[Title 25 CFR ]
[Code of Federal Regulations (annual edition) - April 1, 2017 Edition]
[From the U.S. Government Publishing Office]



[[Page i]]

          

          Title 25

Indians


________________________

Part 300 to End

                         Revised as of April 1, 2017

          Containing a codification of documents of general 
          applicability and future effect

          As of April 1, 2017
                    Published by the Office of the Federal Register 
                    National Archives and Records Administration as 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                                               231
          Chapter V--Bureau of Indian Affairs, Department of 
          the Interior, and Indian Health Service, Department 
          of Health and Human Services                             319
          Chapter VI--Office of the Assistant Secretary, 
          Indian Affairs, Department of the Interior               383
          Chapter VII--Office of the Special Trustee for 
          American Indians, Department of the Interior             447
  Finding Aids:
      Table of CFR Titles and Chapters........................     459
      Alphabetical List of Agencies Appearing in the CFR......     479
      List of CFR Sections Affected...........................     489

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

                     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 
departments and agencies of the Federal Government. The Code is divided 
into 50 titles which represent broad areas subject to Federal 
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name of the issuing agency. Each chapter is further subdivided into 
parts covering specific regulatory areas.
    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

    The appropriate revision date is printed on the cover of each 
volume.

LEGAL STATUS

    The contents of the Federal Register are required to be judicially 
noticed (44 U.S.C. 1507). The Code of Federal Regulations is prima facie 
evidence of the text of the original documents (44 U.S.C. 1510).

HOW TO USE THE CODE OF FEDERAL REGULATIONS

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    To determine whether a Code volume has been amended since its 
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[[Page vi]]

Many agencies have begun publishing numerous OMB control numbers as 
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[[Page vii]]

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    Oliver A. Potts,
    Director,
    Office of the Federal Register.
    April 1, 2017.

                                
                                      
                            

  

[[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, 2017.

    For this volume, Bonnie Fritts was Chief Editor. The Code of Federal 
Regulations publication program is under the direction of John Hyrum 
Martinez, assisted by Stephen J. Frattini.

[[Page 1]]



                            TITLE 25--INDIANS




                  (This book contains part 300 to End)

  --------------------------------------------------------------------
                                                                    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
311-399         [Reserved]

[[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, Secs. 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.

                        PARTS 311	399 [RESERVED]

[[Page 19]]



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




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

                    SUBCHAPTER A--GENERAL PROVISIONS
Part                                                                Page
500             [Reserved]

501             Purpose and scope of this chapter...........          23
502             Definitions of this chapter.................          23
503             Commission information collection 
                    requirements under the Paperwork 
                    Reduction Act: OMB control numbers and 
                    expiration dates........................          27
504-512         [Reserved]

513             Debt collection.............................          27
514             Fees........................................          34
515             Privacy Act procedures......................          38
516             Testimony of commissioners and employees and 
                    former commissioners and former 
                    employees respecting official duties; 
                    response to subpoena....................          44
517             Freedom of Information Act procedures.......          45
518             Self-regulation of class II gaming..........          53
519             Service.....................................          57
    SUBCHAPTER B--APPROVAL OF CLASS II AND CLASS III ORDINANCES AND 
                               RESOLUTIONS
520-521         [Reserved]

522             Submission of gaming ordinance or resolution          59
523-529         [Reserved]

              SUBCHAPTER C--MANAGEMENT CONTRACT PROVISIONS
530             [Reserved]

531             Content of management contracts.............          62
532             [Reserved]

533             Approval of management contracts............          63
534             [Reserved]

535             Post-approval procedures....................          65
536             [Reserved]

[[Page 20]]

537             Background investigations for persons or 
                    entities with a financial interest in, 
                    or having management responsibility for, 
                    a management contract...................          67
538-539         [Reserved]

                      SUBCHAPTER D--HUMAN SERVICES
540-541         [Reserved]

542             Minimum internal control standards..........          70
543             Minimum internal control standards for class 
                    II gaming...............................         156
544-546         [Reserved]

547             Minimum technical standards for class II 
                    gaming systems and equipment............         186
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..         203
557             [Reserved]

558             Gaming licenses for key employees and 
                    primary management officials............         205
559             Facility license notifications and 
                    submissions.............................         207
                         SUBCHAPTER F [RESERVED]
560-569         [Reserved]

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

571             Monitoring and investigations...............         209
572             [Reserved]

573             Compliance and enforcement..................         213
574             [Reserved]

575             Civil fines.................................         215
576-579         [Reserved]

         SUBCHAPTER H--APPEAL PROCEEDINGS BEFORE THE COMMISSION
580             Rules of general application in appeal 
                    proceedings before the Commission.......         217
581             Motions in appeal proceedings before the 
                    Commission..............................         219
582             Appeals of disapprovals of gaming 
                    ordinances, resolutions, or amendments..         220

[[Page 21]]

583             Appeals from approvals or disapprovals of 
                    management contracts or amendments to 
                    management contracts....................         221
584             Appeals before a presiding official.........         222
585             Appeals to the Commission...................         227
586-589         [Reserved]

                         SUBCHAPTER I [RESERVED]
590-599         [Reserved]

[[Page 23]]



                     SUBCHAPTER A_GENERAL PROVISIONS



                           PART 500 [RESERVED]

      



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 (Chair).
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.
502.23  Facility license.
502.24  Enforcement action.

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

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



Sec. 502.1  Chairman (Chair).

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

[80 FR 31993, June 5, 2015]



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:

[[Page 24]]

    (1) Play for prizes with cards bearing numbers or other 
designations;
    (2) Cover numbers or designations when object, similarly numbered or 
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]

[[Page 25]]



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, 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 U.S.C. 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--

[[Page 26]]

    (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-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. 502.23  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]



Sec. 502.24  Enforcement action.

    Enforcement action means any action taken by the Chair under 25 
U.S.C. 2713 against any person engaged in gaming, for a violation of any 
provision of IGRA, the regulations of this chapter, or tribal 
regulations, ordinances, or resolutions approved under 25 U.S.C. 2710 or 
2712 of IGRA, including, but not limited to, the following: A notice of 
violation; a civil fine assessment; or an order for temporary closure. 
Enforcement action does not include any action taken by NIGC staff, 
including but not limited to, the issuance of a letter of concern under 
Sec. 573.2 of this chapter.

[77 FR 47514, Aug. 9, 2012]

[[Page 27]]



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   Expiration
    Part or section number of  title 25 CFR      OMB control     date
                                                   numbers
------------------------------------------------------------------------
Sec. 514.1 (submission of fee reports)........    3141-0007    6/30/94
Sec. 515.3 (request for access to records)....    3141-0002   10/31/95
Sec. 515.5 (request for amendment to records).    3141-0002   10/31/95
Sec. 515.7 (appeals)..........................    3141-0002   10/31/95
Part 519 (designation of agent for service)....    3141-0003   10/31/95
Sec. 522.2 (submission and approval of new        3141-0003   10/31/95
 ordinances)...................................
Sec. 522.3 (amendment)........................    3141-0003   10/31/95
Sec. 522.12 (revocation of class III gaming)..    3141-0003   10/31/95
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 contracts).    3141-0004   10/31/95
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 for         3141-0003   10/31/95
 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?
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?

[[Page 28]]

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 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.

[[Page 29]]



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;
    (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 parts 580 through 585 
may not re-litigate matters that were the subject of the final order.

[66 FR 58057, Nov. 20, 2001, as amended at 80 FR 31994, June 5, 2015]



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

[[Page 30]]

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.



             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

[[Page 31]]

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.



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;

[[Page 32]]

    (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 parts 580 through 585 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
    (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.

[66 FR 58057, Nov. 20, 2001, as amended at 80 FR 31994, June 5, 2015]



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.

[[Page 33]]



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
    (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.

[[Page 34]]

    (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



Sec.
514.1  What is the purpose of this part?
514.2  When will the annual rates be published?
514.3  What is the maximum fee rate?
514.4  What are ``assessable gross revenues'' and how does a tribe 
          calculate the amount of the annual fees it owes?
514.5  When must a tribe pay its annual fees?
514.6  What are the quarterly statements that must be submitted with the 
          fee payments?
514.7  What should a tribe do if it changes its fiscal year?
514.8  Where should fees, quarterly statements, and other communications 
          about fees be sent?
514.9  What happens if a tribe submits its fee payment or quarterly 
          statement late?
514.10  When does a late payment or quarterly statement submission 
          become a failure to pay?
514.11  Can a tribe or gaming operation appeal a proposed late fee?
514.12  When does a notice of late submission and/or a proposed late fee 
          become a final order of the Commission and final agency 
          action?
514.13  How are late submission fees paid, and can interest be assessed?
514.14  What happens if a tribe overpays its fees or if the Commission 
          does not expend the full amount of fees collected in a fiscal 
          year?
514.15  May tribes submit fingerprint cards to the NIGC for processing?
514.16  How does the Commission adopt the fingerprint processing fee?
514.17  How are fingerprint processing fees collected by the Commission?


[[Page 35]]


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

    Source: 77 FR 5181, Feb. 2, 2012, unless otherwise noted.

    Editorial Note: Nomenclature changes to part 514 appear at 78 FR 
4785, Jan. 23, 2013.



Sec. 514.1  What is the purpose of this part?

    Each gaming operation under the jurisdiction of the Commission, 
including a tribe with a certificate of self-regulation, 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.



Sec. 514.2  When will the annual rates be published?

    (a) The Commission shall adopt preliminary rates for each calendar 
year no later than March 1st of each year, and, if considered necessary, 
shall modify those rates no later than June 1st of that year.
    (b) The Commission shall publish the rates of fees in a notice in 
the Federal Register.



Sec. 514.3  What is the maximum fee rate?

    (a) The rates of fees imposed shall be--
    (1) No more than 2.5% of the first $1,500,000 (1st tier), and
    (2) No more than 5% 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.
    (b) If a tribe has a certificate of self-regulation, the rate of 
fees imposed shall be no more than .25% of assessable gross revenues 
from self-regulated class II gaming operations.



Sec. 514.4  What are ``assessable gross revenues'' and how does 
a tribe calculate the amount of the annual fee it owes?

    (a) 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, entry 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 as 
reflected in the gaming operation's audited financial statements.
    (b) Each gaming operation subject to these regulations shall 
calculate the annual fee based on the gaming operation's fiscal year.
    (c) Unless otherwise provided by the regulations, generally accepted 
accounting principles shall be used.
    (d) The allowance for amortization of capital expenditures for 
structures shall be either:
    (1) An amount not to exceed 5% of the cost of structures in use 
throughout the year and 2.5% of the cost of structures in use during 
only a part of the year; or
    (2) An amount not to exceed 10% of the total amount of depreciation 
expenses for the year.
    (e) All class II and III revenues from gaming operations are to be 
included.



Sec. 514.5  When must a tribe pay its annual fees?

    Each gaming operation shall calculate the amount of fees to be paid 
and remit them with the quarterly statement required in Sec. 514.6. The 
fees payable shall be computed using:
    (a) The most recent rates of fees adopted by the Commission pursuant 
to Sec. 514.2,
    (b) The assessable gross revenues for the previous fiscal year as 
calculated using Sec. 514.4, and
    (c) The amounts paid and credits received during the fiscal year, if 
applicable.



Sec. 514.6  What are the quarterly statements that must be submitted
with the fee payments?

    (a) Each gaming operation subject to the jurisdiction of the 
Commission shall file with the Commission quarterly statements showing 
its assessable gross revenues for the previous fiscal year.
    (b) 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.
    (c) The quarterly statements shall be sent to the Commission within 
three (3) months, six (6) months, nine (9) months, and twelve (12) 
months of the

[[Page 36]]

end of the gaming operation's fiscal year.
    (d) The quarterly 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.
    (e) Each quarterly statement shall include the computation of the 
fees payable, showing all amounts used in the calculations. The required 
calculations are as follows:
    (1) Multiply the 1st tier assessable gross revenues, as calculated 
using Sec. 514.4, by the rate for those revenues adopted by the 
Commission.
    (2) Multiply the 2nd tier assessable gross revenues, as calculated 
using Sec. 514.4, by the rate for those revenues adopted by the 
Commission.
    (3) Add (total) the results (products) obtained in paragraphs (e)(1) 
and (2) of this section.
    (4) Multiply the total obtained in paragraph (e)(3) of this section 
by \1/4\.
    (5) The amount computed in paragraph (e)(4) of this section is the 
amount to be remitted.
    (f) Examples of fee computations follow:
    (1) Where a filing is made for the first quarter of the fiscal year, 
the previous year's assessable gross revenues as calculated using 
section 514.4 of this part 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% =........................       0
2nd tier revenues--$500,000  x  .08% =..........................    $400
Annual fees.....................................................    $400
Multiply for fraction of year--\1/4\ or.........................     .25
Fees for first payment..........................................    $100
Amount to be remitted...........................................    $100
 

    (2) [Reserved]
    (g) As required by part 571 of this chapter, quarterly statements 
must be reconciled with a tribe's audited or reviewed financial 
statements for each gaming location. These reconciliations must be made 
available upon the request of any authorized representative of the NIGC.



Sec. 514.7  What should a tribe do if it changes its fiscal year?

    If a gaming operation changes its fiscal year, it shall notify the 
Commission of the change within thirty (30) days. The Commission may 
request that the tribe prepare and submit to the Commission the fees and 
statements required by this subsection for 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 ninety (90) days of its 
request.



Sec. 514.8  Where should fees, quarterly statements, and other 
communications about fees be sent?

    The statements, remittances, and communications about fees shall be 
transmitted to the Commission at the following address: NIGC Attn: 
Comptroller, C/O Department of the Interior, 1849 C Street NW., Mail 
Stop 1621, Washington, DC 20240. Checks should be made payable to the 
National Indian Gaming Commission (do not remit cash).

[77 FR 5181, Feb. 2, 2012, as amended at 80 FR 31994, June 5, 2015]



Sec. 514.9  What happens if a tribe submits its fee payment or
quarterly statement late?

    (a) In the event that a gaming operation fails to submit a fee 
payment or quarterly statement in a timely manner, the Chair of the 
Commission may issue a notice specifying:
    (1) The date the statement and/or payment was due;
    (2) The number of calendar days late the statement and/or payment 
was submitted;
    (3) A citation to the federal or tribal requirement that has been or 
is being violated;
    (4) The action being considered by the Chair; and
    (5) Notice of rights of appeal pursuant to subchapter H of this 
chapter.
    (b) Within fifteen (15) days of service of the notice, a respondent 
may submit written information about the notice to the Chair. The Chair 
shall consider any information submitted by the respondent as well as 
the respondent's history of untimely submissions or failure to file 
statements and/or fee

[[Page 37]]

payments over the preceding five (5) years in determining the amount of 
the late fee, if any.
    (c) When practicable, within thirty (30) days of issuing the notice 
described in paragraph (a) of this section to a respondent, the Chair of 
the Commission may assess a proposed late fee against a respondent for 
each failure to file a timely quarterly statement and/or fee payment:
    (1) For statements and/or fee payments one (1) to thirty (30) 
calendar days late, the Chair may propose a late fee of up to, but not 
more than 10% of the fee amount for that quarter, as calculated in 
Sec. 514.6(e);
    (2) For statements and/or fee payments thirty-one (31) to sixty (60) 
calendar days late, the Chair may propose a late fee of up to, but not 
more than 15% of the fee amount for that quarter, as calculated in 
Sec. 514.6(e);
    (3) For statements and/or fee payments sixty-one (61) to ninety (90) 
calendar days late, the Chair may propose a late fee of up to, but not 
more than 20% of the fee amount for that quarter, as calculated in 
Sec. 514.6(e).



Sec. 514.10  When does a late payment or quarterly statement 
submission become a failure to pay?

    (a) Statements and/or fee payments over ninety (90) calendar days 
late constitute a failure to pay the annual fee, as set forth in IGRA, 
25 U.S.C. 2717(a)(3), and NIGC regulations, 25 CFR 573.4(a)(2). In 
accordance with 25 U.S.C. 2717(a)(3), failure to pay fees shall be 
grounds for revocation of the approval of the Chair of any license, 
ordinance or resolution required under IGRA for the operation of gaming.
    (b) In accordance with Sec. 573.4(a)(2) of this chapter, if a tribe, 
management contractor, or individually owned gaming operation fails to 
pay the annual fee, the Chair may issue a notice of violation and, 
simultaneously with or subsequently to the notice of violation, a 
temporary closure order.

[77 FR 5181, Feb. 2, 2012, as amended at 80 FR 31994, June 5, 2015]



Sec. 514.11  Can a tribe or gaming operation appeal a proposed late fee?

    (a) Proposed late fees assessed by the Chair may be appealed under 
subchapter H of this chapter.
    (b) At any time prior to the filing of a notice of appeal under 
subchapter H of this chapter, the Chair and the respondent may agree to 
settle the notice of late submission, including the amount of the 
proposed late fee. In the event a settlement is reached, a settlement 
agreement shall be prepared and executed by the Chair and the 
respondent. If a settlement agreement is executed, the respondent shall 
be deemed to have waived all rights to further review of the notice or 
late fee 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 proposed late fee before 
the Commission in accordance with subchapter H of this chapter.



Sec. 514.12  When does a notice of late submission and/or a proposed
late fee become a final order of the Commission and final agency
action?

    If the respondent fails to appeal under subchapter H of this 
chapter, the notice and the proposed late fee shall become a final order 
of the Commission and final agency action.



Sec. 514.13  How are late submission fees paid, and can interest be
assessed?

    (a) Late fees assessed under this part shall be paid by the person 
or entity assessed and shall not be treated as an operating expense of 
the operation.
    (b) The Commission shall transfer the late fee paid under this 
subchapter to the U.S. Treasury.
    (c) Interest shall be assessed at rates established from time to 
time by the Secretary of the Treasury on amounts remaining unpaid after 
their due date.



Sec. 514.14  What happens if a tribe overpays its fees or if the
Commission does not expend the full amount of fees collected 
in a fiscal year?

    (a) The total amount of all fees imposed during any fiscal year 
shall not

[[Page 38]]

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 according to Sec. 514.4.
    (b) 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.



Sec. 514.15  May tribes submit fingerprint cards to the NIGC for processing?

    Tribes may submit fingerprint cards to the Commission for processing 
by the Federal Bureau of Investigation (FBI) and the Commission may 
charge a fee to process fingerprint cards on behalf of the tribes.



Sec. 514.16  How does the Commission adopt the fingerprint processing fee?

    (a) The Commission shall review annually the costs involved in 
processing fingerprint cards and, by a vote of not less than two of its 
members, shall adopt preliminary rates for each calendar year no later 
than March 1st of that year, and, if considered necessary, shall modify 
those rates no later than June 1st of that year.
    (b) The fingerprint fee charge shall be based on fees charged by the 
Federal Bureau of Investigation and costs incurred by the Commission. 
Commission costs include Commission personnel, supplies, equipment 
costs, and postage to submit the results to the requesting tribe.



Sec. 514.17  How are fingerprint processing fees collected by the
Commission?

    (a) Fees for processing fingerprint cards will be billed monthly to 
each Tribe for cards processed during the prior month. Tribes shall pay 
the amount billed within forty-five (45) days of the date of the bill.
    (b) The Chair may suspend fingerprint card processing for a tribe 
that has a bill remaining unpaid for more than forty-five (45) days.
    (c) Fingerprint fees shall be sent to the following address: NIGC 
Attn: Comptroller, C/O Department of the Interior, 1849 C Street NW., 
Mail Stop 1621, Washington, DC 20240. Checks should be made payable to 
the National Indian Gaming Commission (do not remit cash).

[77 FR 5181, Feb. 2, 2012, as amended at 80 FR 31994, June 5, 2015]



PART 515_PRIVACY ACT PROCEDURES--Table of Contents



Sec.
515.1  Purpose and scope.
515.2  Definitions.
515.3  Request for access to records.
515.4  Responsibility for responding to requests.
515.5  Responses to requests for access to records.
515.6  Request for amendment or correction of records.
515.7  Appeals of initial agency adverse determination.
515.8  Requests for an accounting of record disclosure.
515.9  Notice of court-ordered and emergency disclosures.
515.10  Fees.
515.11  Penalties.
515.12  [Reserved]
515.13  Specific exemptions.

    Authority: 5 U.S.C. 552a

    Source: 82 FR 8141, Jan. 24, 2017, unless otherwise noted.



Sec. 515.1  Purpose and scope.

    This part contains the regulations the National Indian Gaming 
Commission (Commission) follows in implementing the Privacy Act of 1974. 
These regulations should be read together with the Privacy Act, which 
provides additional information about records maintained on individuals. 
The regulations in this part apply to all records contained within 
systems of records maintained by the Commission that are retrieved by an 
individual's name or personal identifier. They describe the procedures 
by which individuals may request access to records about themselves, 
request amendment or correction of those records, and request an 
accounting of disclosures of those records by the Commission. The 
Commission shall also process all Privacy Act requests for access to 
records

[[Page 39]]

under the Freedom of Information Act (FOIA), 5 U.S.C. 552, and the 
Commission's FOIA regulations contained in 25 CFR part 517, which gives 
requesters maximum disclosure.



Sec. 515.2  Definitions.

    For the purposes of this subpart:
    (a) Individual means a citizen of the United States or an alien 
lawfully admitted for permanent residence.
    (b) Maintain means store, 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 
identifying number, symbol, or other identifier assigned to the 
individual, such as social security number, finger or voice print, or 
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 use of a record for a purpose that is 
compatible with the purpose for which it was collected.
    (f) Working day means a Federal workday that does not include 
Saturdays, Sundays, or Federal holidays.



Sec. 515.3  Request for access to records.

    (a) How made and addressed. Any individual may make a request to the 
Commission for access to records about him or herself. Such requests 
shall conform to the requirements of this section. The request may be 
made in person at 90 K Street NE., Suite 200, Washington, DC 20002 
during the hours of 9 a.m. to 12 noon and 2 p.m. to 5 p.m. Monday 
through Friday, in writing at NIGC Attn: Privacy Act Officer, C/O 
Department of the Interior, 1849 C Street NW., Mail Stop 1621, 
Washington, DC 20240, or via electronic mail addressed to 
[email protected]
    (b) Description of records sought. Each request for access to 
records must describe the records sought in enough detail to enable 
Commission personnel to locate the system of records containing them 
with a reasonable amount of effort. Whenever possible, the request 
should describe the records sought, the time periods in which the 
records were compiled, any tribal gaming facility with which they were 
associated, and the name or identifying number of each system of records 
in which the records are kept.
    (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. The requester must send acknowledgment 
to the Privacy Act Officer indicating his/her willingness to pay the 
fees. Absent such an 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) Verification of identity. When making a request for access to 
records the individual seeking access must provide verification of 
identity. The requester must provide a full name, current address, and 
date and place of birth. The request must be signed and must either be 
notarized or submitted under 28 U.S.C. 1746, which is a law that permits 
statements to be made under penalty of perjury as a substitute for 
notarization. In order to assist in the identification and location of 
requested records, a request may also, at the requester's option, 
include a social security number.
    (e) Verification of guardianship. When making a request as a parent 
or guardian of a minor or as the guardian of someone determined by a 
court to be incompetent, for access to records about that individual, 
the request must establish:
    (1) The identity of the individual who is the subject of the record 
by stating the name, current address, date and place of birth, and, at 
the requester's option, the social security number of the individual;
    (2) The requester's own identity, as required in paragraph (d) of 
this section;
    (3) That the requester is the parent or guardian of the individual 
and proof of such relationship by providing a birth certificate showing 
parentage or

[[Page 40]]

a court order establishing guardianship; and
    (4) That the requester is acting on behalf of that individual in 
making the request.
    (f) Verification in the case of third party information requests. 
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 
whose record is requested, and notarized or witnessed as provided in 
paragraph (d) of this section.
    (g) In-person disclosures. 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. 
If a requester is accompanied by another individual, the requester shall 
be required to authorize in writing any discussion of the records in the 
presence of the other person.



Sec. 515.4  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 Privacy Act Officer shall inform the requester of that 
date.
    (b) Authority to grant or deny requests. The Privacy Act Officer 
shall make initial determinations either to grant or deny in whole or in 
part access to records.
    (c) Consultations and referrals. When the Commission receives a 
request for a record in its possession, the Privacy Act Officer shall 
determine whether another agency of the Federal Government is better 
able to determine whether the record is exempt from disclosure under the 
Privacy Act. If the Privacy Act Officer determines that it is best able 
to process the record in response to the request, then it shall do so. 
If the Privacy Act Officer determines that it is not best able to 
process the record, then it shall either:
    (1) Respond to the request regarding that record, after consulting 
with the agency best able to determine whether to disclose it and with 
any other agency that has a substantial interest in it; or
    (2) Refer the responsibility for responding to the request regarding 
that record to the agency best able to determine whether to disclose it, 
or to another agency that originated the record. Ordinarily, the agency 
that originated a record will be presumed to be best able to determine 
whether to disclose it.
    (d) Notice of referral. Whenever the Privacy Act Officer refers all 
or any part of the responsibility for responding to a request to another 
agency, it ordinarily shall notify the requester of the referral and 
inform the requester of the name of each agency to which the request has 
been referred and of the part of the request that has been referred.



Sec. 515.5  Responses to requests for access to records.

    (a) Acknowledgement of requests. Upon receipt of a request, the 
Privacy Act Officer ordinarily shall, within 20 working days, send an 
acknowledgement letter which shall confirm the requester's agreement to 
pay fees under Sec. 515.9 and provide an assigned request number.
    (b) Grants of requests for access. Once the Privacy Act Officer 
makes a determination to grant a request for access in whole or in part, 
it shall notify the requester in writing. The notice shall inform the 
requester of any fee charged under Sec. 515.9 of this part and the 
Privacy Act Officer shall disclose records to the requester promptly on 
payment of any applicable fee. If a request is made in person, the 
Privacy Act Officer will disclose the records to the requester directly, 
in a manner not unreasonably disruptive of its operations, on payment of 
any applicable fee and with a written record made of the grant of the 
request. If a requester is accompanied by another individual, the 
requester shall be required to authorize in writing any discussion of 
the records in the presence of the other person.
    (c) Adverse determinations of requests for access. If the Privacy 
Act Officer

[[Page 41]]

makes any adverse determination denying a request for access in any 
respect, it shall notify the requester of that determination in writing. 
The notification letter shall be signed by the official making the 
determination and include:
    (1) The name and title of the person responsible for the denial;
    (2) A brief statement of the reason(s) for the denial, including any 
Privacy Act exemption(s) applied to the denial;
    (3) A statement that the denial may be appealed under Sec. 515.7 and 
a description of the requirements of Sec. 515.7.



Sec. 515.6  Request for amendment or correction of records.

    (a) How made and addressed. An individual may make a request for an 
amendment or correction to a Commission record about that individual by 
writing directly to the Privacy Act Officer, following the procedures in 
Sec. 515.3. The request should identify each particular record in 
question, state the amendment or correction that is sought, and state 
why the record is not accurate, relevant, timely, or complete. The 
request may include any documentation that would be helpful to 
substantiate the reasons for the amendment sought.
    (b) Privacy Act Officer response. The Privacy Act Officer shall, not 
later than 10 working days after receipt of a request for an amendment 
or correction of a record, acknowledge receipt of the request and 
provide notification of whether the request is granted or denied. If the 
request is granted in whole or in part, the Privacy Act Officer shall 
describe the amendment or correction made and shall advise the requester 
of the right to obtain a copy of the amended or corrected record. If the 
request is denied in whole or in part, the Privacy Act Officer shall 
send a letter signed by the denying official stating:
    (1) The reason(s) for the denial; and
    (2) The procedure for appeal of the denial under paragraph (c) of 
this section.
    (c) Appeals. A requester may appeal a denial of a request for 
amendment or correction in the same manner as a denial of a request for 
access as described in Sec. 515.7. If the appeal is denied, the 
requester shall be advised of the right to file a Statement of 
Disagreement as described in paragraph (d) of this section and of the 
right under the Privacy Act for judicial review of the decision.
    (d) Statements of Disagreement. If the appeal under this section is 
denied in whole or in part, the requester has the right to file a 
Statement of Disagreement that states the reason(s) for disagreeing with 
the Privacy Act Officer's denial of the request for amendment or 
correction. Statements of Disagreement must be concise, must clearly 
identify each part of any record that is disputed, and should be no 
longer than one typed page for each fact disputed. The Statement of 
Disagreement shall be placed in the system of records in which the 
disputed record is maintained and the record shall be marked to indicate 
a Statement of Disagreement has been filed.
    (e) Notification of amendment, correction, or disagreement. Within 
30 working days of the amendment or correction of the record, the 
Privacy Act Officer shall notify all persons, organizations, or agencies 
to which it previously disclosed the record, and if an accounting of 
that disclosure was made, that the record has been amended or corrected. 
If a Statement of Disagreement was filed, the Commission shall append a 
copy of it to the disputed record whenever the record is disclosed and 
may also append a concise statement of its reason(s) for denying the 
request to amend the record.
    (f) Records not subject to amendment. Section 515.13 lists the 
records that are exempt from amendment or correction.



Sec. 515.7  Appeals of initial adverse agency determination.

