[Federal Register Volume 64, Number 69 (Monday, April 12, 1999)]
[Rules and Regulations]
[Pages 17535-17545]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-8910]


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DEPARTMENT OF THE INTERIOR

Bureau of Indian Affairs

25 CFR Part 291

RIN 1076-AD87


Class III Gaming Procedures

AGENCY: Bureau of Indian Affairs, Interior.


[[Page 17536]]


ACTION: Final rule.

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SUMMARY: The Department is issuing regulations prescribing procedures 
to permit Class III gaming when a State interposes its immunity from 
suit by an Indian tribe in which the tribe accuses the state of failing 
to negotiate in good faith. The rule announces the Department's 
determination that the Secretary may promulgate Class III gaming 
procedures under certain specified circumstances. It also sets forth 
the process and standards pursuant to which any procedures would be 
adopted.

EFFECTIVE DATE: These regulations take effect on May 12, 1999.

FOR FURTHER INFORMATION CONTACT: Paula Hart, Indian Gaming Management 
Staff, Bureau of Indian Affairs, Department of the Interior, MS 2070-
MIB, 1849 C Street NW, Washington, DC 20240, Telephone (202) 219-4066.

SUPPLEMENTARY INFORMATION: Congress enacted the Indian Gaming 
Regulatory Act (IGRA), 25 U.S.C. 2701-2721, to provide a statutory 
basis for the operation and regulation of Indian gaming and to protect 
Indian gaming as a means of generating revenue for tribal governments. 
Prior to the enactment of IGRA, states generally were precluded from 
any regulation of gaming on Indian reservations. See California v. 
Cabazon Band of Mission Indians, 480 U.S. 202 (1987). The IGRA, by 
offering States an opportunity to participate with Indian tribes in 
developing regulations for Indian gaming, ``extends to the States a 
power withheld from them by the Constitution.'' Seminole Tribe of 
Florida v. State of Florida, 517 U.S. 44, 58 (1996).
    Since IGRA's passage in 1988, more than 200 compacts in 24 States 
have been successfully negotiated by tribes and States, and approved by 
the Secretary. Today, Indian gaming generates significant revenue for 
Indian tribes. As required by IGRA, gaming revenues are being devoted 
primarily to providing essential government services such as roads, 
schools, and hospitals, as well as economic development.
    The IGRA divides Indian gaming into three categories. This rule 
addresses only the conduct of Class III gaming, which primarily 
includes slot machines, casino games, banking card games, dog racing, 
horse racing, and lotteries. 25 U.S.C. 2703(8); 25 CFR 502.4. Under 
IGRA, the conduct of ``Class III gaming activities'' is lawful on 
Indian lands only if such activities: (1) Are authorized by an 
ordinance adopted by the governing body of the tribe and approved by 
the Chairman of the National Indian Gaming Commission (NIGC), (2) are 
located in a State that permits such gaming for any purpose by any 
person, organization, or entity, and (3) are conducted in conformance 
with a Tribal-State compact. 25 U.S.C. 2710(d)(1)(B). The regulations 
that follow relate primarily to this third requirement, i.e., the 
Tribal-State compact.
    Under IGRA, a tribe interested in operating Class III gaming 
initiates the compacting process by requesting the State to enter into 
negotiations to develop the Tribal-State compact. 25 U.S.C. 
2710(d)(3)(A). Upon receiving such a request, the State is obliged ``to 
negotiate with the Indian tribe in good faith to enter into such a 
compact.'' Id. If the State fails to negotiate in good faith, the tribe 
may initiate an action against the State in Federal district court. 25 
U.S.C. 2710(d)(7)(A)(i). If the court finds that the State has failed 
to negotiate in good faith, it must order the State and the tribe to 
conclude a compact within 60 days. 25 U.S.C. 2710(d)(7)(B)(iii). If the 
State and tribe fail to conclude a compact within that period, each 
side must submit their last best offer to a court-appointed mediator, 
who selects one of the proposals. 25 U.S.C. 2710(d)(7)(B)(iv). If the 
State consents to the mediator's proposal it is treated as a Tribal-
State compact. 25 U.S.C. 2710(d)(7)(B)(vi). If the State does not 
consent, the Secretary of the Interior (Secretary) shall prescribe 
procedures (1) which are consistent with the proposed compact selected 
by the mediator, the provisions of IGRA, and the relevant provisions of 
State laws, and (2) under which Class III gaming may be conducted on 
the Indian lands over which the Indian tribe has jurisdiction. 25 
U.S.C. 2710(d)(7)(B)(vii).
    In Seminole Tribe of Florida v. Florida, the Supreme Court held 
that a State may assert an Eleventh Amendment immunity defense to avoid 
a lawsuit brought by a tribe alleging that the State did not negotiate 
in good faith. After the Seminole decision, some States have signaled 
their intention to assert immunity to any suit in Federal court. 
Claiming immunity will, if no further action is taken, create an 
effective State veto over IGRA's dispute resolution system and 
therefore will stalemate the compacting process. This rule contemplates 
that the Secretary may prescribe Class III gaming procedures to end the 
stalemate.
    On May 10, 1996, the Bureau of Indian Affairs (BIA) published an 
Advance Notice of Proposed Rulemaking (ANPR) in response to the United 
States Supreme Court's decision in Seminole Tribe of Florida v. 
Florida. 61 FR 21394 (May 10, 1996). In that ANPR, the Department 
posed, among others, the question of ``[w]hether and under what 
circumstances, the Secretary is empowered to prescribe `procedures' for 
the conduct of Class III gaming when a State interposes an Eleventh 
Amendment defense to an action pursuant to 25 U.S.C. 2710(d)(7)(B).'' 
The Secretary, in consultation with the Solicitor, has determined that 
he possesses legal authority to promulgate procedures setting out the 
terms under which Class III gaming may take place when a State asserts 
its immunity from suit. The Secretary's authority arises from the 
statutory delegation of powers contained in 25 U.S.C. 
2710(d)(7)(B)(vii) of IGRA and 25 U.S.C. 2 and 9.

Summary of the Rule

    The rule tracks IGRA's negotiation and mediation process, adjusted 
only to the extent necessary to reflect the unavailability of tribal 
access to Federal court where a State refuses to waive sovereign 
immunity. The rule applies only where a tribe asserts that a State is 
not negotiating in good faith, files suit against the State in Federal 
court in accordance with IGRA, but cannot proceed in Federal court 
because the State refuses to waive its sovereign immunity from suit. In 
cases in which a State chooses not to assert a sovereign immunity 
defense, the rule will not apply. Instead, the negotiation and 
mediation process set forth in section 2710(d)(7) of IGRA would 
continue under the supervision of the court.
    In those cases in which a State interposes a sovereign immunity 
defense to a tribal lawsuit in Federal court, the regulation 
establishes a process for obtaining State participation in the 
compacting process, prior to the Secretary's identification of 
procedures.
    The steps set forth in the rule include:

    1. Following dismissal on grounds of sovereign immunity of a 
tribe's suit brought pursuant to 25 U.S.C. 2710(d)(7) against a 
State, the tribe will have the opportunity to submit a request to 
the Department to establish gaming procedures. The procedures 
submitted by the tribe will be required to address all of the issues 
identified in the rule, including the scope of the gaming activities 
being requested by the tribe and detailed mechanisms for regulation 
of the gaming, including assurances that games will be conducted 
fairly and that the financial integrity of the entire operation will 
be safeguarded. The tribe will be asked to provide a legal analysis 
supporting the proposed scope of gaming in view of State 
prohibitions and other policies on specific types of gaming.
    2. The Department will notify the tribe within 15 days that it 
has received the proposal and whether it is complete. Within

