[Federal Register Volume 88, Number 72 (Friday, April 14, 2023)]
[Proposed Rules]
[Pages 22962-22966]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-06765]


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DEPARTMENT OF THE INTERIOR

National Indian Gaming Commission

25 CFR Parts 502, 556, and 558

RIN 3141-AA32


Definitions; Background Investigation for Primary Management 
Officials and Key Employees; Gaming Licenses for Primary Management 
Officials and Key Employees

AGENCY: National Indian Gaming Commission, Department of the Interior.

ACTION: Proposed rule.

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SUMMARY: In 2022, the Commission issued a proposed rule seeking to 
amend the ``primary management official'' and ``key employee'' 
definitions; add definitions for ``Gaming Enterprise'' and ``Tribal 
Gaming Regulatory Authority'' (TGRA); and establish modern retention 
requirements for background investigations and licensing applications. 
The rule proposed vesting revocation hearing rights upon license 
issuance as well as in accord with tribal law, regulation or policy 
along with augmenting revocation decision notification and submission 
requirements. This revised proposed rule results from comments 
received. It permits tribes to designate and document other gaming 
enterprise employees as key employees and other employed gaming 
enterprise management officials as primary management officials, 
including TGRA personnel. Now such designations may occur by any 
documentary means. Updates to the key employee definition include 
custodians of gaming supplies and gaming operation employees authorized 
by the gaming operation for unescorted access to secure gaming areas, 
not vendors or other outside parties. The primary management official 
definition, however, now is narrower with the removal of individuals 
who have authority to

[[Page 22963]]

supervise key employees of the gaming operation.

DATES: Written comments on this proposed rule must be received on or 
before May 30, 2023.

ADDRESSES: You may submit comments by any one of the following methods, 
however, please note that comments sent by electronic mail are strongly 
encouraged.
    [ssquf] Federal eRulemaking Portal: Go to https://www.regulations.gov. Follow the instructions for submitting comments.
    [ssquf] Email comments to: [email protected].
    [ssquf] Mail comments to: National Indian Gaming Commission, 1849 C 
Street NW, MS 1621, Washington, DC 20240.
    [ssquf] Fax comments to: National Indian Gaming Commission at 202-
632-0045.

FOR FURTHER INFORMATION CONTACT: Jo-Ann Shyloski by phone at (202) 632-
7003, by email [email protected], or by fax (202) 632-7066 
(these numbers are not toll free).

SUPPLEMENTARY INFORMATION:

I. Background and Development of the Rule

A. 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 established the National Indian Gaming Commission (``NIGC'' or 
``Commission'') and set out a comprehensive framework for the 
regulation of gaming on Indian lands. IGRA requires that tribal gaming 
ordinances provide a system for: background investigations of ``primary 
management officials and key employees of the gaming enterprise;'' 
tribal licenses for them; a suitability standard to assess whether they 
pose a threat to gaming and are not eligible for employment; and 
notices of background check results to the Commission before the 
issuance of licenses.
    The Commission first defined ``key employee'' and ``primary 
management official'' in April of 1992, early in its existence. As 
mandated by IGRA, applicants for key employee and primary management 
official positions are subject to a background investigation as a 
condition of licensure. In 2009, the Commission expanded these 
definitions to permit tribes to designate other persons as key 
employees or primary management officials (74 FR 36926). The FBI, U.S. 
Department of Justice, took issue with this expansion, denying the 
processing of CHRI for the expanded positions' background 
investigations. The initial proposed rule and this revision rectify 
this issue in part 502. The revised proposed rule now limits tribal 
designations to ``[a]ny other employee of the gaming enterprise as 
documented by the tribe as a key employee'' and ``[a]ny other employed 
management official of the gaming enterprise documented by the tribe as 
a primary management official.'' Likewise constricted is the key 
employee definition in part 502 regarding unescorted access to secured 
gaming areas. Now, a key employee is ``any gaming operation employee 
authorized by the gaming operation for unescorted access to secured 
gaming areas . . . .'' Similarly constrained is the primary management 
official definition, because individuals who have authority ``[t]o 
supervise key employees of the gaming operation'' are no longer 
included. Lastly, the term independent now describes the Tribal Gaming 
Regulatory Authority (TGRA) definition, aligning with NIGC guidance 
about TGRAs.
    Background investigation and licensing regulations for key 
employees and primary management officials were initially issued by the 
Commission in January 1993 (58 FR 5802-01) in parts 556 and 558, 
respectively. The Commission updated these regulations in 2013 to 
streamline the submission of documents; to ensure that two 
notifications are submitted to the Commission in compliance with IGRA; 
and to clarify the regulations regarding the issuance of temporary and 
permanent gaming licenses (78 FR 5276-01). As for parts 556 and 558, 
this revised proposed rule reflects the same changes as the initial 
proposed rule.