    (a) Adverse determination. An initial adverse agency determination 
of a request may consist of: A determination to withhold any requested 
record in whole or in part; a determination that a requested record does 
not exist or cannot be located; a determination that the requested 
record is not a record subject to the Privacy Act; a determination that 
a record will not be amended; a determination to deny a request for an 
accounting; a determination on any disputed fee matter; and any 
associated denial of a request for

[[Page 42]]

expedited treatment under the Commission's FOIA regulations.
    (b) Appeals. If the Privacy Act Officer issues an adverse 
determination in response to a request, the requester may file a written 
notice of appeal. The notice shall be accompanied by the original 
request, the initial adverse determination that is being appealed, and a 
statement describing why the adverse determination was in error. The 
appeal shall be addressed to the Privacy Act Appeals Officer at the 
locations listed in Sec. 515.3 of this part no later than 90 calendar 
days after the date of the letter denying the request. Both the appeal 
letter and envelope should be marked ``Privacy Act Appeal.'' Any Privacy 
Act appeals submitted via electronic mail should state ``Privacy Act 
Appeal'' in the subject line.
    (c) Responses to appeals. The decision on appeal will be made in 
writing within 20 working days of receipt of the notice of appeal by the 
Privacy Act Appeals Officer. For good cause shown, however, the Privacy 
Act Appeals Officer may extend the 30 working day period. If such an 
extension is taken, the requester shall be promptly notified of such 
extension and the anticipated date of decision. A decision affirming an 
adverse determination in whole or in part will include a brief statement 
of the reason(s) for the determination, including any Privacy Act 
exemption(s) applied. If the adverse determination is reversed or 
modified in whole or in part, the requester will be notified in a 
written decision and the request will be reprocessed in accordance with 
that appeal decision. The response to the appeal shall also advise of 
the right to institute a civil action in a Federal district court for 
judicial review of the decision.
    (d) When appeal is required. In order to institute a civil action in 
a federal district court for judicial review of an adverse 
determination, a requester must first appeal it under this section.



Sec. 515.8  Requests for an accounting of record disclosure.

    (a) How made and addressed. Subject to the exceptions listed in 
paragraph (b) of this section, an individual may make a request for an 
accounting of the disclosures of any record about that individual that 
the Commission has made to another person, organization, or agency. The 
accounting contains the date, nature and purpose of each disclosure, as 
well as the name and address of the person, organization, or agency to 
which the disclosure was made. The request for an accounting should 
identify each particular record in question and should be made in 
writing to the Commission's Privacy Act Officer, following the 
procedures in Sec. 515.3.
    (b) Where accountings are not required. The Commission is not 
required to provide an accounting where they relate to:
    (1) Disclosures for which accountings are not required to be kept, 
such as those that are made to employees of the Commission who have a 
need for the record in the performance of their duties and disclosures 
that are made under section 552 of title 5;
    (2) Disclosures made to law enforcement agencies for authorized law 
enforcement activities in response to written requests from those law 
enforcement agencies specifying the law enforcement activities for which 
the disclosures are sought; or
    (3) Disclosures made from law enforcement systems of records that 
have been exempted from accounting requirements.
    (c) Appeals. A requester may appeal a denial of a request for an 
accounting in the same manner as a denial of a request for access as 
described in Sec. 515.7 of this part and the same procedures will be 
followed.
    (d) Preservation of accountings. All accountings made under this 
section will be retained for at least five years or the life of the 
record, whichever is longer, after the disclosure for which the 
accounting is made.



Sec. 515.9  Notice of court-ordered and emergency disclosures.

    (a) Court-ordered disclosures. When a record pertaining to an 
individual is required to be disclosed by a court order, the Privacy Act 
Officer shall make reasonable efforts to provide notice of this to the 
individual. Notice shall be given within a reasonable time after the 
Privacy Act Officer's receipt of the order--except that in a case in 
which the order

[[Page 43]]

is not a matter of public record, the notice shall be given only after 
the order becomes public. This notice shall be mailed to the 
individual's last known address and shall contain a copy of the order 
and a description of the information disclosed. Notice shall not be 
given if disclosure is made from a criminal law enforcement system of 
records that has been exempted from the notice requirement.
    (b) Emergency disclosures. Upon disclosing a record pertaining to an 
individual made under compelling circumstances affecting health or 
safety, the Privacy Act Officer shall, within a reasonable time, notify 
that individual of the disclosure. This notice shall be mailed to the 
individual's last known address and shall state the nature of the 
information disclosed; the person, organization, or agency to which it 
was disclosed; the date of disclosure; and the compelling circumstances 
justifying disclosure.



Sec. 515.10  Fees.

    The Commission shall charge fees for duplication of records under 
the Privacy Act in the same way in which it charges duplication fees 
under Sec. 517.9 of this part. No search or review fee may be charged 
for any record. Additionally, when the Privacy Act Officer makes a copy 
of a record as a necessary part of reviewing the record or granting 
access to the record, the Commission shall not charge for the cost of 
making that copy. Otherwise, the Commission may charge a fee sufficient 
to cover the cost of duplicating a record.



Sec. 515.11  Penalties.

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



Sec. 515.12  [Reserved]



Sec. 515.13  Specific exemptions.

    (a) The following systems of records are exempt from 5 U.S.C. 
552a(c)(3), (d), (e)(1) and (f):
    (1) Indian Gaming Individuals Records System.
    (2) Management Contract Individuals Record System.
    (b) The exemptions under paragraph (a) of this section apply only to 
the extent that information in these systems 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 or verifying the 
suitability of an individual who has a financial interest in, or 
management responsibility for a management contract, 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

[[Page 44]]

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 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

[[Page 45]]

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.



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 following address: NIGC Attn: 
Freedom of Information Act Officer, C/O Department of the Interior, 1849 
C Street NW., Mail Stop 1621, Washington, DC 20240.

[64 FR 54542, Oct. 7, 1999, as amended at 80 FR 31994, June 5, 2015]



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 90 K Street NE., Suite 
200, Washington, DC 20002. Reading room records created on or after 
November 1, 1996, shall be made available electronically via the Web 
site.

[71 FR 20007, Apr. 19, 2006, as amended at 81 FR 76307, Nov. 2, 2016]



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

[[Page 46]]

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.
    (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

[[Page 47]]

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 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, C/O Department of 
Interior, 1849 C Street NW., Mailstop 1621, Washington, DC 20240. 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

[[Page 48]]

that the requested records have been destroyed or disposed.

[71 FR 20007, Apr. 19, 2006, as amended at 81 FR 76307, Nov. 2, 2016]



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.
    (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.

[[Page 49]]

    (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 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

[[Page 50]]

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 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, C/O Department of Interior, 1849 C Street NW., Mailstop 1621, 
Washington, DC 20240.
    (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

[[Page 51]]

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.

[71 FR 20007, Apr. 19, 2006, as amended at 81 FR 76307, Nov. 2, 2016]



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.
    (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.

[[Page 52]]

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 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.

[[Page 53]]

    (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 will administer the self-regulation program for the 
          Commission?
518.3  Who is eligible to petition for a certificate of self-regulation?
518.4  What must a tribe submit to the Commission as part of its 
          petition?
518.5  What criteria must a tribe meet to receive a certificate of self-
          regulation?
518.6  What are the responsibilities of the Office of Self-Regulation in 
          the certification process?
518.7  What process will the Commission use to review and certify 
          petitions?
518.8  What is the hearing process?
518.9  When will a certificate of self-regulation become effective?
518.10  What must a self-regulating tribe provide the Commission to 
          maintain its self-regulatory status?
518.11  Does a tribe that holds a certificate of self-regulation have a 
          continuing duty to advise the Commission of any additional 
          information?
518.12  Which investigative or enforcement powers of the Commission are 
          inapplicable to self-regulating tribes?
518.13  When may the Commission revoke a certificate of self-regulation?
518.14  May a tribe request a hearing on the Commission's proposal to 
          revoke its certificate of self-regulation?

    Authority: 25 U.S.C. Sec. 2706(b)(10); E.O. 13175.

    Source: 78 FR 20241, Apr. 4, 2013, unless otherwise noted.



Sec. 518.1  What does this part cover?

    This part sets forth requirements for obtaining a certificate 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 applies to all Class II gaming activity 
conducted by the tribe holding the certificate.



Sec. 518.2  Who will administer the self-regulation program for the
Commission?

    The self-regulation program will be administered by the Office of 
Self-Regulation. The Chair shall appoint one Commissioner to administer 
the Office of Self-Regulation.



Sec. 518.3  Who is eligible to petition for a certificate of
self-regulation?

    A tribe is eligible to petition the Commission for a certificate of 
self-regulation of Class II gaming if, for a three (3)-year period 
immediately preceding the date of its petition:
    (a) The tribe has continuously conducted such gaming;
    (b) All gaming that the tribe has engaged in, or has 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 Chair 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 (3) years immediately preceding the date of the petition, 
maintained all records required to support the petition for self-
regulation.



Sec. 518.4  What must a tribe submit to the Commission as part 
of its petition?

    A petition for a certificate of self-regulation is complete under 
this part when it contains:
    (a) Two copies on 8\1/2\  x  11 paper of a 
petition for self-regulation approved by the governing body of the tribe 
and

[[Page 54]]

certified as authentic by an authorized tribal official;
    (b) A description of how the tribe meets the eligibility criteria in 
Sec. 518.3, which may include supporting documentation; and
    (c) The following information with supporting documentation:
    (1) A brief history of each gaming operation(s), including the 
opening dates and periods of voluntary or involuntary closure;
    (2) An organizational chart of the tribal regulatory body;
    (3) A brief description of the criteria tribal regulators must meet 
before being eligible for employment as a tribal regulator;
    (4) A brief description of the process by which the tribal 
regulatory body is funded, and the funding level for the three years 
immediately preceding the date of the petition;
    (5) A list of the current regulators and employees of the tribal 
regulatory body, their complete resumes, their titles, the dates they 
began employment, and, if serving limited terms, the expiration date of 
such terms;
    (6) A brief description of the accounting system(s) at the gaming 
operation which tracks the flow of the gaming revenues;
    (7) A list of gaming activity internal controls at the gaming 
operation(s);
    (8) A description of the record keeping system(s) for all 
investigations, enforcement actions, and prosecutions of violations of 
the tribal gaming ordinance or regulations, for the three (3)-year 
period immediately preceding the date of the petition; and
    (9) The tribe's current set of gaming regulations, if not included 
in the approved tribal gaming ordinance.



Sec. 518.5  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 for a three (3)-year period, the tribe has:
    (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) Conducted its gaming operation on a fiscally and economically 
sound basis;
    (3) Conducted its gaming activity in compliance with the IGRA, NIGC 
regulations in this chapter, and the tribe's gaming ordinance and gaming 
regulations; and
    (4) Adopted and is implementing adequate systems for:
    (i) Accounting of all revenues from the gaming activity;
    (ii) Investigating, licensing and monitoring of all employees of the 
gaming activity;
    (iii) Investigating, enforcing, prosecuting, or referring for 
prosecution violations of its gaming ordinance and regulations; and
    (iv) Prosecuting criminal or dishonest activity or referring such 
activity for prosecution.
    (b) A tribe may illustrate that it has met the criteria listed in 
paragraph (a) of this section by addressing factors such as those listed 
below. The list of factors is not all-inclusive; other factors not 
listed here may also be addressed and considered.
    (1) The tribe adopted and is implementing minimum internal control 
standards which are at least as stringent as those promulgated by the 
Commission;
    (2) The tribe requires tribal gaming regulators to meet the same 
suitability requirements as those required for key employees and primary 
management officials of the gaming operation(s);
    (3) The tribe's gaming operation utilizes an adequate system for 
accounting of all gaming revenues from Class II gaming activity;
    (4) The tribe has a dispute resolution process for gaming operation 
customers and has taken steps to ensure that the process is adequately 
implemented;
    (5) The tribe has a gaming regulatory body which:
    (i) Monitors gaming activities to ensure compliance with Federal and 
tribal laws and regulations;

[[Page 55]]

    (ii) Monitors the gaming revenues accounting system for continued 
effectiveness;
    (iii) Performs routine operational or other audits of the Class II 
gaming activities;
    (iv) Routinely receives and reviews gaming revenue accounting 
information from the gaming operation(s);
    (v) Has access to, and may inspect, examine, photocopy and audit, 
all papers, books, and records of the gaming operation(s) and Class II 
gaming activities;
    (vi) Monitors compliance with minimum internal control standards for 
the gaming operation;
    (vii) Has adopted and is implementing an adequate system for 
investigating, licensing, and monitoring of all employees of the gaming 
activity;
    (viii) Maintains records on licensees and on persons denied 
licenses, including persons otherwise prohibited from engaging in gaming 
activities within the tribe's jurisdiction;
    (ix) 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;
    (x) Establishes or approves the rules governing Class II games, and 
requires their posting;
    (xi) Has adopted and is implementing an adequate system for the 
investigation of possible violations of the tribal gaming ordinance and 
regulations, and takes appropriate enforcement actions; and
    (xii) Takes testimony and conducts hearings on regulatory matters, 
including matters related to the revocation of primary management 
officials, key employee and vendor licenses;
    (6) The tribe allocates and appropriates a sufficient source of 
permanent and stable funding for the tribal regulatory body;
    (7) The tribe has adopted and is implementing a conflict of interest 
policy for the regulators/regulatory body and their staff;
    (8) The tribe has adopted and is implementing a system for adequate 
prosecution of violations of the tribal gaming ordinance and regulations 
or referrals for prosecution; and
    (9) The tribe demonstrates that the operation is being conducted in 
a manner which adequately protects the environment and the public health 
and safety.
    (c) The tribe assists the Commission with access and information-
gathering responsibilities during the certification process.
    (d) The burden of establishing self-regulation is upon the tribe 
filing the petition.



Sec. 518.6  What are the responsibilities of the Office of
Self-Regulation in the certification process?

    The Office of Self-Regulation shall be responsible for directing and 
coordinating the certification process. It shall provide a written 
report and recommendation to the Commission as to whether a certificate 
of self-regulation should be issued or denied, and a copy of the report 
and recommendation to the petitioning tribe.



Sec. 518.7  What process will the Commission use to review and
certify petitions?

    (a) Petitions for self-regulation shall be submitted by tribes to 
the Office of Self-Regulation.
    (1) Within 30 days of receipt of a tribe's petition, the Office of 
Self-Regulation shall conduct a review of the tribe's petition to 
determine whether it is complete under Sec. 518.4.
    (2) If the tribe's petition is incomplete, the Office of Self-
Regulation shall notify the tribe by letter, certified mail or return 
receipt requested, of any obvious deficiencies or significant omissions 
in the petition. A tribe with an incomplete petition may submit 
additional information and/or clarification within 30 days of receipt of 
notice of an incomplete petition.
    (3) If the tribe's petition is complete, the Office of Self-
Regulation shall notify the tribe in writing.
    (b) Once a tribe's petition is complete, the Office of Self-
Regulation shall conduct a review to determine whether the tribe meets 
the eligibility criteria in Sec. 518.3 and the approval criteria in 
Sec. 518.5. During its review, the Office of Self-Regulation:
    (1) May request from the tribe any additional material it deems 
necessary

[[Page 56]]

to assess whether the tribe has met the criteria for self-regulation.
    (2) Will coordinate an on-site review and verification of the 
information submitted by the petitioning tribe.
    (c) Within 120 days of notice of a complete petition under 
Sec. 518.4, the Office of Self-Regulation shall provide a recommendation 
and written report to the full Commission and the petitioning tribe.
    (1) If the Office of Self-Regulation determines that the tribe has 
satisfied the criteria for a certificate of self-regulation, it shall 
recommend to the Commission that a certificate be issued to the tribe.
    (2) If the Office of Self-Regulation determines that the tribe has 
not met the criteria for a certificate of self-regulation, it shall 
recommend to the Commission that it not issue a certificate to the 
tribe.
    (3) The Office of Self-Regulation shall make all information, on 
which it relies in making its recommendation and report, available to 
the tribe, subject to the confidentiality requirements in 25 U.S.C. 
2716(a), and shall afford the tribe an opportunity to respond.
    (4) The report shall include:
    (i) Findings as to whether each of the eligibility criteria is met, 
and a summary of the basis for each finding;
    (ii) Findings as to whether each of the approval criteria is met, 
and a summary of the basis for each finding;
    (iii) A recommendation to the Commission as to whether it should 
issue the tribe a certificate of self-regulation; and
    (iv) A list of any documents and other information received in 
support of the tribe's petition.
    (5) A tribe shall have 30 days from the date of issuance of the 
report to submit to the Office of Self-Regulation a response to the 
report.
    (d) After receiving the Office of Self-Regulation's recommendation 
and report, and a tribe's response to the report, the Commission shall 
issue preliminary findings as to whether the eligibility and approval 
criteria are met. The Commission's preliminary findings will be provided 
to the tribe within 45 days of receipt of the report.
    (e) Upon receipt of the Commission's preliminary findings, the tribe 
can request, in writing, a hearing before the Commission, as set forth 
in Sec. 518.8. Hearing requests shall be made to the Office of Self-
Regulation, and shall specify the issues to be addressed by the tribe at 
the hearing and any proposed oral or written testimony the tribe wishes 
to present.
    (f) The Commission shall issue a final determination 30 days after 
issuance of its preliminary findings or after the conclusion of a 
hearing, if one is held. The decision of the Commission to approve or 
deny a petition shall be a final agency action.
    (g) A tribe may withdraw its petition and resubmit it at any time 
prior to the issuance of the Commission's final determination.

[78 FR 20241, Apr. 4, 2013, as amended at 78 FR 37115, June 20, 2013]



Sec. 518.8  What is the hearing process?

    (a) Within 10 days of receipt of the request for a hearing, the 
Office of Self-Regulation shall notify the tribe of the date and place 
of the hearing. The notice shall also set a hearing schedule, the time 
allotted for testimony and oral argument, and the order of the 
presentation.
    (1) To the extent possible, the hearing will be scheduled not later 
than 60 days after the notice is issued, and the hearing schedule will 
be issued at least 30 days prior to the hearing.
    (2) [Reserved]
    (b) The Commission shall issue a decision on the petition within 30 
days after the hearing's conclusion. The decision shall set forth, with 
particularity, findings regarding the tribe's satisfaction of the self-
regulation standards in this Part. If the Commission determines that a 
certificate will issue, it will do so in accordance with Sec. 518.9 of 
this part.
    (c) The decision of the Commission to approve or deny a petition 
shall be a final agency action.

[78 FR 20241, Apr. 4, 2013, as amended at 78 FR 37115, June 20, 2013]



Sec. 518.9  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

[[Page 57]]

Commission determines that a certificate will issue. Petitions will be 
reviewed in chronological order based on the date of receipt of a 
complete petition.



Sec. 518.10  What must a self-regulating tribe provide the Commission
to maintain its self-regulatory status?

    Each tribe that holds a certificate of self-regulation shall be 
required to submit the following information by April 15 of each year 
following the first year of self-regulation, or within 120 days after 
the end of each fiscal year of the gaming operation, as required by 25 
CFR 571.13:
    (a) An annual independent audit, to be filed with the Commission, as 
required by 25 U.S.C. 2710(b)(2)(C); and
    (b) A complete resume for all employees of the tribal regulatory 
body hired and licensed by the tribe subsequent to its receipt of a 
certificate of self-regulation, to be filed with the Office of Self-
Regulation.
    Failure to submit the information required by this section may 
result in revocation of a certificate of self-regulation.

[78 FR 20241, Apr. 4, 2013, as amended at 78 FR 37115, June 20, 2013]



Sec. 518.11  Does a tribe that holds a certificate of self-regulation
have a continuing duty to advise the Commission of any additional
information?

    Yes. A tribe that holds a certificate of self-regulation has a 
continuing duty to advise the Commission within three business days of 
any changes in circumstances that are material to the approval criteria 
in Sec. 518.5 and may reasonably cause the Commission to review and 
revoke the tribe's certificate of self-regulation. Failure to do so is 
grounds for revocation of a certificate of self-regulation. Such 
circumstances may include, but are not limited to, a change of primary 
regulatory official; financial instability; or any other factors that 
are material to the decision to grant a certificate of self-regulation.



Sec. 518.12  Which investigative or enforcement powers of the 
Commission are inapplicable to self-regulating tribes?

    During any time in which a tribe has a certificate of self-
regulation, the powers of the Commission, as set forth in 25 U.S.C. 
2706(b)(1)-(4), shall be inapplicable.



Sec. 518.13  When may the Commission revoke a certificate of
self-regulation?

    The Commission may, after an opportunity for a hearing, revoke a 
certificate of self-regulation by a majority vote of its members if it 
determines that the tribe no longer meets the eligibility criteria of 
Sec. 518.3, the approval criteria of Sec. 518.5, the requirements of 
Sec. 518.10 or the requirements of Sec. 518.11. The Commission shall 
provide the tribe with prompt notice of the Commission's intent to 
revoke a certificate of self-regulation under this part. Such notice 
shall state the reasons for the Commission's action and shall advise the 
tribe of its right to a hearing under part 584 or right to appeal under 
part 585. The decision to revoke a certificate is a final agency action 
and is appealable to Federal District Court pursuant to 25 U.S.C. 2714.



Sec. 518.14  May a tribe request a hearing on the Commission's
proposal to revoke its certificate of self-regulation?

    Yes. A tribe may request a hearing regarding the Commission's 
proposal to revoke a certificate of self-regulation. Such a request 
shall be filed with the Commission pursuant to part 584. Failure to 
request a hearing within the time provided by part 584 shall constitute 
a waiver of the right to a hearing.



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.

[[Page 58]]



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 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 59]]



     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\  x  11 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 Secs. 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 60]]

    (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 582 of this 
chapter. A disapproval shall be effective immediately unless appealed 
under part 582 of this chapter.

[58 FR 5810, Jan. 22, 1993, as amended at 80 FR 31994, June 5, 2015]



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 582 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

[[Page 61]]

responsibility for a management contract, or their agents.
    (b) A disapproval shall be effective immediately unless appealed 
under part 582 of this chapter.

[58 FR 5810, Jan. 22, 1993, as amended at 80 FR 31994, June 5, 2015]



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.

[58 FR 5810, Jan. 22, 1993, as amended at 80 FR 31994, June 5, 2015]



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\  x  
11 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.

                        PARTS 523	529 [RESERVED]

[[Page 62]]



               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 gaming 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 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.
    (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.

[[Page 63]]

    (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, as amended at 80 FR 31994, June 5, 2015]



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]



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

[[Page 64]]

disapproval of the management contract under part 583 of this chapter.

[74 FR 36935, July 27, 2009, as amended at 80 FR 31994, June 5, 2015]



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 and;
    (2) A representation that the contract as submitted to the Chairman 
is the entirety of the agreement among the parties.
    (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 Secs. 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, as amended at 80 FR 31994, June 5, 2015]



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:
    (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

[[Page 65]]

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 the 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, as amended at 80 FR 31994, June 5, 2015]



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 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

[[Page 66]]

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 583 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 583 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, as amended at 80 FR 31994, June 5, 2015]



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 Secs. 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 
584 or part 585 of this chapter. The Chairman will initiate modification 
or voiding proceedings by serving the parties, specifying the grounds 
for the modification or voiding. 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, as amended at 80 FR 31994, June 5, 2015]

                           PART 536 [RESERVED]

[[Page 67]]



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 any tribe, a wholly owned tribal entity, national bank, 
or institutional investor that is federally regulated or is required to 
undergo a background investigation and licensure by a state or tribe 
pursuant to a tribal-state compact, the Chair 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

[[Page 68]]

criminal charge, and the dates of the charge and the disposition.
    (2) Fingerprints. The management contractor shall arrange with an 
appropriate federal, state, or tribal law enforcement authority to 
supply the Commission with a completed form FD-258, Applicant 
Fingerprint Card, (provided by the Commission), for each person for whom 
background information is provided under this section.
    (3) Responses to Questions. Each person with a direct or indirect 
financial interest in a management contract or management responsibility 
for a management contract shall respond within thirty (30) days to 
written or oral questions propounded by the Chairman.
    (4) Privacy notice. In compliance with the Privacy Act of 1974, each 
person required to submit information under this section shall sign and 
submit the following statement:

    Solicitation of the information in this section is authorized by 25 
U.S.C. 2701 et seq. The purpose of the requested information is to 
determine the suitability of individuals with a financial interest in, 
or having management responsibility for, a management contract. The 
information will be used by the National Indian Gaming Commission 
members and staff and Indian tribal officials who have need for the 
information in the performance of their official duties. The information 
may be disclosed to appropriate federal, tribal, state, or foreign law 
enforcement and regulatory agencies in connection with a background 
investigation or when relevant to civil, criminal or regulatory 
investigations or prosecutions or investigations of activities while 
associated with a gaming operation. Failure to consent to the 
disclosures indicated in this statement will mean that the Chairman of 
the National Indian Gaming Commission will be unable to approve the 
contract in which the person has a financial interest or management 
responsibility.
    The disclosure of a person's Social Security Number (SSN) is 
voluntary. However, failure to supply a SSN may result in errors in 
processing the information provided.

    (5) Notice regarding false statements. Each person required to 
submit information under this section shall sign and submit the 
following statement:

    A false statement knowingly and willfully provided in any of the 
information pursuant to this section may be grounds for not approving 
the contract in which I have a financial interest or management 
responsibility, or for disapproving or voiding such contract after it is 
approved by the Chairman of the National Indian Gaming Commission. Also, 
I may be punished by fine or imprisonment (U.S. Code, title 18, section 
1001).

    (c) For each entity identified in paragraph (a)(4) of this section, 
the management contractor shall provide to the Commission the following 
information:
    (1) List of individuals. (i) Each of the ten (10) largest 
beneficiaries and the trustees when the entity is a trust;
    (ii) Each of the ten (10) largest partners when the entity is a 
partnership;
    (iii) Each person who is a director or who is one of the ten (10) 
largest holders of the issued and outstanding stock alone or in 
combination with another stockholder who is a spouse, parent, child or 
sibling when the entity is a corporation; and
    (iv) For any other type of entity, the ten (10) largest owners of 
that entity alone or in combination with any other owner who is a 
spouse, parent, child or sibling and any person with management 
responsibility for that entity.
    (2) Required information. (i) The information required in paragraph 
(b)(1)(i) of this section for each individual identified in paragraph 
(c)(1) of this section;
    (ii) Copies of documents establishing the existence of the entity, 
such as the partnership agreement, the trust 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;

[[Page 69]]

    (viii) For each gaming offense and for each felony for which there 
is an ongoing prosecution or a conviction, the name and address of the 
court involved, the charge, and the dates of the charge and disposition;
    (ix) For each misdemeanor conviction or ongoing misdemeanor 
prosecution within ten (10) years of the date of the application, the 
name and address of the court involved, and the dates of the prosecution 
and disposition;
    (x) Complete financial statements for the previous three (3) fiscal 
years; and
    (xi) For each criminal charge (excluding minor traffic charges) 
whether or not there is a conviction, if such criminal charge is within 
10 years of the date of the application and is not otherwise listed 
pursuant to paragraph (c)(1)(viii) or (c)(1)(ix) of this section, the 
criminal charge, the name and address of the court involved and the 
dates of the charge and disposition.
    (3) Responses to questions. Each entity with a direct or indirect 
financial interest in a management contract shall respond within thirty 
(30) days to written or oral questions propounded by the Chairman.
    (4) Notice regarding false statements. Each entity required to 
submit information under this section shall sign and submit the 
following statement:

    A false statement knowingly and willfully provided in any of the 
information pursuant to this section may be grounds for not approving 
the contract in which we have a financial interest, or for disapproving 
or voiding such contract after it is approved by the Chairman of the 
National Indian Gaming Commission. Also, we may be punished by fine or 
imprisonment (U.S. Code, title 18, section 1001).

[74 FR 36937, July 27, 2009, as amended at 77 FR 47516, Aug. 9, 2012]



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 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 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) Any remaining balance of the 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, as amended at 77 FR 47516, Aug. 9, 2012]



Sec. 537.4  Determinations.

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

[77 FR 47516, Aug. 9, 2012]

                        PARTS 538	539 [RESERVED]

[[Page 70]]



                       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  [Reserved]
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  [Reserved]
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.
    Betting station means the area designated in a pari-mutuel area that 
accepts wagers and pays winning bets.

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    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.
    Count team means personnel that perform either the count of the 
gaming machine drop and/or the table game drop.

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    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).
    Game server means an electronic selection device, utilizing a random 
number generator.

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    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 similarly in 
other areas of the gaming operation.

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    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 symbols that result in 
the progressive amount being paid.

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    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.
    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

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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 Secs. 542.1 through 542.18, and Secs. 542.20 through 542.23.
    (2) Tier B gaming operations must comply with Secs. 542.1 through 
542.18, and Secs. 542.30 through 542.33.
    (3) Tier C gaming operations must comply with Secs. 542.1 through 
542.18, and Secs. 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:
    (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;

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    (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).
    (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

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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.
    (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

[[Page 79]]

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, 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

[[Page 80]]

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.
    (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

[[Page 81]]

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  [Reserved]



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:

[[Page 82]]

    (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.
    (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.

[[Page 83]]

    (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 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.

[[Page 84]]

    (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.
    (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.

[[Page 85]]

    (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 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

[[Page 86]]

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.
    (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

[[Page 87]]

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.
    (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

[[Page 88]]

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 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;

[[Page 89]]

    (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);
    (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

[[Page 90]]

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.
    (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

[[Page 91]]

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 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.

