36926 Federal Register / Vol. 74, No. 142 / Monday, July 27, 2009 / Rules and Regulations 

Under § 115.7 of the CBP regulations (19 

CFR 115.7), the Commissioner may 

designate additional Certifying 

Authorities. 

On May 8, 2002, Lloyd’s Register 

North America, Inc. (‘‘Lloyd’s’’) filed a 

request with CBP for status as a 

Certifying Authority for containers and 

container-design types pursuant to 19 

CFR part 115. This request was granted 

by the Commissioner by letter dated 

April 10, 2003. Lloyd’s status as a 

Certifying Authority does not extend to 

certification for individual road vehicles 

or road vehicle design types covered in 

19 CFR part 115, subparts E and F. This 

document amends § 115.6 to add 

Lloyd’s to the list of designated 

Certifying Authorities only for 

containers and container-design types. 

This document further amends 

§ 115.6 to update the addresses of the 

previously-designated three Certifying 

Authorities, and also to clarify that they 

are approved entities for certifying both 

containers and road vehicles. Finally, 

this document revises § 115.6 to 

distinguish between the two types of 

Certifying Authorities designated by the 

Commissioner. 

Signing Authority 

This document is limited to technical 

corrections of CBP regulations. 

Accordingly, it is being issued in 

accordance with section 0.2(a) of the 

CBP regulations (19 CFR 0.2(a)). 

Inapplicability of Notice and Delayed 

Effective Date Requirements 

Because this amendment merely 

updates the list of Certifying Authorities 

designated by the Commissioner and 

their addresses, and neither imposes 

any additional burdens on, nor takes 

away any existing rights or privileges 

from, the public, pursuant to 5 U.S.C. 

553(b)(B), notice and public procedure 

are unnecessary, and for the same 

reasons, pursuant to 5 U.S.C. 553(d)(3), 

a delayed effective date is not required. 

Executive Order 12866 and Regulatory 

Flexibility Act 

This final rule document does not 

meet the criteria for a ‘‘significant 

regulatory action’’ as specified in 

Executive Order 12866. In addition, 

because no notice of proposed 

rulemaking is required for the reasons 

stated above, the provisions of the 

Regulatory Flexibility Act (5 U.S.C. 601 

et seq.) do not apply. 

Paperwork Reduction Act 

In accordance with the Paperwork 

Reduction Act of 1995 (44 U.S.C. 3507 

et seq.), this final rule document 

contains no new information collection 

and recordkeeping requirements that 

require Office of Management and 

Budget approval. 

Unfunded Mandates Reform Act of 

1995 

This final rule will not impose an 

unfunded mandate under the Unfunded 

Mandates Reform Act of 1995. It will 

not result in costs of $100 million or 

more, in the aggregate, to any of the 

following: State, local, or Native 

American tribal governments, or the 

private sector. This final rule would not 

result in such an expenditure. 

Executive Order 13132 

In accordance with the principles and 

criteria contained in Executive Order 

13132 (Federalism), this final rule will 

have no substantial effect on the States, 

the current Federal-State relationship, 

or on the current distribution of power 

and responsibilities among local 

officials. 

List of Subjects in 19 CFR Part 115 

Containers, Customs duties and 

inspection, Freight, International 

conventions. 

Amendments to the CBP Regulations 

■ For the reasons set forth above, part 

115, CBP regulations (19 CFR part 115), 

is amended as set forth below: 

PART 115—CARGO CONTAINER AND 

ROAD VEHICLE CERTIFICATION 

PURSUANT TO INTERNATIONAL 

CUSTOMS CONVENTIONS 

■ 1. The authority citation for part 115, 

CBP regulations, continues to read as 

follows: 

Authority: 5 U.S.C. 301, 19 U.S.C. 66, 

1624; E.O. 12445 of October 17, 1983. 

■ 2. Section 115.6 is revised to read as 

follows: 

§ 115.6 Designated Certifying Authorities. 

(a) Certifying Authorities for 

containers and road vehicles. The 

Commissioner has designated the 

following Certifying Authorities for 

containers and road vehicles as defined 

in this part: 

(1) The American Bureau of Shipping, 

ABS Plaza, 16855 Northchase Drive, 

Houston, Texas 77060–6008; 

(2) International Cargo Gear Bureau, 

Inc., 321 West 44th Street, New York, 

New York 10036; 

(3) The National Cargo Bureau, Inc., 

17 Battery Place, Suite 1232, New York, 

New York 10004–1110. 

(b) Certifying Authority for containers. 

The Commissioner has designated 

Lloyd’s Register North America, Inc., 

1401 Enclave Parkway, Suite 200, 

Houston, Texas 77077, as a Certifying 

Authority only for containers as defined 

in this part. 

Dated: July 22, 2009. 

Jayson P. Ahern, 

Acting Commissioner, Customs and Border 

Protection. 

[FR Doc. E9–17876 Filed 7–24–09; 8:45 am] 

BILLING CODE 9111–14–P 

DEPARTMENT OF THE INTERIOR 

National Indian Gaming Commission 

25 CFR Parts 502, 514, 531, 533, 535, 

537, 539, 556, 558, 571, 573 

RIN 3141–0001 

Amendments to Various National 

Indian Gaming Commission 

Regulations 

AGENCY: National Indian Gaming 

Commission. 

ACTION: Final Rule. 

SUMMARY: The final rule modifies 

various Commission regulations to 

reduce by half the fee reporting burdens 

on tribes, remove obsolete provisions, 

clarify existing appellate procedures, 

update and clarify management contract 

procedures and costs for background 

investigations, clarify various 

definitions and licensing notices, 

update audit requirements to allow for 

simplified and consolidated reporting in 

certain circumstances, and add gaming 

on ineligible lands to the class of 

substantial violations warranting 

immediate closure. 

DATES: Effective Date: This rule is 

effective on August 26, 2009. 

Compliance Date: Submitting fee 

statements and payments twice per year 

under sections 514.1(c)(2) and 514.1(d) 

is not required until January 1, 2010. 

FOR FURTHER INFORMATION CONTACT: 

Rebecca Chapman, Staff Attorney, 

Office of General Counsel, at (202) 632– 

7003; fax (202) 632–7066 (not toll-free 

numbers). 

SUPPLEMENTARY INFORMATION: 

I. Background 

On October 17, 1988, Congress 

enacted the Indian Gaming Regulatory 

Act (IGRA or Act), 25 U.S.C. 2701–21, 

creating the National Indian Gaming 

Commission (NIGC or Commission) and 

developing a comprehensive framework 

for the regulation of gaming on Indian 

lands. 25 U.S.C. 2702. IGRA granted the 

NIGC, among other things, regulatory 

oversight and enforcement authority 

over tribal gaming. This authority 


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Federal Register / Vol. 74, No. 142 / Monday, July 27, 2009 / Rules and Regulations 36927 

includes the authority to monitor tribal 

compliance with IGRA, NIGC 

regulations, and tribal gaming 

ordinances. 

In 1992, the Commission adopted its 

initial regulations, and it has worked 

under IGRA for almost 20 years. 25 

U.S.C. 2706(b)(10). The Commission 

undertakes this collection of regulation 

changes to better carry out its statutory 

duties. The final rule modifies various 

Commission regulations to (1) reduce by 

half the fee reporting burdens on tribes, 

(2) remove obsolete provisions, (3) 

clarify existing appellate procedures, (4) 

update and clarify management contract 

procedures and costs for background 

investigations, (5) clarify various 

definitions and licensing notices, (6) 

update audit requirements to allow for 

simplified and consolidated reporting in 

certain circumstances, and (7) add 

gaming on ineligible lands to the class 

of substantial violations warranting 

immediate closure. 

Development of the Proposed Rules 

Through Tribal Consultation 

The Commission identified a need for 

minor changes to various parts of its 

regulations, and in accordance with its 

government-to-government consultation 

policy (69 FR 16973 (Mar. 31, 2004)), 

requested input from Indian tribes. On 

March 26, 2007, the Commission 

prepared amendments to the regulations 

and sent a copy to the leaders of all 

gaming tribes for comment. Fifty-seven 

tribes provided written comments. The 

NIGC carefully reviewed all comments 

and often incorporated suggested 

changes that corrected grammar, 

clarified meaning, and better expressed 

or implemented the Commission’s 

regulatory intent. 

In addition, the NIGC consulted with 

tribes and their gaming commissions at 

regional gaming meetings around the 

country and at the Washington, DC, 

headquarters. Since March 26, 2007, the 

NIGC held consultations at 15 regional 

gaming conferences and consulted with 

more than 110 tribes with the proposed 

rule as a possible topic for discussion. 

Other than the previous 57 submissions, 

tribes gave no further suggestions for 

improvement on the proposed rule. 

The Commission published the 

regulations—updated and improved by 

incorporation of tribal comments—as a 

proposed rule in the Federal Register on 

December 22, 2008, 73 FR 78242, Dec. 

22, 2008. The Commission set a 45-day 

comment period, which would close on 

February 5, 2009. Nineteen tribal 

leaders requested more time to review 

the proposed rule, and the Commission 

extended the comment period to March 

9, 2009. See 74 FR 4363, Jan. 26, 2009. 

The Commission received a total of 54 

written comments on the proposed rule. 

In addition, the Commission met with 

56 tribes at six regional conferences 

around the country after the proposed 

rule’s publication. The Commission 

invited all attending leaders to discuss 

the proposed rule, and two leaders 

provided additional comments. These 

comments were considered with the 

written comments received. 

III. Purpose and Scope 

The final rule modifies various 

Commission regulations to (1) reduce by 

half the fee reporting burdens on tribes, 

(2) remove obsolete provisions, (3) 

clarify existing appellate procedures, (4) 

update and clarify management contract 

procedures and costs for background 

investigations, (5) clarify various 

definitions and licensing notices, (6) 

update audit requirements to allow for 

simplified and consolidated reporting in 

certain circumstances, and (7) add 

gaming on ineligible lands to the class 

of substantial violations warranting 

immediate closure. The final rule is 

discussed below. 

A. Definitions 

NIGC regulations define ‘‘key 

employee’’ at 25 CFR 502.14. Applicants 

for positions defined as key employees 

are, among other things, subject to a 

background investigation as a condition 

of licensure. Under present regulations, 

this list of key employees is limited. 

With the addition of ‘‘any other person 

designated by the tribe as a key 

employee,’’ this section will allow tribes 

to expand the list and access the 

criminal history records held by the 

federal government for the purpose of 

conducting background investigations 

on these additional key employees. 

IGRA and NIGC regulations define 

‘‘net revenue’’ as ‘‘gross gaming 

revenues of an Indian gaming operation 

less amounts paid out as, or paid for, 

prizes; and total gaming-related 

operating expenses, excluding 

management fees.’’ 25 U.S.C. 2703(9); 25 

CFR 502.16. The final rule amends 25 

CFR 502.16 to define net revenues as 

previously seen in the regulations but 

clarifying what constitutes operating 

expenses and what does not. 

The final rule incorporates the 

industry understanding of what 

constitutes an operating expense in 

order to clarify what constitutes net 

revenues for a gaming operation. 

The NIGC’s regulations define a 

‘‘person having a direct or indirect 

financial interest in a management 

contract’’ to include holders of at least 

10% of the issued and outstanding stock 

alone. The final rule reduces the 

requisite financial interest to five 

percent for publicly traded companies 

so as to be consistent with the Securities 

and Exchange Commission’s 

understanding of a ‘‘significant 

shareholder.’’ This change is also 

consistent with similar requirements in 

other gaming jurisdictions. 

NIGC regulations define ‘‘primary 

management official’’ at 25 CFR 502.19. 

Applicants for positions defined as 

primary management officials are, 

among other things, subject to a 

background investigation as a condition 

of licensure. Under present regulations, 

this list of primary management officials 

is limited. With the addition of ‘‘any 

other person designated by the tribe as 

a primary management official,’’ this 

section will allow tribes to expand the 

list and access the criminal history 

records held by the federal government 

for the purpose of conducting 

background investigations on these 

additional primary management 

officials. 

