II

106TH CONGRESS

1ST SESSION S. 399

To amend the Indian Gaming Regulatory Act, and for other purposes.

IN THE SENATE OF THE UNITED STATES

FEBRUARY 10, 1999

Mr. CAMPBELL (for himself and Mr. INOUYE) introduced the following bill;

which was read twice and referred to the Committee on Indian Affairs

A BILL

To amend the Indian Gaming Regulatory Act, and for other

purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Indian Gaming Regu5 latory Improvement Act of 1999’’.

6 SEC. 2. AMENDMENTS TO THE INDIAN GAMING REGU7 LATORY ACT.

8 The Indian Gaming Regulatory Act (25 U.S.C. 2701

9 et seq.) is amended—

10 (1) by striking the first section and inserting

11 the following:
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1 ‘‘SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

2 ‘‘(a) SHORT TITLE.—This Act may be cited as the

3 ‘Indian Gaming Regulatory Act’.

4 ‘‘(b) TABLE OF CONTENTS.—The table of contents

5 for this Act is as follows:

‘‘Sec. 1. Short title; table of contents.

‘‘Sec. 2. Congressional findings.

‘‘Sec. 3. Purposes.

‘‘Sec. 4. Definitions.

‘‘Sec. 5. National Indian Gaming Commission.

‘‘Sec. 6. Powers of Chairman.

‘‘Sec. 7. Powers of Commission.

‘‘Sec. 8. Commission staffing.

‘‘Sec. 9. Commission—access to information.

‘‘Sec. 10. Minimum standards.

‘‘Sec. 11. Rulemaking.

‘‘Sec. 12. Tribal gaming ordinances.

‘‘Sec. 13. Management contracts.

‘‘Sec. 14. Civil penalties.

‘‘Sec. 15. Judicial review.

‘‘Sec. 16. Subpoena and deposition authority.

‘‘Sec. 17. Investigative powers.

‘‘Sec. 18. Commission funding.

‘‘Sec. 19. Authorization of appropriations.

‘‘Sec. 20. Gaming on lands acquired after October 17, 1988.

‘‘Sec. 21. Dissemination of information.

‘‘Sec. 22. Severability.

‘‘Sec. 23. Criminal penalties.

‘‘Sec. 24. Conforming amendment.’’;

6 (2) by striking sections 2 and 3 and inserting

7 the following:

8 ‘‘SEC. 2. CONGRESSIONAL FINDINGS.

9 ‘‘Congress finds that—

10 ‘‘(1) Indian tribes are—

11 ‘‘(A) engaged in the operation of gaming

12 activities on Indian lands as a means of gener13 ating tribal governmental revenue; and

14 ‘‘(B) licensing those activities;
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1 ‘‘(2) because of the unique political and legal

2 relationship between the United States and Indian

3 tribes, Congress has the responsibility of protecting

4 tribal resources and ensuring the continued viability

5 of Indian gaming activities conducted on Indian

6 lands;

7 ‘‘(3) clear Federal standards and regulations

8 for the conduct of gaming on Indian lands will assist

9 tribal governments in assuring the integrity of gam10 ing activities conducted on Indian lands;

11 ‘‘(4) a principal goal of Federal Indian policy is

12 to promote tribal economic development, tribal self13 sufficiency, and strong Indian tribal governments;

14 ‘‘(5) Indian tribes have the exclusive right to

15 regulate gaming activity on Indian lands, if the gam16 ing activity—

17 ‘‘(A) is not specifically prohibited by Fed18 eral law; and

19 ‘‘(B) is conducted within a State that does

20 not, as a matter of criminal law and public pol21 icy, prohibit that gaming activity;

22 ‘‘(6) Congress has the authority to regulate the

23 privilege of doing business with Indian tribes in In24 dian country (as defined in section 1151 of title 18,

25 United States Code);
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1 ‘‘(7) systems for the regulation of gaming ac2 tivities on Indian lands should meet or exceed feder3 ally established minimum regulatory requirements;

4 ‘‘(8) the operation of gaming activities on In5 dian lands has had a significant impact on com6 merce with foreign nations, and among the several

7 States, and with the Indian tribes; and

8 ‘‘(9) the Constitution of the United States vests

9 Congress with the powers to regulate commerce with

10 foreign nations, and among the several States, and

11 with the Indian tribes, and this Act is enacted in the

12 exercise of those powers.