[[Page 92]]

    (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 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.

[[Page 93]]

    (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:
    (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

[[Page 94]]

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.
    (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

[[Page 95]]

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 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;

[[Page 96]]

    (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 (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.

[[Page 97]]

    (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 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

[[Page 98]]

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 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.

[[Page 99]]

    (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 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.).

[[Page 100]]

    (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.
    (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

[[Page 101]]

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 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

[[Page 102]]

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 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

[[Page 103]]

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, 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

[[Page 104]]

    (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 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.

[[Page 105]]

    (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 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.

[[Page 106]]

    (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.
    (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;

[[Page 107]]

    (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  [Reserved]



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 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.

[[Page 108]]

    (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 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

[[Page 109]]

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;
    (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,

[[Page 110]]

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 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

[[Page 111]]

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 
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

[[Page 112]]

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 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.

[[Page 113]]

    (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 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

[[Page 114]]

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 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

[[Page 115]]

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 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

[[Page 116]]

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 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

[[Page 117]]

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:
    (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

[[Page 118]]

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 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.

[[Page 119]]

    (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 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.

[[Page 120]]

    (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 
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,

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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 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

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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 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;

[[Page 123]]

    (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.
    (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

[[Page 124]]

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 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

[[Page 125]]

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
    (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

[[Page 126]]

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.
    (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

[[Page 127]]

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 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

[[Page 128]]

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 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

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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 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

[[Page 130]]

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 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

[[Page 131]]

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 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;

[[Page 132]]

    (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 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

[[Page 133]]

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 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

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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, 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

[[Page 135]]

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 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.

[[Page 136]]

    (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 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

[[Page 137]]

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.
    (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

[[Page 138]]

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 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

[[Page 139]]

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 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.

[[Page 140]]

    (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.
    (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,

[[Page 141]]

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 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

[[Page 142]]

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
    (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

[[Page 143]]

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 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

[[Page 144]]

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.
    (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.

[[Page 145]]

    (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 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:

[[Page 146]]

    (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 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;

[[Page 147]]

    (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 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

[[Page 148]]

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.
    (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.

[[Page 149]]

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, 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

[[Page 150]]

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 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

[[Page 151]]

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:
    (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;

[[Page 152]]

    (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.
    (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.

[[Page 153]]

    (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 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.

[[Page 154]]

    (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 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.

[[Page 155]]

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.
    (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.

[[Page 156]]

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  Does this part apply to small and charitable gaming operations?
543.5  How does a gaming operation apply to use an alternate minimum 
          standard from those set forth in this part?
543.6-543.7  [Reserved]
543.8  What are the minimum internal control standards for bingo?
543.9  What are the minimum internal control standards for pull tabs?
543.10  What are the minimum internal control standards for card games?
543.11  [Reserved]
543.12  What are the minimum internal control standards for gaming 
          promotions and player tracking systems?
543.13  What are the minimum internal control standards for 
          complimentary services or items?
543.14  What are the minimum internal control standards for patron 
          deposit accounts and cashless systems?
543.15  What are the minimum internal control standards for lines of 
          credit?
543.16  [Reserved]
543.17  What are the minimum internal control standards for drop and 
          count?
543.18  What are the minimum internal control standards for the cage, 
          vault, kiosk, cash and cash equivalents?
543.19  [Reserved]
543.20  What are the minimum internal control standards for information 
          technology and information technology data?
543.21  What are the minimum internal control standards for 
          surveillance?
543.22  [Reserved]
543.23  What are the minimum internal control standards for audit and 
          accounting?
543.24  What are the minimum internal control standards for auditing 
          revenue?
543.25-543.49  [Reserved]

    Authority: 25 U.S.C. 2702(2), 2706(b)(1-4), 2706(b)(10).

    Source: 77 FR 58712, Sept. 21, 2012, unless otherwise noted.



Sec. 543.1  What does this part cover?

    This part establishes the minimum internal control standards for the 
conduct of Class II games on Indian lands as defined in 25 U.S.C. 2701 
et seq.



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.
    Agent. A person authorized by the gaming operation, as approved by 
the TGRA, to make decisions or perform assigned tasks or actions on 
behalf of the gaming operation.
    Automated payout. Payment issued by a machine.
    Cage. A secure work area within the gaming operation for cashiers, 
which may include a storage area for the gaming operation bankroll.
    Cash equivalents. Documents, financial instruments other than cash, 
or anything else of representative value to which the gaming operation 
has assigned a monetary value. 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, such as to or from a patron deposit account.
    Chair. The Chair of the National Indian Gaming Commission.
    Class II gaming. Class II gaming has the same meaning as defined 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 or part 547 
of this chapter.

[[Page 157]]

    Commission. The National Indian Gaming Commission, established by 
the Indian Gaming Regulatory Act, 25 U.S.C. 2701 et seq.
    Complimentary services and items. Services and items provided to a 
patron at the discretion of an agent on behalf of the gaming operation 
or by a third party on behalf of the gaming operation. Services and 
items may include, but are not limited to, travel, lodging, food, 
beverages, or entertainment expenses.
    Count. The act of counting and recording the drop and/or other 
funds. Also, the total funds counted for a particular game, player 
interface, shift, or other period.
    Count room. A secured room where the count is performed in which the 
cash and cash equivalents are counted.
    Coupon. A financial instrument of fixed wagering value, 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.
    Currency cassette. A compartment that contains a specified 
denomination of currency. Currency cassettes are inserted into kiosks, 
allowing them to dispense currency.
    Dedicated camera. A video camera that continuously records a 
specific activity.
    Drop box. A locked container in which cash or cash equivalents are 
placed at the time of a transaction, typically used in card games.
    Drop proceeds. The total amount of financial instruments removed 
from drop boxes and financial instrument storage components.
    Exception report. A listing of occurrences, transactions or items 
that fall outside a predetermined range of acceptability.
    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 storage component. Any component that stores 
financial instruments, such as a drop box, but typically used in 
connection with player interfaces.
    Gaming promotion. Any promotional activity or award that requires 
game play as a condition of eligibility.
    Generally Accepted Accounting Principles (GAAP). A widely accepted 
set of rules, conventions, standards, and procedures for reporting 
financial information, as established by the Financial Accounting 
Standards Board (FASB), including, but not limited to, the standards for 
casino accounting published by the American Institute of Certified 
Public Accountants (AICPA).
    Generally Accepted Auditing Standards (GAAS). A widely accepted set 
of standards that provide a measure of audit quality and the objectives 
to be achieved in an audit, as established by the Auditing Standards 
Board of the American Institute of Certified Public Accountants (AICPA).
    Governmental Accounting Standards Board (GASB). Generally accepted 
accounting principles used by state and local governments.
    Independent. The separation of functions to ensure that the agent or 
process monitoring, reviewing, or authorizing the controlled activity, 
function, or transaction is separate from the agents or process 
performing the controlled activity, function, or transaction.
    Kiosk. A device capable of redeeming vouchers and/or wagering 
credits or initiating electronic transfers of money to or from a patron 
deposit account.
    Lines of credit. The privilege granted by a gaming operation to a 
patron to:
    (1) Defer payment of debt; or
    (2) Incur debt and defer its payment under specific terms and 
conditions.
    Manual payout. Any non-automated payout.
    Marker. A document, signed by the patron, promising to repay credit 
issued by the gaming operation.
    MICS. Minimum internal control standards in this part.
    Network communication equipment. A device or collection of devices 
that controls data communication in a system including, but not limited 
to, cables, switches, hubs, routers, wireless access points, landline 
telephones and cellular telephones.
    Patron. A person who is a customer or guest of the gaming operation 
and

[[Page 158]]

may interact with a Class II game. Also may be referred to as a 
``player.''
    Patron deposit account. An account maintained on behalf of a patron, 
for the deposit and withdrawal of funds for the primary purpose of 
interacting with a gaming activity.
    Player interface. Any component(s) 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 payout. Payment to a player associated with a winning or 
qualifying event.
    Promotional progressive pots and/or pools. Funds contributed to a 
game by and for the benefit of players that are distributed to players 
based on a predetermined event.
    Shift. A time period, unless otherwise approved by the tribal gaming 
regulatory authority, not to exceed 24 hours.
    Shill. An agent financed by the gaming operation and acting as a 
player.
    Smart card. A card with embedded integrated circuits that possesses 
the means to electronically store or retrieve account data.
    Sufficient clarity. The capacity of a surveillance system to record 
images at a minimum of 20 frames per second or equivalent recording 
speed and at a resolution sufficient to clearly identify the intended 
activity, person, object, or location.
    Surveillance operation room(s). The secured area(s) where 
surveillance takes place and/or where active surveillance equipment is 
located.
    Surveillance system. A system of video cameras, monitors, recorders, 
video printers, switches, selectors, and other equipment used for 
surveillance.
    SICS (System of Internal Control Standards). An overall operational 
framework for a gaming operation that incorporates principles of 
independence and segregation of function, and is comprised of written 
policies, procedures, and standard practices based on overarching 
regulatory standards specifically designed to create a system of checks 
and balances to safeguard the integrity of a gaming operation and 
protect its assets from unauthorized access, misappropriation, forgery, 
theft, or fraud.
    Tier A. Gaming operations with annual gross gaming revenues of more 
than $3 million but not more than $8 million.
    Tier B. Gaming operations with annual gross gaming revenues of more 
than $8 million but not more than $15 million.
    Tier C. Gaming operations with annual gross gaming revenues of more 
than $15 million.
    TGRA. Tribal gaming regulatory authority, which is the entity 
authorized by tribal law to regulate gaming conducted pursuant to the 
Indian Gaming Regulatory Act.
    TICS. Tribal Internal Control Standards established by the TGRA that 
are at least as stringent as the standards set forth in this part.
    Vault. A secure area where cash and cash equivalents are stored.
    Voucher. A financial instrument of fixed wagering value, usually 
paper, that can be used only to acquire an equivalent value of cashable 
credits or cash through interaction with a voucher system.
    Voucher system. A 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.

[77 FR 58712, Sept. 21, 2012, as amended at 78 FR 63874, Oct. 25, 2013]



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

    (a) Minimum standards. These are minimum standards and a TGRA may 
establish and implement additional controls that do not conflict with 
those set out in this part.
    (b) TICS. TGRAs must ensure that TICS are established and 
implemented that provide a level of control that equals or exceeds the 
applicable standards set forth in this part.
    (1) Evaluation of existing TICS. Each TGRA must, in accordance with 
the tribal gaming ordinance, determine whether and to what extent their 
TICS require revision to ensure compliance with this part.

[[Page 159]]

    (2) Compliance date. All changes necessary to ensure compliance with 
this part must be promulgated within twelve months of the effective date 
of this part and implemented at the commencement of the next fiscal 
year. At the discretion of the TGRA, gaming operations may have an 
additional six months to come into compliance with the TICS.
    (c) SICS. Each gaming operation must develop a SICS, as approved by 
the TGRA, to implement the TICS.
    (1) Existing gaming operations. All gaming operations that are 
operating on or before the effective date of this part, must comply with 
this part within the time requirements established in paragraph (b) of 
this section. In the interim, such operations must continue to comply 
with existing TICS.
    (2) New gaming operations. All gaming operations that commence 
operations after the effective date of this part must comply with this 
part before commencement of operations.
    (d) Variances. Where referenced throughout this part, the gaming 
operation must set a reasonable threshold, approved by the TGRA, for 
when a variance must be reviewed to determine the cause, and the results 
of the review must be documented and maintained.
    (e) Computer applications. For any computer applications utilized, 
alternate documentation and/or procedures that provide at least the 
level of control established by the standards of this part, as approved 
in writing by the TGRA, will be acceptable.
    (f) Determination of tier. (1) The determination of tier level will 
be made based upon the annual gross gaming revenues indicated within the 
gaming operation's audited financial statements.
    (2) Gaming operations moving from one tier to another will have nine 
months from the date of the independent certified public accountant's 
audit report to achieve compliance with the requirements of the new 
tier. The TGRA may extend the deadline by an additional six months if 
written notice is provided to the Commission no later than two weeks 
before the expiration of the nine month period.
    (g) 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.
    (h) Enforcement of Commission MICS. (1) Each TGRA is required to 
establish and implement TICS pursuant to paragraph (b) of this section. 
Each gaming operation is then required, pursuant to paragraph (c) of 
this section, to develop a SICS that implements the TICS. Failure to 
comply with this subsection may subject the tribal operator of the 
gaming operation, or the management contractor, to penalties under 25 
U.S.C. 2713.
    (2) Enforcement action by the Commission will not be initiated under 
this part without first informing the tribe and TGRA of deficiencies in 
the TICS or absence of SICS for its gaming operation and allowing a 
reasonable period of time to address such deficiencies. Such prior 
notice and opportunity for corrective action are not required where the 
threat to the integrity of the gaming operation is immediate and severe.



Sec. 543.4  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 TGRA permits the operation to be exempt from this part;
    (2) The annual gross gaming revenue of the operation does not exceed 
$3 million; and
    (3) The TGRA 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 TGRA permits the charitable organization to be exempt from 
this part;

[[Page 160]]

    (3) The charitable gaming operation is operated wholly by the 
charitable organization's agents;
    (4) The annual gross gaming revenue of the charitable operation does 
not exceed $3 million; and
    (5) The TGRA 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.
    (c) Independent operators. Nothing in this section exempts gaming 
operations conducted by independent operators for the benefit of a 
charitable organization.



Sec. 543.5  How does a gaming operation apply to use an alternate 
minimum standard from those set forth in this part?

    (a) TGRA approval. (1) A TGRA may approve an alternate standard from 
those required by this part if it has determined that the alternate 
standard will achieve a level of security and integrity sufficient to 
accomplish the purpose of the standard it is to replace. A gaming 
operation may implement an alternate standard upon TGRA approval subject 
to the Chair's decision pursuant to paragraph (b) of this section.
    (2) For each enumerated standard for which the TGRA approves an 
alternate standard, it must submit to the Chair within 30 days a 
detailed report, which must include the following:
    (i) An explanation of how the alternate standard achieves a level of 
security and integrity sufficient to accomplish the purpose of the 
standard it is to replace; and
    (ii) The alternate standard as approved and the record on which it 
is based.
    (3) In the event that the TGRA or the tribal government chooses to 
submit an alternate standard request directly to the Chair for joint 
government to government review, the TGRA or tribal government may do so 
without the approval requirement set forth in paragraph (a)(1) of this 
section.
    (b) Chair review. (1) The Chair may approve or object to an 
alternate standard approved by a TGRA.
    (2) If the Chair approves the alternate standard, the Tribe may 
continue to use it as authorized by the TGRA.
    (3) If the Chair objects, the operation may no longer use the 
alternate standard and must follow the relevant MICS set forth in this 
part.
    (4) Any objection by the Chair must be in writing and provide 
reasons that the alternate standard, as approved by the TGRA, does not 
provide a level of security or integrity sufficient to accomplish the 
purpose of the standard it is to replace.
    (5) If the Chair fails to approve or object in writing within 60 
days after the date of receipt of a complete submission, the alternate 
standard is considered approved by the Chair. The Chair may, upon 
notification to the TGRA, extend this deadline an additional 60 days.
    (c) Appeal of Chair decision. A TGRA may appeal the Chair's decision 
pursuant to 25 CFR chapter III, subchapter H.



Sec. 543.6-543.7  [Reserved]



Sec. 543.8  What are the minimum internal control standards for bingo?

    (a) Supervision. Supervision must be provided as needed for bingo 
operations by an agent(s) with authority equal to or greater than those 
being supervised.
    (b) Bingo cards. (1) Physical bingo card inventory controls must 
address the placement of orders, receipt, storage, issuance, removal, 
and cancellation of bingo card inventory to ensure that:
    (i) The bingo card inventory can be accounted for at all times; and
    (ii) Bingo cards have not been marked, altered, or otherwise 
manipulated.
    (2) Receipt from supplier.
    (i) When bingo card inventory is initially received from the 
supplier, it must be inspected (without breaking the factory seals, if 
any), counted, inventoried, and secured by an authorized agent.
    (ii) Bingo card inventory records must include the date received, 
quantities received, and the name of the individual conducting the 
inspection.

[[Page 161]]

    (3) Storage.
    (i) Bingo cards must be maintained in a secure location, accessible 
only to authorized agents, and with surveillance coverage adequate to 
identify persons accessing the storage area.
    (ii) For Tier A operations, bingo card inventory may be stored in a 
cabinet, closet, or other similar area; however, such area must be 
secured and separate from the working inventory.
    (4) Issuance and returns of inventory.
    (i) Controls must be established for the issuance and return of 
bingo card inventory. Records signed by the issuer and recipient must be 
created under the following events:
    (A) Issuance of inventory from storage to a staging area;
    (B) Issuance of inventory from a staging area to the cage or 
sellers;
    (C) Return of inventory from a staging area to storage; and
    (D) Return of inventory from cage or seller to staging area or 
storage.
    (ii) [Reserved]
    (5) Cancellation and removal.
    (i) Bingo cards removed from inventory that are deemed out of 
sequence, flawed, or misprinted and not returned to the supplier must be 
cancelled to ensure that they are not utilized in the play of a bingo 
game. Bingo cards that are removed from inventory and returned to the 
supplier or cancelled must be logged as removed from inventory.
    (ii) Bingo cards associated with an investigation must be retained 
intact outside of the established removal and cancellation policy.
    (6) Logs.
    (i) The inventory of bingo cards must be tracked and logged from 
receipt until use or permanent removal from inventory.
    (ii) The bingo card inventory record(s) must include:
    (A) Date;
    (B) Shift or session;
    (C) Time;
    (D) Location;
    (E) Inventory received, issued, removed, and returned;
    (F) Signature of agent performing transaction;
    (G) Signature of agent performing the reconciliation;
    (H) Any variance;
    (I) Beginning and ending inventory; and
    (J) Description of inventory transaction being performed.
    (c) Bingo card sales. (1) Agents who sell bingo cards must not be 
the sole verifier of bingo cards for prize payouts.
    (2) Manual bingo card sales: In order to adequately record, track, 
and reconcile sales of bingo cards, the following information must be 
documented:
    (i) Date;
    (ii) Shift or session;
    (iii) Number of bingo cards issued, sold, and returned;
    (iv) Dollar amount of bingo card sales;
    (v) Signature, initials, or identification number of the agent 
preparing the record; and
    (vi) Signature, initials, or identification number of an independent 
agent who verified the bingo cards returned to inventory and dollar 
amount of bingo card sales.
    (3) Bingo card sale voids must be processed in accordance with the 
rules of the game and established controls that must include the 
following:
    (i) Patron refunds;
    (ii) Adjustments to bingo card sales to reflect voids;
    (iii) Adjustment to bingo card inventory;
    (iv) Documentation of the reason for the void; and
    (v) Authorization for all voids.
    (4) Class II gaming system bingo card sales. In order to adequately 
record, track and reconcile sales of bingo cards, the following 
information must be documented from the server (this is not required if 
the system does not track the information, but system limitation(s) must 
be noted):
    (i) Date;
    (ii) Time;
    (iii) Number of bingo cards sold;
    (iv) Dollar amount of bingo card sales; and
    (v) Amount in, amount out and other associated meter information.
    (d) Draw. (1) Controls must be established and procedures 
implemented to ensure that all eligible objects used in the conduct of 
the bingo game are available to be drawn and have not

[[Page 162]]

been damaged or altered. Verification of physical objects must be 
performed by two agents before the start of the first bingo game/
session. At least one of the verifying agents must be a supervisory 
agent or independent of the bingo games department.
    (2) Where the selection is made through an electronic aid, 
certification in accordance with 25 CFR 547.14 is acceptable for 
verifying the randomness of the draw and satisfies the requirements of 
paragraph (d)(1) of this section.
    (3) Controls must be established and procedures implemented to 
provide a method of recall of the draw, which includes the order and 
identity of the objects drawn, for dispute resolution purposes.
    (4) Verification and display of draw. Controls must be established 
and procedures implemented to ensure that:
    (i) 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 are immediately recorded 
and maintained for a minimum of 24 hours.
    (e) Prize payout. (1) Controls must be established and procedures 
implemented for cash or cash equivalents that address the following:
    (i) Identification of the agent authorized (by position) to make a 
payout;
    (ii) Predetermined payout authorization levels (by position); and
    (iii) Documentation procedures ensuring separate control of the cash 
accountability functions.
    (2) Verification of validity.
    (i) Controls must be established and procedures implemented to 
verify that the following is valid for the game in play prior to payment 
of a winning prize:
    (A) Winning card(s);
    (B) Objects drawn; and
    (C) The previously designated arrangement of numbers or designations 
on such cards, as described in 25 U.S.C. 2703(7)(A).
    (ii) At least two agents must verify that the card, objects drawn, 
and previously designated arrangement were valid for the game in play.
    (iii) Where an automated verification method is available, 
verification by such method is acceptable.
    (3) Validation.
    (i) For manual payouts, at least two agents must determine the 
validity of the claim prior to the payment of a prize. The system may 
serve as one of the validators.
    (ii) For automated payouts, the system may serve as the sole 
validator of the claim.
    (4) Verification.
    (i) For manual payouts, at least two agents must verify that the 
winning pattern has been achieved on the winning card prior to the 
payment of a prize. The system may serve as one of the verifiers.
    (ii) For automated payouts, the system may serve as the sole 
verifier that the pattern has been achieved on the winning card.
    (5) Authorization and signatures.
    (i) At least two agents must authorize, sign, and witness all manual 
prize payouts above $1,200, or a lower threshold as authorized by 
management and approved by the TGRA.
    (ii) Manual prize payouts above the following threshold (or a lower 
threshold, as authorized by management and approved by TGRA) must 
require one of the two signatures and verifications to be a supervisory 
or management employee independent of the operation of Class II Gaming 
System bingo:
    (A) $5,000 for a Tier A facility;
    (B) $10,000 at a Tier B facility;
    (C) $20,000 for a Tier C facility; or
    (D) $50,000 for a Tier C facility with over $100,000,000 in gross 
gaming revenues.
    (iii) The predetermined thresholds, whether set at the MICS level or 
lower, must be authorized by management, approved by the TGRA, 
documented, and maintained.
    (iv) A Class II gaming system may substitute for one authorization/
signature verifying, validating or authorizing a winning card, but may 
not substitute for a supervisory or management authorization/signature.
    (6) Payout records, including manual payout records, must include 
the following information:

[[Page 163]]

    (i) Date and time;
    (ii) Amount of the payout (alpha & numeric for player interface 
payouts); and
    (iii) Bingo card identifier or player interface identifier.
    (iv) Manual payout records must also include the following:
    (A) Game name or number;
    (B) Description of pattern covered, such as cover-all or four 
corners;
    (C) Signature of all, but not less than two, agents involved in the 
transaction;
    (D) For override transactions, verification by a supervisory or 
management agent independent of the transaction; and
    (E) Any other information necessary to substantiate the payout.
    (f) Cash and cash equivalent controls. (1) Cash or cash equivalents 
exchanged between two persons must be counted independently by at least 
two agents and reconciled to the recorded amounts at the end of each 
shift or session. Unexplained variances must be documented and 
maintained. Unverified transfers of cash or cash equivalents are 
prohibited.
    (2) Procedures must be implemented to control cash or cash 
equivalents based on the amount of the transaction. These procedures 
must include documentation by shift, session, or other relevant time 
period of the following:
    (i) Inventory, including any increases or decreases;
    (ii) Transfers;
    (iii) Exchanges, including acknowledging signatures or initials; and
    (iv) Resulting variances.
    (3) Any change to control of accountability, exchange, or transfer 
requires that the cash or cash equivalents be counted and recorded 
independently by at least two agents and reconciled to the recorded 
amount.
    (g) Technologic aids to the play of bingo. Controls must be 
established and procedures implemented to safeguard the integrity of 
technologic aids to the play of bingo during installations, operations, 
modifications, removal and retirements. Such procedures must include the 
following:
    (1) Shipping and receiving.
    (i) A communication procedure must be established between the 
supplier, the gaming operation, and the TGRA to properly control the 
shipping and receiving of all software and hardware components. Such 
procedures must include:
    (A) Notification of pending shipments must be provided to the TGRA 
by the gaming operation;
    (B) Certification in accordance with 25 CFR part 547;
    (C) Notification from the supplier to the TGRA, or the gaming 
operation as approved by the TGRA, of the shipping date and expected 
date of delivery. The shipping notification must include:
    (1) Name and address of the supplier;
    (2) Description of shipment;
    (3) For player interfaces: a serial number;
    (4) For software: software version and description of software;
    (5) Method of shipment; and
    (6) Expected date of delivery.
    (ii) Procedures must be implemented for the exchange of Class II 
gaming system components for maintenance and replacement.
    (iii) Class II gaming system components must be shipped in a secure 
manner to deter unauthorized access.
    (iv) The TGRA, or its designee, must receive all Class II gaming 
system components and game play software packages, and verify the 
contents against the shipping notification.
    (2) Access credential control methods.
    (i) Controls must be established to restrict access to the Class II 
gaming system components, as set forth in Sec. 543.20, Information and 
Technology.
    (ii) [Reserved]
    (3) Recordkeeping and audit processes.
    (i) The gaming operation must maintain the following records, as 
applicable, related to installed game servers and player interfaces:
    (A) Date placed into service;
    (B) Date made available for play;
    (C) Supplier;
    (D) Software version;
    (E) Serial number;
    (F) Game title;
    (G) Asset and/or location number;
    (H) Seal number; and
    (I) Initial meter reading.

[[Page 164]]

    (ii) Procedures must be implemented for auditing such records in 
accordance with Sec. 543.23, Audit and Accounting.
    (4) System software signature verification.
    (i) Procedures must be implemented for system software 
verifications. These procedures must include comparing signatures 
generated by the verification programs required by 25 CFR 547.8, to the 
signatures provided in the independent test laboratory letter for that 
software version.
    (ii) An agent independent of the bingo operation must perform system 
software signature verification(s) to verify that only approved software 
is installed.
    (iii) Procedures must be implemented for investigating and resolving 
any software verification variances.
    (iv) Internal audits must be conducted as set forth in Sec. 543.23, 
Audit and Accounting. Such audits must be documented.
    (5) Installation testing.
    (i) Testing must be completed during the installation process to 
verify that the player interface has been properly installed. This must 
include testing of the following, as applicable:
    (A) Communication with the Class II gaming system;
    (B) Communication with the accounting system;
    (C) Communication with the player tracking system;
    (D) Currency and vouchers to bill acceptor;
    (E) Voucher printing;
    (F) Meter incrementation;
    (G) Pay table, for verification;
    (H) Player interface denomination, for verification;
    (I) All buttons, to ensure that all are operational and programmed 
appropriately;
    (J) System components, to ensure that they are safely installed at 
location; and
    (K) Locks, to ensure that they are secure and functioning.
    (ii) [Reserved]
    (6) Display of rules and necessary disclaimers. The TGRA or the 
operation must verify that all game rules and disclaimers are displayed 
at all times or made readily available to the player upon request, as 
required by 25 CFR part 547;
    (7) TGRA approval of all technologic aids before they are offered 
for play.
    (8) All Class II gaming equipment must comply with 25 CFR part 547, 
Minimum Technical Standards for Gaming Equipment Used With the Play of 
Class II Games; and
    (9) Dispute resolution.
    (h) Operations. (1) Malfunctions. Procedures must be implemented to 
investigate, document and resolve malfunctions. Such procedures must 
address the following:
    (i) Determination of the event causing the malfunction;
    (ii) Review of relevant records, game recall, reports, logs, 
surveillance records;
    (iii) Repair or replacement of the Class II gaming component;
    (iv) Verification of the integrity of the Class II gaming component 
before restoring it to operation; and
    (2) Removal, retirement and/or destruction. Procedures must be 
implemented to retire or remove any or all associated components of a 
Class II gaming system from operation. Procedures must include the 
following:
    (i) For player interfaces and components that accept cash or cash 
equivalents:
    (A) Coordinate with the drop team to perform a final drop;
    (B) Collect final accounting information such as meter readings, 
drop and payouts;
    (C) Remove and/or secure any or all associated equipment such as 
locks, card reader, or ticket printer from the retired or removed 
component; and
    (D) Document removal, retirement, and/or destruction.
    (ii) For removal of software components:
    (A) Purge and/or return the software to the license holder; and
    (B) Document the removal.
    (iii) For other related equipment such as blowers, cards, interface 
cards:
    (A) Remove and/or secure equipment; and
    (B) Document the removal or securing of equipment.
    (iv) For all components:
    (A) Verify that unique identifiers, and descriptions of removed/
retired

[[Page 165]]

components are recorded as part of the retirement documentation; and
    (B) Coordinate with the accounting department to properly retire the 
component in the system records.
    (v) Where the TGRA authorizes destruction of any Class II gaming 
system components, procedures must be developed to destroy such 
components. Such procedures must include the following:
    (A) Methods of destruction;
    (B) Witness or surveillance of destruction;
    (C) Documentation of all components destroyed; and
    (D) Signatures of agent(s) destroying components attesting to 
destruction.
    (i) Vouchers. (1) Controls must be established and procedures 
implemented to:
    (i) Verify the authenticity of each voucher redeemed.
    (ii) If the voucher is valid, verify that the patron is paid the 
appropriate amount.
    (iii) Document the payment of a claim on a voucher that is not 
physically available or a voucher that cannot be validated such as a 
mutilated, expired, lost, or stolen voucher.
    (iv) Retain payment documentation for reconciliation purposes.
    (v) For manual payment of a voucher of $500 or more, require a 
supervisory employee to verify the validity of the voucher prior to 
payment.
    (2) Vouchers paid during a period while the voucher system is 
temporarily out of operation must be marked ``paid'' by the cashier.
    (3) Vouchers redeemed while the voucher system was temporarily out 
of operation must be validated as expeditiously as possible upon 
restored operation of the voucher system.
    (4) Paid vouchers must be maintained in the cashier's accountability 
for reconciliation purposes.
    (5) Unredeemed vouchers can only be voided in the voucher system by 
supervisory employees. The accounting department will maintain the 
voided voucher, if available.
    (j) All relevant controls from Sec. 543.20, Information and 
Technology will apply.
    (k) Revenue Audit. Standards for revenue audit of bingo are 
contained in Sec. 543.24, Revenue Audit.
    (l) Variance. The operation must establish, as approved by the TGRA, 
the threshold level at which a variance, including deviations from the 
mathematical expectations required by 25 CFR 547.4, will be reviewed to 
determine the cause. Any such review must be documented.



