If you want a barrel shorter than 16" then you must register it with the BATF and receive a "tax stamp" for it. It is then classified under the NFA (National Firearms Act) as a SBR (Short Barreled Rifle). The cost is $200.00 and can take about 3-6 months. If you go to the ATF web site you should be able to download the necessary forms and instructions (I think its form 1, but since its been a long time since I did this I can't recall for sure). Basically you have to complete the form, have your local Chief of Police or Sheriff sign off on it and get fingerprinted. Also, if you go to www.subguns.com > Message Boards > NFA Discussions and ask for help those guys are usually happy to answer you questions about applying for a SBR.
One caution. Do not cut or get a shorter barrel for your rifle before you get the paperwork approved and your "stamp" back from the BATF. Also, bear in mind that the "stamp" is your stamp, not the rifles. In other words, you could not sell that SBR as an SBR to anyone else. They would have to have another stamp of thier own first. Likewise, you cannot take the SBR out of your state of residence without BATF approval first.
Troy is right in that you can have a barrel shorter than 16" if you permanently attach another device such as a muzzle brake on a post-ban to the end of it so that the combined length is 16" or greater.