[Federal Register Volume 76, Number 246 (Thursday, December 22, 2011)]
[Proposed Rules]
[Pages 79567-79571]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-32760]
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DEPARTMENT OF THE INTERIOR
National Indian Gaming Commission
25 CFR Parts 556 and 558
RIN 3141-AA15
Tribal Background Investigations and Licensing
AGENCY: National Indian Gaming Commission.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The proposed rule modifies certain NIGC regulations concerning
background investigations and licenses to reduce the quantity of
documents that must be submitted to the Commission; to require that two
notifications be submitted to the Commission in order to comply with
the Indian Gaming Regulatory Act (IGRA); and to establish the
requirements for the issuance of temporary and permanent gaming
licenses.
DATES: Submit comments on or before February 21, 2012.
ADDRESSES: You may submit comments by any one of the following methods,
however, please note that comments sent by electronic mail are strongly
encouraged.
[squf] Email comments to: [email protected].
[squf] Mail comments to: National Indian Gaming Commission, 1441 L
Street NW., Suite 9100, Washington, DC 20005.
[squf] Hand deliver comments to: 1441 L Street NW., Suite 9100,
Washington, DC 20005.
[squf] Fax comments to: National Indian Gaming Commission at (202)
632-0045.
FOR FURTHER INFORMATION CONTACT: National Indian Gaming Commission,
1441 L Street NW., Suite 9100 Washington, DC 20005. Telephone: (202)
632-7009; email: [email protected].
SUPPLEMENTARY INFORMATION:
I. Comments Invited
Interested parties are invited to participate in this proposed
rulemaking by submitting such written data, views, or arguments as they
may desire. Comments that provide the factual basis supporting the
views and suggestions presented are particularly helpful in developing
reasoned regulatory decisions on the proposal.
II. Background
The Indian Gaming Regulatory Act (IGRA or Act), Public Law 100-497,
25 U.S.C. 2701 et seq., was signed into law on October 17, 1988. The
Act establishes the National Indian Gaming Commission (``Commission'')
and sets out a comprehensive framework for the regulation of gaming on
Indian lands. The purposes of IGRA include providing 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; ensuring that the Indian tribe is the primary beneficiary
of the gaming operation; and declaring 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. 25 U.S.C. 2702.
On November 18, 2010, the National Indian Gaming Commission (NIGC)
issued a Notice of Inquiry and Notice of Consultation (NOI) advising
the public that the NIGC was conducting a comprehensive review of its
regulations and requesting public comment on which of its regulations
were most in need of revision, in what order the Commission should
review its regulations, and the process NIGC should utilize to make
revisions. 75 FR 70680 (Nov. 18, 2010). On April 4, 2011, after holding
eight consultations and reviewing all comments, NIGC published a Notice
of Regulatory Review Schedule (NRR) setting out a consultation schedule
and process for review. 76 FR 18457. The Commission's regulatory review
process established a tribal consultation schedule with a description
of the regulation groups to be covered at each consultation. These
Parts 556 and 558 were included in this regulatory review.
[[Page 79568]]
III. Development of the Proposed Rule
The Commission conducted a total of 9 tribal consultations as part
of its review of Parts 556 and 558. Tribal consultations were held in
every region of the country and were attended by over 137 tribes and
381 tribal leaders or their representatives. In addition to tribal
consultations, on July 7, 2011, the Commission requested public comment
on a Preliminary Draft of amendments to Parts 556 and 558. After
considering the comments received from the public and through tribal
consultations, the Commission proposes to amend these parts and
formalize the ``pilot program'' background investigation and licensing
procedures.
Parts 556 and 558 address background investigations and licenses
for gaming operation key employees and primary management officials.
