[Federal Register Volume 76, Number 248 (Tuesday, December 27, 2011)]
[Proposed Rules]
[Pages 80847-80850]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-32757]


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DEPARTMENT OF THE INTERIOR

National Indian Gaming Commission

25 CFR Part 573

RIN 3141-AA50


Enforcement Actions

AGENCY: National Indian Gaming Commission, Interior.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This action proposes to amend NIGC regulations to include a 
graduated pre-enforcement process through which a tribe may come into 
compliance before an enforcement action is taken by the Chair. 
Voluntary compliance is the goal of the Commission. This amendment sets 
forth how Commission staff and tribes may address potential or existing 
compliance issues. The amendment retains the Chair's authority to issue 
an enforcement action at the Chair's discretion.
    The amendment also modifies this Part to allow a temporary closure 
order when there is clear and convincing evidence that a gaming 
operation defrauds a tribe. The current regulation provides for the 
issuance of a temporary closure order when there is clear and 
convincing evidence that a gaming operation defrauds a tribe or a 
customer. The Commission believes this issue has been adequately 
addressed by ordinance requirements of the IGRA and NIGC regulations, 
because tribes must include in their ordinances a dispute resolution 
procedure to address issues where a customer believes she or he has 
been defrauded. If the tribe fails to follow their ordinance, 
enforcement action may be taken.
    Finally, current regulations do not provide specificity for when an 
enforcement action becomes final, such as when a notice of violation is 
issued and there is no appeal filed or settlement agreement reached. 
The proposed amendment clarifies that an enforcement action becomes 
final agency action and a final order of the Commission if no appeal is 
filed or a settlement agreement reached.

DATES: Submit comments on or before February 27, 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.
    1. Email comments to: [email protected].
    2. Mail comments to: National Indian Gaming Commission, 1441 L 
Street NW., Suite 9100, Washington, DC 20005.
    3. Hand deliver comments to: 1441 L St. NW., Suite 9100, 
Washington, DC 20005.
    4. 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].

[[Page 80848]]


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. Part 573 
was included in this regulatory review.

III. Development of the Proposed Rule

    The Commission conducted a total of 9 tribal consultations as part 
of its review of Part 573. Tribal consultations were held in every 
region of the country and were attended by over 160 tribes and 443 
tribal leaders or their representatives. In addition to tribal 
consultations, on June 28, 2011, the Commission requested public 
comment on a Preliminary Draft of amendments to Part 573. After 
considering the comments received from the public and through tribal 
consultations, the Commission proposes one amendment to Part 573: 
inclusion of a graduated pre-enforcement process whereby a gaming 
operation has the opportunity to come into compliance with IGRA, 
Commission regulations, or tribal ordinances and resolutions approved 
by the Chair before an enforcement action is taken. This process would 
not restrict the Chair from initiating enforcement action if 
circumstances require.

A. Voluntary Compliance is a Goal of the Commission

    The proposed draft sets out voluntary compliance as a goal of the 
Commission and identifies how voluntary compliance can be achieved. 
Comments in response to the NOI and NRR consistently stated that the 
NIGC and tribes should be in closer communication prior to the issuance 
of an enforcement action. While the Commission believes it is necessary 
for the Chair to retain the discretion to issue an enforcement action 
whenever the circumstances require it, the Commission also firmly 
believes that communicating with tribes before taking an enforcement 
action can only lead to improved relationships and continued 
compliance. With these two goals in mind, the Commission published a 
Preliminary draft of the proposed rule creating a graduated process 
which can be used by NIGC staff to inform a tribe of potential 
compliance issues. While there are two measures that can be taken as 
part of this process, either may be taken independent of the other.
    The first and lowest level of notification to the tribe of a 
possible compliance issue is a ``letter of concern.'' A letter of 
concern would be issued when NIGC staff believes there could be a 
possible violation of IGRA, NIGC regulations, or the tribe's approved 
gaming ordinance. The second level of notification to the tribe is a 
``warning letter.'' A warning letter provides notice to the tribe that 
NIGC staff believes an actual violation of IGRA, NIGC regulations, or 
the tribe's approved gaming ordinance has occurred, or is occurring. 
The letters would provide the factual basis for the potential 
violation, inform the tribe of any corrective action that may be taken 
to cure the violation, and provide a timeframe for responding to the 
letter or coming into compliance. In the Preliminary draft, the second 
action was called a ``non-compliance notice.'' Commentors suggested 
either doing away with the non-compliance notice entirely, or finding a 
different title for it. The Commission believes having two potential 
options for action that may be taken by NIGC staff prior to the 
issuance of an enforcement action is positive for both the NIGC and 
tribes. However, the Commission did change the name of the second 
action to a ``warning letter.''
    The goal of this proposed amendment is to start with the lowest 
possible action and move forward only if compliance is not achieved. 
However, under certain circumstances, the NIGC staff may be required to 
issue a warning letter without first issuing a letter of concern. 
Alternatively, a letter of concern could be issued and the tribe may 
fully address the concern without any further action required by the 
NIGC. This would achieve the goal of voluntary compliance.
    Many comments to the Preliminary draft stated that the regulation 
should require both actions to include a deadline for the tribe to 
respond if it disagrees with the NIGC's conclusions and a deadline for 
the tribe to come into compliance. The Commission agrees with this 
recommendation and incorporated those requirements into this proposed 
amendment. Some comments to the Preliminary draft questioned whether 
these letters were final agency action. It is important to note that 
these actions would be issued by NIGC staff, not the Chair, and are 
therefore not final agency action.
    Other comments acknowledged that certain circumstances will warrant 
immediate issuance of an NOV and requested that the regulation specify 
circumstances or criteria that should be present before the Chair can 
bypass this process and take immediate enforcement action. One 
commentor stated that while they are confident in this Commission to 
positively utilize this process, they are concerned future Commissions 
may disregard the general process. The intent of this proposed 
amendment is to achieve voluntary compliance before an enforcement 
action is issued. Presumably, a Chair will not initiate an enforcement 
action without NIGC staff first having taken appropriate pre-
enforcement action unless, in the Chair's judgment, the circumstances 
require immediate action

