34 U.S.C. § 40914 — Penalties for noncompliance

(a) Attorney General report: By January 31 each year, the Attorney General must send Congress's Senate and House Judiciary Committees a report on how well states are automating and sharing the record databases described in sections 40912 and 40913. Congress authorized whatever funds are needed to write this report. (b) Penalties: The Attorney General can cut a state's funding under section 10156 if the state doesn't share enough records. There are three stages: (1) Discretionary reduction - starting 3 years after January 8, 2008, for a 2-year period, the Attorney General may withhold up to 3% of a state's funding if the state provides less than 50% of the required records; after that 2-year period, for the next 5 years, the Attorney General may withhold up to 4% if the state provides less than 70% of the required records. (2) Mandatory reduction - after both of those periods end, the Attorney General must withhold 5% of a state's funding if the state provides less than 90% of the required records. (3) Waiver - the Attorney General can waive the mandatory 5% cut if the state shows strong evidence it is making a real effort to comply, including if a court order or other legal rule is stopping it. (c) Reallocation: Any funding withheld from a noncompliant state must be given instead to states that do comply. (d) Methodology: The Attorney General decides how to count the records a state must report and how to measure compliance, based on the total records across all the record categories listed in section 40912(b)(1)(C).