Source: https://www.federalregister.gov/articles/2012/01/31/2012-1763/self-regulation-of-class-ii-gaming
Timestamp: 2015-04-28 18:19:02
Document Index: 613890739

Matched Legal Cases: ['art 518', 'art 518', 'art 518', 'art 518', 'art 518', 'art 518', '§ 518', 'arts 559', 'art 518', '§ 518', 'art 518', 'ART 518', '§ 518', '§ 518', '§ 518', '§ 518', '§ 518', '§ 518', '§ 518', '§ 518', '§ 518', '§ 518', '§ 518', '§ 518', '§ 518', '§ 518', '§ 518', '§ 518', '§ 518', '§ 518', '§ 518', '§ 518', '§ 518', '§ 518', 'art 584', 'art 585', '§ 518']

Federal Register | Self-Regulation of Class II Gaming
77 FR 4714
-4720 (7 pages)
25 CFR 518
3141-AA44
Shorter URL: https://federalregister.gov/a/2012-1763 Action
Self Regulation of Class II 1 action from December 2011 December 2011
IV. Overview of the Proposed Rule
B. Eligibility and Submission Requirements for Petition
C. Criteria That Must Be Met To Receive a Certificate of Self-Regulation
D. Process for Petition Review and Certification of Tribes
E. Post-Certification Rights and Responsibilities
List of Subjects in 25 CFR 518
You may submit comments by any one of the following methods, but please note that comments sent by electronic mail are strongly encouraged.
Mail comments to: Katherine Zebell, National Indian Gaming Commission, 1441 L Street NW., Suite 9100, Washington, DC 20005.
Fax comments to: Katherine Zebell, National Indian Gaming Commission at (202) 632-7066.
Katherine Zebell, National Indian Gaming Commission, 1441 L Street NW., Suite 9100, Washington, DC 20005. Telephone: (202) 632-7003; email: reg.review@nigc.gov.
Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments as they may desire. Comments which provide a factual basis in support of the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal.
On November 18, 2010, the Commission issued a Notice of Inquiry and Notice of Consultation (“NOI”) advising the public that the NIGC was conducting a comprehensive review of its regulations and requesting public comment on which of its regulations were most in need of revision, in what order the NIGC should review its regulations, and the process the NIGC should utilize to make revisions. 75 FR 70680 (Nov. 18, 2010). On April 4, 2011, after holding eight consultations and reviewing all of the comments, the Commission published a Notice of Regulatory Review Schedule, setting out a consultation schedule and process for review. 76 FR 18457. Part 518 is included in one of the regulation groups that are part of this regulatory review.
The Commission conducted numerous tribal consultations as part of its review of part 518—Self-Regulation of Class II Gaming. Tribal consultations were held in every region of the country and were attended by many tribal leaders or their representatives. In addition to tribal consultations, on August 16, 2011, the Commission requested public comment on a Preliminary Draft of part 518. After considering the comments received from the public, and through tribal consultations, the Commission proposes to amend part 518 to (a) tailor the self-regulating criteria to a tribe's regulation of class II gaming activity; and (b) clearly define and streamline the process by which a self-regulation petition is reviewed and a final determination is made by the Commission.
IV. Overview of the Proposed Rule Back to Top
During the regulation review process, the Commission received comments that the existing self-regulation regulation discourages participation because the burdens imposed by the regulation outweigh the benefits. Specifically, comments stated that the current process is confusing, and the submission requirements, and continuing compliance requirements, are redundant and intrusive. The Commission also received comments that the current process is misfocused by placing greater emphasis on a tribe's gaming operation than on the effectiveness of a tribe's regulatory system. Therefore, the Commission is proposing amendments to streamline and clarify the process, as well as to ensure an effective regulatory framework for self-regulating tribes.
The proposed rule amends the petition and approval process to focus on the capability of the tribal regulatory body. To this end, the proposed rule requires information necessary for the Commission to evaluate the strength and effectiveness of a tribe's regulation of its gaming activity.