[[Page 17537]]

30 days the Department will notify the tribe whether it is eligible 
for procedures.
    3. Following issuance of a notice of completeness and 
eligibility, the Department will notify the State of the tribe's 
request for the issuance of procedures, and solicit the State's 
comments on the tribe's proposed procedures, including any comments 
on the proposed scope of gaming. The State will also be invited to 
submit alternative proposed procedures within 60 days.
    4. Based on its review of the submissions of the tribe and the 
State, and if the State has not submitted an alternative proposal, 
the Department will advise the State and Indian tribe of: (a) its 
approval of the tribe's proposal if the Secretary determines that 
there are no objections to the proposals; (b) its convening of an 
informal conference with the State and tribe within 30 days for the 
purpose of resolving any areas of disagreement.
    5. If the State offers an alternative proposal, the Secretary 
will appoint a mediator who will receive ``last best offers'' from 
the State and tribe. The mediator must then submit to the Secretary 
the proposed procedures that best comport with applicable Federal 
and State law. Within 60 days of receipt of the mediator's 
recommendation, the Secretary must notify the State and tribe of his 
decision to approve or disapprove the procedures submitted by the 
mediator, or prescribe such procedures as he determines appropriate 
that are consistent with State law and the provisions of IGRA.

Review of Public Comments

    Sixty-seven (67) comments were submitted in response to the January 
22, 1998, Federal Register publication of the proposed rule, 25 CFR 
291.

Section 291.1 Purpose and Scope

    Nearly all of the comments from the States reiterated or expanded 
on comments previously submitted arguing that the Secretary lacks legal 
authority to promulgate these regulations. Comments from the Indian 
tribes likewise reiterated prior comments in support of the Secretary's 
authority to adopt the proposed regulation.
    Response: The Department adheres to the reasoning set forth in the 
January 22, 1998 Federal Register publication in support of the 
Secretary's authority to adopt the proposed regulation. In addition, a 
recent case, Spokane Tribe of Indians v. Washington State, 139 F.3d 
1297 (9th Cir. 1998)(Spokane II), casts doubt on the legal authority 
relied upon by the States in their comments to the proposed rule. In 
Spokane II, the court noted that an earlier opinion (Spokane Tribe of 
Indians v. Washington State, 28 F.3d 991 9th Cir. 1994)(Spokane I)) 
questioned the Eleventh Circuit court of appeals' statement in Seminole 
Tribe of Florida v. Florida, 11 F.3d 1016 (1994) supporting the 
approach subsequently taken in our proposed rule. The Spokane II court 
noted that the statement in Spokane I:

was in the context of our (incorrect) assumption that tribes could 
sue states. We were pointing out that the Eleventh Circuit's 
suggestion would not be as close to the Congress' intent as the 
scheme Congress in fact passed. True. But the Supreme Court has now 
told us that Congress' scheme is unconstitutional; the Eleventh 
Circuit's suggestion is a lot closer to Congress' intent than 
mechanically enforcing IGRA against tribes even when states refuse 
to negotiate. 139 F.3d at 1301-02.

    As an adjunct to the argument that the Secretary lacks authority, 
the States assert that the Secretary's authority under the statute is 
limited to circumstances where a court has made a finding that a State 
has failed to negotiate in ``good faith'' with an Indian tribe over 
Class III gaming procedures. The State strenuously objects to any role 
for the Secretary in evaluating whether a State has negotiated in 
``good faith.'' Their objection is based on alleged bias that the 
Secretary might have due to the trust responsibility owed by the 
Federal government to the Indian tribes. The States also assert that 
the Secretary lacks expertise to make such a finding. The final 
regulation eliminates the requirement that the Secretary make a finding 
on the ``good faith'' issue. States will be invited to participate in 
mediation if they wish. They can also submit comments on the proposed 
scope of gaming (the issue most often contested in negotiations) and on 
any other matter pertaining to an Indian tribe's proposed procedures. 
The Secretary will take those views into account in his decision-making 
process. Congress' intent was to ensure a role for the States in 
developing the terms and conditions under which Class III Indian gaming 
would take place. The approach taken in the regulation is consistent 
with that intent.
    Several comments suggested that the rule be expanded to explicitly 
include compact renewals.
    Response: This recommendation was adopted because the authority 
granted the Secretary in IGRA to issue Class III gaming procedures 
speaks only in terms of entire compacts, and a renewal of an entire 
compact falls within this authority. Section 291.2(b) was added in the 
definition section to make clear the term ``compact'' as used in the 
regulations includes compact renewals.
    Several comments suggested the scope be expanded to include compact 
amendments.
    Response: This recommendation was not adopted because the authority 
granted to the Secretary in IGRA to issue Class III gaming procedures 
speaks only in terms of entire compacts, not to amendments.
    One comment suggested the scope was too narrow because it limits 
the application to when the tribe has brought an action in Federal 
court and the State has asserted its immunity from such suit, and the 
court has dismissed the action.
    One comment suggested that if the State issues a letter of intent 
to raise its immunity defense, then this should suffice to trigger the 
Class III gaming procedures.
    Response: These recommendations were not adopted because the 
statutory trigger in IGRA for the Secretary to issue Class III gaming 
procedures is the filing of a lawsuit.
    One comment suggested the proposed scope would clog the courts in 
futile litigation and stonewall the IGRA process for several years. The 
comment suggested it should be sufficient for the State to assert its 
immunity in just one tribe's lawsuit.
    Response: This recommendation was not adopted because the statutory 
trigger in IGRA for the Secretary to issue Class III gaming procedures 
is the filing of a lawsuit because of the particular parties' failure 
to conclude a compact. The regulation cannot dispense with the 
requirement that each tribe be involved in a lawsuit. The regulation 
must be the same for each tribe.

Section 291.2  Definitions

    Paragraph (b) was added to make clear the regulations apply to 
compact renewals as suggested by several comments. See Summary of 
Comments under section 291.1.

Section 291.3  When May an Indian Tribe Ask the Secretary To Issue 
Class III Gaming Procedures?

    One comment recommended that paragraph (b) be revised to state that 
if the tribe and State failed to negotiate a compact 180 days after the 
State received the tribe's request, or if the State previously asserted 
its Eleventh Amendment immunity in an action brought by any tribe, or 
if the State unequivocally refused to enter into or continue 
negotiations.
    Response: This recommendation was not adopted because the 
regulation tracks the statutory requirements in 25 U.S.C. 2710(d)(7)(A) 
and (B).
    One comment suggested that section (c) be reworded.
    Response: This recommendation was not adopted because the words 
track the statutory language in 25 U.S.C. 2710(d)(7)(A)(i) and 
(B)(ii)(II).
    One comment suggested broadening paragraph (d) to included any 
tribal action in which the State declined to waive its immunity.