These regulations require tribes to submit to the NIGC an application
and investigative report on all key employees and primary management
officials employed by tribal gaming operations. In the 1990s, the NIGC
initiated a ``pilot program'' for tribes who had a proven track record
of complying with the background and licensing regulations. The purpose
of this program was to reduce the quantity of documents the tribes were
required to submit to the NIGC. Tribes participated in the pilot
program by signing a memorandum of understanding with the NIGC that
allowed a tribe to submit a notice of results (NOR) instead of the
application and investigative report. The notice of results provided a
synopsis of the background investigation and results to the NIGC on key
employees and primary management officials. These regulatory changes
would negate the need for memorandum of understandings with tribes and
eliminate requirement that tribes submit an application and
investigation report for each key employee and primary management
official. Instead, tribes would be required to submit a notice of
results for the background investigation of key employees and primary
management officials as well as to retain applications and
investigation reports for the NIGC to review.
The IGRA requires that tribes submit background investigation
results to the Commission before issuing licenses. 25 U.S.C.
2710(b)(2)(F)(ii)(III). The tribe must then notify the NIGC after it
has issued the license to primary management officials or key
employees. 25 U.S.C. 2710(b)(2)(F)(ii)(I).
A. General Comments
Commenters supported the changes put forward in the preliminary
draft. Tribes noted that the pilot program has been a success and that
they were supportive of the NIGC's proposal to formalize the pilot
program into regulations. One commenter noted that the current
procedure is burdensome and that formalization of the pilot program
creates efficiency in the background and licensing process. Some
commenters questioned the level of detail included in the regulations,
but also noted that these changes were an improvement over the current
regulations while not substantively increasing the requirements.
B. Background Investigation and Licensing
Tribes are currently required to submit a completed application of
background information upon the employment of a key employee or primary
management official. 25 CFR 556.5(a). Tribes are also required to
submit a background investigative report before issuing a license to a
key employee or primary management official. 25 CFR 556.5(b). The
investigative report is required to include: (1) Steps taken in
conducting a background investigation; (2) results obtained; (3)
conclusions reached; and (4) the bases for those conclusions. 25 CFR
556.5(b). When submitting the investigative report, tribes are also
required to include a copy of the eligibility determination. Some
commenters recommended using ``suitability determination'' in the place
of ``eligibility determination.'' The Commission considered this
recommendation but after reviewing the language of the Act, decided
against making that change. The Act references suitability for
determining whether a person is eligible for employment. 25 U.S.C.
2710(b)(2)(f)(ii)(II).
A tribe is required to develop licensing procedures for all
employees of the gaming operation and to retain applications for
employment and reports of any background investigations for inspection
by the Commission for no less than three years from the dates of
termination of employment of key employees and primary management
officials. The licensing requirements are included in a tribal
ordinance when submitted to the Chair for approval.
The proposed rule continues to require a tribe to create and
maintain: (1) A gaming license application identical to the one
required under the current regulations; (2) an investigative report
identical to the one required to be submitted to the NIGC under the
current regulations; and (3) a copy of the eligibility determination.
The proposed rule, however, reduces the submission requirements. In
cases where a tribe issues a license, the tribe need only submit a
notice of results (NOR)--rather than the application and investigative
report--to the NIGC no later than 60 days after the applicant begins
work. Tribes are also required to submit a notice of the issuance of a
license to the NIGC. In cases where a tribe does not issue a license,
it must forward the investigative report to NIGC for inclusion in the
Indian Gaming Individual Records System.
Many commenters noted that a uniform method of sending the NOR to
the NIGC would be useful. The Commission agrees and has developed the
form included in this Notice to be used by all tribes submitting NOR's
to the NIGC.
Under the proposed rule, a tribe would be required to maintain a
completed licensing application for a primary management official or
key employee. The tribe must conduct a background investigation to
determine the eligibility of the employee for a gaming license. The
proposed rule refines the purpose of the background investigation as
one needed to determine whether the employee is eligible for a gaming
license. Tribes can determine for themselves what services to utilize
to conduct the investigation. In some instances, the state may provide
this service, or in others, the tribe may utilize federal or private
services. One commenter suggested requiring applicants to provide a
list of all associations to which they pay membership dues. While this
change was not made in the proposed rule, the Commission is interested
in hearing whether this is a requirement that should be included in the
regulation.
