[Title 25 CFR ]
[Code of Federal Regulations (annual edition) - April 1, 2010 Edition]
[From the U.S. Government Printing Office]



[[Page i]]

          

          25


          Part 300 to End

          Revised as of April 1, 2010


          Indians
          



________________________

          Containing a codification of documents of general 
          applicability and future effect

          As of April 1, 2010
          With Ancillaries
                    Published by
                    Office of the Federal Register
                    National Archives and Records
                    Administration
                    A Special Edition of the Federal Register

[[Page ii]]

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                            Table of Contents



                                                                    Page
  Explanation.................................................       v

  Title 25:
          Chapter II--Indian Arts and Crafts Board, Department 
          of the Interior                                            3
          Chapter III--National Indian Gaming Commission, 
          Department of the Interior                                19
          Chapter IV--The Office of Navajo and Hopi Indian 
          Relocation                                               213
          Chapter V--Bureau of Indian Affairs, Department of 
          the Interior, and Indian Health Service, Department 
          of Health and Human Services                             301
          Chapter VI--Office of the Assistant Secretary, 
          Indian Affairs, Department of the Interior               365
          Chapter VII--Office of the Special Trustee for 
          American Indians, Department of the Interior             429
  Finding Aids:
      Table of CFR Titles and Chapters........................     441
      Alphabetical List of Agencies Appearing in the CFR......     461
      List of CFR Sections Affected...........................     471

[[Page iv]]





                     ----------------------------

                     Cite this Code: CFR
                     To cite the regulations in 
                       this volume use title, 
                       part and section number. 
                       Thus, 25 CFR 301.1 refers 
                       to title 25, part 301, 
                       section 1.

                     ----------------------------

[[Page v]]



                               EXPLANATION

    The Code of Federal Regulations is a codification of the general and 
permanent rules published in the Federal Register by the Executive 
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    Each volume of the Code is revised at least once each calendar year 
and issued on a quarterly basis approximately as follows:

Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1

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[[Page vi]]

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[[Page vii]]



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    Office of the Federal Register.
    April 1, 2010.







[[Page ix]]



                               THIS TITLE

    Title 25--Indians is composed of two volumes. The parts in these 
volumes are arranged in the following order: parts 1-299, and part 300 
to end. The contents of these volumes represent all current regulations 
codified under this title of the CFR as of April 1, 2010.

    For this volume, Bonnie Fritts was Chief Editor. The Code of Federal 
Regulations publication program is under the direction of Michael L. 
White, assisted by Ann Worley.

[[Page 1]]



                            TITLE 25--INDIANS




  --------------------------------------------------------------------
                                                                    Part

chapter ii--Indian Arts and Crafts Board, Department of the 
  Interior..................................................         301

chapter iii--National Indian Gaming Commission, Department 
  of the Interior...........................................         501

chapter iv--The Office of Navajo and Hopi Indian Relocation.         700

chapter v--Bureau of Indian Affairs, Department of the 
  Interior, and Indian Health Service, Department of Health 
  and Human Services........................................         900

chapter vi--Office of the Assistant Secretary, Indian 
  Affairs, Department of the Interior.......................        1000

chapter vii--Office of the Special Trustee for American 
  Indians, Department of the Interior.......................        1200

[[Page 3]]



  CHAPTER II--INDIAN ARTS AND CRAFTS BOARD, DEPARTMENT OF THE INTERIOR




  --------------------------------------------------------------------
Part                                                                Page
300             [Reserved]

301             Navajo, Pueblo, and Hopi silver and 
                    turquoise products; standards...........           5
304             Navajo, Pueblo, and Hopi silver, use of 
                    Government mark.........................           5
307             Navajo all-wool woven fabrics; use of 
                    Government certificate of genuineness...           6
308             Regulations for use of certificates of the 
                    Indian Arts and Crafts Board to be 
                    attached to their trade-marks by Indian 
                    enterprises concerned with the 
                    production and sale of genuine 
                    handicrafts.............................           8
309             Protection of Indian arts and crafts 
                    products................................           9
310             Use of Government marks of genuineness for 
                    Alaskan Indian and Alaskan Eskimo hand-
                    made products...........................          15

[[Page 5]]

                           PART 300 [Reserved]



PART 301_NAVAJO, PUEBLO, AND HOPI SILVER AND TURQUOISE PRODUCTS;
STANDARDS--Table of Contents




Sec.
301.1 Eligibility for use of Government stamp.
301.2 Specifications of material.
301.3 Specifications of dies.
301.4 Application of dies.
301.5 Applique elements in design.
301.6 Stone for ornamentation.
301.7 Stonecutting.
301.8 Finish.

    Authority: Sec. 3, 49 Stat. 892; 25 U.S.C. 305b. Interpret or apply 
sec. 2, 49 Stat. 891, as amended; 25 U.S.C. 305a.

    Source: The provisions of this part 301 contained in standards for 
Navajo, Pueblo, and Hopi silver and turquoise products, Mar. 9, 1937, 
unless otherwise noted.



Sec. 301.1  Eligibility for use of Government stamp.

    Subject to the detailed requirements that follow, the Government 
stamp shall be affixed only to work individually produced and to work 
entirely hand-made. No object produced under conditions resembling a 
bench work system, and no object in whose manufacture any power-driven 
machinery has been used, shall be eligible for the use of the Government 
stamp.



Sec. 301.2  Specifications of material.

    Silver slugs of 1 ounce weight or other silver objects may be used, 
provided their fineness is at least 900, and provided further that no 
silver sheet shall be used. Unless cast, the slug or other object is to 
be hand hammered to thickness and shape desired. The only exceptions 
here are pins on brooches or similar objects; ear screws for earrings; 
backs for tie clasps and chains which may be of silver of different 
fineness and mechanically made.



Sec. 301.3  Specifications of dies.

    Dies used are to be entirely hand-made, with no tools more 
mechanical than hand tools and vise. Dies shall contain only a single 
element of the design.



Sec. 301.4  Application of dies.

    Dies are to be applied to the object with the aid of nothing except 
hand tools.



Sec. 301.5  Applique elements in design.

    All such parts of the ornament are to be hand-made. If wire is used, 
it is to be hand-made with no tool other than a hand-made draw plate. 
These requirements apply to the boxes for stone used in the design.



Sec. 301.6  Stone for ornamentation.

    In addition to turquoise, the use of other local stone is permitted. 
Turquoise, if used, must be genuine stone, uncolored by any artificial 
means.



Sec. 301.7  Stonecutting.

    All stone used, including turquoise, is to be hand-cut and polished. 
This permits the use of hand- or foot-driven wheels.



Sec. 301.8  Finish.

    All silver is to be hand polished.



PART 304_NAVAJO, PUEBLO, AND HOPI SILVER, USE OF GOVERNMENT
MARK--Table of Contents




Sec.
304.1 Penalties for imitation or unauthorized use.
304.2 Marking and ownership of dies.
304.3 Classifying and marking of silver.
304.4 Standards and additional requirements.
304.5 Dies to identify tribe.
304.6 Responsibility of dealer.
304.7 Eligibility of silver meeting standards.
304.8 Use of label by dealer.
304.9 Placards; display of regulations.

    Authority: Sec. 3, 49 Stat. 892; 25 U.S.C. 305b. Interpret or apply 
sec. 2, 49 Stat. 891, as amended; 25 U.S.C. 305a.

    Source: The provisions of this part 304 contained in regulations 
governing use of Government mark on Navajo, Pueblo, and Hopi silver, 
April 2, 1937, unless otherwise noted.



Sec. 304.1  Penalties for imitation or unauthorized use.

    The use of Government trade-marks in an unauthorized manner, or the 
colorable imitation of such marks, is

[[Page 6]]

subject to the criminal penalties imposed by section 5 of the said act 
(49 Stat. 892; 25 U.S.C. 305d).



Sec. 304.2  Marking and ownership of dies.

    All dies used to mark silver will be provided by and owned by the 
Indian Arts and Crafts Board.



Sec. 304.3  Classifying and marking of silver.

    For the present the Indian Arts and Crafts Board reserves to itself 
the sole right to judge what silver complying with its standards shall 
bear the Government mark. All such marking of silver shall, for the 
present, be done by an agent of the Indian Arts and Crafts Board.



Sec. 304.4  Standards and additional requirements.

    No piece of silver, though made in compliance with the standards set 
forth by the Indian Arts and Crafts Board, shall bear the Government 
mark unless:
    (a) Its weight is substantially in accord with Indian usage and 
custom.
    (b) Its design elements are substantially in accord with Indian 
usage and tradition.
    (c) Its workmanship is substantially that expected in good hand 
craftsmanship.



Sec. 304.5  Dies to identify tribe.

    Dies are marked with name of tribe. A Navajo stamp will be used 
where the marker is a Navajo Indian; similarly, for Zuni, Hopi, and Rio 
Grande Pueblo.



Sec. 304.6  Responsibility of dealer.

    All dies will be numbered, and each wholesaler or dealer will be 
held responsible for any violation of standards in silver that bears his 
mark. Until such time as the Board relinquishes its sole right to mark 
silver, the responsibility of the dealer for whom silver is marked will 
be confined to misrepresentations as to quality of silver and of stones 
used for ornament and to methods of production.



Sec. 304.7  Eligibility of silver meeting standards.

    In addition to silver currently made in compliance with the 
standards of the Indian Arts and Crafts Board, other silver products 
made prior to the promulgation of the regulations in this part may be 
stamped, provided the maker thereof is known to be an Indian, and the 
product satisfies the requirements in Sec. 304.4.



Sec. 304.8  Use of label by dealer.

    Any dealer offering for sale silver bearing the Government mark may, 
if he wishes, attach to silver so marked a label or ticket calling 
attention to the Government mark.



Sec. 304.9  Placards; display of regulations.

    Every dealer offering for sale silver bearing the Government mark 
may display in a prominent place a placard setting forth the standards 
and the regulations in this part, such placard to be furnished by the 
Indian Arts and Crafts Board.

[Regs., Apr. 2, 1937, as amended Feb. 21, 1938]



PART 307_NAVAJO ALL-WOOL WOVEN FABRICS; USE OF GOVERNMENT CERTIFICATE
OF GENUINENESS--Table of Contents




Sec.
307.1 Penalties.
307.2 Certificates of genuineness; by whom affixed.
307.3 Granting of licenses, contract, and bond requirements.
307.4 Standards for fabrics.
307.5 Hand seal press and certificates to be furnished.
307.6 Fees.
307.7 Suspension of license.
307.8 Revocation of license.
307.9 Surrender of license.
307.10 Period of license.
307.11 Certificates fastened to fabrics.
307.12 Certificates, dating, and signing thereof.
307.13 Licensee's responsibility.

    Authority: Sec. 3, 49 Stat. 892 (25 U.S.C. 305b). Interpret or apply 
sec. 2, 49 Stat. 891, as amended (25 U.S.C. 305a).

    Source: The provisions of this part 307 contained in regulations 
governing the use of Government certificate of genuineness for Navajo 
all-wool woven fabrics, Oct. 20, 1937, unless otherwise noted.

[[Page 7]]



Sec. 307.1  Penalties.

    The use of Government trade-marks in an unauthorized manner, or the 
colorable imitation of such marks, is subject to the criminal penalties 
imposed by section 5 of the said act (49 Stat. 892; 25 U.S.C. 305d), 
which provides:

    Any person who shall counterfeit or colorably imitate any Government 
trade-mark used or devised by the Board as provided in section 305a of 
this chapter, or shall, except as authorized by the Board, affix any 
such Government trade-mark, or shall knowingly, willfully, and corruptly 
affix any reproduction, counterfeit, copy, or colorable imitation 
thereof upon any products, Indian or otherwise, or to any labels, signs, 
prints, packages, wrappers, or receptacles intended to be used upon or 
in connection with the sale of such products, or any person who shall 
knowingly make any false statement for the purpose of obtaining the use 
of any such Government trade-mark shall be guilty of a misdemeanor, and 
upon conviction thereof shall be enjoined from further carrying on the 
act or acts complained of and shall be subject to a fine not exceeding 
$20,000, or imprisonment not exceeding six months, or both such fine and 
imprisonment.



Sec. 307.2  Certificates of genuineness; by whom affixed.

    Government certificates of genuineness for Navajo all-wool woven 
fabrics may be affixed to fabrics meeting the conditions specified in 
Sec. 307.4 by persons duly authorized to affix such certificates, under 
license issued by the Indian Arts and Crafts Board.



Sec. 307.3  Granting of licenses, contract, and bond requirements.

    A license may be granted to any person desiring to use the 
Government certificate of genuineness for Navajo all-wool woven fabrics 
who shall make application therefor and shall execute a contract 
acceptable to the Indian Arts and Crafts Board providing for the use of 
such certificates in conformity with the regulations in this part, which 
contract shall be accompanied by an indemnity bond acceptable to the 
Indian Arts and Crafts Board, in the amount of $500, conditioned upon 
faithful performance of such contract.



Sec. 307.4  Standards for fabrics.

    No fabric may carry the Government certificate of genuineness for 
Navajo all-wool woven fabric unless all of the following conditions are 
met:
    (a) The fabric is made entirely of local wool that is locally hand-
spun and is entirely woven on a native Navajo loom;
    (b) The fabric is made by a member of the Navajo Tribe working under 
conditions not resembling a workshop or factory system;
    (c) The size of the fabric is indicated in the certificate;
    (d) The licensee signs the certificate.

[Regs., Oct. 20, 1937, as amended at 4 FR 2436, June 17, 1939]



Sec. 307.5  Hand seal press and certificates to be furnished.

    Each licensee will be furnished, upon payment of the registration 
and license fees specified in Sec. 307.6 one hand seal press and a 
supply of blank Government certificates, which shall be used only in 
accordance with this license, and shall remain at all times the property 
of the Board.



Sec. 307.6  Fees.

    Each licensee shall pay a registration fee of $2, together with a 
license fee which shall be determined on the basis of $1 for each 40 
Government certificates ordered by the licensee from the Board.



Sec. 307.7  Suspension of license.

    In the event that complaint is made to the Board that any provision 
of any license or of the regulations in this part has been violated by 
any licensee, the Board may suspend the license and all authority 
conferred thereby, in its discretion, for a period of 30 days, by 
notifying the licensee of such suspension, by mail, by telegraph, or in 
any other manner.



Sec. 307.8  Revocation of license.

    In the event that the Board, after giving a licensee written notice 
of charges and affording an opportunity to reply to such charges, orally 
or in writing, is satisfied that any provision of any license or of the 
regulations in this part has been violated by any licensee, the Board 
may revoke the license by notifying the licensee of such revocation, by 
mail, by telegraph, or in any other manner. Upon notice of such

[[Page 8]]

revocation all authority conferred by the license so revoked shall 
forthwith terminate, but the validity of actions taken while the license 
was in force shall not be affected.



Sec. 307.9  Surrender of license.

    Any license may be surrendered by the licensee at any time by 
surrendering to the Board the Government hand seal press and unused 
certificates of genuineness entrusted to the licensee, accompanied by a 
copy of the license marked ``surrendered'' and signed by the licensee. 
Such surrender shall take effect as of the time that such property and 
document have been received by the Board.



Sec. 307.10  Period of license.

    Each license shall be in effect from the date of execution thereof 
and until 1 year thereafter, unless sooner surrendered or canceled in 
accordance with the foregoing provisions.



Sec. 307.11  Certificates fastened to fabrics.

    Certificates shall be fastened to the woven fabric by wire caught in 
a lead seal disc that shall be impressed and made fast with the hand 
seal press furnished by the Indian Arts and Crafts Board.



Sec. 307.12  Certificates, dating, and signing thereof.

    When the certificate is first affixed the lower of the two spaces 
provided for the purpose shall be signed by the licensee. In the event 
the ultimate retailer of any fabric so marked is not the person who 
originally attached the certificate, that ultimate retailer may sign the 
upper of the two spaces provided for the purpose and detach the original 
signature.

[4 FR 2436, June 17, 1939]



Sec. 307.13  Licensee's responsibility.

    Certificates may be attached only to products which are in the 
ownership or possession of the licensee. Certificates will be 
consecutively numbered and records of the allocation of such 
certificates will be maintained by the Indian Arts and Crafts Board. 
Each licensee will be held responsible for the proper use of such 
certificates and of the Government hand seal press furnished to such 
licensee.



 PART 308_REGULATIONS FOR USE OF CERTIFICATES OF THE INDIAN ARTS
 AND CRAFTS BOARD TO BE ATTACHED TO THEIR TRADE-MARKS BY INDIAN
 
 ENTERPRISES CONCERNED WITH THE 
PRODUCTION AND SALE OF GENUINE HANDICRAFTS--Table of Contents




Sec.
308.1 Penalties.
308.2 Certificates of genuineness to be attached to trade-marks.
308.3 Conditions of eligibility to attach certificates.
308.4 Revocation of privilege of attaching certificates.

    Authority: Sec. 3, 49 Stat. 892 (25 U.S.C. 305b). Interpret or apply 
sec. 2, 49 Stat. 891, as amended (25 U.S.C. 305a).

    Source: 8 FR 8736, June 26, 1943, unless otherwise noted.



Sec. 308.1  Penalties.

    The use of Government trade-marks in an unauthorized manner, or the 
colorable imitation of such marks, is subject to the criminal penalties 
imposed by section 5 of the said act (49 Stat. 892; 25 U.S.C. 305d), 
which provides:

    Any person who shall counterfeit or colorably imitate any Government 
trade-mark used or devised by the Board as provided in section 305a of 
this chapter, or shall, except as authorized by the Board, affix any 
such Government trade-mark, or shall knowingly, willfully, and corruptly 
affix any reproduction, counterfeit, copy, or colorable imitation 
thereof upon any products Indian or otherwise, or to any labels, signs, 
prints, packages, wrappers, or receptacles intended to be used upon or 
in connection with the sale of such products, or any person who shall 
knowingly make any false statement for the purpose of obtaining the use 
of any such Government trade-mark, shall be guilty of a misdemeanor, and 
upon conviction thereof shall be enjoined from further carrying on the 
act or acts complained of and shall be subject to a fine not exceeding 
$2,000, or imprisonment not exceeding six months, or both such fine and 
imprisonment.

[[Page 9]]



Sec. 308.2  Certificates of genuineness to be attached to trade-marks.

    (a) To insure the widest distribution of genuine Indian handicraft 
products, and to protect the various enterprises organized by individual 
Indian craftsmen, or by groups of Indian craftsmen, for the purpose of 
the production and sale of such handicraft products, the Indian Arts and 
Crafts Board offers each such enterprise the privilege of attaching to 
its trademark a certificate declaring that it is recognized by the 
Indian Arts and Crafts Board as an Indian enterprise dealing in genuine 
Indian-made handicraft products, and that its trade-mark has the 
approval of the Board.
    (b) The certificate shall consist of a border around the trade-mark 
bearing the words ``Certified Indian Enterprise Genuine Handicrafts, 
U.S. Indian Arts and Crafts Board, Department of the Interior,'' and 
these words may be used wherever the trade-mark appears.



Sec. 308.3  Conditions of eligibility to attach certificates.

    To be eligible to attach the certificate, an enterprise must meet 
the following conditions:
    (a) It must offer for sale only Indian-made genuine handicraft 
products, i.e., objects produced by Indian craftsmen with the help of 
only such devices as allow the manual skill of the maker to condition 
the shape and design of each individual product.
    (b) It must be entirely Indian owned and organized either by 
individual Indians or by groups of Indians.
    (c) It must agree to apply certificates of genuineness only to such 
products as meet the standards of quality prescribed by the Indian Arts 
and Crafts Board at the time of the application of the enterprise for 
the privilege of attaching the certificate.
    (d) It must agree to obtain the approval of the Indian Arts and 
Crafts Board as to the manner of production of the certificates.



Sec. 308.4  Revocation of privilege of attaching certificates.

    If an enterprise, after securing the privilege of attaching the 
certificates, should fail to meet the above-named conditions, the Board 
reserves the right to revoke the privilege.



PART 309_PROTECTION OF INDIAN ARTS AND CRAFTS PRODUCTS--Table of Contents




Sec.
309.1 How do the regulations in this part carry out the Indian Arts and 
          Crafts Act of 1990?
309.2 What are the key definitions for purposes of the Act?
309.6 When does a commercial product become an Indian product?
309.7 How should a seller disclose the nature and degree of Indian labor 
          when selling, offering, or displaying art and craft work for 
          sale?
309.8 For marketing purposes, what is the recommended method of 
          identifying authentic Indian products?
309.9 When can non-Indians make and sell products in the style of Indian 
          arts and crafts?
309.10 What are some sample categories and examples of Indian products?
309.11 What are examples of jewelry that are Indian products?
309.12 What are examples of basketry that are Indian products?
309.13 What are examples of other weaving and textiles that are Indian 
          products?
309.14 What are examples of beadwork, quillwork, and moose hair tufting 
          that are Indian products?
309.15 What are examples of apparel that are Indian products?
309.16 What are examples of regalia that are Indian products?
309.17 What are examples of woodwork that are Indian products?
309.18 What are examples of hide, leatherwork, and fur that are Indian 
          products?
309.19 What are examples of pottery and ceramics that are Indian 
          products?
309.20 What are examples of sculpture, carving, and pipes that are 
          Indian products?
309.21 What are examples of dolls and toys that are Indian products?
309.22 What are examples of painting and other fine art forms that are 
          Indian products?
309.23 Does this part apply to products made before 1935?
309.24 How will statements about Indian origin of art or craft products 
          be interpreted?
309.25 How can an individual be certified as an Indian artisan?
309.26 What penalties apply?
309.27 How are complaints filed?

    Authority: 18 U.S.C. 1159, 25 U.S.C. 305 et seq.

    Source: 61 FR 54555, Oct. 21, 1996, unless otherwise noted.

[[Page 10]]



Sec. 309.1  How do the regulations in this part carry out the Indian
Arts and Crafts Act of 1990?

    These regulations define the nature and Indian origin of products 
protected by the Indian Arts and Crafts Act of 1990 (18 U.S.C. 1159, 25 
U.S.C. 305 et seq.) from false representations, and specify how the 
Indian Arts and Crafts Board will interpret certain conduct for 
enforcement purposes. The Act makes it unlawful to offer or display for 
sale or sell any good in a manner that falsely suggests it is Indian 
produced, an Indian product, or the product of a particular Indian, or 
Indian tribe, or Indian arts and crafts organization resident within the 
United States.



Sec. 309.2  What are the key definitions for purposes of the Act?

    (a) Indian as applied to an individual means a person who is a 
member of an Indian tribe or for purposes of this part is certified by 
an Indian tribe as a non-member Indian artisan (in accordance with the 
provisions of Sec. 309.4).
    (b) Indian artisan means an individual who is certified by an Indian 
tribe as a non-member Indian artisan.
    (c) Indian arts and crafts organization means any legally 
established arts and crafts marketing organization composed of members 
of Indian tribes.
    (d) Indian product--(1) In general. The term ``Indian product'' 
means any art or craft product made by an Indian. For this purpose, the 
term ``made by an Indian'' means that an Indian has provided the 
artistic or craft work labor necessary to implement an artistic design 
through a substantial transformation of materials to produce the art or 
craft work. This may include more than one Indian working together. The 
labor component of the product, however, must be entirely Indian for the 
Indian art or craft object to be an ``Indian product.''
    (2) Illustrations. The term ``Indian product'' includes, but is not 
limited to:
    (i) Art made by an Indian that is in a traditional or non-
traditional style or medium;
    (ii) Craft work made by an Indian that is in a traditional or non-
traditional style or medium;
    (iii) Handcraft made by an Indian, i.e. an object created with the 
help of only such devices as allow the manual skill of the maker to 
condition the shape and design of each individual product.
    (3) Examples of non-qualifying products. An ``Indian product'' under 
the Act does not include any of the following, for example:
    (i) A product in the style of an Indian art or craft product made by 
non-Indian labor;
    (ii) A product in the style of an Indian art or craft product that 
is designed by an Indian but produced by non-Indian labor;
    (iii) A product in the style of an Indian art or craft product that 
is assembled from a kit;
    (iv) A product in the style of an Indian art or craft product 
originating from a commercial product, without substantial 
transformation provided by Indian artistic or craft work labor;
    (v) Industrial products, which for this purpose are defined as goods 
that have an exclusively functional purpose, do not serve as a 
traditional artistic medium, and that do not lend themselves to Indian 
embellishment, such as appliances and vehicles. An industrial product 
may not become an Indian product.
    (vi) A product in the style of an Indian art or craft product that 
is produced in an assembly line or related production line process using 
multiple workers not all whom are Indians. For example, if twenty people 
make up the labor to create the product(s), and one person is not 
Indian, the product is not an ``Indian product.''
    (e) Indian tribe means--
    (1) Any Indian tribe, band, nation, Alaska Native village, or any 
organized group or community which is recognized as eligible for the 
special programs and services provided by the United States to Indians 
because of their status as Indians; or
    (2) Any Indian group that has been formally recognized as an Indian 
tribe by a State legislature or by a State commission or similar 
organization legislatively vested with State tribal recognition 
authority.
    (f) Product of a particular Indian tribe or Indian arts and crafts 
organization means that the origin of a product is identified as a named 
Indian tribe or

[[Page 11]]

named Indian arts and crafts organization.

[61 FR 54555, Oct. 21, 1996; 61 FR 57002, Nov. 5, 1996, as amended at 68 
FR 35169, June 12, 2003]



Sec. 309.6  When does a commercial product become an Indian product?

    In addressing Indian embellishments to originally commercial 
products, the Indian labor expended to add art or craft work to those 
objects must be sufficient to substantially transform the qualities and 
appearance of the original commercial item. ``Commercial products,'' 
under this part, are consumer goods designed for profit and mass 
distribution that lend themselves to Indian embellishment, for example 
clothing and accessories. Through substantial transformation due to 
Indian labor, a product changes from a commercial product to an Indian 
product. Examples of formerly commercial products that become Indian 
products include tennis shoes to which an Indian applies beadwork and 
denim jackets to which an Indian applies ribbon appliqu[eacute]s.

[68 FR 35170, June 12, 2003]



Sec. 309.7  How should a seller disclose the nature and degree of Indian
labor when selling, offering, or displaying art and craft work for sale?

    The Indian Arts and Crafts Act is a truth-in-marketing law. Those 
who produce and market art and craft work should honestly represent and 
clarify the degree of Indian involvement in the production of the art 
and craft work when it is sold, displayed or offered for sale. The 
following guidelines illustrate the way in which art and craft work may 
be characterized for marketing purposes and gives examples of products 
that may be marketed as Indian products.

------------------------------------------------------------------------
                 If . . .                            then . . .
------------------------------------------------------------------------
(a) An Indian conceives, designs, and       it is an ``Indian product.''
 makes the art or craft work.
(b) An Indian produces a product that is    it can be marketed as such
 ``handcrafted,'' as explained in            and it meets the definition
 309.3(d)(iii).                              of ``Indian product.''
(c) An Indian makes an art or craft work    it is ``Indian made'' and
 using some machine made parts.              meets the definition of
                                             ``Indian product.''
(d) An Indian designs a product, such as a  it does not meet the
 bracelet, which is then produced by non-    definition of ``Indian
 Indians.                                    product'' under the Act.
(e) A product, such as jewelry, is made     it does not meet the
 with non-artistic Indian labor, from        definition of ``Indian
 assembled or ``fit together parts''.        product'' under the Act.
                                             \1\
(f) A product in the style of an Indian     it does not meet the
 product is assembled by non-Indian labor    definition of ``Indian
 from a kit.                                 product'' under the Act.
(g) A product is in the style of an Indian  it does not meet the
 art or craft product, but not made by an    definition of ``Indian
 Indian.                                     product'' under the Act.
(h) An Indian and a non-Indian jointly      less than all of the labor
 undertake the art or craft work to          is Indian and hence it does
 produce an art or craft product, for        not meet the definition of
 example a concho belt.                      ``Indian product'' under
                                             the Act. \2\
------------------------------------------------------------------------
\1\ For example, a necklace strung with overseas manufactured fetishes
  or heshi. If an Indian assembled the necklace, in keeping with the
  truth-in-marketing focus of the Act, it can be marketed as ``Indian
  assembled.'' It does not meet the definition of ``Indian product''
  under the Act. Similarly, if a product, such as a dream catcher is
  assembled by an Indian from a kit, it can be marketed as ``Indian
  assembled.'' It does not meet the definition of ``Indian product''
  under the Act.
\2\ In order to be an ``Indian product,'' the labor component of the
  product must be entirely Indian. In keeping with this truth-in-
  marketing law, a collaborative work should be marketed as such.
  Therefore, it should be marketed as produced by ``X'' (name of artist
  or artisan), ``Y'' (Tribe of individual's enrollment) or (name of
  Tribe providing official written certification the individual is a non-
  member Indian artisan and date upon which such certification was
  issued by the Tribe), and ``Z'' (name of artist or artisan with no
  Tribe listed) to avoid providing false suggestions to consumers.


[68 FR 35170, June 12, 2003]



Sec. 309.8  For marketing purposes, what is the recommended method of
identifying authentic Indian products?

    (a) The recommended method of marketing authentic Indian products is 
to include the name of the artist or artisan, the name of the Tribe in 
which the artist or artisan is enrolled, and the individual's Tribal 
enrollment number. If the individual is a certified non-member Indian 
artisan, rather than an enrolled Tribal member, the product 
identification should include the name of the Tribe providing official 
written certification that the individual is a non-member Indian artisan 
and the date upon which such certification was issued by the Tribe. In 
order for an individual to be certified by an Indian Tribe as a non-
member Indian artisan, the individual must be of Indian lineage of one 
or more members of such Indian Tribe and the certification must be 
issued in writing by the governing

[[Page 12]]

body of an Indian Tribe or by a certifying body delegated this function 
by the governing body of the Indian Tribe.
    (b) For example, the Indian product should include a label, hangtag, 
provenance card, or similar identification that includes W (name of the 
artist or artisan), and X (name of the Tribe in which the individual is 
enrolled) and Y (individual's Tribal enrollment number), or a statement 
that the individual is a certified non-member Indian artisan of Z (name 
of the Tribe providing certification and the date upon which the 
certification was issued by the Tribe).

[68 FR 35170, June 12, 2003]



Sec. 309.9  When can non-Indians make and sell products in the style
of Indian arts and crafts?

    A non-Indian can make and sell products in the style of Indian art 
or craft products only if the non-Indian or other seller does not 
falsely suggest to consumers that the products have been made by an 
Indian.

[68 FR 35170, June 12, 2003]



Sec. 309.10  What are some sample categories and examples of Indian products?

    What constitutes an Indian product is potentially very broad. 
However, to provide guidance to persons who produce, market, or purchase 
items marketed as Indian products, Sec. Sec. 309.11 through 309.22 
contain a sample listing of ``specific examples'' of objects that meet 
the definition of Indian products. There is some repetition, due to the 
interrelated nature of many Indian products when made by Indian artistic 
labor. The lists in these sections contain examples and are not intended 
to be all-inclusive. Additionally, although the Indian Arts and Crafts 
Act of 1990 and the Indian Arts and Crafts Enforcement Act of 2000 do 
not address materials used in Indian products, some materials are 
included for their descriptive nature only. This is not intended to 
restrict materials used or to exclude materials not listed.

[68 FR 35170, June 12, 2003]



Sec. 309.11  What are examples of jewelry that are Indian products?

    (a) Jewelry and related accessories made by an Indian using a wide 
variety of media, including, but not limited to, silver, gold, 
turquoise, coral, lapis, jet, nickel silver, glass bead, copper, wood, 
shell, walrus ivory, whale baleen, bone, horn, horsehair, quill, seed, 
and berry, are Indian products.
    (b) Specific examples include, but are not limited to: ivory and 
baleen scrimshaw bracelets, abalone shell necklaces, nickel silver 
scissortail pendants, silver sand cast bracelets, silver overlay bolos, 
turquoise channel inlay gold rings, cut glass bead rosette earrings, 
wooden horse stick pins, and medicine wheel quilled medallions.

[68 FR 35170, June 12, 2003]



Sec. 309.12  What are examples of basketry that are Indian products?

    (a) Basketry and related weavings made by an Indian using a wide 
variety of media, including, but not limited to, birchbark, black ash, 
brown ash, red cedar, yellow cedar, alder, vine maple, willow, palmetto, 
honeysuckle, river cane, oak, buck brush, sumac, dogwood, cattail, reed, 
raffia, horsehair, pine needle, spruce root, rye grass, sweet grass, 
yucca, bear grass, beach grass, rabbit brush, fiber, maidenhair fern, 
whale baleen, seal gut, feathers, shell, devil's claw, and porcupine 
quill, are Indian products.
    (b) Specific examples include, but are not limited to: double weave 
river cane baskets, yucca winnowing trays, willow burden baskets, 
honeysuckle sewing baskets, black ash picnic baskets, cedar capes and 
dresses, pine needle/raffia effigy baskets, oak splint and braided sweet 
grass fancy baskets, birchbark containers, baleen baskets, rye grass 
dance fans, brown ash strawberry baskets, sumac wedding baskets, cedar 
hats, fiber basket hats, yucca wicker basketry plaques, and spruce root 
tobacco pouches.

[68 FR 35170, June 12, 2003]



Sec. 309.13  What are examples of other weaving and textiles that
are Indian products?

    (a) Weavings and textiles made by an Indian using a wide variety of 
media,

[[Page 13]]

including, but not limited to, cornhusk, raffia, tule, horsehair, 
cotton, wool, fiber, linen, rabbit skin, feather, bison fur, and qiviut 
(musk ox) wool, are Indian products.
    (b) Specific examples include, but are not limited to: corn husk 
bags, twined yarn bags, cotton mantas, willow cradle boards, horsehair 
hatbands, Chiefs Blankets, Two Grey Hills rugs, horse blankets, finger 
woven sashes, brocade table runners, star quilts, pictorial 
appliqu[eacute] wall hangings, fiber woven bags, embroidered dance 
shawls, rabbit skin blankets, and feather blankets.

[68 FR 35170, June 12, 2003]



Sec. 309.14  What are examples of beadwork, quillwork, and moose hair
tufting that are Indian products?

    (a) Beadwork, quillwork, and moose hair tufting made by an Indian to 
decorate a wide variety of materials, including, but not limited to, 
bottles, baskets, bags, pouches, and other containers; belts, buckles, 
jewelry, hatbands, hair clips, barrettes, bolos, and other accessories; 
moccasins, vests, jackets, and other articles of clothing; and dolls and 
other toys and collectibles, are Indian products.
    (b) Specific examples include, but are not limited to: quilled pipe 
stems, loom beaded belts, pictorial bags adorned with cut glass beads, 
deer skin moccasins decorated with moose hair tufting, beaded miniature 
dolls, and quilled and beaded amulets.

[68 FR 35170, June 12, 2003]



Sec. 309.15  What are examples of apparel that are Indian products?

    (a) Apparel made or substantially decorated by an Indian, including, 
but not limited to, parkas, jackets, coats, moccasins, boots, slippers, 
mukluks, mittens, gloves, gauntlets, dresses, and shirts, are Indian 
products.
    (b) Specific examples include, but are not limited to: seal skin 
parkas, ribbon appliqu[eacute] dance shawls, smoked moose hide slippers, 
deer skin boots, patchwork jackets, calico ribbon shirts, wing dresses, 
and buckskin shirts.

[68 FR 35170, June 12, 2003]



Sec. 309.16  What are examples of regalia that are Indian products?

    (a) Regalia are ceremonial clothing, modern items with a traditional 
theme, and accessories with historical significance made or 
significantly decorated by an Indian, including, but not limited to, 
that worn to perform traditional dances, participate in traditional 
socials, used for dance competitions, and worn on special occasions of 
tribal significance. If these items are made or significantly decorated 
by an Indian, they are Indian products.
    (b) Specific examples include, but are not limited to: hide 
leggings, buckskin dresses, breech cloths, dance shawls, frontlets, 
shell dresses, button blankets, feather bustles, porcupine roaches, 
beaded pipe bags, nickel silver stamped armbands, quilled breast plates, 
coup sticks, horse sticks, shields, headdresses, dance fans, and 
rattles.

[68 FR 35170, June 12, 2003]



Sec. 309.17  What are examples of woodwork that are Indian products?

    (a) Woodwork items made by an Indian, including, but not limited to, 
sculpture, drums, furniture, containers, hats, and masks, are Indian 
products.
    (b) Specific examples include, but are not limited to: hand drums, 
totem poles, animal figurines, folk carvings, kachinas, embellished long 
house posts, clan house carved doors, chairs, relief panels, bentwood 
boxes, snow goggles, red and yellow cedar seagoing canoe paddles, 
hunting hats, spirit masks, bows and arrows, atlatls, redwood dug out 
canoes, war clubs, flutes, dance sticks, talking sticks, shaman staffs, 
cradles, decoys, spiral pipe stems, violins, Native American Church 
boxes, and maple ladles, spoons, and soup bowls.

[68 FR 35170, June 12, 2003]



Sec. 309.18  What are examples of hide, leatherwork, and fur that
are Indian products?

    (a) Hide, leatherwork, and fur made or significantly decorated by an 
Indian, including, but not limited to, parfleches, tipis, horse 
trappings and

[[Page 14]]

tack, pouches, bags, and hide paintings, are Indian products.
    (b) Specific examples include, but are not limited to: narrative 
painted hides, martingales, saddles, bonnet cases, drapes, quirts, 
forelocks, rosettes, horse masks, bridles, head stalls, cinches, saddle 
bags, side drops, harnesses, arm bands, belts, and other hand crafted 
items with studs and tooling.

[68 FR 35170, June 12, 2003]



Sec. 309.19  What are examples of pottery and ceramics that are
Indian products?

    (a) Pottery, ceramics, and related arts and crafts items made or 
significantly decorated by an Indian, including, but not limited to, a 
broad spectrum of clays and ceramic material, are Indian products.
    (b) Specific examples include, but are not limited to: ollas, pitch 
vessels, pipes, raku bowls, pitchers, canteens, effigy pots, wedding 
vases, micaceous bean pots, seed pots, masks, incised bowls, blackware 
plates, redware bowls, polychrome vases, and storytellers and other 
figures.

[68 FR 35170, June 12, 2003]



Sec. 309.20  What are examples of sculpture, carving, and pipes
that are Indian products?

    (a) Sculpture, carving, and pipes made by an Indian, including, but 
not limited to, wood, soapstone, alabaster, pipestone, argillite, 
turquoise, ivory, baleen, bone, antler, and shell, are Indian products.
    (b) Specific examples include, but are not limited to: kachina 
dolls, fetishes, animal figurines, pipestone pipes, moose antler combs, 
argillite bowls, ivory cribbage boards, whalebone masks, elk horn 
purses, and clamshell gorgets.

[68 FR 35170, June 12, 2003]



Sec. 309.21  What are examples of dolls and toys that are Indian
products?

    Dolls, toys, and related items made by an Indian, including, but not 
limited to, no face dolls, corn husk dolls, patchwork and palmetto 
dolls, reindeer horn dolls, lacrosse sticks, stick game articles, 
gambling sticks, gaming dice, miniature cradle boards, and yo-yos, are 
Indian products.

[68 FR 35170, June 12, 2003]



Sec. 309.22  What are examples of painting and other fine art
forms that are Indian products?

    Painting and other fine art forms made by an Indian including but, 
not limited to, works on canvas, photography, sand painting, mural, 
computer generated art, graphic art, video art work, printmaking, 
drawing, bronze casting, glasswork, and art forms to be developed in the 
future, are Indian products.

[68 FR 35170, June 12, 2003]



Sec. 309.23  Does this part apply to products made before 1935?

    The provisions of this part do not apply to any art or craft 
products made before 1935.

[68 FR 35170, June 12, 2003]



Sec. 309.24  How will statements about Indian origin of art or
craft products be interpreted?

    (a) In general. The unqualified use of the term ``Indian'' or of the 
term ``Native American'' or the unqualified use of the name of an Indian 
tribe, in connection with an art or craft product, is interpreted to 
mean for purposes of this part that--
    (1) The maker is a member of an Indian tribe, is certified by an 
Indian tribe as a non-member Indian artisan, or is a member of the 
particular Indian tribe named; and
    (2) The art or craft product is an Indian product.
    (b) Products of Indians of foreign tribes--(1) In general. The 
unqualified use of the term ``Indian'' or of the term ``Native 
American'' or the unqualified use of the name of a foreign tribe, in 
connection with an art or craft product, regardless of where it is 
produced and regardless of any country-of-origin marking on the product, 
is interpreted to mean for purposes of this part that--
    (i) The maker is a member of an Indian tribe, is certified by an 
Indian tribe as a non-member Indian artisan, or is a member of the 
particular Indian tribe named;

[[Page 15]]

    (ii) The tribe is resident in the United States; and
    (iii) The art or craft product is an Indian product.
    (2) Exception where country of origin is disclosed. Paragraph (b) of 
this section does not apply to any art or craft for which the name of 
the foreign country of tribal ancestry is clearly disclosed in 
conjunction with marketing of the product.

    Example. X is a lineal descendant of a member of Indian Tribe A. 
However, X is not a member of Indian Tribe A, nor is X certified by 
Indian Tribe A as a non-member Indian artisan. X may not be described in 
connection with the marketing of an art or craft product made by X as an 
Indian, a Native American, a member of an Indian tribe, a member of 
Tribe A, or as a non-member Indian artisan of an Indian tribe. However, 
the true statement may be used that X is of Indian descent, Native 
American descent, or Tribe A descent.

[61 FR 54555, Oct. 21, 1996; 61 FR 57002, Nov. 5, 1996. Redesignated at 
68 FR 35170, June 12, 2003]



Sec. 309.25  How can an individual be certified as an Indian artisan?

    (a) In order for an individual to be certified by an Indian tribe as 
a non-member Indian artisan for purposes of this part--
    (1) The individual must be of Indian lineage of one or more members 
of such Indian tribe; and
    (2) The certification must be documented in writing by the governing 
body of an Indian tribe or by a certifying body delegated this function 
by the governing body of the Indian tribe.
    (b) As provided in section 107 of the Indian Arts and Crafts Act of 
1990, Public Law 101-644, a tribe may not impose a fee for certifying an 
Indian artisan.

[61 FR 54555, Oct. 21, 1996. Redesignated at 68 FR 35170, June 12, 2003]



Sec. 309.26  What penalties apply?

    A person who offers or displays for sale or sells a good, with or 
without a Government trademark, in a manner that falsely suggests it is 
Indian produced, an Indian product, or the product of a particular 
Indian or Indian tribe or Indian arts and crafts organization, resident 
within the United States:
    (a) Is subject to the criminal penalties specified in section 1159, 
title 18, United States Code; and
    (b) Is subject to the civil penalties specified in section 305e, 
title 25, United States Code.

[61 FR 54555, Oct. 21, 1996. Redesignated at 68 FR 35170, June 12, 2003]



Sec. 309.27  How are complaints filed?

    Complaints about protected products alleged to be offered or 
displayed for sale or sold in a manner that falsely suggests they are 
Indian products should be made in writing and addressed to the Director, 
Indian Arts and Crafts Board, Room 4004-MIB, U.S. Department of the 
Interior, 1849 C Street, NW, Washington, DC 20240.

[61 FR 54555, Oct. 21, 1996. Redesignated at 68 FR 35170, June 12, 2003]



PART 310_USE OF GOVERNMENT MARKS OF GENUINENESS FOR ALASKAN INDIAN 
AND ALASKAN ESKIMO HAND-MADE PRODUCTS--Table of Contents




Sec.
310.1 Penalties.

                             Alaskan Indian

310.2 Certificates of genuineness, authority to affix.
310.3 Conditions.
310.4 Application of mark.

                             Alaskan Eskimo

310.5 Certificates of genuineness, authority to affix.
310.6 Conditions.
310.7 Application of mark.

    Authority: Sec. 3, 49 Stat. 892; 25 U.S.C. 305b. Interpret or apply 
sec. 2, 49 Stat. 891, as amended; 25 U.S.C. 305a.

    Source: 4 FR 515, Feb. 4, 1939, unless otherwise noted.



Sec. 310.1  Penalties.

    The use of Government trade-marks in an unauthorized manner, or the 
colorable imitation of such marks, is subject to the criminal penalties 
imposed by section 5 of the said act (49 Stat. 892; 25 U.S.C., 305d), 
which provides:

    Any person who shall counterfeit or colorably imitate any Government 
trade-

[[Page 16]]

mark used or devised by the Board as provided in section 305a of this 
chapter, or shall, except as authorized by the Board, affix any such 
Government trade-mark, or shall knowingly, willfully, and corruptly 
affix any reproduction, counterfeit, copy, or colorable imitation 
thereof upon any products, Indian or otherwise, or to any labels, signs, 
prints, packages, wrappers, or receptacles intended to be used upon or 
in connection with the sale of such products, or any person who shall 
knowingly make any false statement for the purpose of obtaining the use 
of any such Government trade-mark, shall be guilty of a misdemeanor, and 
upon conviction thereof shall be enjoined from further carrying on the 
act or acts complained of and shall be subject to a fine not exceeding 
$2,000 or imprisonment not exceeding six months or both such fine and 
imprisonment.

                             Alaskan Indian



Sec. 310.2  Certificates of genuineness, authority to affix.

    Government marks of genuineness for Alaskan Indian hand-made 
products may be affixed to articles meeting the conditions specified in 
Sec. 310.3 by persons duly authorized by the Indian Arts and Crafts 
Board to affix such marks.



Sec. 310.3  Conditions.

    No article may carry the Government mark of genuineness for Alaskan 
Indian hand-made products unless all of the following conditions are 
met:
    (a) The article is hand-made by an Alaskan Indian.
    (b) The article is hand-made under conditions not resembling a 
workshop or factory system.
    (c) All raw materials used in carving, basketry and mat making, and 
all furs and hides used in the manufacture of hand-made artifacts, must 
be of native origin.



Sec. 310.4  Application of mark.

    All marks shall be applied to the article with a rubber stamp to be 
furnished by the Indian Arts and Crafts Board. Each stamp shall bear a 
distinctive letter and may be used only by the person to whom it has 
been issued. With the addition of the distinctive letter, each stamp 
shall read:

                                   ( )

                                Hand-Made

                             Alaskan Indian

                                   U S

                       Indian Arts & Crafts Board

                                   I D

or, in the case of articles too small to carry this stamp:

                                   ( )

                                 U S I D

                             Alaskan Indian

    On baskets and fabrics which offer no surface for the application of 
such a rubber stamp, the stamp shall be placed on a paper tag attached 
to the article by a wire caught in a lead seal disc that shall be 
impressed and made fast with a hand seal press furnished by the Indian 
Arts and Crafts Board.

                             Alaskan Eskimo



Sec. 310.5  Certificates of genuineness, authority to affix.

    Government marks of genuineness for Alaskan Eskimo hand-made 
products may be affixed to articles meeting the conditions specified in 
Sec. 310.6 by persons duly authorized by the Indian Arts and Crafts 
Board to affix such marks.



Sec. 310.6  Conditions.

    No article may carry the Government mark of genuineness for Alaskan 
Eskimo hand-made products unless all of the following conditions are 
met:
    (a) The article is hand-made by an Alaskan Eskimo.
    (b) The article is hand-made under conditions not resembling a 
workshop or factory system.
    (c) All raw materials used in the making of the articles are of 
native origin except:
    (1) Commercial fasteners.
    (2) Calfskin trimmings for decorative borders on parkas and mukluks.
    (3) Tops for mukluks made of commercial fabric.
    (4) Commercially made draw-cords for mukluks.

[[Page 17]]

    (5) Commercial fabrics for parka linings.
    (6) Sewing thread and glass beads.



Sec. 310.7  Application of mark.

    All marks shall be applied to the article with a rubber stamp to be 
furnished by the Indian Arts and Crafts Board. Each stamp shall bear a 
distinctive letter and may be used only by the person to whom it has 
been issued. With the addition of the distinctive letter, each stamp 
shall read:

                                   ( )

                                Hand-Made

                             Alaskan Eskimo

                                   U S

                       Indian Arts & Crafts Board

                                   I D

or, in the case of articles too small to carry this stamp:

                                   ( )

                                 U S I D

                             Alaskan Eskimo

    On baskets and fabrics which offer no surface for the application of 
such a rubber stamp, the stamp shall be placed on a paper tag attached 
to the article by a wire caught in a lead seal disc that shall be 
impressed and made fast with a hand seal press furnished by the Indian 
Arts and Crafts Board.

[[Page 19]]



   CHAPTER III--NATIONAL INDIAN GAMING COMMISSION, DEPARTMENT OF THE 
                                INTERIOR




  --------------------------------------------------------------------

                    SUBCHAPTER A--GENERAL PROVISIONS
Part                                                                Page
501             Purpose and scope of this chapter...........          21
502             Definitions of this chapter.................          21
503             Commission information collection 
                    requirements under the Paperwork 
                    Reduction Act: OMB control numbers and 
                    expiration dates........................          25
504-512         [Reserved]

513             Debt Collection.............................          25
514             Fees........................................          32
515             Privacy Act procedures......................          35
516             Testimony of commissioners and employees and 
                    former commissioners and former 
                    employees respecting official duties; 
                    response to subpoena....................          39
517             Freedom of Information Act procedures.......          40
518             Self regulation of class II gaming..........          47
519             Service.....................................          53
    SUBCHAPTER B--APPROVAL OF CLASS II AND CLASS III ORDINANCES AND 
                               RESOLUTIONS
520-521         [Reserved]

522             Submission of gaming ordinance or resolution          55
523             Review and approval of existing ordinances 
                    or resolutions..........................          57
524             Appeals.....................................          58
525-529         [Reserved]

              SUBCHAPTER C--MANAGEMENT CONTRACT PROVISIONS
530             [Reserved]

531             Content of management contracts.............          60
532             [Reserved]

533             Approval of management contracts............          61
534             [Reserved]

535             Post-approval procedures....................          63
536             [Reserved]

[[Page 20]]

537             Background investigations for persons or 
                    entities with a financial interest in, 
                    or having management responsibility for, 
                    a management contract...................          65
538             [Reserved]

539             Appeals.....................................          67
                      SUBCHAPTER D--HUMAN SERVICES
540-541         [Reserved]

542             Minimum internal control standards..........          69
543             Minimum internal control standards for class 
                    II gaming...............................         159
544-546         [Reserved]

547             Minimum technical standards for gaming 
                    equipment used with the play of class II 
                    games...................................         176
548-549         [Reserved]

  SUBCHAPTER E--GAMING LICENSES AND BACKGROUND INVESTIGATIONS FOR KEY 
               EMPLOYEES AND PRIMARY MANAGEMENT OFFICIALS
550-555         [Reserved]

556             Background investigations for primary 
                    management officials and key employees..         194
557             [Reserved]

558             Gaming licenses for key employees and 
                    primary management officials............         196
559             Facility license notifications, renewals, 
                    and submissions.........................         197
                         SUBCHAPTER F [RESERVED]
560-569         [Reserved]

           SUBCHAPTER G--COMPLIANCE AND ENFORCEMENT PROVISIONS
570             [Reserved]

571             Monitoring and investigations...............         200
572             [Reserved]

573             Enforcement.................................         203
574             [Reserved]

575             Civil fines.................................         205
576             [Reserved]

577             Appeals before the Commission...............         206
578-579         [Reserved]

                         SUBCHAPTER H [RESERVED]
580-589         [Reserved]

                         SUBCHAPTER I [RESERVED]
590-599         [Reserved]

[[Page 21]]



                     SUBCHAPTER A_GENERAL PROVISIONS





PART 501_PURPOSE AND SCOPE OF THIS CHAPTER--Table of Contents




Sec.
501.1 Purpose.
501.2 Scope.

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

    Source: 58 FR 5810, Jan. 22, 1993, unless otherwise noted.



Sec. 501.1  Purpose.

    This chapter implements the Indian Gaming Regulatory Act (Pub. L. 
100-497, 102 Stat. 2467).



Sec. 501.2  Scope.

    (a) Tribes and other operators of class II and class III gaming 
operations on Indian lands shall conduct gaming operations according to 
the requirements of the Indian Gaming Regulatory Act, the regulations of 
this chapter, tribal law and, where applicable, the requirements of a 
compact or procedures prescribed by the Secretary under 25 U.S.C. 
2710(d).
    (b) Class I gaming on Indian lands is within the exclusive 
jurisdiction of the Indian tribes and shall not be subject to the 
provisions of the Indian Gaming Regulatory Act or this chapter.
    (c) Class II gaming on Indian lands shall continue to be within the 
jurisdiction of an Indian tribe, but shall be subject to the provisions 
of the Indian Gaming Regulatory Act and this chapter.
    (d) Nothing in the Indian Gaming Regulatory Act or this chapter 
shall impair the right of an Indian tribe to regulate class III gaming 
on its Indian lands concurrently with a State, except to the extent that 
such regulation is inconsistent with, or less stringent than, the State 
laws and regulations made applicable by a Tribal-State compact that is 
entered into by an Indian tribe under the Indian Gaming Regulatory Act 
and that is in effect.



PART 502_DEFINITIONS OF THIS CHAPTER--Table of Contents




Sec.
502.1 Chairman.
502.2 Class I gaming.
502.3 Class II gaming.
502.4 Class III gaming.
502.5 Collateral agreement.
502.6 Commission.
502.7 Electronic, computer or other technologic aid.
502.8 Electronic or electromechanical facsimile.
502.9 Other games similar to bingo.
502.10 Gaming operation.
502.11 House banking game.
502.12 Indian lands.
502.13 Indian tribe.
502.14 Key employee.
502.15 Management contract.
502.16 Net revenues.
502.17 Person having a direct or indirect financial interest in a 
          management contract.
502.18 Person having management responsibility for a management 
          contract.
502.19 Primary management official.
502.20 Secretary.
502.21 Tribal-State compact.
502.22 Construction and maintenance of the gaming facility, and the 
          operation of that gaming is conducted in a manner which 
          adequately protects the environment and the public health and 
          safety.
502.23 Facility license.

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

    Source: 57 FR 12392, Apr. 9, 1992, unless otherwise noted.



Sec. 502.1  Chairman.

    Chairman means the Chairman of the National Indian Gaming Commission 
or his or her designee.



Sec. 502.2  Class I gaming.

    Class I gaming means:
    (a) Social games played solely for prizes of minimal value; or
    (b) Traditional forms of Indian gaming when played by individuals in 
connection with tribal ceremonies or celebrations.



Sec. 502.3  Class II gaming.

    Class II gaming means:
    (a) Bingo or lotto (whether or not electronic, computer, or other 
technologic aids are used) when players:
    (1) Play for prizes with cards bearing numbers or other 
designations;
    (2) Cover numbers or designations when object, similarly numbered or

[[Page 22]]

designated, are drawn or electronically determined; and
    (3) Win the game by being the first person to cover a designated 
pattern on such cards;
    (b) If played in the same location as bingo or lotto, pull-tabs, 
punch boards, tip jars, instant bingo, and other games similar to bingo;
    (c) Nonbanking card games that:
    (1) State law explicitly authorizes, or does not explicitly 
prohibit, and are played legally anywhere in the state; and
    (2) Players play in conformity with state laws and regulations 
concerning hours, periods of operation, and limitations on wagers and 
pot sizes;
    (d) Card games played in the states of Michigan, North Dakota, South 
Dakota, or Washington if:
    (1) An Indian tribe actually operates the same card games as played 
on or before May 1, 1988, as determined by the Chairman; and
    (2) The pot and wager limits remain the same as on or before May 1, 
1988, as determined by the Chariman;
    (e) Individually owned class II gaming operations--
    (1) That were operating on September 1, 1986;
    (2) That meet the requirements of 25 U.S.C. 2710(b)(4)(B);
    (3) Where the nature and scope of the game remains as it was on 
October 17, 1988; and
    (4) Where the ownership interest or interests are the same as on 
October 17, 1988.



Sec. 502.4  Class III gaming.

    Class III gaming means all forms of gaming that are not class I 
gaming or class II gaming, including but not limited to:
    (a) Any house banking game, including but not limited to--
    (1) Card games such as baccarat, chemin de fer, blackjack (21), and 
pai gow (if played as house banking games);
    (2) Casino games such as roulette, craps, and keno;
    (b) Any slot machines as defined in 15 U.S.C. 1171(a)(1) and 
electronic or electromechanical facsimiles of any game of chance;
    (c) Any sports betting and parimutuel wagering including but not 
limited to wagering on horse racing, dog racing or jai alai; or
    (d) Lotteries.



Sec. 502.5  Collateral agreement.

    Collateral agreement means any contract, whether or not in writing, 
that is related, either directly or indirectly, to a management 
contract, or to any rights, duties or obligations created between a 
tribe (or any of its members, entities, or organizations) and a 
management contractor or subcontractor (or any person or entity related 
to a management contractor or subcontractor).



Sec. 502.6  Commission.

    Commission means the National Indian Gaming Commission.



Sec. 502.7  Electronic, computer or other technologic aid.

    (a) Electronic, computer or other technologic aid means any machine 
or device that:
    (1) Assists a player or the playing of a game;
    (2) Is not an electronic or electromechanical facsimile; and
    (3) Is operated in accordance with applicable Federal communications 
law.
    (b) Electronic, computer or other technologic aids include, but are 
not limited to, machines or devices that:
    (1) Broaden the participation levels in a common game;
    (2) Facilitate communication between and among gaming sites; or
    (3) Allow a player to play a game with or against other players 
rather than with or against a machine.
    (c) Examples of electronic, computer or other technologic aids 
include pull tab dispensers and/or readers, telephones, cables, 
televisions, screens, satellites, bingo blowers, electronic player 
stations, or electronic cards for participants in bingo games.

[67 FR 41172, June 17, 2002]



Sec. 502.8  Electronic or electromechanical facsimile.

    Electronic or electromechanical facsimile means a game played in an 
electronic or electromechanical format that replicates a game of chance 
by incorporating all of the characteristics of the game, except when, 
for bingo,

[[Page 23]]

lotto, and other games similar to bingo, the electronic or 
electromechanical format broadens participation by allowing multiple 
players to play with or against each other rather than with or against a 
machine.

[67 FR 41172, June 17, 2002]



Sec. 502.9  Other games similar to bingo.

    Other games similar to bingo means any game played in the same 
location as bingo (as defined in 25 USC 2703(7)(A)(i)) constituting a 
variant on the game of bingo, provided that such game is not house 
banked and permits players to compete against each other for a common 
prize or prizes.

[67 FR 41172, June 17, 2002]



Sec. 502.10  Gaming operation.

    Gaming operation means each economic entity that is licensed by a 
tribe, operates the games, receives the revenues, issues the prizes, and 
pays the expenses. A gaming operation may be operated by a tribe 
directly; by a management contractor; or, under certain conditions, by 
another person or other entity.



Sec. 502.11  House banking game.

    House banking game means any game of chance that is played with the 
house as a participant in the game, where the house takes on all 
players, collects from all losers, and pays all winners, and the house 
can win.



Sec. 502.12  Indian lands.

    Indian lands means:
    (a) Land within the limits of an Indian reservation; or
    (b) Land over which an Indian tribe exercises governmental power and 
that is either--
    (1) Held in trust by the United States for the benefit of any Indian 
tribe or individual; or
    (2) Held by an Indian tribe or individual subject to restriction by 
the United States against alienation.



Sec. 502.13  Indian tribe.

    Indian tribe means any Indian tribe, band, nation, or other 
organized group or community of Indians that the Secretary recognizes 
as--
    (a) Eligible for the special programs and services provided by the 
United States to Indians because of their status as Indians; and
    (b) Having powers of self-government.



Sec. 502.14  Key employee.

    Key employee means:
    (a) A person who performs one or more of the following functions:
    (1) Bingo caller;
    (2) Counting room supervisor;
    (3) Chief of security;
    (4) Custodian of gaming supplies or cash;
    (5) Floor manager;
    (6) Pit boss;
    (7) Dealer;
    (8) Croupier;
    (9) Approver of credit; or
    (10) Custodian of gambling devices including persons with access to 
cash and accounting records within such devices;
    (b) If not otherwise included, any other person whose total cash 
compensation is in excess of $50,000 per year; or,
    (c) If not otherwise included, the four most highly compensated 
persons in the gaming operation.
    (d) Any other person designated by the tribe as a key employee.

[57 FR 12392, Apr. 9, 1992, as amended at 74 FR 36932, July 27, 2009]



Sec. 502.15  Management contract.

    Management contract means any contract, subcontract, or collateral 
agreement between an Indian tribe and a contractor or between a 
contractor and a subcontractor if such contract or agreement provides 
for the management of all or part of a gaming operation.



Sec. 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 non-

[[Page 24]]

operating expenses consistent with professional accounting 
pronouncements, excluding management fees.

[74 FR 36932, July 27, 2009]



Sec. 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) 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.

[74 FR 36932, July 27, 2009]



Sec. 502.18  Person having management responsibility for a 
management contract.

    Person having management responsibility for a management contract 
means the person designated by the management contract as having 
management responsibility for the gaming operation, or a portion 
thereof.



Sec. 502.19  Primary management official.

    Primary management official means:
    (a) The person having management responsibility for a management 
contract;
    (b) Any person who has authority:
    (1) To hire and fire employees; or
    (2) To set up working policy for the gaming operation; or
    (c) The chief financial officer or other person who has financial 
management responsibility.
    (d) Any other person designated by the tribe as a primary management 
official.

[57 FR 12392, Apr. 9, 1992, as amended at 74 FR 36933, July 27, 2009]



Sec. 502.20  Secretary.

    Secretary means the Secretary of the Interior.



Sec. 502.21  Tribal-State compact.

    Tribal-State compact means an agreement between a tribe and a state 
about class III gaming under 25 U.S.C. 2710(d).



Sec. 502.22  Construction and maintenance of the gaming facility, and 
the operation of that gaming is conducted in a manner which adequately

protects the 
          environment and the public health and safety.

    Construction and maintenance of the gaming facility, and the 
operation of that gaming is conducted in a manner which adequately 
protects the environment and the public health and safety means a tribe 
has identified and enforces laws, resolutions, codes, policies, 
standards or procedures applicable to each gaming place, facility or 
location that protect the environment and the public health and safety, 
including standards under a tribal-state compact or Secretarial 
procedures. Laws, resolutions, codes, policies, standards or procedures 
in this area shall cover, at a minimum:
    (a) Emergency preparedness, including but not limited to fire 
suppression, law enforcement, and security;
    (b) Food and potable water;
    (c) Construction and maintenance;
    (d) Hazardous materials;
    (e) Sanitation (both solid waste and wastewater); and
    (f) Other environmental or public health and safety standards 
adopted by the tribe in light of climate, geography, and other local 
conditions and applicable to its gaming facilities, places or locations.

[73 FR 6029, Feb. 1, 2008]

[[Page 25]]



Sec. 502.23  Facility license.

    Facility license means a separate license issued by a tribe to each 
place, facility, or location on Indian lands where the tribe elects to 
allow class II or III gaming.

[73 FR 6029, Feb. 1, 2008]



PART 503_COMMISSION INFORMATION COLLECTION REQUIREMENTS UNDER
THE PAPERWORK REDUCTION ACT: OMB CONTROL NUMBERS AND EXPIRATION

DATES--Table of Contents




Sec.
503.1 Purpose of this part.
503.2 Display of control numbers and expiration dates.

    Authority: 44 U.S.C. 3501 et seq.

    Source: 58 FR 16495, Mar. 29, 1993, unless otherwise noted.



Sec. 503.1  Purpose of this part.

    This part displays the control numbers and expiration dates assigned 
to information collection requirements of the National Indian Gaming 
Commission (NIGC, or the Commission) assigned by the Director of the 
Office of Management and Budget (OMB) pursuant to the Paperwork 
Reduction Act of 1980, 44 U.S.C. 3501 et seq.



Sec. 503.2  Display of control numbers and expiration dates.

------------------------------------------------------------------------
                                             Currently
                                           assigned  OMB    Expiration
 Part or section number of title 25 CFR       control          date
                                              numbers
------------------------------------------------------------------------
Sec. 514.1 (submission of fee reports)       3141-0007         6/30/94
Sec. 515.3 (request for access to            3141-0002        10/31/95
 records)...............................
Sec. 515.5 (request for amendment to         3141-0002        10/31/95
 records)...............................
Sec. 515.7 (appeals)..................       3141-0002        10/31/95
Part 519 (designation of agent for             3141-0003        10/31/95
 service)...............................
Sec. 522.2 (submission and approval of       3141-0003        10/31/95
 new ordinances)........................
Sec. 522.3 (amendment)................       3141-0003        10/31/95
Sec. 522.12 (revocation of class III         3141-0003        10/31/95
 gaming)................................
Sec. 523.2 (submission and approval of       3141-0003        10/31/95
 existing ordinances)...................
Sec. 523.4 (amendment)................       3141-0003        10/31/95
Part 524 (appeals)......................       3141-0003        10/31/95
Sec. 533.3 (approval of management           3141-0004        10/31/95
 contracts).............................
Sec. 533.5 (modifications)............       3141-0004        10/31/95
Sec. 535.1 (post-approval procedures).       3141-0004        10/31/95
Part 537 (background investigations)....       3141-0004        10/31/95
Part 539 (appeals)......................       3141-0004        10/31/95
Sec. 556.4 (background investigations        3141-0003        10/31/95
 for class II gaming)...................
Sec. 556.5 (background investigations)       3141-0003        10/31/95
Part 558 (gaming licenses)..............       3141-0003        10/31/95
Sec. 571.7 (maintenance of records)...       3141-0001         7/31/95
Sec. 571.12 (audits)..................       3141-0001         7/31/95
Sec. 571.13 (audits)..................       3141-0001         7/31/95
Sec. 571.14 (audit reconciliation)....       3141-0001         7/31/95
Sec. 575.5 (information to Chairman)..       3141-0001         7/31/95
Sec. 575.6 (penalty reduction)........       3141-0001         7/31/95
Sec. 577.3 (notice of appeal).........       3141-0001         7/31/95
Sec. 577.8 (confidentiality)..........       3141-0001         7/31/95
Sec. 577.12 (intervention)............       3141-0001         7/31/95
Sec. 577.14 (objections)..............       3141-0001         7/31/95
------------------------------------------------------------------------

                        PARTS 504	512 [RESERVED]



PART 513_DEBT COLLECTION--Table of Contents




                      Subpart A_General Provisions

Sec.
513.1 What definitions apply to the regulations in this part?
513.2 What is the Commission's authority to issue these regulations?

[[Page 26]]

513.3 What happens to delinquent debts owed to the Commission?
513.4 What notice will the Commission give to a debtor of the 
          Commission's intent to collect debts?
513.5 What is the Commission's policy on interest, penalty charges, and 
          administrative costs?
513.6 What are the requirements for offset review?
513.7 What is the Commission's policy on revoking a debtor's ability to 
          engage in Indian gaming for failure to pay a debt?

             Subpart B_Administrative and Tax Refund Offset

513.20 What debts can the Commission refer to Treasury for collection by 
          administrative and tax refund offset?
513.21 What notice will a debtor be given of the Commission's intent to 
          collect a debt through administrative and tax refund offset?

                         Subpart C_Salary Offset

513.30 When may the Commission use salary offset to collect debts?
513.31 What notice will the Commission, as the creditor agency, give a 
          debtor that salary offset will occur?
513.32 What are the hearing procedures when the Commission is the 
          creditor agency?
513.33 Will the Commission issue a certification when the Commission is 
          the creditor agency?
513.34 What opportunity is there for a voluntary repayment agreement 
          when the Commission is the creditor agency?
513.35 What special review is available when the Commission is the 
          creditor agency?
513.36 Under what conditions will the Commission refund amounts 
          collected by salary offset?
513.37 What will the Commission do as the paying agency?

                Subpart D_Administrative Wage Garnishment

513.40 How will the Commission handle debt collection through 
          administrative wage garnishment?

    Authority: 31 U.S.C. 3711, 3716-3718, 3720A, 3720D; 5 U.S.C. 5514; 
25 U.S.C. 2713(a)(1).

    Source: 66 FR 58057, Nov. 20, 2001, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 513.1  What definitions apply to the regulations in this part?

    As used in this part:
    (a) Administrative offset means the withholding of funds payable by 
the United States (including funds payable by the United States on 
behalf of a State government) to any person, or the withholding of funds 
held by the United States for any person, in order to satisfy a debt 
owed to the United States.
    (b) Agency means a department, agency, court, court administrative 
office, or instrumentality in the executive, judicial, or legislative 
branch of government, including a government corporation.
    (c) Chairman means the Chairman of the Commission, or his or her 
designee.
    (d) Commission means the National Indian Gaming Commission.
    (e) Creditor agency means a Federal agency that is owed a debt.
    (f) Day means calendar day. To count days, include the last day of 
the period unless it is a Saturday, Sunday, or Federal legal holiday.
    (g) Debt and claim are synonymous and interchangeable. They refer 
to, among other things, fines, fees, and penalties that a Federal agency 
has determined are due the United States from any person, organization, 
or entity, except another Federal agency. For the purposes of 
administrative offset under 31 U.S.C. 3716 and subpart B of this part, 
the terms ``debt'' and ``claims'' include money, funds, or property owed 
to a State, the District of Columbia, American Samoa, Guam, the U.S. 
Virgin Islands, the Commonwealth of the Northern Mariana Islands, or the 
Commonwealth of Puerto Rico.
    (h) Debtor means a person, contractor, Tribe, or other entity that 
owes a debt to the Commission.
    (i) Delinquent debt means a debt that has not been paid within the 
time limit prescribed by the applicable Act, law, or contract.
    (j) Disposable pay means the part of an employee's pay that remains 
after deductions that must be withheld by law have been made (other than 
deductions to execute garnishment orders for child support and/or 
alimony, in accordance with 5 CFR part 581, and for commercial 
garnishment of federal employees' pay, in accordance with 5 CFR part 
582). ``Pay'' includes current basic

[[Page 27]]

pay, special pay, incentive pay, retired pay, and retainer pay.
    (k) Employee means a current employee of an agency, including a 
current member of the Armed Forces or Reserve of the Armed Forces of the 
United States.
    (l) DOJ means the U.S. Department of Justice.
    (m) FCCS means the Federal Claims Collection Standards, which are 
published at 31 CFR parts 900-904.
    (n) FMS means the Federal Management Service, a bureau of the U.S. 
Department of the Treasury.
    (o) Paying agency means the agency that makes payment to an 
individual who owes a debt to the United States.
    (p) Payroll office means the office in an agency that is primarily 
responsible for payroll records and the coordination of pay matters with 
the appropriate personnel office.
    (q) Person includes a natural person or persons, profit or non-
profit corporation, partnership, association, trust, estate, consortium, 
tribe, or other entity that owes a debt to the United States, excluding 
the United States.
    (r) Salary offset means a payroll procedure to collect debt under 5 
U.S.C. 5514 and 31 U.S.C. 3716 by deduction(s) at one or more officially 
established pay intervals from the current pay account of an employee, 
without the employee's consent.
    (s) Tax refund offset means the reduction of a tax refund by the 
amount of a past-due legally enforceable debt.



Sec. 513.2  What is the Commission's authority to issue these regulations?

    (a) The Commission has authority to issue these regulations under 25 
U.S.C. 2713(a)(1) of the Indian Gaming Regulatory Act. The Commission is 
issuing the regulations in this part under the authority of: The FCCS, 
the Debt Collection Act of 1982 and the Debt Collection Improvement Act 
of 1996, 31 U.S.C. 3711, 3716-3718, and 3720A. In addition, the salary 
offset provisions are issued in conformity with 5 U.S.C. 5514 and its 
implementing regulations published at 5 CFR part 550, subpart K.
    (b) The Commission hereby adopts the provisions of the FCCS (31 CFR 
parts 900-904). The Commission's regulations supplement the FCCS as 
necessary.



Sec. 513.3  What happens to delinquent debts owed to the Commission?

    (a) The Commission will collect debts in accordance with these 
regulations in this part.
    (b) The Commission will transfer to the Department of the Treasury 
any past due, legally enforceable nontax debt that has been delinquent 
for 180 days or more so that Treasury may take appropriate action to 
collect the debt or terminate collection action in accordance with 5 
U.S.C. 5514, 26 U.S.C. 6402, 31 U.S.C. 3711 and 3716, the FCCS, 5 CFR 
550.1108, and 31 CFR part 285.
    (c) The Commission may transfer any past due, legally enforceable 
nontax debt that has been delinquent for fewer than 180 days to the 
Department of Treasury for collection in accordance with 5 U.S.C. 5514, 
26 U.S.C. 6402, 31 U.S.C. 3711 and 3716, the FFCS, 5 CFR 550.1108, and 
31 CFR part 285.



Sec. 513.4  What notice will the Commission give to a debtor of the
Commission's intent to collect debts?

    (a) When the Chairman determines that a debt is owed to the 
Commission, the Chairman will send a written notice (Notice), also known 
as a demand letter. The Notice will be sent by facsimile or mail to the 
most current address known to the Commission. The Notice will inform the 
debtor of the following:
    (1) The amount, nature, and basis of the debt;
    (2) The methods of offset that may be employed;
    (3) The debtor's opportunity to inspect and copy agency records 
related to the debt;
    (4) The debtor's opportunity to enter into a written agreement with 
the Commission to repay the debt;
    (5) The Commission's policy concerning interest, penalty charges, 
and administrative costs, as set out in Sec. 513.5, including a 
statement that such assessments must be made against the debtor unless 
excused in accordance with the FCCS and this part;
    (6) The date by which payment should be made to avoid late charges 
and enforced collection;

[[Page 28]]

    (7) The name, address, and telephone number of a contact person or 
office at the Commission that is available to discuss the debt; and
    (8) The debtor's opportunity for review.
    (b) A debtor whose debt arises from a notice of violation and/or 
civil fine assessment that has become a final order and that was subject 
to the Commission's appeal procedures at 25 CFR part 577 may not re-
litigate matters that were the subject of the final order.



Sec. 513.5  What is the Commission's policy on interest, penalty 
charges, and administrative costs?

    (a) Interest.
    (1) The Commission will assess interest on all delinquent debts 
unless prohibited by statute, regulation, or contract.
    (2) Interest begins to accrue on all debts from the date that the 
debt becomes delinquent. The Commission will assess interest at the rate 
established annually by the Secretary of the Treasury under 31 U.S.C. 
3717.
    (b) Penalties. The Commission will assess a penalty charge of 6 
percent a year on any portion of a delinquent debt.
    (c) Administrative costs. The Commission will assess charges to 
cover administrative costs incurred as a result of the debtor's failure 
to pay a debt before it becomes delinquent. Administrative costs include 
the cost of providing a copy of the file to the debtor and costs 
incurred in processing and handling the debt because it became 
delinquent, such as costs incurred in obtaining a credit report or in 
using a private collection contractor, or service fees charged by a 
Federal agency for collection activities undertaken on behalf of the 
Commission.
    (d) Interest, penalties, and administrative costs will continue to 
accrue throughout any appeal process.
    (e) Allocation of payments. A partial or installment payment by a 
debtor will be applied first to outstanding penalty assessments, second 
to administrative costs, third to accrued interest, and fourth to the 
outstanding debt principal.
    (f) Additional authority. The Commission may assess interest, 
penalty charges, and administrative costs on debts that are not subject 
to 31 U.S.C. 3717 to the extent authorized under common law or other 
applicable statutory authority.
    (g) Waiver. (1) Regardless of the amount of the debt, the Chairman 
may decide to waive collection of all or part of the accrued interest, 
penalty charges, or administrative costs if collection of these charges 
would be against equity and good conscience or not in the Commission's 
best interest.
    (2) A decision to waive interest, penalty charges, or administrative 
costs may be made at any time before a debt is paid. However, when 
charges have been collected before the waiver decision, they will not be 
refunded. The Chairman's decision whether to waive collection of these 
charges is final and not subject to further review.



Sec. 513.6  What are the requirements for offset review?

    (a) The Commission will provide the debtor with a reasonable 
opportunity for an oral hearing when the debtor requests reconsideration 
of the debt and the Commission determines that the question of 
indebtedness cannot be resolved by review of the documentary evidence.
    (b) Unless otherwise required by law, an oral hearing is not 
required to be a formal evidentiary hearing, although the Commission 
will carefully document all significant matters discussed at the 
hearing.
    (c) When an oral hearing is not required, the Commission will review 
the request for reconsideration based on the written record.



Sec. 513.7  What is the Commission's policy on revoking a debtor's 
ability to engage in Indian gaming for failure to pay a debt?

    The Chairman of the Commission may revoke a debtor's ability to 
operate, manage, or otherwise participate in the operation of an Indian 
gaming facility if the debtor inexcusably or willfully fails to pay a 
debt. The revocation of ability to engage in gaming may last only as 
long as the debtor's indebtedness.

[[Page 29]]



             Subpart B_Administrative and Tax Refund Offset



Sec. 513.20  What debts can the Commission refer to Treasury for 
collection by administrative and tax refund offset?

    (a) The Commission may refer any past due, legally enforceable 
nonjudgment debt of a person to the Treasury for administrative and tax 
refund offset if the debt:
    (1) Has been delinquent for at least three months and will not have 
been delinquent more than 10 years at the time the offset is made;
    (2) Is at least $25.00 or another amount established by Treasury.
    (b) Debts reduced to judgment may be referred to Treasury for tax 
refund offset at any time.



Sec. 513.21  What notice will a debtor be given of the Commission's intent
to collect a debt through administrative and tax refund offset?

    (a) The Commission will give the debtor written notice of its intent 
to offset before initiating the offset. Notice will be mailed to the 
debtor at the debtor's last known address as determined by the 
Commission.
    (b) The notice will state the amount of the debt and notify the 
debtor that:
    (1) The debt is past due and, unless repaid within 60 days after the 
date of the notice, the Commission will refer the debt to Treasury for 
administrative and tax refund offset;
    (2) The debtor has 60 calendar days to present evidence that all or 
part of the debt is not past-due or legally enforceable; and
    (3) The debtor has an opportunity to make a written agreement to 
repay the debt.



                         Subpart C_Salary Offset



Sec. 513.30  When may the Commission use salary offset to collect debts?

    (a) The Commission collects debts owed by employees to the Federal 
Government by means of salary offset under the authority of: 5 U.S.C. 
5514; 31 U.S.C. 3716; 5 CFR part 550, subpart K; 31 CFR 285.7; and this 
subpart. Salary offset is applicable when the Commission is attempting 
to collect a debt owed by an individual employed by the Commission or 
another agency.
    (b) Nothing in the regulations in this subpart precludes the 
compromise, suspension, or termination of collection actions under the 
Federal Claims Collection Act of 1966, as amended, or the Federal Claims 
Collection Standards.
    (c) A levy pursuant to the Internal Revenue Code takes precedence 
over a salary offset under this subpart, as provided in 5 U.S.C. 5514(d) 
and 31 U.S.C. 3716.
    (d) The regulations in this subpart do not apply to any case where 
collection of a debt by salary offset is explicitly prohibited by 
another statute.
    (e) This subpart's regulations covering notice, hearing, written 
responses, and final decisions do not apply to:
    (1) Any routine intra-agency adjustment in pay that is attributable 
to clerical or administrative error or delay in processing pay documents 
that have occurred within the four pay periods preceding the adjustment, 
or any adjustment to collect a debt amounting to $50 or less. However, 
at the time of any adjustment, or as soon thereafter as possible, the 
Commission's payroll agency will provide the employee with a written 
notice of the nature and amount of the adjustment and a contact point 
for appealing the adjustment.
    (2) Any negative adjustment to pay that arises from the debtor's 
election of coverage or a change in coverage under a Federal benefits 
program requiring periodic deductions from pay, if the amount to be 
recovered was accumulated over four or fewer pay periods. However, at 
the time of the adjustment, the Commission's payroll agent will provide 
in the debtor's earnings statement a clear statement informing the 
debtor of the previous overpayment.
    (f) An employee's involuntary payment of all or any of the debt 
through salary offset will not be construed as a waiver of any rights 
that the employee may have under the law, unless there are statutory or 
contractual provisions to the contrary.

[[Page 30]]



Sec. 513.31  What notice will the Commission, as the creditor agency,
give a debtor that salary offset will occur?

    (a) Deductions from a debtor's salary will not be made unless the 
Commission sends the debtor a written Notice of Intent at least 30 
calendar days before the salary offset is initiated.
    (b) The Notice of Intent will include the following:
    (1) Notice that the Commission has reviewed the records relating to 
the debt and has determined that the employee owes the debt;
    (2) Notice that, after a 30-day period, the Commission will begin to 
collect the debt by deductions from the employee's current disposable 
pay account and the date on which deductions from salary will start;
    (3) The amount of the debt and the facts giving rise to it;
    (4) The frequency and the amount of the intended deduction stated as 
a fixed dollar amount or as a percentage of pay not to exceed 15 percent 
of the disposable pay, and the intention to continue the deductions 
until the debt and all accumulated interest are paid in full or 
resolved;
    (5) The name, address, and telephone number of the person to whom 
the debtor may propose a written alternative schedule for voluntary 
repayment in lieu of salary offset. The debtor must include a 
justification for the alternative schedule in the proposal;
    (6) The Commission's policy concerning interest, penalties, and 
administrative costs, set out at Sec. 513.5, and a statement that 
assessments will be made unless excused in accordance with the FCCS;
    (7) Notice of the employee's right to inspect and copy all 
Commission records pertaining to the debt and the name, address, and 
telephone number of the Commission employee to whom requests for access 
must be made;
    (8) Notice of the employee's opportunity to a hearing conducted by 
an individual who does not work for the Commission on the Commission's 
determination of the existence or amount of the debt and the terms of 
the repayment schedule;
    (9) Notice that filing a request for a hearing on or before the 15th 
calendar day following the debtor's receiving the Notice of Intent will 
stay collection proceedings and that a final decision will be issued at 
the earliest practical date, but not later than 60 days after the filing 
of the petition for hearing, unless the employee requests, and a hearing 
official grants, a delay in proceedings;
    (10) An explanation of the effect of submitting knowingly false or 
frivolous statements; and
    (11) Notice that amounts paid on or deducted from debts that are 
later waived or found not to be owed will be promptly refunded to the 
employee.



Sec. 513.32  What are the hearing procedures when the Commission 
is the creditor agency?

    (a) To request a hearing, the debtor must file, within 15 days of 
receiving the Commission's notice of intent to offset, a written 
petition signed by the debtor and addressed to the Commission stating 
why the debtor believes the Commission's determination of the existence 
or amount of the debt is in error. The Commission may waive the 15-day 
time limit for filing a request for hearing if the employee shows that 
the delay was due to circumstances beyond his or her control or because 
the employee did not receive notice of the 15-day time limit. A debtor 
who has previously obtained a hearing to contest a debt that arose from 
a notice of violation or proposed civil fine assessment matters under 25 
CFR part 577 may not re-litigate matters that were at issue in that 
hearing.
    (b) Regardless of whether the debtor is a Commission employee, the 
Commission will provide a prompt and appropriate hearing before a 
hearing official who is not from the Commission.
    (c) The hearing will be conducted according to the FCCS review 
requirements at 31 CFR 901.3(e).
    (d) Unless the employee requests, and a hearing official grants, a 
delay in proceedings, within 60 days after the petition for hearing the 
hearing official will issue a written decision on:
    (1) The determination of the creditor agency concerning the 
existence or amount of the debt; and

[[Page 31]]

    (2) The repayment schedule, if a schedule was not established by 
written agreement between the employee and the creditor agency.
    (e) If the hearing official determines that a debt may not be 
collected by salary offset but the Commission has determined that the 
debt is valid, the Commission may seek collection of the debt through 
other means in accordance with applicable law and regulations.
    (f) The form of hearings, written responses, and final decisions 
will be according to the Commission's review requirements at Sec. 
513.7. Written decisions regarding salary offset that are provided after 
a request for hearing must state: The facts purported to evidence the 
nature and origin of the alleged debt; the hearing official's analysis, 
findings, and conclusions as to the employee's or creditor agency's 
grounds; the amount and validity of the alleged debt; and, where 
applicable, the repayment schedule.



Sec. 513.33  Will the Commission issue a certification when the
Commission is the creditor agency?

    Yes. Upon completion of the procedures established in this subpart 
and pursuant to 5 U.S.C. 5514, the Commission will submit a 
certification to Treasury or to a paying agency in the form prescribed 
by the paying agency.



Sec. 513.34  What opportunity is there for a voluntary repayment
agreement when the Commission is the creditor agency?

    (a) In response to a Notice of Intent, an employee may propose to 
repay the debt voluntarily in lieu of salary offset by submitting a 
written proposed repayment schedule to the Commission. A proposal must 
be received by the Commission within 15 calendar days after the employee 
is sent the Notice of Intent.
    (b) The Commission will notify the employee whether, within the 
Commission's discretion, the proposed repayment schedule is acceptable.
    (c) If the proposed repayment schedule is unacceptable, the employee 
will have 15 calendar days from the date the notice of the decision is 
received in which to file a request for a hearing.
    (d) If the proposed repayment schedule is acceptable or the employee 
agrees to a modification proposed by the Commission, the agreement will 
be put in writing and signed by the employee and the Commission.



Sec. 513.35  What special review is available when the Commission 
is the creditor agency?

    (a)(1) An employee subject to salary offset or a voluntary repayment 
agreement may, at any time, request a special review by the Commission 
of the amount of the salary offset or voluntary repayment, based on 
materially changed circumstances, including, but not limited to, 
catastrophic illness, divorce, death, or disability.
    (2) The request for special review must include an alternative 
proposed offset or payment schedule and a detailed statement, with 
supporting documents, that shows why the current salary offset or 
payment results in extreme financial hardship to the employee, spouse, 
or dependents. The statement must indicate:
    (i) Income from all sources;
    (ii) Assets;
    (iii) Liabilities;
    (iv) Number of dependents;
    (v) Expenses for food, housing, clothing, and transportation;
    (vi) Medical expenses; and
    (vii) Exceptional expenses, if any.
    (b) The Commission will evaluate the statement and documentation and 
determine whether the current offset or repayment schedule imposes 
extreme financial hardship on the employee. The Commission will notify 
the employee in writing within 30 calendar days of its determination, 
including, if appropriate, a revised offset or payment schedule. If the 
special review results in a revised offset or repayment schedule, the 
Commission will provide a new certification to the paying agency.



Sec. 513.36  Under what conditions will the Commission refund
amounts collected by salary offset?

    (a) As the creditor agency, the Commission will promptly refund any 
amount deducted under the authority of 5 U.S.C. 5514, when:
    (1) The Commission determines that the debt is not owed; or

[[Page 32]]

    (2) An administrative or judicial order directs the Commission to 
make a refund.
    (b) Unless required or permitted by law or contract, refunds under 
this section will not bear interest.



Sec. 513.37  What will the Commission do as the paying agency?

    (a) When the Commission receives a certification from a creditor 
agency that has complied with the Office of Personnel Management's 
requirements set out at 5 CFR 550.1109, the Commission will send the 
employee a written notice of salary offset.
    (b) If the Commission receives an incomplete certification from a 
creditor agency, the Commission will return the certification with 
notice that the procedures under 5 U.S.C. 5514 and 5 CFR 550.1104 must 
be followed and a properly certified claim submitted before the 
Commission will take action to collect the debt from the employee's 
current pay account.
    (c) Notice to a debtor will include:
    (1) The Commission's receipt of a certification from a creditor 
agency;
    (2) The amount of the debt and the deductions to be made, which may 
be stated as a percentage of disposable pay; and
    (3) The date and pay period when the salary offset will begin.
    (d) The Commission will provide a copy of the notice of salary 
offset to a creditor agency.
    (e) The Commission will coordinate salary deductions under this 
subpart as appropriate.
    (f) The Commission's payroll officer will determine the amount of 
the debtor's disposable pay and will implement the salary offset.
    (g) The Commission may use the following types of salary debt 
collection:
    (1) Lump sum offset. If the amount of the debt is equal to or less 
than 15 percent of disposable pay, the debt generally will be collected 
through one lump sum offset.
    (2) Installment deductions. The amount deducted from any period will 
not exceed 15 percent of the disposable pay from which the deduction is 
made unless the debtor has agreed in writing to the deduction of a 
greater amount. If possible, installment payments will liquidate the 
debt in three years or less.
    (3) Deductions from final check. A deduction exceeding the 15 
percent of disposable pay limitation may be made from any final salary 
payment under 31 U.S.C. 3716 and the Federal Claims Collection 
Standards, in order to liquidate the debt, whether the employee is 
leaving voluntarily or involuntarily.
    (4) Deductions from other sources. If an employee subject to salary 
offset is leaving the Commission and the balance of the debt cannot be 
liquidated by offset of the final salary check, then the Commission may 
offset later payments of any kind against the balance of the debt, as 
allowed by 31 U.S.C. 3716 and the Federal Claims Collection Standards.
    (h) When two or more creditor agencies are seeking salary offsets, 
the Commission's payroll office may, in its discretion, determine 
whether one or more debts should be offset simultaneously within the 15 
percent limitation.
    (i) The Commission is not authorized to review the merits of the 
creditor agency's determination with respect to the amount or validity 
of the debt certified by the creditor agency.



                Subpart D_Administrative Wage Garnishment



Sec. 513.40  How will the Commission handle debt collection 
through administrative wage garnishment?

    This part adopts all the provisions of the administrative wage 
garnishment regulations contained in 31 CFR 285.11, promulgated by 
Treasury, which allow Federal agencies to collect debts from a debtor's 
non-Federal pay by means of administrative wage garnishment authorized 
by 31 U.S.C. 3720D, and in 5 CFR parts 581 and 582, promulgated by the 
Office of Personnel Management, which provides for garnishment orders 
for child support and/or alimony and commercial garnishment of federal 
employees' pay.



PART 514_FEES--Table of Contents




    Authority: 25 U.S.C. 2706, 2708, 2710, 2717, 2717a.

[[Page 33]]



Sec. 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 self-regulation, the rate of 
fees imposed shall be no more than .25 percent of assessable gross 
revenues from self-regulated 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 x .05 =................          37,500
        50,000 x .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

[[Page 34]]

 
    Gross gaming profit.................         495,000
    Less allowance for amortization of
     capital expenditures for
     structures:
    Total amount of amortization/                400,000
     depreciation per books
    Maximum allowance:
        $400,000 x .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 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 
June 30th and December 31st 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 June 30th 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 x 0.0% =                            ......
2nd tier revenues--500,000 x                                        $400
.08% =
  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

[[Page 35]]

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 June 30th and December 31st 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.

[74 FR 36933, July 27, 2009; 75 FR 2795, Jan. 19, 2010]



PART 515_PRIVACY ACT PROCEDURES--Table of Contents




Sec.
515.1 Purpose and scope.
515.2 Definitions.
515.3 Identification of individuals making requests.
515.4 Procedures for requests and disclosures.
515.5 Request for amendment to record.
515.6 Review of request for amendment of record by the Records Manager.
515.7 Appeal to the Commission of initial adverse agency determination 
          on access or amendment to records.
515.8 Disclosure of record to a person other than the individual to whom 
          it pertains.
515.9 Fees.
515.10 Penalties.
515.11 General exemptions. [Reserved]
515.12 Specific exemptions.

    Authority: 5 U.S.C. 552a.

    Source: 58 FR 5815, Jan. 22, 1993, unless otherwise noted.



Sec. 515.1  Purpose and scope.

    (a) The purpose of this part is to inform the public of records 
maintained by the Commission about identifiable individuals and to 
inform those individuals how they may gain access to and amend records 
concerning themselves.
    (b) This part carries out the requirements of the Privacy Act of 
1974 (Pub. L. 93-579) codified at 5 U.S.C. 552a.
    (c) The regulation applies only to records disclosed or requested 
under the Privacy Act of 1974, and not to requests for information made 
pursuant to 5 U.S.C. 552, the Freedom of Information Act.



Sec. 515.2  Definitions.

    As defined in the Privacy Act of 1974 and for the purposes of this 
part, unless otherwise required by the context, the following terms 
shall have these meanings:
    (a) Individual means a citizen of the United States or an alien 
lawfully admitted for permanent residence.
    (b) Maintain means maintain, collect, use, or disseminate.
    (c) Record means any item, collection, or grouping of information 
about an individual that is maintained by the Commission, including 
education, financial transactions, medical history, and criminal or 
employment history, and that contains the individual's name, or the 
identifying number, symbol, or other identifier assigned to the 
individual, such as social security number, finger or voice print, or a 
photograph.
    (d) System of records means a group of any records under the control 
of the Commission from which information is retrieved by the name of the 
individual or by some identifying number, symbol, or other identifier 
assigned to the individual.
    (e) Routine use means, with respect to the disclosure of a record, 
the use of such record for a purpose that is compatible with the purpose 
for which it was collected.



Sec. 515.3  Identification of individuals making requests.

    (a) Any individual may request that the Commission inform him or her 
whether a particular record system named by the individual contains a 
record pertaining to him or her and the contents of such record. Such 
requests shall conform to the requirements of

[[Page 36]]

Sec. 515.4 of this part. The request may be made in person or in 
writing at the NIGC, suite 250, 1850 M Street, NW., Washington, DC 
20036-5803 during the hours of 9 a.m. to 12 noon and 2 p.m. to 5 p.m. 
Monday through Friday.
    (b)(1) Requests made in writing shall include a statement, signed by 
the individual and either notarized or witnessed by two persons 
(including witnesses' addresses). If the individual appears before a 
notary, the individual shall submit adequate proof of identity in the 
form of a driver's license, birth certificate, passport, or other 
identification acceptable to the notary. If the statement is witnessed, 
it shall include a statement above the witnesses' signatures that they 
personally know the individual or that the individual has submitted 
proof of his or her identity to their satisfaction. In any case in 
which, because of the extreme sensitivity of the record sought to be 
seen or copied, the Commission determines that the identification is not 
adequate, it may request the individual to submit additional proof of 
identity.
    (2) If the request is made in person, the requester shall submit 
proof of identity similar to that described in paragraph (b)(1) of this 
section, and that is acceptable to the Commission. The individual may 
have a person of his or her own choosing accompany him or her when the 
record is disclosed.
    (c) Requests made by an agent, parent, or guardian shall be in 
accordance with the procedures described in paragraph (b) of this 
section.



Sec. 515.4  Procedures for requests and disclosures.

    (a) Requests for a determination under Sec. 515.3(a) of this part 
shall be acknowledged by the Commission within ten (10) days (excluding 
Saturdays, Sundays and Federal holidays) after the date on which the 
Commission receives the request. If the Commission is unable to locate 
the information requested, it shall so notify the individual within ten 
(10) days (excluding Saturdays, Sundays and Federal holidays) after 
receipt of the request, Such acknowledgement may request additional 
information to assist the Commission in locating the record, or it may 
advise the individual that no record exists about that individual.
    (b)(1) Upon submission of proof of identity as required by Sec. 
515.3(b)(1) or (2) of this part, the Commission shall respond within ten 
(10) days (excluding Saturdays, Sundays and Federal holidays). The 
Commission shall decide whether to make a record available to the record 
subject and shall immediately convey its determination to the requester. 
If the individual asks to see the record, the Commission may make the 
record available at the location where the record is maintained.
    (2) The Commission shall furnish each record requested by an 
individual under this section in a form intelligible to that individual.
    (3) If the Commission denies access to a record to an individual, 
that person shall be advised of the reason for the denial and of the 
appeal procedures provided in Sec. 515.7 of this part.
    (4) Upon request, an individual shall be provided access to the 
accounting of disclosures from his or her record under the same 
procedures as provided above and in Sec. 515.3 of this part.



Sec. 515.5  Request for amendment to record.

    (a) Any individual who has reviewed a record pertaining to him or 
her that was furnished under this part, may request that the Commission 
amend all or any part of that record.
    (b) Each individual requesting an amendment shall send the request 
to the Records Manager.
    (c) Each request for an amendment of a record shall contain the 
following information:
    (1) The name of the individual requesting the amendment;
    (2) The name of the system of records in which the record sought to 
be amended is maintained;
    (3) The location of the system of records from which the individual 
record was obtained;
    (4) A copy of the record sought to be amended or a sufficiently 
detailed description of that record:
    (5) A statement of the material in the record that the individual 
desires to amend;
    (6) A statement of the basis for the requested amendment, including 
any

[[Page 37]]

material that the individual can furnish to substantiate the reasons for 
the amendment sought.



Sec. 515.6  Review of request for amendment of record by the
Records Manager.

    (a) The Records Manager shall, not later than ten (10) days 
(excluding Saturdays, Sundays and Federal holidays) after the receipt of 
a request for an amendment of a record under Sec. 515.5 of this part, 
acknowledge receipt of the request and inform the individual whether 
more information is required before the amendment can be considered.
    (b) If more information is not required, within ten (10) days after 
receipt of the request (excluding Saturdays, Sundays and Federal 
holidays), the Records Manager shall either make the requested amendment 
or notify the individual of the Commission's refusal to do so, including 
in the notification the reasons for the refusal, and the appeal 
procedures provided in Sec. 515.7 of this part.
    (c) The Records Manager shall make each requested amendment to a 
record if such amendment will tend to negate inaccurate, irrelevant, 
untimely, or incomplete material in the record.
    (d) The Records Manager shall inform prior recipients of any 
amendment or notation of dispute of such individual's record. The 
individual may request a list of prior recipients if there exists an 
accounting of the disclosures.



Sec. 515.7  Appeal to the Commission of initial adverse agency 
determination on access or amendment to records.

    (a) Any individual whose request for access or an amendment has been 
denied in whole or in part, may appeal the decision to the Commission no 
later than one hundred eighty (180) days after the adverse decision is 
rendered.
    (b) The appeal shall be in writing and shall contain all of the 
following information:
    (1) The name of the individual making the appeal;
    (2) Identification of the record sought to be amended;
    (3) The record system in which such record is contained;
    (4) A short statement describing the amendment sought; and
    (5) The name and location of the agency official who initially 
denied the amendment.
    (c) Not later than thirty (30) days (excluding Saturdays, Sundays 
and Federal holidays) after the date on which the Commission receives 
the appeal, the Commission shall complete its review of the appeal and 
make a final decision thereon. For good cause shown, however, the 
Commission may extend such thirty (30) day period. If the Commission 
extends the period, the individual requesting the review shall be 
promptly notified of the extension and the anticipated date of a 
decision.
    (d) After review of an appeal, the Commission shall send a written 
notice to the requester containing the following information:
    (1) The decision and, if the denial is upheld, the reasons for the 
decision;
    (2) The right of the requester to file with the Commission a concise 
statement setting forth the reasons for his or her disagreement with the 
Commission's denial of access or amendment. The Commission shall make 
this statement available to any person to whom the record is later 
disclosed, together with a brief statement, if appropriate, of the 
Commission's reasons for denying requested access or amendment. The 
Commission shall also send a copy of the statement to prior recipients 
of the individual's record; and
    (3) The right of the requester to institute a civil action in a 
Federal district court for judicial review of the decision.



Sec. 515.8  Disclosure of record to a person other than the individual
to whom it pertains.