[[Page 17538]]

    Response: This recommendation was not adopted for the same reason 
expressed for one comment under Sec. 291.1, which is that the statute 
requires the particular parties to be unable to conclude a compact and 
a lawsuit is initiated as a result. The regulation must have the same 
criteria for each tribe.
    Several comments suggested broadening paragraph (d) to include the 
State's assertion of any immunity, whether it be the Eleventh 
Amendment, Tenth Amendment, or otherwise.
    Response: These recommendations were not adopted because the 
regulation explicitly deals with Eleventh Amendment immunity, and not 
with other potential barriers.
    One comment recommended that paragraph (d) require the State to 
either choose the court process or the Secretarial process out of 
concern that the Eleventh Amendment immunity defense could be raised 
late in the appeal process.
    Response: This recommendation was not adopted because the 
regulation explicitly deals with the Secretarial process once the State 
successfully asserts its Eleventh Amendment immunity.
    Several comments suggested that instead of requiring an actual 
assertion of the State's immunity, the regulation should only require 
documentation of the State's intention to assert such immunity.
    Response: This recommendation was not adopted because the statutory 
trigger for the Class III gaming procedures is an initiation of a 
lawsuit. The scope of the regulations provides for procedures where the 
State actually raised its Eleventh Amendment immunity and the case was 
dismissed as a result.
    Numerous comments suggested deleting paragraph (e) because the 
requirement that the action be dismissed for each tribe is burdensome, 
wasteful and time consuming.
    One comment suggested that the requirement that each action be 
dismissed could place tribal attorneys in an awkward position under 
Rule 11 of the Federal Rules of Civil Procedure.
    Several comments recommended that in place of requiring a dismissal 
for each lawsuit, require clear proof of the State's intention to raise 
its Eleventh Amendment immunity.
    Response: These recommendations were not adopted because the 
Secretary's authority under IGRA for Class III gaming procedures is 
only triggered by a lawsuit and the regulatory trigger must be the same 
for each tribe.
    The words ``because of lack of jurisdiction'' were deleted from 
paragraph (e) to clarify that the scope of the regulations is limited 
to when the State actually raises its Eleventh Amendment immunity and 
the case was dismissed on that ground. One comment agreed that the 
scope of section 291.3 is consistent with the suggestions made by the 
11th Circuit in the Seminole decision.

Section 291.4  What Must the Proposal Requesting Class III Gaming 
Procedures Contain?

    One comment suggested adding the words ``if any'' at the end of 
paragraph (c) because a tribe's gaming ordinance or resolution need not 
be approved by the NIGC prior to the negotiation and completion of a 
gaming compact.
    Response: This recommendation was adopted because approval of the 
tribe's ordinance or resolution by the NIGC is not required before 
Class III gaming procedures are approved, but the ordinance or 
resolution must be approved by the NIGC before gaming is conducted.
    Two comments suggested adding the words ``if any'' at the end of 
paragraph (d) because not all tribes have organic documents.
    Response: These recommendations were adopted.
    A few comments suggested clarifying paragraph (g) because a ``copy 
of court proceedings'' is ambiguous and provides no useful guidance on 
what exact documents need to be submitted.
    Response: These recommendations were adopted, and paragraph (g) was 
amended to include a list of specific documents in language suggested 
by one of the comments.
    One comment suggested revising paragraph (h) to enumerate specific 
examples of factual and legal authority for the scope of gaming.
    Response: This recommendation was not adopted because the 
regulations leave it up to a tribe's discretion what it wishes to 
submit for the factual and legal authority.
    One comment stated paragraph (i) was ambiguous, unnecessary and 
onerous because the regulation appeared to expand the NIGC's existing 
monitoring and enforcement authority.
    Another comment suggested paragraph (i) be revised to include only 
a regulatory scheme for a federal agency role. One comment stated the 
NIGC is the proper monitoring and enforcement agency and other 
designation was unnecessary.
    Another comment suggested the BIA is precluded from compelling a 
State to participate in monitoring and enforcement in the absence of a 
voluntary agreement.
    Response: To accommodate the concerns raised by the comments, the 
term ``federal'' was deleted from paragraph (i) to make clear that if 
the tribe envisions the State to have a role in monitoring and 
enforcement by mutual and voluntary agreement, the tribe must submit 
this regulatory scheme to the Secretary in its Class III gaming 
procedures proposal. In addition, a new section 291.12 is added to the 
regulations to clarify the NIGC's monitoring and enforcement roles.
    One comment suggested it was unreasonable for tribes to have to 
submit an accounting system under paragraph (j)(1). The comment 
recommended having the tribes submit a certification that it will 
operate its accounting system in accordance with the specified 
standards, principals and NIGC regulations.
    One comment suggested the provision was perplexing because a tribe 
should not have to submit applicable NIGC regulations. The drafters did 
not intend either of these interpretations.
    Response: Both recommendations were adopted, and the language and 
punctuation in paragraph (j)(1) was changed for clarification.
    One comment recommended referencing the NIGC regulations for 
internal control standards in paragraph (j)(4).
    Response: This recommendation was adopted.
    Several comments suggested that the requirements under paragraph 
(j)(8) were beyond the statutory requirements, beyond NIGC regulatory 
requirements, and created low thresholds.
    Response: These recommendations have been adopted, and paragraph 
(j)(8) has been amended to be more consistent with 25 U.S.C. 
2710(b)(2)(D) and NIGC regulations.
    A few comments suggested the Secretary will be inundated with 
background information documents, licensing documents and the like; 
but, the regulation only requires submission of rules governing these 
issues.
    One comment recommended deleting the words ``all gaming activities 
. . . count rooms'' in paragraph (j)(10) as being duplicative because 
they were already covered under (j)(4).
    Response: This recommendation was adopted.
    Several comments addressed the need for flexibility in how tribes 
handle disputes under paragraph (j)(11).
    One comment recommended adding the words ``and/or tribal judicial 
process'' in addition to the administrative process in paragraph 
(j)(11) to accommodate different tribal processes.

[[Page 17539]]

    Response: This recommendation was adopted.
    One comment under paragraph (j)(11) recommended adding a provision 
for tribes acquiring insurance and a waiver of tribal sovereign 
immunity thereunder.
    Response: This recommendation was not adopted because it is beyond 
the scope of these regulations.
    One comment under paragraph (j)(15) suggested adding language in 
case a tribe chooses not to serve liquor at the gaming facility.
    Response: This recommendation was adopted. For clarification, 
reference to the statutory definition of liquor under a Secretarially 
approved ordinance/resolution was incorporated.
    Several comments recommended deleting the word autonomous from 
paragraph (j)(16) as being confusing because tribal gaming commissions 
are to some degree subject to the jurisdiction of the Tribal Council or 
other tribal governing body, and the Secretary should not be making 
that determination.
    Response: This recommendation was adopted and the language deleted 
for clarification.
    Several comments suggested changing the word ``commission'' to 
accommodate the variety of tribal regulatory structures, such as 
departments, individuals, and offices.
    Response: These recommendations were adopted and the word was 
changed to ``entity.''
    One comment suggested paragraph (j)(17) is vague and recommended 
providing reasonable standards that dictate when a tribe must provide 
administrative appeal rights, including what facts trigger the process, 
what due process rights attach and remedies available.
    Response: This recommendation was not adopted because the 
regulations should not impose particular administrative appeal 
processes on the tribes. The regulations provide for such an appeal 
process while accommodating tribal flexibility of its own 
administration.
    One comment suggested paragraph (j)(17) was partially unnecessary 
because the NIGC already had enforcement and investigatory mechanisms.
    Response: To clarify the intent of paragraph (j)(17), the word 
``tribal'' was added to make clear this provision relates to tribal 
enforcement and investigatory mechanisms, not Federal or State. 
Paragraph (j)(18) was added in response to a comment on the duration of 
the Class III gaming procedures. See Summary of Comments under section 
291.15.

