[Congressional Record Volume 143, Number 108 (Monday, July 28, 1997)]
[Senate]
[Pages S8190-S8201]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. McCAIN (for himself and Mr. Inouye):
  S. 1077. A bill to amend the Indian Gaming Regulatory Act, and for 
other purposes; to the Committee on Indian Affairs.


        the indian gaming regulatory act amendments act of 1997

  Mr. McCAIN. Mr. President, I am pleased to be joined today by Senator 
Inouye, is sponsoring the Indian Gaming Regulatory Act Amendments Act 
of 1997. I want to associate myself with Senator Inouye's, remarks 
regarding this legislation and the issue of Indian gaming. I commend 
Senator Inouye for his outstanding leadership over the years on this 
complex issue. This legislation is intended to stimulate discussion in 
the Congress and among the tribes on this important issue.
  The bill I am introducing today would provide for a major overhaul of 
the Indian Gaming Regulatory Act of 1988. It will provide for minimum 
Federal standards in the regulation and licensing of class II and class 
III gaming as well as all of the contractors, suppliers, and industries 
associated with such gaming. This will be accomplished through the 
Federal Indian Gaming Regulator Commission which will be funded through 
assessments on Indian gaming revenues and fees imposed on license 
applicants. The bill also provides a new process for the negotiation of 
class III compacts which authorizes the Secretary of the Interior to 
negotiate compacts with Indian tribes in those instances where a State 
chooses not to participate in compact negotiations or where an Indian 
tribe and a State cannot reach an agreement on a compact. This process 
is consistent with recent Federal court decisions.
  In addition, the bill is consistent with the 1987 decision of the 
U.S. Supreme Court in the case of California versus Cabazon Band of 
Mission Indians in that it neither expands nor further restricts the 
scope of Indian gaming. The laws of each State would continue to be the 
basis for determining what gaming activities may be available to an 
Indian tribe located in that State.
  Since the enactment of the Indian Gaming Regulatory Act in 1988, 
there has been a dramatic increase in the amount of gaming activity 
among the Indian tribes. Indian gaming is now estimated to yield gross 
revenues of about $6 billion per year and net revenues are estimated at 
$750 million. There are about 160 class II bingo and card games in 
operation and over 145 tribal/State compacts governing class III gaming 
in 2 States. Indian gaming comprises about 3 percent of all gaming in 
the United States. Gaming activities operated by State governments 
comprises about 36 percent of all gaming, and the private sector 
accounts for the balance of the gaming activity in the Nation.
  Indian gaming has become the largest source of economic activity for 
some Indian tribes. Annual revenues derived from Indian agricultural 
resources have been estimated at $550 million and have historically 
been the leading source of income for Indian tribes and individuals. 
Annual revenues from oil, gas, and minerals are about $230 million and 
Indian forestry revenue are estimated at $61 million. Gaming revenues 
now equal or exceed all of the revenues derived from Indian natural 
resources. In addition, Indian gaming has generated tens of thousands 
of new jobs for Indians and non-Indians. On many reservations, gaming 
has meant the end of unemployment rates of 90 to 100 percent and the 
beginning of an era of full employment.

  Under the Indian Gaming Regulatory Act of 1988, Indian tribes are 
required to expend the profits from gaming activities to fund tribal 
government operations or programs and to promote tribal economic 
development. Profits may only be distributed directly to the members of 
an Indian tribe under a plan which has been approved by the Secretary 
of the Interior. Only a few such plans have been approved. Virtually 
all of the proceeds from Indian gaming activities are used to fund the 
social services, education, and health needs of the Indian tribes. 
Schools, health facilities, roads and other vital infrastructure are 
being built by the Indian tribes with the proceeds from Indian gaming.
  In the years before enactment of the 1988 act, and even since its 
enactment, we have heard concerns about the possibility of organized 
criminal elements penetrating Indian gaming. Both the Department of 
Justice and the FBI have repeatedly testified before the Committee on 
Indian Affairs and have indicated that there is not any substantial 
criminal activity of any kind

[[Page S8192]]

associated with Indian gaming. Some of our colleagues have suggested 
that no one would know if there is criminal activity because not enough 
people are looking for it. I believe that this point of view overlooks 
the fact the act provides for a very substantial regulatory and law 
enforcement role by the States and Indian tribes in class III gaming 
and by the Federal Government in class II gaming. The record clearly 
shows that in the few instances of known criminal activity in class III 
gaming, the Indian tribes have discovered the activity and have sought 
Federal assistance in law enforcement.
  Nevertheless, the record before the Committee on Indian Affairs also 
shows that the absence of minimum Federal standards for the regulation 
and licensing of Indian gaming has allowed a void to develop which will 
become more and more attractive to criminal elements as Indian gaming 
continues to generate increased revenues. The legislation I am 
introducing today provides for the development of strict minimum 
Federal standards based on the recommendations of Federal, State and 
tribal officials. While Indian tribes or States, or both, will continue 
to exercise primary regulatory authority, their regulatory standards 
must meet or exceed the minimum Federal standards. In the event that 
the Federal Indian Gaming Regulatory determines that the minimum 
Federal standards are not being met, then the Commission may directly 
regulate the gaming activity until such time as Federal standards are 
met. In addition, the Commission is vested with authority to issue and 
revoke licenses as well as to impose civil fines, close Indian gaming 
facilities or seek enforcement of the act through the Federal courts.
  One of the areas which has caused the greatest controversy under the 
current law relates to what has come to be known as the scope of 
gaming. A related issue is the refusal of some States to enter into 
negotiations for a class III compact and their assertion of sovereign 
immunity under the 11th amendment to the Constitution when an Indian 
tribe seeks judicial relief as provided by the act. The bill I am 
introducing incorporates the explicit standards of the Cabazon decision 
to guide all parties in determining the permissible gaming activities 
under the laws of any State. State laws will continue to govern this 
issue. I have not proposed the preemption of the gaming laws of any 
State. In most States, the issue of scope of gaming has now been 
settled through negotiation or litigation. In a few States this issue 
remains unresolved, but appears headed toward resolution by the courts.
  In the course of our work on the gaming issue in the two previous 
Congresses, Senators Campbell, Inouye and I advanced various formal and 
informal proposals for Federal legislation to resolve the scope of 
gaming issue. In addition, proposals were developed by State and Tribal 
officials. However, we were never able to develop a consensus on any 
one proposal. While the Committee on Indian Affairs remains open to 
suggestions on this issue, it is apparent that obtaining a consensus 
may not be possible. This may be an area of the law best left to 
resolution through the courts.
  Mr. President, I am sure that we may find many ways to improve this 
legislation as it moves through the Senate. However, I believe that it 
provides a good foundation for our further consideration of this 
important issue. This legislation is essentially the same as the bill 
that was reported favorably for the Committee on Indian Affairs during 
the last Congress by a vote of 14 to 2. I want to emphasize that this 
bill is intended to stimulate discussion. I am looking forward to 
hearing from all interested parties with regard to their constructive 
suggestions for ways to improve the bill and move it forward. I ask 
unanimous consent that the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1077

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Indian Gaming Regulatory Act 
     Amendments Act of 1997''.

     SEC. 2. AMENDMENTS TO THE INDIAN GAMING REGULATORY ACT.

       The Indian Gaming Regulatory Act (25 U.S.C. 2701 et seq.) 
     is amended--
       (1) by striking the first section and inserting the 
     following new section:

     ``SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       ``(a) Short Title.--This Act may be cited as the `Indian 
     Gaming Regulatory Act'.
       ``(b) Table of Contents.--The table of contents for this 
     Act is as follows:

``Sec. 1. Short title; table of contents.
``Sec. 2. Congressional findings.
``Sec. 3. Purposes.
``Sec. 4. Definitions.
``Sec. 5. Establishment of the Federal Indian Gaming Regulatory 
              Commission.
``Sec. 6. Powers of the Chairperson.
``Sec. 7. Powers and authority of the Commission.
``Sec. 8. Regulatory framework.
``Sec. 9. Advisory Committee on Minimum Regulatory Requirements and 
              Licensing Standards.
``Sec. 10. Licensing.
``Sec. 11. Requirements for the conduct of class I and class II gaming 
              on Indian lands.
``Sec. 12. Class III gaming on Indian lands.
``Sec. 13. Review of contracts.
``Sec. 14. Review of existing contracts; interim authority.
``Sec. 15. Civil penalties.
``Sec. 16. Judicial review.
``Sec. 17. Commission funding.
``Sec. 18. Authorization of appropriations.
``Sec. 19. Application of the Internal Revenue Code of 1986.
``Sec. 20. Gaming on lands acquired after October 17, 1988.
``Sec. 21. Dissemination of information.
``Sec. 22. Severability.
``Sec. 23. Criminal penalties.
``Sec. 24. Conforming amendment.'';
       (2) by striking sections 2 and 3 and inserting the 
     following new sections:

     ``SEC. 2. CONGRESSIONAL FINDINGS.

       ``Congress finds that--
       ``(1) Indian tribes are--
       ``(A) engaged in the operation of gaming activities on 
     Indian lands as a means of generating tribal governmental 
     revenue; and
       ``(B) licensing the activities described in subparagraph 
     (A);
       ``(2) clear Federal standards and regulations for the 
     conduct of gaming on Indian lands will assist tribal 
     governments in assuring the integrity of gaming activities 
     conducted on Indian lands;
       ``(3) a principal goal of Federal Indian policy is to 
     promote tribal economic development, tribal self-sufficiency, 
     and strong Indian tribal governments;
       ``(4) while Indian tribes have the right to regulate the 
     operation of gaming activities on Indian lands, if those 
     gaming activities are--
       ``(A) not specifically prohibited by Federal law; and
       ``(B) conducted within a State that as a matter of public 
     policy permits those gaming activities,

     Congress has the authority to regulate the privilege of doing 
     business with Indian tribes in Indian country (as that term 
     is defined in section 1151 of title 18, United States Code);
       ``(5) systems for the regulation of gaming activities on 
     Indian lands should meet or exceed federally established 
     minimum regulatory requirements;
       ``(6) the operation of gaming activities on Indian lands 
     has had a significant impact on commerce with foreign 
     nations, among the several States and with the Indian tribes; 
     and
       ``(7) the Constitution vests Congress with the powers to 
     regulate Commerce with foreign nations, and among the several 
     States, and with the Indian tribes, and this Act is enacted 
     in the exercise of those powers.

     ``SEC. 3. PURPOSES.

       ``The purposes of this Act are--
       ``(1) to ensure the right of Indian tribes to conduct 
     gaming activities on Indian lands in a manner consistent with 
     the decision of the Supreme Court in California et al. v. 
     Cabazon Band of Mission Indians et al. (480 U.S. 202, 107 S. 
     Ct. 1083, 94 L. Ed. 2d 244 (1987)), involving the Cabazon and 
     Morongo bands of Mission Indians;
       ``(2) to provide a statutory basis for the conduct of 
     gaming activities on Indian lands as a means of promoting 
     tribal economic development, tribal self-sufficiency, and 
     strong Indian tribal governments;
       ``(3) to provide a statutory basis for the regulation of 
     gaming activities on Indian lands by an Indian tribe that is 
     adequate to shield those activities from organized crime and 
     other corrupting influences, to ensure that an Indian tribal 
     government is the primary beneficiary of the operation of 
     gaming activities, and to ensure that gaming is conducted 
     fairly and honestly by both the operator and players; and
       ``(4) to declare that the establishment of independent 
     Federal regulatory authority for the conduct of gaming 
     activities on Indian lands and the establishment of Federal 
     minimum regulatory requirements for the conduct of gaming 
     activities on Indian lands are necessary to protect that 
     gaming.'';
       (3) in section 4--
       (A) by redesignating paragraphs (7) and (8) as paragraphs 
     (6) and (7), respectively;
       (B) by striking paragraphs (1) through (6) and inserting 
     the following new paragraphs:
       ``(1) Applicant.--The term `applicant' means any person who 
     applies for a license pursuant to this Act, including any 
     person who applies for a renewal of a license.

