Federal Gun Buyback Program Funds Local Events with $360M Annually, Mandates Use of Restricted 'Smart Prepaid Cards'

The new Safer Neighborhoods Gun Buyback Act of 2025 is setting up a major federal grant program to fund local gun buyback events across the country. Starting in 2025 and running through 2027, Congress is authorizing $360 million annually to the Bureau of Justice Assistance (BJA) to hand out grants to states, local governments, Tribal governments, and certain licensed gun dealers. The main goal is simple: get guns off the street and ensure they are destroyed, not resold.

The Smart Card Catch: No Cash, No Ammo

Forget cash or gift cards you can spend anywhere. The biggest change here is the introduction of a specialized “smart prepaid card” (Sec. 104). If a local government or dealer runs a buyback event using this federal money, they must pay for the surrendered guns using these cards. The twist is that these smart cards must have technology built in to automatically block any purchase of a firearm or ammunition. This means the card literally cannot be accepted at any business licensed to sell guns. If you try to use one of these cards to buy a gun or ammo, you’re not only blocked, but you could face a serious problem—Title II of the bill creates a new federal crime, making it illegal to use these cards for gun or ammo purchases, punishable by a fine of up to $100,000 (Sec. 201).

Who Gets to Run the Show?

States and local governments can apply for the main grants to run their own buybacks, but the bill also lets them issue subgrants to licensed “covered gun dealers.” This is where the fine print matters. To be a “covered gun dealer,” you must have a clean record—specifically, no warning letters or conferences from the ATF for federal law violations in the last five years (Sec. 106). If you’re a small, independent dealer who got a minor slap on the wrist from the ATF a few years ago, you’re locked out of participating in this federal program, which could limit who gets to run these events in certain areas.

What Happens to the Guns?

For the person turning in a gun, the incentive is significant. Dealers must load the smart card with an amount equal to at least 125% of the gun’s market value, as determined by the BJA Director (Sec. 105). Once the dealer takes possession of the firearm, a strict process kicks in. First, they must check if the gun was reported stolen. If it was, the ATF must be notified within 24 hours. Within 30 days, the gun must be turned over to the ATF or the local government. Crucially, before destruction, the collected guns must be checked against crime databases within 21 days. If the gun was used in a crime, it gets sent straight to the prosecuting authority. The bill is clear: no one—not the dealer, not the state—can resell any firearm, part, or ammunition collected (Sec. 105).

The Real-World Impact and Implementation Hurdles

For busy people, this bill means that local gun buybacks are likely to become much more common and better funded in the coming years. If you’re looking to safely dispose of an unwanted firearm, the payment—125% of market value—is attractive. However, the payment comes with strings attached: a restricted debit card that you can’t cash out and can’t use for any future firearm-related purchase.

The bill gives the BJA Director significant authority to define the “market value” of guns and to set rules for the program (Sec. 104). This vagueness could lead to uneven pricing across different regions or for different types of firearms. Furthermore, the two-year grant term with strict return deadlines for unused funds and cards (Sec. 103) means that states and dealers will have to move quickly and efficiently to run these events, or risk having to return millions of dollars back to the Treasury, which could be a logistical headache for smaller city police departments or dealers taking on this task.