Section 291.5 Where must the proposal requesting Class III gaming 
procedures be filed?

    No comments were received on this section.

Section 291.6 What must the Secretary do upon receiving the proposal?

    Several comments suggested changing the time frames in sections 
291.3, 4 and 6 to be the same.
    Response: In response to this comment, language has been added to 
make clear that the review in paragraph (a) is not substantive, but 
instead a limited review as to whether all the information required 
under section 291.4 is present in the application. The review in 
paragraph (b) is substantive and as such requires a longer period of 
time than the review in paragraph (a). A 60-day time frame is 
reasonable and necessary to make the substantive determination.

Section 291.7 What must the Secretary do if it has been determined that 
the Indian tribe is eligible to request Class III gaming procedures?

    Numerous comments recommended deleting the requirement that the 
State be notified once the Secretary determines the tribe is eligible 
for Class III gaming procedures.
    One comment suggested it was beyond the Secretary's authority 
because IGRA explicitly provides for consultation with the tribe, but 
does not require consultation with the State.
    Many commentors suggested that the State should not be involved in 
the Class III gaming procedures process because they believe it would 
give the State another opportunity to stonewall, delay or subvert the 
IGRA process after it already asserted its Eleventh Amendment immunity 
in the lawsuit.
    Response: These recommendations were not adopted because IGRA does 
not prohibit the consultation of the States. Further, the regulations 
attempt to track the IGRA process in which the participation of all 
parties is contemplated.
    Several comments supported section 291.7 as written to ensure and 
encourage State involvement in the process and to maintain fairness in 
the process as contemplated by IGRA.
    One comment suggested that the Governor and Attorney General may 
not be the proper authorities in the particular State with whom to 
consult, and that the Governor and Attorney General may have opposing 
views.
    Response: This recommendation was not adopted because the Attorney 
General is invited to participate in the procedures since he/she 
represented the State in the lawsuit which was dismissed due to the 
Eleventh Amendment immunity. It is anticipated that in situations where 
the Governor is not the proper official, the Governor may notify the 
Secretary if actual authority has been delegated and/or rests with 
another State official, department, commission, or other entity.
    Several comments suggested that the 60 days in paragraph (b) is too 
long.
    One comment recommended that absent good cause shown, the State 
should be allowed no more than 30 days.
    Response: These recommendations were not adopted because 60 days 
allows time for the State to conduct a thorough and substantive review 
of the tribe's proposal.
    Numerous comments were received on paragraph (b)(2) from both the 
states and tribes.
    One comment suggested that by transferring to the Secretary the 
authority to determine a State's good faith, the tribes have no 
incentive to negotiate in good faith and will often proceed directly to 
the Class III gaming procedures.
    Many comments suggested deleting this paragraph because the 
Secretary has no authority to pass judgment in a quasi-judicial 
determination upon the State's conduct.
    Some comments suggested that the Secretary would not be able to 
make such a determination in the absence of cross-examining witnesses 
and judging credibility.
    Some comments suggested a good faith determination by the Secretary 
will destroy the neutrality of the Class III gaming procedures.
    One comment suggested the paragraph be deleted because the 
Secretary would be making a judicial determination without any of the 
safeguards of a judicial proceeding, contrary to the IGRA scheme.
    Response: These recommendations have been adopted and paragraph 
(b)(2) has been deleted.
    One comment noted that the regulations were ambiguous, and appeared 
to grant the Secretary authority to proceed with the Class III gaming 
procedures irrespective of the good faith determination outcome.
    The comment suggested that the good faith determination be made at 
the outset in order to proceed with the procedures process.

[[Page 17540]]

    One comment suggested the paragraph provided no standard for the 
Secretary to follow in making a good faith determination, and suggested 
placing the burden on the State to prove good faith.
    Response: These recommendations were not adopted because the good 
faith determination has been deleted from the regulations.
    One comment suggested deleting paragraph (b)(3) because State law 
does not apply to activities conducted on Indian lands except regarding 
the scope of gaming.
    This recommendation was not adopted because the language in 
paragraph (b)(3) tracks the requirement and language in IGRA, section 
2710 (d)(7)(B)(vii)(I).
    One comment suggested revising paragraph (c) to require the State 
to address all the issues listed in section 291.4 when it submits an 
alternate proposal.
    Response: This recommendation was not adopted because 291.4 is 
applicable only to the tribal applicant.
    One comment suggested deleting paragraph (c) because the State 
should not be allowed to submit a proposal if the Secretary determines 
the State did not negotiate in good faith.
    Response: This recommendation was not adopted because the good 
faith determination has been deleted from the regulations.

Section 291.8 What must the Secretary do at the expiration of the 60-
day comment period if the State has not submitted an alternative 
proposal?

    One comment suggested deleting the 60-day reference to the comment 
period in section 291.7.
    Response: This recommendation was not adopted in order to retain 
clarity.
    Several comments objected to the discussion of the ``scope of 
gaming'' as being either too broad, or too narrow.
    Response: These recommendations were not adopted, because the 
applicable scope of gaming must be determined on a case-by-case basis. 
The summary of the law and the United States' position as set forth in 
the proposed rule remains the standard for analyzing the scope of 
gaming issue. 63 FR 3289, 3292-3293 (January 22, 1998).
    Several comments suggested deleting paragraph (a)(4) as being 
troubling, unnecessary and inappropriate.
    Response: These recommendations have not been adopted because this 
paragraph is consistent with the requirement as set forth in IGRA, 
section 2710(b)(7)(B)(vii)(I).
    Numerous comments were received from both States and tribes under 
paragraph (a)(8) similar to those received under section 291.7(b)(2).
    Several comments suggested eliminating this paragraph as being 
beyond the authority of the Secretary, unnecessary, unclear and 
irrelevant.
    Several comments suggested the Secretary could not impartially and 
properly adjudicate the issue because of the trust responsibility to 
tribes, a conflict of interest, and a lack of knowledge concerning the 
intricacies of the negotiation between the State and tribe.
    Response: These recommendations were adopted and paragraph (a)(8) 
has been deleted.
    One comment suggested that the Secretary publish his/her 
determination on the good faith issue.
    Response: This recommendation was not adopted because the good 
faith determination has been deleted from the regulations.
    One comment suggested paragraph (a)(8) appeared to be a drafting 
error.
    Response: This comment's concern is alleviated because the 
paragraph has been deleted.
    One comment suggested the paragraph be revised to include specific 
examples of State action which would be considered as evidence of bad 
faith.
    Response: This recommendation was not adopted because the good 
faith determination has been deleted from the regulations.
    Several comments suggested changing the 60-day time frame in 
paragraph (b) because it was too long or unnecessary if a State does 
not submit an alternate proposal.
    Response: These recommendations were not adopted because the 60-day 
time frame is reasonable for a substantive review if the State submits 
comments under section 291.7(b). If the State does not submit comments, 
the Secretary may not need the entire 60 days.
    One comment suggested deleting the requirement that the Secretary 
notify the State.
    Response: This recommendation was not adopted because the State is 
an involved party in the Class III gaming procedures process as 
contemplated by IGRA. Paragraph (b)(2) was deleted as unnecessary. If 
the Secretary determines that the State's alternative proposal contains 
no objections to the tribe's proposal, the proposal is approved. If the 
Secretary determines there are unresolved issues and areas of 
disagreement between the State's alternative proposal and the tribal 
proposal, then the parties will be invited to participate in an 
informal conference.
    One comment suggested paragraph (b)(3) is confusing because if the 
State does not submit an alternative proposal, then how can the 
Secretary make a determination of unresolved issues and areas of 
disagreement.
    Response: This recommendation was not adopted because the State can 
comment on the tribe's proposal under section 291.7(b) without 
necessarily submitting an alternative proposal. Further, if the 
Secretary makes a determination that there are no objections to the 
tribe's proposal, he/she can approve the proposal.
    One comment suggested it was inappropriate under paragraph (b)(3) 
to invite the State to participate in an informal conference because 
the unresolved issues and areas of disagreement may be exclusively 
tribal.
    Response: This recommendation was not adopted because the 
unresolved issues and areas of disagreement are between the parties.
    One comment suggested revising paragraph (b)(3) to include a time 
frame in which the informal conference would be held.
    Response: This recommendation was adopted and language was added to 
state that the parties will be invited to participate in an informal 
conference within 30 days of receiving the Secretary's notice.
    Several comments suggested the 30-day time frame in paragraph (c) 
was excessive and should be shortened.
    Response: This recommendation was not adopted because 30 days is 
reasonable and necessary for the Secretary to prepare a written report 
summarizing the informal conference and making a final decision either 
setting forth the procedures or disapproving the proposal.
    One comment suggested deleting the requirement that the Secretary 
prepare and mail the report and final decision to the State in 
paragraph (c).
    Response: This recommendation was not adopted because the State is 
an involved party in the Class III gaming procedures process as 
contemplated by IGRA.