The proposed rule clarifies both the initial eligibility requirements and the petition submission requirements. Further, the proposed rule eliminates the need to resubmit information already provided to either the NIGC or the Bureau of Indian Affairs (“BIA”), such as gaming regulations, constitutions, revenue allocation plans, and facility licenses. The proposed rule creates distinct stages and timelines for the certification process, and accelerates the timeline for the Commission to issue a final decision. The proposed rule provides for a streamlined process by involving the Commission in the certification review process. Under the proposed rule, the Commission will issue both the preliminary findings and final determination as to whether a tribe meets the approval criteria for self-regulation. The Commission will also hold a hearing, if requested by a tribe upon receipt of the Commission's preliminary findings.
Once certified, the only annual submission requirements under the proposed rule are the submission of independent audits and the resumes of all employees hired and licensed by the tribe's gaming regulatory body. The Commission believes that the annual self-regulation report currently required provides duplicative information already available to the agency and therefore proposes to eliminate that requirement. Additionally, the proposed rule requires self-regulating tribes to notify the NIGC within three business days of any change in circumstances that is material to the requirements for issuance of a certificate of self-regulation. This self-reporting requirement will provide the Commission with essential information in a more timely manner than the annual report mechanism in the current regulations.
Finally, the proposed rule corrects and clarifies the existing rule by referencing IGRA's post-certification limitations regarding the NIGC's authority over self-regulating tribes.
Responses to the NOI and the Preliminary Draft of part 518 were generally positive. Many commenters stated that, in its current form, part 518 should be reviewed and revised to facilitate self-regulation while maintaining stringent standards. A commenter stated that the self-regulation regulations should be about evaluating a tribe's regulatory agency, not the gaming operation. Another commenter agreed, stating the focus should be on the tribal regulatory agency, not the gaming operation. Other commenters noted that the current financial benefits of waived fees do not outweigh the paperwork burdens of the current regulations. One commenter noted that the promise of self-regulation contemplated by the Act is not fulfilled by the NIGC's current regulations. Another commenter stated that the fact that only two tribes are self-regulating means something is wrong with the regulations. As noted above, the Commission's proposed changes attempt to address many of these concerns.
The statute identifies who is eligible to petition for a certificate of self-regulation, and those criteria are contained in § 518.2 of the current regulation. The proposed rule attempts to clearly identify what a tribe is required to include in its petition at the time it is submitted to the NIGC, including evidence that the tribe meets the statutory eligibility requirements.
The requirement that a tribe must have continuously conducted class II gaming activity for the 3-year period immediately preceding the date of the petition raised concerns by several commenters. Commenters stated that this requirement could make ineligible those tribes conducting both class II and class III gaming, but which have not continuously conducted class II gaming for a 3-year period prior to submitting a petition. Commenters stated that if a tribe has conducted, and successfully regulated class II and/or class III gaming for three years, then it should be eligible to petition for a certificate of self-regulation. Further, there are instances in which tribes operate their gaming facilities seasonally or in which tribes have to temporarily close their facilities. While the Commission understands the perspective of the commenters, IGRA requires a tribe to continuously conduct class II gaming activity for three years before submitting a petition for self-regulation. Accordingly, and in light of the comments received, the Commission will continue to interpret the phrase “continuously conducted” in a way consistent with the common-sense interpretation found in the preamble to the existing rule at 63 FR 41961 (August 6, 1998). Likewise, this Commission does not intend to preclude a tribe from obtaining a certificate of self-regulation if its gaming operation is closed for temporary or seasonal closures, and will evaluate each situation on a case-by-case basis. Commenters noted that the current rule requires submission of information that is more focused on the gaming operation than the gaming regulatory framework. The Commission agrees with this comment and has attempted to strengthen the submission requirements that would indicate whether a tribe was successfully regulating its gaming activities, such as the criteria used for hiring tribal regulatory agency employees and a list of the gaming activity internal controls in place at the gaming operation. Under the proposed rule, tribes will be required to provide a list of their internal controls as part of the petition. Additionally, tribes must only submit the gaming regulations with the petition if the gaming regulations are not part of the gaming ordinance previously submitted and approved by the Chair.