    (a) Any individual who desires to have a record covered by this part 
disclosed to or mailed to another person may designate such person and 
authorize such person to act as his or her agent for that specific 
purpose. The authorization shall be in writing, signed by the 
individual, and notarized or witnessed as provided in Sec. 515.3 of 
this part.
    (b) The parent of any minor individual or the legal guardian of any 
individual who has been declared by a

[[Page 38]]

court of competent jurisdiction to be incompetent, due to physical or 
mental incapacity or age, may act on behalf of that individual in any 
matter covered by this section. A parent or guardian who desires to act 
on behalf of such an individual shall present suitable evidence of 
parentage or guardianship, by birth certificate, certified copy of court 
order, or similar documents, and proof of the individual's identity in a 
form that complies with Sec. 515.3(b) of this part.
    (c) An individual to whom a record is to be disclosed in person, 
pursuant to this section, may have a person of his or her own choosing 
accompany him or her when the record is disclosed.



Sec. 515.9  Fees.

    The Commission shall not charge an individual for the costs of 
making a search for a record or the costs of reviewing the record. When 
the Commission makes a copy of a record as a necessary part of reviewing 
the record, the Commission shall not charge the individual for the cost 
of making that copy. Otherwise, the Commission may charge a fee 
sufficient to cover the cost of duplication.



Sec. 515.10  Penalties.

    Any person who makes a false statement in connection with any 
request for a record, or an amendment thereto, under this part, is 
subject to the penalties prescribed in 18 U.S.C. 494 and 495.



Sec. 515.11  General exemptions. [Reserved]



Sec. 515.12  Specific exemptions.

    (a) The following system of records is exempt from 5 U.S.C. 
552a(c)(3), (d), (e)(1) and (f):

                Indian Gaming Individuals Records System

    (b) The exemptions under paragraph (a) of this section apply only to 
the extent that information in this system is subject to exemption under 
5 U.S.C. 552a(k)(2). When compliance would not appear to interfere with 
or adversely affect the overall responsibilities of the Commission with 
respect to licensing of key employees and primary management officials 
for employment in an Indian gaming operation, the applicable exemption 
may be waived by the Commission.
    (c) Exemptions from the particular sections are justified for the 
following reasons:
    (1) From 5 U.S.C. 552a(c)(3), because making available the 
accounting of disclosures to an individual who is the subject of a 
record could reveal investigative interest. This would permit the 
individual to take measures to destroy evidence, intimidate potential 
witnesses, or flee the area to avoid the investigation.
    (2) From 5 U.S.C. 552a(d), (e)(1), and (f) concerning individual 
access to records, when such access could compromise classified 
information related to national security, interfere with a pending 
investigation or internal inquiry, constitute an unwarranted invasion of 
privacy, reveal a sensitive investigative technique, or pose a potential 
threat to the Commission or its employees or to law enforcement 
personnel. Additionally, access could reveal the identity of a source 
who provided information under an express promise of confidentiality.
    (3) From 5 U.S.C. 552a(d)(2), because to require the Commission to 
amend information thought to be incorrect, irrelevant, or untimely, 
because of the nature of the information collected and the length of 
time it is maintained, would create an impossible administrative and 
investigative burden by continually forcing the Commission to resolve 
questions of accuracy, relevance, timeliness, and completeness.
    (4) From 5 U.S.C. 552a(e)(1) because:
    (i) It is not always possible to determine relevance or necessity of 
specific information in the early stages of an investigation.
    (ii) Relevance and necessity are matters of judgment and timing in 
that what appears relevant and necessary when collected may be deemed 
unnecessary later. Only after information is assessed can its relevance 
and necessity be established.
    (iii) In any investigation the Commission may receive information 
concerning violations of law under the jurisdiction of another agency. 
In the interest of effective law enforcement and

[[Page 39]]

under 25 U.S.C. 2716(b), the information could be relevant to an 
investigation by the Commission.
    (iv) In the interviewing of individuals or obtaining evidence in 
other ways during an investigation, the Commission could obtain 
information that may or may not appear relevant at any given time; 
however, the information could be relevant to another investigation by 
the Commission.



PART 516_TESTIMONY OF COMMISSIONERS AND EMPLOYEES AND FORMER  
COMMISSIONERS AND FORMER EMPLOYEES RESPECTING OFFICIAL DUTIES; 

RESPONSE TO SUBPOENA--Table of Contents




Sec.
516.1 What is the purpose of this part and to whom does it apply?
516.2 When may a person to whom this part applies give testimony, make a 
          statement or submit to interview?
516.3 When may a person to whom this part applies produce records?
516.4 How are records certified or authenticated?

    Authority: 5 U.S.C. 301; 25 U.S.C. 2706; 25 U.S.C. 2716(a); 18 
U.S.C. 1905.

    Source: 64 FR 54542, Oct. 7, 1999, unless otherwise noted.



Sec. 516.1  What is the purpose of this part and to whom does it apply?

    (a) The purpose of this part is to promulgate regulations regarding 
the release of official National Indian Gaming Commission information 
and provision of testimony by National Indian Gaming Commission 
personnel with respect to litigation or potential litigation and to 
prescribe conduct on the part of National Indian Gaming Commission 
personnel in response to a litigation-related request or demand.
    (b) This part applies to requests or demands that are litigation-
related or otherwise arise out of judicial, administrative or other 
legal proceedings (including subpoena, order or other demand) for 
interview, testimony (including by deposition) or other statement, or 
for production of documents relating to the business of the National 
Indian Gaming Commission, whether or not the National Indian Gaming 
Commission or the United States is a party to the litigation. It does 
not, however, apply to document requests covered by 25 CFR parts 515 and 
517.
    (c) To the extent the request or demand seeks official information 
or documents, the provisions of this part are applicable to 
Commissioners, employees, and former Commissioners and former employees, 
of the National Indian Gaming Commission.



Sec. 516.2  When may a person to whom this part applies give testimony,
make a statement or submit to interview?

    (a) No person to whom this part applies, except as authorized by the 
Chairman or the General Counsel pursuant to this regulation, shall 
provide testimony, make a statement or submit to interview.
    (b) Whenever a subpoena commanding the giving of any testimony has 
been lawfully served upon a person to whom this part applies, such 
individual shall, unless otherwise authorized by the Chairman or the 
General Counsel, appear in response thereto and respectfully decline to 
testify on the grounds that it is prohibited by this regulation.
    (c) A person who desires testimony or other statement from any 
person to whom this part applies may make written request therefor, 
verified by oath, directed to the Chairman setting forth his or her 
interest in the matter to be disclosed and designating the use to which 
such statement or testimony will be put in the event of compliance with 
such request: provided, that a written request therefor by an official 
of any federal, state or tribal entity, acting in his or her official 
capacity need not be verified by oath. If it is determined by the 
Chairman or the General Counsel that such statement or testimony will be 
in the public interest, the request may be granted. Where a request for 
a statement or testimony is granted, one or more persons to whom this 
part applies may be authorized or designated to appear and testify or 
give a statement with respect thereto.

[[Page 40]]



Sec. 516.3  When may a person to whom this part applies produce records?

    (a) Any request for records of the National Indian Gaming Commission 
shall be handled pursuant to the procedures established in 25 CFR parts 
515 and 517 and shall comply with the rules governing public disclosure 
as provided in 25 CFR parts 515 and 517.
    (b) Whenever a subpoena duces tecum commanding the production of any 
record has been lawfully served upon a person to whom this part applies, 
such person shall forward the subpoena to the General Counsel. If 
commanded to appear in response to any such subpoena, a person to whom 
this part applies shall respectfully decline to produce the record on 
the ground that production is prohibited by this part and state that the 
production of the record(s) of the National Indian Gaming Commission is 
a matter to be determined by the Chairman or the General Counsel.



Sec. 516.4  How are records certified or authenticated?

    (a) Upon request, the person having custody and responsibility for 
maintenance of records which are to be released under this part or 25 
CFR parts 515 or 517 may certify the authenticity of copies of records 
that are requested to be provided in such format.
    (b) A request for certified copies of records or for authentication 
of copies of records shall be sent to the National Indian Gaming 
Commission, 1441 L Street NW., Suite 9100, Washington, DC 20005, 
Attention: Freedom of Information Act Officer.



PART 517_FREEDOM OF INFORMATION ACT PROCEDURES--Table of Contents




Sec.
517.1 General provisions.
517.2 Public reading room.
517.3 Definitions.
517.4 Requirements for making requests.
517.5 Responsibility for responding to requests.
517.6 Timing of responses to requests.
517.7 Confidential commercial information.
517.8 Appeals.
517.9 Fees.

    Authority: 5 U.S.C. 552, as amended.

    Source: 71 FR 20007, Apr. 19, 2006, unless otherwise noted.



Sec. 517.1  General provisions.

    This part contains the regulations the National Indian Gaming 
Commission (Commission) follows in implementing the Freedom of 
Information Act (FOIA) (5 U.S.C. 552) as amended. These regulations 
provide procedures by which you may obtain access to records compiled, 
created, and maintained by the Commission, along with procedures the 
Commission must follow in response to such requests for records. These 
regulations should be read together with the FOIA, which provides 
additional information about access to records maintained by the 
Commission.



Sec. 517.2  Public reading room.

    Records that are required to be maintained by the Commission shall 
be available for public inspection and copying at 1441 L Street, NW., 
Suite 9100 Washington, DC. Reading room records created on or after 
November 1, 1996, shall be made available electronically via the Web 
site.



Sec. 517.3  Definitions.

    (a) Commercial use requester means a requester seeking information 
for a use or purpose that furthers the commercial, trade, or profit 
interests of himself or the person on whose behalf the request is made, 
which can include furthering those interests through litigation. In 
determining whether a request properly belongs in this category, the 
FOIA Officer shall determine the use to which the requester will put the 
documents requested. Where the FOIA Officer has reasonable cause to 
doubt the use to which the requester will put the records sought, or 
where that use is not clear from the request itself, the FOIA Officer 
shall contact the requester for additional clarification before 
assigning the request to a specific category.
    (b) Confidential commercial information means records provided to 
the government by a submitter that arguably contains material exempt 
from disclosure under Exemption 4 of the FOIA, because disclosure could 
reasonably be expected to cause substantial competitive harm.

[[Page 41]]

    (c) Direct costs mean those expenditures by the Commission actually 
incurred in searching for and duplicating records in response to the 
FOIA request. Direct costs include the salary of the employee or 
employees performing the work (the basic rate of pay for the employee 
plus a percentage of that rate to cover benefits) and the cost of 
operating duplicating machinery. Direct costs do not include overhead 
expenses, such as the cost of space, heating, or lighting of the 
facility in which the records are stored.
    (d) Duplication refers to the process of making a copy of a document 
necessary to fulfill the FOIA request. Such copies can take the form of, 
among other things, paper copy, microfilm, audio-visual materials, or 
machine readable documentation. The copies provided shall be in a form 
that is reasonably usable by the requester.
    (e) Educational institution refers to a preschool, a public or 
private elementary or secondary school, an institute of undergraduate 
higher education, an institute of graduate higher education, an 
institute of professional education, or an institute of vocational 
education which operates a program of scholarly research. To qualify for 
this category, the requester must show that the request is authorized by 
and is made under the auspices of a qualifying institution and that the 
records are not sought for a commercial use, but are sought to further 
scholarly research.
    (f) Freedom of Information Act Officer means the person designated 
by the Chairman to administer the FOIA.
    (g) Non-commercial scientific institution refers to an institution 
that is not operated on a ``commercial'' basis as that term is used in 
paragraph (a) of this section, and which is operated solely for the 
purpose of conducting scientific research the results of which are not 
intended to promote any particular product or industry. To qualify for 
this category, the requester must show that the request is authorized by 
and is made under the auspices of a qualifying institution and that the 
records are not sought for a commercial use, but are sought to further 
scholarly research.
    (h) Record means all books, papers, maps, photographs, machine 
readable materials, or other documentary materials, regardless of 
physical form or characteristics, made or received by the Commission 
under Federal law or in connection with the transaction of public 
business and preserved or appropriate for preservation by the Commission 
or its legitimate successor as evidence of the organization, functions, 
policies, decisions, procedures, operations, or other activities of the 
Government or because of the informational value of data in them. 
Library and museum material made or acquired and preserved solely for 
reference or exhibition purposes, extra copies of documents preserved 
only for convenience of reference, and stocks of publications and of 
processed documents are not included.
    (i) Representative of the news media means any person actively 
gathering news for an entity that is organized and operated to publish 
or broadcast news to the public. The term ``news'' means information 
that is about current events or that would be of current interest to the 
public. For a ``freelance journalist'' to be regarded as working for a 
news organization, the requester must demonstrate a solid basis for 
expecting publication through that organization, such as a publication 
contract. Absent such showing, the requester may provide documentation 
establishing the requester's past publication record. To qualify for 
this category, the requester must not be seeking the requested records 
for a commercial use. However, a request for records supporting a news-
dissemination function shall not be considered to be for a commercial 
use.
    (j) Requester means any person, including an individual, Indian 
tribe, partnership, corporation, association, or public or private 
organization other than a Federal agency, that requests access to 
records in the possession of the Commission.
    (k) Review means the process of examining a record in response to a 
FOIA request to determine if any portion of that record may be withheld 
under one or more of the FOIA Exemptions. It also includes processing 
any record for

[[Page 42]]

disclosure, for example, redacting information that is exempt from 
disclosure under the FOIA. Review time includes time spent considering 
any formal objection to disclosure made by a business submitter under 
Sec. 517.7 (c). Review time does not include time spent resolving 
general legal or policy issues regarding the use of FOIA Exemptions.
    (l) Search refers to the time spent looking for material that is 
responsive to a request, including page-by-page or line-by-line 
identification of material within a document and also includes 
reasonable efforts to locate and retrieve information from records 
maintained in electronic form or format. The FOIA Officer shall ensure 
that searches are conducted in the most efficient and least expensive 
manner reasonably possible.
    (m) Submitter means any person or entity who provides information 
directly or indirectly to the Commission. The term includes, but is not 
limited to, corporations, Indian tribal governments, state governments 
and foreign governments.
    (n) Working day means a Federal workday that does not include 
Saturdays, Sundays, or Federal holidays.



Sec. 517.4  Requirements for making requests.

    (a) How to make a FOIA request. Requests for records made pursuant 
to the FOIA must be in writing. Requests should be sent to the National 
Indian Gaming Commission, Attn: FOIA Officer, 1441 L Street, NW., Suite 
9100, Washington, DC 20005. Requests may be mailed, dropped off in 
person, or faxed to (202) 632-7066 (not a toll free number). If the 
requester is making a request for records about himself/herself, the 
requester should see 25 CFR 515.3 for additional information. If the 
requester is making a request for records about another individual, the 
requester must provide either a written authorization signed by that 
individual authorizing disclosure of the records to the requester or 
provide proof that the individual is deceased (for example, a copy of 
the death certificate or a copy of the obituary).
    (b) Description of records sought. Requests for records shall 
describe the records requested with as much specificity as possible to 
enable Commission employees to locate the information requested with a 
reasonable amount of effort.
    (c) Agreement to pay fees. Requests shall also include a statement 
indicating the maximum amount of fees the requester is willing to pay to 
obtain the requested information, or a request for a waiver or reduction 
of fees. If the requester is requesting a waiver or reduction of fees 
the requester must include justification for such waiver or reduction 
(see Sec. 517.9 (c) for more information). If the request for a fee 
waiver is denied, the requester will be notified of this decision and 
advised that fees associated with the processing of the request will be 
assessed. The requester must send an acknowledgment to the FOIA Officer 
indicating his/her willingness to pay the fees. Absent such 
acknowledgment within the specified time frame, the request will be 
considered incomplete, no further work shall be done, and the request 
will be administratively closed.
    (d) Types of records not available. The FOIA does not require the 
Commission to:
    (1) Compile or create records solely for the purpose of satisfying a 
request for records;
    (2) Provide records not yet in existence, even if such records may 
be expected to come into existence at some future time; or
    (3) Restore records destroyed or otherwise disposed of, except that 
the FOIA Officer must notify the requester that the requested records 
have been destroyed or disposed.



Sec. 517.5  Responsibility for responding to requests.

    (a) In general. In determining which records are responsive to a 
request, the Commission ordinarily will include only records in its 
possession as of the date it begins its search for records. If any other 
date is used, the FOIA Officer shall inform the requester of that date.
    (b) Authority to grant or deny requests. The FOIA Officer shall make 
initial determinations either to grant or deny in whole or in part a 
request for records.

[[Page 43]]

    (c) Consultations and referrals. (1) When a requested record has 
been created by another Federal Government agency that record shall be 
referred to the originating agency for direct response to the requester. 
The requester shall be informed of the referral. As this is not a denial 
of a FOIA request, no appeal rights accrue to the requester.
    (2) When a requested record is identified as containing information 
originating with another Federal Government agency, the record shall be 
referred to the originating agency for review and recommendation on 
disclosure.



Sec. 517.6  Timing of responses to requests.

    (a) In general. The FOIA Officer ordinarily shall respond to 
requests according to their order of receipt.
    (b) Multitrack processing. (1) The FOIA Officer may use multi-track 
processing in responding to requests. Multi-track processing means 
placing simple requests requiring rather limited review in one 
processing track and placing more voluminous and complex requests in one 
or more other tracks. Request in either track are processed on a first-
in/first-out basis.
    (2) The FOIA Officer may provide requesters in its slower track(s) 
with an opportunity to limit the scope of their requests in order to 
qualify for faster processing within the specified limits of faster 
track(s). The FOIA Officer will do so either by contacting the requester 
by letter or telephone, whichever is more efficient in each case.
    (c) Initial determinations. (1) The FOIA Officer shall make an 
initial determination regarding access to the requested information and 
notify the requester within twenty (20) working days after receipt of 
the request. This 20 day period may be extended if unusual circumstances 
arise. If an extension is necessary, the FOIA Officer shall promptly 
notify the requester of the extension, briefly stating the reasons for 
the extension, and estimating when the FOIA Officer will respond. 
Unusual circumstances warranting extension are:
    (i) The need to search for and collect the requested records from 
field facilities or other establishments that are separate from the 
office processing the request;
    (ii) The need to search for, collect, and appropriately examine a 
voluminous amount of records which are demanded in a single request; or
    (iii) The need for consultation with another agency having a 
substantial interest in the determination of the request, which 
consultation shall be conducted with all practicable speed.
    (2) If the FOIA Officer decides that an initial determination cannot 
be reached within the time limits specified in paragraph (c)(1) of this 
section, the FOIA Officer shall notify the requester of the reasons for 
the delay and include an estimate of when a determination will be made. 
The requester will then have the opportunity to modify the request or 
arrange for an alternative time frame for completion of the request.
    (3) If the FOIA Officer has a reasonable basis to conclude that a 
requester or group of requesters has divided a request into a series of 
requests on a single subject or related subjects to avoid fees, the 
requests may be aggregated and fees charged accordingly. Multiple 
requests involving unrelated matters will not be aggregated.
    (4) If no initial determination has been made at the end of the 20 
day period provided for in paragraph (a)(1) of this section, including 
any extension, the requester may appeal the action to the FOIA Appeals 
Officer.
    (5) If the FOIA Officer determines that another agency is 
responsible for the records, the FOIA Officer shall refer such records 
to the appropriate agency for direct response to the requester. The FOIA 
Officer shall inform the requester of the referral and of the name and 
address of the agency or agencies to which the request has been 
referred.
    (d) Granting of requests. When the FOIA Officer determines that the 
requested records shall be made available, the FOIA Officer shall notify 
the requester in writing and provide copies of the requested records in 
whole or in part once any fees charged under Sec. 517.9 have been paid 
in full. Records disclosed in part shall be marked or annotated to show 
the exemption applied

[[Page 44]]

to the withheld information and the amount of information withheld 
unless to do so would harm the interest protected by an applicable 
exemption. If a requested record contains exempted material along with 
nonexempt material, all reasonable segregable material shall be 
disclosed.
    (e) Denial of requests. When the FOIA Officer determines that access 
to requested records should be denied, the FOIA Officer shall notify the 
requester of the denial, the grounds for the denial, and the procedures 
for appeal of the denial.
    (f) Expedited processing of request. The FOIA Officer must determine 
whether to grant the request for expedited processing within (10) 
calendar days of its receipt. Requests will receive expedited processing 
if one of the following compelling needs is met:
    (1) The requester can establish that failure to receive the records 
quickly could reasonably be expected to pose an imminent threat to the 
life or physical safety of an individual; or
    (2) The requester is primarily engaged in disseminating information 
and can demonstrate that an urgency to inform the public concerning 
actual or alleged Federal Government activity exists.



Sec. 517.7  Confidential commercial information.

    (a) Notice to submitters. The FOIA Officer shall, to the extent 
permitted by law, provide a submitter who provides confidential 
commercial information to the FOIA Officer, with prompt notice of a FOIA 
request or administrative appeal encompassing the confidential 
commercial information if the Commission may be required to disclose the 
information under the FOIA. Such notice shall either describe the exact 
nature of the information requested or provide copies of the records or 
portions thereof containing the confidential commercial information. The 
FOIA Officer shall also notify the requester that notice and an 
opportunity to object has been given to the submitter.
    (b) Where notice is required. Notice shall be given to a submitter 
when:
    (1) The information has been designated by the submitter as 
confidential commercial information protected from disclosure. 
Submitters of confidential commercial information shall use good faith 
efforts to designate, either at the time of submission or a reasonable 
time thereafter, those portions of their submissions they deem protected 
from disclosure under Exemption 4 of the FOIA because disclosure could 
reasonably be expected to cause substantial competitive harm. Such 
designation shall be deemed to have expired ten years after the date of 
submission, unless the requester provides reasonable justification for a 
designation period of greater duration; or
    (2) The FOIA Officer has reason to believe that the information may 
be protected from disclosure under Exemption 4 of the FOIA.
    (c) Opportunity to object to disclosure. The FOIA Officer shall 
afford a submitter a reasonable period of time to provide the FOIA 
Officer with a detailed written statement of any objection to 
disclosure. The statement shall specify all grounds for withholding any 
of the information under any exemption of the FOIA, and if Exemption 4 
applies, shall demonstrate the reasons the submitter believes the 
information to be confidential commercial information that is exempt 
from disclosure. Whenever possible, the submitter's claim of 
confidentiality shall be supported by a statement or certification by an 
officer or authorized representative of the submitter. In the event a 
submitter fails to respond to the notice in the time specified, the 
submitter will be considered to have no objection to the disclosure of 
the information. Information provided by the submitter that is received 
after the disclosure decision has been made will not be considered. 
Information provided by a submitter pursuant to this paragraph may 
itself be subject to disclosure under the FOIA.
    (d) Notice of intent to disclose. The FOIA Officer shall carefully 
consider a submitter's objections and specific grounds for nondisclosure 
prior to determining whether to disclose the information requested. 
Whenever the FOIA Officer determines that disclosure is appropriate, the 
FOIA Officer shall, within a reasonable number of days prior to 
disclosure, provide the

[[Page 45]]

submitter with written notice of the intent to disclose which shall 
include a statement of the reasons for which the submitter's objections 
were overruled, a description of the information to be disclosed, and a 
specific disclosure date. The FOIA Officer shall also notify the 
requester that the requested records will be made available.
    (e) Notice of lawsuit. If the requester files a lawsuit seeking to 
compel disclosure of confidential commercial information, the FOIA 
Officer shall promptly notify the submitter of this action. If a 
submitter files a lawsuit seeking to prevent disclosure of confidential 
commercial information, the FOIA Officer shall notify the requester.
    (f) Exceptions to the notice requirements under this section. The 
notice requirements under paragraphs (a) and (b) of this section shall 
not apply if:
    (1) The FOIA Officer determines that the information should not be 
disclosed pursuant to Exemption 4 and/or any other exemption of the 
FOIA;
    (2) The information lawfully has been published or officially made 
available to the public;
    (3) Disclosure of the information is required by law (other than the 
FOIA);
    (4) The information requested is not designated by the submitter as 
exempt from disclosure in accordance with this part, when the submitter 
had the opportunity to do so at the time of submission of the 
information or within a reasonable time thereafter, unless the agency 
has substantial reason to believe that disclosure of the information 
would result in competitive harm; or
    (5) The designation made by the submitter in accordance with this 
part appears obviously frivolous. When the FOIA Officer determines that 
a submitter was frivolous in designating information as confidential, 
the FOIA Officer must provide the submitter with written notice of any 
final administrative disclosure determination within a reasonable number 
of days prior to the specified disclosure date, but no opportunity to 
object to disclosure will be offered.



Sec. 517.8  Appeals.

    (a) Right of appeal. The requester has the right to appeal to the 
FOIA Appeals Officer any adverse determination.
    (b) Notice of appeal. (1) Time for appeal. An appeal must be 
received no later than thirty (30) working days after notification of 
denial of access or after the time limit for response by the FOIA 
Officer has expired. Prior to submitting an appeal any outstanding fees 
associated with FOIA requests must be paid in full.
    (2) Form of appeal. An appeal shall be initiated by filing a written 
notice of appeal. The notice shall be accompanied by copies of the 
original request and initial denial. To expedite the appellate process 
and give the requester an opportunity to present his/her arguments, the 
notice should contain a brief statement of the reasons why the requester 
believes the initial denial to have been in error. The appeal shall be 
addressed to the National Indian Gaming Commission, Attn: FOIA Appeals 
Officer, 1441 L Street, NW., Suite 9100, Washington, DC 20005.
    (c) Final agency determinations. The FOIA Appeals Officer shall 
issue a final written determination, stating the basis for its decision, 
within twenty (20) working days after receipt of a notice of appeal. If 
the determination is to provide access to the requested records, the 
FOIA Officer shall make those records immediately available to the 
requester. If the determination upholds the denial of access to the 
requested records, the FOIA Appeals Officer shall notify the requester 
of the determination and his/her right to obtain judicial review in the 
appropriate Federal district court.



Sec. 517.9  Fees.

    (a) In general. Fees pursuant to the FOIA shall be assessed 
according to the schedule contained in paragraph (b) of this section for 
services rendered by the Commission in response to requests for records 
under this part. All fees shall be charged to the requester, except 
where the charging of fees is limited under paragraph (d) of this 
section or where a waiver or reduction of fees is granted under 
paragraph (c) of this section. Payment of fees should be by check or 
money order made payable to the Treasury of the United States.

[[Page 46]]

    (b) Charges for responding to FOIA requests. The following fees 
shall be assessed in responding to requests for records submitted under 
this part, unless a waiver or reduction of fees has been granted 
pursuant to paragraph (c) of this section:
    (1) Copies. The FOIA Officer shall charge $0.15 per page for copies 
of documents up to 8\1/2\ x 14. For copies prepared by computer, the 
FOIA Officer will charge actual costs of production of the computer 
printouts, including operator time. For other methods of reproduction, 
the FOIA Officer shall charge the actual costs of producing the 
documents.
    (2) Searches. (i) Manual searches. Whenever feasible, the FOIA 
Officer will charge at the salary rate (basic pay plus a percent for 
benefits) of the employee or employees performing the search. However, 
where a homogenous class of personnel is used exclusively in a search 
(e.g. all administrative/clerical or all professional/executive), the 
FOIA Officer shall charge $4.45 per quarter hour for clerical time and 
$7.75 per quarter hour for professional time. Charges for search time 
less than a full hour will be in increments of quarter hours.
    (ii) Computer searches. The FOIA Officer will charge the actual 
direct costs of conducting computer searches. These direct costs shall 
include the cost of operating the central processing unit for that 
portion of operating time that is directly attributable to searching for 
requested records, as well as the costs of operator/programmer salary 
apportionable to the search. The Commission is not required to alter or 
develop programming to conduct searches.
    (3) Review fees. Review fees shall be assessed only with respect to 
those requesters who seek records for a commercial use under paragraph 
(d)(1) of this section. Review fees shall be assessed at the same rates 
as those listed under paragraph (b)(2)(i) of this section. Review fees 
shall be assessed only for the initial record review, for example, 
review undertaken when the FOIA Officer analyzes the applicability of a 
particular exemption to a particular record or portion thereof at the 
initial request level. No charge shall be assessed at the administrative 
appeal level of an exemption already applied.
    (c) Statutory waiver. Documents shall be furnished without charge or 
at a charge below that listed in paragraph (b) of this section where it 
is determined, based upon information provided by a requester or 
otherwise made known to the FOIA Officer, that disclosure of the 
requested information is in the public interest. Disclosure is in the 
public interest if it is likely to contribute significantly to public 
understanding of government operations and is not primarily for 
commercial purposes. Requests for a waiver or reduction of fees shall be 
considered on a case by case basis. In order to determine whether the 
fee waiver requirement is met, the FOIA Officer shall consider the 
following six factors:
    (1) The subject of the request. Whether the subject of the requested 
records concerns the operations or activities of the government;
    (2) The informative value of the information to be disclosed. 
Whether the disclosure is likely to contribute to an understanding of 
government operations or activities;
    (3) The contribution to an understanding of the subject by the 
general public likely to result from disclosure. Whether disclosure of 
the requested information will contribute to public understanding;
    (4) The significance of the contribution to public understanding. 
Whether the disclosure is likely to contribute significantly to public 
understanding of government operations or activities;
    (5) The existence and magnitude of commercial interest. Whether the 
requester has a commercial interest that would be furthered by the 
requested disclosure; and, if so
    (6) The primary interest in disclosure. Whether the magnitude of the 
identified commercial interest of the requester is sufficiently large, 
in comparison with the public interest in disclosure, that disclosure is 
primarily in the commercial interest of the requester.
    (d) Types of requesters. There are four categories of FOIA 
requesters: Commercial use requesters, educational and non-commercial 
scientific institutional requesters; representative of the news

[[Page 47]]

media; and all other requesters. These terms are defined in Sec. 517.3. 
The following specific levels of fees are prescribed for each of these 
categories:
    (1) Commercial use requesters. The FOIA Officer shall charge 
commercial use requesters the full direct costs of searching for, 
reviewing, and duplicating requested records.
    (2) Educational and non-commercial scientific institution 
requesters. The FOIA Officer shall charge educational and non-commercial 
scientific institution requesters for document duplication only, except 
that the first 100 pages of copies shall be provided without charge.
    (3) News media requesters. The FOIA Officer shall charge news media 
requesters for document duplication costs only, except that the first 
100 pages of paper copies shall be provided without charge.
    (4) All other requesters. The FOIA Officer shall charge requesters 
who do not fall into any of the categories in paragraphs (d)(1) through 
(3) of this section fees which recover the full reasonable direct costs 
incurred for searching for and reproducing records if that total costs 
exceeds $15.00, except that the first 100 pages and the first two hours 
of manual search time shall not be charged. To apply this term to 
computer searches, the FOIA Officer shall determine the total hourly 
cost of operating the central processing unit and the operator's salary 
(plus 16 percent for benefits). When the cost of the search equals the 
equivalent dollar amount of two hours of the salary of the person 
performing the search, the FOIA Officer will begin assessing charges for 
the computer search.
    (e) Charges for unsuccessful searches. Ordinarily, no charges will 
be assessed when requested records are not found or when records located 
are withheld as exempt. However, if the requester has been notified of 
the estimated cost of the search time and has been advised specifically 
that the requested records may not exist or may be withheld as exempt, 
fees may be charged.
    (f) Charges for interest. The FOIA Officer may assess interest 
charges on an unpaid bill, accrued under previous FOIA request(s), 
starting the 31st day following the day on which the bill was sent to 
you. A fee received by the FOIA Officer, even if not processed, will 
result in a stay of the accrual of interest. The Commission shall follow 
the provisions of the Debt Collection Act of 1982, as amended, and the 
implementing procedures to recover any indebtedness owed to the 
Commission.
    (g) Aggregating requests. The requester or a group of requesters may 
not submit multiple requests at the same time, each seeking portions of 
a document or documents solely in order to avoid payment of fees. When 
the FOIA Officer reasonably believes that a requester is attempting to 
divide a request into a series of requests to evade an assessment of 
fees, the FOIA Officer may aggregate such request and charge 
accordingly.
    (h) Advance payment of fees. Fees may be paid upon provision of the 
requested records, except that payment may be required prior to that 
time if the requester has previously failed to pay fees or if the FOIA 
Officer determines the total fee will exceed $250.00. When payment is 
required in advance of the processing of a request, the time limits 
prescribed in Sec. 517.6 shall not be deemed to begin until the FOIA 
Officer has received payment of the assessed fee.
    (i) Payment of fees. Where it is anticipated that the cost of 
providing the requested record will exceed $25.00 after the free 
duplication and search time has been calculated, and the requester has 
not indicated in advance a willingness to pay a fee greater than $25.00, 
the FOIA Officer shall promptly notify the requester of the amount of 
the anticipated fee or a portion thereof, which can readily be 
estimated. The notification shall offer the requester an opportunity to 
confer with agency representatives for the purpose of reformulating the 
request so as to meet the requester's needs at a reduced cost.



PART 518_SELF REGULATION OF CLASS II GAMING--Table of Contents




Sec.
518.1 What does this part cover?
518.2 Who may petition for a certificate of self-regulation?
518.3 What must a tribe submit to the Commission as part of its 
          petition?
518.4 What criteria must a tribe meet to receive a certificate of self-
          regulation?

[[Page 48]]

518.5 What process will the Commission use to review petitions?
518.6 When will a certificate of self-regulation become effective?
518.7 If a tribe holds a certificate of self-regulation, is it required 
          to report information to the Commission to maintain its self-
          regulatory status?
518.8 Does a tribe that holds a certificate of self-regulation have a 
          continuous duty to advise the Commission of any information?
518.9 Are any of the investigative or enforcement powers of the 
          Commission limited by the issuance of a certificate of self-
          regulation?
518.10 Under what circumstances may the Commission remove a certificate 
          of self-regulation?
518.11 May a tribe request a hearing on the Commission's proposal to 
          remove its certificate?
518.12 May a tribe request reconsideration by the Commission of a denial 
          of a petition or a removal of a certificate of self-
          regulation?

    Authority: 25 U.S.C. 2706(b)(10), 2710(c)(3)-(6).

    Source: 63 FR 41969, Aug. 6, 1998, unless otherwise noted.



Sec. 518.1  What does this part cover?

    This part sets forth requirements for obtaining, and procedures 
governing, the Commission's issuance of certificates of self-regulation 
of class II gaming operations under 25 U.S.C. 2710(c). When the 
Commission issues a certificate of self-regulation, the certificate is 
issued to the tribe, not to a particular gaming operation; the 
certificate will apply to all class II gaming operations operated by the 
tribe that holds the certificate.



Sec. 518.2  Who may petition for a certificate of self-regulation?

    A tribe may submit to the Commission a petition for self-regulation 
of class II gaming if, for the three (3) year period immediately 
preceding the date of its petition:
    (a) The tribe has continuously conducted the gaming activity for 
which it seeks self-regulation;
    (b) All gaming that the tribe has engaged in, or licensed and 
regulated, on Indian lands within the tribe's jurisdiction, is located 
within a State that permits such gaming for any purpose by any person, 
organization or entity (and such gaming is not otherwise specifically 
prohibited on Indian lands by federal law), in accordance with 25 U.S.C. 
2710(b)(1)(A);
    (c) The governing body of the tribe has adopted an ordinance or 
resolution that the Chairman has approved, in accordance with 25 U.S.C. 
2710(b)(1)(B);
    (d) The tribe has otherwise complied with the provisions of 25 
U.S.C. 2710; and
    (e) The gaming operation and the tribal regulatory body have, for 
the three years immediately preceding the date of the petition, 
maintained all records required to support the petition for self-
regulation.



Sec. 518.3  What must a tribe submit to the Commission as part of its petition?

    (a) A petition for a certificate of self-regulation under this part 
shall contain:
    (1) Two copies on 8-1/2x11 paper of a petition 
for self-regulation approved by the governing body of the tribe and 
certified as authentic by an authorized tribal official, which includes:
    (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 independent tribal regulatory 
body;
    (iii) A description of the process by which all employee and 
regulator positions at the independent tribal regulatory body are 
filled, including qualifying and disqualifying criteria;
    (iv) A description of the process by which the independent 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 
independent tribal regulatory body, their titles, the dates they began 
employment, and, if serving limited terms, the expiration date of such 
terms;
    (vi) A list of the current gaming operation division heads; and
    (vii) A report, with supporting documentation, including a sworn 
statement signed by an authorized tribal official, which explains how 
tribal net gaming revenues were used in accordance with the requirements 
of 25 U.S.C. 2710(b)(2)(B);

[[Page 49]]

    (2) A descriptive list of the documents maintained by the tribe, 
together with an assurance that the listed documents or records are 
available for the Commission's review for use in determining whether the 
tribe meets the eligibility criteria of Sec. 518.2 and the approval 
criteria of Sec. 518.4, which shall include but is not limited to:
    (i) The tribe's constitution or other governing documents;
    (ii) If applicable, the tribe's revenue allocation plan pursuant to 
25 U.S.C. 2710(b)(3);
    (iii) A description of the accounting system(s) at both the gaming 
operation and the tribe that account for the flow of the gaming revenues 
from receipt to their ultimate use, consistent with IGRA;
    (iv) Manual(s) of the internal control systems of the gaming 
operation(s);
    (v) A description of the record keeping system for all allegations 
of criminal or dishonest activity for the three (3)-year period 
immediately preceding the date of the petition, and measures taken to 
resolve the allegations;
    (vi) A description of the record keeping system 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, including 
dispositions thereof;
    (vii) A description of the personnel record keeping system of all 
current employees of the gaming operation(s);
    (viii) The dates of issuance, and criteria for the issuance of 
tribal gaming licenses issued for each place, facility or location at 
which gaming is conducted; and
    (ix) The tribe's current set of gaming regulations; and
    (3) A copy of the public notice required under 25 CFR 518.5(d) and a 
certification, signed by a tribal official, that it has been posted. 
Upon publication of the notice in a local newspaper, the tribe shall 
forward an affidavit of publication to the Commission.



Sec. 518.4  What criteria must a tribe meet to receive a certificate
of self-regulation?

    (a) The Commission shall issue a certificate of self-regulation if 
it determines that the tribe has, for the three years immediately 
preceding the petition:
    (1) Conducted its gaming activity in a manner that:
    (i) Has resulted in an effective and honest accounting of all 
revenues;
    (ii) Has resulted in a reputation for safe, fair, and honest 
operation of the activity; and
    (iii) Has been generally free of evidence of criminal or dishonest 
activity;
    (2) Adopted and is implementing adequate systems for:
    (i) Accounting of all revenues from the activity;
    (ii) Investigation, licensing and monitoring of all employees of the 
gaming activity; and
    (iii) Investigation, enforcement and prosecution of violations of 
its gaming ordinance and regulations;
    (3) Conducted the operation on a fiscally and economically sound 
basis; and
    (4) The gaming activity has been conducted in compliance with the 
IGRA, NIGC regulations in this chapter, and the tribe's gaming ordinance 
and gaming regulations.
    (b) Indicators that a tribe has met the criteria set forth in 
paragraph (a) of this section may include, but are not limited to:
    (1) Adoption and implementation of minimum internal control 
standards which are at least as stringent as those promulgated by the 
Commission, or until such standards are promulgated by the Commission, 
minimum internal control standards at least as stringent as those 
required by the State of Nevada or the State of New Jersey;
    (2) Evidence that suitability determinations are made with respect 
to tribal gaming regulators which are at least as stringent as those 
required for key employees and primary management officials of the 
gaming operation(s);
    (3) Evidence of an established independent regulatory body within 
the tribal government which:
    (i) Monitors gaming activities to ensure compliance with federal and 
tribal laws and regulations;
    (ii) Promulgates tribal gaming regulations pursuant to tribal law;

[[Page 50]]

    (iii) Ensures that there is an adequate system for accounting of all 
revenues from the activity and monitors such system for continued 
effectiveness;
    (iv) Performs routine operational or other audits of the gaming 
operation(s);
    (v) Routinely receives and reviews accounting information from the 
gaming operation(s);
    (vi) Has access to and may inspect, examine, photocopy and audit all 
papers, books, and records of the gaming operation(s);
    (vii) Provides ongoing information to the tribe on the status of the 
tribe's gaming operation(s);
    (viii) Monitors compliance with minimum internal control standards 
for the gaming operation;
    (ix) Adopts and implements an adequate system for investigation, 
licensing, and monitoring of all employees of the gaming activity;
    (x) Maintains records on licensees and on persons denied licenses 
including persons otherwise prohibited from engaging in gaming 
activities within the tribe's jurisdiction;
    (xi) Inspects and examines all premises where gaming is conducted;
    (xii) Establishes standards for and issues vendor licenses or 
permits to persons or entities who deal with the gaming operation, such 
as manufacturers and suppliers of services, equipment and supplies;
    (xiii) Establishes or approves, and requires the posting of, rules 
of games;
    (xiv) Inspects games, tables, equipment, cards, and chips or tokens 
used in the gaming operation(s);
    (xv) Establishes standards for technological aids and tests such for 
compliance with standards;
    (xvi) Establishes or approves video surveillance standards;
    (xvii) Adopts and implements an adequate system for the 
investigation of possible violations of the tribal gaming ordinance and 
regulations and takes appropriate enforcement actions;
    (xviii) Determines that there are adequate dispute resolution 
procedures for gaming operation employees and customers, and ensures 
that such system is adequately implemented; and
    (xix) Takes testimony and conducts hearings on regulatory matters, 
including matters related to the revocation of primary management 
officials and key employee licenses;
    (4) Documentation of a sufficient source of permanent and stable 
funding for the independent tribal regulatory body which is allocated 
and appropriated by the tribal governing body;
    (5) Adoption of a conflict of interest policy for the regulators/
regulatory body and their staff;
    (6) Evidence that the operation is financially stable;
    (7) Adoption and implementation of a system for adequate prosecution 
of violations of the tribal gaming ordinance and regulations, which may 
include the existence of a tribal court system authorized to hear and 
decide gaming related cases;
    (8) Evidence that the operation is being conducted in a safe manner, 
which may include, but not be limited to:
    (i) The availability of medical, fire, and emergency services;
    (ii) The existence of an evacuation plan; and
    (iii) Proof of compliance with applicable building, health, and 
safety codes; and
    (9) Evidence that reports are produced or received by the tribe, the 
tribal regulatory body, or the gaming operation based on an evaluation 
of the internal controls of the gaming operation during the three (3) 
year period immediately preceding the date of the petition.
    (c) The burden of establishing self-regulation is upon the tribe 
filing the petition.
    (d) During the review of the petition, the Commission shall have 
complete access to all areas of and all papers, books, and records of 
the tribal regulatory body, the gaming operation, and any other entity 
involved in the regulation or oversight of the gaming operation. The 
Commission shall be allowed to inspect and photocopy any relevant 
materials. The tribe shall take no action to prohibit the Commission 
from soliciting information from any current or former employees of the 
tribe, the tribal regulatory body, or the gaming operation. Failure to 
adhere to

[[Page 51]]

this paragraph may be grounds for denial of a petition for self-
regulation.



Sec. 518.5  What process will the Commission use to review petitions?

    (a) The Chairman shall appoint one Commissioner to administer the 
Office of Self Regulation. The Office of Self Regulation shall undertake 
an initial review of the petition to determine whether the tribe meets 
all of the eligibility criteria of Sec. 518.2. If the tribe fails to 
meet any of the eligibility criteria, the Office of Self Regulation 
shall deny the petition and so notify the tribe. If the tribe meets all 
of the eligibility criteria, the Office of Self Regulation shall review 
the petition and accompanying documents for completeness. If the Office 
of Self Regulation finds the petition incomplete, it shall immediately 
notify the tribe by letter, certified mail, return receipt requested, of 
any obvious deficiencies or significant omissions apparent in the 
petition and provide the tribe with an opportunity to submit additional 
information and/or clarification.
    (b) The Office of Self Regulation shall notify a tribe, by letter, 
when it considers a petition to be complete.
    (c) Upon receipt of a complete petition, the Office of Self 
Regulation shall conduct a review and investigation to determine whether 
the tribe meets the approval criteria under Sec. 518.4. During the 
course of this review, the Office of Self Regulation may request from 
the tribe any additional material it deems necessary to assess whether 
the tribe has met the requirements for self-regulation. The tribe shall 
provide all information requested by the Office of Self Regulation in a 
timely manner. The Office of Self Regulation may consider any evidence 
which may be submitted by interested or informed parties. The Office of 
Self Regulation shall make all such information on which it relies in 
making its determination available to the Tribe and shall afford the 
Tribe an opportunity to respond.
    (d) The tribe shall post a notice, contemporaneous with the filing 
of the petition, advising the public that it has petitioned the 
Commission for a certificate of self regulation. Such notice shall be 
posted in conspicuous places in the gaming operation and the tribal 
government offices. Such notice shall remain posted until the Commission 
either issues a certificate or declines to do so. The tribe shall also 
publish such notice, once a week for four weeks, in a local newspaper 
with a broad based circulation. Both notices shall state that one of the 
criteria for the issuance of a certificate is that the tribe has a 
reputation for safe, fair, and honest operation of the gaming activity, 
and shall solicit comments in this regard. The notices shall instruct 
commentors to submit their comments directly to the Office of Self 
Regulation, shall provide the mailing address of the Commission and 
shall request that commentors include their name, address and day time 
telephone number.
    (e) After making an initial determination on the petition, the 
Office of Self Regulation shall issue a report of its findings to the 
tribe.
    (1) If the Office of Self Regulation determines that the tribe has 
satisfied the criteria for a certificate of self regulation, it shall so 
indicate in its report and shall issue a certificate in accordance with 
25 CFR 518.6.
    (2) If the Office of Self Regulation's initial determination is that 
a tribe has not met the criteria for a certificate of self regulation, 
it shall so advise the tribe in its report and the tribe shall have 60 
days from the date of service of the report to submit to the Office of 
Self Regulation a written response to the report. This response may 
include additional materials which:
    (i) The tribe deems necessary to adequately respond to the findings; 
and
    (ii) The tribe believes supports its petition.
    (f) At the time of the submission of its response the tribe may 
request a hearing before the Office of Self Regulation. This request 
shall specify the issues to be addressed by the tribe at such hearing, 
and any proposed oral or written testimony the tribe wishes to present. 
The Office of Self Regulation may limit testimony.
    (g) The Office of Self Regulation shall notify the tribe, within 10 
days of receipt of such request, of the date and place of the hearing. 
The Office of Self Regulation shall also set forth the

[[Page 52]]

schedule for the conduct of the hearing, including the specification of 
all issues to be addressed at the hearing, the identification of any 
witnesses, the time allotted for testimony and oral argument, and the 
order of the presentation.
    (h) Following review of the tribe's response and the conduct of the 
hearing, the Office of Self Regulation shall issue a decision on the 
petition. The decision shall set forth with particularity the findings 
with respect to the tribe's compliance with standards for self-
regulation set forth in this part. If the Office of Self Regulation 
determines that a certificate will issue, it will do so in accordance 
with 25 CFR 518.6.
    (i) The decision to deny a petition shall be appealable to the full 
Commission. Such appeal shall be received by the Commission within 
thirty (30) days of service of the decision and shall include a 
supplemental statement that states with particularity the relief desired 
and the grounds therefor. The full Commission shall decide the appeal 
based only on a review of the record before it. The decision on appeal 
shall require a majority vote of the Commissioners.
    (j) The decision of the Commission to approve or deny a petition 
shall be a final agency action. A denial shall be appealable under 25 
U.S.C. 2714, subject to the provisions of Sec. 518.12. The Commission 
decision shall be effective when the time for the filing of a request 
for reconsideration pursuant to Sec. 518.12 has expired and no request 
has been filed.



Sec. 518.6  When will a certificate of self-regulation become effective?

    A certificate of self-regulation shall become effective on January 1 
of the year following the year in which the Commission determines that a 
certificate will issue. Complete petitions are due no later than June 
30. No petitions will be considered for the following January 1 
effective date that have not been received by June 30 of the previous 
year. Petitions will be reviewed and investigated in chronological order 
based on the date of receipt of a complete petition. The Commission will 
announce its determinations on December 1 for all those reviews and 
investigations it completes.



Sec. 518.7  If a tribe holds a certificate of self-regulation, is it
required to report information to the Commission to maintain its

self-regulatory status?

    Yes. Each tribe that holds a certificate of self-regulation shall be 
required to submit a self-regulation report annually to the Commission 
in order to maintain its self-regulatory status. Such report shall set 
forth information to establish that the tribe has continuously met the 
eligibility requirements of Sec. 518.2 and the approval requirements of 
Sec. 518.4 and shall include a report, with supporting documentation, 
including a sworn statement signed by an authorized tribal official, 
which explains how tribal net gaming revenues were used in accordance 
with the requirements of 25 U.S.C. 2710(b)(2)(B)''. The annual report 
shall be filed with the Commission on April 15th of each year following 
the first year of self-regulation. Failure to file such report shall be 
grounds for the removal of a certificate under Sec. 518.8.



Sec. 518.8  Does a tribe that holds a certificate of self-regulation 
have a continuing duty to advise the Commission of any information?

    Yes. A tribe that holds a certificate of self-regulation has a 
continuing duty to advise immediately the Commission of any 
circumstances that may reasonably cause the Commission to review the 
tribe's certificate of self-regulation. Failure to do so is grounds for 
removal of a certificate of self-regulation. Such circumstances may 
include, but are not limited to: a change in management contractor; 
financial instability; or any other factors that are material to the 
decision to grant a certificate of self regulation.



Sec. 518.9  Are any of the investigative or enforcement powers of 
the Commission limited by the issuance of a certificate of self-regulation?

    No. Subject to the provisions of 25 U.S.C. 2710(c)(5)(A) the 
Commission retains its investigative and enforcement powers over all 
class II gaming tribes

[[Page 53]]

notwithstanding the issuance of a certificate of self-regulation. The 
Commission shall retain its powers to investigate and bring enforcement 
actions for violations of the Indian Gaming Regulatory Act, accompanying 
regulations, and violations of tribal gaming ordinances.



Sec. 518.10  Under what circumstances may the Commission remove a
certificate of self-regulation?

    The Commission may, after an opportunity for a hearing, remove a 
certificate of self-regulation by a majority vote of its members if it 
determines that the tribe no longer meets the eligiblity criteria of 
Sec. 518.2, the approval criteria of Sec. 518.4, the requirements of 
Sec. 518.7 or the requirements of Sec. 518.8. The Commission shall 
provide the tribe with prompt notice of the Commission's intent to 
remove 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 Sec. 518. 11. The decision to 
remove a certificate is appealable to Federal District Court pursuant to 
25 U.S.C. 2714.



Sec. 518.11  May a tribe request a hearing on the Commission's 
proposal to remove its certificate?

    Yes. A tribe may request a hearing regarding the Commission's 
proposal to remove a certificate of self regulation under Sec. 518.10. 
Such a request shall be filed with the Commission within thirty (30) 
days after the tribe receives notice of the Commission's action. Failure 
to request a hearing within the time provided by this section shall 
constitute a waiver of the right to a hearing.



Sec. 518.12  May a tribe request reconsideration by the Commission 
of a denial of a petition or a removal of a certificate of self-regulation?

    Yes. A tribe may file a request for reconsideration of a denial of a 
petition or a removal of a certificate of self-regulation within 30 days 
of receipt of the denial or removal. Such request shall set forth the 
basis for the request, specifically identifying those Commission 
findings which the tribe believes to be erroneous. The Commission shall 
issue a final decision within 30 days of receipt of the request. If the 
Commission fails to issue a decision within 30 days, the request shall 
be considered to be disapproved.



PART 519_SERVICE--Table of Contents




Sec.
519.1 Designation of an agent by a tribe.
519.2 Designation of an agent by a management contractor or a tribal 
          operator.
519.3 Methods of service.
519.4 Copy of any official determination, order, or notice of violation.

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

    Source: 58 FR 5810, Jan. 22, 1993, unless otherwise noted.



Sec. 519.1  Designation of an agent by a tribe.

    By written notification to the Commission, a tribe shall designate 
an agent for service of any official determination, order, or notice of 
violation.



Sec. 519.2  Designation of an agent by a management contractor or a 
tribal operator.

    By written notification to the Commission, a management contractor 
or a tribal operator shall designate an agent for service of any 
official determination, order, or notice of violation.



Sec. 519.3  Methods of service.

    (a) The Chairman shall serve any official determination, order, or 
notice of violation by:
    (1) Delivering a copy to a designated agent;
    (2) Delivering a copy to the person who is the subject of the 
official determination, order, or notice of violation;
    (3) Delivering a copy to the individual who, after reasonable 
inquiry, appears to be in charge of the gaming operation that is the 
subject of the official determination, order, or notice of violation;
    (4) Mailing to the person who is the subject of the official 
determination, order, or notice of violation or to his or her designated 
agent at the last known address. Service by mail is complete upon 
mailing; or
    (5) Transmitting a facsimile to the person who is the subject of the 
official

[[Page 54]]

determination, order, or notice of violation or to his or her designated 
agent at the last known facsimile number. Service by facsimile is 
complete upon transmission.
    (b) Delivery of a copy means: Handing it to the person or designated 
agent (or attorney for either); leaving a copy at the person's, agent's 
or attorney's office with a clerk or other person in charge thereof; if 
there is no one in charge, leaving it in a conspicuous place therein; 
or, if the office is closed or the person to be served has no office, 
leaving it at the person's dwelling house or usual place of abode with 
some person of suitable age and discretion then residing therein.
    (c) Service shall not be deemed incomplete because of refusal to 
accept.



Sec. 519.4  Copy of any official determination, order, or notice 
of violation.

    The Commission shall transmit a copy of any official determination, 
order, or notice of violation to the tribal chairman, the designated 
tribal agent under Sec. 519.1, and to the relevant tribal gaming 
authority. The Commission shall transmit such copy as expeditiously as 
possible. Service under Sec. 519.3 shall not depend on a copy being 
sent to the appropriate tribal chairman, the designated tribal agent or 
to the relevant tribal gaming authority.

[[Page 55]]



     SUBCHAPTER B_APPROVAL OF CLASS II AND CLASS III ORDINANCES AND 
                               RESOLUTIONS



                        PARTS 520	521 [RESERVED]



PART 522_SUBMISSION OF GAMING ORDINANCE OR RESOLUTION--
Table of Contents




Sec.
522.1 Scope of this part.
522.2 Submission requirements.
522.3 Amendment.
522.4 Approval requirements for class II ordinances.
522.5 Disapproval of a class II ordinance.
522.6 Approval requirements for class III ordinances.
522.7 Disapproval of a class III ordinance.
522.8 Publication of class III ordinance and approval.
522.9 Substitute approval.
522.10 Individually owned class II and class III gaming operations other 
          than those operating on September 1, 1986.
522.11 Individually owned class II gaming operations operating on 
          September 1, 1986.
522.12 Revocation of class III gaming.

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

    Source: 58 FR 5810, Jan. 22, 1993, unless otherwise noted.



Sec. 522.1  Scope of this part.

    This part applies to any gaming ordinance or resolution adopted by a 
tribe after February 22, 1993. Part 523 of this chapter applies to all 
existing gaming ordinances or resolutions.

[58 FR 5810, Jan. 22, 1993, as amended at 58 FR 16494, Mar. 29, 1993]



Sec. 522.2  Submission requirements.

    A tribe shall submit to the Chairman all of the following 
information with a request for approval of a class II or class III 
ordinance or resolution:
    (a) One copy on 8\1/2\x11 paper of an 
ordinance or resolution certified as authentic by an authorized tribal 
official and that meets the approval requirements in Sec. 522.4(b) or 
522.6 of this part;
    (b) A description of procedures to conduct or cause to be conducted 
background investigations on key employees and primary management 
officials and to ensure that key employees and primary management 
officials are notified of their rights under the Privacy Act as 
specified in Sec. 556.2 of this chapter;
    (c) A description of procedures to issue tribal licenses to primary 
management officials and key employees;
    (d) Copies of all tribal gaming regulations;
    (e) When an ordinance or resolution concerns class III gaming, a 
copy of the tribal-state compact or procedures as prescribed by the 
Secretary;
    (f) A description of procedures for resolving disputes between the 
gaming public and the tribe or the management contractor;
    (g) Designation of an agent for service under Sec. 519.1 of this 
chapter; and
    (h) Identification of a law enforcement agency that will take 
fingerprints and a description of procedures for conducting a criminal 
history check by a law enforcement agency. Such a criminal history check 
shall include a check of criminal history records information maintained 
by the Federal Bureau of Investigation.
    (i) A tribe shall provide Indian lands or environmental and public 
health and safety documentation that the Chairman may in his or her 
discretion request as needed.

[58 FR 5810, Jan. 22, 1993, as amended at 58 FR 16494, Mar. 29, 1993; 73 
FR 6029, Feb. 1, 2008]



Sec. 522.3  Amendment.

    (a) Within 15 days after adoption, a tribe shall submit for the 
Chairman's approval any amendment to an ordinance or resolution.
    (b) A tribe shall submit for the Chairman's approval any amendment 
to the submissions made under Sec. Sec. 522.2(b) through (h) of this 
part within 15 days after adoption of such amendment.



Sec. 522.4  Approval requirements for class II ordinances.

    No later than 90 days after the submission to the Chairman under 
Sec. 522.2 of this part, the Chairman shall approve the class II 
ordinance or resolution if the Chairman finds that--

[[Page 56]]

    (a) A tribe meets the submission requirements contained in Sec. 
522.2 of this part; and
    (b) The class II ordinance or resolution provides that--
    (1) The tribe shall have the sole proprietary interest in and 
responsibility for the conduct of any gaming operation unless it elects 
to allow individually owned gaming under either Sec. 522.10 or Sec. 
522.11 of this part;
    (2) A tribe shall use net revenues from any tribal gaming or from 
any individually owned games only for one or more of the following 
purposes:
    (i) To fund tribal government operations or programs;
    (ii) To provide for the general welfare of the tribe and its members 
(if a tribe elects to make per capita distributions, the plan must be 
approved by the Secretary of the Interior under 25 U.S.C. 2710(b)(3));
    (iii) To promote tribal economic development;
    (iv) To donate to charitable organizations; or
    (v) To help fund operations of local government agencies;
    (3) A tribe shall cause to be conducted independent audits of gaming 
operations annually and shall submit the results of those audits to the 
Commission;
    (4) All gaming related contracts that result in purchases of 
supplies, services, or concessions for more than $25,000 in any year 
(except contracts for professional legal or accounting services) shall 
be specifically included within the scope of the audit conducted under 
paragraph (b)(3) of this section;
    (5) A tribe shall perform background investigations and issue 
licenses for key employees and primary management officials according to 
requirements that are at least as stringent as those in parts 556 and 
558 of this chapter;
    (6) A tribe shall issue a separate license to each place, facility, 
or location on Indian lands where a tribe elects to allow class II 
gaming; and
    (7) A tribe shall construct, maintain and operate a gaming facility 
in a manner that adequately protects the environment and the public 
health and safety.



Sec. 522.5  Disapproval of a class II ordinance.

    No later than 90 days after a tribe submits an ordinance for 
approval under Sec. 522.2 of this part, the Chairman may disapprove an 
ordinance if he or she determines that a tribe failed to comply with the 
requirements of Sec. 522.2 or Sec. 522.4(b) of this part. The Chairman 
shall notify a tribe of its right to appeal under part 524 of this 
chapter. A disapproval shall be effective immediately unless appealed 
under part 524 of this chapter.



Sec. 522.6  Approval requirements for class III ordinances.

    No later than 90 days after the submission to the Chairman under 
Sec. 522.2 of this part, the Chairman shall approve the class III 
ordinance or resolution if--
    (a) A tribe follows the submission requirements contained in Sec. 
522.2 of this part;
    (b) The ordinance or resolution meets the requirements contained in 
Sec. 522.4(b) (2), (3), (4), (5), (6), and (7) of this part; and
    (c) The tribe shall have the sole proprietary interest in and 
responsibility for the conduct of any gaming operation unless it elects 
to allow individually owned gaming under Sec. 522.10 of this part.



Sec. 522.7  Disapproval of a class III ordinance.

    (a) Notwithstanding compliance with the requirements of Sec. 522.6 
of this part and no later than 90 days after a submission under Sec. 
522.2 of this part, the Chairman shall disapprove an ordinance or 
resolution and notify a tribe of its right of appeal under part 524 of 
this chapter if the Chairman determines that--
    (1) A tribal governing body did not adopt the ordinance or 
resolution in compliance with the governing documents of a tribe; or
    (2) A tribal governing body was significantly and unduly influenced 
in the adoption of the ordinance or resolution by a person having a 
direct or indirect financial interest in a management contract, a person 
having management responsibility for a management contract, or their 
agents.

[[Page 57]]

    (b) A disapproval shall be effective immediately unless appealed 
under part 524 of this chapter.



Sec. 522.8  Publication of class III ordinance and approval.

    The Chairman shall publish a class III tribal gaming ordinance or 
resolution in the Federal Register along with the Chairman's approval 
thereof.



Sec. 522.9  Substitute approval.

    If the Chairman fails to approve or disapprove an ordinance or 
resolution submitted under Sec. 522.2 of this part within 90 days after 
the date of submission to the Chairman, a tribal ordinance or resolution 
shall be considered to have been approved by the Chairman but only to 
the extent that such ordinance or resolution is consistent with the 
provisions of the Act and this chapter.



Sec. 522.10  Individually owned class II and class III gaming operations
other than those operating on September 1, 1986.

    For licensing of individually owned gaming operations other than 
those operating on September 1, 1986 (addressed under Sec. 522.11 of 
this part), a tribal ordinance shall require:
    (a) That the gaming operation be licensed and regulated under an 
ordinance or resolution approved by the Chairman;
    (b) That income to the tribe from an individually owned gaming 
operation be used only for the purposes listed in Sec. 522.4(b)(2) of 
this part;
    (c) That not less than 60 percent of the net revenues be income to 
the Tribe;
    (d) That the owner pay an assessment to the Commission under Sec. 
514.1 of this chapter;
    (e) Licensing standards that are at least as restrictive as those 
established by State law governing similar gaming within the 
jurisdiction of the surrounding State; and
    (f) Denial of a license for any person or entity that would not be 
eligible to receive a State license to conduct the same activity within 
the jurisdiction of the surrounding State. State law standards shall 
apply with respect to purpose, entity, pot limits and hours of 
operation.



Sec. 522.11  Individually owned class II gaming operations operating
on September 1, 1986.

    For licensing of individually owned gaming operations operating on 
September 1, 1986, under Sec. 502.3(e) of this chapter, a tribal 
ordinance shall contain the same requirements as those in Sec. 
522.10(a)-(d) of this part.



Sec. 522.12  Revocation of class III gaming.

    A governing body of a tribe, in its sole discretion and without the 
approval of the Chairman, may adopt an ordinance or resolution revoking 
any prior ordinance or resolution that authorizes class III gaming.
    (a) A tribe shall submit to the Chairman on 8\1/
2\x11 paper one copy of any revocation ordinance 
or resolution certified as authentic by an authorized tribal official.
    (b) The Chairman shall publish such ordinance or resolution in the 
Federal Register and the revocation provided by such ordinance or 
resolution shall take effect on the date of such publication.
    (c) Notwithstanding any other provision of this section, any person 
or entity operating a class III gaming operation on the date of 
publication in the Federal Register under paragraph (b) of this section 
may, during a one-year period beginning on the date of publication, 
continue to operate such operation in conformance with a tribal-state 
compact.
    (d) A revocation shall not affect--
    (1) Any civil action that arises during the one-year period 
following publication of the revocation; or
    (2) Any crime that is committed during the one-year period following 
publication of the revocation.



PART 523_REVIEW AND APPROVAL OF EXISTING ORDINANCES OR RESOLUTIONS--
Table of Contents




Sec.
523.1 Scope of this part.
523.2 Submission requirements.
523.3 Review of an ordinance or resolution.
523.4 Review of an amendment.

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

[[Page 58]]


    Source: 58 FR 5812, Jan. 22, 1993, unless otherwise noted.



Sec. 523.1  Scope of this part.

    This part applies to a class II or a class III gaming ordinance or 
resolution enacted by a tribe prior to February 22, 1993, and that has 
not been submitted to the Chairman.

[58 FR 5810, Jan. 22, 1993, as amended at 58 FR 16494, Mar. 29, 1993]



Sec. 523.2  Submission requirements.

    (a) Within 60 days after a request by the Chairman, a tribe shall:
    (1) Submit for review and approval all items required under Sec. 
522.2 of this chapter; and
    (2) For each gaming operation submit the financial statements for 
the previous fiscal year and the most recent audit report and management 
letter.
    (b) If a tribe fails to submit all items under Sec. 522.2 of this 
chapter within 60 days, the Chairman shall deem the ordinance or 
resolution disapproved and shall notify the tribe of its right to appeal 
under part 524.



Sec. 523.3  Review of an ordinance or resolution.

    Within 90 days after receipt of a submission under Sec. 523.2 of 
this part, the Chairman shall subject the ordinance or resolution to the 
standards in part 522 of this chapter.
    (a) For class II and class III gaming, if the Chairman determines 
that an ordinance or resolution submitted under this part meets the 
approval and submission requirements of part 522 of this chapter and the 
Chairman finds the annual financial statements are included in the 
submission, the Chairman shall approve the ordinance or resolution.
    (b) If an ordinance or resolution fails to meet the requirements for 
review under part 522 of this chapter or if a tribe fails to submit the 
annual financial statement, the Chairman shall notify a tribe in writing 
of the specific areas of noncompliance.
    (c) The Chairman shall allow a tribe 120 days from receipt of such 
notice to bring the ordinance or resolution into compliance with the 
requirements of part 522 of this chapter or to submit an annual 
financial statement, or both.
    (d) At the end of the 120-day period provided under paragraph (c) of 
this section, or earlier if the tribe notifies the Chairman that it 
intends not to comply, the Chairman shall disapprove any ordinance or 
resolution if a tribe fails to amend according to the notification made 
under paragraph (b) of this section.



Sec. 523.4  Review of an amendment.

    Within 90 days after receipt of an amendment, the Chairman shall 
subject the amendment to the standards in part 522 of this chapter.
    (a) If the Chairman determines that an amendment meets the approval 
and submission requirements of part 522 of this chapter, the Chairman 
will approve the amendment.
    (b) If an amendment fails to meet the requirements for review under 
part 522 of this chapter, the Chairman shall notify the tribe in writing 
of the specific areas of noncompliance.
    (c) If the Chairman fails to disapprove a submission under paragraph 
(a) or (b) of this section within 90 days after the date of submission 
to the Chairman, a tribal amendment shall be considered to have been 
approved by the Chairman but only to the extent that such amendment is 
consistent with the provisions of the Act and this chapter.



PART 524_APPEALS--Table of Contents




Sec.
524.1 Appeals by a tribe.
524.2 Limited participation by an entity other than a tribe.
524.3 Decisions on appeals.

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

    Source: 58 FR 5812, Jan. 22, 1993, unless otherwise noted.



Sec. 524.1  Appeal by a tribe.

    A tribe may appeal disapproval of a gaming ordinance, resolution or 
amendment under part 522 or 523 of this chapter. An appeal shall be 
filed with the Commission within 30 days after the Chairman serves his 
or her determination under part 519 of this chapter. Such an appeal 
shall state succinctly why the tribe believes the Chairman's 
determination to be erroneous, and shall include supporting

[[Page 59]]

documentation, if any. Failure to file an appeal within the time 
provided by this section shall result in a waiver of the opportunity for 
an appeal.



Sec. 524.2  Limited participation by an entity other than a tribe.

    (a) An entity other than a tribe may request to participate in an 
appeal of a disapproval under part 522 or part 523 of this chapter by 
filing a written submission. Such written submission shall:
    (1) State the property, financial, or other interest of the party in 
the appeal; and
    (2) The reasons why the action of the Chairman in disapproving an 
ordinance, resolution or amendment may be in error or the reasons why 
the Chairman's disapproval should be upheld by the Commission. The 
reasons shall address the approval requirements under Sec. Sec. 522.4, 
522.5, 522.6, 522.7, 523.2 of this chapter.
    (b) The Commission shall forward a copy of a request under paragraph 
(a) of this section to the party of record under Sec. 524.1 of this 
part.
    (c) The Commission shall review a request under this section and 
timely notify the requester of its determination. Such notification 
shall supply the reasons for the determination. The Commission shall 
also notify the party of record on appeal under Sec. 524.1 of its 
determination.
    (d) The Commission shall limit the extent of participation by an 
entity other than a tribe to one written submission as described under 
paragraph (a) of this section, unless the Commission determines further 
participation would substantially contribute to the record.



Sec. 524.3  Decisions on appeals.

    (a) Within 90 days after it receives the appeal, the Commission 
shall render its decision on the appeal.
    (b) The Commission shall notify the party of record under Sec. 
524.1 of this part and any limited participant under Sec. 524.2 of this 
part of its final decision and the reasons supporting it.

                        PARTS 525	529 [RESERVED]

[[Page 60]]



               SUBCHAPTER C_MANAGEMENT CONTRACT PROVISIONS



                           PART 530 [RESERVED]



PART 531_CONTENT OF MANAGEMENT CONTRACTS--Table of Contents




Sec.
531.1 Required provisions.
531.2 Prohibited provisions.

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

    Source: 58 FR 5828, Jan. 22, 1993, unless otherwise noted.



Sec. 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 Sec. 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 Sec. 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:
    (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.

[[Page 61]]

    (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.

[74 FR 36934, July 27, 2009]



Sec. 531.2  Prohibited provisions.

    A management contract shall not transfer or, in any other manner, 
convey any interest in land or other real property, unless specific 
statutory authority exists and unless clearly specified in writing in 
the contract.

                           PART 532 [RESERVED]



PART 533_APPROVAL OF MANAGEMENT CONTRACTS--Table of Contents




Sec.
533.1 Requirement for review and approval.
533.2 Time for submitting management contracts and amendments.
533.3 Submission of management contract for approval.
533.4 Action by the Chairman.
533.5 [Reserved]
533.6 Approval and disapproval.
533.7 Void agreements.

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

    Source: 58 FR 5829, Jan. 22, 1993, unless otherwise noted.



Sec. 533.1  Requirement for review and approval.

    Subject to the Chairman's approval, an Indian tribe may enter into a 
management contract for the operation of a class II or class III gaming 
activity.
    (a) Such contract shall become effective upon approval by the 
Chairman.
    (b) Contract approval shall be evidenced by a Commission document 
dated and signed by the Chairman. No other means of approval shall be 
valid.

[58 FR 5829, Jan. 22, 1993, as amended at 74 FR 36935, July 27, 2009]

[[Page 62]]



Sec. 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.

[74 FR 36935, July 27, 2009]



Sec. 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 Sec. Sec. 
537.1(a) and 537.1(c)(1) of this chapter, and either:
    (1) The information required under Sec. 537.1(b)(1) of this chapter 
for class II gaming contracts and Sec. 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 Sec. 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 Sec. 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.

[74 FR 36935, July 27, 2009]



Sec. 533.4  Action by the Chairman.

    (a) The Chairman shall approve or disapprove a management contract, 
applying the standards contained in Sec. 533.6 of this part, within 180 
days of the date on which the Chairman receives a complete submission 
under Sec. 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.

[74 FR 36935, July 27, 2009]



Sec. 533.5  [Reserved]



Sec. 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 Sec. 533.3 of this part. 
Failure to comply with the standards of part 531 of this chapter or 
Sec. 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:

[[Page 63]]

    (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 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.

[74 FR 36935, July 27, 2009]



Sec. 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.

[74 FR 36936, July 27, 2009]

                           PART 534 [RESERVED]



PART 535_POST-APPROVAL PROCEDURES--Table of Contents




Sec.
535.1 Amendments.
535.2 Assignments.
535.3 Post-approval noncompliance.

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

    Source: 58 FR 5830, Jan. 22, 1993, unless otherwise noted.



Sec. 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 Sec. 537.1(a) 
and Sec. 537.1(c)(1) of this chapter:
    (i) If the amendment involves a change in person(s) having a direct 
or

[[Page 64]]

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 Sec. 537.1(b)(1) of this chapter 
for class II gaming contracts or Sec. 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 Sec. 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 Sec. 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 Sec. 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 Sec. 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.

[74 FR 36936, July 27, 2009]



Sec. 535.2  Assignments.

    Subject to the approval of the Chairman, a management contractor may 
assign its rights under a management contract to the extent permitted by 
the contract. A tribe or a management contractor shall submit such 
assignment to the Chairman upon execution. The Chairman shall approve or 
disapprove an assignment applying the standards of, and within the time 
provided by Sec. Sec. 535.1(d) and 535.1(e) of this part.



Sec. 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.

[74 FR 36936, July 27, 2009]

[[Page 65]]

                           PART 536 [RESERVED]



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

MANAGEMENT CONTRACT--Table of Contents




Sec.
537.1 Applications for approval.
537.2 Submission of background information.
537.3 Fees for background investigations.
537.4 Determinations.

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

    Source: 58 FR 5831, Jan. 22, 1993, unless otherwise noted.



Sec. 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.

[[Page 66]]

    (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 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

[[Page 67]]

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).

[74 FR 36937, July 27, 2009]



Sec. 537.2  Submission of background information.

    A management contractor shall submit the background information 
required in Sec. 537.1 of this part:
    (a) In sufficient time to permit the Commission to complete its 
background investigation by the time the individual is to assume 
management responsibility for, or the management contractor is to begin 
managing, the gaming operation; and
    (b) Within ten (10) days of any proposed change in financial 
interest.



Sec. 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.

[74 FR 36938, July 27, 2009]



Sec. 537.4  Determinations.

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

                           PART 538 [RESERVED]



PART 539_APPEALS--Table of Contents




Sec.
539.1 Scope of this part.

[[Page 68]]

539.2 Appeals.

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

    Source: 58 FR 5832, Jan. 22, 1993, unless otherwise noted.



Sec. 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 Sec. 535.3 
and part 577 of this chapter.

[74 FR 36938, July 27, 2009]



Sec. 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.

[74 FR 36938, July 27, 2009]

[[Page 69]]



                       SUBCHAPTER D_HUMAN SERVICES



                        PARTS 540	541 [RESERVED]



PART 542_MINIMUM INTERNAL CONTROL STANDARDS--Table of Contents




Sec.
542.1 What does this part cover?
542.2 What are the definitions for this part?
542.3 How do I comply with this part?
542.4 How do these regulations affect minimum internal control standards 
          establish in a Tribal-State compact?
542.5 How do these regulations affect state jurisdiction?
542.6 Does this part apply to small and charitable gaming operations?
542.7 What are the minimum internal control standards for bingo?
542.8 What are the minimum internal control standards for pull tabs?
542.9 What are the minimum internal control standards for card games?
542.10 What are the minimum internal control standards for keno?
542.11 What are the minimum internal control standards for pari-mutuel 
          wagering?
542.12 What are the minimum internal control standards for table games?
542.13 What are the minimum internal control standards for gaming 
          machines?
542.14 What are the minimum internal control standards for the cage?
542.15 What are the minimum internal control standards for credit?
542.16 What are the minimum internal control standards for information 
          technology?
542.17 What are the minimum internal control standards for complimentary 
          services or items?
542.18 How does a gaming operation apply for a variance from the 
          standards of the part?
542.19 What are the minimum internal control standards for accounting?
542.20 What is a Tier A gaming operation?
542.21 What are the minimum internal control standards for drop and 
          count for Tier A gaming operations?
542.22 What are the minimum internal control standards for internal 
          audit for Tier A gaming operations?
542.23 What are the minimum internal control standards for surveillance 
          for Tier A gaming operations?
542.30 What is a Tier B gaming operation?
542.31 What are the minimum internal control standards for drop and 
          count for Tier B gaming operations?
542.32 What are the minimum internal control standards for internal 
          audit for Tier B gaming operations?
542.33 What are the minimum internal control standards for surveillance 
          for Tier B gaming operations?
542.40 What is a Tier C gaming operation?
542.41 What are the minimum internal control standards for drop and 
          count for Tier C gaming operations?
542.42 What are the minimum internal control standards for internal 
          audit for Tier C gaming operations?
542.43 What are the minimum internal control standards for surveillance 
          for a Tier C gaming operation?

    Authority: 25 U.S.C. 2702(c), 2706(b)(10).

    Source: 67 FR 43400, June 27, 2002, unless otherwise noted.



Sec. 542.1  What does this part cover?

    This part establishes the minimum internal control standards for 
gaming operations on Indian land.



Sec. 542.2  What are the definitions for this part?

    The definitions in this section shall apply to all sections of this 
part unless otherwise noted.
    Account access card means an instrument used to access customer 
accounts for wagering at a gaming machine. Account access cards are used 
in connection with a computerized account database. Account access cards 
are not ``smart cards.''
    Accountability means all items of cash, chips, coins, tokens, 
plaques, receivables, and customer deposits constituting the total 
amount for which the bankroll custodian is responsible at a given time.
    Accumulated credit payout means credit earned in a gaming machine 
that is paid to a customer manually in lieu of a machine payout.
    Actual hold percentage means the percentage calculated by dividing 
the win by the drop or coin-in (number of credits wagered). Can be 
calculated for individual tables or gaming machines, type of table 
games, or gaming machines on a per day or cumulative basis.
    Ante means a player's initial wager or predetermined contribution to 
the pot before the dealing of the first hand.

[[Page 70]]

    Betting station means the area designated in a pari-mutuel area that 
accepts wagers and pays winning bets.
    Betting ticket means a printed, serially numbered form used to 
record the event upon which a wager is made, the amount and date of the 
wager, and sometimes the line or spread (odds).
    Bill acceptor means the device that accepts and reads cash by 
denomination in order to accurately register customer credits.
    Bill acceptor canister means the box attached to the bill acceptor 
used to contain cash received by bill acceptors.
    Bill acceptor canister release key means the key used to release the 
bill acceptor canister from the bill acceptor device.
    Bill acceptor canister storage rack key means the key used to access 
the storage rack where bill acceptor canisters are secured.
    Bill acceptor drop means cash contained in bill acceptor canisters.
    Bill-in meter means a meter included on a gaming machine accepting 
cash that tracks the number of bills put in the machine.
    Boxperson means the first-level supervisor who is responsible for 
directly participating in and supervising the operation and conduct of a 
craps game.
    Breakage means the difference between actual bet amounts paid out by 
a racetrack to bettors and amounts won due to bet payments being rounded 
up or down. For example, a winning bet that should pay $4.25 may be 
actually paid at $4.20 due to rounding.
    Cage means a secure work area within the gaming operation for 
cashiers and a storage area for the gaming operation bankroll.
    Cage accountability form means an itemized list of the components 
that make up the cage accountability.
    Cage credit means advances in the form of cash or gaming chips made 
to customers at the cage. Documented by the players signing an IOU or a 
marker similar to a counter check.
    Cage marker form means a document, signed by the customer, 
evidencing an extension of credit at the cage to the customer by the 
gaming operation.
    Calibration module means the section of a weigh scale used to set 
the scale to a specific amount or number of coins to be counted.
    Call bets means a wager made without cash or chips, reserved for a 
known customer and includes marked bets (which are supplemental bets 
made during a hand of play). For the purpose of settling a call bet, a 
hand of play in craps is defined as a natural winner (e.g., seven or 
eleven on the come-out roll), a natural loser (e.g., a two, three or 
twelve on the come-out roll), a seven-out, or the player making his 
point, whichever comes first.
    Card game means a game in which the gaming operation is not party to 
wagers and from which the gaming operation receives compensation in the 
form of a rake, a time buy-in, or other fee or payment from a player for 
the privilege of playing.
    Card room bank means the operating fund assigned to the card room or 
main card room bank.
    Cash-out ticket means an instrument of value generated by a gaming 
machine representing a cash amount owed to a customer at a specific 
gaming machine. This instrument may be wagered at other machines by 
depositing the cash-out ticket in the machine bill acceptor.
    Chips means cash substitutes, in various denominations, issued by a 
gaming operation and used for wagering.
    Coin-in meter means the meter that displays the total amount wagered 
in a gaming machine that includes coins-in and credits played.
    Coin meter count machine means a device used in a coin room to count 
coin.
    Coin room means an area where coins and tokens are stored.
    Coin room inventory means coins and tokens stored in the coin room 
that are generally used for gaming machine department operation.
    Commission means the National Indian Gaming Commission.
    Complimentary means a service or item provided at no cost, or at a 
reduced cost, to a customer.
    Count means the total funds counted for a particular game, gaming 
machine, shift, or other period.
    Count room means a room where the coin and cash drop from gaming 
machines, table games, or other games are transported to and counted.

[[Page 71]]

    Count team means personnel that perform either the count of the 
gaming machine drop and/or the table game drop.
    Counter check means a form provided by the gaming operation for the 
customer to use in lieu of a personal check.
    Counter Game means a game in which the gaming operation is a party 
to wagers and wherein the gaming operation documents all wagering 
activity. The term includes, but is not limited to, bingo, keno, and 
pari-mutuel race books. The term does not include table games, card 
games and gaming machines.
    Credit means the right granted by a gaming operation to a customer 
to defer payment of debt or to incur debt and defer its payment.
    Credit limit means the maximum dollar amount of credit assigned to a 
customer by the gaming operation.
    Credit slip means a form used to record either:
    (1) The return of chips from a gaming table to the cage; or
    (2) The transfer of IOUs, markers, or negotiable checks from a 
gaming table to a cage or bankroll.
    Customer deposits means the amounts placed with a cage cashier by 
customers for the customers' use at a future time.
    Deal means a specific pull tab game that has a specific serial 
number associated with each game.
    Dealer means an employee who operates a game, individually or as a 
part of a crew, administering house rules and making payoffs.
    Dedicated camera means a video camera required to continuously 
record a specific activity.
    Deskman means a person who authorizes payment of winning tickets and 
verifies payouts for keno games.
    Draw ticket means a blank keno ticket whose numbers are punched out 
when balls are drawn for the game. Used to verify winning tickets.
    Drop (for gaming machines) means the total amount of cash, cash-out 
tickets, coupons, coins, and tokens removed from drop buckets and/or 
bill acceptor canisters.
    Drop (for table games) means the total amount of cash, chips, and 
tokens removed from drop boxes, plus the amount of credit issued at the 
tables.
    Drop box means a locked container affixed to the gaming table into 
which the drop is placed. The game type, table number, and shift are 
indicated on the box.
    Drop box contents keys means the key used to open drop boxes.
    Drop box release keys means the key used to release drop boxes from 
tables.
    Drop box storage rack keys means the key used to access the storage 
rack where drop boxes are secured.
    Drop bucket means a container located in the drop cabinet (or in a 
secured portion of the gaming machine in coinless/cashless 
configurations) for the purpose of collecting coins, tokens, cash-out 
tickets, and coupons from the gaming machine.
    Drop cabinet means the wooden or metal base of the gaming machine 
that contains the gaming machine drop bucket.
    Drop period means the period of time that occurs between sequential 
drops.
    Earned and unearned take means race bets taken on present and future 
race events. Earned take means bets received on current or present 
events. Unearned take means bets taken on future race events.
    EPROM means erasable programmable read-only memory or other 
equivalent game software media.
    Fill means a transaction whereby a supply of chips, coins, or tokens 
is transferred from a bankroll to a table game or gaming machine.
    Fill slip means a document evidencing a fill.
    Flare means the information sheet provided by the manufacturer that 
sets forth the rules of a particular pull tab game and that is 
associated with a specific deal of pull tabs. The flare shall contain 
the following information:
    (1) Name of the game;
    (2) Manufacturer name or manufacturer's logo;
    (3) Ticket count; and
    (4) Prize structure, which shall include the number of winning pull 
tabs by denomination, with their respective winning symbols, numbers, or 
both.
    Future wagers means bets on races to be run in the future (e.g., 
Kentucky Derby).

[[Page 72]]

    Game server means an electronic selection device, utilizing a random 
number generator.
    Gaming machine means an electronic or electromechanical machine that 
allows a player to play games of chance, some of which may be affected 
by skill, which contains a microprocessor with random number generator 
capability for outcome selection or computer terminal that accesses an 
outcome that is subsequently and randomly selected in drawings that are 
electronically conducted by central computer or other such methods of 
chance selection, whether mechanical or electronic. The machine is 
activated by the insertion of cash or cash equivalents and which awards 
cash, cash equivalents, merchandise, or a written statement of the 
player's accumulated credits, which written statements may be redeemable 
for cash.
    Gaming machine analysis report means a report prepared that compares 
theoretical to actual hold by a gaming machine on a monthly or other 
periodic basis.
    Gaming machine booths and change banks means a booth or small cage 
in the gaming machine area used to provide change to players, store 
change aprons and extra coin, and account for jackpot and other payouts.
    Gaming machine count means the total amount of coins, tokens, and 
cash removed from a gaming machine. The amount counted is entered on the 
Gaming Machine Count Sheet and is considered the drop. Also, the 
procedure of counting the coins, tokens, and cash or the process of 
verifying gaming machine coin and token inventory.
    Gaming machine pay table means the reel strip combinations 
illustrated on the face of the gaming machine that can identify payouts 
of designated coin amounts.
    Gaming operation accounts receivable (for gaming operation credit) 
means credit extended to gaming operation customers in the form of 
markers, returned checks, or other credit instruments that have not been 
repaid.
    Gross gaming revenue means annual total amount of cash wagered on 
class II and class III games and admission fees (including table or card 
fees), less any amounts paid out as prizes or paid for prizes awarded.
    Hold means the relationship of win to coin-in for gaming machines 
and win to drop for table games.
    Hub means the person or entity that is licensed to provide the 
operator of a pari-mutuel wagering operation information related to 
horse racing that is used to determine winners of races or payoffs on 
wagers accepted by the pari-mutuel wagering operation.
    Internal audit means persons who perform an audit function of a 
gaming operation that are independent of the department subject to 
audit. Independence is obtained through the organizational reporting 
relationship, as the internal audit department shall not report to 
management of the gaming operation. Internal audit activities should be 
conducted in a manner that permits objective evaluation of areas 
examined. Internal audit personnel may provide audit coverage to more 
than one operation within a Tribe's gaming operation holdings.
    Issue slip means a copy of a credit instrument that is retained for 
numerical sequence control purposes.
    Jackpot payout means the portion of a jackpot paid by gaming machine 
personnel. The amount is usually determined as the difference between 
the total posted jackpot amount and the coins paid out by the machine. 
May also be the total amount of the jackpot.
    Lammer button means a type of chip that is placed on a gaming table 
to indicate that the amount of chips designated thereon has been given 
to the customer for wagering on credit before completion of the credit 
instrument. Lammer button may also mean a type of chip used to evidence 
transfers between table banks and card room banks.
    Linked electronic game means any game linked to two (2) or more 
gaming operations that are physically separate and not regulated by the 
same Tribal gaming regulatory authority.
    Main card room bank means a fund of cash, coin, and chips used 
primarily for poker and pan card game areas. Used to make even cash 
transfers between various games as needed. May be used

[[Page 73]]

similarly in other areas of the gaming operation.
    Marker means a document, signed by the customer, evidencing an 
extension of credit to him by the gaming operation.
    Marker credit play means that players are allowed to purchase chips 
using credit in the form of a marker.
    Marker inventory form means a form maintained at table games or in 
the gaming operation pit that are used to track marker inventories at 
the individual table or pit.
    Marker transfer form means a form used to document transfers of 
markers from the pit to the cage.
    Master credit record means a form to record the date, time, shift, 
game, table, amount of credit given, and the signatures or initials of 
the persons extending the credit.
    Master game program number means the game program number listed on a 
gaming machine EPROM.
    Master game sheet means a form used to record, by shift and day, 
each table game's winnings and losses. This form reflects the opening 
and closing table inventories, the fills and credits, and the drop and 
win.
    Mechanical coin counter means a device used to count coins that may 
be used in addition to or in lieu of a coin weigh scale.
    Meter means an electronic (soft) or mechanical (hard) apparatus in a 
gaming machine. May record the number of coins wagered, the number of 
coins dropped, the number of times the handle was pulled, or the number 
of coins paid out to winning players.
    MICS means minimum internal control standards in this part 542.
    Motion activated dedicated camera means a video camera that, upon 
its detection of activity or motion in a specific area, begins to record 
the activity or area.
    Multi-game machine means a gaming machine that includes more than 
one type of game option.
    Multi-race ticket means a keno ticket that is played in multiple 
games.
    On-line gaming machine monitoring system means a system used by a 
gaming operation to monitor gaming machine meter readings and/or other 
activities on an on-line basis.
    Order for credit means a form that is used to request the transfer 
of chips or markers from a table to the cage. The order precedes the 
actual transfer transaction that is documented on a credit slip.
    Outstation means areas other than the main keno area where bets may 
be placed and tickets paid.
    Par percentage means the percentage of each dollar wagered that the 
house wins (i.e., gaming operation advantage).
    Par sheet means a specification sheet for a gaming machine that 
provides machine hold percentage, model number, hit frequency, reel 
combination, number of reels, number of coins that can be accepted, and 
reel strip listing.
    Pari-mutuel wagering means a system of wagering on horse races, jai-
alai, greyhound, and harness racing, where the winners divide the total 
amount wagered, net of commissions and operating expenses, proportionate 
to the individual amount wagered.
    Payment slip means that part of a marker form on which customer 
payments are recorded.
    Payout means a transaction associated with a winning event.
    PIN means the personal identification number used to access a 
player's account.
    Pit podium means a stand located in the middle of the tables used by 
gaming operation supervisory personnel as a workspace and a record 
storage area.
    Pit supervisor means the employee who supervises all games in a pit.
    Player tracking system means a system typically used in gaming 
machine departments that can record the gaming machine play of 
individual customers.
    Post time means the time when a pari-mutuel track stops accepting 
bets in accordance with rules and regulations of the applicable 
jurisdiction.
    Primary and secondary jackpots means promotional pools offered at 
certain card games that can be won in addition to the primary pot.
    Progressive gaming machine means a gaming machine, with a payoff 
indicator, in which the payoff increases as it is played (i.e., deferred 
payout). The payoff amount is accumulated, displayed on a machine, and 
will remain until a player lines up the jackpot

[[Page 74]]

symbols that result in the progressive amount being paid.
    Progressive jackpot means deferred payout from a progressive gaming 
machine.
    Progressive table game means table games that offer progressive 
jackpots.
    Promotional payout means merchandise or awards given to players by 
the gaming operation based on a wagering activity.
    Promotional progressive pots and/or pools means funds contributed to 
a table game or card game by and for the benefit of players. Funds are 
distributed to players based on a predetermined event.
    Rabbit ears means a device, generally V-shaped, that holds the 
numbered balls selected during a keno or bingo game so that the numbers 
are visible to players and employees.
    Rake means a commission charged by the house for maintaining or 
dealing a game such as poker.
    Rake circle means the area of a table where rake is placed.
    Random number generator means a device that generates numbers in the 
absence of a pattern. May be used to determine numbers selected in 
various games such as keno and bingo. Also commonly used in gaming 
machines to generate game outcome.
    Reel symbols means symbols listed on reel strips of gaming machines.
    Rim credit means extensions of credit that are not evidenced by the 
immediate preparation of a marker and does not include call bets.
    Runner means a gaming employee who transports chips/cash to or from 
a gaming table and a cashier.
    SAM means a screen-automated machine used to accept pari-mutuel 
wagers. SAM's also pay winning tickets in the form of a voucher, which 
is redeemable for cash.
    Series number means the unique identifying number printed on each 
sheet of bingo paper that identifies the bingo paper as a series or 
packet. The series number is not the free space or center space number 
located on the bingo paper.
    Shift means an eight-hour period, unless otherwise approved by the 
Tribal gaming regulatory authority, not to exceed twenty-four (24) 
hours.
    Shill means an employee financed by the house and acting as a player 
for the purpose of starting or maintaining a sufficient number of 
players in a game.
    Short pay means a payoff from a gaming machine that is less than the 
listed amount.
    Soft count means the count of the contents in a drop box or a bill 
acceptor canister.
    Statistical drop means total amount of money, chips and tokens 
contained in the drop boxes, plus pit credit issued, minus pit credit 
payments in cash in the pit.
    Statistical win means closing bankroll, plus credit slips for cash, 
chips or tokens returned to the cage, plus drop, minus opening bankroll, 
minus fills to the table, plus marker credits.
    Sufficient clarity means use of monitoring and recording at a 
minimum of twenty (20) frames per second. Multiplexer tape recordings 
are insufficient to satisfy the requirement of sufficient clarity.
    Surveillance room means a secure location(s) in a gaming operation 
used primarily for casino surveillance.
    Surveillance system means a system of video cameras, monitors, 
recorders, video printers, switches, selectors, and other ancillary 
equipment used for casino surveillance.
    Table games means games that are banked by the house or a pool 
whereby the house or the pool pays all winning bets and collects from 
all losing bets.
    Table inventory means the total coins, chips, and markers at a 
table.
    Table inventory form means the form used by gaming operation 
supervisory personnel to document the inventory of chips, coins, and 
tokens on a table at the beginning and ending of a shift.
    Table tray means the container located on gaming tables where chips, 
coins, or cash are stored that are used in the game.
    Take means the same as earned and unearned take.
    Theoretical hold means the intended hold percentage or win of an 
individual gaming machine as computed by reference to its payout 
schedule and reel strip settings or EPROM.

[[Page 75]]

    Theoretical hold worksheet means a worksheet provided by the 
manufacturer for all gaming machines that indicate the theoretical 
percentages that the gaming machine should hold based on adequate levels 
of coin-in. The worksheet also indicates the reel strip settings, number 
of credits that may be played, the payout schedule, the number of reels 
and other information descriptive of the particular type of gaming 
machine.
    Tier A means gaming operations with annual gross gaming revenues of 
more than $1 million but not more than $5 million.
    Tier B means gaming operations with annual gross gaming revenues of 
more than $5 million but not more than $15 million.
    Tier C means gaming operations with annual gross gaming revenues of 
more than $15 million.
    Tokens means a coin-like cash substitute, in various denominations, 
used for gambling transactions.
    Tribal gaming regulatory authority means the tribally designated 
entity responsible for gaming regulation.
    Vault means a secure area within the gaming operation where tokens, 
checks, cash, coins, and chips are stored.
    Weigh/count means the value of coins and tokens counted by a weigh 
machine.
    Weigh scale calibration module means the device used to adjust a 
coin weigh scale.
    Weigh scale interface means a communication device between the weigh 
scale used to calculate the amount of funds included in drop buckets and 
the computer system used to record the weigh data.
    Weigh tape means the tape where weighed coin is recorded.
    Wide area progressive gaming machine means a progressive gaming 
machine that is linked to machines in other operations and play on the 
machines affect the progressive amount. As wagers are placed, the 
progressive meters on all of the linked machines increase.
    Win means the net win resulting from all gaming activities. Net win 
results from deducting all gaming losses from all wins prior to 
considering associated operating expenses.
    Win-to-write hold percentage means win divided by write to determine 
hold percentage.
    Wrap means the method of storing coins after the count process has 
been completed, including, but not limited to, wrapping, racking, or 
bagging. May also refer to the total amount or value of the counted and 
stored coins.
    Write means the total amount wagered in keno, bingo, pull tabs, and 
pari-mutuel operations.
    Writer means an employee who writes keno, bingo, pull tabs, or pari-
mutuel tickets. A keno writer usually also makes payouts.

[67 FR 43400, June 27, 2002, as amended at 70 FR 23021, May 4, 2005; 71 
FR 27391, May 11, 2006]



Sec. 542.3  How do I comply with this part?

    (a) Compliance based upon tier. (1) Tier A gaming operations must 
comply with Sec. Sec. 542.1 through 542.18, and Sec. Sec. 542.20 
through 542.23.
    (2) Tier B gaming operations must comply with Sec. Sec. 542.1 
through 542.18, and Sec. Sec. 542.30 through 542.33.
    (3) Tier C gaming operations must comply with Sec. Sec. 542.1 
through 542.18, and Sec. Sec. 542.40 through 542.43.
    (b) Determination of tier. (1) The determination of tier level shall 
be made based upon the annual gross gaming revenues indicated within the 
gaming operation's audited financial statements. Gaming operations 
moving from one tier to another shall have nine (9) months from the date 
of the independent certified public accountant's audit report to achieve 
compliance with the requirements of the new tier.
    (2) The Tribal gaming regulatory authority may extend the deadline 
by an additional six (6) months if written notice is provided to the 
Commission no later than two weeks before the expiration of the nine (9) 
month period.
    (c) Tribal internal control standards. Within six (6) months of June 
27, 2002, each Tribal gaming regulatory authority shall, in accordance 
with the Tribal gaming ordinance, establish and implement tribal 
internal control standards that shall:

[[Page 76]]

    (1) Provide a level of control that equals or exceeds those set 
forth in this part;
    (2) Contain standards for currency transaction reporting that comply 
with 31 CFR part 103;
    (3) Establish standards for games that are not addressed in this 
part; and
    (4) Establish a deadline, which shall not exceed nine (9) months 
from June 27, 2002, by which a gaming operation must come into 
compliance with the tribal internal control standards. However, the 
Tribal gaming regulatory authority may extend the deadline by an 
additional six (6) months if written notice is provided to the 
Commission no later than two weeks before the expiration of the nine (9) 
month period.
    (d) Gaming operations. Each gaming operation shall develop and 
implement an internal control system that, at a minimum, complies with 
the tribal internal control standards.
    (1) Existing gaming operations. All gaming operations that are 
operating on or before June 27, 2002, shall comply with this part within 
the time requirements established in paragraph (c) of this section. In 
the interim, such operations shall continue to comply with existing 
tribal internal control standards.
    (2) New gaming operations. All gaming operations that commence 
operations after August 26, 2002, shall comply with this part before 
commencement of operations.
    (e) Submission to Commission. Tribal regulations promulgated 
pursuant to this part shall not be required to be submitted to the 
Commission pursuant to 25 CFR 522.3(b).
    (f) CPA testing. (1) An independent certified public accountant 
(CPA) shall be engaged to perform ``Agreed-Upon Procedures'' to verify 
that the gaming operation is in compliance with the minimum internal 
control standards (MICS) set forth in this part or a Tribally approved 
variance thereto that has received Commission concurrence. The CPA shall 
report each event and procedure discovered by or brought to the CPA's 
attention that the CPA believes does not satisfy the minimum standards 
or Tribally approved variance that has received Commission concurrence. 
The ``Agreed-Upon Procedures'' may be performed in conjunction with the 
annual audit. The CPA shall report its findings to the Tribe, Tribal 
gaming regulatory authority, and management. The Tribe shall submit two 
copies of the report to the Commission within 120 days of the gaming 
operation's fiscal year end. This regulation is intended to communicate 
the Commission's position on the minimum agreed-upon procedures to be 
performed by the CPA. Throughout these regulations, the CPA's engagement 
and reporting are based on Statements on Standards for Attestation 
Engagements (SSAEs) in effect as of December 31, 2003, specifically SSAE 
10 (``Revision and Recodification Agreed-Upon Procedures 
Engagements.''). If future revisions are made to the SSAEs or new SSAEs 
are adopted that are applicable to this type of engagement, the CPA is 
to comply with any new or revised professional standards in conducting 
engagements pursuant to these regulations and the issuance of the 
agreed-upon procedures report. The CPA shall perform the ``Agreed-Upon 
Procedures'' in accordance with the following:
    (i) As a prerequisite to the evaluation of the gaming operation's 
internal control systems, it is recommended that the CPA obtain and 
review an organization chart depicting segregation of functions and 
responsibilities, a description of the duties and responsibilities of 
each position shown on the organization chart, and an accurate, detailed 
narrative description of the gaming operation's procedures in effect 
that demonstrate compliance.
    (ii) Complete the CPA NIGC MICS Compliance checklists or other 
comparable testing procedures. The checklists should measure compliance 
on a sampling basis by performing walk-throughs, observations and 
substantive testing. The CPA shall complete separate checklists for each 
gaming revenue center, cage and credit, internal audit, surveillance, 
information technology and complimentary services or items. All 
questions on each applicable checklist should be completed. Work-paper 
references are suggested for all ``no'' responses for the results 
obtained during testing (unless a note in the ``W/P Ref'' can explain 
the exception).