B. Annual Fees Required 

IGRA requires the NIGC to set an 

annual funding rate. 25 U.S.C. 2717. 

NIGC implements this requirement 

under 25 CFR part 514, which requires 

tribal submissions of fees four times per 

year. The final rule reduces the number 

of fee submissions by half. That said, 

submitting fee statements and payments 

twice per year under sections 514.1(c)(2) 

and 514.1(d) is not required until 

January 1, 2010. 

In addition, the final rule requires that 

fees be sent on or before their due dates. 

This is a change from the previous 

requirement that NIGC actually receive 

fees on or before their due dates. Fees 

and statements must now be 

postmarked by their due dates. If using 

a private delivery service, such as FedEx 

or UPS, then the shipping receipt must 

be dated on or before the due date. 

C. Content of Management Contracts 

IGRA and NIGC regulations require 

specific provisions in a management 

contract, and its accompanying 

submission package, before the 

Chairman can approve it. 25 U.S.C. 

2711; 25 CFR 531.1, 533.3. The 

Chairman must also approve any 

amendment to a management contract. 

25 CFR 535.1, 535.3. In applying for 

approval, all persons having a financial 

interest in, or management 

responsibility for, a management 

contract must be disclosed to the 

Commission and must undergo a 

background investigation. 25 CFR 537.1. 

Management contractors must pay for 

this investigation. 25 CFR 537.3. If the 

Chairman disapproves a management 


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36928 Federal Register / Vol. 74, No. 142 / Monday, July 27, 2009 / Rules and Regulations 

contract or amendment, the tribe or 

contractor may appeal. 25 CFR 539.1, 

539.2. 

The final rule updates 25 CFR 531.1, 

533.1, 533.3, and 533.7 by removing 

language regarding the Secretary of the 

Interior’s approval of management 

contracts. Because the Secretary no 

longer fulfills that role, the NIGC is 

eliminating unnecessary references in 

sections 531.1, 533.1, 533.3, and 533.7 

to the Secretary’s former authority. 

Further, section 533.5 permits the 

Chairman to take action on 

noncompliant management contracts 

previously approved by the Secretary. 

Because no management contracts 

approved by the Secretary remain 

active, section 533.5 is obsolete, and the 

final rule removes it. 

Additionally, the final rule updates 

section 533.3 to reflect the existing 

practice of providing a legal description 

for the land upon which the gaming 

facility operates or will operate. This 

allows the Commission to determine 

whether a management contract 

references a site that is ‘‘Indian lands’’ 

eligible for gaming as required under 

IGRA. 

The final rule changes § 537.3 to 

increase the fee for background 

investigations. This updates the fee and 

more accurately reflects the 

Commission’s actual costs. 

Finally, the final rule replaces the 

words ‘‘modification’’ and ‘‘modify’’ 

with ‘‘amendment’’ and ‘‘amend’’ in 

§§ 535.1, 535.3, 539.1, and 539.2 for 

purposes of internal consistency. 

D. Background and Licensing for 

Primary Management Officials and Key 

Employees 

IGRA requires that tribes, through 

their gaming ordinances, maintain an 

adequate system of background 

investigations. 25 U.S.C. 2710(b)(2)(F). 

NIGC regulations, 25 CFR parts 556 and 

558, implement this requirement. The 

final rule removes language in 25 CFR 

556.2, 556.3 and 558.2 referring to the 

employment of individuals as key 

employees and primary management 

officials and replaces it with language 

referring to their licensure instead. The 

reason for this is that a decision to 

license an applicant and a decision 

about an applicant’s suitability (or 

eligibility) for licensure is separate and 

distinct from a decision to hire the 

applicant. The Commission believes 

that these sections should be concerned 

with licensure and suitability 

determinations, not employment 

decisions. 

The granting of a license is a privilege 

and the burden of proving suitability is 

on the applicant. In doing so, the 

applicant typically provides much more 

comprehensive personal information on 

a license application than is normally 

required on an employment application. 

Thus, these changes redraw the 

distinction between employment and 

licensure, making it clear when an 

applicant must provide more detailed 

information and when this Commission 

may share applicant information. 

As stated in the notice required by the 

proposed 25 CFR 556.2, application 

information may be ‘‘disclosed * * * in 

connection with the issuance, denial, or 

revocation of a gaming license. * * *’’ 

As such, the information could not, 

without otherwise complying with the 

requirements of the Privacy Act, 5 

U.S.C. 552a, be provided to support 

employment decisions by prospective or 

current employers of the license 

applicant. This is a change from prior 

practice. Under the NIGC’s existing 

regulations, application information can 

be disclosed in connection with the 

hiring and firing of an employee. 

Finally, the amendments to 25 CFR 

556.2, 556.3 and 558.2 will have 

implications for tribal gaming 

ordinances, but not immediately. Upon 

the effective date, tribes do not have to 

immediately amend their gaming 

ordinances. However, following the 

effective date, whenever tribes amend 

their gaming ordinances, they must also 

make amendments conforming to the 

language in these sections. 

E. Monitoring and Investigating 

IGRA requires ordinances submitted 

for the Chairman’s review to contain a 

provision requiring an annual audit. 25 

U.S.C. 2710(b)(2). The NIGC’s 

regulation, 25 CFR 571.12, creates 

standard procedures for the submission 

of the annual audit to the Commission, 

and § 571.13 deals with how and when 

a tribe submits an audit statement. The 

final rule still requires tribes to contract 

with independent certified public 

accountants that use Generally 

Accepted Accounting Principles and 

Generally Accepted Accounting 

Standards to complete their audits. 

However, the final rule allows tribes 

with multiple facilities to consolidate 

their audit statements into one. Further, 

the final rule allows operations earning 

less than $2 million in gross gaming 

revenue to file an abbreviated statement. 

The final rule also allows a tribe to 

submit an electronic version of an audit 

for so called ‘‘stub periods’’ of less than 

one year. 

Finally, the final rule requires that 

audits and financial statements be sent 

on or before their due dates. This is a 

change from the previous requirement 

that NIGC actually receive the audits 

and statements on or before their due 

dates. Audits and statements must now 

be postmarked by their due dates. If 

using a private delivery service, such as 

FedEx or UPS, then the shipping receipt 

must be dated on or before the due date. 

The final rule reflects common sense 

practice and reduces tribal costs and 

burden hours. 

NIGC regulation 25 CFR 573.6 

discusses the Chairman’s ability to close 

a gaming operation for any listed 

substantial IGRA violation. The final 

rule adds one substantial violation to 

the list. The Chairman may now issue 

a temporary closure order for a gaming 

operation that operates on Indian land 

not eligible for gaming under IGRA. 

Indian gaming under IGRA must occur 

on ‘‘Indian lands,’’ 25 U.S.C. 2710(a), (b) 

and (d), as IGRA defines that term. 25 

U.S.C. 2703(4). If Indian land is trust 

land acquired after October 17, 1988 

(‘‘after-acquired land’’), then the land is 

eligible for gaming only if it meets one 

of the exceptions provided in 25 U.S.C. 

2719. A gaming operation that operates 

on after-acquired trust land that does 

not meet one of the exceptions in 

section 2719 is in violation of IGRA. 

Operating illegally in this way is a 

substantial violation of IGRA that 

warrants immediate closure. 

Regulatory Matters 

Regulatory Flexibility Act 

The Regulatory Flexibility Act, 5 

U.S.C. 601 et seq., requires that an 

agency prepare a regulatory flexibility 

analysis of any rule subject to notice 

and comment rulemaking requirements 

under the Administrative Procedure Act 

or any other statute, unless the agency 

certifies that the rule will not have a 

significant economic impact on a 

substantial number of small entities. 

For purposes of assessing the impact 

of the final rule, ‘‘small entity’’ is 

defined as: (1) A small business that 

meets the definition of a small business 

found in the Small Business Act and 

codified at 13 CFR 121.201; (2) a small 

governmental jurisdiction that is a 

government of a city, county, town, 

school district or special district with a 

population of less than 50,000; and (3) 

a small organization that is any not-forprofit enterprise that is independently 

owned and operated and is not 

dominant in its field. 

Indian tribes and tribal casinos do not 

meet this definition. Tribes are excluded 

from the governmental jurisdictions 

listed under (2), and tribally owned 

casinos are not ordinary commercial 

activities but are tribal governmental 

operations. 


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As a practical matter here, the cost 

increases of the final rule take the form 

of increased fees for management 

contractors’ background investigations. 

The economic impact of these is not 

significant as the fees, currently below 

industry norms, are raised to meet them, 

and the effect is limited to only 

management contracting entities. These 

are by no means substantial in number, 

and, generally, do not fall within the 

definition of ‘‘small entity’’ as defined 

by the Small Business Act. Accordingly, 

the Commission certifies that this action 

will not have a significant economic 

impact on a substantial number of small 

entities. 

Small Business Regulatory Enforcement 

Fairness Act 

The final 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 

annual 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 final rule have a significant adverse 

effect on competition, employment, 

investment, productivity, innovation, or 

the ability of the enterprises to compete 

with foreign-based enterprises. 

Unfunded Mandates Reform Act 

The Commission, as an independent 

regulatory agency within the 

Department of the Interior, is exempt 

from compliance with the Unfunded 

Mandates Reform Act. 2 U.S.C. 1502(1); 

2 U.S.C. 658(1). Regardless, the final 

rule does not impose an unfunded 

mandate on state, local, tribal 

governments, or on the private sector of 

more than $100 million per year. Thus, 

it is not a ‘‘significant regulatory action’’ 

under the Unfunded Mandates Reform 

Act. 

Civil Justice Reform 

In accordance with Executive Order 

12988, the Office of General Counsel has 

determined that the final rule does not 

unduly burden the judicial system, and 

it meets the requirements of section 3(a) 

and 3(b)(2) of that order. 

National Environmental Policy Act 

The Commission has determined that 

the final rule does not constitute a major 

federal action significantly affecting the 

quality of the human environment and 

no detailed statement is required 

pursuant to the National Environmental 

Policy Act of 1969, 42 U.S.C. 4321 et 

seq. 

Paperwork Reduction Act 

The final rule does not require any 

significant changes in information 

collection under the Paperwork 

Reduction Act of 1995, 44 U.S.C. 3501 

et seq. The information collections in 

the affected regulations are included 

within OMB control numbers 3141– 

0001 for part 571; 3141–0003 for parts 

556 and 558; 3141–0004 for parts 531, 

533, 535, 537, 539; and 3141–0007 for 

part 514. 

Review of Public Comments 

A number of commenters made 

editorial suggestions that improved 

consistency within the final rule. These 

changes were accepted and did not 

change the substance of the final rule. 

Substantive changes and suggestions are 

addressed below. 

General Comments 

Comment: Eight commenters objected 

generally to any promulgation of 

regulations by the NIGC, stating that 

such action violated tribal sovereignty. 

Further, the commenters also stated that 

the NIGC had failed to consult tribes in 

crafting these changes. The commenters 

requested complete withdrawal of these 

regulations, including regulations 

passed in 1993 that the NIGC has not 

proposed to amend. 

Response: The Commission does not 

agree that making these slight 

modifications to its existing regulations 

violates tribal sovereignty. Under IGRA, 

tribes and the NIGC share dual 

regulatory roles, and the NIGC is 

statutorily authorized to issue 

regulations. Thus, the Commission does 

not feel that it is appropriate to 

withdraw the final rule. Further, as to 

those regulations passed in 1993 that 

were not addressed in the proposed 

rule, they have served Indian gaming 

well for 16 years, and the Commission 

sees no reason to withdraw them now. 

As to a failure of consultation, the 

Commission strongly disagrees. The 

NIGC has spent the last two years 

consulting with tribes on the updates. 

The Commission alerted tribes to the 

changes in March 2007, has asked them 

for review and comment, and has 

incorporated tribal suggestions into each 

successive draft. Further, the 

Commission has met with tribes all over 

the country to discuss the regulations, 

or anything else that tribal leaders 

desired to discuss. Comments from 

those discussions were incorporated 

into the final rule. 

