impacts 
or burdens that this rule may or will have on current or future NICS 
users and entities that may be contacted during research of NICS 
transactions.

E. Unfunded Mandates Reform Act of 1995

    This proposed rule will not result in the expenditure by State, 
local, or Tribal governments, in the aggregate, or by the private 
sector, of $100 million or more (adjusted for inflation) in any 1 year, 
and it will not significantly or uniquely affect small governments. 
Therefore, no actions are necessary under the provisions of the 
Unfunded Mandates Reform Act of 1995, Public Law 104-4, 109 Stat. 48. 
See 2 U.S.C. 1532.

F. Paperwork Reduction Act

    This rule does not impose any new reporting or recordkeeping 
requirements under the Paperwork Reduction Act of 1995, Public Law 104-
13, 109 Stat. 163. See 44 U.S.C. 3501-3521.

G. Executive Order 13175 (Consultation and Coordination With Indian 
Tribal Governments)

    The Department has determined that formal Tribal consultation under 
Executive Order 13175 is not required because this proposed rule is 
provided as part of a public collaboration that includes Tribes and is 
being issued in order to implement Congress's mandate that the Attorney 
General promulgate regulations that allow licensees under 18 U.S.C. 923 
to use NICS for purposes of FHCs as described in this proposed rule. 
Implementation of these regulations will not have any substantial 
direct effects on federally recognized Tribes.

List of Subjects

    Administrative practice and procedure, Arms and munitions, Computer 
technology, Privacy, Security measures, Telecommunications.

Authority and Issuance

    Accordingly, for the reasons set forth in the preamble, 28 CFR part 
25, subpart A, is proposed to be amended as follows:

PART 25

Subpart A--the National Instant Criminal Background Check System

0
1. The authority citation for 28 CFR part 25 is revised to read as 
follows:

    Authority:  Public Law 103-159, 107 Stat. 1536, 49 U.S.C. 30501-
30505; Public Law 101-410, 104 Stat. 890, as amended by Public Law 
104-134, 110 Stat. 1321; Public Law 117-159, 136 Stat. 1313; 34 
U.S.C. 40901; 18 U.S.C. 921, 922.

0
2. Revise Sec.  25.1 to read as follows:


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 subsection (t) of 18 
U.S.C. 922. The NICS may also be contacted, pursuant to the Bipartisan 
Safer Communities Act, Public Law 117-159, 136 Stat. 1313, by any 
Federal Firearms Licensee (FFL) for purposes of a firearm handler 
background check (FHC). The regulations in this subpart A are issued 
pursuant to section 103(h) of the Brady Act, 107 Stat. 1542 (18 U.S.C. 
922 note) and section 12004(h)(1) of the Bipartisan Safer Communities 
Act, 136 Stat. 1330-31 (34 U.S.C. 40901(b)(2)(A)), and include 
requirements to ensure the privacy and security of the NICS and appeals 
procedures for persons who have been determined not to have the right 
to receive a firearm as a result of a NICS background check, including 
an FHC, performed by the Federal Bureau of Investigation (FBI) or a 
state or local law enforcement agency. The provisions of this subpart A 
shall be construed as being severable from one another and any 
remaining upheld or unchallenged provisions shall be treated 
independently of any invalidated provision.
0
3. Amend Sec.  25.2 by:
0
a. Revising the definitions of ``Appeal'' and ``ARI'';
0
b. Adding in alphabetical order the definitions of ``Did Not Pass'' and 
``Eligible employee'';
0
c. Revising the definitions of ``FFL'';
0
d. Adding in alphabetical order the definitions of ``Firearm handler'' 
and ``Firearm handler background check (FHC)'';
0
e. Revising the definitions of ``NICS,'' ``NICS Representative,'' 
``NICS Section,'' ``NRI (NICS Record Identifier)''; and
0
f. Adding in alphabetical order the definitions of ``Pass,'' 
``Pending,''
0
g. Revising the definition of ``POC (Point of Contact)''; and
0
h. Adding in alphabetical order the definitions of ``Responding 
agency,'' and ``Responsible person.''
    The revisions and additions read as follows:


Sec.  25.2  Definitions

    Appeal means a formal procedure to challenge the denial of a 
firearm transfer or a ``Did Not Pass'' response for an FHC.