[[Page 77]]

    (iii) The CPA shall perform, at a minimum, the following procedures 
in conjunction with the completion of the checklists:
    (A) At least one unannounced observation of each of the following: 
Gaming machine coin drop, gaming machine currency acceptor drop, table 
games drop, gaming machine coin count, gaming machine currency acceptor 
count, and table games count. The AICPA's ``Audits of Casinos'' Audit 
and Accounting Guide states that ``observations of operations in the 
casino cage and count room should not be announced in advance * * *'' 
For purposes of these procedures, ``unannounced'' means that no 
officers, directors, or employees are given advance information 
regarding the dates or times of such observations. The independent 
accountant should make arrangements with the gaming operation and Tribal 
gaming regulatory authority to ensure proper identification of the CPA's 
personnel and to provide for their prompt access to the count rooms.
    (1) The gaming machine coin count observation would include a weigh 
scale test of all denominations using pre-counted coin. The count would 
be in process when these tests are performed, and would be conducted 
prior to the commencement of any other walk-through procedures. For 
computerized weigh scales, the test can be conducted at the conclusion 
of the count, but before the final totals are generated.
    (2) The checklists should provide for drop/count observations, 
inclusive of hard drop/count, soft drop/count and currency acceptor 
drop/count. The count room would not be entered until the count is in 
process and the CPA would not leave the room until the monies have been 
counted and verified to the count sheet by the CPA and accepted into 
accountability. If the drop teams are unaware of the drop observations 
and the count observations would be unexpected, the hard count and soft 
count rooms may be entered simultaneously. Additionally, if the gaming 
machine currency acceptor count begins immediately after the table games 
count in the same location, by the same count team, and using the same 
equipment, the currency acceptor count observation can be conducted on 
the same day as the table games count observation, provided the CPA 
remains until monies are transferred to the vault/cashier.
    (B) Observations of the gaming operation's employees as they perform 
their duties.
    (C) Interviews with the gaming operation's employees who perform the 
relevant procedures.
    (D) Compliance testing of various documents relevant to the 
procedures. The scope of such testing should be indicated on the 
checklist where applicable.
    (E) For new gaming operations that have been in operation for three 
months or less at the end of their business year, performance of this 
regulation, section 542.3(f), is not required for the partial period.
    (2) Alternatively, at the discretion of the Tribe, the Tribe may 
engage an independent certified public accountant (CPA) to perform the 
testing, observations and procedures reflected in paragraphs (f)(1)(i), 
(ii), and (iii) of this section utilizing the Tribal internal control 
standards adopted by the Tribal gaming regulatory authority or Tribally 
approved variance that has received Commission concurrence. Accordingly, 
the CPA will verify compliance by the gaming operation with the Tribal 
internal control standards. Should the Tribe elect this alternative, as 
a prerequisite, the CPA will perform the following:
    (i) The CPA shall compare the Tribal internal control standards to 
the MICS to ascertain whether the criteria set forth in the MICS or 
Commission approved variances are adequately addressed.
    (ii) The CPA may utilize personnel of the Tribal gaming regulatory 
authority to cross-reference the Tribal internal control standards to 
the MICS, provided the CPA performs a review of the Tribal gaming 
regulatory authority personnel's work and assumes complete 
responsibility for the proper completion of the work product.
    (iii) The CPA shall report each procedure discovered by or brought 
to the CPA's attention that the CPA believes does not satisfy paragraph 
(f)(2)(i) of this section.

[[Page 78]]

    (3) Reliance on Internal Auditors. (i) The CPA may rely on the work 
of an internal auditor, to the extent allowed by the professional 
standards, for the performance of the recommended procedures specified 
in paragraphs (f)(1)(iii)(B), (C), and (D) of this section, and for the 
completion of the checklists as they relate to the procedures covered 
therein provided that the internal audit department can demonstrate to 
the satisfaction of the CPA that the requirements contained within Sec. 
542.22, 542.32, or 542.42, as applicable, have been satisfied.
    (ii) Agreed-upon procedures are to be performed by the CPA to 
determine that the internal audit procedures performed for a past 12-
month period (includes two 6-month periods) encompassing a portion or 
all of the most recent business year has been properly completed. The 
CPA will apply the following Agreed-Upon Procedures to the gaming 
operation's written assertion:
    (A) Obtain internal audit department work-papers completed for a 12-
month period (includes two 6-month periods) encompassing a portion or 
all of the most recent business year and determine whether the CPA NIGC 
MICS Compliance Checklists or other comparable testing procedures were 
included in the internal audit work-papers and all steps described in 
the checklists were initialed or signed by an internal audit 
representative.
    (B) For the internal audit work-papers obtained in paragraph 
(f)(3)(ii)(A) of this section, on a sample basis, reperform the 
procedures included in CPA NIGC MICS Compliance Checklists or other 
comparable testing procedures prepared by internal audit and determine 
if all instances of noncompliance noted in the sample were documented as 
such by internal audit. The CPA NIGC MICS Compliance Checklists or other 
comparable testing procedures for the applicable Drop and Count 
procedures are not included in the sample reperformance of procedures 
because the CPA is required to perform the drop and count observations 
as required under paragraph (f)(1)(iii)(A) of this section of the 
Agreed-Upon Procedures. The CPA's sample should comprise a minimum of 3 
percent of the procedures required in each CPA NIGC MICS Compliance 
Checklist or other comparable testing procedures for the gaming machine 
and table game departments and 5 percent for the other departments 
completed by internal audit in compliance with the internal audit MICS. 
The reperformance of procedures is performed as follows:
    (1) For inquiries, the CPA should either speak with the same 
individual or an individual of the same job position as the internal 
auditor did for the procedure indicated in their checklist.
    (2) For observations, the CPA should observe the same process as the 
internal auditor did for the procedure as indicated in their checklist.
    (3) For document testing, the CPA should look at the same original 
document as tested by the internal auditor for the procedure as 
indicated in their checklist. The CPA need only retest the minimum 
sample size required in the checklist.
    (C) The CPA is to investigate and resolve any differences between 
their reperformance results and the internal audit results.
    (D) Documentation is maintained for 5 years by the CPA indicating 
the procedures reperformed along with the results.
    (E) When performing the procedures for paragraph (f)(3)(ii)(B) of 
this section in subsequent years, the CPA must select a different sample 
so that the CPA will reperform substantially all of the procedures after 
several years.
    (F) Any additional procedures performed at the request of the 
Commission, the Tribal gaming regulatory authority or management should 
be included in the Agreed-Upon Procedures report transmitted to the 
Commission.
    (4) Report Format. (i) The NIGC has concluded that the performance 
of these procedures is an attestation engagement in which the CPA 
applies such Agreed-Upon Procedures to the gaming operation's assertion 
that it is in compliance with the MICS and, if applicable under 
paragraph (f)(2) of this section, the Tribal internal control standards 
and approved variances, provide a level of control that equals or 
exceeds that of the MICS. Accordingly,

[[Page 79]]

the Statements on Standards for Attestation Engagements (SSAE's), 
specifically SSAE 10, issued by the Auditing Standards Board is 
currently applicable. SSAE 10 provides current, pertinent guidance 
regarding agreed-upon procedure engagements, and the sample report 
formats included within those standards should be used, as appropriate, 
in the preparation of the CPA's agreed-upon procedures report. If future 
revisions are made to this standard or new SSAEs are adopted that are 
applicable to this type of engagement, the CPA is to comply with any 
revised professional standards in issuing their agreed upon procedures 
report. The Commission will provide an Example Report and Letter Formats 
upon request that may be used and contain all of the information 
discussed below:
    (A) The report must describe all instances of procedural 
noncompliance regardless of materiality) with the MICS or approved 
variations, and all instances where the Tribal gaming regulatory 
authority's regulations do not comply with the MICS. When describing the 
agreed-upon procedures performed, the CPA should also indicate whether 
procedures performed by other individuals were utilized to substitute 
for the procedures required to be performed by the CPA. For each 
instance of noncompliance noted in the CPA's agreed-upon procedures 
report, the following information must be included:
    (1) The citation of the applicable MICS for which the instance of 
noncompliance was noted.
    (2) A narrative description of the noncompliance, including the 
number of exceptions and sample size tested.
    (5) Report Submission Requirements. (i) The CPA shall prepare a 
report of the findings for the Tribe and management. The Tribe shall 
submit 2 copies of the report to the Commission no later than 120 days 
after the gaming operation's business year. This report should be 
provided in addition to any other reports required to be submitted to 
the Commission.
    (ii) The CPA should maintain the work-papers supporting the report 
for a minimum of five years. Digital storage is acceptable. The 
Commission may request access to these work-papers, through the Tribe.
    (6) CPA NIGC MICS Compliance Checklists. In connection with the CPA 
testing pursuant to this section and as referenced therein, the 
Commission will provide CPA MICS Compliance Checklists upon request.
    (g) Enforcement of Commission Minimum Internal Control Standards. 
(1) Each Tribal gaming regulatory authority is required to establish and 
implement internal control standards pursuant to paragraph (c) of this 
section. Each gaming operation is then required, pursuant to paragraph 
(d) of this section, to develop and implement an internal control system 
that complies with the Tribal internal control standards. Failure to do 
so may subject the Tribal operator of the gaming operation, and/or the 
management contractor, to penalties under 25 U.S.C. 2713.
    (2) Recognizing that Tribes are the primary regulator of their 
gaming operation(s), enforcement action by the Commission will not be 
initiated under this part without first informing the Tribe and Tribal 
gaming regulatory authority of deficiencies in the internal controls of 
its gaming operation and allowing a reasonable period of time to address 
such deficiencies. Such prior notice and opportunity for corrective 
action is not required where the threat to the integrity of the gaming 
operation is immediate and severe.

[67 FR 43400, June 27, 2002, as amended at 70 FR 47104, Aug. 12, 2005]



Sec. 542.4  How do these regulations affect minimum internal control 
standards established in a Tribal-State compact?

    (a) If there is a direct conflict between an internal control 
standard established in a Tribal-State compact and a standard or 
requirement set forth in this part, then the internal control standard 
established in a Tribal-State compact shall prevail.
    (b) If an internal control standard in a Tribal-State compact 
provides a level of control that equals or exceeds the level of control 
under an internal control standard or requirement set forth in this 
part, then the Tribal-State compact standard shall prevail.

[[Page 80]]

    (c) If an internal control standard or a requirement set forth in 
this part provides a level of control that exceeds the level of control 
under an internal control standard established in a Tribal-State 
compact, then the internal control standard or requirement set forth in 
this part shall prevail.



Sec. 542.5  How do these regulations affect state jurisdiction?

    Nothing in this part shall be construed to grant to a state 
jurisdiction in class II gaming or extend a state's jurisdiction in 
class III gaming.



Sec. 542.6  Does this part apply to small and charitable gaming operations?

    (a) Small gaming operations. This part shall not apply to small 
gaming operations provided that:
    (1) The Tribal gaming regulatory authority permits the operation to 
be exempt from this part;
    (2) The annual gross gaming revenue of the operation does not exceed 
$1 million; and
    (3) The Tribal gaming regulatory authority develops and the 
operation complies with alternate procedures that:
    (i) Protect the integrity of games offered; and
    (ii) Safeguard the assets used in connection with the operation.
    (b) Charitable gaming operations. This part shall not apply to 
charitable gaming operations provided that:
    (1) All proceeds are for the benefit of a charitable organization;
    (2) The Tribal gaming regulatory authority permits the charitable 
organization to be exempt from this part;
    (3) The charitable gaming operation is operated wholly by the 
charitable organization's employees or volunteers;
    (4) The annual gross gaming revenue of the charitable gaming 
operation does not exceed $100,000;
    (i) Where the annual gross gaming revenues of the charitable gaming 
operation exceed $100,000, but are less than $1 million, paragraph (a) 
of this section shall also apply; and
    (ii) [Reserved]
    (5) The Tribal gaming regulatory authority develops and the 
charitable gaming operation complies with alternate procedures that:
    (i) Protect the integrity of the games offered; and
    (ii) Safeguard the assets used in connection with the gaming 
operation.
    (c) Independent operators. Nothing in this section shall exempt 
gaming operations conducted by independent operators for the benefit of 
a charitable organization.



Sec. 542.7  What are the minimum internal control standards for bingo?

    (a) Computer applications. For any computer applications utilized, 
alternate documentation and/or procedures that provide at least the 
level of control described by the standards in this section, as approved 
by the Tribal gaming regulatory authority, will be acceptable.
    (b) Game play standards. (1) The functions of seller and payout 
verifier shall be segregated. Employees who sell cards on the floor 
shall not verify payouts with cards in their possession. Floor clerks 
who sell cards on the floor are permitted to announce the serial numbers 
of winning cards.
    (2) All sales of bingo cards shall be documented by recording at 
least the following:
    (i) Date;
    (ii) Shift (if applicable);
    (iii) Session (if applicable);
    (iv) Dollar amount;
    (v) Signature, initials, or identification number of at least one 
seller (if manually documented); and
    (vi) Signature, initials, or identification number of a person 
independent of the seller who has randomly verified the card sales (this 
requirement is not applicable to locations with $1 million or less in 
annual write).
    (3) The total win and write shall be computed and recorded by shift 
(or session, if applicable).
    (4) The Tribal gaming regulatory authority, or the gaming operation 
as approved by the Tribal gaming regulatory authority, shall establish 
and the gaming operation shall comply with procedures that ensure the 
correct calling of numbers selected in the bingo game.
    (5) Each ball shall be shown to a camera immediately before it is 
called so that it is individually displayed to all customers. For speed 
bingo games not

[[Page 81]]

verified by camera equipment, each ball drawn shall be verified by a 
person independent of the bingo caller responsible for calling the speed 
bingo game.
    (6) For all coverall games and other games offering a payout of 
$1,200 or more, as the balls are called the numbers shall be immediately 
recorded by the caller and maintained for a minimum of twenty-four (24) 
hours.
    (7) Controls shall be present to assure that the numbered balls are 
placed back into the selection device prior to calling the next game.
    (8) The authenticity of each payout shall be verified by at least 
two persons. A computerized card verifying system may function as the 
second person verifying the payout if the card with the winning numbers 
is displayed on a reader board.
    (9) Payouts in excess of $1,200 shall require written approval, by 
personnel independent of the transaction, that the bingo card has been 
examined and verified with the bingo card record to ensure that the 
ticket has not been altered.
    (10) Total payout shall be computed and recorded by shift or 
session, if applicable.
    (c) Promotional payouts or awards. (1) If the gaming operation 
offers promotional payouts or awards, the payout form/documentation 
shall include the following information:
    (i) Date and time;
    (ii) Dollar amount of payout or description of personal property 
(e.g., jacket, toaster, car, etc.), including fair market value;
    (iii) Type of promotion; and
    (iv) Signature of at least one employee authorizing and completing 
the transaction.
    (2) [Reserved]
    (d) Accountability form. (1) All funds used to operate the bingo 
department shall be recorded on an accountability form.
    (2) All funds used to operate the bingo department shall be counted 
independently by at least two persons and reconciled to the recorded 
amounts at the end of each shift or session. Unverified transfers of 
cash and/or cash equivalents are prohibited.
    (e) Bingo equipment. (1) Access to controlled bingo equipment (e.g., 
blower, balls in play, and back-up balls) shall be restricted to 
authorized persons.
    (2) The procedures established by the Tribal gaming regulatory 
authority, or the gaming operation as approved by the Tribal gaming 
regulatory authority, shall include standards relating to the inspection 
of new bingo balls put into play as well as for those in use.
    (3) Bingo equipment shall be maintained and checked for accuracy on 
a periodic basis.
    (4) The bingo card inventory shall be controlled so as to assure the 
integrity of the cards being used as follows:
    (i) Purchased paper shall be inventoried and secured by a person or 
persons independent of the bingo sales;
    (ii) The issue of paper to the cashiers shall be documented and 
signed for by the person responsible for inventory control and a 
cashier. The document log shall include the series number of the bingo 
paper;
    (iii) A copy of the bingo paper control log shall be given to the 
bingo ball caller for purposes of determining if the winner purchased 
the paper that was issued for sale that day (electronic verification 
satisfies this standard);
    (iv) At the end of each month, a person or persons independent of 
bingo sales and inventory control shall verify the accuracy of the 
ending balance in the bingo paper control by reconciling the paper on-
hand;
    (v) A monthly comparison for reasonableness shall be made of the 
amount of paper sold from the bingo paper control log to the amount of 
revenue recognized.
    (f) Standards for statistical reports. (1) Records shall be 
maintained, which include win, write (card sales), and a win-to-write 
hold percentage, for:
    (i) Each shift or each session;
    (ii) Each day;
    (iii) Month-to-date; and
    (iv) Year-to-date or fiscal year-to-date.
    (2) A manager independent of the bingo department shall review bingo 
statistical information on at least a monthly basis and investigate any 
large or unusual statistical fluctuations.
    (3) Investigations shall be documented, maintained for inspection, 
and

[[Page 82]]

provided to the Tribal gaming regulatory authority upon request.
    (g) Electronic equipment. (1) If the gaming operation utilizes 
electronic equipment in connection with the play of bingo, then the 
following standards shall also apply.
    (i) If the electronic equipment contains a bill acceptor, then Sec. 
542.21(e) and (f), Sec. 542.31(e) and (f), or Sec. 542.41(e) and (f) 
(as applicable) shall apply.
    (ii) If the electronic equipment uses a bar code or microchip 
reader, the reader shall be tested periodically by a person or persons 
independent of the bingo department to determine that it is correctly 
reading the bar code or the microchip.
    (iii) If the electronic equipment returns a voucher or a payment 
slip to the player, then Sec. 542.13(n) (as applicable) shall apply.
    (iv) If the electronic equipment utilizes patron account access 
cards for activation of play, then Sec. 542.13(o) (as applicable) shall 
apply.
    (2) [Reserved]
    (h) Standards for linked electronic games. Management shall ensure 
that all agreements/contracts entered into after June 27, 2002 to 
provide linked electronic games shall contain language requiring the 
vendor to comply with the standards in this section applicable to the 
goods or services the vendor is providing.
    (i) Host requirements/game information (for linked electronic 
games). (1) Providers of any linked electronic game(s) shall maintain 
complete records of game data for a period of one (1) year from the date 
the games are played (or a time frame established by the Tribal gaming 
regulatory authority). This data may be kept in an archived manner, 
provided the information can be produced within twenty-four (24) hours 
upon request. In any event, game data for the preceding seventy-two (72) 
hours shall be immediately accessible.
    (2) Data required to be maintained for each game played includes:
    (i) Date and time game start and game end;
    (ii) Sales information by location;
    (iii) Cash distribution by location;
    (iv) Refund totals by location;
    (v) Cards-in-play count by location;
    (vi) Identification number of winning card(s);
    (vii) Ordered list of bingo balls drawn; and
    (viii) Prize amounts at start and end of game.
    (j) Host requirements/sales information (for linked electronic 
games). (1) Providers of any linked electronic game(s) shall maintain 
complete records of sales data for a period of one (1) year from the 
date the games are played (or a time frame established by the Tribal 
gaming regulatory authority). This data may be kept in an archived 
manner, provided the information can be produced within twenty-four (24) 
hours upon request. In any event, sales data for the preceding ten (10) 
days shall be immediately accessible. Summary information must be 
accessible for at least 120 days.
    (2) Sales information required shall include:
    (i) Daily sales totals by location;
    (ii) Commissions distribution summary by location;
    (iii) Game-by-game sales, prizes, refunds, by location; and
    (iv) Daily network summary, by game by location.
    (k) Remote host requirements (for linked electronic games). (1) 
Linked electronic game providers shall maintain on-line records at the 
remote host site for any game played. These records shall remain on-line 
until the conclusion of the session of which the game is a part. 
Following the conclusion of the session, records may be archived, but in 
any event, must be retrievable in a timely manner for at least seventy-
two (72) hours following the close of the session. Records shall be 
accessible through some archived media for at least ninety (90) days 
from the date of the game.
    (2) Game information required includes date and time of game start 
and game end, sales totals, cash distribution (prizes) totals, and 
refund totals.
    (3) Sales information required includes cash register 
reconciliations, detail and summary records for purchases, prizes, 
refunds, credits, and game/sales balance for each session.
    (l) Standards for player accounts (for proxy play and linked 
electronic games). (1) Prior to participating in any game,

[[Page 83]]

players shall be issued a unique player account number. The player 
account number can be issued through the following means:
    (i) Through the use of a point-of-sale (cash register device);
    (ii) By assignment through an individual play station; or
    (iii) Through the incorporation of a ``player tracking'' media.
    (2) Printed receipts issued in conjunction with any player account 
should include a time/date stamp.
    (3) All player transactions shall be maintained, chronologically by 
account number, through electronic means on a data storage device. These 
transaction records shall be maintained on-line throughout the active 
game and for at least twenty-four (24) hours before they can be stored 
on an ``off-line'' data storage media.
    (4) The game software shall provide the ability to, upon request, 
produce a printed account history, including all transactions, and a 
printed game summary (total purchases, deposits, wins, debits, for any 
account that has been active in the game during the preceding twenty-
four (24) hours).
    (5) The game software shall provide a ``player account summary'' at 
the end of every game. This summary shall list all accounts for which 
there were any transactions during that game day and include total 
purchases, total deposits, total credits (wins), total debits (cash-
outs) and an ending balance.

[67 FR 43400, June 27, 2002, as amended at 70 FR 23021, May 4, 2005; 70 
FR 47106, Aug. 12, 2005; 71 FR 27392, May 11, 2006]

    Effective Date Note: At 73 FR 60498, Oct. 10, 2008, Sec. 542.7 was 
removed and reserved, effective Oct. 13, 2009. At 74 FR 52139, Oct. 9, 
2009, the effectiveness of this amendment was delayed until Oct. 13, 
2010.



Sec. 542.8  What are the minimum internal control standards for pull tabs?

    (a) Computer applications. For any computer application utilized, 
alternate documentation and/or procedures that provide at least the 
level of control described by the standards in this section, as approved 
by the Tribal gaming regulatory authority, will be acceptable.
    (b) Pull tab inventory. (1) Pull tab inventory (including unused 
tickets) shall be controlled to assure the integrity of the pull tabs.
    (2) Purchased pull tabs shall be inventoried and secured by a person 
or persons independent of the pull tab sales.
    (3) The issue of pull tabs to the cashier or sales location shall be 
documented and signed for by the person responsible for inventory 
control and the cashier. The document log shall include the serial 
number of the pull tabs issued.
    (4) Appropriate documentation shall be given to the redemption booth 
for purposes of determining if the winner purchased the pull tab from 
the pull tabs issued by the gaming operation. Electronic verification 
satisfies this requirement.
    (5) At the end of each month, a person or persons independent of 
pull tab sales and inventory control shall verify the accuracy of the 
ending balance in the pull tab control by reconciling the pull tabs on 
hand.
    (6) A monthly comparison for reasonableness shall be made of the 
amount of pull tabs sold from the pull tab control log to the amount of 
revenue recognized.
    (c) Access. Access to pull tabs shall be restricted to authorized 
persons.
    (d) Transfers. Transfers of pull tabs from storage to the sale 
location shall be secured and independently controlled.
    (e) Winning pull tabs. (1) Winning pull tabs shall be verified and 
paid as follows:
    (i) Payouts in excess of a dollar amount determined by the gaming 
operation, as approved by the Tribal gaming regulatory authority, shall 
be verified by at least two employees.
    (ii) Total payout shall be computed and recorded by shift.
    (iii) The winning pull tabs shall be voided so that they cannot be 
presented for payment again.
    (2) Personnel independent of pull tab operations shall verify the 
amount of winning pull tabs redeemed each day.
    (f) Accountability form. (1) All funds used to operate the pull tab 
game shall be recorded on an accountability form.

[[Page 84]]

    (2) All funds used to operate the pull tab game shall be counted 
independently by at least two persons and reconciled to the recorded 
amounts at the end of each shift or session. Unverified transfers of 
cash and/or cash equivalents are prohibited.
    (g) Standards for statistical reports. (1) Records shall be 
maintained, which include win, write (sales), and a win-to-write hold 
percentage as compared to the theoretical hold percentage derived from 
the flare, for each deal or type of game, for:
    (i) Each shift;
    (ii) Each day;
    (iii) Month-to-date; and
    (iv) Year-to-date or fiscal year-to-date as applicable.
    (2) A manager independent of the pull tab operations shall review 
statistical information at least on a monthly basis and shall 
investigate any large or unusual statistical fluctuations. These 
investigations shall be documented, maintained for inspection, and 
provided to the Tribal gaming regulatory authority upon request.
    (3) Each month, the actual hold percentage shall be compared to the 
theoretical hold percentage. Any significant variations (3%) shall be 
investigated.
    (h) Electronic equipment. (1) If the gaming operation utilizes 
electronic equipment in connection with the play of pull tabs, then the 
following standards shall also apply.
    (i) If the electronic equipment contains a bill acceptor, then Sec. 
542.21(e) and (f), Sec. 542.31(e) and (f), or Sec. 542.41(e) and (f) 
(as applicable) shall apply.
    (ii) If the electronic equipment uses a bar code or microchip 
reader, the reader shall be tested periodically to determine that it is 
correctly reading the bar code or microchip.
    (iii) If the electronic equipment returns a voucher or a payment 
slip to the player, then Sec. 542.13(n)(as applicable) shall apply.
    (iv) If the electronic equipment utilizes patron account access 
cards for activation of play, then Sec. 542.13(o) (as applicable) shall 
apply.
    (2) [Reserved]

[67 FR 43400, June 27, 2002, as amended at 70 FR 23021, May 4, 2005; 70 
FR 47106, Aug. 12, 2005; 71 FR 27392, May 11, 2006]



Sec. 542.9  What are the minimum internal control standards for card games?

    (a) Computer applications. For any computer applications utilized, 
alternate documentation and/or procedures that provide at least the 
level of control described by the standards in this section, as approved 
by the Tribal gaming regulatory authority, will be acceptable.
    (b) Standards for drop and count. The procedures for the collection 
of the card game drop and the count thereof shall comply with Sec. 
542.21, Sec. 542.31, or Sec. 542.41 (as applicable).
    (c) Standards for supervision. (1) Supervision shall be provided at 
all times the card room is in operation by personnel with authority 
equal to or greater than those being supervised.
    (2) Exchanges between table banks and the main card room bank (or 
cage, if a main card room bank is not used) in excess of $100.00 shall 
be authorized by a supervisor. All exchanges shall be evidenced by the 
use of a lammer unless the exchange of chips, tokens, and/or cash takes 
place at the table.
    (3) Exchanges from the main card room bank (or cage, if a main card 
room bank is not used) to the table banks shall be verified by the card 
room dealer and the runner.
    (4) If applicable, transfers between the main card room bank and the 
cage shall be properly authorized and documented.
    (5) A rake collected or ante placed shall be done in accordance with 
the posted rules.
    (d) Standards for playing cards. (1) Playing cards shall be 
maintained in a secure location to prevent unauthorized access and to 
reduce the possibility of tampering.
    (2) Used cards shall be maintained in a secure location until 
marked, scored, or destroyed, in a manner approved by the Tribal gaming 
regulatory authority, to prevent unauthorized access and reduce the 
possibility of tampering.
    (3) The Tribal gaming regulatory authority, or the gaming operation 
as approved by the Tribal gaming regulatory authority, shall establish 
and the gaming operation shall comply with a reasonable time period, 
which shall not exceed seven (7) days, within

[[Page 85]]

which to mark, cancel, or destroy cards from play.
    (i) This standard shall not apply where playing cards are retained 
for an investigation.
    (ii) [Reserved]
    (4) A card control log shall be maintained that documents when cards 
and dice are received on site, distributed to and returned from tables 
and removed from play by the gaming operation.
    (e) Plastic cards. Notwithstanding paragraph (d) of this section, if 
a gaming operation uses plastic cards (not plastic-coated cards), the 
cards may be used for up to three (3) months if the plastic cards are 
routinely inspected, and washed or cleaned in a manner and time frame 
approved by the Tribal gaming regulatory authority.
    (f) Standards for shills. (1) Issuance of shill funds shall have the 
written approval of the supervisor.
    (2) Shill returns shall be recorded and verified on the shill sign-
out form.
    (3) The replenishment of shill funds shall be documented.
    (g) Standards for reconciliation of card room bank. (1) The amount 
of the main card room bank shall be counted, recorded, and reconciled on 
at least a per shift basis.
    (2) At least once per shift, the table banks that were opened during 
that shift shall be counted, recorded, and reconciled by a dealer or 
other person, and a supervisor, and shall be attested to by their 
signatures on the check-out form.
    (h) Standards for promotional progressive pots and pools. (1) All 
funds contributed by players into the pools shall be returned when won 
in accordance with the posted rules with no commission or administrative 
fee withheld.
    (2) Rules governing promotional pools shall be conspicuously posted 
and designate:
    (i) The amount of funds to be contributed from each pot;
    (ii) What type of hand it takes to win the pool (e.g., what 
constitutes a ``bad beat'');
    (iii) How the promotional funds will be paid out;
    (iv) How/when the contributed funds are added to the jackpots; and
    (v) Amount/percentage of funds allocated to primary and secondary 
jackpots, if applicable.
    (3) Promotional pool contributions shall not be placed in or near 
the rake circle, in the drop box, or commingled with gaming revenue from 
card games or any other gambling game.
    (4) The amount of the jackpot shall be conspicuously displayed in 
the card room.
    (5) At least once a day, the posted pool amount shall be updated to 
reflect the current pool amount.
    (6) At least once a day, increases to the posted pool amount shall 
be reconciled to the cash previously counted or received by the cage by 
personnel independent of the card room.
    (7) All decreases to the pool must be properly documented, including 
a reason for the decrease.
    (i) Promotional progressive pots and pools where funds are displayed 
in the card room. (1) Promotional funds displayed in the card room shall 
be placed in a locked container in plain view of the public.
    (2) Persons authorized to transport the locked container shall be 
precluded from having access to the contents keys.
    (3) The contents key shall be maintained by personnel independent of 
the card room.
    (4) At least once a day, the locked container shall be removed by 
two persons, one of whom is independent of the card games department, 
and transported directly to the cage or other secure room to be counted, 
recorded, and verified.
    (5) The locked container shall then be returned to the card room 
where the posted pool amount shall be updated to reflect the current 
pool amount.
    (j) Promotional progressive pots and pools where funds are 
maintained in the cage. (1) Promotional funds removed from the card game 
shall be placed in a locked container.
    (2) Persons authorized to transport the locked container shall be 
precluded from having access to the contents keys.
    (3) The contents key shall be maintained by personnel independent of 
the card room.

[[Page 86]]

    (4) At least once a day, the locked container shall be removed by 
two persons, one of whom is independent of the card games department, 
and transported directly to the cage or other secure room to be counted, 
recorded, and verified, prior to accepting the funds into cage 
accountability.
    (5) The posted pool amount shall then be updated to reflect the 
current pool amount.



Sec. 542.10  What are the minimum internal control standards for keno?

    (a) Computer applications. For any computer applications utilized, 
alternate documentation and/or procedures that provide at least the 
level of control described by the standards in this section, as approved 
by the Tribal gaming regulatory authority, will be acceptable.
    (b) Game play standards. (1) The computerized customer ticket shall 
include the date, game number, ticket sequence number, station number, 
and conditioning (including multi-race if applicable).
    (2) The information on the ticket shall be recorded on a restricted 
transaction log or computer storage media concurrently with the 
generation of the ticket.
    (3) Keno personnel shall be precluded from having access to the 
restricted transaction log or computer storage media.
    (4) When it is necessary to void a ticket, the void information 
shall be inputted in the computer and the computer shall document the 
appropriate information pertaining to the voided wager (e.g., void slip 
is issued or equivalent documentation is generated).
    (5) Controls shall exist to prevent the writing and voiding of 
tickets after a game has been closed and after the number selection 
process for that game has begun.
    (6) The controls in effect for tickets prepared in outstations (if 
applicable) shall be identical to those in effect for the primary keno 
game.
    (c) Rabbit ear or wheel system. (1) The following standards shall 
apply if a rabbit ear or wheel system is utilized:
    (i) A dedicated camera shall be utilized to monitor the following 
both prior to, and subsequent to, the calling of a game:
    (A) Empty rabbit ears or wheel;
    (B) Date and time;
    (C) Game number; and
    (D) Full rabbit ears or wheel.
    (ii) The film of the rabbit ears or wheel shall provide a legible 
identification of the numbers on the balls drawn.
    (iii) Keno personnel shall immediately input the selected numbers in 
the computer and the computer shall document the date, the game number, 
the time the game was closed, and the numbers drawn.
    (iv) The Tribal gaming regulatory authority, or the gaming operation 
as approved by the Tribal gaming regulatory authority, shall establish 
and the gaming operation shall comply with procedures that prevent 
unauthorized access to keno balls in play.
    (v) Back-up keno ball inventories shall be secured in a manner to 
prevent unauthorized access.
    (vi) The Tribal gaming regulatory authority, or the gaming operation 
as approved by the Tribal gaming regulatory authority, shall establish 
and the gaming operation shall comply with procedures for inspecting new 
keno balls put into play as well as for those in use.
    (2) [Reserved]
    (d) Random number generator. (1) The following standards shall apply 
if a random number generator is utilized:
    (i) The random number generator shall be linked to the computer 
system and shall directly relay the numbers selected into the computer 
without manual input.
    (ii) Keno personnel shall be precluded from access to the random 
number generator.
    (2) [Reserved]
    (e) Winning tickets. Winning tickets shall be verified and paid as 
follows:
    (1) The sequence number of tickets presented for payment shall be 
inputted into the computer, and the payment amount generated by the 
computer shall be given to the customer.
    (2) The Tribal gaming regulatory authority, or the gaming operation 
as approved by the Tribal gaming regulatory authority, shall establish 
and the gaming operation shall comply

[[Page 87]]

with procedures that preclude payment on tickets previously presented 
for payment, unclaimed winning tickets (sleepers) after a specified 
period of time, voided tickets, and tickets that have not been issued 
yet.
    (3) All payouts shall be supported by the customer (computer-
generated) copy of the winning ticket (payout amount is indicated on the 
customer ticket or a payment slip is issued).
    (4) A manual report or other documentation shall be produced and 
maintained documenting any payments made on tickets that are not 
authorized by the computer.
    (5) Winning tickets over a specified dollar amount (not to exceed 
$10,000 for locations with more than $5 million annual keno write and 
$3,000 for all other locations) shall also require the following:
    (i) Approval of management personnel independent of the keno 
department, evidenced by their signature;
    (ii) Review of the video recording and/or digital record of the 
rabbit ears or wheel to verify the legitimacy of the draw and the 
accuracy of the draw ticket (for rabbit ear or wheel systems only);
    (iii) Comparison of the winning customer copy to the computer 
reports;
    (iv) Regrading of the customer copy using the payout schedule and 
draw information; and
    (v) Documentation and maintenance of the procedures in this 
paragraph.
    (6) When the keno game is operated by one person, all winning 
tickets in excess of an amount to be determined by management (not to 
exceed $1,500) shall be reviewed and authorized by a person independent 
of the keno department.
    (f) Check out standards at the end of each keno shift. (1) For each 
writer station, a cash summary report (count sheet) shall be prepared 
that includes:
    (i) Computation of net cash proceeds for the shift and the cash 
turned in; and
    (ii) Signatures of two employees who have verified the net cash 
proceeds for the shift and the cash turned in. Unverified transfers of 
cash and/or cash equivalents are prohibited.
    (2) [Reserved]
    (g) Promotional payouts or awards. (1) If a gaming operation offers 
promotional payouts or awards, the payout form/documentation shall 
include the following information:
    (i) Date and time;
    (ii) Dollar amount of payout or description of personal property 
(e.g., jacket, toaster, car, etc.), including fair market value;
    (iii) Type of promotion; and
    (iv) Signature of at least one employee authorizing and completing 
the transaction.
    (2) [Reserved]
    (h) Standards for statistical reports. (1) Records shall be 
maintained that include win and write by individual writer for each day.
    (2) Records shall be maintained that include win, write, and win-to-
write hold percentage for:
    (i) Each shift;
    (ii) Each day;
    (iii) Month-to-date; and
    (iv) Year-to-date or fiscal year-to-date as applicable.
    (3) A manager independent of the keno department shall review keno 
statistical data at least on a monthly basis and investigate any large 
or unusual statistical variances.
    (4) At a minimum, investigations shall be performed for statistical 
percentage fluctuations from the base level for a month in excess of 
3%. The base level shall be defined as the gaming 
operation's win percentage for the previous business year or the 
previous twelve (12) months.
    (5) Such investigations shall be documented, maintained for 
inspection, and provided to the Tribal gaming regulatory authority upon 
request.
    (i) System security standards. (1) All keys (including duplicates) 
to sensitive computer hardware in the keno area shall be maintained by a 
department independent of the keno function.
    (2) Personnel independent of the keno department shall be required 
to accompany such keys to the keno area and shall observe changes or 
repairs each time the sensitive areas are accessed.
    (j) Documentation standards. (1) Adequate documentation of all 
pertinent keno information shall be generated by the computer system.

[[Page 88]]

    (2) This documentation shall be restricted to authorized personnel.
    (3) The documentation shall include, at a minimum:
    (i) Ticket information (as described in paragraph (b)(1) of this 
section);
    (ii) Payout information (date, time, ticket number, amount, etc.);
    (iii) Game information (number, ball draw, time, etc.);
    (iv) Daily recap information, including:
    (A) Write;
    (B) Payouts; and
    (C) Gross revenue (win);
    (v) System exception information, including:
    (A) Voids;
    (B) Late pays; and
    (C) Appropriate system parameter information (e.g., changes in pay 
tables, ball draws, payouts over a predetermined amount, etc.); and
    (vi) Personnel access listing, including:
    (A) Employee name or employee identification number; and
    (B) Listing of functions employee can perform or equivalent means of 
identifying same.
    (k) Keno audit standards. (1) The keno audit function shall be 
independent of the keno department.
    (2) At least annually, keno audit shall foot the write on the 
restricted copy of the keno transaction report for a minimum of one 
shift and compare the total to the total as documented by the computer.
    (3) For at least one shift every other month, keno audit shall 
perform the following:
    (i) Foot the customer copy of the payouts and trace the total to the 
payout report; and
    (ii) Regrade at least 1% of the winning tickets using the payout 
schedule and draw ticket.
    (4) Keno audit shall perform the following:
    (i) For a minimum of five games per week, compare the video 
recording and/or digital record of the rabbit ears or wheel to the 
computer transaction summary;
    (ii) Compare net cash proceeds to the audited win/loss by shift and 
investigate any large cash overages or shortages (i.e., in excess of 
$25.00);
    (iii) Review and regrade all winning tickets greater than or equal 
to $1,500, including all forms that document that proper authorizations 
and verifications were obtained and performed;
    (iv) Review the documentation for payout adjustments made outside 
the computer and investigate large and frequent payments;
    (v) Review personnel access listing for inappropriate functions an 
employee can perform;
    (vi) Review system exception information on a daily basis for 
propriety of transactions and unusual occurrences including changes to 
the personnel access listing;
    (vii) If a random number generator is used, then at least weekly 
review the numerical frequency distribution for potential patterns; and
    (viii) Investigate and document results of all noted improper 
transactions or unusual occurrences.
    (5) When the keno game is operated by one person:
    (i) The customer copies of all winning tickets in excess of $100 and 
at least 5% of all other winning tickets shall be regraded and traced to 
the computer payout report;
    (ii) The video recording and/or digital record of rabbit ears or 
wheel shall be randomly compared to the computer game information report 
for at least 10% of the games during the shift; and
    (iii) Keno audit personnel shall review winning tickets for proper 
authorization pursuant to paragraph (e)(6) of this section.
    (6) In the event any person performs the writer and deskman 
functions on the same shift, the procedures described in paragraphs 
(k)(5)(i) and (ii) of this section (using the sample sizes indicated) 
shall be performed on tickets written by that person.
    (7) Documentation (e.g., a log, checklist, etc.) that evidences the 
performance of all keno audit procedures shall be maintained.
    (8) A manager independent of the keno department shall review keno 
audit exceptions, and perform and document investigations into 
unresolved exceptions. These investigations shall be documented, 
maintained for inspection, and provided to the Tribal gaming regulatory 
authority upon request.

[[Page 89]]

    (9) When a multi-game ticket is part of the sample in paragraphs 
(k)(3)(ii), (k)(5)(i) and (k)(6) of this section, the procedures may be 
performed for ten (10) games or ten percent (10%) of the games won, 
whichever is greater.
    (l) Access. Access to the computer system shall be adequately 
restricted (i.e., passwords are changed at least quarterly, access to 
computer hardware is physically restricted, etc.).
    (m) Equipment standards. (1) There shall be effective maintenance 
planned to service keno equipment, including computer program updates, 
hardware servicing, and keno ball selection equipment (e.g., service 
contract with lessor).
    (2) Keno equipment maintenance (excluding keno balls) shall be 
independent of the operation of the keno game.
    (3) Keno maintenance personnel shall report irregularities to 
management personnel independent of the keno department.
    (4) If the gaming operation utilizes a barcode or microchip reader 
in connection with the play of keno, the reader shall be tested at least 
annually by personnel independent of the keno department to determine 
that it is correctly reading the barcode or microchip.
    (n) Document retention. (1) All documents (including computer 
storage media) discussed in this section shall be retained for five (5) 
years, except for the following, which shall be retained for at least 
seven (7) days:
    (i) Video recordings and/or digital records of rabbit ears or wheel;
    (ii) All copies of winning keno tickets of less than $1,500.00.
    (2) [Reserved]
    (o) Multi-race tickets. (1) Procedures shall be established to 
notify keno personnel immediately of large multi-race winners to ensure 
compliance with standards in paragraph (e)(5) of this section.
    (2) Procedures shall be established to ensure that keno personnel 
are aware of multi-race tickets still in process at the end of a shift.
    (p) Manual keno. For gaming operations that conduct manual keno 
games, alternate procedures that provide at least the level of control 
described by the standards in this section shall be developed and 
implemented.

[67 FR 43400, June 27, 2002, as amended at 70 FR 47106, Aug. 12, 2005]



Sec. 542.11  What are the minimum internal control standards for 
pari-mutuel wagering?

    (a) Exemptions. (1) The requirements of this section shall not apply 
to gaming operations who house pari-mutuel wagering operations conducted 
entirely by a state licensed simulcast service provider pursuant to an 
approved tribal-state compact if:
    (i) The simulcast service provider utilizes its own employees for 
all aspects of the pari-mutuel wagering operation;
    (ii) The gaming operation posts, in a location visible to the 
public, that the simulcast service provider and its employees are wholly 
responsible for the conduct of pari-mutuel wagering offered at that 
location;
    (iii) The gaming operation receives a predetermined fee from the 
simulcast service provider; and
    (iv) In addition, the Tribal gaming regulatory authority, or the 
gaming operation as approved by the Tribal gaming regulatory authority, 
shall establish and the gaming operation shall comply with standards 
that ensure that the gaming operation receives, from the racetrack, its 
contractually guaranteed percentage of the handle.
    (2) Gaming operations that contract directly with a state regulated 
racetrack as a simulcast service provider, but whose on-site pari-mutuel 
operations are conducted wholly or in part by tribal gaming operation 
employees, shall not be required to comply with paragraphs (h)(5) thru 
(h)(9) of this section.
    (i) If any standard contained within this section conflicts with 
state law, a tribal-state compact, or a contract, then the gaming 
operation shall document the basis for noncompliance and shall maintain 
such documentation for inspection by the Tribal gaming regulatory 
authority and the Commission.
    (ii) In addition, the Tribal gaming regulatory authority, or the 
gaming operation as approved by the Tribal gaming regulatory authority, 
shall establish and the gaming operation shall

[[Page 90]]

comply with standards that ensure that the gaming operation receives, 
from the racetrack, its contractually guaranteed percentage of the 
handle.
    (b) Computer applications. For any computer applications utilized, 
alternate documentation and/or procedures that provide at least the 
level of control described by the standards in this section, as approved 
by the Tribal gaming regulatory authority, will be acceptable.
    (c) Betting ticket and equipment standards. (1) All pari-mutuel 
wagers shall be transacted through the pari-mutuel satellite system. In 
case of computer failure between the pari-mutuel book and the hub, no 
tickets shall be manually written.
    (2) Whenever a betting station is opened for wagering or turned over 
to a new writer/cashier, the writer/cashier shall sign on and the 
computer shall document gaming operation name (or identification 
number), station number, the writer/cashier identifier, and the date and 
time.
    (3) A betting ticket shall consist of at least two parts:
    (i) An original, which shall be transacted and issued through a 
printer and given to the customer; and
    (ii) A copy that shall be recorded concurrently with the generation 
of the original ticket either on paper or other storage media (e.g., 
tape or diskette).
    (4) Upon accepting a wager, the betting ticket that is created shall 
contain the following:
    (i) A unique transaction identifier;
    (ii) Gaming operation name (or identification number) and station 
number;
    (iii) Race track, race number, horse identification or event 
identification, as applicable;
    (iv) Type of bet(s), each bet amount, total number of bets, and 
total take; and
    (v) Date and time.
    (5) All tickets shall be considered final at post time.
    (6) If a gaming operation voids a betting ticket written prior to 
post time, it shall be immediately entered into the system.
    (7) Future wagers shall be accepted and processed in the same manner 
as regular wagers.
    (d) Payout standards. (1) Prior to making payment on a ticket, the 
writer/cashier shall input the ticket for verification and payment 
authorization.
    (2) The computer shall be incapable of authorizing payment on a 
ticket that has been previously paid, a voided ticket, a losing ticket, 
or an unissued ticket.
    (e) Checkout standards. (1) Whenever the betting station is closed 
or the writer/cashier is replaced, the writer/cashier shall sign off and 
the computer shall document the gaming operation name (or identification 
number), station number, the writer/cashier identifier, the date and 
time, and cash balance.
    (2) For each writer/cashier station a summary report shall be 
completed at the conclusion of each shift including:
    (i) Computation of cash turned in for the shift; and
    (ii) Signature of two employees who have verified the cash turned in 
for the shift. Unverified transfers of cash and/or cash equivalents are 
prohibited.
    (f) Employee wagering. Pari-mutuel employees shall be prohibited 
from wagering on race events while on duty, including during break 
periods.
    (g) Computer reports standards. (1) Adequate documentation of all 
pertinent pari-mutuel information shall be generated by the computer 
system.
    (2) This documentation shall be restricted to authorized personnel.
    (3) The documentation shall be created for each day's operation and 
shall include, but is not limited to:
    (i) Unique transaction identifier;
    (ii) Date/time of transaction;
    (iii) Type of wager;
    (iv) Animal identification or event identification;
    (v) Amount of wagers (by ticket, writer/SAM, track/event, and 
total);
    (vi) Amount of payouts (by ticket, writer/SAM, track/event, and 
total);
    (vii) Tickets refunded (by ticket, writer, track/event, and total);
    (viii) Unpaid winners/vouchers (``outs'') (by ticket/voucher, track/
event, and total);
    (ix) Voucher sales/payments (by ticket, writer/SAM, and track/
event);
    (x) Voids (by ticket, writer, and total);

[[Page 91]]

    (xi) Future wagers (by ticket, date of event, total by day, and 
total at the time of revenue recognition);
    (xii) Results (winners and payout data);
    (xiii) Breakage data (by race and track/event);
    (xiv) Commission data (by race and track/event); and
    (xv) Purged data (by ticket and total).
    (4) The system shall generate the following reports:
    (i) A reconciliation report that summarizes totals by track/event, 
including write, the day's winning ticket total, total commission and 
breakage due the gaming operation, and net funds transferred to or from 
the gaming operation's bank account;
    (ii) An exception report that contains a listing of all system 
functions and overrides not involved in the actual writing or cashing of 
tickets, including sign-on/off, voids, and manually input paid tickets; 
and
    (iii) A purged ticket report that contains a listing of the unique 
transaction identifier(s), description, ticket cost and value, and date 
purged.
    (h) Accounting and auditing functions. A gaming operation shall 
perform the following accounting and auditing functions:
    (1) The parimutuel audit shall be conducted by personnel independent 
of the parimutuel operation.
    (2) Documentation shall be maintained evidencing the performance of 
all parimutuel accounting and auditing procedures.
    (3) An accounting employee shall review handle, commission, and 
breakage for each day's play and recalculate the net amount due to or 
from the systems operator on a weekly basis.
    (4) The accounting employee shall verify actual cash/cash 
equivalents turned in to the system's summary report for each cashier's 
drawer (Beginning balance, (+) fills (draws), (+) net write (sold less 
voids), (-) payouts (net of IRS withholding), (-) cashbacks (paids), (=) 
cash turn-in).
    (5) An accounting employee shall produce a gross revenue recap 
report to calculate gross revenue for each day's play and for a month-
to-date basis, including the following totals:
    (i) Commission;
    (ii) Positive breakage;
    (iii) Negative breakage;
    (iv) Track/event fees;
    (v) Track/event fee rebates; and
    (vi) Purged tickets.
    (6) All winning tickets and vouchers shall be physically removed 
from the SAM's for each day's play.
    (7) In the event a SAM does not balance for a day's play, the 
auditor shall perform the following procedures:
    (i) Foot the winning tickets and vouchers deposited and trace to the 
totals of SAM activity produced by the system;
    (ii) Foot the listing of cashed vouchers and trace to the totals 
produced by the system;
    (iii) Review all exceptions for propriety of transactions and 
unusual occurrences;
    (iv) Review all voids for propriety;
    (v) Verify the results as produced by the system to the results 
provided by an independent source;
    (vi) Regrade 1% of paid (cashed) tickets to ensure accuracy and 
propriety; and
    (vii) When applicable, reconcile the totals of future tickets 
written to the totals produced by the system for both earned and 
unearned take, and review the reports to ascertain that future wagers 
are properly included on the day of the event.
    (8) At least annually, the auditor shall foot the wagers for one day 
and trace to the total produced by the system.
    (9) At least one day per quarter, the auditor shall recalculate and 
verify the change in the unpaid winners to the total purged tickets.

[67 FR 43400, June 27, 2002, as amended at 70 FR 47106, Aug. 12, 2005]



Sec. 542.12  What are the minimum internal control standards for table games?

    (a) Computer applications. For any computer applications utilized, 
alternate documentation and/or procedures that provide at least the 
level of control described by the standards in this section, as approved 
by the Tribal gaming regulatory authority, will be acceptable.

[[Page 92]]

    (b) Standards for drop and count. The procedures for the collection 
of the table game drop and the count thereof shall comply with Sec. 
542.21, Sec. 542.31, or Sec. 542.41 (as applicable).
    (c) Fill and credit standards. (1) Fill slips and credit slips shall 
be in at least triplicate form, and in a continuous, prenumbered series. 
Such slips shall be concurrently numbered in a form utilizing the 
alphabet and only in one series at a time. The alphabet need not be used 
if the numerical series is not repeated during the business year.
    (2) Unissued and issued fill/credit slips shall be safeguarded and 
adequate procedures shall be employed in their distribution, use, and 
control. Personnel from the cashier or pit departments shall have no 
access to the secured (control) copies of the fill/credit slips.
    (3) When a fill/credit slip is voided, the cashier shall clearly 
mark ``void'' across the face of the original and first copy, the 
cashier and one other person independent of the transactions shall sign 
both the original and first copy, and shall submit them to the 
accounting department for retention and accountability.
    (4) Fill transactions shall be authorized by pit supervisory 
personnel before the issuance of fill slips and transfer of chips, 
tokens, or cash equivalents. The fill request shall be communicated to 
the cage where the fill slip is prepared.
    (5) At least three parts of each fill slip shall be utilized as 
follows:
    (i) One part shall be transported to the pit with the fill and, 
after the appropriate signatures are obtained, deposited in the table 
game drop box;
    (ii) One part shall be retained in the cage for reconciliation of 
the cashier bank; and
    (iii) For computer systems, one part shall be retained in a secure 
manner to insure that only authorized persons may gain access to it. For 
manual systems, one part shall be retained in a secure manner in a 
continuous unbroken form.
    (6) For Tier C gaming operations, the part of the fill slip that is 
placed in the table game drop box shall be of a different color for 
fills than for credits, unless the type of transaction is clearly 
distinguishable in another manner (the checking of a box on the form 
shall not be a clearly distinguishable indicator).
    (7) The table number, shift, and amount of fill by denomination and 
in total shall be noted on all copies of the fill slip. The correct date 
and time shall be indicated on at least two copies.
    (8) All fills shall be carried from the cashier's cage by a person 
who is independent of the cage or pit.
    (9) The fill slip shall be signed by at least the following persons 
(as an indication that each has counted the amount of the fill and the 
amount agrees with the fill slip):
    (i) Cashier who prepared the fill slip and issued the chips, tokens, 
or cash equivalent;
    (ii) Runner who carried the chips, tokens, or cash equivalents from 
the cage to the pit;
    (iii) Dealer or boxperson who received the chips, tokens, or cash 
equivalents at the gaming table; and
    (iv) Pit supervisory personnel who supervised the fill transaction.
    (10) Fills shall be broken down and verified by the dealer or 
boxperson in public view before the dealer or boxperson places the fill 
in the table tray.
    (11) A copy of the fill slip shall then be deposited into the drop 
box on the table by the dealer, where it shall appear in the soft count 
room with the cash receipts for the shift.
    (12) Table credit transactions shall be authorized by a pit 
supervisor before the issuance of credit slips and transfer of chips, 
tokens, or other cash equivalent. The credit request shall be 
communicated to the cage where the credit slip is prepared.
    (13) At least three parts of each credit slip shall be utilized as 
follows:
    (i) Two parts of the credit slip shall be transported by the runner 
to the pit. After signatures of the runner, dealer, and pit supervisor 
are obtained, one copy shall be deposited in the table game drop box and 
the original shall accompany transport of the chips, tokens, markers, or 
cash equivalents from the pit to the cage for verification and signature 
of the cashier.
    (ii) For computer systems, one part shall be retained in a secure 
manner to

[[Page 93]]

insure that only authorized persons may gain access to it. For manual 
systems, one part shall be retained in a secure manner in a continuous 
unbroken form.
    (14) The table number, shift, and the amount of credit by 
denomination and in total shall be noted on all copies of the credit 
slip. The correct date and time shall be indicated on at least two 
copies.
    (15) Chips, tokens, and/or cash equivalents shall be removed from 
the table tray by the dealer or boxperson and shall be broken down and 
verified by the dealer or boxperson in public view prior to placing them 
in racks for transfer to the cage.
    (16) All chips, tokens, and cash equivalents removed from the tables 
and markers removed from the pit shall be carried to the cashier's cage 
by a person who is independent of the cage or pit.
    (17) The credit slip shall be signed by at least the following 
persons (as an indication that each has counted or, in the case of 
markers, reviewed the items transferred):
    (i) Cashier who received the items transferred from the pit and 
prepared the credit slip;
    (ii) Runner who carried the items transferred from the pit to the 
cage;
    (iii) Dealer who had custody of the items prior to transfer to the 
cage; and
    (iv) Pit supervisory personnel who supervised the credit 
transaction.
    (18) The credit slip shall be inserted in the drop box by the 
dealer.
    (19) Chips, tokens, or other cash equivalents shall be deposited on 
or removed from gaming tables only when accompanied by the appropriate 
fill/credit or marker transfer forms.
    (20) Cross fills (the transfer of chips between table games) and 
even cash exchanges are prohibited in the pit.
    (d) Table inventory forms. (1) At the close of each shift, for those 
table banks that were opened during that shift:
    (i) The table's chip, token, coin, and marker inventory shall be 
counted and recorded on a table inventory form; or
    (ii) If the table banks are maintained on an imprest basis, a final 
fill or credit shall be made to bring the bank back to par.
    (2) If final fills are not made, beginning and ending inventories 
shall be recorded on the master game sheet for shift win calculation 
purposes.
    (3) The accuracy of inventory forms prepared at shift end shall be 
verified by the outgoing pit supervisor and the dealer. Alternatively, 
if the dealer is not available, such verification may be provided by 
another pit supervisor or another supervisor from another gaming 
department. Verifications shall be evidenced by signature on the 
inventory form.
    (4) If inventory forms are placed in the drop box, such action shall 
be performed by a person other than a pit supervisor.
    (e) Table games computer generated documentation standards. (1) The 
computer system shall be capable of generating adequate documentation of 
all information recorded on the source documents and transaction detail 
(e.g., fill/credit slips, markers, etc.).
    (2) This documentation shall be restricted to authorized personnel.
    (3) The documentation shall include, at a minimum:
    (i) System exception information (e.g., appropriate system parameter 
information, corrections, voids, etc.); and
    (ii) Personnel access listing, which includes, at a minimum:
    (A) Employee name or employee identification number (if applicable); 
and
    (B) Listing of functions employees can perform or equivalent means 
of identifying the same.
    (f) Standards for playing cards and dice. (1) Playing cards and dice 
shall be maintained in a secure location to prevent unauthorized access 
and to reduce the possibility of tampering.
    (2) Used cards and dice shall be maintained in a secure location 
until marked, scored, or destroyed, in a manner as approved by the 
Tribal gaming regulatory authority, to prevent unauthorized access and 
reduce the possibility of tampering.
    (3) The Tribal gaming regulatory authority, or the gaming operation 
as approved by the Tribal gaming regulatory authority, shall establish 
and the gaming operation shall comply with a reasonable time period, 
which shall not exceed seven (7) days, within

[[Page 94]]

which to mark, cancel, or destroy cards and dice from play.
    (i) This standard shall not apply where playing cards or dice are 
retained for an investigation.
    (ii) [Reserved]
    (4) A card control log shall be maintained that documents when cards 
and dice are received on site, distributed to and returned from tables 
and removed from play by the gaming operation.
    (g) Plastic cards. Notwithstanding paragraph (f) of this section, if 
a gaming operation uses plastic cards (not plastic-coated cards), the 
cards may be used for up to three (3) months if the plastic cards are 
routinely inspected, and washed or cleaned in a manner and time frame 
approved by the Tribal gaming regulatory authority.
    (h) Standards for supervision. Pit supervisory personnel (with 
authority equal to or greater than those being supervised) shall provide 
supervision of all table games.
    (i) Analysis of table game performance standards. (1) Records shall 
be maintained by day and shift indicating any single-deck blackjack 
games that were dealt for an entire shift.
    (2) Records reflecting hold percentage by table and type of game 
shall be maintained by shift, by day, cumulative month-to-date, and 
cumulative year-to-date.
    (3) This information shall be presented to and reviewed by 
management independent of the pit department on at least a monthly 
basis.
    (4) The management in paragraph (i)(3) of this section shall 
investigate any unusual fluctuations in hold percentage with pit 
supervisory personnel.
    (5) The results of such investigations shall be documented, 
maintained for inspection, and provided to the Tribal gaming regulatory 
authority upon request.
    (j) Accounting/auditing standards. (1) The accounting and auditing 
procedures shall be performed by personnel who are independent of the 
transactions being audited/accounted for.
    (2) If a table game has the capability to determine drop (e.g., 
bill-in/coin-drop meters, bill acceptor, computerized record, etc.) the 
dollar amount of the drop shall be reconciled to the actual drop by 
shift.
    (3) Accounting/auditing employees shall review exception reports for 
all computerized table games systems at least monthly for propriety of 
transactions and unusual occurrences.
    (4) All noted improper transactions or unusual occurrences shall be 
investigated with the results documented.
    (5) Evidence of table games auditing procedures and any follow-up 
performed shall be documented, maintained for inspection, and provided 
to the Tribal gaming regulatory authority upon request.
    (6) A daily recap shall be prepared for the day and month-to-date, 
which shall include the following information:
    (i) Drop;
    (ii) Win; and
    (iii) Gross revenue.
    (k) Marker credit play. (1) If a gaming operation allows marker 
credit play (exclusive of rim credit and call bets), the following 
standards shall apply:
    (i) A marker system shall allow for credit to be both issued and 
repaid in the pit.
    (ii) Prior to the issuance of gaming credit to a player, the 
employee extending the credit shall contact the cashier or other 
independent source to determine if the player's credit limit has been 
properly established and there is sufficient remaining credit available 
for the advance.
    (iii) Proper authorization of credit extension in excess of the 
previously established limit shall be documented.
    (iv) The amount of credit extended shall be communicated to the cage 
or another independent source and the amount documented within a 
reasonable time subsequent to each issuance.
    (v) The marker form shall be prepared in at least triplicate form 
(triplicate form being defined as three parts performing the functions 
delineated in the standard in paragraph (k)(1)(vi) of this section), 
with a preprinted or concurrently printed marker number, and utilized in 
numerical sequence. (This requirement shall not preclude the 
distribution of batches of markers to various pits.)
    (vi) At least three parts of each separately numbered marker form 
shall be utilized as follows:

[[Page 95]]

    (A) Original shall be maintained in the pit until settled or 
transferred to the cage;
    (B) Payment slip shall be maintained in the pit until the marker is 
settled or transferred to the cage. If paid in the pit, the slip shall 
be inserted in the table game drop box. If not paid in the pit, the slip 
shall be transferred to the cage with the original;
    (C) Issue slip shall be inserted into the appropriate table game 
drop box when credit is extended or when the player has signed the 
original.
    (vii) When marker documentation (e.g., issue slip and payment slip) 
is inserted in the drop box, such action shall be performed by the 
dealer or boxperson at the table.
    (viii) A record shall be maintained that details the following 
(e.g., master credit record retained at the pit podium):
    (A) The signature or initials of the person(s) approving the 
extension of credit (unless such information is contained elsewhere for 
each issuance);
    (B) The legible name of the person receiving the credit;
    (C) The date and shift of granting the credit;
    (D) The table on which the credit was extended;
    (E) The amount of credit issued;
    (F) The marker number;
    (G) The amount of credit remaining after each issuance or the total 
credit available for all issuances;
    (H) The amount of payment received and nature of settlement (e.g., 
credit slip number, cash, chips, etc.); and
    (I) The signature or initials of the person receiving payment/
settlement.
    (ix) The forms required in paragraphs (k)(1)(v), (vi), and (viii) of 
this section shall be safeguarded, and adequate procedures shall be 
employed to control the distribution, use, and access to these forms.
    (x) All credit extensions shall be initially evidenced by lammer 
buttons, which shall be displayed on the table in public view and placed 
there by supervisory personnel.
    (xi) Marker preparation shall be initiated and other records updated 
within approximately one hand of play following the initial issuance of 
credit to the player.
    (xii) Lammer buttons shall be removed only by the dealer or 
boxperson employed at the table upon completion of a marker transaction.
    (xiii) The original marker shall contain at least the following 
information:
    (A) Marker number;
    (B) Player's name and signature;
    (C) Date; and
    (D) Amount of credit issued.
    (xiv) The issue slip or stub shall include the same marker number as 
the original, the table number, date and time of issuance, and amount of 
credit issued. The issue slip or stub shall also include the signature 
of the person extending the credit, and the signature or initials of the 
dealer or boxperson at the applicable table, unless this information is 
included on another document verifying the issued marker.
    (xv) The payment slip shall include the same marker number as the 
original. When the marker is paid in full in the pit, it shall also 
include the table number where paid, date and time of payment, nature of 
settlement (cash, chips, etc.), and amount of payment. The payment slip 
shall also include the signature of pit supervisory personnel 
acknowledging payment, and the signature or initials of the dealer or 
boxperson receiving payment, unless this information is included on 
another document verifying the payment of the marker.
    (xvi) When partial payments are made in the pit, a new marker shall 
be completed reflecting the remaining balance and the marker number of 
the marker originally issued.
    (xvii) When partial payments are made in the pit, the payment slip 
of the marker that was originally issued shall be properly cross-
referenced to the new marker number, completed with all information 
required by paragraph (k)(1)(xv) of this section, and inserted into the 
drop box.
    (xviii) The cashier's cage or another independent source shall be 
notified when payments (full or partial) are made in the pit so that 
cage records can be updated for such transactions. Notification shall be 
made no later than when the customer's play is completed or at shift 
end, whichever is earlier.

[[Page 96]]

    (xix) All portions of markers, both issued and unissued, shall be 
safeguarded and procedures shall be employed to control the 
distribution, use and access to the forms.
    (xx) An investigation shall be performed to determine the cause and 
responsibility for loss whenever marker forms, or any part thereof, are 
missing. These investigations shall be documented, maintained for 
inspection, and provided to the Tribal gaming regulatory authority upon 
request.
    (xxi) When markers are transferred to the cage, marker transfer 
forms or marker credit slips (or similar documentation) shall be 
utilized and such documents shall include, at a minimum, the date, time, 
shift, marker number(s), table number(s), amount of each marker, the 
total amount transferred, signature of pit supervisory personnel 
releasing instruments from the pit, and the signature of cashier 
verifying receipt of instruments at the cage.
    (xxii) All markers shall be transferred to the cage within twenty-
four (24) hours of issuance.
    (xxiii) Markers shall be transported to the cashier's cage by a 
person who is independent of the marker issuance and payment functions 
(pit clerks may perform this function).
    (2) [Reserved]
    (l) Name credit instruments accepted in the pit. (1) For the 
purposes of this paragraph, name credit instruments means personal 
checks, payroll checks, counter checks, hold checks, traveler's checks, 
or other similar instruments that are accepted in the pit as a form of 
credit issuance to a player with an approved credit limit.
    (2) The following standards shall apply if name credit instruments 
are accepted in the pit:
    (i) A name credit system shall allow for the issuance of credit 
without using markers;
    (ii) Prior to accepting a name credit instrument, the employee 
extending the credit shall contact the cashier or another independent 
source to determine if the player's credit limit has been properly 
established and the remaining credit available is sufficient for the 
advance;
    (iii) All name credit instruments shall be transferred to the 
cashier's cage (utilizing a two-part order for credit) immediately 
following the acceptance of the instrument and issuance of chips (if 
name credit instruments are transported accompanied by a credit slip, an 
order for credit is not required);
    (iv) The order for credit (if applicable) and the credit slip shall 
include the customer's name, amount of the credit instrument, the date, 
time, shift, table number, signature of pit supervisory personnel 
releasing instrument from pit, and the signature of the cashier 
verifying receipt of instrument at the cage;
    (v) The procedures for transacting table credits at standards in 
paragraphs (c)(12) through (19) of this section shall be strictly 
adhered to; and
    (vi) The acceptance of payments in the pit for name credit 
instruments shall be prohibited.
    (m) Call bets. (1) The following standards shall apply if call bets 
are accepted in the pit:
    (i) A call bet shall be evidenced by the placement of a lammer 
button, chips, or other identifiable designation in an amount equal to 
that of the wager in a specific location on the table;
    (ii) The placement of the lammer button, chips, or other 
identifiable designation shall be performed by supervisory/boxperson 
personnel. The placement may be performed by a dealer only if the 
supervisor physically observes and gives specific authorization;
    (iii) The call bet shall be settled at the end of each hand of play 
by the preparation of a marker, repayment of the credit extended, or the 
payoff of the winning wager. Call bets extending beyond one hand of play 
shall be prohibited; and
    (iv) The removal of the lammer button, chips, or other identifiable 
designation shall be performed by the dealer/ boxperson upon completion 
of the call bet transaction.
    (2) [Reserved]
    (n) Rim credit. (1) The following standards shall apply if rim 
credit is extended in the pit:
    (i) Rim credit shall be evidenced by the issuance of chips to be 
placed in a

[[Page 97]]

neutral zone on the table and then extended to the customer for the 
customer to wager, or to the dealer to wager for the customer, and by 
the placement of a lammer button or other identifiable designation in an 
amount equal to that of the chips extended; and
    (ii) Rim credit shall be recorded on player cards, or similarly used 
documents, which shall be:
    (A) Prenumbered or concurrently numbered and accounted for by a 
department independent of the pit;
    (B) For all extensions and subsequent repayments, evidenced by the 
initials or signatures of a supervisor and the dealer attesting to the 
validity of each credit extension and repayment;
    (C) An indication of the settlement method (e.g., serial number of 
marker issued, chips, cash);
    (D) Settled no later than when the customer leaves the table at 
which the card is prepared;
    (E) Transferred to the accounting department on a daily basis; and
    (F) Reconciled with other forms utilized to control the issuance of 
pit credit (e.g., master credit records, table cards).
    (2) [Reserved]
    (o) Foreign currency. (l) The following standards shall apply if 
foreign currency is accepted in the pit:
    (i) Foreign currency transactions shall be authorized by a pit 
supervisor/ boxperson who completes a foreign currency exchange form 
before the exchange for chips or tokens;
    (ii) Foreign currency exchange forms include the country of origin, 
total face value, amount of chips/token extended (i.e., conversion 
amount), signature of supervisor/boxperson, and the dealer completing 
the transaction;
    (iii) Foreign currency exchange forms and the foreign currency shall 
be inserted in the drop box by the dealer; and
    (iv) Alternate procedures specific to the use of foreign valued 
gaming chips shall be developed by the Tribal gaming regulatory 
authority, or the gaming operation as approved by the Tribal gaming 
regulatory authority.
    (2) [Reserved]

[67 FR 43400, June 27, 2002, as amended at 70 FR 23021, May 4, 2005]



Sec. 542.13  What are the minimum internal control standards for
gaming machines?

    (a) Standards for gaming machines. (1) For this section only, credit 
or customer credit means a unit of value equivalent to cash or cash 
equivalents deposited, wagered, won, lost, or redeemed by a customer.
    (2) Coins shall include tokens.
    (3) For all computerized gaming machine systems, a personnel access 
listing shall be maintained, which includes at a minimum:
    (i) Employee name or employee identification number (or equivalent); 
and
    (ii) Listing of functions employee can perform or equivalent means 
of identifying same.
    (b) Computer applications. For any computer applications utilized, 
alternate documentation and/or procedures that provide at least the 
level of control described by the standards in this section, as approved 
by the Tribal gaming regulatory authority, will be acceptable.
    (c) Standards for drop and count. The procedures for the collection 
of the gaming machine drop and the count thereof shall comply with Sec. 
542.21, Sec. 542.31, or Sec. 542.41 (as applicable).
    (d) Jackpot payouts, gaming machines fills, short pays and 
accumulated credit payouts standards. (1) For jackpot payouts and gaming 
machine fills, documentation shall include the following information:
    (i) Date and time;
    (ii) Machine number;
    (iii) Dollar amount of cash payout or gaming machine fill (both 
alpha and numeric) or description of personal property awarded, 
including fair market value. Alpha is optional if another unalterable 
method is used for evidencing the amount of the payout;
    (iv) Game outcome (including reel symbols, card values, suits, etc.) 
for jackpot payouts. Game outcome is not required if a computerized 
jackpot/fill system is used;
    (v) Preprinted or concurrently printed sequential number; and
    (vi) Signatures of at least two employees verifying and witnessing 
the payout or gaming machine fill (except as otherwise provided in 
paragraphs

[[Page 98]]

(d)(1)(vi)(A), (B), and (C) of this section).
    (A) Jackpot payouts over a predetermined amount shall require the 
signature and verification of a supervisory or management employee 
independent of the gaming machine department (in addition to the two 
signatures required in paragraph (d)(1)(vi) of this section). 
Alternatively, if an on-line accounting system is utilized, only two 
signatures are required: one employee and one supervisory or management 
employee independent of the gaming machine department. This 
predetermined amount shall be authorized by management (as approved by 
the Tribal gaming regulatory authority), documented, and maintained.
    (B) With regard to jackpot payouts and hopper fills, the signature 
of one employee is sufficient if an on-line accounting system is 
utilized and the jackpot or fill is less than $1,200.
    (C) On graveyard shifts (eight-hour maximum) payouts/fills less than 
$100 can be made without the payout/fill being witnessed by a second 
person.
    (2) For short pays of $10.00 or more, and payouts required for 
accumulated credits, the payout form shall include the following 
information:
    (i) Date and time;
    (ii) Machine number;
    (iii) Dollar amount of payout (both alpha and numeric); and
    (iv) The signature of at least one (1) employee verifying and 
witnessing the payout.
    (A) Where the payout amount is $50 or more, signatures of at least 
two (2) employees verifying and witnessing the payout. Alternatively, 
the signature of one (1) employee is sufficient if an on-line accounting 
system is utilized and the payout amount is less than $3,000.
    (B) [Reserved]
    (3) Computerized jackpot/fill systems shall be restricted so as to 
prevent unauthorized access and fraudulent payouts by one person as 
required by Sec. 542.16(a).
    (4) Payout forms shall be controlled and routed in a manner that 
precludes any one person from producing a fraudulent payout by forging 
signatures or by altering the amount paid out subsequent to the payout 
and misappropriating the funds.
    (e) Promotional payouts or awards. (1) If a gaming operation offers 
promotional payouts or awards that are not reflected on the gaming 
machine pay table, then the payout form/documentation shall include:
    (i) Date and time;
    (ii) Machine number and denomination;
    (iii) Dollar amount of payout or description of personal property 
(e.g., jacket, toaster, car, etc.), including fair market value;
    (iv) Type of promotion (e.g., double jackpots, four-of-a-kind bonus, 
etc.); and
    (v) Signature of at least one employee authorizing and completing 
the transaction.
    (2) [Reserved]
    (f) Gaming machine department funds standards. (1) The gaming 
machine booths and change banks that are active during the shift shall 
be counted down and reconciled each shift by two employees utilizing 
appropriate accountability documentation. Unverified transfers of cash 
and/or cash equivalents are prohibited.
    (2) The wrapping of loose gaming machine booth and cage cashier coin 
shall be performed at a time or location that does not interfere with 
the hard count/wrap process or the accountability of that process.
    (3) A record shall be maintained evidencing the transfers of wrapped 
and unwrapped coins and retained for seven (7) days.
    (g) EPROM control standards. (1) At least annually, procedures shall 
be performed to insure the integrity of a sample of gaming machine game 
program EPROMs, or other equivalent game software media, by personnel 
independent of the gaming machine department or the machines being 
tested.
    (2) The Tribal gaming regulatory authority, or the gaming operation 
subject to the approval of the Tribal gaming regulatory authority, shall 
develop and implement procedures for the following:
    (i) Removal of EPROMs, or other equivalent game software media, from 
devices, the verification of the existence of errors as applicable, and 
the correction via duplication from the

[[Page 99]]

master game program EPROM, or other equivalent game software media;
    (ii) Copying one gaming device program to another approved program;
    (iii) Verification of duplicated EPROMs before being offered for 
play;
    (iv) Receipt and destruction of EPROMs, or other equivalent game 
software media; and
    (v) Securing the EPROM, or other equivalent game software media, 
duplicator, and master game EPROMs, or other equivalent game software 
media, from unrestricted access.
    (3) The master game program number, par percentage, and the pay 
table shall be verified to the par sheet when initially received from 
the manufacturer.
    (4) Gaming machines with potential jackpots in excess of $100,000 
shall have the game software circuit boards locked or physically sealed. 
The lock or seal shall necessitate the presence of a person independent 
of the gaming machine department to access the device game program 
EPROM, or other equivalent game software media. If a seal is used to 
secure the board to the frame of the gaming device, it shall be pre-
numbered.
    (5) Records that document the procedures in paragraph (g)(2)(i) of 
this section shall include the following information:
    (i) Date;
    (ii) Machine number (source and destination);
    (iii) Manufacturer;
    (iv) Program number;
    (v) Personnel involved;
    (vi) Reason for duplication;
    (vii) Disposition of any permanently removed EPROM, or other 
equivalent game software media;
    (viii) Seal numbers, if applicable; and
    (ix) Approved testing lab approval numbers, if available.
    (6) EPROMS, or other equivalent game software media, returned to 
gaming devices shall be labeled with the program number. Supporting 
documentation shall include the date, program number, information 
identical to that shown on the manufacturer's label, and initials of the 
person replacing the EPROM, or other equivalent game software media.
    (h) Standards for evaluating theoretical and actual hold 
percentages.
    (1) Accurate and current theoretical hold worksheets shall be 
maintained for each gaming machine.
    (2) For multi-game/multi-denominational machines, an employee or 
department independent of the gaming machine department shall:
    (i) Weekly, record the total coin-in meter;
    (ii) Quarterly, record the coin-in meters for each paytable 
contained in the machine; and
    (iii) On an annual basis, adjust the theoretical hold percentage in 
the gaming machine statistical report to a weighted average based upon 
the ratio of coin-in for each game paytable.
    (3) For those gaming operations that are unable to perform the 
weighted average calculation as required by paragraph (h)(2) of this 
section, the following procedures shall apply:
    (i) On at least an annual basis, calculate the actual hold 
percentage for each gaming machine;
    (ii) On at least an annual basis, adjust the theoretical hold 
percentage in the gaming machine statistical report for each gaming 
machine to the previously calculated actual hold percentage; and
    (iii) The adjusted theoretical hold percentage shall be within the 
spread between the minimum and maximum theoretical payback percentages.
    (4) The adjusted theoretical hold percentage for multi-game/multi-
denominational machines may be combined for machines with exactly the 
same game mix throughout the year.
    (5) The theoretical hold percentages used in the gaming machine 
analysis reports should be within the performance standards set by the 
manufacturer.
    (6) Records shall be maintained for each machine indicating the 
dates and type of changes made and the recalculation of theoretical hold 
as a result of the changes.
    (7) Records shall be maintained for each machine that indicate the 
date the machine was placed into service, the date the machine was 
removed from operation, the date the machine was placed back into 
operation, and

[[Page 100]]

any changes in machine numbers and designations.
    (8) All of the gaming machines shall contain functioning meters that 
shall record coin-in or credit-in, or on-line gaming machine monitoring 
system that captures similar data.
    (9) All gaming machines with bill acceptors shall contain 
functioning billing meters that record the dollar amounts or number of 
bills accepted by denomination.
    (10) Gaming machine in-meter readings shall be recorded at least 
weekly (monthly for Tier A and Tier B gaming operations) immediately 
prior to or subsequent to a gaming machine drop. On-line gaming machine 
monitoring systems can satisfy this requirement. However, the time 
between readings may extend beyond one week in order for a reading to 
coincide with the end of an accounting period only if such extension is 
for no longer than six (6) days.
    (11) The employee who records the in-meter reading shall either be 
independent of the hard count team or shall be assigned on a rotating 
basis, unless the in-meter readings are randomly verified quarterly for 
all gaming machines and bill acceptors by a person other than the 
regular in-meter reader.
    (12) Upon receipt of the meter reading summary, the accounting 
department shall review all meter readings for reasonableness using pre-
established parameters.
    (13) Prior to final preparation of statistical reports, meter 
readings that do not appear reasonable shall be reviewed with gaming 
machine department employees or other appropriate designees, and 
exceptions documented, so that meters can be repaired or clerical errors 
in the recording of meter readings can be corrected.
    (14) A report shall be produced at least monthly showing month-to-
date, year-to-date (previous twelve (12) months data preferred), and if 
practicable, life-to-date actual hold percentage computations for 
individual machines and a comparison to each machine's theoretical hold 
percentage previously discussed.
    (15) Each change to a gaming machine's theoretical hold percentage, 
including progressive percentage contributions, shall result in that 
machine being treated as a new machine in the statistical reports (i.e., 
not commingling various hold percentages), except for adjustments made 
in accordance with paragraph (h)(2) of this section.
    (16) If promotional payouts or awards are included on the gaming 
machine statistical reports, it shall be in a manner that prevents 
distorting the actual hold percentages of the affected machines.
    (17) The statistical reports shall be reviewed by both gaming 
machine department management and management employees independent of 
the gaming machine department on at least a monthly basis.
    (18) For those machines that have experienced at least 100,000 
wagering transactions, large variances (three percent (3%) recommended) 
between theoretical hold and actual hold shall be investigated and 
resolved by a department independent of the gaming machine department 
with the findings documented and provided to the Tribal gaming 
regulatory authority upon request in a timely manner.
    (19) Maintenance of the on-line gaming machine monitoring system 
data files shall be performed by a department independent of the gaming 
machine department. Alternatively, maintenance may be performed by 
gaming machine supervisory employees if sufficient documentation is 
generated and it is randomly verified on a monthly basis by employees 
independent of the gaming machine department.
    (20) Updates to the on-line gaming machine monitoring system to 
reflect additions, deletions, or movements of gaming machines shall be 
made at least weekly prior to in-meter readings and the weigh process.
    (i) Gaming machine hopper contents standards. (1) When machines are 
temporarily removed from the floor, gaming machine drop and hopper 
contents shall be protected to preclude the misappropriation of stored 
funds.
    (2) When machines are permanently removed from the floor, the gaming 
machine drop and hopper contents shall be counted and recorded by at 
least two employees with appropriate

[[Page 101]]

documentation being routed to the accounting department for proper 
recording and accounting for initial hopper loads.
    (j) Player tracking system. (1) The following standards apply if a 
player tracking system is utilized:
    (i) The player tracking system shall be secured so as to prevent 
unauthorized access (e.g., changing passwords at least quarterly and 
physical access to computer hardware, etc.).
    (ii) The addition of points to members' accounts other than through 
actual gaming machine play shall be sufficiently documented (including 
substantiation of reasons for increases) and shall be authorized by a 
department independent of the player tracking and gaming machines. 
Alternatively, addition of points to members' accounts may be authorized 
by gaming machine supervisory employees if sufficient documentation is 
generated and it is randomly verified by employees independent of the 
gaming machine department on a quarterly basis.
    (iii) Booth employees who redeem points for members shall be allowed 
to receive lost players club cards, provided that they are immediately 
deposited into a secured container for retrieval by independent 
personnel.
    (iv) Changes to the player tracking system parameters, such as point 
structures and employee access, shall be performed by supervisory 
employees independent of the gaming machine department. Alternatively, 
changes to player tracking system parameters may be performed by gaming 
machine supervisory employees if sufficient documentation is generated 
and it is randomly verified by supervisory employees independent of the 
gaming machine department on a monthly basis.
    (v) All other changes to the player tracking system shall be 
appropriately documented.
    (2) [Reserved]
    (k) In-house progressive gaming machine standards. (1) A meter that 
shows the amount of the progressive jackpot shall be conspicuously 
displayed at or near the machines to which the jackpot applies.
    (2) At least once each day, each gaming operation shall record the 
amount shown on each progressive jackpot meter at the gaming operation 
except for those jackpots that can be paid directly from the machine's 
hopper;
    (3) Explanations for meter reading decreases shall be maintained 
with the progressive meter reading sheets, and where the payment of a 
jackpot is the explanation for a decrease, the gaming operation shall 
record the jackpot payout number on the sheet or have the number 
reasonably available; and
    (4) Each gaming operation shall record the base amount of each 
progressive jackpot the gaming operation offers.
    (5) The Tribal gaming regulatory authority shall approve procedures 
specific to the transfer of progressive amounts in excess of the base 
amount to other gaming machines. Such procedures may also include other 
methods of distribution that accrue to the benefit of the gaming public 
via an award or prize.
    (l) Wide area progressive gaming machine standards. (1) A meter that 
shows the amount of the progressive jackpot shall be conspicuously 
displayed at or near the machines to which the jackpot applies.
    (2) As applicable to participating gaming operations, the wide area 
progressive gaming machine system shall be adequately restricted to 
prevent unauthorized access (e.g., changing passwords at least 
quarterly, restrict access to EPROMs or other equivalent game software 
media, and restrict physical access to computer hardware, etc.).
    (3) The Tribal gaming regulatory authority shall approve procedures 
for the wide area progressive system that:
    (i) Reconcile meters and jackpot payouts;
    (ii) Collect/drop gaming machine funds;
    (iii) Verify jackpot, payment, and billing to gaming operations on 
pro-rata basis;
    (iv) System maintenance;
    (v) System accuracy; and
    (vi) System security.
    (4) Reports, where applicable, adequately documenting the procedures 
required in paragraph (l)(3) of this section shall be generated and 
retained.

[[Page 102]]

    (m) Accounting/auditing standards. (1) Gaming machine accounting/
auditing procedures shall be performed by employees who are independent 
of the transactions being reviewed.
    (2) For on-line gaming machine monitoring systems, procedures shall 
be performed at least monthly to verify that the system is transmitting 
and receiving data from the gaming machines properly and to verify the 
continuing accuracy of the coin-in meter readings as recorded in the 
gaming machine statistical report.
    (3) For weigh scale and currency interface systems, for at least one 
drop period per month accounting/auditing employees shall make such 
comparisons as necessary to the system generated count as recorded in 
the gaming machine statistical report. Discrepancies shall be resolved 
prior to generation/distribution of gaming machine reports.
    (4) For each drop period, accounting/auditing personnel shall 
compare the coin-to-drop meter reading to the actual drop amount. 
Discrepancies should be resolved prior to generation/distribution of on-
line gaming machine monitoring system statistical reports.
    (5) Follow-up shall be performed for any one machine having an 
unresolved variance between actual coin drop and coin-to-drop meter 
reading in excess of three percent (3%) and over $25.00. The follow-up 
performed and results of the investigation shall be documented, 
maintained for inspection, and provided to the Tribal gaming regulatory 
authority upon request.
    (6) For each drop period, accounting/auditing employees shall 
compare the bill-in meter reading to the total bill acceptor drop amount 
for the period. Discrepancies shall be resolved before the generation/
distribution of gaming machine statistical reports.
    (7) Follow-up shall be performed for any one machine having an 
unresolved variance between actual currency drop and bill-in meter 
reading in excess of an amount that is both more than $25 and at least 
three percent (3%) of the actual currency drop. The follow-up performed 
and results of the investigation shall be documented, maintained for 
inspection, and provided to the Tribal gaming regulatory authority upon 
request.
    (8) At least annually, accounting/auditing personnel shall randomly 
verify that EPROM or other equivalent game software media changes are 
properly reflected in the gaming machine analysis reports.
    (9) Accounting/auditing employees shall review exception reports for 
all computerized gaming machine systems on a daily basis for propriety 
of transactions and unusual occurrences.
    (10) All gaming machine auditing procedures and any follow-up 
performed shall be documented, maintained for inspection, and provided 
to the Tribal gaming regulatory authority upon request.
    (n) Cash-out tickets. For gaming machines that utilize cash-out 
tickets, the following standards apply. This standard is not applicable 
to Tiers A and B. Tier A and B gaming operations shall develop adequate 
standards governing the security over the issuance of the cash-out paper 
to the gaming machines and the redemption of cash-out slips.
    (1) In addition to the applicable auditing and accounting standards 
in paragraph (m) of this section, on a quarterly basis, the gaming 
operation shall foot all jackpot cash-out tickets equal to or greater 
than $1,200 and trace totals to those produced by the host validation 
computer system.
    (2) The customer may request a cash-out ticket from the gaming 
machine that reflects all remaining credits. The cash-out ticket shall 
be printed at the gaming machine by an internal document printer. The 
cash-out ticket shall be valid for a time period specified by the Tribal 
gaming regulatory authority, or the gaming operation as approved by the 
Tribal gaming regulatory authority. Cash-out tickets may be redeemed for 
payment or inserted in another gaming machine and wagered, if 
applicable, during the specified time period.
    (3) The customer shall redeem the cash-out ticket at a change booth 
or cashiers' cage. Alternatively, if a gaming operation utilizes a 
remote computer validation system, the Tribal gaming regulatory 
authority, or the gaming operation as approved by the

[[Page 103]]

Tribal gaming regulatory authority, shall develop alternate standards 
for the maximum amount that can be redeemed, which shall not exceed 
$2,999.99 per cash-out transaction.
    (4) Upon presentation of the cash-out ticket(s) for redemption, the 
following shall occur:
    (i) Scan the bar code via an optical reader or its equivalent; or
    (ii) Input the cash-out ticket validation number into the computer.
    (5) The information contained in paragraph (n)(4) of this section 
shall be communicated to the host computer. The host computer shall 
verify the authenticity of the cash-out ticket and communicate directly 
to the redeemer of the cash-out ticket.
    (6) If valid, the cashier (redeemer of the cash-out ticket) pays the 
customer the appropriate amount and the cash-out ticket is 
electronically noted ``paid'' in the system. The ``paid'' cash-out 
ticket shall remain in the cashiers'' bank for reconciliation purposes. 
The host validation computer system shall electronically reconcile the 
cashier's banks for the paid cashed-out tickets.
    (7) If invalid, the host computer shall notify the cashier (redeemer 
of the cash-out ticket). The cashier (redeemer of the cash-out ticket) 
shall refuse payment to the customer and notify a supervisor of the 
invalid condition. The supervisor shall resolve the dispute.
    (8) If the host validation computer system temporarily goes down, 
cashiers may redeem cash-out tickets at a change booth or cashier's cage 
after recording the following:
    (i) Serial number of the cash-out ticket;
    (ii) Date and time;
    (iii) Dollar amount;
    (iv) Issuing gaming machine number;
    (v) Marking ticket ``paid''; and
    (vi) Ticket shall remain in cashier's bank for reconciliation 
purposes.
    (9) Cash-out tickets shall be validated as expeditiously as possible 
when the host validation computer system is restored.
    (10) The Tribal gaming regulatory authority, or the gaming operation 
as approved by the Tribal gaming regulatory authority, shall establish 
and the gaming operation shall comply with procedures to control cash-
out ticket paper, which shall include procedures that:
    (i) Mitigate the risk of counterfeiting of cash-out ticket paper;
    (ii) Adequately control the inventory of the cash-out ticket paper; 
and
    (iii) Provide for the destruction of all unused cash-out ticket 
paper.
    (iv) Alternatively, if the gaming operation utilizes a computer 
validation system, this standard shall not apply.
    (11) If the host validation computer system is down for more than 
four (4) hours, the gaming operation shall promptly notify the Tribal 
gaming regulatory authority or its designated representative.
    (12) These gaming machine systems shall comply with all other 
standards (as applicable) in this part including:
    (i) Standards for bill acceptor drop and count;
    (ii) Standards for coin drop and count; and
    (iii) Standards concerning EPROMS or other equivalent game software 
media.
    (o) Account access cards. For gaming machines that utilize account 
access cards to activate play of the machine, the following standards 
shall apply:
    (1) Equipment. (i) A central computer, with supporting hardware and 
software, to coordinate network activities, provide system interface, 
and store and manage a player/account database;
    (ii) A network of contiguous player terminals with touch-screen or 
button-controlled video monitors connected to an electronic selection 
device and the central computer via a communications network;
    (iii) One or more electronic selection devices, utilizing random 
number generators, each of which selects any combination or combinations 
of numbers, colors, and/or symbols for a network of player terminals.
    (2) Player terminals standards. (i) The player terminals are 
connected to a game server;
    (ii) The game server shall generate and transmit to the bank of 
player terminals a set of random numbers, colors, and/or symbols at 
regular intervals. The subsequent game results are determined at the 
player terminal and

[[Page 104]]

the resulting information is transmitted to the account server;
    (iii) The game server shall be housed in a game server room or a 
secure locked cabinet.
    (3) Customer account maintenance standards. (i) A central computer 
acting as an account server shall provide customer account maintenance 
and the deposit/withdrawal function of those account balances;
    (ii) Customers may access their accounts on the computer system by 
means of an account access card at the player terminal. Each player 
terminal may be equipped with a card reader and personal identification 
number (PIN) pad or touch screen array for this purpose;
    (iii) All communications between the player terminal, or bank of 
player terminals, and the account server shall be encrypted for security 
reasons.
    (4) Customer account generation standards. (i) A computer file for 
each customer shall be prepared by a clerk, with no incompatible 
functions, prior to the customer being issued an account access card to 
be utilized for machine play. The customer may select his/her PIN to be 
used in conjunction with the account access card.
    (ii) For each customer file, an employee shall:
    (A) Record the customer's name and current address;
    (B) The date the account was opened; and
    (C) At the time the initial deposit is made, account opened, or 
credit extended, the identity of the customer shall be verified by 
examination of a valid driver's license or other reliable identity 
credential.
    (iii) The clerk shall sign-on with a unique password to a terminal 
equipped with peripherals required to establish a customer account. 
Passwords are issued and can only be changed by information technology 
personnel at the discretion of the department director.
    (iv) After entering a specified number of incorrect PIN entries at 
the cage or player terminal, the customer shall be directed to proceed 
to a clerk to obtain a new PIN. If a customer forgets, misplaces or 
requests a change to their PIN, the customer shall proceed to a clerk 
for assistance.
    (5) Deposit of credits standards. (i) The cashier shall sign-on with 
a unique password to a cashier terminal equipped with peripherals 
required to complete the credit transactions. Passwords are issued and 
can only be changed by information technology personnel at the 
discretion of the department director.
    (ii) The customer shall present cash, chips, coin or coupons along 
with their account access card to a cashier to deposit credits.
    (iii) The cashier shall complete the transaction by utilizing a card 
scanner that the cashier shall slide the customer's account access card 
through.
    (iv) The cashier shall accept the funds from the customer and enter 
the appropriate amount on the cashier terminal.
    (v) A multi-part deposit slip shall be generated by the point of 
sale receipt printer. The cashier shall direct the customer to sign the 
deposit slip receipt. One copy of the deposit slip shall be given to the 
customer. The other copy of the deposit slip shall be secured in the 
cashier's cash drawer.
    (vi) The cashier shall verify the customer's balance before 
completing the transaction. The cashier shall secure the funds in their 
cash drawer and return the account access card to the customer.
    (vii) Alternatively, if a kiosk is utilized to accept a deposit of 
credits, the Tribal gaming regulatory authority, or the gaming operation 
as approved by the Tribal gaming regulatory authority, shall establish 
and the gaming operation shall comply with procedures that safeguard the 
integrity of the kiosk system.
    (6) Prize standards. (i) Winners at the gaming machines may receive 
cash, prizes redeemable for cash or merchandise.
    (ii) If merchandise prizes are to be awarded, the specific type of 
prize or prizes that may be won shall be disclosed to the player before 
the game begins.
    (iii) The redemption period of account access cards, as approved by 
the Tribal gaming regulatory authority,

[[Page 105]]

shall be conspicuously posted in the gaming operation.
    (7) Credit withdrawal. The customer shall present their account 
access card to a cashier to withdraw their credits. The cashier shall 
perform the following:
    (i) Scan the account access card;
    (ii) Request the customer to enter their PIN, if the PIN was 
selected by the customer;
    (iii) The cashier shall ascertain the amount the customer wishes to 
withdraw and enter the amount into the computer;
    (iv) A multi-part withdrawal slip shall be generated by the point of 
sale receipt printer. The cashier shall direct the customer to sign the 
withdrawal slip;
    (v) The cashier shall verify that the account access card and the 
customer match by:
    (A) Comparing the customer to image on the computer screen;
    (B) Comparing the customer to image on customer's picture ID; or
    (C) Comparing the customer signature on the withdrawal slip to 
signature on the computer screen.
    (vi) The cashier shall verify the customer's balance before 
completing the transaction. The cashier shall pay the customer the 
appropriate amount, issue the customer the original withdrawal slip and 
return the account access card to the customer;
    (vii) The copy of the withdrawal slip shall be placed in the cash 
drawer. All account transactions shall be accurately tracked by the 
account server computer system. The copy of the withdrawal slip shall be 
forwarded to the accounting department at the end of the gaming day; and
    (viii) In the event the imaging function is temporarily disabled, 
customers shall be required to provide positive ID for cash withdrawal 
transactions at the cashier stations.
    (p) Smart cards. All smart cards (i.e., cards that possess the means 
to electronically store and retrieve data) that maintain the only source 
of account data are prohibited.

[67 FR 43400, June 27, 2002, as amended at 70 FR 23021, May 4, 2005; 70 
FR 47106, Aug. 12, 2005; 71 FR 27392, May 11, 2006]



Sec. 542.14  What are the minimum internal control standards for the cage?

    (a) Computer applications. For any computer applications utilized, 
alternate documentation and/or procedures that provide at least the 
level of control described by the standards in this section, as approved 
by the Tribal gaming regulatory authority, will be acceptable.
    (b) Personal checks, cashier's checks, payroll checks, and counter 
checks. (1) If personal checks, cashier's checks, payroll checks, or 
counter checks are cashed at the cage, the Tribal gaming regulatory 
authority, or the gaming operation as approved by the Tribal gaming 
regulatory authority, shall establish and the gaming operation shall 
comply with appropriate controls for purposes of security and integrity.
    (2) The Tribal gaming regulatory authority, or the gaming operation 
as approved by the Tribal gaming regulatory authority, shall establish 
and the gaming operation shall comply with procedures for the acceptance 
of personal checks, collecting and recording checks returned to the 
gaming operation after deposit, re-deposit, and write-off authorization.
    (3) When counter checks are issued, the following shall be included 
on the check:
    (i) The customer's name and signature;
    (ii) The dollar amount of the counter check (both alpha and 
numeric);
    (iii) Customer's bank name and bank account number;
    (iv) Date of issuance; and
    (v) Signature or initials of the person approving the counter check 
transaction.
    (4) When traveler's checks or other guaranteed drafts such as 
cashier's checks are presented, the cashier shall comply with the 
examination and documentation procedures as required by the issuer.
    (c) Customer deposited funds. If a gaming operation permits a 
customer to deposit funds with the gaming operation at the cage, the 
following standards shall apply.
    (1) The receipt or withdrawal of a customer deposit shall be 
evidenced by at least a two-part document with one

[[Page 106]]

copy going to the customer and one copy remaining in the cage file.
    (2) The multi-part receipt shall contain the following information:
    (i) Same receipt number on all copies;
    (ii) Customer's name and signature;
    (iii) Date of receipt and withdrawal;
    (iv) Dollar amount of deposit/withdrawal; and
    (v) Nature of deposit (cash, check, chips); however,
    (vi) Provided all of the information in paragraph (c)(2)(i) through 
(v) is available, the only required information for all copies of the 
receipt is the receipt number.
    (3) The Tribal gaming regulatory authority, or the gaming operation 
as approved by the Tribal gaming regulatory authority, shall establish 
and the gaming operation shall comply with procedures that:
    (i) Maintain a detailed record by customer name and date of all 
funds on deposit;
    (ii) Maintain a current balance of all customer cash deposits that 
are in the cage/vault inventory or accountability; and
    (iii) Reconcile this current balance with the deposits and 
withdrawals at least daily.
    (4) The gaming operation, as approved by the Tribal gaming 
regulatory authority, shall describe the sequence of the required 
signatures attesting to the accuracy of the information contained on the 
customer deposit or withdrawal form ensuring that the form is signed by 
the cashier.
    (5) All customer deposits and withdrawal transactions at the cage 
shall be recorded on a cage accountability form on a per-shift basis.
    (6) Only cash, cash equivalents, chips, and tokens shall be accepted 
from customers for the purpose of a customer deposit.
    (7) The Tribal gaming regulatory authority, or the gaming operation 
as approved by the Tribal gaming regulatory authority, shall establish 
and the gaming operation shall comply with procedures that verify the 
customer's identity, including photo identification.
    (8) A file for customers shall be prepared prior to acceptance of a 
deposit.
    (d) Cage and vault accountability standards. (1) All transactions 
that flow through the cage shall be summarized on a cage accountability 
form on a per shift basis and shall be supported by documentation.
    (2) The cage and vault (including coin room) inventories shall be 
counted by the oncoming and outgoing cashiers. These employees shall 
make individual counts for comparison for accuracy and maintenance of 
individual accountability. Such counts shall be recorded at the end of 
each shift during which activity took place. All discrepancies shall be 
noted and investigated. Unverified transfers of cash and/or cash 
equivalents are prohibited.
    (3) The Tribal gaming regulatory authority, or the gaming operation 
as approved by the Tribal gaming regulatory authority, shall establish 
and the gaming operation shall comply with a minimum bankroll formula to 
ensure the gaming operation maintains cash or cash equivalents (on hand 
and in the bank, if readily accessible) in an amount sufficient to 
satisfy obligations to the gaming operation's customers as they are 
incurred. A suggested bankroll formula will be provided by the 
Commission upon request.
    (e) Chip and token standards. The Tribal gaming regulatory 
authority, or the gaming operation as approved by the Tribal gaming 
regulatory authority, shall establish and the gaming operation shall 
comply with procedures for the receipt, inventory, storage, and 
destruction of gaming chips and tokens.
    (f) Coupon standards. Any program for the exchange of coupons for 
chips, tokens, and/or another coupon program shall be approved by the 
Tribal gaming regulatory authority prior to implementation. If approved, 
the gaming operation shall establish and comply with procedures that 
account for and control such programs.
    (g) Accounting/auditing standards. (1) The cage accountability shall 
be reconciled to the general ledger at least monthly.
    (2) A trial balance of gaming operation accounts receivable, 
including the name of the customer and current balance, shall be 
prepared at least

[[Page 107]]

monthly for active, inactive, settled or written-off accounts.
    (3) The trial balance of gaming operation accounts receivable shall 
be reconciled to the general ledger each month. The reconciliation and 
any follow-up performed shall be documented, maintained for inspection, 
and provided to the Tribal gaming regulatory authority upon request.
    (4) On a monthly basis an evaluation of the collection percentage of 
credit issued to identify unusual trends shall be performed.
    (5) All cage and credit accounting procedures and any follow-up 
performed shall be documented, maintained for inspection, and provided 
to the Tribal gaming regulatory authority upon request.
    (h) Extraneous items. The Tribal gaming regulatory authority, or the 
gaming operation as approved by the Tribal gaming regulatory authority, 
shall establish and the gaming operation shall comply with procedures to 
address the transporting of extraneous items, such as coats, purses, 
and/or boxes, into and out of the cage, coin room, count room, and/or 
vault.