Comment: The NIGC has received 

comments that are generally supportive 

of these updated rules. 

Response: The Commission 

appreciates the support and is grateful 

to everyone who commented, both on 

the proposed rule and in response to the 

earlier draft sent to tribal leaders. 

Comment: Nine commenters cited to 

a White House memorandum signed by 

Chief of Staff Rahm Emanuel on January 

20, 2009, stating that it advocated for 

the immediate withdrawal of all 

pending regulations. Thus, the 

commenters insisted that the proposed 

rule could not go forward. 

Response: The Commission disagrees. 

The commenters incorrectly refer to this 

memorandum as an executive order, 

which it is not. Further, the 

memorandum does not ask agencies to 

withdraw all pending regulations. 

Rather, it says something far narrower, 

asking for the withdrawal of proposed 

regulations that had not already been 

published in the Federal Register by 

January 20, 2009. This proposed rule 

was published in the Federal Register 

on December 22, 2008, almost one 

month prior to the memorandum. 

Additionally, the memorandum asks 

agencies to extend the comment periods 

for any proposed rules pending. The 

Commission had done just that and 

extended the comment period for the 

proposed rule as published in the 

Federal Register. See 74 FR 4363 

(January 26, 2009). Finally, the 

Commission continues to comply with 

the memorandum and keep the 

Administration informed as to the final 

rule. 

Specific Comments 

Comment: Some commenters 

requested that the definition for ‘‘net 

revenues’’ in 25 CFR 502.16 include the 

words ‘‘gaming-related’’ in order to 

make clear that the Commission’s 

jurisdiction extends only to gaming 

revenues. 

Response: The Commission agrees 

and incorporated this change into the 

final rule. 

Comment: Ten commenters claimed 

that the NIGC has no authority to 

change the definition of ‘‘net revenues’’ 

in 25 CFR 502.16 because Congress has 

already defined the term. 

Response: The Commission is not 

changing the definition of net revenue. 

It is, rather, preserving the original 

meaning of the term in IGRA in light of 

changes in professional accounting 

pronouncements that make the term 

ambiguous. What is more, that 

ambiguity has the potential to 

improperly increase management 

contract fees. 

When IGRA was enacted, the 

definition of net revenue reflected the 

accounting profession’s understanding 

of ‘‘operating expenses’’ as including all 

expenses incurred by a business. 


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Subsequently, however, the accounting 

profession changed its understanding of 

the term. 

The American Institute of Certified 

Professional Accountants (AICPA) 

reasoned that not all expenses are alike. 

Some expenses are directly tied to 

increases and decreases in the economic 

activity of a business, and hence its 

ability to produce revenue. Examples of 

these include salaries, utilities, and 

advertising. Presumably, an increase in 

these expenses—say, in a period of 

expansion for the business—should 

ultimately result in the business 

producing more revenue. AICPA called 

these expenses ‘‘operating expenses,’’ 

and thus the term has come to refer to 

a smaller class of expenses than it did 

when IGRA was adopted. 

Other expenses are not so closely tied 

to a business’s economic activity and 

revenue production. For example, a 

business’s interest obligation on a loan 

may increase with a change in the prime 

rate, and this does not represent an 

expansion of business activity at all. 

These latter expenses AICPA now calls 

‘‘non-operating expenses.’’ 

Under IGRA, ‘‘net revenue’’ is 

calculated by deducting prizes and 

‘‘operating expenses’’ from gross 

revenue. ‘‘Operating expenses,’’ 

however, has become ambiguous 

because of the change in AICPA’s 

understanding of the term. Thus, the 

question arises whether to calculate net 

revenues by deducting ‘‘operating 

expenses’’ as the term was understood 

at the time IGRA was adopted or as the 

term is understood now. 

If you apply the current 

understanding and remove interest and 

the like—the ‘‘non-operating’’ 

expenses—from the calculation of net 

revenue, the result is improperly high 

management contract fees. The expenses 

deducted from gross revenues become 

smaller, and net revenues, which form 

the basis for calculating management 

fees, are overstated. 

This is the result the Commission 

intends to prevent. The amendment to 

502.16 is intended to ensure that net 

revenues are calculated by using 

AICPA’s original understanding and 

deducting as ‘‘operating expenses’’ all of 

the expenses incurred by a business—by 

deducting, in other words, what AICPA 

now calls ‘‘operating expenses’’ and 

‘‘non-operating expenses.’’ 

Comment: Fifteen commenters 

objected to the definition of ‘‘Person 

having a direct or indirect financial 

interest in a management contract,’’ 25 

CFR 502.17 as unduly burdensome to 

tribes. Tribal commenters argued that 

the definition could make it impossible 

for tribal entities to manage a gaming 

operation because the definition can be 

read to include all tribal members. 

Thus, they argue, when a tribal entity is 

the manager, all tribal members would 

be subject to background investigations 

and suitability determinations. 

Response: The Commission does not 

agree. The language in 502.17(e) to 

which the commenters refer is the same 

language adopted in 1993. The 

Commission has not proposed any 

changes to it, and it sees no reason to 

change the language now. The 

Commission has never interpreted this 

section to include the entire 

membership of a tribe for purposes of 

determining who ‘‘has an interest’’ in a 

management contract and thus who 

needs to undergo a background 

investigation. 

The Commission proposed only two 

changes here. One was to lower the 

threshold for corporate stockholders 

included in the definition of ‘‘persons 

with a direct or indirect financial 

interest’’ from persons owning 10% of 

stocks to 5% of stocks. The other was 

to add persons receiving gifts. 

Comment: These same commenters 

objected to the change in section 502.17 

that allows the agency to conduct 

background investigations on persons 

with 5% or more interest in the 

management contract, a change from the 

previous 10% interest. The commenters 

argued that this change appeared 

arbitrary and would increase the time 

needed to complete the approval 

process by increasing the number and 

costs of required background 

investigations. 

Response: The Commission disagrees. 

It feels that the changes do not create 

significant cost increases for tribes 

because the management contractor 

pays for the background investigations 

conducted on their principals. While 

the change may require a greater 

number of background investigations, 

the increased workload falls on the 

Commission staff conducting the 

background investigations. The 

Commission feels that the increase in 

workload is offset by the benefit of 

protecting the integrity of Indian 

gaming. Finally, eight commenters 

expressly agreed with the changes 

presented in this section. 

Comment: Nine commenters objected 

to the changes in filing fee statements 

under 25 CFR 514.1 and cited to 

Colorado River Indian Tribe v. National 

Indian Gaming Commission (CRIT), 383 

F. Supp 2d 123 (D.D.C. 2005), aff’d 466 

F. 3d 134 (D.C. Cir. 2006), for the 

proposition that the NIGC does not 

possess authority to apply these changes 

to Class III gaming operations. 

Response: The Commission disagrees. 

The commenters incorrectly understand 

CRIT to hold that NIGC has no authority 

over Class III gaming. CRIT, however, 

only holds that NIGC lacks the authority 

to promulgate and enforce minimum 

internal control standards for most Class 

III gaming operations. 383 F. Supp 2d 

123, 132 (D.D.C. 2005). CRIT did not 

strip the NIGC of the power to regulate 

Class III gaming generally. Rather, it 

stands for the proposition that NIGC, 

like every other administrative agency, 

has only those authorities Congress has 

granted to it. The NIGC has continued 

to regulate the industry consistent with 

IGRA’s provisions, and IGRA 

specifically gives the Commission the 

authority to assess fees on Class III 

gaming. 25 U.S.C 2717(a)(1). Finally, six 

commenters agreed with the changes to 

514.1. 

Comment: Nine commenters objected 

to the requirement in 25 CFR 514.1 that 

fees and fee statements actually be 

received by NIGC on or before the due 

dates, preferring instead to apply the 

mailbox rule. This would mean that fee 

payments and statements are timely so 

long as they are mailed by their due 

dates, no matter how long those 

documents take to arrive. 

Response: The Commission agrees. 

The final rule now requires that fees and 

fee statements be sent on or before their 

due dates. Fees and fee statements must 

now be postmarked by their due dates. 

If using a private delivery service, such 

as FedEx or UPS, then the shipping 

receipt must be dated on or before the 

due date. 

Comment: Six commenters objected to 

the requirements that management 

contracts set operating days and hours 

as well as the advertising and placing 

budgets under 25 CFR 531.1(b)(3) and 

(10). Specifically, commenters asserted 

that these requirements were indicative 

of NIGC overreaching its authority and 

asked too much of tribes and potential 

contractors. 

Response: The Commission disagrees. 

None of the language in 531.1(b) was 

changed from the original language 

adopted in 1993. The requirements that 

management contracts must contain 

provisions regarding days and hours of 

operation, as well as provisions on 

advertising and placing budgets, has 

always existed in the Commission’s 

regulations. The Commission sees no 

reason to change that language now. 

Finally, two commenters specifically 

agreed with the changes presented in 

531.1. 

Comment: Five commenters noted 

that 25 CFR 533.2 gave tribes only 30 

days to submit contracts for 


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management approval and felt that the 

timeline was too stringent. 

Response: The Commission 

understands that the parties to a 

management contract may desire more 

time and thinks that it is fair to allow 

a longer time for submission. Thus, the 

Commission has changed this section to 

allow for the submission of management 

contracts within 60 days of their 

execution. 

Comment: Twelve commenters 

objected to the requirement in 25 CFR 

533.3(h) that the parties to a 

management contract submit a legal 

description of the land on which the 

gaming is to take place. The 

requirement, they felt, was burdensome 

and unnecessary. Commenters instead 

preferred the idea of having the 

Chairman approve management 

contracts without a legal description in 

case the parties chose a different site for 

construction or needed more time to 

finalize the land-into-trust process. 

Response: The Commission disagrees. 

The NIGC routinely requests land 

descriptions for all management 

contracts. Since all management 

contracts are site-specific, the Chairman 

needs to have this legal description to 

determine whether the gaming 

operation will reside on Indian lands as 

IGRA requires. The Chairman does not 

normally approve management 

contracts prior to land being taken into 

trust. Consequently, this change simply 

clarifies agency practice. 

Comment: Seven commenters 

objected to the 90-day extension 

permitted to the Chairman for his 

decision on a management contract 

under 25 CFR 533.4 because it allows 

the Chairman too much time. The 

commenters insisted that the standard 

180 days for approval was long enough. 

Response: The Commission disagrees. 

The 90-day extension that the 

commenters object to is the original 

language of the regulations adopted in 

1993. The changes to this section do not 

involve this timeline, and the 

Commission feels no need to revisit the 

question now. 

Comment: One commenter objected to 

25 CFR 535.3 and 537.1 on grounds that 

they violated tribal sovereignty and 

were too burdensome. 

Response: The Commission disagrees. 

The commenter failed to explain what 

changes were problematic or why these 

changes violate sovereignty or burden 

the tribes. Further, the changes made to 

these two sections do not impede tribal 

sovereignty. The changes to section 

535.3 indicate that the Chairman can 

void management contract amendments 

as well as approve them, a power given 

to him by IGRA. 25 U.S.C. 2711. Thus, 

this change merely clarifies the 

Chairman’s existing authority. 

Furthermore, the changes to section 

537.1 merely require a management 

contractor to disclose its ten largest 

stock holders, their relations, and 

managers, regardless of corporate form. 

This is a clarification of an existing 

obligation. In fact, much of the text of 

these two sections remains unchanged 

from the original language adopted in 

1993. Finally, two commenters agreed 

with the changes. 

Comment: Six commenters objected to 

the language in 25 CFR 535.1 that states: 

‘‘If the Chairman does not approve or 

disapprove an amendment within the 

timelines of paragraph (d)(1) or (d)(2) of 

this section, the amendment shall be 

deemed disapproved.’’ The commenters 

asserted that the Chairman’s failure to 

act on these contracts should make them 

‘‘deemed approved’’ by operation of law 

instead of ‘‘deemed disapproved.’’ They 

requested that the NIGC make this 

change to this section. 