13 ‘‘SEC. 3. PURPOSES.

14 ‘‘The purposes of this Act are as follows:

15 ‘‘(1) To ensure the right of Indian tribes to

16 conduct gaming activities on Indian lands in a man17 ner consistent with—

18 ‘‘(A) the inherent sovereign rights of In19 dian tribes; and

20 ‘‘(B) the decision of the Supreme Court in

21 California et al. v. Cabazon Band of Mission In22 dians et al. (480 U.S.C. 202, 107 S. Ct. 1083,

23 94 L. Ed. 2d 244 (1987)), involving the

24 Cabazon and Morongo bands of Mission Indi25 ans.
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1 ‘‘(2) To provide a statutory basis for the con2 duct of gaming activities on Indian lands as a means

3 of promoting tribal economic development, tribal

4 self-sufficiency, and strong Indian tribal govern5 ments.

6 ‘‘(3) To provide a statutory basis for the regu7 lation of gaming activities on Indian lands by an In8 dian tribe that is adequate to shield those activities

9 from organized crime and other corrupting influ10 ences, to ensure that an Indian tribal government is

11 the primary beneficiary of the operation of gaming

12 activities, and to ensure that gaming is conducted

13 fairly and honestly by both the operator and play14 ers.’’;

15 (3) in section 4—

16 (A) by striking paragraphs (1) through (6)

17 and inserting the following:

18 ‘‘(1) APPLICANT.—The term ‘applicant’ means

19 any person who applies for a license pursuant to this

20 Act, including any person who applies for a renewal

21 of a license.

22 ‘‘(2) ATTORNEY GENERAL.—The term ‘Attor23 ney General’ means the Attorney General of the

24 United States.
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1 ‘‘(3) CHAIRMAN.—The term ‘Chairman’ means

2 the Chairman of the Commission.

3 ‘‘(4) CLASS I GAMING.—The term ‘class I gam4 ing’ means social games played solely for prizes of

5 minimal value or traditional forms of Indian gaming

6 engaged in by individuals as a part of, or in connec7 tion with, tribal ceremonies or celebrations.’’;

8 (B) by redesignating paragraphs (7) and

9 (8) as paragraphs (5) and (6), respectively;

10 (C) in paragraph (5), as redesignated by

11 subparagraph (B) of this paragraph, by striking

12 ‘‘(5)(A) The term’’ and inserting ‘‘(5) CLASS II

13 GAMING.—(A) The term’’;

14 (D) in paragraph (6), as redesignated by

15 subparagraph (B) of this paragraph, by striking

16 ‘‘(6) The term’’ and inserting ‘‘(6) CLASS III

17 GAMING.—The term’’; and

18 (E) by adding after paragraph (6), as re19 designated by subparagraph (B) of this para20 graph, the following:

21 ‘‘(7) COMMISSION.—The term ‘Commission’

22 means the National Indian Gaming Commission es23 tablished under section 5.

24 ‘‘(8) COMPACT.—The term ‘compact’ means an

25 agreement relating to the operation of class III gam-
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1 ing on Indian lands that is entered into by an Indian

2 tribe and a State and that is approved by the Sec3 retary.

4 ‘‘(9) GAMING OPERATION.—The term ‘gaming

5 operation’ means an entity that conducts class II or

6 class III gaming on Indian lands.

7 ‘‘(10) INDIAN LANDS.—The term ‘Indian lands’

8 means—

9 ‘‘(A) all lands within the limits of any In10 dian reservation; and

11 ‘‘(B) any lands the title to which is held in

12 trust by the United States for the benefit of

13 any Indian tribe or individual or held by any

14 Indian tribe or individual subject to restriction

15 by the United States against alienation and

16 over which an Indian tribe exercises govern17 mental power.

18 ‘‘(11) INDIAN TRIBE.—The term ‘Indian tribe’

19 means any Indian tribe, band, nation, or other orga20 nized group or community of Indians that—

21 ‘‘(A) is recognized as eligible by the Sec22 retary for the special programs and services

23 provided by the United States to Indians be24 cause of their status as Indians; and
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1 ‘‘(B) is recognized as possessing powers of

2 self-government.