[[Page S8193]]

       ``(2) Advisory committee.--The term `Advisory Committee' 
     means the Advisory Committee on Minimum Regulatory 
     Requirements and Licensing Standards established under 
     section 9(a).
       ``(3) Attorney general.--The term `Attorney General' means 
     the Attorney General of the United States.
       ``(4) Chairperson.--The term `Chairperson' means the 
     Chairperson of the Federal Indian Gaming Regulatory 
     Commission established under section 5.
       ``(5) Class i gaming.--The term `class I gaming' means 
     social games played solely for prizes of minimal value or 
     traditional forms of Indian gaming engaged in by individuals 
     as a part of, or in connection with, tribal ceremonies or 
     celebrations.'';
       (C) by striking paragraphs (9) and (10); and
       (D) by adding after paragraph (7) (as redesignated by 
     subparagraph (A) of this paragraph) the following new 
     paragraphs:
       ``(8) Commission.--The term `Commission' means the Federal 
     Indian Gaming Regulatory Commission established under section 
     5.
       ``(9) Compact.--The term `compact' means an agreement 
     relating to the operation of class III gaming on Indian lands 
     that is entered into pursuant to this Act.
       ``(10) Gaming operation.--The term `gaming operation' means 
     an entity that conducts class II or class III gaming on 
     Indian lands.
       ``(11) Gaming-related contract.--The term `gaming-related 
     contract' means--
       ``(A) any agreement for an amount of more than $50,000 per 
     year under which an Indian tribe or an agent of any Indian 
     tribe procures gaming materials, supplies, equipment, or 
     services that are used in the conduct of a class II or class 
     III gaming activity; or
       ``(B) any agreement or contract that provides for financing 
     of an amount more than $50,000 per year for the construction 
     or rehabilitation of any facility in which a gaming activity 
     is to be conducted.
       ``(12) Gaming-related contractor.--The term `gaming-related 
     contractor' means any person who enters into a gaming-related 
     contract with an Indian tribe or an agent of an Indian tribe, 
     including any person with a financial interest in such 
     contract.
       ``(13) Gaming service industry.--The term `gaming service 
     industry' means any form of enterprise that provides goods or 
     services that are used in conjunction with any class II or 
     class III gaming activity, in any case in which--
       ``(A) the proposed agreement between the enterprise and a 
     class II or class III gaming operation, or the aggregate of 
     such agreements is for an amount of not less than $100,000 
     per year; or
       ``(B) the amount of business conducted by such enterprise 
     with any such gaming operation in the 1-year period preceding 
     the effective date of the proposed agreement between the 
     enterprise and a class II or class III gaming operation was 
     not less than $250,000.
       ``(14) Indian lands.--The term `Indian lands' means--
       ``(A) all lands within the limits of any Indian 
     reservation; and
       ``(B) any lands--
       ``(i) the title to which is held in trust by the United 
     States for the benefit of any Indian tribe; or
       ``(ii)(I) the title to which is--

       ``(aa) held by an Indian tribe subject to a restriction by 
     the United States against alienation;
       ``(bb) held in trust by the United States for the benefit 
     of an individual Indian; or

       ``(cc) held by an individual subject to restriction by the 
     United States against alienation; and

       ``(II) over which an Indian tribe exercises governmental 
     power.
       ``(15) Indian tribe.--The term `Indian tribe' means any 
     Indian tribe, band, nation, or other organized group or 
     community of Indians that--
       ``(A) is recognized as eligible by the Secretary for the 
     special programs and services provided by the United States 
     to Indians because of their status as Indians; and
       ``(B) is recognized as possessing powers of self-
     government.
       ``(16) Key employee.--The term `key employee' means any 
     individual employed in a gaming operation licensed pursuant 
     to this Act in a supervisory capacity or empowered to make 
     any discretionary decision with regard to the gaming 
     operation, including any pit boss, shift boss, credit 
     executive, cashier supervisor, gaming facility manager or 
     assistant manager, or manager or supervisor of security 
     employees.
       ``(17) Management contract.--The term `management contract' 
     means any contract or collateral agreement between an Indian 
     tribe and a contractor, if such contract or agreement 
     provides for the management of all or part of a gaming 
     operation.
       ``(18) Management contractor.--The term `management 
     contractor' means any person entering into a management 
     contract with an Indian tribe or an agent of the Indian tribe 
     for the management of a gaming operation, including any 
     person with a financial interest in that contract.
       ``(19) Material control.--The term `material control' means 
     the exercise of authority or supervision or the power to make 
     or cause to be made any discretionary decision with regard to 
     matters which have a substantial effect on the financial or 
     management aspects of a gaming operation.
       ``(20) Net revenues.--The term `net revenues' means the 
     gross revenues of an Indian gaming activity reduced by the 
     sum of--
       ``(A) any amounts paid out or paid for as prizes; and
       ``(B) the total operating expenses associated with the 
     gaming activity, excluding management fees.
       ``(21) Person.--The term `person' means an individual, 
     firm, corporation, association, organization, partnership, 
     trust, consortium, joint venture, or entity.
       ``(22) Secretary.--The term `Secretary' means the Secretary 
     of the Interior.'';
       (4) by striking sections 5 through 19 and inserting the 
     following new sections:

     ``SEC. 5. ESTABLISHMENT OF THE FEDERAL INDIAN GAMING 
                   REGULATORY COMMISSION.

       ``(a) Establishment.--There is established as an 
     independent agency of the United States, a Commission to be 
     known as the Federal Indian Gaming Regulatory Commission. 
     Such Commission shall be an independent establishment, as 
     defined in section 104 of title 5, United States Code.
       ``(b) Composition of the Commission.--
       ``(1) In general.--The Commission shall be composed of 3 
     full-time members, who shall be appointed by the President, 
     by and with the advice and consent of the Senate.
       ``(2) Citizenship of members.--Each member of the 
     Commission shall be a citizen of the United States.
       ``(3) Requirements for members.--No member of the 
     Commission may--
       ``(A) pursue any other business or occupation or hold any 
     other office;
       ``(B) be actively engaged in or, other than through 
     distribution of gaming revenues as a member of an Indian 
     tribe, have any pecuniary interest in gaming activities;
       ``(C) other than through distribution of gaming revenues as 
     a member of an Indian tribe, have any pecuniary interest in 
     any business or organization that holds a gaming license 
     under this Act or that does business with any person or 
     organization licensed under this Act;
       ``(D) have been convicted of a felony or gaming offense; or
       ``(E) have any pecuniary interest in, or management 
     responsibility for, any gaming-related contract or any other 
     contract approved pursuant to this Act.
       ``(4) Political affiliation.--Not more than 2 members of 
     the Commission shall be members of the same political party. 
     In making appointments to the Commission, the President shall 
     appoint members of different political parties, to the extent 
     practicable.
       ``(5) Additional qualifications.--
       ``(A) In general.--The Commission shall be composed of the 
     most qualified individuals available. In making appointments 
     to the Commission, the President shall give special reference 
     to the training and experience of individuals in the fields 
     of corporate finance, accounting, auditing, and investigation 
     or law enforcement.
       ``(B) Tribal government experience.--Not less than 2 
     members of the Commission shall be individuals with extensive 
     experience or expertise in tribal government.
       ``(6) Background investigations.--The Attorney General 
     shall conduct a background investigation concerning any 
     individual under consideration for appointment to the 
     Commission, with particular regard to the financial 
     stability, integrity, responsibility, and reputation for good 
     character, honesty, and integrity of the nominee.
       ``(c) Chairperson.--The President shall select a 
     Chairperson from among the members appointed to the 
     Commission.
       ``(d) Vice Chairperson.--The Commission shall select, by 
     majority vote, 1 of the members of the Commission to serve as 
     Vice Chairperson. The Vice Chairperson shall--
       ``(1) serve as Chairperson of the Commission in the absence 
     of the Chairperson; and
       ``(2) exercise such other powers as may be delegated by the 
     Chairperson.
       ``(e) Terms of Office.--
       ``(1) In general.--Each member of the Commission shall hold 
     office for a term of 5 years.
       ``(2) Initial appointments.--Initial appointments to the 
     Commission shall be made for the following terms:
       ``(A) The Chairperson shall be appointed for a term of 5 
     years.
       ``(B) One member shall be appointed for a term of 4 years.
       ``(C) One member shall be appointed for a term of 3 years.
       ``(3) Limitation.--No member shall serve for more than 2 
     terms of 5 years each.
       ``(f) Vacancies.--
       ``(1) In general.--Each individual appointed by the 
     President to serve as Chairperson and each member of the 
     Commission shall, unless removed for cause under paragraph 
     (2), serve in the capacity for which such individual is 
     appointed until the expiration of the term of such individual 
     or until a successor is duly appointed and qualified.
       ``(2) Removal from office.--The Chairperson or any member 
     of the Commission may only be removed from office before the 
     expiration of the term of office by the President for neglect 
     of duty, malfeasance in office, or for other good cause 
     shown.
       ``(3) Term to fill vacancies.--The term of any member 
     appointed to fill a vacancy on the Commission shall be for 
     the unexpired term of the member.
       ``(g) Quorum.--Two members of the Commission shall 
     constitute a quorum.
       ``(h) Meetings.--
       ``(1) In general.--The Commission shall meet at the call of 
     the Chairperson or a majority of the members of the 
     Commission.

[[Page S8194]]

       ``(2) Majority of members determine action.--A majority of 
     the members of the Commission shall determine any action of 
     the Commission.
       ``(i) Compensation.--
       ``(1) Chairperson.--The Chairperson shall be paid at a rate 
     equal to that of level IV of the Executive Schedule under 
     section 5316 of title 5, United States Code.
       ``(2) Other members.--Each member of the Commission (other 
     than the Chairperson) shall be paid at a rate equal to that 
     of level V of the Executive Schedule under section 5316 of 
     title 5, United States Code.
       ``(3) Travel.--All members of the Commission shall be 
     reimbursed in accordance with title 5, United States Code, 
     for travel, subsistence, and other necessary expenses 
     incurred by them in the performance of their duties.
       ``(j) Administrative Support Services.--The Administrator 
     of General Services shall provide to the Commission on a 
     reimbursable basis such administrative support services as 
     the Commission may request.

     ``SEC. 6. POWERS OF THE CHAIRPERSON.

       ``(a) Chief Executive Officer.--The Chairperson shall serve 
     as the chief executive officer of the Commission.
       ``(b) Administration of the Commission.--
       ``(1) In general.--Subject to subsection (c), the 
     Chairperson--
       ``(A) shall employ and supervise such personnel as the 
     Chairperson considers to be necessary to carry out the 
     functions of the Commission, and assign work among such 
     personnel;
       ``(B) shall appoint a General Counsel to the Commission, 
     who shall be paid at the annual rate of basic pay payable for 
     ES-6 of the Senior Executive Service Schedule under section 
     5382 of title 5, United States Code;
       ``(C) shall appoint and supervise other staff of the 
     Commission without regard to the provisions of title 5, 
     United States Code, governing appointments in the competitive 
     service;
       ``(D) may procure temporary and intermittent services under 
     section 3109(b) of title 5, United States Code, but at rates 
     for individuals not to exceed the daily equivalent of the 
     maximum annual rate of basic pay payable for ES-6 of the 
     Senior Executive Service Schedule;
       ``(E) may request the head of any Federal agency to detail 
     any personnel of such agency to the Commission to assist the 
     Commission in carrying out the duties of the Commission under 
     this Act, unless otherwise prohibited by law;
       ``(F) shall use and expend Federal funds and funds 
     collected pursuant to section 17; and
       ``(G) may contract for the services of such other 
     professional, technical, and operational personnel and 
     consultants as may be necessary for the performance of the 
     Commission's responsibilities under this Act.
       ``(2) Compensation of staff.--The staff referred to in 
     paragraph (1)(C) shall be paid without regard to the 
     provisions of chapter 51 and subchapters III and VIII of 
     chapter 53 of title 5, United States Code, relating to 
     classification and General Schedule and Senior Executive 
     Service Schedule pay rates, except that no individual so 
     appointed may receive pay in excess of the annual rate of 
     basic pay payable for ES-5 of the Senior Executive Service 
     Schedule under section 5382 of title 5, United States Code.
       ``(c) Applicable Policies.--In carrying out any of the 
     functions under this section, the Chairperson shall be 
     governed by the general policies of the Commission and by 
     such regulatory decisions, findings, and determinations as 
     the Commission may by law be authorized to make.