Response: The Commission disagrees. 

This language has not changed from the 

language adopted in 1993 and has 

always read that the Chairman can 

‘‘approve or disapprove’’ the 

amendment at issue and that the 

amendment will be ‘‘deemed 

disapproved’’ if he fails to act. The 

Commission sees no reason to change 

this now. 

Comment: Twelve commenters 

objected to the increase in fees for 

background investigations from $10,000 

to $25,000 under 25 CFR 537.3. The 

commenters suggested that the fee was 

too high and caused too great a burden 

on tribes. They advised that the fee 

should remain the same. 

Response: The Commission disagrees. 

The change represents the amount of the 

deposit made for the background 

investigations rather than an increase in 

fees. Furthermore, typically, contractors 

pay for their background investigations, 

and not the tribes. Furthermore, even if 

a tribe chooses to reimburse a contractor 

for the costs, the deposit presented in 

the final rule has been changed to reflect 

the actual costs of performing this 

service. 

Comment: One commenter objected to 

the ability of a party to appeal the 

Chairman’s approval of a management 

contract or amendment under 25 CFR 

539.2. Originally, this section only 

permitted appeals for disapprovals of 

management contracts and 

amendments. The commenter requested 

that this language be removed for fear 

that state and local governments might 

be considered a party for purposes of 

appealing under this section and 

challenging an approved management 

contract or amendment. 

Response: The Commission disagrees. 

While the Commission anticipates that 

this addition will be used infrequently, 

the amendment was made to 

acknowledge the possibility that parties 

may question the propriety of a contract 

approval. This section does not give 

standing to an entity that was not a 

party to the management contract or 

amendment. The amended section 

merely recognizes a practical necessity 

and reflects existing practices. 

Comment: Two commenters stated 

that 25 CFR 558.2 needed clarification 

because the language appeared to 

indicate that someone other than a 

gaming commission could license 

gaming employees. 

Response: The Commission agrees 

and has altered the language in the final 

rule accordingly. 

Comment: Twenty-three commenters 

objected to the changes presented in 25 

CFR 556.2, 556.3, and 558.2. The 

commenters insisted that the NIGC lacks 

the authority to change these sections 

because the changes would require 

tribes to specifically amend their 

ordinances in contravention of their 

status as a sovereign. 

The commenters also asserted that in 

replacing the word ‘‘employment’’ with 

the word ‘‘licensing’’ throughout these 

sections, the Commission was making a 

mistake. They argued that changing 

these words incorrectly indicated that 

the Privacy Act and False Statement Act 

now apply to tribes. Finally, the 

commenters argued that using these 

sections for employment purposes was 

convenient for their needs. 

Response: The Commission does not 

agree. The final rule is not retroactive 

and does not require any tribe to 

immediately amend its gaming 

ordinance. Rather, the amendments 

need only be made when a tribe 

otherwise chooses to amend its gaming 

ordinance. Thus, the final rule states 

that tribal gaming ordinances and 

ordinance amendments that have been 

approved by the Chairman * * * and 

that reference this rulemaking will not 

need to be amended to comply with this 

section. All future ordinance 

submissions, however, must comply. 

Furthermore, the Privacy Act notice 

and False Statement Act notice have 

been required as part of NIGC 

regulations since they were adopted in 

1993. The Commission is only changing 

the word ‘‘employment’’ to ‘‘licensing.’’ 

None of the changes alter the 

application of these Acts. Because tribes 

access personally identifiable 

information through the NIGC, they 


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have agreed to the Privacy Act and False 

Statement Act restrictions. 

Finally, the emphasis here is on 

licensing and not employment. A 

decision to license an applicant and a 

decision about an applicant’s suitability 

(or eligibility) for licensure are separate 

and distinct from a decision to hire the 

applicant. We have concluded that these 

sections should be concerned with 

licensure and suitability determinations, 

not employment decisions. 

Comment: Ten commenters objected 

to the changes for filing audits under 25 

CFR 571.12 and cited the Colorado 

River Indian Tribe v. National Indian 

Gaming Commission (CRIT), 383 F. 

Supp 2d 123 (D.D.C. 2005), aff’d 466 F. 

3d 134 (D.C. Cir 2006), for the 

proposition that the NIGC does not 

possess authority to apply these changes 

to Class III gaming operations. 

Response: The Commission disagrees. 

The commenters incorrectly understand 

CRIT to hold that NIGC has no authority 

over Class III gaming. CRIT, however, 

only holds that NIGC lacks the authority 

to promulgate and enforce minimum 

internal control standards for Class III 

gaming operations. 383 F. Supp 2d 123, 

132 (D.D.C. 2005). CRIT did not strip the 

NIGC of the power to regulate Class III 

gaming generally. Rather, it stands for 

the proposition that NIGC, like every 

other administrative agency, has only 

those authorities Congress has granted 

to it. The NIGC has continued to 

regulate the industry consistent with 

IGRA’s provisions, and IGRA requires 

Class II and Class III operations to file 

annual audits. 25 U.S.C. 2710(b)(2)(C); 

2710(d)(1)(A)(ii). Finally, five 

commenters agreed with the changes to 

571.12. 

Comment: Ten commenters objected 

to the requirement in 25 CFR 571.12 

that audit statements actually be 

received by NIGC on or before the due 

dates, preferring instead to apply the 

mailbox rule. This would mean that 

audit statements are timely so long as 

they are mailed by the due dates, no 

matter how long those documents take 

to arrive. 

Response: The Commission agrees. 

The final rule now requires that audits 

and financial statements be sent on or 

before their due dates. Audit statements 

must now be postmarked by their due 

dates. If using a private delivery service, 

such as FedEx or UPS, then the 

shipping receipt must be dated on or 

before the due date. 

Comment: Three commenters objected 

to the new requirement for a written 

statement as requested under 25 CFR 

571.12(c)(3), (d)(5), and (e)(5). They 

insisted that the requirement was 

unnecessary and that the requirement 

was vaguely worded. Without further 

explanation, the requirement could 

cause further non-compliance as tribes 

attempt to understand the scope of what 

is required in the statement. 

Response: The Commission agrees. 

The Commission is convinced by the 

arguments presented and has altered the 

final rule to delete these section 

requirements. 

Comment: One commenter noted that 

the word ‘‘reports’’ appeared in the 1993 

version of this section but no longer 

appears in the proposed rule published 

in December 2008. The commenter 

suggested that 25 CFR 571.13 include 

the word ‘‘reports’’ again because it 

captures more broadly the documents 

compiled by the certified public 

accountant when conducting an audit. 

Response: The Commission agrees. 

The Commission has altered the final 

rule to put the word ‘‘reports’’ back in 

the relevant section. 

Comment: Ten commenters objected 

to the addition of gaming on ineligible 

lands as a substantial violation under 25 

CFR 573.6. Commenters argued that the 

Commission could not claim that 

gaming on ineligible lands is a 

substantial IGRA violation when it 

routinely permits operations to continue 

running after it is discovered that they 

exist on ineligible lands. The 

commenters asserted that the regulation 

was also duplicative because gaming 

occurring on ineligible lands is an issue 

that could be handled by parties other 

than the NIGC. Further, they suggested 

that the additional enforcement power 

for the Chairman creates confusion as to 

authority between the NIGC and the 

Department of the Interior (DOI) on this 

issue. A split decision between the 

departments could cause problems for 

tribes. 

Response: The Commission disagrees. 

First, the Chairman does not routinely 

permit the operation of gaming on 

ineligible lands under IGRA. Next, the 

addition is not duplicative, and there is 

no additional power given to the 

Chairman. The Chairman already has 

the authority to close an operation 

running on ineligible lands. Under 

existing regulations, closure is a twostep process. The Chairman first has to 

issue a notice of violation. He may 

subsequently order closure if the 

operation on ineligible lands continues. 

Under the change here, the Chairman 

may issue a notice of violation and 

closure order simultaneously. The 

change thus merely adds operating on 

ineligible lands to the list of serious 

violations that justify immediate 

closure. Finally, there is no confusion 

between DOI and NIGC. Regardless of 

which agency makes the decision as to 

whether lands qualify for gaming, only 

the NIGC has the authority to close a 

gaming operation. 

List of Subjects in 25 CFR Parts 502, 

514, 531, 533, 535, 537, 539, 556, 558, 

571 

Gambling, Indians—lands, Indians— 

tribal government, Reporting and 

recordkeeping requirements. 

■ For the reasons set forth in the 

preamble, the Commission amends its 

regulations at 25 CFR Chapter III as 

follows: 

PART 502—DEFINITIONS OF THIS 

CHAPTER 

■ 1. The authority citation for part 502 

continues to read as follows: 

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

■ 2. Add new paragraph (d) to § 502.14 

to read as follows: 

§ 502.14 Key employee. 

* * * * * 

(d) Any other person designated by 

the tribe as a key employee. 

■ 3. Revise § 502.16 to read as follows: 

§ 502.16 Net revenues. 

Net revenues means gross gaming 

revenues of an Indian gaming operation 

less— 

(a) Amounts paid out as, or paid for, 

prizes; and 

(b) Total gaming-related operating 

expenses, including all those expenses 

of the gaming operation commonly 

known as operating expenses and nonoperating expenses consistent with 

professional accounting 

pronouncements, excluding 

management fees. 

■ 4. Revise § 502.17 to read as follows: 

§ 502.17 Person having a direct or indirect 

financial interest in a management contract. 

Person having a direct or indirect 

financial interest in a management 

contract means: 

(a) When a person is a party to a 

management contract, any person 

having a direct financial interest in such 

management contract; 

(b) When a trust is a party to a 

management contract, any beneficiary or 

trustee; 

(c) When a partnership is a party to 

a management contract, any partner; 

(d) When a corporation is a party to 

a management contract, any person who 

is a director or who holds at least 5% 

of the issued and outstanding stock 

alone or in combination with another 

stockholder who is a spouse, parent, 

child or sibling when the corporation is 

publicly traded or the top ten (10) 


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shareholders for a privately held 

corporation; 

(e) When an entity other than a 

natural person has an interest in a trust, 

partnership or corporation that has an 

interest in a management contract, all 

parties of that entity are deemed to be 

persons having a direct financial 

interest in a management contract; or 

(f) Any person or entity who will 

receive a portion of the direct or indirect 

interest of any person or entity listed 

above through attribution, grant, pledge, 

or gift. 

■ 5. Add new paragraph (d) to § 502.19 

to read as follows: 

§ 502.19 Primary management official. 

* * * * * 

(d) Any other person designated by 

the tribe as a primary management 

official. 

PART 514—FEES 

■ 6. The authority citation for part 514 

continues to read as follows: 

Authority: 25 U.S.C. 2706, 2708, 2710, 

2717, 2717a. 

■ 7. Revise § 514.1 to read as follows: 

§ 514.1 Annual fees. 

(a) Each gaming operation under the 

jurisdiction of the Commission shall pay 

to the Commission annual fees as 

established by the Commission. The 

Commission, by a vote of not less than 

two of its members, shall adopt the rates 

of fees to be paid. 

(1) The Commission shall adopt 

preliminary rates for each calendar year 

no later than February 1st of that year, 

and, if considered necessary, shall 

modify those rates no later than July 1st 

of that year. 

(2) The Commission shall publish the 

rates of fees in a notice in the Federal 

Register. 

(3) The rates of fees imposed shall 

be— 

(i) No more than 2.5 percent of the 

first $ 1,500,000 (1st tier), and 

(ii) No more than 5 percent of 

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

(2nd tier) of the assessable gross 

revenues from each gaming operation 

subject to the jurisdiction of the 

Commission. 

(4) If a tribe has a certificate of selfregulation, the rate of fees imposed shall 

be no more than .25 percent of 

assessable gross revenues from selfregulated class II gaming operations. 