Section 291.9  What must the Secretary do at the end of the 60-day 
comment period if the State provides comments offering an alternative 
proposal for Class III gaming procedures?

    Several comments suggested deleting section 291.9 as unnecessary 
and inconsistent with the IGRA scheme.
    One comment suggested it served no legitimate purpose since it adds 
an additional 60 days to a process which

[[Page 17541]]

will ultimately end up in mediation anyway where the parties can 
present their objections and counter-proposals.
    Reponse: These recommendations were adopted and the section has 
been deleted and rewritten to provide automatic appointment of a 
mediator.
    One comment received under 291.10 recommended specifying the number 
of days in which the mediator will be appointed.
    Response: This recommendation was adopted under the newly revised 
Section 291.9 and language was added saying the mediator shall be 
appointed within 30 days of the Secretary receiving the State's 
alternative proposal. See Summary of Comments under section 291.10.

Section 291.10  What must the Indian tribe do when it receives the 
State's alternative proposal for Class III gaming procedures?

    Several comments recommended this section be deleted as unnecessary 
and inconsistent with the IGRA scheme or be revised to provide for 
automatic appointment of a mediator.
    Response: The recommendation to delete as unnecessary and 
inconsistent was adopted, and the recommendation to revise is adopted 
under the new revised section 291.9.
    The comment further recommended to revise the section and specify 
the number of days in which the mediator will be appointed.
    Response: This recommendation was adopted and language was added to 
the new revised section 291.9 saying the mediator shall be appointed 
within 30 days of receiving the State's alternative proposal. See 
Summary of Comments under section 291.9.
    One comment recommended revising the section to provide for a 
mechanism that establishes procedures if the Secretary disapproves the 
State's alternative proposal.
    Response: This comment was not adopted because this paragraph has 
been deleted.

Section 291.11  What must the Secretary do if the Indian tribe files 
timely objections to the State's alternative proposal?

    Several comments recommended setting forth qualifications of the 
mediator. One comment recommended requiring the mediator have 
familiarity and knowledge of IGRA.
    Response: This recommendation was not adopted because it is 
unnecessary.
    One comment recommended that the tribe have considerable input into 
the Secretary's selection.
    Response: This recommendation was not adopted to maintain a 
fairness and timeliness in the process.
    One comment recommended conflict of interest standards.
    Response: This recommendation was adopted and the new revised 
section 291.9 includes such standards.
    Several comments recommended the section be revised to include a 
specific time period in which the Secretary must appoint the mediator. 
One comment recommended 20 days.
    Response: These recommendations were partially adopted, and the new 
revised section 291.9 includes a 30-day time period as being reasonable 
and necessary.
    One comment suggested revising the section to include a time frame 
in which the mediator issues a decision.
    Response: This recommendation was not adopted in order to remain 
consistent with IGRA requirements, to maintain flexibility in the 
mediation process and to avoid imposition of time constraints on the 
mediator. During the mediation process, the parties are free to 
mutually consent to self-imposed time constraints. The IGRA does not 
impose such constraints on the mediator or mediation process. This 
section was deleted as unnecessary due to the automatic appointment of 
a mediator under revised section 291.9 and the sections were renumbered 
accordingly.

Section 291.12 What is the role of the mediator appointed by the 
Secretary?

    This section was renumbered section 291.10 due to the deletion of 
sections 291.9 and 291.10 of the proposed rule.
    Several comments recommended imposing specific procedural 
guidelines and specific time lines on the mediator and mediation 
process.
    Response: These recommendations were not adopted in order to be 
consistent with IGRA and to maintain flexibility in the mediation 
process. During the mediation process, the parties are free to mutually 
consent to self-imposed procedures and/or time lines. The IGRA does not 
impose procedures or deadlines on the mediator or mediation process.
    One comment recommended revising the section to include the 
requirement that the mediator apply the canons of construction by which 
all ambiguities should be resolved in favor of the tribe.
    Response: This recommendation was not adopted because the 
mediator's discharge of his or her responsibilities will be guided by 
applicable law, including canons of statutory construction which will 
be applied by the mediator as applicable.
    One comment suggested the words ``opportunity to be heard'' as 
being ambiguous and recommended specifying whether it requires an oral 
hearing unless the parties waive the requirement.
    Response: This recommendation was not adopted because the mediation 
process is not a formal administrative or adjudicatory process. The 
mediation process requires flexibility and the parties are free to 
mutually consent to self-imposed procedures.

Section 291.13 What must the Secretary do upon receiving the proposal 
selected by the mediator?

    This section was renumbered section 291.11 due to the deletion of 
sections 291.9 and 291.10 of the proposed rule.
    One comment suggested changing the 60-day requirement to 45 days 
which IGRA provides for approval or disapproval of gaming compacts.
    Response: This recommendation was not adopted because 60 days is 
reasonable and necessary to make substantive determinations regarding 
the mediator's selected proposal.
    One comment recommended that paragraph (b) be revised to list only 
the disapproval criteria for compacts as set forth in IGRA, section 
2710(b)(8).
    Response: This recommendation was not adopted because the Class III 
gaming procedures must comply not only with section 2710(b)(8) of IGRA 
but also must comply with the requirements for Class III gaming 
procedures in section 291.4 and the requirements in section 
2710(b)(7)(B)(vii).
    One comment recommended providing for automatic approval of the 
mediator's selected proposal because under IGRA, the compact must be 
approved except for enumerated reasons set forth in section 2710(b)(8).
    Response: This recommendation was not adopted because the Class III 
gaming procedures must comply not only with section 2710(b)(8) of IGRA, 
but also with the requirements for Class III gaming procedures in 
section 291.4 and the requirements in section 2710(b)(7)(B)(vii) of 
IGRA.
    One comment recommended revising the section to include the 
requirement that when deciding whether to approve or disapprove the 
proposal selected by the mediator, the Secretary must apply the canons 
of construction by which all ambiguities should be resolved in favor of 
the tribe.
    Response: This recommendation was not adopted because the 
Secretary's discharge of his or her responsibilities will be guided by 
applicable law, including canons of statutory