[[Page 100435]]

    ARI means a unique Agency Record Identifier assigned by the agency 
submitting records for inclusion in the NICS Indices.
* * * * *
    Did Not Pass means the response given by the NICS, in the case of 
an FHC, to indicate that at least one matching record was found that 
demonstrates the eligible employee is prohibited from receiving or 
being transferred a firearm as described in 18 U.S.C. 922(t). The 
receipt of a ``Did Not Pass'' response should not be construed to 
indicate the person is not eligible for any employment with the FFL, 
but rather is solely a determination, based on information available to 
the NICS, that the person is not eligible to receive or be transferred 
firearms under 18 U.S.C. 922(t). Circumstances in which that person 
handles a firearm during the person's employment could lead to criminal 
liability for the person (and potentially the FFL) under applicable 
Federal, State, local or Tribal law.
    Eligible employee: (1) For purposes of conducting FHCs, eligible 
employee means a person who is not listed as a responsible person of 
the FFL and is a
    (i) Firearm handler; or a
    (ii) Person whose current or prospective employment duties for a 
licensed manufacturer include, or will include, access to, or the 
handling of, any
    (A) Forging, casting, printing, extrusion, unmachined body, or 
similar article that has not yet reached a stage of manufacture where 
it is clearly identifiable as an unfinished component part of a firearm 
or ammunition (e.g., unformed block of metal, liquid polymer, or other 
raw material); or
    (B) Tool or other equipment used to manufacture a firearm or 
ammunition, or to otherwise finish a component part of a firearm or 
ammunition.
    (2) Persons who have or will have access to tools or other 
equipment as described in paragraph (1)(B)(ii) of this definition 
include, but are not limited to, persons whose employment duties allow 
them entry to any device, room, or facility where such tools or other 
equipment of the manufacturer are used or stored.
    FFL (Federal firearms licensee) means:
    (1) For purposes of a prospective firearm transfer under 18 U.S.C. 
922(t), a person licensed by ATF as a manufacturer, dealer, or importer 
of firearms; and
    (2) For purposes of an FHC, any licensee as defined under 34 U.S.C. 
40901.
    Firearm handler means a person whose current or prospective 
employment duties for an FFL include or will include the opportunity to 
access firearms or ammunition, regardless of whether the person's 
employment duties include or will include the actual or constructive 
transfer or handling in any way of firearms or ammunition. Persons who 
have or will have access to firearms or ammunition include, but are not 
limited to, persons whose employment duties allow them entry to any 
device, room, or facility where firearms or ammunition of the licensee 
are stored.
    Firearm handler background check (FHC) means a NICS background 
check voluntarily initiated by an FFL pursuant to 34 U.S.C. 40901(b) 
for an eligible employee after that eligible employee has provided the 
FFL with the employee's written consent to the FHC.
* * * * *
    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 be prohibited as described in 18 U.S.C. 922(t). An FFL 
also may voluntarily contact the NICS for the purpose of conducting 
FHCs.
* * * * *
    NICS Representative means a person who receives telephone or 
electronic inquiries to the NICS Section from FFLs requesting 
background checks and provides a response as to whether the receipt or 
transfer of a firearm may proceed or is delayed or, for FHCs, whether 
an eligible employee ``Passed'' or ``Did Not Pass'' a NICS background 
check or whether the FHC is ``Pending.''
    NICS Section means the section of the FBI that receives telephone 
or electronic inquiries from FFLs, performs NICS background checks, 
including FHCs, makes determinations based upon available information 
as to whether the receipt or transfer of a firearm would be prohibited 
as described in 18 U.S.C. 922(t), researches criminal history records, 
tracks and finalizes appeals, and conducts audits of system use. For 
purposes of this subpart, the term NICS Operations Center shall be 
understood to refer to the NICS Section.
    NRI (NICS Record Identifier) means the system-generated unique 
number associated with each record in the NICS Indices.
* * * * *
    Pass means, in the case of an FHC, the response given by the NICS 
to indicate that, at the time of the response, no information was 
available to the NICS demonstrating that the eligible employee is 
prohibited from receiving or being transferred a firearm as described 
in 18 U.S.C. 922(t).
    Pending means, in the case of an FHC, the response given by the 
NICS to indicate that more research is required prior to the NICS being 
able to provide a ``Pass'' or ``Did Not Pass'' response.
    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 for prospective firearm transfers, check state or 
local record systems, perform NICS inquiries, determine whether 
matching records provide information demonstrating that an individual 
is disqualified from receiving or being transferred a firearm as 
described in 18 U.S.C. 922(t), and respond to FFLs with the results of 
a NICS background check. A POC may also, if its state law allows, 
receive FHC requests from FFLs, check state or local record systems, 
perform NICS inquiries, determine whether matching records provide 
information demonstrating that an eligible employee is disqualified 
from receiving or being transferred a firearm as described in 18 U.S.C. 
922(t), and respond to FFLs with the results of an FHC. A POC will be 
an agency with express or implied authority to perform POC duties 
pursuant to state statute, regulation, or executive order.
* * * * *
    Responding agency means, in the case of an FHC, a POC or the NICS 
Section, whichever provides the response that information available to 
the NICS demonstrates that the eligible employee is prohibited from 
receiving or being transferred a firearm as described in 18 U.S.C. 
922(t).
    Responsible person means a sole proprietor or, in the case of a 
corporation, partnership, or association, any individual possessing, 
directly or indirectly, the power to direct or cause the direction of 
the management, policies, and practices of the corporation, 
partnership, or association, insofar as they pertain to any FFL.
* * * * *
0
4. Revise Sec.  25.4 to read as follows:


Sec.  25.4  Record source categories.

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

[[Page 100436]]

by Federal, state, local, tribal, and international criminal justice 
agencies.
0
5. Revise and republish Sec.  25.5 to read as follows:


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 
Indices records supplied by Federal agencies;
    (2) Automatically rejecting any attempted entry of records into the 
NICS Indices that contain detectable invalid data elements;
    (3) Automatically purging records in the NICS Indices after they 
have been on file for a prescribed period of time; and
    (4) Performing quality control checks in the form of periodic 
internal audits by FBI personnel to verify that the information 
provided to the NICS Indices 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 Indices and will 
immediately correct any record determined to be invalid or incorrect.
0
6. Amend Sec.  25.6 by:
0
a. Revising paragraphs (a), (c)(1) introductory text, (c)(2) and (3);
0
b. Adding paragraph (c)(4);
0
c. Revising paragraphs (d)(2), (f) introductory text and (f)(2);
0
d. Adding paragraph (g)(3); and
0
e. Revising paragraphs (h), (i), and (j) introductory text;
    The revisions and additions read as follows:


Sec.  25.6  Accessing records in the system.

    (a) FFLs shall initiate a NICS background check in connection with 
a proposed firearm transfer as required by the Brady Act and may 
initiate a NICS background check in connection with an FHC. 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 Section (by telephone or electronic dial-up access) or a 
POC. FFLs in each state will be advised by ATF whether they are 
required to initiate NICS background checks with the NICS Section or a 
POC and how they are to do so.
* * * * *
    (c)(1) The FBI NICS Section, upon receiving an FFL's request for a 
background check for the transfer of a firearm, will:
* * * * *
    (2) The FBI NICS Section, upon receiving an FFL telephone or 
electronic dial-up request for a background check for an FHC, 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 Indices, 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) ``Pass'' response, if no disqualifying information is found 
demonstrating the eligible employee is prohibited from receiving or 
being transferred a firearm as described in 18 U.S.C. 922(t).
    (B) ``Pending'' response, if a NICS search requires more research 
to determine whether the eligible employee is prohibited from receiving 
or being transferred a firearm as described in 18 U.S.C. 922(t).
    (C) ``Did Not Pass'' response, when at least one matching record is 
found that provides information demonstrating that the eligible 
employee is prohibited from receiving or being transferred a firearm as 
described in 18 U.S.C. 922(t).
    (3) None of the responses provided to the FFL under paragraph 
(c)(1) or (c)(2) of this section will contain any of the underlying 
information in the records checked by the system.
    (4) Except where an FFL believes it has received sufficient 
information demonstrating the eligible employee has become subject to a 
potentially prohibiting event (for example, a new criminal charge, 
conviction, or protection order), an FFL may conduct only one FHC for 
each eligible employee every 12 months.
    (d) * * *
    (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 or an FHC; and
* * * * *
    (f) When the NICS receives an inquiry from a POC, it will search 
the relevant databases (i.e., NICS Indices, 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:
* * * * *
    (2) Partial response, if the NICS has not completed the search of 
all of its records. This response will indicate the databases (i.e., 
NICS Indices, NCIC, and III) that have been searched 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.
* * * * *
    (g) * * *
    (2) In the case of a prospective firearm transfer, notify the FFL 
that the transfer may ``Proceed,'' is ``Delayed'' pending further 
record analysis, or is ``Denied.'' ``Proceed'' notifications made 
within 3 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.
    (3) In the case of an FHC, notify the FFL of a ``Pass'' or ``Did 
Not Pass'' result for the FHC, or that the FHC is ``Pending.'' The POC 
may or may not provide a transaction number (NTN or STN) when notifying 
the FFL of a ``Did Not Pass'' result.
    (h)(1) POCs shall transmit electronic NICS transaction 
determination messages to the FBI for the following transactions:
    (i) In the case of a prospective firearm transfer, ``Delayed'' 
transactions that are not resolved before the end of the operational 
day on which the check is requested; ``Denied'' transactions; 
transactions reported to the NICS as ``Delayed'' or ``Open'' and later 
changed to ``Proceed;'' and ``Denied'' transactions that have been 
overturned.
    (ii) In the case of FHCs that a POC conducts, transactions 
resulting in a ``Pass'' or ``Did Not Pass'' response; and transactions 
that have been overturned.
    (2) The FBI shall provide POCs with an electronic capability to 
transmit the information identified in paragraphs (h)(i) and (h)(ii) of 
this section. These electronic messages shall be provided to the NICS 
immediately upon communicating the POC determination to the FFL. For 
firearm transfer checks where a determination has not been communicated 
to the FFL, the electronic messages shall be communicated no later than 
the end of the operational day on which the check was initiated. With 
the exception of permit checks and FHCs, newly created POC NICS firearm 
transfer checks that are not followed by a determination message 
(``Denied'' or ``Delayed'') before the end of the operational day on 
which they were initiated will be assumed to have