Sec. 543.9  What are the minimum internal control standards for
pull tabs?

    (a) Supervision. Supervision must be provided as needed for pull tab 
operations and over pull tab storage areas by an agent(s) with authority 
equal to or greater than those being supervised.
    (b) Pull tab inventory. Controls must be established and procedures 
implemented to ensure that:
    (1) Access to pull tabs is restricted to authorized agents;
    (2) The pull tab inventory is controlled by agents independent of 
pull tab sales;
    (3) Pull tabs exchanged between agents are secured and independently 
controlled;
    (4) Increases or decreases to pull tab inventory are recorded, 
tracked, and reconciled; and
    (5) Pull tabs are maintained in a secure location, accessible only 
to authorized agents, and with surveillance coverage adequate to 
identify persons accessing the area.
    (c) Pull tab sales. (1) Controls must be established and procedures 
implemented to record, track, and reconcile all pull tab sales and 
voids.
    (2) When pull tab sales are recorded manually, total sales must be 
verified by an agent independent of the pull tab sales being verified.
    (3) No person may have unrestricted access to pull tab sales 
records.
    (d) Winning pull tabs. (1) Controls must be established and 
procedures implemented to record, track, and reconcile all redeemed pull 
tabs and pull tab payouts.
    (2) The redeemed pull tabs must be defaced so that they cannot be 
redeemed for payment again.
    (3) Pull tabs that are uniquely identifiable with a machine readable 
code (including, but not limited to a

[[Page 166]]

barcode) may be redeemed, reconciled, and stored by kiosks without the 
need for defacing, so long as the redeemed pull tabs are secured and 
destroyed after removal from the kiosk in accordance with the procedures 
approved by the TGRA.
    (4) At least two agents must document and verify all prize payouts 
above $600, or lower threshold as authorized by management and approved 
by the TGRA.
    (i) An automated method may substitute for one verification.
    (ii) The predetermined threshold must be authorized by management, 
approved by the TGRA, documented, and maintained.
    (5) Total payout must be calculated and recorded by shift.
    (e) Pull tab operating funds. (1) All funds used to operate the pull 
tab game must be accounted for and recorded and all transfers of cash 
and/or cash equivalents must be verified.
    (2) All funds used to operate the pull tab game must be 
independently counted and verified by at least two agents and reconciled 
to the recorded amounts at the end of each shift or session.
    (f) Statistical records. (1) Statistical records must be maintained, 
including (for games sold in their entirety or removed from play) a win-
to-write hold percentage as compared to the expected hold percentage 
derived from the flare.
    (2) A manager independent of the pull tab operations must review 
statistical information when the pull tab deal has ended or has been 
removed from the floor and must investigate any unusual statistical 
fluctuations. These investigations must be documented, maintained for 
inspection, and provided to the TGRA upon request.
    (g) Revenue audit. Standards for revenue audit of pull tabs are 
contained in Sec. 543.24, Revenue Audit.
    (h) Variances. The operation must establish, as approved by the 
TGRA, the threshold level at which a variance must be reviewed to 
determine the cause. Any such review must be documented.



Sec. 543.10  What are the minimum internal control standards for
card games?

    (a) Supervision. Supervision must be provided as needed during the 
card room operations by an agent(s) with authority equal to or greater 
than those being supervised.
    (1) A supervisor may function as a dealer without any other 
supervision if disputes are resolved by supervisory personnel 
independent of the transaction or independent of the card games 
department; or
    (2) A dealer may function as a supervisor if not dealing the game.
    (b) Exchanges or transfers. (1) Exchanges between table banks and 
the main card room bank (or cage, if a main card room bank is not used) 
must be authorized by a supervisor. All exchanges must be evidenced by 
the use of a lammer unless the exchange of chips, tokens, and/or cash 
takes place at the table. If table banks are maintained at an imprest 
level and runners are used for the exchanges at the table, no 
supervisory authorization is required.
    (2) Exchanges from the main card room bank (or cage, if a main card 
room bank is not used) to the table banks must be verified by the card 
room dealer and the runner.
    (3) Transfers between the main card room bank and the cage must be 
properly authorized and documented. Documentation must be retained for 
at least 24 hours.
    (c) Playing cards. (1) New and used playing cards must be maintained 
in a secure location, with appropriate surveillance coverage, and 
accessible only to authorized agents.
    (2) Used playing cards that are not to be re-used must be properly 
cancelled and removed from service to prevent re-use. The removal and 
cancellation procedure requires TGRA review and approval.
    (3) Playing cards associated with an investigation must be retained 
intact and outside of the established removal and cancellation 
procedure.
    (d) Shill funds. (1) Issuance of shill funds must be recorded and 
have the written approval of the supervisor.
    (2) Returned shill funds must be recorded and verified by a 
supervisor.

[[Page 167]]

    (3) The replenishment of shill funds must be documented.
    (e) Standards for reconciliation of card room bank. Two agents--one 
of whom must be a supervisory agent--must independently count the table 
inventory at the opening and closing of the table and record the 
following information:
    (1) Date;
    (2) Shift;
    (3) Table number;
    (4) Amount by denomination;
    (5) Amount in total; and
    (6) Signatures of both agents.
    (f) Posted rules. The rules must be displayed or available for 
patron review at the gaming operation, including rules governing 
contests, prize payouts, fees, the rake collected, and the placing of 
antes.
    (g) Promotional progressive pots and pools. (1) All funds 
contributed by players into the pools must be returned when won in 
accordance with posted rules, and no commission or administrative fee 
may be withheld.
    (i) The payout may be in the form of personal property, such as a 
car.
    (ii) A combination of a promotion and progressive pool may be 
offered.
    (2) The conditions for participating in current card game 
promotional progressive pots and/or pools must be prominently displayed 
or available for patron review at the gaming operation.
    (3) Individual payouts for card game promotional progressive pots 
and/or pools that are $600 or more must be documented at the time of the 
payout to include the following:
    (i) Patron's name;
    (ii) Date of payout;
    (iii) Dollar amount of payout and/or nature and dollar value of any 
non-cash payout;
    (iv) The signature of the agent completing the transaction attesting 
to the disbursement of the payout; and
    (v) Name of contest/tournament.
    (4) If the cash (or cash equivalent) payout for the card game 
promotional progressive pot and/or pool is less than $600, documentation 
must be created to support accountability of the bank from which the 
payout was made.
    (5) Rules governing current promotional pools must be conspicuously 
posted in the card room and/or available in writing for patron review. 
The rules must designate:
    (i) The amount of funds to be contributed from each pot;
    (ii) What type of hand it takes to win the pool;
    (iii) How the promotional funds will be paid out;
    (iv) How/when the contributed funds are added to the pools; and
    (v) Amount/percentage of funds allocated to primary and secondary 
pools, if applicable.
    (6) Promotional pool contributions must 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.
    (7) The amount of the pools must be conspicuously displayed in the 
card room.
    (8) At least once each day that the game is offered, the posted pool 
amount must be updated to reflect the current pool amount.
    (9) At least once each day that the game is offered, agents 
independent of the card room must reconcile the increases to the posted 
pool amount to the cash previously counted or received by the cage.
    (10) All decreases to the pool must be properly documented, 
including a reason for the decrease.
    (11) Promotional funds removed from the card game must be placed in 
a locked container.
    (i) Agents authorized to transport the locked container are 
precluded from having access to the contents keys.
    (ii) The contents key must be maintained by a department independent 
of the card room.
    (iii) At least once a day, the locked container must be removed by 
two agents, 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.
    (h) Variances. The operation must establish, as approved by the 
TGRA, the threshold level at which a variance must be reviewed to 
determine the cause. Any such review must be documented.

[[Page 168]]



Sec. 543.11  [Reserved]



Sec. 543.12  What are the minimum internal control standards for 
gaming promotions and player tracking systems?

    (a) Supervision. Supervision must be provided as needed for gaming 
promotions and player tracking by an agent(s) with authority equal to or 
greater than those being supervised.
    (b) Gaming promotions. The rules of the gaming promotion must be 
displayed or made readily available to patron upon request. Gaming 
promotions rules require TGRA approval and must include the following:
    (1) The rules of play;
    (2) The nature and value of the associated prize(s) or cash 
award(s);
    (3) Any restrictions or limitations on participant eligibility;
    (4) The date(s), time(s), and location(s) for the associated 
promotional activity or activities;
    (5) Any other restrictions or limitations, including any related to 
the claim of prizes or cash awards;
    (6) The announcement date(s), time(s), and location(s) for the 
winning entry or entries; and
    (7) Rules governing promotions offered across multiple gaming 
operations, third party sponsored promotions, and joint promotions 
involving third parties.
    (c) Player tracking systems and gaming promotions. (1) Changes to 
the player tracking systems, 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 agents, 
independent of the department initiating the change. Alternatively, the 
changes may be performed by supervisory agents of the department 
initiating the change if sufficient documentation is generated and the 
propriety of the changes are randomly verified by supervisory agents 
independent of the department initiating the change on a monthly basis.
    (2) All other changes to the player tracking system must be 
appropriately documented.
    (d) Variances. The operation must establish, as approved by the 
TGRA, the threshold level at which a variance must be reviewed to 
determine the cause. Any such review must be documented.



Sec. 543.13  What are the minimum internal control standards for 
complimentary services or items?

    (a) Supervision. Supervision must be provided as needed for approval 
of complimentary services by an agent(s) with authority equal to or 
greater than those being supervised.
    (b) Complimentary services or items. Controls must be established 
and procedures implemented for complimentary services or items that 
address the following:
    (1) Agents authorized to approve the issuance of complimentary 
services or items, including levels of authorization;
    (2) Limits and conditions on the approval and issuance of 
complimentary services or items;
    (3) Making and documenting changes to conditions or limits on the 
approval and issuance of complimentary services or items;
    (4) Documenting and recording the authorization, issuance, and 
redemption of complimentary services or items, including cash and non-
cash gifts;
    (i) Records must include the following for all complimentary items 
and services equal to or exceeding an amount established by the gaming 
operation and approved by the TGRA:
    (A) Name of patron who received the complimentary service or item;
    (B) Name(s) of issuer(s) of the complimentary service or item;
    (C) The actual cash value of the complimentary service or item;
    (D) The type of complimentary service or item (i.e., food, 
beverage); and
    (E) Date the complimentary service or item was issued.
    (ii) [Reserved]
    (c) Complimentary services and items records must be summarized and 
reviewed for proper authorization and compliance with established 
authorization thresholds.

[[Page 169]]

    (1) A detailed reporting of complimentary services or items 
transactions that meet an established threshold approved by the TGRA 
must be prepared at least monthly.
    (2) The detailed report must be forwarded to management for review.
    (d) Variances. The operation must establish, as approved by the 
TGRA, the threshold level at which a variance must be reviewed to 
determine the cause. Any such review must be documented.



Sec. 543.14  What are the minimum internal control standards for 
patron deposit accounts and cashless systems?

    (a) Supervision. Supervision must be provided as needed for patron 
deposit accounts and cashless systems by an agent(s) with authority 
equal to or greater than those being supervised.
    (b) Patron deposit accounts and cashless systems. (1) Smart cards 
cannot maintain the only source of account data.
    (2) Establishment of patron deposit accounts. The following 
standards apply when a patron establishes an account.
    (i) The patron must appear at the gaming operation in person, at a 
designated area of accountability, and present valid government issued 
picture identification; and
    (ii) An agent must examine the patron's identification and record 
the following information:
    (A) Type, number, and expiration date of the identification;
    (B) Patron's name;
    (C) A unique account identifier;
    (D) Date the account was opened; and
    (E) The agent's name.
    (3) The patron must sign the account documentation before the agent 
may activate the account.
    (4) The agent or cashless system must provide the patron deposit 
account holder with a secure method of access.
    (c) Patron deposits, withdrawals and adjustments. (1) Prior to the 
patron making a deposit or withdrawal from a patron deposit account, the 
agent or cashless system must verify the patron deposit account, the 
patron identity, and availability of funds. A personal identification 
number (PIN) is an acceptable form of verifying identification.
    (2) Adjustments made to the patron deposit accounts must be 
performed by an agent.
    (3) When a deposit, withdrawal, or adjustment is processed by an 
agent, a transaction record must be created containing the following 
information:
    (i) Same document number on all copies;
    (ii) Type of transaction, (deposit, withdrawal, or adjustment);
    (iii) Name or other identifier of the patron;
    (iv) The unique account identifier;
    (v) Patron signature for withdrawals, unless a secured method of 
access is utilized;
    (vi) For adjustments to the account, the reason for the adjustment;
    (vii) Date and time of transaction;
    (viii) Amount of transaction;
    (ix) Nature of deposit, withdrawal, or adjustment (cash, check, 
chips); and
    (x) Signature of the agent processing the transaction.
    (4) When a patron deposits or withdraws funds from a patron deposit 
account electronically, the following must be recorded:
    (i) Date and time of transaction;
    (ii) Location (player interface, kiosk);
    (iii) Type of transaction (deposit, withdrawal);
    (iv) Amount of transaction; and
    (v) The unique account identifier.
    (5) Patron deposit account transaction records must be available to 
the patron upon reasonable request.
    (6) If electronic funds transfers are made to or from a gaming 
operation bank account for patron deposit account funds, the bank 
account must be dedicated and may not be used for any other types of 
transactions.
    (d) Variances. The operation must establish, as approved by the 
TGRA, the threshold level at which a variance must be reviewed to 
determine the cause. Any such review must be documented.



Sec. 543.15  What are the minimum internal control standards for 
lines of credit?

    (a) Supervision. Supervision must be provided as needed for lines of 
credit by

[[Page 170]]

an agent(s) with authority equal to or greater than those being 
supervised.
    (b) Establishment of lines of credit policy. (1) If a gaming 
operation extends lines of credit, controls must be established and 
procedures implemented to safeguard the assets of the gaming operation. 
Such controls must include a lines of credit policy including the 
following:
    (i) A process for the patron to apply for, modify, and/or re-
establish lines of credit, to include required documentation and credit 
line limit;
    (ii) Authorization levels of credit issuer(s);
    (iii) Identification of agents authorized to issue lines of credit;
    (iv) A process for verifying an applicant's credit worthiness;
    (v) A system for recording patron information, to include:
    (A) Name, current address, and signature;
    (B) Identification credential;
    (C) Authorized credit line limit;
    (D) Documented approval by an agent authorized to approve credit 
line limits;
    (E) Date, time and amount of credit issuances and payments; and
    (F) Amount of available credit.
    (vi) A process for issuing lines of credit to:
    (A) Verify the patron's identity;
    (B) Notify the patron of the lines of credit terms, including 
obtaining patron's written acknowledgment of the terms by signature;
    (C) Complete a uniquely identified, multi-part, lines of credit 
issuance form, such as a marker or counter check, which includes the 
terms of the lines of credit transaction;
    (D) Obtain required signatures;
    (E) Determine the amount of the patron's available lines of credit;
    (F) Update the credit balance record at the time of each transaction 
to ensure that lines of credit issued are within the established limit 
and balance for that patron; and
    (G) Require the agent issuing the lines of credit to be independent 
of the agent who authorized the lines of credit.
    (vii) A policy establishing credit line limit exceptions to include 
the following:
    (A) Identification of the agent(s) authorized to permit a credit 
line limit to be exceeded;
    (B) Authorization thresholds; and
    (C) Required documentation.
    (viii) A policy governing increases and decreases to a patron's 
lines of credit account balances to include the following:
    (A) Documentation and record keeping requirements;
    (B) Independence between the department that receives the payment 
and the department that maintains custody of the credit balance for 
payments made by mail;
    (C) Collections;
    (D) Periodic audits and confirmation of balances; and
    (E) If a collection agency is used, a process to ensure 
documentation of increases and decreases to the lines of credit account 
balances.
    (ix) A policy governing write-offs and settlements to include:
    (A) Identification of agent(s) authorized to approve write-offs and 
settlements;
    (B) Authorization levels for write-offs and settlements of lines of 
credit instruments;
    (C) Required documentation for write-offs and settlements;
    (D) Independence between the agent who established the lines of 
credit and the agent writing off or settling the lines of credit 
instrument; and
    (E) Necessary documentation for the approval of write-offs and 
settlements and transmittal to the appropriate department for recording 
and deductibility.
    (c) Variances. The operation must establish, as approved by the 
TGRA, the threshold level at which a variance must be reviewed to 
determine the cause. Any such review must be documented.



Sec. 543.16  [Reserved]



Sec. 543.17  What are the minimum internal control standards for 
drop and count?

    (a) Supervision. Supervision must be provided for drop and count as 
needed by an agent(s) with authority equal to or greater than those 
being supervised.

[[Page 171]]

    (b) Count room access. Controls must be established and procedures 
implemented to limit physical access to the count room to count team 
agents, designated staff, and other authorized persons. Such controls 
must include the following:
    (1) Count team agents may not exit or enter the count room during 
the count except for emergencies or scheduled breaks.
    (2) Surveillance must be notified whenever count room agents exit or 
enter the count room during the count.
    (3) The count team policy, at a minimum, must address the 
transportation of extraneous items such as personal belongings, tool 
boxes, beverage containers, etc., into or out of the count room.
    (c) Count team. Controls must be established and procedures 
implemented to ensure security of the count and the count room to 
prevent unauthorized access, misappropriation of funds, forgery, theft, 
or fraud. Such controls must include the following:
    (1) For Tier A and B operations, all counts must be performed by at 
least two agents. For Tier C operations, all counts must be performed by 
at least three agents.
    (2) For Tier A and B operations, at no time during the count can 
there be fewer than two count team agents in the count room until the 
drop proceeds have been accepted into cage/vault accountability. For 
Tier C operations, at no time during the count can there be fewer than 
three count team agents in the count room until the drop proceeds have 
been accepted into cage/vault accountability.
    (3) For Tier A and B operations, count team agents must be rotated 
on a routine basis such that the count team is not consistently the same 
two agents more than four days per week. This standard does not apply to 
gaming operations that utilize a count team of more than two agents. For 
Tier C operations, count team agents must be rotated on a routine basis 
such that the count team is not consistently the same three agents more 
than four days per week. This standard does not apply to gaming 
operations that utilize a count team of more than three agents.
    (4) Functions performed by count team agents must be rotated on a 
routine basis.
    (5) Count team agents must be independent of the department being 
counted. A cage/vault agent may be used if they are not the sole 
recorder of the count and do not participate in the transfer of drop 
proceeds to the cage/vault. An accounting agent may be used if there is 
an independent audit of all count documentation.
    (d) Card game drop standards. Controls must be established and 
procedures implemented to ensure security of the drop process. Such 
controls must include the following:
    (1) Surveillance must be notified when the drop is to begin so that 
surveillance may monitor the activities.
    (2) At least two agents must be involved in the removal of the drop 
box, at least one of whom is independent of the card games department.
    (4) Once the drop is started, it must continue until finished.
    (5) All drop boxes may be removed only at the time previously 
designated by the gaming operation and reported to the TGRA. If an 
emergency drop is required, surveillance must be notified before the 
drop is conducted and the TGRA must be informed within a timeframe 
approved by the TGRA.
    (6) At the end of each shift:
    (i) All locked card game drop boxes must be removed from the tables 
by an agent independent of the card game shift being dropped;
    (ii) For any tables opened during the shift, a separate drop box 
must be placed on each table, or a gaming operation may utilize a single 
drop box with separate openings and compartments for each shift; and
    (iii) Card game drop boxes must be transported directly to the count 
room or other equivalently secure area by a minimum of two agents, at 
least one of whom is independent of the card game shift being dropped, 
until the count takes place.
    (7) All tables that were not open during a shift and therefore not 
part of the drop must be documented.
    (8) All card game drop boxes must be posted with a number 
corresponding to a permanent number on the gaming

[[Page 172]]

table and marked to indicate game, table number, and shift, if 
applicable.
    (e) Player interface and financial instrument storage component drop 
standards. (1) Surveillance must be notified when the drop is to begin 
so that surveillance may monitor the activities.
    (2) At least two agents must be involved in the removal of the 
player interface storage component drop, at least one of whom is 
independent of the player interface department.
    (3) All financial instrument storage components may be removed only 
at the time previously designated by the gaming operation and reported 
to the TGRA. If an emergency drop is required, surveillance must be 
notified before the drop is conducted and the TGRA must be informed 
within a timeframe approved by the TGRA.
    (4) The financial instrument storage components must be removed by 
an agent independent of the player interface 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 must be provided for the financial instrument storage 
components removed from player interfaces and awaiting transport to the 
count room.
    (ii) Transportation of financial instrument storage components must 
be performed by a minimum of two agents, at least one of whom is 
independent of the player interface department.
    (5) All financial instrument storage components must be posted with 
a number corresponding to a permanent number on the player interface.
    (f) Card game count standards. (1) Access to stored, full card game 
drop boxes must be restricted to:
    (i) Authorized members of the drop and count teams; and
    (ii) In an emergency, authorized persons for the resolution of a 
problem.
    (2) The card game count must be performed in a count room or other 
equivalently secure area with comparable controls.
    (3) Access to the count room during the count must 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 must be in effect to prevent the commingling 
of funds from different revenue centers.
    (5) Count equipment and systems must be tested, with the results 
documented, at minimum before the first count begins to ensure the 
accuracy of the equipment.
    (6) The card game drop boxes must be individually emptied and 
counted so as to prevent the commingling of funds between boxes until 
the count of the box has been recorded.
    (i) The count of each box must be recorded in ink or other permanent 
form of recordation.
    (ii) For counts that do not utilize a currency counter, a second 
count must be performed by a member of the count team who did not 
perform the initial count. Separate counts of chips and tokens must 
always be performed by members of the count team.
    (iii) Coupons or other promotional items not included in gross 
revenue must be recorded on a supplemental document by either the count 
team members or accounting personnel. All single-use coupons must be 
cancelled daily by an authorized agent to prevent improper 
recirculation.
    (iv) If a currency counter interface is used:
    (A) It must be restricted to prevent unauthorized access; and
    (B) The currency drop figures must be transferred via direct 
communications line or computer storage media to the accounting 
department.
    (7) If currency counters are utilized, a count team member must 
observe the loading and unloading of all currency at the currency 
counter, including rejected currency.
    (8) Two counts of the currency rejected by the currency counter must 
be recorded per table, as well as in total. Posting rejected currency to 
a nonexistent table is prohibited.
    (9) Card game drop boxes, when empty, must be shown to another 
member of the count team, to another agent observing the count, or to 
surveillance, provided that the count is

[[Page 173]]

monitored in its entirety by an agent independent of the count.
    (10) Procedures must be implemented to ensure that any corrections 
to the count documentation are permanent and identifiable, and that the 
original, corrected information remains legible. Corrections must be 
verified by two count team agents.
    (11) The count sheet must be reconciled to the total drop by a count 
team member who may not function as the sole recorder, and variances 
must be reconciled and documented.
    (12) All count team agents must sign the count sheet attesting to 
their participation in the count.
    (13) A final verification of the total drop proceeds, before 
transfer to cage/vault, must be performed by at least two agents, one of 
whom is a supervisory count team member, and one a count team agent.
    (i) Final verification must include a comparison of currency counted 
totals against the currency counter/system report, if any counter/system 
is used.
    (ii) Any unresolved variances must be documented, and the 
documentation must remain part of the final count record forwarded to 
accounting.
    (iii) This verification does not require a complete recount of the 
drop proceeds, but does require a review sufficient to verify the total 
drop proceeds being transferred.
    (iv) The two agents must sign the report attesting to the accuracy 
of the total drop proceeds verified.
    (v) All drop proceeds and cash equivalents that were counted must be 
submitted to the cage or vault agent (who must be independent of the 
count team), or to an agent independent of the revenue generation source 
and the count process, for verification. The agent must certify, by 
signature, the amount of the drop proceeds delivered and received. Any 
unresolved variances must be reconciled, documented, and/or investigated 
by accounting/revenue audit.
    (14) After verification by the agent receiving the funds, the drop 
proceeds must be transferred to the cage/vault.
    (i) The count documentation and records must not be transferred to 
the cage/vault with the drop proceeds.
    (ii) The cage/vault agent must have no knowledge or record of the 
drop proceeds total before it is verified.
    (iii) All count records must be forwarded to accounting or secured 
and accessible only by accounting agents.
    (iv) The cage/vault agent receiving the transferred drop proceeds 
must sign the count sheet attesting to the verification of the total 
received, and thereby assume accountability of the drop proceeds, ending 
the count.
    (v) Any unresolved variances between total drop proceeds recorded on 
the count sheet and the cage/vault final verification during transfer 
must be documented and investigated.
    (15) The count sheet, with all supporting documents, must be 
delivered to the accounting department by a count team member or an 
agent independent of the cage/vault. Alternatively, it may be secured so 
that it is only accessible to accounting agents.
    (g) Player interface financial instrument count standards. (1) 
Access to stored full financial instrument storage components must be 
restricted to:
    (i) Authorized members of the drop and count teams; and
    (ii) In an emergency, authorized persons for the resolution of a 
problem.
    (2) The player interface financial instrument count must be 
performed in a count room or other equivalently secure area with 
comparable controls.
    (3) Access to the count room during the count must 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 must be in effect that prevent the 
commingling of funds from different revenue centers.
    (5) The count team must not have access to amount-in or bill-in 
meter amounts until after the count is completed and the drop proceeds 
are accepted into the cage/vault accountability.
    (6) Count equipment and systems must be tested, and the results 
documented, before the first count begins, to ensure the accuracy of the 
equipment.

