[Senate Report 109-122]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 193
109th Congress                                                   Report
                                 SENATE
 1st Session                                                    109-122

======================================================================



 
AMENDING THE INDIAN GAMING REGULATORY ACT TO PROVIDE FOR ACCOUNTABILITY 
          AND FUNDING OF THE NATIONAL INDIAN GAMING COMMISSION

                                _______
                                

                August 31, 2005.--Ordered to be printed

   Filed, under authority of the order of the Senate of July 29, 2005

                                _______
                                

    Mr. McCain, from the Committee on Indian Affairs, submitted the 
                               following

                              R E P O R T

                         [To accompany S. 1295]

    The Committee on Indian Affairs, to which was referred the 
bill (S. 1295) to amend the Indian Gaming Regulatory Act \1\ 
(the ``IGRA'') to provide for accountability and funding of the 
National Indian Gaming Commission, having considered the same, 
reports favorably thereon without amendment and recommends that 
the bill do pass.
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    \1\ Pub. L. 100-497.
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                                Purpose

    The primary purpose of S. 1295, the National Indian Gaming 
Commission Accountability Act of 2005, is to provide for 
greater accountability and funding for the National Indian 
Gaming Commission (the ``NIGC''). S. 1295 was introduced by 
Senator McCain on June 23, 2005, and amends IGRA through three 
provisions:
    1. An amendment to Sec. 18(a)(2)(B) changing the equation 
for fees assessed on tribal gaming operations and eliminating 
the current $8 million cap on fee collection;
    2. An addition to Sec. 7 subjecting the NIGC to the 
Government Performance and Results Act (``GPRA'') \2\ and
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    \2\ Pub. L. 103-62.
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    3. An addition to Sec. 7 that would require the agency to 
include, as part of its compliance with GPRA, a plan that 
addresses technical assistance to tribal gaming operations.