B. Development of the Rule

    On, June 9, 2021, the National Indian Gaming Commission sent a 
Notice of Consultation announcing that the Agency intended to consult 
on a number of topics, including proposed changes to the key employee 
and primary management definitions and the backgrounding and licensing 
regulations. Prior to consultation, the Commission released proposed 
discussion drafts of the regulations for review. The proposed 
amendments to these regulations were intended to: address the FBI's 
concerns regarding the key employee and primary management official 
definitions; include gaming operation employees with unescorted access 
to secured areas as key employees; combine certain subsections of the 
key employee definition; add general managers and similar positions to 
the primary management official definition; and update licensing 
application retention requirements. The Commission held two virtual 
consultation sessions in July of 2021 to receive tribal input on the 
possible changes.
    The Commission reviewed all comments received as part of the 
consultation process and addressed them in the initial proposed rule, 
issued on August 10, 2022. Once again, the Commission has thoroughly 
reviewed comments from the initial proposed rule and responds to them 
here. First, a commenter asserts that FBI's concerns about CHRI 
management have almost no connection to the intent of IGRA and should 
not be the bases for regulatory changes to the key employee and primary 
management official definitions. The Commission disagrees. The NIGC 
receives CHRI from the FBI for the purpose of tribes' backgrounding key 
employees and primary management officials. So, it is the FBI who 
determines when it is and is not appropriate to share CHRI for that 
purpose. Given the FBI's authority over CHRI, NIGC consulted with FBI 
on NIGC's regulatory proposals and considered its views.
    Along the same lines, another commenter believes the proposed 
changes to the key employee and primary management official definitions 
may impair tribal compliance with the Criminal Justice Information 
Systems (CJIS) Security Policy, governing CHRI use, storage, and 
destruction. That will not be the case. The current NIGC-Tribal CHRI 
Memorandum of Understanding (MOU) explicitly accommodates and applies 
to new regulatory definitions for key employees and primary management 
officials. Consequently, when new key employee and primary management 
official regulatory definitions become effective, the current CHRI MOU 
applies to them and remains applicable to CJIS compliance, ensuring its 
continuity.
    Beyond the FBI and CJIS Security policy comments, several 
commenters recommended changes to the initial proposed rule that the 
Commission accepted. Notably, when tribes designate gaming enterprise 
employees as key employees or employed gaming enterprise management 
officials as primary management officials, they no longer have to do so 
through their gaming ordinances. Instead, tribes must document the 
designations through different means, such as gaming commission 
regulations, which presumably are easier to revise and implement. In 
addition, the primary management official definition no longer includes 
individuals who have authority ``to supervise a key employee of the 
gaming operation,'' because, as commenters noted, such a definition

[[Page 22964]]