[67 FR 43400, June 27, 2002, as amended at 70 FR 47107, Aug. 12, 2005]



Sec. 542.15  What are the minimum internal control standards for credit?

    (a) Computer applications. For any computer applications utilized, 
alternate documentation and/or procedures that provide at least the 
level of control described by the standards in this section, as approved 
by the Tribal gaming regulatory authority, will be acceptable.
    (b) Credit standards. The following standards shall apply if the 
gaming operation authorizes and extends credit to customers:
    (1) At least the following information shall be recorded for 
customers that have credit limits or are issued credit (excluding 
personal checks, payroll checks, cashier's checks, and traveler's 
checks):
    (i) Customer's name, current address, and signature;
    (ii) Identification verifications;
    (iii) Authorized credit limit;
    (iv) Documentation of authorization by a person designated by 
management to approve credit limits; and
    (v) Credit issuances and payments.
    (2) Prior to extending credit, the customer's gaming operation 
credit record and/or other documentation shall be examined to determine 
the following:
    (i) Properly authorized credit limit;
    (ii) Whether remaining credit is sufficient to cover the credit 
issuance; and
    (iii) Identity of the customer (except for known customers).
    (3) Credit extensions over a specified dollar amount shall be 
approved by personnel designated by management.
    (4) Proper approval of credit extensions over ten percent (10%) of 
the previously established limit shall be documented.
    (5) The job functions of credit approval (i.e., establishing the 
customer's credit worthiness) and credit extension (i.e., advancing 
customer's credit) shall be segregated for credit extensions to a single 
customer of $10,000 or more per day (applies whether the credit is 
extended in the pit or the cage).
    (6) If cage credit is extended to a single customer in an amount 
exceeding $2,500, appropriate gaming personnel shall be notified on a 
timely basis of the customers playing on cage credit, the applicable 
amount of credit issued, and the available balance.
    (7) Cage marker forms shall be at least two parts (the original 
marker and a payment slip), prenumbered by the printer or concurrently 
numbered by the computerized system, and utilized in numerical sequence.
    (8) The completed original cage marker shall contain at least the 
following information:
    (i) Marker number;
    (ii) Player's name and signature; and
    (iii) Amount of credit issued (both alpha and numeric).
    (9) The completed payment slip shall include the same marker number 
as the original, date and time of payment, amount of payment, nature of 
settlement (cash, chips, etc.), and signature of cashier receiving the 
payment.
    (c) Payment standards. (1) All payments received on outstanding 
credit instruments shall be recorded in ink or other permanent form of 
recordation in the gaming operation's records.

[[Page 108]]

    (2) When partial payments are made on credit instruments, they shall 
be evidenced by a multi-part receipt (or another equivalent document) 
that contains:
    (i) The same preprinted number on all copies;
    (ii) Customer's name;
    (iii) Date of payment;
    (iv) Dollar amount of payment (or remaining balance if a new marker 
is issued), and nature of settlement (cash, chips, etc.);
    (v) Signature of employee receiving payment; and
    (vi) Number of credit instrument on which partial payment is being 
made.
    (3) Unless account balances are routinely confirmed on a random 
basis by the accounting or internal audit departments, or statements are 
mailed by a person independent of the credit transactions and 
collections thereon, and the department receiving payments cannot access 
cash, then the following standards shall apply:
    (i) The routing procedures for payments by mail require that they be 
received by a department independent of credit instrument custody and 
collection;
    (ii) Such receipts by mail shall be documented on a listing 
indicating the customer's name, amount of payment, nature of payment (if 
other than a check), and date payment received; and
    (iii) The total amount of the listing of mail receipts shall be 
reconciled with the total mail receipts recorded on the appropriate 
accountability form by the accounting department on a random basis (for 
at least three (3) days per month).
    (d) Access to credit documentation. (1) Access to credit 
documentation shall be restricted as follows:
    (i) The credit information shall be restricted to those positions 
that require access and are so authorized by management;
    (ii) Outstanding credit instruments shall be restricted to persons 
authorized by management; and
    (iii) Written-off credit instruments shall be further restricted to 
persons specified by management.
    (2) [Reserved]
    (e) Maintenance of credit documentation. (1) All extensions of cage 
credit, pit credit transferred to the cage, and subsequent payments 
shall be documented on a credit instrument control form.
    (2) Records of all correspondence, transfers to and from outside 
agencies, and other documents related to issued credit instruments shall 
be maintained.
    (f) Write-off and settlement standards. (1) Written-off or settled 
credit instruments shall be authorized in writing.
    (2) Such authorizations shall be made by at least two management 
officials who are from departments independent of the credit 
transaction.
    (g) Collection agency standards. (1) If credit instruments are 
transferred to collection agencies or other collection representatives, 
a copy of the credit instrument and a receipt from the collection 
representative shall be obtained and maintained until the original 
credit instrument is returned or payment is received.
    (2) A person independent of credit transactions and collections 
shall periodically review the documents in paragraph (g)(1) of this 
section.
    (h) Accounting/auditing standards. (1) A person independent of the 
cage, credit, and collection functions shall perform all of the 
following at least three (3) times per year:
    (i) Ascertain compliance with credit limits and other established 
credit issuance procedures;
    (ii) Randomly reconcile outstanding balances of both active and 
inactive accounts on the accounts receivable listing to individual 
credit records and physical instruments;
    (iii) Examine credit records to determine that appropriate 
collection efforts are being made and payments are being properly 
recorded; and
    (iv) For a minimum of five (5) days per month, partial payment 
receipts shall be subsequently reconciled to the total payments recorded 
by the cage for the day and shall be numerically accounted for.
    (2) [Reserved]



Sec. 542.16  What are the minimum internal control standards for 
information technology?

    (a) General controls for gaming hardware and software. (1) 
Management

[[Page 109]]

shall take an active role in making sure that physical and logical 
security measures are implemented, maintained, and adhered to by 
personnel to prevent unauthorized access that could cause errors or 
compromise data or processing integrity.
    (i) Management shall ensure that all new gaming vendor hardware and 
software agreements/contracts contain language requiring the vendor to 
adhere to tribal internal control standards applicable to the goods and 
services the vendor is providing.
    (ii) Physical security measures shall exist over computer, computer 
terminals, and storage media to prevent unauthorized access and loss of 
integrity of data and processing.
    (iii) Access to systems software and application programs shall be 
limited to authorized personnel.
    (iv) Access to computer data shall be limited to authorized 
personnel.
    (v) Access to computer communications facilities, or the computer 
system, and information transmissions shall be limited to authorized 
personnel.
    (vi) Standards in paragraph (a)(1) of this section shall apply to 
each applicable department within the gaming operation.
    (2) The main computers (i.e., hardware, software, and data files) 
for each gaming application (e.g., keno, race and sports, gaming 
machines, etc.) shall be in a secured area with access restricted to 
authorized persons, including vendors.
    (3) Access to computer operations shall be restricted to authorized 
personnel to reduce the risk of loss of integrity of data or processing.
    (4) Incompatible duties shall be adequately segregated and monitored 
to prevent error in general information technology procedures to go 
undetected or fraud to be concealed.
    (5) Non-information technology personnel shall be precluded from 
having unrestricted access to the secured computer areas.
    (6) The computer systems, including application software, shall be 
secured through the use of passwords or other approved means where 
applicable. Management personnel or persons independent of the 
department being controlled shall assign and control access to system 
functions.
    (7) Passwords shall be controlled as follows unless otherwise 
addressed in the standards in this section.
    (i) Each user shall have their own individual password;
    (ii) Passwords shall be changed at least quarterly with changes 
documented; and
    (iii) For computer systems that automatically force a password 
change on a quarterly basis, documentation shall be maintained listing 
the systems and the date the user was given access.
    (8) Adequate backup and recovery procedures shall be in place that 
include:
    (i) Frequent backup of data files;
    (ii) Backup of all programs;
    (iii) Secured off-site storage of all backup data files and 
programs, or other adequate protection; and
    (iv) Recovery procedures, which are tested on a sample basis at 
least annually with documentation of results.
    (9) Adequate information technology system documentation shall be 
maintained, including descriptions of hardware and software, operator 
manuals, etc.
    (b) Independence of information technology personnel. (1) The 
information technology personnel shall be independent of the gaming 
areas (e.g., cage, pit, count rooms, etc.). Information technology 
personnel procedures and controls should be documented and 
responsibilities communicated.
    (2) Information technology personnel shall be precluded from 
unauthorized access to:
    (i) Computers and terminals located in gaming areas;
    (ii) Source documents; and
    (iii) Live data files (not test data).
    (3) Information technology personnel shall be restricted from:
    (i) Having unauthorized access to cash or other liquid assets; and
    (ii) Initiating general or subsidiary ledger entries.
    (c) Gaming program changes. (1) Program changes for in-house 
developed systems should be documented as follows:
    (i) Requests for new programs or program changes shall be reviewed 
by the

[[Page 110]]

information technology supervisor. Approvals to begin work on the 
program shall be documented;
    (ii) A written plan of implementation for new and modified programs 
shall be maintained, and shall include, at a minimum, the date the 
program is to be placed into service, the nature of the change, a 
description of procedures required in order to bring the new or modified 
program into service (conversion or input of data, installation 
procedures, etc.), and an indication of who is to perform all such 
procedures;
    (iii) Testing of new and modified programs shall be performed and 
documented prior to implementation; and
    (iv) A record of the final program or program changes, including 
evidence of user acceptance, date in service, programmer, and reason for 
changes, shall be documented and maintained.
    (2) [Reserved]
    (d) Security logs. (1) If computer security logs are generated by 
the system, they shall be reviewed by information technology supervisory 
personnel for evidence of:
    (i) Multiple attempts to log-on, or alternatively, the system shall 
deny user access after three attempts to log-on;
    (ii) Unauthorized changes to live data files; and
    (iii) Any other unusual transactions.
    (2) This paragraph shall not apply to personal computers.
    (e) Remote dial-up. (1) If remote dial-up to any associated 
equipment is allowed for software support, the gaming operation shall 
maintain an access log that includes:
    (i) Name of employee authorizing modem access;
    (ii) Name of authorized programmer or manufacturer representative;
    (iii) Reason for modem access;
    (iv) Description of work performed; and
    (v) Date, time, and duration of access.
    (2) [Reserved]
    (f) Document storage. (1) Documents may be scanned or directly 
stored to an unalterable storage medium under the following conditions.
    (i) The storage medium shall contain the exact duplicate of the 
original document.
    (ii) All documents stored on the storage medium shall be maintained 
with a detailed index containing the gaming operation department and 
date. This index shall be available upon request by the Commission.
    (iii) Upon request and adequate notice by the Commission, hardware 
(terminal, printer, etc.) shall be made available in order to perform 
auditing procedures.
    (iv) Controls shall exist to ensure the accurate reproduction of 
records up to and including the printing of stored documents used for 
auditing purposes.
    (v) The storage medium shall be retained for a minimum of five 
years.
    (2) [Reserved]

[67 FR 43400, June 27, 2002, as amended at 71 FR 27392, May 11, 2006]

    Effective Date Note: At 73 FR 60498, Oct. 10, 2008, Sec. 542.16 was 
removed and reserved, effective Oct. 13, 2009. At 74 FR 52139, Oct. 9, 
2009, the effectiveness of this amendment was delayed until Oct. 13, 
2010.



Sec. 542.17  What are the minimum internal control standards for 
complimentary services or items?

    (a) Each Tribal gaming regulatory authority or gaming operation 
shall establish and the gaming operation shall comply with procedures 
for the authorization, issuance, and tracking of complimentary services 
and items, including cash and non-cash gifts. Such procedures must be 
approved by the Tribal gaming regulatory authority and shall include, 
but shall not be limited to, the procedures by which the gaming 
operation delegates to its employees the authority to approve the 
issuance of complimentary services and items, and the procedures by 
which conditions or limits, if any, which may apply to such authority 
are established and modified (including limits based on relationships 
between the authorizer and recipient), and shall further include 
effective provisions for audit purposes.
    (b) At least monthly, accounting, information technology, or audit 
personnel that cannot grant or receive complimentary privileges shall 
prepare reports that include the following information for all 
complimentary items and services equal to or exceeding $100 or an amount 
established by the Tribal

[[Page 111]]

gaming regulatory authority, which shall not be greater than $100:
    (1) Name of customer who received the complimentary service or item;
    (2) Name(s) of authorized issuer of the complimentary service or 
item;
    (3) The actual cash value of the complimentary service or item;
    (4) The type of complimentary service or item (i.e., food, beverage, 
etc.); and
    (5) Date the complimentary service or item was issued.
    (c) The internal audit or accounting departments shall review the 
reports required in paragraph (b) of this section at least monthly. 
These reports shall be made available to the Tribe, Tribal gaming 
regulatory authority, audit committee, other entity designated by the 
Tribe, and the Commission upon request.

[67 FR 43400, June 27, 2002, as amended at 70 FR 47107, Aug. 12, 2005]



Sec. 542.18  How does a gaming operation apply for a variance from 
the standards of the part?

    (a) Tribal gaming regulatory authority approval. (1) A Tribal gaming 
regulatory authority may approve a variance for a gaming operation if it 
has determined that the variance will achieve a level of control 
sufficient to accomplish the purpose of the standard it is to replace.
    (2) For each enumerated standard for which the Tribal gaming 
regulatory authority approves a variance, it shall submit to the 
Chairman of the NIGC, within thirty (30) days, a detailed report, which 
shall include the following:
    (i) A detailed description of the variance;
    (ii) An explanation of how the variance achieves a level of control 
sufficient to accomplish the purpose of the standard it is to replace; 
and
    (iii) Evidence that the Tribal gaming regulatory authority has 
approved the variance.
    (3) In the event that the Tribal gaming regulatory authority or the 
Tribe chooses to submit a variance request directly to the Chairman, it 
may do so without the approval requirement set forth in paragraph 
(a)(2)(iii) of this section and such request shall be deemed as having 
been approved by the Tribal gaming regulatory authority.
    (b) Review by the Chairman. (1) Following receipt of the variance 
approval, the Chairman or his or her designee shall have sixty (60) days 
to concur with or object to the approval of the variance.
    (2) Any objection raised by the Chairman shall be in the form of a 
written explanation based upon the following criteria:
    (i) There is no valid explanation of why the gaming operation should 
have received a variance approval from the Tribal gaming regulatory 
authority on the enumerated standard; or
    (ii) The variance as approved by the Tribal gaming regulatory 
authority does not provide a level of control sufficient to accomplish 
the purpose of the standard it is to replace.
    (3) If the Chairman fails to object in writing within sixty (60) 
days after the date of receipt of a complete submission, the variance 
shall be considered concurred with by the Chairman.
    (4) The 60-day deadline may be extended, provided such extension is 
mutually agreed upon by the Tribal gaming regulatory authority and the 
Chairman.
    (c) Curing Chairman's objections. (1) Following an objection by the 
Chairman to the issuance of a variance, the Tribal gaming regulatory 
authority shall have the opportunity to cure any objections noted by the 
Chairman.
    (2) A Tribal gaming regulatory authority may cure the objections 
raised by the Chairman by:
    (i) Rescinding its initial approval of the variance; or
    (ii) Rescinding its initial approval, revising the variance, 
approving it, and re-submitting it to the Chairman.
    (3) Upon any re-submission of a variance approval, the Chairman 
shall have thirty (30) days to concur with or object to the re-submitted 
variance.
    (4) If the Chairman fails to object in writing within thirty (30) 
days after the date of receipt of the re-submitted variance, the re-
submitted variance shall be considered concurred with by the Chairman.
    (5) The thirty (30) day deadline may be extended, provided such 
extension is mutually agreed upon by the Tribal

[[Page 112]]

gaming regulatory authority and the Chairman.
    (d) Appeals. (1) Upon receipt of objections to a re-submission of a 
variance, the Tribal gaming regulatory authority shall be entitled to an 
appeal to the full Commission in accordance with the following process:
    (i) Within thirty (30) days of receiving an objection to a re-
submission, the Tribal gaming regulatory authority shall file its notice 
of appeal.
    (ii) Failure to file an appeal within the time provided by this 
section shall result in a waiver of the opportunity for an appeal.
    (iii) An appeal under this section shall specify the reasons why the 
Tribal gaming regulatory authority believes the Chairman's objections 
should be reviewed, and shall include supporting documentation, if any.
    (iv) The Tribal gaming regulatory authority shall be provided with 
any comments offered by the Chairman to the Commission on the substance 
of the appeal by the Tribal gaming regulatory authority and shall be 
offered the opportunity to respond to any such comments.
    (v) Within thirty (30) days after receipt of the appeal, the 
Commission shall render a decision based upon the criteria contained 
within paragraph (b)(2) of this section unless the Tribal gaming 
regulatory authority elects to wave the thirty (30) day requirement and 
to provide the Commission additional time, not to exceed an additional 
thirty (30) days, to render a decision.
    (vi) In the absence of a decision within the time provided, the 
Tribal gaming regulatory authority's resubmission shall be considered 
concurred with by the Commission and become effective.
    (2) The Tribal gaming regulatory authority may appeal the Chairman's 
objection to the approval of a variance to the full Commission without 
resubmitting the variance by filling a notice of appeal with the full 
Commission within thirty (30) days of the Chairman's objection and 
complying with the procedures described in paragraph (d)(1) of this 
section.
    (e) Effective date of variance. The gaming operation shall comply 
with standards that achieve a level of control sufficient to accomplish 
the purpose of the standard it is to replace until such time as the 
Commission objects to the Tribal gaming regulatory authority's approval 
of a variance as provided in paragraph (b) of this section. Concurrence 
in a variance by the Chairman or Commission is discretionary and 
variances will not be granted routinely. The gaming operation shall 
comply with standards at least as stringent as those set forth in this 
part until such time as the Chairman or Commission concurs with the 
Tribal gaming regulatory authority's approval of a variance.

[70 FR 23022, May 4, 2005]



Sec. 542.19  What are the minimum internal control standards for accounting?

    (a) Each gaming operation shall prepare accurate, complete, legible, 
and permanent records of all transactions pertaining to revenue and 
gaming activities.
    (b) Each gaming operation shall prepare general accounting records 
according to Generally Accepted Accounting Principles on a double-entry 
system of accounting, maintaining detailed, supporting, subsidiary 
records, including, but not limited to:
    (1) Detailed records identifying revenues, expenses, assets, 
liabilities, and equity for each gaming operation;
    (2) Detailed records of all markers, IOU's, returned checks, hold 
checks, or other similar credit instruments;
    (3) Individual and statistical game records to reflect statistical 
drop, statistical win, and the percentage of statistical win to 
statistical drop by each table game, and to reflect statistical drop, 
statistical win, and the percentage of statistical win to statistical 
drop for each type of table game, by shift, by day, cumulative month-to-
date and year-to-date, and individual and statistical game records 
reflecting similar information for all other games;
    (4) Gaming machine analysis reports which, by each machine, compare 
actual hold percentages to theoretical hold percentages;

[[Page 113]]

    (5) The records required by this part and by the Tribal internal 
control standards;
    (6) Journal entries prepared by the gaming operation and by its 
independent accountants; and
    (7) Any other records specifically required to be maintained.
    (c) Each gaming operation shall establish administrative and 
accounting procedures for the purpose of determining effective control 
over a gaming operation's fiscal affairs. The procedures shall be 
designed to reasonably ensure that:
    (1) Assets are safeguarded;
    (2) Financial records are accurate and reliable;
    (3) Transactions are performed only in accordance with management's 
general and specific authorization;
    (4) Transactions are recorded adequately to permit proper reporting 
of gaming revenue and of fees and taxes, and to maintain accountability 
of assets;
    (5) Recorded accountability for assets is compared with actual 
assets at reasonable intervals, and appropriate action is taken with 
respect to any discrepancies; and
    (6) Functions, duties, and responsibilities are appropriately 
segregated in accordance with sound business practices.
    (d) Gross gaming revenue computations. (1) For table games, gross 
revenue equals the closing table bankroll, plus credit slips for cash, 
chips, tokens or personal/payroll checks returned to the cage, plus 
drop, less opening table bankroll and fills to the table, and money 
transfers issued from the game through the use of a cashless wagering 
system.
    (2) For gaming machines, gross revenue equals drop, less fills, 
jackpot payouts and personal property awarded to patrons as gambling 
winnings. Additionally, the initial hopper load is not a fill and does 
not affect gross revenue. The difference between the initial hopper load 
and the total amount that is in the hopper at the end of the gaming 
operation's fiscal year should be adjusted accordingly as an addition to 
or subtraction from the drop for the year.
    (3) For each counter game, gross revenue equals:
    (i) The money accepted by the gaming operation on events or games 
that occur during the month or will occur in subsequent months, less 
money paid out during the month to patrons on winning wagers (``cash 
basis''); or
    (ii) The money accepted by the gaming operation on events or games 
that occur during the month, plus money, not previously included in 
gross revenue, that was accepted by the gaming operation in previous 
months on events or games occurring in the month, less money paid out 
during the month to patrons as winning wagers (``modified accrual 
basis'').
    (4) For each card game and any other game in which the gaming 
operation is not a party to a wager, gross revenue equals all money 
received by the operation as compensation for conducting the game.
    (i) A gaming operation shall not include either shill win or loss in 
gross revenue computations.
    (ii) In computing gross revenue for gaming machines, keno and bingo, 
the actual cost to the gaming operation of any personal property 
distributed as losses to patrons may be deducted from winnings (other 
than costs of travel, lodging, services, food, and beverages), if the 
gaming operation maintains detailed documents supporting the deduction.
    (e) Each gaming operation shall establish internal control systems 
sufficient to ensure that currency (other than tips or gratuities) 
received from a patron in the gaming area is promptly placed in a locked 
box in the table, or, in the case of a cashier, in the appropriate place 
in the cashier's cage, or on those games which do not have a locked drop 
box, or on card game tables, in an appropriate place on the table, in 
the cash register or in another approved repository.
    (f) If the gaming operation provides periodic payments to satisfy a 
payout resulting from a wager, the initial installment payment, when 
paid, and the actual cost of a payment plan, which is funded by the 
gaming operation, may be deducted from winnings. The gaming operation is 
required to obtain the approval of all payment plans from the TGRA. For 
any funding method which

[[Page 114]]

merely guarantees the gaming operation's performance, and under which 
the gaming operation makes payments out of cash flow (e.g. irrevocable 
letters of credits, surety bonds, or other similar methods), the gaming 
operation may only deduct such payments when paid to the patron.
    (g) For payouts by wide-area progressive gaming machine systems, a 
gaming operation may deduct from winnings only its pro rata share of a 
wide-area gaming machine system payout.
    (h) Cash-out tickets issued at a gaming machine or gaming device 
shall be deducted from gross revenue as jackpot payouts in the month the 
tickets are issued by the gaming machine or gaming device. Tickets 
deducted from gross revenue that are not redeemed within a period, not 
to exceed 180 days of issuance, shall be included in gross revenue. An 
unredeemed ticket previously included in gross revenue may be deducted 
from gross revenue in the month redeemed.
    (i) A gaming operation may not deduct from gross revenues the unpaid 
balance of a credit instrument extended for purposes other than gaming.
    (j) A gaming operation may deduct from gross revenue the unpaid 
balance of a credit instrument if the gaming operation documents, or 
otherwise keeps detailed records of, compliance with the following 
requirements. Such records confirming compliance shall be made available 
to the TGRA or the Commission upon request:
    (1) The gaming operation can document that the credit extended was 
for gaming purposes;
    (2) The gaming operation has established procedures and relevant 
criteria to evaluate a patron's credit reputation or financial resources 
and to then determine that there is a reasonable basis for extending 
credit in the amount or sum placed at the patron's disposal;
    (3) In the case of personal checks, the gaming operation has 
established procedures to examine documentation, which would normally be 
acceptable as a type of identification when cashing checks, and has 
recorded the patron's bank check guarantee card number or credit card 
number, or has satisfied paragraph (j)(2) of this section, as management 
may deem appropriate for the check-cashing authorization granted;
    (4) In the case of third-party checks for which cash, chips, or 
tokens have been issued to the patron, or which were accepted in payment 
of another credit instrument, the gaming operation has established 
procedures to examine documentation, normally accepted as a means of 
identification when cashing checks, and has, for the check's maker or 
drawer, satisfied paragraph (j)(2) of this section, as management may 
deem appropriate for the check-cashing authorization granted;
    (5) In the case of guaranteed drafts, procedures should be 
established to ensure compliance with the issuance and acceptance 
procedures prescribed by the issuer;
    (6) The gaming operation has established procedures to ensure that 
the credit extended is appropriately documented, not least of which 
would be the patron's identification and signature attesting to the 
authenticity of the individual credit transactions. The authorizing 
signature shall be obtained at the time credit is extended.
    (7) The gaming operation has established procedures to effectively 
document its attempt to collect the full amount of the debt. Such 
documentation would include, but not be limited to, letters sent to the 
patron, logs of personal or telephone conversations, proof of 
presentation of the credit instrument to the patron's bank for 
collection, settlement agreements, or other documents which demonstrate 
that the gaming operation has made a good faith attempt to collect the 
full amount of the debt. Such records documenting collection efforts 
shall be made available to the TGRA or the commission upon request.
    (k) Maintenance and preservation of books, records and documents. 
(1) All original books, records and documents pertaining to the conduct 
of wagering activities shall be retained by a gaming operation in 
accordance with the following schedule. A record that summarizes gaming 
transactions is sufficient, provided that all documents containing an 
original signature(s) attesting to the accuracy of a gaming related

[[Page 115]]

transaction are independently preserved. Original books, records or 
documents shall not include copies of originals, except for copies that 
contain original comments or notations on parts of multi-part forms. The 
following original books, records and documents shall be retained by a 
gaming operation for a minimum of five (5) years:
    (i) Casino cage documents;
    (ii) Documentation supporting the calculation of table game win;
    (iii) Documentation supporting the calculation of gaming machine 
win;
    (iv) Documentation supporting the calculation of revenue received 
from the games of keno, pari-mutuel, bingo, pull-tabs, card games, and 
all other gaming activities offered by the gaming operation;
    (v) Table games statistical analysis reports;
    (vi) Gaming machine statistical analysis reports;
    (vii) Bingo, pull-tab, keno and pari-mutuel wagering statistical 
reports;
    (viii) Internal audit documentation and reports;
    (ix) Documentation supporting the write-off of gaming credit 
instruments and named credit instruments;
    (x) All other books, records and documents pertaining to the conduct 
of wagering activities that contain original signature(s) attesting to 
the accuracy of the gaming related transaction.
    (2) Unless otherwise specified in this part, all other books, 
records, and documents shall be retained until such time as the 
accounting records have been audited by the gaming operation's 
independent certified public accountants.
    (3) The above definition shall apply without regards to the medium 
by which the book, record or document is generated or maintained (paper, 
computer-generated, magnetic media, etc.).

[71 FR 27392, May 11, 2006]



Sec. 542.20  What is a Tier A gaming operation?

    A Tier A gaming operation is one with annual gross gaming revenues 
of more than $1 million but not more than $5 million.



Sec. 542.21  What are the minimum internal control standards for drop
and count for Tier A gaming operations?

    (a) Computer applications. For any computer applications utilized, 
alternate documentation and/or procedures that provide at least the 
level of control described by the standards in this section, as approved 
by the Tribal gaming regulatory authority, will be acceptable.
    (b) Table game drop standards. (1) The setting out of empty table 
game drop boxes and the drop shall be a continuous process.
    (2) At the end of each shift:
    (i) All locked table game drop boxes shall be removed from the 
tables by a person independent of the pit shift being dropped;
    (ii) A separate drop box shall be placed on each table opened at any 
time during each shift or a gaming operation may utilize a single drop 
box with separate openings and compartments for each shift; and
    (iii) Upon removal from the tables, table game drop boxes shall be 
transported directly to the count room or other equivalently secure area 
with comparable controls and locked in a secure manner until the count 
takes place.
    (3) If drop boxes are not placed on all tables, then the pit 
department shall document which tables were open during the shift.
    (4) The transporting of table game drop boxes shall be performed by 
a minimum of two persons, at least one of whom is independent of the pit 
shift being dropped.
    (5) All table game drop boxes shall be posted with a number 
corresponding to a permanent number on the gaming table and marked to 
indicate game, table number, and shift.
    (c) Soft count room personnel. (1) The table game soft count and the 
gaming machine bill acceptor count shall be performed by a minimum of 
two employees.
    (2) Count room personnel shall not be allowed to exit or enter the 
count room during the count except for emergencies or scheduled breaks. 
At no time during the count, shall there be fewer than two employees in 
the count room until the drop proceeds have been

[[Page 116]]

accepted into cage/vault accountability.
    (3) Count team members shall be rotated on a routine basis such that 
the count team is not consistently the same two persons more than four 
(4) days per week. This standard shall not apply to gaming operations 
that utilize a count team of more than two persons.
    (4) The count team shall be independent of transactions being 
reviewed and counted. The count team shall be independent of the cage/
vault departments, however, a dealer or a cage cashier may be used if 
this person is not allowed to perform the recording function. An 
accounting representative may be used if there is an independent audit 
of all soft count documentation.
    (d) Table game soft count standards. (1) The table game soft count 
shall be performed in a soft count room or other equivalently secure 
area with comparable controls.
    (2) Access to the count room during the count shall be restricted to 
members of the drop and count teams, with the exception of authorized 
observers, supervisors for resolution of problems, and authorized 
maintenance personnel.
    (3) If counts from various revenue centers occur simultaneously in 
the count room, procedures shall be in effect that prevent the 
commingling of funds from different revenue centers.
    (4) The table game drop boxes shall be individually emptied and 
counted in such a manner to prevent the commingling of funds between 
boxes until the count of the box has been recorded.
    (i) The count of each box shall be recorded in ink or other 
permanent form of recordation.
    (ii) A second count shall be performed by an employee on the count 
team who did not perform the initial count.
    (iii) Corrections to information originally recorded by the count 
team on soft count documentation shall be made by drawing a single line 
through the error, writing the correct figure above the original figure, 
and then obtaining the initials of at least two count team members who 
verified the change, unless the count team only has two (2) members in 
which case the initials of only one (1) verifying member is required.
    (5) If cash counters are utilized and the count room table is used 
only to empty boxes and sort/stack contents, a count team member shall 
be able to observe the loading and unloading of all cash at the cash 
counter, including rejected cash.
    (6) Table game drop boxes, when empty, shall be shown to another 
member of the count team, or to another person who is observing the 
count, or to surveillance.
    (7) Orders for fill/credit (if applicable) shall be matched to the 
fill/credit slips. Fills and credits shall be traced to or recorded on 
the count sheet.
    (8) Pit marker issue and payment slips (if applicable) removed from 
the table game drop boxes shall either be:
    (i) Traced to or recorded on the count sheet by the count team; or
    (ii) Totaled by shift and traced to the totals documented by the 
computerized system. Accounting personnel shall verify the issue/payment 
slip for each table is accurate.
    (9) Foreign currency exchange forms (if applicable) removed from the 
table game drop boxes shall be reviewed for the proper daily exchange 
rate and the conversion amount shall be recomputed by the count team. 
Alternatively, this may be performed by accounting/auditing employees.
    (10) The opening/closing table and marker inventory forms (if 
applicable) shall either be:
    (i) Examined and traced to or recorded on the count sheet; or
    (ii) If a computerized system is used, accounting personnel can 
trace the opening/closing table and marker inventory forms to the count 
sheet. Discrepancies shall be investigated with the findings documented 
and maintained for inspection.
    (11) The count sheet shall be reconciled to the total drop by a 
count team member who shall not function as the sole recorder.
    (12) All members of the count team shall sign the count document or 
a summary report to attest to their participation in the count.
    (13) All drop proceeds and cash equivalents that were counted shall 
be

[[Page 117]]

turned over to the cage or vault cashier (who shall be independent of 
the count team) or to an authorized person/employee independent of the 
revenue generation and the count process for verification. Such person 
shall certify by signature as to the accuracy of the drop proceeds 
delivered and received.
    (14) The count sheet, with all supporting documents, shall be 
delivered to the accounting department by a count team member or a 
person independent of the cashiers department. Alternatively, it may be 
adequately secured (e.g., locked container to which only accounting 
personnel can gain access) until retrieved by the accounting department.
    (15) Access to stored, full table game drop boxes shall be 
restricted to authorized members of the drop and count teams.
    (e) Gaming machine bill acceptor drop standards. (1) A minimum of 
two employees shall be involved in the removal of the gaming machine 
drop, at least one of whom is independent of the gaming machine 
department.
    (2) All bill acceptor canisters shall be removed only at the time 
previously designated by the gaming operation and reported to the Tribal 
gaming regulatory authority, except for emergency drops.
    (3) The bill acceptor canisters shall be removed by a person 
independent of the gaming machine department then transported directly 
to the count room or other equivalently secure area with comparable 
controls and locked in a secure manner until the count takes place.
    (i) Security shall be provided over the bill acceptor canisters 
removed from the gaming machines and awaiting transport to the count 
room.
    (ii) The transporting of bill acceptor canisters shall be performed 
by a minimum of two persons, at least one of whom is independent of the 
gaming machine department.
    (4) All bill acceptor canisters shall be posted with a number 
corresponding to a permanent number on the gaming machine.
    (f) Gaming machine bill acceptor count standards. (1) The gaming 
machine bill acceptor count shall be performed in a soft count room or 
other equivalently secure area with comparable controls.
    (2) Access to the count room during the count shall be restricted to 
members of the drop and count teams, with the exception of authorized 
observers, supervisors for resolution of problems, and authorized 
maintenance personnel.
    (3) If counts from various revenue centers occur simultaneously in 
the count room, procedures shall be in effect that prevent the 
commingling of funds from different revenue centers.
    (4) The bill acceptor canisters shall be individually emptied and 
counted in such a manner to prevent the commingling of funds between 
canisters until the count of the canister has been recorded.
    (i) The count of each canister shall be recorded in ink or other 
permanent form of recordation.
    (ii) Corrections to information originally recorded by the count 
team on soft count documentation shall be made by drawing a single line 
through the error, writing the correct figure above the original figure, 
and then obtaining the initials of at least two count team members who 
verified the change.
    (5) If cash counters are utilized and the count room table is used 
only to empty canisters and sort/stack contents, a count team member 
shall be able to observe the loading and unloading of all cash at the 
cash counter, including rejected cash.
    (6) Canisters, when empty, shall be shown to another member of the 
count team, or to another person who is observing the count, or to 
surveillance.
    (7) The count sheet shall be reconciled to the total drop by a count 
team member who shall not function as the sole recorder.
    (8) All members of the count team shall sign the count document or a 
summary report to attest to their participation in the count.
    (9) All drop proceeds and cash equivalents that were counted shall 
be turned over to the cage or vault cashier (who shall be independent of 
the count team) or to an authorized person/employee independent of the 
revenue generation and the count process for verification. Such person 
shall certify by signature

[[Page 118]]

as to the accuracy of the drop proceeds delivered and received.
    (10) The count sheet, with all supporting documents, shall be 
delivered to the accounting department by a count team member or a 
person independent of the cashiers department. Alternatively, it may be 
adequately secured (e.g., locked container to which only accounting 
personnel can gain access) until retrieved by the accounting department.
    (11) Access to stored bill acceptor canisters, full or empty, shall 
be restricted to:
    (i) Authorized members of the drop and count teams; and
    (ii) Authorized personnel in an emergency for resolution of a 
problem.
    (g) Gaming machine coin drop standards. (1) A minimum of two 
employees shall be involved in the removal of the gaming machine drop, 
at least one of whom is independent of the gaming machine department.
    (2) All drop buckets shall be removed only at the time previously 
designated by the gaming operation and reported to the Tribal gaming 
regulatory authority, except for emergency drops.
    (3) Security shall be provided over the buckets removed from the 
gaming machine drop cabinets and awaiting transport to the count room.
    (4) As each machine is opened, the contents shall be tagged with its 
respective machine number if the bucket is not permanently marked with 
the machine number. The contents shall be transported directly to the 
area designated for the counting of such drop proceeds. If more than one 
trip is required to remove the contents of the machines, the filled 
carts of coins shall be securely locked in the room designed for 
counting or in another equivalently secure area with comparable 
controls. There shall be a locked covering on any carts in which the 
drop route includes passage out of doors.
    (i) Alternatively, a smart bucket system that electronically 
identifies and tracks the gaming machine number, and facilitates the 
proper recognition of gaming revenue, shall satisfy the requirements of 
this paragraph.
    (ii) [Reserved]
    (5) Each drop bucket in use shall be:
    (i) Housed in a locked compartment separate from any other 
compartment of the gaming machine and keyed differently than other 
gaming machine compartments; and
    (ii) Identifiable to the gaming machine from which it is removed. If 
the gaming machine is identified with a removable tag that is placed in 
the bucket, the tag shall be placed on top of the bucket when it is 
collected.
    (6) Each gaming machine shall have drop buckets into which coins or 
tokens that are retained by the gaming machine are collected. Drop 
bucket contents shall not be used to make change or pay hand-paid 
payouts.
    (7) The collection procedures may include procedures for dropping 
gaming machines that have trays instead of drop buckets.
    (h) Hard count room personnel. (1) The weigh/count shall be 
performed by a minimum of two employees.
    (2) At no time during the weigh/count shall there be fewer than two 
employees in the count room until the drop proceeds have been accepted 
into cage/vault accountability.
    (i) If the gaming machine count is conducted with a continuous 
mechanical count meter that is not reset during the count and is 
verified in writing by at least two employees at the start and end of 
each denomination count, then one employee may perform the wrap.
    (ii) [Reserved]
    (3) Count team members shall be rotated on a routine basis such that 
the count team is not consistently the same two persons more than four 
(4) days per week. This standard shall not apply to gaming operations 
that utilize a count team of more than two persons.
    (4) The count team shall be independent of transactions being 
reviewed and counted. The count team shall be independent of the cage/
vault departments, unless they are non-supervisory gaming machine 
employees and perform the laborer function only (A non-supervisory 
gaming machine employee is defined as a person below the level of gaming 
machine shift supervisor). A cage cashier may be used if this person is 
not allowed to perform the recording function. An accounting 
representative

[[Page 119]]

may be used if there is an independent audit of all count documentation.
    (i) Gaming machine coin count and wrap standards. (1) Coins shall 
include tokens.
    (2) The gaming machine coin count and wrap shall be performed in a 
count room or other equivalently secure area with comparable controls.
    (i) Alternatively, an on-the-floor drop system utilizing a mobile 
scale shall satisfy the requirements of this paragraph, subject to the 
following conditions:
    (A) The gaming operation shall utilize and maintain an effective on-
line gaming machine monitoring system, as described in Sec. 
542.13(m)(3);
    (B) Components of the on-the-floor drop system shall include, but 
not be limited to, a weigh scale, a laptop computer through which weigh/
count applications are operated, a security camera available for the 
mobile scale system, and a VCR to be housed within the video compartment 
of the mobile scale. The system may include a mule cart used for mobile 
weigh scale system locomotion.
    (C) The gaming operation must obtain the security camera available 
with the system, and this camera must be added in such a way as to 
eliminate tampering.
    (D) Prior to the drop, the drop/count team shall ensure the scale 
batteries are charged;
    (E) Prior to the drop, a videotape shall be inserted into the VCR 
used to record the drop in conjunction with the security camera system 
and the VCR shall be activated;
    (F) The weigh scale test shall be performed prior to removing the 
unit from the hard count room for the start of the weigh/drop/count;
    (G) Surveillance shall be notified when the weigh/drop/count begins 
and shall be capable of monitoring the entire process;
    (H) An observer independent of the weigh/drop/count teams 
(independent observer) shall remain by the weigh scale at all times and 
shall observe the entire weigh/drop/count process;
    (I) Physical custody of the key(s) needed to access the laptop and 
video compartment shall require the involvement of two persons, one of 
whom is independent of the drop and count team;
    (J) The mule key (if applicable), the laptop and video compartment 
keys, and the remote control for the VCR shall be maintained by a 
department independent of the gaming machine department. The appropriate 
personnel shall sign out these keys;
    (K) A person independent of the weigh/drop/count teams shall be 
required to accompany these keys while they are checked out, and observe 
each time the laptop compartment is opened;
    (L) The laptop access panel shall not be opened outside the hard 
count room, except in instances when the laptop must be rebooted as a 
result of a crash, lock up, or other situation requiring immediate 
corrective action;
    (M) User access to the system shall be limited to those employees 
required to have full or limited access to complete the weigh/drop/
count; and
    (N) When the weigh/drop/count is completed, the independent observer 
shall access the laptop compartment, end the recording session, eject 
the videotape, and deliver the videotape to surveillance.
    (ii) [Reserved]
    (3) Access to the count room during the count shall be restricted to 
members of the drop and count teams, with the exception of authorized 
observers, supervisors for resolution of problems, and authorized 
maintenance personnel.
    (4) If counts from various revenue centers occur simultaneously in 
the count room, procedures shall be in effect that prevent the 
commingling of funds from different revenue centers.
    (5) The following functions shall be performed in the counting of 
the gaming machine drop:
    (i) Recorder function, which involves the recording of the gaming 
machine count; and
    (ii) Count team supervisor function, which involves the control of 
the gaming machine weigh and wrap process. The supervisor shall not 
perform the initial recording of the weigh/count unless a weigh scale 
with a printer is used.
    (6) The gaming machine drop shall be counted, wrapped, and 
reconciled in

[[Page 120]]

such a manner to prevent the commingling of gaming machine drop coin 
with coin (for each denomination) from the next gaming machine drop 
until the count of the gaming machine drop has been recorded. If the 
coins are not wrapped immediately after being weighed or counted, they 
shall be secured and not commingled with other coins.
    (i) The amount of the gaming machine drop from each machine shall be 
recorded in ink or other permanent form of recordation on a gaming 
machine count document by the recorder or mechanically printed by the 
weigh scale.
    (ii) Corrections to information originally recorded by the count 
team on gaming machine count documentation shall be made by drawing a 
single line through the error, writing the correct figure above the 
original figure, and then obtaining the initials of at least two count 
team members who verified the change.
    (A) If a weigh scale interface is used, corrections to gaming 
machine count data shall be made using either of the following:
    (1) Drawing a single line through the error on the gaming machine 
document, writing the correct figure above the original figure, and then 
obtaining the initials of at least two count team employees. If this 
procedure is used, an employee independent of the gaming machine 
department and count team shall enter the correct figure into the 
computer system prior to the generation of related gaming machine 
reports; or
    (2) During the count process, correct the error in the computer 
system and enter the passwords of at least two count team employees. If 
this procedure is used, an exception report shall be generated by the 
computer system identifying the gaming machine number, the error, the 
correction, and the count team employees attesting to the correction.
    (B) [Reserved]
    (7) If applicable, the weight shall be converted to dollar amounts 
prior to the reconciliation of the weigh to the wrap.
    (8) If a coin meter is used, a count team member shall convert the 
coin count for each denomination into dollars and shall enter the 
results on a summary sheet.
    (9) The recorder and at least one other count team member shall sign 
the weigh tape and the gaming machine count document attesting to the 
accuracy of the weigh/count.
    (10) All members of the count team shall sign the count document or 
a summary report to attest to their participation in the count.
    (11) All drop proceeds and cash equivalents that were counted shall 
be turned over to the cage or vault cashier (who shall be independent of 
the count team) or to an authorized person/employee independent of the 
revenue generation and the count process for verification. Such person 
shall certify by signature as to the accuracy of the drop proceeds 
delivered and received.
    (12) All gaming machine count and wrap documentation, including any 
applicable computer storage media, shall be delivered to the accounting 
department by a count team member or a person independent of the 
cashier's department. Alternatively, it may be adequately secured (e.g., 
locked container to which only accounting personnel can gain access) 
until retrieved by the accounting department.
    (13) If the coins are transported off the property, a second 
(alternative) count procedure shall be performed before the coins leave 
the property. Any variances shall be documented.
    (14) Variances. Large (by denomination, either $1,000 or 2% of the 
drop, whichever is less) or unusual (e.g., zero for weigh/count or 
patterned for all counts) variances between the weigh/count and wrap 
shall be investigated by management personnel independent of the gaming 
machine department, count team, and the cage/vault functions on a timely 
basis. The results of such investigation shall be documented, maintained 
for inspection, and provided to the Tribal gaming regulatory authority 
upon request.
    (j) Security of the coin room inventory during the gaming machine 
coin count and wrap. (1) If the count room serves as a coin room and 
coin room inventory is not secured so as to preclude access by the count 
team, then the following standards shall apply:

[[Page 121]]

    (i) At the commencement of the gaming machine count the following 
requirements shall be met:
    (A) The coin room inventory shall be counted by at least two 
employees, one of whom is a member of the count team and the other is 
independent of the weigh/count and wrap procedures;
    (B) The count in paragraph (j)(1)(i)(A) of this section shall be 
recorded on an appropriate inventory form;
    (ii) Upon completion of the wrap of the gaming machine drop:
    (A) At least two members of the count team (wrap team), 
independently from each other, shall count the ending coin room 
inventory;
    (B) The counts in paragraph (j)(1)(ii)(A) of this section shall be 
recorded on a summary report(s) that evidences the calculation of the 
final wrap by subtracting the beginning inventory from the sum of the 
ending inventory and transfers in and out of the coin room;
    (C) The same count team members shall compare the calculated wrap to 
the weigh/count, recording the comparison and noting any variances on 
the summary report;
    (D) A member of the cage/vault department shall count the ending 
coin room inventory by denomination and shall reconcile it to the 
beginning inventory, wrap, transfers, and weigh/count; and
    (E) At the conclusion of the reconciliation, at least two count/wrap 
team members and the verifying employee shall sign the summary report(s) 
attesting to its accuracy.
    (iii) The functions described in paragraph (j)(1)(ii)(A) and (C) of 
this section may be performed by only one count team member. That count 
team member must then sign the summary report, along with the verifying 
employee, as required under paragraph (j)(1)(ii)(E).
    (2) If the count room is segregated from the coin room, or if the 
coin room is used as a count room and the coin room inventory is secured 
to preclude access by the count team, all of the following requirements 
shall be completed, at the conclusion of the count:
    (i) At least two members of the count/wrap team shall count the 
final wrapped gaming machine drop independently from each other;
    (ii) The counts shall be recorded on a summary report;
    (iii) The same count team members (or the accounting department) 
shall compare the final wrap to the weigh/count, recording the 
comparison, and noting any variances on the summary report;
    (iv) A member of the cage/vault department shall count the wrapped 
gaming machine drop by denomination and reconcile it to the weigh/count;
    (v) At the conclusion of the reconciliation, at least two count team 
members and the cage/vault employee shall sign the summary report 
attesting to its accuracy; and
    (vi) The wrapped coins (exclusive of proper transfers) shall be 
transported to the cage, vault or coin vault after the reconciliation of 
the weigh/count to the wrap.
    (k) Transfers during the gaming machine coin count and wrap. (1) 
Transfers may be permitted during the count and wrap only if permitted 
under the internal control standards approved by the Tribal gaming 
regulatory authority.
    (2) Each transfer shall be recorded on a separate multi-part form 
with a preprinted or concurrently-printed form number (used solely for 
gaming machine count transfers) that shall be subsequently reconciled by 
the accounting department to ensure the accuracy of the reconciled 
gaming machine drop.
    (3) Each transfer must be counted and signed for by at least two 
members of the count team and by a person independent of the count team 
who is responsible for authorizing the transfer.
    (l) Gaming machine drop key control standards. (1) Gaming machine 
coin drop cabinet keys, including duplicates, shall be maintained by a 
department independent of the gaming machine department.
    (2) The physical custody of the keys needed to access gaming machine 
coin drop cabinets, including duplicates, shall require the involvement 
of two persons, one of whom is independent of the gaming machine 
department.
    (3) Two employees (separate from key custodian) shall be required to 
accompany such keys while checked out and

[[Page 122]]

observe each time gaming machine drop cabinets are accessed.
    (m) Table game drop box key control standards. (1) Tier A gaming 
operations shall be exempt from compliance with this paragraph if the 
Tribal gaming regulatory authority, or the gaming operation as approved 
by the Tribal gaming regulatory authority, establishes and the gaming 
operation complies with procedures that maintain adequate key control 
and restricts access to the keys.
    (2) Procedures shall be developed and implemented to insure that 
unauthorized access to empty table game drop boxes shall not occur from 
the time the boxes leave the storage racks until they are placed on the 
tables.
    (3) The involvement of at least two persons independent of the cage 
department shall be required to access stored empty table game drop 
boxes.
    (4) The release keys shall be separately keyed from the contents 
keys.
    (5) At least two count team members are required to be present at 
the time count room and other count keys are issued for the count.
    (6) All duplicate keys shall be maintained in a manner that provides 
the same degree of control as is required for the original keys. Records 
shall be maintained for each key duplicated that indicate the number of 
keys made and destroyed.
    (7) Logs shall be maintained by the custodian of sensitive keys to 
document authorization of personnel accessing keys.
    (n) Table game drop box release keys. (1) Tier A gaming operations 
shall be exempt from compliance with this paragraph if the Tribal gaming 
regulatory authority, or the gaming operation as approved by the Tribal 
gaming regulatory authority, establishes and the gaming operation 
complies with procedures that maintain adequate key control and 
restricts access to the keys.
    (2) The table game drop box release keys shall be maintained by a 
department independent of the pit department.
    (3) Only the person(s) authorized to remove table game drop boxes 
from the tables shall be allowed access to the table game drop box 
release keys; however, the count team members may have access to the 
release keys during the soft count in order to reset the table game drop 
boxes.
    (4) Persons authorized to remove the table game drop boxes shall be 
precluded from having simultaneous access to the table game drop box 
contents keys and release keys.
    (5) For situations requiring access to a table game drop box at a 
time other than the scheduled drop, the date, time, and signature of 
employee signing out/in the release key must be documented.
    (o) Bill acceptor canister release keys. (1) Tier A gaming 
operations shall be exempt from compliance with this paragraph if the 
Tribal gaming regulatory authority, or the gaming operation as approved 
by the Tribal gaming regulatory authority, establishes and the gaming 
operation complies with procedures that maintain adequate key control 
and restricts access to the keys.
    (2) The bill acceptor canister release keys shall be maintained by a 
department independent of the gaming machine department.
    (3) Only the person(s) authorized to remove bill acceptor canisters 
from the gaming machines shall be allowed access to the release keys.
    (4) Persons authorized to remove the bill acceptor canisters shall 
be precluded from having simultaneous access to the bill acceptor 
canister contents keys and release keys.
    (5) For situations requiring access to a bill acceptor canister at a 
time other than the scheduled drop, the date, time, and signature of 
employee signing out/in the release key must be documented.
    (p) Table game drop box storage rack keys. (1) Tier A gaming 
operations shall be exempt from compliance with this paragraph if the 
Tribal gaming regulatory authority, or the gaming operation as approved 
by the Tribal gaming regulatory authority, establishes and the gaming 
operation complies with procedures that maintain adequate key control 
and restricts access to the keys.
    (2) Persons authorized to obtain table game drop box storage rack 
keys shall be precluded from having simultaneous

[[Page 123]]

access to table game drop box contents keys, with the exception of the 
count team.
    (q) Bill acceptor canister storage rack keys. (1) Tier A gaming 
operations shall be exempt from compliance with this paragraph if the 
Tribal gaming regulatory authority, or the gaming operation as approved 
by the Tribal gaming regulatory authority, establishes and the gaming 
operation complies with procedures that maintain adequate key control 
and restricts access to the keys.
    (2) Persons authorized to obtain bill acceptor canister storage rack 
keys shall be precluded from having simultaneous access to bill acceptor 
canister contents keys, with the exception of the count team.
    (r) Table game drop box contents keys. (1) Tier A gaming operations 
shall be exempt from compliance with this paragraph if the Tribal gaming 
regulatory authority, or the gaming operation as approved by the Tribal 
gaming regulatory authority, establishes and the gaming operation 
complies with procedures that maintain adequate key control and 
restricts access to the keys.
    (2) The physical custody of the keys needed for accessing stored, 
full table game drop box contents shall require the involvement of 
persons from at least two separate departments, with the exception of 
the count team.
    (3) Access to the table game drop box contents key at other than 
scheduled count times shall require the involvement of at least two 
persons from separate departments, including management. The reason for 
access shall be documented with the signatures of all participants and 
observers.
    (4) Only count team members shall be allowed access to table game 
drop box contents keys during the count process.
    (s) Bill acceptor canister contents keys. (1) Tier A gaming 
operations shall be exempt from compliance with this paragraph if the 
Tribal gaming regulatory authority, or the gaming operation as approved 
by the Tribal gaming regulatory authority, establishes and the gaming 
operation complies with procedures that maintain adequate key control 
and restricts access to the keys.
    (2) The physical custody of the keys needed for accessing stored, 
full bill acceptor canister contents shall require involvement of 
persons from two separate departments, with the exception of the count 
team.
    (3) Access to the bill acceptor canister contents key at other than 
scheduled count times shall require the involvement of at least two 
persons from separate departments, one of whom must be a supervisor. The 
reason for access shall be documented with the signatures of all 
participants and observers.
    (4) Only the count team members shall be allowed access to bill 
acceptor canister contents keys during the count process.
    (t) Gaming machine computerized key security systems. (1) 
Computerized key security systems which restrict access to the gaming 
machine drop and count keys through the use of passwords, keys or other 
means, other than a key custodian, must provide the same degree of 
control as indicated in the aforementioned key control standards; refer 
to paragraphs (l), (o), (q) and (s) of this section. Note: This standard 
does not apply to the system administrator. The system administrator is 
defined in paragraph (t)(2)(i) of this section.
    (2) For computerized key security systems, the following additional 
gaming machine key control procedures apply:
    (i) Management personnel independent of the gaming machine 
department assign and control user access to keys in the computerized 
key security system (i.e., system administrator) to ensure that gaming 
machine drop and count keys are restricted to authorized employees.
    (ii) In the event of an emergency or the key box is inoperable, 
access to the emergency manual key(s) (a.k.a. override key), used to 
access the box containing the gaming machine drop and count keys, 
requires the physical involvement of at least three persons from 
separate departments, including management. The date, time, and reason 
for access, must be documented with the signatures of all participating

[[Page 124]]

employees signing out/in the emergency manual key(s).
    (iii) The custody of the keys issued pursuant to paragraph 
(t)(2)(ii) of this section requires the presence of two persons from 
separate departments from the time of their issuance until the time of 
their return.
    (iv) Routine physical maintenance that requires accessing the 
emergency manual key(s) (override key) and does not involve the 
accessing of the gaming machine drop and count keys, only requires the 
presence of two persons from separate departments. The date, time and 
reason for access must be documented with the signatures of all 
participating employees signing out/in the emergency manual key(s).
    (3) For computerized key security systems controlling access to 
gaming machine drop and count keys, accounting/audit personnel, 
independent of the system administrator, will perform the following 
procedures:
    (i) Daily, review the report generated by the computerized key 
security system indicating the transactions performed by the 
individual(s) that adds, deletes, and changes user's access within the 
system (i.e., system administrator). Determine whether the transactions 
completed by the system administrator provide an adequate control over 
the access to the gaming machine drop and count keys. Also, determine 
whether any gaming machine drop and count key(s) removed or returned to 
the key cabinet by the system administrator was properly authorized.
    (ii) For at least one day each month, review the report generated by 
the computerized key security system indicating all transactions 
performed to determine whether any unusual gaming machine drop and count 
key removals or key returns occurred.
    (iii) At least quarterly, review a sample of users that are assigned 
access to the gaming machine drop and count keys to determine that their 
access to the assigned keys is adequate relative to their job position.
    (iv) All noted improper transactions or unusual occurrences are 
investigated with the results documented.
    (4) Quarterly, an inventory of all count room, drop box release, 
storage rack and contents keys is performed, and reconciled to records 
of keys made, issued, and destroyed. Investigations are performed for 
all keys unaccounted for, with the investigation being documented.
    (u) Table games computerized key security systems. (1) Computerized 
key security systems which restrict access to the table game drop and 
count keys through the use of passwords, keys or other means, other than 
a key custodian, must provide the same degree of control as indicated in 
the aforementioned key control standards; refer to paragraphs (m), (n), 
(p) and (r) of this section. Note: This standard does not apply to the 
system administrator. The system administrator is defined in paragraph 
(u)(2)(ii) of this section.
    (2) For computerized key security systems, the following additional 
table game key control procedures apply:
    (i) Management personnel independent of the table game department 
assign and control user access to keys in the computerized key security 
system (i.e., system administrator) to ensure that table game drop and 
count keys are restricted to authorized employees.
    (ii) In the event of an emergency or the key box is inoperable, 
access to the emergency manual key(s) (a.k.a. override key), used to 
access the box containing the table game drop and count keys, requires 
the physical involvement of at least three persons from separate 
departments, including management. The date, time, and reason for 
access, must be documented with the signatures of all participating 
employees signing out/in the emergency manual key(s).
    (iii) The custody of the keys issued pursuant to paragraph 
(u)(2)(ii) of this section requires the presence of two persons from 
separate departments from the time of their issuance until the time of 
their return.
    (iv) Routine physical maintenance that requires accessing the 
emergency manual key(s) (override key) and does not involve the 
accessing of the table games drop and count keys, only requires the 
presence of two persons from separate departments. The date, time

[[Page 125]]

and reason for access must be documented with the signatures of all 
participating employees signing out/in the emergency manual key(s).
    (3) For computerized key security systems controlling access to 
table games drop and count keys, accounting/audit personnel, independent 
of the system administrator, will perform the following procedures:
    (i) Daily, review the report generated by the computerized key 
security system indicating the transactions performed by the 
individual(s) that adds, deletes, and changes user's access within the 
system (i.e., system administrator). Determine whether the transactions 
completed by the system administrator provide an adequate control over 
the access to the table games drop and count keys. Also, determine 
whether any table games drop and count key(s) removed or returned to the 
key cabinet by the system administrator was properly authorized.
    (ii) For at least one day each month, review the report generated by 
the computerized key security system indicating all transactions 
performed to determine whether any unusual table games drop and count 
key removals or key returns occurred.
    (iii) At least quarterly, review a sample of users that are assigned 
access to the table games drop and count keys to determine that their 
access to the assigned keys is adequate relative to their job position.
    (iv) All noted improper transactions or unusual occurrences are 
investigated with the results documented.
    (4) Quarterly, an inventory of all count room, table game drop box 
release, storage rack and contents keys is performed, and reconciled to 
records of keys made, issued, and destroyed. Investigations are 
performed for all keys unaccounted for, with the investigations being 
documented.
    (v) Emergency drop procedures. Emergency drop procedures shall be 
developed by the Tribal gaming regulatory authority, or the gaming 
operation as approved by the Tribal gaming regulatory authority.
    (w) Equipment standards for gaming machine count. (1) A weigh scale 
calibration module shall be secured so as to prevent unauthorized access 
(e.g., prenumbered seal, lock and key, etc.).
    (2) A person independent of the cage, vault, gaming machine, and 
count team functions shall be required to be present whenever the 
calibration module is accessed. Such access shall be documented and 
maintained.
    (3) If a weigh scale interface is used, it shall be adequately 
restricted so as to prevent unauthorized access (passwords, keys, etc.).
    (4) If the weigh scale has a zero adjustment mechanism, it shall be 
physically limited to minor adjustments (e.g., weight of a bucket) or 
physically situated such that any unnecessary adjustments to it during 
the weigh process would be observed by other count team members.
    (5) The weigh scale and weigh scale interface (if applicable) shall 
be tested by a person or persons independent of the cage, vault, and 
gaming machine departments and count team at least quarterly. At least 
annually, this test shall be performed by internal audit in accordance 
with the internal audit standards. The result of these tests shall be 
documented and signed by the person or persons performing the test.
    (6) Prior to the gaming machine count, at least two employees shall 
verify the accuracy of the weigh scale with varying weights or with 
varying amounts of previously counted coin for each denomination to 
ensure the scale is properly calibrated (varying weights/coin from drop 
to drop is acceptable).
    (7) If a mechanical coin counter is used (instead of a weigh scale), 
the Tribal gaming regulatory authority, or the gaming operation as 
approved by the Tribal gaming regulatory authority, shall establish and 
the gaming operation shall comply, with procedures that are equivalent 
to those described in paragraphs (u)(4), (u)(5), and (u)(6) of this 
section.
    (8) If a coin meter count machine is used, the count team member 
shall record the machine number denomination and number of coins in ink 
on a source document, unless the meter machine automatically records 
such information.
    (i) A count team member shall test the coin meter count machine 
prior to

[[Page 126]]

the actual count to ascertain if the metering device is functioning 
properly with a predetermined number of coins for each denomination.
    (ii) [Reserved]

[67 FR 43400, June 27, 2002, as amended at 70 FR 23021, May 4, 2005; 70 
FR 47107, Aug. 12, 2005]



Sec. 542.22  What are the minimum internal control standards for 
internal audit for Tier A gaming operations?

    (a) Internal audit personnel. (1) For Tier A gaming operations, a 
separate internal audit department must be maintained. Alternatively, 
designating personnel (who are independent with respect to the 
departments/procedures being examined) to perform internal audit work 
satisfies the requirements of this paragraph.
    (2) The internal audit personnel shall report directly to the Tribe, 
Tribal gaming regulatory authority, audit committee, or other entity 
designated by the Tribe in accordance with the definition of internal 
audit in Sec. 542.2.
    (b) Audits. (1) Internal audit personnel shall perform audits of all 
major gaming areas of the gaming operation. The following shall be 
reviewed at least annually:
    (i) Bingo, including but not limited to, bingo card control, payout 
procedures, and cash reconciliation process;
    (ii) Pull tabs, including but not limited to, statistical records, 
winner verification, perpetual inventory, and accountability of sales 
versus inventory;
    (iii) Card games, including but not limited to, card games 
operation, cash exchange procedures, shill transactions, and count 
procedures;
    (iv) Keno, including but not limited to, game write and payout 
procedures, sensitive key location and control, and a review of keno 
auditing procedures;
    (v) Pari-mutual wagering, including write and payout procedures, and 
pari-mutual auditing procedures;
    (vi) Table games, including but not limited to, fill and credit 
procedures, pit credit play procedures, rim credit procedures, soft 
drop/count procedures and the subsequent transfer of funds, unannounced 
testing of count room currency counters and/or currency interface, 
location and control over sensitive keys, the tracing of source 
documents to summarized documentation and accounting records, and 
reconciliation to restricted copies;
    (vii) Gaming machines, including but not limited to, jackpot payout 
and gaming machine fill procedures, gaming machine drop/count and bill 
acceptor drop/count and subsequent transfer of funds, unannounced 
testing of weigh scale and weigh scale interface, unannounced testing of 
count room currency counters and/or currency interface, gaming machine 
drop cabinet access, tracing of source documents to summarized 
documentation and accounting records, reconciliation to restricted 
copies, location and control over sensitive keys, compliance with EPROM 
duplication procedures, and compliance with MICS procedures for gaming 
machines that accept currency or coin(s) and issue cash-out tickets or 
gaming machines that do not accept currency or coin(s) and do not return 
currency or coin(s);
    (viii) Cage and credit procedures including all cage, credit, and 
collection procedures, and the reconciliation of trial balances to 
physical instruments on a sample basis. Cage accountability shall be 
reconciled to the general ledger;
    (ix) Information technology functions, including review for 
compliance with information technology standards;
    (x) Complimentary service or item, including but not limited to, 
procedures whereby complimentary service items are issued, authorized, 
and redeemed; and
    (xi) Any other internal audits as required by the Tribe, Tribal 
gaming regulatory authority, audit committee, or other entity designated 
by the Tribe.
    (2) In addition to the observation and examinations performed under 
paragraph (b)(1) of this section, follow-up observations and 
examinations shall be performed to verify that corrective action has 
been taken regarding all instances of noncompliance cited by internal 
audit, the independent accountant, and/or the Commission. The 
verification shall be performed within six (6) months following the date 
of notification.

[[Page 127]]

    (3) Whenever possible, internal audit observations shall be 
performed on an unannounced basis (i.e., without the employees being 
forewarned that their activities will be observed). Additionally, if the 
independent accountant also performs the internal audit function, the 
accountant shall perform separate observations of the table games/gaming 
machine drops and counts to satisfy the internal audit observation 
requirements and independent accountant tests of controls as required by 
the American Institute of Certified Public Accountants guide.
    (c) Documentation. (1) Documentation (e.g., checklists, programs, 
reports, etc.) shall be prepared to evidence all internal audit work 
performed as it relates to the requirements in this section, including 
all instances of noncompliance.
    (2) The internal audit department shall operate with audit programs, 
which, at a minimum, address the MICS. Additionally, the department 
shall properly document the work performed, the conclusions reached, and 
the resolution of all exceptions. Institute of Internal Auditors 
standards are recommended but not required.
    (d) Reports. (1) Reports documenting audits performed shall be 
maintained and made available to the Commission upon request.
    (2) Such audit reports shall include the following information:
    (i) Audit objectives;
    (ii) Audit procedures and scope;
    (iii) Findings and conclusions;
    (iv) Recommendations, if applicable; and
    (v) Management's response.
    (e) Material exceptions. All material exceptions resulting from 
internal audit work shall be investigated and resolved with the results 
of such being documented and retained for five years.
    (f) Role of management. (1) Internal audit findings shall be 
reported to management.
    (2) Management shall be required to respond to internal audit 
findings stating corrective measures to be taken to avoid recurrence of 
the audit exception.
    (3) Such management responses shall be included in the internal 
audit report that will be delivered to management, the Tribe, Tribal 
gaming regulatory authority, audit committee, or other entity designated 
by the Tribe.
    (g) Internal Audit Guidelines. In connection with the internal audit 
testing pursuant to paragraph (b)(1) of this section, the Commission 
shall develop recommended Internal Audit Guidelines, which shall be 
available upon request.

[67 FR 43400, June 27, 2002, as amended at 70 FR 47107, Aug. 12, 2005]



Sec. 542.23  What are the minimum internal control standards for 
surveillance for Tier A gaming operations?

    (a) Tier A gaming operations must, at a minimum, maintain and 
operate an unstaffed surveillance system in a secured location whereby 
the areas under surveillance are continually recorded.
    (b) The entrance to the secured location shall be located so that it 
is not readily accessible by either gaming operation employees who work 
primarily on the casino floor, or the general public.
    (c) Access to the secured location shall be limited to surveillance 
personnel, designated employees, and other persons authorized in 
accordance with the surveillance department policy. Such policy shall be 
approved by the Tribal gaming regulatory authority.
    (d) The surveillance system shall include date and time generators 
that possess the capability to display the date and time of recorded 
events on video and/or digital recordings. The displayed date and time 
shall not significantly obstruct the recorded view.
    (e) The surveillance department shall strive to ensure staff is 
trained in the use of the equipment, knowledge of the games, and house 
rules.
    (f) Each camera required by the standards in this section shall be 
installed in a manner that will prevent it from being readily 
obstructed, tampered with, or disabled by customers or employees.
    (g) Each camera required by the standards in this section shall 
possess the capability of having its picture recorded. The surveillance 
system shall include sufficient numbers of recorders to simultaneously 
record multiple gaming and count room activities, and

[[Page 128]]

record the views of all dedicated cameras and motion activated dedicated 
cameras.
    (h) Reasonable effort shall be made to repair each malfunction of 
surveillance system equipment required by the standards in this section 
within seventy-two (72) hours after the malfunction is discovered. The 
Tribal gaming regulatory authority shall be notified of any camera(s) 
that has malfunctioned for more than twenty-four (24) hours.
    (1) In the event of a dedicated camera malfunction, the gaming 
operation and/or the surveillance department shall, upon identification 
of the malfunction, provide alternative camera coverage or other 
security measures, such as additional supervisory or security personnel, 
to protect the subject activity.
    (2) [Reserved]
    (i) Bingo. The surveillance system shall record the bingo ball 
drawing device, the game board, and the activities of the employees 
responsible for drawing, calling, and entering the balls drawn or 
numbers selected.
    (j) Card games. The surveillance system shall record the general 
activities in each card room and be capable of identifying the employees 
performing the different functions.
    (k) Keno. The surveillance system shall record the keno ball-drawing 
device, the general activities in each keno game area, and be capable of 
identifying the employees performing the different functions.
    (l) Table games--(1) Operations with four (4) or more table games. 
Except as otherwise provided in paragraphs (l)(3), (l)(4), and (l)(5) of 
this section, the surveillance system of gaming operations operating 
four (4) or more table games shall provide at a minimum one (1) pan-
tilt-zoom camera per two (2) tables and surveillance must be capable of 
taping:
    (i) With sufficient clarity to identify customers and dealers; and
    (ii) With sufficient coverage and clarity to simultaneously view the 
table bank and determine the configuration of wagers, card values, and 
game outcome.
    (iii) One (1) dedicated camera per table and one (1) pan-tilt-zoom 
camera per four (4) tables may be an acceptable alternative procedure to 
satisfy the requirements of this paragraph.
    (2) Operations with three (3) or fewer table games. The surveillance 
system of gaming operations operating three (3) or fewer table games 
shall:
    (i) Comply with the requirements of paragraph (l)(1) of this 
section; or
    (ii) Have one (1) overhead camera at each table.
    (3) Craps. All craps tables shall have two (2) dedicated cross view 
cameras covering both ends of the table.
    (4) Roulette. All roulette areas shall have one (1) overhead 
dedicated camera covering the roulette wheel and shall also have one (1) 
dedicated camera covering the play of the table.
    (5) Big wheel. All big wheel games shall have one (1) dedicated 
camera viewing the wheel.
    (m) Progressive table games. (1) Progressive table games with a 
progressive jackpot of $25,000 or more shall be recorded by dedicated 
cameras that provide coverage of:
    (i) The table surface, sufficient that the card values and card 
suits can be clearly identified;
    (ii) An overall view of the entire table with sufficient clarity to 
identify customers and dealer; and
    (iii) A view of the progressive meter jackpot amount. If several 
tables are linked to the same progressive jackpot meter, only one meter 
need be recorded.
    (2) [Reserved]
    (n) Gaming machines. (1) Except as otherwise provided in paragraphs 
(n)(2) and (n)(3) of this section, gaming machines offering a payout of 
more than $250,000 shall be recorded by a dedicated camera(s) to provide 
coverage of:
    (i) All customers and employees at the gaming machine; and
    (ii) The face of the gaming machine, with sufficient clarity to 
identify the payout line(s) of the gaming machine.
    (2) In-house progressive machine. In-house progressive gaming 
machines offering a base payout amount (jackpot reset amount) of more 
than $100,000 shall be recorded by a dedicated camera(s) to provide 
coverage of:
    (i) All customers and employees at the gaming machine; and

[[Page 129]]

    (ii) The face of the gaming machine, with sufficient clarity to 
identify the payout line(s) of the gaming machine.
    (3) Wide-area progressive machine. Wide-area progressive gaming 
machines offering a base payout amount of $1 million or more and 
monitored by an independent vendor utilizing an on-line progressive 
computer system shall be recorded by a dedicated camera(s) to provide 
coverage of:
    (i) All customers and employees at the gaming machine; and
    (ii) The face of the gaming machine, with sufficient clarity to 
identify the payout line(s) of the gaming machine.
    (4) Notwithstanding paragraph (n)(1) of this section, if the gaming 
machine is a multi-game machine, the Tribal gaming regulatory authority, 
or the gaming operation subject to the approval of the Tribal gaming 
regulatory authority, may develop and implement alternative procedures 
to verify payouts.
    (o) Currency and coin. The surveillance system shall record a 
general overview of all areas where currency or coin may be stored or 
counted.
    (p) Video recording and/or digital record retention. (1) All video 
recordings and/or digital records of coverage provided by the dedicated 
cameras or motion-activated dedicated cameras required by the standards 
in this section shall be retained for a minimum of seven (7) days.
    (2) Recordings involving suspected or confirmed gaming crimes, 
unlawful activity, or detentions by security personnel, must be retained 
for a minimum of thirty (30) days.
    (3) Duly authenticated copies of video recordings and/or digital 
records shall be provided to the Commission upon request.
    (q) Video library log. A video library log, or comparable 
alternative procedure approved by the Tribal gaming regulatory 
authority, shall be maintained to demonstrate compliance with the 
storage, identification, and retention standards required in this 
section.
    (r) Malfunction and repair log. (1) Surveillance personnel shall 
maintain a log or alternative procedure approved by the Tribal gaming 
regulatory authority that documents each malfunction and repair of the 
surveillance system as defined in this section.
    (2) The log shall state the time, date, and nature of each 
malfunction, the efforts expended to repair the malfunction, and the 
date of each effort, the reasons for any delays in repairing the 
malfunction, the date the malfunction is repaired, and where applicable, 
any alternative security measures that were taken.

[67 FR 43400, June 27, 2002, as amended at 70 FR 47107, Aug. 12, 2005]



Sec. 542.30  What is a Tier B gaming operation?

    A Tier B gaming operation is one with gross gaming revenues of more 
than $5 million but not more than $15 million.



Sec. 542.31  What are the minimum internal control standards for
drop and count for Tier B gaming operations?

    (a) Computer applications. For any computer applications utilized, 
alternate documentation and/or procedures that provide at least the 
level of control described by the standards in this section, as approved 
by the Tribal gaming regulatory authority, will be acceptable.
    (b) Table game drop standards. (1) The setting out of empty table 
game drop boxes and the drop shall be a continuous process.
    (2) At the end of each shift:
    (i) All locked table game drop boxes shall be removed from the 
tables by a person independent of the pit shift being dropped;
    (ii) A separate drop box shall be placed on each table opened at any 
time during each shift or a gaming operation may utilize a single drop 
box with separate openings and compartments for each shift; and
    (iii) Upon removal from the tables, table game drop boxes shall be 
transported directly to the count room or other equivalently secure area 
with comparable controls and locked in a secure manner until the count 
takes place.
    (3) If drop boxes are not placed on all tables, then the pit 
department shall document which tables were open during the shift.

[[Page 130]]

    (4) The transporting of table game drop boxes shall be performed by 
a minimum of two persons, at least one of whom is independent of the pit 
shift being dropped.
    (5) All table game drop boxes shall be posted with a number 
corresponding to a permanent number on the gaming table and marked to 
indicate game, table number, and shift.
    (6) Surveillance shall be notified when the drop is to begin so that 
surveillance may monitor the activities.
    (c) Soft count room personnel. (1) The table game soft count and the 
gaming machine bill acceptor count shall be performed by a minimum of 
two employees.
    (i) The count shall be viewed live, or on video recording and/or 
digital record, within seven (7) days by an employee independent of the 
count.
    (ii) [Reserved]
    (2) Count room personnel shall not be allowed to exit or enter the 
count room during the count except for emergencies or scheduled breaks. 
At no time during the count, shall there be fewer than two employees in 
the count room until the drop proceeds have been accepted into cage/
vault accountability. Surveillance shall be notified whenever count room 
personnel exit or enter the count room during the count.
    (3) Count team members shall be rotated on a routine basis such that 
the count team is not consistently the same two persons more than four 
(4) days per week. This standard shall not apply to gaming operations 
that utilize a count team of more than two persons.
    (4) The count team shall be independent of transactions being 
reviewed and counted. The count team shall be independent of the cage/
vault departments, however, a dealer or a cage cashier may be used if 
this person is not allowed to perform the recording function. An 
accounting representative may be used if there is an independent audit 
of all soft count documentation.
    (d) Table game soft count standards. (1) The table game soft count 
shall be performed in a soft count room or other equivalently secure 
area with comparable controls.
    (2) Access to the count room during the count shall be restricted to 
members of the drop and count teams, with the exception of authorized 
observers, supervisors for resolution of problems, and authorized 
maintenance personnel.
    (3) If counts from various revenue centers occur simultaneously in 
the count room, procedures shall be in effect that prevent the 
commingling of funds from different revenue centers.
    (4) The table game drop boxes shall be individually emptied and 
counted in such a manner to prevent the commingling of funds between 
boxes until the count of the box has been recorded.
    (i) The count of each box shall be recorded in ink or other 
permanent form of recordation.
    (ii) A second count shall be performed by an employee on the count 
team who did not perform the initial count.
    (iii) Corrections to information originally recorded by the count 
team on soft count documentation shall be made by drawing a single line 
through the error, writing the correct figure above the original figure, 
and then obtaining the initials of at least two count team members who 
verified the change, unless the count team only has two (2) members in 
which case the initials of only one (1) verifying count team member is 
required.
    (5) If currency counters are utilized and the count room table is 
used only to empty boxes and sort/stack contents, a count team member 
shall be able to observe the loading and unloading of all currency at 
the currency counter, including rejected currency.
    (6) Table game drop boxes, when empty, shall be shown to another 
member of the count team, or to another person who is observing the 
count, or to surveillance, provided the count is monitored in its 
entirety by a person independent of the count.
    (7) Orders for fill/credit (if applicable) shall be matched to the 
fill/credit slips. Fills and credits shall be traced to or recorded on 
the count sheet.
    (8) Pit marker issue and payment slips (if applicable) removed from 
the table game drop boxes shall either be:
    (i) Traced to or recorded on the count sheet by the count team; or
    (ii) Totaled by shift and traced to the totals documented by the 
computerized system. Accounting personnel shall

[[Page 131]]

verify the issue/payment slip for each table is accurate.
    (9) Foreign currency exchange forms (if applicable) removed from the 
table game drop boxes shall be reviewed for the proper daily exchange 
rate and the conversion amount shall be recomputed by the count team. 
Alternatively, this may be performed by accounting/auditing employees.
    (10) The opening/closing table and marker inventory forms (if 
applicable) shall either be:
    (i) Examined and traced to or recorded on the count sheet; or
    (ii) If a computerized system is used, accounting personnel can 
trace the opening/closing table and marker inventory forms to the count 
sheet. Discrepancies shall be investigated with the findings documented 
and maintained for inspection.
    (11) The count sheet shall be reconciled to the total drop by a 
count team member who shall not function as the sole recorder.
    (12) All members of the count team shall sign the count document or 
a summary report to attest to their participation in the count.
    (13) All drop proceeds and cash equivalents that were counted shall 
be turned over to the cage or vault cashier (who shall be independent of 
the count team) or to an authorized person/employee independent of the 
revenue generation and the count process for verification. Such person 
shall certify by signature as to the accuracy of the drop proceeds 
delivered and received.
    (14) The count sheet, with all supporting documents, shall be 
delivered to the accounting department by a count team member or a 
person independent of the cashiers department. Alternatively, it may be 
adequately secured (e.g., locked container to which only accounting 
personnel can gain access) until retrieved by the accounting department.
    (15) Access to stored, full table game drop boxes shall be 
restricted to authorized members of the drop and count teams.
    (e) Gaming machine bill acceptor drop standards. (1) A minimum of 
two employees shall be involved in the removal of the gaming machine 
drop, at least one of who is independent of the gaming machine 
department.
    (2) All bill acceptor canisters shall be removed only at the time 
previously designated by the gaming operation and reported to the Tribal 
gaming regulatory authority, except for emergency drops.
    (3) Surveillance shall be notified when the drop is to begin so that 
surveillance may monitor the activities.
    (4) The bill acceptor canisters shall be removed by a person 
independent of the gaming machine department then transported directly 
to the count room or other equivalently secure area with comparable 
controls and locked in a secure manner until the count takes place.
    (i) Security shall be provided over the bill acceptor canisters 
removed from the gaming machines and awaiting transport to the count 
room.
    (ii) The transporting of bill acceptor canisters shall be performed 
by a minimum of two persons, at least one of who is independent of the 
gaming machine department.
    (5) All bill acceptor canisters shall be posted with a number 
corresponding to a permanent number on the gaming machine.
    (f) Gaming machine bill acceptor count standards. (1) The gaming 
machine bill acceptor count shall be performed in a soft count room or 
other equivalently secure area with comparable controls.
    (2) Access to the count room during the count shall be restricted to 
members of the drop and count teams, with the exception of authorized 
observers, supervisors for resolution of problems, and authorized 
maintenance personnel.
    (3) If counts from various revenue centers occur simultaneously in 
the count room, procedures shall be in effect that prevent the 
commingling of funds from different revenue centers.
    (4) The bill acceptor canisters shall be individually emptied and 
counted in such a manner to prevent the commingling of funds between 
canisters until the count of the canister has been recorded.
    (i) The count of each canister shall be recorded in ink or other 
permanent form of recordation.
    (ii) Corrections to information originally recorded by the count 
team on

[[Page 132]]

soft count documentation shall be made by drawing a single line through 
the error, writing the correct figure above the original figure, and 
then obtaining the initials of at least two count team members who 
verified the change.
    (5) If currency counters are utilized and the count room table is 
used only to empty canisters and sort/stack contents, a count team 
member shall be able to observe the loading and unloading of all 
currency at the currency counter, including rejected currency.
    (6) Canisters, when empty, shall be shown to another member of the 
count team, to another person who is observing the count, or to 
surveillance, provided that the count is monitored in its entirety by a 
person independent of the count.
    (7) The count sheet shall be reconciled to the total drop by a count 
team member who shall not function as the sole recorder.
    (8) All members of the count team shall sign the count document or a 
summary report to attest to their participation in the count.
    (9) All drop proceeds and cash equivalents that were counted shall 
be turned over to the cage or vault cashier (who shall be independent of 
the count team) or to an authorized person/employee independent of the 
revenue generation and the count process for verification. Such person 
shall certify by signature as to the accuracy of the drop proceeds 
delivered and received.
    (10) The count sheet, with all supporting documents, shall be 
delivered to the accounting department by a count team member or a 
person independent of the cashiers department. Alternatively, it may be 
adequately secured (e.g., locked container to which only accounting 
personnel can gain access) until retrieved by the accounting department.
    (11) Access to stored bill acceptor canisters, full or empty, shall 
be restricted to:
    (i) Authorized members of the drop and count teams; and
    (ii) Authorized personnel in an emergency for the resolution of a 
problem.
    (g) Gaming machine coin drop standards. (1) A minimum of two 
employees shall be involved in the removal of the gaming machine drop, 
at least one of who is independent of the gaming machine department.
    (2) All drop buckets shall be removed only at the time previously 
designated by the gaming operation and reported to the Tribal gaming 
regulatory authority, except for emergency drops.
    (3) Surveillance shall be notified when the drop is to begin in 
order that surveillance may monitor the activities.
    (4) Security shall be provided over the buckets removed from the 
gaming machine drop cabinets and awaiting transport to the count room.
    (5) As each machine is opened, the contents shall be tagged with its 
respective machine number if the bucket is not permanently marked with 
the machine number. The contents shall be transported directly to the 
area designated for the counting of such drop proceeds. If more than one 
trip is required to remove the contents of the machines, the filled 
carts of coins shall be securely locked in the room designed for 
counting or in another equivalently secure area with comparable 
controls. There shall be a locked covering on any carts in which the 
drop route includes passage out of doors.
    (i) Alternatively, a smart bucket system that electronically 
identifies and tracks the gaming machine number, and facilitates the 
proper recognition of gaming revenue, shall satisfy the requirements of 
this paragraph.
    (ii) [Reserved]
    (6) Each drop bucket in use shall be:
    (i) Housed in a locked compartment separate from any other 
compartment of the gaming machine and keyed differently than other 
gaming machine compartments; and
    (ii) Identifiable to the gaming machine from which it is removed. If 
the gaming machine is identified with a removable tag that is placed in 
the bucket, the tag shall be placed on top of the bucket when it is 
collected.
    (7) Each gaming machine shall have drop buckets into which coins or 
tokens that are retained by the gaming machine are collected. Drop 
bucket contents shall not be used to make change or pay hand-paid 
payouts.

[[Page 133]]

    (8) The collection procedures may include procedures for dropping 
gaming machines that have trays instead of drop buckets.
    (h) Hard count room personnel. (1) The weigh/count shall be 
performed by a minimum of two employees.
    (i) The count shall be viewed either live, or on video recording 
and/or digital record within seven (7) days by an employee independent 
of the count.
    (ii) [Reserved]
    (2) At no time during the weigh/count shall there be fewer than two 
employees in the count room until the drop proceeds have been accepted 
into cage/vault accountability. Surveillance shall be notified whenever 
count room personnel exit or enter the count room during the count.
    (i) If the gaming machine count is conducted with a continuous 
mechanical count meter that is not reset during the count and is 
verified in writing by at least two employees at the start and end of 
each denomination count, then one employee may perform the wrap.
    (ii) [Reserved]
    (3) Count team members shall be rotated on a routine basis such that 
the count team is not consistently the same two persons more than four 
(4) days per week. This standard shall not apply to gaming operations 
that utilize a count team of more than two persons.
    (4) The count team shall be independent of transactions being 
reviewed and counted. The count team shall be independent of the cage/
vault departments, unless they are non-supervisory gaming machine 
employees and perform the laborer function only (A non-supervisory 
gaming machine employee is defined as a person below the level of gaming 
machine shift supervisor). A cage cashier may be used if this person is 
not allowed to perform the recording function. An accounting 
representative may be used if there is an independent audit of all count 
documentation.
    (i) Gaming machine coin count and wrap standards. (1) Coins shall 
include tokens.
    (2) The gaming machine coin count and wrap shall be performed in a 
count room or other equivalently secure area with comparable controls.
    (i) Alternatively, an on-the-floor drop system utilizing a mobile 
scale shall satisfy the requirements of this paragraph, subject to the 
following conditions:
    (A) The gaming operation shall utilize and maintain an effective on-
line gaming machine monitoring system, as described in Sec. 
542.13(m)(3);
    (B) Components of the on-the-floor drop system shall include, but 
not be limited to, a weigh scale, a laptop computer through which weigh/
count applications are operated, a security camera available for the 
mobile scale system, and a VCR to be housed within the video compartment 
of the mobile scale. The system may include a mule cart used for mobile 
weigh scale system locomotion.
    (C) The gaming operation must obtain the security camera available 
with the system, and this camera must be added in such a way as to 
eliminate tampering.
    (D) Prior to the drop, the drop/count team shall ensure the scale 
batteries are charged;
    (E) Prior to the drop, a videotape shall be inserted into the VCR 
used to record the drop in conjunction with the security camera system 
and the VCR shall be activated;
    (F) The weigh scale test shall be performed prior to removing the 
unit from the hard count room for the start of the weigh/drop/count;
    (G) Surveillance shall be notified when the weigh/drop/count begins 
and shall be capable of monitoring the entire process;
    (H) An observer independent of the weigh/drop/count teams 
(independent observer) shall remain by the weigh scale at all times and 
shall observe the entire weigh/drop/count process;
    (I) Physical custody of the key(s) needed to access the laptop and 
video compartment shall require the involvement of two persons, one of 
whom is independent of the drop and count team;
    (J) The mule key (if applicable), the laptop and video compartment 
keys, and the remote control for the VCR shall be maintained by a 
department independent of the gaming machine department. The appropriate 
personnel shall sign out these keys;

[[Page 134]]

    (K) A person independent of the weigh/drop/count teams shall be 
required to accompany these keys while they are checked out, and observe 
each time the laptop compartment is opened;
    (L) The laptop access panel shall not be opened outside the hard 
count room, except in instances when the laptop must be rebooted as a 
result of a crash, lock up, or other situation requiring immediate 
corrective action;
    (M) User access to the system shall be limited to those employees 
required to have full or limited access to complete the weigh/drop/
count; and
    (N) When the weigh/drop/count is completed, the independent observer 
shall access the laptop compartment, end the recording session, eject 
the videotape, and deliver the videotape to surveillance.
    (ii) [Reserved]
    (3) Access to the count room during the count shall be restricted to 
members of the drop and count teams, with the exception of authorized 
observers, supervisors for resolution of problems, and authorized 
maintenance personnel.
    (4) If counts from various revenue centers occur simultaneously in 
the count room, procedures shall be in effect that prevent the 
commingling of funds from different revenue centers.
    (5) The following functions shall be performed in the counting of 
the gaming machine drop:
    (i) Recorder function, which involves the recording of the gaming 
machine count; and
    (ii) Count team supervisor function, which involves the control of 
the gaming machine weigh and wrap process. The supervisor shall not 
perform the initial recording of the weigh/count unless a weigh scale 
with a printer is used.
    (6) The gaming machine drop shall be counted, wrapped, and 
reconciled in such a manner to prevent the commingling of gaming machine 
drop coin with coin (for each denomination) from the next gaming machine 
drop until the count of the gaming machine drop has been recorded. If 
the coins are not wrapped immediately after being weighed or counted, 
they shall be secured and not commingled with other coin.
    (i) The amount of the gaming machine drop from each machine shall be 
recorded in ink or other permanent form of recordation on a gaming 
machine count document by the recorder or mechanically printed by the 
weigh scale.
    (ii) Corrections to information originally recorded by the count 
team on gaming machine count documentation shall be made by drawing a 
single line through the error, writing the correct figure above the 
original figure, and then obtaining the initials of at least two count 
team members who verified the change.
    (A) If a weigh scale interface is used, corrections to gaming 
machine count data shall be made using either of the following:
    (1) Drawing a single line through the error on the gaming machine 
document, writing the correct figure above the original figure, and then 
obtaining the initials of at least two count team employees. If this 
procedure is used, an employee independent of the gaming machine 
department and count team shall enter the correct figure into the 
computer system prior to the generation of related gaming machine 
reports; or
    (2) During the count process, correct the error in the computer 
system and enter the passwords of at least two count team employees. If 
this procedure is used, an exception report shall be generated by the 
computer system identifying the gaming machine number, the error, the 
correction, and the count team employees attesting to the correction.
    (B) [Reserved]
    (7) If applicable, the weight shall be converted to dollar amounts 
before the reconciliation of the weigh to the wrap.
    (8) If a coin meter is used, a count team member shall convert the 
coin count for each denomination into dollars and shall enter the 
results on a summary sheet.
    (9) The recorder and at least one other count team member shall sign 
the weigh tape and the gaming machine count document attesting to the 
accuracy of the weigh/count.
    (10) All members of the count team shall sign the count document or 
a

[[Page 135]]

summary report to attest to their participation in the count.
    (11) All drop proceeds and cash equivalents that were counted shall 
be turned over to the cage or vault cashier (who shall be independent of 
the count team) or to an authorized person/employee independent of the 
revenue generation and the count process for verification. Such person 
shall certify by signature as to the accuracy of the drop proceeds 
delivered and received.
    (12) All gaming machine count and wrap documentation, including any 
applicable computer storage media, shall be delivered to the accounting 
department by a count team member or a person independent of the 
cashier's department. Alternatively, it may be adequately secured (e.g., 
locked container to which only accounting personnel can gain access) 
until retrieved by the accounting department.
    (13) If the coins are transported off the property, a second 
(alternative) count procedure shall be performed before the coins leave 
the property. Any variances shall be documented.
    (14) Variances. Large (by denomination, either $1,000 or 2% of the 
drop, whichever is less) or unusual (e.g., zero for weigh/count or 
patterned for all counts) variances between the weigh/count and wrap 
shall be investigated by management personnel independent of the gaming 
machine department, count team, and the cage/vault functions on a timely 
basis. The results of such investigation shall be documented, maintained 
for inspection, and provided to the Tribal gaming regulatory authority 
upon request.
    (j) Security of the coin room inventory during the gaming machine 
coin count and wrap. (1) If the count room serves as a coin room and 
coin room inventory is not secured so as to preclude access by the count 
team, then the following standards shall apply:
    (i) At the commencement of the gaming machine count the following 
requirements shall be met:
    (A) The coin room inventory shall be counted by at least two 
employees, one of whom is a member of the count team and the other is 
independent of the weigh/count and wrap procedures;
    (B) The count in paragraph (j)(1)(i)(A) of this section shall be 
recorded on an appropriate inventory form;
    (ii) Upon completion of the wrap of the gaming machine drop:
    (A) At least two members of the count team (wrap team), 
independently from each other, shall count the ending coin room 
inventory;
    (B) The counts in paragraph (j)(1)(ii)(A) of this section shall be 
recorded on a summary report(s) that evidences the calculation of the 
final wrap by subtracting the beginning inventory from the sum of the 
ending inventory and transfers in and out of the coin room;
    (C) The same count team members shall compare the calculated wrap to 
the weigh/count, recording the comparison and noting any variances on 
the summary report;
    (D) A member of the cage/vault department shall count the ending 
coin room inventory by denomination and shall reconcile it to the 
beginning inventory, wrap, transfers and weigh/count; and
    (E) At the conclusion of the reconciliation, at least two count/wrap 
team members and the verifying employee shall sign the summary report(s) 
attesting to its accuracy.
    (iii) The functions described in paragraph (j)(1)(ii)(A) and (C) of 
this section may be performed by only one count team member. That count 
team member must then sign the summary report, along with the verifying 
employee, as required under paragraph (j)(1)(ii)(E).
    (2) If the count room is segregated from the coin room, or if the 
coin room is used as a count room and the coin room inventory is secured 
to preclude access by the count team, all of the following requirements 
shall be completed, at the conclusion of the count:
    (i) At least two members of the count/wrap team shall count the 
final wrapped gaming machine drop independently from each other;
    (ii) The counts shall be recorded on a summary report;
    (iii) The same count team members (or the accounting department) 
shall compare the final wrap to the weigh/count, recording the 
comparison, and

[[Page 136]]

noting any variances on the summary report;
    (iv) A member of the cage/vault department shall count the wrapped 
gaming machine drop by denomination and reconcile it to the weigh/count;
    (v) At the conclusion of the reconciliation, at least two count team 
members and the cage/vault employee shall sign the summary report 
attesting to its accuracy; and
    (vi) The wrapped coins (exclusive of proper transfers) shall be 
transported to the cage, vault or coin vault after the reconciliation of 
the weigh/count to the wrap.
    (k) Transfers during the gaming machine coin count and wrap. (1) 
Transfers may be permitted during the count and wrap only if permitted 
under the internal control standards approved by the Tribal gaming 
regulatory authority.
    (2) Each transfer shall be recorded on a separate multi-part form 
with a preprinted or concurrently-printed form number (used solely for 
gaming machine count transfers) that shall be subsequently reconciled by 
the accounting department to ensure the accuracy of the reconciled 
gaming machine drop.
    (3) Each transfer must be counted and signed for by at least two 
members of the count team and by a person independent of the count team 
who is responsible for authorizing the transfer.
    (l) Gaming machine drop key control standards. (1) Gaming machine 
coin drop cabinet keys, including duplicates, shall be maintained by a 
department independent of the gaming machine department.
    (2) The physical custody of the keys needed to access gaming machine 
coin drop cabinets, including duplicates, shall require the involvement 
of two persons, one of whom is independent of the gaming machine 
department.
    (3) Two employees (separate from key custodian) shall be required to 
accompany such keys while checked out and observe each time gaming 
machine drop cabinets are accessed, unless surveillance is notified each 
time keys are checked out and surveillance observes the person 
throughout the period the keys are checked out.
    (m) Table game drop box key control standards. (1) Procedures shall 
be developed and implemented to insure that unauthorized access to empty 
table game drop boxes shall not occur from the time the boxes leave the 
storage racks until they are placed on the tables.
    (2) The involvement of at least two persons independent of the cage 
department shall be required to access stored empty table game drop 
boxes.
    (3) The release keys shall be separately keyed from the contents 
keys.
    (4) At least two count team members are required to be present at 
the time count room and other count keys are issued for the count.
    (5) All duplicate keys shall be maintained in a manner that provides 
the same degree of control as is required for the original keys. Records 
shall be maintained for each key duplicated that indicate the number of 
keys made and destroyed.
    (6) Logs shall be maintained by the custodian of sensitive keys to 
document authorization of personnel accessing keys.
    (n) Table game drop box release keys. (1) The table game drop box 
release keys shall be maintained by a department independent of the pit 
department.
    (2) Only the person(s) authorized to remove table game drop boxes 
from the tables shall be allowed access to the table game drop box 
release keys; however, the count team members may have access to the 
release keys during the soft count in order to reset the table game drop 
boxes.
    (3) Persons authorized to remove the table game drop boxes shall be 
precluded from having simultaneous access to the table game drop box 
contents keys and release keys.
    (4) For situations requiring access to a table game drop box at a 
time other than the scheduled drop, the date, time, and signature of 
employee signing out/in the release key must be documented.
    (o) Bill acceptor canister release keys. (1) The bill acceptor 
canister release keys shall be maintained by a department independent of 
the gaming machine department.
    (2) Only the person(s) authorized to remove bill acceptor canisters 
from the

[[Page 137]]

gaming machines shall be allowed access to the release keys.
    (3) Persons authorized to remove the bill acceptor canisters shall 
be precluded from having simultaneous access to the bill acceptor 
canister contents keys and release keys.
    (4) For situations requiring access to a bill acceptor canister at a 
time other than the scheduled drop, the date, time, and signature of 
employee signing out/in the release key must be documented.
    (p) Table game drop box storage rack keys. Persons authorized to 
obtain table game drop box storage rack keys shall be precluded from 
having simultaneous access to table game drop box contents keys with the 
exception of the count team.
    (q) Bill acceptor canister storage rack keys. Persons authorized to 
obtain bill acceptor canister storage rack keys shall be precluded from 
having simultaneous access to bill acceptor canister contents keys with 
the exception of the count team.
    (r) Table game drop box contents keys. (1) The physical custody of 
the keys needed for accessing stored, full table game drop box contents 
shall require the involvement of persons from at least two separate 
departments, with the exception of the count team.
    (2) Access to the table game drop box contents key at other than 
scheduled count times shall require the involvement of at least two 
persons from separate departments, including management. The reason for 
access shall be documented with the signatures of all participants and 
observers.
    (3) Only count team members shall be allowed access to table game 
drop box contents keys during the count process.
    (s) Bill acceptor canister contents keys. (1) The physical custody 
of the keys needed for accessing stored, full bill acceptor canister 
contents shall require involvement of persons from two separate 
departments, with the exception of the count team.
    (2) Access to the bill acceptor canister contents key at other than 
scheduled count times shall require the involvement of at least two 
persons from separate departments, one of whom must be a supervisor. The 
reason for access shall be documented with the signatures of all 
participants and observers.
    (3) Only the count team members shall be allowed access to bill 
acceptor canister contents keys during the count process.
    (t) Gaming machine computerized key security systems. (1) 
Computerized key security systems which restrict access to the gaming 
machine drop and count keys through the use of passwords, keys or other 
means, other than a key custodian, must provide the same degree of 
control as indicated in the aforementioned key control standards; refer 
to paragraphs (l), (o), (q) and (s) of this section. Note: This standard 
does not apply to the system administrator. The system administrator is 
defined in paragraph (t)(2)(i) of this section.
    (2) For computerized key security systems, the following additional 
gaming machine key control procedures apply:
    (i) Management personnel independent of the gaming machine 
department assign and control user access to keys in the computerized 
key security system (i.e., system administrator) to ensure that gaming 
machine drop and count keys are restricted to authorized employees.
    (ii) In the event of an emergency or the key box is inoperable, 
access to the emergency manual key(s) (a.k.a. override key), used to 
access the box containing the gaming machine drop and count keys, 
requires the physical involvement of at least three persons from 
separate departments, including management. The date, time, and reason 
for access, must be documented with the signatures of all participating 
employees signing out/in the emergency manual key(s).
    (iii) The custody of the keys issued pursuant to paragraph 
(t)(2)(ii) of this section, requires the presence of two persons from 
separate departments from the time of their issuance until the time of 
their return.
    (iv) Routine physical maintenance that requires accessing the 
emergency manual key(s) (override key) and does not involve the 
accessing of the gaming machine drop and count keys, only requires the 
presence of two persons from separate departments. The date, time

[[Page 138]]

and reason for access must be documented with the signatures of all 
participating employees signing out/in the emergency manual key(s).
    (3) For computerized key security systems controlling access to 
gaming machine drop and count keys, accounting/audit personnel, 
independent of the system administrator, will perform the following 
procedures:
    (i) Daily, review the report generated by the computerized key 
security system indicating the transactions performed by the 
individual(s) that adds, deletes, and changes user's access within the 
system (i.e., system administrator). Determine whether the transactions 
completed by the system administrator provide an adequate control over 
the access to the gaming machine drop and count keys. Also, determine 
whether any gaming machine drop and count key(s) removed or returned to 
the key cabinet by the system administrator was properly authorized.
    (ii) For at least one day each month, review the report generated by 
the computerized key security system indicating all transactions 
performed to determine whether any unusual gaming machine drop and count 
key removals or key returns occurred.
    (iii) At least quarterly, review a sample of users that are assigned 
access to the gaming machine drop and count keys to determine that their 
access to the assigned keys is adequate relative to their job position.
    (iv) All noted improper transactions or unusual occurrences are 
investigated with the results documented.
    (4) Quarterly, an inventory of all count room, drop box release, 
storage rack and contents keys is performed, and reconciled to records 
of keys made, issued, and destroyed. Investigations are performed for 
all keys unaccounted for, with the investigation being documented.
    (u) Table games computerized key security systems. (1) Computerized 
key security systems which restrict access to the table game drop and 
count keys through the use of passwords, keys or other means, other than 
a key custodian, must provide the same degree of control as indicated in 
the aforementioned key control standards, refer to paragraphs (m), (n), 
(p) and (r) of this section. Note: This standard does not apply to the 
system administrator. The system administrator is defined in paragraph 
(u)(2)(ii) of this section.
    (2) For computerized key security systems, the following additional 
table game key control procedures apply:
    (i) Management personnel independent of the table game department 
assign and control user access to keys in the computerized key security 
system (i.e., system administrator) to ensure that table game drop and 
count keys are restricted to authorized employees.
    (ii) In the event of an emergency or the key box is inoperable, 
access to the emergency manual key(s) (a.k.a. override key), used to 
access the box containing the table game drop and count keys, requires 
the physical involvement of at least three persons from separate 
departments, including management. The date, time, and reason for 
access, must be documented with the signatures of all participating 
employees signing out/in the emergency manual key(s).
    (iii) The custody of the keys issued pursuant to paragraph 
(u)(2)(ii) of this section, requires the presence of two persons from 
separate departments from the time of their issuance until the time of 
their return.
    (iv) Routine physical maintenance that requires accessing the 
emergency manual key(s) (override key) and does not involve the 
accessing of the table games drop and count keys, only requires the 
presence of two persons from separate departments. The date, time and 
reason for access must be documented with the signatures of all 
participating employees signing out/in the emergency manual key(s).
    (3) For computerized key security systems controlling access to 
table games drop and count keys, accounting/audit personnel, independent 
of the system administrator, will perform the following procedures:
    (i) Daily, review the report generated by the computerized key 
security system indicating the transactions performed by the 
individual(s) that adds,

[[Page 139]]

deletes, and changes user's access within the system (i.e., system 
administrator). Determine whether the transactions completed by the 
system administrator provide an adequate control over the access to the 
table games drop and count keys. Also, determine whether any table games 
drop and count key(s) removed or returned to the key cabinet by the 
system administrator was properly authorized.
    (ii) For at least one day each month, review the report generated by 
the computerized key security system indicating all transactions 
performed to determine whether any unusual table games drop and count 
key removals or key returns occurred.
    (iii) At least quarterly, review a sample of users that are assigned 
access to the table games drop and count keys to determine that their 
access to the assigned keys is adequate relative to their job position.
    (iv) All noted improper transactions or unusual occurrences are 
investigated with the results documented.
    (4) Quarterly, an inventory of all count room, table game drop box 
release, storage rack and contents keys is performed, and reconciled to 
records of keys made, issued, and destroyed. Investigations are 
performed for all keys unaccounted for, with the investigations being 
documented.
    (v) Emergency drop procedures. Emergency drop procedures shall be 
developed by the Tribal gaming regulatory authority, or the gaming 
operation as approved by the Tribal gaming regulatory authority.
    (w) Equipment standards for gaming machine count. (1) A weigh scale 
calibration module shall be secured so as to prevent unauthorized access 
(e.g., prenumbered seal, lock and key, etc.).
    (2) A person independent of the cage, vault, gaming machine, and 
count team functions shall be required to be present whenever the 
calibration module is accessed. Such access shall be documented and 
maintained.
    (3) If a weigh scale interface is used, it shall be adequately 
restricted so as to prevent unauthorized access (passwords, keys, etc.).
    (4) If the weigh scale has a zero adjustment mechanism, it shall be 
physically limited to minor adjustments (e.g., weight of a bucket) or 
physically situated such that any unnecessary adjustments to it during 
the weigh process would be observed by other count team members.
    (5) The weigh scale and weigh scale interface (if applicable) shall 
be tested by a person or persons independent of the cage, vault, and 
gaming machine departments and count team at least quarterly. At least 
annually, this test shall be performed by internal audit in accordance 
with the internal audit standards. The result of these tests shall be 
documented and signed by the person or persons performing the test.
    (6) Prior to the gaming machine count, at least two employees shall 
verify the accuracy of the weigh scale with varying weights or with 
varying amounts of previously counted coin for each denomination to 
ensure the scale is properly calibrated (varying weights/coin from drop 
to drop is acceptable).
    (7) If a mechanical coin counter is used (instead of a weigh scale), 
the Tribal gaming regulatory authority, or the gaming operation as 
approved by the Tribal gaming regulatory authority, shall establish and 
the gaming operation shall comply with procedures that are equivalent to 
those described in paragraphs (u)(4), (u)(5), and (u)(6) of this 
section.
    (8) If a coin meter count machine is used, the count team member 
shall record the machine number denomination and number of coins in ink 
on a source document, unless the meter machine automatically records 
such information.
    (i) A count team member shall test the coin meter count machine 
before the actual count to ascertain if the metering device is 
functioning properly with a predetermined number of coins for each 
denomination.
    (ii) [Reserved]

[67 FR 43400, June 27, 2002, as amended at 70 FR 23024, May 4, 2005; 70 
FR 47107, Aug. 12, 2005]



Sec. 542.32  What are the minimum internal control standards for
internal audit for Tier B gaming operations?