3 ‘‘(12) MANAGEMENT CONTRACT.—The term

4 ‘management contract’ means any contract or collat5 eral agreement between an Indian tribe and a con6 tractor, if that contract or agreement provides for

7 the management of all or part of a gaming oper8 ation.

9 ‘‘(13) MANAGEMENT CONTRACTOR.—The term

10 ‘management contractor’ means any person entering

11 into a management contract with an Indian tribe or

12 an agent of the Indian tribe for the management of

13 a gaming operation, including any person with a fi14 nancial interest in that contract.

15 ‘‘(14) NET REVENUES.—With respect to a gam16 ing activity, net revenues shall constitute—

17 ‘‘(A) the annual amount of money wa18 gered; reduced by

19 ‘‘(B)(i) any amounts paid out during the

20 year involved for prizes awarded;

21 ‘‘(ii) the total operating expenses for the

22 year involved (excluding any management fees)

23 associated with the gaming activity; and

24 ‘‘(iii) an allowance for amortization of cap25 ital expenses for structures.
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1 ‘‘(15) PERSON.—The term ‘person’ means—

2 ‘‘(A) an individual; or

3 ‘‘(B) a firm, corporation, association, orga4 nization, partnership, trust, consortium, joint

5 venture, or other nongovernmental entity.

6 ‘‘(16) SECRETARY.—The term ‘Secretary’

7 means the Secretary of the Interior.’’;

8 (4) in section 5(b)(3), by striking ‘‘At least two

9 members of the Commission shall be enrolled mem10 bers of any Indian tribe.’’ and inserting ‘‘No fewer

11 than 2 members of the Commission shall be individ12 uals who—

13 ‘‘(A) are each enrolled as a member of an

14 Indian tribe; and

15 ‘‘(B) have extensive experience or expertise

16 in Indian affairs or policy.’’;

17 (5) in section 6(a)(4), by striking ‘‘provided in

18 sections 11(d)(9) and 12’’ and inserting ‘‘provided in

19 sections 12(d)(9) and 13’’;

20 (6) by striking section 13;

21 (7) by redesignating section 12 as section 13;

22 (8) by redesignating section 11 as section 12;

23 (9) by striking section 10 and inserting the fol24 lowing:
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1 ‘‘SEC. 10. MINIMUM STANDARDS.

2 ‘‘(a) CLASS II GAMING.—As of the date of enactment

3 of the Indian Gaming Regulatory Improvement Act of

4 1999, an Indian tribe shall retain the rights of that Indian

5 tribe, with respect to class II gaming and in a manner

6 that meets or exceeds the minimum Federal standards es7 tablished under section 11, to—

8 ‘‘(1) monitor and regulate that gaming;

9 ‘‘(2) conduct background investigations; and

10 ‘‘(3) establish and regulate internal control sys11 tems.

12 ‘‘(b) CLASS III GAMING UNDER A COMPACT.—With

13 respect to class III gaming conducted under a compact

14 entered into under this Act, an Indian tribe or State (or

15 both), as provided in such a compact or a related tribal

16 ordinance or resolution shall, in a manner that meets or

17 exceeds the minimum Federal standards established by

18 the Commission under section 11—

19 ‘‘(1) monitor and regulate that gaming;

20 ‘‘(2) conduct background investigations; and

21 ‘‘(3) establish and regulate internal control sys22 tems.’’;

23 (10) by inserting after section 10 the following:

24 ‘‘SEC. 11. RULEMAKING.

25 ‘‘(a) IN GENERAL.—Subject to subsection (b), not

26 later than 180 days after the date of enactment of the
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1 Indian Gaming Regulatory Improvement Act of 1999, the

2 Commission shall, in accordance with the rulemaking pro3 cedures under chapter 5 of title 5, United States Code,

4 promulgate minimum Federal standards relating to back5 ground investigations, internal control systems, and licens6 ing standards described in section 10. In promulgating the

7 regulations under this section, the Commission shall con8 sult with the Attorney General, Indian tribes, and appro9 priate States.