In addition, the proposed rule changes current regulations by
clarifying that these parts do not apply to licenses that are intended
to expire within 90 days of issuance. Many tribes utilize a temporary
license system. The NIGC does not propose to restrict the tribes'
authority to send applicants to work while processing their background
investigations, so long as they are not employed for more than 90 days
without obtaining a license that meets the requirements of these parts.
C. Access to Background Investigation
Many commenters requested improved access to the background
investigation materials obtained by the NIGC. While the NIGC does
collect the NOR submitted by tribes on primary
[[Page 79569]]
management officials and key employees that information is not
currently made available to third-party tribes. In response to the many
comments on improved access the NIGC is working towards making
information more readily available to tribes. Until there is sufficient
resources and technology to make this kind of information available in
a secure format, the NIGC will endeavor to make information available
when and where appropriate.
Two commenters requested that the NIGC remove the requirements of
Sec. 556.2 and Sec. 556.3 which reference ordinance amendments with
regard to the Privacy Act and False Statement notices. The NIGC agrees
that ordinance amendments need not be mentioned in that section because
tribes may include specifics of background investigation procedures--
including Privacy Act and False Statement notices--in supplementary
submission materials rather than placing them in the ordinance itself
(See 25 CFR 522.2(b)). Once final, however, all future ordinances and
submission materials must comply with Sec. 556.8 of this proposed
rule. The NIGC further notes that the privacy notice is required by
federal law to notify applicants of the restrictions binding the NIGC
as a federal agency for releasing personal information. Tribes are not
necessarily bound by those restrictions, but must supply the notice to
applicants before submitting their information to NIGC as required by
25 U.S.C. 2710(b)(2)(F)(ii)(III).
One commenter suggested that tribes should have the discretion to
decide whether to keep confidential the identities of those interviewed
in the course of a background investigation. NIGC disagrees, notes that
this is an existing requirement under the current regulations and pilot
program (See 25 CFR 556.4(b)), and believes the promise of
confidentiality is necessary for obtaining sensitive information from
those interviewed.
Regulatory Matters
Regulatory Flexibility Act
The proposed rule will not have a significant impact on a
substantial number of small entities as defined under the Regulatory
Flexibility Act, 5 U.S.C. 601, et seq. Moreover, Indian Tribes are not
considered to be small entities for the purposes of the Regulatory
Flexibility Act.
Small Business Regulatory Enforcement Fairness Act
The proposed rule is not a major rule under 5 U.S.C. 804(2), the
Small Business Regulatory Enforcement Fairness Act. The rule does not
have an effect on the economy of $100 million or more. The rule will
not cause a major increase in costs or prices for consumers, individual
industries, Federal, State, local government agencies or geographic
regions, nor will the proposed rule have a significant adverse effect
on competition, employment, investment, productivity, innovation, or
the ability of the enterprises to compete with foreign based
enterprises.
Unfunded Mandates Reform Act
The Commission, as an independent regulatory agency, is exempt from
compliance with the Unfunded Mandates Reform Act, 2 U.S.C. 1502(1); 2
U.S.C. 658(1).
Takings
In accordance with Executive Order 12630, the Commission has
determined that the proposed rule does not have significant takings
implications. A takings implication assessment is not required.
Civil Justice Reform
In accordance with Executive Order 12988, the Commission has
determined that the rule does not unduly burden the judicial system and
meets the requirements of sections 3(a) and 3(b)(2) of the Order.
National Environmental Policy Act
The Commission has determined that the 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, 42 U.S.C. 4321, et seq.
Paperwork Reduction Act
The information collection requirements contained in this rule were
previously approved by the Office of Management and Budget (OMB) as
required by 44 U.S.C. 3501 et seq. and assigned OMB Control Number
3141- 0007, which expired in August of 2011. The NIGC is in the process
of reinstating that Control Number.
List of Subjects
25 CFR Part 556
Gaming, Indian lands.
25 CFR Part 558
Gaming, Indian lands.
Text of the Proposed Rules
For the reasons discussed in the Preamble, the Commission proposes
to amend Subchapter E of Title 25 to read as follows:
1. Revise Part 556 to read as follows:
PART 556--BACKGROUND INVESTIGATIONS FOR PRIMARY MANAGEMENT
OFFICIALS AND KEY EMPLOYEES
Sec.