                               Background

    When IGRA was enacted in 1988, Congress created the NIGC to 
provide Federal oversight of the regulation of Indian gaming. 
Originally, the IGRA provided for the NIGC to be funded by a 
blend of Federally appropriated monies and fees assessed on 
Indian gaming operations. The total fees assessed were capped 
at $2 million.
    In 1997, Congress raised the fee assessment cap to $8 
million. Since Fiscal Year 1998, no Federal funds have been 
appropriated for the operation of the NIGC. To address the 
rising budgetary needs of the agency tasked with oversight of 
the fast-growing Indian gaming industry, the 108th Congress, 
through appropriations legislation, authorized an increase in 
the fee cap to $12 million for fiscal 2005 and 2006. These year 
to year ``stop-gap'' appropriations measures have helped the 
agency meet its regulatory responsibilities but have impeded 
long-term budgeting.
    The National Indian Gaming Commission Accountability Act of 
2005 is designed to allow the agency to increase fee collection 
in proportion to the size of the industry it oversees. With 
fees capped at .08 percent of the industry's gross revenue, the 
agency's funding would float in proportion to the revenues of 
the Indian gaming industry, expanding or contracting as the 
Indian gaming industry grew or diminished. For example, had 
fees been capped at 0.08 percent for calendar year 2004, when 
reported industry gross revenues exceeded $19.4 billion, the 
agency would have been authorized to collect fees of up to 
$15.5 million.
    S. 1295 does not, of course, compel the NIGC to annually 
collect the full amount allowable. Continuing careful 
stewardship of tribes' fee payments, such has been exercised 
recently by the Commission, is encouraged. The agency must be 
free, however, to respond to continued growth in Indian gaming 
with adequate funds to provide oversight.
    As the agency's needs have grown, so has scrutiny of the 
agency by tribes and other interested parties. This legislation 
therefore increases not only the agency's funding but also its 
accountability by directing that the NIGC be subject to GPRA. 
Heretofore the Commission has not been subject to GPRA pursuant 
to an exemption that allows OMB to exempt agencies with outlays 
under $20 million from GPRA's requirements.\3\ Because the 
NIGC's budget has never been more than $12 million, the NIGC 
OMB exemption from GPRA's requirements has been applied. S. 
1295 requires, however, that NIGC be subject to GPRA.
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    \3\ Pub. L. 103-62, Sec. 4(b).
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    Congress enacted GPRA in an effort to strengthen public 
confidence in government and to assist Federal managers 
inimproving program efficiency and effectiveness.\4\ That act requires 
that Federal agencies submit to Congress strategic five-year plans, 
annual performance plans, and performance reports. It specifically 
requires that, when developing a strategic plan, an agency must not 
only consult with Congress, but also ``solicit and consider the views 
and suggestions of those entities potentially affected by or interested 
in such a plan.'' \5\ In the case of the Commission, those affected 
entities include tribes.
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    \4\ Pub. L. 103-62, Sec. 2.
    \5\ 5 U.S.C. 306(d).
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    There are some well defined limits as to the degree of 
solicitation required by GPRA itself, including the caveat that 
the solicitation and consideration of views does not mean that 
the agency's plan must be agreeable to all parties. GPRA 
provides that ``the function and activities of this section 
shall be considered to be inherently governmental functions. 
The drafting of strategic plans under this section shall be 
performed only by Federal employees.'' \6\ In the case of a 
regulating agency such as NIGC, creation of any given plan can 
be improved by consulting with, but should not be compelled by, 
the regulated entities, notwithstanding a policy of government-
to-government relationship between the Federal and tribal 
governments.
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    \6\ 5 U.S.C. 306(e).
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    Additionally, it is to be noted that the NIGC is an 
independent regulatory agency. This status has ramifications, 
including, that the agency is not governed by Executive Order 
13175, which compels agencies other than independent regulatory 
agencies to consult tribal officials in the development of 
regulatory policies that have tribal implications. The 
Executive Order encourages independent agencies to observe its 
precepts, however, and the Committee notes with approval that 
the Commission, through its current consultation policy, has 
endeavored to do so.
    In keeping with the long-standing Federal policy of tribal 
self-determination, and the corollary policy of maintaining 
government-to-government relations, the Committee strongly 
encourages the NIGC, consistent with its regulatory 
responsibilities, to work with tribal governments on a 
government-to-government basis in the development of regulatory 
policies, standards and definitions, which may include, where 
appropriate, the use of tribal advisory committees and 
negotiated rulemaking.
    S. 1295 also requires that the agency's GPRA plans address 
the need for technical assistance to tribal gaming operations. 
In the past, the NIGC has provided training and technical 
assistance to tribes and tribal gaming operations. Such 
assistance plays a critical role in supporting IGRA's purposes 
by strengthening the Indian gaming industry, which in turn will 
lead to strengthened tribal governments. Including technical 
assistance in its regulatory plans will help both the agency 
and tribes focus on the importance of assistance in 
effectuating IGRA's goals.

                      Summary of Major Provisions

    The purpose in amending Pub. L. 100-447 through S. 1295 is 
two-fold: one, to hold NIGC accountable for its funding and 
two, to correlate NIGC funding with the size of the industry it 
regulates. The amendment thus requires compliance with the 
Government Performance and Results Act (Pub. L. 103-62; 107 
Stat. 286). Compliance with this requirement will result in the 
agency writing strategic and performance plans for its 
programs. The amendment also specifies that performance plans 
address tribes' needs for technical assistance in regulating 
their gaming operations.
    The amendment also deletes IGRA's current cap on NIGC 
funding at $8 million. In order to make the budget more 
responsive to the growth of the Indian gaming industry, the 
amendment replaces the cap with a formula whereby the agency 
may collect fees not to exceed .08 percent of the gross gaming 
revenues of all gaming operations.

                          Legislative History

    S. 1295 was introduced on June 23, 2005, by Senator McCain 
and was referred to the Committee on Indian Affairs.
    On June 29, 2005, at a business meeting duly noticed, the 
Committee passed the bill for consideration by the full Senate, 
with a favorable recommendation that the Senate pass the bill.

