section shall be liable to the Attorney General for the full 
amount of the grant received under this section. 
(d) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to carry out this section 
$250,000,000 for each of the fiscal years 2008 through 
2010. 
(e) USER FEE.—The Federal Bureau of Investiga-
tion shall not charge a user fee for background checks pur-
suant to section 922(t) of title 18, United States Code. 
SEC. 104. PENALTIES FOR NONCOMPLIANCE. 
(a) ATTORNEY GENERAL REPORT.— 
(1) IN GENERAL.—Not later than January 31 
of each year, the Attorney General shall submit to 
the Committee on the Judiciary of the Senate and 
the Committee on the Judiciary of the House of 
Representatives a report on the progress of the 
States in automating the databases containing infor-
mation described under sections 102 and 103, and 
in providing that information pursuant to the re-
quirements of sections 102 and 103. 
(2) AUTHORIZATION
OF
APPROPRIATIONS.— 
There are authorized to be appropriated to the De-
partment of Justice, such funds as may be necessary 
to carry out paragraph (1). 
(b) PENALTIES.— 
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(1) DISCRETIONARY REDUCTION.—During the 
2-year period beginning 3 years after the date of en-
actment of this Act, the Attorney General may with-
hold not more than 3 percent of the amount that 
would otherwise be allocated to a State under sec-
tion 506 of the Omnibus Crime Control and Safe 
Streets Act of 1968 (42 U.S.C. 3756) if the State 
provides less than 60 percent of the information re-
quired to be provided under sections 102 and 103. 
(2) MANDATORY REDUCTION.—After the expi-
ration of the period referred to in paragraph (1), the 
Attorney General shall withhold 5 percent of the 
amount that would otherwise be allocated to a State 
under section 506 of the Omnibus Crime Control 
and Safe Streets Act of 1968 (42 U.S.C. 3756), if 
the State provides less than 90 percent of the infor-
mation required to be provided under sections 102 
and 103. 
(3) WAIVER BY ATTORNEY GENERAL.—The At-
torney General may waive the applicability of para-
graph (2) to a State if the State provides substantial 
evidence, as determined by the Attorney General, 
that the State is making a reasonable effort to com-
ply with the requirements of sections 102 and 103. 
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(c) REALLOCATION.—Any funds that are not allo-
cated to a State because of the failure of the State to com-
ply with the requirements of this title shall be reallocated 
to States that meet such requirements. 
TITLE II—FOCUSING FEDERAL 
ASSISTANCE 
ON 
THE 
IM-
PROVEMENT 
OF 
RELEVANT 
RECORDS 
SEC. 201. CONTINUING EVALUATIONS. 
(a) EVALUATION REQUIRED.—The Director of the 
Bureau of Justice Statistics (referred to in this section 
as the ‘‘Director’’) shall study and evaluate the operations 
of the National Instant Criminal Background Check Sys-
tem. Such study and evaluation shall include compilations 
and analyses of the operations and record systems of the 
agencies and organizations necessary to support such Sys-
tem. 
(b) REPORT ON GRANTS.—Not later than January 
31 of each year, the Director shall submit to Congress 
a report containing the estimates submitted by the States 
under section 102(b). 
(c) REPORT ON BEST PRACTICES.—Not later than 
January 31 of each year, the Director shall submit to Con-
gress, and to each State participating in the National 
Criminal History Improvement Program, a report of the 
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