[[Page 174]]

    (7) If a currency counter interface is used:
    (i) It must be adequately restricted to prevent unauthorized access; 
and
    (ii) The currency drop figures must be transferred via direct 
communications line or computer storage media to the accounting 
department.
    (8) The financial instrument storage components must be individually 
emptied and counted so as to prevent the commingling of funds between 
storage components until the count of the storage component has been 
recorded.
    (i) The count of each storage component must be recorded in ink or 
other permanent form of recordation.
    (ii) Coupons or other promotional items not included in gross 
revenue may be recorded on a supplemental document by the count team 
members or accounting personnel. All single-use coupons must be 
cancelled daily by an authorized agent to prevent improper 
recirculation.
    (9) If currency counters are utilized, a count team member must 
observe the loading and unloading of all currency at the currency 
counter, including rejected currency.
    (10) Two counts of the currency rejected by the currency counter 
must be recorded per interface terminal as well as in total. Rejected 
currency must be posted to the player interface from which it was 
collected.
    (11) Storage components, when empty, must be shown to another member 
of the count team, to another agent who is observing the count, or to 
surveillance, provided that the count is monitored in its entirety by an 
agent independent of the count.
    (12) Procedures must be implemented to ensure that any corrections 
to the count documentation are permanent, identifiable and the original, 
corrected information remains legible. Corrections must be verified by 
two count team agents.
    (13) The count sheet must be reconciled to the total drop by a count 
team member who may not function as the sole recorder, and variances 
must be reconciled and documented. This standard does not apply to 
vouchers removed from the financial instrument storage components.
    (14) All count team agents must sign the report attesting to their 
participation in the count.
    (15) A final verification of the total drop proceeds, before 
transfer to cage/vault, must be performed by the at least two agents, 
one of whom is a supervisory count team member and the other a count 
team agent.
    (i) Final verification must include a comparison of currency counted 
totals against the currency counter/system report, if a counter/system 
is used.
    (ii) Any unresolved variances must be documented and the 
documentation must remain a part of the final count record forwarded to 
accounting.
    (iii) This verification does not require a complete recount of the 
drop proceeds but does require a review sufficient to verify the total 
drop proceeds being transferred.
    (iv) The two agents must sign the report attesting to the accuracy 
of the total drop proceeds verified.
    (v) All drop proceeds and cash equivalents that were counted must be 
turned over to the cage or vault cashier (who must be independent of the 
count team) or to an agent independent of the revenue generation and the 
count process for verification. Such cashier or agent must certify, by 
signature, the amount of the drop proceeds delivered and received. Any 
unresolved variances must be reconciled, documented, and/or investigated 
by accounting/revenue audit.
    (16) After certification by the agent receiving the funds, the drop 
proceeds must be transferred to the cage/vault.
    (i) The count documentation and records must not be transferred to 
the cage/vault with the drop proceeds.
    (ii) The cage/vault agent must not have knowledge or record of the 
drop proceeds total before it is verified.
    (iii) All count records must be forwarded to accounting secured and 
accessible only by accounting agents.
    (iv) The cage/vault agent receiving the transferred drop proceeds 
must sign the count sheet attesting to the verification of the total 
received, and thereby assuming accountability of the drop proceeds, and 
ending the count.
    (v) Any unresolved variances between total drop proceeds recorded on 
the count room report and the cage/vault

[[Page 175]]

final verification during transfer must be documented and investigated.
    (17) The count sheet, with all supporting documents, must be 
delivered to the accounting department by a count team member or agent 
independent of the cashiers department. Alternatively, it may be 
adequately secured and accessible only by accounting department.
    (h) Collecting currency cassettes and financial instrument storage 
components from kiosks. Controls must be established and procedures 
implemented to ensure that currency cassettes and financial instrument 
storage components are securely removed from kiosks. Such controls must 
include the following:
    (1) Surveillance must be notified prior to the financial instrument 
storage components or currency cassettes being accessed in a kiosk.
    (2) At least two agents must be involved in the collection of 
currency cassettes and/or financial instrument storage components from 
kiosks and at least one agent should be independent of kiosk 
accountability.
    (3) Currency cassettes and financial instrument storage components 
must be secured in a manner that restricts access to only authorized 
agents.
    (4) Redeemed vouchers and pulltabs (if applicable) collected from 
the kiosk must be secured and delivered to the appropriate department 
(cage or accounting) for reconciliation.
    (5) Controls must be established and procedures implemented to 
ensure that currency cassettes contain the correct denominations and 
have been properly installed.
    (i) Kiosk count standards. (1) Access to stored full kiosk financial 
instrument storage components and currency cassettes must be restricted 
to:
    (i) Authorized agents; and
    (ii) In an emergency, authorized persons for the resolution of a 
problem.
    (2) The kiosk count must be performed in a secure area, such as the 
cage or count room.
    (3) If counts from various revenue centers and kiosks occur 
simultaneously in the count room, procedures must be in effect that 
prevent the commingling of funds from the kiosks with any revenue 
centers.
    (4) The kiosk financial instrument storage components and currency 
cassettes must be individually emptied and counted so as to prevent the 
commingling of funds between kiosks until the count of the kiosk 
contents has been recorded.
    (i) The count of must be recorded in ink or other permanent form of 
recordation.
    (ii) Coupons or other promotional items not included in gross 
revenue (if any) may be recorded on a supplemental document. All single-
use coupons must be cancelled daily by an authorized agent to prevent 
improper recirculation.
    (5) Procedures must be implemented to ensure that any corrections to 
the count documentation are permanent, identifiable, and the original, 
corrected information remains legible. Corrections must be verified by 
two agents.
    (j) Controlled keys. Controls must be established and procedures 
implemented to safeguard the use, access, and security of keys for 
kiosks.
    (k) Variances. The operation must establish, as approved by the 
TGRA, the threshold level at which a variance must be reviewed to 
determine the cause. Any such review must be documented.

[77 FR 58712, Sept. 21, 2012, as amended at 78 FR 63874, Oct. 25, 2013]



Sec. 543.18  What are the minimum internal control standards for the
cage, vault, kiosk, cash and cash equivalents?

    (a) Supervision. Supervision must be provided as needed for cage, 
vault, kiosk, and other operations using cash or cash equivalents by an 
agent(s) with authority equal to or greater than those being supervised.
    (b) Check cashing. (1) If checks are cashed at the cage, the 
controls must provide for security and integrity. For each check cashing 
transaction, the agent(s) conducting the transaction must:
    (i) Verify the patron's identity;
    (ii) Examine the check to ensure it includes the patron's name, 
current address, and signature;
    (iii) For personal checks, verify the patron's check cashing 
authority and

[[Page 176]]

record the source and results in accordance with management policy; 
however
    (iv) If a check guarantee service is used to guarantee the 
transaction and the procedures required by the check guarantee service 
are followed, then the above requirements do not apply.
    (2) When counter checks are issued, the following must be included 
on the check:
    (i) The patron's name and signature;
    (ii) The dollar amount of the counter check;
    (iii) Patron's bank name, bank routing, and account numbers;
    (iv) Date of issuance; and
    (v) Signature of the agent approving the counter check transaction.
    (3) Checks that are not deposited in the normal course of business, 
as established by management, (held checks) are subject to Sec. 543.15 
lines of credit standards.
    (4) When traveler's checks or other guaranteed drafts, such as 
cashier's checks, are presented, the cashier must comply with the 
examination and documentation procedures as required by the issuer.
    (5) If a third party check cashing or guarantee service is used, the 
examination and documentation procedures required by the service 
provider apply, unless otherwise provided by tribal law or regulation.
    (c) Cage and vault accountability. (1) All transactions that flow 
through the cage must be summarized for each work shift of the cage and 
must be supported by documentation.
    (2) Increases and decreases to the total cage inventory must be 
verified, supported by documentation, and recorded. Documentation must 
include the date and shift, the purpose of the increase/decrease, the 
agent(s) completing the transaction, and the person or department 
receiving the cage funds (for decreases only).
    (3) The cage and vault inventories (including coin rooms) must be 
counted independently by at least two agents, attested to by signature, 
and recorded in ink or other permanent form at the end of each shift 
during which the activity took place. These agents must make individual 
counts to compare for accuracy and maintain individual accountability. 
All variances must be documented and investigated.
    (4) The gaming operation must establish and 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 
patrons as they are incurred.
    (d) Kiosks. (1) Kiosks must be maintained on the cage accountability 
and must be counted independently by at least two agents, documented, 
and reconciled for each increase or decrease to the kiosk inventory.
    (2) Currency cassettes must be counted and filled by an agent and 
verified independently by at least one agent, all of whom must sign each 
cassette.
    (3) Currency cassettes must be secured with a lock or tamper 
resistant seal and, if not placed inside a kiosk, must be stored in a 
secured area of the cage/vault.
    (4) The TGRA or the gaming operation, subject to the approval of the 
TGRA, must develop and implement physical security controls over the 
kiosks. Controls should address the following: forced entry, evidence of 
any entry, and protection of circuit boards containing programs.
    (5) With regard to cashless systems, the TGRA or the gaming 
operation, subject to the approval of the TGRA, must develop and 
implement procedures to ensure that communications between the kiosk and 
system are secure and functioning.
    (6) The following reconciliation reports must be available upon 
demand for each day, shift, and drop cycle (this is not required if the 
system does not track the information, but system limitation(s) must be 
noted):
    (i) Starting balance dollar amount per financial instrument;
    (ii) Starting balance number of items per financial instrument;
    (iii) Dollar amount per financial instrument issued;
    (iv) Number of items per financial instrument issued;
    (v) Dollar amount per financial instrument issued;
    (vi) Number of items per financial instrument redeemed;

[[Page 177]]

    (vii) Dollar amount per financial instrument increases;
    (viii) Number of items per financial instrument increases;
    (ix) Dollar amount per financial instrument decreases;
    (x) Number of items per financial instrument decreases;
    (xi) Ending balance dollar amount per financial instrument; and
    (xii) Ending balance number of items per financial instrument.
    (e) Patron deposited funds. If a gaming operation permits a patron 
to deposit funds with the gaming operation at the cage, and when 
transfers of patron deposited funds are transferred to a gaming area for 
wagering purposes, the following standards apply:
    (1) The receipt or withdrawal of a patron deposit must be 
documented, with a copy given to the patron and a copy remaining in the 
cage.
    (2) Both copies of the document of receipt or withdrawal must 
contain the following information:
    (i) Same receipt number on each copy;
    (ii) Patron's name and signature;
    (iii) Date of receipt and withdrawal;
    (iv) Dollar amount of deposit/withdrawal (for foreign currency 
transactions include the US dollar equivalent, the name of the foreign 
country, and the amount of the foreign currency by denomination);
    (v) Nature of deposit/withdrawal; and
    (vi) Name and signature of the agent who conducted the transaction.
    (3) Procedures must be established and complied with for front money 
deposits to:
    (i) Maintain a detailed record by patron name and date of all funds 
on deposit;
    (ii) Maintain a current balance of all patron deposits that are in 
the cage/vault inventory or accountability; and
    (iii) Reconcile the current balance with the deposits and 
withdrawals at least daily.
    (f) Promotional payments, drawings, and giveaway programs. The 
following procedures must apply to any payment resulting from a 
promotional payment, drawing, or giveaway program disbursed by the cage 
department or any other department. This section does not apply to 
payouts for card game promotional pots and/or pools.
    (1) All payments must be documented to support the cage 
accountability.
    (2) Payments above $600 (or lesser amount as approved by TGRA) must 
be documented at the time of the payment, and documentation must include 
the following:
    (i) Date and time;
    (ii) Dollar amount of payment or description of personal property;
    (iii) Reason for payment; and
    (iv) Patron's name and confirmation that identity was verified 
(drawings only).
    (v) Signature(s) of at least two agents verifying, authorizing, and 
completing the promotional payment with the patron. For computerized 
systems that validate and print the dollar amount of the payment on a 
computer generated form, only one signature is required.
    (g) Chip(s) and token(s). Controls must be established and 
procedures implemented to ensure accountability of chip and token 
inventory. Such controls must include, but are not limited to, the 
following:
    (1) Purchase;
    (2) Receipt;
    (3) Inventory;
    (4) Storage; and
    (5) Destruction.
    (h) Vouchers. (1) Controls must be established and procedures 
implemented to:
    (i) Verify the authenticity of each voucher redeemed.
    (ii) If the voucher is valid, verify that the patron is paid the 
appropriate amount.
    (iii) Document the payment of a claim on a voucher that is not 
physically available or a voucher that cannot be validated such as a 
mutilated, expired, lost, or stolen voucher.
    (iv) Retain payment documentation for reconciliation purposes.
    (v) For manual payment of a voucher of $500 or more, require a 
supervisory employee to verify the validity of the voucher prior to 
payment.
    (2) Vouchers paid during a period while the voucher system is 
temporarily out of operation must be marked ``paid'' by the cashier.

[[Page 178]]

    (3) Vouchers redeemed while the voucher system was temporarily out 
of operation must be validated as expeditiously as possible upon 
restored operation of the voucher system.
    (4) Paid vouchers must be maintained in the cashier's accountability 
for reconciliation purposes.
    (5) Unredeemed vouchers can only be voided in the voucher system by 
supervisory employees. The accounting department will maintain the 
voided voucher, if available.
    (i) Cage and vault access. Controls must be established and 
procedures implemented to:
    (1) Restrict physical access to the cage to cage agents, designated 
staff, and other authorized persons; and
    (2) Limit transportation of extraneous items such as personal 
belongings, tool boxes, beverage containers, etc., into and out of the 
cage.
    (j) Variances. The operation must establish, as approved by the 
TGRA, the threshold level at which a variance must be reviewed to 
determine the cause. Any such review must be documented.



Sec. 543.19  [Reserved]



Sec. 543.20  What are the minimum internal control standards for 
information technology and information technology data?

    (a) Supervision. (1) Controls must identify the supervisory agent in 
the department or area responsible for ensuring that the department or 
area is operating in accordance with established policies and 
procedures.
    (2) The supervisory agent must be independent of the operation of 
Class II games.
    (3) Controls must ensure that duties are adequately segregated and 
monitored to detect procedural errors and to prevent the concealment of 
fraud.
    (4) Information technology agents having access to Class II gaming 
systems may not have signatory authority over financial instruments and 
payout forms and must be independent of and restricted from access to:
    (i) Financial instruments;
    (ii) Accounting, audit, and ledger entries; and
    (iii) Payout forms.
    (b) As used in this section only, a system is any computerized 
system that is integral to the gaming environment. This includes, but is 
not limited to, the server and peripherals for Class II gaming system, 
accounting, surveillance, essential phone system, and door access and 
warning systems.
    (c) Class II gaming systems' logical and physical controls. Controls 
must be established and procedures implemented to ensure adequate:
    (1) Control of physical and logical access to the information 
technology environment, including accounting, voucher, cashless and 
player tracking systems, among others used in conjunction with Class II 
gaming;
    (2) Physical and logical protection of storage media and its 
contents, including recovery procedures;
    (3) Access credential control methods;
    (4) Record keeping and audit processes; and
    (5) Departmental independence, including, but not limited to, means 
to restrict agents that have access to information technology from 
having access to financial instruments.
    (d) Physical security. (1) The information technology environment 
and infrastructure must be maintained in a secured physical location 
such that access is restricted to authorized agents only.
    (2) Access devices to the systems' secured physical location, such 
as keys, cards, or fobs, must be controlled by an independent agent.
    (3) Access to the systems' secured physical location must be 
restricted to agents in accordance with established policies and 
procedures, which must include maintaining and updating a record of 
agents granted access privileges.
    (4) Network Communication Equipment must be physically secured from 
unauthorized access.
    (e) Logical security. (1) Controls must be established and 
procedures implemented to protect all systems and to ensure that access 
to the following is restricted and secured:
    (i) Systems' software and application programs;
    (ii) Data associated with Class II gaming; and

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    (iii) Communications facilities, systems, and information 
transmissions associated with Class II gaming systems.
    (2) Unused services and non-essential ports must be disabled 
whenever possible.
    (3) Procedures must be implemented to ensure that all activity 
performed on systems is restricted and secured from unauthorized access, 
and logged.
    (4) Communications to and from systems via Network Communication 
Equipment must be logically secured from unauthorized access.
    (f) User controls. (1) Systems, including application software, must 
be secured with passwords or other means for authorizing access.
    (2) Management personnel or agents independent of the department 
being controlled must assign and control access to system functions.
    (3) Access credentials such as passwords, PINs, or cards must be 
controlled as follows:
    (i) Each user must have his or her own individual access credential;
    (ii) Access credentials must be changed at an established interval 
approved by the TGRA; and
    (iii) Access credential records must be maintained either manually 
or by systems that automatically record access changes and force access 
credential changes, including the following information for each user:
    (A) User's name;
    (B) Date the user was given access and/or password change; and
    (C) Description of the access rights assigned to user.
    (4) Lost or compromised access credentials must be deactivated, 
secured or destroyed within an established time period approved by the 
TGRA.
    (5) Access credentials of terminated users must be deactivated 
within an established time period approved by the TGRA.
    (6) Only authorized agents may have access to inactive or closed 
accounts of other users, such as player tracking accounts and terminated 
user accounts.
    (g) Installations and/or modifications. (1) Only TGRA authorized or 
approved systems and modifications may be installed.
    (2) Records must be kept of all new installations and/or 
modifications to Class II gaming systems. These records must include, at 
a minimum:
    (i) The date of the installation or modification;
    (ii) The nature of the installation or change such as new software, 
server repair, significant configuration modifications;
    (iii) Evidence of verification that the installation or the 
modifications are approved; and
    (iv) The identity of the agent(s) performing the installation/
modification.
    (3) Documentation must be maintained, such as manuals and user 
guides, describing the systems in use and the operation, including 
hardware.
    (h) Remote access. (1) Agents may be granted remote access for 
system support, provided that each access session is documented and 
maintained at the place of authorization. The documentation must 
include:
    (i) Name of agent authorizing the access;
    (ii) Name of agent accessing the system;
    (iii) Verification of the agent's authorization;
    (iv) Reason for remote access;
    (v) Description of work to be performed;
    (vi) Date and time of start of end-user remote access session; and
    (vii) Date and time of conclusion of end-user remote access session.
    (2) All remote access must be performed via a secured method.
    (i) Incident monitoring and reporting. (1) Procedures must be 
implemented for responding to, monitoring, investigating, resolving, 
documenting, and reporting security incidents associated with 
information technology systems.
    (2) All security incidents must be responded to within an 
established time period approved by the TGRA and formally documented.
    (j) Data backups. (1) Controls must include adequate backup, 
including, but not limited to, the following:
    (i) Daily data backup of critical information technology systems;
    (ii) Data backup of critical programs or the ability to reinstall 
the exact programs as needed;

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    (iii) Secured storage of all backup data files and programs, or 
other adequate protection;
    (iv) Mirrored or redundant data source; and
    (v) Redundant and/or backup hardware.
    (2) Controls must include recovery procedures, including, but not 
limited to, the following:
    (i) Data backup restoration;
    (ii) Program restoration; and
    (iii) Redundant or backup hardware restoration.
    (3) Recovery procedures must be tested on a sample basis at 
specified intervals at least annually. Results must be documented.
    (4) Backup data files and recovery components must be managed with 
at least the same level of security and access controls as the system 
for which they are designed to support.
    (k) Software downloads. Downloads, either automatic or manual, must 
be performed in accordance with 25 CFR 547.12.
    (l) Verifying downloads. Following download of any Class II gaming 
system software, the Class II gaming system must verify the downloaded 
software using a software signature verification method. Using any 
method it deems appropriate, the TGRA must confirm the verification.



Sec. 543.21  What are the minimum internal control standards for 
surveillance?

    (a) Supervision. Supervision must be provided as needed for 
surveillance by an agent(s) with authority equal to or greater than 
those being supervised.
    (b) Surveillance equipment and control room(s). Controls must be 
established and procedures implemented that include the following:
    (1) For Tier A, the surveillance system must be maintained and 
operated from a secured location, such as a locked cabinet. For Tiers B 
and C, the surveillance system must be maintained and operated from a 
staffed surveillance operation room(s).
    (2) The surveillance operation room(s) must be secured to prevent 
unauthorized entry.
    (3) Access to the surveillance operation room(s) must be limited to 
surveillance agents and other authorized persons.
    (4) Surveillance operation room(s) access logs must be maintained.
    (5) Surveillance operation room equipment must have total override 
capability over all other satellite surveillance equipment.
    (6) Power loss to the surveillance system:
    (i) For Tier A, in the event of power loss to the surveillance 
system, alternative security procedures, such as additional supervisory 
or security agents, must be implemented immediately.
    (ii) For Tier B and C, in the event of power loss to the 
surveillance system, an auxiliary or backup power source must be 
available and capable of providing immediate restoration of power to the 
surveillance system to ensure that surveillance agents can observe all 
areas covered by dedicated cameras.
    (7) The surveillance system must record an accurate date and time 
stamp on recorded events. The displayed date and time must not 
significantly obstruct the recorded view.
    (8) All surveillance agents must be trained in the use of the 
equipment, games, and house rules.
    (9) Each camera required by the standards in this section must be 
installed in a manner that will prevent it from being readily 
obstructed, tampered with, or disabled.
    (10) The surveillance system must:
    (i) Have the capability to display all camera views on a monitor;
    (ii) Include sufficient numbers of recording devices to record the 
views of all cameras required by this section;
    (iii) Record all camera views; and
    (iv) For Tier B and C only, include sufficient numbers of monitors 
to simultaneously display gaming and count room activities.
    (11) A periodic inspection of the surveillance systems must be 
conducted. When a malfunction of the surveillance system is discovered, 
the malfunction and necessary repairs must be documented and repairs 
initiated within seventy-two (72) hours.
    (i) If a dedicated camera malfunctions, alternative security 
procedures, such as additional supervisory or security agents, must be 
implemented immediately.

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    (ii) The TGRA must be notified of any surveillance system and/or 
camera(s) that have malfunctioned for more than twenty-four (24) hours 
and the alternative security measures being implemented.
    (c) Additional surveillance requirements. With regard to the 
following functions, controls must also include:
    (1) Surveillance of the progressive prize meters for Class II gaming 
systems at the following thresholds:
    (i) Wide area progressives with a reset amount of $1 million; and
    (ii) In-house progressives with a reset amount of $250,000.
    (2) Manual bingo:
    (i) For manual draws, the surveillance system must monitor the bingo 
ball drawing device or mechanical random number generator, which must be 
recorded during the course of the draw by a dedicated camera to identify 
the numbers or other designations drawn; and
    (ii) The surveillance system must monitor and record the activities 
of the bingo game, including drawing, and entering the balls, numbers or 
other designations drawn.
    (3) Card games:
    (i) Except for card game tournaments, a dedicated camera(s) with 
sufficient clarity must be used to provide:
    (A) An overview of the activities on each card table surface, 
including card faces and cash and/or cash equivalents;
    (B) An overview of card game activities, including patrons and 
dealers; and
    (C) An unobstructed view of all posted progressive pool amounts.
    (ii) For card game tournaments, a dedicated camera(s) must be used 
to provide an overview of tournament activities, and any area where cash 
or cash equivalents are exchanged.
    (4) Cage and vault:
    (i) The surveillance system must monitor and record a general 
overview of activities occurring in each cage and vault area with 
sufficient clarity to identify individuals within the cage and patrons 
and staff members at the counter areas and to confirm the amount of each 
cash transaction;
    (ii) Each cashier station must be equipped with one (1) dedicated 
overhead camera covering the transaction area; and
    (iii) The cage or vault area in which exchange and transfer 
transactions occur must 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 
exchange and transfer documentation. Controls provided by a computerized 
exchange and transfer system constitute an adequate alternative to 
viewing the amounts on the exchange and transfer documentation.
    (5) Count rooms:
    (i) The surveillance system must monitor and record with sufficient 
clarity a general overview of all areas where cash or cash equivalents 
may be stored or counted; and
    (ii) The surveillance system must provide coverage of count 
equipment with sufficient clarity to view any attempted manipulation of 
the recorded data.
    (6) Kiosks: The surveillance system must monitor and record a 
general overview of activities occurring at each kiosk with sufficient 
clarity to identify the activity and the individuals performing it, 
including maintenance, drops or fills, and redemption of wagering 
vouchers or credits.
    (d) Reporting requirements. TGRA-approved procedures must be 
implemented for reporting suspected crimes and suspicious activity.
    (e) Recording retention. Controls must be established and procedures 
implemented that include the following:
    (1) All recordings required by this section must be retained for a 
minimum of seven days; and
    (2) Suspected crimes, suspicious activity, or detentions by security 
agents discovered within the initial retention period must be copied and 
retained for a time period, not less than one year.
    (f) Logs. Logs must be maintained and demonstrate the following:
    (1) Compliance with the storage, identification, and retention 
standards required in this section;
    (2) Each malfunction and repair of the surveillance system as 
defined in this section; and

[[Page 182]]

    (3) Activities performed by surveillance agents as required by the 
controls in this section.

[77 FR 58712, Sept. 21, 2012, as amended at 78 FR 63875, Oct. 25, 2013]



Sec. 543.22  [Reserved]



Sec. 543.23  What are the minimum internal control standards for
audit and accounting?

    (a) Conflicts of standards. When establishing SICS, the gaming 
operation should review, and consider incorporating, other external 
standards such as GAAP, GAAS, and standards promulgated by GASB and 
FASB. In the event of a conflict between the MICS and the incorporated 
external standards, the external standards prevail.
    (b) Accounting. Controls must be established and procedures 
implemented to safeguard assets and ensure each gaming operation:
    (1) Prepares accurate, complete, legible, and permanent records of 
all transactions pertaining to gaming revenue and activities for 
operational accountability.
    (2) Prepares general accounting records on a double-entry system of 
accounting, maintaining detailed, supporting, subsidiary records, and 
performs the following activities:
    (i) Record gaming activity transactions in an accounting system to 
identify and track all revenues, expenses, assets, liabilities, and 
equity;
    (ii) Record all markers, IOU's, returned checks, held checks, or 
other similar credit instruments;
    (iii) Record journal entries prepared by the gaming operation and by 
any independent accountants used;
    (iv) Prepare income statements and balance sheets;
    (v) Prepare appropriate subsidiary ledgers to support the balance 
sheet;
    (vi) Prepare, review, and maintain accurate financial statements;
    (vii) Prepare transactions in accordance with the appropriate 
authorization, as provided by management;
    (viii) Record transactions to facilitate proper recording of gaming 
revenue and fees, and to maintain accountability of assets;
    (ix) Compare recorded accountability for assets to actual assets at 
periodic intervals, and take appropriate action with respect to any 
variances;
    (x) Segregate functions, duties, and responsibilities;
    (xi) Prepare minimum bankroll calculations; and
    (xii) Maintain and preserve all financial records and relevant 
supporting documentation.
    (c) Internal audit. Controls must be established and procedures 
implemented to ensure that:
    (1) Internal auditor(s) perform audits of each department of a 
gaming operation, at least annually, to review compliance with TICS, 
SICS, and these MICS, which include at least the following areas:
    (i) Bingo, including supervision, bingo cards, bingo card sales, 
draw, prize payout; cash and equivalent controls, technologic aids to 
the play of bingo, operations, vouchers, and revenue audit procedures;
    (ii) Pull tabs, including, supervision, pull tab inventory, pull tab 
sales, winning pull tabs, pull tab operating funds, statistical records, 
and revenue audit procedures;
    (iii) Card games, including supervision, exchange or transfers, 
playing cards, shill funds, reconciliation of card room bank, posted 
rules, and promotional progressive pots and pools;
    (iv) Gaming promotions and player tracking procedures, including 
supervision, gaming promotion rules and player tracking systems;
    (v) Complimentary services or items, including procedures for 
issuing, authorizing, redeeming, and reporting complimentary service 
items;
    (vi) Patron deposit accounts and cashless systems procedures, 
including supervision, patron deposit accounts and cashless systems, as 
well as patron deposits, withdrawals and adjustments;
    (vii) Lines of credit procedures, including establishment of lines 
of credit policy;
    (viii) Drop and count standards, including supervision, count room 
access, count team, card game drop standards, player interface and 
financial instrument drop standards, card game count standards, player 
interface financial instrument count standards, and controlled keys;

[[Page 183]]

    (ix) Cage, vault, cash and cash equivalent procedures, including 
supervision, cash and cash equivalents, personal checks, cashier's 
checks, traveler's checks, payroll checks, and counter checks, cage and 
vault accountability, kiosks, patron deposited funds, promotional 
payouts, drawings, and giveaway programs, chip and token standards, and 
cage and vault access;
    (x) Information technology, including supervision, class II gaming 
systems' logical and physical controls, independence, physical security, 
logical security, user controls, installations and/or modifications, 
remote access, incident monitoring and reporting, data back-ups, 
software downloads, and verifying downloads; and
    (xi) Accounting standards, including accounting records, maintenance 
and preservation of financial records and relevant supporting 
documentation.
    (2) Internal auditor(s) are independent of gaming operations with 
respect to the departments subject to audit (auditors internal to the 
operation, officers of the TGRA, or outside CPA firm may perform this 
function).
    (3) Internal auditor(s) report directly to the Tribe, TGRA, audit 
committee, or other entity designated by the Tribe.
    (4) Documentation such as checklists, programs, reports, etc. is 
prepared to evidence all internal audit work and follow-up performed as 
it relates to compliance with TICS, SICS, and these MICS, including all 
instances of noncompliance.
    (5) Audit reports are maintained and made available to the 
Commission upon request and must 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.
    (6) All material exceptions identified by internal audit work are 
investigated and resolved and the results are documented.
    (7) Internal audit findings are reported to management, responded to 
by management stating corrective measures to be taken, and included in 
the report delivered to management, the Tribe, TGRA, audit committee, or 
other entity designated by the Tribe for corrective action.
    (8) Follow-up observations and examinations is performed to verify 
that corrective action has been taken regarding all instances of non-
compliance. The verification is performed within six (6) months 
following the date of notification of non-compliance.
    (d) Annual requirements. (1) Agreed upon procedures. A CPA must be 
engaged to perform an assessment to verify whether the gaming operation 
is in compliance with these MICS, and/or the TICS or SICS if they 
provide at least the same level of controls as the MICS. The assessment 
must be performed in accordance with agreed upon procedures and the most 
recent versions of the Statements on Standards for Attestation 
Engagements and Agreed-Upon Procedures Engagements (collectively 
``SSAEs''), issued by the American Institute of Certified Public 
Accountants.
    (2) The tribe must submit two copies of the agreed-upon procedures 
report to the Commission within 120 days of the gaming operation's 
fiscal year end in conjunction with the submission of the annual 
financial audit report required pursuant to 25 CFR part 571.
    (3) Review of internal audit.
    (i) The CPA must determine compliance by the gaming operation with 
the internal audit requirements in this paragraph (d) by:
    (A) Completing the internal audit checklist;
    (B) Ensuring that the internal auditor completed checklists for each 
gaming department of the operation;
    (C) Verifying that any areas of non-compliance have been identified;
    (D) Ensuring that audit reports are completed and include responses 
from management; and
    (E) Verifying that appropriate follow-up on audit findings has been 
conducted and necessary corrective measures have been taken to 
effectively mitigate the noted risks.
    (ii) If the CPA determines that the internal audit procedures 
performed during the fiscal year have been properly completed, the CPA 
may rely on the work of the internal audit for the

[[Page 184]]

completion of the MICS checklists as they relate to the standards 
covered by this part.
    (4) Report format. The SSAEs are applicable to agreed-upon 
procedures engagements required in this part. All noted instances of 
noncompliance with the MICS and/or the TICS or SICS, if they provide the 
same level of controls as the MICS, must be documented in the report 
with a narrative description, the number of exceptions and sample size 
tested.



Sec. 543.24  What are the minimum internal control standards for
auditing revenue?

