[Senate Report 104-241]
[From the U.S. Government Publishing Office]
Calendar No. 346
104th Congress Report
SENATE
2d Session 104-241
_______________________________________________________________________
AMENDING THE INDIAN GAMING REGULATORY ACT, AND FOR OTHER PURPOSES
_______
March 14 (legislative day, March 13), 1996.--Ordered to be printed
_______________________________________________________________________
Mr. McCain, from the Committee on Indian Affairs, submitted the
following
R E P O R T
[To accompany S. 487]
The Committee on Indian Affairs to which was referred the
bill (S. 487) the Indian Gaming Regulatory Act Amendments Act
of 1995 having considered the same, reports favorably thereon
with an amendment and recommends that the bill (as amended) do
pass.
Purposes
The purpose of S. 487 is to ensure the rights of Indian
tribal governments to conduct gaming activities on Indian lands
consistent with the United States Supreme Court decision in
California v. Cabazon Band of Mission Indians, 480 U.S. 202
(1987), to provide a more comprehensive statutory basis for the
conduct and regulation of gaming activities on Indian lands,
and to establish minimum Federal standards for the conduct of
gaming activities on Indian lands.
Background
On March 2, 1995, Senators McCain and Inouye introduced S.
487, the Indian Gaming Regulatory Act Amendments Act of 1995.
Senator Campbell joined as a co-sponsor of the legislation on
August 1, 1995. During the previous three years, Senators
McCain and Inouye met with representatives of State and tribal
governments to discuss amendments to the Indian Gaming
Regulatory Act of 1988 (IGRA). This three-year process also
included consultation with representatives of Federal agencies
that are charged with various responsibilities associated with
Indian gaming or law enforcement. In these discussions with
State and tribal governments, a wide variety of proposed
amendments to IGRA were discussed. Although there was general
agreement supporting increased Federal regulation of Indian
gaming, neither the States nor the tribes could agree on
specific legislation to accomplish this objective. S. 487 was
introduced to continue the discussions among the parties
regarding amendments to the Indian Gaming Regulatory Act. It
reflects many of the positions considered during the
discussions between the Indian tribes and States.
In order to properly consider the issue of Indian gaming,
there must be a review of the legal and constitutional basis of
Indian gaming. The authority of Indian tribal governments to
conduct gaming activities on Indian lands arises out of their
status as sovereign governments and the well-established legal
principle that, absent an express authorization by the United
States Congress, state laws do not apply on Indian lands. The
legal foundation of Indian gaming was addressed by the U.S.
Supreme Court in its 1987 ruling in California v. Cabazon Band
of Mission Indians.
Cabazon Decision
On February 25, 1987, the U.S. Supreme Court issued its
decision in California v. Cabazon Band of Mission Indians, 480
U.S. 202, 107 S. Ct. 1083, 94 L. Ed. 2d 244 (1987). This case
involved the Cabazon and Morongo Bands of Mission Indians of
Riverside, California. At the time of the case, both tribes
were operating high stakes bingo games and card rooms which
were open to the general public. These games were conducted
pursuant to tribal ordinances that had been approved by the
Secretary of the Interior. The issue presented in the case was
whether the State of California and the County of Riverside
could apply their regulatory authority and ordinances to the
tribal gaming operations which were located wholly within the
Cabazon and Morongo Indian Reservations. In deciding this
question, the U.S. Supreme Court weighed several factors,
including the fact that in 1953, the Federal Government had
granted California limited jurisdictional authority over Indian
reservations within the State under Public Law 83-280. In
analyzing whether the State of California possessed the
authority to impose and enforce State laws regulating bingo and
card games on the Cabazon and Morongo Indian Reservations, the
U.S. Supreme Court considered whether the State statutes
regulating bingo and card games were criminal or civil in
nature. Under the authority of Section 2 of Public Law 83-280,
six States, including California, were granted broad criminal
jurisdiction over offenses committed by or against Indians
within all Indian Country within those States. However, the
United States Supreme Court in Bryan v. Itasca County, 426 U.S.
373 (1976), interpreted Section 4 of that Act to grant these
States jurisdiction over private civil litigation involving
reservation Indians in State court, but not to grant general
civil regulatory jurisdiction to these States. To grant States
``general civil regulatory power over Indian reservations would
result in the destruction of tribal institutions and values.
Accordingly, when a State seeks to enforce a law within an
Indian reservation under the authority of Public Law 280, it
must be determined whether the law is criminal in nature, and
thus fully applicable to the reservation under Section 2, or
civil in nature, and applicable only as it may be relevant to
private civil litigation in state court.'' Cabazon, 480 U.S. at
208. Under Public Law 83-280, those State statutes which were
determined to be civil/regulatory in nature could not be
enforced on Indian reservations by the States. In applying this
analysis to the facts presented in the Cabazon case, the U.S.
Supreme Court determined that California's statutes regulating
bingo and card games were not criminal/prohibitory in nature,
but rather, these statutes were civil/regulatory and therefore
did not apply to activities on the Cabazon and Morongo Indian
Reservations. Further, the U.S. Supreme Court found that the
application of State and Country ordinances to the gaming
activities on the Indian reservations had been preempted as a
matter of Federal law.
The U.S. Supreme Court's decision in Cabazon made clear
that Indian tribes had the authority to conduct gaming
activities on reservations unfettered by any State or County
regulation. This decision recognized the important Federal
principles of tribal self-governance and self-determination and
found that these Federal principles preempted the application
of California civil statutes. At the same time that the Cabazon
case was being litigated, there was a wide spread growth of
Indian bingo halls in many parts of the country. The growth of
Indian gaming increasingly came under congressional scrutiny
during the 99th and 100th Congresses and was the subject of
numerous congressional hearings. In response to State concerns
that Indian gaming activities presented attractive targets to
organized crime infiltration due to the absence of any
comprehensive Federal regulation of Indian gaming, Congress
enacted the Indian Gaming Regulatory Act, Public Law 100-497 in
1988.
The Indian Gaming Regulatory Act
On October 17, 1988, Public Law 100-497, the Indian Gaming
Regulatory Act (IGRA) was signed into law by President Ronald
Reagan. This law established a system for the joint regulation
of Class II and Class III gaming operations on Indian lands.
Under IGRA, Class II Indian gaming activities are jointly
regulated by the Federal government, through the National
Indian Gaming Commission, and by the Tribal government. Class
III Indian gaming activities are jointly regulated by the
Tribal government and the State government pursuant to Tribal-
State Gaming Compacts. Class I Indian gaming activities are
under the exclusive jurisdiction of Indian tribal governments.
Class I Gaming is defined as traditional or social games played
solely for prizes of minimal value or played in connection with
tribal ceremonies or celebrations. Class II Gaming activities
are defined in IGRA as bingo, pull-tabs, lotto, punch boards,
tip jars, instant bingo, and other games similar to bingo, and
non-banking card games which have not been prohibited by the
State in which the reservation is located. IGRA defines Class
III Gaming activities as all forms of gaming that are not Class
I or Class II Gaming. Examples of Class III Gaming activities
under IGRA include blackjack, baccarat, parimutuel wagering,
roulette, craps, and any type of banking card games.
IGRA established a three member commission within the
Department of the Interior known as the National Indian Gaming
Commission (NIGC). The Commission is charged with the oversight
and regulation of all Class II Indian gaming operations. The
Chairman of the Commission is vested with the authority to
issue temporary closure orders, to collect and levy civil
fines, to approve tribal ordinances or resolutions governing
Class II and Class III gaming activities, and to approve
management contracts for Class II and Class III gaming
operations. The Commission is responsible for monitoring Class
II gaming operations on Indian lands, which includes the
authority to inspect and examine all Class II gaming
operations, and to inspect, examine, and audit all papers,
books and records of any Class II Gaming operation. The
Commission is also authorized to conduct or cause to be
conducted background investigations as required under the Act.
The Commission has the authority to issue permanent closure
orders, issue subpoenas, hold hearings and take testimony, and
receive evidence.
The IGRA makes clear that an Indian tribal government may
engage in Class II or Class III gaming activities on Indian
lands if such gaming is located in a State that permits such
gaming for any purpose by any person, organization, or entity
and for purposes of Class III gaming activities, if such gaming
is conducted pursuant to an approved Tribal-State gaming
compact. The Act requires all Class II and Class III Indian
gaming to be conducted pursuant to tribal gaming ordinances
which have been approved by the Chairman of the National Indian
Gaming Commission. A tribal gaming ordinance must include
provisions that ensure the Indian tribe has the sole
proprietary interest and responsibility for the gaming
operation. Tribal gaming ordinances must provide that net
revenues for any tribal gaming operation be used to fund tribal
governmental operations, provide for the general welfare of the
tribal government and its members, promote tribal economic
development, and fund other operations of local government. A
tribal government may also use net gaming revenues for
charitable donations. In addition, a tribal government may make
per capita distributions of gaming proceeds to tribal members
if the tribal government has a distribution plan approved by
the Secretary of the Interior. These per capita distributions
are subject to Federal income tax and the tribal government is
required to notify the tribal members of their tax liability
when such distribution payments are made.
Under the IGRA, all Class III Indian gaming operations must
be conducted under the authority of a Tribal-State gaming
compact or under procedures which have been prescribed by the
Secretary of the Interior. A Tribal-State gaming compact may
include provisions relating to the application of civil and
criminal laws and regulations of the Indian tribal government
or the State government for the licensing and regulation of the
gaming activity. Compacts may also include provisions that
allocate civil and criminal jurisdiction between the Indian
tribal government and the State government. Pursuant to the
Compact, a State may assess the costs of any enforcement or
regulatory activities undertaken against the gaming operation.
Similarly, an Indian tribal government may assess a tax against
the gaming operation to defray the costs of tribal regulatory
enforcement activities. IGRA explicitly prohibits a State or
any political subdivision of a State from imposing any tax,
fee, charge or other assessment upon an Indian tribe or any
other person or entity authorized to operate a Class III gaming
enterprise. Further, IGRA prohibits a State from refusing to
negotiate with an Indian tribe for a Class gaming compact due
to the failure to include such taxing authority.
An Indian tribal government seeking to conduct Class III
gaming activities on Indian lands is required under the IGRA to
make a request to the State in which such lands are located to
enter into negotiations for a Tribal-State gaming compact. Upon
the request of an Indian tribal government, a State is required
to enter into good faith negotiations with the tribal
government for a Class III gaming compact. In the event that a
State fails to negotiate a gaming compact in good faith, an
Indian tribal government may file an action in Federal court
alleging bad faith negotiations on the part of the State. In
such an action, the State has the burden of proving that it has
negotiated in good faith with the Indian tribal government. If
the Court determines that the State has failed to negotiate in
good faith, the court shall order the State and the Indian
tribal government to conclude Class III compact negotiations
within 60 days. The Court may consider the public interest, the
public safety, criminality, financial integrity, and adverse
economic impacts on existing gaming activities in determining
whether a State negotiated in good faith. The Court shall
consider any demand by the State for direct taxation of the
Indian tribe or any Indian lands as evidence that the State has
not negotiated in good faith.
If a State and an Indian tribal government have failed to
successfully conclude compact negotiations within the 60 day
period established by the Court, the State and the Indian
tribal government are required to submit their respective last
best offers for a compact to a mediator who has been appointed
by the Court. The mediator is required to select the compact
which best comports with IGRA, other applicable Federal laws,
and the findings and order of the Court. The selected compact
is then submitted to the State and the Indian tribal government
for approval. If the State approves the compact, it is
considered an effective Tribal-State gaming compact on the date
it was submitted by the mediator to the State. If the State
fails to approve the selected compact during the 60 day period,
the mediator notifies the Secretary of the Interior who then
prescribes procedures under which Class III gaming activities
may be conducted. These procedures must be consistent with the
provisions of the selected compact, the provisions of the IGRA
and any relevant provisions of State law.
The IGRA also includes provisions that limit the authority
of Indian tribal governments to conduct gaming activities on
lands acquired after the enactment of the IGRA. An Indian
tribal government may conduct gaming activities on lands
acquired after the enactment of IGRA if such lands are located
within, or are contiguous to, the tribe's existing reservation.
For Indian tribal governments located in Oklahoma which have no
reservation, gaming can be conducted on after-acquired lands if
such lands are within the boundaries of the tribal government's
former reservation, or are contiguous to trust allotted lands.
For Indian tribal governments located outside of Oklahoma which
have no reservation, gaming can be conducted on after-acquired
lands if such lands are located within the tribal governments
last recognized reservation. An Indian tribal government may
petition the Secretary of the Interior to conduct gaming
activities on lands acquired after the enactment of IGRA. The
Secretary must determine that the conduct of gaming on such
lands is in the best interest of the Indian tribe and its
members and is not detrimental to the surrounding community. In
making this determination, the Secretary must consult with the
Indian tribal government and appropriate State and local
officials, including officials of any nearby Indian tribes. An
Indian tribal government may only conduct gaming on these lands
if the Secretary determines that it would be in the tribe's
best interest and the Governor of the State in which such lands
are located concurs in the Secretary's determination. The Act
specifies that the limitations on the Secretary's authority to
bring lands into trust only apply to lands on which gaming
activities will occur and do not apply to the Secretary's
authority to bring lands in to trust for purposes other than
gaming.
In its consideration of IGRA in 1988, it is clear that
Congress balanced the competing interests of Federal, Tribal,
and State governments. It also considered the need for strong
enforcement of gaming laws and regulations and the Federal
interest in protecting and preserving the sovereign authority
of Indian tribal governments. In enacting IGRA, the Congress
specifically recognized several longstanding principles of
Federal Indian policy:
It is a long- and well-established principle of
Federal-Indian law as expressed in the United States
Constitution, reflected in Federal statutes, and
articulated in decisions of the Supreme Court, that
unless authorized by an act of Congress, the
jurisdiction of State governments and the application
of state laws do not extend to Indian lands. In modern
times, even when Congress has enacted laws to allow a
limited application of State law on Indian lands, the
Congress has required the consent of the tribal
governments before State jurisdiction can be extended
to tribal lands. * * * In determining what patterns of
jurisdiction and regulation should govern the conduct
of gaming activities on Indian lands, the Committee has
sought to preserve the principles which have guided the
evolution of Federal-Indian law for over 150 years. In
so doing, the Committee has attempted to balance the
need for sound enforcement of gaming laws and
regulations, with the strong Federal interest in
preserving the sovereign rights of tribal governments
to regulate activities and enforce laws on Indian land.
The Committee recognizes and affirms the principle that
by virtue of their original tribal sovereignty, tribes
reserved certain rights when entering into treaties
with the United States, and that today, tribal
governments retain all rights that were not expressly
relinquished.\1\
\1\ (S. Rept. 100-446, 2d session, 1988, at page 5.)
Under IGRA, the Congress authorized Indian tribal
governments to negotiate with State governments for compacts
governing the operation of Class III gaming activities on
Indian lands. Under these compacts, Indian tribal governments
and State governments could negotiate the extent of State
jurisdiction, if any, over criminal violations on the
reservation, or the amount of State regulation, if any, of the
tribal gaming operation, or the application of any other State
laws to the tribal gaming operation. The Congress recognized
the unique character of the Tribal-State compacts authorized in
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IGRA:
The mechanism for facilitating the unusual
relationship in which a tribe might affirmatively seek
the extension of State jurisdiction and the application
of State laws to activities conducted on Indian land is
a tribal-State compact. In no instance, does [this Act]
contemplate the extension of State jurisdiction or the
application of State laws for any other purpose.
Further, it is the Committee's intention that to the
extent tribal governments elect to relinquish rights in
a tribal-State compact that they might have otherwise
reserved, the relinquishment of such rights shall be
specific to the tribe so making the election, and shall
not be construed to extend to other tribes, or as a
general abrogation of other reserved rights or of
tribal sovereignty.\2\
\2\ (S. Rept. 100-446, 2d session, 1988, at page 6.)
In IGRA, Congress provided State governments with an
unprecedented opportunity to participate in the regulation of
Indian gaming activities on Indian lands pursuant to Tribal-
State compacts. IGRA provided this authority to State
governments to work cooperatively with Indian tribal
governments in the regulation of Indian gaming in recognition
of significant State interests in the lawful conduct of gaming
activities within a State including the paramount concern of
Federal, State, and tribal governments in preventing the
infiltration of organized crime in gaming activities conducted
on Indian reservations.
IGRA reflected a compromise. It diminished the extent of
tribal sovereign authority over gaming that had been determined
by the U.S. Supreme Court in the Cabazon decision, authorizing
the exercise of some authority by State governments that was
previously reserved to the Federal and Tribal governments.
State governors were afforded the right to withhold their
concurrence in a Secretary of the Interior's decision to hold
in trust, for the benefit of an Indian tribal government, off-
reservation lands which were acquired by the tribal government
for gaming purposes. In addition, State governments were
authorized to enter into compacts with Indian tribal
governments to determine the terms and conditions under which
Class III gaming activities can occur on Indian lands.
Congress utilized the U.S. Supreme Court's reasoning in
Cabazon to apply the distinction between civil/regulatory and
criminal/prohibitory laws to the context of Indian gaming. In
applying this analysis, Congress reasoned:
[This Act] is intended to expressly preempt the field
in governance of gaming activities on Indian lands.
Consequently, Federal courts should not balance
competing Federal, State, and tribal interests to
determine the extent to which various gaming activities
are allowed. * * * Finally, the Committee anticipates
that Federal courts will rely on the distinction
between State criminal laws which prohibit certain
activities and the civil laws of a State which impose a
regulatory scheme upon those activities to determine
whether class II games are allowed in certain States. *
* * The Committee wishes to make clear that, under
[this Act], application of the prohibitory/regulatory
distinction is markedly different from the application
of the distinction in the context of Public Law 83-280.
Here, the courts will consider the distinction between
a State's civil and criminal laws to determine whether
a body of law is applicable, as a matter of Federal
law, to either allow or prohibit certain activities.
The Committee does not intend [this Act] to be used in
any way to subject Indian tribes or their members who
engage in class II games to the criminal jurisdiction
of States in which criminal laws prohibit class II
games.\3\
\3\ (S. Rept. 100-446, 2d session, 1988, at page 6.)
IGRA requires the Federal courts to review the character of
State civil and criminal laws governing gaming activities to
determine whether such laws should act as a bar to Indian
gaming activities. Where a State's law governing gaming
activities is determined to be criminal/prohibitory rather than
civil/regulatory, then such gaming activities may not be
conducted on Indian lands. Where a State's law governing gaming
activities is determined to be civil/regulatory, then such
gaming activities may be conducted on Indian lands subject to
the terms and conditions of the IGRA. Where a gaming activity
is not determined to be prohibited as a matter of Federal law,
the conduct of such gaming activities are not governed by the
application of State law and regulation; instead, such gaming
activities are governed by the provisions in the Tribal-State
compact, or in the case of Class II gaming, pursuant to such
regulations as may be developed by the Tribal government and
the National Indian Gaming Commission. This standard is
entirely consistent with the U.S. Supreme Court's decision in
Cabazon.
Indian Gaming Post-Cabazon
Since the decision of the U.S. Supreme Court in Cabazon,
Indian gaming has experienced tremendous growth. In 1987,
Indian gaming was a $121 million industry (in annual gross
revenues). In the succeeding years, that figure has grown to
$2.6 billion. Since 1985, the Indian gaming industry has
experienced an average annual growth in gross revenues of
approximately 53 percent. Of the 557 Indian tribes across the
nation, 115 Indian tribal governments have entered into 131
approved Class III gaming compacts involving 23 States.\4\ Of
the 115 Indian tribes with compacts, some tribes have not yet
established a gaming operation despite having an approved
compact. In addition, some Indian tribes have more than one
approved compact with a State and certain tribes may have
compacts with more than one State. The table below indicates
the estimated annual gross revenues realized by Class II and
Class III Indian gaming enterprises since 1988:
\4\ These figures reflect the number of approved Tribal-State
compacts as of Mar. 23, 1995, as compiled by the U.S. Bureau of Indian
Affairs, Indian Gaming Management Staff.
ESTIMATED GROSS REVENUES OF INDIAN GAMING \1\
[In thousands of dollars]
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1988 1989 1990 1991 1992 1993
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Class II Indian gaming.................. N/A N/A $388,200 $419,250 $429,000 $435,300
Class III Indian gaming................. N/A N/A 100,300 300,900 1,202,600 2,159,600
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Total............................. $121,000 $300,000 488,500 720,150 1,631,600 2,594,900
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\1\ The figures for the table are based on information compiled by the Congressional Research Service from the
Annual Estimates prepared by Christiansen/Cummings Associates, Inc. for Gaming & Wagering Business magazine's
July 15-Sept. 14 issues of 1989-92, July 15-Aug. 14, 1993, issue, and Aug. 5, 1994, issue, using the most
recent revised figures.
From these figures it is apparent that since 1988 Class II
Indian gaming has remained relatively stable with some slight
growth in gross revenues each year. Over the same period of
time, the growth in gross revenues for Class III gaming
operations has increased exponentially. Despite the growth in
gross revenues, Indian gaming still represents only 7.5 percent
of the total gross revenues of legalized gambling in the
Nation. Some of this growth can be explained through the
increase in the number of Indian tribes operating Class III
gaming operations since 1990. Additional growth can be
accounted for by the increased numbers of States which have
compacted with Indian tribal governments to conduct Class III
gaming operations.
