Federal Register / Vol. 63, No. 14 /Thursday, January 22, 1998 / Proposed Rules 3289

and

(ii) An undertaking by such person on

behalf of the person seeking a Letter that

at such time as any material

representation made in the request

ceases to be accurate and complete, the

person who has made the request or

received the Letter will promptly submit

a written supplement reflecting all

material changed circumstances.

(4) The request must identify the type

of relief requested and Letter sought and

must clearly state why a Letter is

needed. The request must identify all

relevant legal and factual issues and

must discuss the legal and public policy

bases supporting issuance of the Letter.

(5) The request must contain

references to all relevant authorities,

including the Act, Commission rules,

regulations in this chapter, and orders,

judicial decisions, administrative

decisions, relevant statutory

interpretations and policy statements.

Adverse authority must be cited and

discussed.

(6) The request must identify prior

Letters issued by Commission staff in

response to circumstances similar to

those surrounding the request

(including adverse Letters), and must

identify any conditions imposed by

prior Letters as prerequisites for the

issuance of those Letters.

(7) Requests may ask that, if the

primary relief is denied, alternative

relief be granted.

(d) Filing requirements. Each request

for a Letter must comply with the

following filing requirements:

(1) The request must be made in

writing and signed.

(2) The request must be filed with the

Director, Division of Trading and

Markets, Commodity Futures Trading

Commission, Three Lafayette Centre,

1155 21st Street, N.W., Washington,

D.C. 20581. The Director will route the

request to the appropriate division.

(e) Form of staff response. No grant of

any request governed by this section is

effective unless it is in writing signed by

responsible Commission staff and has

been transmitted in final form to the

requester. Failure by Commission staff

to respond to a request for a Letter does

not constitute approval of the request.

Nothing in this section shall preclude

Commission staff from responding to a

request for a Letter by way of

endorsement or any other abbreviated,

written form of response.

(f) Withdrawal of requests. Once filed,

a request for a Letter may only be

withdrawn if:

(1) A request for withdrawal is made

in writing and makes the following

representations, as applicable, together

with a certification that such

representations are true:

(i) The person on whose behalf the

request was made has determined not to

proceed with the proposed transaction

or activity, or

(ii) Intervening events have rendered

the request moot; or

(2) The request is the subject of a

request for confidential treatment

pursuant to § 140.98 and Commission

staff has notified the requester that the

request for confidential treat-ment will

be denied, in which event the requester

may withdraw the letter within 30 days

after such notification, as provided in

§ 140.98.

(g) Failure to pursue a request. If a

requester fails to respond within 30

calendar days of the date of a request

from Commission staff for additional

information or analysis, Commission

staff generally will issue an adverse

response, unless an extension of time

has been granted.

(h) Confidential treatment. If a

requester seeks confidential treatment of

a request for a Letter that it has filed,

such treatment must be separately

requested in accordance with § 140.98

or § 145.9 of this chapter, as applicable.

(i) Applicability to other sections. The

provisions of this section shall not affect

the requirements of, or otherwise be

applicable to, notice filings required to

be made to claim relief from the Act or

from a Commission rule, regulation or

order including, without limitation,

§§ 4.5, 4.7(a), 4.7(b), 4.12(b), 4.13(b) and

4.14(a)(8) of this chapter.

Issued in Washington, D.C. on January 13,

1998 by the Commission.

Catherine D. Dixon,

Assistant Secretary of the Commission.

[FR Doc. 98–1138 Filed 1–21–98; 8:45 am]

BILLING CODE 6351–01–P

DEPARTMENT OF THE INTERIOR

Bureau of Indian Affairs

25 CFR Part 291

RIN 1076–AD87

Class III Gaming Procedures

AGENCY: Bureau of Indian Affairs,

Interior.

ACTION: Proposed rule.

SUMMARY: The Department has

concluded that it has the authority to

prescribe procedures permitting Class III

gaming when a State interposes its

immunity from suit by an Indian Tribe.

The proposed rule announces the

Department’s determination that the

Secretary may promulgate Class III

gaming procedures under certain

specified circumstances. It also sets

forth the process and standards

pursuant to which any procedures

would be adopted.

DATES: Written comments must be

submitted on or before April 22, 1998 to

be considered.

ADDRESSES: Mail comments to Paula L.

Hart, Indian Gaming Management Staff,

Bureau of Indian Affairs (BIA),

Department of the Interior, MS 2070–

MIB, 1849 C Street, NW, Washington,

DC 20240. Comments may be handdelivered to the same address from 9:00

a.m. to 4:00 p.m. Monday through

Friday or sent by facsimile to (202) 273–

3153. Comments will be made available

for public inspection at this address

from 9:00 a.m. to 4:00 p.m. Monday

through Friday beginning approximately

two weeks after publication of the

proposed rule.

FOR FURTHER INFORMATION CONTACT:

Paula L. Hart, Indian Gaming

Management Staff, Bureau of Indian

Affairs, Department of the Interior, MS

2070–MIB, 1849 C Street, NW,

Washington, DC 20240, Telephone (202)

219–4066.

SUPPLEMENTARY INFORMATION:

Introduction

Congress enacted the Indian Gaming

Regulatory Act (IGRA), 25 U.S.C. 2701–

2721, to provide a statutory basis for the

operation and regulation of Indian

gaming and to protect Indian gaming as

a means of generating revenue for tribal

governments. Prior to the enactment of

IGRA, states generally were precluded

from any regulation of gaming on Indian

reservations. See California v. Cabazon

Band of Mission Indians, 480 U.S. 202

(1987). IGRA, by offering States an

opportunity to participate with Indian

Tribes in developing regulations for

Indian gaming, ‘‘extends to States a

power withheld from them by the

Constitution.’’ Seminole Tribe of Florida

v. State of Florida, 116 S. Ct. 1114, 1124

(1996).

Since IGRA’s passage in 1988, more

than 150 compacts in more than 20

States have been successfully negotiated

by Tribes and States, and approved by

the Secretary. Today, Indian gaming

generates significant revenue for Indian

Tribes. As required by IGRA, gaming

revenues are being devoted primarily to

providing essential government services

such as roads, schools, and hospitals, as

well as economic development.