556.1 Scope of this part.
556.2 Privacy notice.
556.3 Notice regarding false statements.
556.4 Background investigations.
556.5 Tribal eligibility determination.
556.6 Report to the Commission.
556.7 Notice.
556.8 Compliance with this part.
Authority: 25 U.S.C. 2706, 2710, 2712.
Sec. 556.1 Scope of this part.
Unless a tribal-state compact assigns sole jurisdiction to an
entity other than a tribe with respect to background investigations,
the requirements of this part apply to all class II and class III
gaming. The procedures and standards of this part apply only to primary
management officials and key employees. This part does not apply to any
license that is intended to expire within 90 days of issuance.
Sec. 556.2 Privacy notice.
(a) A tribe shall place the following notice on the application
form for a key employee or a primary management official before that
form is filled out by an applicant:
In compliance with the Privacy Act of 1974, the following
information is provided: Solicitation of the information on this form
is authorized by 25 U.S.C. 2701 et seq. The purpose of the requested
information is to determine the eligibility of individuals to be
granted a gaming license. The information will be used by the Tribal
gaming regulatory authorities and by the National Indian Gaming
Commission (NIGC) members and staff who have need for the information
in the performance of their official duties. The information may be
disclosed by the Tribe or the NIGC to appropriate Federal, Tribal,
State, local, or foreign law enforcement and regulatory agencies when
relevant to civil, criminal or regulatory investigations or
prosecutions or when pursuant to a requirement by a tribe or the NIGC
in connection with the issuance, denial, or revocation of a gaming
license, or investigations of activities while associated with a tribe
or a gaming operation. Failure to consent to the disclosures indicated
in this notice will
[[Page 79570]]
result in a tribe's being unable to license you for a primary
management official or key employee position.
The disclosure of your Social Security Number (SSN) is voluntary.
However, failure to supply a SSN may result in errors in processing
your application.
(b) A tribe shall notify in writing existing key employees and
primary management officials that they shall either:
(1) Complete a new application form that contains a Privacy Act
notice; or
(2) Sign a statement that contains the Privacy Act notice and
consent to the routine uses described in that notice.
(c) All license application forms used one-hundred eighty (180)
days after the effective date of this section shall comply with this
section.
Sec. 556.3 Notice regarding false statements.
(a) A tribe shall place the following notice on the application
form for a key employee or a primary management official before that
form is filled out by an applicant:
A false statement on any part of your license application may be
grounds for denying a license or the suspension or revocation of a
license. Also, you may be punished by fine or imprisonment (U.S. Code,
title 18, section 1001).
(b) A tribe shall notify in writing existing key employees and
primary management officials that they shall either:
(1) Complete a new application form that contains a notice
regarding false statements; or
(2) Sign a statement that contains the notice regarding false
statements.
(c) All license application forms used 180 days after the effective
date of this section shall comply with this section.
Sec. 556.4 Background investigations.
A tribe shall perform a background investigation for each primary
management official and for each key employee of a gaming operation.
(a) A tribe shall request from each primary management official and
from each key employee all of the following information:
(1) Full name, other names used (oral or written), social security
number(s), birth date, place of birth, citizenship, gender, all
languages (spoken or written);
(2) Currently and for the previous five years: business and
employment positions held, ownership interests in those businesses,
business and residence addresses, and driver's license numbers;
(3) The names and current addresses of at least three personal
references, including one personal reference who was acquainted with
the applicant during each period of residence listed under paragraph
(a)(2) of this section;
(4) Current business and residence telephone numbers;
(5) A description of any existing and previous business
relationships with Indian tribes, including ownership interests in
those businesses;
(6) A description of any existing and previous business
relationships with the gaming industry generally, including ownership
interests in those businesses;
(7) The name and address of any licensing or regulatory agency with
which the person has filed an application for a license or permit
related to gaming, whether or not such license or permit was granted;
(8) For each felony for which there is an ongoing prosecution or a
conviction, the charge, the name and address of the court involved, and
the date and disposition if any;
(9) For each misdemeanor conviction or ongoing misdemeanor
prosecution (excluding minor traffic violations) within 10 years of the
date of the application, the name and address of the court involved and
the date and disposition;
(10) For each criminal charge (excluding minor traffic charges)
whether or not there is a conviction, if such criminal charge is within
10 years of the date of the application and is not otherwise listed
pursuant to paragraph (a)(8) or (a)(9) of this section, the criminal
charge, the name and address of the court involved and the date and
disposition;
(11) The name and address of any licensing or regulatory agency
with which the person has filed an application for an occupational
license or permit, whether or not such license or permit was granted;
(12) A photograph;
(13) Any other information a tribe deems relevant; and
(14) Fingerprints consistent with procedures adopted by a tribe
according to Sec. 522.2(h) of this chapter.