Over this same period of time, non-Indian gaming, including
casino gambling and State lotteries, has also experienced a
tremendous growth in gross revenues. Since 1988, non-Indian
casino gambling has grown from $7.16 billion in annual gross
revenues to $12.54 billion. The average annual growth in gross
revenues for non-Indian casino gambling in the United States
since 1985 is 11 percent. Similarly, since 1988 State lotteries
grew from $8.42 billion in annual gross revenues to $12.82
billion. The average annual growth in gross revenues for State
lotteries since 1985 is 12 percent. It is clear that the Nation
as a whole has experienced a significant expansion of gambling
since 1985 which has resulted in a steady growth in gross
revenues to the gambling industry in general. The growth of
Indian gaming since 1985 reflects an overall trend in the
growth of gambling within the United States. The chart below
describes the number of Indian tribal governments with approved
Class III gaming compacts since 1989:
NUMBER OF APPROVED TRIBAL-STATE COMPACTS FOR CLASS III GAMING, AND NUMBER OF TRIBES AND STATES WITH CLASS III
COMPACTS \1\
----------------------------------------------------------------------------------------------------------------
Cumulative
Number of Cumulative Number of number of Number of Cumulative
new number of new tribes new tribes new States number of
approved approved with with with States with
compacts compacts compacts compacts compacts compacts
----------------------------------------------------------------------------------------------------------------
1989.............................. 0 0 0 0 0 0
1990.............................. 14 14 14 14 4 4
1991.............................. 21 35 9 23 3 7
1992.............................. 31 66 29 52 8 15
1993.............................. 36 102 34 86 4 19
1994.............................. 12 114 12 98 3 22
1995.............................. 17 131 17 115 1 23
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\1\ The information provided in this chart was prepared by the Congressional Research Service from lists of
approved Tribal-State Compacts compiled by the Bureau of Indian Affairs. This information reflects data
available through Mar. 23, 1995.
Despite the continued growth of Indian gaming since the
passage of the Indian Gaming Regulatory Act, the vast majority
of Indian tribal governments are not involved in any Indian
gaming operations. There are a variety of reasons why an Indian
tribal government may not choose to engage in gaming. In recent
years, Indian tribes, like the Navajo Nation and the Hopi
Indian tribe, have conducted referendums in which the tribal
membership elected not to have gaming operations on their
reservations. Other Indian tribal governments have determined
that their reservations are too remote and too isolated for a
successful Indian gaming operation. In some areas of the
country, the market is already saturated with gambling
operations, both Indian and non-Indian, and it is not
economically feasible to locate additional gaming operations in
that part of the country. Finally, there are a substantial
number of Indian tribes that are culturally, socially, or
morally opposed to gaming of any form.
A number of States have refused to negotiate Tribal-State
compacts with the Indian tribal governments whose reservations
are located within their State boundaries. States such as
California, Florida, Texas, and Oklahoma have elected not to
negotiate Class III gaming compacts with Indian tribal
governments. In many cases, the State's election not to
negotiate compacts with Indian tribal governments is based on a
fundamental disagreement with the Indian tribal governments
over the scope of gaming which is permitted by State law. Since
the passage of the IGRA, the scope of the gaming issue has
become a major source of disagreement between Tribal and State
governments. The lack of agreement on this issue has been a
significant barrier for Indian tribal governments in the
development of Class III gaming operations on their lands.
The issue of scope of gaming was presented to the Ninth
Circuit Court of Appeals in the case of Rumsey Indian Rancheria
et al. v. Wilson, 41 F. 3d 421 (9th Cir., 1994). In this case,
the court considered whether the State of California was
required to negotiate Class III gaming compacts with California
Indian tribes which permitted electronic gaming devices, live
banking card games (blackjack, baccarat, etc.), and percentage
card games. The State of California argued that because these
types of gaming activities are not permitted in California, the
State was under no obligation to include these gaming
activities in compact negotiations with Indian tribes. The
Indian tribes argued that under the Indian Gaming Regulatory
Act, the State of California must negotiate for those games
that do not violate the public policy of the State of
California. The tribes argued that because California permits
certain types of Class III gaming activities, it does not
criminally prohibit Class III gaming but rather merely
regulates Class III gaming activities, and therefore the tribes
are entitled under IGRA to negotiate compacts for these gaming
activities. The Indian tribes also argued that because the
State of California permits video lottery, parimutuel wagering,
and non-banked and non-percentage card games, then other types
of electronic gaming, banking and percentage card games should
be available for compact negotiations. The Indian tribes
reasoned that because the types of games permitted by the State
of California are functionally similar to the electronic gaming
and banking card games sought by the Indian tribes, then the
tribes should be permitted to include such games in a Class III
gaming compact.
The Ninth Circuit Court of Appeals held that, consistent
with the U.S. Supreme Court's holding in Cabazon, IGRA required
a State to negotiate with Indian tribes on those games which
are permitted by the State for any purpose by any person,
organization, or entity. The Court in Rumsey found after a
factual inquiry, that California did not permit banked or
percentage card games and therefore those gaming activities
could not be included in Tribal-State Class III gaming
compacts. The Court also found that if the State of
California's video keno lottery terminals did not constitute
slot machines under California law, then Indian tribes in
California could not negotiate for electronic gaming under
IGRA. The Ninth Circuit Court of Appeals remanded this portion
of the case to the district court for a determination of
whether California permits the operation of slot machines
through the operation of video keno lottery terminals.
Another area where State governments have challenged the
constitutionality of IGRA are the provisions which authorize
the Federal courts to review the actions of a State to
determine if a State has negotiated in ``good faith'' with an
Indian tribal government for a Class III gaming compact. States
have argued that the provisions of IGRA that subject a State
government to suit in Federal court and which require a State
to negotiate in good faith with an Indian tribal government for
a Class III gaming compact violate the 10th and 11th Amendments
to the U.S. Constitution. The principle case raising this
constitutional challenge to IGRA is Seminole Tribe of Florida
v. Florida, No. 94-12 (1994) which was argued before the U.S.
Supreme Court on October 11, 1995.
In this case, the Seminole tribe filed an action in Federal
court alleging that the State of Florida had failed to
negotiate in good faith for a Tribal-State gaming compact under
IGRA. The Seminole tribe alleged bad faith on the part of the
State due to the failure of the State of Florida to negotiate
with the tribe for any video gaming or computer-assisted
gaming. The Seminole tribe argued that because Florida permits
casino gambling and slot machines, then the tribe should be
permitted to negotiate for those gaming activities as part of a
Tribal-State compact. In response, the State argued that the
tribe's complaint should be dismissed under the 11th Amendment
to the Constitution because Florida had not waived its immunity
to suit. The district court denied the State's motion to
dismiss, reasoning that Congress had the authority to abrogate
the State of Florida's immunity pursuant to the authority in
the Indian Commerce Clause \5\ of the U.S. Constitution.\6\
\5\ Art. 1, Sec. 8, cl. 3, U.S. Const.
\6\ Seminole tribe of Florida v. Florida, 801 F. Supp. 655 (S.D.
Fla. 1992).
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The Eleventh Circuit Court of Appeals reversed the decision
of the district court to deny the State of Florida's motion to
dismiss. In reversing the lower court, the Court of Appeals
held that Congress could not abrogate a State's immunity to
suit through the exercise of the Indian Commerce Clause of the
U.S. Constitution.\7\ The Court of Appeals further found that
none of the exceptions to the State's 11th Amendment immunity
were presented in the case. On January 23, 1995, the U.S.
Supreme Court granted certiorari to hear the case. The issues
presented to the U.S. Supreme Court are: does the Congress have
the authority to abrogate a State's immunity pursuant to the
Indian Commerce Clause of the U.S. Constitution; if a State's
immunity cannot be abrogated under the Indian Commerce Clause,
does the doctrine of Ex parte Young \8\ allow the Court to
order State officials to comply with IGRA. The Seminole case is
similar to several other cases which have been filed in other
States where Class III gaming compact negotiations have broken
down. The U.S. Supreme Court's decision in Seminole will have a
dramatic impact on the future implementation of the IGRA.
\7\ Seminole tribe of Florida v. Florida, 11 F. 3d 1016 (11th Cir.
1994).
\8\ Ex parte Young, 209 U.S. 123 (1908).
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S. 487, The Indian Gaming Regulatory Act Amendments Act of 1995
S. 487 establishes an independent Federal agency called the
Federal Indian Gaming Regulatory Commission. The Commission is
comprised of three full-time members appointed by the
President, with the advice and consent of the Senate. The bill
requires one member of the Commission to be a certified public
accountant and one member to have expertise and experience in
the field of investigation of law enforcement. It also provides
that no more than two Commission members may be members of the
same political party and at least two Commission members must
be members of Federally-recognized Indian tribes.
Under S. 487, the Commission is vested with the power to
establish a rate of fees and assessments for each Class II and
Class III gaming activity and to conduct investigations,
including background investigations. The bill also provides the
Commission with the authority to issue temporary and permanent
orders closing gaming operations; to grant, deny, condition or
suspend any license issued under any authority under the Act;
to inspect Class II and Class III gaming premises; to inspect
and audit the books and records of any Class II and Class III
gaming operations; and to assess fines and penalties for
violations of the Act. In addition the Commission has the
authority to issue written interrogatories administer oaths,
serve or cause to be served process or notices, and conduct
hearings on violations of the Act. Under S. 487, the Commission
is responsible for the regulation and monitoring of all Class
II and Class III gaming activities. In carrying out its duties,
the Commission is authorized to enter into a contract with
State, tribal or private entities to assist the Commission in
carrying out its responsibilities. Finally, the Commission is
authorized to provide training and technical assistance to
Indian tribes on the conduct and regulation of gaming
activities.
S. 487, as introduced, substantially retains the
definitions for Class I, Class II, and Class III gaming in the
Indian Gaming Regulatory Act of 1988, and the regulations
promulgated by the National Indian Gaming Commission to
implement the Act. The bill provides a framework for the
regulation of Class II and Class III gaming in conformance with
minimum Federal standards which are established by the
Commission. The regulatory scheme created by the bill covers
all Class II gaming, Class III gaming which is conducted under
a Tribal-State compact, and Class III gaming which is conducted
pursuant to a compact negotiated by the Secretary of the
Interior. Under this scheme, the Commission is vested with the
authority to enforce violations of the minimum standards
established under the bill.
S. 487 establishes an advisory committee to develop
recommendations for minimum Federal standards on Indian gaming
which is called the Advisory Committee or Minimum Regulatory
Requirements and Licensing Standards. The advisory committee is
composed of 7 members who are appointed by the President. Three
members of the Advisory Committee must be members of Federally-
recognized Indian tribes which are engaged in gaming under this
Act, two members are required to be representatives of state
governments, and two members shall be employees of the
Department of Justice. The Advisory Committee is responsible
for the development of recommended minimum Federal standards
for the conduct of background investigations, internal control
systems, and licensing standards for all Indian gaming
operations. Within 180 days of being fully constituted, the
Advisory Committee is required to submit its recommendations to
the Federal Indian Gaming Regulatory Commission. Once the
recommendations have been received by the Commission, the
Commission shall hold public hearings on the recommendations.
The bill provides that in developing the recommendations and
promulgating minimum Federal standards, the Committee and the
Commission shall consider the unique nature of tribal gaming as
compared to non-Indian commercial, governmental, and charitable
gaming; the broad variations in the scope and size of tribal
gaming; the sovereign authority of Indian tribes to regulate
their own affairs; and the findings and purposes set out in
this Act.
While the bill as introduced maintains the same
requirements for Class I and Class II gaming that were provided
in the Indian Gaming Regulatory Act of 1988, the bill modifies
the requirements for Class III gaming activities. Class I
gaming would remain under the exclusive jurisdiction of Indian
tribes and not subject to the provisions of the Act. The
treatment of Class II gaming would remain unchanged under the
Act. Class II would remain under the jurisdiction of the
tribes, but it is subject to regulation by the Commission
pursuant to the provisions of the Act. The bill maintains the
requirement that Class II gaming be conducted pursuant to a
compact. S. 487 retains the process for the negotiation of a
Class III gaming compact between an Indian tribe and a state.
However, where Tribal-State negotiations cannot be concluded
within 180 days from the time an Indian tribe has requested in
writing that the State enter into negotiations for a Class III
gaming compact, and where such tribe has specified each gaming
activity to be included in the compact, then the tribe may
notify the Secretary of the Interior of the impasse, unless the
parties have agreed to a longer period of time. Upon receipt of
the notice, the Secretary requests the State and the tribe to
submit their respective positions on what should be included in
the compact, including the types of gaming activities to be
permitted, the framework for regulating the gaming activities,
and such other matters as the Secretary deems appropriate
within 60 days of the request. Not later than 90 days after the
60 day period has expired, the Secretary is authorized to
approve a compact which meets the requirements of the Act and
includes provisions that best meet the objectives of the Act
for background investigations, internal controls, and
licensing. The Secretary must ensure that the compact does not
violate any provision of this Act, any other provision of
Federal law, and the trust obligation of the Federal
government. The Secretary may not approve a compact which
requires state regulation of Indian gaming about the consent of
the State or the Indian tribe. An approved compact shall be
published in the Federal Register.
The bill requires that all gaming operations, key employees
of gaming operations, management contractors, gaming-related
contractors, and any person who has material control, directly
or indirectly, over a licensed gaming operation be licensed. In
addition, the Commission may require any gaming service
industry to be licensed. Under the bill, the Commission is
required to review all management contracts, management fees,
gaming-related contracts, contract modifications, and existing
contracts. The bill provides that the Federal Indian Gaming
Regulatory Commission may derive up to $25 million of its
operating funds through an assessment of fees from Class II and
Class III gaming activities not to exceed 2 percent of net
revenues. The Commission is also authorized to seek
reimbursements of costs for conducting reviews and
investigations associated with licensing. In addition, Federal
appropriations are authorized for up to $5 million for each
fiscal year from 1997 through 1999. The bill authorizes the
Commission to impose civil penalties of $50,000 per day for
each violation of the Act. The Commission is also authorized to
temporarily close all or part of an Indian gaming operation.
Finally, the bill as introduced included provisions which
maintained the Secretary of Interior's authority to take lake
into trust for gaming purposes at the request of an Indian
tribe. The bill requires the Secretary to consult with the
tribe and review the recommendations of the Governor of the
State in which such lands are located, any state or local
officials, and any other nearby Indian tribes. In order to take
such land into trust, the Secretary must determine that the
gaming establishment on such lands would be in the best
interest of the tribe and its members and would not be
detrimental to the surrounding community.
Proposed Alternatives to Section 12
Prior to the July 25th Committee hearing on S. 487, the
Chairman directed the Committee staff to draft alternative
provisions for Section 12 of the bill. The alternative
proposals were intended to address States' concerns regarding
Section 12. Over the months preceding the July 25th hearing the
Committee had received numerous letters from State Governors
and State Attorneys General objecting to the provisions in
Section 12 of the bill. This section authorizes the Secretary
of the Interior to act as the mediator in the negotiation of a
Class III gaming compact when a tribe and a State cannot agree
on the terms of a compact. Under current law, when a tribe and
State cannot agree on the terms of a compact or where a State
has negotiated in bad faith, the Federal court appoints a
mediator to develop the terms of a Class III gaming compact.
States strenuously objected to the changes proposed by S. 487
to the compact negotiation process. In order to address States
concerns regarding Section 12 and to provide a negotiation
process that would avoid an impasse in negotiations and result
in a gaming compact, Committee staff drafted two alternative
proposals which were then circulated to interested parties.
The first alternative would provide the State with the
option to request a binding arbitration proceeding to resolve
the differences in the positions of the tribe and the State in
the compact negotiations. Under this proposal, an Indian tribe
would be required to participate in the arbitration proceeding
once it has been requested by the State. Both parties would
jointly select the arbitrator who shall be independent to the
parties. If the parties could not agree on an arbitrator, then
the Secretary would appoint the arbitrator from a list of
qualified arbitrators. The cost of the arbitration would be
shared by both parties. The final decision of the arbitrator
would be binding on both parties.
The second alternative would authorize the Secretary to
file an expedited action in Federal court for a determination
of which types of gaming activities are permitted under State
law. It would permit a State and an Indian tribe to submit a
compact to the Secretary which leaves unresolved the issue of
which types of Class III gaming activities are permitted by
State law. In filing the expedited action, the Secretary could
request the Federal court to certify the question of which
types of Class III gaming activities are permitted by State law
to the highest court of the State. Once the State court makes a
determination regarding which types of gaming activities are
permitted under the State law, such determination would be
presented to the Federal court to determine what gaming
activities could be incorporated in a Class III gaming compact.
Once the Federal court determined the scope of gaming under
IGRA, the Secretary is required to make such modifications as
are necessary to incorporate the determination of the Federal
court prior to approving the Compact.
At the July 25th hearing on S. 487, the Committee solicited
the views of the several tribal representatives and the
National Governors Association on the two proposed alternatives
to Section 12 of the bill. The National Governors Association
testified in opposition to both proposed alternatives to
Section 12. During the hearing the Chairman invited the
National Governors Association to provide an alternative
approach to address the issues presented in Section 12. The
Committee has yet to receive any proposal from the National
Governors Association. While several tribal witnesses testified
in opposition to the second alternative to Section 12 of the
Act, there were several tribal witnesses who did express
support for a revised form of binding arbitration. In addition,
the Committee did receive proposed revisions to alternative 1
from some Indian tribes.
Committee Substitute Amendment
The substitute amendment proposes four major changes to the
provisions of S. 487, the Indian Gaming Regulatory Act
Amendments Act of 1995. The first proposed change to S. 487 as
introduced would delete Section 19 of the bill regarding the
authority of the Secretary to bring lands into trust for
purposes of gaming. The Substitute Amendment would return to
the original statutory language in the Indian Gaming Regulatory
Act (IGRA) by not deleting Section 20 of the 1988 Act regarding
Gaming on Lands Acquired After Enactment of this Act. The
proposed change is in response to objections raised by a number
of State Governors and Attorneys General to the provisions of
Section 19 of the bill. As originally introduced, Section 19
would have authorized the Secretary of the Interior to consult
with, and review the recommendations of, the Governor of the
State in which such lands are located, any state or local
officials, including the recommendations of any other nearby
Indian tribes. S. 487 proposed the change to existing law in
order to address the Siletz decision,\9\ where a Federal
district court held that section 20 of IGRA was an
unconstitutional delegation of Federal authority to a State.
Section 19 of the bill merely required the Secretary to consult
with the Governor of a State rather than require the Secretary
to seek the concurrence of the Governor. In the June 22nd
hearing on S. 487, the Department of Justice testified that the
Department's view is that Section 20 of IGRA is constitutional.
Accordingly, the Committee Substitute Amendment deletes Section
19 of the bill and retains Section 20 of existing law in
entirety.
\9\ Confederated Tribes of Siletz Indians of Oregon v. U.S., 841 F.
Supp. 1479 (D. Or. 1994).
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The second major change to S. 487 as introduced pertains to
the definitions of Class II and Class III gaming. The
Substitute Amendment proposes to delete the definitions of
``Class II gaming''; ``Class III gaming''; ``Electronic,
Computer, or other Technologic Aid''; ``Electronic or
Electromechanical Facsimile''; and ``Gambling Device'' as
contained in section 4 of S. 487. In place of those
definitions, the Substitute Amendment would retain the
definitions of Class II and Class III gaming as set out in
section 4 of IGRA. This proposed change responds to concerns
raised by witnesses before the Committee regarding the impact
of the new definitions in section 4 of the bill on current
regulations promulgated under the 1988 Act by the Commission
regarding the distinctions between Class II and Class III
gaming. Under the Substitute Amendment, the Committee would
return to the original definitions under the IGRA. It is the
intent of the Committee to retain the current regulations
pertaining to Class II and Class III gaming activities,
including the definitions of ``Electronic, Computer or other
Technologic Aid'' and ``Electronic or Electromechanical
Facsimile'', as promulgated by the Commission on April 9,
1992.\10\ The Committee supports the continued application of
such regulations to Class II and Class III gaming activities
and does not intend the passage of S. 487 to alter said
application. One additional change in the Substitute Amendment
is the inclusion of a new definition for the term ``gaming
operation''.
\10\ See 25 CFR part 502, sections 502.3, 502.4, 502.7, and 502.8.
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The third major change to S. 487 would modify the
qualifications for members of the Federal Indian Gaming
Regulatory Commission under Section 5 of the bill. As
introduced, S. 487 would require that at least two members of
the Commission be members of Federally-recognized Indian tribes
and that one member of the Commission be a certified public
accountant with not less than 5 years of experience, and that
one member of the Commission be an individual with training and
experience in the fields of investigation and law enforcement.