    (a) Internal audit personnel. (1) For Tier B gaming operations, a 
separate internal audit department must be maintained. Alternatively, 
designating

[[Page 140]]

personnel (who are independent with respect to the departments/
procedures being examined) to perform internal audit work satisfies the 
requirements of this paragraph.
    (2) The internal audit personnel shall report directly to the Tribe, 
Tribal gaming regulatory authority, audit committee, or other entity 
designated by the Tribe in accordance with the definition of internal 
audit in Sec. 542.2.
    (b) Audits. (1) Internal audit personnel shall perform audits of all 
major gaming areas of the gaming operation. The following shall be 
reviewed at least annually:
    (i) Bingo, including but not limited to, bingo card control, payout 
procedures, and cash reconciliation process;
    (ii) Pull tabs, including but not limited to, statistical records, 
winner verification, perpetual inventory, and accountability of sales 
versus inventory;
    (iii) Card games, including but not limited to, card games 
operation, cash exchange procedures, shill transactions, and count 
procedures;
    (iv) Keno, including but not limited to, game write and payout 
procedures, sensitive key location and control, and a review of keno 
auditing procedures;
    (v) Pari-mutual wagering, including write and payout procedures, and 
pari-mutual auditing procedures;
    (vi) Table games, including but not limited to, fill and credit 
procedures, pit credit play procedures, rim credit procedures, soft 
drop/count procedures and the subsequent transfer of funds, unannounced 
testing of count room currency counters and/or currency interface, 
location and control over sensitive keys, the tracing of source 
documents to summarized documentation and accounting records, and 
reconciliation to restricted copies;
    (vii) Gaming machines, including but not limited to, jackpot payout 
and gaming machine fill procedures, gaming machine drop/count and bill 
acceptor drop/count and subsequent transfer of funds, unannounced 
testing of weigh scale and weigh scale interface, unannounced testing of 
count room currency counters and/or currency interface, gaming machine 
drop cabinet access, tracing of source documents to summarized 
documentation and accounting records, reconciliation to restricted 
copies, location and control over sensitive keys, compliance with EPROM 
duplication procedures, and compliance with MICS procedures for gaming 
machines that accept currency or coin(s) and issue cash-out tickets or 
gaming machines that do not accept currency or coin(s) and do not return 
currency or coin(s);
    (viii) Cage and credit procedures including all cage, credit, and 
collection procedures, and the reconciliation of trial balances to 
physical instruments on a sample basis. Cage accountability shall be 
reconciled to the general ledger;
    (ix) Information technology functions, including review for 
compliance with information technology standards;
    (x) Complimentary service or item, including but not limited to, 
procedures whereby complimentary service items are issued, authorized, 
and redeemed; and
    (xi) Any other internal audits as required by the Tribe, Tribal 
gaming regulatory authority, audit committee, or other entity designated 
by the Tribe.
    (2) In addition to the observation and examinations performed under 
paragraph (b)(1) of this section, follow-up observations and 
examinations shall be performed to verify that corrective action has 
been taken regarding all instances of noncompliance cited by internal 
audit, the independent accountant, and/or the Commission. The 
verification shall be performed within six (6) months following the date 
of notification.
    (3) Whenever possible, internal audit observations shall be 
performed on an unannounced basis (i.e., without the employees being 
forewarned that their activities will be observed). Additionally, if the 
independent accountant also performs the internal audit function, the 
accountant shall perform separate observations of the table games/gaming 
machine drops and counts to satisfy the internal audit observation 
requirements and independent accountant tests of controls as required by 
the American Institute of Certified Public Accountants guide.
    (c) Documentation. (1) Documentation (e.g., checklists, programs, 
reports,

[[Page 141]]

etc.) shall be prepared to evidence all internal audit work performed as 
it relates to the requirements in this section, including all instances 
of noncompliance.
    (2) The internal audit department shall operate with audit programs, 
which, at a minimum, address the MICS. Additionally, the department 
shall properly document the work performed, the conclusions reached, and 
the resolution of all exceptions. Institute of Internal Auditors 
standards are recommended but not required.
    (d) Reports. (1) Reports documenting audits performed shall be 
maintained and made available to the Commission upon request.
    (2) Such audit reports shall include the following information:
    (i) Audit objectives;
    (ii) Audit procedures and scope;
    (iii) Findings and conclusions;
    (iv) Recommendations, if applicable; and
    (v) Management's response.
    (e) Material exceptions. All material exceptions resulting from 
internal audit work shall be investigated and resolved with the results 
of such being documented and retained for five years.
    (f) Role of management. (1) Internal audit findings shall be 
reported to management.
    (2) Management shall be required to respond to internal audit 
findings stating corrective measures to be taken to avoid recurrence of 
the audit exception.
    (3) Such management responses shall be included in the internal 
audit report that will be delivered to management, the Tribe, Tribal 
gaming regulatory authority, audit committee, or other entity designated 
by the Tribe.
    (g) Internal Audit Guidelines. In connection with the internal audit 
testing pursuant to paragraph (b)(1) of this section, the Commission 
shall develop recommended Internal Audit Guidelines, which shall be 
available upon request.

[67 FR 43400, June 27, 2002, as amended at 70 FR 47107, Aug. 12, 2005]



Sec. 542.33  What are the minimum internal control standards for
surveillance for Tier B gaming operations?

    (a) The surveillance system shall be maintained and operated from a 
staffed surveillance room and shall provide surveillance over gaming 
areas.
    (b) The entrance to the surveillance room shall be located so that 
it is not readily accessible by either gaming operation employees who 
work primarily on the casino floor, or the general public.
    (c) Access to the surveillance room shall be limited to surveillance 
personnel, designated employees, and other persons authorized in 
accordance with the surveillance department policy. Such policy shall be 
approved by the Tribal gaming regulatory authority. The surveillance 
department shall maintain a sign-in log of other authorized persons 
entering the surveillance room.
    (d) Surveillance room equipment shall have total override capability 
over all other satellite surveillance equipment located outside the 
surveillance room.
    (e) The surveillance system shall include date and time generators 
that possess the capability to display the date and time of recorded 
events on video and/or digital recordings. The displayed date and time 
shall not significantly obstruct the recorded view.
    (f) The surveillance department shall strive to ensure staff is 
trained in the use of the equipment, knowledge of the games, and house 
rules.
    (g) Each camera required by the standards in this section shall be 
installed in a manner that will prevent it from being readily 
obstructed, tampered with, or disabled by customers or employees.
    (h) Each camera required by the standards in this section shall 
possess the capability of having its picture displayed on a monitor and 
recorded. The surveillance system shall include sufficient numbers of 
monitors and recorders to simultaneously display and record multiple 
gaming and count room activities, and record the views of all dedicated 
cameras and motion activated dedicated cameras.
    (i) Reasonable effort shall be made to repair each malfunction of 
surveillance system equipment required by the standards in this section 
within seventy-two (72) hours after the malfunction is discovered. The 
Tribal gaming regulatory authority shall be notified

[[Page 142]]

of any camera(s) that has malfunctioned for more than twenty-four (24) 
hours.
    (1) In the event of a dedicated camera malfunction, the gaming 
operation and/or surveillance department shall immediately provide 
alternative camera coverage or other security measures, such as 
additional supervisory or security personnel, to protect the subject 
activity.
    (2) [Reserved]
    (j) Bingo. (1) The surveillance system shall possess the capability 
to monitor the bingo ball drawing device or random number generator, 
which shall be recorded during the course of the draw by a dedicated 
camera with sufficient clarity to identify the balls drawn or numbers 
selected.
    (2) The surveillance system shall monitor and record the game board 
and the activities of the employees responsible for drawing, calling, 
and entering the balls drawn or numbers selected.
    (k) Card games. The surveillance system shall monitor and record 
general activities in each card room with sufficient clarity to identify 
the employees performing the different functions.
    (l) Progressive card games. (1) Progressive card games with a 
progressive jackpot of $25,000 or more shall be monitored and recorded 
by dedicated cameras that provide coverage of:
    (i) The table surface, sufficient that the card values and card 
suits can be clearly identified;
    (ii) An overall view of the entire table with sufficient clarity to 
identify customers and dealer; and
    (iii) A view of the posted jackpot amount.
    (2) [Reserved]
    (m) Keno. (1) The surveillance system shall possess the capability 
to monitor the keno ball-drawing device or random number generator, 
which shall be recorded during the course of the draw by a dedicated 
camera with sufficient clarity to identify the balls drawn or numbers 
selected.
    (2) The surveillance system shall monitor and record general 
activities in each keno game area with sufficient clarity to identify 
the employees performing the different functions.
    (n) Pari-mutuel. The surveillance system shall monitor and record 
general activities in the pari-mutuel area, to include the ticket writer 
and cashier areas, with sufficient clarity to identify the employees 
performing the different functions.
    (o) Table games--(1) Operations with four (4) or more table games. 
Except as otherwise provided in paragraphs (o)(3), (o)(4), and (o)(5) of 
this section, the surveillance system of gaming operations operating 
four (4) or more table games shall provide at a minimum one (1) pan-
tilt-zoom camera per two (2) tables and surveillance must be capable of 
taping:
    (i) With sufficient clarity to identify customers and dealers; and
    (ii) With sufficient coverage and clarity to simultaneously view the 
table bank and determine the configuration of wagers, card values, and 
game outcome.
    (iii) One (1) dedicated camera per table and one (1) pan-tilt-zoom 
camera per four (4) tables may be an acceptable alternative procedure to 
satisfy the requirements of this paragraph.
    (2) Operations with three (3) or fewer table games. The surveillance 
system of gaming operations operating three (3) or fewer table games 
shall:
    (i) Comply with the requirements of paragraph (o)(1) of this 
section; or
    (ii) Have one (1) overhead camera at each table.
    (3) Craps. All craps tables shall have two (2) dedicated cross view 
cameras covering both ends of the table.
    (4) Roulette. All roulette areas shall have one (1) overhead 
dedicated camera covering the roulette wheel and shall also have one (1) 
dedicated camera covering the play of the table.
    (5) Big wheel. All big wheel games shall have one (1) dedicated 
camera viewing the wheel.
    (p) Progressive table games. (1) Progressive table games with a 
progressive jackpot of $25,000 or more shall be monitored and recorded 
by dedicated cameras that provide coverage of:
    (i) The table surface, sufficient that the card values and card 
suits can be clearly identified;
    (ii) An overall view of the entire table with sufficient clarity to 
identify customers and dealer; and
    (iii) A view of the progressive meter jackpot amount. If several 
tables are

[[Page 143]]

linked to the same progressive jackpot meter, only one meter need be 
recorded.
    (2) [Reserved]
    (q) Gaming machines. (1) Except as otherwise provided in paragraphs 
(q)(2) and (q)(3) of this section, gaming machines offering a payout of 
more than $250,000 shall be monitored and recorded by a dedicated 
camera(s) to provide coverage of:
    (i) All customers and employees at the gaming machine, and
    (ii) The face of the gaming machine, with sufficient clarity to 
identify the payout line(s) of the gaming machine.
    (2) In-house progressive machine. In-house progressive gaming 
machines offering a base payout amount (jackpot reset amount) of more 
than $100,000 shall be monitored and recorded by a dedicated camera(s) 
to provide coverage of:
    (i) All customers and employees at the gaming machine; and
    (ii) The face of the gaming machine, with sufficient clarity to 
identify the payout line(s) of the gaming machine.
    (3) Wide-area progressive machine. Wide-area progressive gaming 
machines offering a base payout amount of $1 million or more and 
monitored by an independent vendor utilizing an on-line progressive 
computer system shall be recorded by a dedicated camera(s) to provide 
coverage of:
    (i) All customers and employees at the gaming machine; and
    (ii) The face of the gaming machine, with sufficient clarity to 
identify the payout line(s) of the gaming machine.
    (4) Notwithstanding paragraph (q)(1) of this section, if the gaming 
machine is a multi-game machine, the Tribal gaming regulatory authority, 
or the gaming operation subject to the approval of the Tribal gaming 
regulatory authority, may develop and implement alternative procedures 
to verify payouts.
    (r) Cage and vault. (1) The surveillance system shall monitor and 
record a general overview of activities occurring in each cage and vault 
area with sufficient clarity to identify employees within the cage and 
customers and employees at the counter areas.
    (2) Each cashier station shall be equipped with one (1) dedicated 
overhead camera covering the transaction area.
    (3) The surveillance system shall provide an overview of cash 
transactions. This overview should include the customer, the employee, 
and the surrounding area.
    (s) Fills and credits. (1) The cage or vault area in which fills and 
credits are transacted shall be monitored and recorded by a dedicated 
camera or motion activated dedicated camera that provides coverage with 
sufficient clarity to identify the chip values and the amounts on the 
fill and credit slips.
    (2) Controls provided by a computerized fill and credit system may 
be deemed an adequate alternative to viewing the fill and credit slips.
    (t) Currency and coin. (1) The surveillance system shall monitor and 
record with sufficient clarity all areas where currency or coin may be 
stored or counted.
    (2) The surveillance system shall provide for:
    (i) Coverage of scales shall be sufficiently clear to view any 
attempted manipulation of the recorded data.
    (ii) Monitoring and recording of the table game drop box storage 
rack or area by either a dedicated camera or a motion-detector activated 
camera.
    (iii) Monitoring and recording of all areas where coin may be stored 
or counted, including the hard count room, all doors to the hard count 
room, all scales and wrapping machines, and all areas where uncounted 
coin may be stored during the drop and count process.
    (iv) Monitoring and recording of soft count room, including all 
doors to the room, all table game drop boxes, safes, and counting 
surfaces, and all count team personnel. The counting surface area must 
be continuously monitored and recorded by a dedicated camera during the 
soft count.
    (v) Monitoring and recording of all areas where currency is sorted, 
stacked, counted, verified, or stored during the soft count process.
    (u) Change booths. The surveillance system shall monitor and record 
a general overview of the activities occurring in each gaming machine 
change booth.

[[Page 144]]

    (v) Video recording and/or digital record retention. (1) All video 
recordings and/or digital records of coverage provided by the dedicated 
cameras or motion-activated dedicated cameras required by the standards 
in this section shall be retained for a minimum of seven (7) days.
    (2) Recordings involving suspected or confirmed gaming crimes, 
unlawful activity, or detentions by security personnel, must be retained 
for a minimum of thirty (30) days.
    (3) Duly authenticated copies of video recordings and/or digital 
records shall be provided to the Commission upon request.
    (w) Video library log. A video library log, or comparable 
alternative procedure approved by the Tribal gaming regulatory 
authority, shall be maintained to demonstrate compliance with the 
storage, identification, and retention standards required in this 
section.
    (x) Malfunction and repair log. (1) Surveillance personnel shall 
maintain a log or alternative procedure approved by the Tribal gaming 
regulatory authority that documents each malfunction and repair of the 
surveillance system as defined in this section.
    (2) The log shall state the time, date, and nature of each 
malfunction, the efforts expended to repair the malfunction, and the 
date of each effort, the reasons for any delays in repairing the 
malfunction, the date the malfunction is repaired, and where applicable, 
any alternative security measures that were taken.
    (y) Surveillance log. (1) Surveillance personnel shall maintain a 
log of all surveillance activities.
    (2) Such log shall be maintained by surveillance room personnel and 
shall be stored securely within the surveillance department.
    (3) At a minimum, the following information shall be recorded in a 
surveillance log:
    (i) Date;
    (ii) Time commenced and terminated;
    (iii) Activity observed or performed; and
    (iv) The name or license credential number of each person who 
initiates, performs, or supervises the surveillance.
    (4) Surveillance personnel shall also record a summary of the 
results of the surveillance of any suspicious activity. This summary may 
be maintained in a separate log.

[67 FR 43400, June 27, 2002, as amended at 70 FR 47107, Aug. 12, 2005]



Sec. 542.40  What is a Tier C gaming operation?

    A Tier C gaming operation is one with annual gross gaming revenues 
of more than $15 million.



Sec. 542.41  What are the minimum internal control standards for
drop and count for Tier C gaming operations?

    (a) Computer applications. For any computer applications utilized, 
alternate documentation and/or procedures that provide at least the 
level of control described by the standards in this section, as approved 
by the Tribal gaming regulatory authority, will be acceptable.
    (b) Table game drop standards. (1) The setting out of empty table 
game drop boxes and the drop shall be a continuous process.
    (2) At the end of each shift:
    (i) All locked table game drop boxes shall be removed from the 
tables by a person independent of the pit shift being dropped;
    (ii) A separate drop box shall be placed on each table opened at any 
time during each shift or a gaming operation may utilize a single drop 
box with separate openings and compartments for each shift; and
    (iii) Upon removal from the tables, table game drop boxes shall be 
transported directly to the count room or other equivalently secure area 
with comparable controls and locked in a secure manner until the count 
takes place.
    (3) If drop boxes are not placed on all tables, then the pit 
department shall document which tables were open during the shift.
    (4) The transporting of table game drop boxes shall be performed by 
a minimum of two persons, at least one of whom is independent of the pit 
shift being dropped.
    (5) All table game drop boxes shall be posted with a number 
corresponding to

[[Page 145]]

a permanent number on the gaming table and marked to indicate game, 
table number, and shift.
    (6) Surveillance shall be notified when the drop is to begin so that 
surveillance may monitor the activities.
    (c) Soft count room personnel. (1) The table game soft count and the 
gaming machine bill acceptor count shall be performed by a minimum of 
three employees.
    (2) Count room personnel shall not be allowed to exit or enter the 
count room during the count except for emergencies or scheduled breaks. 
At no time during the count, shall there be fewer than three employees 
in the count room until the drop proceeds have been accepted into cage/
vault accountability. Surveillance shall be notified whenever count room 
personnel exit or enter the count room during the count.
    (3) Count team members shall be rotated on a routine basis such that 
the count team is not consistently the same three persons more than four 
(4) days per week. This standard shall not apply to gaming operations 
that utilize a count team of more than three persons.
    (4) The count team shall be independent of transactions being 
reviewed and counted. The count team shall be independent of the cage/
vault departments, however, an accounting representative may be used if 
there is an independent audit of all soft count documentation.
    (d) Table game soft count standards. (1) The table game soft count 
shall be performed in a soft count room or other equivalently secure 
area with comparable controls.
    (2) Access to the count room during the count shall be restricted to 
members of the drop and count teams, with the exception of authorized 
observers, supervisors for resolution of problems, and authorized 
maintenance personnel.
    (3) If counts from various revenue centers occur simultaneously in 
the count room, procedures shall be in effect that prevent the 
commingling of funds from different revenue centers.
    (4) The table game drop boxes shall be individually emptied and 
counted in such a manner to prevent the commingling of funds between 
boxes until the count of the box has been recorded.
    (i) The count of each box shall be recorded in ink or other 
permanent form of recordation.
    (ii) A second count shall be performed by an employee on the count 
team who did not perform the initial count.
    (iii) Corrections to information originally recorded by the count 
team on soft count documentation shall be made by drawing a single line 
through the error, writing the correct figure above the original figure, 
and then obtaining the initials of at least two count team members who 
verified the change.
    (5) If currency counters are utilized and the count room table is 
used only to empty boxes and sort/stack contents, a count team member 
shall be able to observe the loading and unloading of all currency at 
the currency counter, including rejected currency.
    (6) Table game drop boxes, when empty, shall be shown to another 
member of the count team, or to another person who is observing the 
count, or to surveillance, provided the count is monitored in its 
entirety by a person independent of the count.
    (7) Orders for fill/credit (if applicable) shall be matched to the 
fill/credit slips. Fills and credits shall be traced to or recorded on 
the count sheet.
    (8) Pit marker issue and payment slips (if applicable) removed from 
the table game drop boxes shall either be:
    (i) Traced to or recorded on the count sheet by the count team; or
    (ii) Totaled by shift and traced to the totals documented by the 
computerized system. Accounting personnel shall verify the issue/payment 
slip for each table is accurate.
    (9) Foreign currency exchange forms (if applicable) removed from the 
table game drop boxes shall be reviewed for the proper daily exchange 
rate and the conversion amount shall be recomputed by the count team. 
Alternatively, this may be performed by accounting/auditing employees.
    (10) The opening/closing table and marker inventory forms (if 
applicable) shall either be:
    (i) Examined and traced to or recorded on the count sheet; or

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    (ii) If a computerized system is used, accounting personnel can 
trace the opening/closing table and marker inventory forms to the count 
sheet. Discrepancies shall be investigated with the findings documented 
and maintained for inspection.
    (11) The count sheet shall be reconciled to the total drop by a 
count team member who shall not function as the sole recorder.
    (12) All members of the count team shall sign the count document or 
a summary report to attest to their participation in the count.
    (13) All drop proceeds and cash equivalents that were counted shall 
be turned over to the cage or vault cashier (who shall be independent of 
the count team) or to an authorized person/employee independent of the 
revenue generation and the count process for verification. Such person 
shall certify by signature as to the accuracy of the drop proceeds 
delivered and received.
    (14) The count sheet, with all supporting documents, shall be 
delivered to the accounting department by a count team member or a 
person independent of the cashiers department. Alternatively, it may be 
adequately secured (e.g., locked container to which only accounting 
personnel can gain access) until retrieved by the accounting department.
    (15) Access to stored, full table game drop boxes shall be 
restricted to authorized members of the drop and count teams.
    (e) Gaming machine bill acceptor drop standards. (1) A minimum of 
three employees shall be involved in the removal of the gaming machine 
drop, at least one of who is independent of the gaming machine 
department.
    (2) All bill acceptor canisters shall be removed only at the time 
previously designated by the gaming operation and reported to the Tribal 
gaming regulatory authority, except for emergency drops.
    (3) Surveillance shall be notified when the drop is to begin so that 
surveillance may monitor the activities.
    (4) The bill acceptor canisters shall be removed by a person 
independent of the gaming machine department then transported directly 
to the count room or other equivalently secure area with comparable 
controls and locked in a secure manner until the count takes place.
    (i) Security shall be provided over the bill acceptor canisters 
removed from the gaming machines and awaiting transport to the count 
room.
    (ii) The transporting of bill acceptor canisters shall be performed 
by a minimum of two persons, at least one of who is independent of the 
gaming machine department.
    (5) All bill acceptor canisters shall be posted with a number 
corresponding to a permanent number on the gaming machine.
    (f) Gaming machine bill acceptor count standards. (1) The gaming 
machine bill acceptor count shall be performed in a soft count room or 
other equivalently secure area with comparable controls.
    (2) Access to the count room during the count shall be restricted to 
members of the drop and count teams, with the exception of authorized 
observers, supervisors for resolution of problems, and authorized 
maintenance personnel.
    (3) If counts from various revenue centers occur simultaneously in 
the count room, procedures shall be in effect that prevent the 
commingling of funds from different revenue centers.
    (4) The bill acceptor canisters shall be individually emptied and 
counted in such a manner to prevent the commingling of funds between 
canisters until the count of the canister has been recorded.
    (i) The count of each canister shall be recorded in ink or other 
permanent form of recordation.
    (ii) Corrections to information originally recorded by the count 
team on soft count documentation shall be made by drawing a single line 
through the error, writing the correct figure above the original figure, 
and then obtaining the initials of at least two count team members who 
verified the change.
    (5) If currency counters are utilized and the count room table is 
used only to empty canisters and sort/stack contents, a count team 
member shall be able to observe the loading and unloading of all 
currency at the currency counter, including rejected currency.
    (6) Canisters, when empty, shall be shown to another member of the 
count

[[Page 147]]

team, or to another person who is observing the count, or to 
surveillance, provided that the count is monitored in its entirety by a 
person independent of the count.
    (7) The count sheet shall be reconciled to the total drop by a count 
team member who shall not function as the sole recorder.
    (8) All members of the count team shall sign the count document or a 
summary report to attest to their participation in the count.
    (9) All drop proceeds and cash equivalents that were counted shall 
be turned over to the cage or vault cashier (who shall be independent of 
the count team) or to an authorized person/employee independent of the 
revenue generation and the count process for verification. Such person 
shall certify by signature as to the accuracy of the drop proceeds 
delivered and received.
    (10) The count sheet, with all supporting documents, shall be 
delivered to the accounting department by a count team member or a 
person independent of the cashiers department. Alternatively, it may be 
adequately secured (e.g., locked container to which only accounting 
personnel can gain access) until retrieved by the accounting department.
    (11) Access to stored bill acceptor canisters, full or empty, shall 
be restricted to:
    (i) Authorized members of the drop and count teams; and
    (ii) Authorized personnel in an emergency for the resolution of a 
problem.
    (g) Gaming machine coin drop standards. (1) A minimum of three 
employees shall be involved in the removal of the gaming machine drop, 
at least one of who is independent of the gaming machine department.
    (2) All drop buckets shall be removed only at the time previously 
designated by the gaming operation and reported to the Tribal gaming 
regulatory authority, except for emergency drops.
    (3) Surveillance shall be notified when the drop is to begin in 
order that surveillance may monitor the activities.
    (4) Security shall be provided over the buckets removed from the 
gaming machine drop cabinets and awaiting transport to the count room.
    (5) As each machine is opened, the contents shall be tagged with its 
respective machine number if the bucket is not permanently marked with 
the machine number. The contents shall be transported directly to the 
area designated for the counting of such drop proceeds. If more than one 
trip is required to remove the contents of the machines, the filled 
carts of coins shall be securely locked in the room designed for 
counting or in another equivalently secure area with comparable 
controls. There shall be a locked covering on any carts in which the 
drop route includes passage out of doors.
    (i) Alternatively, a smart bucket system that electronically 
identifies and tracks the gaming machine number, and facilitates the 
proper recognition of gaming revenue, shall satisfy the requirements of 
this paragraph.
    (ii) [Reserved]
    (6) Each drop bucket in use shall be:
    (i) Housed in a locked compartment separate from any other 
compartment of the gaming machine and keyed differently than other 
gaming machine compartments; and
    (ii) Identifiable to the gaming machine from which it is removed. If 
the gaming machine is identified with a removable tag that is placed in 
the bucket, the tag shall be placed on top of the bucket when it is 
collected.
    (7) Each gaming machine shall have drop buckets into which coins or 
tokens that are retained by the gaming machine are collected. Drop 
bucket contents shall not be used to make change or pay hand-paid 
payouts.
    (8) The collection procedures may include procedures for dropping 
gaming machines that have trays instead of drop buckets.
    (h) Hard count room personnel. (1) The weigh/count shall be 
performed by a minimum of three employees.
    (2) At no time during the weigh/count shall there be fewer than 
three employees in the count room until the drop proceeds have been 
accepted into cage/vault accountability. Surveillance shall be notified 
whenever count room personnel exit or enter the count room during the 
count.

[[Page 148]]

    (i) If the gaming machine count is conducted with a continuous 
mechanical count meter that is not reset during the count and is 
verified in writing by at least three employees at the start and end of 
each denomination count, then one employee may perform the wrap.
    (ii) [Reserved]
    (3) Count team members shall be rotated on a routine basis such that 
the count team is not consistently the same three persons more than four 
(4) days per week. This standard shall not apply to gaming operations 
that utilize a count team of more than three persons.
    (4) The count team shall be independent of transactions being 
reviewed and counted. The count team shall be independent of the cage/
vault departments, unless they are non-supervisory gaming machine 
employees and perform the laborer function only (A non-supervisory 
gaming machine employee is defined as a person below the level of gaming 
machine shift supervisor). A cage cashier may be used if this person is 
not allowed to perform the recording function. An accounting 
representative may be used if there is an independent audit of all count 
documentation.
    (i) Gaming machine coin count and wrap standards. (1) Coins shall 
include tokens.
    (2) The gaming machine coin count and wrap shall be performed in a 
count room or other equivalently secure area with comparable controls.
    (i) Alternatively, an on-the-floor drop system utilizing a mobile 
scale shall satisfy the requirements of this paragraph, subject to the 
following conditions:
    (A) The gaming operation shall utilize and maintain an effective on-
line gaming machine monitoring system, as described in Sec. 
542.13(m)(3);
    (B) Components of the on-the-floor drop system shall include, but 
not be limited to, a weigh scale, a laptop computer through which weigh/
count applications are operated, a security camera available for the 
mobile scale system, and a VCR to be housed within the video compartment 
of the mobile scale. The system may include a mule cart used for mobile 
weigh scale system locomotion.
    (C) The gaming operation must obtain the security camera available 
with the system, and this camera must be added in such a way as to 
eliminate tampering.
    (D) Prior to the drop, the drop/count team shall ensure the scale 
batteries are charged;
    (E) Prior to the drop, a videotape shall be inserted into the VCR 
used to record the drop in conjunction with the security camera system 
and the VCR shall be activated;
    (F) The weigh scale test shall be performed prior to removing the 
unit from the hard count room for the start of the weigh/drop/count;
    (G) Surveillance shall be notified when the weigh/drop/count begins 
and shall be capable of monitoring the entire process;
    (H) An observer independent of the weigh/drop/count teams 
(independent observer) shall remain by the weigh scale at all times and 
shall observe the entire weigh/drop/count process;
    (I) Physical custody of the key(s) needed to access the laptop and 
video compartment shall require the involvement of two persons, one of 
whom is independent of the drop and count team;
    (J) The mule key (if applicable), the laptop and video compartment 
keys, and the remote control for the VCR shall be maintained by a 
department independent of the gaming machine department. The appropriate 
personnel shall sign out these keys;
    (K) A person independent of the weigh/drop/count teams shall be 
required to accompany these keys while they are checked out, and observe 
each time the laptop compartment is opened;
    (L) The laptop access panel shall not be opened outside the hard 
count room, except in instances when the laptop must be rebooted as a 
result of a crash, lock up, or other situation requiring immediate 
corrective action;
    (M) User access to the system shall be limited to those employees 
required to have full or limited access to complete the weigh/drop/
count; and
    (N) When the weigh/drop/count is completed, the independent observer 
shall access the laptop compartment,

[[Page 149]]

end the recording session, eject the videotape, and deliver the 
videotape to surveillance.
    (ii) [Reserved]
    (3) Access to the count room during the count shall be restricted to 
members of the drop and count teams, with the exception of authorized 
observers, supervisors for resolution of problems, and authorized 
maintenance personnel.
    (4) If counts from various revenue centers occur simultaneously in 
the count room, procedures shall be in effect that prevent the 
commingling of funds from different revenue centers.
    (5) The following functions shall be performed in the counting of 
the gaming machine drop:
    (i) Recorder function, which involves the recording of the gaming 
machine count; and
    (ii) Count team supervisor function, which involves the control of 
the gaming machine weigh and wrap process. The supervisor shall not 
perform the initial recording of the weigh/count unless a weigh scale 
with a printer is used.
    (6) The gaming machine drop shall be counted, wrapped, and 
reconciled in such a manner to prevent the commingling of gaming machine 
drop coin with coin (for each denomination) from the next gaming machine 
drop until the count of the gaming machine drop has been recorded. If 
the coins are not wrapped immediately after being weighed or counted, 
they shall be secured and not commingled with other coin.
    (i) The amount of the gaming machine drop from each machine shall be 
recorded in ink or other permanent form of recordation on a gaming 
machine count document by the recorder or mechanically printed by the 
weigh scale.
    (ii) Corrections to information originally recorded by the count 
team on gaming machine count documentation shall be made by drawing a 
single line through the error, writing the correct figure above the 
original figure, and then obtaining the initials of at least two count 
team members who verified the change.
    (A) If a weigh scale interface is used, corrections to gaming 
machine count data shall be made using either of the following:
    (1) Drawing a single line through the error on the gaming machine 
document, writing the correct figure above the original figure, and then 
obtaining the initials of at least two count team employees. If this 
procedure is used, an employee independent of the gaming machine 
department and count team shall enter the correct figure into the 
computer system prior to the generation of related gaming machine 
reports; or
    (2) During the count process, correct the error in the computer 
system and enter the passwords of at least two count team employees. If 
this procedure is used, an exception report shall be generated by the 
computer system identifying the gaming machine number, the error, the 
correction, and the count team employees attesting to the correction.
    (B) [Reserved]
    (7) If applicable, the weight shall be converted to dollar amounts 
before the reconciliation of the weigh to the wrap.
    (8) If a coin meter is used, a count team member shall convert the 
coin count for each denomination into dollars and shall enter the 
results on a summary sheet.
    (9) The recorder and at least one other count team member shall sign 
the weigh tape and the gaming machine count document attesting to the 
accuracy of the weigh/count.
    (10) All members of the count team shall sign the count document or 
a summary report to attest to their participation in the count.
    (11) All drop proceeds and cash equivalents that were counted shall 
be turned over to the cage or vault cashier (who shall be independent of 
the count team) or to an authorized person/employee independent of the 
revenue generation and the count process for verification. Such person 
shall certify by signature as to the accuracy of the drop proceeds 
delivered and received.
    (12) All gaming machine count and wrap documentation, including any 
applicable computer storage media, shall be delivered to the accounting 
department by a count team member or a person independent of the 
cashier's department. Alternatively, it may be

[[Page 150]]

adequately secured (e.g., locked container to which only accounting 
personnel can gain access) until retrieved by the accounting department.
    (13) If the coins are transported off the property, a second 
(alternative) count procedure shall be performed before the coins leave 
the property. Any variances shall be documented.
    (14) Variances. Large (by denomination, either $1,000 or 2% of the 
drop, whichever is less) or unusual (e.g., zero for weigh/count or 
patterned for all counts) variances between the weigh/count and wrap 
shall be investigated by management personnel independent of the gaming 
machine department, count team, and the cage/vault functions on a timely 
basis. The results of such investigation shall be documented, maintained 
for inspection, and provided to the Tribal gaming regulatory authority 
upon request.
    (j) Security of the count room inventory during the gaming machine 
coin count and wrap. (1) If the count room serves as a coin room and 
coin room inventory is not secured so as to preclude access by the count 
team, then the following standards shall apply:
    (i) At the commencement of the gaming machine count the following 
requirements shall be met:
    (A) The coin room inventory shall be counted by at least two 
employees, one of whom is a member of the count team and the other is 
independent of the weigh/count and wrap procedures;
    (B) The count in paragraph (j)(1)(i)(A) of this section shall be 
recorded on an appropriate inventory form;
    (ii) Upon completion of the wrap of the gaming machine drop:
    (A) At least two members of the count team (wrap team), 
independently from each other, shall count the ending coin room 
inventory;
    (B) The counts in paragraph (j)(1)(ii)(A) of this section shall be 
recorded on a summary report(s) that evidences the calculation of the 
final wrap by subtracting the beginning inventory from the sum of the 
ending inventory and transfers in and out of the coin room;
    (C) The same count team members shall compare the calculated wrap to 
the weigh/count, recording the comparison and noting any variances on 
the summary report;
    (D) A member of the cage/vault department shall count the ending 
coin room inventory by denomination and shall reconcile it to the 
beginning inventory, wrap, transfers, and weigh/count; and
    (E) At the conclusion of the reconciliation, at least two count/wrap 
team members and the verifying employee shall sign the summary report(s) 
attesting to its accuracy.
    (2) If the count room is segregated from the coin room, or if the 
coin room is used as a count room and the coin room inventory is secured 
to preclude access by the count team, all of the following requirements 
shall be completed, at the conclusion of the count:
    (i) At least two members of the count/wrap team shall count the 
final wrapped gaming machine drop independently from each other;
    (ii) The counts shall be recorded on a summary report;
    (iii) The same count team members (or the accounting department) 
shall compare the final wrap to the weigh/count, recording the 
comparison and noting any variances on the summary report;
    (iv) A member of the cage/vault department shall count the wrapped 
gaming machine drop by denomination and reconcile it to the weigh/count;
    (v) At the conclusion of the reconciliation, at least two count team 
members and the cage/vault employee shall sign the summary report 
attesting to its accuracy; and
    (vi) The wrapped coins (exclusive of proper transfers) shall be 
transported to the cage, vault or coin vault after the reconciliation of 
the weigh/count to the wrap.
    (k) Transfers during the gaming machine coin count and wrap. (1) 
Transfers may be permitted during the count and wrap only if permitted 
under the internal control standards approved by the Tribal gaming 
regulatory authority.
    (2) Each transfer shall be recorded on a separate multi-part form 
with a preprinted or concurrently-printed form number (used solely for 
gaming machine count transfers) that shall be

[[Page 151]]

subsequently reconciled by the accounting department to ensure the 
accuracy of the reconciled gaming machine drop.
    (3) Each transfer must be counted and signed for by at least two 
members of the count team and by a person independent of the count team 
who is responsible for authorizing the transfer.
    (l) Gaming machine drop key control standards. (1) Gaming machine 
coin drop cabinet keys, including duplicates, shall be maintained by a 
department independent of the gaming machine department.
    (2) The physical custody of the keys needed to access gaming machine 
coin drop cabinets, including duplicates, shall require the involvement 
of two persons, one of whom is independent of the gaming machine 
department.
    (3) Two employees (separate from key custodian) shall be required to 
accompany such keys while checked out and observe each time gaming 
machine drop cabinets are accessed, unless surveillance is notified each 
time keys are checked out and surveillance observes the person 
throughout the period the keys are checked out.
    (m) Table game drop box key control standards. (1) Procedures shall 
be developed and implemented to insure that unauthorized access to empty 
table game drop boxes shall not occur from the time the boxes leave the 
storage racks until they are placed on the tables.
    (2) The involvement of at least two persons independent of the cage 
department shall be required to access stored empty table game drop 
boxes.
    (3) The release keys shall be separately keyed from the contents 
keys.
    (4) At least three (two for table game drop box keys in operations 
with three tables or fewer) count team members are required to be 
present at the time count room and other count keys are issued for the 
count.
    (5) All duplicate keys shall be maintained in a manner that provides 
the same degree of control as is required for the original keys. Records 
shall be maintained for each key duplicated that indicate the number of 
keys made and destroyed.
    (6) Logs shall be maintained by the custodian of sensitive keys to 
document authorization of personnel accessing keys.
    (n) Table game drop box release keys. (1) The table game drop box 
release keys shall be maintained by a department independent of the pit 
department.
    (2) Only the person(s) authorized to remove table game drop boxes 
from the tables shall be allowed access to the table game drop box 
release keys; however, the count team members may have access to the 
release keys during the soft count in order to reset the table game drop 
boxes.
    (3) Persons authorized to remove the table game drop boxes shall be 
precluded from having simultaneous access to the table game drop box 
contents keys and release keys.
    (4) For situations requiring access to a table game drop box at a 
time other than the scheduled drop, the date, time, and signature of 
employee signing out/in the release key must be documented.
    (o) Bill acceptor canister release keys. (1) The bill acceptor 
canister release keys shall be maintained by a department independent of 
the gaming machine department.
    (2) Only the person(s) authorized to remove bill acceptor canisters 
from the gaming machines shall be allowed access to the release keys.
    (3) Persons authorized to remove the bill acceptor canisters shall 
be precluded from having simultaneous access to the bill acceptor 
canister contents keys and release keys.
    (4) For situations requiring access to a bill acceptor canister at a 
time other than the scheduled drop, the date, time, and signature of 
employee signing out/in the release key must be documented.
    (p) Table game drop box storage rack keys. (1) A person independent 
of the pit department shall be required to accompany the table game drop 
box storage rack keys and observe each time table game drop boxes are 
removed from or placed in storage racks.
    (2) Persons authorized to obtain table game drop box storage rack 
keys shall be precluded from having simultaneous access to table game 
drop box contents keys with the exception of the count team.

[[Page 152]]

    (q) Bill acceptor canister storage rack keys. (1) A person 
independent of the gaming machine department shall be required to 
accompany the bill acceptor canister storage rack keys and observe each 
time canisters are removed from or placed in storage racks.
    (2) Persons authorized to obtain bill acceptor canister storage rack 
keys shall be precluded from having simultaneous access to bill acceptor 
canister contents keys with the exception of the count team.
    (r) Table game drop box contents keys. (1) The physical custody of 
the keys needed for accessing stored, full table game drop box contents 
shall require the involvement of persons from at least two separate 
departments, with the exception of the count team.
    (2) Access to the table game drop box contents key at other than 
scheduled count times shall require the involvement of at least three 
persons from separate departments, including management. The reason for 
access shall be documented with the signatures of all participants and 
observers.
    (3) Only count team members shall be allowed access to table game 
drop box content keys during the count process.
    (s) Bill acceptor canister contents keys. (1) The physical custody 
of the keys needed for accessing stored, full bill acceptor canister 
contents shall require involvement of persons from two separate 
departments, with the exception of the count team.
    (2) Access to the bill acceptor canister contents key at other than 
scheduled count times shall require the involvement of at least three 
persons from separate departments, one of whom must be a supervisor. The 
reason for access shall be documented with the signatures of all 
participants and observers.
    (3) Only the count team members shall be allowed access to bill 
acceptor canister contents keys during the count process.
    (t) Gaming machine computerized key security systems. (1) 
Computerized key security systems which restrict access to the gaming 
machine drop and count keys through the use of passwords, keys or other 
means, other than a key custodian, must provide the same degree of 
control as indicated in the aforementioned key control standards; refer 
to paragraphs (l), (o), (q) and (s) of this section. Note: This standard 
does not apply to the system administrator. The system administrator is 
defined in paragraph (t)(2)(i) of this section.
    (2) For computerized key security systems, the following additional 
gaming machine key control procedures apply:
    (i) Management personnel independent of the gaming machine 
department assign and control user access to keys in the computerized 
key security system (i.e., system administrator) to ensure that gaming 
machine drop and count keys are restricted to authorized employees.
    (ii) In the event of an emergency or the key box is inoperable, 
access to the emergency manual key(s) (a.k.a. override key), used to 
access the box containing the gaming machine drop and count keys, 
requires the physical involvement of at least three persons from 
separate departments, including management. The date, time, and reason 
for access, must be documented with the signatures of all participating 
employees signing out/in the emergency manual key(s).
    (iii) The custody of the keys issued pursuant to paragraph 
(t)(2)(ii) of this section requires the presence of two persons from 
separate departments from the time of their issuance until the time of 
their return.
    (iv) Routine physical maintenance that requires accessing the 
emergency manual key(s) (override key) and does not involve the 
accessing of the gaming machine drop and count keys, only requires the 
presence of two persons from separate departments. The date, time and 
reason for access must be documented with the signatures of all 
participating employees signing out/in the emergency manual key(s).
    (3) For computerized key security systems controlling access to 
gaming machine drop and count keys, accounting/audit personnel, 
independent of the system administrator, will perform the following 
procedures:
    (i) Daily, review the report generated by the computerized key 
security system indicating the transactions performed by the 
individual(s) that adds,

[[Page 153]]

deletes, and changes user's access within the system (i.e., system 
administrator). Determine whether the transactions completed by the 
system administrator provide an adequate control over the access to the 
gaming machine drop and count keys. Also, determine whether any gaming 
machine drop and count key(s) removed or returned to the key cabinet by 
the system administrator was properly authorized.
    (ii) For at least one day each month, review the report generated by 
the computerized key security system indicating all transactions 
performed to determine whether any unusual gaming machine drop and count 
key removals or key returns occurred.
    (iii) At least quarterly, review a sample of users that are assigned 
access to the gaming machine drop and count keys to determine that their 
access to the assigned keys is adequate relative to their job position.
    (iv) All noted improper transactions or unusual occurrences are 
investigated with the results documented.
    (4) Quarterly, an inventory of all count room, drop box release, 
storage rack and contents keys is performed, and reconciled to records 
of keys made, issued, and destroyed. Investigations are performed for 
all keys unaccounted for, with the investigation being documented.
    (u) Table games computerized key security systems. (1) Computerized 
key security systems which restrict access to the table game drop and 
count keys through the use of passwords, keys or other means, other than 
a key custodian, must provide the same degree of control as indicated in 
the aforementioned key control standards; refer to paragraphs (m), (n), 
(p) and (r) of this section. Note: This standard does not apply to the 
system administrator. The system administrator is defined in paragraph 
(u)(2)(ii) of this section.
    (2) For computerized key security systems, the following additional 
table game key control procedures apply:
    (i) Management personnel independent of the table game department 
assign and control user access to keys in the computerized key security 
system (i.e., system administrator) to ensure that table game drop and 
count keys are restricted to authorized employees.
    (ii) In the event of an emergency or the key box is inoperable, 
access to the emergency manual key(s) (a.k.a. override key), used to 
access the box containing the table game drop and count keys, requires 
the physical involvement of at least three persons from separate 
departments, including management. The date, time, and reason for 
access, must be documented with the signatures of all participating 
employees signing out/in the emergency manual key(s).
    (iii) The custody of the keys issued pursuant to paragraph 
(u)(2)(ii) of this section requires the presence of two persons from 
separate departments from the time of their issuance until the time of 
their return.
    (iv) Routine physical maintenance that requires accessing the 
emergency manual key(s) override key) and does not involve the accessing 
of the table games drop and count keys, only requires the presence of 
two persons from separate departments. The date, time and reason for 
access must be documented with the signatures of all participating 
employees signing out/in the emergency manual key(s).
    (3) For computerized key security systems controlling access to 
table games drop and count keys, accounting/audit personnel, independent 
of the system administrator, will perform the following procedures:
    (i) Daily, review the report generated by the computerized key 
security system indicating the transactions performed by the 
individual(s) that adds, deletes, and changes user's access within the 
system (i.e., system administrator). Determine whether the transactions 
completed by the system administrator provide an adequate control over 
the access to the table games drop and count keys. Also, determine 
whether any table games drop and count key(s) removed or returned to the 
key cabinet by the system administrator was properly authorized.
    (ii) For at least one day each month, review the report generated by 
the computerized key security system indicating all transactions 
performed to determine whether any unusual table

[[Page 154]]

games drop and count key removals or key returns occurred.
    (iii) At least quarterly, review a sample of users that are assigned 
access to the table games drop and count keys to determine that their 
access to the assigned keys is adequate relative to their job position.
    (iv) All noted improper transactions or unusual occurrences are 
investigated with the results documented.
    (4) Quarterly, an inventory of all count room, table game drop box 
release, storage rack and contents keys is performed, and reconciled to 
records of keys made, issued, and destroyed. Investigations are 
performed for all keys unaccounted for, with the investigations being 
documented.
    (v) Emergency drop procedures. Emergency drop procedures shall be 
developed by the Tribal gaming regulatory authority, or the gaming 
operation as approved by the Tribal gaming regulatory authority.
    (w) Equipment standards for gaming machine count. (1) A weigh scale 
calibration module shall be secured so as to prevent unauthorized access 
(e.g., prenumbered seal, lock and key, etc.).
    (2) A person independent of the cage, vault, gaming machine, and 
count team functions shall be required to be present whenever the 
calibration module is accessed. Such access shall be documented and 
maintained.
    (3) If a weigh scale interface is used, it shall be adequately 
restricted so as to prevent unauthorized access (passwords, keys, etc.).
    (4) If the weigh scale has a zero adjustment mechanism, it shall be 
physically limited to minor adjustments (e.g., weight of a bucket) or 
physically situated such that any unnecessary adjustments to it during 
the weigh process would be observed by other count team members.
    (5) The weigh scale and weigh scale interface (if applicable) shall 
be tested by a person or persons independent of the cage, vault, and 
gaming machine departments and count team at least quarterly. At least 
annually, this test shall be performed by internal audit in accordance 
with the internal audit standards. The result of these tests shall be 
documented and signed by the person or persons performing the test.
    (6) Prior to the gaming machine count, at least two employees shall 
verify the accuracy of the weigh scale with varying weights or with 
varying amounts of previously counted coin for each denomination to 
ensure the scale is properly calibrated (varying weights/coin from drop 
to drop is acceptable).
    (7) If a mechanical coin counter is used (instead of a weigh scale), 
the Tribal gaming regulatory authority, or the gaming operation as 
approved by the Tribal gaming regulatory authority, shall establish and 
the gaming operation shall comply with procedures that are equivalent to 
those described in paragraphs (u)(4), (u)(5), and (u)(6) of this 
section.
    (8) If a coin meter count machine is used, the count team member 
shall record the machine number denomination and number of coins in ink 
on a source document, unless the meter machine automatically records 
such information.
    (i) A count team member shall test the coin meter count machine 
before the actual count to ascertain if the metering device is 
functioning properly with a predetermined number of coins for each 
denomination.
    (ii) [Reserved]

[67 FR 43400, June 27, 2002, as amended at 70 FR 23026, May 4, 2005; 70 
FR 47107, Aug. 12, 2005]



Sec. 542.42  What are the minimum internal control standards for
internal audit for Tier C gaming operations?

    (a) Internal audit personnel. (1) For Tier C gaming operations, a 
separate internal audit department shall be maintained whose primary 
function is performing internal audit work and that is independent with 
respect to the departments subject to audit.
    (2) The internal audit personnel shall report directly to the Tribe, 
Tribal gaming regulatory authority, audit committee, or other entity 
designated by the Tribe in accordance with the definition of internal 
audit in Sec. 542.2.
    (b) Audits. (1) Internal audit personnel shall perform audits of all 
major gaming areas of the gaming operation. The following shall be 
reviewed at least annually:

[[Page 155]]

    (i) Bingo, including but not limited to, bingo card control, payout 
procedures, and cash reconciliation process;
    (ii) Pull tabs, including but not limited to, statistical records, 
winner verification, perpetual inventory, and accountability of sales 
versus inventory;
    (iii) Card games, including but not limited to, card games 
operation, cash exchange procedures, shill transactions, and count 
procedures;
    (iv) Keno, including but not limited to, game write and payout 
procedures, sensitive key location and control, and a review of keno 
auditing procedures;
    (v) Pari-mutual wagering, including write and payout procedures, and 
pari-mutual auditing procedures;
    (vi) Table games, including but not limited to, fill and credit 
procedures, pit credit play procedures, rim credit procedures, soft 
drop/count procedures and the subsequent transfer of funds, unannounced 
testing of count room currency counters and/or currency interface, 
location and control over sensitive keys, the tracing of source 
documents to summarized documentation and accounting records, and 
reconciliation to restricted copies;
    (vii) Gaming machines, including but not limited to, jackpot payout 
and gaming machine fill procedures, gaming machine drop/count and bill 
acceptor drop/count and subsequent transfer of funds, unannounced 
testing of weigh scale and weigh scale interface, unannounced testing of 
count room currency counters and/or currency interface, gaming machine 
drop cabinet access, tracing of source documents to summarized 
documentation and accounting records, reconciliation to restricted 
copies, location and control over sensitive keys, compliance with EPROM 
duplication procedures, and compliance with MICS procedures for gaming 
machines that accept currency or coin(s) and issue cash-out tickets or 
gaming machines that do not accept currency or coin(s) and do not return 
currency or coin(s);
    (viii) Cage and credit procedures including all cage, credit, and 
collection procedures, and the reconciliation of trial balances to 
physical instruments on a sample basis. Cage accountability shall be 
reconciled to the general ledger;
    (ix) Information technology functions, including review for 
compliance with information technology standards;
    (x) Complimentary service or item, including but not limited to, 
procedures whereby complimentary service items are issued, authorized, 
and redeemed; and
    (xi) Any other internal audits as required by the Tribe, Tribal 
gaming regulatory authority, audit committee, or other entity designated 
by the Tribe.
    (2) In addition to the observation and examinations performed under 
paragraph (b)(1) of this section, follow-up observations and 
examinations shall be performed to verify that corrective action has 
been taken regarding all instances of noncompliance cited by internal 
audit, the independent accountant, and/or the Commission. The 
verification shall be performed within six (6) months following the date 
of notification.
    (3) Whenever possible, internal audit observations shall be 
performed on an unannounced basis (i.e., without the employees being 
forewarned that their activities will be observed). Additionally, if the 
independent accountant also performs the internal audit function, the 
accountant shall perform separate observations of the table games/gaming 
machine drops and counts to satisfy the internal audit observation 
requirements and independent accountant tests of controls as required by 
the American Institute of Certified Public Accountants guide.
    (c) Documentation. (1) Documentation (e.g., checklists, programs, 
reports, etc.) shall be prepared to evidence all internal audit work 
performed as it relates to the requirements in this section, including 
all instances of noncompliance.
    (2) The internal audit department shall operate with audit programs, 
which, at a minimum, address the MICS. Additionally, the department 
shall properly document the work performed, the conclusions reached, and 
the resolution of all exceptions. Institute of Internal Auditors 
standards are recommended but not required.

[[Page 156]]

    (d) Reports. (1) Reports documenting audits performed shall be 
maintained and made available to the Commission upon request.
    (2) Such audit reports shall include the following information:
    (i) Audit objectives;
    (ii) Audit procedures and scope;
    (iii) Findings and conclusions;
    (iv) Recommendations, if applicable; and
    (v) Management's response.
    (e) Material exceptions. All material exceptions resulting from 
internal audit work shall be investigated and resolved with the results 
of such being documented and retained for five years.
    (f) Role of management. (1) Internal audit findings shall be 
reported to management.
    (2) Management shall be required to respond to internal audit 
findings stating corrective measures to be taken to avoid recurrence of 
the audit exception.
    (3) Such management responses shall be included in the internal 
audit report that will be delivered to management, the Tribe, Tribal 
gaming regulatory authority, audit committee, or other entity designated 
by the Tribe.
    (g) Internal Audit Guidelines. In connection with the internal audit 
testing pursuant to paragraph (b)(1) of this section, the Commission 
shall develop recommended Internal Audit Guidelines, which shall be 
available upon request.

[67 FR 43400, June 27, 2002, as amended at 70 FR 47107, Aug. 12, 2005]



Sec. 542.43  What are the minimum internal control standards for
surveillance for a Tier C gaming operation?

    (a) The surveillance system shall be maintained and operated from a 
staffed surveillance room and shall provide surveillance over gaming 
areas.
    (b) The entrance to the surveillance room shall be located so that 
it is not readily accessible by either gaming operation employees who 
work primarily on the casino floor, or the general public.
    (c) Access to the surveillance room shall be limited to surveillance 
personnel, designated employees, and other persons authorized in 
accordance with the surveillance department policy. Such policy shall be 
approved by the Tribal gaming regulatory authority. The surveillance 
department shall maintain a sign-in log of other authorized persons 
entering the surveillance room.
    (d) Surveillance room equipment shall have total override capability 
over all other satellite surveillance equipment located outside the 
surveillance room.
    (e) In the event of power loss to the surveillance system, an 
auxiliary or backup power source shall be available and capable of 
providing immediate restoration of power to all elements of the 
surveillance system that enable surveillance personnel to observe the 
table games remaining open for play and all areas covered by dedicated 
cameras. Auxiliary or backup power sources such as a UPS System, backup 
generator, or an alternate utility supplier, satisfy this requirement.
    (f) The surveillance system shall include date and time generators 
that possess the capability to display the date and time of recorded 
events on video and/or digital recordings. The displayed date and time 
shall not significantly obstruct the recorded view.
    (g) The surveillance department shall strive to ensure staff is 
trained in the use of the equipment, knowledge of the games, and house 
rules.
    (h) Each camera required by the standards in this section shall be 
installed in a manner that will prevent it from being readily 
obstructed, tampered with, or disabled by customers or employees.
    (i) Each camera required by the standards in this section shall 
possess the capability of having its picture displayed on a monitor and 
recorded. The surveillance system shall include sufficient numbers of 
monitors and recorders to simultaneously display and record multiple 
gaming and count room activities, and record the views of all dedicated 
cameras and motion activated dedicated cameras.
    (j) Reasonable effort shall be made to repair each malfunction of 
surveillance system equipment required by the standards in this section 
within seventy-two (72) hours after the malfunction is discovered. The 
Tribal gaming regulatory authority shall be notified

[[Page 157]]

of any camera(s) that has malfunctioned for more than twenty-four (24) 
hours.
    (1) In the event of a dedicated camera malfunction, the gaming 
operation and/or the surveillance department shall immediately provide 
alternative camera coverage or other security measures, such as 
additional supervisory or security personnel, to protect the subject 
activity.
    (2) [Reserved]
    (k) Bingo. (1) The surveillance system shall possess the capability 
to monitor the bingo ball drawing device or random number generator, 
which shall be recorded during the course of the draw by a dedicated 
camera with sufficient clarity to identify the balls drawn or numbers 
selected.
    (2) The surveillance system shall monitor and record the game board 
and the activities of the employees responsible for drawing, calling, 
and entering the balls drawn or numbers selected.
    (l) Card games. The surveillance system shall monitor and record 
general activities in each card room with sufficient clarity to identify 
the employees performing the different functions.
    (m) Progressive card games. (1) Progressive card games with a 
progressive jackpot of $25,000 or more shall be monitored and recorded 
by dedicated cameras that provide coverage of:
    (i) The table surface, sufficient that the card values and card 
suits can be clearly identified;
    (ii) An overall view of the entire table with sufficient clarity to 
identify customers and dealer; and
    (iii) A view of the posted jackpot amount.
    (2) [Reserved]
    (n) Keno. (1) The surveillance system shall possess the capability 
to monitor the keno ball-drawing device or random number generator, 
which shall be recorded during the course of the draw by a dedicated 
camera with sufficient clarity to identify the balls drawn or numbers 
selected.
    (2) The surveillance system shall monitor and record general 
activities in each keno game area with sufficient clarity to identify 
the employees performing the different functions.
    (o) Pari-mutuel. The surveillance system shall monitor and record 
general activities in the pari-mutuel area, to include the ticket writer 
and cashier areas, with sufficient clarity to identify the employees 
performing the different functions.
    (p) Table games--(1) Operations with four (4) or more table games. 
Except as otherwise provided in paragraphs (p)(3), (p)(4), and (p)(5) of 
this section, the surveillance system of gaming operations operating 
four (4) or more table games shall provide at a minimum one (1) pan-
tilt-zoom camera per two (2) tables and surveillance must be capable of 
taping:
    (i) With sufficient clarity to identify customers and dealers; and
    (ii) With sufficient coverage and clarity to simultaneously view the 
table bank and determine the configuration of wagers, card values, and 
game outcome.
    (iii) One (1) dedicated camera per table and one (1) pan-tilt-zoom 
camera per four (4) tables may be an acceptable alternative procedure to 
satisfy the requirements of this paragraph.
    (2) Operations with three (3) or fewer table games. The surveillance 
system of gaming operations operating three (3) or fewer table games 
shall:
    (i) Comply with the requirements of paragraph (p)(1) of this 
section; or
    (ii) Have one (1) overhead camera at each table.
    (3) Craps. All craps tables shall have two (2) dedicated cross view 
cameras covering both ends of the table.
    (4) Roulette. All roulette areas shall have one (1) overhead 
dedicated camera covering the roulette wheel and shall also have one (1) 
dedicated camera covering the play of the table.
    (5) Big wheel. All big wheel games shall have one (1) dedicated 
camera viewing the wheel.
    (q) Progressive table games. (1) Progressive table games with a 
progressive jackpot of $25,000 or more shall be monitored and recorded 
by dedicated cameras that provide coverage of:
    (i) The table surface, sufficient that the card values and card 
suits can be clearly identified;
    (ii) An overall view of the entire table with sufficient clarity to 
identify customers and dealer; and
    (iii) A view of the progressive meter jackpot amount. If several 
tables are

[[Page 158]]

linked to the same progressive jackpot meter, only one meter need be 
recorded.
    (2) [Reserved]
    (r) Gaming machines. (1) Except as otherwise provided in paragraphs 
(r)(2) and (r)(3) of this section, gaming machines offering a payout of 
more than $250,000 shall be monitored and recorded by a dedicated 
camera(s) to provide coverage of:
    (i) All customers and employees at the gaming machine, and
    (ii) The face of the gaming machine, with sufficient clarity to 
identify the payout line(s) of the gaming machine.
    (2) In-house progressive machine. In-house progressive gaming 
machines offering a base payout amount (jackpot reset amount) of more 
than $100,000 shall be monitored and recorded by a dedicated camera(s) 
to provide coverage of:
    (i) All customers and employees at the gaming machine; and
    (ii) The face of the gaming machine, with sufficient clarity to 
identify the payout line(s) of the gaming machine.
    (3) Wide-area progressive machine. Wide-area progressive gaming 
machines offering a base payout amount of $1 million or more and 
monitored by an independent vendor utilizing an on-line progressive 
computer system shall be recorded by a dedicated camera(s) to provide 
coverage of:
    (i) All customers and employees at the gaming machine; and
    (ii) The face of the gaming machine, with sufficient clarity to 
identify the payout line(s) of the gaming machine.
    (4) Notwithstanding paragraph (r)(1) of this section, if the gaming 
machine is a multi-game machine, the Tribal gaming regulatory authority, 
or the gaming operation subject to the approval of the Tribal gaming 
regulatory authority, may develop and implement alternative procedures 
to verify payouts.
    (s) Cage and vault. (1) The surveillance system shall monitor and 
record a general overview of activities occurring in each cage and vault 
area with sufficient clarity to identify employees within the cage and 
customers and employees at the counter areas.
    (2) Each cashier station shall be equipped with one (1) dedicated 
overhead camera covering the transaction area.
    (3) The surveillance system shall provide an overview of cash 
transactions. This overview should include the customer, the employee, 
and the surrounding area.
    (t) Fills and credits. (1) The cage or vault area in which fills and 
credits are transacted shall be monitored and recorded by a dedicated 
camera or motion activated dedicated camera that provides coverage with 
sufficient clarity to identify the chip values and the amounts on the 
fill and credit slips.
    (2) Controls provided by a computerized fill and credit system maybe 
deemed an adequate alternative to viewing the fill and credit slips.
    (u) Currency and coin. (1) The surveillance system shall monitor and 
record with sufficient clarity all areas where currency or coin may be 
stored or counted.
    (2) Audio capability of the soft count room shall also be 
maintained.
    (3) The surveillance system shall provide for:
    (i) Coverage of scales shall be sufficiently clear to view any 
attempted manipulation of the recorded data.
    (ii) Monitoring and recording of the table game drop box storage 
rack or area by either a dedicated camera or a motion-detector activated 
camera.
    (iii) Monitoring and recording of all areas where coin may be stored 
or counted, including the hard count room, all doors to the hard count 
room, all scales and wrapping machines, and all areas where uncounted 
coin may be stored during the drop and count process.
    (iv) Monitoring and recording of soft count room, including all 
doors to the room, all table game drop boxes, safes, and counting 
surfaces, and all count team personnel. The counting surface area must 
be continuously monitored and recorded by a dedicated camera during the 
soft count.
    (v) Monitoring and recording of all areas where currency is sorted, 
stacked, counted, verified, or stored during the soft count process.

[[Page 159]]

    (v) Change booths. The surveillance system shall monitor and record 
a general overview of the activities occurring in each gaming machine 
change booth.
    (w) Video recording and/or digital record retention. (1) All video 
recordings and/or digital records of coverage provided by the dedicated 
cameras or motion-activated dedicated cameras required by the standards 
in this section shall be retained for a minimum of seven (7) days.
    (2) Recordings involving suspected or confirmed gaming crimes, 
unlawful activity, or detentions by security personnel, must be retained 
for a minimum of thirty (30) days.
    (3) Duly authenticated copies of video recordings and/or digital 
records shall be provided to the Commission upon request.
    (x) Video library log. A video library log, or comparable 
alternative procedure approved by the Tribal gaming regulatory 
authority, shall be maintained to demonstrate compliance with the 
storage, identification, and retention standards required in this 
section.
    (y) Malfunction and repair log. (1) Surveillance personnel shall 
maintain a log or alternative procedure approved by the Tribal gaming 
regulatory authority that documents each malfunction and repair of the 
surveillance system as defined in this section.
    (2) The log shall state the time, date, and nature of each 
malfunction, the efforts expended to repair the malfunction, and the 
date of each effort, the reasons for any delays in repairing the 
malfunction, the date the malfunction is repaired, and where applicable, 
any alternative security measures that were taken.
    (z) Surveillance log. (1) Surveillance personnel shall maintain a 
log of all surveillance activities.
    (2) Such log shall be maintained by surveillance room personnel and 
shall be stored securely within the surveillance department.
    (3) At a minimum, the following information shall be recorded in a 
surveillance log:
    (i) Date;
    (ii) Time commenced and terminated;
    (iii) Activity observed or performed; and
    (iv) The name or license credential number of each person who 
initiates, performs, or supervises the surveillance.
    (4) Surveillance personnel shall also record a summary of the 
results of the surveillance of any suspicious activity. This summary may 
be maintained in a separate log.

[67 FR 43400, June 27, 2002, as amended at 70 FR 47108, Aug. 12, 2005]



PART 543_MINIMUM INTERNAL CONTROL STANDARDS FOR CLASS II GAMING--
Table of Contents




Sec.
543.1 What does this part cover?
543.2 What are the definitions for this part?
543.3 How do tribal governments comply with this part?
543.4-543.5 [Reserved]
543.6 Does this part apply to small and charitable gaming operations?
543.7 What are the minimum internal control standards for bingo?
543.8-543.15 [Reserved]
543.16 What are the minimum internal controls for information 
          technology?

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

    Source: 73 FR 60498, Oct. 10, 2008, unless otherwise noted.



Sec. 543.1  What does this part cover?

    This part, along with Sec. Sec. 542.14 through 542.15, 542.17 
through 542.18, 542.20 through 542.23, 542.30 through 542.33, and 542.40 
through 542.43 of this chapter establishes the minimum internal control 
standards for the conduct of Class II bingo and other games similar to 
bingo on Indian lands as described in 25 U.S.C. 2701 et seq. Throughout 
this part the term bingo includes other games similar to bingo.



Sec. 543.2  What are the definitions for this part?

    The definitions in this section apply to all sections of this part 
unless otherwise noted.
    Accountability. All financial instruments, receivables, and patron 
deposits constituting the total amount for which the bankroll custodian 
is responsible at a given time.
    Actual bingo win percentage. The percentage calculated by dividing 
the bingo win by the bingo sales. Can be

[[Page 160]]

calculated for individual prize schedules or type of player interfaces 
on a per-day or cumulative basis.
    Agent. An employee or licensed person authorized by the gaming 
operation, as approved by the tribal gaming regulatory authority, 
designated for certain authorizations, decisions, tasks and actions in 
the gaming operation. This definition is not intended to eliminate nor 
suggest that appropriate management contracts are not required, where 
applicable, as referenced in 25 U.S.C. 2711.
    Amount in. The total value of all financial instruments and cashless 
transactions accepted by the Class II gaming system.
    Amount out. The total value of all financial instruments and 
cashless transactions paid by the Class II gaming system, plus the total 
value of manual payments.
    Bingo paper. A consumable physical object that has one or more bingo 
cards on its face.
    Bingo sales. The value of purchases made by players to participate 
in bingo.
    Bingo win. The result of bingo sales minus prize payouts.
    Cage. A secure work area within the gaming operation for cashiers 
which may include a storage area for the gaming operation bankroll.
    Cash equivalents. The monetary value that a gaming operation may 
assign to a document, financial instrument, or anything else of 
representative value other than cash. A cash equivalent includes, but is 
not limited to, tokens, chips, coupons, vouchers, payout slips and 
tickets, and other items to which a gaming operation has assigned an 
exchange value.
    Cashless system. A system that performs cashless transactions and 
maintains records of those cashless transactions.
    Cashless transaction. A movement of funds electronically from one 
component to another, often to or from a patron deposit account.
    Class II game. A game as described in 25 U.S.C. 2703(7)(A).
    Class II Gaming System. All components, whether or not technologic 
aids in electronic, computer, mechanical, or other technologic form, 
that function together to aid the play of one or more Class II games 
including accounting functions mandated by part 547 of this chapter.
    Commission. The National Indian Gaming Commission.
    Count. The act of counting and recording the drop and/or other 
funds.
    Count room. A secured room where the count is performed.
    Coupon. A financial instrument of fixed wagering value, usually 
paper, that can only be used to acquire non-cashable credits through 
interaction with a voucher system. This does not include instruments 
such as printed advertising material that cannot be validated directly 
by a voucher system.
    Drop. The total amount of financial instruments removed from 
financial instrument storage components in Class II gaming systems.
    Drop period. The period of time that occurs between sequential 
drops.
    Electronic funds transfer. A transfer of funds to or from a Class II 
gaming system through the use of a cashless system, which are transfers 
from an external financial institution.
    Financial instrument. Any tangible item of value tendered in Class 
II game play including but not limited to bills, coins, vouchers, and 
coupons.
    Financial instrument acceptor. Any component that accepts financial 
instruments.
    Financial instrument storage component. Any component that stores 
financial instruments.
    Game software. The operational program or programs that govern the 
play, display of results, and/or awarding of prizes or credits for Class 
II games.
    Gaming Equipment. All electronic, electro-mechanical, mechanical or 
other physical components utilized in the play of Class II games.
    Independent. The separation of functions so that the person or 
process monitoring, reviewing or authorizing the controlled 
transaction(s) is separate from the persons or process performing the 
controlled transaction(s).
    Inter-tribal prize pool. A fund to which multiple tribes contribute 
from which prizes are paid to winning players at a participating tribal 
gaming facility and which is administered by one of

[[Page 161]]

the participating tribes or a third party, (e.g. progressive prize 
pools, shared prize pools, etc.).
    Internal audit. The audit function of a gaming operation that is 
independent of the department subject to the audit. Internal audit 
activities should be conducted in a manner that permits objective 
evaluation of areas examined.
    Internal auditor. The person(s) who perform an independent audit. 
Independence is obtained through the organizational reporting 
relationship, as the internal audit department must not report to 
management of the gaming operation. Internal audit personnel may provide 
audit coverage to more than one operation within a tribe's gaming 
operation holdings.
    Kiosk. A self serve point of sale or other component capable of 
accepting or dispensing financial instruments and may also be capable of 
initiating cashless transactions of values to or from a patron deposit 
account or promotional account.
    Manual payout. The payment to a player of some or all of a player's 
accumulated credits (e.g. short pays, cancelled credits, etc.) or an 
amount owed as a result of a winning event by an agent of the gaming 
operation.
    MICS. Minimum internal control standards in this part.
    Non-cashable credit. Credits given by an operator to a patron; 
placed on a Class II gaming system through a coupon, cashless 
transaction, or other approved means; and capable of activating play but 
not being converted to cash.
    Patron deposit account. An account maintained on behalf of a patron, 
for the purpose of depositing and withdrawing cashable funds for the 
primary purpose of interacting with a gaming activity.
    Patron deposits. The funds placed with a designated cashier by 
patrons for the patrons' use at a future time.
    PIN. A personal identification number.
    Player interface. Any component(s) of a Class II gaming system, 
including an electronic or technological aid (not limited to terminals, 
player stations, handhelds, fixed units, etc.) that directly enable(s) 
player interaction in a Class II game.
    Player tracking system. A system typically used by a gaming 
operation to record the amount of play of an individual patron.
    Prize payout. A transaction associated with a winning event.
    Prize schedule. A set of prizes available to players for achieving 
pre-designated patterns in Class II game(s).
    Progressive prize. A prize that increases by a selectable or 
predefined amount based on play of a Class II game.
    Promotional account. A file, record, or other data structure that 
records transactions involving a patron or patrons that are not 
otherwise recorded in a patron deposit account.
    Promotional prize payout. Merchandise or awards given to players by 
the gaming operation which is based on gaming activity.
    Random number generator (RNG). A software module, hardware component 
or combination of these designed to produce outputs that are effectively 
random.
    Server. A computer which controls one or more applications or 
environments.
    Shift. An eight-hour period, unless otherwise approved by the tribal 
gaming regulatory authority, not to exceed 24 hours.
    Short pay. The payment of the unpaid balance of an incomplete payout 
by a player interface.
    Tier A. Gaming operations with annual gross gaming revenues of more 
than $1 million but not more than $5 million.
    Tier B. Gaming operations with annual gross gaming revenues of more 
than $5 million but not more than $15 million.
    Tier C. Gaming operations with annual gross gaming revenues of more 
than $15 million.
    Tribal Gaming Regulatory Authority. The entity authorized by tribal 
law to regulate gaming conducted pursuant to the Indian Gaming 
Regulatory Act.
    Voucher. A financial instrument of fixed value that can only be used 
to acquire an equivalent value of cashable credits or cash through 
interaction with a voucher system.
    Voucher System. A component of the Class II gaming system or an 
external

[[Page 162]]

system that securely maintains records of vouchers and coupons; 
validates payment of vouchers and coupons; records successful or failed 
payments of vouchers and coupons; and controls the purging of expired 
vouchers and coupons.



Sec. 543.3  How do tribal governments comply with this part?

    (a) Compliance based upon tier. [Reserved]
    (b) Determination of tier. [Reserved]
    (c) Tribal internal control standards. Within six months of October 
10, 2008, each tribal gaming regulatory authority must, in accordance 
with the tribal gaming ordinance, establish or ensure that tribal 
internal control standards are established and implemented that must:
    (1) Provide a level of control that equals or exceeds those set 
forth in this part; and
    (2) Contain standards to identify, detect and deter money laundering 
in furtherance of a criminal enterprise, terrorism, tax evasion or other 
unlawful activity. The standards should be designed to facilitate the 
keeping of records and the filing of reports with the appropriate 
federal regulatory and law enforcement authorities.
    (3) Establish a deadline, no later than October 13, 2010, by which a 
gaming operation must come into compliance with the tribal internal 
control standards. However, the tribal gaming regulatory authority may 
extend the deadline by six months if written notice citing justification 
is provided to the Commission no later than two weeks before the 
deadline.
    (d) Gaming operations. Each gaming operation must develop and 
implement an internal control system that, at a minimum, complies with 
the tribal internal control standards.
    (1) Existing gaming operations. All gaming operations that are 
operating on or before November 10, 2008, must comply with this part 
within the time requirements established in paragraph (c) of this 
section. In the interim, such operations must continue to comply with 
existing tribal internal control standards.
    (2) New gaming operations. All gaming operations that commence 
operations after April 10, 2009, must comply with this part before 
commencement of operations.
    (e) Submission to Commission. Tribal regulations promulgated 
pursuant to this part are not required to be submitted to the Commission 
pursuant to Sec. 522.3(b) of this chapter.
    (f) CPA testing. (1) An independent certified public accountant 
(CPA) must be engaged to perform ``Agreed-Upon Procedures'' to verify 
that the gaming operation is in compliance with the minimum internal 
control standards (MICS) set forth in this part or a tribally approved 
variance thereto that has received Commission concurrence. The CPA must 
report each event and procedure discovered by or brought to the CPA's 
attention that the CPA believes does not satisfy the minimum standards 
or tribally approved variance that has received Commission concurrence. 
The ``Agreed-Upon Procedures'' may be performed in conjunction with the 
annual audit. The tribe must submit two copies of the report to the 
Commission within 120 days of the gaming operation's fiscal year end. In 
performing the compliance audit, the CPA must use the Statements on 
Standards for Attestation Engagements No. 10 at Sections 101 (``Attest 
Engagements'') and 201 (``Agreed-Upon Procedures Engagements'') 
(collectively ``SSAE's''), July 12, 2007, American Institute of 
Certified Public Accountants Inc, (AICPA). SSAE No. 10 at Sections 101 
and 201 are incorporated by reference into this section with the 
approval of the Director of the Federal Register under 5 U.S.C. 552(a) 
and 1 CFR part 51. To enforce any edition other than that specified in 
this section, the Commission must publish notice of change in the 
Federal Register and the material must be available to the public. You 
may obtain a copy from the American Institute of Certified Public 
Accountants, 220 Leigh Farm Rd., Durham, NC 27707, 1-888-777-7077, at 
http://www.aicpa.org. You may inspect a copy at the National Indian 
Gaming Commission, 1441 L Street, NW., Suite 9100, Washington, DC 20005, 
202-632-7003. All approved material is available for inspection at the 
National Archives and Records Administration (NARA). For information on 
the availability of this material at NARA, call 202-741-6030 or

[[Page 163]]

go to http://www.archives.gov/federal--register/code--of--federal--
regulations/ibr--locations.html. The CPA must perform the ``Agreed-Upon 
Procedures'' in accordance with the following:
    (i) As a prerequisite to the evaluation of the gaming operation's 
internal control systems, it is recommended that the CPA obtain and 
review an organization chart depicting segregation of functions and 
responsibilities, a description of the duties and responsibilities of 
each position shown on the organization chart, and an accurate, detailed 
narrative description of the gaming operation's procedures in effect 
that demonstrate compliance.
    (ii) Complete the CPA NIGC MICS Compliance checklists or other 
comparable testing procedures. The checklists should measure compliance 
on a sampling basis by performing inspections, observations and 
substantive testing. The CPA must complete separate checklists for bingo 
and information technology. All questions on each applicable checklist 
should be completed. Work-paper references are suggested for all ``no'' 
responses for the results obtained during testing (unless a note in the 
``W/P Ref'' can explain the exception).
    (iii) The CPA must perform, at a minimum, the following procedures 
in conjunction with the completion of the checklists:
    (A) At least one unannounced observation of each of the following: 
financial instrument acceptor drop and count. For purposes of these 
procedures, ``unannounced'' means that no officers, directors, or 
employees are given advance information regarding the dates or times of 
such observations. The independent accountant should make arrangements 
with the gaming operation and tribal gaming regulatory authority to 
ensure proper identification of the CPA's personnel and to provide for 
their prompt access to the count rooms. The checklists should provide 
for drop and count observations. The count room should not be entered 
until the count is in process and the CPA should not leave the room 
until the monies have been counted and verified to the count sheet by 
the CPA and accepted into accountability.
    (B) Observations of the gaming operation's agents as they perform 
their duties.
    (C) Interviews with the gaming operation's agents who perform the 
relevant procedures.
    (D) Compliance testing of various documents relevant to the 
procedures. The scope of such testing should be indicated on the 
checklist where applicable.
    (E) For new gaming operations that have been in operation for three 
months or less at the end of their business year, performance of this 
regulation, this section, is not required for the partial period.
    (2) Alternatively, at the discretion of the tribe, the tribe may 
engage an independent CPA to perform the testing, observations and 
procedures reflected in paragraphs (f)(1)(i), (ii), and (iii) of this 
section utilizing the tribal internal control standards adopted by the 
tribal gaming regulatory authority or tribally approved variance that 
has received Commission concurrence. Accordingly, the CPA will verify 
compliance by the gaming operation with the tribal internal control 
standards. Should the tribe elect this alternative, as a prerequisite, 
the CPA will perform the following:
    (i) The CPA must compare the tribal internal control standards to 
the MICS to ascertain whether the criteria set forth in the MICS or 
Commission approved variances are adequately addressed.
    (ii) The CPA may utilize personnel of the tribal gaming regulatory 
authority to cross-reference the tribal internal control standards to 
the MICS, provided the CPA performs a review of the tribal gaming 
regulatory authority personnel's work and assumes complete 
responsibility for the proper completion of the work product.
    (iii) The CPA must report each procedure discovered by or brought to 
the CPA's attention that the CPA believes does not satisfy paragraph 
(f)(2)(i) of this section.
    (3) Reliance on Internal Auditors. (i) The CPA may rely on the work 
of an internal auditor, to the extent allowed by the professional 
standards, for the performance of the recommended procedures specified 
in paragraphs

[[Page 164]]

(f)(1)(iii)(B), (C), and (D) of this section, and for the completion of 
the checklists as they relate to the procedures covered therein.
    (ii) Agreed-upon procedures are to be performed by the CPA to 
determine that the internal audit procedures performed for a past 12-
month period (includes two six month periods) encompassing a portion or 
all of the most recent business year has been properly completed. The 
CPA will apply the following agreed-upon procedures to the gaming 
operation's written assertion:
    (A) Obtain internal audit department work-papers completed for a 12-
month period (includes two six month periods) encompassing a portion or 
all of the most recent business year and determine whether the CPA NIGC 
MICS Compliance Checklists or other comparable testing procedures were 
included in the internal audit work-papers and all steps described in 
the checklists were initialed or signed by an internal audit 
representative.
    (B) For the internal audit work-papers obtained in paragraph 
(f)(3)(ii)(A) of this section, on a sample basis, re-perform the 
procedures included in CPA NIGC MICS Compliance Checklists or other 
comparable testing procedures prepared by internal audit and determine 
if all instances of noncompliance noted in the sample were documented as 
such by internal audit. The CPA NIGC MICS Compliance Checklists or other 
comparable testing procedures for the applicable Drop and Count 
procedures are not included in the sample re-performance of procedures 
because the CPA is required to perform the drop and count observations 
as required under paragraph (f)(1)(iii)(A) of this section of the 
agreed-upon procedures. The CPA's sample should comprise a minimum of 
three percent of the procedures required in each CPA NIGC MICS 
Compliance Checklist or other comparable testing procedures for the 
bingo department and five percent for the other departments completed by 
internal audit in compliance with the internal audit MICS. The re-
performance of procedures is performed as follows:
    (1) For inquiries, the CPA should either speak with the same 
individual or an individual of the same job position as the internal 
auditor did for the procedure indicated in the CPA checklist.
    (2) For observations, the CPA should observe the same process as the 
internal auditor did for the procedure as indicated in their checklist.
    (3) For document testing, the CPA should look at the same original 
document as tested by the internal auditor for the procedure as 
indicated in their checklist. The CPA need only retest the minimum 
sample size required in the checklist.
    (C) The CPA is to investigate and document any differences between 
their re-performance results and the internal audit results.
    (D) Documentation must be maintained for five years by the CPA 
indicating the procedures re-performed along with the results.
    (E) When performing the procedures for paragraph (f)(3)(ii)(B) of 
this section in subsequent years, the CPA must select a different sample 
so that the CPA will re-perform substantially all of the procedures 
after several years.
    (F) Additional procedures performed at the request of the 
Commission, the tribal gaming regulatory authority or management should 
be included in the Agreed-Upon Procedures report transmitted to the 
Commission.
    (4) Report Format. The NIGC has concluded that the performance of 
these procedures is an attestation engagement in which the CPA applies 
such Agreed-Upon Procedures to the gaming operation's assertion that it 
is in compliance with the MICS and, if applicable under paragraph (f)(2) 
of this section, the tribal internal control standards and approved 
variances, provide a level of control that equals or exceeds that of the 
MICS. Accordingly, the Statements on Standards for Attestation 
Engagements (SSAE's), specifically SSAE 10, at Sections 101 and 201 are 
applicable. SSAE 10 provides current, pertinent guidance regarding 
agreed-upon procedure engagements, and the sample report formats 
included within those standards should be used, as appropriate, in the 
preparation of the CPA's agreed-upon procedures report. If future 
revisions are made to this standard or new SSAE's are adopted that are 
applicable to this type of engagement, the CPA is to comply

[[Page 165]]

with any revised professional standards in issuing their agreed upon 
procedures report. The Commission will provide an example report and 
letter formats upon request that may be used and contain all of the 
information discussed below. The report must describe all instances of 
procedural noncompliance (regardless of materiality) with the MICS or 
approved variations, and all instances where the tribal gaming 
regulatory authority's regulations do not comply with the MICS. When 
describing the agreed-upon procedures performed, the CPA should also 
indicate whether procedures performed by other individuals were utilized 
to substitute for the procedures required to be performed by the CPA. 
For each instance of noncompliance noted in the CPA's agreed-upon 
procedures report, the following information must be included: The 
citation of the applicable MICS for which the instance of noncompliance 
was noted; a narrative description of the noncompliance, including the 
number of exceptions and sample size tested.
    (5) Report Submission Requirements. (i) The CPA must prepare a 
report of the findings for the tribe and management. The tribe must 
submit two copies of the report to the Commission no later than 120 days 
after the gaming operation's business year end. This report should be 
provided in addition to any other reports required to be submitted to 
the Commission.
    (ii) The CPA should maintain the work-papers supporting the report 
for a minimum of five years. Digital storage is acceptable. The 
Commission may request access to these work-papers, through the tribe.
    (6) CPA NIGC MICS Compliance Checklists. In connection with the CPA 
testing pursuant to this section and as referenced therein, the 
Commission will provide CPA MICS Compliance Checklists upon request.
    (g) Enforcement of Commission Minimum Internal Control Standards.
    (1) Each tribal gaming regulatory authority is required to establish 
and implement internal control standards pursuant to paragraph (c) of 
this section. Each gaming operation is then required, pursuant to 
paragraph (d) of this section, to develop and implement an internal 
control system that complies with the tribal internal control standards. 
Failure to do so may subject the tribal operator of the gaming 
operation, or the management contractor, to penalties under 25 U.S.C. 
2713.
    (2) Recognizing that tribes are the primary regulator of their 
gaming operation(s), enforcement action by the Commission will not be 
initiated under this part without first informing the tribe and tribal 
gaming regulatory authority of deficiencies in the internal controls of 
its gaming operation and allowing a reasonable period of time to address 
such deficiencies. Such prior notice and opportunity for corrective 
action is not required where the threat to the integrity of the gaming 
operation is immediate and severe.

[73 FR 60498, Oct. 10, 2008, as amended at 74 FR 52139, Oct. 9, 2009]



Sec. Sec. 543.4-543.5  [Reserved]



Sec. 543.6  Does this part apply to small and charitable gaming operations?

    (a) Small gaming operations. This part does not apply to small 
gaming operations provided that:
    (1) The tribal gaming regulatory authority permits the operation to 
be exempt from this part;
    (2) The annual gross gaming revenue of the operation does not exceed 
$2 million; and
    (3) The tribal gaming regulatory authority develops and the 
operation complies with alternate procedures that:
    (i) Protect the integrity of games offered;
    (ii) Safeguard the assets used in connection with the operation; and
    (iii) Create, prepare and maintain records in accordance with 
Generally Accepted Accounting Principles.
    (b) Charitable gaming operations. This part does not apply to 
charitable gaming operations provided that:
    (1) All proceeds are for the benefit of a charitable organization;
    (2) The tribal gaming regulatory authority permits the charitable 
organization to be exempt from this part;
    (3) The charitable gaming operation is operated wholly by the 
charitable organization's agents;

[[Page 166]]

    (4) The annual gross gaming revenue of the charitable operation does 
not exceed $2 million; and
    (5) The tribal gaming regulatory authority develops and the 
charitable gaming operation complies with alternate procedures that:
    (i) Protect the integrity of the games offered;
    (ii) Safeguard the assets used in connection with the gaming 
operation; and
    (iii) Create, prepare and maintain records in accordance with 
Generally Accepted Accounting Principles. For more information please 
see www.fasb.gov or www.fasb.org.
    (c) Independent operators. Nothing in this section exempts gaming 
operations conducted by independent operators for the benefit of a 
charitable organization.



Sec. 543.7  What are the minimum internal control standards for bingo?