[[Page 100437]]

resulted in a ``Proceed'' notification to the FFL. The information 
provided in the POC determination messages for firearm transfer checks 
will be maintained in the NICS Audit Log described in Sec.  25.9(b). 
The NICS will destroy its records regarding POC determinations for 
firearm transfer checks in accordance with the procedures detailed in 
Sec.  25.9(b).
    (i)(1) In the case of a background check for the transfer of a 
firearm, FFLs are required to record the system response, whether 
provided by the FBI NICS Section or a POC, on the appropriate ATF form 
for audit and inspection purposes, under 27 CFR part 478 recordkeeping 
requirements. The FBI NICS Section 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 or determination.
    (2) In the case of a background check for an FHC, FFLs may record 
the system response, whether provided by the FBI NICS Section or a POC, 
on the appropriate form for FHC checks. The FBI NICS Section response 
will always include an NTN and associated response of ``Pass,'' 
``Pending,'' or ``Did Not Pass.'' POC responses may vary as discussed 
in paragraph (g) of this section. In these instances, FFLs may record 
the POC response, including any transaction number or determination. 
FFLs should follow the instructions on the applicable FHC form when 
recording responses.
    (j) Access to the NICS Indices for purposes unrelated to NICS 
background checks required by the Brady Act or an FHC. Access to the 
NICS Indices for purposes unrelated to NICS background checks pursuant 
to 18 U.S.C. 922(t) or an FHC shall be limited to uses for the purposes 
of:
* * * * *
0
7. In Sec.  25.8:
0
a. Revise paragraphs (a), (f)(2), and (g)(1);
0
b. Redesignate paragraph (g)(2) as (g)(2)(i); and
0
c. Add new paragraph (g)(2)(ii).
    The addition and revisions read as follows:


Sec.  25.8  System safeguards.

    (a) Information maintained in the NICS Indices 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.
* * * * *
    (f) * * *
    (2) FFLs will provide the NICS Representative with their FFL Number 
and code word, the type of sale or whether the background check is an 
FHC, and the name, sex, race, date of birth, and state of residence of 
the prospective buyer or eligible employee.
* * * * *
    (g) * * *
    (1) Access will be restricted to the initiation of a NICS 
background check in connection with the proposed transfer of a firearm 
or an FHC.
* * * * *
    (ii) The NICS Representative will only provide a response of 
``Pass,'' ``Pending,'' or ``Did Not Pass'' (with regard to an FHC) and 
will not provide the details of any record information about the 
subject of the FHC. In cases where potentially disqualifying 
information is found in response to an FFL query, the NICS 
Representative will provide a ``Pending'' response to the FFL. Follow-
up ``Pass'' or ``Did Not Pass'' responses will be provided by the NICS 
Section during its regular business hours.
* * * * *
0
8. Revise and republish Sec.  25.9 to read as follows:


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

    (a) The NICS will retain NICS Indices records that indicate that 
receipt of a firearm by the individuals to whom the records pertain 
would be prohibited as described in 18 U.S.C. 922(t). 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 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) 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 or, with respect to FHCs, 
employee and the NTN).
    (i) NICS ``Denied'' and ``Did Not Pass'' transaction records 
obtained or created in the course of the operation of the system will 
be retained in the Audit Log for 110 years.
    (ii) NICS Audit Log records relating to transactions remaining in 
an ``Open'' or ``Pending'' status, except the NTN and the NTN's 
creation date, will be destroyed after not more than 90 days from the 
date of inquiry; and
    (iii) In cases of NICS Audit Log records relating to allowed 
transactions, all identifying information submitted by or on behalf of 
the transferee will be destroyed within 24 hours after the FFL receives 
a ``Pass'' or ``Proceed'' response, as applicable. All other 
information, except the NTN and the NTN's creation date, will be 
destroyed after not more than 90 days from the date of inquiry.
    (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, and support audits 
of the use and performance of the system. Searches may be conducted on 
the Audit Log by timeframe, e.g., by day or month, or by a particular 
state or agency. Information in the NICS Audit Log pertaining to 
allowed transactions may be accessed directly only by the FBI and only 
for the purpose of conducting audits of the use and performance of the 
NICS, except that:
    (i) Information in the NICS Audit Log, including information not 
yet destroyed under Sec.  25.9(b)(1)(iii), that indicates, either on 
its face or in conjunction with other information, a violation or 
potential violation of law or regulation, may be shared with 
appropriate authorities responsible for investigating, prosecuting, or 
enforcing such law or regulation; and
    (ii) The NTNs and their creation dates for allowed transactions may 
be shared with ATF in Individual FFL Audit Logs as specified in Sec.  
25.9(b)(4).
    (3) Limitation on use. 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, except with 
respect to persons prohibited from receiving or being transferred a 
firearm as described in 18 U.S.C. 922(t). The NICS Audit Log will be 
monitored and reviewed on a regular basis to detect any possible misuse 
of NICS data.

[[Page 100438]]

    (4) Creation and Use of Individual FFL Audit Logs. Upon written 
request from ATF containing the name and license number of the FFL and 
the proposed date of inspection of the named FFL by ATF, 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 denied transactions, and, with respect to all other 
transactions, only non-identifying information from the transactions. 
In no instance shall an Individual FFL Audit Log contain more than 60 
days' worth of transaction records with a status of ``Delayed,'' 
``Open,'' ``Pass,'' ``Pending,'' or ``Proceed'' originating at the FFL. 
The FBI will provide POC states the means to provide to the FBI 
information that will allow the FBI to generate Individual FFL Audit 
Logs in connection with ATF inspections of FFLs in POC states. POC 
states that elect not to have the FBI generate Individual FFL Audit 
Logs for FFLs in their states must develop a means by which the POC 
will provide such logs to ATF.
    (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 or 
``Pass'' status for an FHC; and
    (2) All information (regardless of media) contained in the NICS 
Audit Log relating to a background check that results in an allowed 
transfer or ``Pass'' status for an FHC.
    (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 
results in an allowed transfer or ``Pass'' status for an FHC 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 subject and result of a NICS 
check that are not part of a record system created and maintained 
pursuant to independent state law regarding firearms transactions.
0
9. Revise Sec.  25.10 to read as follows:


Sec.  25.10  Correction of erroneous system information.