The Substitute Amendment would modify these provisions to
require that at least two members of the Commission be
individuals with extensive experience or expertise in tribal
government. The Substitute would authorize the President to
give special reference to the training and experience of
individuals in the fields of corporate finance, accounting,
auditing, and investigation or law enforcement. The Committee
intends the amendments to Section 5 of the bill to provide the
Administration with more flexibility in making appointments to
the Commission. The Committee believes that because of the
nature of the work to be carried out by the Commission,
qualified candidates should have significant experience in
corporate finance, accounting, and auditing or significant
experience in investigation and law enforcement. Finally, the
Committee intends the changes in Section 5 which require at
least 2 members of the Commission to have extensive experience
or expertise in tribal government will ensure that these
Commission members will be well-versed in the principles of
Federal Indian law and have significant experience working with
or in tribal governments. In addition, the Substitute would add
to the list of authorities of the Commission under Section 7 of
the bill, the authority to establish precertification criteria
that apply to management contractors and other persons having
material control over a gaming operation.
The fourth major change to S. 487 would substantially
revise Section 12 of the bill and reinsert the original
statutory provisions in Subsection (d) of Section 11 of IGRA.
S. 487 as introduced would have authorized the Secretary of the
Interior to act as a mediator between the State and an Indian
tribe where the parties are unable to successfully conclude
compact negotiations within the timelines provided under the
bill. Under Section 12 of the Substitute Amendment, the
original statutory language regarding compact negotiations
would be incorporated into the amendment. The proposed change
in the Substitute Amendment would restore the good faith
defense to the States and restore the Federal court mediation
process to address those circumstances where an Indian tribe
and a State are unable to conclude a compact. The changes
contained in the Substitute Amendment were made in response to
the concerns raised by a number of State Governors and State
Attorneys General regarding the provisions in Section 12 of S.
487 which authorized the Secretary of the Interior to act as a
mediator. Several States objected to this provision in S. 487
arguing that it ceded too much authority to the Secretary of
the Interior to develop a Class III gaming compact without
sufficient State participation. Indian tribes testified in
support of the provisions of S. 487 as introduced as an
appropriate response to those circumstances where a State
refused to negotiate with a tribe on Class III gaming, and
invoked its 10th and 11th Amendment defenses to the Federal
court mediation process to create an impasse. Finally, the two
alternative proposals to Section 12 which were circulated by
the Committee were not supported by the representatives of
tribal governments and the National Governors Association in
the July 25th hearing. Because there is no consensus between
the States and the tribes on this issue and there has been no
agreement on proposed alternative language to Section 12 of the
bill, the Committee has determined to return to the original
process set out under IGRA.
Other Considerations
In recent years, three serious proposals have been made to
levy a new Federal tax upon the proceeds of gaming activity
conducted by Indian tribal governments. In 1994, the Clinton
Administration floated a wagering tax on all casino-style
gaming in order to finance its welfare reform proposal. That
tax would have applied to both for-profit commercial gaming
private enterprises operated in Nevada, New Jersey, and in
other states on riverboats and land, as well as to the
governmental gaming conducted by Indian tribes. The
Administration's new wagering tax was not adopted by the
Congress. In early 1995, a revenue proposal of uncertain origin
was floated during consideration of the General Agreement on
Tariffs and Trade (GATT) that would have imposed a Federal tax
on Indian gaming activity. This too was abandoned.
Subsequently, during the summer of 1995, the House Committee on
Ways and Means proposed and then approved a provision as part
of its balanced budget reconciliation bill that would have
applied a new Federal tax solely on Indian gaming.
The House provision singled out Indian tribal governments
for disparate treatment by imposing a new Federal income tax on
the Federally-authorized governmental gaming revenues of
tribes, while continuing to treat as exempt from Federal tax
both the gaming revenues derived by State and local governments
and the gaming funds raised by non-profit, tax-exempt
charitable organizations. In passing the Indian governmental
gaming tax provision as part of its initial reconciliation
measure, the House of Representatives proposed a dramatic
change in the tax status of Indian tribal governments. Federal
policy for decades has encouraged tribal governments to foster
economic development on their impoverished reservations. Since
the time tribal governments entered into treaties with the
United States, they have been considered sovereign governments.
Consequently, Indian tribal governments have been treated as
non-taxable entities under Federal income tax law. (See IRS
Rev. Rul. 67-284, 1967-2 C.B. 55: Rev. Rul. 81-295, 1981-2 C.B.
15; Rev. Rul. 94-16, 1994-12 I.R.B. 1; Rev. Rul. 94-65, 1994-42
I.R.B. 10.) Perhaps the sharpest irony is that the tribal
revenue declared by the House provision to be taxable was
characterized as ``unrelated business income''. However, tribal
revenues derived from the conduct of gaming activities on
Indian lands are expressly required by Federal law to be
expended by tribal governments for governmental purposes under
the Indian Gaming Regulatory Act of 1988 in a provision that
would not be altered by S. 487.
The Chairman, Vice-Chairman, and many other members of the
Senate Committee on Indian Affairs wrote the leadership of the
Senate Committee on Finance to urge that Committee to reject
the House-passed provision to tax Indian gaming revenues. After
considering the matter, the Finance Committee did not include
that provision in its Balanced Budget bill, and subsequently
prevailed upon the House to drop the idea in the Conference
Committee. The effort to defeat the Indian gaming tax was led
by a broadly bi-partisan group of Senators. The arguments they
made against the bill included the following points. Indian
tribes are governments, they are not cultural organizations or
non-profit corporations. Tribal governments exercise
substantial jurisdiction and governmental authority under
Federal law. The governmental status of tribes has been
confirmed repeatedly by the United States Supreme Court and
Federal statutes, consistent with long-standing constitutional
principles. Like States and other sovereign governments, Indian
tribes have a need to raise revenues to meet their governmental
obligations and to provide basic governmental services by
conducting business activities such as gaming. Tribal
governments do not have ``unrelated business income,'' they
have governmental revenues derived from Federally-authorized
economic development activities. No serious proposal was under
consideration to impose a Federal income tax on State or other
governments who conduct lotteries or other gaming activities as
part of their responsibility to raise revenues to carry out
governmental activities for their territories. Consequently,
the House proposal was rejected as a plainly discriminatory
Federal income tax against Indian tribal governments.
Legislative History
S. 487 was introduced by Senator McCain, for himself and
Senator Inouye, on March 2, 1995, and was referred to the
Committee on Indian Affairs. On June 22, 1995, the Committee on
Indian Affairs held a hearing on S. 487. A second hearing was
held on July 25, 1995.
Committee Recommendation and Tabulation of Vote
In an open business session on August 9, 1995, the
Committee on Indian Affairs ordered the bill reported with
amendments, with the recommendation that the Senate pass the
bill as reported.
Section-by-Section Analysis
Section 1. Short title
This section provides that this Act may be cited as the
``Indian Gaming Regulatory Act Amendments Act of 1995''.
Section 2. Amendment to the Indian Gaming Regulatory Act
This section provides that the Indian Gaming Regulatory Act
(25 U.S.C. 2701 et seq.) is amended by striking the first
section and inserting the following new section:
Section 1. Short title; table of contents
Subsection (a) provides that this Act may be cited as the
``Indian Gaming Regulatory Act''.
Subsection (b) sets forth the table of contents for the Act
and strikes sections 2 and 3 of the Act and inserting the
following new sections:
Section 2. Congressional findings
This section contains seven separate findings, including
the following: Indian tribes are engaged in the licensing and
operation of gaming activities as a means of generating tribal
governmental revenue; clear Federal standards and regulations
for the conduct of Indian gaming will assist tribal governments
in assuring the integrity of gaming activities; a principal
goal of Federal Indian policy is to promote tribal economic
development, self-sufficiency and strong tribal government;
Indian tribes have the right to regulate gaming activities on
Indian lands if such activities are not prohibited by Federal
law and are conducted within a state that permits such gaming
activities and the Congress has the authority to regulate the
privilege of doing business with Indian tribes in Indian
country; the regulation of Indian gaming activities should meet
or exceed federally established minimum regulatory
requirements; gaming activities on Indian lands has had a
substantial impact on commerce with foreign nations, among the
several states and with the Indian tribes; and the Constitution
vests the Congress with the power to regulate commerce with
foreign nations, among the several states and with the Indian
tribes and this Act is enacted in the exercise of those powers.
Section 3. Purposes
This section sets forth four purposes of the Act, including
the following: to ensure the right of Indian tribes to conduct
gaming operations on Indian lands consistent with the U.S.
Supreme Court decision in the case of California v. Cabazon
Band of Mission Indians; to provide a statutory basis for the
conduct of gaming activities on Indian lands as a means of
promoting tribal economic development and strong tribal
governments; to provide an adequate statutory basis for the
regulation of Indian gaming by tribal governments to shield the
gaming from organized crime; ensure that the Indian tribe is
the primary beneficiary of the gaming activities and to ensure
that the gaming activities are conducted fairly by both the
operator and the patrons; and to declare that the establishment
of independent Federal regulatory authority and minimum
regulatory standards for the conduct of gaming activities on
Indian lands are necessary to protect such gaming.
Section 4. Definitions
This section contains definitions for the following terms:
``applicant'', ``Advisory Committee'', ``Attorney General'',
``Chairperson'', ``Class I Gaming'', ``Commission'',
``Compact'', ``Gaming Operation'', ``Gaming-Related Contract'',
``Gaming Related Contractor'', ``Gaming Service Industry'',
``Indian Lands'', ``Indian Tribe'', ``Key Employee'',
``Management Contract'', ``Management Contractor'', ``Material
Control'', ``Net Revenues'', ``Person'', and ``Secretary''.
This Section also incorporates by reference the definitions of
``Class II gaming'' and ``Class III gaming'' from the Indian
Gaming Regulatory Act.
Section 5. Establishment of the Federal Indian Gaming
Regulatory Commission
Subsection (a) of this section provides for the
establishment of the Federal Indian Gaming Regulatory
Commission as an independent agency of the United States.
Subsection (b) provides that the Commission shall be
composed of 3 full-time members who are appointed by the
President and confirmed by the Senate. Commission members are
prohibited from pursuing any other business or occupation or
holding any other office. Other than through distribution of
gaming revenues as a member of an Indian tribe, Commission
members are prohibited from engaging in or having a pecuniary
interest in a gaming activity or in any business or
organization that has a license under this Act or that does
business with any person or organization under this Act.
Persons who have been convicted of a felony or a gaming offense
cannot serve as Commissioners. In addition, persons who have
any financial interest in or management responsibility for any
gaming contract or other contract approved pursuant to this Act
are also ineligible to serve as Commissioners.
Subsection (b) also provides that not more than 2 members
of the Commission shall be members of the same political party.
Under this subsection, the President is authorized to give
special reference to an individual's training and experience in
the fields of corporate finance, accounting, auditing and
investigation or law enforcement. It also provides that not
less than 2 members of the Commission shall be individuals with
extensive experience or expertise in tribal government. Any
person under consideration for appointment to the Commission
shall be the subject of a background investigation conducted by
the Attorney General with particular emphasis on the person's
financial stability, integrity, responsibility and reputation
for good character and honesty.
Subsection (c) provides that the President shall select a
Chairperson from among the members appointed to the Commission.
Subsection (d) provides that the Commission shall select a
Vice Chairperson by majority vote. The Vice Chairperson shall
serve as the Chairperson in the absence of the Chairperson and
shall exercise such other powers as may be delegated by the
Chairperson.
Subsection (e) provides that each member of the Commission
shall hold for a term of 5 years and no member can serve more
than two terms of 5 years each. The initial appointments to the
Commission will be made for staggered terms, with the
Chairperson serving a full 5 year term.
Subsection (f) provides that Commissioners shall serve
until the expiration of their term or until their successor is
duly appointed and qualified, unless a Commissioner is removed
for cause. A Commissioner can only be removed by the President
for neglect of duty, malfeasance in office of for other good
cause. Any member appointed to fill a vacancy shall serve for
the unexpired term of the vacancy.
Subsection (g) provides that two members of the Commission
shall constitute a quorum.
Subsection (h) provides that the Commission shall meet at
the call of the Chairperson or a majority of the members of the
Commission. A majority of the members of the Commission shall
determine any action of the Commission.
Subsection (i) provides that the Chairperson shall be
compensated at level IV of the Executive Schedule and other
members shall be compensated at level V. All members of the
Commission shall be reimbursed for travel, subsistence and
other necessary expenses.
Subsection (j) requires the Administrator of General
Services to provide to the Commission on a reimbursable basis
such administrative support services as the Commission may
request.
Section 6. Powers of the chairperson
Subsection (a) provides that the Chairperson is the chief
executive officer of the Commission.
Subsection (b) provides that the Chairperson can employ and
supervise such personnel as may be necessary to carry out the
functions of the Commission, without regard to the requirements
of title 5 of the United States Code relating to appointments
in the competitive service. The Chairperson is required to
appoint a General Counsel and may procure temporary and
intermittent services or request the head of any federal agency
to detail any personnel of such agency to the Commission to
assist in carrying out the duties of the Commission under this
Act. The Chairperson is also authorized to use and expend
federal funds and fees collected pursuant to this Act and to
contract for such professional, technical and operational
personnel as may be necessary to carry out this Act. Staff of
the Commission are to be paid without regard to the
requirements of title 5 of the United States Code relating to
classification and pay rates.
Subsection (c) provides that the Chairperson shall be
governed by the general policies of the Commission and by such
regulatory decisions and determinations as the Commission is
authorized to make.
Section 7. Powers and authority of the Commission
Subsection (a) provides that the Commission shall have the
power to approve the annual budget of the Commission;
promulgate regulations to carry out this Act; establish fees
and assessments; conduct investigations; issue temporary and
permanent orders closing gaming operations; grant, deny or
condition or suspend any license issued under any authority
conferred on the Commission by this Act; fine any person
licensed pursuant to this Act for violation of any of the
conditions of licensure under this Act; inspect the premises
where Class II and III gaming operations are located; inspect
and audit all books and records of Class II and III gaming
operations; use the U.S. mail in the same manner as any agency
of the U.S.; procure supplies and services by contract;
contract with state, tribal and private entities to assist in
the discharge of the Commission's duties; serve or cause to be
served process or notices of the Commission; propound written
interrogatories and appoint hearing examiners who are empowered
to administer oaths; conduct hearings pertaining to violations
of this Act; collect the fees and assessments authorized by
this Act; assess penalties for violations of the Act; provide
training and technical assistance to Indian tribes with respect
to the conduct and regulation of gaming activities; monitor and
regulate Class II and III gaming; establish precertification
criteria that apply to management contractors and other persons
having material control over a gaming operation; approve all
management-related and gaming-related contracts; delegate any
of the functions of the Commission, except for rulemaking, to a
division of the Commission or a Commissioner, employee or
administrative law judge.
Subsection (b) provides that the Commission reserves the
right to review any action taken pursuant to a delegation of
its authority. The vote of one Commissioner is sufficient to
bring a delegated action before the full Commission for review.
If the Commission declines to exercise the right of review,
then the delegated action shall be deemed an action of the
Commission.
Subsection (c) provides that after receiving
recommendations from the Advisory Committee pursuant to this
Act, the Commission shall establish minimum Federal standards
for: background investigations; licensing; the operation of
Class II and III gaming activities, including surveillance,
security and systems for monitoring all gaming activity,
protection of the integrity of the rules for play of games,
cash counting and control, controls over gambling devices and
accounting and auditing.
Subsection (d) provides that the Commission may secure from
any department or agency of the United States information
necessary to enable the Commission to carry out this Act. The
Commission may also secure from any law enforcement or gaming
regulatory agency of any State, Indian tribe or foreign nation
information necessary to enable the Commission to carry out
this Act. All such information obtained by the Commission shall
be protected from disclosure by the Commission. For purposes of
this subsection, the Commission shall be considered to be a law
enforcement agency.
Subsection (e) authorizes the Commission to 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. In addition,
the Commission is authorized to investigate such facts,
conditions, practices, or matters as the Commission considers
necessary to proper to aid in the enforcement, implementation
or amendment of the Act. Any member of the Commission or any
officer designated by the Commission is empowered to administer
oaths and to subpoena witnesses and evidence from any place in
the United States at any designated place of hearing. The
Commission is authorized to invoke the jurisdiction of any
Federal court to require the attendance and testimony of
witnesses and the production of records. The failure of any
person to obey an order of a Federal court to appear and
testify or to produce records is punishable as a contempt of
such court. If the Commission determines that any person is
engaged, has engaged or is conspiring to engage in any act or
practice which constitutes a violation of this Act, the
Commission may bring an action in the Federal District Court
for the District of Columbia to enjoin such act or practice or
refer the matter to the Attorney General for the initiation of
criminal proceedings. At the request of the Commission, each
Federal district court shall have jurisdiction to issue writs
of mandamus, injunctions and orders commanding any person to
comply with this Act and any rules or regulations promulgated
pursuant to the Act.
Section 8. Regulatory framework
Subsection (a) provides that for Class II gaming Indian
tribes shall retain the right to monitor and regulate such
gaming, conduct background investigations, and issue licenses
in a manner which meets or exceeds minimum Federal standards
established by the Commission pursuant to section 7(c) of this
Act.
Subsection (b) provides that for Class III gaming which is
conducted pursuant to a tribal/state compact, an Indian tribe
or a state or both shall monitor and regulate such gaming,
conduct background investigations, issue licenses and establish
and regulate internal control systems in a manner which meets
or exceeds minimum Federal standards established by the
Commission pursuant to section 7(c) of this Act.
Subsection (c) provides that in any case in which an Indian
tribe conducts Class II gaming in a manner which substantially
fails to meet or enforce the minimum Federal standards for
Class II gaming, then the Commission shall have the authority
to conduct background investigations, issue licenses and
establish and regulate internal control systems after providing
the Indian tribe an opportunity to cure violations and to be
heard. The authority of the Commission may be exclusive and may
continue until such time as the regulatory and internal control
systems of the Indian tribe meet or exceed the minimum Federal
standards established by the Commission.
Subsection (c) also provides that in the case of Class III
gaming, if an Indian tribe or a state, or both, fail to meet or
enforce the minimum Federal standards for Class III gaming then
the Commission shall have the authority to conduct background
investigations, issue licenses and establish and regulate
internal control systems after providing notice and an
opportunity to cure problems and be heard. The authority of the
Commission may be exclusive and may continue until such time as
the regulatory and internal control systems of an Indiana tribe
or a state, or both, meet or exceed the minimum Federal
standards established by the Commission.
Section 9. Advisory Committee on Minimum Regulatory
Requirements and Licensing Standards
Subsection (a) authorizes the President to establish an
Advisory Committee on Minimum Regulatory Requirements and
Licensing Standards.
Subsection (b) provides that the advisory committee shall
be composed of 7 members who shall be appointed by the
President within 120 days of enactment of the Indian Gaming
Regulatory Act Amendments Act of 1995. Three members shall be
members of, and represent, Indian tribal governments which are
engaged in gaming under this Act and shall be selected from a
list of recommendations submitted to the President by the
Chairman and Vice Chairman of the Senate Committee on Indian
Affairs and the Chairman and ranking minority member of the
Subcommittee on Native American and Insular Affairs of the
Committee on Resources of the House of Representatives. Two
members shall represent state governments and shall be 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 Minority Leader of the House of
Representatives. Two members shall be employees of the
department of Justice. Any vacancy on the Advisory Committee
shall not affect its powers, but shall be filed in the same
manner as the original appointment.
Subsection (c) provides that 180 days after the date on
which the Advisory Committee is fully constituted it shall
develop recommendations for minimum Federal standards for the
conduct of background investigations, internal control systems
and licensing standards. The committee's recommendations shall
be submitted 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, the
Commission and to each federally recognized Indian tribe. The
Commission and the Advisory Committee are required to give
equal weight to existing industry standards, the unique nature
of tribal gaming, the broad variations in the scope and size of
tribal gaming activity, the inherent sovereign right of Indian
tribes to regulate their own affairs and the Findings and
Purposes set forth in sections 2 and 3 of this Act.
Subsection (d) provides that the Commission shall hold
public hearings on the Advisory Committee's recommendations
after they are received. At the conclusion of the hearings, the
Commission shall promulgate regulations establishing minimum
regulatory requirements and licensing standards.
Subsection (e) provides that the members of the Advisory
Committee who are not officers or employees of the Federal
government or a State government shall be reimbursed for travel
and per diem during the performance of the duties of the
Advisory Committee and while away from home or their regular
place of business.
Subsection (f) provides that the Advisory Committee shall
cease to exist 10 days after it submits its recommendations to
the Commission.
Subsection (g) provides that the activities of the Advisory
Committee are exempt from the Federal Advisory Committee Act.
Section 10. Licensing
Subsection (a) provides that licenses shall be required of
gaming operations, key employees of a gaming operation,
management- and gaming-related contractors, any gaming service
industry, and any person who has material control over a
licensed gaming operation.
Subsection (b) provides that the Commission may require
license of management contractors and gaming operations
notwithstanding any other provision of law relating to the
issuance of licenses by an Indian tribe or a state, or both.
Subsection (c) provides that no gaming operation shall
operate unless all required licenses and approvals have been
obtained in accordance with this Act. Each management contract
for a gaming operation must be in writing and filed with and
approved by the Commission. The Commission may require that a
management contract include any provisions that are reasonably
necessary to meet the requirements of this Act. Any applicant
for a license who does not have the ability to exercise any
significant control over a licensed gaming operation may be
determined by the Commission to be ineligible to hold a license
or to be exempt from being required to hold a license.