     ``SEC. 7. POWERS AND AUTHORITY OF THE COMMISSION.

       ``(a) General Powers.--
       ``(1) In general.--The Commission shall have the power to--
       ``(A) approve the annual budget of the Commission;
       ``(B) promulgate regulations to carry out this Act;
       ``(C) establish a rate of fees and assessments, as provided 
     in section 17;
       ``(D) conduct investigations, including background 
     investigations;
       ``(E) issue a temporary order closing the operation of 
     gaming activities;
       ``(F) after a hearing, make permanent a temporary order 
     closing the operation of gaming activities, as provided in 
     section 15;
       ``(G) grant, deny, limit, condition, restrict, revoke, or 
     suspend any license issued under any licensing authority 
     conferred upon the Commission pursuant to this Act or fine 
     any person licensed pursuant to this Act for violation of any 
     of the conditions of licensure under this Act;
       ``(H) inspect and examine all premises in which class II or 
     class III gaming is conducted on Indian lands;
       ``(I) demand access to and inspect, examine, photocopy, and 
     audit all papers, books, and records of class II and class 
     III gaming activities conducted on Indian lands and any other 
     matters necessary to carry out the duties of the Commission 
     under this Act;
       ``(J) use the United States mails in the same manner and 
     under the same conditions as any department or agency of the 
     United States;
       ``(K) procure supplies, services, and property by contract 
     in accordance with applicable Federal laws;
       ``(L) enter into contracts with Federal, State, tribal, and 
     private entities for activities necessary to the discharge of 
     the duties of the Commission;
       ``(M) serve or cause to be served, process or notices of 
     the Commission in a manner provided for by the Commission or 
     in a manner provided for the service of process and notice in 
     civil actions in accordance with the applicable rules of a 
     tribal, State, or Federal court;
       ``(N) propound written interrogatories and appoint hearing 
     examiners, to whom may be delegated the power and authority 
     to administer oaths, issue subpoenas, propound written 
     interrogatories, and require testimony under oath;
       ``(O) conduct all administrative hearings pertaining to 
     civil violations of this Act (including any civil violation 
     of a regulation promulgated under this Act);
       ``(P) collect all fees and assessments authorized by this 
     Act and the regulations promulgated pursuant to this Act;
       ``(Q) assess penalties for violations of the provisions of 
     this Act and the regulations promulgated pursuant to this 
     Act;
       ``(R) provide training and technical assistance to Indian 
     tribes with respect to all aspects of the conduct and 
     regulation of gaming activities;
       ``(S) monitor and, as specifically authorized by this Act, 
     regulate class II and class III gaming;
       ``(T) establish precertification criteria that apply to 
     management contractors and other persons having material 
     control over a gaming operation;
       ``(U) approve all management and gaming-related contracts; 
     and
       ``(V) in addition to the authorities otherwise specified in 
     this Act, delegate, by published order or rule, any of the 
     functions of the Commission (including functions with respect 
     to hearing, determining, ordering, certifying, reporting, or 
     otherwise acting on the part of the Commission concerning any 
     work, business, or matter) to a division of the Commission, 
     an individual member of the Commission, an administrative law 
     judge, or an employee of the Commission.
       ``(2) Statutory construction.--Nothing in this section may 
     be construed to authorize the delegation of the function of 
     rulemaking, as described in subchapter II of chapter 5 of 
     title 5, United States Code, with respect to general rules 
     (as distinguished from rules of particular applicability), or 
     the promulgation of any other rule.
       ``(b) Right To Review Delegated Functions.--
       ``(1) In general.--With respect to the delegation of any of 
     the functions of the Commission, the Commission shall retain 
     a discretionary right to review the action of any division of 
     the Commission, individual member of the Commission, 
     administrative law judge, or employee of the Commission, upon 
     the initiative of the Commission.
       ``(2) Vote needed for review.--The vote of 1 member of the 
     Commission shall be sufficient to bring an action referred to 
     in paragraph (1) before the Commission for review, and the 
     Commission shall ratify, revise, or reject the action under 
     review not later than the last day of the applicable period 
     specified in regulations promulgated by the Commission.
       ``(3) Failure to conduct review.--If the Commission 
     declines to exercise the right to a review described in 
     paragraph (1) or fails to exercise that right within the 
     applicable period specified in regulations promulgated by the 
     Commission, the action of any such division of the 
     Commission, individual member of the Commission, 
     administrative law judge, or employee, shall, for all 
     purposes, including any appeal or review of such action, be 
     deemed an action of the Commission.
       ``(c) Minimum Requirements.--Pursuant to the procedures 
     described in section 9(d), after receiving recommendations 
     from the Advisory Committee, the Commission shall establish 
     minimum Federal standards--
       ``(1) for background investigations, licensing of persons, 
     and licensing of gaming operations associated with the 
     conduct or regulation of class II and class III gaming on 
     Indian lands by tribal governments; and
       ``(2) for the operation of class II and class III gaming 
     activities on Indian lands, including--
       ``(A) surveillance and security personnel and systems 
     capable of monitoring all gaming activities, including the 
     conduct of games, cashiers' cages, change booths, count 
     rooms, movements of cash and chips, entrances and exits to 
     gaming facilities, and other critical areas of any gaming 
     facility;
       ``(B) procedures for the protection of the integrity of the 
     rules for the play of games and controls related to such 
     rules;
       ``(C) credit and debit collection controls;
       ``(D) controls over gambling devices and equipment; and
       ``(E) accounting and auditing.
       ``(d) Commission Access to Information.--
       ``(1) In general.--The Commission may secure from any 
     department or agency of the United States information 
     necessary to enable the Commission to carry out this Act. 
     Unless otherwise prohibited by law, upon request of the 
     Chairperson, the head of such department or agency shall 
     furnish such information to the Commission.
       ``(2) Information transfer.--The Commission may secure from 
     any law enforcement agency or gaming regulatory agency of any 
     State, Indian tribe, or foreign nation information necessary 
     to enable the Commission to carry out this Act. Unless 
     otherwise prohibited by law, upon request of the Chairperson, 
     the head of any State or tribal law

[[Page S8195]]

     enforcement agency shall furnish such information to the 
     Commission.
       ``(3) Privileged information.--Notwithstanding sections 552 
     and 552a of title 5, United States Code, the Commission shall 
     protect from disclosure information provided by Federal, 
     State, tribal, or international law enforcement or gaming 
     regulatory agencies.
       ``(4) Law enforcement agency.--For purposes of this 
     subsection, the Commission shall be considered to be a law 
     enforcement agency.
       ``(e) Investigations and Actions.--
       ``(1) In general.--
       ``(A) Possible violations.--The Commission may, at the 
     discretion of the Commission, and as specifically authorized 
     by this Act, conduct such investigations as the Commission 
     considers necessary to determine whether any person has 
     violated, is violating, or is conspiring to violate any 
     provision of this Act (including any rule or regulation 
     promulgated under this Act). The Commission may require or 
     permit any person to file with the Commission a statement in 
     writing, under oath, or otherwise as the Commission may 
     determine, concerning all relevant facts and circumstances 
     regarding the matter under investigation by the Commission 
     pursuant to this subsection.
       ``(B) Administrative investigations.--The Commission may, 
     at the discretion of the Commission, and as specifically 
     authorized by this Act, investigate such facts, conditions, 
     practices, or matters as the Commission considers necessary 
     or proper to aid in--
       ``(i) the enforcement of any provision of this Act;
       ``(ii) prescribing rules and regulations under this Act; or
       ``(iii) securing information to serve as a basis for 
     recommending further legislation concerning the matters to 
     which this Act relates.
       ``(2) Administrative authorities.--
       ``(A) In general.--For the purpose of any investigation or 
     any other proceeding conducted under this Act, any member of 
     the Commission or any officer designated by the Commission is 
     empowered to administer oaths and affirmations, subpoena 
     witnesses, compel their attendance, take evidence, and 
     require the production of any books, papers, correspondence, 
     memoranda, or other records that the Commission considers 
     relevant or material to the inquiry. The attendance of such 
     witnesses and the production of any such records may be 
     required from any place in the United States at any 
     designated place of hearing.
       ``(B) Requiring appearances or testimony.--In case of 
     contumacy by, or refusal to obey any subpoena issued to, any 
     person, the Commission may invoke the jurisdiction of any 
     court of the United States within the jurisdiction of which 
     an investigation or proceeding is carried on, or where such 
     person resides or carries on business, in requiring the 
     attendance and testimony of witnesses and the production of 
     books, papers, correspondence, memoranda, and other records.
       ``(C) Court orders.--Any court described in subparagraph 
     (B) may issue an order requiring such person to appear before 
     the Commission or member of the Commission or officer 
     designated by the Commission, there to produce records, if so 
     ordered, or to give testimony touching the matter under 
     investigation or in question, and any failure to obey such 
     order of the court may be punished by such court as a 
     contempt of such court.
       ``(3) Enforcement.--
       ``(A) In general.--If the Commission determines that any 
     person is engaged, has engaged, or is conspiring to engage, 
     in any act or practice constituting a violation of any 
     provision of this Act (including any rule or regulation 
     promulgated under this Act), the Commission may--
       ``(i) bring an action in the appropriate district court of 
     the United States or the United States District Court for the 
     District of Columbia to enjoin such act or practice, and upon 
     a proper showing, the court shall grant, without bond, a 
     permanent or temporary injunction or restraining order; or
       ``(ii) transmit such evidence as may be available 
     concerning such act or practice as may constitute a violation 
     of any Federal criminal law to the Attorney General, who may 
     institute the necessary criminal or civil proceedings.
       ``(B) Statutory construction.--
       ``(i) In general.--The authority of the Commission to 
     conduct investigations and take actions under subparagraph 
     (A) may not be construed to affect in any way the authority 
     of any other agency or department of the United States to 
     carry out statutory responsibilities of such agency or 
     department.
       ``(ii) Effect of transmittal by the commission.--The 
     transmittal by the Commission of evidence pursuant to 
     subparagraph (A)(ii) may not be construed to constitute a 
     condition precedent with respect to any action taken by any 
     department or agency referred to in clause (i).
       ``(4) Writs, injunctions, and orders.--Upon application of 
     the Commission, each district court of the United States 
     shall have jurisdiction to issue writs of mandamus, 
     injunctions, and orders commanding any person to comply with 
     the provisions of this Act (including any rule or regulation 
     promulgated under this Act).

     ``SEC. 8. REGULATORY FRAMEWORK.