[[Page 17542]]

construction which will be applied by the Secretary as applicable.
    Several comments recommended changing paragraph (c) to require the 
Secretary to issue procedures if the mediator's proposal is rejected.
    Response: This recommendation was adopted and the word ``may'' in 
paragraph (c) was replaced by the word ``shall'' to more closely track 
the statutory language in 25 U.S.C. 2710(d)(7)(B)(vii).
    One comment recommended specifying a time frame within which the 
Secretary prescribes procedures under paragraph (c).
    Response: This recommendation was adopted and a 60-day requirement 
has been added.
    One comment suggested paragraph (c) was confusing because it 
appeared the Secretary was adopting the mediator's selected proposal 
even though he/she was rejecting it.
    Response: This recommendation was adopted and language was added to 
clarify that the Secretary will use the mediator's selected proposal as 
much as possible while comporting with IGRA and relevant provisions of 
State law.
    One comment recommended under paragraph (c) the Secretary be 
required to explain in writing the specific reasons for disapproval.
    Response: This recommendation was not adopted because that 
requirement is already specified in paragraph (a). The words ``in the 
event'' were changed to ``if'' for clarification.

Section 291.14 When do Class III gaming procedures for an Indian tribe 
become effective?

    This section was renumbered section 291.13 due to the deletions of 
sections 291.9 and 291.10 of the proposed rule.
    Language referencing section 291.10(b)(1) was deleted because 
section 291.10 has been deleted due to the new revised section 291.9.
    One comment recommended specifying that the Secretary shall have 15 
days to publish the procedures in the Federal Register.
    Another comment recommended adding the words ``as soon as 
possible'' to make sure there is no delay.
    Response: These recommendations were not adopted as being 
unnecessary or too vague, and to remain consistent with IGRA's 
language. The IGRA does not provide for a specific publication time, 
but it is the Secretary's intention to publish the notice 
expeditiously.

Section 291.15 How can Class III gaming procedures approved by the 
Secretary be amended?

    This section was renumbered section 291.14 due to the deletions of 
sections 291.9 and 291.10 of the proposed rule.
    One comment suggested the section is unwieldy if the regulations do 
not take the States out of the Class III gaming procedures process.
    Response: This recommendation was not adopted because it cannot be 
assumed that the States will fail to participate in amendments. States 
are involved parties as contemplated by IGRA.
    One comment suggested this section erroneously made amendments to 
the Class III gaming procedures subject to the process in section 
291.3.
    Response: This recommendation was adopted and the section was 
clarified to explicitly exclude procedures amendments to the 
requirements of section 291.3.
    One comment recommended a two-tiered approach to Class III gaming 
procedures amendments.
    Response: This recommendation was not adopted in order to keep the 
same process applicable to amendments as to original proposals.
    One comment suggested specifying the duration of Class III gaming 
procedures. The comment recommended stating the procedures would be 
valid in perpetuity or for a term certain, unless the Secretary either 
approves an amendment to the procedures or repeals them, or unless the 
Indian tribe requires cancellation. The comment recommended that 
procedures remain in effect regardless of any changes in state law 
during the length of the term.
    Response: This recommendation was partially adopted and a new 
section 291.15 was added to provide that procedures will remain in 
effect for the duration specified in the procedures themselves, or 
until amended. In addition, section 291.4(j) was amended to require the 
Indian tribe's proposal to address the length of time the procedures 
will remain in effect. Finally, this new section will not address the 
effect of any changes in state law on existing procedures because the 
effect of any such change is not explicitly resolved by IGRA, and has 
not been settled by the courts. Accordingly, the Department has 
determined not to take a position on this issue in these regulations.
    One comment suggested the regulations do not state whether the 
Secretary's decisions can be appealed or if the decisions are 
considered final.
    Response: This recommendation was not adopted because the 
Department of the Interior (Department) already has regulations 
specifying appealability in 25 CFR Sec. 2 et seq.

Executive Order 12866

    This is a significant rule under Executive Order (E.O.) 12866 and 
has been reviewed by Office of Management and Budget (OMB).

Regulatory Flexibility Act

    The Department certifies that this document will not have a 
significant economic effect on a substantial number of small entities 
under the Regulatory Flexibility Act, 5 U.S.C. 601 et seq. Indian 
tribes are not considered to be small entities for purposes of this 
Act.

Small Business Regulatory Enforcement Fairness Act

    This rule is not a major rule under 5 U.S.C. 804(2), the Small 
Business Regulatory Enforcement Fairness Act. This rule does not have 
an annual effect on the economy of $100 million or more.
    This rule will not cause a major increase in costs or prices for 
consumers, individual industries, Federal, State or local government 
agencies or geographic regions and does not have significant adverse 
effects on competition, employment, investment, productivity, 
innovation, or the ability to U.S.-based enterprises to compete with 
foreign-based enterprises.

Unfunded Mandates Act of 1995

    This regulation imposes no unfunded mandate on any governmental or 
private entity and is in compliance with the provisions of the Unfunded 
Mandates Act of 1995.

Executive Order 12630

    The Department has determined that this rule does not have 
significant ``takings'' implications. The rule does not pertain to 
``taking'' of private property interests, nor does it impact private 
property.

Executive Order 12612

    The Department has determined that this rule does not have 
significant Federalism effects.
    As explained above, the Secretary has determined that he has the 
statutory authority to adopt procedures to permit Indian gaming in 
appropriate circumstances. Secretarial authority was expressly provided 
in IGRA with respect to the judicially-supervised mediation scheme. It 
would be exercised under the rule in a manner consistent with the 
statutory directive

[[Page 17543]]

and congressional intent. The rule provides the opportunity for States 
to voluntarily participate in a mediation process under the auspices of 
the Secretary. As the Supreme Court noted in Seminole, Congress may, 
under the Constitution, choose to withhold from States any authority 
over Indian gaming. Under the rule, the Secretary would be tracking the 
scheme set forth by Congress and the rule would afford the States as 
much opportunity to participate as where it does not claim immunity 
from suit.

Executive Order 12988

    The Department has certified to OMB that these regulations meet the 
applicable standards provided in sections (3)(a) and 3(b)(2) of E.O. 
12988.

Paperwork Reduction Act of 1995

    Sections 291.4, 291.10, 291.12, and 291.15 contain information 
collection requirements. The BIA has submitted a request for emergency 
clearance by OMB for this collection of information.
    The information requested will be unique for each tribe and may be 
changed when necessary to fit the needs of the tribe.
    All information is to be collected upon the submission of a request 
by a tribe for Class III gaming procedures. The annual reporting and 
record keeping burden for the collection of information is estimated to 
average 1,000 hours for each response and we estimate there will be 
approximately 12 respondents. The collection will include time for 
reviewing instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
information. The total annual burden is estimated to be 12,000 hours.
    The Paperwork Reduction Act of 1995 requires us to tell you that a 
Federal Agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a 
currently valid OMB control number.