Subsection (d) provides that the Commission shall deny a
license to any applicant who is disqualified for failure to
meet any of the minimum Federal standards promulgated by the
Commission pursuant to section 7(c).
Subsection (e) provides that the Commission shall conduct
an investigation into the qualifications of the applicant and
may conduct a non-public hearing concerning the applicant's
qualifications. No later than 90 days after an application is
filed with the Commission, the Commission shall complete its
investigation and any hearings associated with such
investigation. Not later than 10 days after the expiration of
the 90-day period, the Commission shall take final action grant
or deny a license. If an application is denied by the
Commission, the applicant can request a statement of the
reasons, including specific findings of fact. If the Commission
is satisfied that the applicant is qualified to receive a
license, then the Commission shall issue a license upon the
tender of all license fees and assessments required by this Act
and such bonds as the Commission may require for the faithful
performance of all requirements imposed by this Act. The
Commission is authorized to fix the amount of any bond it
requires. Bonds furnished to the Commission may be applied by
the Commission to any unpaid liability of the licensee. Bonds
shall be furnished in cash or negotiable securities, by a
surety or through an irrevocable letter of credit.
Subsection (f) provides that the Commission shall renew any
license issued under this Act, subject to its power to deny,
revoke or suspend licenses, upon proper application for renewal
and the receipt of license fees and assessments. Licenses can
be renewed for up to two years for each of the first 2 renewal
periods and three years for each succeeding renewal period. A
licensing hearing can be reopened by the Commission at any
time. Any licenses in existence on the date of enactment of
this Act may be renewed for a period of 18 months. Any
application for renewal must be filed with the Commission not
later than 90 days prior to the expiration of the current
license. Upon renewal of a license, the Commission shall issue
an appropriate renewal certificate.
Subsection (g) provides that the Commission shall establish
procedures for the conduct of hearings associated with
licensing including procedures for denying, limiting,
conditioning, revoking or suspending any such license. After
the completion of a licensing hearing the Commission shall
render a decision and issue and serve an order on the affected
parties. The Commission may order a rehearing on a decision on
a motion made by a party or the Commission not later than 10
days after the service of a decision and order. Following a
rehearing, the Commission shall render a decision, issue an
order and serve it on the affected parties. Any licensing
decision or order made by the Commission shall be final agency
action for the purposes of judicial review. The United States
Court of Appeals for the District of Columbia has jurisdiction
to review the licensing decisions and orders of the Commission.
Subsection (h) provides that the Commission shall maintain
a registry of all licenses granted or denied and shall make the
information contained in the registry available to Indian
tribes to assist them in the licensing and regulation of gaming
activities.
Section 11. Requirements for the conduct of class I and
class II gaming on Indian lands.
Subsection (a) provides that Class I gaming shall be within
the exclusive jurisdiction of the Indian tribes and shall not
be subject to the provisions of this Act.
Subsection (b) provides that Class II gaming shall be
within the jurisdiction of the Indian tribes, but shall be
subject to the provisions of this Act. An Indian tribe may
engage in, and license and regulate Class II gaming on the
lands within the jurisdiction of the tribe if: the gaming is
located within a state that permits such gaming for any purpose
by any person; such gaming is not otherwise specifically
prohibited on Indian lands by Federal law; and the Class II
gaming operation meets or exceeds the requirements of section
7(c) and 10. With regard to any Class II gaming operation, the
Commission shall ensure that: the Indian tribe has issued a
separate license for each place, facility or location at which
Class II gaming is conducted; the Indian tribe has or will have
the sole proprietary interest and responsibility for the
conduct of any Class II gaming activity, except as provided
elsewhere in the Act with regard to gaming operations by Indian
individuals; and the net revenues from Class II gaming may only
be used to fund tribal government operations or programs, to
provide for the general welfare of the Indian tribe and its
members, to promote tribal economic development, to donate to
charitable organizations, to help fund operations of local
government agencies, to comply with section 17 of this Act, or
to make per capital payments to tribal members pursuant to the
provisions of this subsection. The Indian tribe is required to
provide the Commission with annual outside audits of its Class
II gaming operation. Such audits shall include a review of all
contracts for supplies and services equal to or more than
$50,000 annually, except for contracts for legal and accounting
services.
Subsection (b) further provides that the Commission shall
ensure that the construction and maintenance of a Class I
gaming facility and the operation of the gaming shall be
conducted in a manner that adequately protects the environment
and public health and safety. The Commission must also ensure
that their is an adequate system for background investigations
on all persons who are required to be licensed in accordance
with sections 7(c) and 10 and notice to the Commission by the
Indian tribe of the results of the background investigation
before the issuance of any license. No license may be granted
to any person whose prior activities, criminal record or
reputation habits and associations pose a threat to the public
interest or the effective regulation of gaming.
With regard to per capita payments, subsection (b) provides
that such payments may only be made if: the Indian tribe has
prepared a plan to allocate revenues to the public,
governmental, economic development and social welfare purposes
prescribed by this Act and the Secretary determines that the
plan is adequate; the interests of minors and other legally
incompetent persons are protected and preserved and the
payments for such individuals are disbursed to their parents or
legal guardians under a plan approved by the Secretary and the
governing body of the Indian tribe; and the per capita payments
are subject to Federal income taxation and Indian tribes
withhold such tax.
With regard to Class II gaming operations on Indian lands
which are owned by a person or entity other than the Indian
tribe, subsection (b) requires the issuance of a separate
license which includes the requirements of this section and
requirements that are at least as restrictive as those
established by state law governing similar gaming within the
jurisdiction of the state within which the Indian lands are
located. No person or entity, other than the Indian tribe shall
be eligible to receive a tribal license to own a Class II
gaming operation on Indian lands within the jurisdiction of the
Indian tribe if such person or entity would not be eligible to
receive a state license to conduct the same activity within the
jurisdiction of the state. Any individually owned Class II
gaming operation that was in operation on September 1, 1986
shall not be barred by this Act if: it is licensed by an Indian
tribe; the income to the Indian tribe from such gaming is not
used for per capita payments; not less than 60 percent of the
net revenues from the gaming operation is income to the Indian
tribe; and the owner of the gaming operation pays an assessment
to the Commission pursuant to section 17 for the regulation of
such gaming. This exemption for certain individually owned
games cannot be transferred to any person or entity and only
remains in effect so long as the gaming activity remains within
the same nature and scope as the gaming operation which was
operated on October 17, 1988. The Commission is required to
maintain and publish in the Federal Register a list of
individually owned gaming operations.
Subsection (c) provides that any Indian tribe that operates
a Class II gaming activity may petition the Commission for a
certificate of self-regulation if that Indian tribe has
continuously conducted such gaming activity for a period of not
less than 3 years, including at least one year after the date
of enactment of this Act, and has otherwise complied with the
provisions of this Act. The Commission shall issue a
certificate of self-regulation if it determines that the Indian
tribe has: conducted its gaming activity in a manner which has
resulted in an effective and honest accounting of all revenues;
resulted in a reputation for safe, fair, and honest operation
of the activity; been generally free of evidence of criminal or
dishonest activity; and the Indian tribe has adequate systems
for accounting for revenues, investigation and licensing of
employees and contractors, investigation and enforcement of its
gaming laws and has conducted the gaming operation on a
fiscally sound basis. During any period in which a certificate
of self-regulation is in effect, the Indian tribe shall
continue to submit an annual independent audit to the
Commission and a complete resume of each employee and
contractor hired and licensed by the Indian tribe. The
Commission cannot assess a fee on a self-regulated activity
pursuant to section 17 in excess of one quarter of 1 percent of
the net revenue from such activity. The Commission may rescind
a certificate of self-regulation for just cause and after an
opportunity for a hearing.
Subsection (d) provides that if the Commission notifies the
Indian tribe that any license which has been issued by the
tribe under this section does not meet any standards
established under sections 7(c) or 10, then the Indian tribe
shall immediately suspend the license and after notice and
hearing to the licensee in conformity with the laws of the
Indian tribe may revoke such license.
Section 12. Class III gaming on Indian lands
Subsection (a) provides that Class III gaming activities
shall be lawful on Indian lands only if such activities are
authorized by the Secretary under procedures prescribed under
paragraph (3)(B)(vii) or by a compact that: is adopted by the
governing body of the Indian tribe having jurisdiction over
such lands; meets the requirements of section 11(b)(3) for the
conduct of Class II gaming; is approved by the Secretary. Such
gaming activities must be located in a State that permits such
gaming for any purpose by any person and be conducted in
conformity with a compact that is in effect or with procedures
prescribed by the Secretary under paragraph (3)(B)(vii). Any
Indian tribe which has jurisdiction over the lands upon which a
Class III gaming activity is to be conducted shall request the
State in which such lands are located to enter into
negotiations for the purpose of entering into a compact to
govern the conduct of Class III gaming activities. Upon
receiving such a request, the State shall negotiate with the
Indian tribe in good faith to enter into such a compact.
Any State and any Indian tribe may enter into a Class III
gaming compact, however such compact shall only take effect
when notice of approval by the Secretary of such compact has
been published in the Federal Register. The U.S. District
Courts shall have jurisdiction over: 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 Class III gaming compact or to
conduct such negotiations in good faith; any cause of action
initiated by a State or Indian tribe to enjoin a Class III
gaming activity located on Indian lands conducted in violation
of any Class III gaming compact; and any cause of action
initiated by the Secretary to enforce the procedures prescribed
under subparagraph (B)(vii).
Subparagraph (B) provides that an Indian tribe may only
initiate a cause of action after the expiration of the 180 day
period beginning on the date when the Indian tribe requests the
State to enter into negotiations. In any action arising from
the failure of the State to enter into negotiations with an
Indian tribe in good faith, the burden of proof shall be upon
the State to prove that it had negotiated in good faith. If the
court finds that the State has failed to negotiate in good
faith with the tribe, the court shall order the State and the
tribe to conclude such compact within a 60 day period. In
determining whether a State has negotiated in good faith the
court may take into account the public interest, public safety,
adverse economic impacts on existing gaming activities and
shall consider the 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.
In the event that a State and an Indian tribe fail to
conclude a compact within the 60 day period, the tribe and the
State shall each submit to a mediator appointed by the court a
proposed compact that represents their last best offer for a
compact. The mediator shall select from the two proposed
compact one which best comports with the terms of this Act and
any other applicable Federal law and with the findings and
order of the court. The mediator shall submit the proposed
compact he has selected to the State and the Indian tribe for
their review. If a State consents to a proposed compact during
the 60 day period, then such compact shall be treated as a
compact entered into under paragraph (2). If a State fails to
consent to a compact submitted by the mediator during the 60
day period, the mediator shall notify the Secretary and the
Secretary shall prescribe procedures for the conduct of Class
III which are consistent with the proposed compact selected by
the mediator, the provisions of this Act, and the relevant
provisions of State law.
The Secretary is authorized to approve any compact between
an Indian tribe and a State governing gaming on Indian lands of
such tribe. The Secretary may disapprove a compact only if that
compact violates any provision of this Act, any other provision
of Federal law that does not relate to jurisdiction over gaming
on Indian lands, or the trust obligations of the United States
to Indians. If the Secretary does not approve or disapprove a
compact 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 approved to the
extent that it is consistent with the provisions of this Act.
The Secretary shall publish notice of any compact that is
approved, or considered to have been approved under this
paragraph in the Federal Register. The publication of a compact
that permits a form of Class III gaming shall be conclusive
evidence that such Class III gaming is an activity subject to
the laws of the state where the gaming is to be conducted. Any
compact negotiated under this subsection shall become effective
on its publication in the Federal Register. The Commission
shall monitor and, if authorized, regulate and license Class
III gaming with respect to any compact that is approved by the
Secretary.
Subsection (a) also provides that a compact may include
provisions relating to the criminal and civil laws of the
Indian tribe or the state; the allocation of criminal and civil
jurisdiction between the state and the Indian tribe; 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; taxation by the Indian tribe of
such activity in amounts comparable to the amounts assessed by
the state for similar activity; remedies for breach of
contract; standards for the operation of such activity and
maintenance of the gaming facility; and any other subject that
is directly related to the operation of gaming activities and
the impact of gaming on tribal, state and local governments.
Nothing in this Act may be construed as conferring on a state
or political subdivision of a state the authority to impose any
tax, fee, charge, or other assessment on an Indian tribe, an
Indian gaming operation or the value generated by the gaming
operation or any person or entity authority by an Indian tribe
to engage in a Class III gaming activity in conformity with
this Act.
Nothing in subsection (a) impairs the right of an Indian
tribe to regulate Class III gaming on the 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. The Committee has included language to
clarify exemptions to the Johnson Act, also known as the
Gambling Devices Transportation Act (15 U.S.C. 1172 and 1175),
for gaming conducted under the Indian Gaming Regulatory Act.
Specifically, this section provides that sections 1172 and 1175
of the Johnson Act shall not apply to any Class II gaming
activity, or to any gaming activity conducted pursuant to a
Tribal-State compact, or gaming conducted under procedures
prescribed by the Secretary of the Interior pursuant to the
Indian Gaming Regulatory Act. The Committee is concerned that
the definition of a ``gambling device'' in the Johnson Act is
overbroad and may have unintended consequences when applied to
gaming activities regulated under IGRA. In particular, the
Committee is concerned that devices which have been classified
by the National Indian Gaming Commission, or its successor
under this bill, the Federal Indian Gaming Regulatory
Commission, to be ``class II technologic aids'' should not fall
under the broad definition of ``gambling devices'' in the
Johnson Act. Of particular concern are those electronic,
computer, or technologic aids which support class II gaming
activities such as random number generators, bingo blowers,
computers, televisions, and other types of devices. Under
section 1171 of the Johnson Act, gambling devices are defined
as including ``any other machine or mechanical device * * *
designed and manufactured primarily for use in connection with
gambling, and (A) which when operated may deliver, as the
result of the application of an element of chance, any money or
property, or (B) by the operation of which a person may become
entitled to receive, as the result of the application of an
element of chance, any money or property * * *.'' \11\ The
definition additionally includes any subassembly or essential
part of any such machine or mechanical device.\12\ This
definition has been interpreted by the courts to apply to
``trade booster'' devices which were attached to cigarette
vending machines to deliver a free package of cigarettes to
certain customers based on randomly generated numbers.\13\ The
Committee is concerned that those electronic, computer, or
technologic aids to class II gaming activities, as determined
by the Federal Indian Gaming Regulatory Commission, be exempted
from the application of the provisions of the Johnson Act. The
Committee has also clarified that gaming activities conducted
under Tribal-State compacts or under procedures prescribed by
the Secretary of the Interior be exempted from the application
of sections 1172 and 1175 of the Johnson Act, which pertain to
the transportation of gambling devices and the manufacture,
sale, repair, or possession of gambling devices, respectively.
\11\ 15 U.S.C. 1171(a)(2).
\12\ 15 U.S.C. 1171(a)(3).
\13\ See U.S. v. 11 Star-Pack Cigarette Merchandiser Machines, 248
F.Supp. 933 (D.C.Pa., 1966).
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Subsection (b) provides that the Federal District Court for
the District of Columbia shall have jurisdiction over any
action initiated by an Indian tribe, a state, the Secretary or
the Commission to enforce a compact or to enjoin a Class III
gaming activity located on Indian lands and conducted in
violation of any compact.
Subsection (c) provides that the governing body of an
Indian tribe 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 a revocation
shall render Class III gaming illegal on the Indian lands of
such Indian tribe. The Commission is required to publish the
revocation ordinance or resolution in the Federal Register not
later than 90 days after receipt of such resolution or
ordinance and it shall take effect upon such publication. Any
person or entity operating a Class III gaming activity on the
date of such revocation may continue to operate such activity
in conformity with a compact that is in effect for one year
from the date of publication of the revocation.
Subsection (d) provides that with regard to compacts
entered into and approved by the Secretary before the date of
enactment of this Act shall remain lawful during the period
such compact is in effect notwithstanding any amendments made
by this Act or any changes made in state law enacted after the
approval of the compact. It further provides that all Class III
gaming activity conducted under a compact or pursuant to
procedures prescribed by the Secretary shall be subject to all
Federal minimum regulatory standards established under this act
and any regulations promulgated under this Act. Any compact
entered into after the date of enactment of this Act shall
remain lawful under this Act notwithstanding any change in
state law enacted after the approval of the compact.
Section 13. Review of contracts
Subsection (a) provides that the Commission shall review
and approve or disapprove any management contracts for the
management of any gaming activity and any gaming-related
contract unless such gaming related contract is licensed by an
Indian tribe consistent with the minimum Federal standards
promulgated pursuant to section 7(c).
Subsection (b) provides that the Commission shall only
approve a management contract if it determines that the
contract provides for: adequate accounting procedures that are
maintained and for verifiable monthly financial reports
prepared by or for the governing body of the Indian tribe;
access to the gaming operations by tribal officials who shall
have the right to verify the daily gross revenues and income
derived from the gaming activity; a minimum guaranteed payment
to the Indian tribe that has preference over the retirement of
any development and construction costs; an agreed upon ceiling
for the repayment of any development and construction costs; a
contract term of not more than 5 years unless the Commission
determines that a term of 7 years is appropriate based on the
capital investment required and the income projections for the
gaming activity; and grounds and mechanisms for the termination
of the contract.
Subsection (c) provides that the Commission may approve a
management contract that provides for a fee of 30 percent of
the net revenues of a tribal gaming activity, unless the Indian
tribe requests a higher fee and the Commission determines that
based on the capital investment required and the income
projections a higher fee is justified. In no circumstances can
a management fee exceed 40 percent.
Subsection (d) provides that the Commission shall approve a
gaming-related contract only if the Commission determines that
the contract provides for: grounds and mechanisms for the
termination of the contract and such other conditions as the
Commission may be empowered to impose under this Act.
Subsection (e) provides that not later than 90 days after
the date on which a management contract or gaming-related
contract is submitted to the Commission for approval the
Commission shall either approve or disapprove the contract. The
90 day period may be extended for 45 days if the Commission
notifies the tribe in writing of the reason for the extension.
The Indian tribe may bring an action in the Federal District
Court for the District of Columbia to compel action by the
Commission if it does not act in a timely manner. Any gaming-
related contract for an amount of $100,000 or less which is
submitted to the Commission for approval by a person who holds
a valid license that is in effect under this Act, shall be
deemed to be approved if the Commission has not acted to
approve or disapprove it within 90 days of its submission.
Subsection (f) provides that after providing notice and
hearing, the Commission shall have the authority to require
appropriate contract modifications to ensure compliance with
this Act or may void any contract if the Commission determines
that it violates any of the provisions of this Act.
Subsection (g) provides that no contract regulated by this
Act may transfer or in any other manner convey any interest in
real property unless specific statutory authority exists, all
necessary approvals have been obtained and the conveyance is
clearly specified in the contract.
Subsection (h) provides that the authority of the Secretary
under 25 U.S.C. 81 shall not extend to any contracts or
agreements which are regulated pursuant to this Act.
Subsection (i) provides that the Commission may not approve
a contract if the Commission finds that: any person having a
direct financial interest in, or management responsibility for
such contract, and in the case of a corporation, any member of
the board of directors or any stockholders who hold more than
10 percent of its issued stock is an elected member of the
governing body of the Indian tribe which is a party to the
contract; has been convicted of any felony or any gaming
offense; has knowingly and willfully provided materially false
statements to the Commission or the Indian tribe or has refused
to respond to questions propounded by the Commission; or has
been determined to be a person whose prior activities, criminal
record, reputation, habits or associations pose a threat to the
public interest or to the effective regulation and control of
gaming. The Commission may also disapprove any contract if it
finds that; the contractor has unduly interfered or influenced
for its gain any decision or process of tribal government
relating to the gaming activity; the contractor has
deliberately or substantially failed to comply with the terms
of the contract; or a trustee, exercising the skill and
diligence that a trustee is commonly held to, would not approve
the contract.
Section 14. Review of existing contracts; interim authority
Subsection (a) provides that 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 entered into a
contract prior to the enactment of this Act that the Indian
tribe is required to submit the contract to the Commission
within 60 days of such notice. Any such contract shall be valid
under this Act unless the Commission disapproves it under this
section. Not later than 180 days after the submission of a
contract for review, the Commission shall review it to
determine if it meets the requirements of section 13. The
Commission shall approve a contract if it determines that the
contract meets the requirements of section 13 and the
contractor has obtained all of the licenses required by this
Act. If the Commission determines that a contract does not meet
the requirements of section 13, the Commission shall provide
written notice to the parties of the necessary modifications
and the parties shall have 180 days to make the modifications.
Subsection (b) provides that the Commissioners who are
holding office on the date of enactment of this Act shall
exercise the authorities vested in the Federal Indian Gaming
Regulatory Commission (except those authorities specified in
7(a)(1) and those authorities associated with the
administration of the Commission as an independent agency as
defined in 5 U.S.C. 104) until such time as the members of that
Commission are sworn into office. Until such time as the
Federal Indian Gaming Regulatory Commission promulgates
regulations under this Act, the regulations promulgated under
the Indian Gaming Regulatory Act of 1988 shall apply.