    (a) An individual may request the reasons for the denial of a 
firearm transfer 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. In the case of an FHC, an individual may request the 
reasons for the ``Did Not Pass'' response from the agency that 
conducted the check of the NICS (the ``responding agency,'' which will 
be either the FBI or the state or local law enforcement agency serving 
as a POC). The FFL will provide the individual the name and address of 
the responding agency and the unique NTN or STN associated with the 
FHC. A request for the reasons for the ``Denied'' or ``Did Not Pass'' 
response must be made in writing to the denying or responding agency, 
as applicable. (POCs at their discretion may waive the requirement for 
a written request.)
    (b) The denying or responding agency will respond to the individual 
with the reasons for the ``Denied'' or ``Did Not Pass'' response 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 making the request).
    (c) If the individual wishes to challenge the accuracy of the 
record upon which a ``Denied'' or ``Did Not Pass'' response is based, 
or if the individual wishes to assert that the individual's right to 
possess a firearm has been restored, the individual may make 
application first to the denying or responding agency, i.e., either the 
FBI or the POC. If the denying or responding agency is unable to 
resolve the appeal, the 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 ``Denied'' or ``Did Not Pass'' 
response 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 agency that issued a ``Denied'' or ``Did 
Not Pass'' response, which will, in turn, verify the record correction 
with the originating agency (assuming the originating agency has not 
already notified the denying or responding agency of the correction) 
and take all necessary steps to correct the record in the NICS.
    (d) As an alternative to the procedure as described in paragraphs 
(a) through (c) of this section, where a POC was the denying or 
responding agency, the individual may elect to direct the individual's 
challenge to the accuracy of the record, in writing, to the FBI, NICS 
Section, Criminal Justice Information Services Division, 1000 Custer 
Hollow Road, Module C-1, Clarksburg, West Virginia 26306-0147. Upon 
receipt of the information, the FBI will investigate the matter either 
by contacting the POC that provided the ``Denied'' or ``Did Not Pass'' 
response or by contacting the source of the data on which the 
``Denied'' or ``Did Not Pass'' response was based. The FBI will request 
that the POC or the data source verify that the record in question 
pertains to the individual who was the subject of the ``Denied'' or 
``Did Not Pass'' response or 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, local, or tribal agency, that was the data 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 or 
responding agency shall provide a written confirmation of the 
correction of the erroneous data to the individual for presentation to 
the FFL. In cases where multiple disqualifying or potentially 
disqualifying records are the basis for the ``Denied'' or ``Did Not 
Pass'' response, or where further disqualifying or potentially 
disqualifying records otherwise exist in the subject's background, the 
individual must pursue a correction for each record before a 
``Proceed'' or ``Pass'' response can be provided to the FFL. In the 
case of a prospective firearm transfer, if the appeal of a contested 
record is successful and 30 or fewer days have transpired since the 
initial check, and there are no other disqualifying or potentially 
disqualifying records upon which to continue the denial, the NICS will 
communicate a ``Proceed'' response to the FFL. If the appeal of a 
prospective firearm transfer is successful and more than 30 days have 
transpired since the initial check, the FFL must recheck the NICS 
before allowing the transfer to continue. In the case of an FHC, if the

[[Page 100439]]

appeal of a contested record is successful and there are no other 
disqualifying or potentially disqualifying records upon which to 
continue the ``Did Not Pass'' status, the NICS will communicate a 
``Pass'' response to the FFL.
    (f) An individual who is the subject of a denied transfer 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. Similarly, an individual who is the 
subject of a ``Did Not Pass'' response during an FHC may bring an 
action against the state or political subdivision responsible for 
providing the contested information, or responsible for providing the 
``Did Not Pass'' response, or against the United States, as the case 
may be, for an order directing that the contested information be 
corrected or that the FHC be passed.
    (g) An individual may provide written consent to the FBI to 
maintain information about the individual in a Voluntary Appeal File to 
be established by the FBI and checked by the NICS for the purpose of 
preventing future erroneous ``Denied'' or ``Did Not Pass'' responses or 
extended responses of ``Delayed'' or ``Pending'' by the NICS. Such file 
shall be used only by the NICS for prospective firearm transfers and 
FHCs. The FBI shall remove all information in the Voluntary Appeal File 
pertaining to an individual upon receipt of a written request by the 
individual. However, the FBI may retain such information contained in 
the Voluntary Appeal File as long as needed to pursue cases of 
identified misuse of the system. If the FBI finds a disqualifying 
record on the individual after the individual's entry into the 
Voluntary Appeal File, the FBI may remove the individual's information 
from the file.
0
10. In Sec.  25.11, revise paragraph (b)(1) to read as follows:


Sec.  25.11  Prohibited Activities and Penalties

* * * * *
    (b) * * *
    (1) State or local agencies', FFLs', or individuals' purposefully 
furnishing incorrect information to the system to obtain a ``Proceed'' 
or ``Pass'' response.
* * * * *

    Dated: November 29, 2024.
Merrick B. Garland,
Attorney General.
[FR Doc. 2024-28711 Filed 12-11-24; 8:45 am]
BILLING CODE 4410-02-P`