IGRA divides Indian gaming into

three categories. This proposed rule

addresses only the conduct of Class III
3290 Federal Register / Vol. 63, No. 14 /Thursday, January 22, 1998 / Proposed Rules

1 ‘‘The Commissioner of Indian Affairs shall,

under the direction of the Secretary of the Interior,

and agreeably to such regulations as the President

may prescribe, have the management of all Indian

affairs and all matters arising out of Indian

relations.’’ 25 U.S.C. 2.’’ The President may

prescribe such regulations as he may think fit for

carrying into effect the various provisions of any act

relating to Indian affairs, and for the settlement of

the accounts of Indian affairs.’’ 25 U.S.C. 9; see also

43 U.S.C. 1457 (charging Secretary of Interior with

administration of ‘‘public business’’ related to

Indians).

gaming, which primarily includes slot

machines, casino games, banking card

games, dog racing, horse racing, and

lotteries. 25 U.S.C. 2703(8); 25 CFR

§ 502.4. Under IGRA, the conduct of

‘‘Class III gaming activities’’ is lawful on

Indian lands only if such activities (1)

are authorized by an ordinance adopted

by the governing body of the Tribe and

approved by the Chairman of the

National Indian Gaming Commission

(NIGC), (2) are located in a State that

permits such gaming for any purpose by

any person, organization, or entity, and

(3) are conducted in conformance with

a Tribal-State compact. 25 U.S.C.

2710(d)(1)(B). The proposed regulations

which follow relate primarily to this

third requirement, i.e., the Tribal-State

compact.

Under IGRA, a Tribe interested in

operating Class III gaming initiates the

compacting process by requesting the

State to enter into negotiations. 25

U.S.C. 2710(d)(3)(A). Upon receiving

such a request, the State is obliged ‘‘to

negotiate with the Indian Tribe in good

faith to enter into such a compact.’’ Id.

If the State fails to negotiate in good

faith, the Tribe may initiate an action

against the State in Federal district

court. 25 U.S.C. 2710(d)(7)(A)(I). If the

court finds that the State has failed to

negotiate in good faith, it must order the

State and the Tribe to conclude a

compact within 60 days. 25 U.S.C.

2710(d)(7)(B)(iii). If the State and Tribe

fail to conclude a compact within that

period, each side must submit their last

best offer to a court-appointed mediator,

who selects one of the proposals. 25

U.S.C. 2710(d)(7)(B)(iv). If the State

consents to that proposal, it is treated as

a Tribal-State compact. 25 U.S.C.

2710(d)(7)(B)(vi). If the State does not

consent, the Secretary of the Interior

shall prescribe procedures (1) which are

consistent with the proposed compact

selected by the mediator, the provisions

of IGRA, and the relevant provisions of

State laws, and (2) under which Class III

gaming may be conducted on the Indian

lands over which the Indian Tribe has

jurisdiction. 25 U.S.C. 2710(d)(7)(B)(vii).

In Seminole Tribe of Florida v.

Florida, the Supreme Court held that a

State may assert an Eleventh

Amendment immunity defense to avoid

a lawsuit brought by a Tribe alleging

that the State did not negotiate in good

faith. After the Seminole decision, some

States have signaled their intention to

assert immunity to suit in Federal court.

Claiming immunity will, if no further

action is taken, create an effective State

veto over IGRA’s dispute resolution

system and therefore will stalemate the

compacting process. The proposed

rulemaking contemplates that the

Secretary would prescribe Class III

gaming procedures to end the stalemate.

Secretarial Authority to Prescribe

Procedures

On May 10, 1996, the BIA published

an ‘‘Advance Notice of Proposed

Rulemaking’’ (hereafter, ANPR) in

response to the United States Supreme

Court’s decision in Seminole Tribe of

Florida v. State of Florida, 116 S. Ct.

1114 (1996). 61 FR 21394 (May 10,

1996). In that ANPR, the Department

posed, among others, the question of

‘‘[w]hether and under what

circumstances, the Secretary of the

Interior is empowered to prescribe

‘procedures’ for the conduct of Class III

gaming when a State interposes an

Eleventh Amendment defense to an

action pursuant to 25 U.S.C.

2710(d)(7)(B).’’ The Secretary of the

Interior, in consultation with the

Solicitor, has determined that he

possesses legal authority to promulgate

procedures setting out the terms under

which Class III gaming may take place

when a State asserts its immunity from

suit.

The Secretary’s authority arises from

the statutory delegation of powers

contained in 25 U.S.C. 2710

(d)(7)(B)(vii) of IGRA and 25 U.S.C. 2

and 9. As the Eleventh Circuit Court of

Appeals explained, in the case where

the Supreme Court ultimately found the

States could assert Eleventh amendment

immunity:

We are left with the question as to what

procedure is left for an Indian Tribe faced

with a State that not only will not negotiate

in good faith, but also will not consent to

suit. The answer, gleaned from the statute, is

simple. One hundred and eighty days after

the Tribe first requests negotiations with the

State, the Tribe may file suit in district court.

If the State pleads an Eleventh Amendment

defense, the suit is dismissed, and the Tribe

pursuant to 25 U.S.C. § 2710(d)(7)(B)(vii),

then may notify the Secretary of the Interior

of the Tribe’s failure to negotiate a compact

with the State. The Secretary may then

prescribe regulations governing Class III

gaming on the Tribe’s lands. This solution

conforms with IGRA and serves to achieve

Congress’ goals, as delineated in §§ 2701–02.

Seminole Tribe of Florida v. State of

Florida, 11 F.3d 1016, 1029 (11th Cir.

1994) (dictum), aff’d on other grounds,

116 S.Ct. 1114 (1996).

Although Congress likely did not

foresee the States’ refusal to participate

in the court-ordered mediation process,

it plainly authorized the Secretary to

permit Class III gaming in the event that

the court-supervised process failed to

produce a joint compact. The power of

an agency to administer a congressional

mandate like this one is not restricted to

circumstances explicitly described by

Congress; the agency’s power also

extends to circumstances that Congress,

for a variety of reasons, may not have

anticipated or articulated in the statute.

When Congress has not ‘‘directly spoken

to the precise question at issue,’’ courts

‘‘must sustain the Secretary’s approach

so long as it is based on a reasonable

construction of the statute.’’ Auer v.

Robbins, 117 S.Ct. 905, 909 (1997),

quoting Chevron U.S.A., Inc. v. Natural

Resources Defense Council, 467 U.S.

837, 842–43 (1984); Morton v. Ruiz, 415

U.S. 199 (1974); Kenneth Culp Davis &

Richard J. Pierce Jr., Administrative Law

Treatise § 3.3 (3d ed. 1994). As

explained in the proposed rule, the

Secretary will provide procedures only

when a State has successfully asserted

its immunity from an Indian Tribe’s

good faith lawsuit. Moreover, the

proposed rule generally mirrors the

mediation scheme provided in IGRA to

the maximum practicable extent.

Along with the specific authority

under section 2701(d)(7)(B)(vii),

Congress has delegated to the Executive

under 25 U.S.C. 2 and 9 broad authority

to issue regulations necessary to manage

Indian affairs and carry into effect

legislation relating to such affairs. 1 The

courts on many occasions have upheld

the exercise of this authority. In

Washington v. Washington State

Commercial Passenger Fishing Vessel

Association, 443 U.S. 658, 691 (1979),

for example, the Court noted with

approval regulations protective of offreservation Indian fishing rights.