    (a) Bingo Cards--(1) Inventory of bingo paper. (i) The bingo paper 
inventory must be controlled so as to assure the integrity of the bingo 
paper being used as follows:
    (A) When received, bingo paper must be inventoried and secured by an 
authorized agent(s) independent of bingo sales;
    (B) The issue of bingo paper to the cashiers must be documented and 
signed for by the authorized agent(s) responsible for inventory control 
and a cashier. The bingo control log must include the series number of 
the bingo paper;
    (C) The bingo control log must be utilized by the gaming operation 
to verify the integrity of the bingo paper being used; and
    (D) Once each month, an authorized agent(s) independent of both 
bingo paper sales and bingo paper inventory control must verify the 
accuracy of the ending balance in the bingo control log by reconciling 
it with the bingo paper inventory.
    (ii) Paragraph (a)(1) of this section does not apply where no 
physical inventory is applicable.
    (2) Bingo sales. (i) There must be an accurate accounting of all 
bingo sales.
    (ii) All bingo sales records must include the following information:
    (A) Date;
    (B) Time;
    (C) Shift or session;
    (D) Sales transaction identifiers, which may be the unique card 
identifier(s) sold or when electronic bingo card faces are sold, the 
unique identifiers of the card faces sold;
    (E) Quantity of bingo cards sold;
    (F) Dollar amount of bingo sales;
    (G) Signature, initials, or identification of the agent or device 
who conducted the bingo sales; and
    (H) When bingo sales are recorded manually, total sales are verified 
by an authorized agent independent of the bingo sales being verified and 
the signature, initials, or identification of the authorized agent who 
verified the bingo sales is recorded.
    (iii) No person shall have unrestricted access to modify bingo sales 
records.
    (iv) An authorized agent independent of the seller must perform the 
following standards for each seller at the end of each session:
    (A) Reconcile the documented total dollar amount of cards sold to 
the documented quantity of cards sold;
    (B) Note any variances; and
    (C) Appropriately investigate any noted variances with the results 
of the follow-up documented.
    (3) Voiding bingo cards. (i) Procedures must be established and 
implemented to prevent the voiding of card sales after the start of the 
calling of the game for which the bingo card was sold. Cards may not be 
voided after the start of a game for which the card was sold.
    (ii) When a bingo card must be voided the following controls must 
apply as relevant:
    (A) A non-electronic bingo card must be marked void; and
    (B) The authorization of the void, by an authorized agent 
independent of the original sale transaction (supervisor recommended), 
must be recorded either by signature on the bingo card or by 
electronically associating the void authorization to the sale 
transaction of the voided bingo card.
    (4) Reissue of previously sold bingo cards. When one or more 
previously sold bingo cards need to be reissued, the following controls 
must apply: the original sale of the bingo cards must be

[[Page 167]]

verified; and the reissue of the bingo cards must be documented, 
including the identity of the agent authorizing reissuance.
    (b) Draw--(1) Verification and display. (i) Procedures must be 
established and implemented to ensure the identity of each object drawn 
is accurately recorded and transmitted to the participants. The 
procedures must identify the method used to ensure the identity of each 
object drawn.
    (ii) For all games offering a prize payout of $1,200 or more, as the 
objects are drawn, the identity of the objects must be immediately 
recorded and maintained for a minimum of 24 hours.
    (iii) Controls must be present to assure that all objects eligible 
for the draw are available to be drawn prior to the next draw.
    (c) Manual Payouts and Short Pays. (1) Procedures must be 
established and implemented to prevent unauthorized access or fraudulent 
transactions using manual payout documents, including:
    (i) Payout documents must be controlled and completed in a manner 
that is intended to prevent a custodian of funds from altering the 
dollar amount on all parts of the payout document subsequent to the 
manual payout and misappropriating the funds.
    (ii) Payout documents must be controlled and completed in a manner 
that deters any one individual from initiating and producing a 
fraudulent payout document, obtaining the funds, forging signatures on 
the payout document, routing all parts of the document, and 
misappropriating the funds. Recommended procedures of this standard 
include but are not limited to the following:
    (A) Funds are issued either to a second verifier of the manual 
payout (i.e., someone other than the agents who generated/requested the 
payout) or to two agents concurrently (i.e., the generator/requestor of 
the document and the verifier of the manual payout). Both witness the 
manual payout; or
    (B) The routing of one part of the completed document is under the 
physical control (e.g., dropped in a locked box) of an agent other than 
the agent that obtained/issued the funds and the agent that obtained/
issued the funds must not be able to place the document in the locked 
box.
    (iii) Segregation of responsibilities. The functions of sales and 
prize payout verification must be segregated, if performed manually. 
Agents who sell bingo cards on the floor must not verify bingo cards for 
prize payouts with bingo cards in their possession of the same type as 
the bingo card being verified for the game. Floor clerks who sell bingo 
cards on the floor are permitted to announce the identifiers of winning 
bingo cards.
    (iv) Validation. Procedures must be established and implemented to 
determine the validity of the claim prior to the payment of a prize 
(i.e., bingo card was sold for the game played, not voided, etc.) by at 
least two persons.
    (v) Verification. Procedures must be established and implemented to 
ensure that at least two persons verify the winning pattern has been 
achieved on the winning card prior to the payment of a prize.
    (vi) Authorization and signatures. (A) A Class II gaming system may 
substitute as one authorization/signature verifying, validating or 
authorizing a winning card of less than $1,200 or other manual payout. 
Where a Class II gaming system substitutes as an authorization/
signature, the manual payout is subject to the limitations provided in 
this section.
    (B) For manual prize payouts of $1,200 or more and less than a 
predetermined amount not to exceed $50,000, at least two agents must 
authorize, sign and witness the manual prize payout.
    (1) Manual prize payouts over a predetermined amount not to exceed 
$50,000 must require one of the two signatures and verifications to be a 
supervisory or management employee independent of the operation of 
bingo.
    (2) This predetermined amount, not to exceed $50,000, must be 
authorized by management, approved by the tribal gaming regulatory 
authority, documented, and maintained.
    (2) Documentation, including:
    (i) Manual payouts and short-pays exceeding $10 must be documented 
on a two-part form, of which a restricted system record can be 
considered one part of the form, and documentation

[[Page 168]]

must include the following information:
    (A) Date and time;
    (B) Player interface identifier or game identifier;
    (C) Dollar amount paid (both alpha and numeric) or description of 
personal property awarded, including fair market value. Alpha is 
optional if another unalterable method is used for evidencing the amount 
paid;
    (D) Type of manual payout (e.g., prize payout, external bonus 
payout, short pay, etc.);
    (E) Game outcome (e.g., patterns, symbols, bingo card identifier/
description, etc.) for manual prize payouts, external bonus description, 
reason for short pay, etc.;
    (F) Preprinted or concurrently printed sequential manual payout 
identifier; and
    (G) Signatures or other authorizations, as required by this part.
    (ii) For short-pays of $10 or less, the documentation (single-part 
form or log is acceptable) must include the following information:
    (A) Date and time;
    (B) Player interface number;
    (C) Dollar amount paid (both alpha and numeric). Alpha is optional 
if another unalterable method is used for evidencing the amount paid;
    (D) The signature of at least one agent verifying and witnessing the 
short pay; and
    (E) Reason for short pay.
    (iii) In other situations that allow an agent to input a prize 
payout or change the dollar amount of the prize payout by more than $1 
in a Class II gaming system that has an automated prize payout 
component, two agents, one of which is a supervisory employee, must be 
physically involved in verifying and witnessing the prize payout.
    (iv) For manually paid promotional prize payouts, as a result of the 
play of a game and where the amount paid is not included in the prize 
schedule, the documentation (single-part form or log is acceptable) must 
include the following information:
    (A) Date and time;
    (B) Player interface number;
    (C) Dollar amount paid (both alpha and numeric). Alpha is optional 
if another unalterable method is used for evidencing the amount paid;
    (D) The signature of at least one agent verifying and witnessing the 
manual promotional prize payout of $599 or less and two agents verifying 
and witnessing the manual promotional prize payout exceeding $599;
    (E) Description or name of the promotion; and
    (F) Total amount of manual promotional prize payouts must be 
recorded by shift, session or other relevant time period.
    (v) When a controlled manual payout document is voided, the agent 
completing the void must clearly mark ``void'' across the face of the 
document, sign across the face of the document and all parts of the 
document must be retained for accountability.
    (d) Operational controls. (1) Procedures must be established and 
implemented with the intent to prevent unauthorized access to or 
fraudulent transactions involving cash or cash equivalents.
    (2) Cash or cash equivalents exchanged between two persons must be 
counted independently by at least two persons and reconciled to the 
recorded amounts at the end of each shift or if applicable each session. 
Unexplained variances must be documented and maintained. Unverified 
transfers of cash or cash equivalents are prohibited.
    (3) Procedures must be established and implemented to control cash 
or cash equivalents in accordance with this section and based on the 
amount of the transaction. These procedures include, but are not limited 
to, counting and recording on an accountability form by shift, session 
or relevant time period the following:
    (i) Inventory, including any increases or decreases;
    (ii) Transfers;
    (iii) Exchanges, including acknowledging signatures or initials; and
    (iv) Resulting variances.
    (4) Any change of control of accountability, exchange or transfer 
must require the cash or cash equivalents be counted and recorded 
independently by at least two persons and reconciled to the recorded 
amount.

[[Page 169]]

    (e) Gaming equipment. (1) Procedures must be established and 
implemented with the intention to restrict access to agents for the 
following:
    (i) Controlled gaming equipment/components (e.g., draw objects and 
back-up draw objects); and
    (ii) Random number generator software. (Additional information 
technology security standards can be found in Sec. 543.16 of this 
part.)
    (2) The game software components of a Class II gaming system will be 
identified in the test laboratory report. When initially received, the 
software must be verified to be authentic copies, as certified by the 
independent testing laboratory.
    (3) Procedures must be established relating to the periodic 
inspection, maintenance, testing, and documentation of a random sampling 
of gaming equipment/components, including but not limited to:
    (i) Software related to game outcome must be authenticated semi-
annually by an agent independent of bingo operations by comparing 
signatures against the test laboratory letter on file with the tribal 
gaming regulatory authority for that version.
    (ii) Class II gaming system interfaces to external systems must be 
tested annually for accurate communications and appropriate logging of 
events.
    (4) Records must be maintained for each player interface that 
indicate the date the player interface was placed into service or made 
available for play, the date the player interface was removed from 
service and not available for play, and any changes in player interface 
identifiers.
    (f) Voucher systems. (1) The voucher system must be utilized to 
verify the authenticity of each voucher or coupon redeemed.
    (2) If the voucher is valid, the patron is paid the appropriate 
amount.
    (3) Procedures must be established and implemented to document the 
payment of a claim on a voucher that is not physically available or a 
voucher that cannot be validated (e.g., mutilated, expired, lost, 
stolen, etc.).
    (i) If paid, appropriate documentation is retained for 
reconciliation purposes.
    (ii) Payment of a voucher for $50 or more, a supervisory employee 
must review the applicable voucher system, player interface or other 
transaction history records to verify the validity of the voucher and 
initial the voucher or documentation prior to payment.
    (4) Vouchers redeemed must remain in the cashier's accountability 
for reconciliation purposes. The voucher redemption system reports must 
be used to ensure all paid vouchers have been validated.
    (5) Vouchers paid during a period while the voucher system is 
temporarily out of operation must be marked ``paid'', initialed and 
dated by the cashier. If the voucher is greater than a predetermined 
amount approved (not to exceed $500), a supervisory employee must 
approve the payment and evidence that approval by initialing the voucher 
prior to payment.
    (6) Paid vouchers are maintained in the cashier's accountability for 
reconciliation purposes.
    (7) Upon restored operation of the voucher system, vouchers redeemed 
while the voucher system was temporarily out of operation must be 
validated as expeditiously as possible.
    (8) Unredeemed vouchers can only be voided in the voucher system by 
supervisory employees. The supervisory employee completing the void must 
clearly mark ``void'' across the face of the voucher and sign across the 
face of the voucher, if available. The accounting department will 
maintain the voided voucher, if available.
    (g) Patron accounts and cashless systems. (1) All smart cards (i.e., 
cards that possess the means to electronically store or retrieve data) 
that maintain the only source of account data are prohibited.
    (2) For patron deposit accounts the following standards must apply:
    (i) For each patron deposit account, an agent must:
    (A) Require the patron to personally appear at the gaming operation;
    (B) Record the type of identification credential examined, the 
credential number, the expiration date of credential, and the date 
credential was examined. (Note: A patron's driver's license is the 
preferred method for verifying the patron's identity. A passport, non-

[[Page 170]]

resident alien identification card, other government issued 
identification credential or another picture identification credential 
normally acceptable as a means of identification when cashing checks, 
may also be used.);
    (C) Record the patron's name and may include another identifier 
(e.g., nickname, title, etc.) of the patron, if requested by patron;
    (D) Record a unique identity for each patron deposit account;
    (E) Record the date the account was opened; and
    (F) Provide the account holder with a secure method of access to the 
account.
    (ii) Patron deposit accounts must be established for patrons at 
designated areas of accountability and the creation of the account must 
meet all the controls of paragraph (g)(2)(i) of this section when the 
patron makes an initial deposit of cash or cash equivalents.
    (iii) If patron deposit account adjustments may be made by the 
operation, the operation must be authorized by the account holder to 
make necessary adjustments. This requirement can be met through the 
collection of a single authorization that covers the life of the patron 
deposit account.
    (iv) Patron deposits & withdrawals. (A) Prior to the patron making a 
withdrawal from a patron deposit account, the cashier must verify the 
identity of the patron and availability of funds. Reliance on a secured 
PIN entered by the patron is an acceptable method of verifying patron 
identity.
    (B) A multi-part deposit/withdrawal record must be created when the 
transaction is processed by a cashier, including;
    (1) Same document number on all copies;
    (2) Type of transaction, deposit or withdrawal;
    (3) Name or other identifier of the patron;
    (4) At least the last four digits of the account identifier;
    (5) Patron signature for withdrawals, unless a secured PIN is 
utilized by the patron;
    (6) Date of transaction;
    (7) Dollar amount of transaction;
    (8) Nature of deposit or withdrawal (e.g., cash, check, chips); and
    (9) Signature of the cashier processing the transaction.
    (C) A copy of the transaction record must be secured for 
reconciliation of the cashier's bank for each shift. All transactions 
involving patron deposit accounts must be accurately tracked.
    (D) The copy of the transaction record must be forwarded to the 
accounting department at the end of the gaming day.
    (E) When a cashier is not involved in the deposit/withdrawal of 
funds, procedures must be established that safeguard the integrity of 
the process used.
    (v) Patron Deposit Account Adjustments. (A) Adjustments to the 
patron deposit accounts must be performed by an agent.
    (B) A record must be created when the transaction is processed, 
including;
    (1) Unique transaction identifier;
    (2) Type of transaction, adjustment;
    (3) Name or other identifier of the patron;
    (4) At least the last four digits of the account identifier;
    (5) Date of transaction;
    (6) Dollar amount of transaction;
    (7) Reason for the adjustment; and
    (8) Signature or unique identifier for the agent who made the 
adjustment.
    (C) The transaction record must be forwarded to the accounting 
department at the end of the gaming day.
    (vi) Where available, systems reports that indicate the dollar 
amount of transactions for patron deposit accounts (e.g., deposits, 
withdrawals, account adjustments, etc.) that should be reflected in each 
cashier's accountability must be utilized at the conclusion of each 
shift in the reconciling of funds.
    (vii) Cashless transactions and electronic funds transfers to and 
from patron deposit accounts must be recorded and maintained at the end 
of the gaming operations specified 24-hour accounting period.
    (viii) Procedures must be established to maintain a detailed record 
for each patron deposit account that includes the dollar amount of all 
funds deposited and withdrawn, account adjustments made, and the 
transfers to or from player interfaces.
    (ix) Detailed patron deposit account transaction records must be 
available

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to the patron upon reasonable request and to the tribal gaming 
regulatory authority upon request.
    (x) Only dedicated gaming operation bank accounts must be used to 
record electronic funds transfers to or from the patron deposit 
accounts. Gaming operation bank accounts dedicated to electronic funds 
transfers to or from the patron deposit accounts must not be used for 
any other types of transactions.
    (3) For promotional and other accounts the following standards must 
apply:
    (i) Changes to promotional and other accounts must be performed by 
an agent.
    (ii) The following standards apply if a player tracking system is 
utilized:
    (A) In the absence of the patron, modifications to balances on a 
promotional or other account must be made under the authorization of 
supervisory employees and must be sufficiently documented (including 
substantiation of reasons for modification). Modifications are randomly 
verified by independent agents on a quarterly basis. This standard does 
not apply to the deletion of balances related to inactive or closed 
accounts through an automated process.
    (B) Access to inactive or closed accounts is restricted to 
supervisory employees.
    (C) Patron identification is required when redeeming values.
    Reliance on a secured PIN by the patron is an acceptable method of 
verifying patron identification.
    (h) Promotions. (1) The conditions for participating in promotional 
programs, including drawings and giveaway programs must be approved and 
available for patron review at the gaming operation.
    (2) Changes to the player tracking systems, promotional accounts, 
promotion and external bonusing system parameters which control features 
such as the awarding of bonuses, the issuance of cashable credits, non-
cashable credits, coupons and vouchers, must be performed under the 
authority of supervisory employees, independent of the department 
initiating the change. Alternatively, the changes may be performed by 
supervisory employees of the department initiating the change if 
sufficient documentation is generated and the propriety of the changes 
are randomly verified by supervisory employees independent of the 
department initiating the change on a monthly basis.
    (3) All other changes to the player tracking system must be 
appropriately documented.
    (4) All relevant controls from Sec. 543.16 of this part will apply.
    (i) Accounting. (1) Accounting/audit standards. (i) Accounting/
auditing procedures must be performed by agents who are independent of 
the persons who performed the transactions being reviewed.
    (ii) All accounting/audit procedures and actions must be documented 
(e.g., log, checklist, investigations and notation on reports), 
maintained for inspection and provided to the tribal gaming regulatory 
authority upon request.
    (iii) Accounting/audit procedures must be performed reviewing 
transactions for relevant accounting periods, including a 24-hour 
accounting period and reconciled in total for those time periods.
    (iv) Accounting/audit procedures must be performed within seven days 
of the transaction's occurrence date being reviewed.
    (v) Accounting/audit procedures must be in place to review variances 
related to bingo accounting data, which must include at a minimum any 
variance noted by the Class II gaming system for cashless transactions 
in and out, electronic funds transfer in and out, external bonus 
payouts, vouchers out and coupon promotion out.
    (vi) At least monthly, an accounting/audit agent must confirm that 
the appropriate investigation has been completed for the review of 
variances.
    (2) Audit tasks to be performed for each day's business.
    (i) Records of bingo card sales must be reviewed for proper 
authorization, completion and accurate calculations.
    (ii) Manual payout summary report, if applicable, must be reviewed 
for proper authorizations, completion, accurate calculations, and 
authorization confirming manual payout summary report totals.

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    (iii) A random sampling of records of manual payouts must be 
reviewed for proper authorizations and completion for manual payouts 
less than $1,200.
    (iv) Records of all manual prize payouts of $1,200 or more must be 
reviewed for proper authorizations and completion.
    (v) Where manual payout information is available per player 
interface, records of manual payouts must be reviewed against the 
recorded manual payout amounts per player interface.
    (vi) Manual payout forms must be reconciled to each cashier's 
accountability documents and in total for each relevant period (e.g., 
session, shift, day, etc.).
    (vii) Records of voided manual payouts must be reviewed for proper 
authorization and completion.
    (viii) Records of voided bingo cards must be reviewed for proper 
authorization and completion.
    (ix) Use of controlled forms must be reviewed to ensure each form is 
accounted for.
    (x) Where bingo sales are available per player interface, bingo 
sales must be reviewed for reasonableness.
    (xi) Amount of financial instruments accepted per financial 
instrument type and per financial instrument acceptor must be reviewed 
for reasonableness, to include but not limited to zero amounts.
    (xii) Where total prize payouts are available per player interface, 
total prize payouts must be reviewed for reasonableness.
    (xiii) Amount of financial instruments dispensed per financial 
instrument type and per financial instrument dispenser must be reviewed 
for reasonableness, to include but not limited to zero amounts.
    (xiv) For a random sampling, foot the vouchers redeemed and trace 
the totals to the totals recorded in the voucher system and to the 
amount recorded in the applicable cashier's accountability document.
    (xv) Daily exception information provided by systems used in the 
operation of bingo must be reviewed for propriety of transactions and 
unusual occurrences.
    (xvi) Ensure promotional coupons which are not financial instruments 
are properly cancelled to prevent improper recirculation.
    (xvii) Reconcile all parts of the form used to document transfers 
that increase/decrease the inventory of an accountability (includes 
booths and any other accountability areas).
    (xviii) Reconcile voucher liability (e.g., issued-voided-redeemed-
expired = unpaid) to the voucher system records.
    (xix) The total of all patron deposit accounts must be reconciled, 
as follows:
    (A) A report must be generated that details each day's beginning and 
ending balance of patron deposit accounts, adjustments to patron deposit 
accounts, and all patron deposit account transactions.
    (B) Reconcile the beginning and ending balances to the summary of 
manual deposit/withdrawal and account adjustment documentation to the 
patron deposit account report.
    (xx) Reconcile each day's patron deposit account liability (e.g., 
deposits  adjustments-withdrawals = total account 
balance) to the system records.
    (xxi) Reconcile electronic funds transfers to the cashless system 
records, the records of the outside entity which processed the 
transactions and the operations dedicated cashless account bank records.
    (xxii) Accounting data used in performance analysis may only be 
altered to correct amounts that were determined to be in error. When 
correcting accounting data, the correct amount must be indicated in any 
Class II gaming system exception reports generated.
    (xxiii) Accounting/auditing agents must reconcile the audited bingo 
totals report to the audited bingo accounting data for each day.
    (xxiv) Accounting/auditing agents must ensure each day's bingo 
accounting data used in performance reports has been audited and 
reconciled.
    (xxv) If the Class II gaming system produces exception reports they 
must be reviewed on a daily basis for propriety of transactions and 
unusual occurrences.
    (3) Audit tasks to be performed at relevant periods:
    (i) Financial instrument acceptor data must be recorded immediately

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prior to or subsequent to a financial instrument acceptor drop. The 
financial instrument acceptor amount-in data must be recorded at least 
weekly. The time between recordings may extend beyond one week in order 
for a recording to coincide with the end of an accounting period only if 
such extension is for no longer than six additional days.
    (ii) When a player interface is removed from the floor, the 
financial instrument acceptor contents must be protected to prevent the 
misappropriation of stored funds.
    (iii) When a player interface is permanently removed from the floor, 
the financial instrument acceptor contents must be counted and recorded.
    (iv) For currency interface systems, accounting/auditing agents must 
make appropriate comparisons of system generated count as recorded in 
the statistical report at least one drop period per month. Discrepancies 
must be resolved prior to generation/distribution of reports.
    (v) For each drop period, accounting/auditing agents must compare 
the amount-in per financial instrument accepted by the financial 
instrument acceptors to the drop amount counted for the period. 
Discrepancies must be resolved before the generation/distribution of 
statistical reports.
    (vi) Investigation must be performed for any one player interface 
having an unresolved drop variance in excess of an amount that is both 
more than $25 and at least three percent (3%) of the actual drop. The 
investigation performed and results of the investigation must be 
documented, maintained for inspection, and provided to the tribal gaming 
regulatory authority upon request.
    (vii) The results of a variance investigation, including the date 
and personnel involved in any investigation, will be documented in the 
appropriate report and retained. The results will also include any 
corrective action taken (e.g., accounting data storage component 
replaced, interface component repaired, software debugged, etc.). The 
investigation will be completed and the results documented within seven 
days of the day the variance was noted, unless otherwise justified.
    (viii) Procedures must be established and implemented to perform the 
following on a regular basis, at a minimum of monthly, and using 
predetermined thresholds:
    (A) Where the Class II gaming system is capable of providing 
information per player interface, identify and investigate player 
interfaces with total prize payouts exceeding bingo sales;
    (B) Where bingo sales is available per player interface, investigate 
any percentage of increase/decrease exceeding a predetermined threshold, 
not to exceed 20%, in total bingo sales as compared to a similar period 
of time that represents consistency in prior performance.
    (C) Investigate any exception noted in paragraphs (i)(3)(viii)(A) 
and (B) of this section and document the findings. The investigation may 
include procedures to review one or more of the following:
    (1) Verify days on floor are comparable.
    (2) Non-prize payouts for authenticity and propriety.
    (3) Player interface out of service periods.
    (4) Unusual fluctuations in manual payouts.
    (D) If the investigation does not identify an explanation for 
exceptions then a physical check procedure must be performed, as 
required by paragraph (i)(3)(viii)(E) of this section.
    (E) Document any investigation of unresolved exceptions using a 
predefined player interface physical check procedure and checklist, to 
include a minimum of the following as applicable:
    (1) Verify game software;
    (2) Verify player interface configurations;
    (3) Test amount in accounting data for accuracy upon insertion of 
financial instruments into the financial instrument acceptor;
    (4) Test amount out accounting data for accuracy upon dispensing of 
financial instruments from the financial instrument dispenser;
    (5) Record findings and repairs or modifications made to resolve 
malfunctions, including date and time, player interface identifier and 
signature of

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the agent performing the player interface physical check, and additional 
signatures as required; and
    (6) Maintain player interface physical check records, either in 
physical or electronic form, for the period prescribed by the procedure.
    (ix) For Class II gaming systems, procedures must be performed at 
least monthly to verify that the system accounting data is accurate.
    (x) For Tier C, at least weekly:
    (A) Financial instruments accepted at a kiosk must be removed and 
counted by at least two agents; and
    (B) Kiosk transactions must be reconciled to the beginning and 
ending balances for each kiosk.
    (xi) At the conclusion of a promotion, accounting/audit agents must 
perform procedures (e.g., interviews, review of payout documentation, 
etc.) to ensure that promotional prize payouts, drawings, and giveaway 
programs are conducted in accordance with the rules provided to the 
patrons.
    (4) Inter-tribal prize pools. Procedures must be established and 
implemented to govern the participation in inter-tribal prize pools, 
which at a minimum must include the review, verification and maintenance 
of the following records, which must be made available, within a 
reasonable time of the request, to the tribal gaming regulatory 
authority upon request:
    (i) Summary of contributions in total made to an inter-tribal prize 
pool;
    (ii) Summary of disbursements in total from an inter-tribal prize 
pool; and
    (iii) Summary of inter-tribal prize pool funds availability.
    (5) Performance Analysis. (i) Bingo performance data must be 
recorded at the end of the gaming operations specified 24-hour 
accounting period. Such data must include:
    (A) Amount-in and amount-out for each Class II gaming system.
    (B) The total value of all financial instruments accepted by the 
Class II gaming system by each financial instrument acceptor and by each 
financial instrument type.
    (C) The total value of all financial instruments dispensed by the 
Class II gaming system and by each financial instrument type.
    (D) The total value of all manual payouts by each Class II gaming 
system.
    (E) The total value of bingo purchases for each Class II gaming 
system.
    (F) The total value of prizes paid for each Class II gaming system.
    (ii) Procedures must be established and implemented that ensure the 
reliability of the performance data.
    (iii) Upon receipt of the summary of the data, the accounting 
department must review it for reasonableness using pre-established 
parameters defined by the gaming operation.
    (iv) An agent must record and maintain all required data before and 
after any maintenance or modifications that involves the clearing of the 
data (e.g., system software upgrades, data storage media replacement, 
etc.). The information recorded must be used when reviewing performance 
reports to ensure that the maintenance or modifications did not 
improperly affect the data in the reports.
    (6) Statistical reporting. (i) The bingo sales, prize payouts, bingo 
win, and actual bingo win percentages must be recorded for:
    (A) Each shift or session;
    (B) Each day;
    (C) Month-to-date; and
    (D) Year-to-date or fiscal year-to-date.
    (ii) A monthly comparison for reasonableness must be made of the 
amount of bingo paper sold from the bingo paper control log to the 
amount of bingo paper sales revenue recognized.
    (iii) Management employees independent of the bingo department must 
review bingo statistical information on at least a monthly basis.
    (iv) Agents independent of the bingo department must investigate any 
large or unusual statistical fluctuations, as defined by the gaming 
operation.
    (v) Such investigations must be documented, maintained for 
inspection, and provided to the tribal gaming regulatory authority upon 
request.
    (vi) The actual bingo win percentages used in the statistical 
reports should not include operating expenses (e.g., a percentage 
payment to administrators of inter-tribal prize pools), promotional

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prize payouts or bonus payouts not included in the prize schedule.
    (7) Progressive prize pools. (i) A display that shows the amount of 
the progressive prize must be conspicuously displayed at or near the 
player interface(s) to which the prize applies.
    (ii) At least once each day, each gaming operation must record the 
total amount of each progressive prize pool offered at the gaming 
operation on the progressive log.
    (iii) When a manual payment for a progressive prize is made from a 
progressive prize pool, the amount must be recorded on the progressive 
log.
    (iv) Each gaming operation must record, on the progressive log, the 
base reset amount of each progressive prize the gaming operation offers.
    (v) Procedures must be established and implemented specific to the 
transfer of progressive amounts in excess of the base reset amount to 
other awards or prizes. Such procedures may also include other methods 
of distribution that accrue to the benefit of the gaming public.



Sec. Sec. 543.8-543.15  [Reserved]



Sec. 543.16  What are the minimum internal controls for 
information technology?

    (a) Physical security measures restricting access to agents, 
including vendors, must exist over the servers, including computer 
terminals, storage media, software and data files to prevent 
unauthorized access and loss of integrity of data and processing.
    (b) Unauthorized individuals must be precluded from having access to 
the secured computer area(s).
    (c) User controls. (1) Computer systems, including application 
software, must be secured through the use of passwords or other approved 
means.
    (2) Procedures must be established and implemented to ensure that 
management or independent agents assign and control access to computer 
system functions.
    (3) Passwords must be controlled as follows unless otherwise 
addressed in the standards in this section.
    (i) Each user must have his or her own individual user 
identification and password.
    (ii) When an individual has multiple user profiles, only one user 
profile per application may be used at a time.
    (iii) Passwords must be changed at least quarterly with changes 
documented. Documentation is not required if the system prompts users to 
change passwords and then denies access if the change is not completed.
    (iv) The system must be updated to change the status of terminated 
users from active to inactive status within 72 hours of termination.
    (v) At least quarterly, independent agents must review user access 
records for appropriate assignment of access and to ensure that 
terminated users do not have access to system functions.
    (vi) Documentation of the quarterly user access review must be 
maintained.
    (vii) System exception information (e.g., changes to system 
parameters, corrections, overrides, voids, etc.) must be maintained.
    (4) Procedures must be established and implemented to ensure access 
listings are maintained which include at a minimum:
    (i) User name or identification number (or equivalent); and
    (ii) Listing of functions the user can perform or equivalent means 
of identifying same.
    (d) Adequate backup and recovery procedures must be in place that 
include:
    (1) Daily backup of data files--(i) Backup of all programs. Backup 
of programs is not required if the program can be reinstalled.
    (ii) Secured storage of all backup data files and programs, or other 
adequate protection to prevent the permanent loss of any data.
    (iii) Backup data files and programs may be stored in a secured 
manner in another building that is physically separated from the 
building where the system's hardware and software are located. They may 
also be stored in the same building as the hardware/software as long as 
they are secured in a fireproof safe or some other manner that will 
ensure the safety of the files and programs in the event of a fire or 
other disaster.
    (2) Recovery procedures must be tested on a sample basis at least 
annually with documentation of results.

[[Page 176]]

    (e) Access records. (1) Procedures must be established to ensure 
computer access records, if capable of being generated by the computer 
system, are reviewed for propriety for the following at a minimum:
    (i) Class II gaming systems;
    (ii) Accounting/auditing systems;
    (iii) Cashless systems;
    (iv) Voucher systems;
    (v) Player tracking systems; and
    (vi) External bonusing systems.
    (2) If the computer system cannot deny access after a predetermined 
number of consecutive unsuccessful attempts to log on, the system must 
record unsuccessful log on attempts.
    (f) Remote access controls. (1) For computer systems that can be 
accessed remotely, the written system of internal controls must 
specifically address remote access procedures including, at a minimum:
    (i) Record the application remotely accessed, authorized user's name 
and business address and version number, if applicable;
    (ii) Require approved secured connection;
    (iii) The procedures used in establishing and using passwords to 
allow authorized users to access the computer system through remote 
access;
    (iv) The agents involved and procedures performed to enable the 
physical connection to the computer system when the authorized user 
requires access to the system through remote access; and
    (v) The agents involved and procedures performed to ensure the 
remote access connection is disconnected when the remote access is no 
longer required.
    (2) In the event of remote access, the information technology 
employees must prepare a complete record of the access to include:
    (i) Name or identifier of the employee authorizing access;
    (ii) Name or identifier of the authorized user accessing system;
    (iii) Date, time, and duration of access; and
    (iv) Description of work performed in adequate detail to include the 
old and new version numbers, if applicable of any software that was 
modified, and details regarding any other changes made to the system.

                        PARTS 544	546 [RESERVED]



PART 547_MINIMUM TECHNICAL STANDARDS FOR GAMING EQUIPMENT USED WITH
THE PLAY OF CLASS II GAMES--Table of Contents




Sec.
547.1 What is the purpose of this part?
547.2 How do these regulations affect state jurisdiction?
547.3 What are the definitions for this part?
547.4 How does a tribal government, tribal gaming regulatory authority, 
          or tribal gaming operation comply with this part?
547.5 What are the rules of interpretation and of general application 
          for this part?
547.6 What are the minimum technical standards for enrolling and 
          enabling Class II gaming system components?
547.7 What are the minimum technical hardware standards applicable to 
          Class II gaming systems?
547.8 What are the minimum technical software standards applicable to 
          Class II gaming systems?
547.9 What are the minimum technical standards for Class II gaming 
          system accounting functions?
547.10 What are the minimum standards for Class II gaming system 
          critical events?
547.11 What are the minimum technical standards for money and credit 
          handling?
547.12 What are the minimum technical standards for downloading on a 
          Class II gaming system?
547.13 What are the minimum technical standards for program storage 
          media?
547.14 What are the minimum technical standards for electronic random 
          number generation?
547.15 What are the minimum technical standards for electronic data 
          communications between system components?
547.16 What are the minimum standards for game artwork, glass, and 
          rules?
547.17 How does a tribal gaming regulatory authority apply for a 
          variance from these standards?

    Authority: 25 U.S.C. 2706(b).

    Source: 73 FR 60525, Oct. 10, 2008, unless otherwise noted.



Sec. 547.1  What is the purpose of this part?

    The Indian Gaming Regulatory Act, 25 U.S.C. 2703(7)(A)(i), permits 
the use of electronic, computer, or other technologic aids in connection 
with the

[[Page 177]]

play of Class II games. This part establishes the minimum technical 
standards governing the use of such aids.



Sec. 547.2  How do these regulations affect state jurisdiction?

    Nothing in this part shall be construed to grant to a state 
jurisdiction over Class II gaming or to extend a state's jurisdiction 
over Class III gaming.



Sec. 547.3  What are the definitions for this part?

    For the purposes of this part, the following definitions apply:
    Account access component. A component within a Class II gaming 
system that reads or recognizes account access media and gives a patron 
the ability to interact with his or her account.
    Account access medium. A magnetic stripe card or any other medium 
inserted into, or otherwise made to interact with, an account access 
component in order to give a patron the ability to interact with an 
account.
    Audit mode. The mode where it is possible to view Class II gaming 
system accounting functions, statistics, etc. and perform non-player-
related functions.
    Agent. An employee or other person authorized by the gaming 
operation, as approved by the tribal gaming regulatory authority, 
designated for certain decisions, tasks and actions in the gaming 
operation.
    Cancel credit. An action initiated by the Class II gaming system 
where some or all of a player's credits are removed by an attendant and 
paid to the player.
    Cashless system. A system that performs cashless transactions and 
maintains records of those cashless transactions.
    Cashless transaction. A movement of funds electronically from one 
component to another, often to or from a patron deposit account.
    CD-ROM. Compact Disc--Read Only Memory.
    Chairman. The Chairman of the National Indian Gaming Commission.
    Class II game. The same as ``class II gaming'' in 25 U.S.C. 
2703(7)(A).
    Class II gaming system. All components, whether or not technologic 
aids in electronic, computer, mechanical, or other technologic form, 
that function together to aid the play of one or more Class II games, 
including accounting functions mandated by these regulations.
    Commission. The National Indian Gaming Commission established by the 
Indian Gaming Regulatory Act, 25 U.S.C. 2701 et seq.
    Coupon. A financial instrument of fixed wagering value, usually 
paper, that can only be used to acquire non-cashable credits through 
interaction with a voucher system. This does not include instruments 
such as printed advertising material that cannot be validated directly 
by a voucher system.
    Critical memory. Memory locations storing data essential to the 
functionality of the Class II gaming system.
    DLL. A Dynamic-Link Library file.
    Download package. Approved data sent to a component of a Class II 
gaming system for such purposes as changing the component software.
    DVD. Digital Video Disk or Digital Versatile Disk.
    Electromagnetic interference. The physical characteristic of an 
electronic component to emit electronic noise either into free air, onto 
the power lines, or onto communication cables.
    Electrostatic discharge. A single-event, rapid transfer of 
electrostatic charge between two objects, usually resulting when two 
objects at different potentials come into direct contact with each 
other.
    EPROM. Erasable Programmable Read Only Memory--a storage area that 
may be filled with data and information, that once written is not 
modifiable, and that is retained even if there is no power applied to 
the machine.
    Fault. An event that when detected by a Class II gaming system 
causes a discontinuance of game play or other component functions.
    Financial instrument. Any tangible item of value tendered in Class 
II game play, including, but not limited to, bills, coins, vouchers and 
coupons.
    Financial instrument acceptor. Any component that accepts financial 
instruments.

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    Financial instrument dispenser. Any component that dispenses 
financial instruments.
    Financial instrument storage component. Any component that stores 
financial instruments.
    Flash memory. Non-volatile memory that retains its data when the 
power is turned off and that can be electronically erased and 
reprogrammed without being removed from the circuit board.
    Game software. The operational program or programs that govern the 
play, display of results, and/or awarding of prizes or credits for Class 
II games.
    Gaming equipment. All electronic, electro-mechanical, mechanical, or 
other physical components utilized in the play of Class II games.
    Hardware. Gaming equipment.
    Interruption. Any form of mis-operation, component failure, or 
interference to the Class II gaming equipment.
    Modification. A revision to any hardware or software used in a Class 
II gaming system.
    Non-cashable credit. Credits given by an operator to a patron; 
placed on an Class II gaming system through a coupon, cashless 
transaction or other approved means; and capable of activating play but 
not being converted to cash.
    Patron deposit account. An account maintained on behalf of a patron, 
for the purpose of depositing and withdrawing cashable funds for the 
primary purpose of interacting with a gaming activity.
    Player interface. Any component or components of a Class II gaming 
system, including an electronic or technologic aid (not limited to 
terminals, player stations, handhelds, fixed units, etc.), that directly 
enables player interaction in a Class II game.
    Prize schedule. The set of prizes available to players for achieving 
pre-designated patterns in the Class II game.
    Program storage media. An electronic data storage component, such as 
a CD-ROM, EPROM, hard disk, or flash memory on which software is stored 
and from which software is read.
    Progressive prize. A prize that increases by a selectable or 
predefined amount based on play of a Class II game.
    Random number generator (RNG). A software module, hardware component 
or combination of these designed to produce outputs that are effectively 
random.
    Reflexive software. Any software that has the ability to manipulate 
and/or replace a randomly generated outcome for the purpose of changing 
the results of a Class II game.
    Removable/rewritable storage media. Program or data storage 
components that can be removed from gaming equipment and be written to, 
or rewritten by, the gaming equipment or by other equipment designed for 
that purpose.
    Server. A computer that controls one or more applications or 
environments within a Class II gaming system.
    Test/diagnostics mode. A mode on a component that allows various 
tests to be performed on the Class II gaming system hardware and 
software.
    Testing laboratory. An organization recognized by a tribal gaming 
regulatory authority pursuant to Sec. 547.4(f).
    Tribal gaming regulatory authority. The entity authorized by tribal 
law to regulate gaming conducted pursuant to the Indian Gaming 
Regulatory Act.
    Voucher. A financial instrument of fixed wagering value, usually 
paper, that can only be used to acquire an equivalent value of cashable 
credits or cash through interaction with a voucher system.
    Voucher system. A component of the Class II gaming system or an 
external system that securely maintains records of vouchers and coupons; 
validates payment of vouchers; records successful or failed payments of 
vouchers and coupons; and controls the purging of expired vouchers and 
coupons.



Sec. 547.4  How does a tribal government, tribal gaming regulatory
authority, or tribal gaming operation comply with this part?

    (a) Limited immediate compliance. A tribal gaming regulatory 
authority shall:
    (1) Require that all Class II gaming system software that affects 
the play of the Class II game be submitted, together with the signature 
verification

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required by Sec. 547.8(f), to a testing laboratory recognized pursuant 
to paragraph (f) of this section within 120 days after November 10, 
2008;
    (2) Require that the testing laboratory test the submission to the 
standards established by Sec. 547.8(b), Sec. 547.8(f), Sec. 547.14, 
the minimum probability standards of Sec. 547.5(c), and to any 
additional technical standards adopted by the tribal gaming regulatory 
authority;
    (3) Require that the testing laboratory provide the tribal gaming 
regulatory authority with a formal written report setting forth and 
certifying to the findings and conclusions of the test;
    (4) Make a finding, in the form of a certificate provided to the 
supplier or manufacturer of the Class II gaming system, that the Class 
II gaming system qualifies for grandfather status under the provisions 
of this section, but only upon receipt of a testing laboratory's report 
that the Class II gaming system is compliant with Sec. 547.8(b), Sec. 
547.8(f), the minimum probability standards of Sec. 547.5(c), Sec. 
547.14, and any other technical standards adopted by the tribal gaming 
regulatory authority. If the tribal gaming regulatory authority does not 
issue the certificate, or if the testing laboratory finds that the Class 
II gaming system is not compliant with Sec. 547.8(b), Sec. 547.8(f), 
the minimum probability standards of Sec. 547.5(c), Sec. 547.14, or 
any other technical standards adopted by the tribal gaming regulatory 
authority, then the gaming system shall immediately be removed from play 
and not be utilized.
    (5) Retain a copy of any testing laboratory's report so long as the 
Class II gaming system that is the subject of the report remains 
available to the public for play;
    (6) Retain a copy of any certificate of grandfather status so long 
as the Class II gaming system that is the subject of the certificate 
remains available to the public for play; and
    (7) Require the supplier of any player interface to designate with a 
permanently affixed label each player interface with an identifying 
number and the date of manufacture or a statement that the date of 
manufacture was on or before the effective date of this part. The tribal 
gaming regulatory authority shall also require the supplier to provide a 
written declaration or affidavit affirming that the date of manufacture 
was on or before November 10, 2008.
    (b) Grandfather provisions. All Class II gaming systems manufactured 
or placed in a tribal facility on or before the effective date of this 
part and certified pursuant to paragraph (a) of this section are 
grandfathered Class II gaming systems for which the following provisions 
apply:
    (1) Grandfathered Class II gaming systems may continue in operation 
for a period of five years from November 10, 2008.
    (2) Grandfathered Class II gaming system shall be available for use 
at any tribal gaming facility subject to approval by the tribal gaming 
regulatory authority, which shall transmit its notice of that approval, 
identifying the grandfathered Class II gaming system and its components, 
to the Commission.
    (3) As permitted by the tribal gaming regulatory authority, 
individual hardware or software components of a grandfathered Class II 
gaming system may be repaired or replaced to ensure proper functioning, 
security, or integrity of the grandfathered Class II gaming system.
    (4) All modifications that affect the play of a grandfathered Class 
II gaming system must be approved pursuant to paragraph (c) of this 
section, except for the following:
    (i) Any software modifications that the tribal gaming regulatory 
authority finds will maintain or advance the system's overall compliance 
with this part or any applicable provisions of parts 542 and 543 of this 
chapter, after receiving a new testing laboratory report that the 
modifications are compliant with the standards established by Sec. 
547.8(b), the minimum probability requirements of Sec. 547.5(c), Sec. 
547.14, and any other standards adopted by the tribal gaming regulatory 
authority;
    (ii) Any hardware modifications that the tribal gaming regulatory 
authority finds will maintain or advance the system's overall compliance 
with this part or any applicable provisions of parts 542 and 543 of this 
chapter; and

[[Page 180]]

    (iii) Any other modification to the software of a grandfathered 
Class II gaming system that the tribal gaming regulatory authority finds 
will not detract from, compromise or prejudice:
    (A) The proper functioning, security, or integrity of the Class II 
gaming system, and
    (B) The gaming system's overall compliance with the requirements of 
this part or any applicable provisions of parts 542 and 543 of this 
chapter.
    (iv) No such modification may be implemented without the approval of 
the tribal gaming regulatory authority. The tribal gaming regulatory 
authority shall maintain a record of the modification so long as the 
Class II gaming system that is the subject of the modification remains 
available to the public for play and shall make the record available to 
the Commission upon request. The Commission will only make available for 
public review records or portions of records subject to release under 
the Freedom of Information Act, 5 U.S.C. 552; the Privacy Act of 1974, 5 
U.S.C. 552a; or the Indian Gaming Regulatory Act, 25 U.S.C. 2716(a).
    (c) Submission, testing, and approval--generally. Except as provided 
in paragraphs (b) and (d) of this section, no tribal gaming regulatory 
authority shall permit in a tribal gaming operation the use of any Class 
II gaming system, or any associated cashless system or voucher system or 
any modification thereto, unless:
    (1) The Class II gaming system, cashless system, voucher payment 
system, or modification has been submitted to a testing laboratory;
    (2) The testing laboratory tests the submission to the standards 
established by:
    (i) This part;
    (ii) Any applicable provisions of parts 542 and 543 of this chapter 
that are testable by the testing laboratory; and
    (iii) The tribal gaming regulatory authority;
    (3) The testing laboratory provides a formal written report to the 
party making the submission, setting forth and certifying to its 
findings and conclusions; and
    (4)(i) Following receipt of the testing laboratory's report, the 
tribal gaming regulatory authority makes a finding that the Class II 
gaming system, cashless system, or voucher system conforms to the 
standards established by:
    (A) This part;
    (B) Any applicable provisions of parts 542 and 543 of this chapter 
that are testable by the testing laboratory; and
    (C) The tribal gaming regulatory authority.
    (ii) The tribal gaming regulatory authority shall retain a copy of 
the testing laboratory's report so long as the Class II gaming system, 
cashless system, voucher system, or modification thereto that is the 
subject of the report remains available to the public for play in its 
gaming operation.
    (d) Emergency hardware and software modifications. (1) A tribal 
gaming regulatory authority, in its discretion, may permit modified 
hardware or software to be made available for play without prior 
laboratory testing or review if the modified hardware or software is:
    (i) Necessary to correct a problem affecting the fairness, security, 
or integrity of a game or accounting system or any cashless system, or 
voucher system; or
    (ii) Unrelated to game play, an accounting system, a cashless 
system, or a voucher system.
    (2) If a tribal gaming regulatory authority authorizes new or 
modified software or hardware to be made available for play or use 
without prior testing laboratory review, the tribal gaming regulatory 
authority shall thereafter require the hardware or software manufacturer 
to:
    (i) Immediately advise other users of the same hardware or software 
of the importance and availability of the update;
    (ii) Immediately submit the new or modified hardware or software to 
a testing laboratory for testing and verification of compliance with 
this part and any applicable provisions of parts 542 and 543 of this 
chapter that are testable by the testing laboratory; and
    (iii) Immediately provide the tribal gaming regulatory authority 
with a software signature verification tool meeting the requirements of 
Sec. 547.8(f) for any new or modified software.

[[Page 181]]

    (3) If a tribal gaming regulatory authority authorizes a software or 
hardware modification under this paragraph, it shall maintain a record 
of the modification and a copy of the testing laboratory report so long 
as the Class II gaming system that is the subject of the modification 
remains available to the public for play and shall make the record 
available to the Commission upon request. The Commission will only make 
available for public review records or portions of records subject to 
release under the Freedom of Information Act, 5 U.S.C. 552; the Privacy 
Act of 1974, 5 U.S.C. 552a; or the Indian Gaming Regulatory Act, 25 
U.S.C. 2716(a).
    (e) Compliance by charitable gaming operations. This part shall not 
apply to charitable gaming operations, provided that:
    (1) The tribal government determines that the organization 
sponsoring the gaming operation is a charitable organization;
    (2) All proceeds of the charitable gaming operation are for the 
benefit of the charitable organization;
    (3) The tribal gaming regulatory authority permits the charitable 
organization to be exempt from this part;
    (4) The charitable gaming operation is operated wholly by the 
charitable organization's employees or volunteers; and
    (5) The annual gross gaming revenue of the charitable gaming 
operation does not exceed $1,000,000.
    (f) Testing laboratories. (1) A testing laboratory may provide the 
examination, testing, evaluating and reporting functions required by 
this section provided that:
    (i) It demonstrates its integrity, independence and financial 
stability to the tribal gaming regulatory authority.
    (ii) It demonstrates its technical skill and capability to the 
tribal gaming regulatory authority.
    (iii) It is not owned or operated by the same tribe or tribal gaming 
regulatory authority for whom it is providing the testing, evaluating, 
and reporting functions required by this section.
    (iv) The tribal gaming regulatory authority:
    (A) Makes a suitability determination of the testing laboratory 
based upon standards no less stringent than those set out in Sec. Sec. 
533.6(b)(1)(ii) through (v) of this chapter and based upon no less 
information than that required by Sec. 537.1 of this chapter, or
    (B) Accepts, in its discretion, a determination of suitability for 
the testing laboratory made by any other gaming regulatory authority in 
the United States.
    (v) After reviewing the suitability determination and the 
information provided by the testing laboratory, the tribal gaming 
regulatory authority determines that the testing laboratory is qualified 
to test and evaluate Class II gaming systems.
    (2) The tribal gaming regulatory authority shall:
    (i) Maintain a record of all determinations made pursuant to 
paragraphs (f)(1)(iv) and (f)(1)(v) of this section for a minimum of 
three years and shall make the records available to the Commission upon 
request. The Commission will only make available for public review 
records or portions of records subject to release under the Freedom of 
Information Act, 5 U.S.C. 552; the Privacy Act of 1974, 5 U.S.C. 552a; 
or the Indian Gaming Regulatory Act, 25 U.S.C. 2716(a).
    (ii) Place the testing laboratory under a continuing obligation to 
notify it of any adverse regulatory action in any jurisdiction where the 
testing laboratory conducts business.
    (iii) Require the testing laboratory to provide notice of any 
material changes to the information provided to the tribal gaming 
regulatory authority.



Sec. 547.5  What are the rules of interpretation and of general
application for this part?

    (a) Minimum standards. A tribal gaming regulatory authority may 
establish and implement additional technical standards that are as 
stringent as, or more stringent than, those set out in this part.
    (b) Only applicable standards apply. Gaming equipment and software 
used with Class II gaming systems shall meet all applicable requirements 
of this part. For example, if a Class II gaming system lacks the ability 
to

[[Page 182]]

print or accept vouchers, then any standards that govern vouchers do not 
apply.
    (c) Fairness. No Class II gaming system shall cheat or mislead 
users. All prizes advertised shall be available to win. No progressive 
prize shall have a probability of winning less than 1 in 100,000,000. No 
other prize shall have a probability of winning less than 1 in 
50,000,000.
    (d) Approved equipment and software only. All gaming equipment and 
software used with Class II gaming systems shall be identical in all 
respects to a prototype reviewed and tested by a testing laboratory and 
approved for use by the tribal gaming regulatory authority pursuant to 
Sec. 547.4(a) through (c). Unapproved software shall not be loaded onto 
or stored on any program storage medium used in a Class II gaming 
system, except as provided in Sec. 547.4(d).
    (e) Proper functioning. All gaming equipment and software used with 
Class II gaming systems shall perform according to the manufacturer's 
design and operating specifications.
    (f) No Limitation of Technology. This part should not be interpreted 
to limit the use of technology or to preclude the use of technology not 
specifically referenced.
    (g) Severability. If any provision of this part is declared invalid 
by a court of competent jurisdiction, such decision shall not affect the 
remainder of this part.



Sec. 547.6  What are the minimum technical standards for enrolling
and enabling Class II gaming system components?

    (a) General requirements. Class II gaming systems shall provide a 
method to:
    (1) Enroll and unenroll system components;
    (2) Enable and disable specific system components.
    (b) Specific requirements. Class II gaming systems shall:
    (1) Ensure that only enrolled and enabled system components 
participate in gaming; and
    (2) Ensure that the default condition for components shall be 
unenrolled and disabled.



Sec. 547.7  What are the minimum technical hardware standards 
applicable to Class II gaming systems?

    (a) General requirements. (1) The Class II gaming system shall 
operate in compliance with applicable regulations of the Federal 
Communications Commission.
    (2) Prior to approval by the tribal gaming regulatory authority 
pursuant to Sec. 547.4(c), the Class II gaming system shall have 
obtained from Underwriters' Laboratories, or its equivalent, relevant 
certification(s) required for equipment of its type, including but not 
limited to certifications for liquid spills, electromagnetic 
interference, etc.
    (b) Printed circuit boards. (1) Printed circuit boards that have the 
potential to affect the outcome or integrity of the game, and are 
specially manufactured or proprietary and not off-the-shelf, shall 
display a unique identifier such as a part number and/or revision 
number, which shall be updated to reflect new revisions or modifications 
of the board.
    (2) Switches or jumpers on all circuit boards that have the 
potential to affect the outcome or integrity of any game, progressive 
award, financial instrument, cashless transaction, voucher transaction, 
or accounting records shall be capable of being sealed.
    (c) Electrostatic discharge. Class II gaming system components 
accessible to the public shall be constructed so that they exhibit 
immunity to human body electrostatic discharges on areas exposed to 
contact. Static discharges of 15 kV for air 
discharges and 7.5 kV for contact discharges may 
not cause damage, or inhibit operation or integrity of the Class II 
gaming system.
    (d) Physical enclosures. Physical enclosures shall be of a robust 
construction designed to resist determined illegal entry. All 
protuberances and attachments such as buttons, identification plates, 
and labels shall be sufficiently robust to avoid unauthorized removal.
    (e) Player interface. The player interface shall include a method or 
means to:
    (1) Display information to a player; and

[[Page 183]]

    (2) Allow the player to interact with the Class II gaming system.
    (f) Account access components. A Class II gaming system component 
that reads account access media shall be located within a secure, locked 
or tamper-evident area or in a cabinet or housing that is of a robust 
construction designed to resist determined illegal entry and to protect 
internal components. In addition, the account access component:
    (1) Shall be constructed so that physical tampering leaves evidence 
of such tampering; and
    (2) Shall provide a method to enable the Class II gaming system to 
interpret and act upon valid or invalid input or error condition.
    (g) Financial instrument storage components. Any Class II gaming 
system components that store financial instruments and that are not 
operated under the direct control of a gaming operation employee or 
agent shall be located within a secure and locked area or in a locked 
cabinet or housing that is of a robust construction designed to resist 
determined illegal entry and to protect internal components.
    (h) Financial instrument acceptors. (1) Any Class II gaming system 
components that handle financial instruments and that are not operated 
under the direct control of an agent shall:
    (i) Be located within a secure, locked and tamper-evident area or in 
a locked cabinet or housing that is of a robust construction designed to 
resist determined illegal entry and to protect internal components;
    (ii) Be able to detect the entry of valid or invalid financial 
instruments and to provide a method to enable the Class II gaming system 
to interpret and act upon valid or invalid input or error condition; and
    (iii) Be constructed to permit communication with the Class II 
gaming system of the accounting information required by Sec. 547.9(a) 
and by applicable provisions of any Commission and tribal gaming 
regulatory regulations governing minimum internal control standards.
    (2) Prior to completion of a valid financial instrument transaction 
by the Class II gaming system, no monetary amount related to that 
instrument shall be available for play. For example, credits shall not 
be available for play until currency or coupon inserted into an acceptor 
is secured in the storage component.
    (3) The monetary amount related to all valid financial instrument 
transactions by the Class II gaming system shall be recorded as required 
by Sec. 547.9(a) and the applicable provisions of any Commission and 
tribal gaming regulatory authority regulations governing minimum 
internal control standards.
    (i) Financial instrument dispensers. (1) Any Class II gaming system 
components that dispense financial instruments and that are not operated 
under the direct control of a gaming operation employee or agent shall:
    (i) Be located within a secure, locked and tamper-evident area or in 
a locked cabinet or housing that is of a robust construction designed to 
resist determined illegal entry and to protect internal components;
    (ii) Provide a method to enable the Class II gaming system to 
interpret and act upon valid or invalid input or error condition; and
    (iii) Be constructed to permit communication with the Class II 
gaming system of the accounting information required by Sec. 547.9(a) 
and by applicable provisions of any Commission and tribal gaming 
regulatory regulations governing minimum internal control standards.
    (2) The monetary amount related to all valid financial instrument 
transactions by the Class II gaming system shall be recorded as required 
by Sec. 547.9(a), the applicable provisions of parts 542 and 543 of 
this chapter, and any tribal gaming regulatory authority regulations 
governing minimum internal control standards.
    (j) Game Outcome Determination Components. Any Class II gaming 
system logic components that affect the game outcome and that are not 
operated under the direct control of a gaming operation employee or 
agent shall be located within a secure, locked and tamper-evident area 
or in a locked cabinet or housing that is of a robust construction 
designed to resist determined illegal entry and to protect internal 
components. DIP switches or jumpers

[[Page 184]]

that can affect the integrity of the Class II gaming system must be 
capable of being sealed by the tribal gaming regulatory authority.
    (k) Door access detection. All components of the Class II gaming 
system that are locked in order to meet the requirements of this part 
shall include a sensor or other methods to monitor an open door. A door 
open sensor, and its components or cables, shall be secure against 
attempts to disable them or interfere with their normal mode of 
operation;
    (l) Separation of functions/no limitations on technology. Nothing 
herein shall prohibit the account access component, financial instrument 
storage component, financial instrument acceptor, and financial 
instrument dispenser from being included within the same component, or 
separated into individual components.



Sec. 547.8  What are the minimum technical software standards 
applicable to Class II gaming systems?

    This section provides general software standards for Class II gaming 
systems for the play of Class II games.
    (a) Player interface displays. (1) If not otherwise provided to the 
player, the player interface shall display the following:
    (i) The purchase or wager amount;
    (ii) Game results; and
    (iii) Any player credit balance.
    (2) Between plays of any game and until the start of the next play, 
or until the player selects a new game option such as purchase or wager 
amount or card selection, whichever is earlier, if not otherwise 
provided to the player, the player interface shall display:
    (i) The total purchase or wager amount and all prizes and total 
credits won for the last game played;
    (ii) The final results for the last game played, including 
entertaining displays of results, if any; and
    (iii) Any default purchase or wager amount for the next play.
    (b) Game initiation and play. (1) Each game played on the Class II 
gaming system shall follow and not deviate from a constant set of rules 
for each game provided to players pursuant to Sec. 547.16. Any change 
in rules constitutes a different game. There shall be no automatic or 
undisclosed changes of rules.
    (2) For bingo games and games similar to bingo, the Class II gaming 
system shall not alter or allow to be altered the card permutations or 
game rules used for play of a Class II game unless specifically chosen 
by the player prior to commitment to participate in the game. No 
duplicate cards shall be sold for any common draw.
    (3) No game play shall commence and, no financial instrument or 
credit shall be accepted on the affected player interface, in the 
presence of any fault condition that affects the outcome of the game, 
open door, or while in test, audit, or lock-up mode.
    (4) The player must choose to participate in the play of a game.
    (c) Audit Mode. (1) If an audit mode is provided, the Class II 
gaming system shall provide, for those components actively involved in 
the audit:
    (i) All accounting functions required by Sec. 547.9, by applicable 
provisions of any Commission regulations governing minimum internal 
control standards, and by any internal controls adopted by the tribe or 
tribal gaming regulatory authority;
    (ii) Display player interface identification; and
    (iii) Display software version or game identification;
    (2) Audit mode shall be accessible by a secure method such as an 
employee PIN and key or other auditable access control.
    (3) Accounting function data shall be accessible by an authorized 
person at any time, except during a payout, during a handpay, or during 
play.
    (4) The Class II gaming system shall disable financial instrument 
acceptance on the affected player interface while in audit mode, except 
during financial instrument acceptance testing.
    (d) Last game recall. The last game recall function shall:
    (1) Be retrievable at all times, other than when the recall 
component is involved in the play of a game, upon the operation of an 
external key-switch, entry of an audit card, or a similar method;
    (2) Display the results of recalled games as originally displayed or 
in text representation, including entertaining

[[Page 185]]

display results implemented in video, rather than electro-mechanical, 
form, if any, so as to enable the tribal gaming regulatory authority or 
operator to clearly identify the game sequences and results that 
occurred;
    (3) Allow the Class II gaming system component providing game 
recall, upon return to normal game play mode, to restore any affected 
display to the positions, forms and values displayed before access to 
the game recall information; and
    (4) Provide the following information for the current and previous 
four games played and shall display:
    (i) Game start time, end time, and date;
    (ii) The total number of credits at the start of play, less the 
purchase or wager amount;
    (iii) The purchase or wager amount;
    (iv) The total number of credits at the end of play; and
    (v) The total number of credits won as a result of the game 
recalled, and the value in dollars and cents for progressive prizes, if 
different.
    (vi) For bingo games and games similar to bingo only, also display:
    (A) The card(s) used by the player;
    (B) The identifier of the bingo game played;
    (C) The numbers or other designations drawn, in the order that they 
were drawn;
    (D) The numbers or other designations and prize patterns covered on 
each card;
    (E) All prizes won by the player, including winning patterns and 
entertaining displays implemented in video, rather than electro-
mechanical form, if any; and
    (F) The unique identifier of the card on which prizes were won;
    (vii) For pull-tab games only, also display:
    (A) The result(s) of each pull-tab, displayed in the same pattern as 
on the tangible pull-tab;
    (B) All prizes won by the player;
    (C) The unique identifier of each pull tab; and
    (D) Any other information necessary to fully reconstruct the current 
and four previous plays.
    (e) Voucher and credit transfer recall. Notwithstanding the 
requirements of any other section in this part, a Class II gaming system 
shall have the capacity to:
    (1) Display the information specified in Sec. 547.11(b)(5)(ii) 
through (vi) for the last five vouchers or coupons printed and the last 
five vouchers or coupons accepted; and
    (2) Display a complete transaction history for the last five 
cashless transactions made and the last five cashless transactions 
accepted.
    (f) Software signature verification. The manufacturer or developer 
of the Class II gaming system must provide to the testing laboratory and 
to the tribal gaming regulatory authority an industry-standard 
methodology, acceptable to the tribal gaming regulatory authority, for 
verifying the Class II gaming system game software. By way of 
illustration, for game software stored on rewritable media, such 
methodologies include signature algorithms and hashing formulas such as 
SHA-1.
    (g) Test, diagnostic, and demonstration modes. If test, diagnostic, 
and/or demonstration modes are provided, the Class II gaming system 
shall, for those components actively involved in the test, diagnostic, 
or demonstration mode:
    (1) Clearly indicate when that component is in the test, diagnostic, 
or demonstration mode;
    (2) Not alter financial data on that component other than temporary 
data;
    (3) Only be available after entering a specific mode;
    (4) Disable credit acceptance and payment unless credit acceptance 
or payment is being tested; and
    (5) Terminate all mode-specific functions upon exiting a mode.
    (h) Multi-game. If multiple games are offered for player selection 
at the player interface, the player interface shall:
    (1) Provide a display of available games;
    (2) Provide the means of selecting among them;
    (3) Display the full amount of the player's credit balance;
    (4) Identify the game selected or being played; and
    (5) Not force the play of a game after its selection.

[[Page 186]]

    (i) Program interruption and resumption. The Class II gaming system 
software shall be designed so that upon resumption following any 
interruption, the system:
    (1) Is able to return to a known state;
    (2) Shall check for any fault condition upon resumption;
    (3) Shall verify the integrity of data stored in critical memory;
    (4) Shall return the purchase or wager amount to the player in 
accordance with the rules of the game; and
    (5) Shall detect any change or corruption in the Class II gaming 
system software.
    (j) Class II gaming system components acting as progressive 
controllers. This paragraph applies to progressive controllers and 
components acting as progressive controllers in Class II gaming systems.
    (1) Modification of progressive parameters shall be conducted in a 
secure manner approved by the tribal gaming regulatory authority. Such 
parameters may include:
    (i) Increment value;
    (ii) Secondary pool increment(s);
    (iii) Reset amount(s);
    (iv) Maximum value(s); and
    (v) Identity of participating player interfaces.
    (2) The Class II gaming system component or other progressive 
controller shall provide a means of creating a progressive balancing 
report for each progressive link it controls. At a minimum, that report 
shall provide balancing of the changes of the progressive amount, 
including progressive prizes won, for all participating player 
interfaces versus current progressive amount(s), plus progressive 
prizes. In addition, the report shall account for, and not be made 
inaccurate by, unusual events such as:
    (i) Class II gaming system critical memory clears;
    (ii) Modification, alteration, or deletion of progressive prizes;
    (iii) Offline equipment; or
    (iv) Multiple site progressive prizes.
    (k) Critical memory.(1) Critical memory may be located anywhere 
within the Class II gaming system. Critical memory is any memory that 
maintains any of the following data:
    (i) Accounting data;
    (ii) Current credits;
    (iii) Configuration data;
    (iv) Last game recall information required by Sec. 547.8(d);
    (v) Game recall information for the current game, if incomplete;
    (vi) Software state (the last normal state software was in before 
interruption);
    (vii) RNG seed(s), if necessary for maintaining integrity;
    (viii) Encryption keys, if necessary for maintaining integrity;
    (ix) Progressive prize parameters and current values;
    (x) The five most recent financial instruments accepted by type, 
excluding coins and tokens;
    (xi) The five most recent financial instruments dispensed by type, 
excluding coins and tokens; and
    (xii) The five most recent cashless transactions paid and the five 
most recent cashless transactions accepted.
    (2) Critical memory shall be maintained using a methodology that 
enables errors to be identified and acted upon. All accounting and 
recall functions shall be verified as necessary to ensure their ongoing 
integrity.
    (3) The validity of affected data stored in critical memory shall be 
checked after each of the following events:
    (i) Every restart;
    (ii) Each attendant paid win;
    (iii) Each attendant paid progressive win;
    (iv) Each sensored door closure; and
    (v) Every reconfiguration, download, or change of prize schedule or 
denomination requiring operator intervention or action.
    (l) Secured access. Class II gaming systems that use a logon or 
other means of secured access shall include a user account lockout after 
a predetermined number of consecutive failed attempts to access system.



Sec. 547.9  What are the minimum technical standards for Class II
gaming system accounting functions?

    This section provides standards for accounting functions used in 
Class II gaming systems.
    (a) Required accounting data.The following minimum accounting data,

[[Page 187]]

however named, shall be maintained by the Class II gaming system.

----------------------------------------------------------------------------------------------------------------
                     Title                                                 Description
----------------------------------------------------------------------------------------------------------------
(1) Amount In..................................  The total value of all financial instruments and cashless
                                                  transactions accepted by the Class II gaming system. Each type
                                                  of financial instrument accepted by the Class II gaming system
                                                  shall be tracked independently per financial instrument
                                                  acceptor, and as required by applicable requirements of any
                                                  Commission and tribal gaming regulatory authority regulations
                                                  governing minimum internal control standards.
(2) Amount Out.................................  The total value of all financial instruments and cashless
                                                  transactions paid by the Class II gaming system, plus the
                                                  total value of attendant pay. Each type of financial
                                                  instrument paid by the Class II Gaming System shall be tracked
                                                  independently per financial instrument dispenser, and as
                                                  required by applicable requirements of any Commission and
                                                  tribal gaming regulatory authority regulations governing
                                                  minimum internal control standards.
----------------------------------------------------------------------------------------------------------------

    (b) Accounting data storage. If the Class II gaming system 
electronically maintains accounting data:
    (1) Accounting data shall be stored with at least eight decimal 
digits.
    (2) Credit balances shall have sufficient digits to accommodate the 
design of the game.
    (3) Accounting data displayed to the player may be incremented or 
decremented using visual effects, but the internal storage of this data 
shall be immediately updated in full.
    (4) Accounting data shall be updated upon the occurrence of the 
relevant accounting event.
    (5) Modifications to accounting data shall be recorded, including 
the identity of the person(s) making the modifications, and be 
reportable by the Class II gaming system.
    (c) Rollover. Accounting data that rolls over to zero shall not 
corrupt data.
    (d) Credit balance display and function.(1) Any credit balance 
maintained at the player interface shall be prominently displayed at all 
times except:
    (i) In audit, configuration, recall and test modes; or
    (ii) Temporarily, during entertaining displays of game results.
    (2) Progressive prizes may be added to the player's credit balance 
provided:
    (i) The player credit balance is maintained in dollars and cents;
    (ii) The progressive accounting data is incremented in number of 
credits; or
    (iii) The prize in dollars and cents is converted to player credits 
or transferred to the player's credit balance in a manner that does not 
mislead the player or cause accounting imbalances.
    (3) If the player credit balance displays in credits, but the actual 
balance includes fractional credits, the Class II gaming system shall 
display the fractional credit when the player credit balance drops below 
one credit.



Sec. 547.10  What are the minimum standards for Class II gaming
system critical events?

    This section provides standards for events such as system critical 
faults, deactivation, door open or other changes of states, and lockup 
within the Class II gaming system.
    (a) Fault events.(1) The following events are to be treated as 
described below:

------------------------------------------------------------------------
                Events                 Definition and action to be taken
------------------------------------------------------------------------
(i) Component fault..................  Reported when a fault on a
                                        component is detected. When
                                        possible, this event message
                                        should indicate what the nature
                                        of the fault is.
(ii) Financial storage component full  Reported when a financial
                                        instrument acceptor or dispenser
                                        includes storage, and it becomes
                                        full. This event message should
                                        indicate what financial storage
                                        component is full.
(iii) Financial output component       Reported when a financial
 empty.                                 instrument dispenser is empty.
                                        The event message should
                                        indicate which financial output
                                        component is affected, and
                                        whether it is empty.
(iv) Financial component fault.......  Reported when an occurrence on a
                                        financial component results in a
                                        known fault state.
(v) Critical memory error............  Some critical memory error has
                                        occurred. When a non-correctable
                                        critical memory error has
                                        occurred, the data on the Class
                                        II gaming system component can
                                        no longer be considered
                                        reliable. Accordingly, any game
                                        play on the affected component
                                        shall cease immediately, and an
                                        appropriate message shall be
                                        displayed, if possible.

[[Page 188]]

 
(vi) Progressive communication fault.  If applicable; when
                                        communications with a
                                        progressive controller component
                                        is in a known fault state.
(vii) Program storage medium fault...  The software has failed its own
                                        internal security check or the
                                        medium itself has some fault.
                                       Any game play on the affected
                                        component shall cease
                                        immediately, and an appropriate
                                        message shall be displayed, if
                                        possible.
------------------------------------------------------------------------

    (2) The occurrence of any event identified in paragraph (a)(1) of 
this section shall be recorded.
    (3) Upon clearing any event identified in paragraph (a)(1) of this 
section, the Class II gaming system shall:
    (i) Record that the fault condition has been cleared;
    (ii) Ensure the integrity of all related accounting data; and
    (iii) In the case of a malfunction, return a player's purchase or 
wager according to the rules of the game.
    (b) Door open/close events. (1) In addition to the requirements of 
paragraph (a)(1) of this section, the Class II gaming system shall 
perform the following for any component affected by any sensored door 
open event:
    (i) Indicate that the state of a sensored door changes from closed 
to open or opened to closed;
    (ii) Disable all financial instrument acceptance, unless a test mode 
is entered;
    (iii) Disable game play on the affected player interface;
    (iv) Disable player inputs on the affected player interface, unless 
test mode is entered; and
    (v) Disable all financial instrument disbursement, unless a test 
mode is entered.
    (2) The Class II gaming system may return the component to a ready 
to play state when all sensored doors are closed.
    (c) Non-fault events. (1) The following non-fault events are to be 
treated as described below, if applicable:

------------------------------------------------------------------------
                Event                  Definition and action to be taken
------------------------------------------------------------------------
(i) Player interface power off during  This condition is reported by the
 play.                                  affected component(s) to
                                        indicate power has been lost
                                        during game play.
(ii) Player interface power on.......  This condition is reported by the
                                        affected component(s) to
                                        indicate it has been turned on.
(iii) Financial instrument storage     This condition is reported when a
 component container/stacker removed.   financial instrument storage
                                        container has been removed. The
                                        event message should indicate
                                        which storage container was
                                        removed.
------------------------------------------------------------------------



Sec. 547.11  What are the minimum technical standards for money 
and credit handling?

    This section provides standards for money and credit handling by a 
Class II gaming system.
    (a) Credit acceptance, generally. (1) Upon any credit acceptance, 
the Class II gaming system shall register the correct number of credits 
on the player's credit balance.
    (2) The Class II gaming system shall reject financial instruments 
deemed invalid.
    (b) Credit redemption, generally. (1) For cashable credits on a 
player interface, players shall be allowed to cash out and/or redeem 
those credits at the player interface except when that player interface 
is:
    (i) Involved in the play of a game;
    (ii) In audit mode, recall mode or any test mode;
    (iii) Detecting any sensored door open condition;
    (iv) Updating the player credit balance or total win accounting 
data; or
    (v) Displaying a fault condition that would prevent cash-out or 
credit redemption. In this case a fault indication shall be displayed.
    (2) For cashable credits not on a player interface, the player shall 
be allowed to cash out and/or redeem those credits at any time.

[[Page 189]]

    (3) A Class II gaming system shall not automatically pay an award 
subject to mandatory tax reporting or withholding.
    (4) Credit redemption by voucher or coupon shall conform to the 
following:
    (i) A Class II gaming system may redeem credits by issuing a voucher 
or coupon when it communicates with a voucher system that validates the 
voucher or coupon.
    (ii) A Class II gaming system that redeems credits by issuing 
vouchers and coupons shall either:
    (A) Maintain an electronic record of all information required by 
paragraphs (b)(5)(ii) through (vi) of this section; or
    (B) Generate two identical copies of each voucher or coupon issued, 
one to be provided to the player and the other to be retained within the 
machine for audit purposes.
    (5) Valid vouchers and coupons shall contain the following:
    (i) Gaming operation name and location;
    (ii) The identification number of the Class II gaming system 
component or the player interface number, as applicable;
    (iii) Date and time of issuance;
    (iv) Alpha and numeric dollar amount;
    (v) A sequence number;
    (vi) A validation number that:
    (A) Is produced by a means specifically designed to prevent 
repetition of validation numbers; and
    (B) Has some form of checkcode or other form of information 
redundancy to prevent prediction of subsequent validation numbers 
without knowledge of the checkcode algorithm and parameters;
    (vii) For machine-readable vouchers and coupons, a bar code or other 
form of machine readable representation of the validation number, which 
shall have enough redundancy and error checking to ensure that 99.9% of 
all misreads are flagged as errors;
    (viii) Transaction type or other method of differentiating voucher 
and coupon types; and
    (ix) Expiration period or date.
    (6) Transfers from an account may not exceed the balance of that 
account.
    (7) For Class II gaming systems not using dollars and cents 
accounting and not having odd cents accounting, the Class II gaming 
system shall reject any transfers from voucher payment systems or 
cashless systems that are not even multiples of the Class II gaming 
system denomination.
    (8) Voucher redemption systems shall include the ability to report 
redemptions per redemption location or user.



Sec. 547.12  What are the minimum technical standards for downloading 
on a Class II gaming system?

    This section provides standards for downloading on a Class II gaming 
system.
    (a) Downloads. (1) Downloads are an acceptable means of transporting 
approved content, including but not limited to software, files, data, 
and prize schedules.
    (2) Downloads of software, games, prize schedules, or other download 
packages shall be conducted only as authorized by the tribal gaming 
regulatory authority.
    (3) Downloads shall use secure methodologies that will deliver the 
download data without alteration or modification, in accordance with 
Sec. 547.15(a).
    (4) Downloads conducted during operational periods shall be 
performed in a manner that will not affect game play.
    (5) Downloads shall not affect the integrity of accounting data.
    (6) The Class II gaming system or the tribal gaming regulatory 
authority shall log each download of any download package. Each log 
record shall contain as a minimum:
    (i) The time and date of the initiation of the download;
    (ii) The time and date of the completion of the download;
    (iii) The Class II gaming system components to which software was 
downloaded;
    (iv) The version(s) of download package and any software downloaded. 
Logging of the unique software signature will satisfy this requirement;
    (v) The outcome of any software verification following the download 
(success or failure); and
    (vi) The name and identification number, or other unique identifier, 
of any individual(s) conducting or scheduling a download.

[[Page 190]]

    (b) Verifying downloads. Following download of any game software, 
the Class II gaming system shall verify the downloaded software using a 
software signature verification method that meets the requirements of 
Sec. 547.8(f). Using any method it deems appropriate, the tribal gaming 
regulatory authority shall confirm the verification.



Sec. 547.13  What are the minimum technical standards for program storage media?

    This section provides minimum standards for removable, (re-
)writable, and nonwritable storage media in Class II gaming systems.
    (a) Removable program storage media. All removable program storage 
media shall maintain an internal checksum or signature of its contents. 
Verification of this checksum or signature is to be performed after 
every restart. If the verification fails, the affected Class II gaming 
system component(s) shall lock up and enter a fault state.
    (b) Nonrewritable program storage media. (1) All EPROMs and 
Programmable Logic Devices (PLDs) that have erasure windows shall be 
fitted with covers over their erasure windows.
    (2) All unused areas of EPROMs shall be written with the inverse of 
the erased state (e.g., zero bits (00 hex) for most EPROMs), random 
data, or repeats of the program data.
    (3) Flash memory storage components intended to have the same 
logical function as ROM, i.e. not to be dynamically written, shall be 
write-protected or otherwise protected from unauthorized modification.
    (4) The write cycle shall be closed or finished for all CD-ROMs such 
that it is not possible to write any further data to the CD.
    (5) Write protected hard disks are permitted if the hardware means 
of enabling the write protect is easily viewable and can be sealed in 
place Write protected hard disks are permitted using software write 
protection verifiable by a testing laboratory.
    (c) Writable and rewritable program storage media. (1) Writable and 
rewritable program storage, such as hard disk drives, Flash memory, 
writable CD-ROMs, and writable DVDs, may be used provided that the 
software stored thereon may be verified using the mechanism provided 
pursuant to Sec. 547.8(f).
    (2) Program storage shall be structured so there is a verifiable 
separation of fixed data (e.g. program, fixed parameters, DLLs) and 
variable data.
    (d) Identification of program storage media. All program storage 
media that is not rewritable in circuit, (e.g. EPROM, CD-ROM) shall be 
uniquely identified, displaying:
    (1) Manufacturer;
    (2) Program identifier;
    (3) Program version number(s); and
    (4) Location information, if critical (e.g. socket position 3 on the 
printed circuit board).



Sec. 547.14  What are the minimum technical standards for electronic
random number generation?

    This section provides minimum standards for electronic RNGs in Class 
II gaming systems.
    (a) Properties.All RNGs shall produce output having the following 
properties:
    (1) Statistical randomness;
    (2) Unpredictability; and
    (3) Non-repeatability.
    (b) Statistical Randomness.(1) Numbers produced by an RNG shall be 
statistically random individually and in the permutations and 
combinations used in the application under the rules of the game. For 
example, if a bingo game with 75 objects with numbers or other 
designations has a progressive winning pattern of the five numbers or 
other designations on the bottom of the card and the winning of this 
prize is defined to be the five numbers or other designations are 
matched in the first five objects drawn, the likelihood of each of the 
75C5 combinations are to be verified to be statistically equal.
    (2) Numbers produced by an RNG shall pass the statistical tests for 
randomness to a 99% confidence level, which may include:
    (i) Chi-square test;
    (ii) Equi-distribution (frequency) test;
    (iii) Gap test;
    (iv) Poker test;
    (v) Coupon collector's test;
    (vi) Permutation test;

[[Page 191]]

    (vii) Run test (patterns of occurrences shall not be recurrent);
    (viii) Spectral test;
    (ix) Serial correlation test potency and degree of serial 
correlation (outcomes shall be independent from the previous game); and
    (x) Test on subsequences.
    (c) Unpredictability.(1) It shall not be feasible to predict future 
outputs of an RNG, even if the algorithm and the past sequence of 
outputs are known.
    (2) Unpredictability shall be ensured by reseeding or by 
continuously cycling the RNG, and by providing a sufficient number of 
RNG states for the applications supported.
    (3) Re-seeding may be used where the re-seeding input is at least as 
statistically random as, and independent of, the output of the RNG being 
re-seeded.
    (d) Non-repeatability. The RNG shall not be initialized to reproduce 
the same output stream that it has produced before, nor shall any two 
instances of an RNG produce the same stream as each other. This property 
shall be ensured by initial seeding that comes from:
    (1) A source of ``true'' randomness, such as a hardware random noise 
generator; or
    (2) A combination of timestamps, parameters unique to a Class II 
gaming system, previous RNG outputs, or other, similar method.
    (e) General requirements. (1) Software that calls an RNG to derive 
game outcome events shall immediately use the output returned in 
accordance with the game rules.
    (2) The use of multiple RNGs is permitted as long as they operate in 
accordance with this section.
    (3) RNG outputs shall not be arbitrarily discarded or selected.
    (4) Where a sequence of outputs is required, the whole of the 
sequence in the order generated shall be used in accordance with the 
game rules.
    (5) The Class II gaming system shall neither adjust the RNG process 
or game outcomes based on the history of prizes obtained in previous 
games nor make any reflexive or secondary decision that affects the 
results shown to the player or game outcome. Nothing in this paragraph 
shall prohibit the use of entertaining displays.
    (f) Scaling algorithms and scaled numbers. An RNG that provides 
output scaled to given ranges shall:
    (1) Be independent and uniform over the range;
    (2) Provide numbers scaled to the ranges required by game rules, and 
notwithstanding the requirements of paragraph (e)(3) of this section, 
may discard numbers that do not map uniformly onto the required range 
but shall use the first number in sequence that does map correctly to 
the range;
    (3) Be capable of producing every possible outcome of a game 
according to its rules; and
    (4) Use an unbiased algorithm. A scaling algorithm is considered to 
be unbiased if the measured bias is no greater than 1 in 100 million.



Sec. 547.15  What are the minimum technical standards for electronic
data communications between system components?

    This section provides minimum standards for electronic data 
communications with gaming equipment or components used with Class II 
gaming systems.
    (a) Sensitive data.Communication of sensitive data shall be secure 
from eavesdropping, access, tampering, intrusion or alteration 
unauthorized by the tribal gaming regulatory authority. Sensitive data 
shall include, but not be limited to:
    (1) RNG seeds and outcomes;
    (2) Encryption keys, where the implementation chosen requires 
transmission of keys;
    (3) PINs;
    (4) Passwords;
    (5) Financial instrument transactions;
    (6) Transfers of funds;
    (7) Player tracking information;
    (8) Download Packages; and
    (9) Any information that affects game outcome.
    (b) Wireless communications. (1) Wireless access points shall not be 
accessible to the general public.
    (2) Open or unsecured wireless communications are prohibited.
    (3) Wireless communications shall be secured using a methodology 
that makes eavesdropping, access, tampering, intrusion or alteration 
impractical. By way of illustration, such

[[Page 192]]

methodologies include encryption, frequency hopping, and code division 
multiplex access (as in cell phone technology).
    (c) Methodologies shall be used that will ensure the reliable 
transfer of data and provide a reasonable ability to detect and act upon 
any corruption of the data.
    (d) Class II gaming systems shall record detectable, unauthorized 
access or intrusion attempts.
    (e) Remote communications shall only be allowed if authorized by the 
tribal gaming regulatory authority. Class II gaming systems shall have 
the ability to enable or disable remote access, and the default state 
shall be set to disabled.
    (f) Failure of data communications shall not affect the integrity of 
critical memory.
    (g) The Class II gaming system shall log the establishment, loss, 
and re-establishment of data communications between sensitive Class II 
gaming system components.



Sec. 547.16  What are the minimum standards for game artwork, glass, and rules?

    This section provides standards for the display of game artwork, the 
displays on belly or top glass, and the display and disclosure of game 
rules, whether in physical or electronic form.
    (a) Rules, instructions, and prize schedules, generally.The 
following shall at all times be displayed or made readily available to 
the player upon request:
    (1) Game name, rules, and options such as the purchase or wager 
amount stated clearly and unambiguously;
    (2) Denomination;
    (3) Instructions for play on, and use of, the player interface, 
including the functions of all buttons; and
    (4) A prize schedule or other explanation, sufficient to allow a 
player to determine the correctness of all prizes awarded, including;
    (i) The range and values obtainable for any variable prize;
    (ii) Whether the value of a prize depends on the purchase or wager 
amount; and
    (iii) The means of division of any pari-mutuel prizes; but
    (iv) For bingo and games similar to bingo, the prize schedule or 
other explanation need not state that subsets of winning patterns are 
not awarded as additional prizes (e.g. five in a row does not also pay 
three in a row or four in a row), unless there are exceptions, which 
shall be clearly stated.
    (b) Disclaimers.The Class II gaming system shall continually 
display:
    (1) ``Malfunctions void all prizes and plays'' or equivalent; and
    (2) ``Actual Prizes Determined by Bingo [or other applicable Class 
II game] Play. Other Displays for Entertainment Only.'' or equivalent.



Sec. 547.17  How does a tribal gaming regulatory authority apply
for a variance from these standards?

    (a) Tribal Gaming Regulatory Authority approval. (1) A tribal gaming 
regulatory authority may approve a variance from the requirements of 
this part if it has determined that the variance will achieve a level of 
security and integrity sufficient to accomplish the purpose of the 
standard it is to replace.
    (2) For each enumerated standard for which the tribal gaming 
regulatory authority approves a variance, it shall submit to the 
Chairman within 30 days, a detailed report, which shall include the 
following:
    (i) An explanation of how the variance achieves a level of security 
and integrity sufficient to accomplish the purpose of the standard it is 
to replace; and
    (ii) The variance as granted and the record on which it is based.
    (3) In the event that the tribal gaming regulatory authority or the 
tribe's government chooses to submit a variance request directly to the 
Chairman for joint government to government review, the tribal gaming 
regulatory authority or tribal government may do so without the approval 
requirement set forth in paragraph (a) (1) of this section.
    (b) Chairman Review.(1) The Chairman may approve or object to a 
variance granted by a tribal gaming regulatory authority.
    (2) Any objection by the Chairman shall be in written form with an 
explanation why the variance as approved

[[Page 193]]

by the tribal gaming regulatory authority does not provide a level of 
security or integrity sufficient to accomplish the purpose of the 
standard it is to replace.
    (3) If the Chairman fails to approve or object in writing within 60 
days after the date of receipt of a complete submission, the variance 
shall be considered approved by the Chairman. The Chairman and the 
tribal gaming regulatory authority may, by agreement, extend this 
deadline an additional 60 days.
    (4) No variance may be implemented until approved by the tribal 
gaming regulatory authority pursuant to paragraph (a)(1) of this section 
or the Chairman has approved pursuant to paragraph (b)(1) of this 
section.
    (c) Commission Review.Should the tribal gaming regulatory authority 
elect to maintain its approval after written objection by the Chairman, 
the tribal gaming regulatory authority shall be entitled to an appeal to 
the full Commission in accordance with the following process:
    (1) Within 60 days of receiving an objection, the tribal gaming 
regulatory authority shall file a written notice of appeal with the 
Commission that may include a request for an oral hearing or it may 
request that the matter be decided upon written submissions.
    (2) Within 10 days after filing a notice of appeal the tribal gaming 
regulatory authority shall file a supplemental statement specifying the 
reasons why the tribal gaming regulatory authority believes the 
Chairman's objection should be reviewed, and shall include supporting 
documentation, if any.
    (3) Failure to file an appeal or submit the supplemental statement 
within the time provided by this section shall result in a waiver of the 
opportunity for an appeal.
    (4) If an oral hearing is requested it shall take place within 30 
days of the notice of appeal and a record shall be made.
    (5) If the tribal gaming regulatory authority requests that the 
appeal be decided on the basis of written submission, the Commission 
shall issue a written decision within 30 days of receiving the 
supplemental statement.
    (6) The Commission shall uphold the objection of the Chairman, only 
if, upon de novo review of the record upon which the Chairman's decision 
is based, the Commission determines that the variance approved by the 
tribal gaming regulatory authority does not achieve a level of security 
and integrity sufficient to accomplish the purpose of the standard it is 
to replace.
    (7) The Commission shall issue a decision within 30 days of the oral 
hearing unless the tribal gaming regulatory authority elects to provide 
the Commission additional time, not to exceed an additional 30 days, to 
issue a decision. In the absence of a decision by the Commission within 
the time provided, the decision of the tribal gaming regulatory 
authority shall be deemed affirmed.
    (8) The Commission's decision shall constitute final agency action.

                        PARTS 548	549 [RESERVED]

[[Page 194]]



   SUBCHAPTER E_GAMING LICENSES AND BACKGROUND INVESTIGATIONS FOR KEY 
               EMPLOYEES AND PRIMARY MANAGEMENT OFFICIALS



                        PARTS 550	555 [RESERVED]



PART 556_BACKGROUND INVESTIGATIONS FOR PRIMARY MANAGEMENT OFFICIALS
AND KEY EMPLOYEES--Table of Contents




Sec.
556.1 Scope of this part.
556.2 Privacy notice.
556.3 Notice regarding false statements.
556.4 Background investigations.
556.5 Report to Commission.

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

    Source: 58 FR 5813, Jan. 22, 1993, unless otherwise noted.



Sec. 556.1  Scope of this part.

    Unless a tribal-state compact allocates sole jurisdiction to an 
entity other than a tribe with respect to background investigations, the 
requirements of this part apply to all class II and class III gaming.

[58 FR 5810, Jan. 22, 1993, as amended at 58 FR 16494, Mar. 29, 1993]



Sec. 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 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.

[74 FR 36938, July 27, 2009]



Sec. 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:

[[Page 195]]

    (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.

[74 FR 36939, July 27, 2009]



Sec. 556.4  Background investigations.

    A tribe shall perform a background investigation for each primary 
management official and for each key employee of a gaming operation.
    (a) A tribe shall request from each primary management official and 
from each key employee all of the following information:
    (1) Full name, other names used (oral or written), social security 
number(s), birth date, place of birth, citizenship, gender, all 
languages (spoken or written);
    (2) Currently and for the previous 5 years: business and employment 
positions held, ownership interests in those businesses, business and 
residence addresses, and drivers license numbers;
    (3) The names and current addresses of at least three personal 
references, including one personal reference who was acquainted with the 
applicant during each period of residence listed under paragraph (a)(2) 
of this section;
    (4) Current business and residence telephone numbers;
    (5) A description of any existing and previous business 
relationships with Indian tribes, including ownership interests in those 
businesses;
    (6) A description of any existing and previous business 
relationships with the gaming industry generally, including ownership 
interests in those businesses;
    (7) The name and address of any licensing or regulatory agency with 
which the person has filed an application for a license or permit 
related to gaming, whether or not such license or permit was granted;
    (8) For each felony for which there is an ongoing prosecution or a 
conviction, the charge, the name and address of the court involved, and 
the date and disposition if any;
    (9) For each misdemeanor conviction or ongoing misdemeanor 
prosecution (excluding minor traffic violations) within 10 years of the 
date of the application, the name and address of the court involved and 
the date and disposition;
    (10) 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 (a)(8) or (a)(9) of this section, the criminal 
charge, the name and address of the court involved and the date and 
disposition;
    (11) The name and address of any licensing or regulatory agency with 
which the person has filed an application for an occupational license or 
permit, whether or not such license or permit was granted;
    (12) A photograph;
    (13) Any other information a tribe deems relevant; and
    (14) Fingerprints consistent with procedures adopted by a tribe 
according to Sec. 522.2(h) of this chapter.
    (b) A tribe shall conduct an investigation sufficient to make a 
determination under Sec. 558.2 of this chapter. In conducting a 
background investigation, a tribe or its agents shall promise to keep 
confidential the identity of each person interviewed in the course of 
the investigation.
    (c) If the Commission has received an investigative report 
concerning an individual who another tribe wishes to employ as a key 
employee or primary management official and if the second tribe has 
access to the investigative materials held by the first tribe, the 
second tribe may update the investigation and update the investigative 
report under Sec. 556.5(b) of this part.



Sec. 556.5  Report to Commission.

    (a) When a tribe employs a primary management official or a key 
employee, the tribe shall forward to the

[[Page 196]]

Commission a completed application containing the information listed 
under Sec. 556.4(a)(1)-(13) of this part.
    (b) Before issuing a license to a primary management official or to 
a key employee, a tribe shall forward to the Commission an investigative 
report on each background investigation. An investigative report shall 
include all of the following:
    (1) Steps taken in conducting a background investigation;
    (2) Results obtained;
    (3) Conclusions reached; and
    (4) The bases for those conclusions.
    (c) When a tribe forwards its report to the Commission, it shall 
include a copy of the eligibility determination made under Sec. 558.2 
of this chapter.
    (d) If a tribe does not license an applicant--
    (1) The tribe shall notify the Commission; and
    (2) May forward copies of its eligibility determination under Sec. 
558.2 and investigative report (if any) under Sec. 556.5(b) to the 
Commission for inclusion in the Indian Gaming Individuals Record System.

                           PART 557 [RESERVED]



PART 558_GAMING LICENSES FOR KEY EMPLOYEES AND PRIMARY MANAGEMENT 
OFFICIALS--Table of Contents




Sec.
558.1 Scope of this part.
558.2 Eligibility determination for granting a gaming license.
558.3 Procedures for forwarding applications and reports for key 
          employees and primary management officials to the Commission.
558.4 Granting a gaming license.
558.5 License suspension.

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

    Source: 58 FR 5814, Jan. 22, 1993, unless otherwise noted.



Sec. 558.1  Scope of this part.

    Unless a tribal-state compact allocates responsibility to an entity 
other than a tribe:
    (a) The licensing authority for class II or class III gaming is a 
tribal authority.
    (b) A tribe shall develop licensing procedures for all employees of 
a gaming operation. The procedures and standards of part 556 of this 
chapter and the procedures and standards of this part apply only to 
primary management officials and key employees.
    (c) For primary management officials or key employees, a tribe shall 
retain applications for employment and reports (if any) of background 
investigations for inspection by the Chairman or his or her designee for 
no less than three (3) years from the date of termination of employment.
    (d) A right to a hearing under Sec. 558.5 of this part shall vest 
only upon receipt of a license granted under an ordinance approved by 
the Chairman.

[58 FR 5814, Jan. 22, 1993, as amended at 58 FR 16494, Mar. 29, 1993]



Sec. 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.

[74 FR 36939, July 27, 2009]



Sec. 558.3  Procedures for forwarding applications and reports for 
key employees and primary management officials to the Commission.

    (a) When a key employee or a primary management official begins work 
at a gaming operation, a tribe shall:

[[Page 197]]

    (1) Forward to the Commission a completed application for employment 
that contains the notices and information listed in Sec. Sec. 556.2, 
556.3 and 556.4 of this chapter; and
    (2) Conduct a background investigation under part 556 of this 
chapter to determine the eligibility of the key employee or primary 
management official for continued employment in a gaming operation.
    (b) Upon completion of a background investigation and a 
determination of eligibility for employment in a gaming operation under 
paragraph (a)(2) of this section, a tribe shall forward a report under 
Sec. 556.5(b) of this chapter to the Commission within 60 days after an 
employee begins work or within 60 days of the Chairman's approval of an 
ordinance under part 523. A gaming operation shall not employ a key 
employee or primary management official who does not have a license 
after 90 days.
    (c) During a 30-day period beginning when the Commission receives a 
report submitted under paragraph (b) of this section, the Chairman may 
request additional information from a tribe concerning a key employee or 
a primary management official who is the subject of a report. Such a 
request shall suspend the 30-day period until the Chairman receives the 
additional information.



Sec. 558.4  Granting a gaming license.

    (a) If, within the 30-day period described in Sec. 558.3(c) of this 
part, the Commission notifies a tribe that it has no objection to the 
issuance of a license pursuant to a license application filed by a key 
employee or a primary management official for whom the tribe has 
provided an application and investigative report to the Commission 
pursuant to Sec. 558.3 (a) and (b) of this part, the tribe may go 
forward and issue a license to such applicant.
    (b) If, within the 30-day period described in Sec. 558.3(c) of this 
part, the Commission provides the tribe with a statement itemizing 
objections to the issuance of a license to a key employee or to a 
primary management official for whom the tribe has provided an 
application and investigative report to the Commission pursuant to Sec. 
558.3 (a) and (b) of this part, the tribe shall reconsider the 
application, taking into account the objections itemized by the 
Commission. The tribe shall make the final decision whether to issue a 
license to such applicant.



Sec. 558.5  License suspension.

    (a) If, after the issuance of a gaming license, the Commission 
receives reliable information indicating that a key employee or a 
primary management official is not eligible for employment under Sec. 
558.2 of this part, the Commission shall notify the tribe that issued a 
gaming license.
    (b) Upon receipt of such notification under paragraph (a) of this 
section, a tribe shall suspend such license and shall notify in writing 
the licensee of the suspension and the proposed revocation.
    (c) A tribe shall notify the licensee of a time and a place for a 
hearing on the proposed revocation of a license.
    (d) After a revocation hearing, a tribe shall decide to revoke or to 
reinstate a gaming license. A tribe shall notify the Commission of its 
decision.



PART 559_FACILITY LICENSE NOTIFICATIONS, RENEWALS, AND SUBMISSIONS--
Table of Contents




Sec.
559.1 What is the scope and purpose of this part?
559.2 When must a tribe notify the Chairman that it is considering 
          issuing a new facility license?
559.3 How often must a facility license be renewed?
559.4 When must a tribe submit a copy of a newly issued or renewed 
          facility license to the Chairman?
559.5 What must a tribe submit to the Chairman with the copy of each 
          facility license that has been issued or renewed?
559.6 Does a tribe need to notify the Chairman if a facility license is 
          terminated or not renewed or if a gaming place, facility, or 
          location closes or reopens?
559.7 May the Chairman request Indian lands or environmental and public 
          health and safety documentation regarding any gaming place, 
          facility, or location where gaming will occur?
559.8 May a tribe submit documents required by this part electronically?

    Authority: 25 U.S.C. 2701, 2702(3), 2703(4), 2705, 2706, 2710 and 
2719.

[[Page 198]]


    Source: 73 FR 6029, Feb. 1, 2008, unless otherwise noted.



Sec. 559.1  What is the scope and purpose of this part?

    (a) The purpose of this part is to ensure that each place, facility, 
or location where class II or III gaming will occur is located on Indian 
lands eligible for gaming and that the construction and maintenance of 
the gaming facility, and the operation of that gaming is conducted in a 
manner which adequately protects the environment and the public health 
and safety pursuant to the Indian Gaming Regulatory Act.
    (b) Each gaming place, facility, or location conducting class II or 
III gaming pursuant to the Indian Gaming Regulatory Act or on which a 
tribe intends to conduct class II or III gaming pursuant to the Indian 
Gaming Regulatory Act is subject to the requirements of this part.



Sec. 559.2  When must a tribe notify the Chairman that it is considering
issuing a new facility license?

    (a) A tribe shall submit to the Chairman a notice that a facility 
license is under consideration for issuance at least 120 days before 
opening any new place, facility, or location on Indian lands where class 
II or III gaming will occur. The notice shall contain the following:
    (1) The name and address of the property;
    (2) A legal description of the property;
    (3) The tract number for the property as assigned by the Bureau of 
Indian Affairs, Land Title and Records Offices, if any;
    (4) If not maintained by the Bureau of Indian Affairs, Department of 
the Interior, a copy of the trust or other deed(s) to the property or an 
explanation as to why such documentation does not exist; and
    (5) If not maintained by the Bureau of Indian Affairs, Department of 
the Interior, documentation of the property's ownership.
    (b) A tribe does not need to submit to the Chairman a notice that a 
facility license is under consideration for issuance for occasional 
charitable events lasting not more than a week.



Sec. 559.3  How often must a facility license be renewed?

    At least once every three years after the initial issuance of a 
facility license, a tribe shall renew or reissue a separate facility 
license to each existing place, facility or location on Indian lands 
where a tribe elects to allow gaming.



Sec. 559.4  When must a tribe submit a copy of a newly issued or renewed
facility license to the Chairman?

    A tribe must submit to the Chairman a copy of each newly issued or 
renewed facility license within 30 days of issuance.



Sec. 559.5  What must a tribe submit to the Chairman with the copy of
each facility license that has been issued or renewed?

    (a) A tribe shall submit to the Chairman with each facility license 
an attestation certifying that by issuing the facility license:
    (1) The tribe has identified and enforces the environment and public 
health and safety laws, resolutions, codes, policies, standards or 
procedures applicable to its gaming operation;
    (2) The tribe is in compliance with those laws, resolutions, codes, 
policies, standards, or procedures, or, if not in compliance with any or 
all of the same, the tribe will identify those with which it is not in 
compliance, and will adopt and submit its written plan for the specific 
action it will take, within a period not to exceed six months, required 
for compliance. At the successful completion of such written plan, or at 
the expiration of the period allowed for its completion, the tribe shall 
report the status thereof to the Commission. In the event that the tribe 
estimates that action for compliance will exceed six months, the 
Chairman must concur in such an extension of the time period, otherwise 
the tribe will be deemed noncompliant. The Chairman will take into 
consideration the consequences on the environment and the public health 
and safety, as well as mitigating measures the tribe may provide in the 
interim, in his or her consideration of requests for such an extension 
of the time period.

[[Page 199]]

    (3) The tribe is ensuring that the construction and maintenance of 
the gaming facility, and the operation of that gaming is conducted in a 
manner which adequately protects the environment and the public health 
and safety.
    (b) A document listing all laws, resolutions, codes, policies, 
standards or procedures identified by the tribe as applicable to its 
gaming facilities, other than Federal laws, in the following areas:
    (1) Emergency preparedness, including but not limited to fire 
suppression, law enforcement, and security;
    (2) Food and potable water;
    (3) Construction and maintenance;
    (4) Hazardous materials;
    (5) Sanitation (both solid waste and wastewater); and
    (6) Other environmental or public health and safety laws, 
resolutions, codes, policies, standards or procedures adopted by the 
tribe in light of climate, geography, and other local conditions and 
applicable to its gaming places, facilities, or locations.
    (c) After the first submission of a document under paragraph (b) of 
this section, upon reissuing a license to an existing gaming place, 
facility, or location, and in lieu of complying with paragraph (b) of 
this section, a tribe may certify to the Chairman that it has not 
substantially modified its laws protecting the environment and public 
health and safety.



Sec. 559.6  Does a tribe need to notify the Chairman if a facility 
license is terminated or not renewed or if a gaming place, facility,

or location closes or reopens?

    A tribe must notify the Chairman within 30 days if a facility 
license is terminated or not renewed or if a gaming place, facility, or 
location closes or reopens.



Sec. 559.7  May the Chairman request Indian lands or environmental 
and public health and safety documentation regarding any gaming 

place, facility, or location where gaming will occur?

    A tribe shall provide Indian lands or environmental and public 
health and safety documentation that the Chairman may in his or her 
discretion request.