Section 15. Civil penalties
Subsection (a) provides that any person who violates this
Act or the regulations promulgated pursuant to this Act, either
by an act or an omission, shall be subject to a civil penalty
of not more than $50,000 per day for each violation.
Subsection (b) provides that the Commission shall assess
the civil penalties authorized by this Act and the Attorney
General shall collect them in a civil action. The Commission
may seek to compromise any assessed civil penalty. In
determining the amount of a civil penalty, the Commission shall
take into account: the nature, circumstances, extent and
gravity of the violation; with regard to the person found to
have committed the violation, the degree of culpability, any
history of prior violations, ability to pay and the effect on
ability to continue to do business; and such other matters as
justice may require.
Subparagraph (c) provides that the Commission may order the
temporary closure of all or part of an Indian gaming operation
for substantial violation of this Act and the regulations
promulgated by the Commission. Not later than 30 days after an
order of temporary closure the Indian tribe or the individual
owner of the gaming operation may request a hearing on the
record to determine whether the order should be made permanent
or dissolved. Not later than 30 days after a request for a
hearing, the Commission shall hold the hearing and render a
final decision within 30 days after the completion of the
hearing.
Section 16. Judicial review
Any decision made by the Commission pursuant to sections 7,
8, 10, 13, 14, and 15 shall constitute final agency decisions
for purposes of appeal to the Federal District Court for the
District of Columbia under the Administrative Procedures Act.
Section 17. Commission funding
Subsection (a) provides that the Commission shall establish
an annual schedule of fees to be paid to it by each Class II
and III gaming operation that is regulated by this Act. No
gaming operation may be assessed more than 2 percent of its net
revenues and the Commission cannot collect more than $25
million in fees in any year. Fees are payable to the Commission
on a monthly basis. The fees paid by a gaming operation may be
reduced by the Commission to take into account that regulatory
functions are performed by an Indian tribe, or an Indian tribe
and a state. Failure to pay fees imposed by the Commission will
be grounds for revocation of any license required under this
Act for the operation of gaming activities. Any surplus
assessments in any given year will be credited pro rata against
such fees for the succeeding year.
Subsection (b) provides that the Commission is authorized
to assess license applicants, except for Indian tribes, for the
actual cost of all reviews and investigations necessary to
determine whether a license should be granted or denied.
Subsection (c) provides that the Commission shall adopt an
annual budget for each fiscal year. Any request for an
appropriation pursuant to section 18 shall be submitted
directly to the Congress.
Section 18. Authorization of appropriations
This section authorizes an appropriation of $5 million for
the operation of the Commission for each of the fiscal years
1997, 1998 and 1999 to remain available until expended.
Section 19. Application of the Internal Revenue Code of
1986
Subsection (a) provides that the provisions of the Internal
Revenue Code with regard to reporting and withholding taxes on
winnings.
Subsection (b) provides that the provisions of the Bank
Secrecy Act relating to the reporting requirements for cash
transactions of $10,000 or greater will apply to Indian gaming
operations which are regulated by this Act.
Subsection (c) provides that this section shall apply
notwithstanding any other provision of law enacted before, on
or after the date of enactment unless such other provision
specifically cites this subsection.
Subsection (d) provides that the Commission shall make
available to a state or the governing body of an Indian tribe
any law enforcement information it has obtained pursuant to
section 7(d), unless otherwise prohibited by law, in order to
assist the state or Indian tribe to carry out its
responsibilities under this Act or any compact approved by the
Secretary.
Section 3. Conforming amendments
This section provides for several amendments to titles 10,
18, 26, and 28 of the United States Code to conform them to the
provisions of this Act.
Cost and Budgetary Consideration
The cost estimate for S. 487, as calculated by the
Congressional Budget Office is set forth below:
U.S. Congress,
Congressional Budget Office,
Washington, DC, October 26, 1995.
Hon. John McCain,
Chairman, Committee on Indian Affairs,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 487, the Indian
Gaming Regulatory Act Amendments Act of 1995.
Enacting S. 487 would affect direct spending or receipts.
Therefore, pay-as-you-go procedures would apply to the bill.
If you wish further details on this estimate, we will be
pleased to provide them.
Sincerely,
James L. Blum
(For June E. O'Neill, Director).
CONGRESSIONAL BUDGET OFFICE COST ESTIMATE
1. Bill number: S. 487.
2. Bill title: Indian Gaming Regulatory Act Amendments Act
of 1995.
3. Bill status: As ordered reported by the Senate Committee
on Indian Affairs on August 9, 1995.
4. Bill purpose: S. 487 would amend the Indian Gaming
Regulatory Act to clarify the responsibilities of the Indian
Gaming Commission. Licensing procedures for both Class II and
Class III gaming would be expanded, and civil penalties for any
violation of this Act would be increased. (Class II gaming
includes games of chance such as bingo and certain card games;
Class III gaming includes gambling activities like blackjack
and slot machines.) In addition, the bill would raise the level
of fees that may be collected each year by the Commission and
would authorize appropriations of $5 million each fiscal year
for fiscal years 1997 through 1999. Finally, S. 487 would
create an Advisory Committee on Minimum Regulatory Requirements
and Licensing Standards, which would cease to exist once it
recommends minimum federal licensing and internal control
standards.
5. Estimated cost to the Federal Government: Assuming that
the full amounts authorized are appropriated for each year, CBO
estimates that spending under S. 487 would total about $15
million over the next five years, as shown in the following
table.
----------------------------------------------------------------------------------------------------------------
1995 1996 1997 1998 1999 2000
----------------------------------------------------------------------------------------------------------------
SPENDING SUBJECT TO APPROPRIATIONS ACTION
Spending under current law:
Budget authority \1\.................................. 1 ....... ....... ....... ....... .......
Estimated outlays..................................... 3 (\2\) ....... ....... ....... .......
Proposed changes:
Authorization level................................... ....... ....... 5 5 5 .......
Estimated outlays..................................... ....... ....... 4 5 5 1
Spending under S. 487:
Authorization level \1\............................... 1 ....... 5 5 5 .......
Estimated outlays..................................... 3 (\2\) 4 5 5 1
ADDITIONAL REVENUES
Estimated revenues........................................ ....... (\2\) (\2\) (\2\) (\2\) (\2\)
----------------------------------------------------------------------------------------------------------------
\1\ The 1995 level is the amount appropriated for that year. At this time, fiscal year 1996 appropriations have
not been enacted. Hence, the table does not include any amount for 1996. However, the conference agreement for
the Department of the Interior and Related Agencies Appropriations bill includes $1 million for 1996.
\2\ Less than $500,000.
The costs of this bill fall within budget function 800.
6. Basis of estimate: This estimate assumes that the
amounts authorized will be appropriated for each year and that
spending will occur at historical rates. Other provisions,
including the creation of a temporary Advisory Committee, would
result in no significant cost to the federal government.
In addition to the authorization of appropriations, S. 487
would authorize an increase in annual fees that may be paid to
the Commission by Class II and Class III gaming operations.
Such fees are treated as offsetting collections and may be
spent without further appropriations. Fees may also be
collected to cover the costs of licensing any non-Indian owned
gaming establishment on Indian land. Currently, about $1.5
million (the highest amount allowed by law) is collected by the
Commission from Class II gaming operations. Under S. 487, the
maximum amount allowed to be collected from both Class II and
Class III operations would increase to $25 million. Based on
information from the Commission, CBO expects that collections
would eventually rise to an amount between $15 million and $25
million. The highest amount attained would depend on several
factors, including the way that Indian tribes and States
regulate Indian gaming, the rate of growth of Indian gaming,
and the complexity of the final regulations approved after
recommendations by the Advisory Committee are submitted.
Because the Commission can spend any amounts collected, we
estimate that the change in collections would be matched by a
change in spending, resulting in no net budgetary impact.
S. 487 would increase civil penalties that could cause
government receipts to increase, and thus would be subject to
pay-as-you-go procedures. CBO estimates, however, that any such
increase would be less than $500,000 per fiscal year.
7. Pay-as-you-go considerations: Section 252 of the
Balanced Budget and Emergency Deficit Control Act of 1985 sets
up pay-as-you-go procedures for legislation affecting direct
spending or receipts through 1998. CBO estimates that enacting
S. 487 would increase federal receipts, but the increase would
be less than $500,000 per year. The following table shows the
estimated pay-as-you-go impact of this bill.
------------------------------------------------------------------------
1996 1997 1998
------------------------------------------------------------------------
Change in outlays................... (\1\) (\1\) (\1\)
Change in receipts.................. 0 0 0
------------------------------------------------------------------------
\1\ Not applicable.
8. Estimated cost to State and local governments: None.
9. Estimate comparison: None.
10. Previous CBO estimate: None.
11. Estimate prepared by: Rachel Robertson.
12. Estimate approved by: Paul N. Van de Water, Assistant
Director for Budget Analysis.
Regulatory Impact Statement
Paragraph 11(b) of the rule XXVI of the Standing Rules of
the Senate requires each report accompanying a bill to evaluate
the regulatory and paperwork impact that would be incurred in
carrying out the bill. The Committee believes that S. 487 will
have a regulatory or paperwork impact.
Executive Communications
The Committee received written testimony from the
Department of Justice, the Department of the Interior, and the
National Indian Gaming Commission for the hearing held on June
22, 1995. The written testimony from the Administration is as
follows:
Statement of Kevin V. Di Gregory, Deputy Assistant Attorney General
Criminal Division
Chairman McCain, Chairman Gallegly, Vice Chairman Inouye,
and members of the Committees, I am Kevin Di Gregory, Deputy
Assistant Attorney General in the Criminal Division of the
Department of Justice. Thank you for inviting the Department to
present its views on Senate Bill 487, the Indian Gaming
Regulatory Act Amendments.
The Administration and the Attorney General greatly
appreciate the efforts that you and the Vice Chairman have made
over the course of the past several years to foster government-
to-government dialogue between the federal government, Indian
tribes, and states concerning Indian gaming. The Department
recognizes that S.487 is based on the Committee's thorough
review of Indian gaming and your synthesis of the views
presented to you by government leaders involved in the
Committee's consultation process.
As you well know, despite important economic gains made by
Indian tribes in certain areas, Indian people continue to
suffer serious economic deprivation, which exacerbates social
problems in Indian country. The Indian Gaming Regulatory Act
has provided one of the few successful avenues of economic
development in Indian country, and Senate Bill 487 demonstrates
the Committee's vital commitment to protect Indian gaming as a
means of building strong trial government and economic self-
sufficiency within a regulatory system that preserves long-term
viability of Indian gaming and shields Indian tribes and the
public from organized crime and corrupting influences. At the
same time, S. 487 continues to offer states a role in
developing the regulatory framework for class III gaming by
Indian tribes.
In July 1994, the Department presented its position on
Senate Bill 2230, the proposed Indian Gaming Regulatory Act
Amendments of 1994, and we identified two primary concerns.
First, we noted that the generation of the protracted
litigation between the tribes and the states concerning class
III gaming is ``the central failing of the IGRA.'' Second, the
Department emphasized the vital importance of ensuring that an
adequate regulatory base exists for Indian gaming. S. 487
addresses both of those concerns.
the class iii gaming compact process
S. 487 eliminates the provision that states are subject to
suit unless they negotiate a compact in good faith, thereby
avoiding potential 10th and 11th Amendment concerns with the
IGRA.
Under S. 487, states and Indian tribes have the opportunity
to negotiate class III gaming compacts. State participation in
the compacting is, however, voluntary and the states are not
compelled to negotiate or regulate. In this way, potential 10th
and 11th Amendment concerns are eliminated. I emphasize
potential because the Department is defending the IGRA against
an 11th Amendment challenge as amicus curiae before the Supreme
Court and against a 10th Amendment challenge in the Ninth
Circuit Court of Appeals as amicus curiae.
If no class III gaming compact is concluded within the
negotiation period, then the Secretary of the Interior becomes
responsible for concluding the compact. The Secretary will
choose class III gaming compact provisions from among
alternative provisions submitted by the state and the affected
Indian tribe that best meet the objectives of the Act.
The Department recognizes that to a certain extent this new
scheme will shift the burden of litigation to the Secretary,
particularly on the scope of gaming issue. We defer to the
Department of the Interior as to whether this shift is
appropriate.
minimum federal regulatory standards
Significantly, S. 487 provides for the establishment of
federal minimum regulatory standards for Indian gaming. These
standards are to be developed by an Advisory Committee composed
of federal, tribal, and state officials, on which two
Department of Justice employees are to be members. The Advisory
Committee is to complete its work within 180 days, and
thereafter, regulations incorporating the standards are to be
promulgated by the reconfigured Federal Indian Gaming
Regulatory Commission.
Although the Department recognizes that many tribes have
sophisticated regulatory regimes, the Department views the
promulgation of uniform federal minimum standards for Indian
gaming regulatory regimes as an important prudential measure.
The S. 487 process for promulgating federal minimum regulatory
standards with the aid of the Advisory Committee is consonant
with the federal policy of promoting government-to-government
relations with Indian tribes. The Department of Interior has
suggested that use of the negotiated rulemaking is akin to the
process underway pursuant to the Indian Self-Determination Act.
That alternative also would be consonant with the government-
to-government relationship with tribes.
The Department notes that S. 487, in fairness to Indian
tribes with existing gaming operations, sets a 180-day grace
period for compliance with the federal minimum regulatory
standards. The Department also notes that for federal minimum
regulatory standards to be effective, they must be uniform in
application. Although the clear thrust of S. 487 is to apply
federal minimum standards uniformly to all Indian gaming
operations, section 12(e), which was created to ``grandfather''
in existing class III gaming compacts, somewhat confuses this
issue. Therefore, the Department includes a proposed technical
correction to section 12(e) in our attached addendum.
Finally, although minimum standards are an integral part of
well-regulated gaming, a fully funded FIGRC is equally
important. The Department urges Congress to ensure that FIGRC
is provided with sufficient resources to maintain and enforce
the standards.
allocation of regulatory responsibility to the figrc
Senate Bill 487 amends the current regulatory structure of
the IGRA by vesting the Federal Indian Gaming Regulatory
Commission with regulatory authority over class III gaming,
while the current law vests the NIGC with primary
responsibility for regulating only class II gaming (i.e.,
bingo, pull-tabs, etc.). Accordingly, if an Indian tribe or
management contractor operates class III gaming outside the
scope of a class III gaming compact, the FIGRC would have the
authority to seek both temporary and permanent closure orders
for the operation, as well as monetary penalties up to $50,000
per day. The Department believes that these stringent civil
penalties are appropriate measures to deal with non-compacted
class III gaming.
FIGRC's increased authority includes the authority to bring
civil enforcement actions. In general, it is the policy of the
Department to propose such grants of independent litigating
authority. Such independent authority invites inconsistent
interpretations of federal law.
changes in state law
S. 487 also addresses the issue of the effect that changes
in state law have on existing compacts. S. 487 states that
changes in state law have no effect on existing compacts. The
Department believes that this provision resolves the
uncertainty that currently exists in the IGRA.
after acquired trust lands
The Department is presently defending the constitutionality
of the ``after acquired'' lands provision of IGRA against an
Appointments Clause challenge in the Ninth Circuit. Senate Bill
487 eliminates the provision that requires the concurrence of
the governor of a state before a tribe is allowed to game on
lands acquired after the passage of IGRA. The Department
continues to believe that there is in fact no Appointment
Clause problem under the current law.
tax treatment of indian tribes
Section 19(b)(1) of S. 487 would amend the current language
of the IGRA relating to the application of the Internal Revenue
Code to Indian gaming operations, apparently with the intent
that Indian tribes receive the same treatment as states vis-a-
vis the federal wagering taxes. The Department reserves comment
on this issue, as this is primarily a Department of the
Treasury issue.
Finally, we have included the Department of Justice's list
of suggested technical corrections for your review.
That concludes my prepared remarks. At this time, I would
be pleased to respond to questions from the Committee Members.
department of justice suggested technical corrections to s. 487
1. Section 4(16) Indian lands
(B)(ii)(II) should read: ``held in trust by the United
States for the benefit of an individual Indian.'' The omission
of the italicized words appears to be a typographical error.
(B)(iii) should be renumbered (B)(ii)(IV) because, a
priori, Indian tribes have government authority over their own
tribal trust lands.
2. Section 12(e)(1) Compacts entered into before the date of the
enactment of the Indian Gaming Regulatory Act Amendments of
1995
The phrase ``Provided that the minimum regulatory
requirements set forth in the Indian Gaming Regulatory Act
Amendments of 1995 and the regulations promulgated thereunder
are applied.''
The addition of this phrase should make clear that federal
minimum regulatory standards apply uniformly throughout the
United States to all Indian gaming operations.
3. Section 19(b)(3) Statutory construction
The word ``after'' should be substituted for the word
``before'' used in this paragraph.
4. Section 7(e)(3)(A) Enforcement
Rewrite Section 7(e)(3) to read, after (A) ``[* * * the
Commission may] transmit such evidence as may be available
concerning such act or practice as may constitute a violation
of any Federal civil or criminal law to the Attorney General,
who may institute the necessary civil or criminal proceedings.
The Department of Justice may bring an action in the
appropriate district court of the United States of 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.''
At the end of Section 7(e)(3)(B) insert ``nor is a referral
by the Commission a condition precedent to action by such
agency or department.''
----------
Statement of John J. Duffy, Counselor to the Secretary, Department of
the Interior
Mr. Chairman and members of the committee, I am pleased to
present the views of the Department of the Interior on S. 487,
a bill proposing amendments to the Indian Gaming Regulatory Act
of 1988.
I want to begin by emphasizing that the department strongly
supports tribes engaging in gaming activities. As a tool for
tribal economic development, Indian gaming is working. Gaming
tribes now have more funds available to provide their people
with health care, education, and social services. Although
there is no systematically collected data on the tribal use of
gaming proceeds, information supplied by gaming tribes
indicates that gaming revenues are used by tribes for the
following purposes: (1) Infrastructure, new roads, water and
sewer systems, and community centers; (2) economic development,
land acquisitions, new business development, long-term
investments; (3) community grants, payments to local
governments for schools, police protection, and social service
programs; (4) health care, funding health insurance programs,
new medical facilities, and programs for the elderly; (5)
education, scholarships, new school facilities, day care
subsidies, school buses, and youth programs; and (6) housing,
home construction, repairs and senior citizen housing. In
addition, Indian gaming and related economic activities have
improved reservation employment opportunities for tribal
members and for members of the surrounding non-Indian
communities as well. The benefits of Indian gaming are accruing
to the approximately 150 Indian tribes which are currently
operating class II or class III gaming establishments in 28
States.
The bill provides a framework for regulation of gaming
activities on Indian lands. S. 487 requires the formulation of
minimum Federal standards for the regulation and licensing of
class II and class III gaming, as well as regulation of all
contractors, suppliers, and industries associated with such
gaming. We support the creation of such standards as long as
their development and enforcement are consistent with the
principles of tribal sovereignty and self-determination.
Although the bill establishes a seven member advisory committee
to develop recommendations for minimum Federal standards in the
areas of background investigations, internal control systems
and licensing standards, we are concerned that this process may
not provide for enough tribal participation.
With respect to the members of the current National Indian
Gaming Commission, we believe that to provide some continuity
during the transition, commissioners serving at the time of the
passage of the act should be permitted to serve out their term.
The bill also makes several proposed changes in the
compacting process for class III gaming activities. While we
understand and respect the rationale for these changes, we
believe that the present process can work if the lack of
certainty about the ability of tribes to sue states in Federal
court is resolved by the courts in favor of the
constitutionality of the Indian Gaming Regulatory Act of 1988.
This concludes my statement. I will be happy to answer any
questions the committee may have. Thank you.
----------
Testimony of Harold A. Monteau, Chairman, National Indian Gaming
Commission
Mr. Chairman, Members of the Committee, thank you for the
opportunity to appear before you and offer testimony on S. 487.
My name is Harold Monteau. I am Chairman of the National Indian
Gaming Commission. With me today is Associate Commissioner Jana
McKeag.
If enacted, S. 487 would supersede Public Law 100-497, The
Indian Gaming Regulatory Act of 1988. This Act established the
National Indian Gaming Commission. The primary mission of the
Commission is to monitor and oversee the regulation of Class II
gaming such as bingo and pull-tabs conducted on Indian lands.
The Commission reviews and approves Class II and Class III
tribal gaming ordinances and management contracts. In addition,
it has the authority to impose civil penalties or to close a
gaming establishment for substantial violations of the 1988
Act, regulations promulgated by the Commission, or tribal
gaming ordinances.
The Commission is also responsible for conducting
background investigations of entities and of individuals with a
financial interest in, or management responsibility for Class
II management contracts, unless the contracts combines Class II
and Class III activities. The Commission does not have the
authority to conduct background investigations with respect to
Class III management contracts. The regulation of Class III
gaming is primarily the responsibility of the tribes and the
states as set forth in the compacts negotiated between those
parties.
The amendments as proposed in S. 487 provide for: the
establishment of a new Federal Indian Regulatory Gaming
Commission (FIRGC), the regulation of gaming activities by
tribes, the establishment of Federal minimum standards, the
compacting of Class III gaming, regulatory oversight by the new
Commission along with licensing of contractors, penalty
assessment, and funding.