       ``(a) Class II Gaming.--For class II gaming, Indian tribes 
     shall retain the exclusive right of those tribes to, if the 
     exercise of that right is made in a manner that meets or 
     exceeds minimum Federal standards established by the 
     Commission pursuant to section 7(c)--
       ``(1) monitor and regulate such gaming; and
       ``(2) conduct background investigations and issue licenses 
     to persons who are required to obtain a license under section 
     10(a).
       ``(b) Class III Gaming Conducted Under a Compact.--For 
     class III gaming conducted under the authority of a compact 
     entered into pursuant to section 12, an Indian tribe or a 
     State, or both, as provided in a compact or by tribal 
     ordinance or resolution, shall, in a manner that meets or 
     exceeds minimum Federal standards established by the 
     Commission pursuant to section 7(c)--
       ``(1) monitor and regulate gaming;
       ``(2) conduct background investigations and issue licenses 
     to persons who are required to obtain a license pursuant to 
     section 10(a); and
       ``(3) establish and regulate internal control systems.
       ``(c) Violations of Minimum Federal Standards.--
       ``(1) Class ii gaming.--
       ``(A) In general.--In any case in which an Indian tribe 
     that regulates or conducts class II gaming on Indian lands 
     substantially fails to meet or enforce minimum Federal 
     standards for that gaming, after providing the Indian tribe 
     notice and reasonable opportunity to cure violations and to 
     be heard, and after the exhaustion of other authorized 
     remedies and sanctions, the Commission shall have the 
     authority to conduct background investigations, issue 
     licenses, and establish and regulate internal control systems 
     relating to class II gaming conducted by the Indian tribe.
       ``(B) Exercise of exclusive authority.--The Commission may 
     excercise exclusive authority in carrying out the activities 
     specified in subparagraph (A) until such time as the 
     regulatory and internal control systems of the Indian tribe 
     meet or exceed the minimum Federal standards concerning 
     regulatory, licensing, or internal control requirements 
     established by the Commission for that gaming.
       ``(2) Class iii gaming.--In any case in which an Indian 
     tribe or a State (or both) that regulates class III gaming on 
     Indian lands fails to meet or enforce minimum Federal 
     standards for class III gaming, after providing notice and 
     reasonable opportunity to cure violations and be heard, and 
     after the exhaustion of other authorized remedies and 
     sanctions, the Commission shall have the authority to conduct 
     background investigations, issue licenses, and establish and 
     regulate internal control systems relating to class III 
     gaming conducted by the Indian tribe. That authority of the 
     Commission may be exclusive until such time as the regulatory 
     or internal control systems of the Indian tribe or the State 
     (or both) meet or exceed the minimum Federal regulatory, 
     licensing, or internal control requirements established by 
     the Commission for that gaming.

     ``SEC. 9. ADVISORY COMMITTEE ON MINIMUM REGULATORY 
                   REQUIREMENTS AND LICENSING STANDARDS.

       ``(a) Establishment.--The President shall establish an 
     advisory committee to be known as the `Advisory Committee on 
     Minimum Regulatory Requirements and Licensing Standards'.
       ``(b) Members.--
       ``(1) In general.--The Advisory Committee shall be composed 
     of 8 members who shall be appointed by the President not 
     later than 120 days after the date of enactment of the Indian 
     Gaming Regulatory Act Amendments Act of 1997, of which--
       ``(A) 3 members, selected from a list of recommendations 
     submitted to the President by the Chairperson and Vice 
     Chairperson of the Committee on Indian Affairs of the Senate 
     and the Chairperson and ranking minority member of the 
     Subcommittee on Native American and Insular Affairs of the 
     Committee on Resources of the House of Representatives, shall 
     be members of, and represent, Indian tribal governments 
     involved in gaming covered under this Act;
       ``(B) 3 members, selected from a list of recommendations 
     submitted to the President by the Majority Leader and the 
     Minority Leader of the Senate and the Speaker and the 
     Minority Leader of the House of Representatives, shall 
     represent State governments involved in gaming covered under 
     this Act, and shall have experience as State gaming 
     regulators; and
       ``(C) 2 members shall each be an employee of the Department 
     of Justice.
       ``(2) Vacancies.--Any vacancy on the Advisory Committee 
     shall not affect its powers, but shall be filled in the same 
     manner as the original appointment.
       ``(c) Recommendations for Minimum Federal Standards.--
       ``(1) In general.--Not later than 180 days after the date 
     on which all initial members of the Advisory Committee have 
     been appointed under subsection (b), the Advisory Committee 
     shall develop and submit to the entities referred to in 
     paragraph (2) recommendations for minimum Federal standards 
     relating to background investigations, internal control 
     systems, and licensing standards (as described in section 
     7(c)).
       ``(2) Recipients of recommendations.--The Advisory 
     Committee shall submit the recommendations described in 
     paragraph (1) to the Committee on Indian Affairs of the 
     Senate, the Subcommittee on Native American and Insular 
     Affairs of the Committee on Resources of the House of 
     Representatives,

[[Page S8196]]

     the Commission, and to each federally recognized Indian 
     tribe.
       ``(3) Factors for consideration.--The minimum Federal 
     standards recommended or established pursuant to this section 
     may be developed taking into account for industry standards 
     existing at the time of the development of the standards. The 
     Advisory Committee, and the Commission in promulgating 
     standards pursuant to subsection (d), shall, in addition to 
     considering any other factor that the Commission considers to 
     be appropriate, consider--
       ``(A) the unique nature of tribal gaming as compared to 
     non-Indian commercial, governmental, and charitable gaming;
       ``(B) the broad variations in the scope and size of tribal 
     gaming activity;
       ``(C) the inherent sovereign right of Indian tribes to 
     regulate their own affairs; and
       ``(D) the findings and purposes set forth in sections 2 and 
     3.
       ``(d) Regulations.--Upon receipt of the recommendations of 
     the Advisory Committee, the Commission shall hold public 
     hearings on the recommendations. After the conclusion of the 
     hearings, the Commission shall promulgate regulations 
     establishing minimum Federal regulatory requirements and 
     licensing standards.
       ``(e) Travel.--Each member of the Advisory Committee who is 
     appointed under subparagraph (A) or (B) of subsection (b)(1) 
     and who is not an officer or employee of the Federal 
     Government or a government of a State shall be reimbursed for 
     travel and per diem in lieu of subsistence expenses during 
     the performance of duties of the Advisory Committee while 
     away from the home or the regular place of business of that 
     member, in accordance with subchapter I of chapter 57 of 
     title 5, United States Code.
       ``(f) Termination.--The Advisory Committee shall cease to 
     exist on the date that is 10 days after the date on which the 
     Advisory Committee submits the recommendations under 
     subsection (c).
       ``(g) Exemption From Federal Advisory Committee Act.--All 
     activities of the Advisory Committee shall be exempt from the 
     Federal Advisory Committee Act (5 U.S.C. App.).

     ``SEC. 10. LICENSING.

       ``(a) In General.--A license issued under this Act shall be 
     required of--
       ``(1) a gaming operation;
       ``(2) a key employee of a gaming operation;
       ``(3) a management contractor or gaming-related contractor;
       ``(4) a gaming service industry; or
       ``(5) a person who has material control, either directly or 
     indirectly, over a licensed gaming operation.
       ``(b) Certain Licenses for Management Contractors and 
     Gaming Operations.--Notwithstanding any other provision of 
     law relating to licenses issued by an Indian tribe or a State 
     (or both) pursuant to this Act, the Commission may require 
     licenses of--
       ``(1) management contractors; and
       ``(2) gaming operations.
       ``(c) Gaming Operation License.--
       ``(1) In general.--No gaming operation shall operate unless 
     all required licenses and approvals for the gaming operation 
     have been obtained in accordance with this Act.
       ``(2) Written agreements.--
       ``(A) Filing.--Prior to the operation of any gaming 
     facility or activity, each management contract for the gaming 
     operation shall be in writing and filed with the Commission 
     pursuant to section 13.
       ``(B) Express approval required.--No management contract 
     referred to in subparagraph (A) shall be effective unless the 
     Commission expressly approves the management contract.
       ``(C) Requirement of additional provisions.--The Commission 
     may require that a management contract referred to in 
     subparagraph (A) include any provisions that are reasonably 
     necessary to meet the requirements of this Act.
       ``(D) Ineligibility or exemption.--The Commission may, with 
     respect to an applicant who does not have the ability to 
     exercise any significant control over a licensed gaming 
     operation--
       ``(i) determine that applicant to be ineligible to hold a 
     license; or
       ``(ii) exempt that applicant from being required to hold a 
     license.
       ``(d) Denial of License.--The Commission, in the exercise 
     of the specific licensure power conferred upon the Commission 
     by this Act, shall deny a license to any applicant who is 
     disqualified on the basis of a failure to meet any of the 
     minimum Federal standards promulgated by the Commission 
     pursuant to section 7(c).
       ``(e) Application for License.--
       ``(1) In general.--Upon the filing of the materials 
     specified in paragraph (2), the Commission shall conduct an 
     investigation into the qualifications of an applicant. The 
     Commission may conduct a nonpublic hearing on such 
     investigation concerning the qualifications of the applicant 
     in accordance with regulations promulgated by the Commission.
       ``(2) Filing of materials.--The Commission shall carry out 
     paragraph (1) upon the filing of--
       ``(A) an application for a license that the Commission is 
     specifically authorized to issue pursuant to this Act; and
       ``(B) such supplemental information as the Commission may 
     require.
       ``(3) Timing of hearings and investigations and final 
     action.--
       ``(A) Deadline for hearings and investigations.--Not later 
     than 90 days after receiving the materials described in 
     paragraph (2), the Commission shall complete the 
     investigation described in paragraph (1) and any hearings 
     associated with the investigation conducted pursuant to that 
     paragraph.
       ``(B) Deadline for final action.--Not later than 10 days 
     after the date specified in subparagraph (A), the Commission 
     shall take final action to grant or deny a license to the 
     applicant.
       ``(4) Denials.--
       ``(A) In general.--The Commission may disapprove an 
     application submitted to the Commission under this section 
     and deny a license to the applicant.
       ``(B) Order of denial.--If the Commission denies a license 
     to an applicant under subparagraph (A), the Commission shall 
     prepare an order denying such license. In addition, if an 
     applicant requests a statement of the reasons for the denial, 
     the Commission shall prepare such statement and provide the 
     statement to the applicant. The statement shall include 
     specific findings of fact.
       ``(5) Issuance of licenses.--If the Commission is satisfied 
     that an applicant is qualified to receive a license, the 
     Commission shall issue a license to the applicant upon tender 
     of--
       ``(A) all license fees and assessments as required by this 
     Act (including any rule or regulation promulgated under this 
     Act); and
       ``(B) such bonds as the Commission may require for the 
     faithful performance of all requirements imposed by this Act 
     (including any rule or regulation promulgated under this 
     Act).
       ``(6) Bonds.--
       ``(A) Amounts.--The Commission shall, by rules of uniform 
     application, fix the amount of each bond that the Commission 
     requires under this section in such amount as the Commission 
     considers appropriate.
       ``(B) Use of bonds.--The bonds furnished to the Commission 
     under this paragraph may be applied by the Commission to the 
     payment of any unpaid liability of the licensee under this 
     Act.
       ``(C) Terms.--Each bond required in accordance with this 
     section shall be furnished--
       ``(i) in cash or negotiable securities;
       ``(ii) by a surety bond guaranteed by a satisfactory 
     guarantor; or
       ``(iii) by an irrevocable letter of credit issued by a 
     banking institution acceptable to the Commission.
       ``(D) Treatment of principal and income.--If a bond is 
     furnished under this paragraph in cash or negotiable 
     securities, the principal shall be placed without restriction 
     at the disposal of the Commission, but any income shall inure 
     to the benefit of the licensee.
       ``(f) Renewal of License.--
       ``(1) In general.--
       ``(A) Renewals.--Subject to the power of the Commission to 
     deny, revoke, or suspend licenses, any license issued under 
     this section and in force shall be renewed by the Commission 
     for the next succeeding license period upon proper 
     application for renewal and payment of license fees and 
     assessments, as required by applicable law (including any 
     rule or regulation promulgated under this Act).
       ``(B) Renewal term.--Subject to subparagraph (C), the term 
     of a renewal period for a license issued under this section 
     shall be for a period of not more than--
       ``(i) 2 years, for each of the first 2 renewal periods 
     succeeding the initial issuance of a license pursuant to 
     subsection (e); and
       ``(ii) 3 years, for each succeeding renewal period.
       ``(C) Reopening hearings.--The Commission may reopen 
     licensing hearings at any time after the Commission has 
     issued or renewed a license.
       ``(2) Transition.--
       ``(A) In general.--Notwithstanding any other provision of 
     this subsection, the Commission shall, for the purpose of 
     facilitating the administration of this Act, renew a license 
     for an activity covered under subsection (a) that is held by 
     a person on the date of enactment of the Indian Gaming 
     Regulatory Act Amendments Act of 1997 for a renewal period of 
     18 months.
       ``(B) Action before expiration.--The Commission shall act 
     upon a timely filed license renewal application prior to the 
     date of expiration of the then current license.
       ``(3) Filing requirement.--Each application for renewal 
     shall be filed with the Commission not later than 90 days 
     prior to the expiration of the then current license, and 
     shall be accompanied by full payment of all license fees and 
     assessments that are required by law to be paid to the 
     Commission.
       ``(4) Renewal certificate.--Upon renewal of a license, the 
     Commission shall issue an appropriate renewal certificate, 
     validating device, or sticker, which shall be attached to the 
     license.
       ``(g) Hearings.--
       ``(1) In general.--The Commission shall establish 
     procedures for the conduct of hearings associated with 
     licensing, including procedures for issuing, denying, 
     limiting, conditioning, restricting, revoking, or suspending 
     any such license.
       ``(2) Action by commission.--Following a hearing conducted 
     for any of the purposes authorized in this section, the 
     Commission shall--
       ``(A) render a decision of the Commission;
       ``(B) issue an order; and
       ``(C) serve the decision referred to in subparagraph (A) 
     and order referred to in subparagraph (B) upon the affected 
     parties.