    (a) Supervision. Supervision must be provided as needed for bingo 
operations by an agent(s) with authority equal to or greater than those 
being supervised.
    (b) Independence. Audits must be performed by agent(s) independent 
of the transactions being audited.
    (c) Documentation. The performance of revenue audit procedures, the 
exceptions noted, and the follow-up of all revenue audit exceptions must 
be documented and maintained.
    (d) Controls must be established and procedures implemented to audit 
of each of the following operational areas:
    (1) Bingo.
    (i) At the end of each month, verify the accuracy of the ending 
balance in the bingo control log by reconciling it with the bingo paper 
inventory. Investigate and document any variance noted.
    (ii) Daily, reconcile supporting records and documents to summarized 
paperwork or electronic records (e.g. total sales and payouts per shift 
and/or day).
    (iii) At least monthly, review variances related to bingo accounting 
data in accordance with an established threshold, which must include, at 
a minimum, variance(s) 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. Investigate and 
document any variance noted.
    (iv) At least monthly, review statistical reports for any deviations 
from the mathematical expectations exceeding a threshold established by 
the TGRA. Investigate and document any deviations compared to the 
mathematical expectations required to be submitted per Sec. 547.4.
    (v) At least monthly, take a random sample, 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.
    (2) Pull tabs.
    (i) Daily, verify the total amount of winning pull tabs redeemed 
each day.
    (ii) At the end of each month, verify the accuracy of the ending 
balance in the pull tab control log by reconciling the pull tabs on 
hand. Investigate and document any variance noted.
    (iii) At least monthly, compare for reasonableness the amount of 
pull tabs sold from the pull tab control log to the amount of pull-tab 
sales.
    (iv) At least monthly, review statistical reports for any deviations 
exceeding a specified threshold, as defined by the TGRA. Investigate and 
document any large and unusual fluctuations noted.
    (3) Card games.
    (i) Daily, reconcile the amount indicated on the progressive sign/
meter to the cash counted or received by the cage and the payouts made 
for each promotional progressive pot and pool. This reconciliation must 
be sufficiently documented, including substantiation of differences and 
adjustments.
    (ii) At least monthly, review all payouts for the promotional 
progressive pots, pools, or other promotions to verify payout accuracy 
and proper accounting treatment and that they are conducted in 
accordance with conditions provided to the patrons.
    (iii) At the conclusion of each contest/tournament, reconcile all 
contest/tournament entry and payout forms to the dollar amounts recorded 
in the appropriate accountability document.
    (4) Gaming promotions and player tracking.
    (i) At least monthly, review promotional payments, drawings, and 
giveaway programs to verify payout accuracy and proper accounting 
treatment in accordance with the rules provided to patrons.

[[Page 185]]

    (ii) At least monthly, for computerized player tracking systems, 
perform the following procedures:
    (A) Review authorization documentation for all manual point 
additions/deletions for propriety;
    (B) Review exception reports, including transfers between accounts; 
and
    (C) Review documentation related to access to inactive and closed 
accounts.
    (iii) At least annually, all computerized player tracking systems 
must be reviewed by agent(s) independent of the individuals that set up 
or make changes to the system parameters. The review must be performed 
to determine that the configuration parameters are accurate and have not 
been altered without appropriate management authorization Document and 
maintain the test results.
    (5) Complimentary services or items. At least monthly, review the 
reports required in Sec. 543.13(d). These reports must be made available 
to those entities authorized by the TGRA or by tribal law or ordinance.
    (6) Patron deposit accounts.
    (i) At least weekly, reconcile patron deposit account liability 
(deposits [adjustments-withdrawals = total account balance) to the 
system record.
    (ii) At least weekly, review manual increases and decreases to/from 
player deposit accounts to ensure proper adjustments were authorized.
    (7) Lines of credit.
    (i) At least three (3) times per year, an agent independent of the 
cage, credit, and collection functions must perform the following 
review:
    (A) Select a sample of line of credit accounts;
    (B) Ascertain compliance with credit limits and other established 
credit issuance procedures;
    (C) Reconcile outstanding balances of both active and inactive 
(includes write-offs and settlements) accounts on the accounts 
receivable listing to individual credit records and physical 
instruments. This procedure need only be performed once per year for 
inactive accounts; and
    (D) Examine line of credit records to determine that appropriate 
collection efforts are being made and payments are being properly 
recorded.
    (E) For at least five (5) days during the review period, 
subsequently reconcile partial payment receipts to the total payments 
recorded by the cage for the day and account for the receipts 
numerically.
    (ii) At least monthly, perform an evaluation of the collection 
percentage of credit issued to identify unusual trends.
    (8) Drop and count.
    (i) At least quarterly, unannounced currency counter and currency 
counter interface (if applicable) tests must be performed, and the test 
results documented and maintained. All denominations of currency and all 
types of cash out tickets counted by the currency counter must be 
tested. This test may be performed by internal audit or the TGRA. The 
result of these tests must be documented and signed by the agent(s) 
performing the test.
    (ii) At least quarterly, unannounced weigh scale and weigh scale 
interface (if applicable) tests must be performed, and the test results 
documented and maintained. This test may be performed by internal audit 
or the TGRA. The result of these tests must be documented and signed by 
the agent(s) performing the test.
    (iii) For computerized key security systems controlling access to 
drop and count keys, perform the following procedures:
    (A) At least quarterly, review the report generated by the 
computerized key security system indicating the transactions performed 
by the individual(s) that adds, deletes, and changes users' access 
within the system (i.e., system administrator). Determine whether the 
transactions completed by the system administrator provide adequate 
control over the access to the drop and count keys. Also, determine 
whether any drop and count key(s) removed or returned to the key cabinet 
by the system administrator was properly authorized;
    (B) At least quarterly, review the report generated by the 
computerized key security system indicating all transactions performed 
to determine whether any unusual drop and count key removals or key 
returns occurred; and

[[Page 186]]

    (C) At least quarterly, review a sample of users that are assigned 
access to the drop and count keys to determine that their access to the 
assigned keys is appropriate relative to their job position.
    (iv) At least quarterly, an inventory of all controlled keys must be 
performed and reconciled to records of keys made, issued, and destroyed. 
Investigations must be performed for all keys unaccounted for, and the 
investigation documented.
    (9) Cage, vault, cash, and cash equivalents.
    (i) At least monthly, the cage accountability must be reconciled to 
the general ledger.
    (ii) At least monthly, trace the amount of cage deposits to the 
amounts indicated in the bank statements.
    (iii) Twice annually, a count must be performed of all funds in all 
gaming areas (i.e. cages, vaults, and booths (including reserve areas), 
kiosks, cash-out ticket redemption machines, and change machines. Count 
all chips and tokens by denomination and type. Count individual straps, 
bags, and imprest banks on a sample basis. Reconcile all amounts counted 
to the amounts recorded on the corresponding accountability forms to 
ensure that the proper amounts are recorded. Maintain documentation 
evidencing the amount counted for each area and the subsequent 
comparison to the corresponding accountability form. The count must be 
completed within the same gaming day for all areas.
    (A) Counts must be observed by an individual independent of the 
department being counted. It is permissible for the individual 
responsible for the funds to perform the actual count while being 
observed.
    (B) Internal audit may perform and/or observe the two counts.
    (iv) At least annually, select a sample of invoices for chips and 
tokens purchased, and trace the dollar amount from the purchase invoice 
to the accountability document that indicates the increase to the chip 
or token inventory to ensure that the proper dollar amount has been 
recorded.
    (v) At each business year end, create and maintain documentation 
evidencing the amount of the chip/token liability, the change in the 
liability from the previous year, and explanations for adjustments to 
the liability account including any adjustments for chip/token float.
    (vi) At least monthly, review a sample of returned checks to 
determine that the required information was recorded by cage agent(s) 
when the check was cashed.
    (vii) At least monthly, review exception reports for all 
computerized cage systems for propriety of transactions and unusual 
occurrences. The review must include, but is not limited to, voided 
authorizations. All noted improper transactions or unusual occurrences 
identified must be investigated and the results documented.
    (viii) Daily, reconcile all parts of forms used to document 
increases/decreases to the total cage inventory, investigate any 
variances noted, and document the results of such investigations.
    (10) Inventory.
    (i) At least monthly, verify receipt, issuance, and use of 
controlled inventory, including, but not limited to, bingo cards, pull 
tabs, playing cards, keys, pre-numbered and/or multi-part forms.
    (ii) Periodically perform minimum bankroll calculations to ensure 
that the gaming operation maintains cash in an amount sufficient to 
satisfy the gaming operation's obligations.



Secs. 543.25-543.49  [Reserved]

                        PARTS 544	546 [RESERVED]



PART 547_MINIMUM TECHNICAL STANDARDS FOR CLASS II GAMING SYSTEMS
AND EQUIPMENT--Table of Contents



Sec.
547.1  What is the purpose of this part?
547.2  What are the definitions for this part?
547.3  Who is responsible for implementing these standards?
547.4  What are the rules of general application for this part?
547.5  How does a tribal government, TGRA, or tribal gaming operation 
          comply with this part?
547.6  What are the minimum technical standards for enrolling and 
          enabling Class II gaming system components?

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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 TGRA apply to implement an alternate minimum standard 
          to those required by this part?

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

    Source: 77 FR 58479, Sept. 21, 2012, 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 play of Class II games. This part establishes the minimum 
technical standards governing the use of such aids.



Sec. 547.2  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 an 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.
    Advertised top prize. The highest single prize available based on 
information contained in the prize schedule and help screens.
    Agent. A person authorized by the tribal gaming operation, as 
approved by the TGRA, to make decisions or to perform tasks or actions 
on behalf of the tribal gaming operation.
    Audit mode. The mode in which it is possible to view Class II gaming 
system accounting functions and statistics and perform non-player-
related functions.
    Cancel credit. An action initiated by the Class II gaming system by 
which 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.
    CD-ROM. Compact Disc--Read Only Memory.
    Chair. The Chair of the National Indian Gaming Commission.
    Class II gaming. Class II gaming has the same meaning as defined 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 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.

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    Electromagnetic interference. The disruption of operation of an 
electronic device when it is in the vicinity of an electromagnetic field 
in the radio frequency spectrum that is caused by another electronic 
device.
    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.
    Enroll. The process by which a Class II gaming system identifies and 
establishes communications with an additional system component to allow 
for live gaming activity to take place on that component.
    EPROM. Erasable Programmable Read Only Memory--a non-volatile 
storage chip or device 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 system.
    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, such as a bill validator.
    Financial instrument dispenser. Any component that dispenses 
financial instruments, such as a ticket printer.
    Financial instrument storage component. Any component that stores 
financial instruments, such as a drop box.
    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 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. A person who is a customer or guest of the tribal gaming 
operation and may interact with a Class II game. Also may be referred to 
as a ``player''.
    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(s) 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 a 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

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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 TGRA pursuant to 
Sec. 547.5(f).
    TGRA. Tribal gaming regulatory authority, which is the entity 
authorized by tribal law to regulate gaming conducted pursuant to the 
Indian Gaming Regulatory Act.
    Unenroll. The process by which a Class II gaming system disconnects 
an enrolled system component, disallowing any live gaming activity to 
take place on that component.
    Voucher. A financial instrument of fixed wagering value, usually 
paper, that can be used only 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 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. 547.3  Who is responsible for implementing these standards?

    (a) Minimum standards. These are minimum standards and a TGRA may 
establish and implement additional technical standards that do not 
conflict with the standards set out in this part.
    (b) 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.
    (c) Only applicable standards apply. Gaming equipment and software 
must meet all applicable requirements of this part. For example, if a 
Class II gaming system lacks the ability to print or accept vouchers, 
then any standards that govern vouchers do not apply. These standards do 
not apply to associated equipment such as voucher and kiosk systems.
    (d) State jurisdiction. Nothing in this part should be construed to 
grant to a state jurisdiction over Class II gaming or to extend a 
state's jurisdiction over Class III gaming.



Sec. 547.4  What are the rules of general application for this part?

    (a) Fairness. No Class II gaming system may cheat or mislead users. 
All prizes advertised must be available to win during the game. A test 
laboratory must calculate and/or verify the mathematical expectations of 
game play, where applicable, in accordance with the manufacturer stated 
submission. The results must be included in the test laboratory's report 
to the TGRA. At the request of the TGRA, the manufacturer must also 
submit the mathematical expectations of the game play to the TGRA.
    (b) Approved gaming equipment and software only. All gaming 
equipment and software used with Class II gaming systems must be 
identical in all respects to a prototype reviewed and tested by a 
testing laboratory and approved for use by the TGRA pursuant to 
Sec. 547.5(a) through (c).
    (c) Proper functioning. All gaming equipment and software used with 
Class II gaming systems must perform according to the manufacturer's 
design and operating specifications.



Sec. 547.5  How does a tribal government, TGRA, or tribal gaming 
operation comply with this part?

    (a) Grandfathered gaming systems: Any Class II gaming system 
manufactured before November 10, 2008, that is not already certified 
pursuant to this sub-section or compliant with paragraph (c) of this 
section may be made available for use at any tribal gaming operation if:
    (1) The TGRA submits the Class II gaming system software that 
affects the play of the Class II game, together with the signature 
verification required by Sec. 547.8(f) to a testing laboratory 
recognized pursuant to paragraph (f) of this section within 120 days 
after October 22, 2012;

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    (2) The testing laboratory tests the submission to the standards 
established by Sec. 547.8(b), Sec. 547.8(f), Sec. 547.14, and any 
additional technical standards adopted by the TGRA;
    (3) The testing laboratory provides the TGRA with a formal written 
report setting forth and certifying to the findings and conclusions of 
the test;
    (4) The TGRA makes 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. A TGRA may make such a finding 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), Sec. 547.14, and any 
other technical standards adopted by the TGRA. If the TGRA 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), 
Sec. 547.14, or any other technical standards adopted by the TGRA, then 
the gaming system must immediately be removed from play and not be 
utilized.
    (5) The TGRA retains 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; and
    (6) The TGRA retains 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.
    (b) Grandfather provisions. All Class II gaming systems manufactured 
on or before November 10, 2008, that have been 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 ten years from November 10, 2008.
    (2) Grandfathered Class II gaming systems may only be used as 
approved by the TGRA. The TGRA must transmit its notice of that 
approval, identifying the grandfathered Class II gaming system and its 
components, to the Commission.
    (3) Remote communications may only be allowed if authorized by the 
TGRA.
    (4) As permitted by the TGRA, 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.
    (5) 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 TGRA finds will maintain or 
advance the Class II gaming system's overall compliance with this part 
or any applicable provisions of part 543 of this chapter, after 
receiving a new testing laboratory report that the modifications are 
compliant with the standards established by Sec. 547.4(a), 
Sec. 547.8(b), Sec. 547.14, and any other standards adopted by the TGRA;
    (ii) Any hardware modifications that the TGRA finds will maintain or 
advance the Class II gaming system's overall compliance with this part 
or any applicable provisions of part 543 of this chapter; and
    (iii) Any other modification to the software of a grandfathered 
Class II gaming system that the TGRA 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 part 543 of this chapter.
    (iv) No such modification may be implemented without the approval of 
the TGRA. The TGRA must 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 must 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.

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552a; or the Indian Gaming Regulatory Act, 25 U.S.C. 2716(a).
    (6) The player interface must exhibit information consistent with 
Sec. 547.7(d) and any other information required by the TGRA.
    (7) If a grandfathered Class II gaming system is approved pursuant 
to paragraph (c) of this section, it ceases to be a grandfathered system 
and the restrictions of paragraph (a) and (b) of this section no longer 
apply.
    (c) Submission, testing, and approval--generally. Except as provided 
in paragraphs (b) and (d) of this section, a TGRA may not permit the use 
of any Class II gaming system, or any associated cashless system or 
voucher system or any modification thereto, in a tribal gaming operation 
unless:
    (1) The Class II gaming system, cashless system, voucher system, or 
modification thereto 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 part 543 of this chapter that are 
testable by the testing laboratory; and
    (iii) The TGRA;
    (3) The testing laboratory provides a formal written report to the 
party making the submission, setting forth and certifying its findings 
and conclusions, and noting compliance with any standard established by 
the TGRA pursuant to paragraph (c)(2)(iii) of this section;
    (4) The testing laboratory's written report confirms that the 
operation of a player interface prototype has been certified that it 
will not be compromised or affected by electrostatic discharge, liquid 
spills, electromagnetic interference, radio frequency interference, or 
any other tests required by the TGRA;
    (5) Following receipt of the testing laboratory's report, the TGRA 
makes a finding that the Class II gaming system, cashless system, or 
voucher system conforms to the standards established by:
    (i) This part;
    (ii) Any applicable provisions of part 543 of this chapter that are 
testable by the testing laboratory; and
    (iii) The TGRA.
    (6) The TGRA retains a copy of the testing laboratory's report 
required by paragraph (c) of this section for as 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 tribal gaming operation.
    (d) Emergency hardware and software modifications. (1) A TGRA, in 
its discretion, may permit the modification of previously approved 
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 TGRA authorizes modified software or hardware to be made 
available for play or use without prior testing laboratory review, the 
TGRA must 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 part 543 of this chapter that 
are testable by the testing laboratory; and
    (iii) Immediately provide the TGRA with a software signature 
verification tool meeting the requirements of Sec. 547.8(f) for any new 
or modified software.
    (3) If a TGRA authorizes a software or hardware modification under 
this paragraph, it must 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 must make the record available to the Commission upon 
request. The Commission

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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 does 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 TGRA 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 $3,000,000.
    (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 TGRA.
    (ii) It demonstrates its technical skill and capability to the TGRA.
    (iii) If the testing laboratory is owned or operated by, or 
affiliated with, a tribe, it must be independent from the manufacturer 
and gaming operator for whom it is providing the testing, evaluating, 
and reporting functions required by this section.
    (iv) The TGRA:
    (A) Makes a suitability determination of the testing laboratory 
based upon standards no less stringent than those set out in 
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 TGRA determines that 
the testing laboratory is qualified to test and evaluate Class II gaming 
systems.
    (2) The TGRA must:
    (i) Maintain a record of all determinations made pursuant to 
paragraphs (f)(1)(iii) and (f)(1)(iv) of this section for a minimum of 
three years and must 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 TGRA.

[77 FR 58479, Sept. 21, 2012, as amended at 78 FR 24062, Apr. 24, 2013]



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



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

    (a) 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-

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shelf, must display a unique identifier such as a part number and/or 
revision number, which must 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 must be capable of being sealed.
    (b) Electrostatic discharge. Class II gaming system components 
accessible to the public must 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 must not cause damage or inhibit operation or 
integrity of the Class II gaming system.
    (c) Physical enclosures. Physical enclosures must be of a robust 
construction designed to resist determined illegal entry. All 
protuberances and attachments such as buttons, identification plates, 
and labels must be sufficiently robust to avoid unauthorized removal.
    (d) Player interface. The player interface must exhibit a serial 
number and date of manufacture and include a method or means to:
    (1) Display information to a player; and
    (2) Allow the player to interact with the Class II gaming system.
    (e) Account access components. A Class II gaming system component 
that reads account access media must be located within a secure and 
locked area, 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) Must be constructed so that physical tampering leaves evidence 
of such tampering; and
    (2) Must provide a method to enable the Class II gaming system to 
interpret and act upon valid or invalid input or error condition.
    (f) Financial instrument storage components. Any financial 
instrument storage components managed by Class II gaming system software 
must be located within a secure and locked area, cabinet, or housing 
that is of a robust construction designed to resist determined illegal 
entry and to protect internal components.
    (g) 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 must:
    (i) Be located within a secure and locked area, 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 TGRA 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 may be available for play. For example, credits may not be 
available for play until a financial instrument 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 must be recorded as required 
by Sec. 547.9(a) and the applicable provisions of any Commission and 
TGRA regulations governing minimum internal control standards.
    (h) 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 tribal gaming operation agent must:
    (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

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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 TGRA regulations 
governing minimum internal control standards.
    (2) The monetary amount related to all valid financial instrument 
transactions by the Class II gaming system must be recorded as required 
by Sec. 547.9(a), the applicable provisions of part 543 of this chapter, 
and any TGRA regulations governing minimum internal control standards.
    (i) 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 tribal gaming operation agent 
must 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 that can affect the integrity of the Class II gaming 
system must be capable of being sealed by the TGRA.
    (j) Door access detection. All components of the Class II gaming 
system that are locked in order to meet the requirements of this part 
must include a sensor or other methods to monitor an open door. A door 
open sensor, and its components or cables, must be secure against 
attempts to disable them or interfere with their normal mode of 
operation.
    (k) Separation of functions/no limitations on technology. Nothing 
herein prohibits the account access component, financial instrument 
storage component, financial instrument acceptor, and financial 
instrument dispenser from being included within the same component or 
being separated into individual components.



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

    (a) Player interface displays. (1) If not otherwise provided to the 
player, the player interface must 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 must 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; 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 must follow and not deviate from a constant set of rules 
for each game provided to players pursuant to Sec. 547.16. There must be 
no undisclosed changes of rules.
    (2) The Class II gaming system may not alter or allow to be altered 
the card permutations 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 may be sold for any common draw.
    (3) No game play may commence, and no financial instrument or credit 
may be accepted on the affected player interface, in the presence of any 
fault condition that affects the outcome of the game, or while in test, 
audit, or lock-up mode.
    (4) Each player must initiate his or her participation in the play 
of a game.
    (c) Audit mode. (1) If an audit mode is provided, the Class II 
gaming system must, for those components actively involved in the audit:
    (i) Provide 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 TGRA;
    (ii) Display player interface identification; and
    (iii) Display software version or game identification.
    (2) Audit mode must be accessible by a secure method such as an 
agent PIN, key, or other auditable access control.

[[Page 195]]

    (3) Accounting function data must be accessible by an agent at any 
time, except during a payout, during a handpay, or during play.
    (4) The Class II gaming system must 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 must:
    (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 so as to enable the TGRA or operator to clearly 
identify the 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 must display:
    (i) Play start time, end time, and date;
    (ii) The total number of credits at the start of play;
    (iii) The purchase or wager amount;
    (iv) The total number of credits at the end of play;
    (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, 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, 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 
must 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 TGRA an industry-standard methodology, acceptable to the TGRA, 
for verifying the Class II gaming system game software. For example, 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 
must, 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) Multigame. If multiple games are offered for player selection at 
the player interface, the player interface must:

[[Page 196]]

    (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.
    (i) Program interruption and resumption. The Class II gaming system 
software must be designed so that upon resumption following any 
interruption, the system:
    (1) Is able to return to a known state;
    (2) Must check for any fault condition;
    (3) Must verify the integrity of data stored in critical memory;
    (4) Must return the purchase or wager amount to the player in 
accordance with the rules of the game; and
    (5) Must 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 must be conducted in a 
secure manner approved by the TGRA. 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 must provide a means of creating a progressive balancing 
report for each progressive link it controls. At a minimum, that report 
must 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 must 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 play recall information required by paragraph (d) of 
this section;
    (v) Game play recall information for the current game play, 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 must be maintained using a methodology that 
enables errors to be identified and acted upon. All accounting and 
recall functions must be verified as necessary to ensure their ongoing 
integrity.
    (3) The validity of affected data stored in critical memory must 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 must include a user account lockout after 
a predetermined

[[Page 197]]

number of consecutive failed attempts to access the Class II gaming 
system.



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

    (a) Required accounting data. The following minimum accounting data, 
however named, must be maintained by the Class II gaming system:
    (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 must be 
tracked independently per financial instrument acceptor, and as required 
by applicable requirements of TGRA regulations that meet or exceed the 
minimum internal control standards at 25 CFR part 543.
    (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 must be tracked independently per financial 
instrument dispenser, and as required by applicable requirements of TGRA 
regulations that meet or exceed the minimum internal control standards 
at 25 CFR part 543.
    (b) Accounting data storage. If the Class II gaming system 
electronically maintains accounting data:
    (1) Accounting data must be stored with at least eight decimal 
digits.
    (2) Credit balances must 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 
must be immediately updated in full.
    (4) Accounting data must be updated upon the occurrence of the 
relevant accounting event.
    (5) Modifications to accounting data must 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 must not 
corrupt data.
    (d) Credit balance display and function. (1) Any credit balance 
maintained at the player interface must 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 that:
    (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 must 
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?

    (a) Fault events. (1) The following are fault events that must be 
capable of being recorded by the Class II gaming system:

------------------------------------------------------------------------
                                           Definition and action to be
                 Event                                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 must indicate
                                          what financial storage
                                          component is full.
(iii) Financial output component empty.  Reported when a financial
                                          instrument dispenser is empty.
                                          The event message must
                                          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 must
                                          cease immediately, and an
                                          appropriate message must be
                                          displayed, if possible.
(vi) Progressive communication fault...  If applicable; when
                                          communications with a
                                          progressive controller
                                          component is in a known fault
                                          state.

[[Page 198]]

 
(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 must cease
                                          immediately, and an
                                          appropriate message must be
                                          displayed, if possible.
------------------------------------------------------------------------

    (2) The occurrence of any event identified in paragraph (a)(1) of 
this section must be recorded.
    (3) Upon clearing any event identified in paragraph (a)(1) of this 
section, the Class II gaming system must:
    (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 must 
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. The following non-fault events are to be acted 
upon as described below, if applicable:

------------------------------------------------------------------------
                 Event                              Definition
------------------------------------------------------------------------
(1) Player interface off during play...  Indicates power has been lost
                                          during game play. This
                                          condition must be reported by
                                          the affected component(s).
(2) Player interface power on..........  Indicates the player interface
                                          has been turned on. This
                                          condition must be reported by
                                          the affected component(s).
(3) Financial instrument storage         Indicates that a financial
 component container/stacker removed.     instrument storage container
                                          has been removed. The event
                                          message must indicate which
                                          storage container was removed.
------------------------------------------------------------------------



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

    (a) Credit acceptance, generally. (1) Upon any credit acceptance, 
the Class II gaming system must register the correct number of credits 
on the player's credit balance.
    (2) The Class II gaming system must reject financial instruments 
deemed invalid.
    (b) Credit redemption, generally. (1) For cashable credits on a 
player interface, players must 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 must be displayed.
    (2) For cashable credits not on a player interface, the player must 
be allowed to cash out and/or redeem those credits at any time.
    (3) A Class II gaming system must not automatically pay an award 
subject to mandatory tax reporting or withholding.
    (4) Credit redemption by voucher or coupon must 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 must 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 
electronic player interface for audit purposes.
    (5) Valid vouchers and coupons from a voucher system must contain 
the following:
    (i) Tribal gaming operation name and location;

[[Page 199]]

    (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 
must 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 must reject any transfers from voucher systems or cashless 
systems that are not even multiples of the Class II gaming system 
denomination.
    (8) Voucher systems must 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?

    (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 must use secure methodologies that will deliver the 
download data without alteration or modification, in accordance with 
Sec. 547.15(a).
    (3) Downloads conducted during operational periods must be performed 
in a manner that will not affect game play.
    (4) Downloads must not affect the integrity of accounting data.
    (5) The Class II gaming system must be capable of providing:
    (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.
    (b) Verifying downloads. Downloaded software on a Class II gaming 
system must be capable of being verified by the Class II gaming system 
using a software signature verification method that meets the 
requirements of Sec. 547.8(f).



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

    (a) Removable program storage media. All removable program storage 
media must 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) must lock up and enter a fault state.
    (b) Nonrewritable program storage media. (1) All EPROMs and 
Programmable Logic Devices that have erasure windows must be fitted with 
covers over their erasure windows.
    (2) All unused areas of EPROMs must be written with the inverse of 
the erased state (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, must be write-protected or otherwise protected 
from unauthorized modification.

[[Page 200]]

    (4) The write cycle must 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 must be structured so there is a verifiable 
separation of fixed data (such as program, fixed parameters, DLLs) and 
variable data.
    (d) Identification of program storage media. All program storage 
media that is not rewritable in circuit, (EPROM, CD-ROM) must be 
uniquely identified, displaying:
    (1) Manufacturer;
    (2) Program identifier;
    (3) Program version number(s); and
    (4) Location information, if critical (socket position 3 on the 
printed circuit board).



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

    (a) Properties. All RNGs must produce output having the following 
properties:
    (1) Statistical randomness;
    (2) Unpredictability; and
    (3) Non-repeatability.
    (b) Statistical randomness. (1) Numbers or other designations 
produced by an RNG must 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 that 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 or other designations produced by an RNG must pass the 
statistical tests for randomness to a 99% confidence level, which may 
include:
    (i) Chi-square test;
    (ii) Runs test (patterns of occurrences must not be recurrent); and
    (iii) Serial correlation test potency and degree of serial 
correlation (outcomes must be independent from the previous game).
    (iv) Equi-distribution (frequency) test;
    (v) Gap test;
    (vi) Poker test;
    (vii) Coupon collector's test;
    (viii) Permutation test;
    (ix) Spectral test; or
    (x) Test on subsequences.
    (c) Unpredictability. (1) It must not be feasible to predict future 
outputs of an RNG, even if the algorithm and the past sequence of 
outputs are known.
    (2) Unpredictability must 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 may not be initialized to reproduce 
the same output stream that it has produced before, nor may any two 
instances of an RNG produce the same stream as each other. This property 
must 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 must 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 must not be arbitrarily discarded or selected.

[[Page 201]]

    (4) Where a sequence of outputs is required, the whole of the 
sequence in the order generated must be used in accordance with the game 
rules.
    (5) The Class II gaming system must neither adjust the RNG process 
or game outcomes based on the history of prizes obtained in previous 
games nor use any reflexive software or secondary decision that affects 
the results shown to the player or game outcome.
    (f) Scaling algorithms and scaled numbers. An RNG that provides 
output scaled to given ranges must:
    (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 must 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 50 million.