These proposed amendments continue Congress' approach of
recognizing that Indian tribes have the fundamental
responsibility for regulating Class II gaming activities over
Indian lands. The Commission supports this overall approach.
The amendments also enhance and strengthen the Federal, tribal
and state involvement in the overall gaming regulatory process.
The Commission's role would be that of oversight and general
monitoring so as to assure that Federal minimum standards are
complied with. This approach is consistent with the government-
to-government relationship the United States has with Indian
tribes. It is respectful of Tribal sovereignty.
The compacting provisions for Class III gaming, likewise,
would provide a non-compulsory mechanism for tribes and states
to establish procedures for the conduct of such gaming
activities. The amendments do this by not imposing requirements
on the states to negotiate with tribes. Elimination of the
compulsory aspects of the 1988 Act, effectively removes the
10th and 11th Amendments issues raised by the states. These
have been contentious issues for the tribes and the states, and
have delayed the benefits of tribal economic development
envisioned in the 1988 Act, through gaming.
S. 487 proposes to change the way Commissioners are
appointed. It also sets the terms of the Commissioners and sets
certain qualifications for Commissioners. The number of
Commissioners remains as under current law, three. The
amendments designate that the Chairperson of the Commission as
the Chief executive officer of the Commission. Certain powers
that were conferred under the 1988 Act on the Chairman would be
exercised by the full Commission with the enactment of these
amendments.
The fundamental nature of the operation and scope of
authority of the Commission remains that of an independent
regulatory authority. New Federal minimum standards are to be
developed and promulgated as regulations of the Commission.
During the interim, that is before the new Commissioners are
appointed and the minimum standards are established, the
existing regulatory framework is to be followed. Also, the
existing Commissioners serve until they are replaced or
nominated through the new process.
Along with certain tribal and political qualifications, the
amendments call for additional requirements of candidates for
the Commission. While the Commission does not object that
certain professional qualifications for Commissioners, the
Executive branch should not be constrained by specific
limitations by law to select and establish professional
qualifications of candidates. Lengthening of the terms of the
Commissioners to five years is viewed favorably; it provides
the opportunity for greater experience on the Commission.
Moreover, with the treatment of the Commission as an
independent regulatory agency these five-year terms strengthen
the independent status of the Commission.
The amendments do not adequately deal with the transition
of the Commissioners. At the least, the present Associate
Commissioners terms should be completed prior to the
appointment of the new Commissioners. This would assure
continuity in the administration of the existing provisions of
the 1988 Act and the implementation of the new ones.
S. 487 provides a mechanism for establishing Federal
minimum standards. The Commission supports the setting of
minimum standards. The overall concept behind passage of the
1988 Act was to assist tribes in the establishment of gaming as
an economic opportunity for tribes and to protect the integrity
of gaming for the tribes and the public. The setting of uniform
minimum standards will assist in meeting Congressional intent.
The minimum standards fall into two broad general
categories: operational and regulatory. The operational aspects
are concerned with such functions as internal controls,
survelliance, security and auditing. The regulatory area is
concerned with establishing procedures to assure that the
operational standards are being complied with and that
background investigations and licensing requirements are being
met.
Although the Commission welcomes and solicits the input of
the tribes and the states in formulating those standards, the
methodology set out in S. 487 is not conducive to prompt
appointments of the Advisory Committee members. The process of
appointments could be fairly lengthy and result in delays in
the development and implementation of the Federal minimum
standards. Essentially, the setting of minimum standards is
that of creating operational and regulatory standards and
procedures which serve to protect the integrity of gaming
conducted by the tribes. If a method could be established for
the prompt selection of an Advisory Committee and mandatory
deadlines set, the concept could be made to work. However, the
Advisory Committee would need to include some expertise by way
of individuals with gaming regulatory and operational
expertise.
The appointment of the new Commissioners and promulgation
of the regulations for the Federal minimum standards under the
process set out in S. 487 could take several years to
accomplish. The Commission recommends that this new framework
be instituted during the transition period, even while the new
Commissioners are being appointed and confirmed.
The approach of recognizing tribal regulatory
responsibility of gaming activities at the operational level in
these amendments serves to assist in strengthening tribal
government. Moreover, placing the Commission in the position of
providing a backup role where minimum standards are not being
followed is consonant with this overall concept. It also
assures that safeguards exist to protect the integrity of
gaming and protect the interests of the tribes and the general
public. The Commission supports this general conceptional
approach.
S. 487 provides broader enforcement authority to the
Commission. Where the Federal minimum standards are not being
met with respect to both Class II and Class III gaming
activities the Commission is given the authority to directly
regulate these activities.
To be able to carry out these particular functions and the
others vested in the Commission, these amendments authorize the
Commission to impose fees on Class III gaming. Existing law
only authorizes the Commission to assess Class II gaming. Given
the growth in gaming the Commission believes that such
authorization is necessary and prudent. The amendments,
however, provide for the assessment to be made against net
revenues as opposed to gross revenues, as provided for in the
current law. The Commission recommends that the assessment be
on the gross revenues. The cost of regulation should be
allocated across the regulated industry on the volume of
activity, not the profitability of individual operations.
The efficacy of the self-regulation provisions should be
re-evaluated. The overall concept of the amendments and that of
the 1988 Act was and is for tribes to be responsible for
regulation. The role of the Commission is oversight and
monitoring of tribal regulatory implementation. The amendments
in S. 487 only authorize direct Commission regulatory action
where Federal minimum standards are not being followed.
Therefore, the self-regulation provisions appear to be
redundant.
As under existing law, the Commission by these amendments
will continue to exercise the responsibility of reviewing and
approving management contracts between Indian tribes and other
entities. This particular function places the Commission in the
position of examining the economic terms of the management
contract negotiated by the tribes. This particular role is not
one traditionally vested in a regulatory-type agency. Whether
the Commission should continue to function in this capacity
should be reconsidered. The Commission recommends that rather
than second-guessing tribal business and economic decisions,
the Commission could establish limits on the various components
of management fees, including (1) management, (2) risk
assumption, and (3) return on or of any capital investment.
In summary the Commission supports many of the concepts in
S. 487 and is preparing amendatory language changes for
submission to the Committee. The Commission looks forward to
working with the Committee on this bill.
Changes in Existing Law
In compliance with subsection 12 of rule XXVI of the
Standing Rules of the Senate, the Committee states that the
enactment of S. 487 will result in the following changes in 24
U.S.C. Sec. Sec. 2701 et seq., 10 U.S.C. Sec. 2323a(e)(1), 18
U.S.C. Sec. Sec. 1166, 1167, and 1168, 28 U.S.C.
Sec. Sec. 3701(2) and 3704(b), and Section 168(j)(4)(A)(iv) of
the Internal Revenue Code of 1986, with existing language which
is to be deleted in black brackets and the new language to be
added in italic:
24 U.S.C. Sec. Sec. 2701 THROUGH 2721
Sec. 2701 [Congressional Findings
[The Congress finds that--
[(1) numerous Indian tribes have become engaged in or
have licensed gaming activities on Indian lands as a
means of generating tribal governmental revenue;
[(2) Federal courts have held that section 81 of this
title requires Secretarial review of management
contracts dealing with Indian gaming, but does not
provide standards for approval of such contracts;
[(3) existing Federal law does not provide clear
standards or regulations for the conduct of gaming on
Indian lands;
[(4) a principal goal of Federal Indian policy is to
promote tribal economic development, tribal self-
sufficiency, and strong tribal government;
[(5) Indian tribes have exclusive right to regulate
gaming activity on Indian lands if the gaming activity
is not specifically prohibited by Federal law and is
conducted within a State which does not, as a matter of
criminal law and public policy, prohibit such gaming
activity.]
SEC. 2. CONGRESSIONAL FINDINGS.
The Congress finds that--
(1) Indian tribes are--
(A) engaged in the operation of gaming
activities on Indian lands as a means of
generating tribal government revenue; and
(B) licensing such activities;
(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
such gaming activities are--
(A) not specifically prohibited by Federal
law; and
(B) conducted within a State that as a matter
of public policy permits such gaming
activities,
Congress has the authority to regulate the privilege of
doing business with Indian tribes in Indian country (as
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 the 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. 2702 [Congressional Declaration of Policy
[The purpose of this chapter is--
[(1) to provide a statutory basis for the operation
of gaming by Indian tribes as a means of promoting
tribal economic development, self-sufficiency, and
strong tribal governments;
[(2) to provide a statutory basis for the regulation
of gaming by an Indian tribe adequate to shield it from
organized crime and other corrupting influences, to
ensure that the Indian tribe is the primary beneficiary
of the gaming operation, and to assure that gaming is
conducted fairly and honestly by both the operator and
players; and
[(3) to declare that the establishment of independent
Federal regulatory authority for gaming on Indian
lands, the establishment of Federal standards for
gaming on Indian lands, and the establishment of a
National Indian Gaming Commission are necessary to meet
congressional concerns regarding gaming and to protect
such gaming as a means of generating tribal revenue.]
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 Indian 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 such 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 land and the establishment of
Federal minimum regulatory requirements for the conduct
of gaming activities on Indian lands are necessary to
protect such gaming.
Sec. 2703 Definitions
For the purposes of this Chapter--
[(1) The terms ``Attorney General'' means the
Attorney General of the United States.
[(2) The term ``Chairman'' means the Chairman of the
National Indian Gaming Commission.
[(3) The term ``Commission'' means the national
Indian Gaming Commission established pursuant to
section 2704 of this title.
[(4) The term ``Indian lands'' means--
[(A) all lands within the limits of any
Indian reservation; and
[(B) any lands title to which is either held
in trust by the United States for the benefit
of any Indian Tribe or individual or held by
any Indian tribe or individual section to
restriction by the United States against
alienation and over which an Indian tribe
exercises governmental power.
[(5) The term ``Indian tribe'' means any Indian
tribe, band, nation, or other organized group or
community of Indians which--
[(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.
[(6) The term ``class I gaming'' means social gaming
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.]
[(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 o9f a
license.
[(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 4stablished 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 part of, or in connection with,
tribal ceremonies or celebrations.
[(7)](6)(A) The term ``class II gaming'' means--
(i) the game of change commonly known as
bingo (whether or not electronic computer, or
other technologic aids are used in connection
therewith)--
(I) which is played for prizes,
including monetary prizes, with cards
bearing numbers or other designations,
(II) in which the holder of the card
covers such numbers or designations
when objects, similarly numbered or
designated, are drawn or electronically
determined, and
(III) in which the game is won by the
first person covering a previously
designated arrangement of numbers or
designations on such cards,
including (if played in the same location)
pull-tabs, lotto, punch boards, tip jars,
instant bingo, and other games similar to
bingo, and
(ii) card games that--
(I) are explicitly authorized by the
laws of the State, or
(II) are not explicitly prohibited by
the laws of the State and are played at
any location in the State,
but only is such card games are played in
conformity with those laws and regulations (if
any) of the State regarding hours or periods of
operation of such card games or limitations on
wagers or pot sizes in such card games.
(B) The term ``class II gaming'' does not include--
(i) any banking card games, including
baccarat, chemin de fer, or blackjack (21), or
(ii) electronic or electromechanical
facsimiles of any game of chance or slot
machines of any kind.
(C) Notwithstanding any other provision of this
paragraph, the term ``class II gaming'' includes those
card games played in the State of Michigan, the State
of North Dakota, the State of South Dakota, or the
State of Washington, that were actually operated in
such State by an Indian tribe on or before May 1, 1988,
but only to the extent of the nature and scope of the
card games that were actually operated by an Indian
tribe in such State on or before such date, as
determined by the Chairman.
(D) Notwithstanding any other provision of this
paragraph, the term ``class II gaming'' includes,
during the 1-year period beginning on October 17, 1988,
any gaming described in subparagraph (B)(ii) that was
legally operated on Indian lands on or before May 1,
1988, if the Indian tribe having jurisdiction over the
lands on which such gaming was operated requests the
State, by no later than the date that is 30 days after
October 17, 1988, to negotiate a Tribal-State compact
under section 2710(d)(3) of this title.
(E) Notwithstanding any other provision of this
paragraph, the term ``class II gaming'' includes,
during the 1-year period beginning on December 17,
1991, any gaming described in subparagraph (B)(ii) that
was legally operated on Indian lands in the State of
Wisconsin on or before May 1, 1988, if the Indian
tribes having jurisdiction over the lands on which such
gaming was operated requested the State, by no later
than November 16, 1988, to negotiate a Tribal-State
compact under section 2710(d)(3) of this title.
(F) If, during the 1-year period described in
subparagraph (E), there is a final judicial
determination that the gaming described in subparagraph
(E) is not legal as a matter of State law, then such
gaming on such Indian land shall cease to operate on
the date next following the date of such judicial
decision.
[(8)](7) The term ``class III gaming'' means all
forms of gaming that are not class I gaming or class II
gaming.
[(9) The term ``net revenues'' means gross revenues
of an Indian gaming activity less amounts paid out as,
or paid for, prizes and total operating expenses,
excluding management fees.
[(10) The term ``Secretary'' means the Secretary of
the Interior.]
(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 by an Indian tribe and a
State and that is approved by the Secretary.
(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 any agreement for an amount of
more than $50,000 per year--
(A) 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) financing contracts or agreements for 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 such contract.
(19) Material Control.--The term ``material control''
means the exercise of authority of 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.
Sec. 2704 [National Indian Gaming Commission
[(a) Establishment.--There is established within the
Department of the Interior a Commission to be known as the
National Indian Gaming Commission.
[(b) Composition; Investigation; Term of Office; Removal.--
[(1) The Commission shall be composed of three full-
time members who shall be appointed as follows:
[(A) a Chairman, who shall be appointed by
the President with the advice and consent of
the Senate; and
[(B) two associate members who shall be
appointed by the Secretary of the Interior.
[(2)(A) The Attorney General shall conduct a
background investigation on any person considered for
appointment to the Commission.
[(B) The Secretary shall publish in the Federal
Register the name and other information the Secretary
deems pertinent regarding a nominee for membership on
the Commission and shall allow a period of not less
than thirty days for receipt of public comment.
[(3) Not more than two members shall be of the same
political party. At least two members of the Commission
shall be enrolled members of any Indian tribe.
[(4)(A) Except as provided in subparagraph (B), the
term of office of the members of the Commission shall
be three years.
[(B) Of the initial members of the Commission--
[(i) two members, including the Chairman,
shall have a term of office of three years; and
[(ii) one member shall have a term of office
of one year.
[(5) No individual shall be eligible for any
appointment to, or to continue service on, the
Commission, who--
[(A) has been convicted of a felony or gaming
offense;
[(B) has any financial interest in, or
management responsibility for, any gaming
activity; or
[(C) has a financial interest in, or
management responsibility for, any management
contract approved pursuant to section 2711 of
this title.
[(6) A Commissioner may only be removed from office
before the expiration of the term of office of the
member by the President (or, in the case of associate
member, by the Secretary) for neglect of duty, or
malfeasance in office, or for other good cause shown.
[(c) Vacancies.--Vacancies occurring on the Commission
shall be filled in the same manner as the original appointment.
A member may serve after the expiration of his term of office
until his successor has been appointed, unless the member has
been removed for cause under subsection (b)(6) of this section.
[(d) Quorum.--Two members of the Commission, at least one
of which is the Chairman or Vice Chairman, shall constitute a
quorum.
[(e) Vice Chairman.--The Commission shall select, by
majority vote, one of the members of the Commission to serve as
Vice Chairman. The Vice Chairman shall serve as Chairman during
meetings of the Commission in the absence of the Chairman.
[(f) Meetings.--The Commission shall meet at the call of
the Chairman or a majority of its members, but shall meet at
least once every 4 months.
[(g) Compensation.--
[(1) The Chairman of the Commission shall be paid at
a rate equal to that of level IV of the Executive
Schedule under section 5315 of Title 5.
[(2) the associate members of the Commission shall
each be paid at a rate equal to that of level V of the
Executive Schedule under section 5316 of Title 5.
[(3) All members of the Commission shall be
reimbursed in accordance with Title 5, for travel,
subsistence, and other necessary expenses incurred by
them in the performance of their duties.
Sec. 2705 [Powers of the Chairman
[(a) The Chairman, on behalf of the Commission, shall have
power, subject to an appeal to the Commission, to--
[(1) issue orders of temporary closure of gaming
activities as provided in section 2713(b) of this
title;
[(2) levy and collect civil fines as provided in
section 2713(a) of this title;
[(3) approve tribal ordinances or resolutions
regulating class II gaming and class III gaming as
provided in section 2710 of this title; and
[(4) approve management contracts for class II gaming
and class III gaming as provided in sections 2710(d)(9)
and 2711 of this title.
[(b) The Chairman shall have such other powers as may be
delegated by the Commission.
Sec. 2706 [Powers of the Commission
[(a) Budget Approval; Civil Fines; Fees; Subpoenas;
Permanent Orders.--The Commission shall have the power, not
subject to delegation--
[(1) upon the recommendation of the Chairman, to
approve the annual budget of the Commission as provided
in section 2717 of this title;
[(2) to adopt regulations for the assessment and
collection of civil fines as provided in section
2713(a) of this title;
[(3) by an affirmative vote of not less than 2
members, to establish the rate of fees as provided in
section 2717 of this title; and
[(4) by an affirmative vote of not less than 2
members, to authorize the Chairman to issue subpoenas
as provided in section 2715 of this title; and
[(5) by an affirmative vote of not less than 2
members and after a full hearing, to make permanent a
temporary order of the Chairman closing a gaming
activity as provided in section 2713(b)(2) of this
title.
[(b) Monitoring; Inspection of Premises; Investigations;
Access to Records; Mail; Contracts; Hearings; Oaths;
Regulations.--The Commission--
[(1) shall monitor class II gaming conducted on
Indian lands on a continuing basis;
[(2) shall inspect and examine all premises located
on Indian lands on which class II gaming is conducted;
[(3) shall conduct or cause to be conducted such
background investigations as may be necessary;
[(4) may demand access to and inspect, examine,
photocopy, and audit all papers, books, and records
respecting gross revenues of class II gaming conducted
on Indian lands and any other matters necessary to
carry out the duties of the Commission under this
chapter.
[(5) may use the United States mail in the same
manner and under the same conditions as any department
or agency of the United States;
[(6) may procure supplies, services, and property by
contract in accordance with applicable Federal laws and
regulations;
[(7) may enter in contracts with Federal, State,
tribal and private entities for activities necessary to
the discharge of the duties of the Commission and, to
the extent feasible contract the enforcement of the
Commission's regulations with the Indian tribes;
[(8) may hold such hearings, sit and act at such
times and places, take such testimony, and receive such
evidence as the Commission deems appropriate;
[(9) may administer oaths or affirmations to
witnesses appearing before the Commission; and
[(10) shall promulgate such regulations and
guidelines as it deems appropriate to implement the
provisions of this chapter.
[(c) Report.--The Commission shall submit a report with
minority views, if any, to the Congress on December 31, 1989,
and every two years thereafter. The report shall include
information on--
[(1) whether the associate commissioners shall
continue as full or part-time officials;
[(2) funding, including income and expenses, of the
Commission;
[(3) recommendations for amendments to the chapter;
and
[(4) any other matter considered appropriate by the
Commission.
Sec. 2707 [Commission staffing
[(a) General Counsel.--The Chairman shall appoint a General
Counsel to the Commission who shall be paid at the annual rate
of basic pay payable for GS-18 of the General Schedule under
section 5332 of Title 5.
[(b) Staff.--The Chairman shall appoint and supervise other
staff of the Commission without regard to the provisions of
Title 5, governing appointments in the competitive service.
Such staff shall be paid without regard to the provisions of
chapter 51 and subchapter III of chapter 53 of such title
relating to classification and General Schedule pay rates,
except that no individual so appointed may receive pay in
excess of the annual rate of basic pay payable for GS-17 of the
General Schedule under section 5332 of that title.
[(c) Temporary Services.--The Chairman may procure
temporary and intermittent services under section 3109(b) of
Title 5, but at rates for individuals not to exceed the daily
equivalent of the maximum annual rate of basic pay payable for
GS-18 of the General Schedule.
[(d) Federal Agency Personnel.--Upon the request of the
Chairman, the head of any Federal agency is authorized to
detail any of the personnel of such agency to the Commission to
assist the Commission in carrying out its duties under this
chapter, unless otherwise prohibited by law.
[(e) Administrative Support Services.--The Secretary or
Administrator of General Services shall provide to the
Commission on a reimbursable basis such administrative support
services as the Commission may request.
Sec. 2708 [Commission--access to information
[The Commission may secure from any department or agency of
the United States information necessary to enable it to carry
out this chapter. Upon the request of the Chairman, the head of
such department or agency shall furnish such information to the
Commission, unless otherwise prohibited by law.
Sec. 2709 [Interim authority to regulate gaming
[Notwithstanding any other provision of this chapter, the
Secretary shall continue to exercise those authorities vested
in the Secretary on the day before October 17, 1988, relating
to the supervision of Indian gaming until such time as the
Commission is organized and prescribes regulations. The
Secretary shall provide staff and support assistance to
facilitate an orderly transition to regulation of Indian gaming
by the Commission.