could encompass team leaders and dual-rate employees who possess 
supervisory duties but not managerial duties.
    Commenters also advocated for additions and changes to terminology 
in the proposed rule. The Commission added custodian of ``gaming 
supplies'' to the key employee definition, given the importance of 
these supplies to the integrity of gaming as well as mitigating the 
risk of tampering by licensing the employees who handle, access, or 
have custody of them. The Commission modified terms in the key employee 
definition as well. Specifically, ``any person authorized by the gaming 
operation for unescorted access to restricted areas'' now reads: ``any 
gaming operation employee authorized by the gaming operation for 
unescorted access to secured gaming areas . . . .'' The Commission 
removed the term person, as a broad interpretation of it could include 
vendors. Further, changing the term restricted to secured not only 
reflects comments received but also aligns with NIGC's minimum internal 
control standards, where secured is utilized in reference to the cage, 
count room, surveillance room and vault as well as in numerous MICS 
regulations referencing secure area, secure location and secure access. 
Lastly, the Commission added the term independent to the Tribal Gaming 
Regulatory Authority (TGRA) definition, as recommended by a commenter 
and in accord with NIGC guidance. Further, TGRAs come within the Gaming 
Enterprise definition--as entities through which tribes regulate gaming 
under IGRA on their Indian lands within their jurisdiction. And if a 
tribe so chooses, it may designate TGRA personnel as key employees or 
primary management officials by documenting its designation. There are 
several regulations in part 558 where commenters recommend that the 
term TGRA supplant the term Tribe. The term Tribe encompasses TGRA; so 
the Commission did not alter the wording.
    In addition, several commenters view the substantive submission 
requirement associated with a key employee or primary management 
official's license revocation as onerous and unnecessary. Yet, the 
required submissions--a copy of the license revocation decision and a 
summary of the evidence supporting it--allow the NIGC to potentially 
object when previously revoked licensees apply for a new license. 
Tribal revocations are not contained in other background checks, 
including FBI CHRI. Ultimately, these submissions further protect and 
enhance the integrity of Indian gaming.
    Lastly, commenters challenged the Commission's authority to define 
``Gaming Enterprise'' and incorporate it into NIGC regulations. The 
IGRA mandates tribal gaming ordinances possesses ``an adequate system 
which . . . ensures that background investigations are conducted on the 
primary management officials and key employees of the gaming 
enterprise.'' Given this plain statutory language, defining the term 
``gaming enterprise'' is appropriate and within NIGC's authority.

II. Regulatory Matters

Regulatory Flexibility Act

    The 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 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 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 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

1. Overview
    The Paperwork Reduction Act (PRA), 44 U.S.C. 3501, et seq., 
provides that an 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. Collections of 
information include any request or requirement that persons obtain, 
maintain, retain, or report information to an agency, or disclose 
information to a third party or to the public (44 U.S.C. 3502(3) and 5 
CFR 1320.3(c)). This proposed rule contains new information collection 
requirements at 25 CFR 558.3(e) that are subject to review by OMB under 
the PRA and, accordingly, have been submitted to OMB for review under 
the PRA, Section 3507(d). OMB previously reviewed and approved 
information collection relating to 25 CFR 558.3 and assigned OMB 
control number 3141-0003 (expires 6/30/2023).
    Described below are the proposed rule's information collection 
activities along with estimates of their annual burdens. These 
activities, along with annual burden estimates, do not include 
activities that are usual and customary industry practices. The burden 
estimates comprise the time necessary for Tribes to forward to the NIGC 
copies of their license revocation decisions and evidence summaries 
supporting such revocations, unless they already submit such to the 
NIGC in the usual course of their business. The burden also may include 
the time necessary for Tribes to summarize the evidence they relied 
upon for each revocation decision, if such summary does not already 
exist for tribal purposes and/or the Tribe does not send it to the NIGC 
as a customary business practice.
    The Commission requests comment on all aspects of this information 
collection, including:
    a. Whether the collection of information is necessary for the 
proper performance of the functions of the agency, including whether 
the information will have practical utility;
    b. The accuracy of the estimate of the burden for this collection 
of information, including the validity of the methodology and 
assumptions used;
    c. Ways to enhance the quality, utility, and clarity of the 
information to be collected; and

[[Page 22965]]

    d. How the agency might minimize the burden of the collection of 
information on those required to respond, including through the use of 
appropriate automated, electronic, mechanical, or other technological 
collection techniques or other forms of information technology, e.g., 
permitting electronic submission of response.
2. Summary of Proposed Information Collection Requirements and Burden 
Estimates
    Title of Collection: Class II and Class III/Background 
Investigation Tribal Licenses.
    OMB Control Number: 3141-0003.
    Form Number: None.
    Type of Review: New rule with added collection burden.
    Respondents/Affected Public: Tribal gaming operations of Indian 
Tribes that conduct Class II and/or Class III gaming under the Indian 
Gaming Regulatory Act.
    Respondent's Obligation: Mandatory.
    Frequency of Collection: On occasion.
    The new rule proposed under 25 CFR 558.3(e) will create the 
following estimated burdens:
    Total Estimated Number of Annual Responses: 100
    Estimated Completion Time per Response: 1 hour.
    Total Estimated Number of Annual Burden Hours: 100 hours.
    Total Estimated Annual Non-Hour Burden Cost: None.
3. Written Comments or Additional Information
    Written comments and suggestions on the information collection 
requirements should be submitted by May 30, 2023. Submit comments 
directly to OMB's Office of Information and Regulatory Affairs, Attn: 
Policy Analyst/Desk Officer for the National Indian Gaming Commission. 
Comments also may be emailed to [email protected], by 
including reference to ``NIGC PRA Renewals'' in the subject line.
    To request additional information about this ICR, contact Tim 
Osumi, Privacy & Records Information Manager, NIGC Information 
Management Program by email at [email protected] or by telephone at 
(202) 264-0676.