(b) For purposes of computing fees, 

assessable gross revenues for each 

gaming operation are the annual total 

amount of money wagered on class II 

and III games, admission fees (including 

table or card fees), less any amounts 

paid out as prizes or paid for prizes 

awarded, and less an allowance for 

amortization of capital expenditures for 

structures. 

(1) Unless otherwise provided by the 

regulations, generally accepted 

accounting principles shall be used. 

(2) The allowance for amortization of 

capital expenditures for structures shall 

be either: 

(i) An amount not to exceed 5% of the 

cost of structures in use throughout the 

year and 2.5% (two and one-half 

percent) of the cost of structures in use 

during only a part of the year; or 

(ii) An amount not to exceed 10% of 

the cost of the total amount of 

amortization/depreciation expenses for 

the year. 

(3) Examples of computations follow: 

(i) For paragraph (2)(i) of this section: 

Gross gaming revenues: 

Money wagered ................................................................................................................................................ ........................ $1,000,000 

Admission fees ................................................................................................................................................ 5,000 ........................

........................ 1,005,000 

Less: 

Prizes paid in cash .......................................................................................................................................... $500,000 

Cost of other prizes awarded .......................................................................................................................... 10,000 510,000 

Gross gaming profit .................................................................................................................................. ........................ 495,000 

Less allowance for amortization of capital expenditures for structures: 

Capital expenditures for structures made in— 

Prior years ................................................................................................................................................. 750,000 ........................

Current year .............................................................................................................................................. 50,000 ........................

Maximum allowance: 

$750,000 × .05 = ....................................................................................................................................... 37,500 ........................

50,000 × .025 = ......................................................................................................................................... 1,250 38,750 

Assessable gross revenues ............................................................................................................................... ........................ 456,250 

(ii) For paragraph (2)(ii) of this 

section: 

Gross gaming revenues: 

Money wagered ................................................................................................................................................ ........................ $1,000,000 

Admission fees ................................................................................................................................................ 5,000 1,005,000 

Less: 

Prizes paid in cash .......................................................................................................................................... $500,000 ........................

Cost of other prizes awarded .......................................................................................................................... 10,000 510,000 

Gross gaming profit ......................................................................................................................................... ........................ 495,000 

Less allowance for amortization of capital expenditures for structures: 

Total amount of amortization/depreciation per books 400,000 ........................

Maximum allowance: 

$400,000 × .10 = ....................................................................................................................................... ........................ 40,000 

Gross gaming revenues .................................................................................................................................... ........................ 455,000 

Assessable gross revenues ............................................................................................................................... ........................ 455,000 

(4) All class II and III revenues from 

gaming operations are to be included. 

(c) Each gaming operation subject to 

the jurisdiction of the Commission and 

not exempt from paying fees pursuant to 

the self-regulation provisions shall file 

with the Commission a statement 


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36934 Federal Register / Vol. 74, No. 142 / Monday, July 27, 2009 / Rules and Regulations 

showing its assessable gross revenues 

for the previous calendar year. 

(1) These statements shall show the 

amounts derived from each type of 

game, the amounts deducted for prizes, 

and the amounts deducted for the 

amortization of structures; 

(2) These statements shall be sent to 

the Commission on or before March 1st 

and August 1st of each calendar year. 

(3) The statements shall identify an 

individual or individuals to be 

contacted should the Commission need 

to communicate further with the gaming 

operation. The telephone numbers of 

the individual(s) shall be included. 

(4) Each gaming operation shall 

determine the amount of fees to be paid 

and remit them with the statement 

required in paragraph (c) of this section. 

The fees payable shall be computed 

using— 

(i) The most recent rates of fees 

adopted by the Commission pursuant to 

paragraph (a)(1) of this section, 

(ii) The assessable gross revenues for 

the previous calendar year as reported 

pursuant to this paragraph, and 

(iii) The amounts paid and credits 

received during the year. 

(5) Each statement shall include the 

computation of the fees payable, 

showing all amounts used in the 

calculations. The required calculations 

are as follows: 

(i) Multiply the previous calendar 

year’s 1st tier assessable gross revenues 

by the rate for those revenues adopted 

by the Commission. 

(ii) Multiply the previous calendar 

year’s 2nd tier assessable gross revenues 

by the rate for those revenues adopted 

by the Commission. 

(iii) Add (total) the results (products) 

obtained in paragraphs (c)(5)(i) and (ii) 

of this section. 

(iv) Multiply the total obtained in 

paragraph (c)(5)(iii) of this section by 1⁄2. 

(v) The amount computed in 

paragraph (c)(5)(iv) of this section is the 

amount to be remitted. 

(6) Examples of fee computations 

follow: 

(i) Where a filing is made for March 

1st of the calendar year, the previous 

year’s assessable gross revenues are 

$2,000,000, the fee rates adopted by the 

Commission are 0.0% on the first 

$1,500,000 and .08% on the remainder, 

the amounts to be used and the 

computations to be made are as follows: 

1st tier revenues—$1,500,000 × 

0.0% = 

2nd tier revenues—500,000 × 

.08% = $400 

Annual fees .................................... 400 

Multiply for fraction of year—1⁄2 or .50 

Fees for first payment .................... 200 

Amount to be remitted ............... 200 

(7) The statements, remittances and 

communications about fees shall be 

transmitted to the Commission at the 

following address: Office of Finance, 

National Indian Gaming Commission, 

1441 L Street, NW., Suite 9100, 

Washington, DC 20005. Checks should 

be made payable to the National Indian 

Gaming Commission (do not remit 

cash). 

(8) The Commission may assess a 

penalty for failure to file timely a 

statement. 

(9) Interest shall be assessed at rates 

established from time to time by the 

Secretary of the Treasury on amounts 

remaining unpaid after their due date. 

(d) The total amount of all fees 

imposed during any fiscal year shall not 

exceed the statutory maximum imposed 

by Congress. The Commission shall 

credit pro-rata any fees collected in 

excess of this amount against amounts 

otherwise due by March 1st and August 

1st of each calendar year. 

(e) Failure to pay fees, any applicable 

penalties, and interest related thereto 

may be grounds for: 

(1) Closure, or 

(2) Disapproving or revoking the 

approval of the Chairman of any license, 

ordinance, or resolution required under 

this Act for the operation of gaming. 

(f) To the extent that revenue derived 

from fees imposed under the schedule 

established under this paragraph are not 

expended or committed at the close of 

any fiscal year, such funds shall remain 

available until expended to defray the 

costs of operations of the Commission. 

PART 531—CONTENT OF 

MANAGEMENT CONTRACTS 

■ 8. The authority citation for part 531 

continues to read as follows: 

Authority: 25 U.S.C. 81, 2706(b)(10), 

2710(d)(9), 2711. 

■ 9. Revise § 531.1 to read as follows: 

§ 531.1 Required provisions. 

Management contracts shall conform 

to all of the requirements contained in 

this section in the manner indicated. 

(a) Governmental authority. Provide 

that all gaming covered by the contract 

will be conducted in accordance with 

the Indian Gaming Regulatory Act 

(IGRA, or the Act) and governing tribal 

ordinance(s). 

(b) Assignment of responsibilities. 

Enumerate the responsibilities of each 

of the parties for each identifiable 

function, including: 

(1) Maintaining and improving the 

gaming facility; 

(2) Providing operating capital; 

(3) Establishing operating days and 

hours; 

(4) Hiring, firing, training and 

promoting employees; 

(5) Maintaining the gaming 

operation’s books and records; 

(6) Preparing the operation’s financial 

statements and reports; 

(7) Paying for the services of the 

independent auditor engaged pursuant 

to § 571.12 of this chapter; 

(8) Hiring and supervising security 

personnel; 

(9) Providing fire protection services; 

(10) Setting advertising budget and 

placing advertising; 

(11) Paying bills and expenses; 

(12) Establishing and administering 

employment practices; 

(13) Obtaining and maintaining 

insurance coverage, including coverage 

of public liability and property loss or 

damage; 

(14) Complying with all applicable 

provisions of the Internal Revenue 

Code; 

(15) Paying the cost of any increased 

public safety services; and 

(16) If applicable, supplying the 

National Indian Gaming Commission 

(NIGC, or the Commission) with all 

information necessary for the 

Commission to comply with the 

regulations of the Commission issued 

pursuant to the National Environmental 

Policy Act (NEPA). 

(c) Accounting. Provide for the 

establishment and maintenance of 

satisfactory accounting systems and 

procedures that shall, at a minimum: 

(1) Include an adequate system of 

internal accounting controls; 

(2) Permit the preparation of financial 

statements in accordance with generally 

accepted accounting principles; 

(3) Be susceptible to audit; 

(4) Allow a gaming operation, the 

tribe, and the Commission to calculate 

the annual fee under § 514.1 of this 

chapter; 

(5) Permit the calculation and 

payment of the manager’s fee; and 

(6) Provide for the allocation of 

operating expenses or overhead 

expenses among the tribe, the tribal 

gaming operation, the contractor, and 

any other user of shared facilities and 

services. 

(d) Reporting. Require the 

management contractor to provide the 

tribal governing body not less frequently 

than monthly with verifiable financial 

reports or all information necessary to 

prepare such reports. 

(e) Access. Require the management 

contractor to provide immediate access 

to the gaming operation, including its 

books and records, by appropriate tribal 

officials, who shall have: 


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(1) The right to verify the daily gross 

revenues and income from the gaming 

operation; and 

(2) Access to any other gaming-related 

information the tribe deems appropriate. 

(f) Guaranteed payment to tribe. 

Provide for a minimum guaranteed 

monthly payment to the tribe in a sum 

certain that has preference over the 

retirement of development and 

construction costs. 

(g) Development and construction 

costs. Provide an agreed upon maximum 

dollar amount for the recoupment of 

development and construction costs. 

(h) Term limits. Be for a term not to 

exceed five (5) years, except that upon 

the request of a tribe, the Chairman may 

authorize a contract term that does not 

exceed seven (7) years if the Chairman 

is satisfied that the capital investment 

required, and the income projections, 

for the particular gaming operation 

require the additional time. The time 

period shall begin running no later than 

the date when the gaming activities 

authorized by an approved management 

contract begin. 

(i) Compensation. Detail the method 

of compensating and reimbursing the 

management contractor. If a 

management contract provides for a 

percentage fee, such fee shall be either: 

(1) Not more than thirty (30) percent 

of the net revenues of the gaming 

operation if the Chairman determines 

that such percentage is reasonable 

considering the circumstances; or 

(2) Not more than forty (40) percent of 

the net revenues if the Chairman is 

satisfied that the capital investment 

required and income projections for the 

gaming operation require the additional 

fee. 

(j) Termination provisions. Provide 

the grounds and mechanisms for 

amending or terminating the contract 

(termination of the contract shall not 

require the approval of the Chairman). 

(k) Dispute provisions. Contain a 

mechanism to resolve disputes between: 

(1) The management contractor and 

customers, consistent with the 

procedures in a tribal ordinance; 

(2) The management contractor and 

the tribe; and 

(3) The management contractor and 

the gaming operation employees. 

(l) Assignments and subcontracting. 

Indicate whether and to what extent 

contract assignments and subcontracting 

are permissible. 

(m) Ownership interests. Indicate 

whether and to what extent changes in 

the ownership interest in the 

management contract require advance 

approval by the tribe. 

(n) Effective date. State that the 

contract shall not be effective unless 

and until it is approved by the 

Chairman, date of signature of the 

parties notwithstanding. 

PART 533—APPROVAL OF 

MANAGEMENT CONTRACTS 

■ 10. The authority citation for part 533 

continues to read as follows: 

Authority: 25 U.S.C. 81, 2706(b)(10), 

2710(d)(9), 2711. 

■ 11. In § 533.1, remove paragraph (c). 

■ 12. Revise § 533.2 to read as follows: 

§ 533.2 Time for submitting management 

contracts and amendments. 

A tribe or a management contractor 

shall submit a management contract to 

the Chairman for review within sixty 

(60) days of execution by the parties. 