Sec. 2710 [Tribal gaming ordinances
[(a) Exclusive Jurisdiction of Class I Gaming Activity.--
[(1) Class I gaming on Indian lands is within the
exclusive jurisdiction of the Indian tribes and shall
not be subject to the provisions of this chapter.
[(2) Any class II gaming on Indian lands shall
continue to be within the jurisdiction of the Indian
tribes, but shall be subject to the provisions of this
chapter.
[(b) Regulation of Class II Gaming Activity; Net Revenue
Allocation; Audits; Contracts.--
[(1) An Indian tribe may engage in, or license and
regulate, class II gaming on Indian lands within such
tribe's jurisdiction, if--
[(A) such Indian gaming is located within a
State that permits such gaming for any purpose
by any person, organization, or entity (and
such gaming is not otherwise specifically
prohibited on Indian lands by Federal law), and
[(B) the governing body of the Indian tribe
adopts an ordinance or resolution which is
approved by the Chairman.
A separate license issued by the Indian tribe shall be
required for each place, facility, or location on
Indian lands at which class II gaming is conducted.
[(2) The Chairman shall approve any tribal ordinance
or resolution concerning conduct, or regulation of
class II gaming on the Indian lands within the tribe's
jurisdiction if such ordinance or resolution provides
that--
[(A) except as provided in paragraph (4), the
Indian tribe will have the sole proprietary
interest and responsibility for the conduct of
any gaming activity;
[(B) net revenues from any tribal gaming are
not to be used for purposes other than--
[(i) to fund tribal government
operations or programs;
[(ii) to provide for the general
welfare of the Indian tribe and its
members;
[(iii) to promote tribal economic
development;
[(iv) to donate to charitable
organizations; or
[(v) to help fund operations of local
government agencies;
[(C) annual outside audits of the gaming
which may be encompassed within existing
independent tribal audit systems, will be
provided by the Indian tribe to the Commission;
[(D) all contracts for supplies, services, or
concessions for a contract amount in excess of
$25,000 annually (except contracts for
professional legal or accounting services)
relating to such gaming shall be subject to
independent audits;
[(E) the construction and maintenance of the
gaming facility, and the operation of that
gaming is conducted in a manner which
adequately protects the environment and the
public health and safety; and
[(F) there is an adequate system which--
[(i) ensures that background
investigations are conducted on the
primary management officials and key
employees of the gaming enterprise and
that oversight of such officials and
their management is conducted on an
ongoing basis; and
[(ii) includes--
[(I) tribal licenses for
primary management officials
and key employees of the gaming
enterprise with prompt
notification to the Commission
of the issuance of such
license;
[(II) 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; and
[(III) notification by the
Indian tribe to the Commission
of the results of such
background check before the
issuance of any of such
licenses.
[(3) Net revenues from any class II gaming activities
conducted or licensed by any Indian tribe may be used
to make per capita payments to members of the Indian
tribe only if--
[(A) the Indian tribe has prepared a plan to
allocate revenues to uses authorized by
paragraph (2)(B);
[(B) the plan is approved by the Secretary as
adequate, particularly with respect to uses
described in clause (i) or (iii) of paragraph
(2)(B);
[(C) the interests of minors and other
legally incompetent person who are entitled to
receive any of the per capita payments are
protected and preserved and the per capita
payments are disbursed to the parents or legal
guardian of such minors or legal incompetents
is such amounts as may be necessary for health,
education, or welfare, of the minor or other
legally incompetent person under a plan
approved by the Secretary and the governing
body of the Indian tribe; and
[(D) the per capita payments are subject to
Federal taxation and tribes notify members of
such tax liability when payments are made.
[(4)(A) A tribal ordinance or resolution may provide
for the licensing or regulation of class II gaming
activities owned by any person or entity other than the
Indian tribe and conducted on Indian lands, only if the
tribal licensing requirements include the requirements
described in the subclauses of subparagraph (B)(i) and
are at least as restrictive as those established by
State law governing similar gaming within the
jurisdiction of the Indian tribe, shall be eligible to
receive a tribal license to own a class II gaming
activity conducted on Indian lands within the
jurisdiction of the Indian tribe if such person or
entity would not be eligible to receive a State license
to conduct the same activity within the jurisdiction of
the State.
[(B)(i) The provisions of subparagraph (A) of this
paragraph and the provisions of subparagraphs (A) and
(B) of paragraph (2) shall not bar the continued
operation of an individually owned class II gaming
operation that was operating on September 1, 1986, if--
[(I) such gaming operation is licensed and
regulated by an Indian tribe pursuant to an
ordinance reviewed and approved by the
Commission in accordance with section 2712 of
this title,
[(II) income to the Indian tribe from such
gaming is used only for the purposes described
in paragraph (2)(B) of this subsection,
[(III) not less than 60 percent of the net
revenues is income to the Indian tribe, and
[(IV) the owner of such gaming operation pays
an appropriate assessment to the National
Indian Gaming Commission under section
2717(a)(1) of this title for regulation of such
gaming.
[(ii) The exemption from the application of this
subsection provided under this subparagraph may not be
transferred to any person or entity and shall remain in
effect only so long as the gaming activity remains
within the same nature and scope as operated on October
17, 1988.
[(iii) Within sixty days of October 17, 1988, the
Secretary shall prepare a list of each individually
owned gaming operation to which clause (i) applies and
shall publish such list in the Federal Register.
[(c) Issuance of Gaming License; Certificate of Self-
regulation.--
[(1) The Commission may consult with appropriate law
enforcement officials concerning gaming licenses issued
by an Indian tribe and shall have thirty days to notify
the Indian tribe of any objections to issuance of such
license.
[(2) If, after the issuance of a gaming license by an
Indian tribe, reliable information is received from the
Commission indicating that a primary management
official or key employee does not meet the standard
established under subsection (b)(2)(F)(ii)(II) of this
section, the Indian tribe shall suspend such license
and, after notice and hearing, may revoke such license.
[(3) Any Indian tribe which operates a class II
gaming activity and which--
[(A) has continuously conducted such activity
for a period of not less than three years,
including at least one year after October 17,
1988; and
[(B) has otherwise complied with the
provisions of this section may petition the
Commission for a certificate of self-
regulation.
[(4) The Commission shall issue a certificate of
self-regulation if it determines from available
information, and after a hearing if requested by the
tribe, that the tribe has--
[(A) conducted its gaming activity in a
manner which--
[(i) has resulted in an effective and
honest accounting of all revenues;
[(ii) has resulted in a reputation
for safe, fair, and honest operation of
the activity; and
[(iii) has been generally free of
evidence of criminal or dishonest
activity;
[(B) adopted and is implementing adequate
systems for--
[(i) accounting for all revenues from
the 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; and
[(C) conducted the operation on a fiscally
and economically sound basis.
[(5) During any year in which a tribe has a
certificate of self-regulation--
[(A) the tribe shall not be subject to the
provisions of paragraphs (1), (2), (3), and (4)
of section 2706(b) of this title;
[(B) the tribe shall continue to submit an
annual independent audit as required by subsec.
(b)(2)(C) of this section and shall submit to
the Commission a complete resume on all
employees hired and licensed by the tribe
subsequent to the issuance of a certificate of
self-regulation; and
[(C) the Commission may not assess a fee on
such activity pursuant to section 2717 of this
title in excess of one quarter of 1 per centum
of the gross revenue.
[(6) The Commission may, for just cause and after an
opportunity for a hearing, remove a certificate of
self-regulation by majority vote of its members.
[(d) Class III Gaming Activities; Authorization;
Revocation; Tribal-State Compact.--
[(1) Class III gaming activities shall be lawful on
Indian lands only if such activities are--
[(A) authorized by an ordinance or resolution
that--
[(i) is adopted by the governing body
of the Indian tribe having jurisdiction
over such lands,
[(ii) meets the requirements of
subsection (b) of this section, and
[(iii) is approved by the Chairman.
[(B) located in a State that permits such
gaming for any purpose by any person,
organization, or entity, and
[(C) conducted in conformance with a Tribal-
State compact entered into by the Indian tribe
and the State under paragraph (3) that is in
effect.
[(2)(A) If any Indian tribe proposes to engage in, or
to authorize any person or entity to engage in, a class
III gaming activity on Indian lands of the Indian
tribe, the governing body of the Indian tribe shall
adopt and submit to the Chairman an ordinance or
resolution that meets the requirements of subsection
(b) of this section.
[(B) The Chairman shall approve any ordinance or
resolution described in subparagraph (A), unless the
Chairman specifically determines that--
[(i) the ordinance or resolution was not
adopted in compliance with the governing
documents of the Indian tribe, or
[(ii) the tribal governing body was
significantly and unduly influenced in the
adoption of such ordinance or resolution by any
person identified in section 2711 (e)(1)(D) of
this title.
Upon the approval of such an ordinance or resolution,
the Chairman shall publish in the Federal Register such
ordinance or resolution and the order of approval.
[(C) Effective with the publication under
subparagraph (B) of an ordinance or resolution adopted
by the governing body of an Indian tribe that has been
approved by the Chairman under subparagraph (B), class
III gaming activity on the Indian lands of the Indian
tribe shall be fully subject to the terms and
conditions of the Tribal-State compact entered into
under paragraph (3) by the Indian tribe that is in
effect.
[(D)(i) The governing body of an Indian tribe, in its
sole discretion and without the approval of the
Chairman, 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.
[(ii) The Indian tribe shall submit any revocation
ordinance or resolution described in clause (i) to the
Chairman. The Chairman shall publish such ordinance or
resolution in the Federal Register and the revocation
provided by such ordinance or resolution shall take
effect on the date of such publication.
[(iii) Notwithstanding any provision of this
subsection--
[(I) any person or entity operating a class
III gaming activity pursuant to this paragraph
on the date on which an ordinance or resolution
described in clause (i) 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 clause (ii),
continue to operate such activity in
conformance with the Tribal-State compact
entered into under paragraph (3) that is in
effect, and
[(II) any civil action that arises before,
and any crime that is committed before, the
close of such 1-year period shall not be
affected by such revocation ordinance or
resolution.
[(3)(A) 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 such lands are located to enter into
negotiations for the purpose of entering into a Tribal-
State 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) Any State and any Indian tribe may enter into a
Tribal-State compact governing gaming activities on the
Indian lands of the Indian tribe, but such compact
shall take effect only when notice of approval by the
Secretary of such compact has been published by the
Secretary in the Federal Register.
[(C) Any Tribal-State compact negotiated under
subparagraph (A) may include provisions relating to--
[(i) the application of the criminal and
civil laws and regulations of the Indian tribe
or the State that are directly related to, and
necessary for, the licensing and regulation of
such activity;
[(ii) the allocation of criminal and civil
jurisdiction between the State and the Indian
tribe necessary for the enforcement of such
laws and regulations;
[(iii) the assessment by the State of 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 contract;
[(vi) standards for the operation of such
activity and maintenance of the gaming
facility, including licensing; and
[(vii) any other subjects that are directly
related to the operation of gaming activities.
[(4) Except for any assessments that may be agreed to
under paragraph (3)(C)(iii) of this subsection, nothing
in this section shall be interpreted as conferring upon
a State or any of its political subdivisions authority
to impose any tax, fee, charge, or other assessment
upon an Indian tribe or upon any other person or entity
authorized by an Indian tribe to engage in a class III
activity. No State may refuse to enter into the
negotiations described in paragraph (3)(A) base upon
the lack of authority in such State, or its political
subdivisions, to impose such a tax, free, charge, or
other assessment.
[(5) Nothing in this subsection shall impair the
right of an Indian tribe to regulate class III gaming
on its Indian lands concurrently with the State, except
to the extent that such regulations inconsistent with,
or less stringent than, the State laws and regulations
made applicable by any Tribal-State compact entered
into by the Indian tribe under paragraph (3) that is in
effect.
[(6) The provisions of section 1175 of Title 15 shall
not apply to any gaming conducted under a Tribal-State
compact that--
[(A) is entered into under paragraph (8) by a
State in which gambling devices are legal, and
[(B) is in effect.
[(7)(A) 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
Tribal-State compact under paragraph (3) 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 Tribal-State
compact entered into under paragraph (3) that
is in effect, and
[(iii) any cause of action initiated by the
Secretary to enforce the procedures prescribed
under subparagraph (B)(vii).
[(B)(i) An Indian tribe may initiate a cause of
action described in subparagraph (A)(i) only after the
close of the 180-day period beginning on the date on
which the Indian tribe requested the State to enter
into negotiations under paragraph (3)(A).
[(ii) In any action described in subparagraph (A)(i),
upon the introduction of evidence by an Indian tribe
that--
[(I) a Tribal-State compact has not been
entered into under paragraph (3), 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 provide that the State has
negotiated with the Indian tribe in good faith
to conclude a Tribal-State compact governing
the conduct of gaming activities.
[(iii) 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 Tribal-State 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. 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) If a State and an Indian tribe fail to conclude
a Tribal-State 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 their last best offer for a
compact. The mediator shall select from the two
proposed compacts the one which best comports with the
terms in this Act and any other applicable Federal law
and with the findings and order of the court.
[(v) The mediator appointed by the court under clause
(iv) shall submit to the State and the Indian tribe the
compact selected by the mediator under clause (iv),
[(vi) If a State consents to a proposed compact
during the 60-day period beginning on the date on which
the proposed compact is submitted by the mediator to
the State under clause (v), the proposed compact shall
be treated as a Tribal-State compact entered into under
paragraph (3).
[(vii) 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) which are consistent with the proposed
compact selected by the mediator under clause
(iv), the provisions of this chapter and the
relevant 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.
[(8)(A) The Secretary is authorized to approve any
Tribal-State compact entered into between an Indian
tribe and a State governing gaming on Indian lands of
such Indian tribe.
[(B) The Secretary may disapprove a compact described
in subparagraph (A) only if such compact violates--
[(i) any provision of this chapter,
[(ii) any other provision of Federal law that
does not relate to jurisdiction over gaming on
Indian lands, or
[(iii) the trust obligations of the United
States to Indians.
[(C) If the Secretary does not approve or disapprove
a compact described in subparagraph (A) before the date
that is 45 days after 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 chapter.
[(D) The Secretary shall publish in the Federal
Register notice of any Tribal-State compact that is
approved, or considered to have been approved, under
this paragraph.
[(9) An Indian tribe may enter into a management
contract for the operation of a class III gaming
activity if such contract has been submitted to, and
approved by, the Chairman. The Chairman's review and
approval of such contract shall be governed by the
provisions of subsections (b), (c), (d), (f), (g), and
(h) of section 2711 of this title.
[(e) Approval of Ordinances.--For purposes of this section,
by no later than the date that is 90 days after the date on
which any tribal gaming ordinance or resolution is submitted to
the Chairman, the Chairman shall approve such ordinance or
resolution if it meets the requirements of this section. Any
such ordinance or resolution not acted upon at the end of that
90-day period shall be considered to have been approved by the
Chairman, but only to the extent such ordinance or resolution
is consistent with the provisions of this chapter.
Sec. 2711. [Management Contracts
[(a) Class II Gaming Activity; Information on Operators.--
[(1) Subject to the approval of the Chairman, an
Indian tribe may enter into a management contract for
the operation and management of a class II gaming
activity that the Indian tribe may engage in under
section 2710(b)(1) of this title, but, before approving
such contract, the Chairman shall require and obtain
the following information:
[(A) the name, address and other additional
pertinent background information on each person
or entity (including individuals comprising
such entity) having a direct financial interest
in, or management responsibility for, such
contract, and, in the case of a corporation,
those individuals who serve on the board of
directors of such corporation and each of its
stockholders who hold (directly or indirectly)
10 percent or more of its issued and
outstanding stock;
[(B) a description of any previous experience
that each person listed pursuant to
subparagraph (A) has had with other gaming
contracts with Indian tribes or with the gaming
industry generally, including specifically the
name and address of any licensing or regulatory
agency with which such person has had a
contract relating to gaming; and
[(C) a complete financial statement of each
person listed pursuant to subparagraph (A).
[(2) Any person listed pursuant to paragraph (1)(A)
shall be required to respond to such written or oral
questions that the Chairman may propound in accordance
with his responsibilities under this section.
[(3) For purposes of this chapter, any references to
the management contract described in paragraph (1)
shall be considered to include all collateral
agreements to such contract that relate to the gaming
activity.
[(b) Approval.--The Chairman may approve any management
contract entered into pursuant to this section only if he
determines that it provides at least--
[(1) for adequate accounting procedures that are
maintained, and for verifiable financial reports that
are prepared, by or for the tribal governing body on a
monthly basis;
[(2) for access to the daily operations of the gaming
to appropriate tribal officials who shall also have a
right to verify the daily gross revenues and income
made from any such tribal gaming activity;
[(3) for a minimum guaranteed payment to the Indian
tribe that has preference over the retirement of
development and construction costs;
[(4) for an agreed ceiling for the repayment of
development and construction costs;
[(5) for a contract term not to exceed five years,
except that, upon the request of an Indian tribe, the
Chairman may authorize a contract term that exceeds
five years but does not exceed seven years if the
Chairman is satisfied that the capital investment
required, and the income projections, for the
particular gaming activity require the additional time;
and
[(6) for grounds and mechanisms for terminating such
contract, but actual contract termination shall not
require the approval of the Commission.
[(c) Fee Based on Percentage of Net Revenues.--
[(1) The Chairman may approve a management contract
providing for a fee based upon a percentage of the net
revenues of a tribal gaming activity if the Chairman
determines that such percentage fee is reasonable in
light of surrounding circumstances. Except as otherwise
provided in this subsection, such fee shall not exceed
30 percent of the net revenues.
[(2) Upon the request of an Indian tribe, the
Chairman may approve a management contract for a fee
based upon a percentage of the net revenues of a tribal
gaming activity that exceeds 30 percent but not 40
percent of the net revenues if the Chairman is
satisfied that the capital investment required, and
income projections, for such tribal gaming activity
require the additional fee requested by the Indian
tribe.
[(d) Period for Approval; Extension.--By no later than the
date that is 180 days after the date on which a management
contract is submitted to the Chairman for approval, the
Chairman shall approve or disapprove such contract on its
merits. The Chairman may extend the 180-day period by not more
than 90 days if the Chairman notifies the Indian tribe in
writing of the reason for the extension. The Indian tribe may
bring an action in a United States district court to compel
action by the Chairman if a contract has not been approved or
disapproved within the period required by this subsection.
[(e) Disapproval.--The Chairman shall not approve any
contract if the Chairman determines that--
[(1) any person listed pursuant to subsection
(a)(1)(A) of this section--
[(A) is an elected member of the governing
body of the Indian tribe which is the party to
the management contract;
[(B) has been or subsequently is 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 chapter or has refused
to respond to questions propounded pursuant to
subsection (a)(2) of this section; 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 management contractor has, or has attempted
to, unduly interfere or influence for its gain or
advantage any decision or process of tribal government
relating to the gaming activity;
[(3) the management contractor has deliberately or
substantially failed to comply with the terms of the
management contract or the tribal gaming ordinance or
resolution adopted and approved pursuant to this
chapter; or
[(4) a trustee, exercising the skill and diligence
that a trustee is commonly held to; would not approve
the contract.
[(f) Modification or Voiding.--The Chairman, after notice
and hearing, shall have the authority to require appropriate
contract modifications or may void any contract if he
subsequently determines that any of the provisions of this
section have been violated.
[(g) Interest in Land.--No management contract for the
operation and management of a gaming activity regulated by this
chapter shall transfer or, in any other manner, convey any
interest in land or other real property, unless specific
statutory authority exists and unless clearly specified in
writing in said contract.
[(h) Authority.--The authority of the Secretary under
section 81 of this title, relating to management contracts
regulated pursuant to this chapter, is hereby transferred to
the Commission.
[(i) Investigation Fee.--The Commission shall require a
potential contractor to pay a fee to cover the cost of the
investigation necessary to reach a determination required in
subsection (e) of this section.
Sec. 2712. [Review of existing ordinances and contracts
[(a) Notification to Submit.--As soon as practicable after
the organization of the Commission, the Chairman shall notify
each Indian tribe or management contractor who, prior to
October 17, 1988, adopted an ordinance or resolution
authorizing class II gaming or class III gaming or entered into
a management contract, that such ordinance, resolution, or
contract, including all collateral agreements relating to the
gaming activity, must be submitted for his review within 60
days of such notification. Any activity conducted under such
ordinance, resolution, contract, or agreement shall be valid
under this chapter, or any amendment made by this Act, unless
disapproved under this section.
[(b) Approval or Modification of Ordinance or Resolution.--
[(1) By no later than the date that is 90 days after
the date on which an ordinance or resolution
authorizing class II gaming or class III gaming is
submitted to the Chairman pursuant to subsection (a) of
this section, the Chairman shall review such ordinance
or resolution to determine if it conforms to the
requirements of section 2710(b) of this title.
[(2) If the Chairman determines that an ordinance or
resolution submitted under subsection (a) of this
section conforms to the requirements of section 2710(b)
of this title, the Chairman shall approve it.