                      Section-by-Section Analysis


Sec. 2(a). Powers of the Commission

    Adds the requirement that the Commission shall be subject 
to the Government Performance and Results Act of 1993 and that, 
in addition to compliance with GPRA, the Commission shall 
submit a plan to provide technical assistance to tribes 
conducting gaming under IGRA.

Sec. 2(b). Commission funding

    Deletes subparagraph imposing cap on NIGC funding and 
replaces it with provision authorizing funding not to exceed 
.08 percent of gross gaming revenues of all gaming operations 
subject to IGRA.

            Committee Recommendation and Tabulation of Vote

    On June 29, 2005, the Committee, in an open business 
session, considered S. 1295 and approved the bill, and ordered 
S. 1295 favorably reported to the full Senate with a 
recommendation that the bill do pass.

                   Cost and Budgetary Considerations

    The cost estimate for S. 1295 as calculated by the 
Congressional Budget Office, is set forth below:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 19, 2005.
Hon. John McCain,
Chairman, Committee on Indian Affairs,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: As you requested, the Congressional 
Budget Office has prepared the enclosed cost estimate for S. 
1295, the National Indian Gaming Commission Accountability Act 
of 2005.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Matthew 
Pickford (for federal costs), and Marjorie Miller (for the 
impact on state, local, and tribal governments).
            Sincerely,
                                       Douglas Holtz-Eakin,
                                                          Director.
    Enclosure.

S. 1295--National Indian Gaming Commission Accountability Act of 2005

    Summary: S. 1295 would amend the Indian Gaming Regulatory 
Act (IGRA) to increase the fees paid to the National Indian 
Gaming Commission (NIGC) by tribal gaming operators. The 
legislation would also require the NIGC to comply with the 
requirements of the Government Performance and Results Act of 
1993.
    CBO estimates that implementing S. 1295 would increase 
direct spending by $7 million in 2006 and about $230 million 
over the 2006-2015 period. CBO also estimates that enacting the 
legislation would increase revenues by $7 million in 2006 and 
about $230 million over the 2006-2015 period.
    S. 1295 contains an intergovernmental mandate as defined in 
the Unfunded Mandates Reform Act (UMRA) because it would 
increase the amount of fees that gaming tribes must pay to the 
NIGC. CBO estimates that the cost of this mandate would be well 
below the threshold established in UMRA ($62 million in 2005, 
adjusted annually for inflation) for at least the next five 
years. The bill contains no private-sector mandates as defined 
in UMRA.
    Estimated cost to the Federal Government. The estimated 
budgetary impact of S. 1295 is shown in the following table. 
The costs of the legislation fall within budget function 800 
(general government).

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                                                     By fiscal years, in millions of dollars--
                                 -------------------------------------------------------------------------------
                                   2006    2007    2008    2009    2010    2011    2012    2013    2014    2015
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                                               CHANGES IN REVENUES

NIGC Fees:
    Estimated Revenues..........       7      14      16      19      22      25      27      30      32      35