[[Page S8197]]

       ``(3) Rehearing.--
       ``(A) In general.--The Commission may, upon a motion made 
     not later than 10 days after the service of a decision and 
     order, order a rehearing before the Commission on such terms 
     and conditions as the Commission considers just and proper if 
     the Commission finds cause to believe that the decision and 
     order should be reconsidered in view of the legal, policy, or 
     factual matters that are--
       ``(i) advanced by the party that makes the motion; or
       ``(ii) raised by the Commission on a motion made by the 
     Commission.
       ``(B) Action after rehearing.--Following a rehearing 
     conducted by the Commission, the Commission shall--
       ``(i) render a decision of the Commission;
       ``(ii) issue an order; and
       ``(iii) serve such decision and order upon the affected 
     parties.
       ``(C) Final agency action.--A decision and order made by 
     the Commission under paragraph (2) (if no motion for a 
     rehearing is made by the date specified in subparagraph (A)), 
     or a decision and order made by the Commission upon rehearing 
     shall constitute final agency action for purposes of judicial 
     review.
       ``(4) Jurisdiction.--The United States Court of Appeals for 
     the District of Columbia Circuit shall have jurisdiction to 
     review the licensing decisions and orders of the Commission.
       ``(h) License Registry.--The Commission shall--
       ``(1) maintain a registry of all licenses that are granted 
     or denied pursuant to this Act; and
       ``(2) make the information contained in the registry 
     available to Indian tribes to assist the licensure and 
     regulatory activities of Indian tribes.

     ``SEC. 11. REQUIREMENTS FOR THE CONDUCT OF CLASS I AND CLASS 
                   II GAMING ON INDIAN LANDS.

       ``(a) Class I Gaming.--Class I gaming on Indian lands shall 
     be within the exclusive jurisdiction of the Indian tribes and 
     shall not be subject to the provisions of this Act.
       ``(b) Class II Gaming.--
       ``(1) In general.--Any class II gaming on Indian lands 
     shall be within the jurisdiction of the Indian tribes, but 
     shall be subject to the provisions of this Act.
       ``(2) Legal activities.--An Indian tribe may engage in, and 
     license and regulate, class II gaming on Indian lands within 
     the jurisdiction of such tribe, if--
       ``(A) that Indian gaming is located within a State that 
     permits that gaming for any purpose by any person; and
       ``(B) the class II gaming operation meets or exceeds the 
     requirements of sections 7(c) and 10.
       ``(3) Requirements for class ii gaming operations.--
       ``(A) In general.--The Commission shall ensure that, with 
     regard to any class II gaming operation on Indian lands--
       ``(i) a separate license is issued by the Indian tribe for 
     each place, facility, or location on Indian lands at which 
     class II gaming is conducted;
       ``(ii) the Indian tribe has or will have the sole 
     proprietary interest and responsibility for the conduct of 
     any class II gaming activity, unless the conditions of clause 
     (ix) apply;
       ``(iii) the net revenues from any class II gaming activity 
     are used only--

       ``(I) to fund tribal government operations or programs;
       ``(II) to provide for the general welfare of the Indian 
     tribe and the members of the Indian tribe;
       ``(III) to promote tribal economic development;
       ``(IV) to donate to charitable organizations;
       ``(V) to assist in funding operations of local government 
     agencies;
       ``(VI) to comply with the provisions of section 17; or
       ``(VIII) to make per capita payments to members of the 
     Indian tribe pursuant to clause (viii);

       ``(iv) the Indian tribe provides to the Commission annual 
     outside audit reports of the class II gaming operation of the 
     Indian tribe, which may be encompassed within existing 
     independent tribal audit systems;
       ``(v) each contract for supplies, services, or concessions 
     for a contract amount equal to more than $50,000 per year, 
     other than a contract for professional legal or accounting 
     services, relating to such gaming is subject to such 
     independent audit reports and any audit conducted by the 
     Commission;
       ``(vi) the construction and maintenance of a class II 
     gaming facility and the operation of class II gaming are 
     conducted in a manner that adequately protects the 
     environment and public health and safety;
       ``(vii) there is instituted an adequate system that--

       ``(I) ensures that--

       ``(aa) background investigations are conducted on primary 
     management officials, key employees, and persons having 
     material control, either directly or indirectly, in a 
     licensed class II gaming operation, and gaming-related 
     contractors associated with a licensed class II gaming 
     operation; and
       ``(bb) oversight of the officials referred to in item (aa) 
     and the management by those officials is conducted on an 
     ongoing basis; and

       ``(II) includes--

       ``(aa) tribal licenses for persons involved in class II 
     gaming operations, issued in accordance with sections 7(c) 
     and 10;
       ``(bb) a standard whereby any person whose prior 
     activities, criminal record, if any, or reputation, habits, 
     and associations pose a threat to the public interest or to 
     the effective regulation of gaming, or create or enhance the 
     dangers of unsuitable, unfair, or illegal practices and 
     methods and activities in the conduct of gaming shall not be 
     eligible for employment or licensure; and
       ``(cc) notification by the Indian tribe to the Commission 
     of the results of a background investigation conducted under 
     item (bb) before the issuance of any such license;
       ``(viii) net revenues from any class II gaming activities 
     conducted or licensed by any Indian tribal government are 
     used to make per capita payments to members of the Indian 
     tribe only if--

       ``(I) the Indian tribe has prepared a plan to allocate 
     revenues to uses authorized by clause (iii);
       ``(II) the Secretary determines that the plan is adequate, 
     particularly with respect to uses described in subclause (I) 
     or (III) of clause (iii);
       ``(III) the interests of minors and other legally 
     incompetent persons who are entitled to receive any of the 
     per capita payments are protected and preserved;
       ``(IV) the per capita payments to minors and other legally 
     incompetent persons are disbursed to the parents or legal 
     guardians of the minors or legally incompetent persons 
     referred to in subclause (III) in such amounts as may be 
     necessary for the health, education, or welfare of each such 
     minor or legally incompetent person under a plan approved by 
     the Secretary and the governing body of the Indian tribe; and
       ``(V) the per capita payments are subject to Federal income 
     taxation and Indian tribes withhold such taxes when such 
     payments are made;

       ``(ix) a separate license is issued by the Indian tribe for 
     any class II gaming operation owned by any person or entity 
     other than the Indian tribe and conducted on Indian lands, 
     that includes--

       ``(I) requirements set forth in clauses (v) through (vii) 
     (other than the requirements of clause (vii)(II)(cc)), and 
     (x); and
       ``(II) requirements that are at least as restrictive as 
     those established by State law governing similar gaming 
     within the jurisdiction of the State within which such Indian 
     lands are located; and

       ``(x) no person or entity, other than the Indian tribe, is 
     eligible to receive a tribal license for a class II gaming 
     operation conducted on Indian lands within the jurisdiction 
     of the Indian tribe if that person or entity would not be 
     eligible to receive a State license to conduct the same 
     activity within the jurisdiction of the State.
       ``(B) Transition.--
       ``(i) In general.--Clauses (ii), (iii), and (ix) of 
     subparagraph (A) shall not bar the continued operation of a 
     class II gaming operation described in clause (ix) of that 
     subparagraph that was operating on September 1, 1986, if--

       ``(I) that gaming operation is licensed and regulated by an 
     Indian tribe;
       ``(II) income to the Indian tribe from such gaming is used 
     only for the purposes described in subparagraph (A)(iii);
       ``(III) not less than 60 percent of the net revenues from 
     such gaming operation is income to the licensing Indian 
     tribe; and
       ``(IV) the owner of that gaming operation pays an 
     appropriate assessment to the Commission pursuant to section 
     17 for the regulation of that gaming.

       ``(ii) Limitations on exemption.--The exemption from 
     application provided under clause (i) may not be transferred 
     to any person or entity and shall remain in effect only 
     during such period as the gaming operation remains within the 
     same nature and scope as that gaming operation was actually 
     operated on October 17, 1988.
       ``(C) List.--The Commission shall--
       ``(i) maintain a list of each gaming operation that is 
     subject to subparagraph (B); and
       ``(ii) publish such list in the Federal Register.
       ``(c) Petition for Certificate of Self-Regulation.--
       ``(1) In general.--Any Indian tribe that operates, directly 
     or with a management contract, a class II gaming activity may 
     petition the Commission for a certificate of self-regulation 
     if that Indian tribe--
       ``(A) has continuously conducted such activity for a period 
     of not less than 3 years, including a period of not less than 
     1 year that begins after the date of enactment of the Indian 
     Gaming Regulatory Act Amendments Act of 1997; and
       ``(B) has otherwise complied with the provisions of this 
     Act.
       ``(2) Issuance of certificate of self-regulation.--The 
     Commission shall issue a certificate of self-regulation under 
     this subsection if the Commission determines, on the basis of 
     available information, and after a hearing if requested by 
     the Indian tribe, that the Indian tribe has--
       ``(A) conducted its gaming activity in a manner which has--
       ``(i) resulted in an effective and honest accounting of all 
     revenues;
       ``(ii) resulted in a reputation for safe, fair, and honest 
     operation of the activity; and
       ``(iii) been generally free of evidence of criminal or 
     dishonest activity;
       ``(B) adopted and implemented adequate systems for--

[[Page S8198]]

       ``(i) accounting for all revenues from the gaming activity;
       ``(ii) investigation, licensing, and monitoring of all 
     employees of the gaming activity; and
       ``(iii) investigation, enforcement, and prosecution of 
     violations of its gaming ordinance and regulations;
       ``(C) conducted the operation on a fiscally and 
     economically sound basis; and
       ``(D) paid all fees and assessments that the tribe is 
     required to pay to the Commission under this Act.
       ``(3) Effect of certificate of self-regulation.--During the 
     period in which a certificate of self-regulation issued under 
     this subsection is in effect with respect to a gaming 
     activity conducted by an Indian tribe--
       ``(A) the Indian tribe shall--
       ``(i) submit an annual independent audit report required 
     under subsection (b)(3)(A)(iv); and
       ``(ii) submit to the Commission a complete resume of each 
     employee hired and licensed by the Indian tribe subsequent to 
     the issuance of a certificate of self-regulation; and
       ``(B) the Commission may not assess a fee under section 17 
     on gaming operated by the Indian tribe pursuant to paragraph 
     (1) in excess of \1/4\ of 1 percent of the net revenue from 
     that activity.
       ``(4) Rescission.--The Commission may, for just cause and 
     after a reasonable opportunity for a hearing, rescind a 
     certificate of self-regulation issued under this subsection 
     by majority vote of the members of the Commission.
       ``(d) License Revocation.--If, after the issuance of any 
     license by an Indian tribe under this section, the Indian 
     tribe receives reliable information from the Commission 
     indicating that a licensee does not meet any standard 
     established under section 7(c) or 10, or any other applicable 
     regulation promulgated under this Act, the Indian tribe--
       ``(1) shall immediately suspend that license; and
       ``(2) after providing notice, holding a hearing, and making 
     findings of fact under procedures established pursuant to 
     applicable tribal law, may revoke that license.