Tribal Consultation

    The National Indian Gaming Commission is committed to fulfilling 
its tribal consultation obligations--whether directed by statute or 
administrative action such as Executive Order (E.O.) 13175 
(Consultation and Coordination with Indian Tribal Governments)--by 
adhering to the consultation framework described in its Consultation 
Policy, published July 15, 2013. The NIGC's consultation policy 
specifies that it will consult with tribes on Commission Action with 
Tribal Implications, which is defined as: Any Commission regulation, 
rulemaking, policy, guidance, legislative proposal, or operational 
activity that may have a substantial direct effect on an Indian tribe 
on matters including, but not limited to the ability of an Indian tribe 
to regulate its Indian gaming; an Indian tribe's formal relationship 
with the Commission; or the consideration of the Commission's trust 
responsibilities to Indian tribes.
    Pursuant to this policy, on June 9, 2021, the National Indian 
Gaming Commission sent a Notice of Consultation announcing that the 
Agency intended to consult on a number of topics, including proposed 
changes to the key employee and primary management official regulatory 
definitions as well as the background and licensing regulations. 
Consultations were held on July 27 and 28, 2021. A proposed rule was 
issued on August 10, 2022.

List of Subjects in 25 CFR Parts 502, 556, 558

    Gambling, Indian lands.

    Therefore, for reasons stated in the preamble, 25 CFR parts 502, 
556, and 558 are proposed to be amended as follows:

PART 502--DEFINITIONS OF THIS CHAPTER

0
1. The authority citation for part 502 continues to read as follows:

    Authority: 25 U.S.C. 2701 et seq.

0
2. Revise Sec.  502.14 to read as follows:


Sec.  502.14  Key employee.

    Key employee means:
    (a) Any person who performs one or more of the following functions 
for the gaming operation:
    (1) Bingo caller;
    (2) Counting room supervisor;
    (3) Chief of security;
    (4) Floor manager;
    (5) Pit boss;
    (6) Dealer;
    (7) Croupier;
    (8) Approver of credit;
    (9) Custodian of gaming systems as defined in 25 CFR 547.2 and 
similar class III systems, gaming cash or gaming cash equivalents, 
gaming supplies or gaming system records;
    (10) Custodian of surveillance systems or surveillance system 
records.
    (b) Any gaming operation employee authorized by the gaming 
operation for unescorted access to secured gaming areas designated as 
secured gaming areas by the TGRA;
    (c) If not otherwise licensed as a key employee or primary 
management official, the four persons most highly compensated by the 
gaming operation;
    (d) Any other employee of the gaming enterprise as documented by 
the tribe as a key employee.
0
3. Revise Sec.  502.19 to read as follows:


Sec.  502.19  Primary management official.

    Primary management official means:
    (a) Any person having management responsibility for a management 
contract;
    (b) Any person who has authority:
    (1) To hire and fire employees of the gaming operation; or
    (2) To establish policy for the gaming operation.
    (c) The chief financial officer or a position with duties similar 
to a chief financial officer.
    (d) The general manager or a position with duties similar to a 
general manager.
    (e) Any other employed management official of the gaming enterprise 
as documented by the tribe as a primary management official.
0
4. Add Sec. Sec.  502.25 and 502.26 to read as follows:


Sec.  502.25  Gaming Enterprise.

    Gaming Enterprise means the entities through which tribe conducts, 
regulates, and secures gaming on Indian lands within such tribe's 
jurisdiction pursuant to the Indian Gaming Regulatory Act.