[(3) If the Chairman determines that an ordinance or
resolution submitted under subsection (a) of this
section does not conform to the requirements of section
2170(b) of this title, the Chairman shall provide
written notification of necessary modifications to the
Indian tribe which shall have not more than 120 days to
bring such ordinance or resolution into compliance.
[(c) Approval or Modification of Management Contract.--
[(1) Within 180 days after the submission of a
management contract, including all collateral
agreements, pursuant to subsection (a) of this section,
the Chairman shall subject such contract to the
requirements and process of section 2711 of this title.
[(2) If the Chairman determines that a management
contract submitted under subsection (a) of this
section, or the management contractor under a contract
submitted under subsection (a) of this section, does
not meet the requirements of section 2711 of this
title, the Chairman shall provide written notification
to the parties to such contract of necessary
notifications and the parties shall have not more than
120 days to come into compliance. If a management
contract has been approved by the Secretary prior to
October 17, 1988, the parties shall have not more than
180 days after notification of necessary modifications
to come into compliance.
Sec. 2713. Civil penalties
[(a) Authority; Amount; Appeal; Written Complaint.--
[(1) Subject to such regulations as may be prescribed
by the Commission, the Chairman shall have authority to
levy and collect appropriate civil fines, not to exceed
$25,000 per violation, against the tribal operator of
an Indian game or a management contractor engaged in
gaming for any violation of any provision of this
chapter, any regulation prescribed by the Commission
pursuant to this chapter, or tribal regulations,
ordinances, or resolutions approved under section 2710
or 2712 of this title.
[(2) The Commission shall, by regulation, provide an
opportunity for an appeal and hearing before the
Commission on fines levied and collected by the
Chairman.
[(3) Whenever the Commission has reason to believe
that the tribal operator of an Indian game or a
management contractor is engaged in activities
regulated by this chapter, by regulations prescribed
under this chapter, or by tribal regulations,
ordinances, or resolutions, approved under section 2710
or 2712 of this title, that may result in the
imposition of a fine under subsection (a)(1) of this
section, the permanent closure of such game, or the
modification, or termination of any management
contract, the Commission shall provide such tribal
operator or management contractor with a written
complaint stating the acts or omissions which form the
basis for such belief and the action or choice being
considered by the Commission. The allegation shall be
set forth in common and concise language and must
specify the statutory or regulatory provisions alleged
to have been violated, but may not consist merely of
allegations stated in statutory or regulatory language.
[(b) Temporary Closure; Hearing.--
[(1) The Chairman shall have power to order temporary
closure of an Indian game for substantial violation of
the provisions of this chapter, of regulations
prescribed by the Commission pursuant to this chapter,
or of tribal regulations, ordinances, or resolutions
approved under section 2710 or 2712 of this title.
[(2) Not later than thirty days after the issuance by
the Chairman of an order of temporary closure, the
Indian tribe or management contractor involved shall
have a right to a hearing before the Commission to
determine whether such order should be made permanent
or dissolved. Not later than sixty days following such
hearing, the Commission shall, by a vote of not less
than two of its members, decide whether to order a
permanent closure of the gaming operation.
[(c) Appeal From Final Decision.--A decision of the
Commission to give final approval of a fine levied by the
Chairman or to order a permanent closure pursuant to this
section shall be appealable to the appropriate Federal district
court pursuant to chapter 7 of Title 5.
[(d) Regulatory Authority Under Tribal Law.--Nothing in
this chapter precludes an Indian tribe from exercising
regulatory authority provided under tribal law over a gaming
establishment within the Indian tribe's jurisdiction if such
regulation is not inconsistent with this chapter or with any
rules or regulations adopted by the Commission.
Sec. 2714 [Judicial review
[Decisions made by the Commission pursuant to sections
2710, 2711, 2712, and 2713 of this title shall be final agency
decisions for purposes of appeal to the appropriate Federal
district court pursuant to chapter 7 of Title 5.
Sec. 2715 [Subpoena and deposition authority
[(a) Attendance, Testimony, Production of Papers, Etc.--By
a vote of not less than two members, the Commission shall have
the power to require by subpoena the attendance and testimony
of witnesses and the production of all books, papers, and
documents relating to any matter under consideration of
investigation. Witnesses so summoned shall be paid the same
fees and mileage that are paid witnesses in the courts of the
United States.
[(b) Geographical Location.--The attendance of witnesses
and the production of books, papers, and documents, may be
required from any place in the United States at any designated
place of hearing. The Commission may request the Secretary to
request the Attorney General to bring an action to enforce any
subpoena under this section.
[(c) Refusal of Subpoena; Court Order; Contempt.--Any court
of the United States within the jurisdiction of which an
inquiry is carried on may, in case of contumacy or refusal to
obey a subpoena for any reason, issue an order requiring such
person to appear before the Commission (and produce books,
papers, or documents as so ordered) and give evidence
concerning the matter in question and any failure to obey such
order of the court may be punished by such court as a contempt
thereof.
[(d) Depositions; Notice.--A Commissioner may order
testimony to be taken by deposition in any proceeding or
investigation pending before the Commission at any stage of
such proceeding or investigation. Such depositions may be taken
before any person designated by the Commission and having power
to administer oaths. Reasonable notice must first be given to
the Commission in writing by the party or his attorney
proposing to take such deposition, and, in cases in which a
Commissioner proposes to take a deposition, reasonable notice
must be given. The notice shall state the name of the witness
and the time and place of the taking of his deposition. Any
person may be compelled to appear and depose, and to produce
books, papers, or documents in the same manner as witnesses may
be compelled to appear and testify and produce like documentary
evidence before the Commission, as hereinbefore provided.
[(e) Oath or Affirmation Required.--Every person deposing
as herein provided shall be cautioned and shall be required to
swear (or affirm, if he so requests) to testify to the whole
truth, and shall be carefully examined. His testimony shall be
reduced in writing by the person taking the deposition, or
under his direction, and shall, after it has been reduced to
writing, be subscribed by the deponent. All depositions shall
be promptly filed with the Commission.
[(f) Witness fees.--Witnesses whose depositions are taken
as authorized in this section, and the persons taking the same,
shall severally be entitled to the same fees as are paid for
like services in the courts of the United States.
Sec. 2716 [Investigative powers
[(a) Confidential Information.--Except as provided in
subsection (b) of this section, the Commission shall preserve
any and all information received pursuant to this chapter as
confidential pursuant to the provisions of paragraphs (4) and
(7) of section 552(b) of Title 5.
[(b) Provision to Law Enforcement Officials.--The
Commission shall, when such information indicates a violation
of Federal, State, or tribal statutes, ordinances, or
resolutions, provide such information to the appropriate law
enforcement officials.
[(c) Attorney General.--The Attorney General shall
investigate activities associated with gaming authorized by
this chapter which may be a violation of Federal law.
Sec. 2717 [Commission Funding
[(a)(1) The Commission shall establish a schedule of fees
to be paid to the Commission annually by each class II gaming
activity that is regulated by this chapter.
[(2)(A) The rate of the fees imposed under the schedule
established under paragraph (1) shall be--
[(i) not less than 0.5 percent nor more than 2.5
percent of the first $1,500,000, and
[(ii) no more than 5 percent of amounts in excess of
the first $1,500,000, of the gross revenues from each
activity regulated by this chapter.
[(B) The total amount of all fees imposed during any fiscal
year under the schedule established under paragraph (1) shall
not exceed $1,500,000.
[(3) The Commission, by a vote of not less than two of its
members, shall annually adopt the rate of the fees authorized
by this section which shall be payable to the Commission on a
quarterly basis.
[(4) Failure to pay the fees imposed under the schedule
established under paragraph (1) shall, subject to the
regulations of the Commission, be grounds for revocation of the
approval of the Chairman of any license, ordinance, or
resolution required under this chapter for the operation of
gaming.
[(5) To the extent that revenue derived from fees imposed
under the schedule established under paragraph (1) are not
expended or committed at the close of any fiscal year, such
surplus funds shall be credited to each gaming activity on a
pro rata basis against such fees imposed for the succeeding
year.
[(6) For purposes of this section, gross revenues shall
constitute the annual total amount of money wagered, less any
amounts paid out as prizes or paid for prizes awarded and less
allowance for amortization of capital expenditure for
structures.
[(b)(1) The Commission, in coordination with the Secretary
and in conjunction with the fiscal year of the United States,
shall adopt an annual budget for the expenses and operation of
the Commission.
[(2) The budget of the Commission may include a request for
appropriations, as authorized by section 2718 of this title, in
an amount equal the amount of funds derived from assessments
authorized by subsection (a) of this section for the fiscal
year preceding the fiscal year for which the appropriation
request is made.
[(3) The request for appropriations pursuant to paragraph
(2) shall be subject to the approval of the Secretary and shall
be included as a part of the budget request of the Department
of the Interior.
Sec. 2717a [Availablity of class II gaming activity fees to carry out
duties of the Commission
[In fiscal year 1990 and thereafter, fees collected
pursuant to and as limited by section 2717 of this title shall
be available to carry out the duties of the Commission, to
remain available until expended.
Sec. 2718 [Authorization of appropriations
[(a) Subject to the provisions of section 2717 of this
title, there are hereby authorized to be appropriated such sums
as may be necessary for the operation of the Commission.
[(b) Notwithstanding the provisions of section 2717 of this
title, there are hereby authorized to be appropriated not to
exceed $2,000,000 to fund the operation of the Commission for
each of the fiscal years beginning October 1, 1988 and October
1, 1989. Notwithstanding the provisions of section 2717 of this
title, there are authorized to be appropriated such sums as may
be necessary to fund the operation of the Commission for each
of the fiscal years beginning October 1, 1991, and October 1,
1992.]
SEC. 6. 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 activity 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 investigation.--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 elect 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 the 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.
(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 other member of the
Commission 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 necessary to carry
out the function 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
provision 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 Services
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 violation 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 precertificaton criteria that
apply to management contractors and other
persons having material control over a gaming
operation;
(U) approve all management-related 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 Reserve 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 one 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 such review or fails
to exercise such 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 recommendation 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 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 is authorized at the discretion of
the Commission, and as specifically authorized
by this Act, to 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; or
(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 of 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 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 or
mandamus, injunctions, and orders commanding any person
to comply with the provision 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 right of such tribes to, 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.--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. Such authority of the Commission may be
exclusive 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 such 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. Such 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 such
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 1995, 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 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, the Commission, and to each Federally-
recognized Indian tribe.
(3) Factors for consideration.--While the minimum
Federal standards recommended or established pursuant
to this section may be developed with due regard for
existing industry standards, the Advisory Committee,
and the Commission in promulgating standards pursuant
in subsection (d), shall also 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 of 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 Contractor 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 approval 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 operations 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) Inelgibility 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
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 non-public
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
investigations 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 license 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 in cash or negotiable
securities, the principal shall be placed
without restriction of 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 this subsection (a)
that is held by a person on the date of
enactment of the Indian Gaming Regulatory Act
Amendments Act of 1995 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 such decision and order upon the
affected parties.
(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) such Indian gaming is located within a
State that permits such 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 help fund operations
of local government agencies;
(VI) to comply with the
provisions of section 17; and
(VII) 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
such officials and the
management by such
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 such
background
investigation 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
received 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 such minors
or legally incompetent persons
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 such 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.--Clause (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) such 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 such gaming
operation pays on appropriate
assessment to the Commission
pursuant to section 17 for the
regulation of such 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
such 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 the enactment of the
Indian Gaming Regulatory Act Amendments Act of
1995; 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 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--
(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 tribe shall--
(i) submit an annual independent
audit report as required by subsection
(b)(3)(A)(iv); and
(ii) submit to the Commission a
complete resume of each employee hired
and licensed by the 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 tribe
pursuant to paragraph (1) in excess of \1/4\ of
1 percent of the net revenues from such
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 license 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 such license; and
(2) after providing notice, holding a hearing, and
making findings of fact under procedures established
pursuant to applicable tribal law, may revoke such
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 such 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 such 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 such
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); and
(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 such 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 such
compact shall take effect only when notice of
approval by the Secretary of such 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 with a 60-day period. 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 their last best
offer for a compact. The mediator shall
select from the 2 proposed compacts the
1 which best comports with the terms of
this Act and any other applicable
Federal law and with 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 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 relevant
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 provisions 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.--
(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
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 Indians lands of the Indian tribe
concurrently with a State and the Comission, 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 section 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 conducted 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 1995.--
(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 1995 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 1995 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
1995.--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 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 any 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 exceed 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 association 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 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.--
(i) 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 1995, 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 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 modification.--
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 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 1995
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 1995, 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 1995, 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 such gaming operation.
(B) Total amount of fees.--The total amount
of all fees imposed during any fiscal 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. Such 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, such surplus funds shall
be credited to each gaming activity that is the subject
of the fees on a pro rata basis against such fees
imposed for the succeeding year.
(b) Reimbursement of Costs.--The Commission is authorized
to assess any applicant, except the governing body of an Indian
tribe, for any license required pursuant to this Act. Such
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 1995, 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.--Nothwithstanding any
other provision of law, a request for appropriations
made pursuant to paragraph (2) shall be submitted by
the Commission directly to the 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, 1997, 1998, and 1999, 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 1141, 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 to States with respect to taxation of such gaming
and wagering operations 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 Government.--
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 which it 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.''
Sec. 2719. Gaming on lands acquired after October 17, 1988
(a) Prohibition on Lands Acquired in Trust by Secretary.--
Except as provided in subsection (b) of this section, gaming
regulated by this chapter shall not be conducted on lands
acquired by the Secretary in trust for the benefit of an Indian
tribe after October 17, 1988, unless--
(1) such lands are located within or contiguous to
the boundaries of the reservation of the Indian tribe
on October 17, 1988; or
(2) the Indian tribe has no reservation on October
17, 1988, and--
(A) such lands are located in Oklahoma, and--
(i) are within the boundaries of the
Indian tribe's former reservation, as
defined by the Secretary; or
(ii) are contiguous to other land
held in trust or restricted status by
the United States for the Indian tribe
in Oklahoma; or
(B) such lands are located in a State other
than Oklahoma and are within the Indian tribe's
last recognized reservation within the State or
States within which such Indian tribe is
presently located.
(b) Exceptions.--
(1) Subsection (a) of this section will not apply
when--
(A) the Secretary, after consultation with
the Indian tribe and appropriate State, and
local officials, including officials of other
nearby Indian tribes, determines that a gaming
establishment on newly acquired lands would be
in the best interest of the Indian tribe and
its members, and would not be detrimental to
the surrounding community, but only if the
Governor of the State in which the gaming
activity is to be conducted concurs in the
Secretary's determination; or
(B) lands are taken into trust as part of--
(i) a settlement of a land claim,
(ii) the initial reservation of an
Indian tribe acknowledged by the
Secretary under the Federal
acknowledgment process, or
(iii) the restoration of lands for an
Indian tribe that is restored to
Federal recognition.
(2) Subsection (a) of this section shall not apply
to--
(A) any lands involved in the trust petition
of the St. Croix Chippewa Indians of Wisconsin
that is the subject of the action filed in the
United States District Court for the District
of Columbia entitled St. Croix Chippewa Indians
of Wisconsin v. United States, Civ. No. 86-
2278, or
(B) the interests of the Miccosukee Tribe of
Indians of Florida in approximately 25
contiguous acres of land, more or less, in Dade
County, Florida, located within one mile of the
intersection of State Road Numbered 27 (also
known as Krome Avenue) and the Tamiami Trail.
(3) Upon request of the governing body of the
Miccosukee Tribe of Indians of Florida, the Secretary
shall, notwithstanding any other provision of law,
accept the transfer by such Tribe to the Secretary of
the interests of such Tribe in the lands described in
paragraph (2)(B) and the Secretary shall declare that
such interests are held in trust by the Secretary for
the benefit of such Tribe and that such interests are
part of the reservation of such Tribe under sections
465 and 467 of this title, subject to any encumbrances
and rights that are held at the time of such transfer
by any person or entity other than such Tribe. The
Secretary shall publish in the Federal Register the
legal description of any lands that are declared held
in trust by the Secretary under this paragraph.
(c) Authority of Secretary Not Affected.--Nothing in this
section shall affect or diminish the authority and
responsibility of the Secretary to take land into trust.
[(d) Application of Internal Revenue Code of 1986.--
[(1) The provisions of the Internal Revenue Code of
1986 (including sections 1441, 3402(q), 6041, and
6050I, 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
chapter, or under a Tribal-State compact entered into
under section 2710(d)(3) of this title is in effect, in
the same manner as such provisions apply to State
gaming and wagering operations.
[(2) The provisions of this subsection shall apply
notwithstanding any other provision of law enacted
before, on, or after October 17, 1988, unless such
other provision of law specifically cites this
subsection.]
Sec. 2720. Dissemination of information
Consistent with the requirements of this chapter, sections
1301, 1302, 1303, and 1304 of Title 18 shall not apply to any
gaming conducted by an Indian tribe pursuant to this chapter.
Sec. 2721. Severability
In the event that any section or provision of this chapter,
or amendment, made by this chapter, is held invalid, it is the
intent of Congress that the remaining sections or provisions of
this chapter, and amendments made by this chapter, shall
continue in full force and effect.
* * * * * * *
10 U.S.C. Sec. 2323a(e)(1)
(e)(1) The term ``Indian Lands'' has the meaning given that
term by [section 4(4) of the Indian Gaming Regulatory Act (102
Stat. 2468; 25 U.S.C. 2703(4))] Section 4(14) of the Indian
Gaming Regulatory Act.
* * * * * * *
18 U.S.C. Sec. 1166
(c) For the purpose of this section the term ``gambling''
does not include--
(1) class I gaming or class II gaming regulated by
the Indian Gaming Regulatory Act, or
(2) class II gaming conducted under [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] a compact approved by the Secretary
of the Interior under section 12(a)(4) 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.
(d) The United States shall have exclusive jurisdiction
over criminal prosecutions of violations of State gambling laws
that are made applicable under this section to Indian country,
unless an Indian tribe pursuant to [a Tribal-State compact
approved by the Secretary of the Interior under section
11(d)(8) of the Indian Gaming Regulatory Act] a compact
approved by the Secretary of the Interior under section
12(a)(4) 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, or under any provision of
Federal law, has consented to the transfer to the State of
criminal jurisdiction with respect to gambling on the lands of
the Indian tribe.
* * * * * * *
18 U.S.C. Sec. 1167
(a) Whoever abstracts, purloins, willfully misapplies, or
takes and carries away with intent to steal, any money, funds,
or other property of a value of $1,000 or less belonging to an
establishment operated by or for or licensed by an Indian tribe
[pursuant to an ordinance of resolution approved by the
National Indian Gaming Commission] shall be fined under this
title or be imprisoned for not more than one year, or both.
(b) whoever abstracts, purloins, willfully misapplies, or
takes and carries away with intent to steal, any money, funds,
or other property of a value in excess of $1,000 belonging to a
gaming establishment operated by or licensed by an Indian tribe
[pursuant to an ordinance of resolution approved by the
National Indian Gaming Commission] shall be fined under this
title, or imprisoned for not more than ten years, or both.
* * * * * * *
18 U.S.C. Sec. 1168
(a) Whoever, being an officer, employee, or individual
licensee of a gaming establishment operated by or for or
licensed by an Indian tribe [pursuant to an ordinance or
resolution approved by the National Indian Gaming Commission],
embezzles, abstracts, purloins, willfully misapplies, or takes
and carries away with intent to steal, any moneys, funds,
assets, or other property of such establishment of a value of
$1,000 or less shall be fined not more than $250,000 or
imprisoned not more than five years, or both;
(b) Whoever, being an officer, employee, or individual
licensee of a gaming establishment operated by or for or
licensed by an Indian Tribe [pursuant to an ordinance or
resolution approved by the National Indian Gaming Commission,]
embezzles, abstracts, purloins, willfully misapplies, or takes
and carries away with intent to steal, any moneys, funds,
assets, or other property of such establishment of a value in
excess of $1,000 shall be fined not more than $1,000,000 or
imprisoned for not more than twenty years, or both.
* * * * * * *
Sec. 168(j)(4)(A)(iv) of the Internal Revenue Code of 1986
(iv) not property (or any portion
thereof) placed in service for purposes
of conducting or housing class I, II,
or III gaming (as defined in section 4
of the [Indian Regulatory Act] Indian
Gaming Regulatory Act (25 U.S.C.
2703)).
* * * * * * *
28 U.S.C. Sec. 3701(2)
(2) the term ``governmental entity'' means a State, a
political subdivision of State, or an entity or
organization described in [section 4(5) of the Indian
Gaming Regulatory Act (25 U.S.. 2703(5))] section 4(15)
of the Indian Gaming Regulatory Act, that has
governmental authority within the territorial
boundaries of the United States, including on lands
described in [section 4(4) of such Act (25 U.S.C.
2703(4))] section 4(14) of such Act,
* * * * * * *
28 U.S.C. Sec. 3704(b)
(b) Except as provided in subsection (a), section 3702
shall apply on lands described in [section 4(4) of the Indian
Gaming Regulatory Act] section 4(14) of the Indian Gaming
Regulatory Act (25 U.S.C. 2703(4)).