     ``SEC. 12. CLASS III GAMING ON INDIAN LANDS.

       ``(a) Requirements for the Conduct of Class III Gaming on 
     Indian Lands.--
       ``(1) In general.--Class III gaming activities shall be 
     lawful on Indian lands only if those activities are--
       ``(A) authorized by--
       ``(i) a compact that--

       ``(I) is approved pursuant to tribal law by the governing 
     body of the Indian tribe having jurisdiction over those 
     lands;
       ``(II) meets the requirements of section 11(b)(3) for the 
     conduct of class II gaming; and
       ``(III) is approved by the Secretary under paragraph (4); 
     or

       ``(ii) the Secretary under procedures prescribed by the 
     Secretary under paragraph (3)(B)(vii);
       ``(B) located in a State that permits that gaming for any 
     purpose by any person; and
       ``(C) conducted in conformance with--
       ``(i) a compact that--

       ``(I) is in effect; and
       ``(II) is entered into by an Indian tribe and a State and 
     approved by the Secretary under paragraph (4); or

       ``(ii) procedures prescribed by the Secretary under 
     paragraph (3)(B)(vii).
       ``(2) Compact negotiations.--
       ``(A) In general.--Any Indian tribe having jurisdiction 
     over the Indian lands upon which a class III gaming activity 
     is being conducted, or is to be conducted, shall request the 
     State in which those lands are located to enter into 
     negotiations for the purpose of entering into a compact 
     governing the conduct of gaming activities. Upon receiving 
     such a request, the State shall negotiate with the Indian 
     tribe in good faith to enter into such a compact.
       ``(B) Approval by the secretary.--Any State and any Indian 
     tribe may enter into a compact governing class III gaming 
     activities on the Indian lands of the Indian tribe, but that 
     compact shall take effect only when notice of approval by the 
     Secretary of that compact has been published by the Secretary 
     in the Federal Register.
       ``(3) Actions.--
       ``(A) In general.--The United States district courts shall 
     have jurisdiction over--
       ``(i) any cause of action initiated by an Indian tribe 
     arising from the failure of a State to enter into 
     negotiations with the Indian tribe for the purpose of 
     entering into a compact under paragraph (2) or to conduct 
     such negotiations in good faith;
       ``(ii) any cause of action initiated by a State or Indian 
     tribe to enjoin a class III gaming activity located on Indian 
     lands and conducted in violation of any compact entered into 
     under paragraph (2) that is in effect; and
       ``(iii) any cause of action initiated by the Secretary to 
     enforce the procedures prescribed under subparagraph 
     (B)(vii).
       ``(B) Procedures.--
       ``(i) In general.--An Indian tribe may initiate a cause of 
     action described in subparagraph (A)(i) only after the 
     expiration of the 180-day period beginning on the date on 
     which the Indian tribe requests the State to enter into 
     negotiations under paragraph (2)(A).
       ``(ii) Burden of proof.--In any action described in 
     subparagraph (A)(i), upon introduction of evidence by an 
     Indian tribe that--

       ``(I) a compact has not been entered into under paragraph 
     (2); and
       ``(II) the State did not respond to the request of the 
     Indian tribe to negotiate such a compact or did not respond 
     to such request in good faith,

     the burden of proof shall be upon the State to prove that the 
     State has negotiated with the Indian tribe in good faith to 
     conclude a compact governing the conduct of gaming 
     activities.
       ``(iii) Failure to negotiate.--If, in any action described 
     in subparagraph (A)(i), the court finds that the State has 
     failed to negotiate in good faith with the Indian tribe to 
     conclude a compact governing the conduct of gaming 
     activities, the court shall order the State and the Indian 
     tribe to conclude such a compact within a 60-day period 
     beginning on the date of that order. In determining in such 
     an action whether a State has negotiated in good faith, the 
     court--

       ``(I) may take into account the public interest, public 
     safety, criminality, financial integrity, and adverse 
     economic impacts on existing gaming activities; and
       ``(II) shall consider any demand by the State for direct 
     taxation of the Indian tribe or of any Indian lands as 
     evidence that the State has not negotiated in good faith.

       ``(iv) Procedure in the event of failure to conclude a 
     compact.--If a State and an Indian tribe fail to conclude a 
     compact governing the conduct of gaming activities on the 
     Indian lands subject to the jurisdiction of such Indian tribe 
     within the 60-day period provided in the order of a court 
     issued under clause (iii), the Indian tribe and the State 
     shall each submit to a mediator appointed by the court a 
     proposed compact that represents the last best offer of the 
     Indian tribe and the State for a compact. The mediator shall 
     select from the 2 proposed compacts the proposed compact that 
     best comports with--

       ``(I) the terms of this Act;
       ``(II) any other applicable Federal law; and
       ``(III) the findings and order of the court.

       ``(v) Submission of compact to state and indian tribe.--The 
     mediator appointed under clause (iv) shall submit to the 
     State and the Indian tribe the proposed compact selected by 
     the mediator under clause (iv).
       ``(vi) Consent of state.--If a State consents to a proposed 
     compact submitted to the State under clause (v) during the 
     60-day period beginning on the date on which the proposed 
     compact is submitted to the State under clause (v), the 
     proposed compact shall be treated as a compact entered into 
     under paragraph (2).
       ``(vii) Failure of state to consent.--If the State does not 
     consent during the 60-day period described in clause (vi) to 
     a proposed compact submitted by a mediator under clause (v), 
     the mediator shall notify the Secretary and the Secretary 
     shall prescribe, in consultation with the Indian tribe, 
     procedures--

       ``(I) that are consistent with the proposed compact 
     selected by the mediator under clause (iv), the provisions of 
     this Act, and the applicable provisions of the laws of the 
     State; and
       ``(II) under which class III gaming may be conducted on the 
     Indian lands over which the Indian tribe has jurisdiction.

       ``(4) Approval by secretary.--
       ``(A) In general.--The Secretary is authorized to approve 
     any compact entered into between an Indian tribe and a State 
     governing gaming on Indian lands of such Indian tribe.
       ``(B) Disapproval by secretary.--The Secretary may 
     disapprove a compact described in subparagraph (A) only if 
     such compact violates--
       ``(i) any provision of this Act;
       ``(ii) any other provision of Federal law that does not 
     relate to jurisdiction over gaming on Indian lands; or
       ``(iii) the trust obligation of the United States to 
     Indians.
       ``(C) Failure of the secretary to take final action.--If 
     the Secretary does not approve or disapprove a compact 
     described in subparagraph (A) before the expiration of the 
     45-day period beginning on the date on which the compact is 
     submitted to the Secretary for approval, the compact shall be 
     considered to have been approved by the Secretary, but only 
     to the extent the compact is consistent with the provisions 
     of this Act.
       ``(D) Publication of notice.--The Secretary shall publish 
     in the Federal Register notice of any compact that is 
     approved, or considered to have been approved, under this 
     paragraph.
       ``(E) Effect of publication of compact.--Except for an 
     appeal conducted under subchapter II of chapter 5 of title 5, 
     United States Code, by an Indian tribe or by a State 
     associated with the publication of the compact, the 
     publication of a compact pursuant to subparagraph (D) or 
     subsection (c)(4) that permits a form of class III gaming 
     shall, for purposes of this Act, be conclusive evidence that 
     such class III gaming is an activity subject to negotiations 
     under the laws of the State where the gaming is to be 
     conducted, in any matter under consideration by the 
     Commission or a Federal court.
       ``(F) Effective date of compact.--A compact shall become 
     effective upon the publication of the compact in the Federal 
     Register by the Secretary.
       ``(G) Duties of commission.--Consistent with the provisions 
     of sections 7(c), 8, and 10, the Commission shall monitor 
     and, if specifically authorized, regulate and license class 
     III gaming with respect to any compact that is published in 
     the Federal Register.
       ``(5) Provisions of compacts.--

[[Page S8199]]

       ``(A) In general.--A compact negotiated under this 
     subsection may include provisions relating to--
       ``(i) the application of the criminal and civil laws 
     (including any rule or regulation) of the Indian tribe or the 
     State that are directly related to, and necessary for, the 
     licensing and regulation of such activity in a manner 
     consistent with sections 7(c), 8, and 10;
       ``(ii) the allocation of criminal and civil jurisdiction 
     between the State and the Indian tribe necessary for the 
     enforcement of such laws (including any rule or regulation);
       ``(iii) the assessment by the State of the costs associated 
     with such activities in such amounts as are necessary to 
     defray the costs of regulating such activity;
       ``(iv) taxation by the Indian tribe of such activity in 
     amounts comparable to amounts assessed by the State for 
     comparable activities;
       ``(v) remedies for breach of compact provisions;
       ``(vi) standards for the operation of such activity and 
     maintenance of the gaming facility, including licensing, in a 
     manner consistent with sections 7(c), 8, and 10; and
       ``(vii) any other subject that is directly related to the 
     operation of gaming activities and the impact of gaming on 
     tribal, State, and local governments.
       ``(B) Statutory construction with respect to assessments.--
     Except for any assessments for services agreed to by an 
     Indian tribe in compact negotiations, nothing in this section 
     may be construed as conferring upon a State or any political 
     subdivision thereof the authority to impose any tax, fee, 
     charge, or other assessment upon an Indian tribe, an Indian 
     gaming operation or the value generated by the gaming 
     operation, or any person or entity authorized by an Indian 
     tribe to engage in a class III gaming activity in conformance 
     with this Act.
       ``(6) Statutory construction with respect to certain rights 
     of indian tribes.--Nothing in this subsection impairs the 
     right of an Indian tribe to regulate class III gaming on the 
     Indian lands of the Indian tribe concurrently with a State 
     and the Commission, except to the extent that such regulation 
     is inconsistent with, or less stringent than, this Act or any 
     laws (including any rule or regulation) made applicable by 
     any compact entered into by the Indian tribe under this 
     subsection that is in effect.
       ``(7) Exemption.--The provisions of sections 2 and 5 of the 
     Act of January 2, 1951 (commonly referred to as the `Gambling 
     Devices Transportation Act') (64 Stat. 1134, chapter 1194, 15 
     U.S.C. 1172 and 1175) shall not apply to any class II gaming 
     activity or any gaming activity conducted pursuant to a 
     compact entered into after the date of enactment of this Act 
     or conducted pursuant to procedures prescribed by the 
     Secretary under this Act, but in no event shall this 
     paragraph be construed as invalidating any exemption from 
     section 2 or 5 of the Act of January 2, 1951, for any compact 
     entered into prior to the date of enactment of this Act or 
     any procedures for conducting a gaming activity prescribed by 
     the Secretary prior to such date of enactment.
       ``(b) Jurisdiction of United States District Court for the 
     District of Columbia.--The United States District Court for 
     the District of Columbia shall have jurisdiction over any 
     action initiated by the Secretary, the Commission, a State, 
     or an Indian tribe to enforce any provision of a compact 
     under subsection (a) that is in effect or to enjoin a class 
     III gaming activity located on Indian lands and conducted in 
     violation of such compact that is in effect and that was 
     entered into under subsection (a).
       ``(c) Revocation of Ordinance.--
       ``(1) In general.--The governing body of an Indian tribe, 
     in its sole discretion, may adopt an ordinance or resolution 
     revoking any prior ordinance or resolution that authorized 
     class III gaming on the Indian lands of the Indian tribe. 
     Such revocation shall render class III gaming illegal on the 
     Indian lands of such Indian tribe.
       ``(2) Publication of revocation.--An Indian tribe shall 
     submit any revocation ordinance or resolution described in 
     paragraph (1) to the Commission. Not later than 90 days after 
     the date on which the Commission receives such ordinance or 
     resolution, the Commission shall publish such ordinance or 
     resolution in the Federal Register. The revocation provided 
     by such ordinance or resolution shall take effect on the date 
     of such publication.
       ``(3) Conditional operation.--Notwithstanding any other 
     provision of this subsection--
       ``(A) any person or entity operating a class III gaming 
     activity pursuant to this subsection on the date on which an 
     ordinance or resolution described in paragraph (1) that 
     revokes authorization for such class III gaming activity is 
     published in the Federal Register may, during the 1-year 
     period beginning on the date on which such revocation, 
     ordinance, or resolution is published under paragraph (2), 
     continue to operate such activity in conformance with an 
     applicable compact approved or issued under subsection (a) 
     that is in effect; and
       ``(B) any civil action that arises before, and any crime 
     that is committed before, the expiration of such 1-year 
     period shall not be affected by such revocation ordinance, or 
     resolution.
       ``(d) Certain Class III Gaming Activities.--
       ``(1) Compacts entered into before the date of enactment of 
     the indian gaming regulatory act amendments act of 1997.--
       ``(A) In general.--Subject to subparagraph (B), class III 
     gaming activities that are authorized under a compact 
     approved, or procedures prescribed, by the Secretary under 
     the authority of this Act prior to the date of enactment of 
     the Indian Gaming Regulatory Act Amendments Act of 1997 
     shall, during such period as the compact is in effect, remain 
     lawful for the purposes of this Act, notwithstanding the 
     Indian Gaming Regulatory Act Amendments Act of 1997 and the 
     amendments made by such Act or any change in State law 
     enacted after the approval or issuance of the compact.
       ``(B) Compact or procedures subject to minimum regulatory 
     standards.--Subparagraph (A) shall apply to a compact or 
     procedures described in that subparagraph on the condition 
     that any class III gaming activity conducted under the 
     compact or procedures shall be subject to all Federal minimum 
     regulatory standards established under this Act and the 
     regulations promulgated under this Act.
       ``(2) Compact entered into after the date of enactment of 
     the indian gaming regulatory act amendments act of 1997.--Any 
     compact entered into under subsection (a) after the date 
     specified in paragraph (1) shall remain lawful for the 
     purposes of this Act, notwithstanding any change in State law 
     enacted after the approval or issuance of the compact.