Although there was no explicit

delegation of authority to adopt fishing

regulations in the Treaty reserving the

right, the Supreme Court recognized

that the Secretary’s ‘‘general Indian

powers’’ embodied in 25 U.S.C. 2 and 9

gave him the authority to adopt

regulations over Indian affairs. See also

United States v. Eberhardt, 789 F.2d

1354, 1360–61 (9th Cir. 1986);

Parravano v. Masten, 70 F.3d 539 (9th

Cir. 1995), cert. denied, l U.S. l, 116

S. Ct. 2546 (1996); United States v.

Michigan, 623 F.2d 448, 450 (6th Cir.

1980); James v. U.S. Dep’t. of Health

and Human Services, 824 F.2d 1132,

1137 (D.C. Cir. 1987). Such cases fully

support the exercise of Secretarial
Federal Register / Vol. 63, No. 14 /Thursday, January 22, 1998 / Proposed Rules 3291

2The Supreme Court in Seminole did not resolve

the Ninth and Eleventh Circuits’ conflicting dicta,

stating, ‘‘[w]e do not consider, and express no

opinion upon, that portion of the position of the

decision below that provides a substitute remedy

for a Tribe bringing suit. See 11 F.3d 1016, 1029

(C.A. 11)(case below).’’ 116 S. Ct. at 1133 n.18.

3Twenty-two States filed joint comments on the

ANPR indicating their ‘‘view that the Court in

Seminole did not invalidate any portion of IGRA,

but that it left the Act intact. The decision merely

revitalized a jurisdictional defense of the States. If

a State consents to suit in Federal court, then the

complete remedial scheme envisioned by Congress

can be played out.’’ Comments of Florida, et al., at

8 (June 28, 1996). We agree that no part of the

statute need be invalidated, or ‘‘severed’’ from the

statute. We note that IGRA does, however, contain

a severability provision, 25 U.S.C. 2721. See

generally Alaska Airlines v. Brock, 480 U.S. 678,

686 (1987).

authority to promulgate regulations

governing and protecting Indian rights,

such as the right to engage in gaming

activities, that are rooted in Federal law.

In comments on the ANPR, some

States have suggested that the Supreme

Court’s decision in Organized Village of

Kake v. Egan, 369 U.S. 60 (1962), may

preclude the Secretary’s exercise of rulemaking authority for gaming

procedures. See Comments of Florida, et

al., supra, at 9. In Organized Village of

Kake, the Secretary purported to

authorize off-reservation fisheries in

Alaska pursuant to his general authority

over Indian affairs and the White Act,

48 U.S.C. 221–228. However, no treaty,

executive order, statute, or Federal

common law established tribal fishing

rights. Accordingly, the Court struck

down the Secretary’s regulations

authorizing the use of fish traps in

violation of State law because the Tribe

had no ‘‘fishing rights derived from

Federal laws.’’ Id. at 76. See

McClanahan v. Arizona State Tax

Com’n., 411 U.S. 164, 176 n.15 (1973)

(distinguishing Organized Village of

Kake as limited to situations involving

non-reservation Indians without

Federally-protected rights); see also

Clinton, et al., American Indian Law at

593 (3d ed. 1991).

Here, in contrast, the Tribes’ Federal

common law right to engage in gaming

activities free of most State regulation

on Indian land was recognized in

California v. Cabazon Band of Mission

Indians, 480 U.S. 202 (1987) and preexisted adoption of IGRA. Because tribal

gaming rights are rooted in Federal law,

25 U.S.C. 2 and 9 give the Secretary the

authority to adopt regulations to carry

into effect those rights.

The Ninth Circuit, in a case vacated

after the Supreme Court’s decision in

Seminole, expressed concern that the

Secretary would undermine

congressional intent if he imposed

regulations for Class III gaming when a

State asserted immunity. Spokane Tribe

of Indians v. Washington, 28 F.3d. 991,

997 (9th Cir. 1994) (dictum), vacated

and remanded, ll U.S. ll, 116 S. Ct.

1410 (1996). The court relied on the

provision in IGRA that the Secretary act

only after a State is provided the

opportunity to participate in

negotiations and mediation.2

In our view, Congress had at least

three purposes in enacting IGRA: to

recognize and give a statutory structure

for gaming as a means of promoting

tribal economic development, self

sufficiency and strong tribal

government; to provide a basis for

regulating Indian gaming to ensure that

it is conducted fairly and that the Indian

Tribe is the primary beneficiary of the

activity; and finally, to afford an

opportunity for States to participate in

the establishment and conduct of Indian

gaming through Tribal-State compacts,

but also to make a Federal backstop

available should a consensual TribalState compact not be reached. If the

Secretary were unable to issue

procedures to permit gaming when a

State refused to submit to a Federal

court the issue of whether it was

bargaining in good faith, that State

would effectively be awarded a veto

over all Class III Indian gaming within

its borders. Congress did not

contemplate or authorize such a State

veto in IGRA.

The proposed rules are faithful to

Congress’ intent that States be able to

participate in the establishment and

regulation of Class III gaming, through

negotiation and mediation, and that

Indian gaming will be protected from

the influence of organized crime. Thus,

contrary to the concern expressed by the

Ninth Circuit, the approach of the

proposed regulations is not to

undermine congressional intent;

instead, the regulations provide the

tools necessary to fulfill congressional

intent in the wake of Seminole.3

Faced with the ‘‘problem of defining

the bounds of its regulatory authority,

an agency may appropriately look to the

* * * underlying policies of its

statutory grants of authority.’’ United

States v. Riverside Bayview Homes, Inc.,

474 U.S. 121, 132 (1985). In this case,

IGRA’s underlying policies strongly

support the issuance of the proposed

rule. In addition, it is a well-settled

principle of Indian law that Indian

affairs statutes be construed where

possible to benefit Tribes, not in a way

that results in the backhanded

deprivation of tribal rights. Bryan v.

Itasca County, 426 U.S. 373, 379 (1976);

C. Wilkinson, American Indians, Time,

and the Law 46–52 (1987). For these

reasons, the Secretary concludes that he

has the authority to prescribe the

following rule.

The Department invites comment on

the legal analysis set forth above and in

the other sections of this document.

Summary of the Proposed Rule

The proposed rule tracks IGRA’s

negotiation and mediation process,

adjusted only to the extent necessary to

reflect the unavailability of tribal access

to Federal court where a State refuses to

waive sovereign immunity. The

proposed rule applies only where a

Tribe asserts that a State is not

negotiating in good faith, files suit

against the State in Federal court in

accordance with IGRA, but cannot

proceed in Federal court because the

State refuses to waive its sovereign

immunity from suit. In cases in which

a State chooses not to assert a sovereign

immunity defense, these proposed rules

would not apply. Instead, the

negotiation and mediation process set

forth in Section 2710(d)(7) of IGRA

would continue under the supervision

of the court.