The Chairman shall notify the parties of 

their right to appeal the approval or 

disapproval of the management contract 

under part 539 of this chapter. 

■ 13. Revise § 533.3 to read as follows: 

§ 533.3 Submission of management 

contract for approval. 

A tribe shall include in any request 

for approval of a management contract 

under this part: 

(a) A contract containing: 

(1) Original signatures of an 

authorized official of the tribe and the 

management contractor; 

(2) A representation that the contract 

as submitted to the Chairman is the 

entirety of the agreement among the 

parties; and 

(b) A letter, signed by the tribal 

chairman, setting out the authority of an 

authorized tribal official to act for the 

tribe concerning the management 

contract. 

(c) Copies of documents evidencing 

the authority under paragraph (b) of this 

section. 

(d) A list of all persons and entities 

identified in §§ 537.1(a) and 537.1(c)(1) 

of this chapter, and either: 

(1) The information required under 

§ 537.1(b)(1) of this chapter for class II 

gaming contracts and § 537.1(b)(1)(i) of 

this chapter for class III gaming 

contracts; or 

(2) The dates on which the 

information was previously submitted. 

(e)(1) For new contracts and new 

operations, a three (3)-year business 

plan which sets forth the parties’ goals, 

objectives, budgets, financial plans, and 

related matters; or 

(2) For new contracts for existing 

operations, a three (3)-year business 

plan which sets forth the parties’ goals, 

objectives, budgets, financial plans, and 

related matters, and income statements 

and sources and uses of funds 

statements for the previous three (3) 

years. 

(f) If applicable, a justification, 

consistent with the provisions of 

§ 531.1(h) of this chapter, for a term 

limit in excess of five (5) years, but not 

exceeding seven (7) years. 

(g) If applicable, a justification, 

consistent with the provisions of 

§ 531.1(i) of this chapter, for a fee in 

excess of thirty (30) percent, but not 

exceeding forty (40) percent. 

(h) A legal description for the site on 

which the gaming operation to be 

managed is, or will be, located. 

■ 14. Revise § 533.4 to read as follows: 

§ 533.4 Action by the Chairman. 

(a) The Chairman shall approve or 

disapprove a management contract, 

applying the standards contained in 

§ 533.6 of this part, within 180 days of 

the date on which the Chairman 

receives a complete submission under 

§ 533.3 of this part, unless the Chairman 

notifies the tribe and management 

contractor in writing of the need for an 

extension of up to ninety (90) days. 

(b) A tribe may bring an action in a 

U.S. district court to compel action by 

the Chairman: 

(1) After 180 days following the date 

on which the Chairman receives a 

complete submission if the Chairman 

does not approve or disapprove the 

contract under this part; or 

(2) After 270 days following the 

Chairman’s receipt of a complete 

submission if the Chairman has told the 

tribe and management contractor in 

writing of the need for an extension and 

has not approved or disapproved the 

contract under this part. 

§ 533.5 [Removed and Reserved] 

■ 15. Remove and reserve § 533.5. 

■ 16. Revise § 533.6 to read as follows: 

§ 533.6 Approval and disapproval. 

(a) The Chairman may approve a 

management contract if it meets the 

standards of part 531 of this chapter and 

§ 533.3 of this part. Failure to comply 

with the standards of part 531 of this 

chapter or § 533.3 may result in the 

Chairman’s disapproval of the 

management contract. 

(b) The Chairman shall disapprove a 

management contract for class II gaming 

if he or she determines that— 

(1) Any person with a direct or 

indirect financial interest in, or having 

management responsibility for, a 

management contract: 

(i) Is an elected member of the 

governing body of the tribe that is party 

to the management contract; 

(ii) Has been convicted of any felony 

or any misdemeanor gaming offense; 

(iii) Has knowingly and willfully 

provided materially false statements or 


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information to the Commission or to a 

tribe; 

(iv) Has refused to respond to 

questions asked by the Chairman in 

accordance with his or her 

responsibilities under this part; or 

(v) Is determined by the Chairman to 

be a person whose prior activities, 

criminal record, if any, or reputation, 

habits, and associations pose a threat to 

the public interest or to the effective 

regulation and control of gaming, or 

create or enhance the dangers of 

unsuitable, unfair, or illegal practices, 

methods, and activities in the conduct 

of gaming or the carrying on of related 

business and financial arrangements; 

(2) The management contractor or its 

agents have unduly interfered with or 

influenced for advantage, or have tried 

to unduly interfere with or influence for 

advantage, any decision or process of 

tribal government relating to the gaming 

operation; 

(3) The management contractor or its 

agents has deliberately or substantially 

failed to follow the terms of the 

management contract or the tribal 

gaming ordinance or resolution adopted 

and approved pursuant to this Act; or 

(4) A trustee, exercising the skill and 

diligence to which a trustee is 

commonly held, would not approve the 

contract. 

(c) The Chairman may disapprove a 

management contract for class III 

gaming if he or she determines that a 

person with a financial interest in, or 

management responsibility for, a 

management contract is a person whose 

prior activities, criminal record, if any, 

or reputation, habits, and associations 

pose a threat to the public interest or to 

the effective regulation and control of 

gaming, or create or enhance the 

dangers of unsuitable, unfair, or illegal 

practices, methods, and activities in the 

conduct of gaming or the carrying on of 

related business and financial 

arrangements. 

■ 17. Revise § 533.7 to read as follows: 

§ 533.7 Void agreements. 

Management contracts and changes in 

persons with a financial interest in or 

management responsibility for a 

management contract, that have not 

been approved by the Chairman in 

accordance with the requirements of 

part 531 of this chapter and this part, 

are void. 

PART 535—POST-APPROVAL 

PROCEDURES 

■ 18. The authority citation for part 535 

continues to read as follows: 

Authority: 25 U.S.C. 81, 2706(b)(10), 

2710(d)(9), 2711. 

■ 19. Revise § 535.1 to read as follows: 

§ 535.1 Amendments. 

(a) Subject to the Chairman’s 

approval, a tribe may enter into an 

amendment of a management contract 

for the operation of a class II or class III 

gaming activity. 

(b) A tribe shall submit an 

amendment to the Chairman within 

thirty (30) days of its execution. 

(c) A tribe shall include in any request 

for approval of an amendment under 

this part: 

(1) An amendment containing original 

signatures of an authorized official of 

the tribe and the management contractor 

and terms that meet the applicable 

requirements of part 531 of this chapter; 

(2) A letter, signed by the tribal 

chairman, setting out the authority of an 

authorized tribal official to act for the 

tribe concerning the amendment; 

(3) Copies of documents evidencing 

the authority under paragraph (c)(2) of 

this section; 

(4) A list of all persons and entities 

identified in § 537.1(a) and § 537.1(c)(1) 

of this chapter: 

(i) If the amendment involves a 

change in person(s) having a direct or 

indirect financial interest in the 

management contract or having 

management responsibility for the 

management contract, a list of such 

person(s) and either: 

(A) The information required under 

§ 537.1(b)(1) of this chapter for class II 

gaming contracts or § 537.1(b)(1)(i) of 

this chapter for class III gaming 

contracts; or 

(B) The dates on which the 

information was previously submitted; 

(ii) [Reserved] 

(5) If applicable, a justification, 

consistent with the provisions of 

§ 531.1(h) of this chapter, for a term 

limit in excess of five (5) years, but not 

exceeding seven (7) years; and 

(6) If applicable, a justification, 

consistent with the provisions of 

§ 531.1(i) of this chapter, for a 

management fee in excess of thirty (30) 

percent, but not exceeding forty (40) 

percent. 

(d)(1) The Chairman shall approve or 

disapprove an amendment within thirty 

(30) days from receipt of a complete 

submission if the amendment does not 

require a background investigation 

under part 537 of this chapter, unless 

the Chairman notifies the parties in 

writing of the need for an extension of 

up to thirty (30) days. 

(2) The Chairman shall approve or 

disapprove an amendment as soon as 

practicable but no later than 180 days 

from receipt of a complete submission if 

the amendment requires a background 

investigation under part 537 of this 

chapter; 

(3) A party may appeal the 

Chairman’s approval or disapproval of 

an amendment under part 539 of this 

chapter. If the Chairman does not 

approve or disapprove an amendment 

within the timelines of paragraph (d)(1) 

or (d)(2) of this section, the amendment 

shall be deemed disapproved and a 

party shall have thirty (30) days to 

appeal the decision under part 539 of 

this chapter. 

(e)(1) The Chairman may approve an 

amendment to a management contract if 

the amendment meets the submission 

requirements of paragraph (c) of this 

section. Failure to comply with the 

submission requirements of paragraph 

(c) of this section may result in the 

Chairman’s disapproval of an 

amendment. 

(2) The Chairman shall disapprove an 

amendment of a management contract 

for class II gaming if he or she 

determines that the conditions 

contained in § 533.6(b) of this chapter 

apply. 

(3) The Chairman may disapprove an 

amendment of a management contract 

for class III gaming if he or she 

determines that the conditions 

contained in § 533.6(c) of this chapter 

apply. 

(f) Amendments that have not been 

approved by the Chairman in 

accordance with the requirements of 

this part are void. 

■ 20. Revise § 535.3 to read as follows: 

§ 535.3 Post-approval noncompliance. 

If the Chairman learns of any action 

or condition that violates the standards 

contained in parts 531, 533, 535, or 537 

of this chapter, the Chairman may 

require modifications of, or may void, a 

management contract or amendment 

approved by the Chairman under such 

sections, after providing the parties an 

opportunity for a hearing before the 

Chairman and a subsequent appeal to 

the Commission as set forth in part 577 

of this chapter. The Chairman will 

initiate modification or void 

proceedings by serving the parties, 

specifying the grounds for the 

modification or void. The parties will 

have thirty (30) days to request a 

hearing or respond with objections. 

Within thirty (30) days of receiving a 

request for a hearing, the Chairman will 

hold a hearing and receive oral 

presentations and written submissions. 

The Chairman will make a decision on 

the basis of the developed record and 

notify the parties of the decision and of 

their right to appeal. 


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PART 537—BACKGROUND 

INVESTIGATIONS FOR PERSONS OR 

ENTITIES WITH A FINANCIAL 

INTEREST IN, OR HAVING 

MANAGEMENT RESPONSIBILITY FOR, 

A MANAGEMENT CONTRACT 

■ 21. The authority citation to part 537 

continues to read as follows: 

Authority: 25 U.S.C. 81, 2706(b)(10), 

2710(d)(9), 2711. 

■ 22. Revise § 537.1 to read as follows: 

§ 537.1 Applications for approval. 

(a) For each management contract for 

class II gaming, the Chairman shall 

conduct or cause to be conducted a 

background investigation of: 

(1) Each person with management 

responsibility for a management 

contract; 

(2) Each person who is a director of 

a corporation that is a party to a 

management contract; 

(3) The ten (10) persons who have the 

greatest direct or indirect financial 

interest in a management contract; 

(4) Any entity with a financial interest 

in a management contract (in the case of 

institutional investors, the Chairman 

may exercise discretion and reduce the 

scope of the information to be furnished 

and the background investigation to be 

conducted); and 

(5) Any other person with a direct or 

indirect financial interest in a 

management contract otherwise 

designated by the Commission. 

