Here's the ruling of the supreme court, the ATF lost the case against TC that it was an SBR. It's only an SBR if assembled that way. So, you remove the rifle stock, attach the pistol barrel, then attach the pistol grip. There are a few legal links in this copy and paste. So in the end this is legal to do, as long as the firearm is configured properly.
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CONVERTING AN ENCORE:
BATFE in their infinite wisdom says it is legal to go back and forth between pistol and carbine versions with the Encore or Contender. ONLY IF you never have a pistol barrel installed on a frame at the same time as a carbine stock. A carbine stock with a pistol barrel is a SBR.
ATF didn't have any say in the matter. Or rather, they tried to have a say, and got slapped back by the US Supreme Court (5-4 decision). From
http://www.cs.cmu.edu/afs/cs/usr/wbardwel/public/nfalist/supreme_cases.html
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U.S. v. Thompson/Center Arms Co., - U.S.- (1992)
This is another recent examination of the meaning of the language of the NFA by the Supreme Court, along with Staples. Neither involves constitutional law. In this case the court was called upon to decide what constituted a short barreled rifle. T/C wanted to market a kit consisting of one receiver for their Contender gun, a 16"+ barrel, a >16" barrel, a pistol grip and a shoulder stock. This kit could be used, as intended, to assemble a rifle or a pistol, or it could also be used to assemble a SBR. As it could be so used, ATF decided it was a SBR. T/C made one unit on a Form 1, then sued for a tax refund, claiming it wasn't subject to the NFA. This is the way to challenge such a classification. Doing the thing York or SWD did, in those cases, is an invitation to a prosecution. The Staples case will limit such things, but one can easily lose....Here all that was at stake was money. The court decided that the language of the definition of a SBR was vague, and gave it the reading most favorable to the taxpayer, T/C. They decided the kit was not a SBR, nor was any set of parts where they could be used for a legitimate purpose, even if they could also be used to assemble a SBR. However a SBR fully assembled was also clearly a SBR. Thus the other grey area was a SBR in parts form, like an Uzi carbine and a Uzi SMG barrel. A lower court had held in a prior case that that set of parts was a SBR. The court agreed; that if the parts had only one use, to make a SBR, and a person possessed them all that was a SBR also.
The court's decision and opinions can be seen at
http://www.cs.cmu.edu/afs/cs/usr/wbardwel/public/nfalist/thompson.txt
Note even the dissenters did not hold with all the government's arguements. From
http://www.stephenhalbrook.com/tc.html (website for Stephen Holbrook, attorney for TC in this case)
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