[Federal Register Volume 76, Number 246 (Thursday, December 22, 2011)]
[Proposed Rules]
[Pages 79565-79567]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-32759]


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DEPARTMENT OF THE INTERIOR

National Indian Gaming Commission

25 CFR Part 537

RIN 3141-AA46


Management Contracts--Background Investigations

AGENCY: National Indian Gaming Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This action proposes to amend NIGC regulations to include 
tribes, wholly owned tribal entities, and national banks that are 
already federally regulated or required to undergo a background 
investigation and licensure by a state or tribe pursuant to a tribal-
state compact as entities that the Chair may exercise discretion 
regarding the submission of information and background investigations.
    This process may provide for a streamlined review for such entities 
in the background investigation process required for management 
contracts. The proposed revision may reduce duplication of efforts 
while maintaining the integrity of NIGC review. The proposal maintains 
the Chair's discretion in determining which entities should be allowed 
to proceed through an expedited background investigation. This 
amendment has been included in this proposed rule.
    The Commission also considered revising its regulations to clarify 
that a management contractor should be required to submit background 
information when the contract is for management of both Class II and 
Class III gaming activities. Many public comments noted that it was not 
a necessary revision. The Commission agrees with those public comments 
and does not propose that clarification.

DATES: The agency must receive comments on or before February 21, 2012.

ADDRESSES: You may submit comments by any one of the following methods, 
however, please note that comments sent by electronic mail are strongly 
encouraged.
    [squf] Email comments to: reg.review@nigc.gov.
    [squf] Mail comments to: National Indian Gaming Commission, 1441 L 
Street NW., Suite 9100, Washington, DC 20005.
    [squf] Hand deliver comments to: 1441 L Street NW., Suite 9100, 
Washington, DC 20005.
    [squf] Fax comments to: National Indian Gaming Commission at (202) 
632-0045.

FOR FURTHER INFORMATION CONTACT: National Indian Gaming Commission, 
1441 L Street NW., Suite 9100, Washington, DC 20005. Telephone: (202) 
632-7009; email: reg.review@nigc.gov.

SUPPLEMENTARY INFORMATION: 

I. Comments Invited

    Interested parties are invited to participate in this proposed 
rulemaking by submitting such written data, views, or arguments as they 
may desire. Comments that provide the factual basis supporting the 
views and suggestions presented are particularly helpful in developing 
reasoned regulatory decisions on the proposal.

II. Background

    The Indian Gaming Regulatory Act (IGRA or Act), Public Law 100-497, 
25 U.S.C. 2701 et seq., was signed into law on October 17, 1988. The 
Act establishes the National Indian Gaming Commission (``Commission'') 
and sets out a comprehensive framework for the regulation of three 
classes of gaming on Indian lands. The purposes of IGRA

[[Page 79566]]

include providing a statutory basis for the operation of gaming by 
Indian Tribes as a means of promoting tribal economic development, 
self-sufficiency, and strong tribal governments; ensuring that the 
Indian tribe is the primary beneficiary of the gaming operation; and 
declaring that the establishment of independent federal regulatory 
authority for gaming on Indian lands, the establishment of federal 
standards for gaming on Indian lands, and the establishment of a 
National Indian Gaming Commission are necessary to meet congressional 
concerns regarding gaming and to protect such gaming as a means of 
generating tribal revenue. 25 U.S.C. 2702.
    On November 18, 2010, the National Indian Gaming Commission (NIGC) 
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 Commission should 
review its regulations, and the process NIGC should utilize to make 
revisions. 75 FR 70680. On April 4, 2011, after holding eight 
consultations and reviewing all comments, NIGC published a Notice of 
Regulatory Review Schedule setting out a consultation schedule and 
process for review. 76 FR 18457. The Commission's regulatory review 
process established a tribal consultation schedule with a description 
of the regulation groups to be covered at each consultation. This Part 
537 was included in the regulatory review process.

III. Development of the Proposed Rule

    The Commission conducted a total of 10 tribal consultations as part 
of its review of Part 537. Tribal consultations were held in every 
region of the country and were attended by over 137 tribes and 381 
tribal leaders or their representatives. In addition to tribal 
consultations, on June 28, 2011, the Commission requested public 
comment on a Preliminary Draft of amendments to Part 537. The Notice of 
Regulatory Review Schedule (NRR) announced the Commission's intent to 
review whether Part 537 should be revised to clarify that a management 
contractor should be required to submit background information when the 
contract is for management of both Class II and Class III gaming 
activities. Additionally, comments received from the NRR included a 
recommendation for the Commission to include a provision to streamline 
background investigations for certain entities already subject to 
background requirements and for tribes.