(b) If, in the course of a background investigation, a tribe
discovers that the applicant has a notice of results on file with the
NIGC from a prior investigation and the tribe has access to the earlier
investigative materials (either through the NIGC or the previous tribal
investigative body), the tribe may rely on those materials and update
the investigation and investigative report under Sec. 556.6(b)(1) of
this part.
(c) In conducting a background investigation, a tribe or its agents
shall keep confidential the identity of each person interviewed in the
course of the investigation.
Sec. 556.5 Tribal Eligibility Determination.
A tribe shall conduct an investigation sufficient to make an
eligibility determination.
(a) To make a finding concerning the eligibility of a key employee
or primary management official for granting of a gaming license, an
authorized tribal official shall review a person's:
(1) Prior activities;
(2) Criminal record, if any; and
(3) Reputation, habits and associations.
(b) If the authorized tribal official, in applying the standards
adopted in a tribal ordinance, determines that licensing of the person
poses a threat to the public interest or to the effective regulation of
gaming, or creates or enhances the dangers of unsuitable, unfair, or
illegal practices and methods and activities in the conduct of gaming,
an authorizing tribal official shall not license that person in a key
employee or primary management official position.
Sec. 556.6 Report to the Commission.
(a) When a tribe employs a primary management official or a key
employee, the tribe shall maintain a complete application file
containing the information listed under Sec. 556.4(a)(1)-(14) of this
part.
(b) Before issuing a license to a primary management official or to
a key employee, a tribe shall:
(1) Create and maintain an investigative report on each background
investigation. An investigative report shall include all of the
following:
(i) Steps taken in conducting a background investigation;
(ii) Results obtained;
(iii) Conclusions reached; and
(iv) The bases for those conclusions.
(2) Submit a notice of results of the applicant's background
investigation to the Commission no later than sixty (60) days after the
applicant begins work. The notice of results shall contain:
(i) Applicant's name, date of birth, and social security number;
(ii) Date on which applicant began or will begin work as key
employee or primary management official;
(iii) A summary of the information presented in the investigative
report, which shall at a minimum include a listing of:
A. Licenses that have previously been denied;
B. Gaming licenses that have been revoked, even if subsequently
reinstated;
C. Every known criminal charge brought against the applicant within
the last 10 years of the date of application; and
[[Page 79571]]
D. Every felony of which the applicant has been convicted or any
ongoing prosecution.
(iv) A copy of the eligibility determination made under Sec. 556.5
of this part.
Sec. 556.7 Notice.
(a) All notices under this part shall be provided to the Commission
through the appropriate Regional office.
(b) Should a tribe wish to submit notices electronically, it should
contact the appropriate Regional office for guidance on acceptable
document formats and means of transmission.
Sec. 556.8 Compliance with this part.
All tribal gaming ordinances and ordinance amendments approved by
the Chair prior to the effective date of this part and that reference
this part, do not need to be amended to comply with this part. All
future ordinance submissions, however, must comply.
2. Revise Part 558 to read as follows:
PART 558--GAMING LICENSES FOR KEY EMPLOYEES AND PRIMARY MANAGEMENT
OFFICIALS
Sec.
558.1 Scope of this part.
558.2 Review of notice of results for a key employee or primary
management official.
558.3 Notification to NIGC of license issuance and retention
obligations.