In those cases in which a State

interposes a sovereign immunity

defense to a tribal lawsuit in Federal

court, the proposed regulations establish

a process for obtaining State

participation in the compacting process,

prior to the Secretary’s identification of

procedures. It is important to emphasize

that, under the proposed rules, the

Secretary will not adopt procedures in

any specific situation unless he first

determines that the State has failed to

bargain in good faith. The Department

expects that, in most cases, this will

require addressing the applicable scope

of gaming under State law and IGRA.

Scope of gaming is discussed further

below.

The steps set forth in the proposed

rule include:

1. Following dismissal on grounds of

sovereign immunity of a Tribe’s suit brought

pursuant to 25 U.S.C. 2710(d)(7) against a

State, the Tribe would have the opportunity

to submit a request to the Department to

establish gaming procedures. The procedures

submitted by the Tribe would be required to

address all of the issues identified in the

proposed rule, including the scope of the

gaming activities being requested by the

Tribe; the Tribe’s position regarding whether

the State has negotiated with the Tribe in

good faith within the meaning of IGRA; and

detailed mechanisms for regulation of the

gaming, including assurances that games will

be conducted fairly and that the financial

integrity of the entire operation will be

safeguarded. Because the good faith

bargaining issue often turns on the question

of the appropriate scope of gaming, the Tribe

will be asked to provide a legal analysis
3292 Federal Register / Vol. 63, No. 14 /Thursday, January 22, 1998 / Proposed Rules

4The Johnson Act makes it ‘‘unlawful to

manufacture, recondition, repair, sell, transport,

possess, or use any gambling device * * * within

Indian country as defined in 1151 of Title 18[.]’’ 15

U.S.C. 1175. It does not apply when there is a

Tribal-State compact ‘‘in effect.’’ 25 U.S.C.

2710(d)(6). Section 23 of IGRA provides that:

(a) Subject to subsection (c), for purposes of

Federal law, all State laws pertaining to the

licensing, regulation, or prohibition of gambling,

including but not limited to criminal sanctions

applicable thereto, shall apply in Indian country in

the same manner and to the same extent as such

laws apply elsewhere in the State.

* * * * *

For the purpose of this section, the term gambling

does not include:

* * * * *

(2) Class III gaming conducted under a TribalState compact approved under 11(d)(8) of the IGRA

that is in effect. codified at 18 U.S.C. 1166

(emphasis added).

supporting the proposed scope of gaming in

view of State prohibitions and other policies

on specific types of gaming.

2. The Department would notify the Tribe

within 15 days that it has received the

proposal and whether it is complete. Within

30 days the Department will notify the Tribe

whether it is eligible for procedures. The

Department will not make a determination of

the ‘‘good faith’’ issue at this point.

3. Following issuance of a notice of

completeness and eligibility, the Department

will notify the State of the Tribe’s request for

the issuance of procedures, and solicit the

State’s comments on the Tribe’s proposed

procedures, including any comments on the

proposed scope of gaming. The State also

will be asked to comment on the Tribe’s

statements regarding whether the State has

negotiated in good faith within the meaning

of IGRA, particularly on the scope of gaming

issue. The State will also be invited to submit

alternative proposed procedures. The State

will have 60 days to respond.

4. Based on its review of the submissions

of the Tribe and the State, the Department

shall make a determination whether the State

is negotiating in good faith with the Tribe. If

the Department determines that the State is

not negotiating in good faith, and the State

has not submitted an alternative proposal,

the Department will advise the State and

Indian Tribe of: (a) its approval of the Tribe’s

proposal; (b) its rejection of the Tribe’s

proposal because of its failure to meet the

substantive standards in the regulation,

§ 291.8; or (c) its convening of an informal

conference with the State and Tribe within

30 days for the purpose of resolving any areas

of disagreement.

5. Alternatively, if the State submits

objections to the Indian Tribe’s proposal and

offers alternative proposed procedures, the

Tribe must file objections to the State’s

proposal within 60 days. If the Tribe does not

submit objections to the proposed

procedures, the Secretary will adopt the

State’s proposed procedures unless they do

not meet the substantive standards in the

regulations, § 291.8.

6. If the Indian Tribe objects to the State’s

proposed procedures, the Secretary will

appoint a mediator who will receive ‘‘last

best offers’’ from the State and Tribe. The

mediator must then submit to the Secretary

the proposed procedures that best comport

with applicable Federal and State law.

Within 60 days of receipt of the mediator’s

recommendation, the Secretary must notify

the State and Tribe of his decision to approve

or disapprove the procedures submitted by

the mediator, or prescribe such procedures as

he determines appropriate that are consistent

with State law and the provisions of IGRA.

The Johnson Act and IGRA’s Criminal

Provision

The Secretary has also considered the

application of criminal prohibitions

found in IGRA and the Johnson Act and

has concluded that those prohibitions

would not apply upon the adoption of

‘‘procedures’’ pursuant to these

proposed regulations. The Johnson Act

and section 23 of IGRA make most Class

III gaming in Indian country illegal

unless conducted pursuant to an

approved compact that is ‘‘in effect.’’ 4

In comments on the ANPR, some States

argue that these criminal statutes are

applicable unless there is a compact

that: (1) has been voluntarily entered

into by a State and an Indian Tribe, 25

U.S.C. 2710(d)(8)(A); and (2) is ‘‘in

effect’’ within the meaning of IGRA by

virtue of having been approved by the

Secretary and published in the Federal

Register. 25 U.S.C. 2710(d)(3)(B). See

Comments of Arizona at 18–20;

Comments of Florida at 10.

That reading of IGRA is inconsistent

with the statute when read as a whole,

and must therefore be rejected. The

Supreme Court has long recognized that:

‘‘[i]t is a fundamental canon of statutory

construction that the words of a statute

must be read in their context and with

a view to their place in the overall

statutory scheme.’’ Davis v. Michigan

Dept. of Treasury, 489 U.S. 803, 809

(1989); see also King v. St. Vincent’s

Hospital, 502 U.S. 215, 221 n.10 (1991)

(‘‘in construing statute [sic] court should

adopt sense of words which best

harmonizes with context and promotes

policy and objectives of legislature,’’

paraphrasing United States v. Hartwell,

73 U.S. (6 Wall.) 385, 398 (1868)). Most

importantly, statutes must be read to

give effect to every provision. Rake v.

Wade, 508 U.S. 464, 471 (1994).

The States’ construction would render

the section of IGRA authorizing the

Secretary to establish ‘‘procedures’’ for

Class III gaming meaningless, because

thus woodenly read, no compact can be

‘‘in effect’’ absent a State’s agreement to

it. See 25 U.S.C. 2710(d)(3)(B) (compact

entered into by Tribe and State ‘‘shall

take effect only when notice of approval

of such compact has been published by

the Secretary in the Federal Register’’).