10 ‘‘(b) FACTORS FOR CONSIDERATION.—In promulgat11 ing the minimum standards under this section, the Com12 mission may give appropriate consideration to existing in13 dustry standards at the time of the development of the

14 standards and, in addition to considering those existing

15 standards, the Commission shall consider—

16 ‘‘(1) the unique nature of tribal gaming as com17 pared to commercial gaming, other governmental

18 gaming, and charitable gaming;

19 ‘‘(2) the broad variations in the nature, scale,

20 and size of tribal gaming activity;

21 ‘‘(3) the inherent sovereign rights of Indian

22 tribes with respect to regulating the affairs of Indian

23 tribes;

24 ‘‘(4) the findings and purposes under sections 2

25 and 3;
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1 ‘‘(5) the effectiveness and efficiency of a na2 tional licensing program for vendors or management

3 contractors; and

4 ‘‘(6) any other matter that is consistent with

5 the purposes under section 3.’’;

6 (11) in section 12, as redesignated by para7 graph (8) of this section—

8 (A) by striking subsection (a) and insert9 ing the following:

10 ‘‘(a) CLASS I GAMING.—Class I gaming on Indian

11 lands shall be within the exclusive jurisdiction of the In12 dian tribes and shall not be subject to the provisions of

13 this Act.’’;

14 (B) in subsection (b)—

15 (i) in paragraph (1)—

16 (I) in subparagraph (A), by strik17 ing ‘‘and’’ at the end;

18 (II) in subparagraph (B), by

19 striking the period at the end and in20 serting ‘‘; and’’; and

21 (III) by striking the flush lan22 guage following subparagraph (B) and

23 inserting the following:

24 ‘‘(C) such Indian gaming meets or exceeds

25 the requirements of this section and the stand-
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1 ards established by the Commission under sec2 tion 11.’’;

3 (ii) in paragraph (2)—

4 (I) in subparagraph (D), by

5 striking ‘‘$25,000’’ and inserting

6 ‘‘$100,000’’;

7 (II) in subparagraph (E), by

8 striking ‘‘and’’ at the end; and

9 (III) in subparagraph (F)—

10 (aa) by striking subclause

11 (I) of clause (ii) and inserting the

12 following:

13 ‘‘(I) a tribal license for primary man14 agement officials and key employees of the

15 gaming enterprise, issued in accordance

16 with the standards established by the Com17 mission under section 11 with prompt noti18 fication to the Commission of the issuance

19 of such licenses;’’; and

20 (bb) in subclause (III) of

21 clause (ii), by striking the period

22 and inserting ‘‘; and’’; and

23 (iii) by adding at the end the follow24 ing:
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1 ‘‘(G) a separate license will be issued by

2 the Indian tribe for each place, facility, or loca3 tion on Indian lands at which class II gaming

4 is conducted;’’;

5 (C) in subsection (c), by striking para6 graph (3) and inserting the following:

7 ‘‘(3) Any Indian tribe that operates, directly or

8 with a management contract, a class III gaming ac9 tivity may petition the Commission for a fee reduc10 tion if the Commission determines that the Indian

11 tribe has—

12 ‘‘(A) continuously conducted that gaming

13 activity for a period of not less than 3 years, in14 cluding a period of not less than 1 year that be15 gins after the date of enactment of the Indian

16 Gaming Regulatory Improvement Act of 1999;

17 ‘‘(B) implemented standards that meet or

18 exceed minimum Federal standards established

19 under section 11;

20 ‘‘(C) otherwise complied with the provi21 sions of this Act; and

22 ‘‘(D) paid all fees and assessments that

23 the Indian tribe is required to pay to the Com24 mission under this Act.’’; and

25 (D) in subsection (d)—
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1 (i) in paragraph (2)(B)(ii), by striking

2 ‘‘section 12(e)(1)(D)’’ and inserting ‘‘sec3 tion 13(e)(1)(D)’’; and

4 (ii) in paragraph (9), by striking ‘‘sec5 tion 12’’ and inserting ‘‘section 13’’;

6 (12) in section 13, as redesignated by para7 graph (7) of this section, by striking ‘‘section

8 11(b)(1)’’ and inserting ‘‘section 12(b)(1)’’;

9 (13) in section 14—

10 (A) in subsection (a)—

11 (i) in paragraph (1), by striking ‘‘sec12 tion 11 or 12’’ and inserting ‘‘section 12

13 or 13’’;

14 (ii) in paragraph (3), by striking ‘‘sec15 tion 11 or 12’’ and inserting ‘‘section 12