(b) For each natural person identified 

in paragraph (a) of this section, the 

management contractor shall provide to 

the Commission the following 

information: 

(1) Required information. (i) Full 

name, other names used (oral or 

written), social security number(s), birth 

date, place of birth, citizenship, and 

gender; 

(ii) A current photograph, driver’s 

license number, and a list of all 

languages spoken or written; 

(iii) Business and employment 

positions held, and business and 

residence addresses currently and for 

the previous ten (10) years; the city, 

state and country of residence from age 

eighteen (18) to the present; 

(iv) The names and current addresses 

of at least three (3) personal references, 

including one personal reference who 

was acquainted with the person at each 

different residence location for the past 

five (5) years; 

(v) Current business and residence 

telephone numbers; 

(vi) A description of any existing and 

previous business relationships with 

Indian tribes, including ownership 

interests in those businesses; 

(vii) A description of any existing and 

previous business relationships with the 

gaming industry generally, including 

ownership interests in those businesses; 

(viii) The name and address of any 

licensing or regulatory agency with 

which the person has filed an 

application for a license or permit 

relating to gaming, whether or not such 

license or permit was granted; 

(ix) For each gaming offense and for 

each felony for which there is an 

ongoing prosecution or a conviction, the 

name and address of the court involved, 

the charge, and the dates of the charge 

and of the disposition; 

(x) For each misdemeanor conviction 

or ongoing misdemeanor prosecution 

(excluding minor traffic violations) 

within ten (10) years of the date of the 

application, the name and address of the 

court involved, and the dates of the 

prosecution and the disposition; 

(xi) A complete financial statement 

showing all sources of income for the 

previous three (3) years, and assets, 

liabilities, and net worth as of the date 

of the submission; and 

(xii) For each criminal charge 

(excluding minor traffic charges) 

regardless of whether or not it resulted 

in a conviction, if such criminal charge 

is within 10 years of the date of the 

application and is not otherwise listed 

pursuant to paragraphs (b)(1)(ix) or 

(b)(1)(x) of this section, the name and 

address of the court involved, the 

criminal charge, and the dates of the 

charge and the disposition. 

(2) Fingerprints. The management 

contractor shall arrange with an 

appropriate federal, state, or tribal law 

enforcement authority to supply the 

Commission with a completed form FD– 

258, Applicant Fingerprint Card, 

(provided by the Commission), for each 

person for whom background 

information is provided under this 

section. 

(3) Responses to Questions. Each 

person with a direct or indirect financial 

interest in a management contract or 

management responsibility for a 

management contract shall respond 

within thirty (30) days to written or oral 

questions propounded by the Chairman. 

(4) Privacy notice. In compliance with 

the Privacy Act of 1974, each person 

required to submit information under 

this section shall sign and submit the 

following statement: 

Solicitation of the information in this 

section is authorized by 25 U.S.C. 2701 et 

seq. The purpose of the requested 

information is to determine the suitability of 

individuals with a financial interest in, or 

having management responsibility for, a 

management contract. The information will 

be used by the National Indian Gaming 

Commission members and staff and Indian 

tribal officials who have need for the 

information in the performance of their 

official duties. The information may be 

disclosed to appropriate federal, tribal, state, 

or foreign law enforcement and regulatory 

agencies in connection with a background 

investigation or when relevant to civil, 

criminal or regulatory investigations or 

prosecutions or investigations of activities 

while associated with a gaming operation. 

Failure to consent to the disclosures 

indicated in this statement will mean that the 

Chairman of the National Indian Gaming 

Commission will be unable to approve the 

contract in which the person has a financial 

interest or management responsibility. 

The disclosure of a person’s Social 

Security Number (SSN) is voluntary. 

However, failure to supply a SSN may result 

in errors in processing the information 

provided. 

(5) Notice regarding false statements. 

Each person required to submit 

information under this section shall sign 

and submit the following statement: 

A false statement knowingly and willfully 

provided in any of the information pursuant 

to this section may be grounds for not 

approving the contract in which I have a 

financial interest or management 

responsibility, or for disapproving or voiding 

such contract after it is approved by the 

Chairman of the National Indian Gaming 

Commission. Also, I may be punished by fine 

or imprisonment (U.S. Code, title 18, section 

1001). 

(c) For each entity identified in 

paragraph (a)(4) of this section, the 

management contractor shall provide to 

the Commission the following 

information: 

(1) List of individuals. (i) Each of the 

ten (10) largest beneficiaries and the 

trustees when the entity is a trust; 

(ii) Each of the ten (10) largest 

partners when the entity is a 

partnership; 

(iii) Each person who is a director or 

who is one of the ten (10) largest holders 

of the issued and outstanding stock 

alone or in combination with another 

stockholder who is a spouse, parent, 

child or sibling when the entity is a 

corporation; and 

(iv) For any other type of entity, the 

ten (10) largest owners of that entity 

alone or in combination with any other 

owner who is a spouse, parent, child or 

sibling and any person with 

management responsibility for that 

entity. 

(2) Required information. (i) The 

information required in paragraph 

(b)(1)(i) of this section for each 

individual identified in paragraph (c)(1) 

of this section; 

(ii) Copies of documents establishing 

the existence of the entity, such as the 

partnership agreement, the trust 


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36938 Federal Register / Vol. 74, No. 142 / Monday, July 27, 2009 / Rules and Regulations 

agreement, or the articles of 

incorporation; 

(iii) Copies of documents designating 

the person who is charged with acting 

on behalf of the entity; 

(iv) Copies of bylaws or other 

documents that provide the day-to-day 

operating rules for the organization; 

(v) A description of any existing and 

previous business relationships with 

Indian tribes, including ownership 

interests in those businesses; 

(vi) A description of any existing and 

previous business relationships with the 

gaming industry generally, including 

ownership interest in those businesses; 

(vii) The name and address of any 

licensing or regulatory agency with 

which the entity has filed an application 

for a license or permit relating to 

gaming, whether or not such license or 

permit was granted; 

(viii) For each gaming offense and for 

each felony for which there is an 

ongoing prosecution or a conviction, the 

name and address of the court involved, 

the charge, and the dates of the charge 

and disposition; 

(ix) For each misdemeanor conviction 

or ongoing misdemeanor prosecution 

within ten (10) years of the date of the 

application, the name and address of the 

court involved, and the dates of the 

prosecution and disposition; 

(x) Complete financial statements for 

the previous three (3) fiscal years; and 

(xi) For each criminal charge 

(excluding minor traffic charges) 

whether or not there is a conviction, if 

such criminal charge is within 10 years 

of the date of the application and is not 

otherwise listed pursuant to paragraph 

(c)(1)(viii) or (c)(1)(ix) of this section, 

the criminal charge, the name and 

address of the court involved and the 

dates of the charge and disposition. 

(3) Responses to questions. Each 

entity with a direct or indirect financial 

interest in a management contract shall 

respond within thirty (30) days to 

written or oral questions propounded by 

the Chairman. 

(4) Notice regarding false statements. 

Each entity required to submit 

information under this section shall sign 

and submit the following statement: 

A false statement knowingly and willfully 

provided in any of the information pursuant 

to this section may be grounds for not 

approving the contract in which we have a 

financial interest, or for disapproving or 

voiding such contract after it is approved by 

the Chairman of the National Indian Gaming 

Commission. Also, we may be punished by 

fine or imprisonment (U.S. Code, title 18, 

section 1001). 

■ 23. Revise § 537.3 to read as follows: 

§ 537.3 Fees for background 

investigations. 

(a) A management contractor shall 

pay to the Commission or the 

contractor(s) designated by the 

Commission the cost of all background 

investigations conducted under this 

part. 

(b) The management contractor shall 

post a bond, letter of credit, or deposit 

with the Commission to cover the cost 

of the background investigations as 

follows: 

(1) Management contractor (party to 

the contract)—$25,000 

(2) Each individual and entity with a 

financial interest in the contract— 

$10,000 

(c) The management contractor shall 

be billed for the costs of the 

investigation as it proceeds; the 

investigation shall be suspended if the 

unpaid costs exceed the amount of the 

bond, letter of credit, or deposit 

available. 

(1) An investigation will be 

terminated if any bills remain unpaid 

for more than thirty (30) days. 

(2) A terminated investigation will 

preclude the Chairman from making the 

necessary determinations and result in a 

disapproval of a management contract. 

(d) The bond, letter of credit or 

deposit will be returned to the 

management contractor when all bills 

have been paid and the investigations 

have been completed or terminated. 

PART 539—APPEALS 

■ 24. The authority citation for part 539 

continues to read as follows: 

Authority: 25 U.S.C. 81, 2706(b)(10), 

2710(d)(9), 2711. 

■ 25. Revise § 539.1 to read as follows: 

§ 539.1 Scope of this part. 

This part applies to appeals from the 

Chairman’s decision to approve or 

disapprove a management contract or 

amendment under this subchapter, 

except that appeals from the Chairman’s 

decision to require modifications of or 

to void a management contract or 

amendment subsequent to his or her 

initial approval are addressed in § 535.3 

and part 577 of this chapter. 

■ 26. Revise § 539.2 to read as follows: 

§ 539.2 Appeals. 

A party may appeal the Chairman’s 

approval or disapproval of a 

management contract or amendment 

under parts 533 or 535 of this chapter 

to the Commission. Such an appeal 

shall be filed with the Commission 

within thirty (30) days after the 

Chairman serves his or her 

determination pursuant to part 519 of 

this chapter. Failure to file an appeal 

within the time provided by this section 

shall result in a waiver of the 

opportunity for an appeal. At the time 

of filing, an appeal under this section 

shall specify the reasons why the party 

believes the Chairman’s determination 

to be erroneous, and shall include 

supporting documentation, if any. 

Within thirty (30) days after receipt of 

the appeal, the Commission shall render 

a decision unless the appellant elects to 

provide the Commission additional 

time, not to exceed an additional thirty 

(30) days, to render a decision. In the 

absence of a decision within the time 

provided, the Chairman’s decision shall 

constitute a final decision of the 

Commission. 

PART 556—BACKGROUND 

INVESTIGATIONS FOR PRIMARY 

MANAGEMENT OFFICIALS AND KEY 

EMPLOYEES 

■ 27. The authority citation for part 556 

continues to read as follows: 

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

■ 28. Revise § 556.2 to read as follows: 

§ 556.2 Privacy notice. 

(a) A tribe shall place the following 

notice on the application form for a key 

employee or a primary management 

official before that form is filled out by 

an applicant: 

In compliance with the Privacy Act of 

1974, the following information is provided: 

Solicitation of the information on this form 

is authorized by 25 U.S.C. 2701 et seq. The 

purpose of the requested information is to 

determine the eligibility of individuals to be 

granted a gaming license. The information 

will be used by the Tribal gaming regulatory 

authorities and by the National Indian 

Gaming Commission members and staff who 

have need for the information in the 

performance of their official duties. The 

information may be disclosed to appropriate 

Federal, Tribal, State, local, or foreign law 

enforcement and regulatory agencies when 

relevant to civil, criminal or regulatory 

investigations or prosecutions or when 

pursuant to a requirement by a tribe or the 

National Indian Gaming Commission in 

connection with the issuance, denial, or 

revocation of a gaming license, or 

investigations of activities while associated 

with a tribe or a gaming operation. Failure to 

consent to the disclosures indicated in this 

notice will result in a tribe’s being unable to 

license you for a primary management 

official or key employee position. 

The disclosure of your Social Security 

Number (SSN) is voluntary. However, 

failure to supply a SSN may result in 

errors in processing your application. 

(b) A tribe shall notify in writing 

existing key employees and primary 


rmajette on DSK29S0YB1PROD with RULES
Federal Register / Vol. 74, No. 142 / Monday, July 27, 2009 / Rules and Regulations 36939 

management officials that they shall 

either: 

(1) Complete a new application form 

that contains a Privacy Act notice; or 

(2) Sign a statement that contains the 

Privacy Act notice and consent to the 

routine uses described in that notice. 

(c) All tribal gaming ordinances and 

ordinance amendments that have been 

approved by the Chairman prior to the 

effective date of this section and that 

reference this notice do not need to be 

amended to comply with this section. 

All future ordinance submissions, 

however, must comply. 

(d) All license application forms used 

180 days after the effective date of this 

section shall contain notices in 

compliance with this section. 

■ 29. Revise § 556.3 to read as follows: 

§ 556.3 Notice regarding false statements. 

(a) A tribe shall place the following 

notice on the application form for a key 

employee or a primary management 

official before that form is filled out by 

an applicant: 

A false statement on any part of your 

license application may be grounds for 

denying a license or the suspension or 

revocation of a license. Also, you may be 

punished by fine or imprisonment (U.S. 

Code, title 18, section 1001). 