Thus, even if the Supreme Court had

not decided Seminole as it did, under

Florida and Arizona’s reading of the

statute, Class III gaming would remain

unlawful even if procedures were set in

place by the Secretary after completion

of the judicially-supervised mediation

process.

Put another way, if the statute is read

with such extreme literalness it has a

technical flaw. It provides for

Secretarial procedures in the event that

States and Indian Tribes cannot agree to

a compact. If they can agree, such a

compact becomes ‘‘in effect’’ upon

approval by Secretary. 25 U.S.C.

2710(d)(3)(B). Where a State does not

assert immunity from suit and

procedures ultimately are adopted by

the Secretary without State consent,

IGRA does not call this a compact ‘‘in

effect.’’ Compare 25 U.S.C.

2710(d)(7)(B)(vii), with 25 U.S.C.

2710(d)(3)(B). Yet there is nothing else

in the statute or its legislative history

that even hints that the Johnson Act or

§ 23 of IGRA would criminalize Class III

Indian gaming in such circumstances. If

Florida and Arizona’s construction were

accepted, it would negate the entire part

of IGRA that calls for mediation and

Secretarial procedures.

To avoid such an absurd result, the

statute must be read to mean that all

Secretarial-sanctioned gaming is exempt

from the provisions of the Johnson Act

and section 23 of IGRA. The

‘‘procedures’’ adopted by the

Secretary—whether pursuant to the

judicially-supervised mode prescribed

by IGRA or pursuant to this

rulemaking—are properly viewed as a

full substitute for the compact that

would be ‘‘in effect’’ if a voluntary

agreement had been reached, and thus

qualify for the exemption to the

criminal prohibitions on gaming.

Scope of Gaming

The most frequently contested issue

among Tribes and States relates to the

‘‘scope of gaming’’ permitted under

State law, for this is important in

determining whether particular games

are properly the subject of negotiation

between a Tribe and a State. In the

context of this proposed rulemaking, the

issue bears directly upon whether a

State is bargaining in good faith with a

Tribe and whether a Tribe’s requested

procedures include games lawful under

IGRA. 25 U.S.C. 2710(d)(1)(B). In

evaluating the permissible ‘‘scope of

gaming’’ under the various States’’ laws,

the Department will apply the

interpretation set forth as the position of

the United States on the scope of

gaming issue in its amicus curiae brief

in the Supreme Court in Rumsey Indian

Rancheria of Wintun Indians v. Wilson,

64 F.3d 1250 (9th Cir. 1995), as
Federal Register / Vol. 63, No. 14 /Thursday, January 22, 1998 / Proposed Rules 3293

modified on denial of petition for

rehearing, 99 F.3d 321 (9th Cir. 1996),

cert. denied, sub nom. Sycuan Band of

Mission Indians v. Wilson, No. 96–1059,

65 U.S.L.W. 3855 (June 24, 1997).

Copies of the brief are available to any

reviewer upon request.

As a threshold matter, the Secretary

would disapprove proposals when

‘‘contemplated gaming activities are not

permitted in the State for any purpose

by any person, organization, or entity.’’

Proposed 25 CFR § 291.8(b)(3), infra.

This conclusion is based on 25 U.S.C.

2710(d)(1)(B), which states that ‘‘Class

III gaming activities shall be lawful on

Indian lands only if such activities are

* * * located in a State that permits

such gaming for any purpose by any

person, organization or entity.’’ IGRA

thus makes it unlawful for Tribes to

operate particular Class III games that

State law completely and affirmatively

prohibits. Courts have determined that a

State therefore has no duty to negotiate

with respect to such games. See Rumsey

Indian Rancheria, supra. In other

words, if a State prohibits an entire class

of traditional games, it need not

negotiate over the particular games

within that category. Consequently,

such gaming would not be permitted

under Secretarial procedures.

Our interpretation of the scope of

gaming issues is adopted from the

United States’ amicus brief filed in the

Supreme Court in Rumsey Indian

Rancheria, supra:

In some circumstances, a question may

arise concerning whether a State law

prohibits a distinct form of gaming or instead

regulates the manner in which a permitted

form of gaming may be played. Several

hypothetical examples may illustrate the

point. If State law prohibits five-card stud

poker but permits seven-card draw poker (or

prohibits parimutuel wagering on dog racing,

but not on horse racing), a question could

arise as to whether that State law prohibits

a distinct form of gaming known as ‘‘five card

stud poker’’ (‘‘or dog racing’’), or instead

regulates the manner in which the permitted

form of gaming known as ‘‘poker’’ (‘‘or

animal racing’’) may be conducted. If

characterized in the former way, the State

would have to negotiate concerning only

seven-card draw poker (or horse racing); if

characterized in the latter way, the State

would have to negotiate over all poker games

(or all animal racing). The relevant question

in such a case would be whether, in light of

traditional understandings and the text and

legislative history of IGRA, the State has

reasonably characterized the relevant State

laws as completely prohibiting a distinct

form of gaming. If the State has not

reasonably so characterized its laws, it would

have a duty to negotiate with respect to the

gaming.

United States’ Brief at 15.

It is impractical for the Department to

attempt to evaluate, in advance of a

tribal request, the permissible scope of

gaming in each State. For that reason the

proposed rule requires a Tribe to submit

its own analysis along with its request

for Secretarial procedures, and goes on

to invite the views and active

participation of the affected State with

respect to the applicable scope of

gaming under any Secretarial

procedures.

Monitoring

Many voluntarily negotiated compacts

include a monitoring role for the

affected State. In these compacts States

often assist in background checks on

key casino personnel, and/or monitor

tribal financial statements. Tribes may

make certain financial information

available to States to ensure that

applicable regulatory requirements have

been satisfied. Because of the

importance of this monitoring function,

the proposed regulations invite State

participation in the promulgation of

Secretarial procedures, notwithstanding

a State’s assertion of immunity from

suit. If a State declines to participate in

such an activity, the Department

believes steps ought to be taken to

ensure that independent monitoring and

enforcement exists. The proposed rule

requires that the Tribe provide in its

procedures for monitoring and

enforcement by an independent and

autonomous tribal regulatory

commission. Further, the Department

seeks comments on whether the NIGC or

some other entity should perform

monitoring and enforcement functions,

and, if so, who should bear the cost of

such functions.

Publication of this proposed rule by

the Department provides the public an

opportunity to participate in the

rulemaking process. Interested persons

may submit written comments to the

location identified in the ADDRESSES

section of this proposed rule.