NEPA Statement

    The Department has determined that this proposed rule does not 
constitute a major Federal action significantly affecting the quality 
of the human environment and that no detailed statement is required 
pursuant to the National Environmental Policy Act of 1969.
    Drafting Information: The primary author of this proposed rule is 
George Skibine, Director, Indian Gaming Management Staff, Bureau of 
Indian Affairs.

List of Subjects in 25 CFR Part 291

Indians--business and finance, Indians--Gaming

    For the reasons given in the preamble, part 291 is added to Title 
25, Chapter 1 of the Code of Federal Regulations to read as set forth 
below.

PART 291--Class III Gaming Procedures

Sec.
291.1  Purpose and scope.
291.2  Definitions.
291.3  When may an Indian tribe ask the Secretary to issue Class III 
gaming procedures?
291.4  What must a proposal requesting Class III gaming procedures 
contain?
291.5  Where must the proposal requesting Class III gaming 
procedures be filed?
291.6  What must the Secretary do upon receiving a proposal?
291.7  What must the Secretary do if it has been determined that the 
Indian tribe is eligible to request Class III gaming procedures?
291.8  What must the Secretary do at the expiration of the 60-day 
comment period if the State has not submitted an alternative 
proposal?
291.9  What must the Secretary do at the end of the 60-day comment 
period if the State offers an alternative proposal for Class III 
gaming procedures?
291.10  What is the role of the mediator appointed by the Secretary?
291.11  What must the Secretary do upon receiving the proposal 
selected by the mediator?
291.12  Who will monitor and enforce tribal compliance with the 
Class III gaming procedures?
291.13  When do Class III gaming procedures for an Indian tribe 
become effective?
291.14  How can Class III gaming procedures issued by the Secretary 
be amended?
291.15  How long do Class III gaming procedures remain in effect?

    Authority: 5 U.S.C. 301; 25 U.S.C. sections 2,9 and 2710.


Sec. 291.1  Purpose and scope.

    The regulations in this part establish procedures that the 
Secretary will use to promulgate rules for the conduct of Class III 
Indian gaming when:
    (a) A State and an Indian tribe are unable to voluntarily agree to 
a compact and;
    (b) The State has asserted its immunity from suit brought by an 
Indian tribe under 25 U.S.C. 2710(d)(7)(B).


Sec. 291.2  Definitions

    (a) All terms have the same meaning as set forth in the 
definitional section of IGRA, 25 U.S.C. section 2703(1)-(10).
    (b) The term ``compact'' includes renewal of an existing compact.


Sec. 291.3  When may an Indian tribe ask the Secretary to issue Class 
III gaming procedures?

    An Indian tribe may ask the Secretary to issue Class III gaming 
procedures when the following steps have taken place:
    (a) The Indian tribe submitted a written request to the State to 
enter into negotiations to establish a Tribal-State compact governing 
the conduct of Class III gaming activities;
    (b) The State and the Indian tribe failed to negotiate a compact 
180 days after the State received the Indian tribe's request;
    (c) The Indian tribe initiated a cause of action in Federal 
district court against the State alleging that the State did not 
respond, or did not respond in good faith, to the request of the Indian 
tribe to negotiate such a compact;
    (d) The State raised an Eleventh Amendment defense to the tribal 
action; and
    (e) The Federal district court dismissed the action due to the 
State's sovereign immunity under the Eleventh Amendment.


Sec. 291.4  What must a proposal requesting Class III gaming procedures 
contain?

    A proposal requesting Class III gaming procedures must include the 
following information:
    (a) The full name, address, and telephone number of the Indian 
tribe submitting the proposal;
    (b) A copy of the authorizing resolution from the Indian tribe 
submitting the proposal;
    (c) A copy of the Indian tribe's gaming ordinance or resolution 
approved by the NIGC in accordance with 25 U.S.C. 2710, if any;
    (d) A copy of the Indian tribe's organic documents, if any;
    (e) A copy of the Indian tribe's written request to the State to 
enter into compact negotiations, along with the Indian tribe's proposed 
compact, if any;
    (f) A copy of the State's response to the tribal request and/or 
proposed compact, if any;
    (g) A copy of the tribe's Complaint (with attached exhibits, if 
any); the State's Motion to Dismiss; any Response by the tribe to the 
State's Motion to Dismiss; any Opinion or other written documents from 
the court regarding the State's Motion to Dismiss; and the Court's 
Order of dismissal;
    (h) The Indian tribe's factual and legal authority for the scope of 
gaming specified in paragraph (j)(13) of this section;
    (i) Regulatory scheme for the State's oversight role, if any, in 
monitoring and enforcing compliance; and

[[Page 17544]]

    (j) Proposed procedures under which the Indian tribe will conduct 
Class III gaming activities, including:
    (1) A certification that the tribe's accounting procedures are 
maintained in accordance with American Institute of Certified Public 
Accountants Standards for Audits of Casinos, including maintenance of 
books and records in accordance with Generally Accepted Accounting 
Principles and applicable NIGC regulations;
    (2) A reporting system for the payment of taxes and fees in a 
timely manner and in compliance with Internal Revenue Code and Bank 
Secrecy Act requirements;
    (3) Preparation of financial statements covering all financial 
activities of the Indian tribe's gaming operations;
    (4) Internal control standards designed to ensure fiscal integrity 
of gaming operations as set forth in 25 CFR Part 542;
    (5) Provisions for records retention, maintenance, and 
accessibility;
    (6) Conduct of games, including patron requirements, posting of 
game rules, and hours of operation;
    (7) Procedures to protect the integrity of the rules for playing 
games;
    (8) Rules governing employees of the gaming operation, including 
code of conduct, age requirements, conflict of interest provisions, 
licensing requirements, and such background investigations of all 
management officials and key employees as are required by IGRA, NIGC 
regulations, and applicable tribal gaming laws;
    (9) Policies and procedures that protect the health and safety of 
patrons and employees and that address insurance and liability issues, 
as well as safety systems for fire and emergency services at all gaming 
locations;
    (10) Surveillance procedures and security personnel and systems 
capable of monitoring movement of cash and chips, entrances and exits 
of gaming facilities, and other critical areas of any gaming facility;
    (11) An administrative and/or tribal judicial process to resolve 
disputes between gaming establishment, employees and patrons, including 
a process to protect the rights of individuals injured on gaming 
premises by reason of negligence in the operation of the facility;
    (12) Hearing procedures for licensing purposes;
    (13) A list of gaming activities proposed to be offered by the 
Indian tribe at its gaming facilities;
    (14) A description of the location of proposed gaming facilities;
    (15) A copy of the Indian tribe's liquor ordinance approved by the 
Secretary if intoxicants, as used in 18 U.S.C. 1154, will be served in 
the gaming facility;
    (16) Provisions for a tribal regulatory gaming entity, independent 
of gaming management;
    (17) Provisions for tribal enforcement and investigatory 
mechanisms, including the imposition of sanctions, monetary penalties, 
closure, and an administrative appeal process relating to enforcement 
and investigatory actions;
    (18) The length of time the procedures will remain in effect; and
    (19) Any other provisions deemed necessary by the Indian tribe.


Sec. 291.5  Where must the proposal requesting Class III gaming 
procedures be filed?

    Any proposal requesting Class III gaming procedures must be filed 
with the Director, Indian Gaming Management Staff, Bureau of Indian 
Affairs, U.S. Department of the Interior, MS 2070-MIB, 1849 C Street 
NW, Washington, DC 20240.