                                           CHANGES IN DIRECT SPENDING

Spending of NIGC Fees:
    Estimated Budget Authority..       7      14      16      19      22      25      27      30      32      35
    Estimated Outlays...........       7      14      16      19      22      25      27      30      32      35
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    Basis of estimate: For this estimate, CBO assumes that the 
bill will be enacted near the end of fiscal year 2005 and that 
spending will follow historical patterns for NIGC and its 
programs.
    The IGRA established the NIGC to monitor and regulate 
gaming activity on Indian lands. The legislation authorizes the 
commission to collect and expend an annual fixed assessment on 
tribal gaming operators based on tribal gambling revenues. The 
current limitation is $12 million annually in fiscal years 2005 
and 2006, and $8 million in each subsequent year. The 
legislation would amend the current fixed limitation and allow 
the NIGC to collect up to 0.080 percent (80 cents per $1,000) 
of all gaming revenues subject to NIGC regulation.
    CBO expects that fixing the assessment to a percentage of 
total tribal gambling revenues would lead to a significant 
increase in the amount of fees collected. Over the 2000-2004 
calendar year period, annual tribal gaming revenues increased 
by an average of 14 percent a year to about $19 billion in 
fiscal year 2004. If the revenue increases continue at the same 
rate, the amount of fees generated annually would increase to 
almost $20 million in fiscal year 2006 and to about $62 million 
in fiscal year 2015. However, CBO expects that future growth in 
Indian gaming revenues will slow relative to recent history 
over the 2006-2015 fiscal year period. We estimate that the 
amount of fees generated in fiscal year 2006 would be almost 
$20 million and rise to $43 million by fiscal year 2015.
    CBO estimates that NIGC fees and spending would increase by 
$7 million in 2006. We estimate that fees and spending would 
continue to grow with gaming revenues and reach an additional 
$35 million a year by 2015.
    Intergovernmental and private-sector impact: S. 1295 
contains an intergovernmental mandate as defined in UMRA 
because it would increase the amount of fees that gaming tribes 
must pay to the NIGC. Under an existing mandate, tribes must 
pay fees that are capped at $12 million in each of fiscal years 
2005 and 2006. CBO estimates that enacting this bill would 
increase the cost of that mandate by less than $10 million in 
2006. Because the bill would replace a fixed dollar cap with a 
cap set as a percent of gaming revenues, these incremental 
costs would increase as tribal gaming revenues increase, but we 
expect that they would remain well below the threshold 
established in UMRA ($62 million in 2005, adjusted annually for 
inflation) for at least the next five years. The bill would 
impose no other costs on state, local, or tribal governments. 
The bill contains no private-sector mandates as defined in 
UMRA.
    Estimate prepared by: Federal Costs: Matthew Pickford, 
Federal Revenues: Laura Hanlon. Impact on State, Local, and 
Tribal Governments: Marjorie Miller. Impact on the Private-
Sector: Craig Cammarata.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis. G. Thomas Woodward, Assistant 
Director for Tax Analysis.

               Regulatory and Paperwork Impact Statement

    Paragraph 11(b) of rule XXVI of the Standing Rules of the 
Senate requires that each report accompanying a bill to 
evaluate the regulatory and paperwork impact that would be 
incurred in carrying out the bill. The Committee has concluded 
that S. 1295 will have no impact on regulatory or paperwork 
requirements and impacts.

                        Executive Communications

    The Committee has received no communications from the 
Executive Branch regarding S. 1295.

                        Changes in Existing Law

    In compliance with subsection 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the bill S. 1295, as ordered reported, are shown as follows 
(existing law proposed to be omitted is enclosed in black 
brackets, new matter is printed in italic, existing law in 
which no change is proposed is shown in roman):

Public Law 100-447

           *       *       *       *       *       *       *



SEC. 7. POWERS OF THE COMMISSION.

           *       *       *       *       *       *       *


    (d) Application of Government Performance and Results 
Act.--
          (1) In general.--In carrying out any action under 
        this Act, the Commission shall be subject to the 
        Government Performance and Results Act of 1993 (Public 
        Law 103-62; 107 Stat. 285).
          (2) Plans.--In addition to any plan required under 
        the Government Performance and Results Act of 1993 
        (Public Law 103-62; 107 Stat. 285), the Commission 
        shall submit a plan to provide technical assistance to 
        tribal gaming operations in accordance with that Act.

           *       *       *       *       *       *       *


SEC. 18. SCHEDULE OF FEES IMPOSED.

    (a) * * *

           *       *       *       *       *       *       *

          (2) * * *

           *       *       *       *       *       *       *

                  (B) [The total amount of all fees imposed 
                during any fiscal year under the schedule 
                established under paragraph (1) shall not 
                exceed $8,000,000.] The total amount of all 
                fees imposed during any fiscal year under the 
                schedule established under paragraph (1) shall 
                not exceed 0.080 percent of the gross gaming 
                revenues of all gaming operations subject to 
                regulation under this Act.

                                  
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