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

    (a) Sensitive data. Communication of sensitive data must be secure 
from eavesdropping, access, tampering, intrusion or alteration 
unauthorized by the TGRA. Sensitive data includes, but is not 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 must not be 
accessible to the general public.
    (2) Open or unsecured wireless communications are prohibited.
    (3) Wireless communications must be secured using a methodology that 
makes eavesdropping, access, tampering, intrusion or alteration 
impractical. By way of illustration, such methodologies include 
encryption, frequency hopping, and code division multiplex access (as in 
cell phone technology).
    (c) Methodologies must 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 must record detectable, unauthorized 
access or intrusion attempts.
    (e) Remote communications may only be allowed if authorized by the 
TGRA. Class II gaming systems must have the ability to enable or disable 
remote access, and the default state must be set to disabled.
    (f) Failure of data communications must not affect the integrity of 
critical memory.
    (g) The Class II gaming system must 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?

    (a) Rules, instructions, and prize schedules, generally. The 
following must 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 Class II Gaming Systems, the prize schedule or other 
explanation

[[Page 202]]

need not state that subsets of winning patterns are not awarded as 
additional prizes (for example, five in a row does not also pay three in 
a row or four in a row), unless there are exceptions, which must be 
clearly stated.
    (b) Disclaimers. The Player Interface must 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.
    (c) Odds notification. If the odds of winning any advertised top 
prize exceeds 100 million to one, the Player Interface must display: 
``Odds of winning the advertised top prize exceeds 100 million to one'' 
or equivalent.



Sec. 547.17  How does a TGRA apply to implement an alternate minimum
standard to those required by this part?

    (a) TGRA approval. (1) A TGRA may approve an alternate standard from 
those required by this part if it has determined that the alternate 
standard will achieve a level of security and integrity sufficient to 
accomplish the purpose of the standard it is to replace. A gaming 
operation may implement an alternate standard upon TGRA approval subject 
to the Chair's decision pursuant to paragraph (b) of this section.
    (2) For each enumerated standard for which the TGRA approves an 
alternate standard, it must submit to the Chair within 30 days a 
detailed report, which must include the following:
    (i) An explanation of how the alternate standard achieves a level of 
security and integrity sufficient to accomplish the purpose of the 
standard it is to replace; and
    (ii) The alternate standard as approved and the record on which the 
approval is based.
    (3) In the event that the TGRA or the tribe's government chooses to 
submit an alternate standard request directly to the Chair for joint 
government to government review, the TGRA or tribal government may do so 
without the approval requirement set forth in paragraph (a)(1) of this 
section.
    (b) Chair review. (1) The Chair may approve or object to an 
alternate standard approved by a TGRA.
    (2) If the Chair approves the alternate standard, the Tribe may 
continue to use it as authorized by the TGRA.
    (3) If the Chair objects to the alternate standard, the operation 
may no longer use the alternate standard and must follow the relevant 
technical standard set forth in this part.
    (4) Any objection by the Chair must be in written form with an 
explanation why the alternate standard as approved by the TGRA does not 
provide a level of security or integrity sufficient to accomplish the 
purpose of the standard it is to replace.
    (5) If the Chair fails to approve or object in writing within 60 
days after the date of receipt of a complete submission, the alternate 
standard is considered approved by the Chair. The Chair may, upon 
notification to the TGRA, extend this deadline an additional 60 days.
    (c) Appeal of Chair decision. A TGRA may appeal the Chair's decision 
pursuant to 25 CFR chapter III, subchapter H.

                        PARTS 548	549 [RESERVED]

[[Page 203]]



   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  Tribal eligibility determination.
556.6  Report to the Commission.
556.7  Notice.
556.8  Compliance with this part.

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

    Source: 78 FR 5279, Jan. 25, 2013, unless otherwise noted.



Sec. 556.1  Scope of this part.

    Unless a tribal-state compact assigns 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. 
The procedures and standards of this part apply only to primary 
management officials and key employees. This part does not apply to any 
license that is intended to expire within 90 days of issuance.



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 
(NIGC) members and staff who have need for the information in the 
performance of their official duties. The information may be disclosed 
by the Tribe or the NIGC 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 NIGC 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 license application forms used one-hundred eighty (180) days 
after February 25, 2013 shall comply with this section.

[78 FR 5279, Jan. 25, 2013, as amended at 80 FR 31994, June 5, 2015]



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:
    (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.

[[Page 204]]

    (c) All license application forms used 180 days after February 25, 
2013 shall comply with this section.



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 five years: Business and 
employment positions held, ownership interests in those businesses, 
business and residence addresses, and driver's 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) If, in the course of a background investigation, a tribe 
discovers that the applicant has a notice of results on file with the 
NIGC from a prior investigation and the tribe has access to the earlier 
investigative materials (either through the NIGC or the previous tribal 
investigative body), the tribe may rely on those materials and update 
the investigation and investigative report under Sec. 556.6(b)(1).
    (c) In conducting a background investigation, a tribe or its agents 
shall keep confidential the identity of each person interviewed in the 
course of the investigation.



Sec. 556.5  Tribal eligibility determination.

    A tribe shall conduct an investigation sufficient to make an 
eligibility determination.
    (a) To make a finding concerning the eligibility of a key employee 
or primary management official for granting of a gaming license, an 
authorized tribal official shall review a person's:
    (1) Prior activities;
    (2) Criminal record, if any; and
    (3) Reputation, habits, and associations.
    (b) 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

[[Page 205]]

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.

[78 FR 5279, Jan. 25, 2013, as amended at 80 FR 31994, June 5, 2015]



Sec. 556.6  Report to the Commission.

    (a) When a tribe employs a primary management official or a key 
employee, the tribe shall maintain a complete application file 
containing the information listed under Sec. 556.4(a)(1) through (14).
    (b) Before issuing a license to a primary management official or to 
a key employee, a tribe shall:
    (1) Create and maintain an investigative report on each background 
investigation. An investigative report shall include all of the 
following:
    (i) Steps taken in conducting a background investigation;
    (ii) Results obtained;
    (iii) Conclusions reached; and
    (iv) The basis for those conclusions.
    (2) Submit a notice of results of the applicant's background 
investigation to the Commission no later than sixty (60) days after the 
applicant begins work. The notice of results shall contain:
    (i) Applicant's name, date of birth, and social security number;
    (ii) Date on which applicant began or will begin work as key 
employee or primary management official;
    (iii) A summary of the information presented in the investigative 
report, which shall at a minimum include a listing of:
    (A) Licenses that have previously been denied;
    (B) Gaming licenses that have been revoked, even if subsequently 
reinstated;
    (C) Every known criminal charge brought against the applicant within 
the last 10 years of the date of application; and
    (D) Every felony of which the applicant has been convicted or any 
ongoing prosecution.
    (iv) A copy of the eligibility determination made under Sec. 556.5.



Sec. 556.7  Notice.

    (a) All notices under this part shall be provided to the Commission 
through the appropriate Regional office.
    (b) Should a tribe wish to submit notices electronically, it should 
contact the appropriate Regional office for guidance on acceptable 
document formats and means of transmission.



Sec. 556.8  Compliance with this part.

    All tribal gaming ordinances and ordinance amendments approved by 
the Chair prior to February 25, 2013 and that reference this part, do 
not need to be amended to comply with this part. All future ordinance 
submissions, however, must comply.

[78 FR 5279, Jan. 25, 2013, as amended at 80 FR 31994, June 5, 2015]

                           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  Review of notice of results for a key employee or primary 
          management official.
558.3  Notification to NIGC of license decisions and retention 
          obligations
558.4  Notice of disqualifying information and licensee right to a 
          hearing.
558.5  Submission of notices.
558.6  Compliance with this part.

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

    Source: 78 FR 5280, Jan. 25, 2013, unless otherwise noted.



Sec. 558.1  Scope of this part.

    Unless a tribal-state compact assigns responsibility to an entity 
other than a tribe, the licensing authority for class II or class III 
gaming is a tribal authority. The procedures and standards of this part 
apply only to licenses for primary management officials and key 
employees. This part does not apply to any license that is intended to 
expire within 90 days of issuance.

[[Page 206]]



Sec. 558.2  Review of notice of results for a key employee or primary
management official.

    (a) Upon receipt of a complete notice of results for a key employee 
or primary management official as required by Sec. 556.6(b)(2) of this 
chapter, the Chair has 30 days to request additional information from a 
tribe concerning the applicant or licensee and to object.
    (b) If the Commission has no objection to issuance of a license, it 
shall notify the tribe within thirty (30) days of receiving notice of 
results pursuant to Sec. 556.6(b)(2) of this chapter.
    (c) If, within the 30-day period described in paragraph (a) of this 
section, 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 applicant for whom the tribe has provided a 
notice of results, 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.
    (d) If the tribe has issued the license before receiving the 
Commission's statement of objections, notice and hearing shall be 
provided to the licensee as provided by Sec. 558.4.

[78 FR 5280, Jan. 25, 2013, as amended at 78 FR 21826, Apr. 12, 2013]



Sec. 558.3  Notification to NIGC of license decisions and retention
obligations.

    (a) After a tribe has provided a notice of results of the background 
check to the Commission, a tribe may license a primary management 
official or key employee.
    (b) Within 30 days after the issuance of the license, a tribe shall 
notify the Commission of its issuance.
    (c) A gaming operation shall not employ a key employee or primary 
management official who does not have a license after ninety (90) days.
    (d) If a tribe does not license an applicant--
    (1) The tribe shall notify the Commission; and
    (2) Shall forward copies of its eligibility determination and notice 
of results, under Sec. 556.6(b)(2) of this chapter, to the Commission 
for inclusion in the Indian Gaming Individuals Record System.
    (e) A tribe shall retain the following for inspection by the Chair 
or his or her designee for no less than three years from the date of 
termination of employment:
    (1) Applications for licensing;
    (2) Investigative reports; and
    (3) Eligibility determinations.



Sec. 558.4  Notice of information impacting eligibility and licensee's
right to a hearing.

    (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. 556.5 of this chapter, the Commission shall notify the issuing 
tribe of the information.
    (b) Upon receipt of such notification under paragraph (a) of this 
section, a tribe shall immediately suspend the license and shall provide 
the licensee with written notice of suspension and 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) A right to a hearing under this part shall vest only upon 
receipt of a license granted under an ordinance approved by the Chair.
    (e) 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 within 45 days of receiving notification from the Commission 
pursuant to paragraph (a) of this section.



Sec. 558.5  Submission of notices.

    (a) All notices under this part shall be provided to the Commission 
through the appropriate Regional office.
    (b) Should a tribe wish to submit notices electronically, it should 
contact the appropriate Regional office for guidance on acceptable 
document formats and means of transmission.



Sec. 558.6  Compliance with this part.

    All tribal gaming ordinances and ordinance amendments that have been 
approved by the Chair prior to February 25, 2013 and that reference this

[[Page 207]]

part do not need to be amended to comply with this section. All future 
ordinance submissions, however, must comply.



PART 559_FACILITY LICENSE NOTIFICATIONS 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 Chair that it is considering issuing 
          a new facility license?
559.3  When must a tribe submit a copy of a newly issued or renewed 
          facility license to the Chair?
559.4  What must a tribe submit to the Chair with the copy of each 
          facility license that has been issued or renewed?
559.5  Must a tribe notify the Chair if a facility license is terminated 
          or expires or if a gaming place, facility, or location closes 
          or reopens?
559.6  May the Chair require a tribe to submit applicable and available 
          Indian lands or environmental and public health and safety 
          documentation regarding any gaming place, facility, or 
          location where gaming will occur?
559.7  May a tribe submit documents required by this part 
          electronically?

    Authority: 25 U.S.C. 2701, 2702(3), 2703(4), 2705, 2706(b)(10), 
2710, 2719.

    Source: 77 FR 58772, Sept. 24, 2012, 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 obtains an attestation certifying that the 
construction and maintenance of the gaming facility, and the operation 
of that gaming, is conducted in a manner that 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.

[77 FR 58772, Sept. 24, 2012, as amended at 80 FR 31994, June 5, 2015]



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

    (a) A tribe shall submit to the Chair 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.
    (1) A tribe may request an expedited review of 60 days and the Chair 
shall respond to the tribe's request, either granting or denying the 
expedited review, within 30 days.
    (2) Although not necessary, a tribe may request written confirmation 
from the Chair.
    (b) 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.
    (c) A tribe does not need to submit to the Chair a notice that a 
facility license is under consideration for issuance for occasional 
charitable events lasting not more than one week.



Sec. 559.3  When must a tribe submit a copy of a newly issued or
renewed facility license to the Chair?

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



Sec. 559.4  What must a tribe submit to the Chair with the copy of 
each facility license that has been issued or renewed?

    A tribe shall submit to the Chair with each facility license an 
attestation certifying that by issuing the facility license, the tribe 
has determined

[[Page 208]]

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. This means 
that 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.

[77 FR 58772, Sept. 24, 2012, as amended at 80 FR 31995, June 5, 2015]



Sec. 559.5  Must a tribe notify the Chair if a facility license is 
terminated or expires or if a gaming place, facility, or location
closes or reopens?

    A tribe must notify the Chair within 30 days if a facility license 
is terminated or expires or if a gaming place, facility, or location 
closes or reopens. A tribe need not provide a notification of seasonal 
closures or temporary closures with a duration of less than 180 days.



Sec. 559.6  May the Chair require a tribe to submit applicable and
available 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 applicable and available Indian lands or 
environmental and public health and safety documentation requested by 
the Chair.



Sec. 559.7  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 209]]



           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.
571.4  Investigation completion letter.

                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 is 
addressed in Sec. 584.9 of this chapter.

[58 FR 5842, Jan. 22, 1993, as amended at 80 FR 31995, June 5, 2015]



Sec. 571.4  Investigation completion letter.

    In instances where Commission has concluded its investigation of a 
particular matter and will not recommend the commencement of an 
enforcement proceeding against a respondent at

[[Page 210]]

that time, the Commission's authorized representative, in his or her 
discretion, may advise the party by letter that the investigation has 
been completed. An investigation completion letter does not constitute a 
finding that no violation of IGRA, NIGC regulations, or a tribe's 
approved gaming ordinance or resolution occurred. Further, an 
investigation completion letter does not preclude the reopening of an 
investigation or the initiation of an enforcement action by the Chair.

[77 FR 47517, Aug. 9, 2012, as amended at 80 FR 31995, June 5, 2015]



                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, 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

[[Page 211]]

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 584 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 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.

[58 FR 5842, Jan. 22, 1993, as amended at 80 FR 31995, June 5, 2015]



                            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;

[[Page 212]]

    (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 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]

[[Page 213]]



PART 573_COMPLIANCE AND ENFORCEMENT--Table of Contents



Sec.
573.1  What is the purpose of this part?
573.2  When may a letter of concern be issued?
573.3  Notice of violation.
573.4  When may the Chair issue an order of temporary closure?
573.5  When does an enforcement action become final agency action?

    Authority: 25 U.S.C. 2706(b)(10); 25 U.S.C. 2713; E.O. 13175, 65 FR 
67249, 3 CFR, 2000 Comp.,p.304.

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



Sec. 573.1  What is the purpose of this part?

    Voluntary compliance is the goal of the Commission. Voluntary 
compliance is achieved when a tribe and the NIGC staff are able to 
resolve any potential enforcement issues prior to the Chair issuing an 
enforcement action. This part sets forth efforts for achieving voluntary 
compliance and enforcement action when voluntary compliance is not 
forthcoming. While this part is intended to garner voluntary compliance 
through a graduated enforcement process, there may be circumstances 
under which a graduated enforcement process is omitted and an 
enforcement action must be taken. This part also sets forth general 
rules governing the Commission's enforcement of the Act, this chapter, 
and tribal ordinances and resolutions approved by the Chair under part 
522 of this chapter. Civil fines in connection with notices of violation 
issued under this part are addressed in part 575 of this chapter.

[77 FR 47518, Aug. 9, 2012, as amended at 80 FR 31995, June 5, 2015]



Sec. 573.2  When may a letter of concern be issued?

    (a) Prior to the Chair taking an enforcement action, a letter of 
concern may be provided by NIGC staff, detailing concerns regarding 
compliance with the Act, this chapter, or any tribal ordinance or 
resolution approved by the Chair under part 522 of this chapter. A 
letter of concern describes the available facts and information, 
includes a preliminary assessment regarding the incident or condition, 
and indicates that it may be a violation.
    (b) Action under this section does not constitute agency action.
    (c) A letter of concern issued under paragraph (a) of this section 
must provide a time period for the respondent to respond. If the letter 
of concern is resolved without enforcement action, NIGC staff may send 
an investigation completion letter pursuant to Sec. 571.4 of this 
chapter.
    (d) The Chair's discretion to take an enforcement action is not 
limited or constrained in any way by this section. When the Chair takes 
enforcement action before a letter of concern is issued, the enforcement 
action must state the reasons for moving directly to an enforcement 
action without first issuing a letter of concern.

[77 FR 47519, Aug. 9, 2012, as amended at 78 FR 4324, Jan. 22, 2013; 80 
FR 31995, June 5, 2015]



Sec. 573.3  Notice of violation.

    (a) The Chair 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 Chair under part 522 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.

[58 FR 5844, Jan. 22, 1993, as amended at 77 FR 47519, Aug. 9, 2012]



Sec. 573.4  When may the Chair issue an 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, the Chair may issue an order of temporary closure of

[[Page 214]]

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 is served with 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 Chair has approved under part 522 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 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.
    (7) A management contractor operates for business without a contract 
that the Chair 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 Chair has approved 
under part 522 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 Chair 
under part 522 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. 556.5 of this 
chapter, in violation of Sec. 558.4 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 Chair under part 522 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 Chair.
    (1) The Chair 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 Chair 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 Chair serves an 
order of temporary closure the respondent may appeal the order to the 
Commission under part 584 or part 585 of this chapter. Otherwise, the 
order shall remain in effect unless rescinded by the Chair for good 
cause.

[58 FR 5844, Jan. 22, 1993, as amended at 73 FR 6030, Feb. 1, 2008; 74 
FR 36940, July 27, 2009. Redesignated and amended at 77 FR 47519, Aug. 
9, 2012; 78 FR 4324, Jan. 22, 2013; 80 FR 31995, June 5, 2015]



Sec. 573.5  When does an enforcement action become final agency
action?

    An enforcement action shall become final agency action and a final 
order of the Commission when:
    (a) A respondent fails to appeal the enforcement action as provided 
for in subchapter H of this chapter and does not enter into a settlement 
agreement resolving the matter in its entirety; or

[[Page 215]]

    (b) A respondent enters into a settlement agreement resolving the 
matter in its entirety at any time after the issuance of the enforcement 
action.

[77 FR 47519, Aug. 9, 2012, as amended at 78 FR 4324, Jan. 22, 2013]

                           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.
575.7  Final assessment.

    Authority: 25 U.S.C. 2705(a), 2706, 2713, 2715; and Sec. 701, Pub. 
L. 114-74, 129 Stat. 599.

    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 $50,276 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.

[58 FR 5844, Jan. 22, 1993, as amended at 81 FR 43942, July 6, 2016; 82 
FR 12069, Feb. 28, 2017]



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

[[Page 216]]

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 584 or part 585 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 584 or part 585 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 584 or part 585 
of this chapter.

[58 FR 5844, Jan. 22, 1993, as amended at 80 FR 31995, June 5, 2015]



Sec. 575.7  Final assessment.

    (a) If the respondent fails to request a hearing as provided in part 
584 or part 585 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. 
Redesignated at 80 FR 31995, June 5, 2015]

                        PARTS 576	579 [RESERVED]

[[Page 217]]



          SUBCHAPTER H_APPEAL PROCEEDINGS BEFORE THE COMMISSION





PART 580_RULES OF GENERAL APPLICATION IN APPEAL PROCEEDINGS BEFORE
THE COMMISSION--Table of Contents



Sec.
580.1  What definitions apply?
580.2  When may the Commission waive its procedural rules governing 
          appellate proceedings before the Commission?
580.3  Who may appear before the Commission?
580.4  How do I effect service?
580.5  What happens if I file late or fail to file?
580.6  How is time computed?
580.7  What is the burden of proof and standard of review?
580.8  What will the Commission's final decision contain?
580.9  What is the effective date of the Commission's final decision?
580.10  Is the Commission's decision a final agency action?
580.11  What if the Commission does not issue a majority decision?
580.12  Does an appeal of a Chair's decision stay the effect of that 
          decision?

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

    Source: 77 FR 58945, Sept. 25, 2012, unless otherwise noted.



Sec. 580.1  What definitions apply?

    The following definitions apply to this subchapter:
    Day: A calendar day.
    De novo review: A standard of review where the Commission reviews 
the matter anew, as if it had not been reviewed by the Chair.
    Limited participant: A party who successfully petitions the 
Commission to participate on a limited basis in an ordinance appeal 
under Sec. 582.5 of this subchapter.
    Preponderance of the evidence: The degree of relevant evidence that 
a reasonable person, considering the record as a whole, would accept as 
sufficient to find that a contested fact is more likely to be true than 
untrue.
    Presiding official: The individual who presides over the hearing and 
issues the recommended decision under part 584. This individual shall 
not be under the direct control or supervision of the Commission, nor 
subject to influence by the Chair or the Commission.
    Proceeding: All or part of an appeal heard by a presiding official 
or the Commission, and decided by the Commission.
    Summary proceeding: Ordinance appeals and management contract and 
amendment appeals are summary proceedings.



Sec. 580.2  When may the Commission waive its procedural rules
governing appellate proceedings before the Commission?

    The procedural provisions of parts 580 through 585 of this 
subchapter may be waived, in whole or in part, to promote the orderly 
conduct of business on motion to the Commission or on its own motion, if 
the ends of justice so require and if to do so does not substantially 
prejudice any party, except that the Commission may not extend the time 
for filing a notice of appeal.



Sec. 580.3  Who may appear before the Commission?

    In any appellate proceeding under parts 582 through 585 of this 
subchapter, a party or limited participant may appear in person or by an 
attorney or other authorized representative. An attorney must be in good 
standing and admitted to practice before any Court of the United States, 
the District of Columbia, any tribal court, or the highest court of any 
state, territory, or possession of the United States. Any person 
appearing as an attorney or authorized representative shall file with 
the Commission a written notice of appearance. The notice must state his 
or her name, address, telephone number, facsimile number, email address, 
if any, and the name and address of the person or entity on whose behalf 
he or she appears.



Sec. 580.4  How do I effect service?

    (a) An appellant shall serve its notice of appeal on the Commission 
at the address indicated in the decision or notice that is the subject 
of the appeal.

[[Page 218]]

    (b) Copies of the notice of appeal shall be filed personally or by 
registered or certified mail, return receipt requested. All subsequent 
documents shall be served personally, by facsimile, by email to an 
address designated by a Commission employee, or by first class mail. In 
matters where a hearing has been requested, 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.
    (c) All documents filed after the notice of appeal shall be served 
on the Commission and copies concurrently served on all parties, 
intervenors, or limited participants.
    (d) Service of copies of all documents is complete at the time of 
personal service or, if service is made by mail, facsimile, or email, 
upon transmittal.
    (e) When a representative (including an attorney) has entered an 
appearance for a party, limited participant, or intervenor in a 
proceeding initiated under any provision of parts 582 through 585 of 
this subchapter, service thereafter shall be made upon the 
representative.
    (f) The Commission may extend the time for filing or serving any 
document, except a notice of appeal.
    (1) A request for an extension of time must be filed within the time 
originally allowed for filing.
    (2) For good cause, the Commission may grant an extension of time on 
its own motion.
    (g) Rules governing service of documents by the Chair or Commission 
are governed by part 519 of this chapter.



Sec. 580.5  What happens if I file late or fail to file?

    (a) Failure to file an appeal within the time provided shall result 
in a waiver of the right to appeal.
    (b) Failure to meet any deadline for the filing of any motion or 
response thereto shall result in a waiver of the right to file.



Sec. 580.6  How is time computed?

    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 falls on a Saturday, Sunday, or 
Federal legal holiday, in which case the period shall run until the end 
of the next business day. Except for appeals of temporary closure 
orders, when the period of time prescribed or allowed is less than 11 
days, intermediate Saturdays, Sundays, and legal federal holidays shall 
be excluded from the computation.

[77 FR 58945, Sept. 25, 2012, as amended at 80 FR 31995, June 5, 2015]



Sec. 580.7  What is the burden of proof and standard of review?

    (a) The Chair bears the burden of proof to support his or her action 
or decision by a preponderance of the evidence.
    (b) The Commission shall review the Chair's actions or decisions de 
novo.



Sec. 580.8  What will the Commission's final decision contain?

    The Commission may affirm, modify, or reverse, in whole or in part, 
the Chair's decision or the presiding official's recommended decision, 
or may remove a certificate of self-regulation, and will state the bases 
of its decision. The final decision will be in writing and will include:
    (a) A statement of findings and conclusions, with the bases for them 
on all material issues of fact, law, or discretion;
    (b) A ruling on each material issue; and
    (c) An appropriate grant or denial of relief.



Sec. 580.9  What is the effective date of the Commission's final decision?

    The Commission's final decision is effective immediately unless the 
Commission provides otherwise in the decision.



Sec. 580.10  Is the Commission's decision a final agency action?

    The Commission's final decision is a final agency action for 
purposes of judicial review.



Sec. 580.11  What if the Commission does not issue a majority decision?

    In the absence of a decision of a majority of the Commission within 
the

[[Page 219]]

time provided, the Chair's decision shall constitute the final decision 
of the Commission, except that if the subject of the appeal is a 
temporary closure order, the order shall be dissolved.



Sec. 580.12  Does an appeal of a Chair's decision stay the effect 
of that decision?

    Except as otherwise provided by Commission regulations at 25 CFR 
522.5 and 522.7, the filing of an appeal does not stay the effect of the 
Chair's decision. The appellant must comply with the Chair's decision 
pending the outcome of the appeal.

[77 FR 58945, Sept. 25, 2012, as amended at 80 FR 31995, June 5, 2015]



PART 581_MOTIONS IN APPEAL PROCEEDINGS BEFORE THE COMMISSION--
Table of Contents



Sec.
581.1  What is the scope of this part?
581.2  How does an entity other than a tribe request to participate on a 
          limited basis in an ordinance appeal?
581.3  How do I file a motion to intervene in appeals?
581.4  How do I file a motion before a presiding official?
581.5  How do I file a motion to supplement the record?
581.6  How do I file a motion for reconsideration?

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

    Source: 77 FR 58945, Sept. 25, 2012, unless otherwise noted.



Sec. 581.1  What is the scope of this part?

    (a) This part governs motion practice under:
    (1) Part 582 of this subchapter relating to appeals of disapprovals 
of gaming ordinances, resolutions, or amendments;
    (2) Part 583 of this subchapter relating to appeals of the approval 
or disapproval of management contracts or amendments to a management 
contract;
    (3) Part 584 of this subchapter relating to appeals before a 
presiding official of notices of violation, orders of temporary closure, 
proposed civil fine assessments, the Chair's decisions to void or modify 
management contracts, the Commission's proposals to remove certificates 
of self-regulation, the Chair's decisions to approve or object to a 
tribal gaming regulatory authority's adoption of alternate standards 
from those required by the Commission's minimum internal control 
standards and/or technical standards, and notices of late fees and late 
fee assessments; and
    (4) Part 585 of this subchapter relating to appeals to the 
Commission on written submissions of notices of violation, orders of 
temporary closure, proposed civil fine assessments, the Chair's 
decisions to void or modify management contracts, the Commission's 
proposals to remove certificates of self-regulation, the Chair's 
decisions to approve or object to a tribal gaming regulatory authority's 
adoption of alternate standards from those required by the Commission's 
minimum internal control standards and/or technical standards, and 
notices of late fees and late fee assessments.
    (b) This part also governs motion practice in hearings under 
Sec. 535.3 of this subchapter to review the Chair's decision to void or 
modify a management contract.

[77 FR 58945, Sept. 25, 2012, as amended at 78 FR 21062, Apr. 9, 2013]



Sec. 581.2  How does an entity other than a tribe request to 
participate on a limited basis in an ordinance appeal?

    Requests for limited participation in ordinance appeals are governed 
by Sec. 582.5 of this subchapter.



Sec. 581.3  How do I file a motion to intervene in appeals?

    Motions to intervene in appeals before a presiding official are 
governed by Sec. 584.5 of this subchapter. Motions to intervene in 
appeals before the Commission are governed by Sec. 585.5 of this 
subchapter.



Sec. 581.4  How do I file a motion before a presiding official?

    Motion practice before a presiding official on appeals of notices of 
violation, orders of temporary closure, proposed civil fine assessments, 
the Chair's decisions to void or modify management contracts, the 
Commission's proposals

[[Page 220]]

to remove certificates of self-regulation, the Chair's decisions to 
approve or object to a tribal gaming regulatory authority's adoption of 
alternate standards from those required by the Commission's minimum 
internal control standards and/or technical standards, and notices of 
late fees and late fee assessments is governed by Sec. 584.4 of this 
subchapter.

[78 FR 21062, Apr. 9, 2013]



Sec. 581.5  How do I file a motion to supplement the record?