     ``SEC. 13. REVIEW OF CONTRACTS.

       ``(a) Contracts Included.--The Commission shall, in 
     accordance with this section, review and approve or 
     disapprove--
       ``(1) any management contract for the operation and 
     management of any gaming activity that an Indian tribe may 
     engage in under this Act; and
       ``(2) unless licensed by an Indian tribe consistent with 
     the minimum Federal standards adopted pursuant to section 
     7(c), any gaming-related contract.
       ``(b) Management Contract Requirements.--The Commission 
     shall approve any management contract between an Indian tribe 
     and a person licensed by an Indian tribe or the Commission 
     that is entered into pursuant to this Act only if the 
     Commission determines that the contract provides for--
       ``(1) adequate accounting procedures that are maintained, 
     and verifiable financial reports that are prepared, by or for 
     the governing body of the Indian tribe on a monthly basis;
       ``(2) access to the daily gaming operations by appropriate 
     officials of the Indian tribe who shall have the right to 
     verify the daily gross revenues and income derived from any 
     gaming activity;
       ``(3) a minimum guaranteed payment to the Indian tribe that 
     has preference over the retirement of any development and 
     construction costs;
       ``(4) an agreed upon ceiling for the repayment of any 
     development and construction costs;
       ``(5) a contract term of not to exceed 5 years, except 
     that, upon the request of an Indian tribe, the Commission may 
     authorize a contract term that exceeds 5 years but does not 
     exceed 7 years if the Commission is satisfied that the 
     capital investment required, and the income projections for, 
     the particular gaming activity require the additional time; 
     and
       ``(6) grounds and mechanisms for the termination of the 
     contract, but any such termination shall not require the 
     approval of the Commission.
       ``(c) Management Fee Based on Percentage of Net Revenues.--
       ``(1) Percentage fee.--The Commission may approve a 
     management contract that provides for a fee that is based on 
     a percentage of the net revenues of a tribal gaming activity 
     if the Commission determines that such percentage fee is 
     reasonable, taking into consideration surrounding 
     circumstances.
       ``(2) Fee amount.--Except as provided in paragraph (3), a 
     fee described in paragraph (1) shall not exceed an amount 
     equal to 30 percent of the net revenues described in such 
     paragraph.
       ``(3) Exception.--Upon the request of an Indian tribe, if 
     the Commission is satisfied that the capital investment 
     required, and income projections for, a tribal gaming 
     activity, necessitate a fee in excess of the amount specified 
     in paragraph (2), the Commission may approve a management 
     contract that provides for a fee described in paragraph (1) 
     in an amount in excess of the amount specified in paragraph 
     (2), but not to exceed 40 percent of the net revenues 
     described in paragraph (1).
       ``(d) Gaming-Related Contract Requirements.--The Commission 
     shall approve a gaming-related contract covered under 
     subsection (a)(2) that is entered into pursuant to this Act 
     only if the Commission determines that the contract provides 
     for--
       ``(1) grounds and mechanisms for termination of the 
     contract, but such termination shall not require the approval 
     of the Commission; and
       ``(2) such other provisions as the Commission may be 
     empowered to impose by this Act.
       ``(e) Time Period for Review.--
       ``(1) In general.--Except as provided in paragraph (2), not 
     later than 90 days after the date on which a management 
     contract or other gaming-related contract is submitted to the 
     Commission for approval, the Commission shall approve or 
     disapprove such contract on the merits of the contract. The 
     Commission may extend the 90-day period

[[Page S8200]]

     for an additional period of not more than 45 days if the 
     Commission notifies the Indian tribe in writing of the reason 
     for the extension of the period. The Indian tribe may bring 
     an action in the United States District Court for the 
     District of Columbia to compel action by the Commission if a 
     contract has not been approved or disapproved by the 
     termination date of an applicable period under this 
     subsection.
       ``(2) Effect of failure of commission to act on certain 
     gaming-related contracts.--Any gaming-related contract for an 
     amount less than or equal to $100,000 that is submitted to 
     the Commission pursuant to paragraph (1) by a person who 
     holds a valid license that is in effect under this Act shall 
     be deemed to be approved, if by the date that is 90 days 
     after the contract is submitted to the Commission, the 
     Commission fails to approve or disapprove the contract.
       ``(f) Contract Modifications and Void Contracts.--The 
     Commission, after providing notice and a hearing on the 
     record--
       ``(1) shall have the authority to require appropriate 
     contract modifications to ensure compliance with the 
     provisions of this Act; and
       ``(2) may void any contract regulated by the Commission 
     under this Act if the Commission determines that any 
     provision of this Act has been violated by the terms of the 
     contract.
       ``(g) Interests in Real Property.--No contract regulated by 
     this Act may transfer or, in any other manner, convey any 
     interest in land or other real property, unless specific 
     statutory authority exists, all necessary approvals for such 
     transfer or conveyance have been obtained, and such transfer 
     or conveyance is clearly specified in the contract.
       ``(h) Authority of the Secretary.--The authority of the 
     Secretary under section 2103 of the Revised Statutes (25 
     U.S.C. 81) shall not extend to any contract or agreement that 
     is regulated pursuant to this Act.
       ``(i) Disapproval of Contracts.--The Commission may not 
     approve a contract if the Commission determines that--
       ``(1) any person having a direct financial interest in, or 
     management responsibility for, such contract, and, in the 
     case of a corporation, any individual who serves on the board 
     of directors of such corporation, and any of the stockholders 
     who hold (directly or indirectly) 10 percent or more of its 
     issued and outstanding stock--
       ``(A) is an elected member of the governing body of the 
     Indian tribe which is a party to the contract;
       ``(B) has been convicted of any felony or gaming offense;
       ``(C) has knowingly and willfully provided materially 
     important false statements or information to the Commission 
     or the Indian tribe pursuant to this Act or has refused to 
     respond to questions propounded by the Commission; or
       ``(D) has been determined to be a person whose prior 
     activities, criminal record, if any, or reputation, habits, 
     and associations pose a threat to the public interest or to 
     the effective regulation and control of gaming, or create or 
     enhance the dangers of unsuitable, unfair, or illegal 
     practices, methods, and activities in the conduct of gaming 
     or the carrying on of the business and financial arrangements 
     incidental thereto;
       ``(2) the contractor--
       ``(A) has unduly interfered or influenced for its gain or 
     advantage any decision or process of tribal government 
     relating to the gaming activity; or
       ``(B) has attempted to interfere or influence a decision 
     pursuant to subparagraph (A);
       ``(3) the contractor has deliberately or substantially 
     failed to comply with the terms of the contract; or
       ``(4) a trustee, exercising the skill and diligence that a 
     trustee is commonly held to, would not approve the contract.

     ``SEC. 14. REVIEW OF EXISTING CONTRACTS; INTERIM AUTHORITY.

       ``(a) Review of Existing Contracts.--
       ``(1) In general.--At any time after the Commission is 
     sworn in and has promulgated regulations for the 
     implementation of this Act, the Commission shall notify each 
     Indian tribe and management contractor who, prior to the 
     enactment of the Indian Gaming Regulatory Act Amendments Act 
     of 1997, entered into a management contract that was approved 
     by the Secretary, that the Indian tribe is required to submit 
     to the Commission such contract, including all collateral 
     agreements relating to the gaming activity, for review by the 
     Commission not later than 60 days after such notification. 
     Any such contract shall be valid under this Act, unless the 
     contract is disapproved by the Commission under this section.
       ``(2) Review.--
       ``(A) In general.--Not later than 180 days after the 
     submission of a management contract, including all collateral 
     agreements, to the Commission pursuant to this section, the 
     Commission shall review the contract to determine whether the 
     contract meets the requirements of section 13 and was entered 
     into in accordance with the procedures under such section.
       ``(B) Approval of contract.--The Commission shall approve a 
     management contract submitted for review under subsection (a) 
     if the Commission determines that--
       ``(i) the management contract meets the requirements of 
     section 13; and
       ``(ii) the management contractor has obtained all of the 
     licenses that the contractor is required to obtain under this 
     Act.
       ``(C) Notification of necessary modifications.--If the 
     Commission determines that a contract submitted under this 
     section does not meet the requirements of section 13--
       ``(i) the Commission shall provide the parties to such 
     contract written notification of the necessary modifications; 
     and
       ``(ii) the parties referred to in clause (i) shall have 180 
     days after the date on which such notification is provided to 
     make the modifications.
       ``(b) Interim Authority of the National Indian Gaming 
     Commission.--
       ``(1) In general.--Notwithstanding any other provision of 
     this Act, the Chairman and the associate members of the 
     National Indian Gaming Commission who are holding office on 
     the day before the date of enactment of the Indian Gaming 
     Regulatory Act Amendments Act of 1997 shall exercise the 
     authorities described in paragraph (2) until such time as all 
     of the initial members of the Federal Indian Gaming 
     Regulatory Commission are sworn into office.
       ``(2) Authorities.--Until the date specified in paragraph 
     (1), the Chairman and the associate members of the National 
     Indian Gaming Commission referred to in that paragraph shall 
     exercise those authorities vested in the Federal Indian 
     Gaming Regulatory Commission by this Act (other than the 
     authority specified in section 7(a)(1)(A) and any other 
     authority directly related to the administration of the 
     Federal Indian Gaming Regulatory Commission as an independent 
     establishment, as defined in section 104 of title 5, United 
     States Code).
       ``(3) Regulations.--Until such time as the Commission 
     promulgates revised regulations after the date of enactment 
     of the Indian Gaming Regulatory Act Amendments Act of 1997, 
     the regulations promulgated under this Act, as in effect on 
     the day before the date of enactment of the Indian Gaming 
     Regulatory Act Amendments Act of 1997, shall apply.