Executive Order 12988

The Department has certified to the

Office of Management and Budget

(OMB) that these proposed regulations

meet the applicable standards provided

in Sections (3)(a) and 3(b)(2) of

Executive Order 12988.

Executive Order 12866

This is a significant rule under

Executive Order 12866 and has been

reviewed by OMB.

Regulatory Flexibility Act

We do not believe that this proposed

rule will have a significant economic

impact on a substantial number of small

entities under the Regulatory Flexibility

Act, 5 U.S.C. 601 et seq. The Regulatory

Flexibility Act of 1980 requires

preparation of flexibility analyses for

rules that will have a significant effect

on a substantial number of small

entities, which include small

businesses, organizations or

governmental jurisdictions. At this time,

we do not know whether any Secretarial

procedures, authorized by this proposed

rule, will need to be adopted. We also

do not know whether the adoption of

procedures in a given case will have a

significant impact on small entities as

defined by the Act. If procedures are

proposed pursuant to this rule, States

(and through the States, local

jurisdictions and small entities) will be

permitted to comment on a given

proposal, and any concerns may be

taken into account in Secretarial

procedures.

It is our preliminary view that Indian

tribes are not small entities within the

meaning of the Regulatory Flexibility

Act. The statutory definition specifically

enumerates several kinds of

governmental entities, but does not

include Indian tribes. 5 U.S.C. 601(5).

This indicates that tribes should not be

considered small entities. We invite

comment on this issue.

Executive Order 12630

The Department has determined that

this proposed rule does not have

significant ‘‘takings’’ implications. The

proposed rule does not pertain to

‘‘taking’’ of private property interests,

nor does it impact private property.

Executive Order 12612

The Department has determined that

this proposed rule does not have

significant Federalism effects.

As explained above, the Secretary has

determined that he has the statutory

authority to adopt procedures to permit

Indian gaming in appropriate

circumstances. Secretarial authority was

expressly provided in IGRA with

respect to the judicially-supervised

mediation scheme. It would be

exercised under the proposed rules in a

manner consistent with the statutory

directive and congressional intent. The

proposed rule provides the opportunity

for States to voluntarily participate in a

mediation process under the auspices of

the Secretary of the Interior. As the

Supreme Court noted in Seminole,

Congress may, under the Constitution,

choose to withhold from States any

authority over Indian gaming. Because

under the proposed rules the Secretary

would be tracking the scheme set forth

by Congress, and because the proposed

rule would afford the States as much
3294 Federal Register / Vol. 63, No. 14 /Thursday, January 22, 1998 / Proposed Rules

opportunity to participate as where it

does not claim immunity from suit, we

believe the proposed rule has no

significant Federalism effects.

NEPA Statement

The Department has determined that

this proposed rule does not constitute a

major Federal action significantly

affecting the quality of the human

environment and that no detailed

statement is required pursuant to the

National Environmental Policy Act of

1969.

Paperwork Reduction Act of 1995

Sections 291.4, 291.10, 291.12, and

291.15 contain information collection

requirements. As required by the

Paperwork Reduction Act of 1995 (44

U.S.C. 3507(d)), the Department has

submitted a copy of these sections to the

Office of Management and Budget

(OMB) for its review.

Collection of Information: When a

Tribe and State do not successfully

negotiate a Tribal-State compact, the

Tribe will be required to collect

information to document the negotiation

process, and prepare proposed

procedures for submission to the

Secretary. The information requested

will be unique for each Tribe and may

be changed when necessary to fit the

needs of the Tribe.

All information is to be collected

upon the submission of a request by a

Tribe for Class III gaming procedures.

The annual reporting and record

keeping burden for the collection of

information is estimated to average

1,000 hours for each response and we

estimate there will be approximately 25

respondents. The collection will include

time for reviewing instructions,

searching existing data sources,

gathering and maintaining the data

needed, and completing and reviewing

the information. The total annual

burden is estimated to be 25,000 hours.

Organizations and individuals

desiring to submit comments on the

information collection requirement

should direct them to the Office of

Information and Regulatory Affairs,

OMB, Room 10202, New Executive

Office Building, Washington, DC 20503,

Attn: Desk Officer for the Department of

the Interior.

The Department considers comments

by the public on this proposed

collection of information in:

Evaluating whether the proposed

collection of information is necessary

for the proper performance of the

functions of the Department, including

whether the information will have

practical utility;

Evaluating the accuracy of the

Department’s estimate of the burden of

the proposed collection of information,

including the validity of the

methodology and assumptions used;

Enhancing the quality, usefulness,

and clarity of the information to be

collected; and

Minimizing the burden of the

collection of information on those who

are to respond, including through the

use of appropriate automated,

electronic, mechanical, or other

collection techniques or other forms of

information technology.

OMB is required to make a decision

between 30 and 60 days after

publication of this document in the

Federal Register. Therefore, a comment

to the OMB is best assured of having its

full effect if OMB receives it within 30

days of publication. This does not affect

the deadline for the public to comment

to the BIA on the proposed regulations.

Unfunded Mandates Act of 1995

This regulation imposes no unfunded

mandates on any governmental or

private entity and is in compliance with

the provisions of the Unfunded

Mandates Act of 1995.

Drafting Information

The primary author of this proposed

rule is George Skibine, Acting Deputy

Associate Solicitor, Division of Indian

Affairs, Office of the Solicitor.

List of Subjects in 25 CFR Part 291

Indians—Gaming.

For the reasons given in the preamble,

the Department of the Interior proposes

to establish a new Part 291 of Title 25,

Chapter 1 of the Code of Federal

Regulations as set forth below.

PART 291—CLASS III GAMING

PROCEDURES

Sec.

291.1 Purpose and scope.

291.2 Definitions.

291.3 When may an Indian Tribe ask the

Secretary to issue Class III gaming

procedures?

291.4 What must a proposal requesting

Class III gaming procedures contain?

291.5 Where must the proposal requesting

Class III gaming procedures be filed?

291.6 What must the Secretary do upon

receiving a proposal?

291.7 What must the Secretary do if it has

been determined that the Indian Tribe is

eligible to request Class III gaming

procedures?

291.8 What must the Secretary do at the

expiration of the 60-day comment period

if the State has not submitted an

alternative proposal?

291.9 What must the Secretary do at the

end of the 60-day comment period if the

State offers an alternative proposal for

Class III gaming procedures?

291.10 What must the Indian Tribe do

when it receives the State’s alternative

proposal Class III gaming procedures?

291.11 What must the Secretary do if the

Indian Tribe files timely objections to the

State’s alternative proposal?

291.12 What is the role of the mediator

appointed by the Secretary?

291.13 What must the Secretary do upon

receiving the proposal selected by the

mediator?

291.14 When do Class III gaming

procedures for an Indian Tribe become

effective?

291.15 How can Class III gaming

procedures issued by the Secretary be

amended?