Sec. 559.8  May a tribe submit documents required by this 
part electronically?

    Yes. Tribes wishing to submit documents electronically should 
contact the Commission for guidance on acceptable document formats and 
means of transmission.



                         SUBCHAPTER F [RESERVED]



                        PARTS 560	569 [RESERVED]

[[Page 200]]



           SUBCHAPTER G_COMPLIANCE AND ENFORCEMENT PROVISIONS



                           PART 570 [RESERVED]



PART 571_MONITORING AND INVESTIGATIONS--Table of Contents




                            Subpart A_General

Sec.
571.1 Scope.
571.2 Definitions.
571.3 Confidentiality.

                Subpart B_Inspection of Books and Records

571.5 Entry of premises.
571.6 Access to papers, books, and records.
571.7 Maintenance and preservation of papers and records.

                   Subpart C_Subpoenas and Depositions

571.8 Subpoena of witnesses.
571.9 Subpoena of documents and other items.
571.10 Geographical location.
571.11 Depositions.

                            Subpart D_Audits

571.12 Audit standards.
571.13 Copies of audit reports.
571.14 Relationship of financial statements to fee assessment reports.

    Authority: 25 U.S.C. 2706(b), 2710(b)(2)(C), 2715, 2716.

    Source: 58 FR 5842, Jan. 22, 1993, unless otherwise noted.



                            Subpart A_General



Sec. 571.1  Scope.

    This part sets forth general procedures governing Commission 
monitoring and investigations of Indian gaming operations.



Sec. 571.2  Definitions.

    As used in this subchapter, the following terms have the specified 
meanings:
    Commission's authorized representative means any persons who is 
authorized to act on behalf of the Commission for the purpose of 
implementing the Act and this chapter.
    Day means calendar day unless otherwise specified.
    Hearing means that part of a proceeding that involves the submission 
of evidence to the presiding official, either by oral presentation or 
written submission.
    Party means the Chairman, the respondent(s), and any other person 
named or admitted as a party to a proceeding.
    Person means an individual, Indian tribe, corporation, partnership, 
or other organization or entity.
    Presiding official means a person designated by the Commission who 
is qualified to conduct an administrative hearing and authorized to 
administer oaths, and has had no previous role in the prosecution of a 
matter over which he or she will preside.
    Respondent means a person against whom the Commission is seeking 
civil penalties under section 2713 of the Act.
    Violation means a violation of applicable federal or tribal 
statutes, regulations, ordinances, or resolutions.

[58 FR 5842, Jan. 22, 1993; 58 FR 8449, Feb. 12, 1993, as amended at 58 
FR 16494, Mar. 29, 1993]



Sec. 571.3  Confidentiality.

    Unless confidentiality is waived, the Commission shall treat as 
confidential any and all information received under the Act that falls 
within the exemptions of 5 U.S.C. 552(b) (4) and (7); except that when 
such information indicates a violation of Federal, State, or tribal 
statutes, regulations, ordinances, or resolutions, the Commission shall 
provide such information to appropriate law enforcement officials. The 
confidentiality of documents submitted in a multiple-party proceeding 
under part 577 of this chapter is addressed in Sec. 577.8 of this 
chapter.



                Subpart B_Inspection of Books and Records



Sec. 571.5  Entry of premises.

    (a) The Commission's authorized representative may enter the 
premises of an Indian gaming operation to inspect,

[[Page 201]]

examine, photocopy, and audit all papers, books, and records (including 
computer records) concerning:
    (1) Gross revenues of class II gaming conducted on Indian lands; and
    (2) Any other matters necessary to carry out the duties of the 
Commission under the Act and this chapter.
    (b) The Commission's authorized representative shall present 
official identification upon entering a gaming operation for the purpose 
of enforcing the Act.



Sec. 571.6  Access to papers, books, and records.

    (a) Once the Commission's authorized representative presents proper 
identification, a gaming operation shall provide the authorized 
representative with access to all papers, books, and records (including 
computer records) concerning class II gaming or any other matters for 
which the Commission requires such access to carry out its duties under 
the Act.
    (b) If such papers, books, and records are not available at the 
location of the gaming operation, the gaming operation shall make them 
available at a time and place convenient to the Commission's authorized 
representative.
    (c) Upon the request of the Commission's authorized representative, 
the gaming operation shall photocopy, or allow the Commission's 
authorized representative to photocopy, any papers, books, and records 
that are requested by the Commission's authorized representative.



Sec. 571.7  Maintenance and preservation of papers and records.

    (a) A gaming operation shall keep permanent books of account or 
records, including inventory records of gaming supplies, sufficient to 
establish the amount of gross and net income, deductions and expenses, 
receipts and disbursements, and other information required in any 
financial statement, report, or other accounting prepared pursuant to 
the Act or this chapter.
    (b) The Commission may require a gaming operation to submit 
statements, reports, or accountings, or keep specific records, that will 
enable the Commission to determine whether or not such operation:
    (1) Is liable for fees payable to the Commission and in what amount; 
and
    (2) Has properly and completely accounted for all transactions and 
other matters monitored by the Commission.
    (c) Books or records required by this section shall be kept at all 
times available for inspection by the Commission's authorized 
representatives. They shall be retained for no less than five (5) years.
    (d) A gaming operation shall maintain copies of all enforcement 
actions that a tribe or a state has taken against the operation, noting 
the final disposition of each case.



                   Subpart C_Subpoenas and Depositions



Sec. 571.8  Subpoena of witnesses.

    By majority vote the Commission may authorize the Chairman to 
require by subpoena the attendance and testimony of witnesses relating 
to any matter under consideration or investigation by the Commission. 
Witnesses so summoned shall be paid the same fees and mileage that are 
paid to witnesses in the courts of the United States.



Sec. 571.9  Subpoena of documents and other items.

    By majority vote the Commission may authorize the Chairman to 
require by subpoena the production of certain documents and other items 
that are material and relevant to facts in issue in any matter under 
consideration or investigation by the Commission.



Sec. 571.10  Geographical location.

    The attendance of witnesses and the production of books, papers, and 
documents, may be required from any place in the United States at any 
designated place of hearing.



Sec. 571.11  Depositions.

    (a) Any party wishing to depose a witness shall file a request with 
the Commission or, if a presiding official has been designated under 
part 577 of this chapter, to the presiding official. Such a request 
shall not be granted except for good cause shown. A Commissioner or a 
presiding official may order testimony to be taken by deposition in

[[Page 202]]

any proceeding or investigation pending before the Commission at any 
stage of such proceeding or investigation, except that Commission 
personnel may not be questioned by deposition for the purposes of 
discovery, but may be questioned by written interrogatories as 
authorized by the Commission or a presiding official. Commission records 
are not subject to discovery under this chapter. The inspection of 
Commission records is governed by Sec. 571.3 of this part and the 
Freedom of Information Act, 5 U.S.C. 552. Depositions under this section 
may be taken before any person designated by the Commission or a 
presiding official, and who has the power to administer oaths.
    (b) A party or a Commissioner (or a person designated by a 
Commissioner under paragraph (a) of this section) proposing to take a 
deposition under this section shall give reasonable notice to the 
Commission and the parties, if any, of the taking of a deposition. 
Notice shall include the name of the witness and the time and place of 
the deposition.
    (c) Every person deposed under this part shall be notified of his or 
her right to be represented by counsel during the deposition, and shall 
be required to swear or affirm to testify to the whole truth. Testimony 
shall be reduced to writing and subscribed by the deponent. Depositions 
shall be filed promptly with the Commission or, if a presiding official 
has been designated, with the presiding official.
    (d) Witnesses whose depositions are taken as authorized in this 
section, and the persons taking the same, shall be severally entitled to 
the same fees as are paid for like services in the courts of the United 
States.



                            Subpart D_Audits



Sec. 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 Sec. 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 
Sec. 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

[[Page 203]]

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 
Sec. 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.

[74 FR 36939, July 27, 2009]



Sec. 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 Sec. 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 Sec. 
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 Sec. 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 Sec. 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.

[74 FR 36939, July 27, 2009]



Sec. 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.

[74 FR 36940, July 27, 2009]

                           PART 572 [RESERVED]



PART 573_ENFORCEMENT--Table of Contents




Sec.
573.1 Scope.
573.3 Notice of violation.
573.6 Order of temporary closure.

    Authority: 25 U.S.C. 2705(a)(1), 2706, 2713, 2715.

    Source: 58 FR 5844, Jan. 22, 1993, unless otherwise noted.



Sec. 573.1  Scope.

    This part sets forth general rules governing the Commission's 
enforcement of the Act, this chapter, and tribal ordinances and 
resolutions approved by the Chairman under part 522 or 523 of this 
chapter. Civil fines in connection with notice of violation issued under 
this part are addressed in part 575 of this chapter.

[[Page 204]]



Sec. 573.3  Notice of violation.

    (a) The Chairman may issue a notice of violation to any person for 
violations of any provision of the Act or this chapter, or of any tribal 
ordinance or resolution approved by the Chairman under part 522 or 523 
of this chapter.
    (b) A notice of violation shall contain:
    (1) A citation to the federal or tribal requirement that has been or 
is being violated;
    (2) A description of the circumstances surrounding the violation, 
set forth in common and concise language;
    (3) Measures required to correct the violation;
    (4) A reasonable time for correction, if the respondent cannot take 
measures to correct the violation immediately; and
    (5) Notice of rights of appeal.



Sec. 573.6  Order of temporary closure.

    (a) When an order of temporary closure may issue. Simultaneously 
with or subsequently to the issuance of a notice of violation under 
Sec. 573.3 of this part, the Chairman may issue an order of temporary 
closure of all or part of an Indian gaming operation if one or more of 
the following substantial violations are present:
    (1) The respondent fails to correct violations within:
    (i) The time permitted in a notice of violation; or
    (ii) A reasonable time after a tribe provides notice of a violation.
    (2) A gaming operation fails to pay the annual fee required by 25 
CFR part 514.
    (3) A gaming operation operates for business without a tribal 
ordinance or resolution that the Chairman has approved under part 522 or 
523 of this chapter.
    (4) A gaming operation operates for business without a license from 
a tribe, in violation of part 522 or part 559 of this chapter.
    (5) A gaming operation operates for business without either 
background investigations having been completed for, or tribal licenses 
granted to, all key employees and primary management officials, as 
provided in Sec. 558.3(b) of this chapter.
    (6) There is clear and convincing evidence that a gaming operation 
defrauds a tribe or a customer.
    (7) A management contractor operates for business without a contract 
that the Chairman has approved under part 533 of this chapter.
    (8) Any person knowingly submits false or misleading information to 
the Commission or a tribe in response to any provision of the Act, this 
chapter, or a tribal ordinance or resolution that the Chairman has 
approved under part 522 or 523 of this chapter.
    (9) A gaming operation refuses to allow an authorized representative 
of the Commission or an authorized tribal official to enter or inspect a 
gaming operation, in violation of Sec. 571.5 or Sec. 571.6 of this 
chapter, or of a tribal ordinance or resolution approved by the Chairman 
under part 522 or 523 of this chapter.
    (10) A tribe fails to suspend a license upon notification by the 
Commission that a primary management official or key employee does not 
meet the standards for employment contained in Sec. 558.2 of this 
chapter, in violation of Sec. 558.5 of this chapter.
    (11) A gaming operation operates class III games in the absence of a 
tribal-state compact that is in effect, in violation of 25 U.S.C. 
2710(d).
    (12) A gaming operation's facility is constructed, maintained, or 
operated in a manner that threatens the environment or the public health 
and safety, in violation of a tribal ordinance or resolution approved by 
the Chairman under part 522 or 523 of this chapter.
    (13) A gaming facility operates on Indian lands not eligible for 
gaming under the Indian Gaming Regulatory Act.
    (b) Order effective upon service. The operator of an Indian gaming 
operation shall close the operation upon service of an order of 
temporary closure, unless the order provides otherwise.
    (c) Informal expedited review. Within seven (7) days after service 
of an order of temporary closure, the respondent may request, orally or 
in writing, informal expedited review by the Chairman.

[[Page 205]]

    (1) The Chairman shall complete the expedited review provided for by 
this paragraph within two (2) days after his or her receipt of a timely 
request.
    (2) The Chairman shall, within two (2) days after the expedited 
review provided for by this paragraph:
    (i) Decide whether to continue an order of temporary closure; and
    (ii) Provide the respondent with an explanation of the basis for the 
decision.
    (3) Whether or not a respondent seeks informal expedited review 
under this paragraph, within thirty (30) days after the Chairman serves 
an order of temporary closure the respondent may appeal the order to the 
Commission under part 577 of this chapter. Otherwise, the order shall 
remain in effect unless rescinded by the Chairman for good cause.

[58 FR 5844, Jan. 22, 1993, as amended at 73 FR 6030, Feb. 1, 2008; 74 
FR 36940, July 27, 2009]

                           PART 574 [RESERVED]



PART 575_CIVIL FINES--Table of Contents




Sec.
575.1 Scope.
575.3 How assessments are made.
575.4 When civil fine will be assessed.
575.5 Procedures for assessment of civil fines.
575.6 Settlement, reduction, or waiver of civil fine.
575.9 Final assessment.

    Authority: 25 U.S.C. 2705(a), 2706, 2713, 2715.

    Source: 58 FR 5844, Jan. 22, 1993, unless otherwise noted.



Sec. 575.1  Scope.

    This part addresses the assessment of civil fines under section 
2713(a) of the Act with respect to notices of violation issued under 
Sec. 573.3 of this chapter.



Sec. 575.3  How assessments are made.

    The Chairman shall review each notice of violation and order of 
temporary closure in accordance with Sec. 575.4 of this part to 
determine whether a civil fine will be assessed, the amount of the fine, 
and, in the case of continuing violations, whether each daily illegal 
act or omission will be deemed a separate violation for purposes of the 
total civil fine assessed.



Sec. 575.4  When civil fine will be assessed.

    The Chairman may assess a civil fine, not to exceed $25,000 per 
violation, against a tribe, management contractor, or individual 
operating Indian gaming for each notice of violation issued under Sec. 
573.3 of this chapter after considering the following factors:
    (a) Economic benefit of noncompliance. The Chairman shall consider 
the extent to which the respondent obtained an economic benefit from the 
noncompliance that gave rise to a notice of violation, as well as the 
likelihood of escaping detection.
    (1) The Chairman may consider the documented benefits derived from 
the noncompliance, or may rely on reasonable assumptions regarding such 
benefits.
    (2) If noncompliance continues for more than one day, the Chairman 
may treat each daily illegal act or omission as a separate violation.
    (b) Seriousness of the violation. The Chairman may adjust the amount 
of a civil fine to reflect the seriousness of the violation. In doing 
so, the Chairman shall consider the extent to which the violation 
threatens the integrity of Indian gaming.
    (c) History of violations. The Chairman may adjust a civil fine by 
an amount that reflects the respondent's history of violations over the 
preceding five (5) years.
    (1) A violation cited by the Chairman shall not be considered unless 
the associated notice of violation is the subject of a final order of 
the Commission and has not been vacated; and
    (2) Each violation shall be considered whether or not it led to a 
civil fine.
    (d) Negligence or willfulness. The Chairman may adjust the amount of 
a civil fine based on the degree of fault of the respondent in causing 
or failing to correct the violation, either through act or omission.
    (e) Good faith. The Chairman may reduce the amount of a civil fine 
based on the degree of good faith of the respondent in attempting to 
achieve rapid compliance after notification of the violation.

[[Page 206]]



Sec. 575.5  Procedures for assessment of civil fines.

    (a) Within 15 days after service of a notice of violation, or such 
longer period as the Chairman may grant for good cause, the respondent 
may submit written information about the violation to the Chairman. The 
Chairman shall consider any information so submitted in determining the 
facts surrounding the violation and the amount of the civil fine.
    (b) The Chairman shall serve a copy of the proposed assessment on 
the respondent within thirty (30) days after the notice of violation was 
issued, when practicable.
    (c) The Chairman may review and reassess any civil fine if necessary 
to consider facts that were not reasonably available on the date of 
issuance of the proposed assessment.



Sec. 575.6  Settlement, reduction, or waiver of civil fine.

    (a) Reduction or waiver. (1) Upon written request of a respondent 
received at any time prior to the filing of a notice of appeal under 
part 577 of this chapter, the Chairman may reduce or waive a civil fine 
if he or she determines that, taking into account exceptional factors 
present in a particular case, the fine is demonstrably unjust.
    (2) All petitions for reduction or waiver shall contain:
    (i) A detailed description of the violation that is the subject of 
the fine;
    (ii) A detailed recitation of the facts that support a finding that 
the fine is demonstrably unjust, accompanied by underlying 
documentation, if any; and
    (iii) A declaration, signed and dated by the respondent and his or 
her counsel or representative, if any, as follows: Under penalty of 
perjury, I declare that, to the best of my knowledge and belief, the 
representations made in this petition are true and correct.
    (3) The Chairman shall serve the respondent with written notice of 
his or her determination under paragraph (a) of this section, including 
a statement of the grounds for the Chairman's decision.
    (b) Settlement. At any time prior to the filing of a notice of 
appeal under part 577 of this chapter, the Chairman and the respondent 
may agree to settle an enforcement action, including the amount of the 
associated civil fine. In the event a settlement is reached, a 
settlement agreement shall be prepared and executed by the Chairman and 
the respondent. If a settlement agreement is executed, the respondent 
shall be deemed to have waived all rights to further review of the 
violation or civil fine in question, except as otherwise provided 
expressly in the settlement agreement. In the absence of a settlement of 
the issues under this paragraph, the respondent may contest the assessed 
civil fine before the Commission in accordance with part 577 of this 
chapter.



Sec. 575.9  Final assessment.

    (a) If the respondent fails to request a hearing as provided in part 
577 of this chapter, the proposed civil fine assessment shall become a 
final order of the Commission.
    (b) Civil fines assessed under this part shall be paid by the person 
assessed and shall not be treated as an operating expense of the 
operation.
    (c) The Commission shall transfer civil fines paid under this 
subchapter to the U.S. Treasury.

[58 FR 5844, Jan. 22, 1993, as amended at 58 FR 16495, Mar. 29, 1993]

                           PART 576 [RESERVED]



PART 577_APPEALS BEFORE THE COMMISSION--Table of Contents




Sec.
577.1 Scope.
577.3 Request for hearing.
577.4 Hearing deadline.
577.6 Service.
577.7 Conduct of hearing.
577.8 Request to limit disclosure of confidential information.
577.9 Consent order or settlement.
577.12 Intervention.
577.13 Transcript of hearing.
577.14 Recommended decision of presiding official.
577.15 Review by Commission.

    Authority: 25 U.S.C. 2706, 2713, 2715.

    Source: 58 FR 5845, Jan. 22, 1993, unless otherwise noted.

[[Page 207]]



Sec. 577.1  Scope.

    (a) This part provides procedures for appeals to the Commission 
regarding:
    (1) A violation alleged in a notice of violation;
    (2) Civil fines assessed by the Chairman;
    (3) Whether an order of temporary closure issued by the Chairman 
should be made permanent or be dissolved; and
    (4) The Chairman's decision to void or modify a management contract 
under part 535 of this chapter subsequent to initial approval.
    (b) Appeals from determinations of the Chairman under 25 U.S.C. 2710 
and 2711 (regarding management contracts) and 2710 (regarding tribal 
gaming ordinances) are addressed in parts 539 and 524 of this chapter 
respectively.



Sec. 577.3  Request for hearing.

    (a) A respondent may request a hearing to contest the matters listed 
in Sec. 577.1(a)(1)-(4) by submitting a notice of appeal to the 
Commission within thirty (30) days after service of:
    (1) A notice of violation;
    (2) A proposed civil fine assessment or reassessment;
    (3) An order of temporary closure; or
    (4) An order voiding or modifying a management contract subsequent 
to initial approval.
    (b) A notice of appeal shall reference the notice or order from 
which the appeal is taken.
    (c) Within ten (10) days after filing a notice of appeal, the 
respondent shall file with the Commission a supplemental statement that 
states with particularity the relief desired and the grounds therefor 
and that includes, when available, supporting evidence in the form of 
affidavits. If the respondent wishes to present oral testimony or 
witnesses at the hearing, the respondent shall include a request to do 
so with the supplemental statement. The request to present oral 
testimony or witnesses shall specify the names of proposed witnesses and 
the general nature of their expected testimony, and whether a closed 
hearing is requested and why. The respondent may waive in writing his or 
her right to an oral hearing and instead elect to have the matter 
determined by the Commission solely on the basis of written submissions.



Sec. 577.4  Hearing deadline.

    (a) The Commission shall designate a presiding official who shall 
commence a hearing within 30 days after the Commission receives a timely 
notice of appeal from the respondent. At the request of the respondent, 
the presiding official may order the hearing to commence at a time more 
than 30 days after the respondent files a notice of appeal. The 
Commission shall transmit the administrative record of the case to the 
presiding official upon designation.
    (b) If the subject of an appeal is whether an order of temporary 
closure should be made permanent or be dissolved, the hearing shall be 
concluded within 30 days after the Commission receives a timely notice 
of appeal, unless the respondent waives this requirement. 
Notwithstanding any other provision of this part, the presiding official 
shall conduct such a hearing in a manner that will enable him or her to 
conclude the hearing within the period required by this paragraph, while 
ensuring due process to all parties.



Sec. 577.6  Service.

    (a) A respondent who initiates an appeal under this part shall serve 
copies of the initiating documents on the Commission at the address 
indicated in the notice or order that is the subject of the appeal. All 
filings shall be made with the Commission until a presiding official is 
designated and the parties are so notified, after which all filings 
shall be made with the presiding official. Any party or other person who 
subsequently files any other document with the Commission or the 
presiding officer shall simultaneously serve copies of that document on 
any other parties to the proceeding, except to that extent Sec. 577.8 
of this part may govern the disclosure of confidential information 
contained in a filing.
    (b) Copies of documents by which a proceeding is initiated shall be 
served on all known parties personally, by facsimile, or by registered 
or certified

[[Page 208]]

mail, return receipt requested. All subsequent documents shall be served 
personally, by facsimile, or by first class mail.
    (c) Service of copies of all documents is complete at the time of 
personal service or, if service is made by mail or facsimile, upon 
transmittal.
    (d) Whenever a representative (including an attorney) has entered an 
appearance for a party in a proceeding initiated under this part, 
service thereafter shall be made upon the representative.
    (e) In computing any period of time prescribed for filing and 
serving a document, the first day of the period so computed shall not be 
included. The last day shall be included unless it is a Saturday, 
Sunday, or federal legal holiday, in which case the period shall run 
until the end of the next business day.
    (f)(1) The presiding official may extend the time for filing or 
serving any document except a notice of appeal.
    (2) A request for an extension of time must be filed within the time 
originally allowed for filing.
    (3) For good cause the presiding official may grant an extension of 
time on his or her own initiative.



Sec. 577.7  Conduct of hearing.

    (a) Once designated by the Commission, the presiding official shall 
set the case for hearing. The respondent may appear at the hearing 
personally, through counsel, or personally with counsel. The respondent 
shall have the right to introduce relevant written materials and to 
present an oral argument. At the discretion of the presiding official, a 
hearing under this section may include an opportunity to submit oral and 
documentary evidence and cross-examine witnesses.
    (b) When holding a hearing under this part, the presiding official 
shall:
    (1) Administer oaths and affirmations;
    (2) Issue subpoenas authorized by the Commission;
    (3) Rule on offers of proof and receive relevant evidence;
    (4) Authorize exchanges of information (including depositions and 
interrogatories in accordance with 25 CFR part 571, subpart C) among the 
parties when to do so would expedite the proceeding;
    (5) Regulate the course of the hearing;
    (6) When appropriate, hold conferences for the settlement or 
simplification of the issues by consent of the parties;
    (7) At any conference held pursuant to paragraph (b)(6) of this 
section, require the attendance of at least one representative of each 
party who has authority to negotiate the resolution of issues in 
controversy;
    (8) Dispose of procedural requests or similar matters;
    (9) Recommend decisions in accordance with Sec. 577.14 of this 
part; and
    (10) Take other actions authorized by the Commission consistent with 
this part.
    (c) The presiding official may order the record to be kept open for 
a reasonable period following the hearing (normally five days), during 
which time the parties may make additional submissions to the record. 
Thereafter, the record shall be closed and the hearing shall be deemed 
concluded. Within 30 days after the record closes, the presiding 
official shall issue a recommended decision in accordance with Sec. 
577.14 of this part.



Sec. 577.8  Request to limit disclosure of confidential information.

    (a) If any person submitting a document in a proceeding that 
involves more than two parties claims that some or all of the 
information contained in that document is exempt from the mandatory 
public disclosure requirements under the Freedom of Information Act (5 
U.S.C. 552), is information referred to in 18 U.S.C. 1905 (disclosure of 
confidential information), or is otherwise exempt by law from public 
disclosure, the person shall:
    (1) Indicate that the document in its entirety is exempt from 
disclosure or identify and segregate information within the document 
that is exempt from disclosure; and
    (2) Request that the presiding official not disclose such 
information to the parties to the proceeding (other than the Chairman, 
whose actions regarding

[[Page 209]]

the disclosure of confidential information are governed by Sec. 571.3 
of this chapter) except pursuant to paragraph (b) of this section, and 
shall serve the request upon the parties to the proceeding. The request 
to the presiding official shall include:
    (i) A copy of the document, group of documents, or segregable 
portions of the documents marked ``Confidential Treatment Requested''; 
and
    (ii) A statement explaining why the information is confidential.
    (b) A party to a proceeding may request that the presiding official 
direct a person submitting information under paragraph (a) of this 
section to provide that information to the party. The presiding official 
shall so direct if the party requesting the information agrees under 
oath and in writing:
    (1) Not to use or disclose the information except directly in 
connection with the hearing; and
    (2) To return all copies of the information at the conclusion of the 
proceeding to the person submitting the information under paragraph (a) 
of this section.
    (c) If a person submitting documents in a proceeding under this part 
does not claim confidentiality under paragraph (a) of this section, the 
presiding official may assume that there is no objection to disclosure 
of the document in its entirety.
    (d) If the presiding official determines that confidential treatment 
is not warranted with respect to all or any part of the information in 
question, the presiding official shall so inform all parties by 
telephone, if possible, and by facsimile or express mail letter directed 
to the parties' last known addresses. The person requesting confidential 
treatment then shall be given an opportunity to withdraw the document 
before it is considered by the presiding official, or to disclose the 
information voluntarily to all parties.
    (e) If the presiding official determines that confidential treatment 
is warranted, the presiding official shall so inform all parties by 
facsimile or express mail directed to the parties' last known address.
    (f) When a decision by a presiding official is based in whole or in 
part on evidence not included in the public record, the decision shall 
so state, specifying the nature of the evidence and the provision of law 
under which disclosure was denied, and the evidence so considered shall 
be retained under seal as part of the official record.



Sec. 577.9  Consent order or settlement.

    (a) General. At any time after the commencement of a proceeding, but 
at least five (5) days before the date set for hearing under Sec. 577.7 
of this part, the parties jointly may move to defer the hearing for a 
reasonable time to permit negotiation of a settlement or an agreement 
containing findings and an order disposing of the whole or any part of 
the proceeding.
    (b) Content. Any agreement containing consent findings and an order 
disposing of the whole or any part of a proceeding shall also provide:
    (1) A waiver of any further procedural steps before the Commission;
    (2) A waiver of any right to challenge or contest the validity of 
the order and decision entered into in accordance with the agreement; 
and
    (3) That the presiding official's certification of the findings and 
agreement shall constitute dismissal of the appeal and final agency 
action.
    (c) Submission. Before the expiration of the time granted for 
negotiations, the parties or their authorized representatives may:
    (1) Submit to the presiding official a proposed agreement containing 
consent findings and an order;
    (2) Notify the presiding official that the parties have reached a 
full settlement and have agreed to dismissal of the action, subject to 
compliance with the terms of the settlement; or
    (3) Inform the presiding official that agreement cannot be reached.
    (d) Disposition. In the event a settlement agreement containing 
consent findings and an order is submitted within the time granted, the 
presiding official shall certify such findings and agreement within 
thirty (30) days after his or her receipt of the submission. Such 
certification shall constitute dismissal of the appeal and final agency 
action.

[[Page 210]]



Sec. 577.12  Intervention.

    (a) Persons other than the respondent may be permitted to 
participate as parties if the presiding official finds that:
    (1) The final decision could directly and adversely affect them or 
the class they represent;
    (2) They may contribute materially to the disposition of the 
proceedings;
    (3) Their interest is not adequately represented by existing 
parties; and
    (4) Intervention would not unfairly prejudice existing parties or 
delay resolution of the proceeding.
    (b) If a tribe has jurisdiction over lands on which there is a 
gaming operation that is the subject of a proceeding under this part, 
and the tribe is not already a named party, such tribe may intervene as 
a matter of right.
    (c) A person not named as a party and who wishes to participate as a 
party under this section shall submit a petition to the presiding 
official within ten (10) days after the person knew or should have known 
about the proceeding. The petition shall be filed with the presiding 
official and served on each person who has been made a part at the time 
of filing. The petition shall state concisely:
    (1) Petitioner's interest in the proceeding;
    (2) How his or her participation as a party will contribute 
materially to the disposition of the proceeding;
    (3) Who will appear for petitioner;
    (4) The issues on which petitioner wishes to participate; and
    (5) Whether petitioner wishes to present witnesses.
    (d) Objections to the petition may be filed by any party within ten 
(10) days after service of the petition.
    (e) When petitions to participate as parties are made by individuals 
or groups with common interests, the presiding official may request all 
such petitioners to designate a single representative, or he or she may 
recognize one or more petitioners.
    (f) The presiding official shall give each petitioner, as well as 
the parties, written notice of the presiding official's decision on the 
petition. For each petition granted, the presiding official shall 
provide a brief statement of the basis of the decision. If the petition 
is denied, the presiding official shall briefly state the grounds for 
denial and may then treat the petition as a request for participation as 
amicus curiae (that is, ``friend of the court'').



Sec. 577.13  Transcript of hearing.

    Hearings under this part that involve oral presentations shall be 
recorded verbatim and transcripts thereof shall be provided to parties 
upon request. Fees for transcripts shall be at the actual cost of 
duplication.



Sec. 577.14  Recommended decision of presiding official.

    (a) Recommended decision. Within thirty (30) days after the record 
closes, the presiding official shall render his or her recommended 
decision. The recommended decision of the presiding official shall be 
based upon the whole record and shall include findings of fact and 
conclusions of law upon each material issue of fact or law presented on 
the record.
    (b) Filing of objections. Within ten (10) days after the date of 
service of the presiding official's recommended decision, the parties 
may file with the Commission objections to any aspect of the decision, 
and the reasons therefor.



Sec. 577.15  Review by Commission.

    The Commission shall affirm or reverse, in whole or in part, the 
recommended decision of the presiding official by a majority vote within 
thirty (30) days after the date on which the presiding official issued 
the decision. The Commission shall provide a notice and order to all 
parties stating the reasons for its action. In the absence of a majority 
vote by the Commission within the time provided by this section, the 
recommended decision of the presiding official shall be deemed affirmed 
except that, if the subject of the appeal is an order of temporary 
closure issued under Sec. 573.6 of this chapter, the order of temporary 
closure shall be dissolved.

                        PARTS 578	579 [RESERVED]

[[Page 211]]



                         SUBCHAPTER H [RESERVED]



                        PARTS 580	589 [RESERVED]



                         SUBCHAPTER I [RESERVED]



                        PARTS 590	599 [RESERVED]

[[Page 213]]



       CHAPTER IV--THE OFFICE OF NAVAJO AND HOPI INDIAN RELOCATION




  --------------------------------------------------------------------
Part                                                                Page
700             Commission operations and relocation 
                    procedures..............................         215
720             Enforcement of nondiscrimination on the 
                    basis of handicap in programs or 
                    activities conducted by the Navajo and 
                    Hopi Indian Relocation Commission.......         293
721-899

[Reserved]

[[Page 215]]



PART 700_COMMISSION OPERATIONS AND RELOCATION PROCEDURES--
Table of Contents




               Subpart A_General Policies and Instructions

Sec.
700.1 Purpose.
700.3 Assurances with respect to acquisition and displacement.
700.5 Supersedure of regulations.
700.11 Manner of notice.
700.13 Waiver of regulations.
700.15 Waiver of rights by owner.

                               Definitions

700.31 Applicability of definitions.
700.33 Act (The Act).
700.35 Applicant.
700.37 Application for relocation assistance benefits and agreement to 
          move.
700.39 Appraisal.
700.41 Appraiser.
700.43 Assistance payment.
700.45 Business.
700.47 Commission.
700.49 Certified eligible head of household.
700.51 Custodial parent.
700.53 Dwelling, replacement.
700.55 Decent, safe, and sanitary dwelling.
700.57 Dependent.
700.59 Displaced person.
700.61 Fair market value.
700.65 Farm operation.
700.67 Habitation.
700.69 Head of household.
700.71 Improvements.
700.77 Livestock.
700.79 Marriage.
700.81 Monthly housing cost.
700.83 Nonprofit organization.
700.85 Owner.
700.87 Person.
700.89 Relocation contract.
700.91 Relocation report.
700.93 Relocation plan.
700.95 Replacement housing funds.
700.97 Residence.
700.99 Salvage value.
700.101 Single person.
700.103 Uniform Act.
700.105 Utility charges.

  Subpart B_Acquisition and Disposal of Habitations and/or Improvements

700.111 Applicability of acquisition requirements.
700.113 Basic acquisition policies.
700.115 Preliminary acquisition notice.
700.117 Criteria for appraisals.
700.119 Establishment of fair market value.
700.121 Statement of the basis for the determination of fair market 
          value.
700.123 Expenses incidental to transfer of ownership to the Commission.
700.125 Disposal of property.
700.127 Payments for acquisition of improvements.

                Subpart C_General Relocation Requirements

700.131 Purpose and applicability.
700.133 Notice of displacement.
700.135 Relocation assistance advisory services.
700.137 Final date for voluntary relocation application.
700.138 Persons who have not applied for voluntary relocation by July 7, 
          1986.
700.139 Referral for action.
700.141 General requirements--claims for relocation payments.
700.143 Payments for divorced or separated relocatees.
700.145 Payments to estates.
700.147 Eligibility.

    Subpart D_Moving and Related Expenses, Temporary Emergency Moves

700.151 Eligibility.
700.153 Actual reasonable moving and related expenses--residential 
          moves.
700.155 Expenses in searching for replacement dwelling--residential 
          move.
700.157 Actual reasonable moving and related expenses--nonresidential 
          moves.
700.159 Payment for direct loss of personal property--nonresidential 
          moves.
700.161 Substitute personal property--nonresidential moves.
700.163 Expenses in searching for replacement location--nonresidential 
          moves.
700.165 Ineligible moving and related expenses.
700.167 Moving and related expenses--fixed payment.
700.169 Fixed payment for moving expenses--residential moves.
700.171 Fixed payment for moving expenses--nonresidential moves.
700.173 Average net earnings of business or farm.
700.175 Temporary emergency moves.

                 Subpart E_Replacement Housing Payments

700.181 Eligibility.
700.183 Determination of replacement housing benefit.
700.187 Utilization of replacement home benefits.
700.189 Expenditure of replacement home benefits.

                      Subpart F_Incidental Expenses

700.195 General.

[[Page 216]]

700.197 Basic eligibility requirements.
700.199 Incidental expenses.

             Subpart G_Assistance Payments (Incentive Bonus)

700.205 Eligibility requirements.

                Subpart H_Last Resort Replacement Housing

700.209 Applicability.
700.211 Basic rights and rules.
700.213 Methods of providing last resort replacement housing.

                     Subpart I_Commission Operations

700.219 General.

                     Subpart J_Inspection of Records

700.235 Purpose and scope.
700.237 Definitions.
700.239 Records available.
700.241 Request for records.
700.243 Action on initial requests.
700.245 Time limits on processing of initial requests.
700.247 Appeals.
700.249 Action on appeals.
700.251 Fees.

                          Subpart K_Privacy Act

700.255 Purpose and scope.
700.257 Definitions.
700.259 Records subject to Privacy Act.
700.261 Standards for maintenance of records subject to the Act.
700.263 Assuring integrity of records.
700.265 Conduct of employees.
700.267 Disclosure of records.
700.269 Accounting for disclosures.
700.271 Requests for notification of existence of records: Submission.
700.273 Request for notification of existence of records: Action on.
700.275 Requests for access to records.
700.277 Requests for access to records: Submission.
700.279 Requests for access to records: Initial decision.
700.281 Requests for notification of existence of records and for access 
          to records: Appeals.
700.283 Requests for access to records: Special situations.
700.285 Amendment of records.
700.287 Petitions for amendment: Submission and form.
700.289 Petitions for amendment: Processing and initial decision.
700.291 Petitions for amendment: Time limits for processing.
700.293 Petitions for amendment: Appeals.
700.295 Petitions for amendment: Action on appeals.
700.297 Statements of disagreement.

   Subpart L_Determination of Eligibility, Hearing and Administrative 
                            Review (Appeals)

700.301 Definitions.
700.303 Initial Commission determinations.
700.305 Availability of hearings.
700.307 Request for hearings.
700.309 Presiding officers.
700.311 Hearing scheduling and documents.
700.313 Evidence and procedure.
700.315 Post-hearing briefs.
700.317 Presiding officer decisions.
700.319 Final agency action.
700.321 Direct appeal to Commissioners.

                      Subpart M_Life Estate Leases

700.331 Application for life estate leases.
700.333 Determination of disability.
700.335 Grouping and granting of applications for life estate leases.
700.337 Establishment of boundaries of life estate leases.
700.339 Residency on life estate leases.
700.341 Access to life estate leases.
700.343 Life estate leases.

                      Subpart N_Discretionary Funds

700.451 Purpose.
700.453 Definitions.
700.455 Financial assistance.
700.457 Assistance to match or pay 30% of grants, contracts or other 
          expenditures.
700.459 Assistance for demonstration projects and for provision of 
          related facilities and services.
700.461 Method for soliciting applications.
700.463 Requirements for applications.
700.465 Technical feasibility.
700.467 Construction costs.
700.469 Unallowable program and project costs.
700.471 Review and approval.
700.473 Administrative expenditures of the Commission.
700.475 Reports.
700.477 Administration of financial assistance and recordkeeping 
          requirements.
700.479 Administrative review.

              Subpart O_Employee Responsibility and Conduct

700.501 Statement of purpose.
700.503 Definitions.
700.505 Coverage.
700.507 Responsibilities.
700.509 Duties of the designated agency ethics official.
700.511 Statements of employment and financial interests.
700.513 Business dealings on behalf of the government.

[[Page 217]]

700.515 Conflicts of interest.
700.517 Affiliations and financial interests.
700.519 Gifts, entertainment and favors.
700.521 Outside work and interests.
700.523 Business relationships among employees.
700.525 Use of government information or expertise.
700.527 Endorsements.
700.529 Negotiations for employment.
700.531 Government property.
700.533 Restrictions affecting travel and travel expense reimbursement.
700.535 Nepotism.
700.537 Indebtedness.
700.539 Soliciting contributions.
700.541 Fraud or false statement in a Government matter.
700.543 Gambling.
700.545 Alcoholism and drug abuse.
700.547 Consuming intoxicants on Government premises or during duty 
          hours.
700.549 Employee organizations.
700.551 Franking privilege and official stationery.
700.553 Use of official titles.
700.555 Notary services.
700.557 Political activity.
700.559 Equal opportunity.
700.561 Sexual harassment.
700.563 Statutory restrictions from 18 U.S.C. 207, which are applicable 
          to former Government employees.
700.565 Miscellaneous statutory provisions.

                   Subpart P_Hopi Reservation Evictees

700.601 Definitions.
700.603 Eligibility.
700.605 Relocation assistance.
700.607 Dual eligibility.
700.609 Appeals.
700.611 Application deadline.

                       Subpart Q_New Lands Grazing

700.701 Definitions.
700.703 Authority.
700.705 Objectives.
700.707 Regulations; scope.
700.709 Grazing privileges.
700.711 Grazing permits.
700.713 Tenure of grazing permits.
700.715 Assignment, modification, and cancellation of grazing permits.
700.717 Stocking rate.
700.719 Establishment of grazing fees.
700.721 Range management plans.
700.722 Grazing associations.
700.723 Control of livestock disease and parasites.
700.725 Livestock trespass.
700.727 Impoundment and disposal of unauthorized livestock.
700.729 Amendments.
700.731 Appeals.

            Subpart R_Protection of Archaeological Resources

700.801 Purpose.
700.803 Authority.
700.805 Definitions.
700.807 Prohibited Acts.
700.809 Permit requirements and exceptions.
700.811 Application for permits and information collection.
700.813 Notification of Indian Tribes of possible harm to, or 
          destruction of, sites on public lands having religious or 
          cultural importance.
700.815 Issuance of permits.
700.817 Terms and conditions of permits.
700.819 Suspension and revocation of permits.
700.821 Appeals relating to permits.
700.823 Permit reviews and disputes.
700.825 Relationship to section 106 of the National Historic 
          Preservation Act.
700.827 Custody of Archaeological resources.
700.829 Determination of archaeological or commercial value and cost of 
          restoration and repair.
700.831 Assessment of civil penalties.
700.833 Civil penalty amounts.
700.835 Other penalties and rewards.
700.837 Confidentiality of archaeological resource information.
700.839 Report.
700.841 Determination of loss or absence of archaeological interest.
700.843 Permitting procedures for Navajo Nation Lands.

    Authority: Pub. L. 99-590; Pub. L. 93-531, 88 Stat. 1712 as amended 
by Pub. L. 96-305, 94 Stat. 929, Pub. L. 100-666, 102 Stat. 3929 (25 
U.S.C. 640d).

    Source: 47 FR 2092, Jan. 14, 1982, unless otherwise noted.



               Subpart A_General Policies and Instructions



Sec. 700.1  Purpose.

    The purpose of this part is to implement provisions of the Act of 
December 22, 1974 (Pub. L. 93-531, 88 Stat. 1712 as amended by Pub. L. 
96-305, 94 Stat. 929), hereinafter referred to as the Act, in accordance 
with the following objectives--
    (a) To insure that persons displaced as a result of the Act are 
treated fairly, consistently, and equitably so that these persons will 
not suffer the disproportionate adverse, social, economic, cultural and 
other impacts of relocation.
    (b) To set forth the regulations and procedures by which the 
Commission

[[Page 218]]

shall operate; and implement the provisions of the Act.
    (c) To establish standards consistent with those established in the 
implementation of the Uniform Relocation Assistance and Real Property 
Acquisition Policies Act of 1970 (84 Stat. 1894, 42 U.S.C. 4601 et. 
seq., Pub. L. 91-646), hereinafter referred to as the Uniform Act.
    (d) To insure that owners of habitations and other improvements to 
be acquired pursuant to the Act are treated fairly and consistently, to 
encourage and expedite acquisition by agreements with such owners, to 
minimize litigation, relieve congestion in the courts and to promote 
public confidence in the Commission's relocation program.
    (e) To facilitate development of a relocation plan according to the 
Act and carry out the directed relocation as promptly and fairly as 
possible, with a minimum of hardship and discomfort to the relocation, 
in accordance with the Act.



Sec. 700.3  Assurances with respect to acquisition and displacement.

    The Commission will not approve any programs or projects which may 
result in the acquisition of habitations and/or improvements, or in the 
displacement of any person, until such time as written assurances are 
submitted to the Commission that such projects or programs are in 
accordance with the Act. It will--
    (a) Assure that, within a reasonable period of time prior to 
displacement, adequate, decent, safe and sanitary replacement dwellings 
(defined at Sec. 700.55) will be available to all certified eligible 
heads of households.
    (b) Carry out relocation services in a manner that will promote 
maximum quality in housing.
    (c) Inform affected persons of their rights under the policies and 
procedures set forth under the regulations in this part.



Sec. 700.5  Supersedure of regulations.

    These regulations supersede the regulations formerly appearing in 
this part. However, any acquisition of property or displacement of a 
person occurring prior to the effective date of these regulations shall 
continue to be governed by the regulations at 25 CFR part 700 in effect 
at the time of the acquisition or displacement.



Sec. 700.11  Manner of notice.

    Each notice which the Commission is required to provide under these 
regulations shall be personally served, receipt documented, or sent by 
certified or registered first-class mail, return receipt requested. Each 
notice shall be written in plain understandable language. Recipients who 
notify the Commission that they are unable to read and understand the 
notice will be provided with appropriate translation and counseling. 
Each notice shall indicate the name and telephone number of a person who 
may be contacted for answers to questions or other needed help.



Sec. 700.13  Waiver of regulations.

    (a) Any time limit specified for the filing of a claim or an appeal 
under the regulations in this part may, on a case by case basis, be 
extended by the Commission.
    (b) The Commission may waive any requirement of these regulations in 
this part if such requirement is not required by law and if the 
Commission finds such waiver or exception to be in the best interest of 
individual Indian applicants, the Commission, and the United States. Any 
request for a Commission waiver shall be submitted in writing to the 
Commission and shall be justified on a case by case basis.



Sec. 700.15  Waiver of rights by owner.

    Nothing in these regulations shall prevent a fully informed 
applicant from voluntarily waiving any of his/her rights under the 
regulations in this part. A waiver of rights shall in no way constitute 
an exemption from the requirement to relocate pursuant to the Act.

                               Definitions



Sec. 700.31  Applicability of definitions.

    Except where otherwise noted, the definitions appearing in this 
subpart A apply to the regulations in this part.

[[Page 219]]



Sec. 700.33  Act (The Act).

    (a) The Act. The Act is Pub. L. 93-531, (88 Stat. 1712, 25 U.S.C. 
640d.) as amended by Pub. L. 96-305 (94 Stat. 929).



Sec. 700.35  Applicant.

    A person who applies for relocation assistance benefits and agrees 
to relocate as required by the Act.



Sec. 700.37  Application for relocation assistance benefits and agreement to move.

    The application for relocation assistance benefits and agreement to 
move is Commission Form 69-R0001, completion of which is used 
for establishing the date upon which a person shall be deemed to have a 
contract with the Commission to relocate pursuant to section 14(b) of 
the Act.



Sec. 700.39  Appraisal.

    The appraisal is an estimate of the fair market value which is 
placed on the habitation and other improvements owned by a relocatee.



Sec. 700.41  Appraiser.

    An appraiser is a person appointed or hired by the Commission to 
make an appraisal of the habitation and other improvements on the land 
owned by the relocatees. All compensation for the appraiser shall be 
paid by the Commission.



Sec. 700.43  Assistance payment.

    An assistance payment is the additional payment made to the 
certified eligible head of household pursuant to section 14(b) of the 
Act. This term is synonymous with ``incentive bonus''.



Sec. 700.45  Business.

    The term business means any lawful activity, except a nonprofit 
organization or a farm operation, that is--
    (a) Conducted primarily for the purchase, sale, lease and or rental 
of personal and/or real property, and/or for the manufacture, 
processing, and/or marketing of products, commodities, and/or any other 
personal property; or
    (b) Conducted primarily for the sale of services to the public; or
    (c) Solely for the purpose of subpart D of this part, conducted 
primarily for outdoor advertising display purposes, when the display(s) 
must be moved as a result of the Act.



Sec. 700.47  Commission.

    The Navajo and Hopi Indian Relocation Commission is that entity 
established pursuant to 25 U.S.C. 640d-11 (section 12(a) of the Act).



Sec. 700.49  Certified eligible head of household.

    A certified eligible head of household is a person who has received 
notice from the Commission that he/she has been certified as eligible to 
receive certain relocation assistance benefits.



Sec. 700.51  Custodial parent.

    A custodial parent is a person who has the immediate personal care, 
charge, and control of a minor child who resides in his/her household, 
or a person who fills the parental role but who is not necessarily 
blood-related.



Sec. 700.53  Dwelling, replacement.

    The term replacement dwelling means a dwelling selected by the head 
of a household as a replacement dwelling that meets the criteria of this 
section. A replacement dwelling is a dwelling that:
    (a) Is decent, safe, and sanitary as described in Sec. 700.55.
    (b) May include existing dwellings for resale, new construction, 
modular homes, mobile homes, mutual self-help housing or other federally 
assisted housing programs.
    (c) Is in an area not subjected to unreasonable adverse 
environmental conditions from either natural or man-made sources and in 
an area not generally less desirable than that of the acquired dwelling 
with respect to public utilities, public and commercial facilities, and 
schools.
    (d) Is available at a purchase price within the ability-to-pay of 
the displaced person. A replacement dwelling shall be considered within 
the ability-to-pay of the displaced person if, after he receives a 
replacement housing payment and any available housing assistance 
payments, his new monthly housing cost (defined at Sec. 700.81) for the 
replacement dwelling does not exceed twenty-five percent (25%) of the

[[Page 220]]

monthly gross income of all adult members of the household, including 
supplemental income payments received from public agencies. If the 
person's monthly income pattern is irregular, the Commission shall base 
its determination of average gross monthly income on the period of time, 
actual and/or projected, that most fairly and equitable represents the 
person's ability-to-pay.
    (e) Is actually available to the displaced person on the private 
market, other federally sponsored housing projects, tribal-sponsored 
housing projects and/or Commission-sponsored housing projects.



Sec. 700.55  Decent, safe, and sanitary dwelling.

    (a) General. The term decent, safe, and sanitary dwelling means a 
dwelling which--
    (1) Meets applicable federal, state and local housing and occupancy 
codes; including but not limited to the Uniform Building Code, National 
Electrical Code, ICBO Plumbing Code, the Uniform Mechanical Code, HUD 
Minimum Property Standards, and HUD Mobile Home Construction and Safety 
Standards (24 CFR part 4080).
    (2) Is structurally sound, clean, weathertight and in good repair 
and has adequate living space and number of rooms.
    (3) Has an adequate and safe electrical wiring system for lighting 
and other electrical services where economically feasible.
    (4) Meets the requirements of the HUD lead-based paint regulations 
(24 CFR part 42) issued under the Lead-Based Paint Poisoning Prevention 
Act (42 U.S.C. 4831 et seq.);
    (5) In the case of a physically handicapped person, is free of any 
architectural barriers. To the extent that standards prescribed by the 
American National Standards Institute, Inc., in publication ANSI A117.1-
1961 (R 1971), are pertinent, this provision will be considered met if 
it meets those standards;
    (6) Has heating as required by climatic conditions;
    (7) Has habitable sleeping area that is adequately ventilated and 
sufficient to accommodate the occupants;
    (8) Has a separate well-lighted and ventilated bathroom, affording 
privacy to the user, that contains a sink and bathtub or shower stall, 
properly connected to hot and cold water, and a flush toilet, all in 
good working order and properly connected to a sewage drainage system; 
and
    (9) In the case of new construction or modular housing, complies 
with the energy performance standards for new buildings set forth by the 
U.S. Department of Energy.
    (10) The Commission may waive paragraph (a)(3) or (8) of this 
section on a case-by-case basis if it is determined that it is in the 
best interest of the individual relocatee to do so.



Sec. 700.57  Dependent.

    A dependent is a person who either derives more than one-half of 
his/her support from another or is under the custody, control and care 
of another. In instances where there are conflicting claims for the 
dependent status of a person in more than one household, the household 
of the person having custody, control and care shall be determined to be 
the household wherein the person is a dependent.



Sec. 700.59  Displaced person.

    Displaced person means a member of the Hopi Tribe residing within 
the area partitioned to the Navajo Tribe or a member of the Navajo Tribe 
residing within the area partitioned to the Hopi Tribe who must be 
relocated pursuant to the Act. This term is synonymous with the term 
``relocatee''.



Sec. 700.61  Fair market value.

    Fair market value shall mean the value placed on the habitation and 
improvements owned by each head of household as determined pursuant to 
Sec. Sec. 700.117 through 700.121.



Sec. 700.65  Farm operation.

    Farm operation means any activity conducted for the production of 
one or more agricultural products or commodities including livestock, 
crops and timber for sale or home use, and customarily producing such 
products or commodities in sufficient quantity to be capable of 
contributing materially

[[Page 221]]

to the operator's support as determined in Sec. 700.171(b)(3).



Sec. 700.67  Habitation.

    The term habitation means the dwelling(s) of each household required 
to relocate under the term of the Act.



Sec. 700.69  Head of household.

    (a) Household. A household is:
    (1) A group of two or more persons living together at a specific 
location who form a unit of permanent and domestic character.
    (2) A single person who at the time his/her residence on land 
partitioned to the Tribe of which he/she is not a member actually 
maintained and supported him/herself or was legally married and is now 
legally divorced.
    (b) Head of household. The head of household is that individual who 
speaks on behalf of the members of the household and who is designated 
by the household members to act as such.
    (c) In order to qualify as a head of household, the individual must 
have been a head of household as of the time he/she moved from the land 
partitioned to a tribe of which they were not a member.

[49 FR 22278, May 29, 1984]



Sec. 700.71  Improvements.

    Improvements are structures and attached fixtures to the land owned 
by a member of a household required to relocate under the terms of the 
Act, in addition to the habitation which improvements cannot readily be 
moved without substantial damage, or whose movement would require 
unreasonable cost.



Sec. 700.77  Livestock.

    The term livestock shall mean all domesticated animals of every type 
owned by the displaced person.



Sec. 700.79  Marriage.

    Marriage is a legally recorded marriage or a traditional commitment 
between a man or woman recognized by the law of the Hopi Tribe or the 
Navajo Tribe.



Sec. 700.81  Monthly housing cost.

    (a) General. The term monthly housing cost for a replacement 
dwelling purchased by a certified eligible head of household is the 
average monthly cost for all mortgage payments, real property taxes, 
reasonable utility charges, and insurance.
    (b) Computation of monthly housing cost for replacement dwelling. A 
person's monthly housing cost for a replacement dwelling shall be a 
projected amount that includes one-twelfth of the estimated reasonable 
annual cost for utility charges.



Sec. 700.83  Nonprofit organization.

    The term nonprofit organization means a corporation, individual, or 
other public or private entity that is engaged in a lawful business, 
professional, or instructional activity on a nonprofit basis and that 
has established its nonprofit status under applicable Federal, State, or 
Tribal law.



Sec. 700.85  Owner.

    The term owner means the person who holds any interest in 
habitations and improvements to be acquired by the Commission pursuant 
to section 15(a) of the Act, which the Commission determines warrants 
consideration of ownership.



Sec. 700.87  Person.

    The term person means any individual, partnership, corporation, or 
association.



Sec. 700.89  Relocation contract.

    The Relocation Contract is that contract signed by the head of 
household in which he/she agrees to purchase an existing house or to 
construct a new house, the owner of such existing house or the builder 
of the proposed new house agrees to sell or perform the construction, 
and the Commission agrees to make payments according to such agreement.

[47 FR 17988, Apr. 27, 1982]



Sec. 700.91  Relocation report.

    The relocation report shall be the report prepared by the Commission 
and submitted to Congress pursuant to section 13(a) of the Act.

[[Page 222]]



Sec. 700.93  Relocation plan.

    The relocation plan shall be the plan prepared by the Commission and 
submitted to Congress pursuant to section 13(c) of the Act.



Sec. 700.95  Replacement housing funds.

    Replacement housing funds means those funds authorized to be 
appropriated pursuant to section 25(a)(1) of the Act.



Sec. 700.97  Residence.

    (a) Residence is established by proving that the head of household 
and/or his/her immediate family were legal residents as of December 22, 
1974, of the lands partitioned to the Tribe of which they are not 
members.

[49 FR 22278, May 29, 1984]



Sec. 700.99  Salvage value.

    Salvage value means the probable sale price of an item, if offered 
for sale on the condition that it will be removed from the property at 
the buyer's expense, allowing a reasonable period of time to find a 
person buying with knowledge of the uses and purposes for which it is 
adaptable and capable of being used, including separate use of 
serviceable components and scrap when there is no reasonable prospect of 
sale except on that basis.



Sec. 700.101  Single person.

    A single person is a widow, widower, unmarried or divorced person.



Sec. 700.103  Uniform Act.

    The term Uniform Act means the Uniform Relocation Assistance and 
Real Property Acquisition Policies Act of 1970 (84 Stat. 1894; 42 U.S.C. 
4601 et seq.; Pub. L. 91-646).



Sec. 700.105  Utility charges.

    Utility charges means the cost for heat, lighting, hot water, 
electricity, natural gas, butane, propane, wood, coal or other fuels 
water, sewer and trash removal.



  Subpart B_Acquisition and Disposal of Habitations and/or Improvements



Sec. 700.111  Applicability of acquisition requirements.

    General. The requirements of this subpart B apply to all Commission 
acquisition of habitations and/or improvements that occur on or after 
the effective date of these regulations.



Sec. 700.113  Basic acquisition policies.

    (a) Appraisal and invitation to owner. Before the initiation of 
negotiations, the Commission shall have the habitations and/or 
improvements appraised to its satisfaction and will attempt to assure 
that the owner or his designated representative is contacted in advance 
of the appraisal(s) and given an opportunity to accompany each appraiser 
during the appraiser's inspection of the property.
    (b) Determination and offer of fair market value. Before the 
initiation of negotiations, the Commission shall establish an amount 
which it believes is fair market value for improvements. This amount 
shall be based on a current appraisal at the time negotations commence 
for the Relocation Contract between the NHIRC and the relocatee. The 
appraisal will be adjusted according to the Boeckh Building Cost 
Modifier for time or any physical changes in the improvements. If any 
changes are necessary the appraisal will be corrected to reflect a 
current dollar value. The amount of the current appraisal will be 
offered as just compensation for the improvements acquired, except as 
provided in paragraph (d) of this section. A copy of the initial 
appraisal will be sent to the owner as soon as possible after the 
appraisal program is completed.
    (c) Basic negotiation procedures. The Commission will attempt to 
meet with the owner or his/her representative to discuss its offer to 
purchase his/her property including the basis for the determination of 
fair market value and explain acquisition policies and procedures, 
including payment of incidental expenses. The owner shall be given 
reasonable opportunity to present material which he/she believes is 
relevant to determining the value of the property

[[Page 223]]

and to suggest modification in the proposed terms and conditions of the 
purchase. The Commission shall consider the owner's presentation.
    (d) If the condition of the property indicates the need for a new 
appraisal or if a significant delay has occurred since the time of the 
latest appraisal of the property, the Commission shall have the 
appraisal updated or obtain a new appraisal. If a new appraisal is for a 
lesser value than the previous appraisal and said lesser value is due to 
damage done to the property during the time between the two appraisals, 
and such damage was not caused by the owner of the improvement, the 
owner shall be entitled to the higher appraisal value.
    (e) [Reserved]
    (f) Objection to determination of fair market value. If the owner 
objects to the Commission's determination of fair market value, the 
owner may request a hearing pursuant to the Commission's Hearing and 
Administrative Review procedures;
    (g) Payment before taking possession. Before requiring an owner to 
surrender possession of his habitations and/or improvements, the 
Commission shall--
    (1) Apply the agreed purchase price towards the acquisition price of 
the replacement dwelling or;
    (2) Deposit with the court in an appropriate proceeding, such as 
divorce or probate, for the benefit of the owner, an amount not less 
than the Commission's determination of fair market value for the 
property or the court award of compensation for the property up to the 
maximum benefit allowed under the then existing replacement housing 
benefit.



Sec. 700.115  Preliminary acquisition notice.

    As soon as feasible in the acquisition process, the Commission shall 
issue a preliminary acquisition notice to the owner. The notice shall--
    (a) Inform the owner of the Commission's interest in acquiring his/
her habitations and/or improvements.
    (b) Explain that such preliminary acquisition notice is not a notice 
to vacate and that it does not establish eligibility for relocation 
payments or other relocation assistance under these regulations.



Sec. 700.117  Criteria for appraisals.

    (a) Appraisal standards. The Commission's appraisals shall be based 
upon nationally recognized appraisal standards and techniques to the 
extent that such principles are consistent with the concepts of value 
that the Commission may establish.
    (b) Documentation. Appraisal reports must contain sufficient 
documentation, including supporting valuation data and the appraiser's 
analyses of that data, to demonstrate the reasonableness of the 
appraiser's opinion(s) of value.
    (c) Conflict of interest. No appraiser shall have any interest, 
direct or indirect, in the habitations and/or improvements which he 
appraisers for the Commission that would in any way conflict with his 
performance of the appraisal.



Sec. 700.119  Establishment of fair market value.

    (a) General. The Commission shall establish the amount of fair 
market value to be offered to the owner for the habitations and/or 
improvements. Such amount shall not be less than--
    (1) The appraiser's recommendations as to the fair market value of 
the habitations and/or improvements; or
    (2) The fair market value estimate set forth in the agency's 
approved appraisal, if the property is valued at $2,000 or less.
    (b) Owner retention of improvements. If the owner of a habitation 
and/or improvement is permitted to retain it for removal off-site, the 
amount determined to be just compensation for the interest in 
habitations and/or improvements to be acquired from him shall not be 
less than the amount determined by subtracting the salvage value of the 
improvements he retains for off-site removal from the amount determined 
to be fair market value for his entire interest in the habitation and 
improvement. Retention of improvements by the owner shall not change, 
alter or abrogate the requirement of the Act that the owner must move 
from land partitioned to the tribe of which he/she is not a member.

[[Page 224]]



Sec. 700.121  Statement of the basis for the determination of fair market value.

    At the time of the initiation of negotiations to acquire the 
habitations and/or improvements, the Commission shall furnish the owner, 
along with the initial written purchase offer, a written statement of 
the basis for the determination of fair market value. To the extent 
permitted by the Commission, the statement shall include the following--
    (a) A description and location identification of the habitations 
and/or improvements to be acquired.
    (b) An inventory identifying the buildings, structures, fixtures, 
and other improvements, including appurtenant removable building 
equipment, which are considered to be part of the habitations and/or 
improvements for which the offer of fair market value is made.
    (c) A recital of the amount of the offer and a declaration that such 
amount--
    (1) Is the full amount believed by the Commission to be just 
compensation for the property and is not less than the fair market value 
of the property as determined on the basis of the appraisal(s);
    (2) Does not reflect any relocation payments or other relocation 
assistance which the owner is entitled to receive.
    (d) If only a portion of a habitation and/or improvement is to be 
acquired, an apportionment of the total estimated just compensation for 
the partial acquisition will be made. In the event that the Commission 
determines that partial acquisitions are necessary, all portions so 
acquired will be acquired simultaneously.



Sec. 700.123  Expenses incidental to transfer of ownership to the Commission.

    Eligible costs. The Commission shall reimburse the owner for 
reasonable expenses he/she necessarily incurred incidental to the 
transfer of habitations and/or improvements to the Commission. The 
Commission is not required to pay costs solely required to perfect the 
owner's interest in the habitations and/or improvements.



Sec. 700.125  Disposal of property.

    Property acquired by the Commission pursuant to the Act shall be 
disposed of in one of the following manners:
    (a) If the Commission determines that the property acquired 
constitutes a substantial risk to public health and safety, the 
Commission may remove or destroy the property.
    (b) The Commission may transfer the property acquired by gratuitous 
conveyance to the tribe exercising jurisdiction over the area. Notice of 
such transfer shall be in writing and shall be completed within sixty 
(60) days from the finalization of all property acquisition procedures, 
unless the tribe notifies the Commission in writing within that time 
that the property transfer is refused. In the event of a refusal by the 
tribe, the Commission shall remove the property.



Sec. 700.127  Payments for acquisition of improvements.

    Payments for acquisition of improvements shall be made in the 
following situations:
    (a) To individuals who have been denied benefits under these rules 
and who can prove ownership of habitations and improvements on land 
partitioned to the tribe of which they are not members. If the owner is 
deceased the payment shall be made to his or her estate. Payments under 
this subsection are further limited by 25 U.S.C. 640d-14(c), Pub. L. 93-
531, sec. 15(c).
    (b) To individuals who have been certified as eligible for 
relocation benefits but who at the time of certification, own a decent, 
safe and sanitary dwelling as determined by the Commission pursuant to 
Sec. 700.187 and who own habitation and improvements on land 
partitioned to the tribe of which they are not members.

Ownership shall be determined on the basis of Commission appraisal 
records at the time of the initial eligibility determination.

(25 U.S.C. 640d, Pub. L. 93-531, 25 U.S.C. 640d-14, Pub. L. 96-305)

[49 FR 35379, Sept. 7, 1984]

[[Page 225]]



                Subpart C_General Relocation Requirements



Sec. 700.131  Purpose and applicability.

    This subpart prescribes general requirements governing the provision 
of relocation payments and other relocation assistance under the 
regulations in this part. The relocation requirements of the regulations 
in this part apply to the relocation of any displaced person.



Sec. 700.133  Notice of displacement.

    After the Commission's Relocation Report and Plan is in effect 
pursuant to the Act, the Commission shall issue a preliminary relocation 
notice to each person identified by the Commission as potentially 
subject to relocation. This notice shall--
    (a) Be published in a newspaper of general circulation in the area 
of the former Joint Use Area at least two times, and shall be sent to 
each Chapter House on the former Joint Use Area for posting.
    (b) Inform the person that he/she will be required to relocate 
permanently in the future unless the person has applied for and is 
determined to be eligible for a Life Estate.
    (c) Generally describe the relocation assistance program for which 
the person may become eligible, including the maximum allowable dollar 
amounts and basic conditions of eligibility for the payments.



Sec. 700.135  Relocation assistance advisory services.

    (a) General. The Commission may carry out a relocation assistance 
advisory program which offers the services described in paragraph (b) of 
this section. If the Commission determines that a person occupying 
habitations and/or improvements adjacent to the habitations and/or 
improvements acquired pursuant to the Act is caused substantial social, 
economic cultural or other injury because of such acquisition, it may 
offer such services to such person.
    (b) Services to be provided. The advisory program will include such 
measures, facilities, and services as may be necessary or appropriate in 
order to--
    (1) Personally interview where possible each certified eligible head 
of household to determine his/her relocation needs and preferences, and 
explain to him/her the relocation payments and other assistance for 
which he/she may be eligible, the related eligibility requirements, and 
the procedures for obtaining such payments and assistance;
    (2) Provide current and continuing information on the availability, 
purchase prices, and rental costs of replacement dwellings and 
commercial and farm properties and locations, as the case may be.
    (3) Assure that replacement dwellings are available to all certified 
eligible heads of households.
    (4) Assist any persons displaced from a business or farm operation 
to obtain and become established in a suitable replacement location;
    (5) Supply persons to be displaced with appropriate information 
concerning Tribal, Federal, State or local housing programs, disaster 
loans and other programs administered by the Small Business 
Administration, and other Federal or State programs offering assistance 
to persons to be displaced;
    (6) Endeavor to minimize the adverse social, economic, cultural and 
other hardships and impacts of relocation on persons involved in 
adjusting to such relocation.
    (c) Coordination of relocation activities. The Commission shall, to 
the maximum extent feasible, coordinate its relocation assistance 
advisory services activities with existing local, state, federal and 
Tribal agencies to the extent necessary to enable it to carry out its 
program. Referrals of displaced persons for services to existing 
services providers will be utilized whenever possible.
    (d) Policy. The Commission shall continue to provide assistance to a 
family, individual, business concern, non-profit organization, or farm 
operation until relocation has been achieved unless section Sec. 
700.139 becomes applicable.
    (e) Reasons for terminating assistance. In general, the 
circumstances under which the Commission's relocation obligations cease 
are the following:

[[Page 226]]

    (1) Two years have elapsed since the family or individual has moved 
to a decent, safe and sanitary replacement dwelling and has received all 
assistance payments to which entitled.
    (2) All reasonable efforts to trace a family or individual have 
failed.
    (3) The family or individual on his/her own initiative moves to 
substandard housing and has refused reasonable offers of additional 
assistance in moving to a decent, safe and sanitary replacement 
dwelling.
    (4) The business concern, farm operation, or non-profit organization 
has received all assistance and payments to which it is entitled, and 
has either been successfully relocated or ceased operations.
    (5) Other relevant reasons as determined by the Commission.



Sec. 700.137  Final date for voluntary relocation application.

    (a) In order to be considered for voluntary relocation assistance 
benefits, an applicant must have filed a completed application form with 
the Commission by the close of business on July 7, 1986.
    (b) To qualify for relocation assistance, individuals must meet the 
eligibility requirements as of July 7, 1986.

[51 FR 19170, May 28, 1986]



Sec. 700.138  Persons who have not applied for voluntary
relocation by July 7, 1986.

    (a) Pursuant to 25 U.S.C. 640d-14 (d)(3) heads-of-household who do 
not make timely arrangements for relocation by filing an application by 
July 7, 1986, shall be provided a replacement home by the Commission. To 
be eligible for benefits (Housing and Moving Expenses), such persons 
must be, as of July 7, 1986, physically residing full time on land 
partitioned to a tribe of which they are not members and they must also 
otherwise meet all other current eligibility criteria.
    (b) The Commission shall utilize amounts payable with respect to 
such households pursuant to 25 U.S.C. 640d-14(b)(2) and 25 U.S.C. 640d-
34(a) for the construction or acquisition of a home and related 
facilities for such households.
    (c) Persons identified by the Commission as potentially subject to 
relocation who have not applied for relocation assistance shall be 
contacted by the Commission as soon as practicable after July 7, 1986. 
At such time, the Commission shall--
    (1) Request that the head-of-household choose an available area for 
relocation, and contract with the Commission for relocation; and
    (2) Offer the relocatee suitable housing; and
    (3) Offer to purchase from the head-of-household the habitation and 
improvements; and
    (4) Offer provisions for the head-of-household and his family to be 
moved (e.g., moving expenses, etc.).
    (d) If a person so identified fails to agree to move after the 
actions outlined in this section are taken by the Commission and 
suitable housing is available (or sufficient funds are available to 
assure the relocation assistance to which the relocatee may be 
entitled), the Commission will issue a ninety-day notice stating the 
date by which the person will be required to vacate the area partitioned 
to the Tribe of which he is not a member.

[51 FR 19170, May 28, 1986]



Sec. 700.139  Referral for action.

    Upon the expiration of all notice periods and upon the failure or 
refusal of any relocatees to make timely arrangements to move, the 
Commission shall forward the names and addresses of such relocatees to 
the Secretary of the Interior and to the U.S. Attorney for the District 
of Arizona for such action as they deem appropriate. The Commission will 
assure the availability of relocation assistance to which the relocatees 
may be entitled.



Sec. 700.141  General requirements--claims for relocation payments.

    (a) Documentation. Any claim for a relocation payment under subpart 
D, E, F, G, or H of this part shall be submitted to the Commission on 
the appropriate Commission form and supported by such documentation as 
may reasonably be required by the Commission to demonstrate expenses 
incurred, such as bills and receipts.

[[Page 227]]

    (b) Time for filing. All claims for a relocation payment shall be 
filed with the Commission within sixty (60) days after the family 
occupies the replacement home unless this time period is extended by the 
Commission.
    (c) Direct payment of claim. Relocation payments shall be made in 
accordance with the terms of the Relocation Contracts and are not 
subject to claims of creditors or assignments.



Sec. 700.143  Payments for divorced or separated relocatees.

    General. The following considerations apply to certified eligible 
heads of household who are legally separated or divorced and intend to 
establish separate eligibility.
    (a) Determination of benefits. Eligibility for relocation benefits 
is determined as of the time that the Relocation Contract is signed.
    (1) If the divorce or separation took place before benefits were 
first applied for, the spouse who vacated the habitation will not be 
eligibile for benefits and all relocation benefits will accrue to the 
spouse remaining in occupancy as head of the household remaining to be 
relocated.
    (2) If both husband and wife are in possession of the habitation at 
the time that benefits are first applied for, and are divorced or 
separated prior to signing of a Relocation Contract, both husband and 
wife may qualify separately for benefits if each meets the requirements 
of eligibility under these regulations.
    (3) If both husband and wife are in possession of the habitation at 
the time a Relocation Contract is signed but are divorced or separated 
prior to occupancy of the replacement dwelling, only one benefit will be 
paid to the household. Such benefits (including the assistance payment, 
moving expenses and replacement dwelling benefit) and the purchase price 
of the habitation and improvements may be prorated between husband and 
wife in such manner as they may agree in writing so long as such 
proration is consistent with the terms of the Relocation Contract. Such 
proration may also be made by a court of competent jurisdiction. In the 
absence of an agreement between the parties or a court order, any 
necessary prorations shall be made by the Commission.
    (b) For purposes of this section, a head of household shall be 
considered as married even though living apart from his or her spouse 
unless legally separated under a decree or separate maintenance.

[47 FR 17988, Apr. 27, 1982]



Sec. 700.145  Payments to estates.

    (a) Relocation benefits can be paid to the estate of a deceased 
Certified Eligible Head of Household under the following circumstances:
    (1) If there is no household requiring relocation pursuant to the 
Act surviving the deceased head of household:
    (i) Compensation for the habitation and other improvements owned by 
the deceased head of household and the cost of removing personal 
property from the acquired habitation and other improvements shall be 
paid to the estate of a deceased head of household, or as otherwise 
directed by a court of competent jurisdiction.
    (ii) No replacement housing benefit or assistance payment (bonus) 
shall be paid under this circumstance.
    (2) Replacement housing benefits may be paid to an estate only when 
a certified eligible head of household was qualified for such a housing 
payment pursuant to the Act and signed a Relocation Contract but died 
before the replacement housing was occupied. The estate of a certified 
eligible head of household who had not signed a Relocation Contract at 
the time of his/her death is not eligible for payment of a replacement 
housing benefit.
    (b) If one of a married couple who was a certified eligible head of 
household dies, the surviving spouse may be paid the same relocation 
assistance benefits, including replacement housing payments, which the 
couple would have received had death not occurred. If there is no 
surviving spouse, a court of competent jurisdiction may appoint a 
guardian to act for minor members of the household. The Commission shall 
deal with such guardian and any members of the household who have 
attained their majority in a manner to

[[Page 228]]

effect relocation of the remaining household under these regulations.

[47 FR 17988, Apr. 27, 1982]



Sec. 700.147  Eligibility.

    (a) To be eligible for services provided for under the Act, and 
these regulations, the head of household and/or immediate family must 
have been residents on December 22, 1974, of an area partitioned to the 
Tribe of which they were not members.
    (b) The burden of proving residence and head of household status is 
on the applicant.
    (c) Eligibility for benefits is further restricted by 25 U.S.C. 
640d-13(c) and 14(c).
    (d) Individuals are not entitled to receive separate benefits if it 
is determined that they are members of a household which has received 
benefits.
    (e) Relocation benefits are restricted to those who qualify as 
heads-of-household as of July 7, 1986.

[49 FR 22278, May 29, 1984, as amended at 51 FR 19170, May 28, 1986]



    Subpart D_Moving and Related Expenses, Temporary Emergency Moves



Sec. 700.151  Eligibility.

    (a) General. All certified eligible heads of household are eligible 
for moving and related expenses as prescribed in this subpart. A 
certified eligible head of household who lives on his/her business or 
farm property may be eligible for both a payment as a dwelling occupant 
and a payment with respect to the business or farm operation.
    (b) Least costly approach. The amount of payment for an eligible 
expense under this subpart shall not exceed the least costly method, as 
determined by the Commission, of accomplishing the objective of the 
payment without causing undue hardship to the certified eligible heads 
of household.
    (c) Prior approval. Written approval of the Commission must be 
obtained for all moving and search expenses in this subpart. Such 
approval shall be obtained by each certified eligible head of household 
prior to incurring any expense from the real estate specialist to whom 
the case is assigned. If prior approval and the amount thereof is not 
obtained from the Commission, the Commission thereafter will determine:
    (1) Whether the travel was required and the expenses reasonable and;
    (2) The amount of reimbursement to be paid, if any.



Sec. 700.153  Actual reasonable moving and related expenses--residential moves.

    Subject to the limitations contained in this subpart, a certified 
eligible head of household is entitled to actual reasonable expenses 
for--
    (a) Transportation computed at prevailing federal per diem and 
mileage allowance schedules, meals and lodging away from home required 
by the Commission.
    (b) Transportation computed at prevailing federal per diem and 
mileage allowance schedules of the household and personal property from 
the acquired site to the replacement site.
    (c) Packing, crating, unpacking and uncrating of the personal 
property.
    (d) Disconnecting, dismantling, removing, reassembling and 
reinstalling relocated household appliances, and other personal 
property;
    (e) Storage of the personal property, not to exceed one year unless 
extended by the Commission.
    (f) Insurance of the personal property in connection with the move 
and necessary storage; and
    (g) Other moving related expenses that are not listed as ineligible 
under Sec. 700.165, as the Commission determines to be reasonable and 
necessary.



Sec. 700.155  Expenses in searching for replacement dwelling--residential move.

    (a) A certified eligible head of household is entitled to actual 
reasonable expenses incurred in the search for a replacement dwelling.
    (b) Transportation, meals and lodging when required to be away from 
home by the Commission, computed at prevailing federal per diem and 
mileage allowance schedules.

[[Page 229]]



Sec. 700.157  Actual reasonable moving and related expenses--nonresidential moves.

    (a) Eligible costs. Subject to the limitations of Sec. 700.151(c) a 
certified eligible business, farm operation or nonprofit organization is 
entitled to payment for actual reasonable expenses for:
    (1) Transportation of personal property from the acquired site to 
the replacement site.
    (2) Packing, crating, unpacking, and uncrating the personal 
property.
    (3) Disconnecting, dismantling, removing, reassembling and 
installing relocated and substitute machinery, equipment, and other 
personal property. This includes connection to utilities available 
nearby and modifications necessary to adapt such property to the 
replacement structure or to the utilities or to adapt the utilities to 
the personal property;
    (4) Storage of the personal property;
    (5) Insurance of personal property in connection with the move and 
necessary storage;
    (6) Any license, permit or certification required by the displaced 
person, to the extent such cost is (i) necessary to its re-establishment 
at the replacement location and (ii) does not exceed either the cost for 
one year or for the remaining useful life of the existing license, 
permit, or certification, whichever is less;
    (7) Professional services, including architect's, attorney's and 
engineer's fees, and consultant's charges, necessary for (i) planning 
the move of the personal property, (ii) moving the personal property, or 
(iii) installing the relocation personal property at the replacement 
location.
    (8) Relettering signs and printing replacement stationery made 
obsolete as a result of the move;
    (9) Actual direct loss of personal property;
    (10) Purchase of substitute personal property;
    (11) Searching for a replacement location;
    (12) Other moving-related expenses that are not listed as ineligible 
under Sec. 700.165.
    (b) Self-move. If the displaced person self-moves his business, farm 
operation, or nonprofit organization, the Commission may approve a 
payment for his moving expenses in an amount not to exceed the lowest 
acceptable bid or estimate obtained by the Commission, without 
submission of documentation of moving expenses actually incurred.
    (c) Notification to Commission and inspection. To be eligible for a 
payment under this section, the displaced person shall permit the 
Commission to make reasonable and timely inspections of the personal 
property at the displacement and replacement sites.



Sec. 700.159  Payment for direct loss of personal property--nonresidential
moves.

    (a) General. A certified eligible business is entitled to payment 
for actual direct loss of an item of tangible personal property incurred 
as a result of moving or discontinuing his business, farm operation, or 
nonprofit organization. The payment shall consist of the reasonable 
costs incurred in attempting to sell the item plus the less of--
    (1) The fair market value of the item for continued use at the 
acquired site, less the proceeds from its sale. (When payment for 
property loss is claimed for goods held for sale, the fair market value 
shall be based on the cost of the goods to the business, not the 
potential selling price); or
    (2) The estimated cost of moving the item, but with no allowance for 
storage. (If the business, farm operation or nonprofit organization is 
discontinued, the estimated cost shall be based on a moving distance of 
50 (fifty) miles.)
    (b) Advertising sign. The amount of a payment for direct loss of an 
advertising sign, which is personal property, shall be the lesser of--
    (1) The depreciated reproduction cost of the sign as determined by 
the Commission, less the proceeds from its sale; or
    (2) The estimated cost of moving the sign.
    (c) Sales effort. To be eligible for payment for direct loss of 
personal property, the claimant must make good faith effort to sell the 
personal property, unless the Commission determines that no such effort 
is necessary.

[[Page 230]]

    (d) Transfer of ownership. To be eligible for payment for direct 
loss of personal property, the claimant shall transfer to the Commission 
ownership of the unsold personal property.



Sec. 700.161  Substitute personal property--nonresidential moves.

    (a) General. If an item of personal property, which is used as part 
of a business, farm operation or nonprofit organization, is not moved 
but is promptly replaced with a comparable substitute item at the 
replacement site, the displaced person is entitled to payment of the 
lesser of--
    (1) The cost of the substitute item, including installation cost at 
the replacement site, minus any proceeds from the sale or trade-in of 
the replaced item, if any; or
    (2) The estimated cost of moving the replaced item, based on the 
lowest acceptable bid or estimate obtained by the Commission for 
eligible moving and related expenses, but with no allowance for storage.
    (b) Transfer of ownership. To be eligible for a payment under this 
section, the claimant shall transfer to the Commission ownership of the 
personal property that has not been sold or traded in.



Sec. 700.163  Expenses in searching for replacement 
location--nonresidential moves.

    A displaced business, farm or nonprofit organization is entitled to 
an amount not to exceed $500 (five-hundred dollars), as determined by 
the Commission, for actual reasonable expenses incurred in searching for 
a replacement location, including--
    (a) Transportation computed at prevailing federal per diem and 
mileage allowance schedules; meals and lodging away from home;
    (b) Time spent searching, based on reasonable earnings;
    (c) Fees paid to a real estate agent or broker to locate a 
replacement site.



Sec. 700.165  Ineligible moving and related expenses.

    A displaced person is not entitled to payment for--
    (a) The cost of moving any structure or other improvement in which 
the displaced person reserved ownership; or
    (b) Interest on a loan to cover moving expenses; or
    (c) Loss of goodwill; or
    (d) Loss of profits; or
    (e) Loss of trained employees; or
    (f) Physical changes at replacement location of business, farm or 
nonprofit organization, except as provided at Sec. 700.157; or
    (g) Any additional expense of a business, farm, or nonprofit 
organization incurred because of operating in a new location.



Sec. 700.167  Moving and related expenses--fixed payment.

    A displaced person (other than an outdoor advertising display 
business who is eligible for a payment for his actual moving and related 
expenses under subpart D of these regulations) is entitled to receive a 
fixed payment in lieu of a payment for such actual moving and related 
expenses.



Sec. 700.169  Fixed payment for moving expenses--residential moves.

    The fixed payment for moving and related expenses of a certified 
eligible head of household from a dwelling consists of--
    (a) A moving expense allowance not to exceed $300 (three hundred 
dollars).
    (b) A dislocation allowance of $200 (two hundred dollars).



Sec. 700.171  Fixed payment for moving expenses--nonresidential moves.

    (a) General. The fixed payment for moving and related expenses of a 
displaced business or farm operation that meets applicable requirements 
under this section is an amount equal to its average annual net earnings 
as computed in accordance with Sec. 700.173, but not less than $2,500 
nor more than $10,000. A nonprofit organization which meets the 
applicable requirements under this section is entitled to a payment of 
$2,500.
    (b) Business. A business qualifies for payment under this section if 
the Commission determines that--
    (1) The business cannot be relocated without a substantial loss of 
its existing patronage.

[[Page 231]]

    (2) The business is not part of a commercial enterprise having 
another establishment, which is not being acquired by the Commission, 
and which is under the same ownership and engaged in the same or similar 
business activities. For purposes of this rule, no remaining business 
facility which had average annual gross receipts of less than $1,000 and 
average annual net earnings of less than $500, during the two taxable 
years prior to displacement, shall be considered ``another 
establishment''; and
    (3) The business had (i) average annual gross receipts of at least 
$1,000 during the two taxable years prior to displacement, or (ii) 
average annual net earnings of at least $500 as determined in accordance 
with Sec. 700.173. However, the Commission may waive this test in any 
case in which it determines that its use would cause a substantial 
hardship.
    (c) Determining number of businesses acquired. In determining 
whether two or more legal entities, all of which have been acquired, 
constitute a single business, which is entitled to only one fixed 
payment, all pertinent factors shall be considered, including the extent 
to which--
    (1) The same premises and equipment are shared;
    (2) Substantially identical or interrelated business functions are 
carried out and business and financial affairs are commingled;
    (3) The entities are held out to the public, and to those 
customarily dealing with them, as one business, and
    (4) The same person or closely related persons own, control or 
manage the affairs of the entities.
    (d) Farm operation. A farm operation qualifies for a payment under 
this section if the Commission determines that it meets the criteria set 
forth in Sec. 700.171(b)(3). In the case of a partial acquisition, the 
fixed payment shall be made only if the Commission determines that--
    (1) The part acquired was a farm operation before the acquisition; 
or
    (2) The partial acquisition caused the operator to be displaced from 
the farm operation; or
    (3) The partial acquisition caused a substantial change in the 
nature of the farm operation.
    (e) Nonprofit organization. A nonprofit organization qualifies for a 
$2,500 payment under this section, if the Commission determines that 
it--
    (1) Cannot be relocated without a substantial loss of existing 
patronage (membership and clientele). A nonprofit organization is 
assumed to meet this test, unless the Commission demonstrates otherwise; 
and
    (2) Is not part of an enterprise having at least one other 
establishment engaged in the same or similar activity which is not being 
acquired by the Commission.



Sec. 700.173  Average net earnings of business or farm.

    (a) Computing net earnings. For purposes of this subpart, the 
average annual net earnings of a business or farm operation is one-half 
of its net earnings before Federal, State and local income taxes, during 
the two taxable years immediately prior to the taxable year in which it 
was displaced. However, if the business or farm was not in operation for 
the full two taxable years prior to displacement, net earnings shall be 
computed on the basis of the actual period of operation on the acquired 
site, projected to an annual rate. Also, average annual net earnings may 
be based upon a different period of time when the Commission determines 
it to be more equitable. Net earnings include any compensation obtained 
from the business or farm operation by its owner, his spouse, or 
dependents.
    (b) Documentation. A displaced person who elects to receive a fixed 
payment in lieu of actual expenses incurred in moving his business or 
farm shall furnish the Commission proof of his net earnings through 
income tax returns, certified financial statements or other reasonable 
evidence.



Sec. 700.175  Temporary emergency moves.

    (a) General. An eligible household may be granted temporary 
relocation resources, at the Commission's discretion, provided:

[[Page 232]]

    (1) That the move is for a limited time period not to exceed 12 
months unless extended by the Commission.
    (2) That permanent relocation resources are not available at the 
time of displacement.
    (3) Prior approval of the Commission is obtained.
    (4) That a Relocation Contract providing for permanent relocation 
has been executed.
    (5) The head of household actually remained domiciled on lands 
partitioned to the tribe of which he is not a member as of December 22, 
1974, and continuously thereafter.
    (6) The head of household shall vacate all improvements owned by him 
on lands partitioned to the tribe of which he is not a member and shall 
transfer title to said improvements to the Commission.

Temporary relocation shall in no way diminish the responsibility of the 
Commission to offer relocation assistance and services designed to 
achieve permanent and suitable facilities.
    (b) Conditions under which move to temporary housing accommodations 
may be approved. The move of a family or individual into temporary 
housing accommodations may be approved by the Commission only if the 
following conditions are met.
    (1) The move will be undertaken because:
    (i) It is necessary because of an emergency as determined by the 
Commission; or
    (ii) The individual or family is subject to conditions hazardous to 
his or his family's health or safety.
    (2) The temporary housing is decent, safe, and sanitary.
    (3) The Commission shall have determined that within twelve (12) 
months of the date of the temporary move, replacement housing meeting 
Commission-approved standards will be available for occupancy by the 
persons temporarily rehoused.
    (4) Prior to the move, the Commission shall provide in writing 
assurance to each head of household that:
    (i) Replacement housing will be available at the earliest possible 
time but in any event no later than twelve (12) months from the date of 
the move to temporary housing.
    (ii) Replacement housing will be made available on a priority basis, 
to the individual or family who has been temporarily rehoused.
    (iii) The move to temporary rehousing will not, in any way, affect a 
claimant's eligibility for a replacement housing payment nor deprive him 
of the same choice or replacement housing units that would have been 
made available had the temporary move not been made.
    (iv) The Commission will pay all costs in connection with the move 
to temporary housing, including any increased housing costs.
    (c) Agency documentation. To request Commission approval for a 
temporary move of a family, the following information shall be submitted 
to the Commission (additional information may be required on a case-by-
case basis):
    (1) An explanation of the necessity for the temporary move, based 
upon the criteria set forth by the Commission.
    (2) The estimated duration of the temporary occupancy.
    (3) In the case of the family or individual, (i) a copy of the 
written assurance which will be provided to the person explaining his 
rights and the continuing obligation of the agency to provide relocation 
assistance, and (ii) evidence that the family or individual agrees to 
make the temporary move.
    (d) Costs in connection with temporary move--(1) Costs included. 
Costs included in a temporary move may cover the following:
    (i) Actual reasonable moving costs and related expenses for the move 
to temporary accommodations.
    (ii) For the family or individual moved from a rental unit the 
difference, if any, between the rental cost of the dwelling vacated and 
the rental cost of the temporary unit.
    (iii) For a homeowner who retains ownership of his dwelling the 
reasonable cost of renting the temporary dwelling.
    (iv) For a homeowner whose dwelling has been acquired the 
difference, if any, between his housing costs for the acquired dwelling 
and the rental cost of the temporary unit.
    (2) Costs not a replacement home benefit. Costs in connection with a 
move to

[[Page 233]]

temporary accommodations are not to be considered as relocation payments 
under the Act. (See paragraph (e) of this section.)
    (e) Distinguishing between cost of temporary move and relocation 
payment. The costs of a temporary move, as decribed in the foregoing 
subparagraphs, are not to be considered as all or a part of the 
relocation payment to which a displaced person is entitled under the 
Act. Thus, when a family is moved to temporary accommodations, a 
relocation payment is not made and the election or choice of type of 
payments that would ordinarily be made upon displacement must be delayed 
until the final move is made. When the move out of temporary 
accommodations is made, the displaced person shall receive the full 
relocation payments to which he/she is entitled pursuant to Commission 
regulations.



                 Subpart E_Replacement Housing Payments



Sec. 700.181  Eligibility.

    (a) Basic eligibility requirements. A certified eligible head of 
household who established his/her residency requirements in the area 
partitioned to the tribe of which he/she is not a member, is eligible 
for the replacement housing payment specified at Sec. 700.183(a).
    (b) Other rules and requirements. A payment under this subpart E is 
subject to the other applicable rules and requirements of these 
regulations.



Sec. 700.183  Determination of replacement housing benefit.

    (a) Amount of benefit. The replacement housing benefit for a 
certified eligible head-of-household is an amount not to exceed fifty-
five thousand dollars ($55,000) for a household of three or less and not 
to exceed sixty-six thousand dollars ($66,000) for a household of four 
or more. Subject to such other requirements of these regulations as may 
apply, the replacement housing benefit shall be calculated as follows;
    (1) The amount of the fair market value of the habitation and 
improvements purchased from an eligible head-of-household pursuant to 
subpart B of this part shall be applied first toward the cost of a 
replacement dwelling.
    (2) An additional amount shall be added to the value of the 
habitation and improvements to equal the cost of a decent, safe, and 
sanitary replacement dwelling.
    (3) The total value of the replacement dwelling shall not exceed the 
amount of the replacement housing benefit specified in paragraph (a) of 
this section.
    (4) In the event the cost of providing a decent, safe, and sanitary 
replacement dwelling is less than the fair market value of the 
habitation and improvements purchased from an eligible head-of-household 
pursuant to subpart B of this part, the difference shall be paid to that 
head-of-household.
    (b) The Commission shall, on or before the first Friday in April of 
each fiscal year, after consultation with the Secretary of the 
Department of Housing and Urban Development, annually increase, decrease 
or leave unadjusted the above limitations on replacement housing 
benefits to reflect changes in housing or development and construction 
costs, other than costs of land, during the preceding year. In 
determining whether to increase or decrease the replacement housing 
benefit limitations set forth above, the Commission shall consider the 
following:
    (1) The most recent percentage rate of increase or decrease in 
single family housing construction costs reported by HUD. (General 
Prototype Housing Costs For One to Four Family Dwelling Units).
    (2) The most recent Boecht Building Cost Modifier.
    (3) The experience of relocatee families in obtaining replacement 
housing within the current benefits.
    (4) The cost of available replacement housing which meets Commission 
standards as set forth in these regulations.
    (5) Such other available information which the Commission deems 
appropriate and which is relevant to a determination of whether 
replacement housing benefits should be increased or decreased to reflect 
change in housing or development and construction costs during the 
preceding year.

[[Page 234]]

    (c) If the owner retains ownership of his dwelling, moves it from 
the acquired site, and reoccupies it on a replacement site, the purchase 
price of the replacement dwelling shall be considered to be the sum of--
    (1) The cost of the replacement site, if any; plus
    (2) The moving and restoration expenses; plus
    (3) The costs, if any, incurred to make the unit a decent, safe, and 
sanitary replacement dwelling; but not to exceed the above limitation on 
total replacement home benefits.

[47 FR 17988, Apr. 27, 1982, as amended at 52 FR 21951, June 10, 1987]



Sec. 700.187  Utilization of replacement home benefits.

    The Commission shall assure that all eligible heads of household 
receive a decent, safe and sanitary replacement dwelling in the 
following manner:
    (a) If the eligible head of household owns no dwelling other than 
that on the area from which he or she must move pursuant to the Act, the 
Commission will make funds available to the head of household as 
provided in these regulations for the acquisition of a replacement home 
in one of the following manners:
    (1) Purchase of an existing home, by the head of household,
    (2) Construction of a home by the head of household,
    (3) Participation or purchase by the head of household in a mutual 
help housing or other home ownership project under the U.S. Housing Act 
of 1937 (50 Stat. 888, as amended; 42 U.S.C. 1401) or in any other 
federally assisted housing program.
    (b) If the eligible head of household owns or is buying or building 
a home in an area other than the area from which he or she must move 
pursuant to the Act, the Commission will expend relocation benefits in 
one of the following manners:
    (1) If the home is decent, safe, and sanitary, but is encumbered by 
a mortgage, such mortgage existing as of the effective date of these 
regulations, the Commission will expend replacement housing benefits up 
to the maximum then existing benefit to accelerate to the maximum extent 
possible the achievement by that household of debt-free home ownership.
    (2) If the home is owned free and clear but does not meet Commission 
decent, safe, and sanitary standards, the Commission will, at its 
discretion, either:
    (i) Expend replacement home benefits for improvements to assure the 
home meets decent, safe, and sanitary standards, or
    (ii) Expend replacement home benefits for the acquisition of a 
replacement dwelling as if the eligible head of household or spouse did 
not own a home as in paragraph (a) of this section.
    (3) If the home is neither owned free and clear nor decent, safe, 
and sanitary, the Commission will, at its discretion, either:
    (i) Expend replacement home benefits for improvements to assure that 
the home meets decent, safe, and sanitary standards, and to accelerate 
to the maximium extent possible the achievement of debt-free home 
ownership, or
    (ii) Expend replacement home benefits for the acquisition of a 
replacement dwelling as if the eligible head of household or spouse did 
not own a home as in paragraph (a) of this section.
    (4) If the home is decent, safe, and sanitary, and is owned free and 
clear, no replacement home benefits will be paid.
    (c) Home improvements shall include the following: General repairs, 
painting and texturing, fencing--including corrals, landscaping, 
grading, room additions, re-modeling, roofing, insulating, repair or 
improvements to the water, sewerage, cooling, heating, or electrical 
systems, storage buildings, energy conservation measures, and other home 
improvements as determined and defined by the Commission.
    (d) In implementing these regulations the Commission will encourage 
the use of innovative energy or other technologies in order to achieve 
the minimum monthly housing cost feasible for each replacement house.

[[Page 235]]



Sec. 700.189  Expenditure of replacement home benefits.

    Replacement home benefits shall be expended or obligated in full at 
or before the time of original acquisition except as stated below. It is 
not anticipated that such exceptions would be common and each such 
instance shall be reviewed and a determination will be made by the 
Certification Officer.
    (a) Under unusual circumstances such as: Unknown (latent) defects in 
the replacement dwellings, significant change of circumstances and 
extreme hardship, benefits may be expended after the time of original 
acquisition up to the existing maximum replacement home benefit.
    (b) All replacement home benefits shall be expended not later than 
one (1) year after the date of payment of the incentive bonus, except 
under unusual circumstances as stated above, up to the statutory 
maximum.
    (c) Replacement home benefits shall not be expended for maintenance 
except under unusual circumstances as stated above, up to the statutory 
maximum.
    (d) For purposes of this paragraph, the time of original acquisition 
shall be defined as the date of execution of the Commission's Relocation 
Contract.



                      Subpart F_Incidental Expenses



Sec. 700.195  General.

    Incidental expenses are those reasonable expenses, as determined by 
the Commission, to be incidental to the purchase of the replacement 
dwelling, but not prepaid.



Sec. 700.197  Basic eligibility requirements.

    A certified eligible head of household is eligible for reimbursement 
of expenses that are incidental to the purchase of a replacement 
dwelling, as provided in Sec. 700.199 hereof.



Sec. 700.199  Incidental expenses.

    (a) Eligible costs. Subject to the limitations in paragraphs (b) and 
(c) of this section, the incidental expenses to be paid are those 
actually incurred by the displaced person incident to the purchase of 
the replacement dwelling, including--
    (1) Legal, closing, and related costs, including those for title 
search, preparing conveyance instruments, notary fees, preparing plats, 
recording fees; and title insurance;
    (2) Lender, FHA or VA appraisal fees;
    (3) FHA or VA application fee;
    (4) Certification of structural soundness when required by the 
lender;
    (5) Credit report;
    (6) Owner's and mortgagee's evidence or assurance of title;
    (7) Escrow agent's fee;
    (8) State revenue or documentary stamps, sales or transfer taxes;
    (9) Such administrative costs as are necessary to secure and acquire 
homesite leases and/or allotments on tribal lands. These costs may 
include survey fees, appropriate tribal fees and other conveyance 
instruments as may be appropriate;
    (10) Costs, such as advertising charges, incurred incident to the 
purchase of the improvements owned by the head of household.
    (11) Cost related to fee inspector's inspections of the replacement 
dwelling.
    (12) Such other costs as the Commission determines to be incidental 
to the purchase.
    (b) Truth in lending charge. Any expense, which is determined to be 
part of the debt service or finance charge under 15 U.S.C. 131-1641 and 
Regulation Z (12 CFR part 226) issued thereunder by the Board of 
Governors of the Federal Reserve System, is not eligible for 
reimbursement as an incidental expense.



             Subpart G_Assistance Payments (Incentive Bonus)



Sec. 700.205  Eligibility requirements.

    A certified eligible head of household is eligible for the 
assistance payment pursuant to section 14(b) of the Act.
    (a) Amount of payment. The amount of payment shall be computed in 
accordance with the schedule provided for in section 14(b) of the Act.
    (b) Date for determination of amount of assistance payment. The date 
of completion and filing with the Commission of the Application for 
Relocation Assistance and Agreement to Relocate shall

[[Page 236]]

be the date used for determination of the amount of the assistance 
payment.
    (c) Time of payment. Assistance payments provided for in this 
section shall only be paid upon actual occupancy of the replacement 
dwelling and vacation of the acquired habitation and/or improvement, if 
any, in the area partitioned to the Tribe of which he/she is not a 
member.