16 or 13’’; and

17 (B) in subsection (b)(1), by striking ‘‘sec18 tion 11 or 12’’ and inserting ‘‘section 12 or

19 13’’;

20 (14) in section 15, by striking ‘‘sections 11, 12,

21 13, and 14’’ and inserting ‘‘sections 12, 13, and

22 14’’; and

23 (15) in section 18—

24 (A) in subsection (a)—
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1 (i) by striking ‘‘(a)(1) The’’ and all

2 that follows through the end of paragraph

3 (3) and inserting the following:

4 ‘‘(a) IN GENERAL.—

5 ‘‘(1) ESTABLISHMENT OF SCHEDULE OF

6 FEES.—Except as provided in paragraph (2)(C), the

7 Commission shall establish a schedule of fees to be

8 paid to the Commission annually by each gaming op9 eration that conducts a class II or class III gaming

10 activity that is regulated by this Act.

11 ‘‘(2) RATE OF FEES.—

12 ‘‘(A) IN GENERAL.—The rate of fees under

13 the schedule established under paragraph (1)

14 imposed on the gross revenues from each activ15 ity regulated under this Act shall be as follows:

16 ‘‘(i) No more than 2.5 percent of the

17 first $1,500,000 of those gross revenues.

18 ‘‘(ii) No more than 5 percent of

19 amounts in excess of the first $1,500,000

20 of those gross revenues.

21 ‘‘(B) TOTAL AMOUNT.—The total amount

22 of all fees imposed during any fiscal year under

23 the schedule established under paragraph (1)

24 shall not exceed $8,000,000.
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1 ‘‘(C) MISSISSIPPI BAND OF CHOCTAW.—

2 Nothing in this section shall be interpreted to

3 permit the assessment of fees against the Mis4 sissippi Band of Choctaw for any portion of the

5 3-year period beginning on the date that is 2

6 years before the date of enactment of the In7 dian Gaming Regulatory Improvement Act of

8 1999.

9 ‘‘(3) COMMISSION AUTHORIZATION.—By a vote

10 of not less than 2 members of the Commission, the

11 Commission shall adopt the rate of fees authorized

12 by this section. Those fees shall be payable to the

13 Commission on a quarterly basis.

14 ‘‘(A) IN GENERAL.—The aggregate

15 amount of fees assessed under this section shall

16 be reasonably related to the costs of services

17 provided by the Commission to Indian tribes

18 under this Act (including the cost of issuing

19 regulations necessary to carry out this Act). In

20 assessing and collecting fees under this section,

21 the Commission shall take into account the du22 ties of, and services provided by, the Commis23 sion under this Act.

24 ‘‘(B) FACTORS FOR CONSIDERATION.—In

25 making a determination of the amount of fees
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1 to be assessed for any class II or class III gam2 ing activity, the Commission shall provide for a

3 reduction in the amount of fees that otherwise

4 would be collected on the basis of the following

5 factors:

6 ‘‘(i) The extent of regulation of the

7 gaming activity by a State or Indian tribe

8 (or both).

9 ‘‘(ii) The issuance of a certificate of

10 self-regulation (if any) for that gaming ac11 tivity.

12 ‘‘(C) CONSULTATION.—In establishing a

13 schedule of fees under this subsection, the Com14 mission shall consult with Indian tribes.’’;

15 (ii) by redesignating paragraphs (4)

16 through (6) as paragraphs (5) through (7),

17 respectively; and

18 (iii) by inserting after paragraph (3)

19 the following:

20 ‘‘(4) TRUST FUND.—

21 ‘‘(A) ESTABLISHMENT.—There is estab22 lished in the Treasury of the United States a

23 fund to be known as the Indian Gaming Trust

24 Fund (referred to in this paragraph as the

25 ‘Trust Fund’), consisting of—
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1 ‘‘(i) such amounts as are—

2 ‘‘(I) transferred to the Trust

3 Fund under subparagraph (B)(i); or

4 ‘‘(II) appropriated to the Trust

5 Fund; and

6 ‘‘(ii) any interest earned on the in7 vestment of amounts in the Trust Fund

8 under subparagraph (C).