     ``SEC. 15. CIVIL PENALTIES.

       ``(a) Amount.--Any person who commits any act or causes to 
     be done any act that violates any provision of this Act or 
     any rule or regulation promulgated under this Act, or who 
     fails to carry out any act or causes the failure to carry out 
     any act that is required by any such provision of law shall 
     be subject to a civil penalty in an amount equal to not more 
     than $50,000 per day for each such violation.
       ``(b) Assessment and Collection.--
       ``(1) In general.--Each civil penalty assessed under this 
     section shall be assessed by the Commission and collected in 
     a civil action brought by the Attorney General on behalf of 
     the United States. Before the Commission refers civil penalty 
     claims to the Attorney General, the Commission may compromise 
     the civil penalty after affording the person charged with a 
     violation referred to in subsection (a), an opportunity to 
     present views and evidence in support of such action by the 
     Commission to establish that the alleged violation did not 
     occur.
       ``(2) Penalty amount.--In determining the amount of a civil 
     penalty assessed under this section, the Commission shall 
     take into account--
       ``(A) the nature, circumstances, extent, and gravity of the 
     violation committed;
       ``(B) with respect to the person found to have committed 
     such violation, the degree of culpability, any history of 
     prior violations, ability to pay, the effect on ability to 
     continue to do business; and
       ``(C) such other matters as justice may require.
       ``(c) Temporary Closures.--
       ``(1) In general.--The Commission may order the temporary 
     closure of all or part of an Indian gaming operation for a 
     substantial violation of any provision of law referred to in 
     subsection (a).
       ``(2) Hearing on order of temporary closure.--
       ``(A) In general.--Not later than 30 days after the 
     issuance of an order of temporary closure, the Indian tribe 
     or the individual owner of a gaming operation shall have the 
     right to request a hearing on the record before the 
     Commission to determine whether such order should be made 
     permanent or dissolved.
       ``(B) Deadlines relating to hearing.--Not later than 30 
     days after a request for a hearing is made under subparagraph 
     (A), the Commission shall conduct such hearing. Not later 
     than 30 days after the termination of the hearing, the 
     Commission shall render a final decision on the closure.

     ``SEC. 16. JUDICIAL REVIEW.

       ``A decision made by the Commission pursuant to section 7, 
     8, 10, 13, 14, or 15 shall constitute a final agency decision 
     for purposes of appeal to the United States District Court 
     for the District of Columbia pursuant to chapter 7 of title 
     5, United States Code.

     ``SEC. 17. COMMISSION FUNDING.

       ``(a) Annual Fees.--
       ``(1) In general.--The Commission shall establish a 
     schedule of fees to be paid to the Commission annually by 
     gaming operations for each class II and class III gaming 
     activity that is regulated by this Act.
       ``(2) Limitation on fee rates.--
       ``(A) In general.--For each gaming operation regulated 
     under this Act, the rate of the fees imposed under the 
     schedule established under paragraph (1) shall not exceed 2 
     percent of the net revenues of that gaming operation.
       ``(B) Total amount of fees.--The total amount of all fees 
     imposed during any fiscal

[[Page S8201]]

     year under the schedule established under paragraph (1) shall 
     be equal to not more than $25,000,000.
       ``(3) Annual fee rate.--The Commission, by a vote of a 
     majority of the members of the Commission, shall annually 
     adopt the rate of the fees authorized by this section. Those 
     fees shall be payable to the Commission on a monthly basis.
       ``(4) Adjustment of fees.--The fees imposed upon a gaming 
     operation may be reduced by the Commission to take into 
     account any regulatory functions that are performed by an 
     Indian tribe, or the Indian tribe and a State, pursuant to 
     regulations promulgated by the Commission.
       ``(5) Consequences of failure to pay fees.--Failure to pay 
     the fees imposed under the schedule established under 
     paragraph (1) shall, subject to regulations promulgated by 
     the Commission, be grounds for revocation of the approval of 
     the Commission of any license required under this Act for the 
     operation of gaming activities.
       ``(6) Surplus funds.--To the extent that revenues derived 
     from fees imposed under the schedule established under 
     paragraph (1) exceed the limitation in paragraph (2)(B) or 
     are not expended or committed at the close of any fiscal 
     year, those surplus funds shall be credited to each gaming 
     activity that is the subject of the fees on a pro rata basis 
     against those fees imposed for the succeeding year.
       ``(b) Reimbursement of Costs.--The Commission may assess 
     any applicant, except the governing body of an Indian tribe, 
     for any license required pursuant to this Act. That 
     assessment shall be an amount equal to the actual costs of 
     conducting all reviews and investigations necessary for the 
     Commission to determine whether a license should be granted 
     or denied to the applicant.
       ``(c) Annual Budget.--
       ``(1) In general.--For the first full fiscal year beginning 
     after the date of enactment of the Indian Gaming Regulatory 
     Act Amendments Act of 1997, and each fiscal year thereafter, 
     the Commission shall adopt an annual budget for the expenses 
     and operation of the Commission.
       ``(2) Request for appropriations.--The budget of the 
     Commission may include a request for appropriations 
     authorized under section 18.
       ``(3) Submission to congress.--Notwithstanding any other 
     provision of law, a request for appropriations made pursuant 
     to paragraph (2) shall be submitted by the Commission 
     directly to Congress beginning with the request for the first 
     full fiscal year beginning after the date of enactment of 
     this Act, and shall include the proposed annual budget of the 
     Commission and the estimated revenues to be derived from 
     fees.

     ``SEC. 18. AUTHORIZATION OF APPROPRIATIONS.

       ``Subject to section 17, there are authorized to be 
     appropriated $5,000,000 to provide for the operation of the 
     Commission for each of fiscal years 1998, 1999, and 2000, to 
     remain available until expended.

     ``SEC. 19. APPLICATION OF THE INTERNAL REVENUE CODE OF 1986.

       ``(a) In General.--The provisions of the Internal Revenue 
     Code of 1986 (including sections 1441, 3402(q), 6041, and 
     chapter 35 of such Code) concerning the reporting and 
     withholding of taxes with respect to the winnings from gaming 
     or wagering operations shall apply to Indian gaming 
     operations conducted pursuant to this Act in the same manner 
     as such provisions apply to State gaming and wagering 
     operations. Any exemptions under those provisions to States 
     with respect to taxation of that gaming or wagering operation 
     shall be allowed to Indian tribes.
       ``(b) Exemption.--The provisions of section 6050I of the 
     Internal Revenue Code of 1986 shall apply to an Indian gaming 
     establishment that is not designated by the Secretary of the 
     Treasury as a financial institution pursuant to chapter 53 of 
     title 31, United States Code.
       ``(c) Statutory Construction.--This section shall apply 
     notwithstanding any other provision of law enacted before, 
     on, or after, the date of enactment of this Act unless such 
     other provision of law specifically cites this subsection.
       ``(d) Access to Information by State and Tribal 
     Governments.--Subject to section 7(d), upon the request of a 
     State or the governing body of an Indian tribe, the 
     Commission shall make available any law enforcement 
     information that the Commission has obtained pursuant to such 
     section, unless otherwise prohibited by law, in order to 
     enable the State or the Indian tribe to carry out its 
     responsibilities under this Act or any compact approved by 
     the Secretary.''; and
       (5) by striking section 20(d).

     SEC. 3. CONFORMING AMENDMENTS.

       (a) Title 10.--Section 2323a(e)(1) of title 10, United 
     States Code, is amended by striking ``section 4(4) of the 
     Indian Gaming Regulatory Act (102 Stat. 2468; 25 U.S.C. 
     2703(4))'' and inserting ``section 4(14) of the Indian Gaming 
     Regulatory Act''.
       (b) Title 18.--Title 18, United States Code, is amended--
       (1) in section 1166--
       (A) in subsection (c), by striking ``a Tribal-State compact 
     approved by the Secretary of the Interior under section 
     11(d)(8) of the Indian Gaming Regulatory Act that is in 
     effect'' and inserting ``a compact approved by the Secretary 
     of the Interior under section 12(a) of the Indian Gaming 
     Regulatory Act that is in effect or pursuant to procedures 
     prescribed by the Secretary of the Interior under section 
     12(a)(3)(B)(iii) of such Act''; and
       (B) in subsection (d), by striking ``a Tribal-State compact 
     approved by the Secretary of the Interior under section 
     11(d)(8) of the Indian Gaming Regulatory Act'' and inserting 
     ``a compact approved by the Secretary of the Interior under 
     section 12(a) of the Indian Gaming Regulatory Act or pursuant 
     to procedures prescribed by the Secretary of the Interior 
     under section 12(a)(3)(B)(iii) of such Act,'';
       (2) in section 1167, by striking ``pursuant to an ordinance 
     or resolution approved by the National Indian Gaming 
     Commission'' each place it appears; and
       (3) in section 1168, by striking ``pursuant to an ordinance 
     or resolution approved by the National Indian Gaming 
     Commission,'' each place it appears.
       (c) Internal Revenue Code of 1986.--Section 
     168(j)(4)(A)(iv) of the Internal Revenue Code of 1986 is 
     amended by striking ``Indian Regulatory Act'' and inserting 
     ``Indian Gaming Regulatory Act''.
       (d) Title 28.--Title 28, United States Code, is amended--
       (1) in section 3701(2)--
       (A) by striking ``section 4(5) of the Indian Gaming 
     Regulatory Act (25 U.S.C. 2703(5))'' and inserting ``section 
     4(15) of the Indian Gaming Regulatory Act''; and
       (B) by striking ``section 4(4) of such Act (25 U.S.C. 
     2703(4))'' and inserting ``section 4(14) of such Act''; and
       (2) in section 3704(b), by striking ``section 4(4) of the 
     Indian Gaming Regulatory Act'' and inserting ``section 4(14) 
     of the Indian Gaming Regulatory Act''.

  Mr. INOUYE. Mr. President, I rise today to join my distinguished 
colleague, Senator John McCain, as a co-sponsor of legislation to amend 
the Indian Gaming Regulatory Act of 1988.
  It is my understanding that this measure is substantially identical 
in most respects to the bill, S. 487, that was reported by the 
Committee on Indian Affairs in the last session of the Congress.
   Mr. President, over the years, in our various capacities as Members, 
chairman, and vice chairman of the Committee on Indian Affairs, Senator 
McCain and I have worked together on the complex and challenging issues 
which have typically loomed large on the horizons of Indian gaming.
  We have learned, from sometimes bitter experience, that in this 
arena, one most definitely cannot satisfy even some of the people some 
of the time--but we have continued to explore a range of solutions that 
might hold the potential for finding acceptance amongst the relevant 
parties in interest.
   Mr. President, it is my hope that in the days ahead, the chairman of 
the Indian Affairs Committee and I will be able to introduce a measure 
to amend the Indian Gaming Regulatory Act that will build upon this 
initiative, and the work that the Indian Affairs Committee has been 
engaged in--over the last 7 months.
  We are in the process of updating some of the provisions of the 1988 
act--as well as identifying areas that may require a whole new 
approach.
  In the interim, of this we can be certain--there will be much 
discussion and a renewed round of debate on the merits of the measure 
that is being introduced today--but I commend my colleague for his 
continuing commitment to Indian country, and his efforts to address 
some of the more challenging issues of our times.
                                 ______