[[Page 80849]]

or it is impracticable to issue one or both of these pre-enforcement 
actions. However, if the Chair takes enforcement action before a letter 
of concern and/or warning letter is issued, the enforcement action will 
likely explain the reason for moving directly to an enforcement action 
without pre-enforcement action.

B. Temporary Closure Order will be Issued When There is Clear and 
Convincing Evidence that a Gaming Operation Defrauds a Tribe

    The proposed rule amends this Part to allow a temporary closure 
order only when there is clear and convincing evidence that a gaming 
operation defrauds a tribe, not a customer. A commentor pointed out 
that the current regulation provides for the issuance of a temporary 
closure order when there is clear and convincing evidence that a gaming 
operation defrauds a customer. The Commission believes this issue has 
been adequately addressed by ordinance requirements of the IGRA and 
NIGC regulations. Tribes must include in their ordinances a dispute 
resolution procedure to address issues where a customer believes she or 
he has been defrauded. If the tribe fails to follow their ordinance, 
enforcement action may be taken.

C. Final Agency Action

    The current regulations do not provide specificity for when an 
enforcement action such as a notice of violation is issued and there is 
no appeal filed or settlement agreement reached. The proposed amendment 
clarifies that an enforcement action becomes final agency action and a 
final order of the Commission if no appeal is filed or a settlement 
agreement reached.

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 the Small Business 
Regulatory Enforcement Fairness Act, 5 U.S.C. 804(2). 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 a significant adverse effect on 
competition, employment, investment, productivity, innovation, or the 
ability of U.S.-based enterprises to compete with foreign-based 
enterprises.

Unfunded Mandate 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 proposed rule does not unduly burden the judicial 
system and meets the requirements of sections 3(a) and 3(b)(2) of the 
Executive Order.

National Environmental Policy Act

    The Commission has determined that the 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, 42 U.S.C. 
4321, et seq.

Paperwork Reduction Act

    This proposed rule does not require information collection under 
the Paperwork Reduction Act of 1995, 44 U.S.C. 3501, et seq., and is 
therefore not subject to review by the Office of Management and Budget.

List of Subjects in 25 CFR 573

    Enforcement, Enforcement Actions, Gambling, Gaming, Indians, Indian 
Gaming.

    For the reasons stated in the preamble, the National Indian Gaming 
Commission proposes to amends 25 CFR part 573 as follows:

PART 573--COMPLIANCE AND ENFORCEMENT

    1. The authority citation for part 573 is revised to read as 
follows:

    Authority:  25 U.S.C. 2706(b)(10); 25 U.S.C. 2713; E.O. 13175.

    2. Revise the part 573 heading to read as set forth above.
    3. Revise Sec.  573.1 to read as follows:


Sec.  573.1  What is the purpose of this part?

    Voluntary compliance is the goal of the Commission. Voluntary 
compliance is achieved when a tribe and the NIGC staff are able to 
resolve any potential enforcement issues prior to the Chair issuing an 
enforcement action. This part sets forth efforts for achieving 
voluntary compliance and enforcement action when voluntary compliance 
is not forthcoming. While this part is intended to garner voluntary 
compliance through a graduated enforcement process, there may be 
circumstances under which a graduated enforcement process is omitted 
and an enforcement action must be taken. This part also sets forth 
general rules governing the Commission's enforcement of the Act, this 
chapter, and tribal ordinances and resolutions approved by the Chair 
under part 522 of this chapter. Civil fines in connection with notice 
of violation issued under this part are addressed in part 575 of this 
chapter.
    4. Add Sec.  573.2 to read as follows:


Sec.  573.2  When may a letter of concern and/or warning letter be 
issued?