    Upon its own motion or the motion of a party, the Commission may 
allow the submission of additional evidence. A party may file a motion 
for leave to submit additional evidence at any time prior to issuance of 
a final decision by the Commission. Such motion shall show with 
particularity that such additional evidence is material and that there 
were reasonable grounds for failure to previously submit such evidence. 
The Commission may adjust its time for issuing a final decision 
accordingly, unless the subject of the appeal is a temporary closure 
order.



Sec. 581.6  How do I file a motion for reconsideration?

    (a) Motions for reconsideration may be made only for final decisions 
on appeal and will only be granted if a party can establish that:
    (1) New and material evidence is now available that, despite the 
party's due diligence, was not available when the record closed;
    (2) The final decision was based on an erroneous interpretation of 
law or there has been an intervening change in the controlling law; or
    (3) A manifest injustice, clearly apparent or obvious on its face, 
will occur if the motion for reconsideration is not granted.
    (b) A motion for reconsideration and accompanying brief shall be 
filed within 30 days of the date of the Commission's final decision and 
shall be served on all parties, limited participants, and intervenors, 
if any. A motion for reconsideration shall explain the circumstances 
requiring reconsideration.
    (c) A party may file only one motion and accompanying brief for 
reconsideration.
    (d) Opposition briefs shall be filed within 20 days after the motion 
is filed.
    (e) A reply brief to the brief in opposition shall be filed within 
15 days of service of the brief in opposition.
    (f) The Commission shall issue a decision on reconsideration within 
30 days of the filing of the reply brief or of the expiration of the 
time to file a reply brief, whichever is later. The Commission shall 
issue a brief statement of the reason(s) for its decision.
    (g) If the Commission grants the motion, it may reverse or modify 
the decision, in whole or in part, from which reconsideration is sought 
or may remand to the Chair for further consideration.
    (h) The filing of a motion for reconsideration will not stay the 
effect of any decision or order and will not affect the finality of any 
decision or order for purposes of judicial review, unless so ordered by 
the Commission.



PART 582_APPEALS OF DISAPPROVALS OF GAMING ORDINANCES, RESOLUTIONS,
OR AMENDMENTS--Table of Contents



Sec.
582.1  What does this part cover?
582.2  Who may appeal the disapproval of a gaming ordinance?
582.3  How do I appeal the disapproval of a gaming ordinance?
582.4  Are motions permitted?
582.5  How does an entity other than a tribe request to participate on a 
          limited basis?
582.6  When will I receive a copy of the record on which the Chair 
          relied?
582.7  When will the Commission issue its final decision?

    Authority: 25 U.S.C. 2706, 2710, 2713, 2715.

    Source: 77 FR 58945, Sept. 25, 2012, unless otherwise noted.



Sec. 582.1  What does this part cover?

    This part applies to appeals from the Chair's decision to disapprove 
a gaming ordinance, resolution, or amendment thereto under part 522 of 
this chapter.



Sec. 582.2  Who may appeal the disapproval of a gaming ordinance?

    Only the tribe whose gaming ordinance, resolution, or amendment 
thereto is disapproved by the Chair may appeal.

[[Page 221]]



Sec. 582.3  How do I appeal the disapproval of a gaming ordinance?

    Within 30 days after the Chair serves his or her disapproval, the 
appellant must file with the Commission a notice of appeal. The notice 
of appeal must reference the decision from which the appeal is taken. 
Unless the Commission has extended the time for filing an appeal brief 
pursuant to Sec. 580.4(f) of this subchapter, the appeal brief must be 
filed within 30 days of service of the record pursuant to Sec. 582.6. 
The appeal brief shall state succinctly why the appellant believes the 
Chair's disapproval should be reversed and may include supporting 
documentation.



Sec. 582.4  Are motions permitted?

    Ordinance appeals are summary proceedings. Only motions for 
extension of time under Sec. 580.4(f) of this subchapter, motions for 
limited participation under Sec. 582.5, motions to supplement the record 
under Sec. 581.5 of this subchapter, and motions for reconsideration 
under Sec. 581.6 of this subchapter, are permitted.



Sec. 582.5  How does an entity other than a tribe request to
participate on a limited basis?

    (a) An individual, whether acting on his or her own behalf or as an 
agent of an entity, or an entity other than the tribe identified in 
Sec. 582.2, may request to participate in an appeal of an ordinance 
disapproval on a limited basis by filing a submission with the 
Commission within 10 days of the filing of the notice of appeal.
    (b) The submission may contain supporting documentation, and shall 
state:
    (1) The individual's or entity's property, financial, or other 
interest at stake in the proceeding; and
    (2) The reason(s) why the Chair's decision should be upheld or 
reversed. The submission shall address the ordinance requirements under 
Secs. 522.4, 522.5, 522.6, and 522.7 of this chapter.
    (c) The submission shall be served concurrently on the tribe 
consistent with Sec. 580.4 of this subchapter. Failure to properly serve 
the tribe may be a basis for denying limited participation.
    (d) Within 10 days after service of the submission, any party to the 
appeal may file a brief and supporting material in response to the 
submission.
    (e) Within 10 days of the filing of a response pursuant to paragraph 
(d) of this section, the Commission will notify the submitter in writing 
of its decision whether to accept and consider the submission and will 
state the basis for its decision, which it shall serve on the individual 
or entity and the tribe.



Sec. 582.6  When will I receive a copy of the record on which the 
Chair relied?

    Within 10 days of the filing of a notice of appeal, or as soon 
thereafter as practicable, the record on which the Chair relied will be 
transmitted to the tribe.



Sec. 582.7  When will the Commission issue its final decision?

    (a) Within 90 days after it receives the appeal brief or within 90 
days of its ruling on a request for limited participation brought under 
Sec. 582.5 or within 90 days of the conclusion of briefing by all 
parties, whichever is later, the Commission shall issue its final 
decision.
    (b) The Commission shall notify the tribe and any limited 
participant of its final decision and the reason(s) supporting it.



PART 583_APPEALS FROM APPROVALS OR DISAPPROVALS OF MANAGEMENT 
CONTRACTS OR AMENDMENTS TO MANAGEMENT CONTRACTS--Table of Contents



Sec.
583.1  What does this part cover?
583.2  Who may appeal the approval or disapproval of a management 
          contract or amendment to a management contract?
583.3  How do I appeal the approval or disapproval of a management 
          contract or amendment to a management contract?
583.4  Are motions permitted?
583.5  When will I receive a copy of the record on which the Chair 
          relied?
583.6  When will the Commission issue its final decision?

    Authority: 25 U.S.C. 2706, 2711, 2712, 2713, 2715.

    Source: 77 FR 58945, Sept. 25, 2012, unless otherwise noted.

[[Page 222]]



Sec. 583.1  What does this part cover?

    This part applies to appeals from the Chair's decision to approve or 
disapprove a management contract or amendment to a management contract 
under parts 533 and 535 of this chapter.



Sec. 583.2  Who may appeal the approval or disapproval of a management
contract or amendment to a management contract?

    Only a party to the management contract or amendment thereto 
approved or disapproved by the Chair may appeal.



Sec. 583.3  How do I appeal the approval or disapproval of a management
contract or amendment to a management contract?

    (a) Within 30 days after the Chair serves his or her determination, 
the appellant must file a notice of appeal with the Commission and serve 
it on all parties to the management contract. The notice of appeal must 
reference the decision from which the appeal is taken. Unless the 
Commission has extended the time for filing an appeal brief pursuant to 
Sec. 580.4(f) of this subchapter, the appeal brief must be filed within 
30 days of service of the record pursuant to Sec. 583.5. The brief shall 
state succinctly why the appellant believes the Chair's approval or 
disapproval should be reversed and may include supporting documentation.
    (b) Another party to the management contract may oppose the appeal 
by filing an opposition brief with the Commission within 20 days after 
service of the appellant's brief. The opposition brief shall state 
succinctly why the party believes the Chair's approval or disapproval 
should be upheld and may include supporting documentation.
    (c) The appellant may file a reply brief within 15 days of service 
of the opposition brief.



Sec. 583.4  Are motions permitted?

    Management contract and amendment appeals are summary proceedings. 
Only motions for an extension of time under Sec. 580.4(f) of this 
subchapter, motions to supplement the record under Sec. 581.5 of this 
subchapter, and motions for reconsideration under Sec. 581.6 of this 
subchapter, are permitted.



Sec. 583.5  When will I receive a copy of the record on which the 
Chair relied?

    Within 10 days of the filing of a notice of appeal, or as soon 
thereafter as practicable, the record will be transmitted to all 
parties.



Sec. 583.6  When will the Commission issue its final decision?

    (a) The Commission shall issue its final decision within 90 days 
after service of the appeal brief or within 90 days after the conclusion 
of briefing by the parties, whichever is later.
    (b) The Commission shall notify the tribe and management contractor 
of its final decision and the reason(s) supporting it.



PART 584_APPEALS BEFORE A PRESIDING OFFICIAL--Table of Contents



Sec.
584.1  What does this part cover?
584.2  Who may appeal?
584.3  How do I appeal a notice of violation, proposed civil fine 
          assessment, order of temporary closure, the Chair's decision 
          to void or modify a management contract, the Commission's 
          proposal to remove a certificate of self-regulation, the 
          Chair's decision to approve or object to a tribal gaming 
          regulatory authority's adoption of alternate standards from 
          those required by the Commission's minimum internal control 
          standards and/or technical standards, and a notice of late 
          fees and late fee assessments?
584.4  Are motions permitted?
584.5  How do I file a motion to intervene?
584.6  When will the hearing be held?
584.7  When will I receive a copy of the record on which the Chair 
          relied?
584.8  What is the hearing process?
584.9  How may I request to limit disclosure of confidential 
          information?
584.10  What is the process for pursuing settlement or a consent decree?
584.11  Will the hearing be transcribed?
584.12  What happens after the hearing?
584.13  May I file an objection to the recommended decision?
584.14  When will the Commission issue its final decision?

    Authority: 25 U.S.C. 2706, 2710, 2711, 2712, 2713, 2715, 2717.

    Source: 77 FR 58945, Sept. 25, 2012, unless otherwise noted.

[[Page 223]]



Sec. 584.1  What does this part cover?

    (a) This part applies to appeals of the following where the 
appellant elects a hearing before a presiding official:
    (1) Violation(s) alleged in a notice of violation under Sec. 573.3 
of this chapter;
    (2) Proposed civil fine assessments under part 575 of this chapter;
    (3) Orders of temporary closure under Sec. 573.4 of this chapter;
    (4) The Chair's decision to void or modify a management contract 
under part 535 of this chapter subsequent to initial approval;
    (5) The Commission's proposal to remove a certificate of self-
regulation under part 518 of this chapter; and
    (6) The Chair's decisions to approve or object to a tribal gaming 
regulatory authority's adoption of alternate standards from those 
required by the Commission's minimum internal control standards under 
part 543 of this chapter;
    (7) The Chair's decisions to approve or object to a tribal gaming 
regulatory authority's adoption of alternate standards from those 
required by the Commission's technical standards under part 547 of this 
chapter; and
    (8) Late fee notifications and assessments under part 514 of this 
chapter.
    (b) Appeals identified in paragraph (a) of this section brought 
directly before the Commission on the written record and without a 
hearing are filed pursuant to part 585 of this subchapter.

[77 FR 58945, Sept. 25, 2012, as amended at 78 FR 21062, Apr. 9, 2013]



Sec. 584.2  Who may appeal?

    (a) Appeals of notices of violation, proposed civil fine 
assessments, orders of temporary closure, proposals to remove 
certificates of self-regulation, and late fee notifications and 
assessments may only be brought by the tribe or the recipient of the 
action that is the subject of the appeal.
    (b) Appeals of the Chair's decisions to void or modify a management 
contract after approval may only be brought by a party to the management 
contract.
    (c) Appeals of the Chair's decisions to approve or object to the 
adoption of alternate standards from those required by the Commission's 
minimum internal control standards and/or technical standards may only 
be brought by the tribal gaming regulatory authority that approved the 
alternate standards for the gaming operation(s).

[77 FR 58945, Sept. 25, 2012, as amended at 78 FR 21062, Apr. 9, 2013]



Sec. 584.3  How do I appeal a notice of violation, proposed civil fine
assessment, order of temporary closure, the Chair's decision to void
or modify a management contract, the Commission's proposal to remove a 
          certificate of self-regulation, the Chair's decision to 
          approve or object to a tribal gaming regulatory authority's 
          adoption of alternate standards from those required by the 
          Commission's minimum internal control standards and/or 
          technical standards, and a notice of late fees and late fee 
          assessments?

    (a) Within 30 days after the Chair serves his or her action or 
decision, or the Commission serves its intent to remove a certificate of 
self-regulation, the appellant must file a notice of appeal with the 
Commission. The notice of appeal must reference the action or decision 
from which the appeal is taken.
    (b) Within 10 days after filing the notice of appeal, the appellant 
shall file with the Commission:
    (1) A list of the names of proposed witnesses who will present oral 
testimony at the hearing, the general nature of their expected 
testimony, and whether a closed hearing is requested and the reason(s) 
therefor; and
    (2) A brief that states succinctly the relief sought and the 
ground(s) in support thereof, which may include supporting documentation 
and evidence in the form of affidavits.
    (c) A party that has filed a notice of appeal may waive the right to 
an oral hearing before a presiding official and instead elect to have 
the matter determined by the Commission solely on the basis of written 
submissions. Appeals based on written submissions are governed by part 
585 of this subchapter. If there is more than one party that has filed a 
notice of appeal, and any party that has filed a notice of appeal elects 
a hearing before a presiding official, the entire matter will proceed 
before a presiding official.

[[Page 224]]

    (d) The Chair may file a response brief and a list of the names of 
proposed witnesses who will present oral testimony at the hearing, the 
general nature of their expected testimony, and whether a closed hearing 
is requested and the reason(s) therefor, within 10 days after service of 
the appellate brief.



Sec. 584.4  Are motions permitted?

    Yes. Motions to intervene under Sec. 584.5 are permitted. Motions 
for an extension of time that are filed before the appointment of a 
presiding official shall be decided by the Commission. All other motions 
may be scheduled and heard at the discretion of the presiding official.



Sec. 584.5  How do I file a motion to intervene?

    (a) An entity or an individual, whether acting on his or her own 
behalf or as an agent of another entity not permitted to appeal, may be 
permitted to participate as a party if the presiding official finds 
that:
    (1) The final decision could directly and adversely affect it or the 
class it represents;
    (2) The individual or entity may contribute materially to the 
disposition of the proceedings;
    (3) The individual's or the entity's interest is not adequately 
represented by existing parties; and
    (4) Intervention would not unfairly prejudice existing parties or 
delay resolution of the proceeding.
    (b) A tribe with jurisdiction over the lands on which there is a 
gaming operation that is the subject of a proceeding under this part may 
intervene as a matter of right if the tribe is not already a party.
    (c) A motion to intervene shall be submitted to the presiding 
official within 10 days of the notice of appeal. The motion shall be 
filed with the presiding official and served on each person who has been 
made a party at the time of filing. The motion shall state succinctly:
    (1) The moving party'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 the moving party;
    (4) The issues on which the moving party seeks to participate; and
    (5) Whether the moving party seeks to present witnesses.
    (d) Objections to the motion must be filed by any party within 10 
days after service of the motion.
    (e) A reply brief to the brief in opposition may be filed within 5 
days of service of the brief in opposition.
    (f) When motions to intervene are made by individuals or groups with 
common interests, the presiding official may request all such movants to 
designate a single representative, or he or she may recognize one or 
more movants.
    (g) The presiding official shall give each movant and party written 
notice of his or her decision on the motion. For each motion granted, 
the presiding official shall provide a brief statement of the reason(s) 
for the decision. If the motion is denied, the presiding official shall 
briefly state the ground(s) for denial. The presiding official may allow 
the movant to participate as amicus curiae, if appropriate.



Sec. 584.6  When will the hearing be held?

    (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. At the request of the appellant, the presiding 
official may waive the 30-day hearing requirement upon designation.
    (b) If the subject of an appeal is whether an order of temporary 
closure should be made permanent or dissolved, the presiding official 
shall be designated within 7 days of the timely filing of the notice of 
appeal, and the hearing shall be concluded within 30 days after the 
Commission receives a timely notice of appeal, unless the appellant 
waives this right. Notwithstanding any other provision of this part, the 
presiding official shall conduct such hearing in a manner that will 
enable him or her to conclude the hearing within the period required by 
this paragraph and consistent with any due process rights of the 
parties, including any period that the record is kept open following the 
hearing.

[[Page 225]]



Sec. 584.7  When will I receive a copy of the record on which the
Chair relied?

    Within 10 days of the timely filing of a notice of appeal, or as 
soon thereafter as practicable, the record on which the Chair relied 
will be transmitted to the parties. In appeals dealing with temporary 
closure orders, the record will be transmitted within 5 days of the 
timely filing of a notice of appeal. Upon designation of the presiding 
official, the Commission shall transmit the agency record to the 
presiding official.



Sec. 584.8  What is the hearing process?

    (a) Once designated by the Commission, the presiding official shall 
schedule the matter for hearing. The appellant may appear at the hearing 
personally, through counsel, or through an authorized representative 
consistent with the requirements of Sec. 580.3 of this subchapter. The 
appellant, the Chair, and any intervenor 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 of this 
chapter) among the parties when to do so would expedite the proceeding;
    (5) Establish and administer 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 from 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. 584.12; and
    (10) Take other actions consistent with this part that are 
authorized by the Commission.
    (c) The presiding official may order the record to be kept open for 
a reasonable period of time following the hearing (normally 10 days), 
during which time the parties may make additional submissions to the 
record, except that if the subject of the appeal is an order of 
temporary closure under Sec. 573.4 of this chapter, the record will be 
kept open for a maximum of 10 days. 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. 584.12, except that if the subject of 
the appeal is an order of temporary closure under Sec. 573.4 of this 
chapter, the presiding official shall issue a recommended decision 
within 20 days after the record closes.



Sec. 584.9  How may I request to limit disclosure of confidential 
information?

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

[[Page 226]]

request upon the parties to the proceeding. The request to the presiding 
official shall include:
    (A) A copy of the document, group of documents, or segregable 
portions of the documents marked ``Confidential Treatment Requested''; 
and
    (B) A statement explaining why the information is confidential.
    (b) 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. 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.
    (c) If the presiding official determines that confidential treatment 
is warranted, the presiding official shall so inform all parties.
    (d) If the presiding official determines that confidential treatment 
is warranted, a party to a proceeding may request that the presiding 
official direct the person submitting the confidential information to 
provide that information to the party. The presiding official may 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.
    (e) 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.
    (f) When a decision by a presiding official is based in whole or in 
part on evidence not included in the 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. 584.10  What is the process for pursuing settlement or a consent
decree?

    (a) General. At any time after the commencement of a proceeding, but 
at least 5 days before the date scheduled for hearing under Sec. 584.6, 
the parties may jointly 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) The presiding official's certification of the findings and that 
the 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 or partial settlement and have agreed to dismissal of 
all or part of the action, subject to compliance with the terms of the 
settlement agreement; or
    (3) Inform the presiding official that agreement cannot be reached.
    (d) Disposition. In the event a full or partial settlement agreement 
containing consent findings and an order is submitted within the time 
granted, the presiding official shall certify such findings and 
agreement within 30 days after his or her receipt of the submission. 
Such certification shall constitute full or partial dismissal of the 
appeal, as applicable, and final agency action.

[[Page 227]]



Sec. 584.11  Will the hearing be transcribed?

    Yes. Hearings under this part that involve oral presentations shall 
be recorded verbatim and transcripts thereof shall be provided to 
parties upon request. Each party shall pay its own fees for transcripts.



Sec. 584.12  What happens after the hearing?

    (a) Within 30 days after the record closes, the presiding official 
shall issue his or her recommended decision, except that if the subject 
of the appeal is an order of temporary closure under Sec. 573.4 of this 
chapter, the presiding official shall issue a recommended decision 
within 20 days after the record closes.
    (b) The recommended decision shall be in writing, based on the whole 
record, and include:
    (1) Recommended findings of fact and conclusions of law upon each 
material issue of fact or law; and
    (2) A recommended grant or denial of relief.
    (c) The presiding official's recommended decision is reviewed by the 
Commission. The Commission issues the final decision.



Sec. 584.13  May I file an objection to the recommended decision?

    Yes. Within 20 days after service of the presiding official's 
recommended decision, any party may file objections with the Commission 
to any aspect of the decision and the reasons therefore, unless the 
recommended decision is to dissolve or make permanent a temporary 
closure order issued under Sec. 573.4 of this chapter, in which case 
objections to the recommended decision must be filed within 5 days after 
service of the recommended decision.



Sec. 584.14  When will the Commission issue its final decision?

    (a) The Commission shall issue its final decision within 90 days 
after the date of the recommended decision or within 90 days after the 
date when objections to the recommended decision are filed or within 90 
days after the conclusion of briefing by the parties, whichever comes 
later, unless the recommended decision is to dissolve or make permanent 
a temporary closure order issued under Sec. 573.4 of this chapter, in 
which case the Commission shall issue its decision within 30 days of the 
recommended decision.
    (b) The Commission shall serve its final decision upon the parties.



PART 585_APPEALS TO THE COMMISSION--Table of Contents



Sec.
585.1  What does this part cover?
585.2  Who may appeal?
585.3  How do I appeal a notice of violation, proposed civil fine 
          assessment, order of temporary closure, the Chair's decision 
          to void or modify a management contract, the Commission's 
          proposal to remove a certificate of self regulation, the 
          Chair's decision to approve or object to a tribal gaming 
          regulatory authority's adoption of alternate standards from 
          those required by the Commission's minimum internal control 
          standards and/or technical standards, and notices of late fees 
          and late fee assessments?
585.4  Are motions permitted?
585.5  How do I file a motion to intervene?
585.6  When will I receive a copy of the record on which the Chair 
          relied?
585.7  When will the Commission issue its decision?

    Authority: 25 U.S.C. 2706, 2710, 2711, 2712, 2713, 2715, 2717.

    Source: 77 FR 58945, Sept. 25, 2012, unless otherwise noted.



Sec. 585.1  What does this part cover?

    (a) This part applies to appeals of the following where the 
appellant does not elect a hearing before a presiding official and 
instead elects to have the matter decided by the Commission solely on 
the basis of the written submissions:
    (1) Violation(s) alleged in a notice of violation under Sec. 573.3 
of this chapter;
    (2) Proposed civil fine assessments under part 575 of this chapter;
    (3) Orders of temporary closure under Sec. 573.4 of this chapter;
    (4) The Chair's decisions to void or modify a management contract 
under part 535 of this chapter subsequent to initial approval;
    (5) The Commission's proposals to remove a certificate of self-
regulation under part 518 of this chapter; and
    (6) The Chair's decisions to approve or object to a tribal gaming 
regulatory

[[Page 228]]

authority's adoption of alternate standards from those required by the 
Commission's minimum internal control standards under part 543 of this 
chapter;
    (7) The Chair's decisions to approve or object to a tribal gaming 
regulatory authority's adoption of alternate standards from those 
required by the Commission's technical standards under part 547 of this 
chapter; and
    (8) Late fee notifications and assessments under part 514 of this 
chapter.
    (b) Appeals from these actions involving a hearing before a 
presiding official are brought under part 584 of this chapter.

[77 FR 58945, Sept. 25, 2012, as amended at 78 FR 21063, Apr. 9, 2013]



Sec. 585.2  Who may appeal?

    (a) Appeals of notices of violation, proposed civil fine 
assessments, orders of temporary closure, proposals to remove 
certificates of self-regulation, and late fee notifications and 
assessments may only be brought by the tribe or the recipient that is 
the subject of the action.
    (b) Appeals of the Chair's decision to void or modify a management 
contract after approval may only be brought by a party to the management 
contract.
    (c) Appeals of the Chair's decisions to approve or object to the 
adoption of alternate standards from those required by the Commission's 
minimum internal control standards and/or technical standards may only 
be brought by the tribal gaming regulatory authority that approved the 
alternate standards for the gaming operation(s).

[77 FR 58945, Sept. 25, 2012, as amended at 78 FR 21063, Apr. 9, 2013]



Sec. 585.3  How do I appeal a notice of violation, proposed civil fine
assessment, order of temporary closure, the Chair's decision to void
or modify a management contract, the Commission's proposal to remove a 
          certificate of self regulation, the Chair's decision to 
          approve or object to a tribal gaming regulatory authority's 
          adoption of alternate standards from those required by the 
          Commission's minimum internal control standards and/or 
          technical standards, and notices of late fees and late fee 
          assessments?

    Within 30 days after the Chair serves his or her action or decision, 
or the Commission serves notice of its intent to remove a certificate of 
self-regulation, the appellant must file a notice of appeal with the 
Commission. The notice of appeal must reference the action or decision 
from which the appeal is taken and shall include a written waiver of the 
right to an oral hearing before a presiding official and an election to 
have the matter determined by the Commission solely on the basis of 
written submissions. Unless the Commission has extended the time for 
filing an appeal brief pursuant to Sec. 580.4(f) of this subchapter, the 
appeal brief must be filed within 30 days of service of the record 
pursuant to Sec. 585.6. The appeal brief shall state succinctly the 
relief sought and the supporting ground(s) therefor, and may include 
supporting documentation.



Sec. 585.4  Are motions permitted?

    (a) Motions for extension of time under Sec. 580.4(f) of this 
subchapter, motions to supplement the record under Sec. 581.5 of this 
subchapter, motions to intervene under Sec. 585.5, and motions for 
reconsideration under Sec. 581.6 of this subchapter, are permitted. All 
other motions may be considered at the discretion of the Commission.
    (b) The Chair shall not, either individually or through counsel, 
file or respond to motions.



Sec. 585.5  How do I file a motion to intervene?

    (a) An entity or individual, whether acting on his or her own behalf 
or as an agent of another entity, not permitted

[[Page 229]]

to appeal, may be permitted to participate as a party to a pending 
appeal if the Commission finds that:
    (1) The final decision could directly and adversely affect it or the 
class it represents;
    (2) The individual or entity may contribute materially to the 
disposition of the proceedings;
    (3) The individual's or entity's interest is not adequately 
represented by existing parties; and
    (4) Intervention would not unfairly prejudice existing parties or 
delay resolution of the proceeding.
    (b) A tribe with jurisdiction over the lands on which there is a 
gaming operation that is the subject of a proceeding under this part may 
intervene as a matter of right if the tribe is not already a party.
    (c) A motion to intervene shall be submitted to the Commission 
within 10 days of the notice of appeal. The motion shall be filed with 
the Commission and served on each person who has been made a party at 
the time of filing. The motion shall succinctly state:
    (1) The moving party'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 the moving party;
    (4) The issues on which the moving party seeks to participate; and
    (5) Whether the moving party seeks to present witness affidavits.
    (d) Objections to the motion must be filed by any party within 10 
days after service of the motion.
    (e) A reply brief to the brief in opposition may be filed within 5 
days of service of the brief in opposition.
    (f) When motions to intervene are made by individuals or groups with 
common interests, the Commission may request all such movants to 
designate a single representative, or the Commission may recognize one 
or more movants.
    (g) The Commission shall give each movant and party written notice 
of the decision on the motion. For each motion granted, the Commission 
shall provide a brief statement of the reason(s) for the decision. If 
the motion is denied, the Commission shall briefly state the ground(s) 
for denial. The Commission may allow the movant to participate as amicus 
curiae, if appropriate.



Sec. 585.6  When will I receive a copy of the record on which the 
Chair relied?

    Within 10 days of the filing of a notice of appeal, or as soon 
thereafter as practicable, the record will be transmitted to the 
appellant.



Sec. 585.7  When will the Commission issue its decision?

    (a) The Commission shall issue its decision within 90 days: After it 
receives the appeal brief; or its ruling on a request for intervention, 
if applicable; or after the conclusion of briefing by the parties, 
whichever comes later, unless the subject of the appeal is whether to 
dissolve or make permanent a temporary closure order issued under 
Sec. 573.4 of this chapter, in which case, the Commission shall issue 
its decision within 30 days of conclusion of briefing by the parties.
    (b) The Commission shall serve the final decision upon the 
appellants.

                        PARTS 586	589 [RESERVED]



                         SUBCHAPTER I [RESERVED]



                        PARTS 590	599 [RESERVED]

[[Page 231]]



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




  --------------------------------------------------------------------
Part                                                                Page
700             Commission operations and relocation 
                    procedures..............................         233
720             Enforcement of nondiscrimination on the 
                    basis of handicap in programs or 
                    activities conducted by the Navajo and 
                    Hopi Indian Relocation Commission.......         311
721-899         [Reserved]

[[Page 233]]



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 234]]

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 235]]

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 236]]

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 237]]



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 238]]

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 
Secs. 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 239]]

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 240]]



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 241]]

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 242]]



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 243]]



                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 244]]

    (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 245]]

    (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 
eligible 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 246]]

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 247]]



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 248]]

    (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 249]]

    (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 250]]

    (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 251]]

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 252]]

    (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 253]]



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 254]]

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 255]]

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 256]]

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 257]]

    (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 258]]

    (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 259]]

(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 260]]

    (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 261]]

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 262]]

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 263]]

    (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, embarrassment, 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 Secs. 700.287-

[[Page 264]]

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 265]]

    (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 266]]

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 860