Further, commenters also noted that requiring information such as a tribe's constitution, revenue allocation plan or facility license is duplicative, as these documents have already been submitted to the NIGC or the BIA. The Commission agrees with this observation and has attempted to streamline the certification process by removing the requirements to resubmit documents previously provided to the NIGC or the BIA.
The statute establishes criteria that must be met by a tribe before a certificate of self-regulation can be issued. The current rule identifies those criteria and provides a list of “indicators” that a tribe may use to demonstrate they have met the criteria. The proposed rule clarifies that the examples listed are not all-inclusive and that a tribe can provide other evidence to satisfy the criteria. As discussed above, the proposed rule focuses on evidence related to the tribe's regulation of the gaming activity. The proposed rule also streamlines criteria addressed by other NIGC regulations, such as compliance with applicable building, health and safety codes and procedures for resolving disputes between the gaming public and the tribe. Those requirements are addressed in Parts 559 and 522, respectively.
Several tribes commented that the timing and process for certification needs clarification. In response, the proposed rule attempts to simplify and streamline the certification process, including how petitions are submitted, reviewed and approved, and the timelines for each stage. The proposed rule also attempts to clarify the respective roles and responsibilities of the Commission and the Office of Self-Regulation (“OSR”). The current regulation authorizes the OSR to administer the self-regulation program and receive, review and approve petitions. Commenters stated that IGRA requires the Commission itself to consider petitions and certify qualifying tribes. The proposed rule modifies the roles of the OSR and the Commission by requiring the full Commission to make the final determination as to whether a tribe meets the approval criteria for self-regulation, based on information presented in the tribe's petition, supplemental documentation and a hearing, if held. The proposed rule also streamlines the process by requiring the Commission to issue preliminary findings to the tribe and provide the tribe with an opportunity for a hearing before the Commission issues a final determination. This change allows a tribe to respond to a preliminary adverse finding before a final determination by the Commission. This proposed process is intended to facilitate collaboration with the NIGC to meet the approval criteria. Finally, the proposed rule provides for judicial review in a more timely manner than the current regulations.
IGRA requires a tribe which has been issued a certificate of self-regulation to submit an independent annual audit and a complete resume on all employees hired and licensed by the tribe. The proposed rule requires self-regulating tribes to submit, on an annual basis, an independent audit and the resumes of employees hired and licensed by the tribal gaming regulatory body. Some commenters requested the regulation include a definition of “tribal regulator.” The proposed rule does not define “tribal regulator” because tribal law may vary on how it defines a tribal regulator. In order to account for all persons responsible for the regulation of a tribes' class II gaming activity, without interfering with the tribe's interpretation of a “tribal regulator,” the proposed rule requires self-regulating tribes to submit, on an annual basis, the resumes of all employees hired and licensed by the tribal gaming regulatory body. The Commission invites comment on this approach and comment on potential definitions of “tribal regulator.”
Part 518 currently requires the tribe to submit an annual report to establish that the tribe has continuously met the eligibility and approval requirements. The proposed rule reduces this paperwork burden. The proposed rule requires a tribe to notify the NIGC within three business days of any change in circumstances that is material to meeting the requirements for issuance of the certificate. This approach will ensure timely reporting to maintain the integrity of Indian gaming while reducing paperwork requirements for the regulated community.
Finally, commenters stated that the current regulations concerning the NIGC's enforcement powers over self- regulating tribes were unclear and overbroad. Consistent with public comments, the proposed rule corrects and clarifies § 518.9 by referencing the powers of the NIGC that are limited by statute once a tribe is issued a certificate of self-regulation
This proposed rule will not have a significant economic effect on a substantial number of small entities as defined under the Regulatory Flexibility Act, 5 U.S.C. 601 et seq. Indian tribes are not considered to be small entities for purposes of the Regulatory Flexibility Act.