558.4 Notice of disqualifying information and licensee right to a
hearing.
558.5 Submission of notices.
558.6 Compliance with this part.
Authority: 25 U.S.C. 2706, 2710, 2712.
Sec. 558.1 Scope of this part.
Unless a tribal-state compact assigns responsibility to an entity
other than a tribe, the licensing authority for class II or class III
gaming is a tribal authority. The procedures and standards of this part
apply only to licenses for primary management officials and key
employees. This part does not apply to any license that is intended to
expire within 90 days of issuance.
Sec. 558.2 Review of notice of results for a key employee or primary
management official.
(a) Upon receipt of a complete notice of results for a key employee
or primary management official as required by 25 CFR 556.6(b)(2), the
Chair has 30 days to request additional information from a tribe
concerning the applicant or licensee and to object.
(b) If the Commission has no objection to issuance of a license, it
shall notify the tribe within thirty (30) days of receiving notice of
results pursuant to Sec. 556.6(b)(2).
(c) If, within the 30 day period described in Sec. 558.3(a) of
this part, the Commission provides the tribe with a statement itemizing
objections to the issuance of a license to a key employee or to a
primary management official applicant for whom the tribe has provided a
notice of results, the tribe shall reconsider the application, taking
into account the objections itemized by the Commission. The tribe shall
make the final decision whether to issue a license to such applicant.
(d) If the tribe has issued the license before receiving the
Commission's statement of objections, notice and hearing shall be
provided to the licensee as provided by Sec. 558.4.
Sec. 558.3 Notification to NIGC of license issuance and retention
obligations.
(a) After a tribe has provided a notice of results of the
background check to the Commission, a tribe may license a primary
management official or key employee.
(b) A gaming operation shall not employ a key employee or primary
management official who does not have a license after ninety (90) days.
(c) If a tribe does not license an applicant--
(1) The tribe shall notify the Commission; and
(2) Shall forward copies of its eligibility determination under
this section and investigative report (if any) under Sec. 556.6(b)(1)
to the Commission for inclusion in the Indian Gaming Individuals Record
System.
(d) Within 30 days after the issuance of the license, a tribe shall
notify the Commission of its issuance.
(e) A tribe shall retain the following for inspection by the Chair
or his or her designee for no less than three years from the date of
termination of employment:
(1) Applications for licensing;
(2) Investigative reports; and
(3) Eligibility determinations.
Sec. 558.4 Notice of information impacting eligibility and licensee's
right to a hearing.
(a) If, after the issuance of a gaming license, the Commission
receives reliable information indicating that a key employee or a
primary management official is not eligible for employment under Sec.
556.5, the Commission shall notify the issuing tribe of the
information.
(b) Upon receipt of such notification under paragraph (a) of this
section, a tribe shall immediately suspend the license and shall
provide the licensee with written notice of suspension and proposed
revocation.
(c) A tribe shall notify the licensee of a time and a place for a
hearing on the proposed revocation of a license.
(d) A right to a hearing under this part shall vest only upon
receipt of a license granted under an ordinance approved by the Chair.
(e) After a revocation hearing, a tribe shall decide to revoke or
to reinstate a gaming license. A tribe shall notify the Commission of
its decision within 45 days of receiving notification from the
Commission pursuant to subsection (a).
Sec. 558.5 Submission of notices.
(a) All notices under this part shall be provided to the Commission
through the appropriate Regional office.
(b) Should a tribe wish to submit notices electronically, it should
contact the appropriate Regional office for guidance on acceptable
document formats and means of transmission.
Sec. 558.6 Compliance with this part.
All tribal gaming ordinances and ordinance amendments that have
been approved by the Chair prior to the effective date of this section
and that reference this part do not need to be amended to comply with
this section. All future ordinance submissions, however, must comply.
Dated: December 16, 2011, Washington, DC.
Tracie L. Stevens,
Chairwoman.
Steffani A. Cochran,
Vice-Chairwoman.
Daniel J. Little,
Associate Commissioner.
[FR Doc. 2011-32760 Filed 12-21-11; 8:45 am]
BILLING CODE 7565-02-P