This is DOA. Ain't NO way this is going to fly. It's pure grandstanding.
Let's look JUST at the technical problems with JUST handgun ammo:
1) Lead bullets. Gee, where you gonna mark those? The tail end will be eaten up by ignition, the sides by the lands/grooves, the front by target impact. Which leaves? Ooops. Lead bullets are a common form of cheap practice ammo and also used for hunting (hardcasts).
2) FMJ. Many of these use a lead-exposed base - can't engrave that. The front? What if it hits something hard and wipes the number?
3) Frangibles, as mentioned, forget it. This includes the "clean air green ammo" for use in indoor ranges for strict EPA airborn lead and other heavy metal standards.
Only "total metal jacket" types and any JHP that covers the base (Gold Dot, etc) is even partially compatible with this tech.
It gets better:
DATABASE PROBLEMS!
Holy crap! You're going to set up a database at DOJ HQ that will track every box of ammo to every buyer at every shop!?
That cost issue alone will kill this thing deader'n'Elvis.
Then you've got range theft (or just mixup) of spent shells. Shells in some calibers, esp. low-pressure stuff like 38Spl, 44Spl, 45LC, etc last a LONG time - 10+ reloadings are common when we're talking about practice-grade (or CASS/SAS) performance levels...and they'll often go through multiple hands.
Shooting ranges sweep up the spent cases and either reload them on-site (selling the results in baggies at the front desk) or use a local reloading house to provide cheap range fodder. Given their sale at ranges, this stuff accounts for an ungodly amount of the total practice fodder market and none of the reloaders involved can afford this kind of tech.
I could go on for miles but if Arnold wouldn't sign SB1152 (ammo registration) he's guaranteed to choke on this crap.