(b) A tribe shall notify in writing 

existing key employees and primary 

management officials that they shall 

either: 

(1) Complete a new application form 

that contains a notice regarding false 

statements; or 

(2) Sign a statement that contains the 

notice regarding false statements. 

(c) All tribal gaming ordinances and 

ordinance amendments that have been 

approved by the Chairman prior to the 

effective date of this section and that 

reference this notice do not need to be 

amended to comply with this section. 

All future ordinance submissions, 

however, must comply. 

(d) All license application forms used 

180 days after the effective date of this 

section shall contain notices in 

compliance with this section. 

PART 558—GAMING LICENSES FOR 

KEY EMPLOYEES AND PRIMARY 

MANAGEMENT OFFICIALS 

■ 30. The authority citation for part 558 

continues to read as follows: 

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

■ 31. Revise § 558.2 to read as follows: 

§ 558.2 Eligibility determination for 

granting a gaming license. 

(a) An authorized tribal official shall 

review a person’s prior activities, 

criminal record, if any, and reputation, 

habits and associations to make a 

finding concerning the eligibility of a 

key employee or a primary management 

official for granting of a gaming license. 

If the authorized tribal official, in 

applying the standards adopted in a 

tribal ordinance, determines that 

licensing of the person poses a threat to 

the public interest or to the effective 

regulation of gaming, or creates or 

enhances the dangers of unsuitable, 

unfair, or illegal practices and methods 

and activities in the conduct of gaming, 

an authorizing tribal official shall not 

license that person in a key employee or 

primary management official position. 

(b) All tribal gaming ordinances and 

ordinance amendments that have been 

approved by the Chairman prior to the 

effective date of this section and that 

reference this section do not need to be 

amended to comply with this section. 

All future ordinance submissions, 

however, must comply. 

PART 571—MONITORING AND 

INVESTIGATIONS 

■ 32. The authority citation for part 571 

continues to read as follows: 

Authority: 25 U.S.C. 2706(b), 2710(b)(2)(C), 

2715, 2716. 

■ 33. Revise § 571.12 to read as follows: 

§ 571.12 Audit standards. 

(a) Each tribe shall prepare 

comparative financial statements 

covering all financial activities of each 

class II and class III gaming operation on 

the tribe’s Indian lands for each fiscal 

year. 

(b) A tribe shall engage an 

independent certified public accountant 

to provide an annual audit of the 

financial statements of each class II and 

class III gaming operation on the tribe’s 

Indian lands for each fiscal year. The 

independent certified public accountant 

must be licensed by a state board of 

accountancy. Financial statements 

prepared by the certified public 

accountant shall conform to generally 

accepted accounting principles and the 

annual audit shall conform to generally 

accepted auditing standards. 

(c) If a gaming operation has gross 

gaming revenues of less than $2,000,000 

during the prior fiscal year, the annual 

audit requirement of paragraph (b) of 

this section is satisfied if: 

(1) The independent certified public 

accountant completes a review of the 

financial statements conforming to the 

statements on standards for accounting 

and review services of the gaming 

operation; and 

(2) Unless waived in writing by the 

Commission, the gaming operation’s 

financial statements for the three 

previous years were sent to the 

Commission in accordance with 

§ 571.13. 

(d) If a gaming operation has multiple 

gaming places, facilities or locations on 

the tribe’s Indian lands, the annual 

audit requirement of paragraph (b) of 

this section is satisfied if: 

(1) The tribe chooses to consolidate 

the financial statements of the gaming 

places, facilities or locations; 

(2) The independent certified public 

accountant completes an audit 

conforming to generally accepted 

auditing standards of the consolidated 

financial statements; 

(3) The consolidated financial 

statements include consolidating 

schedules for each gaming place, 

facility, or location; 

(4) Unless waived in writing by the 

Commission, the gaming operation’s 

financial statements for the three 

previous years, whether or not 

consolidated, were sent to the 

Commission in accordance with 

§ 571.13; and 

(5) The independent certified public 

accountant expresses an opinion on the 

consolidated financial statement as a 

whole and subjects the accompanying 

financial information to the auditing 

procedures applicable to the audit of 

consolidated financial statements. 

(e) If there are multiple gaming 

operations on a tribe’s Indian lands and 

each operation has gross gaming 

revenues of less than $2,000,000 during 

the prior fiscal year, the annual audit 

requirement of paragraph (b) of this 

section is satisfied if: 

(1) The tribe chooses to consolidate 

the financial statements of the gaming 

operations; 

(2) The consolidated financial 

statements include consolidating 

schedules for each operation; 

(3) The independent certified public 

accountant completes a review of the 

consolidated schedules conforming to 

the statements on standards for 

accounting and review services for each 

gaming facility or location; 

(4) Unless waived in writing by the 

Commission, the gaming operations’ 

financial statements for the three 

previous years, whether or not 

consolidated, were sent to the 

Commission in accordance with 

§ 571.13; and 

(5) The independent certified public 

accountant expresses an opinion on the 

consolidated financial statements as a 

whole and subjects the accompanying 

financial information to the auditing 

procedures applicable to the audit of 

consolidated financial statements. 

■ 34. Revise § 571.13 to read as follows: 


rmajette on DSK29S0YB1PROD with RULES
36940 Federal Register / Vol. 74, No. 142 / Monday, July 27, 2009 / Rules and Regulations 

1Notice of Establishment of Rates and Class Not 

of General Applicability (Priority Mail Contract 11), 

June 11, 2009 (Notice). 

2PRC Order No. 222, Notice and Order 

Concerning Filing of Priority Mail Contract 11 

Negotiated Service Agreement, June 17, 2009 (Order 

No. 222). 

3Request of the United States Postal Service to 

Add Priority Mail Contract 11 to Competitive 

Product List, June 23, 2009 (Request). 

4Attachment A to the Notice. 

5Attachment A to the Request. 

6Attachment B to the Request. 

7Attachment B to the Notice. 

§ 571.13 Copies of audit reports. 

(a) Each tribe shall prepare and 

submit to the Commission two paper 

copies or one electronic copy of the 

financial statements and audits required 

by § 571.12, together with management 

letter(s), and other documented auditor 

communications and/or reports as a 

result of the audit setting forth the 

results of each fiscal year. The 

submission must be sent to the 

Commission within 120 days after the 

end of each fiscal year of the gaming 

operation. 

(b) If a gaming operation changes its 

fiscal year, the tribe shall prepare and 

submit to the Commission two paper 

copies or one electronic copy of the 

financial statements, reports, and audits 

required by § 571.12, together with 

management letter(s), setting forth the 

results of the stub period from the end 

of the previous fiscal year to the 

beginning of the new fiscal year. The 

submission must be sent to the 

Commission within 120 days after the 

end of the stub period, or a tribe may 

incorporate the financial results of the 

stub period in the financial statements 

for the new business year. 

(c) When gaming ceases to operate 

and the tribal gaming regulatory 

authority has terminated the facility 

license required by § 559.6, the tribe 

shall prepare and submit to the 

Commission two paper copies or one 

electronic copy of the financial 

statements, reports, and audits required 

by § 571.12, together with management 

letter(s), setting forth the results 

covering the period since the period 

covered by the previous financial 

statements. The submission must be 

sent to the Commission within 120 days 

after the cessation of gaming activity or 

upon completion of the tribe’s fiscal 

year. 

■ 35. Revise § 571.14 to read as follows: 

§ 571.14 Relationship of financial 

statements to fee assessment reports. 

A tribe shall reconcile its Commission 

fee assessment reports, submitted under 

25 CFR part 514, with its audited or 

reviewed financial statements for each 

location and make available such 

reconciliation upon request by the 

Commission’s authorized 

representative. 

PART 573—ENFORCEMENT 

■ 36. The authority citation for part 573 

continues to read as follows: 

Authority: 25 U.S.C. 2703 (4), 2705(a)(1), 

2706, 2713, 2715, 2719. 

■ 37. Add new paragraph (a)(13) to 

§ 573.6 to read as follows: 

§ 573.6 Order of temporary closure. 

(a) * * * 

(13) A gaming facility operates on 

Indian lands not eligible for gaming 

under the Indian Gaming Regulatory 

Act. 

* * * * * 

Philip N. Hogen, 

Chairman. 

Norman H. DesRosiers, 

Vice Chairman. 

[FR Doc. E9–17121 Filed 7–24–09; 8:45 am] 

BILLING CODE 7565–01–P 

POSTAL REGULATORY COMMISSION 

39 CFR Part 3020 

[Docket Nos. MC2009–27 and CP2009–37; 

Order No. 231] 

Priority Mail Contract 

AGENCY: Postal Regulatory Commission. 

ACTION: Final rule. 

SUMMARY: The Commission is adding 

Priority Mail Contract 11 to the 

Competitive Product List. This action is 

consistent with changes in a recent law 

governing postal operations. 

Republication of the lists of market 

dominant and competitive products is 

also consistent with new requirements 

in the law. 

DATES: Effective July 27, 2009 and is 

applicable beginning July 1, 2009. 

FOR FURTHER INFORMATION CONTACT: 

Stephen L. Sharfman, General Counsel, 

202–789–6824 or 

stephen.sharfman@prc.gov. 

SUPPLEMENTARY INFORMATION: Regulatory 

History, 74 FR 30179 (June 24, 2009). 

I. Background 

II. Comments 

III. Commission Analysis 

IV. Ordering Paragraphs 

I. Background 

The Postal Service seeks to add a new 

product identified as Priority Mail 

Contract 11 to the Competitive Product 

List. For the reasons discussed below, 

the Commission approves the Request. 

On June 11, 2009, the Postal Service 

filed a notice, pursuant to 39 U.S.C. 

3632(b)(3) and 39 CFR 3015.5, 

announcing that it has entered into an 

additional contract (Priority Mail 

Contract 11), which it attempts to 

classify within the previously proposed 

Priority Mail Contract Group product.1

In support, the Postal Service filed the 

proposed contract and referenced 

Governors’ Decision 09–6 filed in 

Docket No. MC2009–25. Id. at 1. The 

Notice has been assigned Docket No. 

CP2009–37. 

In response to Order No. 222,2 and in 

accordance with 39 U.S.C. 3642 and 39 

CFR 3020 subpart B, the Postal Service 

filed a formal request to add Priority 

Mail Contract 11 to the Competitive 

Product List as a separate product.3 The 

Postal Service asserts that the Priority 

Mail Contract 11 product is a 

competitive product ‘‘not of general 

applicability’’ within the meaning of 39 

U.S.C. 3632(b)(3). This Request has been 

assigned Docket No. MC2009–27. 

In support of its Notice and Request, 

the Postal Service filed the following 

materials: (1) A redacted version of the 

contract which, among other things, 

provides that the contract will expire 3 

years from the effective date, which is 

proposed to be the day that the 

Commission issues all regulatory 

approvals; 4 (2) requested changes in the 

Mail Classification Schedule product 

list; 5 (3) a Statement of Supporting 

Justification as required by 39 CFR 

3020.32; 6 and (4) certification of 

compliance with 39 U.S.C. 3633(a).7

In the Statement of Supporting 

Justification, Mary Prince Anderson, 

Acting Manager, Sales and 

Communications, Expedited Shipping, 

asserts that the service to be provided 

under the contract will cover its 

attributable costs, make a positive 

contribution to coverage of institutional 

costs, and will increase contribution 

toward the requisite 5.5 percent of the 

Postal Service’s total institutional costs. 

Request, Attachment B, at 1. W. Ashley 

Lyons, Manager, Corporate Financial 

Planning, Finance Department, certifies 

that the contract complies with 39 

U.S.C. 3633(a). Notice, Attachment B. 

The Postal Service filed much of the 

supporting materials, including the 

unredacted contract, under seal. In its 

Notice, the Postal Service maintains that 

the contract and related financial 

information, including the customer’s 

name and the accompanying analyses 

that provide prices, terms, conditions, 

and financial projections, should remain 

confidential. Notice at 2–3. 


rmajette on DSK29S0YB1PROD with RULES