This proposed rule is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act. This rule does not have an annual effect on the economy of $100 million or more. This rule will not cause a major increase in costs or prices for consumers, individual industries, Federal, state or local government agencies or geographic regions, and does not have a significant adverse effect on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises.
The Commission has determined that this proposed rule does not constitute a major Federal action significantly affecting the quality of the human environment and that no detailed statement is required pursuant to the National Environmental Policy Act of 1969, 42 U.S.C. 4321 et seq.
This proposed rule requires information collection under the Paperwork Reduction Act of 1995, 44 U.S.C. 3501, et seq., and is, therefore, subject to review by the Office of Management and Budget.
List of Subjects in 25 CFR 518 Back to Top
Accordingly, for the reasons discussed in the preamble, the Commission proposes to revise 25 CFR part 518 to read as follows:
PART 518—SELF-REGULATION OF CLASS II GAMING Back to Top
518.1 What does this part cover?
518.2 Who will administer the self-regulation program for the Commission?
518.3 Who is eligible to petition for a certificate of self-regulation?
518.4 What must a tribe submit to the Commission as part of its petition?
518.5 What criteria must a tribe meet to receive a certificate of self-regulation?
518.6 What are the responsibilities of the Office of Self-Regulation in the certification process?
518.7 What process will the Commission use to review and certify petitions?
518.8 What is the hearing process?
518.9 When will a certificate of self-regulation become effective?
518.10 What must a self-regulating tribe provide the Commission to maintain its self-regulatory status?
518.11 Does a tribe that holds a certificate of self-regulation have a continuing duty to advise the Commission of any additional information?
518.12 Which investigative or enforcement powers of the Commission are inapplicable to self-regulating tribes?
518.13 When may the Commission revoke a certificate of self-regulation?
518.14 May a tribe request a hearing on the Commission's proposal to revoke its certificate of self-regulation?
25 U.S.C. 2706(b)(10); E.O. 13175.
§ 518.1 What does this part cover?
§ 518.2 Who will administer the self-regulation program for the Commission?
§ 518.3 Who is eligible to petition for a certificate of self-regulation?
(a) Two copies on 81/2″ x 11″ paper of a petition for self-regulation approved by the governing body of the tribe and certified as authentic by an authorized tribal official;
(i) A brief history of each gaming operation(s), including the opening dates and periods of voluntary or involuntary closure;
(ii) An organizational chart of the tribal regulatory body;
(iii) A brief description of the criteria tribal regulators must meet before being eligible for employment as a tribal regulator;
(iv) A brief description of the process by which the tribal regulatory body is funded, and the funding level for the three years immediately preceding the date of the petition;
(v) A list of the current regulators and employees of the tribal regulatory body, their complete resumes, their titles, the dates they began employment, and, if serving limited terms, the expiration date of such terms;
(vi) A brief description of the accounting system(s) at the gaming operation which tracks the flow of the gaming revenues;
(vii) A list of gaming activity internal controls at the gaming operation(s);
(viii) A description of the record keeping system(s) for all investigations, enforcement actions, and prosecutions of violations of the tribal gaming ordinance or regulations, for the three (3)-year period immediately preceding the date of the petition; and
(ix) The tribe's current set of gaming regulations, if not included in the approved tribal gaming ordinance.
§ 518.5 What criteria must a tribe meet to receive a certificate of self-regulation?
(v) Has access to and may inspect, examine, photocopy and audit all papers, books, and records of the gaming operation(s) and class II gaming activities;
§ 518.6 What are the responsibilities of the Office of Self-Regulation in the certification process?
§ 518.7 What process will the Commission use to review and certify petitions?
(1) Within 30 days of receipt of a tribe's petition, the Office of Self-Regulation shall conduct a review of the tribe's petition to determine whether it is complete under § 518.4.
(b) Once a tribe's petition is complete, the Office of Self-Regulation shall conduct a review to determine whether the tribe meets the eligibility criteria in § 518.3 and the approval criteria in § 518.5. During its review, the Office of Self-Regulation: (1) May request from the tribe any additional material it deems necessary to assess whether the tribe has met the criteria for self-regulation.