                Subpart H_Last Resort Replacement Housing



Sec. 700.209  Applicability.

    The provisions of this subpart apply only when the Commission 
determines that, unless it acts under the provisions of this subpart, 
there is a reasonable likelihood that replacement dwelling(s) will not 
be available on a timely basis to person(s) to be displaced.



Sec. 700.211  Basic rights and rules.

    The provisions of this subpart do not deprive any displaced person 
of any rights described elsewhere in these regulations. The Commission 
may meet its obligation to provide persons with reasonable opportunities 
to relocate to a replacement dwelling by offering such opportunities 
developed or to be developed under this subpart.



Sec. 700.213  Methods of providing last resort replacement housing.

    (a) General. The methods of providing last resort housing include, 
but are not limited to--
    (1) Rehabilitation of, and/or additions to, an existing replacement 
dwelling;
    (2) A replacement housing payment in excess of the limits set forth 
in subparts E and F of this part or the provision of direct Commission 
mortgage financing;
    (3) The construction of a new replacement dwelling;
    (4) The relocation and, if necessary, rehabilitation of a 
replacement dwelling;
    (5) The purchase of land and/or a replacement dwelling by the 
Commission and subsequent sale or lease to, or exchange with, a 
displaced person; and
    (6) The removal of barriers to the handicapped as may be necessary.



                     Subpart I_Commission Operations



Sec. 700.219  General.

    (a) The operation of the Commission shall be governed by a 
Management Manual passed, amended or repealed by a majority of the 
Commission at any regular or special meeting. The Management Manual is 
the prescribed medium for publication of policies, procedures and 
instructions which are necessary to facilitate the day-to-day operations 
and administration of the Commission.
    (b) Meetings. The Commission shall hold a regular monthly meeting on 
the first Friday of each month at a time and place designated by public 
notice unless said Friday falls on a legal holiday, in that event, the 
meeting shall begin on the next regular workday. The monthly meeting may 
continue for as many days thereafter as is necessary to complete the 
regular affairs of the Commission, and may be recessed from time to time 
and reconvened at times designated by the Chairperson.
    (c) Special public meetings. May be called by any Commissioner with 
ten (10) working days written notice given to the other Commissioners. 
Written notice may be waived by a release bearing the signatures of all 
three Commissioners.
    (d) Executive Session. During a regular or special meeting, any 
Commissioner may request an Executive Session for purposes of personnel 
and administrative matters.
    (e) Compliance with other laws and regulations. As a federal agency, 
the Commission will conduct its activities in conformance with 
applicable federal statutes and administrative procedures.



                     Subpart J_Inspection of Records



Sec. 700.235  Purpose and scope.

    (a) This subpart contains the regulations of the Commission 
implementing the requirement of subsection (a)(3) of the Freedom of 
Information Act, 5 U.S.C. 552(a)(3), which provides that the Commission 
``upon any request for records which (1) Reasonably describes

[[Page 237]]

such records and (2) is made in accordance with published rules stating 
the time, place, fees (if any), and procedures to be followed, shall 
make the records promptly available to any person.'' This subpart 
describes the procedures by which records may be obtained from the 
Commission. The procedures in this subpart are not applicable to 
requests for records published in the Federal Register or opinions in 
the adjudication of cases, statements of policy and interpretations and 
administrative staff manuals which have been published or made available 
under subpart A of this part.



Sec. 700.237  Definitions.

    Act. As used in this subpart, ``Act'' means the ``Freedom of 
Information Act,'' 5 U.S.C. 552.



Sec. 700.239  Records available.

    (a) Commission policy. It is the policy of the Commission to make 
the records of the Commission available to the public to the greatest 
extent possible, in keeping with the spirit of the Freedom of 
Information Act.
    (b) Statutory disclosure requirement. The Freedom of Information Act 
requires that the Commission, on a request from a member of the public 
to inspect or copy records made in accordance with the procedures in 
this subpart, shall promptly make the records available.
    (c) Statutory exemptions. The Act exempts nine categories of records 
from this disclosure requirement. The Act provides that disclosure is 
not required of matters that are:
    (1) Specifically authorized under criteria established by an 
Executive order to be kept secret in the interest of national defense or 
foreign policy and in fact properly classified pursuant to such 
Executive Order;
    (2) Related solely to the internal personnel rules and practices of 
an agency;
    (3) Specifically exempt from disclosure by statute;
    (4) Trade secrets and commercial or financial information obtained 
from a person and privileged or confidential;
    (5) Inter-agency or intra-agency memorandums or letters which would 
not be available by law to a party other than an agency in litigation 
with the agency;
    (6) Personnel and medical files and similar files the disclosure of 
which would constitute a clearly unwarranted invasion of personal 
privacy;
    (7) Investigatory records compiled for law enforcement purposes, but 
only to the extent that production of such records would
    (i) Interfere with enforcement proceedings;
    (ii) Deprive a person of a right to a fair trial or an impartial 
adjudication,
    (iii) Constitute an unwarranted invasion of personal privacy,
    (iv) Disclose the indentity of a confidential source and, in the 
case of a record compiled by a criminal law enforcement authority in the 
course of a criminal investigation, or by an agency conducting a lawful 
national security intelligence investigation, confidential information 
furnished only by the confidential source,
    (v) Disclose investigative techniques and procedures, or
    (vi) Endanger the life or physical safety of law enforcement 
personnel;
    (8) Contained in or related to examination, operating, or condition 
reports prepared by, on behalf of, or for the use of an agency 
responsible for the regulation or supervision of financial institutions; 
or
    (9) Geological and geophysical information and data, including maps, 
concerning wells.
    (d) Decisions on requests. It is the policy of the Commission to 
withhold information falling within an exemption only if (1) disclosure 
is prohibited by statute or Executive Order or (2) sound grounds exist 
for invocation of the exemption.
    (e) Deletion of portions of records. If a requested record contains 
material within an exemption together with material not within an 
exemption and it is determined under the regulations in this subpart to 
withhold the exempt material, any reasonably segregable nonexempt 
material shall be separated from the exempt material.
    (f) Creation of records. This subpart applies only to records which 
exist at the time a request for records is made. Records are not 
required to be created in response to a request by combining

[[Page 238]]

or compiling selected items from the files or by preparing a new 
computer program, nor are records required to be created to provide the 
requester with such data as proportions, percentages, frequency 
distributions, trends, or comparisons.
    (g) Records of concern to other departments and agencies. (1) If the 
release of a record would be of concern to both the Commission and 
another Federal agency, the record will be made available by the 
Commission only if the interest of the Commission is the primary 
interest. If the Commission's interest is not the primary interest, the 
requester shall be referred in writing to the agency having the primary 
interest. The Commission has the primary interest in a record if the 
record was developed pursuant to Commission regulations, directives, or 
request even though the record originated outside of the Commission.
    (2) If the release of a record in which the Commission has a primary 
interest would be of substantial concern to another agency, the official 
processing the request, should, if administratively feasible and 
appropriate, consult with that agency before releasing the record.
    (h) Records obtained from the public. If a requested record was 
obtained by the Commission from a person or entity outside of the 
Government, the official responsible for processing the request shall, 
when it is administratively feasible to do so, seek the views of that 
person or entity on whether the record should be released before making 
a decision on the request.



Sec. 700.241  Request for records.

    (a) Submission of requests. A request to inspect or copy records 
shall be made to the installation where the records are located. If the 
records are located at more than one installation or if the specific 
location of the records is not known to the person wishing to inspect or 
copy the records, he may direct his request to the head of the 
appropriate bureau, or the bureau's chief public information officer, if 
any.
    (b) Form of request. (1) Requests invoking the Freedom of 
Information Act shall be in writing.
    (2)(i) A request must reasonably describe the records requested. A 
request reasonably describes the records requested if it will enable an 
employee of the Commission familiar with the subject area of the request 
to locate the record with a reasonable amount of effort. If such 
information is available, the request should identify the subject matter 
of the record, the date when it was made, the place where it was made, 
and the person or office that made it, the present custodian of the 
record, and any other information which will assist in location of the 
requested records. If the request involves a matter known by the 
requester to be in litigation, the request should also state the case 
name and court hearing the case.
    (ii) If the description of a record sought is insufficient to allow 
identification and location of the record, the response denying the 
request on this ground shall so state and, to the extent possible, 
indicate what additional descriptive information, if any, would assist 
in location of the record.
    (3) A request shall state the maximum amount of fees which the 
requester is willing to pay. Requesters are notified that under Sec. 
700.251, the failure to state willingness to pay fees as high as are 
anticipated by the Commission will delay running of the time limit and 
delay processing of the request, if the responsible official anticipates 
that the fees chargeable may exceed $25.00.
    (4)(i) To insure expeditious handling, requests shall be prominently 
marked, both on the envelope and on the face of the request, with the 
legend ``FREEDOM OF INFORMATION REQUEST.'' The failure of a request to 
bear such a legend will not disqualify a request from processing under 
the procedures in this subpart if the request otherwise meets the 
requirments of this section. A request not bearing the legend ``FREEDOM 
OF INFORMATION REQUEST'' will not, however, be deemed to have been 
received for purposes of the running of the time limit set out in Sec. 
700.245 until it has been identified by bureau personnel as a Freedom of 
Information request and marked by them with this legend.

[[Page 239]]

    (ii) Commission personnel identifying a communication from the 
public not bearing the legend ``FREEDOM OF INFORMATION REQUEST'' as a 
request otherwise meeting the requirements of this section shall 
immediately (A) mark the communication with the legend ``FREEDOM OF 
INFORMATION REQUEST.'' (B) date the request to reflect the date on which 
it was identified, and (C) take steps to assure proper processing of the 
request under the procedures in this subpart.
    (d) Categorical requests. (1) A request for all records falling 
within a reasonably specific category shall be regarded as conforming to 
the statutory requirement that records be reasonably described if (i) it 
can be determined which particular records are covered by the request 
and (ii) the records can be searched for, collected and produced without 
unduly burdening or interfering with Commission operations because of 
the staff time consumed or the resulting disruption of the files.
    (2) If a categorical request is determined under paragraph (d)(1) of 
this section not to reasonably describe the records requested, the 
response denying the request on that ground shall specify the reasons 
why and shall extend to the requester an opportunity to confer with 
knowledgeable Commission personnel in an attempt to reduce the request 
to manageable proportions by reformulation and by agreeing on an orderly 
procedure for the production of the records.



Sec. 700.243  Action on initial requests.

    (a) Granting of requests. (1) A requested record shall be made 
available if (i) the record is not exempt from disclosure or (ii) the 
record is exempt from disclosure, but its withholding is neither 
required by statute or Executive order nor supported by sound grounds.
    (b) Form of grant. (1) When a requested record has been determined 
to be available, the official processing the request shall immediately 
notify the person requesting the record as to where and when the record 
is available for inspection or as the case may be, where and when copies 
will be available. If fees are due under Sec. 700.251, the responsible 
official shall also state the amount or, if the exact amount cannot be 
determined, the approximate amount of fees due.
    (2) If the record was obtained by the Commission from a person or 
entity outside of the Government, the responsible official shall, when 
it is administratively feasible to do so, notify that person or entity 
that the record has been made available.
    (c) Denial of requests. (1) A request for a record may be denied 
only if it is determined that (i) the record is exempt from disclosure 
and (ii) that withholding of the record is required by statute or 
Executive order or supported by sound grounds.
    (2) A request to inspect or copy a record shall be denied only by 
the Freedom of Information Act Officer or by an official whom the 
Executive Director has in writing designated.
    (d) Form of denial. A reply denying a request shall be in writing 
and shall include:
    (1) A reference to the specific exemption or exemptions under the 
Freedom of Information Act authorizing the withholding of the record;
    (2) The sound ground for withholding;
    (3) A listing of the names and titles or positions of each person 
responsible for the denial;
    (4) A statement that the denial may be appealed to the Commission 
pursuant to Sec. 700.247 and that such appeal must be in writing and be 
received by this official within twenty (20) days (Saturdays, Sundays, 
and public legal holidays excepted) after the date of the denial, in the 
case of the denial of an entire request, or within twenty (20) days 
(Saturdays, Sundays, and public legal holidays excepted) of records 
being made available, in the case of a partial denial, by writing to the 
Freedom of Information Act Officer, Navajo-Hopi Indian Relocation 
Commission, P.O. Box KK, Flagstaff, Arizona 86002.
    (e) Exception. The requirements of paragraphs (c), (d), and (e) of 
this section do not apply to requests denied under Sec. 2.14 on the 
ground that the request did not reasonably describe the records 
requested or to requests for records which do not exist.

[[Page 240]]

    (f) Filing of denials. Copies of all replies denying, in whole or 
part, a request for a record which are issued under this section of 
Sec. 700.243 shall be promptly submitted by the Freedom of Information 
Act Officer, denials to the Executive Director and the Commission's 
legal counsel.



Sec. 700.245  Time limits on processing of initial requests.

    (a) Basic limit. Requests for records shall be processed promptly. A 
determination whether to grant or deny a request shall be made within no 
more than ten (10) days (excepting Saturdays, Sundays, and legal public 
holidays) after receipt of a request. This determination shall be 
communicated immediately to the requester.
    (b) Running of basic time limit. For purposes of paragraph (a) of 
this section, the time limit commences to run when a request is received 
at the Commission's office in Flagstaff, Arizona.
    (c) Extensions of time. In the following unusual circumstances, the 
time limit for acting upon an initial request may be extended to the 
extent reasonably necessary to the proper processing of the particular 
request, but in no case may the time limit be extended for more than ten 
(10) working days:
    (1) The need to search for and collect the requested records from 
field facilities or other establishments that are separate from the 
office processing the request;
    (2) The need to search for, collect, and appropriately examine a 
voluminous amount of separate and distinct records which are demanded in 
a single request; or
    (3) The need for consultation, which shall be conducted with all 
practicable speed, with another agency having a substantial interest in 
the determination of the request or among two or more components of the 
agency having substantial subject-matter interest therein.
    (d) Authority to make extensions. (1) An extension of time under 
paragraph (c) of this section may be made only by the Freedom of 
Information Act Officer or such higher authority as the Commission has 
in writing designated.
    (2) The person requesting the records shall be notified in writing 
of the extension. The written notice shall state the reason for the 
extension and the date on which a determination on the request is 
expected to be dispatched.
    (3) The Freedom of Information Act Officer shall be responsible for 
promptly furnishing copies of such notices to the Executive Director and 
the Commission's legal counsel.
    (e) Treatment of delay as denial. (1) If no determination has been 
reached at the end of the ten (10) day period for deciding an initial 
request, or the last extension thereof, the requester may deem his 
request denied and may exercise a right of appeal in accordance with the 
provisions of Sec. 700.247.
    (2) When no determination can be reached within the applicable time 
limit, the responsible official shall nevertheless continue to process 
the request. On expiration of the time limit, the responsible official 
shall inform the requester of the reason for the delay, of the date on 
which a determination may be expected to be dispatched, and of his right 
to treat the delay as a denial for purposes of appeal to the Commission 
in accordance with Sec. 700.247. The requester may be asked to consider 
delaying use of his right to appeal until the date on which the 
determination is expected to be dispatched. If the requester so agrees, 
he is deemed not to have treated the failure to respond within the 
applicable time limit as a denial for purposes of the running of the 
twenty (20) working-day appeal period set out in Sec. 700.247. If a 
determination of the request is not issued by the new agreed upon date, 
or if the request is denied in whole or part, the requester will have 
available his full right of appeal under Sec. 700.247, including the 
entire twenty (20) working-day period for filing of the appeal.



Sec. 700.247  Appeals.

    (a) Right of appeal. Where a request for records has been denied, in 
whole or part, the person submitting the request may appeal the denial 
to the Commission.
    (b) Time for appeal. An appeal must be received no later than twenty 
(20) days (Saturdays, Sundays, and public legal holidays excepted) after 
the date of the initial denial, in the case of a denial of an entire 
request, or twenty (20) days

[[Page 241]]

(Saturdays, Sundays, and public legal holidays excepted) after records 
have been made available, in the case of a partial denial.
    (c) Form of appeal. (1) An appeal shall be initiated by filing a 
written notice of appeal. The notice shall be accompanied by copies of 
the original request and the initial denial and should, in order to 
expedite the appellate process and give the requester an opportunity to 
present his arguments, contain a brief statement of the reasons why the 
requester believes the initial denial to have been in error.
    (2) The appeal shall be addressed to Freedom of Information Act 
Officer, Navajo-Hopi Indian Relocation Commission, P.O. Box KK, 
Flagstaff, Arizona 86002.
    (3)(i) Both the envelope containing the notice of appeal and the 
face of the notice shall bear the legend ``FREEDOM OF INFORMATION 
APPEAL''. The failure of an appeal to bear such a legend will not 
disqualify an appeal from processing under Sec. 2.18 if the appeal 
otherwise meets the requirements of this section. An appeal not bearing 
the legend ``FREEDOM OF INFORMATION APPEAL'' will not, however, be 
deemed to have been received for purposes of the running of the time 
limit set out in Sec. 700.249 until it has been identified by 
Commission personnel as a Freedom of Information appeal and marked by 
them with this legend.
    (ii) Commission personnel identifying a communication from the 
public not bearing the legend ``FREEDOM OF INFORMATION APPEAL'' as an 
appeal otherwise meeting the requirements of this section shall 
immediately (A) mark the communication with the legend ``FREEDOM OF 
INFORMATION APPEAL,'' (B) date the appeal to reflect the date on which 
it was identified, and (C) take steps to assure proper processing of the 
appeal under the procedures in this subpart.
    (4) The Freedom of Information Act Officer shall be responsible for 
promptly furnishing copies of such notices to the Executive Director and 
the Commission's legal counsel.



Sec. 700.249  Action on appeals.

    (a) Authority. Appeals from initial denials of requests for records 
shall be decided for the Commission by the Executive Director after 
consultation with the Commission's legal counsel.
    (b) Time limit. A final determination on any appeal shall be made 
within twenty (20) days (excepting Saturdays, Sundays, and public legal 
holidays) after receipt of the appeal.
    (c) Extensions of time. (1) If the time limit for responding to the 
initial request for a record was not extended under the provisions of 
Sec. 700.245 or was extended for fewer than ten (10) working days, the 
time for processing of the appeal may be extended by the Executive 
Director to the extent reasonably necessary to the proper processing of 
the appeal, but in no event may the extension, when taken together with 
any extension made during processing of the initial request, result in 
an aggregate extension with respect to any one request of more than ten 
(10) working days. The time for processing of an appeal may be extended 
only if one or more of the unusual circumstances listed in Sec. 
700.245(c) requires an extension.
    (2) The Executive Director shall, in writing, advise the appellant 
of the reasons for the extension and the date on which a final 
determination of the appeal is expected to be dispatched.
    (3) If no determination on the appeal has been reached at the end of 
the twenty (20) working-day period for deciding an appeal, or the last 
extension thereof, the requester is deemed to have exhausted his 
administrative remedies, giving rise to a right of review in a district 
court of the United States as specified in 5 U.S.C. 552(a)(4). When no 
determination can be reached within the applicable time limit, the 
appeal will nevertheless continue to be processed. On expiration of the 
time limit, the requester shall be informed of the reason for the delay, 
of the date on which a determination may be expected to be dispatched, 
and of his right to seek judicial review. The requester may be asked to 
consider delaying resort to his right to judicial review until the date 
on which the determination on his appeal is expected to be dispatched.

[[Page 242]]

    (d) Form of decision. The final determination on an appeal shall be 
in writing and shall state the basis for the determination. If the 
determination is to release the requested records or portions thereof, 
the Freedom of Information Act Officer shall immediately make the 
records available or instruct the appropriate bureau official to make 
them immediately available. If the determination upholds in whole or 
part the initial denial of a request for records, the determination 
shall advise the requester of his right to obtain judicial review in the 
U.S. District Court for the district in which the withheld records are 
located, or in which the requester resides or has his principal place of 
business or in the U.S. District Court for the District of Columbia, and 
shall set forth the names and titles or positions of each person 
responsible for the denial.
    (e) Distribution of copies. Copies of final determinations issued by 
the Commission shall be provided to the Commission's legal counsel.



Sec. 700.251  Fees.

    (a) Services for which fees may be charged. (1) Unless waived 
pursuant to the provisions of paragraph (c) of this section, user fees 
shall be charged for document search and duplication costs incurred in 
responding to requests for records. User fees also shall be charged for 
the formal certification of verification attached to authenticated 
copies of records under the seal of the Commission.
    (2) Unless waived or reduced pursuant to paragraph (c) of this 
section, user fees shall be charged in accordance with the schedule of 
charges contained in the Commission's Management Manual.
    (b) Services for which fees may not be charged. No fee may be 
charged for any services required by the Freedom of Information Act to 
be performed in responding to a request for records other than those 
services for which fees may be charged under paragraph (a) of this 
section. Services for which no fees may be charged include, but are not 
limited to,
    (1) Examining requested records to determine whether they are exempt 
from mandatory disclosure or whether, even if exempt, they should 
nevertheless be made available in whole or part,
    (2) Deleting exempt matter from records so that the remaining 
portions of the records may be made available,
    (3) Monitoring a requester's inspection of agency records made 
available to him for inspection, and
    (4) Resolving legal and policy issues affecting access to requested 
records.
    (c) Waiver or reduction of fees. (1) Fees otherwise chargeable for 
document search and duplication costs incurred in responding to requests 
for records may be waived or reduced, as appropriate, if the official 
making the records available determines that furnishing the records can 
be considered as primarily benefiting the public as opposed to the 
requester.
    (2) Fees otherwise applicable for document research and duplication 
costs incurred in responding to requests may be waived and not charged 
if the request involves:
    (i) Furnishing unauthenticated copies of any documents reproduced 
for gratuitous distribution;
    (ii) Furnishing one copy of a personal document (e.g., a birth 
certificate) to a person who has been required to furnish it for 
retention by the Commission;
    (iii) Furnishing one copy of the transcript of a hearing before a 
hearing officer in a grievance or similar proceeding to the employee for 
whom the hearing was held.
    (3) Fees otherwise chargeable for document search and duplication 
costs incurred in responding to requests may be waived or reduced if the 
cost of collecting the fee would exceed the amount of the fee or if the 
request involves:
    (i) Furnishing records to press, radio and television 
representatives for dissemination through the media to the general 
public;
    (ii) Furnishing records to donors with respect to their gifts;
    (iii) Furnishing records to individuals or private non-profit 
organizations having an official voluntary or cooperative relationship 
with the Commission to assist the individual or organization in its work 
with the Commission;
    (iv) Furnishing records to state, local and tribal governments and 
public

[[Page 243]]

international organizations when to do so without charge is an 
appropriate courtesy, or when the recipient is carrying on a function 
related to that of the Commission and to do so will help to accomplish 
the work of the Commission;
    (v) Furnishing records when to do so saves costs and yields income 
equal to the direct cost of providing the records (e.g., where the 
Commission's fee for the service would be included in a billing against 
the Commission);
    (vi) Furnishing records when to do so is in conformance with 
generally established business custom (e.g., furnishing personal 
reference data to prospective employers of former Commission employees);
    (vii) Furnishing one copy of a record in order to assist the 
requester to obtain financial benefits to which he is entitled (e.g., 
veterans or their dependents, employees with Government employee 
compensation claims or persons insured by the Government).
    (d) Notice of anticipated fees and prepayment. (1) Where it is 
anticipated that fees chargeable under this section may amount to more 
than $25.00 and the requester has not indicated in advance his 
willingness to pay fees as high as are anticipated, the request shall be 
deemed not to have been received for purposes of the time limits 
established by Sec. 700.245 until the requester is advised of the fees 
which are anticipated and has agreed to pay these fees. Advice to 
requesters with respect to anticipated fees shall be provided promptly.
    (2) The appropriate cases, advance payment of fees may be required 
before requested records are made available to the requester.
    (3) A notice of anticipated fees or notice of request for advance 
payment shall extend an offer to the requester to confer with 
appropriate personnel in an attempt to reformulate the request in a 
manner which will reduce the anticipated fees and meet the needs of the 
requester.
    (e) Form of payment. Payment of fees shall be made by check or money 
order payable to the Navajo-Hopi Indian Relocation Commission. The term 
United States or the initials ``U.S.'' shall not be included on the 
check or money order. Where appropriate, the official responsible for 
handling a request may require that payment by check be made in the form 
of a certified check.



                          Subpart K_Privacy Act



Sec. 700.255  Purpose and scope.

    This subpart contains the regulations of the Navajo and Hopi Indian 
Relocation Commission implementing section 3 of the Privacy Act.



Sec. 700.257  Definitions.

    (a) Act. As used in this subpart, ``Act'' means section 3 of the 
Privacy Act, 5 U.S.C. 552a.
    (b) Individual. As used in this subpart, ``individual'' means a 
citizen of the United States or an alien lawfully admitted for permanent 
residence.
    (c) Maintain. As used in this subpart, the term ``maintain'' 
includes maintain, collect, use or disseminate.
    (d) Record. As used in this subpart, ``record'' means any item, 
collection, or grouping of information about an individual that is 
maintained by the Commission including, but not limited to, education, 
financial transactions, medical history, and criminal or employment 
history and that contains the individual's name, or the identifying 
number, symbol, or other identifying particular assigned to the 
individual, such as a finger or voice print, or a photograph.
    (e) System of records. As used in this subpart, ``System of 
records'' means a group of any records under the control of the 
Commission from which information is retrieved by the name of the 
individual or by some identifying number, symbol, or other identifying 
particular assigned to the individual.
    (f) Medical records. As used in this subpart, ``medical records'' 
means records which relate to the identification, prevention, cure or 
alleviation of any disease, illness or injury including psychological 
disorders, alcoholism and drug addiction.
    (g) Civil Service Commission personnel records. As used in this 
subpart, ``Civil Service Commission personnel records'' means records 
maintained for the Civil Service Commission by the Commission and used 
for personnel management programs or processes such as

[[Page 244]]

staffing, employee development, retirement, and grievances and appeals.
    (h) Statistical records. As used in this subpart, ``statistical 
records'' means records in a system of records maintained for 
statistical research or reporting purposes only and not used in whole or 
in part in making any determination about an identifiable individual.
    (i) Routine use. As used in this subpart, ``routine use'' means a 
use of a record for a purpose which is compatible with the purpose for 
which it was collected.
    (j) System notice. As used in this subpart, ``system notice'' means 
the notice describing a system of records required by 5 U.S.C. 
552a(e)(4) to be published annually in the Federal Register.
    (k) System manager. As used in this subpart, ``system manager'' 
means the official designated in a system notice as having 
administrative responsibility for a system of records.
    (l) Commission Privacy Act Officer. As used in the subpart, 
``Commission Privacy Act Officer'' means the official in the Commission 
charged with responsibility for assisting the Commission in carrying out 
the functions which he is assigned in this subpart and for coordinating 
the activities of the divisions of the Commission in carrying out the 
functions which they are assigned in this subpart.



Sec. 700.259  Records subject to Privacy Act.

    The Privacy Act applies to all ``records'' as that term is defined 
in Sec. 700.257(d), which the Commission maintains in a ``system of 
records,'' as that term is defined in Sec. 700.257(e).



Sec. 700.261  Standards for maintenance of records subject to the Act.

    (a) Content of records. Records subject to the Privacy Act shall 
contain only such information about an individual as is relevant and 
necessary to accomplish a purpose of the agency required to be 
accomplished by statute or Executive Order of the President.
    (b) Standards of accuracy. Records subject to the Privacy Act which 
are used in making any determination about any individual shall be 
maintained with such accuracy, relevance, timeliness, and completeness 
as is reasonably necessary to assure fairness to the individual in 
making the determination.
    (c) Collection of information. (1) Information which may be used in 
making determination about an individual's rights, benefits, and 
privileges under Federal programs shall, to the greatest extent 
practicable, be collected directly from that individual.
    (2) In deciding whether collection of information from an 
individual, as opposed to a third party source, is practicable, the 
following factors, among others may be considered:
    (i) Whether the nature of the information sought is such that it can 
only be obtained from a third party;
    (ii) Whether the cost of collecting the information from the 
individual is unreasonable when compared with the cost of collecting it 
from a third party;
    (iii) Whether there is a risk that information collected from third 
parties if inaccurate, could result in an adverse determination to the 
individual concerned;
    (iv) Whether the information, if supplied by the individual, would 
have to be verified by a third party; or
    (v) Whether provisions can be made for verification, by the 
individual, of information collected from third parties.
    (d) Advice to individual concerning uses of information. (1) Each 
individual who is asked to supply information about himself which will 
be added to a system of records shall be informed of the basis for 
requesting the information, how it may be used, and what the 
consequences, if any, are of not supplying the information.
    (2) At a minimum, the notice to the individual must state;
    (i) The authority (whether granted by statute or Executive Order of 
the President) which authorizes the solicitation of the information and 
whether disclosure of such information is mandatory or voluntary;
    (ii) The principal purpose or purposes for which the information is 
intended to be used;
    (iii) The routine uses which may be made of the information; and

[[Page 245]]

    (iv) The effects on him, if any, of not providing all or any part of 
the requested information.
    (3)(i) When information is collected on a standard form, the notice 
to the individual shall be on the form or on a tear-off sheet attached 
to the form or on a separate sheet, whichever is most practical.
    (ii) When information is collected by an interviewer, the 
interviewer shall provide the individual with a written notice which the 
individual may retain. If the interview is conducted by telephone, 
however, the interviewer may summarize the notice for the individual and 
need not provide a copy to the individual unless the individual requests 
that a copy be mailed to him.
    (iii) An individual may be asked to acknowledge, in writing, that he 
has been afforded the notice required by this section.
    (e) Records concerning activity protected by the First Amendment. No 
record may be maintained describing how any individual exercises rights 
guaranteed by the First Amendment to the Constitution unless (1) 
expressly authorized by statute or by the individual about whom the 
record is maintained or (2) pertinent to and within the scope of an 
authorized law enforcement activity.



Sec. 700.263  Assuring integrity of records.

    (a) Statutory requirement. The Privacy Act requires that records 
subject to the Act be maintained with appropriate administrative, 
technical and physical safeguards to insure the security and 
confidentiality of records and to protect against any anticipated 
threats or hazards to their security or integrity which could result in 
substantial harm, embarassment, inconvenience, or unfairness to any 
individual on whom information is maintained, 5 U.S.C. 522a(e)(10).
    (b) Records maintained in manual form. When maintained in manual 
form, records subject to the Privacy Act shall be maintained, at a 
minimum, subject to the following safeguards, or safeguards affording 
comparable protection:
    (1) Areas in which the records are maintained or regularly used 
shall be posted with an appropriate warning stating that access to the 
records is limited to authorized persons. The warning shall also 
summarize the requirements of Sec. 700.265 and state that the Privacy 
Act contains a criminal penalty for the unauthorized disclosure of 
records to which it applies.
    (2) During working hours, (i) the area in which the records are 
maintained or regularly used shall be occupied by authorized personnel 
or (ii) access to the records shall be restricted by their storage in 
locked metal file cabinets or a locked room.
    (3) During non-working hours, access to the records shall be 
restricted by their storage in locked metal file cabinets or a locked 
room.
    (c) Records maintained in computerized form. When maintained in 
computerized form, records subject to the Privacy Act shall be 
maintained, at a minimum, subject to safeguards based on those 
recommended in the National Bureau of Standards booklet ``Computer 
Security Guidelines for Implementing the Privacy Act of 1974'' (May 30, 
1975), and any supplements thereto, which are adequate and appropriate 
to assuring the integrity of records in the system.
    (d) Civil Service Commission personnel records. A system of records 
made up of Civil Service Commission personnel records shall be 
maintained under the security requirements set out in 5 CFR 293.108.



Sec. 700.265  Conduct of employees.

    (a) Handling of records subject to the Act. Employees whose duties 
require handling of records subject to the Privacy Act shall, at all 
times, take care to protect the integrity, security and confidentiality 
of these records.
    (b) Disclosure of records. No employee of the Commission may 
disclose records subject to the Privacy Act unless disclosure is 
permitted under Sec. 700.267 or is to the individual to whom the record 
pertains.
    (c) Alteration of records. No employee of the Commission may alter 
or destroy a record subject to the Privacy Act unless (1) such 
alteration or destruction is properly undertaken in the course of the 
employee's regular duties or (2) such alteration or destruction is 
required by a decision under Sec. Sec. 700.287-

[[Page 246]]

700.295 or the decision of a court of competent jurisdiction.



Sec. 700.267  Disclosure of records.

    (a) Prohibition of disclosure. No record contained in a system of 
records may be disclosed by any means of communication to any person, or 
to another agency, except pursuant to a written request by, or with the 
prior written consent of, the individual to whom the record pertains.
    (b) General exceptions. The prohibition contained in paragraph (a) 
of this section does not apply where disclosure of the record would be:
    (1) To those officers or employees of the Commission who have a need 
for the record in the performance of their duties; or
    (2) Required by the Freedom of Information Act, 5 U.S.C. 522.
    (c) Specific exceptions. The prohibition contained in paragraph (a) 
does not apply where disclosure of the record would be:
    (1) For a routine use as defined in Sec. 700.257(i) which has been 
described in a systems notice published in the Federal Register;
    (2) To the Bureau of the Census for purposes of planning or carrying 
out a census or survey or related activity pursuant to the provisions of 
title 13 U.S. Code.
    (3) To a recipient who has provided the System Manager responsible 
for the system in which the record is maintained with advance adequate 
written assurance that the record will be used solely as a statistical 
research or reporting record, and the record is to be transferred in a 
form that is not individually identifiable;
    (4) To the National Archives of the United States as a record which 
has sufficient historical or other value to warrant its continued 
preservation by the U.S. Government, or for evaluation by the 
Administrator of General Services or his designee to determine whether 
the record has such value;
    (5) To another agency or to an instrumentality of any governmental 
jurisdiction within or under the control of the United States for a 
civil or criminal law enforcement activity if the activity is authorized 
by law, and if the head of the agency or instrumentality has made a 
written request to the Department specifying the particular portion 
desired and the law enforcement activity for which the record is sought;
    (6) To a person pursuant to a showing of compelling circumstances 
affecting the health or safety of an individual if upon such disclosure 
notification is transmitted to the last known address of such 
individual;
    (7) To either House of Congress, or, to the extent of matter within 
its jurisdiction, any committee or subcommittee thereof, any joint 
committee of Congress or subcommittee of any such joint committee;
    (8) To the Comptroller General, or any of his authorized 
representatives, in the course of the performance of the duties of the 
General Accounting Office; or
    (9) Pursuant to the order of a court of competent jurisdiction.
    (d) Reviewing records prior to disclosure. (1) Prior to any 
disclosure of a record about an individual, unless disclosure is 
required by the Freedom of Information Act, reasonable efforts shall be 
made to assure that the records are accurate, complete, timely and 
relevant for agency purposes.
    (2) When a record is disclosed in connection with a Freedom of 
Information request made under subpart B of this part and it is 
appropriate and administratively feasible to do so, the requester shall 
be informed of any information known to the Commission indicating that 
the record may not be fully accurate, complete, or timely.



Sec. 700.269  Accounting for disclosures.

    (a) Maintenance of an accounting. (1) Where a record is disclosed to 
any person, or to another agency, under any of the specific exceptions 
provided by Sec. 700.267(c), an accounting shall be made.
    (2) The accounting shall record (i) the date, nature, and purpose of 
each disclosure of a record to any person or to another agency and (ii) 
the name and address of the person or agency to whom the disclosure was 
made.
    (3) Accountings prepared under this section shall be maintained for 
at least five years or the life of the record, whichever is longer, 
after the disclosure for which the accounting is made.

[[Page 247]]

    (b) Access to accountings. (1) Except for accountings of disclosures 
made under Sec. 700.267(c)(5), accountings of all disclosures of a 
record shall be made available to the individual to whom the record 
relates at his request.
    (2) An individual desiring access to accountings of disclosures of a 
record pertaining to him shall submit his request by following the 
procedures of Sec. 700.277.
    (c) Notification of disclosure. When a record is disclosed pursuant 
to Sec. 700.267(c)(9) as the result of the order of a court of 
competent juridiction, reasonable efforts shall be made to notify the 
individual to whom the record pertains as soon as the order becomes a 
matter of public record.



Sec. 700.271  Requests for notification of existence of records:
Submission.

    (a) Submission of requests. (1)(i) An individual desiring to 
determine under the Privacy Act whether a system of records contains 
records pertaining to him shall address his inquiry to the system 
manager having responsibility for the system unless the system notice 
describing the system prescribes or permits submission to some other 
official or officials.
    (ii) If a system notice describing a system requires that an 
individual contact more than two officials concerning the existence of 
records in the system, an individual desiring to determine whether the 
system contains records pertaining to him may contact the system manager 
for assistance in determining which official is most likely to be in 
possession of records pertaining to that individual.
    (2) If an individual desires to determine whether records pertaining 
to him are maintained in two or more systems, he shall make a separate 
inquiry concerning each system.
    (b) Form of request. (1) An inquiry to determine whether a system of 
records contains records pertaining to an individual shall be in 
writing.
    (2) To insure expeditious handling, the request shall be prominently 
marked, both on the envelope and on the face of the request, with the 
legend ``PRIVACY ACT INQUIRY.''
    (3) The request shall state that the individual is seeking 
information concerning records pertaining to himself and shall supply 
such additional identifying information, if any, as is called for in the 
system notice describing the system.
    (4) If an individual has reason to believe that information 
pertaining to him or her may be filed under a name other than the name 
he or she is currently using (e.g., a maiden name), he or she shall 
include this information in the request.



Sec. 700.273  Request for notification of existence of records: Action on.

    (a) Decisions on request. (1) An individual inquiring to determine 
whether a system of records contains records pertaining to him shall be 
advised within ten (10) days (excepting Saturdays, Sundays and legal 
public holidays) whether or not the system does contain records 
pertaining to him unless (i) the records were compiled in reasonable 
anticipation of a civil action or proceeding or (ii) the system of 
records is one which has been excepted from the notification provisions 
of the Privacy Act by rulemaking.
    (2) If the records were compiled in reasonable anticipation of a 
civil action or proceeding or the system of records is one which has 
been excepted from the notification provisions of the Privacy Act by 
rulemaking, the individual will be promptly notified that his is not 
entitled to notification of whether the system contains records 
pertaining to him.
    (b) Authority to deny requests. A decision to deny a request for 
notification of the existence of records shall be made by the Privacy 
Act Officer.
    (c) Form of decision. (1) No particular form is required for a 
decision informing an individual whether or not a system of records 
contains records pertaining to him.
    (2) A decision declining to inform an individual whether or not a 
system of records contains records pertaining to him shall be in writing 
and shall state the basis for denial of the request and shall advise the 
individual that he may appeal the declination to the Executive Director 
pursuant to Sec. 700.285 by writing to the Privacy Act Officer, Navajo 
and Hopi Indian Relocation Commission, P.O. Box KK, Flagstaff, Arizona

[[Page 248]]

86002, and that the appeal must be received by this official within 
twenty (20) days (Saturdays, Sundays and public legal holidays excepted) 
of the date of the decision.



Sec. 700.275  Requests for access to records.

    The Privacy Act permits an individual, upon his request, to gain 
access to his record or to any information pertaining to him which is 
contained in a system and to review the record and have a copy made of 
all or any portion thereof in a form comprehensive to him, 5 U.S.C. 
552a(d)(1). A request for access shall be submitted in accordance with 
the procedures in this subpart.



Sec. 700.277  Requests for access to records: Submission.

    (a) Submission of requests. (1) Requests for access to records shall 
be submitted to the system manager having responsibility for the system 
in which the records are maintained unless the system notice describing 
the system prescribes or permits submission to some other official or 
officials.
    (2) If an individual desires access to records maintained in two or 
more separate systems, he shall submit a separate request for access to 
the records in each system.
    (b) Form of request. (1) A request for access to records subject to 
the Privacy Act shall be in writing.
    (2) To insure expeditious handling, the request shall be prominently 
marked, both on the envelope and on the face of the request, with the 
legend ``PRIVACY ACT REQUEST FOR ACCESS.''
    (3) The request shall specify whether the requester seeks all of the 
records contained in the system which relate to him or only some portion 
thereof. If the requester seeks only a portion of the records which 
relate to him, the request shall reasonably describe the specific 
records sought.
    (4) If the requester seeks to have copies of the requested records 
made, the request shall state the maximum amount of copying fees which 
the requester is willing to pay. A request which does not state the 
amount of fees the requester is willing to pay will be treated as a 
request to inspect the requested records. Requesters are further 
notified that under Sec. 700.279(d) the failure to state willingness to 
pay fees as high as are anticipated by the Commission will delay 
processing of a request.
    (5) The request shall supply such identifying information, if any, 
as is called for in the system notice describing the system.
    (6) Requests failing to meet the requirements of this paragraph 
shall be returned to the requester with a written notice advising the 
request of the deficiency in the request.



Sec. 700.279  Requests for access to records: Initial decision.

    (a) Decisions on requests. A request made under this subpart for 
access to a record shall be granted promptly unless (1) the record was 
compiled in reasonable anticipation of a civil action or proceeding or 
(2) the record is contained in a system of records which has been 
excepted from the access provisions of the Privacy Act by rulemaking.
    (b) Authority to deny requests. A decision to deny a request for 
access under this subpart shall be made by the Privacy Act Officer.
    (c) Form of decision. (1) No particular form is required for a 
decision granting access to a record. The decision shall, however, 
advise the individual requesting the record as to where and when the 
record is available for inspection or, as the case may be, where and 
when copies will be available. If fees are due under Sec. 700.279(d), 
the individual requesting the record shall also be notified of the 
amount of fees due or, if the exact amount has not been determined, the 
approximate amount of fees due.
    (2) A decision denying a request for access, in whole or part, shall 
be in writing and shall state the basis for denial of the request. The 
decision shall also contain a statement that the denial may be appealed 
to the Executive Director pursuant to Sec. 700.281 by writing to 
Privacy Act Officer, Navajo and Hopi Indian Relocation Commission, P.O. 
Box KK, Flagstaff, Arizona 86002, and that the appeal must be received 
by this official within twenty (20) days (Saturdays, Sundays and public 
legal

[[Page 249]]

holidays excepted) of the date of the decision.
    (d) Fees. (1) No fees may be charged for the cost of searching for 
or reviewing a record in response to a request made under Sec. 700.271.
    (2) Fees for copying a record in response to a request made under 
Sec. 700.271 shall be charged in accordance with the schedule of 
charges contained in the Commission's Management Manual, unless the 
official responsible for processing the request determines that, in his/
her opinion, reduction or waiver of fees is appropriate.
    (3) Where it is anticipated that fees chargeable in connection with 
a request will exceed the amount the person submitting the request has 
indicated he/she is willing to pay, the official processing the request 
shall notify the requester and shall not complete processing of the 
request until the requester has agreed, in writing, to pay fees as high 
as are anticipated.



Sec. 700.281  Requests for notification of existence of records
and for access to records: Appeals.

    (a) Right of appeal. If an individual has been notified that he/she 
is not entitled to notification of whether a system of records contains 
records pertaining to him or has been denied access, in whole or part, 
to a requested record that individual may appeal to the Executive 
Director.
    (b) Time for appeal. (1) An appeal must be received by the Privacy 
Act Officer no later than twenty (20) days (Saturdays, Sundays and 
public legal holidays excepted) after the date of the initial decision 
on a request.
    (2) The Executive Director may, for good cause shown, extend the 
time for submission of an appeal if a written request for additional 
time is received within twenty (20) days (Saturdays, Sundays and public 
legal holidays excepted) of the date of the initial decision of the 
request.
    (c) Form of appeal. (1) An appeal shall be in writing and shall 
attach copies of the initial request and the decision on the request.
    (2) The appeal shall contain a brief statement of the reasons why 
the appellant believes the decision on the initial request to have been 
in error.
    (3) The appeal shall be addressed to Privacy Act Officer, Navajo and 
Hopi Indian Relocation Commission, Box KK, Flagstaff, Arizona 86002.
    (d) Action on appeals. (1) Appeals from decisions on initial 
requests made pursuant to Sec. Sec. 700.273 and 700.277 shall be 
decided for the Commission by the Executive Director after consultation 
with the Commission's legal counsel.
    (2) The decision on an appeal shall be in writing and shall state 
the basis for the decision.



Sec. 700.283  Requests for access to records: Special situations.

    (a) Medical records. (1) Medical records shall be disclosed to the 
individual to whom they pertain unless it is determined, in consultation 
with a medical doctor, that disclosure should be made to a medical 
doctor of the individual's choosing.
    (2) If it is determined that disclosure of medical records directly 
to the individual to whom they pertain could have an adverse effect on 
that individual, the individual may designate a medical doctor to 
receive the records and the records will be disclosed to that doctor.
    (b) Inspection in presence of third party. (1) An individual wishing 
to inspect records pertaining to him which have been opened for his 
inspection may, during the inspection, be accompanied by a person of his 
own choosing.
    (2) When such a procedure is deemed appropriate, the individual to 
whom the records pertain may be required to furnish a written statement 
authorizing discussion of his record in the accompanying person's 
presence.



Sec. 700.285  Amendment of records.

    The Privacy Act permits an individual to request amendment of a 
record pertaining to him if be believes the record is not accurate, 
relevant, timely or complete, 5 U.S.C. 552a(d)(2). A request for 
amendment of a record shall be submitted in accordance with the 
procedures in this subpart.



Sec. 700.287  Petitions for amendment: Submission and form.

    (a) Submission of petitions for amendment. (1) A request for 
amendment of a

[[Page 250]]

record shall be submitted to the system manager for the system of 
records containing the record unless the system notice describing the 
system prescribes or permits submission to a different official or 
officials. If an individual wishes to request amendment of records 
located in more than one system, a separate petition must be submitted 
to each system manager.
    (2) A petition for amendment of a record may be submitted only if 
the individual submitting the petition has previously requested and been 
granted access to the record and has inspected or been given a copy of 
the record.
    (b) Form of petition. (1) A petition for amendment shall be in 
writing and shall specifically identify the record whose amendment is 
sought.
    (2) The petition shall state, in detail, the reasons why the 
petitioner believes the record, or the portion thereof objectionable to 
him, is not accurate, relevant, timely or complete. Copies of documents 
or evidence relied upon in support of these reasons shall be submitted 
with the petition.
    (3) The petition shall state, specifically and in detail, the 
changes sought in the record. If the changes involve rewriting of the 
record or portions thereof or involve adding new language to the record, 
the petition shall propose specific language to implement the changes.



Sec. 700.289  Petitions for amendment: Processing and initial decision.

    (a) Decisions on petitions. In reviewing a record in response to a 
petition for amendment, the accuracy, relevance, timeliness and 
completeness of the record shall be assessed against the criteria set 
out in Sec. 700.261. In addition, personnel records shall be assessed 
against the criteria for determining record quality published in the 
Federal Personnel Manual and the Commission Manual addition thereto.
    (b) Authority to decide. An initial decision on a petition for 
amendment may be made only by the Privacy Act Officer.
    (c) Acknowledgement of receipt. Unless processing of a petition is 
completed within ten (10) days (Saturdays, Sundays and public legal 
holidays excepted), the receipt of the petition for amendment shall be 
acknowledged in writing by the system manager to whom it is directed.
    (d) Inadequate petitions. (1) If a petition does not meet the 
requirements of Sec. 700.287, the petitioner shall be so advised and 
shall be told what additional information must be submitted to meet the 
requirements of Sec. 700.287.
    (2) If the petitioner fails to submit the additional information 
within a reasonable time, his petition may be rejected. The rejection 
shall be in writing and shall meet the requirements of paragraph (e) of 
this section.
    (e) Form of decision. (1) A decision on a petition for amendment 
shall be in writing and shall state concisely the basis for the 
decision.
    (2) If the petitioned for amendment is rejected, in whole or part, 
the decision shall advise the petitioner that the rejection may be 
appealed to the Executive Director by writing to the Privacy Act 
Officer, Navajo and Hopi Indian Relocation Commission, Box KK, 
Flagstaff, Arizona 86002, and that the appeal must be received by this 
official within twenty (20) days (Saturdays, Sundays and public legal 
holidays excepted) of the date of the decision.
    (f) Implementation of initial decision. If a petitioned for 
amendment is accepted, in whole or part, the appropriate Commission 
Division maintaining the record shall:
    (1) Correct the record accordingly and,
    (2) Where an accounting of disclosures has been made pursuant to 
Sec. 700.269 advise all previous recipients of the record that the 
correction was made and the substance of the correction.



Sec. 700.291  Petitions for amendment: Time limits for processing.

    (a) Acknowledgement of receipt. The acknowledgement of receipt of a 
petition required by Sec. 700.289(c) shall be dispatched not later than 
ten (10) days (Saturdays, Sundays and public legal holidays excepted) 
after receipt of the petition by the system manager responsible for the 
system containing the challenged record, unless a decision on the 
petition has been previously dispatched.

[[Page 251]]

    (b) Decision on petition. A petition for amendment shall be 
processed promptly. A determination whether to accept or reject the 
petitioned for amendment shall be made within no more than thirty (30) 
days (Saturdays, Sundays, and public legal holidays excepted) after 
receipt of the petition by the system manager responsible for the system 
containing the challenged record.
    (c) Suspension of time limit. The thirty (30) day time limit for a 
decision on a petition shall be suspended if it is necessary to notify 
the petitioner, pursuant to Sec. 700.289(d) that additional information 
in support of the petition is required. Running of the thirty (30) day 
time limit shall resume on receipt of the additional information by the 
system manager responsible for the system containing the challenged 
record.
    (d) Extensions of time. (1) The thirty (30) day time limit for a 
decision on a petition may be extended if the official responsible for 
making a decision on the petition determines that an extension is 
necessary for one of the following reasons:
    (i) A decision on the petition requires analysis of voluminous 
record or records;
    (ii) Some or all of the challenged records must be collected from 
facilities other than the facility at which the official responsible for 
making the decision is located.
    (2) If the official responsible for making a decision on the 
petition determines that an extension is necessary, he shall promptly 
inform the petitioner of the extension and the date on which a decision 
is expected to be dispatched.



Sec. 700.293  Petitions for amendment: Appeals.

    (a) Right of appeal. Where a petitioned-for amendment has been 
rejected, in whole or part, the individual submitting the petition may 
appeal the denial to the Executive Director.
    (b) Time for appeal. (1) An appeal must be received no later than 
twenty (20) days (Saturdays, Sundays and public legal holidays excepted) 
after the date of the decision on a petition.
    (2) The Executive Director may, for good cause shown, extend the 
time for submission of an appeal if a written request for additional 
time is received within twenty (20) days (Saturdays, Sundays and public 
legal holidays excepted) of the date of the decision on a petition.
    (c) Form of appeal. (1) An appeal shall be in writing and shall 
attach copies of the initial petition and the decision on that petition.
    (2) The appeal shall contain a brief statement of the reasons why 
the appellant believes the decision on the petition to have been in 
error.
    (3) The appeal shall be addressed to Privacy Act Officer, Navajo and 
Hopi Indian Relocation Commission, Box KK, Flagstaff, Arizona 86002.



Sec. 700.295  Petitions for amendment: Action on appeals.

    (a) Authority. Appeals from decisions on initial petitions for 
amendment shall be decided for the Commission by the Executive Director 
after consultation with the Commission's legal counsel unless the record 
challenged by the initial petition is a Civil Service Commission 
personnel record maintained for the Commission by the Navajo and Hopi 
Indian Relocation Commission. Appeals from decisions on initial 
petitions requesting amendment of Civil Service Commission records 
maintained for the Commission by the Navajo and Hopi Indian Relocation 
Commission shall be transmitted by the Executive Director, for decision.
    (b) Time limit. (1) A final determination on any appeal shall be 
made within thirty (30) days (Saturdays, Sundays and legal public 
holidays excepted) after receipt of the appeal.
    (2) The thirty (30) day period for decision on an appeal may be 
extended, for good cause shown, by the Commission. If the thirty (30) 
day period is extended, the individual submitting the appeal shall be 
notified of the extension and of the date on which a determination on 
the appeal is expected to be dispatched.
    (c) Form of decision. (1) The final determination on an appeal shall 
be in writing and shall state the basis for the determination.
    (2) If the determination upholds, in whole or part, the initial 
decision rejecting the petitioned for amendment, the determination shall 
also advise the individual submitting the appeal:

[[Page 252]]

    (i) Of his or her right to file a concise statement of the reasons 
for disagreeing with the decision of the agency;
    (ii) Of the procedure established by Sec. 700.297 for the filing of 
the statement of disagreement;
    (iii) That the statement which is filed will be made available to 
anyone to whom the record is subsequently disclosed together with, at 
the discretion of the Commission, a brief statement by the Commission 
summarizing its reasons for refusing to amend the record;
    (iv) That prior recipients of the challenged record will be provided 
a copy of any statement of dispute to the extent that an accounting of 
disclosure was maintained; and
    (v) Of his or her right to seek judicial review of the Commission's 
refusal to amend the record.
    (3) If the determination reverses, in whole or in part, the initial 
decision rejecting the petitioned for amendment, the system manager 
responsible for the system containing the challenged record shall be 
directed to:
    (i) Amend the challenged record accordingly; and
    (ii) If an accounting of disclosure has been made, advise all 
previous recipients of the record which was amended of the amendment and 
its substance.



Sec. 700.297  Statements of disagreement.

    (a) Filing of statements. If the determination of the Executive 
Director under Sec. 700.295 rejects in whole or part, a petitioned for 
amendment, the individual submitting the petition may file with the 
system manager for the system containing the challenged record, a 
concise written statement setting forth the reasons for his disagreement 
with the determination of the Department.
    (b) Disclosure of statements. In any disclosure of a record 
containing information about which an individual has filed a statement 
of disagreement under this section occurring after the filing of the 
statement, the disputed portion of the record will be clearly noted and 
the recipient shall be provided copies of the statement of disagreement. 
If appropriate, a concise statement of the reasons of the Commission for 
not making the requested amendments may also be provided to recipient.



   Subpart L_Determination of Eligibility, Hearing and Administrative 
                            Review (Appeals)

    Source: 46 FR 46801, Sept. 22, 1981; 47 FR 15774, Apr. 13, 1982, 
unless otherwise noted.



Sec. 700.301  Definitions.

    (a) Certifying Officer, as used in this subpart, means that member 
of the Commission staff who certifies eligibility for relocation 
assistance benefits and/or for life estate leases.
    (b) An aggrieved person, as used in this subpart, means a person who 
has been denied any relocation assistance benefits for which he/she has 
applied.



Sec. 700.303  Initial Commission determinations.

    (a) Initial Commission Determination concerning individual 
eligibility or benefits for any person who has filed a claim for 
benefits or for granting of life estate leases shall be made by the 
Certifying Officer. The Determination shall include the amount, if any, 
to which the individual is entitled, and shall state the reasons 
therefor. Such Determination shall be communicated to the Applicant by 
certified letter or in person by Commission staff. A record of personal 
notice shall be maintained by the Commission.
    (b) An explanatory conference shall be scheduled by and with the 
Certifying Officer, if requested by the Applicant or the Certifying 
Officer, within thirty days of the communication of the Determination; 
the right to a hearing is not dependent on the holding of such a 
conference. The Certifying Officer may reverse, amend, or leave standing 
the Initial Determination as a result of such conference: Provided, 
however, his/her decision shall be communicated in writing to the 
Applicant by certified letter or in person by Commission staff within 
five days after such conference.
    (c) Communications of Determinations to the Applicant as provided 
for in Sec. 700.303(a) shall include an explanation of the availability 
of grievance

[[Page 253]]

procedures, including hearings and representation of counsel and the 
fact that a hearing must be requested within 30 (thirty) days of receipt 
of the determination.
    (d) No decision which at the time of its rendition is subject to 
appeal to the Commission shall be considered final agency action subject 
to judicial review under 5 U.S.C. 704, Provided that in the event of a 
whole or partial denial, no benefits shall be paid unless and until said 
Determination is reversed or modified as provided for herein.



Sec. 700.305  Availability of hearings.

    All persons aggrieved by Initial Commission Determinations 
concerning eligibility, benefits, or for granting of life estate leases 
may have a Hearing to present evidence and argument concerning the 
Determination. Parties seeking such relief from the Commission's Initial 
Determination shall be known as ``Applicants.'' When multiple Applicants 
claim interest in one benefit, determination, or question of 
eligibility, their hearings may be consolidated at the Presiding 
Officer's discretion.



Sec. 700.307  Request for hearings.

    Hearing requests shall be made in person or by letter and must be 
received by the Commission within thirty days after the notice letter 
was received, the personal notice was given, or if an explanatory 
conference is held, after the decision of the Certifying Officer. The 
request shall also contain a specific statement indicating the basis for 
the request.



Sec. 700.309  Presiding officers.

    The hearing shall be presided over and conducted by one of the 
Commissioners appointed pursuant to 25 U.S.C. 640d-11(b) or by such 
other person as the Commission may designate.



Sec. 700.311  Hearing scheduling and documents.

    (a) Hearings shall be held as scheduled by the Presiding Officer.
    (b) Notice of the hearing shall be communicated in writing to the 
applicant at least thirty days prior to the hearing and shall include 
the time, date, place, and nature of the hearing.
    (c) Written notice of the Applicant's objections, if any, to the 
time, date, or place fixed for the hearing must be filed with the 
Presiding Officer at least five days before the date set for the 
hearing. Such notice of objections shall state the reasons therefor and 
suggested alternatives. Discretion as to any changes in the date, time, 
or place of the hearing lies entirely with the Presiding Officer, 
Provided, that the 30 (thirty) day notice period as provided in 
paragraph (b) of this section shall be observed unless waived in writing 
by the applicant or his representative.
    (d) All hearings shall be held within thirty days after Commission 
receipt of the applicant's request therefor unless this limit is 
extended by the Presiding Officer.
    (e) All hearings shall be conducted at the Commission office in 
Flagstaff, Arizona, unless otherwise designated by the Presiding 
Officer.
    (f) All time periods in this regulation include Saturdays, Sundays 
and holidays. If any time period would end on a Saturday, Sunday, or 
holiday, it will be extended to the next consecutive day which is not a 
Saturday, Sunday, or holiday.
    (g) A copy of each document filed in a proceeding under this section 
must be filed with the Commission and may be served by the filing party 
by mail on any other party or parties in the case. In all cases where a 
party is represented by an attorney or representative, such attorney or 
representative will be recognized as fully controlling the case on 
behalf of his client, and service of any document relating to the 
proceeding shall be made upon such attorney or representative, which 
service shall suffice as if made upon the Applicant. Where a party is 
represented by more than one attorney or representative, service upon 
one of the attorneys or representatives shall be sufficient.
    (h) Hearings will be recorded verbatim and transcripts thereof shall 
be made when requested by any parties; costs of transcripts shall be 
borne by the requesting parties unless waived according to Sec. 
700.313(a)(5).
    (i) Applicants may be represented by a licensed attorney or by an 
advocate

[[Page 254]]

licensed to practice in any Hopi or Navajo Tribal Court.



Sec. 700.313  Evidence and procedure.

    (a) At the hearing and taking of evidence the Applicant shall have 
an opportunity to:
    (1) Submit and have considered facts, witnesses, arguments, offers 
of settlement, or proposals of adjustment;
    (2) Be represented by a lawyer or other representative as provided 
herein;
    (3) Have produced Commission evidence relative to the determination, 
Provided, that the scope of pre-hearing discovery of evidence shall be 
limited to relevant matters as determined by the Presiding Officer;
    (4) Examine and cross-examine witnesses;
    (5) Receive a transcript of the hearing on request and upon payment 
of appropriate Commission fees as published by the Commission, which may 
be waived in cases of indigency.
    (b) The Presiding Officer is empowered to:
    (1) Administer oaths and afffirmations;
    (2) Rule on offers of proof;
    (3) Receive relevant evidence;
    (4) Take depositions or have depositions taken when the ends of 
justice would be served and to permit other pre-hearing discovery within 
his/her discretion;
    (5) Regulate the course and conduct of the hearings; including pre-
hearing procedures;
    (6) Hold pre-hearing or post-hearing conferences for the settlement 
or simplification of the issues;
    (7) Dispose of procedural requests or similar matters;
    (8) Make a record of the proceedings;
    (9) Hold the record open for submission of evidence no longer than 
fourteen days after completion of the hearings;
    (10) Make or recommend a decision in the case based upon evidence, 
testimony, and argument presented;
    (11) Enforce the provisions of 5 USCA section 557(d) in the event of 
a violation thereof;
    (12) Issue subpoenas authorized by law; and
    (13) Extend any time period of this subpart upon his/her own motion 
or upon motion of the applicant, for good cause shown.



Sec. 700.315  Post-hearing briefs.

    Applicants may submit post-hearing briefs or written comments to the 
Presiding Officer within fourteen days after conclusion of the hearings. 
In the event of multiple applicants or parties to a hearing, such briefs 
shall be served on all such applicants by the applicant submitting the 
brief.



Sec. 700.317  Presiding officer decisions.

    (a) The Presiding Officer shall submit to the Commission a written 
decision based upon the evidence and argument presented, within sixty 
days, not including any period the record is held open, if any, after 
conclusion of the hearing, unless otherwise extended by the Presiding 
Officer.
    (b) Copies of the Presiding Officer's decision shall be mailed to 
the Applicant. The Applicant may submit briefs or other written argument 
to the Commission within fourteen days of the date the Presiding 
Officer's determination was mailed to the Applicant.



Sec. 700.319  Final agency action.

    Within 30 (thirty) days after receipt of the Presiding Officer's 
decision, the Commission shall affirm or reverse the decision and issue 
its final agency action upon the application in writing; Provided, that 
in the event one Commissioner sits as the Presiding Officer, the final 
agency action shall be determined by the remaining Commissioners and 
such other person as they may designate who did not so preside over the 
hearing. Such decisions shall be communicated in writing to the 
Applicant by certified mail.



Sec. 700.321  Direct appeal to Commissioners.

    Commission determinations concerning issues other than individual 
eligibility or benefits which do not require a hearing may be appealed 
directly to the Commission in writing. The Commission decision will 
constitute final agency action on such issues.

[[Page 255]]



                      Subpart M_Life Estate Leases

    Authority: Sec. 30(b), Pub. L. 96-305, 94 Stat. 929 (25 U.S.C. 
640d).

    Source: 46 FR 27921, May 22, 1981; 47 FR 15774, Apr. 13, 1982, 
unless otherwise noted.



Sec. 700.331  Application for life estate leases.

    The following standards and procedures shall govern the application 
for life estate leases:
    (a) Filing of application. Applications for life estate leases shall 
be filed at the Commission's office in Flagstaff, AZ, not later than 
July 1, 1981, unless extended for good cause. Application should be made 
on an approved Commission form known as ``Application for Life Estate 
Lease'' and should contain the following information:
    (1) Name, address, birthdate, social security number, census number, 
spouse, and date of marriage, if married. The head of household who 
applies for a life estate lease shall be known as the ``applicant''.
    (2) Applicant's Quad Map location in the Former Joint Use Area.
    (3) Information listing any other places of Applicant's residence 
since December 22, 1974.
    (4) Name, birthdate, census number, and social security number, if 
any, of the applicant's minor dependent children.
    (5) A statement by the applicant setting forth the nature of the 
applicant's disability, if any.
    (6) Applications should be accompanied, wherever possible, with 
documentation such as Birth Certificates, Baptismal Records, Tribal 
Records, Family Census Cards, Marriage Certificates, Tax Returns, and 
such other documentation required by the Commission.
    (b) Extensions of time for filing of applications for life estate 
leases. Extensions of time for filing of applications for life estate 
leases shall be governed by the following procedures:
    (1) The Commission shall, on a case-by-case basis, determine whether 
good cause exists to warrent a time extension for the receipt of 
applications.
    (2) Initial Commission determinations concerning the time extension 
for receipt of applications shall be made by the Certification Officer. 
Any extensions granted shall be in writing and shall state the length of 
the extensions and the reasons therefore.
    (3) In no event shall an extension be granted for more than eighty-
nine (89) days after July 1, 1981.
    (4) In the event an extension of time is denied or an application is 
refused for filing, the Certification Officer shall state the reasons 
therefore and such determination shall be communicated to the applicant 
by certified letter or in person by Commission staff.
    (5) All persons aggrieved by initial Commission determination may 
have a hearing to present evidence and argument concerning the 
determination. Such hearings shall be requested and governed by the 
Commission's Hearings and Administrative Review Procedures contained in 
Sec. 700.8 of the Commission's Operations and Relocation Procedures.
    (6) For purpose of this subsection, ``good cause'' shall be defined 
as follows:
    (i) Lack of actual notice.
    (ii) Lack of transportation or physical incapacity preventing timely 
filing.
    (iii) Acts of God.
    (iv) Such other facts or reasons deemed sufficient in the discretion 
of the Commission.



Sec. 700.333  Determination of disability.

    The Commission shall determine disability pursuant to the following:
    (a) An applicant shall be considered to be disabled if he/she is 
unable to engage in any substantial gainful activity by reason of any 
medically determined physical or mental impairment which can be expected 
to result in death or which has lasted or can be expected to last for a 
continuous period of not less than twelve months. A physical or mental 
impairment is an impairment that results from anatomical, physiological, 
or psychological abnormalities which are demonstrable by medically 
acceptable clinical and laboratory diagnostic techniques.
    (b) Each applicant who claims entitlement to a life estate lease by 
virture of a disability shall be examined by a physician selected by the 
Commission

[[Page 256]]

or one selected by the applicant and approved by the Commission. The 
reasonable costs of such examinations shall be paid by the Commission. 
The examining physician shall submit a report of his/her examination to 
the rating physician who shall be a physician selected by the 
Commission. The rating physician shall submit to the Commission a report 
stating his/her opinion as to whether or not the applicant is a least 
50% (fifty percent) disabled and if so, the percent of disability. In 
addition, the rating physician shall state in his/her report the 
conditions or conditions of the applicant upon which the rating is 
based.
    (c) In performing examinations and in making ratings, the physician 
shall follow the procedures and adopt the standards set forth in subpart 
I--Determination of Disability or Blindness, of the Social Security 
Administration, contained in title 20, Code of Federal Regulations, 
Sec. Sec. 416.901 through 416.985, including the appendices, etc., to 
the extent that such procedures and standards are appropriate to this 
examination and rating.
    (d) In making its determination as to the disability and the 
percentage thereof of an applicant who claims disability, the Commission 
shall consider the report of the rating physician and such other matters 
as the Commission deems relevant.



Sec. 700.335  Grouping and granting of applications for life estate leases.

    Upon receipt of applications filed pursuant to this section, the 
Commission shall group and award life estate leases in the following 
manner:
    (a) Applicants who are determined to be at least 50% (fifty percent) 
disabled as certified by a physician approved by the Commission. Such 
applicants shall be ranked in the order of the severity of their 
disability.
    (b) Applicants who are not at least 50% (fifty percent) disabled 
shall be ranked in order of their age with the oldest listed first and 
the youngest listed last; provided that, if any applicant physically 
resides in Quarter Quad Numbers 78 NW, 77NE, 55SW, or 54 SE, as 
designated on the Quarter Quad Maps of the Former Joint Use Area 
prepared by the Bureau of Indian Affairs Field Administrative Office, 
such applicant shall be given priority over another applicant of equal 
age.
    (c) Applicants who did not, as of December 22, 1974, and 
continuously thereafter, maintain a separate place of abode and actually 
remain domiciled on Hopi Partitioned Lands, and who, but for this 
subsection would be required to relocate, shall be rejected by the 
Commission.
    (d) Applicants who were not at least forty-nine (49) years of age on 
December 22, 1974, or are not at least 50% (fifty percent) disabled 
shall also be rejected by the Commission.
    (e) The Commission shall award life estate leases to not more than 
one hundred and twenty (120) Navajo applicants with first priority being 
given to applicants listed pursuant to Sec. 700.335(a) and the next 
priority being given to applicants listed pursuant to Sec. 700.335(b), 
in order of such listing.
    (f) The Commission shall award life estate leases to not more than 
ten (10) Hopi applicants with first priority being given to applicants 
listed pursuant to Sec. 700.335(a) and the next priority being given to 
applicants listed pursuant to Sec. 700.335(b) in order of such listing 
except that the portion of Sec. 700.335(b) concerning residency in 
Quarter Quad Numbers 78 NW, 77NE, 77NW, 55 SW, 54SE, etc., shall not 
apply to Hopi applicants.



Sec. 700.337  Establishment of boundaries of life estate leases.

    (a) Prior to the issuance of a life estate lease, the Commission 
shall, after consultation with the Tribe upon whose land the life estate 
lease will be located, establish the actual configuration, shape and 
boundaries of the land area of the life estate lease. The present 
residence of the life tenant shall be within the boundaries of the life 
estate lease and the area of the life estate lease shall not exceed 
ninety (90) acres.
    (b) The following factors will be considered in establishing the 
configuration, shape, and boundaries of a life estate lease:
    (1) The location of the present residence of the applicant and the 
traditional land use area associated with such residence.

[[Page 257]]

    (2) The topography and soil conditions of the land in the immediate 
vicinity of the applicant's present residence.
    (3) The location of the nearest source of water.
    (4) The proximity of roads.
    (5) Such other factors may be necessary or appropriate.



Sec. 700.339  Residency on life estate leases.

    (a) No person may reside on a life estate lease other than the life 
tenant, his or her spouse, and minor dependents and such persons who are 
necessarily present, as determined by the Commission, to provide for the 
care of the life tenant.
    (b) In determining who is necessarily present for the care of the 
life tenant, the Commission shall consider the following criteria:
    (1) The age of the life tenant.
    (2) The nature and extent of the life tenant's disability, if any.
    (3) The location of the life estate lease, including but not limited 
to, the following factors:
    (i) Topography,
    (ii) Proximity to water,
    (iii) Proximity to fuel,
    (iv) Proximity to shopping and medical services, and
    (v) Any other factors deemed relevant to the Commission.
    (4) The nature and extent of care to be provided to a disabled life 
tenant.
    (5) Any other factors deemed relevant by the Commission.
    (c) In the event it becomes necessary to change the identity of the 
person(s) or number of persons identified as necessarily present for the 
care of the life tenant, the life tenant shall make such request for 
change to the Commission. The Commission, upon review of the request, 
may grant an amended life estate lease to reflect the requested change.



Sec. 700.341  Access to life estate leases.

    (a) Family members and other persons may enter upon the life estate 
lease premises for the purpose of visiting the life estate lease 
residents so long as such visit does not exceed thirty (30) consecutive 
days in any one visit or ninety (90) days total of all visits within any 
lease year, except that grandchildren and their descendants who are not 
minor dependents of the life tenant and who have not attained the age of 
18 (eighteen) years may visit for ninety (90) consecutive days in any 
lease year, the first of which shall commence on the date of issuance of 
the life estate lease. There shall be no limitation on visits which do 
not extend overnight.
    (b) Visitors and residents shall use the existing road systems and 
access rights of way when traveling to and from life estate lease 
premises.



Sec. 700.343  Life estate leases.

    The Commission shall execute a life estate lease to each applicant 
to whom a life estate lease is granted, which lease shall contain the 
following:
    (a) The names of the persons entitled to reside on the life estate 
lease which shall be the life tenant, his or her spouse, and minor 
dependents and/or such persons who are necessarily present to provide 
for the care of life tenant.
    (b) A description of the exterior boundaries of the land included in 
said lease.
    (c) The term of the life estate lease which shall end either upon 
voluntary relinquishment or upon the death of the life tenant or his/her 
spouse, whichever occurs last.
    (d) That the life tenant may feed not to exceed twenty-five (25) 
sheep units per year or equivalent livestock on the life estate lease 
premises.
    (e) That no person may reside on a life estate lease other than the 
life tenant, his or her spouse, and minor dependents, and/or such 
persons who are necessarily present to provide for the care of the life 
tenant.
    (f) That the Secretary of Interior shall pay, pursuant to 25 U.S.C. 
640d-28(i), Pub. L. 96-305, section 30(i), on an annual basis, the fair 
market rental value of such life estate lease to the tribe to whom the 
lands leased were partitioned. Rental payments shall be made within 
thirty (30) days of the execution date of the life estate lease.
    (g) That the life tenant may make reasonable improvements on the 
life estate lease which are related to the residence and agricultural 
purposes of

[[Page 258]]

the life tenancy as determined by the Commission. Such improvements:
    (1) May include the renovation or replacement of existing dwelling 
structures and privies or outhouses so as to improve their utility, 
safety or level of modern utilities or amenities, but
    (2) Shall not increase the number, size, or capacity of dwelling 
structures on the leased area except with the express written approval 
of the Commission based upon a showing of actual need, or to reasonably 
accommodate a resident care provider for whom there is not adequate 
existing residential capacity.
    (3) May include not more than one shed or barn to be used in 
connection with livestock and/or agricultural activities permitted.
    (4) May include one ceremonial hogan and one traditional ramada type 
structure.
    (5) May include a garden of reasonable size.
    (6) May include such other improvements as the Commission finds to 
be reasonable under the circumstances of each lease.
    (h) That no person may visit on a life estate lease for more than 
thirty (30) consecutive days in any one visit or ninety (90) days total 
of all visits within any lease year the first of which shall commence on 
the date of issuance of the life estate lease, except that grandchildren 
and their descendants who are not minor dependents of the life tenant 
and who have not attained the age of eighteen (18) years may visit for 
ninety (90) consecutive days in any lease year. There shall be no 
limitation on visits which do not extend overnight.
    (i) That said life tenant or his or her surviving spouse may 
relinquish said life estate lease at any time and may receive relocation 
benefits from the Secretary at the time of relinquishment as provided in 
25 U.S.C. 640d-28(h), (Pub. L. 96-305, section 30(h)).
    (j) The purposes for which the life estate lease may be used.
    (k) The life estate tenure shall end by voluntary relinquishment, or 
at the death of the life tenant or the death of his or her spouse, 
whichever occurs last, all as provided in 25 U.S.C. 640d-28(g) (Pub. L. 
96-305, section 30(g)).
    (l) No livestock shall be allowed in the lease area until the 
perimeter of the lease area is fenced.
    (m) Such other terms and conditions deemed necessary or appropriate 
by the Commission.



                      Subpart N_Discretionary Funds

    Source: 47 FR 57916, Dec 29, 1982, unless otherwise noted.



Sec. 700.451  Purpose.

    (a) The purpose of this subpart is to establish procedures for the 
submission, review and approval, and administration of applications for 
financial assistance from the discretionary fund established by Pub. L. 
93-531, as amended.
    (b) The purpose of the discretionary fund is to provide financial 
assistance to activities which will facilitate and expedite the 
relocation and resettlement of individuals under the Act and ease the 
hardship incurred by these individuals.



Sec. 700.453  Definitions.

    (a) Act means Pub. L. 93-531 (88 Stat. 1712, 25 U.S.C. 640d), as 
amended.
    (b) Applicant means with respect to this subpart, any applicant as 
defined under Sec. 700.457(c) or Sec. 700.459(b).
    (c) Business means any lawful activity, except a nonprofit 
organization, that is--
    (1) Conducted primarily for the purchase, sale, lease and/or rental 
of personal and/or real property, and/or for the manufacture, 
processing, and/or marketing of products, commodities, and/or any other 
personal property; or
    (2) Conducted primarily for the sale of services to the public.
    (d) Commissioners means the three Commissioners of the Navajo and 
Hopi Indian Relocation Commission.
    (e) In-kind contribution means a noncash contribution as described 
in attachment F of OMB Circular A-102.
    (f) Local government means a local unit of government including 
specifically a county, municipality, city, town, township, local public 
authority, special district, council of governments, and other regional 
or interstate entity, or any agency or instrumentality of a local 
government.

[[Page 259]]

    (g) Nonprofit organization means a corporation, partnership, 
individual, or other public or private entity that is engaged in a 
lawful business, professional, or instructional activity on a nonprofit 
basis and that has established its nonprofit status under applicable 
Federal, State, or Tribal law.
    (h) Related facilities means any building or structure normally 
found in a community and includes but is not limited to water, sewer and 
electrical lines, community centers, health centers and clinics, roads, 
and business establishments.
    (i) Services means activities relating to human development 
including, but not limited to, educational and job training, mental 
health counseling, health care, and technical assistance in business 
administration, agriculture, and home economics.
    (j) Tribe means the Navajo Chapter or the Hopi Village.
    (k) Tribal subdivision means a Navajo Chapter or a Hopi Village.



Sec. 700.455  Financial assistance.

    (a) The Commission may provide financial assistance to applicants 
eligible under this subpart from funds available for any fiscal year.
    (b) To obtain financial assistance, an applicant shall submit an 
application in accordance with Sec. 700.463.
    (c) The Commission may make funding decisions throughout the year as 
applications are approved. The Commission shall, to the extent possible, 
make funds available throughout the year for approved applications. 
Based upon the merit of applications received under this subpart, the 
Commission shall determine how funds available under this subpart shall 
be apportioned among the activities described in Sec. Sec. 700.457 and 
700.459.



Sec. 700.457  Assistance to match or pay 30% of grants, contracts or
other expenditures.

    (a) The purpose of applications for financial assistance under this 
section shall be to aid individuals subject to relocation under the Act 
and to assist the host communities, towns, cities, or other entities in 
adjusting to and meeting the needs of the relocatees. For this purpose, 
the discretionary fund may be used to match or pay not to exceed 30% 
(thirty percent) of any grant, contract, or other expenditure of the 
Federal Government, State or local government, tribal government or 
chapter, or private organization for the benefit of the Navajo or Hopi 
Tribe, if the Commission determines that such grant, contract, or 
expenditure would significantly assist the Commission in carrying out 
its responsibility or assist either tribe in meeting the burdens imposed 
by this Act.
    (b) An ``other expenditure'' under this subsection is defined as 
cooperative agreements, direct provision of services, or in-kind 
contributions. The Commission may match or pay not to exceed 30% (thirty 
percent) of another expenditure through a grant, contract, or 
cooperative agreement.
    (c) Eligible applicants under this section for a grant, contract, or 
cooperative agreement are defined as States, local government, the 
Navajo and Hopi Tribes, tribal chapters or villages and profit and 
nonprofit organizations.
    (d) Total Federal financial assistance under this section may reach 
100% (one hundred percent) if the applicant receives 70% (seventy 
percent) Federal funding from Federal agencies other than the 
Commission.
    (e) When another Federal agency is a primary source of financial 
assistance for an applicant, the Commission may, pursuant to an 
interagency agreement, transfer funds to the primary Federal agency 
providing financial assistance to the applicant.
    (f) The Commission may, pursuant to an interagency agreement, 
transfer not to exceed 10% (ten percent) of the funds available under 
this subpart to another Federal agency directly assisting relocatees if 
such agency's activities would accomplish the purpose of paragraph (a) 
of this section. Financial assistance transferred to accomplish an 
eligible activity under paragraph (a) of this section may not exceed the 
funding limitation of paragraph (a) of this section.
    (g) An applicant may apply for financial assistance under this 
section in accordance with the funding limitations described in 
paragraph (a) for the purpose of undertaking a technical feasibility 
study of a construction project

[[Page 260]]

or any major project with a total funding of over $200,000 (two hundred 
thousand dollars) or any dollar amount which the Commission may 
prescribe at some future time.



Sec. 700.459  Assistance for demonstration projects and for provision
of related facilities and services.

    (a) The purpose of applications for financial assistance under this 
section shall be to aid individuals subject to relocation under the Act. 
For this purpose, the discretionary fund may be used by the Commission 
to engage or participate either directly through Federal activities, or 
by cooperative agreement, grant, or contract in demonstration efforts to 
employ innovative energy or other technologies in providing housing and 
related facilities and services in the relocation and resettlement of 
individuals under this Act.
    (b) Applicants eligible under this section to receive grants, 
cooperative agreements or contracts are: states, local governments, the 
Navajo and Hopi Tribes, tribal chapters, profit and nonprofit 
organizations, and individuals.
    (c) Applicants for assistance under this section may receive up to 
100% (one hundred percent) project or program funding from the 
Commission, however, the Commission may specify whether applications for 
certain types of programs or projects under this section require 
matching funding from the applicant.
    (d) Activities described in Sec. 700.457(a) and paragraph (a) of 
this section may be provided by the Commission through in-house 
activities which receive financial assistance under this section.
    (e) The Commission may, pursuant to an interagency agreement, 
transfer not to exceed 10% (ten percent) of the funds available under 
this subpart to another Federal agency directly assisting relocatees if 
such agency's activities would accomplish the purpose of Sec. Sec. 
700.457(a) and 700.459(a).
    (f) An applicant may apply for financial assistance under this 
section for the purpose of undertaking a technical feasibility study of 
a construction project, or any major project with a total planned 
funding of over $200,000, (two hundred thousand dollars) or any dollar 
amount which the Commission may prescribe at some future time.



Sec. 700.461  Method for soliciting applications.

    (a) The Commission shall utilize two methods to solicit applications 
for funding:
    (1) The Commission shall issue an annual announcement of the 
availability of funds for programs which will most effectively meet the 
purposes of Sec. 700.457(a) or 700.459(a). Applicants submitting 
applications under this announcement must demonstrate that the proposed 
project or program will effectively facilitate and expedite the 
relocation effort of the Commission.
    (2) As priority needs are identified by the Commission, calls shall 
be issued during the fiscal year for specific proposals. Requests for 
proposal shall define the need to be addressed and the scope of work 
required.
    (b) The annual announcements of the availability of funds and 
periodic requests for proposals shall be issued through the Commerce 
Business Daily and media which has regional and local circulation. The 
Commission may fund approved applications through grant, contract, or 
direct provision of services, pursuant to Pub. L. 93-531, as amended.



Sec. 700.463  Requirements for applications.

    (a) Applicants shall submit preapplications for funding assistance. 
The preapplication shall be due by the closing date published by the 
Commission, and shall consist of:
    (1) Standard Form 424;
    (2) A brief narrative not to exceed one page describing how the 
program or project will meet the priorities established by the 
Commission pursuant to Sec. 700.457 or Sec. 700.459.
    (b) The Commission shall respond to each preapplication, and shall 
request each person submitting an acceptable preapplication to submit an 
application.
    (c) Applications for financial assistance for a project or program 
may be submitted by the due date established by the Commission for a 
particular

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funding cycle. Applications received after the due date will be 
considered for the next funding cycle, although the Commission, at its 
discretion, may select such a project for funding under the current 
cycle. An original and 5 (five) copies of each application must be 
submitted to the Commission. Applications shall be submitted on such 
forms as the Commission may prescribe in conformity with OMB circulars 
A102 or A110.
    (d) Applications under Sec. 700.457 for matching financial 
assistance not to exceed 30% of another expenditure, shall include:
    (1) A detail sheet showing the sources of matching funds, including 
both cash and in-kind contributions, and documentation that the 
applicant has fulfilled all of the requirements of any Federal agency, 
state or local government or chapter, or private organization from which 
the financial assistance is also requested; and
    (2) A narrative statement which includes an explanation of how the 
application would aid relocatees and assist the host communities, towns, 
cities, or other entities in adjusting to and meeting the needs of 
relocatees.
    (e) Applications for financial assistance under Sec. 700.459 must 
justify the proposed project or program as a demonstration effort in 
order to be eligible for 100% funding.
    (f) Applications shall contain a statement of how the applicant 
plans to comply with the provisions of the Indian Self-Determination Act 
(25 U.S.C. 450e) and the Act of April 16, 1934 (48 Stat. 596) as amended 
(25 U.S.C. 452-457).



Sec. 700.465  Technical feasibility.

    Unless required by a non-Commission source of financial assistance, 
completed plans and specifications are not required at the time an 
application is submitted for construction, technology, or another 
engineering project, however, an application for a construction, 
technology or another engineering project shall:
    (a) Include sufficient information to determine the nature and scope 
of the project, its probable useful life, and a reasonable estimate of 
cost;
    (b) Fully show that the applicant will follow design and performance 
criteria which conform to professionally recognized standards and which 
adequately define the technical capability of the project to serve 
current and foreseeable needs; and
    (c) Justify any evidence or use of unorthodox design.
    (d) Show that the applicant has a management plan for the facility 
which identifies probable sources of operating funds.
    (e) An applicant who is awarded a grant under Sec. 700.465 is 
required to submit completed plans and specifications for the 
construction, technology, or other engineering project prior to 
construction. The Commission shall review the completed plans and 
specifications for technical adequacy as part of its oversight function.



Sec. 700.467  Construction costs.

    Construction costs and costs relating to construction such as 
machinery and equipment, architect/engineer services, and administrative 
services may be allowable as determined by the Commission.



Sec. 700.469  Unallowable program and project costs.

    Costs for program or project operating expenses are not allowable 
except in the following cases--
    (a) An application for an annual contract for services under Sec. 
700.457 or 700.459 may include necessary operating expenses; and
    (b) An application for a demonstration effort under Sec. 700.459 
may include costs relating to the operation of the demonstration.



Sec. 700.471  Review and approval.

    (a) Upon receipt of an application for financial assistance under 
this subpart, members of the Commission staff shall begin a preliminary 
review of the application with the intent of submitting a recommendation 
to the Commissioners of whether to accept or deny the application. The 
Commission staff may inform the applicant before its recommendation to 
the Commissioners, of any special problems or impediments which may 
result in a recommendation for disapproval; may

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offer any available technical assistance required to overcome such 
problems or impediments; and solicit the applicants written response.
    (b) The Commission staff may solicit comments on an application from 
technical specialists, community groups and others, when such advice is 
needed to fully evaluate the application.
    (c) The Commission staff shall forward the application with their 
recommendation to the Commissioners. The Commissioners may approve 
applications if they determine that:
    (1) The application meets the requirements of this subpart;
    (2) The application meets the intent of the Act;
    (3) The application fully demonstrates that it will expedite the 
relocation and resettlement of individuals under the Act and ease the 
hardship incurred by these individuals or by the Tribes;
    (4) The application is compatible with priorities identified by the 
Commission;
    (5) The applicant can carry out the activities described in the 
application and can maintain proper financial controls on the activities 
for which financial assistance is requested;
    (6) The applicant can and will comply with requirements for Indian 
preference in employment and training in connection with the 
administration of the grant, and preference to Indian organizations and 
Indian owned economic enterprises in the award of subcontracts or 
subgrants; and
    (7) Funds are available.
    (d) All applicants shall be notified in writing of the Commission's 
approval or disapproval of the grant applications.



Sec. 700.473  Administrative expenditures of the Commission.

    The Commission may use funds in an amount not to exceed 5 percent of 
the funds authorized under this subpart for expenses relating to the 
administration of the discretionary fund including--
    (a) Personnel, whose time is expended directly in support of such 
administration;
    (b) Supplies which are expended directly in support of such 
administration;
    (c) Contracts, where the work performed is directly related to such 
administration;
    (d) Printing, directly in support of such administration; and
    (e) Travel, directly related to such administration.



Sec. 700.475  Reports.

    Reports shall be furnished by any recipient of financial assistance 
under this subpart, in such manner as may be required by the Commission.



Sec. 700.477  Administration of financial assistance and recordkeeping 
requirements.

    (a) A State or local government (except an institution of higher 
education or a hospital since they are governed by paragraph (b) of this 
section), or the Navajo or Hopi Tribe receiving a grant or cooperative 
agreement under this subpart shall comply with applicable law including 
the following requirements--
    (1) Office of Management and Budget Circular A-102, entitled 
``Uniform Administrative Requirements for Grants-in-Aid to State and 
Local Governments'' including attachment C describing recordkeeping 
requirements; and
    (2) Federal Management Circular 74-4 5 CFR part 1310, entitled 
``Cost Principles Applicable to Grants and Contracts with State and 
Local Governments.''
    (b) A nonprofit organization, institution of higher education, or 
hospital receiving a grant or cooperative agreement under this subpart 
shall comply with applicable law including the following requirements--
    (1) Office of Management and Budget Circular A-110, entitled 
``Grants and Agreements with Institutions of Higher Education, Hospitals 
and Other Nonprofit Organizations'' including attachment C describing 
recordkeeping requirements; and
    (2) Office of Management and Budget Circular A-122, entitled ``Cost 
Principles for Nonprofit Organizations.''
    (c) A profit organization receiving a grant or cooperative agreement 
under this subpart shall comply with applicable law including Federal 
Procurement Regulations (41 CFR subpart 1-15.2) for

[[Page 263]]

determining the reasonableness, allowability, and allocability of costs.
    (d) A profit organization, tribal chapter, or individual receiving a 
grant or cooperative agreement under this subpart shall--
    (1) Follow sound and proper procedures for the administration of the 
financial assistance including any procedures established by the 
Commission; and
    (2) Retain records as required by the Commission.
    (e) A State, local government, the Navajo or Hopi Tribe, a tribal 
chapter or an individual receiving a contract under this subpart shall 
comply with applicable law including Federal Procurement Regulations (41 
CFR parts 1-1 through 1-30). Recordkeeping requirements for contracts 
are described in Sec. Sec. 1-3.814-2, 1-7.103-3, 1-7.103-18, 1-7.603-
20, and 1-7.603-7 of the Federal Procurement Regulations.
    (f) A State, local government, profit or nonprofit organization, or 
an individual residing off of the Navajo or Hopi reservation applying 
for a grant or cooperative agreement under this subpart shall comply 
with Office of Management and Budget Circular A-95, entitled 
``Evaluation, Review and Coordination of Federal and Federally Assisted 
Programs and Projects'' unless exempted under Part I, section 8.b. of 
this circular.
    (g) Recipients of financial assistance under this subpart shall 
comply with other procedures which the Commission may from time to time 
prescribe for the administration of financial assistance provided under 
this subpart.
    (h) A state or local government, nonprofit organization, institution 
of higher education, hospital, profit organization or individual 
receiving a grant, subgrant, contract or subcontract under this part 
shall comply with the provisions of the Indian Self-Determination Act 
(25 U.S.C. 450e) and the Act of April 16, 1934 (48 Stat. 596) as amended 
(25 U.S.C. 452-457) which require that to the greatest extent feasible:
    (1) Preferences and opportunities for training and employment in 
connection with the administration of such contracts or grants shall be 
given to Indians; and
    (2) Preference in the award of subcontracts and subgrants in 
connection with the administration of such contracts or grants shall be 
given to Indian organization and to Indian owned economic enterprises as 
defined in section 3 of the Indian Financing Act of 1974 (88 Stat. 77) 
(25 U.S.C. 1452).



Sec. 700.479  Administrative review.

    (a) If the Commissioners determine that implementation of an 
application approved according to Sec. 700.471 fails to meet the 
requirements of this subpart, the Commissioners shall give notice to the 
recipient of their intent to terminate or suspend financial assistance 
to the recipient.
    (b) The Commission shall issue such notice in written form sent by 
registered mail, return receipt requested, which notice shall include a 
statement of the reasons for the findings referred to in paragraph (a) 
of this section, and an explanation whether any amendments or actions 
would result in compliance with grant terms and conditions.
    (c) Any person whose approved financial assistance is terminated or 
suspended under paragraph (b) of this section may request a review of 
such action by the Commission. Such request for review shall be in 
writing and must be mailed or delivered to the Commission not later than 
thirty (30) days after receipt of the notice from the Commission by the 
applicant. Such request for review shall state the reasons for the 
request and shall include any additional matters not before the 
Commission which the applicant deems appropriate. The Commission may 
grant or deny a review at its discretion and shall inform the applicant 
of its decision in writing.



              Subpart O_Employee Responsibility and Conduct

    Source: 47 FR 11858, Mar. 19, 1982, unless otherwise noted.



Sec. 700.501  Statement of purpose.

    This part prescribes appropriate standards of conduct and 
responsibilites, financial disclosure reports, and rules of ethics in 
the conduct of Government business that are

[[Page 264]]

mandatory for all who serve with the Navajo and Hopi Indian Relocation 
Commission, and in order to implement the requirements of law, Executive 
Order 11222 and 5 CFR part 905. The rules promulgated by the Commission 
as essential to agency operations are in addition to the criminal laws 
and other laws governing conduct of Federal employees. Like the laws, 
they will be strictly interpreted and firmly enforced. Ignorance of 
these rules or laxity in observance or enforcement of them will not be 
condoned. They are the prime responsibility of all Commission personnel.



Sec. 700.503  Definitions.

    (a) Special Government Employee: An officer or employee who has been 
employed to perform temporary duties, with or without compensation, for 
not more than 130 days during any period of 365 consecutive days, either 
on a full-time or intermittent basis (18 U.S.C. 202(a)).
    (b) Employee: Any officer or employee of the Commission who is not a 
special government employee.
    (c) Commission personnel: All officers and employees of the 
Commission, including special Government employees.
    (d) Persons: An individual, corporation, company, association, firm, 
partnership, society, joint stock company, or any other organization or 
institution.
    (e) Gratuity: Any gift, honorarium, favor, entertainment, 
hospitality, transportation, loan, or any other tangible thing, and any 
other intangible benefit (i.e., discounts) given to or on behalf of 
Commission employees or their spouses or dependent children for which 
fair market value is not paid by the recipient or by the Government.



Sec. 700.505  Coverage.

    The regulations contained in this part apply to all Commission 
personnel. Exceptions applicable to special Government employees and 
members of the Senior Executive Service are noted in the body of this 
part.



Sec. 700.507  Responsibilities.

    (a) Office of the Commission and Office of Executive Direction. (1) 
The Chairman of the Commission shall prepare and submit to the Office of 
Personnel Management for approval, standards of employee conduct which 
implement requirements of law, Executive Order 11222 and provisions of 5 
CFR part 905; and prescribe additional standards of ethical and other 
conduct and reporting requirements that are appropriate to the agency. 
After OPM approval, the Chairman shall submit the agency's regulations 
to the Federal Register for publication. These requirements also apply 
to any amendments to agency regulations.
    (2) The Commissioners shall appoint a Designated Agency Ethics 
Official and Deputy Ethics Official in accordance with 5 CFR 738.202(b). 
Responsibilities of these officials are described below in Sec. 735.15.
    (3) The Executive Director shall ensure that the regulations 
published under this part are disseminated to all Commission personnel 
and that staff are familiar with and understand the standards of conduct 
and statutes governing conflicts of interest and post Federal employment 
restrictions.
    (4) The Executive Director shall ensure that disciplinary or 
remedial action is taken in the case of all agency personnel who violate 
these standards or related laws and regulations, and against supervisors 
who fail to carry out their responsibilities in taking disciplinary or 
remedial action in such cases.
    (b) Managers and supervisors. Managers and supervisors shall ensure 
that all Commission personnel under their supervision are familiar with 
and understand these regulations governing standards of conduct, 
conflict of interest, and referenced statutory restrictions, and adhere 
to them at all times. Issues and problems which cannot be resolved 
through the discussion process inherent in the supervisor-employee 
relationship shall be referred to the Designated Agency Ethics Official. 
Managers and supervisors shall ensure that disciplinary or remedial 
action is taken with all agency personnel who violate these regulations, 
and against subordinate supervisors who fail to carry out their 
responsibilities for effecting or recommending disciplinary or remedial 
action in these cases.

[[Page 265]]

    (c) Employees. All Commission personnel shall be familiar with the 
standards of conduct governed in this directive and the laws governing 
conflicts of interest and post employment restrictions, and shall comply 
with them. When in doubt as to the permissibility of an action under the 
terms of this directive, the employee shall not act without first 
consulting the immediate supervisor and as appropriate seeking the 
advice of the Designated Agency Ethics Official.
    (d) Office of Management Operations. (1) The Office of Management 
Operations shall give each employee a copy of these regulations and 
shall conduct an oral briefing on their contents, within 30 days of 
approval. New personnel shall receive a copy and oral briefing promptly 
upon assuming their duties. Additions and amendments shall be similarly 
communicated upon approval.
    (2) The Office shall conduct annual review sessions of these 
standards for all personnel.
    (3) The Office shall provide the Designated Agency Ethics Official 
with necessary administrative and clerical staff support.



Sec. 700.509  Duties of the designated agency ethics official.

    The Designated Agency Ethics Official shall coordinate and manage 
the agency's ethics program. The Deputy Ethics Official shall serve as 
alternate Agency Ethics Official in the absence of the Designated Agency 
Ethics Official, or upon his or her express delegation. Specific duties 
of the Officer include:
    (a) Liaison with Office of Government Ethics (OGE). The Designated 
Agency Ethics Official shall establish and maintain close working 
relations with the OGE, and shall coordinate communications between the 
Commission and OGE through the Agency Liaison Division and Office of 
Ethics of the General Services Administration. If the Designated Agency 
Ethics Official receives a request which he or she believes should be 
answered by the Office of Government Ethics, a referral procedure is 
available. Requests for advisory opinions shall be submitted as 
specified in 5 CFR 738.304. The Designated Agency Ethics Official shall 
provide the OGE with records, reports and any other information which 
may be required under the Ethics in Government Act (Pub. L. 95-521, as 
amended) or requested by the OGE.
    (b) Review of statements. The Designated Agency Ethics Official 
shall review the statements of employment and financial interest 
submitted by agency personnel assessing the application of conflict of 
interest laws and regulations to the information reported. When the 
review discloses a conflict, or the appearance of a conflict, between 
the private interests of an employee and the performance of his or her 
duties as a Commission employee, the Designated Agency Ethics Official 
shall bring the conflict to the attention of the employee, grant the 
individual an opportunity to explain the conflict, and attempt to 
resolve it. If the conflict is not resolved at this point, the 
Designated Agency Ethics Official shall forward a written report on the 
conflict to the Chairman of the Commission recommending appropriate 
action. In developing the recommendation the Designated Agency Ethics 
Official may consult, as appropriate, with the agency General Counsel 
and the GSA Ethics Office.
    (c) Education and counseling program. The Designated Agency Ethics 
Official shall design and conduct an education and counseling program 
for supervisors and employees on all ethics and standards of conduct 
matters, including post-employment matters. Records shall be kept as 
appropriate on the advice rendered.
    (d) Administrative systems review. The Designated Agency Ethics 
Official shall ensure that these regulations and implementing 
administrative systems are evaluated annually to determine their 
adequacy and effectiveness in relation to current agency 
responsibilities. Amendments shall be developed and approved pursuant to 
the results of systems review.



Sec. 700.511  Statements of employment and financial interests.

    (a) Employees required to file statements. (1) Members of the 
Commission shall submit Financial Disclosure Reports (SF-278) to the 
Deputy Ethics

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Counselor of the Department of Interior, according to instructions 
received from that office. Issues of real or apparent conflict of 
interest which involve employees of the Senior Executive Service shall 
be resolved by the Ethics Officer of the Department of the Interior.
    (2) The Designated Agency Ethics Official shall submit SF-278 to the 
Office of Government Ethics for review.
    (3) The employee appointed as Deputy Ethics Official and incumbents 
of the positions listed below shall file NHIRC form 738.1F with the 
Designated Agency Ethics Official:
    (i) Executive Director.
    (ii) General Counsel.
    (iii) Assistant Director for Management Operations.
    (iv) Assistant Director for Relocation Operations.
    (v) Chief, Technical Services Division.
    (vi) Chief, Realty Division.
    (vii) Chief, Advisory Services Division.
    (viii) Chief, Office of Research, Planning and Evaluation.
    (ix) Procurement/Fiscal Officer.
    (x) Realty Specialists.
    (xi) Construction Inspectors.
    (4) The Designated Agency Ethics Official may require Statements of 
Employment and Financial Interest from employees in other specified 
positions, if analysis of duties and responsibilities shows the 
positions meet the criteria listed in paragraph (b) of th