A. Streamlined Background Investigation for Tribes and Entities 
Otherwise Subject to Background Investigations

    The NRR identified a recommendation that the NIGC should provide 
streamlined or expedited review for tribes, tribal entities or other 
entities required to be licensed by a compact or are otherwise 
federally regulated. The discussion draft of the Part included a new 
section providing discretion to reduce the background requirements for 
``a tribe, a wholly owned tribal entity, national bank, or 
institutional investor that is federally regulated or is required to 
undergo a background investigation and licensure by a state or tribe 
pursuant to a tribal-state compact''. Comments were supportive of this 
change. One commentator stated that they welcomed this change, while 
another commentator disagreed that the reduced scope be at the 
discretion of the Chair.
    The Commission believes that this is a reasonable addition to the 
regulations. The proposed revision can reduce duplication of efforts. 
However, it is important for the Chair to retain the discretion in 
determining which entities should be allowed to proceed through an 
expedited background investigation. This amendment has been included in 
this proposed rule through a revision to 25 CFR 537.1(a)(4).

B. Background Investigations for Management Contractors of a Class II 
and Class III Gaming Operation

    The NRR identified background investigation information 
requirements for management contractors of a Class II and Class III 
gaming operations as a topic for review. Responses to the NOI indicated 
that this was an area that may need some clarification. The NIGC 
developed a discussion draft making this clarification and requested 
comment on the draft. After consulting extensively on this issue and 
receiving comments from tribes, it is clear that while most comments 
were amenable to the proposed revision, many noted that it was not a 
necessary revision.
    The Commission does not believe the revision is necessary and has 
not made the proposed change included in the discussion draft.
Regulatory Matters
Regulatory Flexibility Act
    The proposed rule will not have a significant impact on a 
substantial number of small entities as defined under the Regulatory 
Flexibility Act, 5 U.S.C. 601 et seq. Moreover, Indian tribes are not 
considered to be small entities for the purposes of the Regulatory 
Flexibility Act.
Small Business Regulatory Enforcement Fairness Act
    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 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. Nor will the proposed rule 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.
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).
Takings
    In accordance with Executive Order 12630, the Commission has 
determined that the proposed rule does not have significant takings 
implications. A takings implication assessment is not required.
Civil Justice Reform
    In accordance with Executive Order 12988, the Commission has 
determined that the proposed rule does not unduly burden the judicial 
system and meets the requirements of sections 3(a) and 3(b)(2) of the 
Order.
National Environmental Policy Act
    The Commission has determined that the rule does not constitute a 
major federal action significantly affecting the quality of the human 
environment and that no detailed statement is required pursuant to the 
National Environmental Policy Act of 1969, 42 U.S.C. 4321 et seq.
Paperwork Reduction Act
    The information collection requirements contained in this rule were 
previously approved by the Office of Management and Budget (OMB) as 
required by 44 U.S.C. 3501 et seq. and assigned OMB Control Number 
3141-0007, which expired in August of 2011. The NIGC is in the process 
of reinstating that Control Number.

[[Page 79567]]

List of Subjects in 25 CFR Part 537

    Gambling, Indians--tribal government, Indians--business and 
finance.

    For the reasons discussed in the Preamble, the Commission proposes 
to revise its regulations at 25 CFR Part 537 as follows:

PART 537--BACKGROUND INVESTIGATIONS FOR PERSONS OR ENTITIES WITH A 
FINANCIAL INTEREST IN, OR HAVING MANAGEMENT RESPONSIBILITY FOR, A 
MANAGEMENT CONTRACT

    1. The authority citation for art 537 continues to read as follows:

    Authority:  25 U.S.C. 81, 2706(b)(10), 2710(d)(9), 2711.

    2. Amend Sec.  537.1 by revising paragraph (a)(4) to read as 
follows:


Sec.  537.1  Applications for approval.

    (a) * * *
    (4) Any entity with a financial interest in a management contract 
(in the case of any tribe, a wholly owned tribal entity, national bank, 
or institutional investor that is federally regulated or is required to 
undergo a background investigation and licensure by a state or tribe 
pursuant to a tribal-state compact, the Chairman may exercise 
discretion and reduce the scope of the information to be furnished and 
the background investigation to be conducted); and
* * * * *
    3. Revise Sec.  537.3 paragraphs (b), (c) and (d) to read as 
follows:


Sec.  537.3  Fees for background investigations.

* * * * *
    (b) The management contractor shall post a deposit with the 
Commission to cover the cost of the background investigations as 
follows:
* * * * *
    (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 deposit available.
* * * * *
    (d) The deposit will be returned to the management contractor when 
all bills have been paid and the investigations have been completed or 
terminated.
    4. Section 537.4 is revised to read as follows:


Sec.  537.4  Determinations.

    The Chair shall determine whether the results of a background 
investigation preclude the Chair from approving a management contract 
because of the individual disqualifying factors contained in Sec.  
533.6(b)(1) of this chapter. The Chair shall promptly notify the tribe 
and management contractor if any findings preclude the Chair from 
approving a management contract or a change in financial interest.

    Dated: December 16, 2011, Washington, DC.
Tracie L. Stevens,
Chairwoman.
Steffani A. Cochran,

Vice-Chairwoman.

Daniel J. Little,

Associate Commissioner.

[FR Doc. 2011-32759 Filed 12-21-11; 8:45 am]
BILLING CODE 7565-02-P