    (a) Prior to the Chair taking an enforcement action, a letter of 
concern and/or a warning letter may be provided to the respondent by 
NIGC staff, detailing concerns regarding the respondent's compliance 
with the Act, this chapter, or any tribal ordinance or resolution 
approved by the Chair under part 522 of this chapter.
    (b) Action under this section does not constitute agency action and 
may be taken by NIGC staff issuing the respondent, either one or both 
of the following:
    (1) A ``letter of concern'' which recites available facts and 
information about the incident or condition and indicates that it may 
be a violation; and/or
    (2) A ``warning letter'' which confirms an assessment of the matter 
and states the necessary corrective action the respondent needs to 
take, agrees to take, or has taken.
    (c) The letters referenced in paragraph (b) of this section may be 
issued consecutively, but NIGC staff may issue a warning letter without 
first issuing a letter of concern.
    (d) Either action under paragraph (b) of this section shall provide 
a time period for the respondent to respond, and shall also provide a 
time period for the respondent to come into compliance. If voluntary 
compliance efforts are unsuccessful, enforcement action may be taken. 
If voluntary compliance efforts are successful, NIGC staff will send an 
investigation completion letter pursuant to Sec.  571.4.

[[Page 80850]]

    (e) The Chair's discretion to take an enforcement action is not 
limited or constrained in any way by this section. When the Chair takes 
enforcement action before a letter of concern and/or warning letter is 
issued, the enforcement action will state the reasons moving directly 
to an enforcement action without first issuing a letter of concern and/
or warning letter.
    5. In Sec.  573.3, revise paragraph (a) to read as follows:


Sec.  573.3  When may the Chair issue a notice of violation?

    (a) The Chair may issue a notice of violation to any person for 
violations of any provision of the Act or this chapter, or of any 
tribal ordinance or resolution approved by the Chair under part 522 of 
this chapter.
* * * * *


Sec.  573.6  [Redesignated as Sec.  573.4]

    6. Redesignate Sec.  573.6 as Sec.  573.4
    7. In newly redesignated Sec.  573.4, revise the section heading 
and paragraphs (a) introductory text, (a)(3), (6), (7), (8), (9), (12), 
(c) introductory text, (c)(1), (c)(2) introductory text, and (c)(3) to 
read as follows:


Sec.  573.4  When may the Chair issue an order of temporary closure?

    (a) When an order of temporary closure may issue. Simultaneously 
with or subsequently to the issuance of a notice of violation under 
Sec.  573.3 of this part, the Chair may issue an order of temporary 
closure of all or part of an Indian gaming operation if one or more of 
the following substantial violations are present:
* * * * *
    (3) A gaming operation operates for business without a tribal 
ordinance or resolution that the Chair has approved under part 522 of 
this chapter.
* * * * *
    (6) There is clear and convincing evidence that a gaming operation 
defrauds a tribe.
    (7) A management contractor operates for business without a 
contract that the Chair has approved under part 533 of this chapter.
    (8) Any person knowingly submits false or misleading information to 
the Commission or a tribe in response to any provision of the Act, this 
chapter, or a tribal ordinance or resolution that the Chair has 
approved under part 522 of this chapter.
    (9) A gaming operation refuses to allow an authorized 
representative of the Commission or an authorized tribal official to 
enter or inspect a gaming operation, in violation of Sec.  571.5 or 
Sec.  571.6 of this chapter, or of a tribal ordinance or resolution 
approved by the Chair under part 522 of this chapter.
* * * * *
    (12) A gaming operation's facility is constructed, maintained, or 
operated in a manner that threatens the environment or the public 
health and safety, in violation of a tribal ordinance or resolution 
approved by the Chair under part 522 of this chapter.
* * * * *
    (c) Informal expedited review. Within seven (7) days after service 
of an order of temporary closure, the respondent may request, orally or 
in writing, informal expedited review by the Chair.
    (1) The Chair shall complete the expedited review provided for by 
this paragraph within two (2) days after his or her receipt of a timely 
request.
    (2) The Chair shall, within two (2) days after the expedited review 
provided for by this paragraph:
    * * *
    (3) Whether or not a respondent seeks informal expedited review 
under this paragraph, within thirty (30) days after the Chair serves an 
order of temporary closure the respondent may appeal the order to the 
Commission under part 577 of this chapter. Otherwise, the order shall 
remain in effect unless rescinded by the Chair for good cause.
    8. Add Sec.  573.5 to read as follows:


Sec.  573.5  When does an enforcement action become final agency 
action?

    An enforcement action shall become final agency action and a final 
order of the Commission when:
    (a) A respondent fails to appeal the enforcement action as provided 
for in part 577 of this chapter and does not enter into a settlement 
agreement resolving the matter in its entirety; or
    (b) A respondent enters into a settlement agreement resolving the 
matter in its entirety at any time after the issuance of the 
enforcement action.

    Dated: December 16, 2011, Washington, DC.
Tracie L. Stevens,
Chairwoman.
Steffani A. Cochran,
Vice-Chairwoman.

Daniel J. Little,
Associate Commissioner.

[FR Doc. 2011-32757 Filed 12-23-11; 8:45 am]
BILLING CODE 7565-02-P