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

2710.

§ 291.1 Purpose and scope.

The regulations in this part establish

procedures that the Secretary of the

Interior will use to promulgate rules for

the conduct of Class III Indian gaming

when:

(a) A State and an Indian Tribe are

unable voluntarily to agree to a

compact; and

(b) The State has asserted its

immunity from suit brought by an

Indian Tribe under 25 U.S.C.

2710(d)(7)(B).

§ 291.2 Definitions.

All terms have the same meaning as

set forth in the definitional section of

IGRA, 25 U.S.C. 2703(1)–(10).

§ 291.3 When may an Indian Tribe ask the

Secretary to issue Class III gaming

procedures?

An Indian Tribe may ask the Secretary

to issue Class III gaming procedures

when the following steps have taken

place:

(a) The Indian Tribe submitted a

written request to the State to enter into

negotiations to establish a Tribal-State

compact governing the conduct of Class

III gaming activities;

(b) The State and the Indian Tribe

failed to negotiate a compact 180 days

after the State received the Indian

Tribe’s request;

(c) The Indian Tribe initiated a cause

of action in Federal district court against

the State alleging that the State did not

respond, or did not respond in good

faith, to the request of the Indian Tribe

to negotiate such a compact;

(d) The State raised an Eleventh

Amendment defense to the tribal action;

and

(e) The Federal district court

dismissed the action because of lack of

jurisdiction due to the State’s sovereign
Federal Register / Vol. 63, No. 14 /Thursday, January 22, 1998 / Proposed Rules 3295

immunity under the Eleventh

Amendment.

§ 291.4 What must a proposal requesting

Class III gaming procedures contain?

A proposal requesting Class III gaming

procedures must include the following

information:

(a) The full name, address, and

telephone number of the Indian Tribe

submitting the proposal;

(b) A copy of the authorizing

resolution from the Indian Tribe

submitting the proposal;

(c) A copy of the Indian Tribe’s

gaming ordinance or resolution

approved by the NIGC in accordance

with 25 U.S.C. 2710;

(d) A copy of the Indian Tribe’s

organic documents;

(e) A copy of the Indian Tribe’s

written request to the State to enter into

compact negotiations, along with the

Indian Tribe’s proposed compact, if any;

(f) A copy of the State’s response to

the tribal request and/or proposed

compact, if any;

(g) A copy of court proceedings in the

litigation with the State in Federal

district court on compact negotiations,

including a copy of the order dismissing

the lawsuit;

(h) The Indian Tribe’s factual and

legal authority for the scope of gaming

specified in paragraph (j)(13) of this

section;

(i) A regulatory scheme for Federal (or

State, if any) oversight role in

monitoring and enforcing compliance;

and

(j) Proposed procedures under which

the Indian Tribe will conduct Class III

gaming activities, including:

(1) An accounting system maintained

in accordance with American Institute

of Certified Public Accountants (AICPA)

Standards for Audits of Casinos,

including maintenance of books and

records in accordance with Generally

Accepted Accounting Principles

(GAAP), and any applicable NIGC

regulations;

(2) A reporting system for the

payment of taxes and fees in a timely

manner and in compliance with Internal

Revenue Code and Bank Secrecy Act

requirements;

(3) Preparation of financial statements

covering all financial activities of the

Indian Tribe’s gaming operations;

(4) Internal control standards

designed to ensure fiscal integrity of

gaming operations;

(5) Provisions for records retention,

maintenance, and accessibility;

(6) Conduct of games, including

patron requirements, posting of game

rules, and hours of operation;

(7) Procedures to protect the integrity

of the rules for playing games;

(8) Rules governing employees of the

gaming operation, including code of

conduct, age requirements, conflict of

interest provisions, licensing

requirements, and background

investigations of all management

officials and key employees, vendors,

lessors, or suppliers of gaming

materials, equipment or supplies of any

kind in excess of $5,000 per year, that

comply with IGRA requirements, NIGC

regulations, and applicable tribal

gaming laws;

(9) Policies and procedures that

protect the health and safety of patrons

and employees and that address

insurance and liability issues, as well as

safety systems for fire and emergency

services at all gaming locations;

(10) Surveillance procedures and

security personnel and systems capable

of monitoring all gaming activities,

including the conduct of games,

cashiers’ cages, change booths, count

rooms, movement of cash and chips,

entrances and exits of gaming facilities,

and other critical areas of any gaming

facility;

(11) An administrative process to

resolve disputes between the gaming

establishment and employees or

patrons, including a process to protect

the rights of individuals injured on

gaming premises by reason of

negligence in the operation of the

facility;

(12) Hearing procedures for licensing

purposes;

(13) A list of gaming activities

proposed to be offered by the Indian

Tribe at its gaming facilities;

(14) A description of the location of

proposed gaming facilities;

(15) A copy of the Indian Tribe’s

liquor ordinance approved by the

Secretary, if any;

(16) Provisions for an autonomous

tribal regulatory gaming commission,

independent of gaming management;

(17) Provisions for enforcement and

investigatory mechanisms, including the

imposition of sanctions, monetary

penalties, closure, and an administrative

appeal process relating to enforcement

and investigatory actions; and

(18) Any other provisions deemed

necessary by the Indian Tribe.

§ 291.5 Where must the proposal

requesting Class III gaming procedures be

filed?

Any proposal requesting Class III

gaming procedures must be filed with

the Director, Indian Gaming

Management Staff, Bureau of Indian

Affairs, U.S. Department of the Interior,

MS 2070–MIB, 1849 C Street, NW,

Washington, DC 20240.

§ 291.6 What must the Secretary do upon

receiving a proposal?

Upon receipt of a proposal requesting

Class III gaming procedures, the

Secretary must:

(a) Within 15 days, notify the Indian

Tribe in writing that the proposal has

been received, and whether the proposal

meets the requirements of § 291.4; and

(b) Within 30 days of receiving a

complete proposal, notify the Indian

Tribe in writing whether the Indian

Tribe meets the eligibility requirements

in § 291.3. The Secretary’s eligibility

determination is final for the

Department.

§ 291.7 What must the Secretary do if it

has been determined that the Indian Tribe

is eligible to request Class III gaming

procedures?

(a) If the Secretary determines that the

Indian Tribe is eligible to request Class

III gaming procedures and that the

Indian Tribe’s proposal is complete, the

Secretary must submit the Indian

Tribe’s proposal to the Governor and the

Attorney General of the State where the

gaming is proposed.

(b) The Governor and Attorney

General will have 60 days to comment

on:

(1) Whether the State is in agreement

with the Indian Tribe’s proposal;

(2) Whether the State believes it has

negotiated in good faith with the Indian

Tribe under 25 U.S.C. 2710(d)(3)(A);

(3) Whether the proposal is consistent

with relevant provisions of the laws of

the State; and

(4) Whether contemplated gaming

activities are permitted in the State for

any purposes, by any person,

organization, or entity.