Sec. 291.6  What must the Secretary do upon receiving a proposal?

    Upon receipt of a proposal requesting Class III gaming procedures, 
the Secretary must:
    (a) Within 15 days, notify the Indian tribe in writing that the 
proposal has been received, and whether any information required under 
Sec. 291.4 is missing;
    (b) Within 30 days of receiving a complete proposal, notify the 
Indian tribe in writing whether the Indian tribe meets the eligibility 
requirements in Sec. 291.3. The Secretary's eligibility determination 
is final for the Department.


Sec. 291.7  What must the Secretary do if it has been determined that 
the Indian tribe is eligible to request Class III gaming procedures?

    (a) If the Secretary determines that the Indian tribe is eligible 
to request Class III gaming procedures and that the Indian tribe's 
proposal is complete, the Secretary must submit the Indian tribe's 
proposal to the Governor and the Attorney General of the State where 
the gaming is proposed.
    (b) The Governor and Attorney General will have 60 days to comment 
on:
    (1) Whether the State is in agreement with the Indian tribe's 
proposal;
    (2) Whether the proposal is consistent with relevant provisions of 
the laws of the State;
    (3) Whether contemplated gaming activities are permitted in the 
State for any purposes, by any person, organization, or entity.
    (c) The Secretary will also invite the State's Governor and 
Attorney General to submit an alternative proposal to the Indian 
tribe's proposed Class III gaming procedures.


Sec. 291.8  What must the Secretary do at the expiration of the 60-day 
comment period if the State has not submitted an alternative proposal?

    (a) Upon expiration of the 60-day comment period specified in 
Sec. 291.7, if the State has not submitted an alternative proposal, the 
Secretary must review the Indian tribe's proposal to determine:
    (1) Whether all requirements of Sec. 291.4 are adequately 
addressed;
    (2) Whether Class III gaming activities will be conducted on Indian 
lands over which the Indian tribe has jurisdiction;
    (3) Whether contemplated gaming activities are permitted in the 
State for any purposes by any person, organization, or entity;
    (4) Whether the proposal is consistent with relevant provisions of 
the laws of the State;
    (5) Whether the proposal is consistent with the trust obligations 
of the United States to the Indian tribe;
    (6) Whether the proposal is consistent with all applicable 
provisions of IGRA; and
    (7) Whether the proposal is consistent with provisions of other 
applicable Federal laws.
    (b) Within 60 days of the expiration of the 60-day comment period 
in Sec. 291.7, the Secretary must notify the Indian tribe, the 
Governor, and the Attorney General of the State in writing that he/she 
has:
    (1) Approved the proposal if the Secretary determines that there 
are no objections to the Indian tribe's proposal; or
    (2) Identified unresolved issues and areas of disagreements in the 
proposal, and invite the Indian tribe, the Governor and the Attorney 
General to participate in an informal conference, within 30 days of 
notification unless the parties agree otherwise, to resolve identified 
unresolved issues and areas of disagreement.
    (c) Within 30 days of the informal conference, the Secretary must 
prepare and mail to the Indian tribe, the Governor and the Attorney 
General:
    (1) A written report that summarizes the results of the informal 
conference; and
    (2) A final decision either setting forth the Secretary's proposed 
Class III gaming procedures for the Indian tribe, or disapproving the 
proposal for any of the reasons in paragraph (a) of this section.

[[Page 17545]]

Sec. 291.9  What must the Secretary do at the end of the 60-day comment 
period if the State offers an alternative proposal for Class III gaming 
procedures?

    Within 30 days of receiving the State's alternative proposal, the 
Secretary must appoint a mediator who:
    (a) Has no official, financial, or personal conflict of interest 
with respect to the issues in controversy; and
    (b) Must convene a process to resolve differences between the two 
proposals.


Sec. 291.10  What is the role of the mediator appointed by the 
Secretary?

    (a) The mediator must ask the Indian tribe and the State to submit 
their last best proposal for Class III gaming procedures.
    (b) After giving the Indian tribe and the State an opportunity to 
be heard and present information supporting their respective positions, 
the mediator must select from the two proposals the one that best 
comports with the terms of IGRA and any other applicable Federal law. 
The mediator must submit the proposal selected to the Indian tribe, the 
State, and the Secretary.


Sec. 291.11  What must the Secretary do upon receiving the proposal 
selected by the mediator?

    Within 60 days of receiving the proposal selected by the mediator, 
the Secretary must do one of the following:
    (a) Notify the Indian tribe, the Governor and the Attorney General 
in writing of his/her decision to approve the proposal for Class III 
gaming procedures selected by the mediator; or
    (b) Notify the Indian tribe, the Governor and the Attorney General 
in writing of his/her decision to disapprove the proposal selected by 
the mediator for any of the following reasons:
    (1) The requirements of Sec. 291.4 are not adequately addressed;
    (2) Gaming activities would not be conducted on Indian lands over 
which the Indian tribe has jurisdiction;
    (3) Contemplated gaming activities are not permitted in the State 
for any purpose by any person, organization, or entity;
    (4) The proposal is not consistent with relevant provisions of the 
laws of the State;
    (5) The proposal is not consistent with the trust obligations of 
the United States to the Indian tribe;
    (6) The proposal is not consistent with applicable provisions of 
IGRA; or
    (7) The proposal is not consistent with provisions of other 
applicable Federal laws.
    (c) If the Secretary rejects the mediator's proposal under 
paragraph (b) of this section, he/she must prescribe appropriate 
procedures within 60 days under which Class III gaming may take place 
that comport with the mediator's selected proposal as much as possible, 
the provisions of IGRA, and the relevant provisions of the laws of the 
State.


Sec. 291.12  Who will monitor and enforce tribal compliance with the 
Class III gaming procedures?

    The Indian tribe and the State may have an agreement regarding 
monitoring and enforcement of tribal compliance with the Indian tribe's 
Class III gaming procedures. In addition, under existing law, the NIGC 
will monitor and enforce tribal compliance with the Indian tribe's 
Class III gaming procedures.


Sec. 291.13  When do Class III gaming procedures for an Indian tribe 
become effective?

    Upon approval of Class III gaming procedures for the Indian tribe 
under either Sec. 291.8(b), Sec. 291.8(c), or Sec. 291.11(a), the 
Indian tribe shall have 90 days in which to approve and execute the 
Secretarial procedures and forward its approval and execution to the 
Secretary, who shall publish notice of their approval in the Federal 
Register. The procedures take effect upon their publication in the 
Federal Register.


Sec. 291.14  How can Class III gaming procedures approved by the 
Secretary be amended?

    An Indian tribe may ask the Secretary to amend approved Class III 
gaming procedures by submitting an amendment proposal to the Secretary. 
The Secretary must review the proposal by following the approval 
process for initial tribal proposals, except that the requirements of 
Sec. 291.3 are not applicable and he/she may waive the requirements of 
Sec. 291.4 to the extent they do not apply to the amendment request.


Sec. 291.15  How long do Class III gaming procedures remain in effect?

    Class III gaming procedures remain in effect for the duration 
specified in the procedures or until amended pursuant to Sec. 291.14.

    Dated: April 1, 1999.
Kevin Gover,
Assistant Secretary--Indian Affairs.
[FR Doc. 99-8910 Filed 4-9-99; 8:45 am]
BILLING CODE 4310-02-P