9 ‘‘(B) TRANSFER OF AMOUNTS EQUIVA10 LENT TO FEES.—

11 ‘‘(i) IN GENERAL.—The Secretary of

12 the Treasury shall transfer to the Trust

13 Fund an amount equal to the aggregate

14 amount of fees collected under this sub15 section.

16 ‘‘(ii) TRANSFERS BASED ON ESTI17 MATES.—The amounts required to be

18 transferred to the Trust Fund under

19 clause (i) shall be transferred not less fre20 quently than quarterly from the general

21 fund of the Treasury to the Trust Fund on

22 the basis of estimates made by the Sec23 retary of the Treasury. Proper adjustment

24 shall be made in amounts subsequently

25 transferred to the extent prior estimates
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1 were in excess of or less than the amounts

2 required to be transferred.

3 ‘‘(C) INVESTMENTS.—

4 ‘‘(i) IN GENERAL.—It shall be the

5 duty of the Secretary of the Treasury to

6 invest such portion of the Trust Fund as

7 is not, in the judgment of the Secretary of

8 the Treasury, required to meet current

9 withdrawals. The Secretary of the Treas10 ury shall invest the amounts deposited

11 under subparagraph (A) only in interest12 bearing obligations of the United States or

13 in obligations guaranteed as to both prin14 cipal and interest by the United States.

15 ‘‘(ii) SALE OF OBLIGATIONS.—Any

16 obligation acquired by the Trust Fund, ex17 cept special obligations issued exclusively

18 to the Trust Fund, may be sold by the

19 Secretary of the Treasury at the market

20 price, and such special obligations may be

21 redeemed at par plus accrued interest.

22 ‘‘(iii) CREDITS TO TRUST FUND.—The

23 interest on, and proceeds from, the sale or

24 redemption of, any obligations held in the
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1 Trust Fund shall be credited to and form

2 a part of the Trust Fund.

3 ‘‘(D) EXPENDITURES FROM TRUST

4 FUND.—

5 ‘‘(i) IN GENERAL.—Amounts in the

6 Trust Fund shall be available to the Com7 mission, as provided in appropriations

8 Acts, for carrying out the duties of the

9 Commission under this Act.

10 ‘‘(ii) WITHDRAWAL AND TRANSFER

11 OF FUNDS.—Upon request of the Commis12 sion, the Secretary of the Treasury shall

13 withdraw amounts from the Trust Fund

14 and transfer such amounts to the Commis15 sion for use in accordance with clause (i).

16 ‘‘(E) LIMITATION ON TRANSFERS AND

17 WITHDRAWALS.—Except as provided in sub18 paragraph (D)(ii), the Secretary of the Treas19 ury may not transfer or withdraw any amount

20 deposited under subparagraph (A).’’; and

21 (B) in subsection (d), by striking ‘‘section

22 11(d)(3)’’ and inserting ‘‘section 12(d)(3)’’.

23 SEC. 3. CONFORMING AMENDMENTS.

24 (a) TITLE 10.—Section 2323a(e)(1) of title 10,

25 United States Code, is amended by striking ‘‘section 4(4)
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1 of the Indian Gaming Regulatory Act (102 Stat. 2468;

2 25 U.S.C. 2703(4))’’ and inserting ‘‘section 4(10) of the

3 Indian Gaming Regulatory Act’’.

4 (b) INTERNAL REVENUE CODE OF 1986.—Section

5 168(j)(4)(A)(iv) of the Internal Revenue Code of 1986 is

6 amended by striking ‘‘Indian Regulatory Act’’ and insert7 ing ‘‘Indian Gaming Regulatory Act’’.

8 (c) TITLE 28.—Title 28, United States Code, is

9 amended—

10 (1) in section 3701(2)—

11 (A) by striking ‘‘section 4(5) of the Indian

12 Gaming Regulatory Act (25 U.S.C. 2703(5))’’

13 and inserting ‘‘section 4(11) of the Indian

14 Gaming Regulatory Act’’; and

15 (B) by striking ‘‘section 4(4) of such Act

16 (25 U.S.C. 2703(4))’’ and inserting ‘‘section

17 4(10) of such Act’’; and

18 (2) in section 3704(b), by striking ‘‘section 4(4)

19 of the Indian Gaming Regulatory Act’’ and inserting

20 ‘‘section 4(10) of the Indian Gaming Regulatory

21 Act’’.

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