(1) ESTABLISHMENT.—The Attorney General 
may make an annual grant of not more than 
$1,000,000 to each eligible State that has conformed 
to the requirements of this Act. Such grant may be 
renewed for each year that the State remains in 
such conformity. The grant shall be used for the es-
tablishment, operation, and maintenance of a point- 
of-contact system as set forth in section 3. 
(2) AUTHORIZATION
OF
APPROPRIATIONS.— 
There are authorized to carry out this program not 
more than $10,000,000 each fiscal year. 
(3) MATCHING
REQUIREMENT.—The Federal 
share of the cost of a point-of-contact system carried 
out using grant funds may not exceed 25 percent. 
(b) PREFERENCE FOR OTHER GRANTS.—The Attor-
ney General shall give preference in awards of any discre-
tionary grant administered by the Bureau of Justice As-
sistance to a State that has conformed its laws in accord-
ance with this Act. 
SEC. 3. POINT-OF-CONTACT SYSTEMS REQUIRED. 
To be in compliance with this section, a State shall 
conform its laws to the following: 
(1) A point-of-contact system for the sale or 
transfer of a firearm shall be established or main-
tained, under which a person licensed under section 
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923 of title 18, United States Code, may verify that 
the sale or transfer would be lawful. 
(2) A sale or transfer of a firearm may not be 
completed unless the parties to the sale or transfer 
receive an approval number issued by the point-of- 
contact system not later than 10 days after the sale 
or transfer is initiated. 
(3) The point-of-contact system may not issue 
an approval number if the system cannot confirm 
that the sale or transfer would be lawful. 
(4) A hotline shall be established, to be oper-
ated by the State, to be used by a person licensed 
under section 923 of title 18, United States Code, 
for purposes of contacting the national instant crimi-
nal background check system. 
(5) A fund shall be established by the State for 
the operation of the point-of-contact system. 
(6) An appeals process in the case of any fail-
ure by the point-of-contact system to issue an ap-
proval number, with the burden of proof on the 
State to prove that there was a valid basis for fail-
ure to issue shall be established. 
(7) For each denial, the information will be 
transferred to the state or local law enforcement 
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agency responsible for investigating the denial as a 
violation of law. 
SEC. 4. REPORTING REQUIREMENT. 
To be in compliance with this section, a State that 
receives a grant under this Act shall publish an annual 
report that contains information substantially similar to 
the information included in a NICS operations report 
made by the Director of the Federal Bureau of Investiga-
tion and additionally includes the following: 
(1) The number of investigations resulting from 
failures to issue approval numbers. 
(2) Results of investigations reported. 
(3) Denied appeals that were overturned. 
(4) Total number of hours where point of con-
tact system was not functional resulting in a halt in 
processing checks. 
(5) The number of persons arrestsed as a result 
of an information transfer under section 3(7). 
SEC. 5. ANNUAL AUDIT. 
To be in compliance with this section, a State shall 
submit to an annual audit by the Director of the Federal 
Bureau of Investigation of the point-of-contact system es-
tablished under section 3. 
SEC. 6. DEFINITIONS. 
In this Act: 
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(1) The term ‘‘firearm’’ has the meaning given 
such term in section 921 of title 18, United States 
Code. 
(2) The terms ‘‘law enforcement agency’’ and 
‘‘unit of local government’’ have the meanings given 
such terms in section 901 of the Omnibus Crime 
Control and Safe Streets Act of 1968 (34 U.S.C. 
10251). 
(3) The term ‘‘State’’ includes each of the sev-
eral States, the District of Columbia, the Common-
wealth of Puerto Rico, and any other territory of the 
United States. 
Æ 
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