(c) Within 120 days of notice of a complete petition under § 518.4, the Office of Self-Regulation shall provide a recommendation and written report to the full Commission and the petitioning tribe.
(3) The Office of Self-Regulation shall make all information on which it relies in making its recommendation and report available to the tribe, subject to the confidentiality requirements in 25 U.S.C. 2716(a), and shall afford the tribe an opportunity to respond.
(d) After receiving the Office of Self-Regulation's recommendation and report, and a tribe's response to the report, the Commission shall issue preliminary findings as to whether the eligibility and approval criteria are met. The Commission's preliminary findings will be provided to the tribe within 30 days of receipt of the report.
(e) Upon receipt of the Commission's preliminary findings, the tribe can request, in writing, a hearing before the Commission, as set forth in § 518.8. Hearing requests shall be made to the Office of Self-Regulation and shall specify the issues to be addressed by the tribe at the hearing, and any proposed oral or written testimony the tribe wishes to present.
§ 518.8 What is the hearing process?
(a) Within 10 days of receipt of the request for a hearing, the Office of Self-Regulation shall notify the tribe of the date and place of the hearing. The notice shall also set a hearing schedule, the time allotted for testimony and oral argument, and the order of the presentation. To the extent possible, the hearing will be scheduled not later than 60 days after the notice is issued, and the hearing schedule will be issued at least 30 days prior to the hearing.
(b) The Commission shall issue a decision on the petition within 30 days after the hearing's conclusion. The decision shall set forth, with particularity, findings regarding the tribe's satisfaction of the self-regulation standards in this part. If the Commission determines that a certificate will issue, it will do so in accordance with § 518.11.
§ 518.10 What must a self-regulating tribe provide the Commission to maintain its self-regulatory status?
(a) Each tribe that holds a certificate of self-regulation shall be required to submit the following information on April 15 of each year following the first year of self-regulation or within 120 days after the end of each fiscal year of the gaming operation, as required by 25 CFR 571.13:
(1) An annual independent audit, to be filed with the Commission, as required by 25 U.S.C. 2710(b)(2)(c); and
(2) A complete resume for all employees of the tribal regulatory body hired and licensed by the tribe subsequent to its receipt of a certificate of self-regulation, to be filed with the Office of Self-Regulation.
(b) Failure to submit the information required by this section may result in revocation of a certificate of self-regulation.
§ 518.11 Does a tribe that holds a certificate of self-regulation have a continuing duty to advise the Commission of any additional information?
Yes. A tribe that holds a certificate of self-regulation has a continuing duty to advise the Commission within three (3) business days of any changes in circumstances that are material to the approval criteria in § 518.5 and may reasonably cause the Commission to review and revoke the tribe's certificate of self-regulation. Failure to do so is grounds for revocation of a certificate of self-regulation. Such circumstances may include, but are not limited to, a change in management contractor; a change of primary regulatory official; financial instability; or any other factors that are material to the decision to grant a certificate of self-regulation.
§ 518.12 Which investigative or enforcement powers of the Commission are inapplicable to self-regulating tribes?
§ 518.13 When may the Commission revoke a certificate of self-regulation?
The Commission may, after an opportunity for a hearing, revoke a certificate of self-regulation by a majority vote of its members if it determines that the tribe no longer meets the eligibility criteria of § 518.3, the approval criteria of § 518.5, the requirements of § 518.10 or the requirements of § 518.11. The Commission shall provide the tribe with prompt notice of the Commission's intent to revoke a certificate of self-regulation under this part. Such notice shall state the reasons for the Commission's action and shall advise the tribe of its right to a hearing under part 584 or right to appeal under part 585. The decision to revoke a certificate is a final agency action and is appealable to Federal District Court pursuant to 25 U.S.C. 2714.
§ 518.14 May a tribe request a hearing on the Commission's proposal to revoke its certificate of self-regulation?
[FR Doc. 2012-1763 Filed 1-27-12; 11:15 am]