(c) The Secretary will also invite the

State’s Governor and Attorney General

to submit an alternative proposal to the

Indian Tribe’s proposed Class III gaming

procedures.

§ 291.8 What must the Secretary do at the

expiration of the 60-day comment period if

the State has not submitted an alternative

proposal?

(a) Upon expiration of the 60-day

comment period specified in § 291.7, if

the State has not submitted an

alternative proposal, the Secretary must

review the Indian Tribe’s proposal to

determine:

(1) Whether all requirements of

§ 291.4 are adequately addressed;

(2) Whether Class III gaming activities

will be conducted on Indian lands over

which the Indian Tribe has jurisdiction;

(3) Whether contemplated gaming

activities are permitted in the State for

any purposes by any person,

organization, or entity;
3296 Federal Register / Vol. 63, No. 14 /Thursday, January 22, 1998 / Proposed Rules

(4) Whether the proposal is consistent

with relevant provisions of the laws of

the State;

(5) Whether the proposal is consistent

with the trust obligations of the United

States to the Indian Tribe;

(6) Whether the proposal is consistent

with all applicable provisions of the

IGRA;

(7) Whether the proposal is consistent

with provisions of other applicable

Federal laws; and

(8) Whether the State has negotiated

in good faith.

(b) Within 60 days of the expiration

of the 60-day comment period in

§ 291.7, the Secretary must notify the

Indian Tribe, the Governor, and the

Attorney General of the State in writing

that he/she has:

(1) Approved the proposal if the

Secretary determines that there are no

objections to the Indian Tribe’s

proposal;

(2) Disapproved the proposal if it does

not meet the standards in paragraph (a)

of this section; or

(3) Identified unresolved issues and

areas of disagreements in the proposal,

and that the Indian Tribe, the Governor,

and the Attorney General are invited to

participate in an informal conference to

resolve identified unresolved issues and

areas of disagreement.

(c) Within 30 days of the informal

conference, the Secretary must prepare

and mail to the Indian Tribe, the

Governor, and the Attorney General:

(1) A written report that summarizes

the results of the informal conference;

and

(2) A final decision either setting forth

the Secretary’s proposed Class III

gaming procedures for the Indian Tribe,

or disapproving the proposal for any of

the reasons in paragraph (a) of this

section.

§ 291.9 What must the Secretary do at the

end of the 60-day comment period if the

State offers an alternative proposal for

Class III gaming procedures?

Within 7 days of receiving the State’s

alternative proposal, the Secretary must

submit the State’s alternative proposal

to the Indian Tribe for a 60-day

comment period.

§ 291.10 What must the Indian Tribe do

when it receives the State’s alternative

proposal for Class III gaming procedures?

(a) If the Indian Tribe objects to the

State’s alternative proposal, it may,

within 60 days of receiving the

alternative proposal, notify the

Secretary in writing of its objections.

(b) If the Indian Tribe does not file

written objections within 60 days of

receiving of the State’s alternative

proposal, the Secretary must, within 60

days of the expiration of the Indian

Tribe’s comment period in § 291.9,

notify the Indian Tribe, the Governor,

and the Attorney General, in writing of

his/her decision to either:

(1) Approve the State’s alternative

proposal for Class III gaming

procedures; or

(2) Disapprove the State’s alternative

proposal for any of the reasons in

§ 291.13(b).

§ 291.11 What must the Secretary do if the

Indian Tribe files timely objections to the

State’s alternative proposal?

If the Indian Tribe files timely

objections to the State’s alternative

proposal, the Secretary must appoint a

mediator who must convene a process

to resolve differences between the two

proposals.

§ 291.12 What is the role of the mediator

appointed by the Secretary?

(a) The mediator must ask the Indian

Tribe and the State to submit their last

best proposal for Class III gaming

procedures.

(b) After giving the Indian Tribe and

the State an opportunity to be heard and

present information supporting their

respective positions, the mediator must

select from the two proposals the one

that best comports with the terms of the

IGRA and any other applicable Federal

law. The mediator must submit the

proposal selected to the Indian Tribe,

the State, and the Secretary.

§ 291.13 What must the Secretary do upon

receiving the proposal selected by the

mediator?

Within 60 days of receiving the

proposal selected by the mediator, the

Secretary must do one of the following:

(a) Notify the Indian Tribe, the

Governor and the Attorney General in

writing of his/her decision to approve

the proposal for Class III gaming

procedures selected by the mediator.

(b) Notify the Indian Tribe, the

Governor and the Attorney General in

writing of his/her decision to

disapprove the proposal selected by the

mediator for any of the following

reasons:

(1) The requirements of § 291.4 are

not adequately addressed;

(2) Gaming activities would not be

conducted on Indian lands over which

the Indian Tribe has jurisdiction;

(3) Contemplated gaming activities are

not permitted in the State for any

purpose by any person, organization, or

entity;

(4) The proposal is not consistent

with relevant provisions of the laws of

the State;

(5) The proposal is not consistent

with the trust obligations of the United

States to the Indian Tribe;

(6) The proposal is not consistent

with applicable provisions of the IGRA;

or

(7) The proposal is not consistent

with provisions of other applicable

Federal laws.

(c) If the Secretary rejects the

mediator’s proposal under paragraph (b)

of this section, he may prescribe

appropriate procedures under which

Class III gaming may take place

consistent with the mediator’s selected

compact, the provisions of IGRA and the

relevant provisions of the laws of the

State.

§ 291.14 When do Class III gaming

procedures for an Indian Tribe become

effective?

Upon approval of Class III gaming

procedures for the Indian Tribe under

either § 291.8(b), § 291.8(c),

§ 291.10(b)(1), or § 291.13(a), the Indian

Tribe shall have 90 days in which to

approve and execute the Secretarial

procedures and forward its approval

and execution to the Secretary, who will

publish notice of their approval in the

Federal Register. The procedures take

effect upon their publication in the

Federal Register.

§ 291.15 How can Class III gaming

procedures approved by the Secretary be

amended?

An Indian Tribe may ask the Secretary

to amend approved Class III gaming

procedures by submitting an

amendment proposal to the Secretary.

The Secretary must review the proposal

by following the approval process for

initial tribal proposals, except that he/

she may waive the requirements of

§ 291.4 to the extent they do not apply

to the amendment request.

Dated: December 8, 1997.

Kevin Gover,

Assistant Secretary—Indian Affairs.

[FR Doc. 98–1409 Filed 1–22–98; 8:45 am]

BILLING CODE 4310–02–P

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG–110965–97]

RIN 1545–AV47

Obligations of States and Political

Subdivisions

AGENCY: Internal Revenue Service (IRS),

Treasury.