Sec.  502.26  Tribal Gaming Regulatory Authority (TGRA).

    Tribal Gaming Regulatory Authority (TGRA) means the independent 
governmental entity authorized by tribal law to regulate gaming 
conducted pursuant to the Indian Gaming Regulatory Act.

PART 556--BACKGROUND INVESTIGATIONS FOR PRIMARY MANAGEMENT 
OFFICIALS AND KEY EMPLOYEES

0
5. The authority citation for part 556 continues to read as follows:

    Authority: 25 U.S.C. 2706, 2710, 2712.

0
6. Amend Sec.  556.4 by revising the introductory text to read as 
follows:


Sec.  556.4  Background investigations.

    A tribe shall perform a background investigation for each primary 
management official and for each key employee of the gaming enterprise.
* * * * *
0
7. Amend Sec.  556.6 by revising paragraph (a) to read as follows:

[[Page 22966]]

Sec.  556.6  Report to the Commission.

    (a) When a tribe licenses a primary management official or a key 
employee, the tribe shall maintain the information listed under Sec.  
556.4(a)(1) through (14).
* * * * *
0
8. Revise Sec.  556.8 to read as follows:


Sec.  556.8  Compliance with this part.

    All tribal gaming ordinances and ordinance amendments approved by 
the Chair prior to [effective date of final rule] do not need to be 
amended to comply with this part. All future ordinance submissions, 
however, must comply.

PART 558--GAMING LICENSES FOR KEY EMPLOYEES AND PRIMARY MANAGEMENT 
OFFICIALS

0
9. The authority citation for part 558 continues to read as follows:

    Authority: 25 U.S.C. 2706, 2710, 2712.

0
10. Revise Sec.  558.3 to read as follows:


Sec.  558.3  Notification to NIGC of license decisions 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) Within 30 days after the issuance of the license, a tribe shall 
notify the Commission of its issuance.
    (c) A key employee or primary management official who does not have 
a license after ninety (90) days shall not be permitted to perform the 
duties, functions, and/or responsibilities of a key employee or primary 
management official until so licensed.
    (d) If a tribe does not license an applicant--
    (1) The tribe shall notify the Commission; and
    (2) Shall forward copies of its eligibility determination and 
notice of results, under Sec.  556.6(b)(2) of this chapter, to the 
Commission for inclusion in the Indian Gaming Individuals Record 
System.
    (e) If a tribe revokes a key employee or primary management 
official's license--
    (1) The tribe shall notify the Commission; and
    (2) Shall forward copies of its license revocation decision and a 
summary of the evidence it relied upon to the Commission for inclusion 
in the Indian Gaming Individuals Record System.
    (f) A tribe shall retain the following for inspection by the Chair 
or their designee for no less than three years from the date of 
termination of employment:
    (1) The information listed under Sec.  556.4(a)(1) through (14);
    (2) Investigative reports, as defined in Sec.  556.6(b);
    (3) Eligibility determinations, as defined in Sec.  556.5;
    (4) Privacy Act notice, as defined in Sec.  556.2; and
    (5) False Statement notice, as defined in Sec.  556.3.
0
11. Revise Sec.  558.4 to read as follows:


Sec.  558.4  Notice of information impacting eligibility and licensee's 
right to a hearing.

    (a) If, after the issuance of a gaming license pursuant to Sec.  
558.3 of this chapter, the Commission receives reliable information 
indicating that a key employee or a primary management official is not 
eligible for a license under Sec.  556.5 of this chapter, 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) The right to a revocation hearing shall vest upon receipt of a 
license or at such earlier time as is determined by tribal law, 
regulation, and/or policy.
    (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 paragraph (a) of this section.
0
12. Revise Sec.  558.6 to read as follows:


Sec.  558.6  Compliance with this part.

    All tribal gaming ordinances and ordinance amendments that have 
been approved by the Chair prior to [effective date of final rule], and 
that reference this part do not need to be amended to comply with this 
section. All future ordinance submissions, however, must comply.

    Dated: March 27, 2023.
Edward Simermeyer,
Chairman.
Jean Hovland,
Vice Chair.
[FR Doc. 2023-06765 Filed 4-13-23; 8:45 am]
BILLING CODE 7565-01-P