To amend section 922 of Title 18, United States Code, to require that firearms dealers call a national hotline for a background check before transfer of firearm, and for other purposes.

Makes it unlawful, after the establishment of a national hotline under this Act, for a licensed firearms dealer who knows of the existence of such hotline to transfer any firearm to a person if the dealer has not: (1) contacted the hotline; and (2) been informed that the receipt or possession of the firearm by the person will not violate any Federal, State, or local law. Provides license forfeiture as a penalty for violation of such provision.

Directs the Attorney General to take steps to increase the reliability, accuracy, and availability of national criminal history data necessary to establish an instantaneous national hotline which any licensed dealer may contact to determine whether receipt or possession of a firearm by a prospective transferee would violate any Federal, State, or local law. Requires the Attorney General to develop computer software, procure computer hardware, and employ personnel necessary to implement the hotline. Requires State cooperation in providing accurate data for the establishment of the hotline.

Prohibits the hotline from providing any information unless the person inquiring is a licensed firearms dealer and gives appropriate identifying information of the individual attempting to purchase or possess the firearm.

Requires each State to have accurate, reliable, and available State criminal data history for such hotline in order not to have Federal highway funding withheld. Outlines first and subsequent year highway funding withholding procedures for noncompliance with such requirement, as well as provisions for the permanent loss of funds withheld for a certain period of time. Allows funds whose withholding deadline has not elapsed to be reapportioned to the appropriate State after compliance with such requirement.

Gives States without automated criminal data history records and with limited automated criminal data history records priority in receiving grant money made available for such automation.